Jan 10 2012

OPINION: League of Women Voters Task Force Takes Council To Task on Blair Park

Task Force disappointed Council did not adopt  recommendations –

Dear City Council:

The League of Women Voters Task Force was pleased when the City Council, at its November 21, 2011 meeting, appeared poised to adopt recommendations from the Task Force and Audit Subcommittee that would assure improved risk management and project management for major City projects.  The Task Force is disappointed, however, that the City Council stopped short of implementing these recommendations, and is now in the process of moving ahead with Blair Park, the largest public works project the City has ever undertaken, without the benefit of policies and procedures that would implement these recommendations.

We are concerned that the City Council is repeating several of the same basic mistakes made in the Piedmont Hills undergrounding project.  Please note that the Task Force takes no position on the decision to proceed with the Blair Park project itself, or to approve the EIR.  Our comments are solely intended to address the City’s processes in reaching those decisions.

The Task Force believes that the City needs to address the following deficiencies with regard to the Blair Park project:  1) inattention to contract documents; 2) failure to perform a meaningful risk management assessment; and 3) failure to timely utilize independent professional project management services.

Contract Documents.  The City appears to have outsourced the preparation of all contract documents to the project proponents, without any meaningful City review or input on basic legal and contract issues applicable to all construction contracts.  The proposed Lease Agreement appears to have been modeled on the Havens School/Webcor lease-leaseback agreement which has no applicability to this project whatsoever.  For example, schools must prepare detailed plans approved by the DSA, while here the project proponents are responsible for all design, and yet the contract documents fail to address the issue of design responsibility.  The Task Force also believes that the lease (and ordinance) as proposed is subject to legal attack as being unlawful under the State’s Contractor’s Licensing law.  As a result of these deficiencies, the City Attorney decided to pull the proposed lease with the project developer from consideration at the December 5, 2011 City Council meeting to allow time for amendment to address these and potentially other issues.  The fact that the contract documents came up for a vote with these critical deficiencies demonstrates that there was no meaningful review prior to decision-making.  That is precisely what caused problems on Piedmont Hills.  The Task Force believes it is critical that the contract documents be reviewed by experienced construction law counsel before further consideration by the City Council.

Risk Management.  The City does not appear to have performed any meaningful, independent risk management assessment to review what could go wrong with the project and determine whether the City is at risk.  In this connection, it appears that the issue of professional liability for design has been completely overlooked.  The project involves construction of large (over 30’ tall) retaining walls directly behind numerous residences and which must be designed for significant seismic loadings due to the proximity of the Hayward Fault.  There is no requirement anywhere in the contract documents that requires the developer to prepare a final, detailed engineering report and design, and provide adequate professional liability insurance limits to cover the design.  It is important to note that detailed design was not included in the contractor’s scope (or bond), and just as occurred on the Havens School project (where the contractor was paidextra to remove unforeseen buried oil tanks), the contractor here would be entitled to additional change order payments to deal with unforeseen subsurface conditions that arise which are not set out in the detailed design.  These costs would necessarily not be included in the cost estimates because they arise out of conditions which are  not in the defined scope of work, and would represent real exposure to the City (indeed, Mr. Ball has stated that his company would only cover unforeseen conditions “within reason”). The fact that these issues appear to have been completely overlooked in the proposal being considered indicates to us that no meaningful risk management assessment was in fact performed.  We believe that an experienced risk manager could assist the City in identifying and managing risks of this sort.

Project Management.  It appears that the City has misunderstood the Task Force’s recommendations regarding the need for professional project management services on large and complex projects.  TheTask Force believes that utilizing an independent project manager earlier in the process to prepare the project terms and related contract documents would have avoided the types of issues that have arisen recently.  Having a project manager for construction is only the second half of the solution.  We urge the City to hire an independent project manager immediately, so that the project may be structured to protect the City and avoid problems like those identified here.

In summary, the Task Force urges the City Council to immediately take the steps needed to professionally manage the Blair Park project including:  performing a meaningful risk management assessment, engaging an independent project manager, and consulting experienced construction law counsel.  It is not enough to outsource those tasks to the project proponents.

League of Women Voters Task Force on Undergrounding
Alex Gunst
Mary Heller
Rob Hendrickson
Al Peters
Kathleen Quenneville

Editors Note: The opinions expressed are those of the authors and do not necessarily represent the opinions of PCA.

2 Responses to “OPINION: League of Women Voters Task Force Takes Council To Task on Blair Park”

  1. The Conditions of Approval, carefully and thoroughly debated during the last hour of the December 5 city council meeting, require that before a single shovel hits the ground, the full price of the park, guaranteed by Webcor, must be in escrow.
    Those who were not in attendance at that time, may try to see if they can get a recording from KCOM to see for themselves.

  2. Thank you to the Task Force for your excellent recommendations, which I sincerely hope will be adopted by the City Council.

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