AGENDA
Pismo Beach City Council
Friday, February 6, 2026
10:00 a.m. Special Meeting 1 Pacific Banquet Room, 2131 Price Street, Ground Floor, Pismo Beach https://us02web.zoom.us/j/84823715585 1 Live virtual viewing is offered via Zoom.
0.MEETING INSTRUCTIONS:
This meeting is being conducted in a hybrid format with both in-person and virtual options. Ways to watch this meeting and submit public comment are provided below.
Watch and participate in person:
•Visit the Pacific Banquet Room, Ground Floor, 2131 Price Street, Pismo Beach, CA 93449. •To make public comment, please submit an optional blue “speaker slip” to staff; the Mayor will ask you to speak during the public comment period on your item of interest.
Watch via Zoom:
•Click this link on any computer or mobile device: https://us02web.zoom.us/j/84823715585 . This URL may also be typed into a web browser.
Listen via telephone:
•Call 1-669-900-6833 to join by telephone audio only. Enter Meeting ID 848 2371 5585 when prompted.
Submit written comment prior to, or during, the meeting:
•In advance of the meeting, written comments may be emailed to [email protected] or mailed or delivered to the City Clerk’s Office, 760 Mattie Road, Pismo Beach, CA 93449. During the meeting no later than the start of the comment period for your item of interest, written comment may be hand-delivered to staff in the meeting room. Emails submitted after the start of the meeting may not be fully considered prior to any action taken on the item.
Submit voicemail comment:
•Call 805-773-7005 and leave a voicemail before the meeting. Voicemails submitted after the start of the meeting may not be fully considered prior to any action taken on the item. This automated voicemail line will not be answered or monitored for other purposes.
Please note:
•In the event a Council Member participates in this meeting by teleconference under the provisions of Government Code Section 54953(f), public comment will be accepted via Zoom, including by telephone audio, as required by law. However, the timing of a request by a Council Member to participate remotely may not allow sufficient time to post an agenda containing information on how the public may participate via Zoom or telephone. In such instances, the City Clerk or another staff member will orally provide such information at the meeting.
•Meetings may begin a few minutes after the scheduled start time. •Meetings will be recorded, except closed sessions; these recordings are public record. •Phone numbers of call-in attendees may be visible to other meeting attendees, or in meeting recordings. •Phone numbers of voicemail commenters may be visible in the public record along with transcripts.
Please contact City Clerk Erica Inderlied at [email protected] with questions.
Council Agenda 2-3-2026
Pismo Beach City Council Agenda February 6, 2026
Special Goal-Setting Workshop—10:00 a.m.
Pacific Banquet Room, Ground Floor, 2131 Price Street,
Pismo Beach, CA 93449
CALL TO ORDER: Mayor Waage
1.ROLL CALL:
Mayor: Waage
Mayor Pro Tem: Reiss
Council Members: Guthrie, Inman, Newton
2.PUBLIC COMMENT PERIOD
At this time, members of the public may comment on any item appearing on the agenda.
Please adhere to the following procedures when addressing the Council:
• Please limit your comments to 3 minutes or less.
• Unduly disruptive behavior will not be permitted.
Documents submitted to the Council become public record unless otherwise exempt from disclosure.
3.AGENDA ITEMS
10:00 a.m.
Item 3.A: FY 2026 & FY 2027 Council Goals Review (Garcia) Recommendation: Staff to facilitate a review of the established Major City Goals for the Fiscal Year 2026 & 2027 Budget & Goals Cycle. (Packet materials: FY 2026 & FY 2027 Council Goals established January 24, 2025.) Item 3.B: Analysis of Addition of In-House Construction Management (Garcia) Recommendation: Receive a report on the potential fiscal benefits of in-house construction management and provide direction to staff. (Packet materials:
Staff report.)
Break (approximately 12:00 p.m.)
12:30 p.m.
Item 3.C: Discussion of Various Policies/Programs of Interest Recommendation: Provide direction to staff on topics of interest to be returned for consideration as part of future meeting agendas if appropriate (No agenda packet materials except where noted):
1.Advisory Body Member Appointment Process for 2026 (Inderlied)
2.Code of Ethics Annual Review (Inderlied) (Packet materials: Code of Ethics.)
