City Council To Discuss Risk Management Policy
Future City Projects May Get a Closer Look –
The City Council will discuss adoption of a Risk Management Policy for major Piedmont capital projects at its meeting on Monday, April 1. The meeting begins at 7:30 p.m. in Council Chambers, 120 Vista Avenue.
The City’s Public Works Director will present a revised version of his draft risk management policy, which he presented to the Council in January. Since then, a Task Force on Civic Governance formed by the Piedmont League of Women Voters has developed an alternative risk management policy for the City, which it submitted to the Council for consideration. Both the April 1 Risk Management staff report and the League of Women Voter’s suggested changes are available. Read the staff and League report.
Piedmont currently has no formal process for assessing risks to City finances — and taxpayer pockets — before it undertakes major capital projects. Serious concerns about the City’s lack of thorough assessment and supervision of major projects were initially raised by Piedmont residents after cost overruns in the Piedmont Hills Underground Assessment District cost taxpayers approximately $2.4 million. The City is still in litigation with the engineering firms in an attempt to recover its costs. Problem factors have included:
- Inappropriately engineered plans
- Lack of sufficient oversight
- A contract placing ultimate risk on Piedmont taxpayers in general rather than the beneficiaries of the undergrounding project
- Delayed public information on public costs and cost overruns
- Untimely involvement of the City Council as a whole
- Depletion of funds specifically set aside to improve main arterial undergrounding
- Capital improvement funds (CIP) used to pay for the cost overruns instead of scheduled capital projects
The costly undergrounding project was followed by the proposed Blair Park sportsfield project, which was promised to be funded entirely as a “gift” to the City by the Piedmont Recreational Facilities Organization (PRFO). When the project was dropped by PRFO and the City Council withdrew its approval in April 2011, the City was owed some $250,000 in expenditures, which PRFO has yet to pay and for which there is no apparent deadline. The risk management mishaps to the City of both of these projects are cited in the League of Women Voters’ Task Force Report.
With revenues produced from the sale of properties (Property Transfer Tax) and the recently approved City parcel tax measure, Piedmont finances are in a better position than they have been in recent years to commit to new capital projects, exemplified by plans to move ahead with the long delayed renovation of the Beach and Hampton tennis court projects.
A May 28, 2010 Wiltec Peer Review traffic study, done at the request of the Recreation Department, states many concerns about the various traffic issues of the now defunct Blair Park project. This report, at taxpayer expense, was withheld by City Staff and obtained by a Public Records Act (PRA) request after the project was terminated. Beyond adequate risk assessment, much of which is just historic standard industry practices and yet has been ignored in Piedmont, there must be an active City Policy of open and transparent government that serves all residents equally.
The Wiltec report is at: http://tiny.cc/4u7xtw
The report by the League of Women Voters gives a very succinct set of recommendations for Council to adopt in it’s new Risk Management Policy – see http://www.ci.piedmont.ca.us/html/govern/staffreports/2013-04-01/project_risk_management.pdf. In my time on Council, no other issues engendered more public comment than the PHUUD and Blair Park projects so I ask Piedmonters to give constructive ideas about how to improve this policy by submitting comments to the City Clerk.
I concur with the League that the policy elements of the document need to be strengthened, in particular, open government, conflict of interest and accountability. The timely release of public documents on PHUUD and Blair Park would very likely have exposed the flaws in the projects. PHUUD bid and construction contracts were never shown to Council and subsequent public analysis revealed glaring errors and omissions. The WILTEC traffic study certainly would have led to more traffic analysis prior to the project being approved. Conflict of interest is always a concern in government and adding a clear set of criteria to the risk management policy would improve that process. Finally, with even the best policies, mistakes are made and accountability needs to be addressed, if for no other reason to elicit feedback to improve the process. Piedmont has a performance compensation policy in place to evaluate staff but it has not been implemented since 2008. Biennial evaluations of staff by Council are needed to ensure that the new risk management policy is being rigorously adhered to.