Honorable Mayor and Members of the Hermosa Beach City Council
Study Session of April 20, 2023
Title
FISCAL YEAR 2023-24
CAPITAL IMPROVEMENT PROGRAM STUDY SESSION
(Public Works Director Joe SanClemente)
Body
Recommended Action:
Recommendation
Staff recommends City Council:
1. Review and provide comment regarding the FY 2023-24 Capital Improvement Program (CIP); and
2. Receive and file the FY 2023-24 Capital Improvement Program Study Session Report.
Body
Executive Summary:
As part of the annual budget process, a study session is held to provide an opportunity for City Council and staff to discuss the status of the current fiscal year CIP and the proposed CIP budget for next fiscal year. Final approval of the proposed CIP budget and associated funding is handled through the budget adoption process.
Background:
The study session format provides an opportunity for City Council and the community to discuss and provide feedback on the new or updated projects proposed for inclusion in the Fiscal Year 2023-24 Capital Improvement Program. Project discussions assist staff in refining individual project scopes and funding allocations, where needed, identifying priorities, and calibrating staff capacity with priorities.
Discussion:
The Capital Improvement Program Study Session will include a staff presentation outlining the status and next steps for the City of Hermosa Beach Capital Improvement Program.
Proposed FY 2023-24 CIP Budget
In total, the proposed FY 2023-24 CIP Budget includes 55 projects, of which 51 are projects carried over from FY 2022-23 and 4 are new projects. The new projects, and other recommended project budget adjustments, would increase the CIP by $6,512,844 from $24,296,454 to $30,809,298 (Attachment 1). A majority of the requested increase is to fund high priority, deferred and preventative maintenance, and safety projects including resurfacing, sidewalk repair, sewer improvements, and additional Pier structural inspections. The CIP is one of the many components of the City’s budget and staff is working through the department budget requests and will have a full picture of available funding in advance of the budget study session. Attachment 2 details the Five-Year CIP for FY 2023-24 through FY 2027-28 and the Unfunded Future Project list.
Engineering Reorganization and Staffing
As part of the FY 2022-23 budget, Council approved three staffing reclassifications and four new positions in the Engineering Section of the Public Works Department. The staffing modifications aimed to align staff capacity with increased demand and a growing backlog of CIPs as the addition of new projects outpaced staff resources (Attachment 3).
The staffing changes, which involved a restructuring of the department, included:
1. Increasing the number of full-time engineers from 8 to 11:
a. Two new Senior Engineer positions for the creation of a dedicated CIP Design Team and a CIP Construction and Permitting Team. These professional licensed engineers bring depth of expertise to advance CIP projects through design and construction and assist the department in mentoring junior staff to further efficiency;
b. One new Associate Engineer to assist CIP Design Team;
2. One new Public Works inspector to further enforce the City’s right-of-way, and assist with the inspection of CIPs, freeing up engineers to better focus on the design and construction of CIPs;
3. Reclassification of the Senior Office Assistant to Engineering Technician to provide greater technical skills and enhanced level of service for right-of-way permit issuance and to reduce public counter workload for engineering staff; and
4. Reclassification of the Administrative Assistant to Management Analyst to refocus the position, providing the necessary level of expertise in budget management, contract administration, and invoicing associated with the current level of CIPs. This is a critical support role for CIP project managers.
Since the beginning of the fiscal year on July 1, staff in Human Resources, Finance, and the City Manager’s Office have aggressively worked to advance these much-needed changes. Although City Council approved the reclassifications and additions in the FY 2022─23 budget, it took approximately six months to successfully recruit for each of these positions. To date, staff completed the reclassifications and filled all but one of the open positions. Recruitment has been a time intensive process during a very competitive hiring market for Civil Engineers, taking six to more than nine months to work through the recruitment process and fill positions. The two Senior Engineers just recently started with the City in January and March of 2023 and recruitment remains open for the Associate Engineer position. Meanwhile, existing staff works to acclimate and train new staff as 8 of the 13 (62 percent) full-time staff are new to their roles in the Engineering Division.
In addition to CIPs, the Engineering Division oversees a wide variety of City programs and services which include, but are not limited to:
• review and issue right-of-way and encroachment permits;
• research and respond to a high level of resident requests by phone, email, and in-person;
• manage utility coordination (SCE, SoCal Gas, AT&T, etc.);
• review and process tree removal requests;
• facilitate Public Works Commission meetings, including staff reports;
• manage the City’s online bid portal PlanetBids;
• process disabled parking space requests, the right-of-way banner program, and memorial benches donation program;
• manage sewer landscaping and lighting assessment districts;
• manage creation of private utility undergrounding districts; and
• partner with community projects (e.g., Leadership Hermosa, Scouts, South Bay Parkland Conservancy, etc.). These activities are important to the function of the City and service to the community, requiring significant engineering staff involvement on a day-to-day basis.
The Public Works Department’s Maintenance and Operations Division also plays a critical role in the successful completion of CIP projects. Maintenance and Operations Division staff work closely with engineering staff during the design process to identify possible efficiencies in maintenance with the construction of new projects, identify and prioritize preventative maintenance activities to allow time for the design and construction of new CIPs, and provide infrastructure troubleshooting and logistical support during construction activities. The Maintenance and Operations Division workload was significant this past year and the past several months were particularly busy as a result of historic levels of rain and wind which required substantial storm-related clean-up to address displaced sand, downed signs and trees, pot holes, and other storm damage. Similar to the impact of unplanned work that can take up a majority of staff capacity on a day-to-day basis, the Maintenance and Operations Division staff had to set aside ongoing planned work to prioritize storm-related work as emergency work.
