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USAGE OF INTERNAL FORCES FOR THE CONSTRUCTION OF WATER AND ELECTRIC UTILITY PROJECTSCity CouncilFebruary 25, 2025Public Utilities Department RiversideCA.gov2
1. In response to public comments, the RPU Board requested staff to provide information regarding the usage of utility forces for construction projects.2. December 9, 2024 – RPU Board Workshopa. Three main topics:i. What is the cost-effectiveness of utilizing in-house resources as opposed to external contractors? ii. Considering City Charter Section 1109, what legal authority grants the City the power to employ its own forces for the construction of utility projects? iii. Is Resolution No. 15507, which provides an exception to City Charter Section 1109 authorizing the use of internal forces to construct water and electric utility infrastructure, still valid?3. The RPU Board recommended that the City Council approve an updated resolution reaffirming the current policy.BACKGROUND1 2 2/13/2025
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4. Riverside is a Charter City5. Exceptions can be made subject to City Council approval6. Evolution of the City's utility workforceBACKGROUND (CONT.)Pre-1969Contractor-dominatedPost-1969Utility-dominatedResolution No. 11396Post-1984 HybridResolution No. 15507 RiversideCA.gov4
7. Purchasing Resolution No. 24101a. Guides the purchase of products, services and Public Works construction contractsb. Undergoes revisions from time to timec. Separate from other City Council determinations regarding the City Charter8. Resolution No. 15507a. Has not been amended or repealed since its adoption in 1984b. Continues to be in effectc. Includes the current allowance for the use of internal workforce for specified projectsADOPTED CITY POLICIES3 4 2/13/2025
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EXAMPLES OF PIPELINE CONSTRUCTION
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EXAMPLES OF POLE REPLACEMENTS
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WATER CONSTRUCTION COST HISTORY$0.00$10.00$20.00$30.00$40.00$50.00$60.00$70.00$80.00$90.00$100.0020132014201520162017201820192020202120222023 $/Inch-Diameter/LFHistorical Pipeline Construction CostsInternal Forces vs. External ContractorsInternal ForcesExternal ContractorsContractor completed projects were 29%more expensive on averagethan those completed by internal forces RiversideCA.gov8
ELECTRIC CONSTRUCTION COST HISTORYContractor completed projects were 37%more expensive on average than those completed by internal forces $- $4,000 $8,000 $12,000 $16,000 $20,00020132014201520162017201820192020202120222023 Labor : $ / pole Historical Pole Replacement CostInternal Forces vs. External ContractorInternal ForcesExternal Contractor 7 8
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1. Best quality assurance & quality control of new facilities to ensure longer project lifespans2. Deep familiarity with RPU’s water and electric infrastructure and systems3. Facilitates better emergency preparedness when external contractors may be in high demand4. Reduced need for extensive project coordination5. Faster response times1. Ability to quickly address customer or City Council concerns2. Comprehensive training in customer service6. Pride and ownership in the quality of work performedINTANGIBLE ADVANTAGE OF USING INTERNAL FORCES RiversideCA.gov10
1. All expenditures with RPU funding greater than $50,000 are brought to the RPU Board for consideration and approval –No change suggested2. Clarify and reinforce the use of internal forces for the construction of water and electric utility projects3. The revised City Council resolution, if adopted, would reaffirm and update the policy on the use of internal forces for the construction of water and electric utility facilitiesDISCUSSION9 10 2/13/2025
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Strategic Priority 6 – Infrastructure, Mobility and ConnectivityGoal 6.2 –Maintain, protect, and improve assets and infrastructure within the City’s built environment to ensure and enhance reliability, resiliency, sustainability, and facilitate connectivity. Cross-Cutting ThreadsSTRATEGIC PLAN ALIGNMENT Community Trust
Equity
Fiscal Responsibility
Innovation
Sustainability & Resiliency
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That the City Council adopt a resolution, by at least fiveaffirmative votes, reaffirming the policy exceptingcertain types of projects from Section 1109 of theRiverside City Charter and repealing Resolution No.15507.RECOMMENDATION11 12