3.State Housing Legislation Update (Graham)
Council Agenda 2-3-2026
Pismo Beach City Council Agenda February 6, 2026
4.Conceptual Discussion of City Hall Relocation (Garcia)
5.Overview of Potential Transition to 4-year Mayoral Term (Inderlied)
4.CITY COUNCIL COMMENTS AND REQUESTS - No action to be taken
5.ADJOURNMENT
To the following meeting(s). Special and Closed Session times may be subject to change, as noticed. Meetings will be held in a hybrid in-person / virtual format unless otherwise noted:
Regular Meeting Tuesday, February 17, 2025
Regular Council meetings will adjourn by 11:00 p.m. unless four-fifths of the Council votes to continue past that time. If the meeting is adjourned at 11:00 p.m., any remaining agenda items will be continued to the next regular meeting (R-97-04).
AFFIDAVIT OF POSTING
I, Erica Inderlied, City Clerk for the City of Pismo Beach, declare under penalty of perjury that the foregoing agenda for the February 6, 2026 meeting(s) of the Pismo Beach City Council was posted on February 4, 2026, Meeting Schedule: The City Council of Pismo Beach regularly meets on the first and third Tuesdays of each month at 5:30 p.m., unless otherwise noticed. Closed and Special sessions will be duly noticed as needed.
Council Agendas: Agendas for Regular Meetings are available for public review on the City’s website at pismobeach.org/agenda and upon request from the City Clerk’s Office, typically by 4:00 p.m. on the Thursday prior to the meeting, but no later than 72 hours prior to the meeting. Agendas for Closed Sessions and other Special meetings are made available at least 72 hours prior to the meeting when possible, but no later than 24 hours prior to the meeting.
Related Materials: All materials submitted to the Council relating to items on this agenda are open for public inspection unless otherwise exempt by law. Staff reports and attachments published as part of this agenda packet, as well as copies of correspondence received relating to these agenda items and materials distributed at the meeting, may be obtained 1) in the consolidated online Agenda Center at pismobeach.org/agenda, 2) in the Access Pismo public records portal at pismobeach.org/accesspismo, 3) by request from the City Clerk at [email protected], or 4) in person at the City Clerk's Office, City Hall, 760 Mattie Road, Pismo Beach, Mon–-Fri 8:00 a.m.–-5:00 p.m. Please call (805) 773-7003 with any questions.
Broadcasting: Regular (televised) City Council meetings are available for viewing 24/7 at pismobeach.org/agenda, broadcast live on Channel 20, and re-broadcast during the week following the meeting on Channel 20 at 9:00 a.m., 6:00 p.m., and 1:00 a.m. each day.
Use of Equipment: Please contact the City Clerk’s Office if requesting to use the chamber equipment during public comment or as part of a scheduled presentation, 24 hours prior to the meeting at (805) 773-7003.
Notice Regarding Americans with Disabilities Act
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting or if you need agenda documents provided in an alternative format, please contact the City Clerk’s Office at 773-7003 as soon as possible prior to the meeting to ensure that reasonable arrangements can be made (28CFR 35.102-
35.104 ADA Title II).
Council Agenda 2-3-2026
City Council Goals
Fiscal Year 2026 & 2027
Quality of Life
Goal statement: Build on community strengths to protect and enhance the city’s quality of life.
Priorities:
•Invest in neighborhoods
•Implement community beautification and cleanliness strategies •Complete Addie Street Bathroom expansion
•Complete new Ventana sports courts
•Expand use of existing facilities by considering evening use •Invest in coastal access and bluff repair
Streets and Infrastructure
Goal statement: Enhance, beautify, and maintain the City’s streets and infrastructure to ensure safety, accessibility, and long-term sustainability.
Priorities:
•Invest in road, sidewalk, and park improvements
•Update the Pavement Management Plan
•Create a pavement maintenance strategy
•Complete a City facility condition assessment and address deferred maintenance Public Safety
Goal statement: Prioritize the safety and well-being of the community.
Priorities:
•Complete Public Safety Facility
•Reduce wildfire risk and promote fire hardening for the community •Create a lifeguard facility in the downtown
•Focus on retention of Police personnel
•Support technology investments that enhance public safety Water Resources
Goal statement: Ensure the sustainability of the City’s existing water supply and storage, identifying new sources, promoting conservation, and engaging the community.
Priorities:
•Implement Central Coast Blue
•Pursue outside funding
•Complete construction of Charles Street Reservoir and plan for replacement of one groundwater production well
•Evaluate additional water supplies
•Enhance water conservation measures and rebate programs •Conduct public outreach and education
Council Agenda 2-3-2026 3.A-1
Parking and Circulation
Goal statement: Enhance parking infrastructure, expand inventory, and improve traffic circulation.
