AgdaPkt 2020-06-08 Joint SA PFA - Laserfiche WebLink

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6.C. - Page 3 of 55 Many of the services performed by the Building Division are on a cost recovery or user fee basis. Cost recovery is accomplished through fees -for -service with approximately 100% cost recovery for development -related services. The revenues generated for these fees are used to offset the City's labor, materials, and professional service costs. Although City staff completes much of the Building and Code Enforcement work, the City utilizes consultants during staff turnover, in high volume periods, and for specialized expertise on mid -and large-scale development projects. WC3's total contract amount ($5,050,000) is more than the Building Division's other professional services agreements due to the range and quality of services WC3 provides and their consistency in personnel availability. The amount ($1,500,000) of WC3's Amendment No. 3 accounts for an unpaid balance of approximately $750,000. The amendment amount does not reflect an expectation of increased activity during the COVID-19 incident, but does take into consideration continuation of essential functions such as plan review and inspection from now until the contract expires. There are three main factors contributing to the past due amount: staff absences, plan review costs for large projects, and the COVID-19 pandemic. For varying reasons, staff were unavailable, delaying invoice review, consultant follow up, and payment. While staff unavailability is not a chronic problem, the Division is developing procedures to minimize the impact from multiple staff absences. Plan review fees factored into the delay because of the compensation mechanism for plan review. It is common industry practice for consultants to collect a percentage of the plan review fee paid by applicants. There are instances where the consultant's compensation for a small number of plan reviews could amount to a few hundred thousand dollars. This can affect payments as the payments take up a significant portion of the authorized not -to -exceed amount. Though the not -to -exceed amount capped future payments, services were still provided. The COVID-19 pandemic also reduced staff's ability to amend the agreement in a timely manner. Preparation and implementation of remote work further delayed the invoice processing. Due to COVID-19, services performed by Consultants decreased, which increased the workload for permanent staff. During the COVID-19 pandemic, building inspection has been very limited; however, plan review has still continued. The level of plan review activity in March was steady; however, staff availability had significantly decreased due to the lack of consultant permit technicians. Since 2018 staff has utilized the services of CSG, SAFEbuilt, Shums Coda, TRB, and WC3 due to their ability to provide on-site building inspectors, permit technicians, and off-site plan review services. Staff seeks to extend the agreements with all six firms in order to continue providing these services. CSG, Shums Coda, TRB, and WC3 have performed to the City's expectations. Though Interwest has not yet provided services to the City, staff recommend extending the terms for Interwest. To mitigate disruptions in service by one firm, staff recommends maintaining a pool of firms. In the coming year, staff will be assessing the demand for services and work performed through outside firms. FISCAL IMPACT The sum of all amendments amounts to $1,560,000 and is fully recovered by collected building permit and plan review fees. End of year budget amendments will be submitted to reflect an increase in revenue Page 3 of 5 1 S11 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org 33