Memorandum

City of Lawrence

City Manager’s Office

                                                         

TO:

David L. Corliss, City Manager

FROM:

Diane Stoddard, Assistant City Manager

Michelle Stevens, Management Intern

CC:

Cynthia Wagner, Assistant City Manager

Jonathan Douglass, Assistant to the City Manager/City Clerk

Charles Soules, Director of Public Works

Dave Wagner, Director of Utilities  

DATE:

January 5, 2011

RE:

Design Fee Guideline for Basic Architectural and Engineering Services

 

Pursuant to the City Commission’s direction, staff has developed design fee guidelines to serve as a guideline for contracting basic Architectural/Engineering (A/E) services.

 

Background

On May 19, 2009, the City Commission held a study session and discussed the topic of the City’s purchasing policy related to the selection of vendors for professional services.  The City Commission requested that staff provide more information about how other cities procure professional services and more information about how other cities take into account cost as a factor in such procurements.  Also, there was interest in the Brook’s Act and federal requirements related to Qualification Based Selection (QBS).

 

Staff provided the results of a survey comparing the purchasing policies for various peer communities on October 13, 2009, with a special emphasis on the Johnson County hybrid QBS policy. After reviewing various methods, the City Commission indicated a desire to utilize the current City’s Purchasing Procedures for contracting professional services with QBS. However, the City Commission requested that staff develop some guidelines regarding consulting fees for such services.

 

Since the discussion in late 2009, city staff has been discussing possible draft design fee guidelines for the City Commission to consider. 

 

Recommended Design Fee Guidelines

Staff has developed a draft design fee guideline policy for the City Commission’s consideration.  The fee guidelines are a compilation of the fee curves from some other agencies, e.g. Shawnee County, City of Lee’s Summit, MO, Community Development Block Grant and American Society of Civil Engineers, and has been utilized informally by the Public Works Department for several years.  The design fee guidelines are meant to only serve as guidelines related to basic engineering or architectural fees. The proposed policy lists basic services that are included in the guidelines as well as services not included in the guidelines. Variance from the guidelines can be justified based upon services above the basic services and/or the complexity of the project.  For example, the design fee for the reconstruction of a water line in a dense area, like downtown, will require more coordination than a linear project in a less dense area. Also, the design for a highly complex project, like a wastewater treatment plant, may result in a higher design fee than a less complex project. Therefore, a final negotiated fee may be above or below the guidelines shown on the schedule due to these circumstances. Additional examples of such circumstances are also provided in the proposed policy. It is anticipated that staff would utilize the guidelines when negotiating services with vendors and the relationship of a proposed fee to the guidelines would be reported to the City Commission when design contracts are being considered. 

 

Staff compiled an analysis of estimated construction costs and design fees for projects dating back to 2006. Additionally, we have plotted these against the recommended design fee guidelines.

 

Based on the results of this graph, staff believes the A/E design fee guidelines are appropriate for the City of Lawrence to implement. In each case where there was a variance from the guidelines, it can be explained by the scope of the project, such as complexity, extent of required public meetings, etc.

 

Pros and Cons of Guidelines

There are both pros and cons associated with adopting a guideline for design fees. They have been summarized in the table below:

 

Pros

Cons

·              Sets a guideline/benchmark for negotiations purposes

·              Has the possibility of raising design fees that would otherwise be below the guideline

·              Has a possibility of lowering design fees that would otherwise be above the guideline

·              Guidelines won’t be able to take every element of a potential project scope into consideration

 

Meeting with the Consulting Community

In accordance with City Commission direction, city staff requested the review and feedback of the proposed design fee guidelines policy from the consulting community. A meeting regarding the fees was held in the City Commission Meeting Room on November 22, 2010. Associates from Black & Veatch, Grob Engineering, Bartlett & West, BG Consultants and Landplan were in attendance. Overall, the firms were very supportive of implementing proposed fee guidelines for basic A/E services. There were concerns that the construction estimates, upon which the fees are based upon, were appropriate in the future given the recent lower construction costs due to the economy. Additionally, those that could not attend emailed their responses to city staff. Staff has attempted to address any concerns or suggestions made by these stakeholders. 

 

Next Steps

It is proposed that negotiated fees will be routinely articulated to the City Commission with reference to the guidelines as the City Commission considers future design contracts. Staff has drafted the following policy, which outlines basic A/E fees, to be incorporated in the City’s Purchasing Policy.

 

Action Requested

Authorize the City Manager to incorporate the new fee guidelines for basic architectural and engineering services in the City’s Purchasing Procedures.