Review Request for Proposal Requirements for Building Inspection, Electrical Inspection, and Land Use Planning Division Professional Services

The purpose of this case is to seek City Council feedback on extending the requirement to request new proposals for professional services within the Community Development to the end of 2015, rather than within 2014.

The Community Development Department currently has three (3) contracts for professional services to balance staff and service level. These professional services are intended to supplement City Staff without the need to add an additional full-time employee, based on service levels. Each of these services provided ensure adequate service delivery by supplementing Staff on an as-needed basis.

The City's Professional Services Policy states that the City shall issue Requests for Proposals every three (3) years, with the ability of the City Council to extend that to a total of five (5) years. To the extent possible for consistency purposes, Staff would like to discuss extending the request for proposal process to the full five (5) years allowed under the policy. There is a cost in Staff time to prepare, review, and implement requests for proposals. There is also the potential for minor disruptions in service delivery if a new firm is selected during a transition period.

This topic report is intended to introduce the topic of requests for proposals within the Community Development for professional services to frame future cases for consideration.

Building Code Administration

The City contracts with Inspectron, Inc. for building inspections and plan review services. The current contract was executed in 2011. Inspectron charges a flat-rate of $50 per hour for these services. There is no request by Inspectron to amend these rates. For all of 2012 and a portion of 2013, Inspectron additionally provided the State-required Building Official for the City. Inspectron has successfully completed the obligations of the contract, and is able to provide twenty-four (24) hours of service per week at the request of the City. Per the approved contract, the City is not obligated to provide a minimum amount of hours. In other words, if there is not the demand for the service, the City does not have to schedule hours and can maintain the existing contract. The contract is auto-renewing, with cancelation provisions included within the contract (45 days), with no minimum hours guaranteed by the City.

In a cursory review this summer, there were multiple firms providing similar services that would be interested in submitting a proposal for future consideration, but did not currently have the capacity to take on additional obligations unless a long-term contract were provided. If the City Council desired to request new proposals, Staff would anticipate multiple proposals.

The 2014 Budget includes a full-time Building Inspector. At that time, the Inspectron contract could be used on an as-needed basis in the event that service levels demands exceed available staffing.

Alternatives related to this contract include:

1. Continue the contract in its current form and request new proposals at the end of 2015 (extended professional services policy)
   1. Staff suggests the end of 2015 in order to be ready for the 2016 building season rather than making a change mid-year.
2. Request new proposals as soon as reasonably possible in 2014 (base professional services policy)
   1. Under this scenario, Staff would suggest requesting proposals as soon as possible in order to have a decision made and contract in place by May 1.
3. Eliminate the use of contracted services for building code administration and rely on internal Staff only
   1. Regardless of future recruitment, Staff sees value in a balance of internal Staff and contracted services to deliver these services.

Electrical Code Administration

The City contracts with Tokle Inspections, Inc. for Electrical Code administration. The contract is auto-renewed, with cancelation provisions included in the contract (30 days) with no minimum number of hours guaranteed by the City. The contract was executed in July, 2010, so a decision does need to be made soon on this contract, as the building season for 2013 has closed out. Communities can choose to defer to the State of Minnesota to administer the Electrical Code or administer the Electrical Code locally. While a majority of communities defer to the State of Minnesota to administer the program within their municipality (contractors would apply for permits and schedule inspections through the State), Ramsey elected in administer the program locally in 2011, as a number of other municipalities do the same. The City has generally found good success in this approach, and falls in line with the City's Strategic Goal to have a centralized permitting center.

Tokle Inspections collects 75% of the revenue collected for electrical inspections in exchange for these services. The remaining 25% is retained by the City to cover costs to administer the program (permit entry, scheduling, etc.). Tokle Inspections had previously requested (informally) consideration of an 80%/20% split (this split appears closer to the industry standard for the area). However, Tokle Inspections has noted that the current revenue split is acceptable at this time, and is not requesting formal consideration for this amendment. The fiscal impact to the City of this amendment would be made would be approximately $2,000 to $4,000 in reduce revenue annually (which is used to cover administrative costs) depending on permit levels and types.

Staff is aware of at least one (1) other firm interested in submitting a proposal for these services if the City requested new proposals.

Alternatives related to this contract include:

1. Continue the contract in its current form and request new proposals at the end of 2015 (extended professional services policy)
   1. Staff suggests the end of 2015 in order to be ready for the 2016 building season rather than making a change mid-year.
2. Request new proposals as soon as reasonably possible in 2014 (base professional services policy)
   1. Under this scenario, Staff would suggest requesting proposals as soon as possible in order to have a decision made and contract in place by May 1.
3. Return administration of this service to the State of Minnesota
   1. This would not seem the preferred alternative given the strategic goal to establish a centralized permit center, although it would reduce a portion of current administrative workload.

Long Range Planning and Zoning Administration

The City contracts with Stantec, Inc. (formerly Bonestroo) for long range planning and zoning administration supplemental professional services. The contract is auto-renewed, with cancelation provisions provided within the contract (30 days) with no minimum number of hours guaranteed by the City. Stantec provides plan review services for land use applications as needed. Additionally, Stantec provides policy analysis and development (zoning amendment and policy document preparation) on an as-needed basis in order to balance service level demands and City Council priorities.

Stantec charges the City a rate of $93 per hour for these services, but is requesting a 3% increase. The requested rate for 2014 would then be $96. Staff finds this rate fairly competitive, with a wide range of rates and individual/specific services provided. It is possible that a firm may propose a lower rate; however, other factors such as distance of office and full spectrum of services are also part of the equation. The 2014 budget for these services is $20,000. The increase in the rate would not require an additional cost to the City, rather slightly reduce the number of hours to be used. Staff would anticipate multiple firms responding to any request for proposal.

Specific to this service, Staff would recommend consistency for this service over the next one (1) to two (2) years as the City reviews regional policy updates currently being developed that will serve as the foundation for the City's next Comprehensive Plan Update. This service will be necessary in order to provide background, technical analysis so that Staff can focus more on policy development.

Alternatives for this contract include:

1. Continue the contract in its current form and request new proposals at the end of 2015 (extended professional services policy)
   1. Staff suggests the end of 2015 in order to be ready for the 2016 building season rather than making a change mid-year.
2. Request new proposals as soon as reasonably possible in 2014 (base professional services policy)
   1. Under this scenario, Staff would suggest requesting proposals as soon as possible in order to have a decision made and contract in place by May 1.
3. Replace this service with the use of internships to address peak level demands
   1. This scenario would require further restructuring of the Community Development to address skill set needs (the contract addresses higher-level policy issues).

30 minutes

Costs for these services are include in the 2014 General Fund Budget (accounts 191.6315 and 240.6315), and largely funded through revenue collected with Building Permits and Land Use Applications.

Development Services Manager
Building Official

Staff desires consensus to direct Staff to request new proposals for professional services in the Community Development Department (Building Code Administration, Electrical Code Administration, Long-Range Planning and Zoning Administration) at the end of 2015 to have new contracts in place in 2016.