Priorities:
•Update the Downtown Study
•Continue to work on downtown parking solutions, including acquiring additional parking assets, and adopt strategies outlined in the Parking /Management Plan •Incorporate parking modifications in the General Plan
•Complete and implement the Bicycle and Pedestrian Master Plan •Complete the acquisition of Dolliver Street from the state and make circulation improvements in accordance with the General Plan Circulation Element
Development and Housing Access
Goal statement: Foster sustainable community development while supporting efforts to address housing needs and homelessness.
Priorities:
•Complete updates to the Local Coastal Plan, General Plan, and Zoning Code •Identify affordable housing and workforce housing opportunities •Implement measures to streamline the development process •Support and participate in regional efforts in a collaborative manner •Invest in housing and homelessness assistance where feasible Council Agenda 2-3-2026 3.A-2
PISMO BEACH CITY COUNCIL STAF REPOR
Agenda Item #3.B
Meetin Date: Februar 6, 2026
TITLE:
Analysis of Addition of In-House Construction Management RECOMMENDATION:
Receive a report on the potential fiscal benefits of in-house construction management and provide direction to staff.
EXECUTIVE SUMMARY:
Due to concerns about the high cost of construction management services provided by consultants, the City Council directed staff to explore options for delivering projects at lower cost, particularly in the area of construction management. Construction management in the public sector is complex, with standards for measurement and payment of work and the handling of issues that arise. Proper and adequate documentation is critical.
The 2022 Paving Project and the Ventana Sports Courts Project are examples of recent projects with high construction management costs. These will be used along with others to explore the cost effectiveness of potentially adding in-house construction management.
Potential staff augmentation to improve overall project delivery and construction management will also be examined.
Four options are discussed:
1) The addition of a Sr. Capital Projects Manager to accelerate project delivery. 2) The addition of a Sr. Capital Projects Manager and an Engineering Technician or Inspector to accelerate project delivery and assist with encroachment permit inspection and other related duties.
3) The addition of a Sr. Capital Projects Manager and a Construction Manager to accelerate project delivery and provide for more efficient management of consultant construction managers, encroachment permit inspection, and other project-related assistance.
4) The addition of a Sr. Capital Projects Manager, a Construction Manager, and an Inspector. This combination would allow for accelerated project delivery, in-house construction management of non-complex projects, and encroachment permit inspection.
Complex or federally funded projects are often better suited to consultant teams rather than in-house construction management. Federal projects typically require extensive and highly structured documentation, while complex projects demand a range of specialized inspection skills. Projects with a higher percentage of specialized inspections—such as soils and compaction, structural, electrical, environmental, welding, and coatings—are Council Agenda 2-6-2026 3.B-1
best handled by consultants who have the experience and resources to handle these types of inspections. In these cases, it is more efficient to contract with a prime consultant who either has multiple skills or can manage the necessary subconsultants that do.
Using the consultant construction management costs for the 2022 Paving Project, averaging the costs of past and anticipated construction projects from 2025 – 2027, and then applying the realistic workload limitations of two new positions, an in-house construction management team could result in a little over $96,930 in annual savings, while adding the cost of a Sr. Capital Projects Manager to facilitate a steady flow of construction projects could result in a cost increase of $90,346 annually. This is a conservative estimate that does not account for the potential efficiencies gained by scheduling projects to match the capacity of the team as much as possible, knowing that a two-person team can only manage a limited number of projects at one time, depending on the type and complexity. It also does not include the cost of additional vehicles, office space, laptops and phones, and other supporting costs. This does not take into account the potential savings in avoiding future inflation by accelerating Capital Improvement Project (CIP) delivery.
DISCUSSION:
The City of Pismo Beach has relied on consultants to deliver design and construction management services. This is not unusual and is considered a best management practice for smaller cities, allowing the cities to retain a staffing level that is never more than what is needed. This allows a city to be nimble when economic conditions change. If workload or funding declines, a city may simply not initiate new contracts or extend existing ones, avoiding potential financial impacts related to maintaining excess staff. In the past this was also the ideal path for Pismo Beach, but with the volume of current and planned construction activity and the cost of contract construction management, the Council has directed staff to re-evaluate this practice and determine if it is time to consider in-house construction management.
Pismo Beach funds its capital projects using accumulated fund balances from prior-year operating surpluses, transaction and use tax revenues, and special revenues such as gas tax, local transportation funds, and development impact fees. Water and wastewater capital projects are funded separately through dedicated water and wastewater revenues.
