COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

Project Management Funding - Facilities Development

 

SUBJECT/PROPOSAL/REQUEST:

Authorization to change how the Office of Facilities Development is funded. 

 

STAFF CONTACT(S):

Tucker, Foley, Davis, and Letteri

 

 

LEGAL REVIEW:   Yes

 

AGENDA DATE:

August 5, 2009

 

ACTION:               INFORMATION:   

 

CONSENT AGENDA:

  ACTION:   X          INFORMATION: 

 

 

ATTACHMENTS:   No

 

REVIEWED BY:

 

BACKGROUND:

In 2005, the Office of Facilities Development (OFD) was established to provide general oversight and execution of the County’s Capital Improvement Program, including school construction.  The need for the office was the result of the growth in both the volume and complexity of the capital program.  Currently, for example, OFD is directly responsible for managing the design and/or construction of more than 38 active projects with total commitments of over $40 million.

 

The office is comprised of a Director, an Administrative Assistant, a Capital Program Manager (vacant), five Project Managers and two Project Inspectors.  Two of the Project Manager positions are outsourced and engaged as “contract employees”.   OFD also currently utilizes 50% of the time of three Building Inspectors employed with Community Development to perform project inspection services.  

 

OFD’s current budget for costs associated with operations ($658,002) is funded from the General Fund, except for the costs associated with the Capital Program Manager position ($106,238) and the two contract employees ($195,506) which are charged directly to applicable projects in the Capital Fund.

 

STRATEGIC PLAN:

3.  Develop Policies and Infrastructure Improvements to Address the County’s Growing Needs.

 

DISCUSSION:

As one of the measures to address the current budget challenges and after review of best practices from other localities, staff is proposing to change how OFD is funded.  The proposal is to charge direct project management expenses incurred by OFD for a project to that project’s funding in the Capital Fund.  In addition, staff proposes that the employment status of the two “contract employees” be changed to permanent FTE status and that 50% of the salaries of the three Project Inspectors from Community Development assigned to OFD be transferred to OFD.

 

The work load and demands of OFD are directly proportional to the volume of approved projects in the Capital Improvements Plan (CIP).  Overall growth in the CIP has created challenges for OFD and the need to outsource project management services.  Despite recent reductions in the volume of CIP projects, OFD anticipates a continuing need to supplement its project management staff to effectively manage current and future project loads. 

 

A survey of similar municipalities and school districts, as well as UVA, has shown that their project management costs are 4 to 6% of total project costs.  Comparable services secured privately would cost 6 to 7%.  OFD’s current personnel costs are approximately 2 to 3% of the adopted CIP.  In addition, surveys indicate that the typical ratio of Project Managers to assigned projects is approximately 1 to 3, depending on the size and complexity of the projects.  OFD’s current ratio of managers to projects is 1 to 7.6.   

 

To more directly allocate costs, accommodate staffing needs, and more closely match staffing levels to the project volume in the CIP, staff seeks authorization to charge direct project management costs to the Capital Fund rather than to pay these costs from the General Fund.  Capital project budgets would include an appropriate “Project Management Fee” line item to fund OFD charges.  Adjustments to OFD’s staffing levels would be driven by the relative activity in the CIP.  Conversion of the two contracted employees to permanent status would a) reduce the County’s costs associated with privatized project management services; b) ensure retention of trained/developed staff; and c) avoid inconsistency in the quality and effectiveness of project management services.

 

BUDGET IMPACT:

Approval of this item would have no overall impact on the County’s budget.  Revenues to support project management operations in OFD, including the funding for Community Development employees being used by OFD, would be funded by the Capital Fund rather than the General Fund.  Since current capital budgets do not include a Project Management fee component, it would be necessary to utilize savings from current projects for FY 10; capital budgets beyond FY 10 would include a project management fee component. 

 

Annual costs associated with privatized project management services would be reduced with the conversion of contract employees to regular FTE’s. 

 

RECOMMENDATIONS:

Staff recommends that the Board:

 

 

Return to consent agenda

Return to regular agenda