FY 2022-23 CIP Progress
Staff anticipates that nine projects will either be fully constructed by the end of the current fiscal year, or shortly thereafter, and as many as 16 projects nearing completion of design and anticipated to be constructed next fiscal year, pending unforeseen changes in workload (Attachment 4).
Completing construction of the City Park Restrooms and Renovation Project (CIP 669) remains one of the highest priorities. Staff continues to make significant progress following substantial staff effort involved with the termination of the original contractor, the necessary coordination process with the Surety, work involved to retain a new contractor to complete the project, and on-going daily oversight and construction management to ensure expedient project delivery. At the direction of Council, the completion of Clark Restroom has received the highest priority with that facility currently targeted for opening by the end of April, with other restrooms at South Park targeting completion by May, and the remaining locations by summer.
Two projects that will be completed this fiscal year, which are significant because of public safety and critical infrastructure, are the $3.3 million electrical and structural repairs to the Municipal Pier (CIP 629 and 660). Combined, these projects represent approximately 12 percent of the overall FY 2022-23 CIP budget. The need to repair this important public amenity is a high priority, time-sensitive effort for staff to complete the design, obtain necessary permits, and advertise and advance construction to ensure safety and structural integrity of the Pier. Staff will also coordinate additional inspections in May, which may yield further repair needs.
Capital Improvement Project 549, 601, 606, and 698 are in construction, delivering much needed sidewalk repairs, accessible curb ramp improvements, and minor roadway resurfacing.
Staff remains focused advancing and completing other high priority projects including, but not limited to, sidewalk improvements (contract awarded by Council at its April 25, 2023 meeting), street resurfacing (heightened priority due to the historic rainfall this past winter), planned sewer improvements, and the long-awaited Clark Building Renovation.
Looking Ahead to FY 2023-24
Attachment 5 details an estimated schedule for the delivery of the proposed FY 2023-24 CIP taking into account engineering staff capacity in labor hours versus the time commitment required to advance each project through design and construction.
With a significant number of projects (55) in the CIP, staff workload will remain extremely heavy for the next two fiscal years with little, to no, capacity to take on new projects. This trend is anticipated to continue through the through FY 2025-26 as staff continues to work through a backlog of projects carried over from past years and as other priority maintenance projects are likely to be identified in the future.
The dates in the schedule are tentative and subject to delay as a result of any future unplanned work or as other Council priorities are identified through the year. Requests to advance one particular project over the other will have a direct impact on the timing of other projects. Staff recommends a renewed focus prioritizing deferred maintenance and safety projects during FY 2023-24, such as sidewalks, sewer, and paving, over enhancement projects. Continued investment in these areas will help reduce future maintenance and capital costs in the future. At this time, staff aims to complete two paving projects in FY 2023-24. Staff recommends that resurfacing remain one of the highest priorities for the upcoming fiscal year, in order to address the unanticipated increased rate in pavement deterioration experienced during this past winter’s storms. As a result, the proposal includes a substantial increase in the paving budget.
Staff moved some projects to the Unfunded Future Projects category, awaiting funding on a future budget cycle. Additionally at the CIP Study Session, Council can take into consideration whether other projects should be delayed until a future fiscal year due to prioritization.
As a reminder to City Council and the community, there are several upcoming meetings in which the Capital Improvement Program and Preliminary 2023-24 Budget will be discussed prior to final adoption. The public is invited and encouraged to participate or provide feedback in advance of each meeting:
• May 15, 2023 -Posting of the 2023-24 Preliminary Budget
• May 31, 2023-Study Session: 2023-24 Preliminary Budget
• June 13, 2023-Public Hearing: Adoption of 2023-24 Budget
General Plan Consistency:
This report and associated recommendation have been evaluated for their consistency with the City’s General Plan. Relevant Policies are listed below:
Goal 1. A high degree of transparency and integrity in the decision-making process:
Policies:
• 1.1 Open Meetings. Maintain the community’s trust by holding meetings in which decisions are being made, that are open and available for all community members to attend, participate, or view remotely.
• 1.2 Strategic planning. Regularly discuss and set priorities at the City Council and management level to prioritize work programs and staffing needs.
• 1.3 Priority-based budgeting. Utilize priority-based budgeting to ensure funding allocations are consistent with the priorities set by the community and City Council
• 1.4 Consensus oriented. Strive to utilize a consensus-oriented decision-making process.
Goal 2. The community is active and engaged in decision-making processes.
Policies:
• 2.1 Multiple outreach methods. Consistently engage in community outreach through neighborhood forums, social media, the latest technologies, personal interaction, and other methods on a regular basis.
• 2.2 Universal outreach. Utilize diverse methods of outreach that promote public participation and ensure Hermosa Beach events are communicated to all segments of the communities.
• 2.4 Public forums. Host periodic public forums on issues important to the community, facilitating these forums with the purpose of guiding City policy.
Fiscal Impact:
The proposed FY 2023-24 Capital Improvement Program identifies an overall budget of $30,809,298 including $6,512,844 in newly requested funds for the 2023-24 Fiscal Year. The funding is allocated in the following project categories:
• Street + Highway Improvements: $8,873,060
• Sewer + Storm Drain Improvements $5,460,498
• Park Improvements: $4,105,232
• Public Building + Ground Improvements: $12,370,508
Attachments:
1. FY 2023-24 CIP Summary Sheet
2. FY 2023-24 5-year CIP and Unfunded Future Projects
3. FY 2022-23 Public Works Engineering Organizational Chart
4. FY 2022-23 CIP Status
5. FY 2023-24 CIP Tentative Schedules
Respectfully Submitted by: Joe SanClemente, Public Works Director
Noted for Fiscal Impact: Viki Copeland, Finance Director
Approved: Suja Lowenthal, City Manager