The overall ten-year Capital Improvement Program (CIP) is extensive. In addition to a robust paving and roadway drainage program, the City has just completed its Facility Condition Assessment highlighting the maintenance and repairs that need to be addressed over the next ten years, which will add to the CIP.
What Is Covered Under “Construction Management”
Construction Management has become a career of its own with colleges and universities offering degrees in Construction Management. Construction Managers ensure that the work being paid for is performed in accordance with the plans and specifications and all relevant regulations. They also measure the work to approve payment and ensure that the quality is of the specified standards. They compare contract language to issues in the Council Agenda 2-6-2026 3.B-2
field and take appropriate action under established protocols, requiring a high-level aptitude in the field.
Under the umbrella of construction management are private vs. public construction projects. Public projects are much more regulated in how they are designed, constructed, managed and paid for than private projects. There is a further split within the public sector between infrastructure (roads, bridges, parks, water and sewer) and vertical construction, which is mostly buildings. In infrastructure projects, a construction manager also sometimes acts as the Resident Engineer. This is important to note because a single construction manager will not be well-versed in everything. The City of Pismo Beach has more infrastructure projects than vertical projects and would benefit most from a construction manager with that focus.
Construction management contracts vary in what is included based on the project, which is why the cost of construction management as a percentage of the overall project varies.
For example, the Ventana Sports Courts construction management contract is approximately 20% of the construction contract because there are many working days and many different types of work involved. The Construction Management contract for the 2022 Paving Project was approximately 12% of the construction contract price, because there was one major item of work and a significant amount of money’s worth of asphalt can be laid in a single day, while the other items of work were fewer and simpler.
But even with that “simpler” project, in addition to a Senior Resident Engineer, there was also a Principal Engineer assigned, three Inspectors and an Office Engineer (the Office Engineer is not necessarily an engineer, it is just someone who handles the paperwork).
For an in-house team, the work of the Principal Engineer is oversight, and could be absorbed into the work of the City Engineer or Public Works Director. The number of inspectors required depends on how many activities are going on in various locations.
There are some aspects of projects that require work to be performed by consultants such as environmental and cultural monitoring, compaction testing, asphalt or batch plant inspection, structural, materials testing, welding, electrical, and coatings inspection. are required on certain projects. The need for consultant construction management for infrastructure projects will also remain during times when multiple projects are under construction at the same time.
Paving Projects
Paving and slurry projects could potentially be performed by in-house staff. Looking at the construction management contract for the 2022 Paving Project, the total cost of construction management was $1,440,524 and took a little over two years to complete.
While the total is substantial it reflects 12% of the construction cost, which is considered reasonable. Here is the breakdown:
$988,577 – Resident Engineer, Inspection and Office Engineer services that are similar to what could be done in-house
$409,498 – Materials testing, compaction testing, asphalt plant inspection and other services that could not be performed by in-house staff.
Council Agenda 2-6-2026 3.B-3
$40,949 – 10% subconsultant markup. This is something that we would not be paying if we contracted with the specialty consultants directly.
In the scenario above, while total construction management contract was equivalent to 12% of the construction contract, 9% was for work that could have been performed in- house. The bulk of the work was done over two years, with close-out work ongoing for another few months, but assuming that this was money that could have been saved over two years, it would come out to $514,763 per year. Assuming a savings of 9% in paying consultants, that would range from $153,000 for a $1.7 million slurry project to $360,000 for a $4 million dollar paving project.
The caveat is that this could not be just one position, or that person could not get sick or take time off; they would need to be there managing the construction. For a paving project, having both a Construction Manager and an Inspector allows for the Office Engineer tasks to be absorbed by that team and assisted by other City staff. It could also allow them to have multiple projects happening at the same time.
Other Projects and Potential Savings
The Ventana Sports Courts Project could have been managed by an in-house construction management team, except for environmental, geotechnical and retaining wall-related work. Savings could have been as much as $300,000. (This was determined by subtracting inspection types that would not be performed in-house from the total contract).
In addition to managing construction projects, the City currently spends approximately $61,000 per year for encroachment inspections, which include private projects that encroach into the City’s right-of-way and utilities such as PG&E, SoCalGas, cable and others who have infrastructure beneath the City’s roads. The Construction Manager or the Inspector would be responsible for inspecting and managing these types of projects, ensuring City standards are followed. In addition to the cost of using consultants to perform encroachment inspections, there are staff costs for overseeing the consultants.
