Apr 8 2013

City Council Ponders Risk Management Policy for Major Projects

City’s Proposed Policies Get Tough Review-

Risk management policies for future, major Piedmont projects sparked a wide-ranging, sometimes argumentative but ultimately conciliatory discussion at the Monday, April 1, City Council meeting. In the end, the Council  supported the policies proposed by Public Works Director Chester Nakahara for “non-routine” projects costing over $300,000,  but also asked him to consider numerous changes recommended by speakers at the meeting.  A final version of the policy document is to be brought back to the Council at a date to be determined.

In an effort to protect the City from unnecessary risk, Nakahara’s 8-page policy document lays out a step-by-step process of checks and reviews, from the time a project is first proposed, through initial cost estimates and evaluations, to project design, bid award, construction, inspections and completion.

Piedmont League of Women Voters (LWV) President Julie McDonald, an administrative law attorney, critiqued the City’s document in detail for being “imperfectly drafted” and difficult for the public to read.  She noted that terms used are not defined, and there is a lack of clarity.  She said monthly project reports made to the City Administrator or the Council do not state they will be in writing nor that the public will be kept informed. She also noted that the word “risk” does not appear at all in the document. “There appears to be a studious avoidance of ‘risk’ and ‘risk management analysis’ in the document,” she said. “I want to know why that is so.”

Piedmont resident Rob Hendrickson, a construction law attorney and civil engineer who served on the League’s Task Force on Civic Governance, also criticized the City’s document for being a set of procedures rather than policies.  “These are fine for procedures,” he said, “but they are not policies.” He said a future Council might regret being locked in to such detailed procedures. At the same time, he said the document does not provide for any legal or insurance review. “Where is the report to the Council on legal obstacles (of proposed projects)?” he asked, particularly noting that lack of  such legal review could place risk on the City.

Hendrickson explained it was important to learn from past practices and urged the Council to adopt the League’s proposed one-page set of risk management policies.  He argued that if the Council adopted the City’s draft, the existing processes would continue, and the City would not be protected from liability and risk.  Using the “gift” of the Moraga Sports Field as an example, he said that the “hard cold facts on risk” were not developed. 

Alex Gunst, a landscape architect, professional project manager, and member of of the League task force found the draft policy to be more guidelines for running a job rather than policy on managing risk.

To the dismay of Council members Jeff Weiler and Bob McBain, Hendrickson and other speakers frequently referred to the two recent botched City projects, which generated the need for a risk management policy, namely the Piedmont Hills Undergrounding project, which cost City taxpayers $2.5 million in cost overruns, and the failed Blair Park sports field project, which cost taxpayers an estimated $500,000 in staff time and expenditures. When MacDonald mentioned the problem of not providing the public with timely information from an additional traffic consultant, Weiler said he did not want to “rehash” Blair Park, and McBain at one point interrupted McDonald to ask her,  “Do you think we’re trying to hide something?”

Regarding the Piedmont Hills project, Hendrickson said, “No one looked at the big picture. Why was the City the contracting agency (for the project)? As for Blair Park, there was no requirement for professional design liability insurance. No one looked at this.  It was a big omission.”  As an example, he pointed to a potential risk of a hillside collapse becoming the responsibility of the City.

Rick Schiller, concerned about information being kept from the public, noted a 2010 traffic advice letter paid for and obtained by the City that was never made public during the Blair Park/ Moraga Canyon environmental hearings.  He urged that policies be written guaranteeing public access to information and precluding staff from concealing information relevant to public projects. 

Tim Rood, licensed architect, certified city planner, and member of Piedmont’s Budget Advisory and Financial Planning Committee, stated he had worked with several cities to develop policies.  Rood noted the draft procedures would allow a project to get stuck at the City Administrator or closed session level.  Although not a member of the LWV task force, he called for the Risk Management Policy to include the LWV recommendations, especially the omitted section on accountability.

Council member Margaret Fujioka asked how the draft document had evolved, learning that Council member Weiler had originally drafted it, and  it was reviewed by Nakahara and City Engineer John Wanger.  Fujioka suggested that staff look at how other cities handle risk management.   Council member Garrett Keating proposed the City adopt both the League’s one-page set of risk management policies and the City’s procedures. His suggestion was not followed.  Mayor John Chiang said he wanted to make sure that the City’s proposed policies are already in effect and being followed. Although there has never been a written City policy or procedure document,  Nakahara assured him they are in effect, and he is adhering to them.  The Council agreed to wait to adopt the proposed policies, with the proviso that there be “some fine tuning” and the policy be reported back “in coming weeks or months.”

Read the City and LWV Risk Management Policy drafts

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