Attachment
1 
AGENDA #5c
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Report on Construction Management Improvements
DATE: May 13, 2002
The purpose of this report is to provide the Council with information on pending and completed actions intended to enhance our in-house staff capability to manage capital construction projects and major capital repair projects.
BACKGROUND
Historically, the Town has managed construction projects by assigning a Town staff member as the project manager for each project. These project managers have been either department heads or key staff, usually from the department most affected by the project. This method has ensured that the staff project manager has intimate knowledge of the Town’s resources, policies and procedures and the staff project manager is very familiar with the unsatisfied needs that the project is intended to fulfill.
The Public Works Department’s Internal Services Division has staff members who are experienced and knowledgeable in building construction methods. They are generally effective in managing Town projects due to their knowledge of Town programs, resources, policies and procedures. We have attempted, over the past few years, to use the project management abilities of the key staff in Internal Services, particularly the Superintendent and Buildings Program Supervisor, in a lead role on major projects. However, this has proven problematic, given their ongoing workloads.
In addition, one Assistant Town Manager has monitored Town construction over the past several years. Her involvement varies by the degree of complexity of each project and by the level of knowledge and experience of each project manager. This management oversight has included work with a private attorney who specializes in construction issues and who has worked with her to develop construction documents customized for the Town of Chapel Hill. This relationship, as well as several seminars and training opportunities in legal issues of construction projects, have helped improve our staff capabilities in managing the legal and management aspects of our construction projects.
One difficulty associated with this structure is that project management becomes a part-time task for a staff member who is already fully engaged in other duties. There are times when a construction project requires detailed and immediate attention, and such times are not always apparent to a part-time project manager.
In addition, the project manager may or may not have sufficient experience in or knowledge of construction to recognize incipient problems. Guidance provided by consulting architects and engineers varies considerably, and rarely provides the level of detailed oversight that we need. Therefore, the Assistant Town Manager tries to provide guidance to each project manager as needed, with the objective of recognizing problems before they become serious and while they can still be resolved. She calls on the Town Attorney, or when there is a specialized legal question, the consulting attorney mentioned earlier. She is also able to marshal the many types of expertise existing within the Town staff on an ad hoc basis to supplement the technical knowledge of the project manager. Nevertheless, the limited technical knowledge of some staff and the part-time nature of all the individuals involved in the Town’s construction projects leave room for improvement.
DISCUSSION
At the Council’s January 18, 2002 Planning Retreat, construction management was discussed in the context of both construction and maintenance of the Town’s capital assets. The Manager proposed three steps for the immediate future:
1. Transfer personnel resources to create a position to lead work and supervise building mechanics, freeing the Buildings Program Supervisor and Internal Services Superintendent to spend more time on construction management.
2. Seek proposals from value engineering and construction management firms for services such as: development of construction standards and specifications; phase scheduling; value engineering; cost control and cost estimating; bid evaluation; construction administration and construction inspection.
3. Conduct further research on the “Construction Manager at Risk” option newly authorized by the legislature.
One way to provide the Superintendent and Supervisor with more project management time would be to provide additional resources for managing the ongoing operations of the Buildings Program, thus freeing time for the management staff to manage capital projects. We have taken steps to reallocate resources within the Internal Services Division, reducing the Fleet Maintenance Program staff by one automotive mechanic and increasing the Buildings Program staff by one “Building Mechanic Supervisor.” This position will be a working supervisor who will have ongoing responsibility for assigning work and supervising mechanics in the field. This person will also be responsible for small maintenance and repair projects normally done by contract. The Buildings Program Supervisor now performs these duties; therefore, the revised organizational structure and distribution of tasks will enable the Buildings Program Supervisor to concentrate more of his efforts on the management of capital construction, maintenance and repair projects. The newly activated position has been advertised and we expect to fill the position during the 4th quarter of this fiscal year.
We are able to fund this Building Mechanic Supervisor position by not filling a Fleet Equipment Mechanic position, recently vacated by a retirement, and transferring funds from the Fleet Maintenance Program to the Building Maintenance Program. We believe that recent improvements in the overall condition of the Town’s fleet due to the benefits of the comprehensive fleet replacement program and an aggressive training program for our mechanics will enable us to maintain a satisfactory level of fleet maintenance service with five rather than six full-time mechanics.