City employees often have to step in to resolve issues because most consultants don’t have the authority to make decisions on behalf of the City. Looking at the last 12 months, the following could have been saved in staff time if a dedicated Construction Manager position had existed:
City Engineer managing consultants for encroachment
permits (15% of the Engineer’s time)$25,677
Capital Project Manager (35% of the Manager’s time) and Civil Engineer (15% of the Engineer’s time) managing
Construction Management Consultants $43,741
The cost to process a consultant contract $558
Council Agenda 2-6-2026 3.B-4
Other recent consultant inspections include encroachment permit inspection for utility work around the Public Safety Facility, the Oak Park Medical Plaza Parking Lot Water Main Break, Digester Demolition, and Pier Avenue Stair Removal for a total of $168,000.
Staff time savings listed above are not included in Table 1 below, because those numbers are meant to illustrate how these new positions would help save staff time and make sure that their attention is on high level activities.
Table 1. Example Projects that Could Have Been Managed In-House Cost of Select CM that could have
been done in-house
CM plus
markups
Time period if
more than
one ear
Annualized
2022 Pavin Pro ect $1,029,526 2 ears $514,763*
Ventana Sports Courts $300,000 $300,000
Encroachment Permit Inspection $61,000 $61,000
Other pro ects in the past 12 months $168,000 $168,000
Total $1,043,763
*Numbers from this table are underlined in the body of the report.
Would The Savings Be Sufficient and Would They Be Consistent? The savings in using in-house staff over consultants must be enough to cover all costs of carrying an employee. If other staff time is preserved and applied to the current workload of capital projects, more projects could be managed and put out to construction over a five-year period than without that staff time saving. More construction means more potential savings.
According to the Pavement Management Plan, the City is anticipating an estimated $14.7 million dollars in pavement work over the next five years. The Priority drainage projects are estimated to be $9.55 million, but an estimate of $6 million is assumed within five years for the purposes of this exercise. This $6 million estimate is based on Priority 1 drainage projects being completed, Priority 2 drainage projects being 75% completed and Priority 3 projects being out to bid. This is a more conservative estimate and appropriate to use when basing staff augmentation on projected savings). Applying an estimate of 9% to the paving (based on the 2022 Paving Project) plus 15% (based on professional judgement from past experience) to the drainage work results in potential construction management savings of approximately $2.223 million over five years or $444,600 a year, as shown in Table 2 below.
Council Agenda 2-6-2026 3.B-5
Table 2. Future Projects and Potential Savings with an In-House Team Future Projects and Potential
Savings
Construction
Management
Time period
if more than
one ear
Annualized
Pavin and Draina e Pro ects $2,223,000 5 ears $444,600 Enc oachment Permit Inspection $61,000 $61,000
Estimated CM that could be done in
house for the anticipated 26/27 CIP
projects. (likely to be more with
additional Capital Pro ects Mana er
$651,500 2 years $325,750
Total Estimate $831,350
The future projects would still require the use of specialty consultants for soils testing and compaction, survey, environmental, materials testing and batch plant inspection. While the paving and drainage projects are in construction, the in-house team may not be able to manage other construction projects as well.
The County of San Luis Obispo Department of Public Works currently self manages about 60% of their construction projects. The Department no longer has a soils lab and currently relies on geotechnical consultants to perform its materials and compaction testing. It contracts out the large construction projects because they require too many staff and specialties.
Complex projects or federally funded projects are often better suited to consultant teams than in-house construction management. An example of a complex project is the Cliff and Ocean Storm Drain Project. Seawall construction is complex and requires multiple specialties, such as geotechnical (including soils and compaction), materials testing, structural, electrical, environmental, welding, coatings, tieback load testing, and others.
Some projects with a higher percentage of specialized inspections should be left to consultants who are more experienced and resourced to handle these types of projects.
It is usually more efficient to contract with a prime consultant who either has multiple skills or can manage subconsultants that do.
Federally funded projects have a higher level and structure of documentation required.
Failure to properly record events, conduct contractor employee interviews and perform labor compliance can result in lost reimbursements. Recent and current projects with federal funding (such as FEMA) include Pier Avenue Storm Drain Repair, Cliff and Ocean Seawall, Price Canyon Slope Repair and North Shell Beach Road Storm Drain Repair, Highway Bridge Program projects, and the Charles Street Reservoir. The Shell Beach Bike Path Project may also become a federally funded project. One drop of federal money will “federalize” an entire project.
