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City Council - 09/19/1995 - Workshop APPROVED MINUTES CITY COUNCIL/STAFF WORKSHOP TUESDAY, SEPTEMBER 19, 1995 6:15-p.m. CITY CENTER COUNCIL/STAFF WORKSHOP Room: Heritage IV, 8080 Mitchell Road COUNCIL1IEMBERS: Mayor Jean Harris, Councilmembers Patricia Pidcock, Ron Case, Nancy Tyra- Lukens, and Ross Thorfinnson, Jr. CITY COUNCIL STAFF: City Manager Carl Jullie, Assistant City Manager Chris Enger, Assistant to the City Manager Craig Dawson, Director of Human Resources and Community Services Natalie Swaggert, Director of Parks, Recreation and Facilities Bob Lambert, Police Chief Jim Clark, Director of Public Works Gene Dietz, City Engineer Al Gray, Director of Assessing ` and MIS Steve Sinell,Director of Finance John Frane, Maxine Brueck, Financial Operations Manager, Council Recorder Barbara Anderson I. CALL TO ORDER The meeting began at 6:35 p.m. II. DISCUSSION ON CONSULTANT SELECTION PROCESS . City Manager Carl Jullie stated the workshop was.being held for the purpose of discussion regarding the City process in selection of consultants for the various areas where the City needed to utilize a consultant rather than staff. He noted John Frane, Director of Finance, would then review the City's purchasing policies, and Maxine Brueck, Financial Operations Manager, was also present to answer any questions the Council might have. Director of Public Works Gene Dietz described the process by which consultants are selected to submit proposals for typical projects. Consultants are invited to submit proposals, which are evaluated by the staff who endeavors to select the most experienced firms available based on the complexity of the proposal. Once this has been done, several of the best candidates are invited to submit more formal proposals, including their proposed cost for services, which influences the selection. He stated consultants are usually paid on a lump sum basis with periodic payments made based upon the percentage of completion of the project. However, this can vary depending on the project, and the type of services provided by the consultants. He explained initially price is not involved in the process until they have selected the firms they wish to submit formal proposals. Once that has been done, the proposal and the price is considered together. Council/Staff Workshop Minutes September 19, 1995 Page 2 Director of Parks, Recreation and Facilities Bob Lambert stated in the instance of Miller Park the consultant encountered unexpected costs, which had not been covered in the original agreement, and the City had paid for those costs. Dietz stated they have compiled a group of consultants which have a high degree of expertise that know what needs the City has and thus the consultants can be used as an extension of City staff. They have used fums until they have a reason not to use them further. Case inquired if staff does a cost analysis to determine if the fees charged by the consultants are in line with fees charged by other consultants for similar services. Dietz responded affirmatively, noting that if a consultant overcharged the City for services, it would be a guarantee of losing any additional business from that City. He stated most firms complete projects in a timely manner and within a reasonable price range; otherwise they would be replaced by a firm that would do that. Pidcock inquired how the City can change the perception held by some firms in the metropolitan area that this was a "closed" process and new firms were not welcome to submit proposals. Dietz responded some firms usually work exclusively for municipalities and others work for private developers, and staff believe that the two cannot be combined, since the interests do not always coincide. It has been found that sometimes developers will force firms to design projects that do not meet municipal standards in the interests of making profits, and staff believed that this was not always the best for the City to employ consultants who might work for private developers at the same time. City Engineer Al Gray stated the private developer has a different perspective than a municipality has because the City is ultimately the agency that would be rebuilding roads or replacing utilities in the future, and the developer is long gone once the development is completed. Dietz stated some municipalities have only one or two firms that do all the consulting work for that particular community because it has been too difficult to have more firms involved. Different firms use different software packages, different codes for the same types of things, etc. It becomes more cost effective to utilize fewer firms and retain the same codes, software, etc. than to be changing these from project to project. Dietz noted most development done in the private sector is done to municipal standards out of necessity and most developers will shop around to find consultants who will do the work within the price range they have established. He noted the City does the inspections for these developments to ensure the standards are being met, and the City has to pay for these inspectors where the private developer does not. Consultants are in a different position because they have the developer paying them and the City is setting the standards they have to meet. Mayor Harris stated the use of consultants achieved the best middle ground possible with room for negotiation. Case inquired if the need for inspectors would be so great if the City had more control. Dietz responded it would increase the costs for the City if there were no inspections done in the long term, or if the City did not include the costs for Council/Staff Workshop Minutes September 19, 1995 Page 3 those inspections in their fees. Dietz discussed the smaller jobs which the City contracted out, such as those for training, water tower supports, software design, etc. He discussed the design components for various projects, and stated consultants were asked to submit a design and from that submission a selection was made. These are the ways in which consultants have been selected by the City in the past. In the issue of whether the City should select local consultants over a larger group, he believed the present pool of consultants was adequate, and increasing it could be both beneficial or detrimental depending on how it was done. He noted the City had attempted to keep those consultants they hire busy and employed to allow them to retain their experienced personnel. It is beneficial to both the consultant and the City to have experienced, knowledgeable personnel available who are familiar with both the municipality and its policies. Gray commented in the instance of surveyors, the City uses its own two-man survey crew, but sends out the data to the consultant who does the CAD work and implements the survey data. He noted every time they change consultants, they change the codes because no two consulting firms use the same ones. He believed it was beneficial to work with a consultant who used the same codes and was familiar with the City's methods and database information. Pidcock commented utilizing the same pool of consultants lent an appearance of having a closed relationship and she wanted to make it appear to be not so closed. Mayor Harris commented that since consultants were used as an extension of City staff it was a very close relationship out of necessity. Gray commented there are a group of consultants that are considered for each project. Tyra-Lukens inquired how the City determined if the costs for consultants were reasonable or within a feasible range. Dietz responded staff looks at the consulting and engineering costs based on the complexities of the project which will impact those costs. He described how this could change from project-to-project depending on the things involved, such as boundaries, assessments, access issues, etc. M. CITY PURCHASING POLICY Finance Director John Frane reviewed the City Purchasing Policy as it presently exists, commenting that Public Improvements must follow the procedures outlined in Chapter 429 of the State laws. State law also requires a sealed bid for purchases over $25,000, and budgeted items are approved by the Council when the budget is adopted. Any additional items which are not budgeted must be approved by the City Council. Purchases which fall into the $400 to $25,000 range require two bids or quotes, and a purchase order is required. If the price exceeds $5,000 a notice is published in the Eden Prairie News. He noted employees with purchasing power are encouraged to purchase from local businesses whenever it is feasible. Purchases under $400 require that the invoices be submitted directly to Accounts Payable. Council/Staff Workshop Minutes September 19, 1995 Page 4 The City is allowed to purchase items via blanket purchase orders that are seasonal in nature, such as sand, salt, blacktop patch, etc., and the City may purchase from the State or County Contract lists of items already bid, such as gasoline, tires, etc. The City may also dispose of excess or used equipment or vehicles through State or County channels. The State does not require the City to obtain bids for professional services, which also includes insurance. 7ullie stated the lower limit of$400 was established last year and he believed it needed to be raised to a$1,000 limit. Staff will pursue this at a future City Council meeting to make this change. This change is being recommended because of the increased demands on staff time and consultant or contractor time to give bids on a $400 project, which is simply not cost-effective. IN. ADJOURNMENT The meeting was adjourned at 7:18 p.m.