In the four months since we froze the vacant automotive mechanic position, we have experienced an increase in the cost of fleet maintenance work that must be sent to outside maintenance service vendors. This was due to the fact that, in addition to the transfer of one position to the Buildings Program, we lost one Fleet Mechanic to the U.S. Navy Reserves in the aftermath of the events of September 11, 2001. For a period of about 3 and one half months, we were down to four rather than six mechanics. It was a challenge to maintain a satisfactory level of fleet maintenance services with only four mechanics; however, as of April 16, 2002, the Mechanic II was released from active duty and we are now back to five full-time mechanics. We are optimistic that, with the continued success of the Fleet Replacement Program, this staffing level will be sufficient to maintain a high level of automotive maintenance service as we go forward.
In addition to the new position discussed above, we plan to transfer responsibility for managing telephone systems from the Internal Service Superintendent to the Information Technology Department, thus freeing some additional time for the Internal Services Superintendent to work on project management tasks. Executing this change depends upon approval of one additional staff position within the Information Technology Department, as proposed in the Manager’s recommended budget. We do not anticipate making this change until after the new position is added in fiscal year 2002-2003.
The third initiative related to project management involves establishing a contract for general municipal engineering services. Under this contract, the Town would have timely access to a variety of engineering services, including value engineering reviews of project plans and specifications, energy efficiency reviews of project plans and specifications, material testing services and preparation of mechanical, electrical or structural engineering specifications for minor repair projects. We believe that such a contract will streamline our ability to arrange for a variety of necessary engineering services for small to medium projects in a timely manner. For major engineering efforts, we plan to continue following our standard procedures for issuing a specific “Request for Qualifications.” The request for statements of qualifications for the general engineering services contract was advertised on May 1, 2002. We expect to begin reviewing submissions on about May 22, 2002 and to begin interviewing interested engineering firms during June 2002.
Value Engineering. One of the services we expect to obtain under the engineering services contract discussed above is “value engineering.” Value engineering is a process whereby an architectural and engineering firm reviews building construction or renovation plans and specifications in an effort to find opportunities for cost savings or improved value for dollars expended. The value engineering contractor would be involved in design development and design review from the beginning of the project. Value engineering recommendations may include substituting less expensive materials, eliminating non-essential features and adding energy efficient technology to reduce annual operating costs. Such recommendations would include an analysis of what is lost and what is gained by each recommended course of action.
Construction Manager at Risk
“Construction Manager at Risk” is a relatively new construction project delivery method that expands on the traditional role of professional construction management firms. Traditionally, an owner would enter into separate contracts with a designer, a construction management firm and one or more prime contractors. Only the prime contractors were expected to bid a fixed price for their work. Under the Construction Manager at Risk delivery method, the owner enters into a single contract with a construction management firm that provides the owner with a “guaranteed maximum price” to deliver the project. The construction manager at risk is involved with the project from start to finish and enters into contracts with the designer and the general contractor. The primary advantage to the owner is that they are insulated from cost overruns associate with flawed designs and change orders because design and construction are both managed by one firm at a guaranteed maximum price.
We have determined that this delivery method is not generally available for small scope projects. In fact, the North Carolina State Construction Office recommends that it only be used for projects valued at or above $7 million. It is unlikely that the Town would use this construction delivery method on a routine basis.
CONCLUSION
We believe that the actions discussed above will provide a means to enhance our current capability and to better utilize those staff members who have the most skill, ability and experience in construction management. These organizational and procedural changes also provide a means to enhance our current capability without significantly increasing costs during a very difficult budget year.
Attachment
1
May 13, 2002
· Community Center Renovation: This project will be a major capital repair project similar to the ongoing project at the Hargraves Recreation Center. The fiscal year 2001-2016 CIP included an installment-financed project funded with a principal of $772,000. This amount is for maintenance deficiencies alone and includes no funding for addition of new improvements. Work on this project has been deferred pending availability of funds. Since our current priorities place this work after the IFC Shelter, the Museum Roof and the Post Office/Courthouse, it is unlikely that work will begin on the Community Center before fiscal year 2003-2004 at the earliest.
· Fire Station # 3 Ramp Repairs. Completed this year. Project Managers: Harold Harris, Contract Construction Manager and Forrest Heath, Buildings Program Supervisor.
· Fire Station # 4 Roof Repairs: This roof replacement was completed during April 2002. Project Manager: Bill Terry, Internal Services Superintendent.
· Fire Station #5, completed except for punch list items and completion by NCDOT’s
contractor of the reconstruction of Bennett Road. Project Manager: Robert
Bosworth, Deputy Fire Chief.