Council Agenda 2-6-2026 3.B-6
Options to Support Project Delivery and Construction Management This staff report will explore four options for supporting project delivery and construction management, although the City Council may suggest variations it would like further study on. Those potential additions are:
Option 1: Sr. Capital Projects Manager
The addition of one Sr. Capital Projects Manager would accelerate delivery of the CIP but not perform inspections. This would not result in any savings in terms of construction management. The Capital Projects Manager currently manages the projects through construction which includes managing the consultant construction managers.
The City has a substantial CIP and currently has one Capital Projects Manager managing projects with the assistance of an Engineer, but this Engineer is assigned to other duties as well. The Capital Projects Manager also manages the construction management consultant contracts, which takes time away from moving the next projects forward. The addition of one Sr. Capital Projects Manager could help move the City toward its CIP goals more quickly; it would increase speed of delivery but not result in direct savings.
Option 2: Sr. Capital Projects Manager and an Engineering Technician This option would increase the ability to accelerate the CIP and also allow for savings in consultant spending on encroachment inspections. There are other supporting duties that this Inspector or Engineering Technician could perform that would remove lower-level work from the Capital Projects Managers, Engineer, and City Engineer. The Inspector or Engineering Technician would assist with small projects similar to the sidewalk grinding and repair project. The Engineering Technician or Inspector position is in line with the adopted Public Works Assessment recommendation of an additional position within the department to assist with oversight of construction and inspection related work activities.
Option 3: Sr. Capital Projects Manager and a Construction Manager This would retain the benefits of the new Sr. Capital Projects Manager and add a Construction Manager who would assume responsibility for management of consultant construction managers, assist with project management, perform encroachment inspections, perform constructability reviews and manage minor construction projects.
This option could result in cost savings, and the amount would depend on the types of projects being let to construction at any given time. There could be some savings in that encroachment inspection work is currently being performed by consultants. While the Construction Manager position would not be completely covered by savings over using consultants, a portion of the cost would be.
Option 4: Sr. Capital Projects Manager, a Construction Manager and an Inspector The Sr. Capital Projects Manager would result in moving more projects through to construction more quickly, and a Construction Management Team, comprised of a Construction Manager and an Inspector, could perform some of the Construction Management that is currently performed by consultants. The Construction Manager would serve as the Resident Engineer for a project with support from the Inspector. Having a two-person team allows for backup if one of them takes time off or gets ill. This team could Council Agenda 2-6-2026 3.B-7
take over one paving project and two or three small projects. Performing construction management and inspection on some projects is resource intensive and a two-person team would be stretched very thin, so this would be a limiting factor in how many construction projects could be managed by an in-house team.
More projects moving more quickly can result in more opportunities to save money by performing construction management in-house.
Adding these additional staff requires an adjustment to the organization chart for the Engineering Division, and the span of control would be too great for the City Engineer if the Engineer were to manage all of these employees directly. This is why these options recommend the addition of a Sr. Capital Projects Manager rather than another Capital Projects Manager. It is anticipated that the Sr. Project Manager would be paid at the same rate as an Engineer. For this staff report the Engineer salary has been listed, and it will be later determined if the Sr. Capital Projects Manager will be a new position, or if those duties can be added as the responsibilities of an engineer.
Table 3 shows the fully burdened rates for the additional positions. The City would be creating new Construction Manager and Inspector positions, so it is possible that the numbers could shift a bit.
Table 3. Cost of Additional Positions
Position New or
Existin Step Annual Salary Salary &
Benefits
Capital Projects
Mana e Existing Step
38 $97,240 - $118,206 $175,573
Sr. Capital
Projects
Mana e
New Step
42 $107,349 - $130,478 $187,276
Construction
Mana e , PE New Step
47 $121,451 - $147,618 $236,661
Inspector/
Engineering
Technician
New Step
25 $70,554 - $85,758 $111,083
The costs do not include office space, vehicle purchase and vehicle maintenance, cell phones, computers, training, IT support or overtime.
What About Times When There is Little to No Construction Happening? There is often work available performing encroachment inspections. In-house construction management would provide someone who could perform constructability review at any stage of a project, which is important in finding the most cost-effective approach, which can result in project cost savings. They could also assist with cost estimates, project management and minor design. If there are storm damage assessments to be done, this team could handle that. When projects are too large or complex to be performed in-house, the Construction Manager would manage the consultant team. The Construction Manager would also be the one to issue RFQ/Ps for Council Agenda 2-6-2026 3.B-8
Construction Management Services and recommend consultant selections since those would be under their purview.
Financial Impacts
While the word “savings” is used throughout this report, it is important to remember that these are cost transfers from paying consultants to paying staff until it reaches a tipping point where the cost of staff is lower than the cost of consultants, as shown in Tables 4 - 6 below.
Tables 4-6. Financial Impact Analysis
Potential Savings
CM Savin s 2025 $1,043,763
CM Savin s 2026/27 $831,350
Ventana Sports Courts was listed under 2025 because it was awarded in 2025. The work will be done during 2026. The Sr. Capital Projects Manager would not result in cost savings.
Potential Costs
Sr. Capital Pro ects Mana e /En inee $187,276
Construction Mana e $236,661
Inspecto $111,083
Total Potential Costs $535,020
Potential Difference
Calendar Yea 2025 $508,743
Calendar Years 2026/27 $296,330
Avera e of 2025 2027 savin s $402,537
Limitations
Using the average of potential savings from 2025 – 2027, it appears that there is $402,537 in potential savings. However, it is more realistic to assume that an in-house team of two could perform one paving and drainage project and maybe one or two small projects concurrently. The ability to feed projects to the in-house team at a pace that matches their capacity would be key to optimizing cost effectiveness.
As an example, during a paving project it is critical that the inspector is on the site any time construction activities are happening; they cannot be inspecting a paving project plus another project. Pavement is usually laid in two passes. An inspector must walk behind the paving machine and measure the depth of the asphalt right behind the screed. Being just a ¼” too thick or “fat” on one side means that the thickness has to be matched on the return pass so that the centerline is even. On a typical road in Shell Beach that is approximately 1,500 feet long and 40 feet wide, that extra 1/4" would result in an additional 96 tons of asphalt. At $170 per ton, that would be a $16,320 cost overrun on just one street (1,500 ft).
Council Agenda 2-6-2026 3.B-9
This means that the ability to fully realize savings by performing construction management in-house is limited to the type and number of projects one team can handle concurrently. While the inspector must remain on the paving project, the Construction Manager might be able to manage one or two small projects, such as the Toucan Terrace Trestle Relining project with the help from Utilities. Additional savings could be realized by carefully managing projects so that the construction phase is carefully timed to coincide with the completion of other projects. Since more of our projects are paid for by local funds, there is the ability to time construction to optimize the in-house team. When grant money is funding a project, the grant drives the schedule.
Table 7 below shows the potential savings if in-house staff were to perform construction management for a paving project CM for a paving project ($444,600), Toucan Terrace Trestle Relining ($50k) and Eldwayen Park Sidewalk Realignment ($24k). More projects than this at the same time as a paving project would be extremely difficult to do well.
Table 7. Revised Table of Potential Savings in 26/27 With Limitations Applied Potential CM Savin s $444,674
Cost of Construction Mana e $236,661
Cost of Inspecto $111,083
Total Costs $347,744
Difference in Calendar Years 2026/27 $96,930*
* Not included here is that to keep a construction management team busy, the new Sr. Capital Projects Manager would have been necessary, which would have resulted in a cost increase of $90,346.
What is not included in any of the calculations are overtime, two trucks (initial purchase $100,000) and their upkeep, cell phones, computers or IT support, safety equipment, office space, or training. Overtime is common when performing in-house construction management, especially with a small team. Someone must be there to check the contractor’s traffic control, and they must make sure that the construction site is buttoned up for the night or the weekend. If the contractor needs to work weekends, at least one member of the in-house team must be there during some portion of the work. A consultant often has the capacity to rotate and overlap staff to reduce or avoid overtime. It is difficult to quantify, but accelerating the CIP could result in cost savings by avoiding project cost escalation due to increases in the CPI.
These numbers are conservative, and the savings could be greater if the Capital Project Managers could schedule projects to optimize use of the in-house team. More savings are possible if the projects can be planned so that there are fewer projects under construction at one time. This would be easier with a slurry seal, but the time required for construction management increases with grinds and overlays and drainage work. Without knowing the working days for these projects yet, it is not possible to be more precise.
Deeper analysis could be performed if that is the direction.