· Fire Training Facilities Capital Maintenance: This project was completed in March 2000; however, we have not been able to use the burn rooms for training fires due to a continued problem with cracking concrete. We have recommended a follow-up project to install heat shield tiles in the burn rooms. The estimated cost of this work ranges from $50,000 to $70,000 depending on the area to be protected. An application for grant funding is pending. Project Manager: Bill Terry, Internal Services Superintendent.
· Fordham Boulevard Sidewalk: This project will go out to bid as soon as DOT completes its review of the plans. Sidewalk to run from Days Inn to the corner of Elliot Road. Project Manager: Tom Bick, Surveyor, Project Coordinator
· Hargraves Center/A.D. Clark Pool Capital Maintenance: The construction contract has been awarded to O.C. Mitchell Jr., Inc. The notice to proceed was issued at the pre-construction meeting on April 22, 2002. Project Manager: Forrest Heath, Buildings Program Supervisor.
· IFC Shelter Capital Repairs: Work on this project has been deferred pending availability of project management staff. The deterioration of this building is accelerating. We have reordered our priorities and placed this work ahead of other projects. We expect to begin working on this project early in fiscal year 2002-2003. Due to the nature of the repairs on this building, we do not plan on using an architect to prepare plans and specifications. The only technical assistance we envision at this time is for assistance in designing some aspects of the roof repairs. We will execute this project with the Town’s project manager acting as the general contractor. We will subcontract with a roofing contractor, a painting contractor and other contractors as needed to complete the work. Project Manager: Forrest Heath, Buildings Program Supervisor.
· Jones Ferry Road Park/Ride Lot: Pre-construction meeting held May 3, 2002; completion anticipated this fall; Project Manager: Rick Hannegan, Assistant Director of Transportation.
· Library Capital Maintenance: This project includes a complete interior painting and some exterior concrete repair. This work was completed during April 2002. Project Manager: Forrest Heath, Buildings Program Supervisor.
· Lindsay Street Public Housing renovation: Completed this year. Project manager: Glenn Davis, Assistant Director of Housing Department.
· Linear Park: Design work well underway, easement acquisition on-going and various State and federal permits pending. Project Manager: Bill Webster, Administrative Analyst.
· Lower Booker Creek Greenway: Close to completion. Project Manager: Bill Webster, Administrative Analyst.
· Museum Roof Repairs: We are experiencing chronic roof leak problems at the Chapel Hill Museum. We are requesting funds for an installment financed roof repair project in fiscal year 2002-2003. Project Manager: Bill Terry, Internal Services Superintendent.
· Police Station Capital Maintenance: Work on the Police Station project is nearing completion. Project Manager: Major Tony Oakley, Police Administration.
· Post Office/Courthouse Capital Repairs: Work on this project has been deferred pending availability of funding. As an interim measure, the exterior painted areas were repainted this year.
· Pritchard Park: Work by conceptual design committee on design of art garden and proposal for cooperation with Siena Hotel are completed, and negotiations with Siena management have begun. Project Manager: Bill Webster, Administrative Analyst.
· Pritchard Park Public Housing Renovation: Contract about to be executed. Project Manager: Glenn Davis, Assistant Director of Housing Department.
· Public Works Improvements: Several elements of this project were completed this year, including three equipment storage buildings, one employee locker room/break room building, addition of overhead storage, and addition of one fire escape. Remaining work includes safety improvements to the garage lube pit and the truck washing facility. Project Managers: Harold Harris, Contract Construction Manager and Forrest Heath, Buildings Program Supervisor.
· Public Works and Transportation Relocation: Land for new Public Works facility purchased on Millhouse Road. Currently negotiating to purchase additional parcels for relocated Transit facility. Anticipate hiring a consultant to assist with space needs assessment, site analysis and conceptual design in fiscal year 2002-03. Project Manager: Curtis Brooks, Landscape Architect and Rick Hannegan, Assistant Director of Transportation.
· Southern Community Park: Conceptual design completed and proposal for phasing to be presented to Council this spring. Project Manager: Bill Webster, Administrative Analyst
· Town Hall Capital Maintenance: The two most significant elements of this project are roof repairs and carpet replacement. Due to lack of funds, this project has been deferred.
· Town Hall Emergency Generator: The early evaluations of this project under-estimated both the cost and technical complexity of the work. The project was initially deferred pending revision of the budget estimate. The project was deferred a second time in order to contract for design assistance from a qualified electrical engineering firm. Due to recent budget shortfalls affecting the entire Capital Improvements Budget, it has been deferred again.