Council Agenda 2-6-2026 3.B-10
Conclusion and Recommendation
The City has a robust CIP and the addition of a Sr. Capital Projects Manager could accelerate delivery of projects but not result in direct cost savings. The addition of an Inspector or Engineering Technician would accelerate delivery of capital projects with the added potential of cost savings on encroachment permit inspections and other minor inspections. While the consultant inspection savings would not cover the cost of the position, the person could be very useful in multiple areas of Engineering and Facilities.
The addition of a Construction Manager to the new Sr. Capital Projects Manager and the existing Capital Projects Manager could allow them to devote all of their time to managing projects while the Construction Manager takes over the recruitment, selection and management of consultant construction managers, assists the Capital Project Managers, information and assists with some encroachment permits. Finally, adding an Inspector or Engineering Technician to these two new positions would allow for some in-house construction management, which could afford the City some potential savings.
A rough estimate shows that the potential savings with an in-house construction management team may be less than expected because it is more realistic to assume that an in-house team of two could perform one paving and drainage project and maybe one or two small projects concurrently. This reduces the potential savings of an in-house team. During times when there are no active construction projects these individuals could be very useful helping other staff, performing constructability reviews, running consultant construction management selection, closing out completed projects and preparing for the next one. But their time would not be fully offset by savings over using consultants during that time.
Using the consultant construction management costs for the 2022 Paving Project, averaging the costs of past and anticipated construction projects from 2025 – 2027, and then applying the realistic workload limitations, an in-house construction management team could result in a little over $96,930 in annual savings, while adding the cost of a Sr.
Capital Projects Manager to facilitate a steady flow of construction projects could result in a cost increase of $90,346 annually. This does not take into account the potential savings in avoiding future inflation by accelerating CIP delivery.
Staff recommends that the Council receive this report and provide direction to staff.
FISCAL IMPACT:
There is no fiscal impact associated with receiving this report and providing direction to staff. If staff is directed to move forward with these positions, staff will return to Council for a presentation on the costs and budget request. If the City Council directs staff to move forward with the creation of one or more positions, staff recommends that the proposed position(s), along with associated costs such as office space, vehicles, equipment, communications, and training, be funded by the Transaction Sales and Use Tax Fund, as the work is directly related to the delivery of infrastructure projects. The General Fund is currently projected to experience a net operating deficit in the near term, and the recommended funding approach helps minimize additional pressure on General Fund resources. Depending on the nature of the projects assigned, portions of the Council Agenda 2-6-2026 3.B-11
position costs may also be eligible for support from other operating funds or reimbursable grant sources.
ATTACHMENTS:
1. Org Charts for Options 1-4
Submitted by:
Rosemarie R Gaglione, P.E., Director of Public Works
City Manager Approval:
Council Agenda 2-6-2026 3.B-12
Option 1 – Addition of Senior Capital Projects Manager
Public Works
Director
City Engineer
Senior
Management
Analyst
Permit
Technician
Senior Capital
Projects
Manager
Capital Projects
Manager
Engineer/
Senior Engineer
Council Agenda 2-6-2026 3.B-13
Attachment 1
Option 2 – Addition of Senior Capital Projects Manager and an Engineering Technician or Inspector Public Works
Director
City Engineer
Senior
Management
Analyst
Permit
Technician
Senior Capital
Projects
Manager
Capital Projects
Manager
Engineer/
Senior Engineer
Engineering
Technician or
Inspector
Council Agenda 2-6-2026 3.B-14
Attachment 1
Option 3 – Addition of Senior Capital Projects Manager and a Construction Manager Public Works
Director
City Engineer
Senior
Management
Analyst
Permit
Technician
Senior Capital
Projects
Manager
Capital Projects
Manager
Construction
Manager
Engineer/
Senior Engineer
Council Agenda 2-6-2026 3.B-15
Attachment 1
Option 4 – Addition of Senior Capital Projects Manager, Construction Manager, and Inspector Public Works
Director
City Engineer
Senior
Management
Analyst
Permit
Technician
Senior Capital
Projects
Manager
Capital Projects
Manager
Construction
Manager
Inspector or
Engineering
Technician
Engineer or
Senior Engineer
Council Agenda 2-6-2026 3.B-16
Attachment 1
Code of Ethics Exhibit
Council Agenda 2-3-2026 3.C.2-1
Code of Ethics Exhibit
Council Agenda 2-3-2026 3.C.2-2
Code of Ethics Exhibit
Council Agenda 2-3-2026 3.C.2-3
Code of Ethics Exhibit
Council Agenda 2-3-2026 3.C.2-4
Code of Ethics Exhibit
Council Agenda 2-3-2026 3.C.2-5