"The best-laid plans of mice and men often go awry ..." -- "To a Mouse, on Turning Her Up in Her Nest with the Plough" by Robert Burns
Would Robert Burns have written that if he had a "Risk Management Policy and Procedures for Major Capital Improvement Projects" in place?
Hard to say, but Piedmont now has one, recently adopted by the City Council after a year of comment and revision. Development of this new policy was a recommendation of the Piedmont League of Women Voters' Task Force on Open Governance, convened in 2010 after the Piedmont Hills Undergrounding Project revealed fundamental flaws in the city's management of that project. The document consists of policy statements about governance and risk management and a detailed procedure for project management that is to be followed for public and public-private projects.
The policy applies to nonroutine projects in excess of $300,000, public and public/private, so many public works projects such as street maintenance, sewer rehabilitation and facility maintenance are exempt. The procedure consists of explicit requirements for project inception, team formation and project design, award and construction. The complete policy can be reviewed at http://www.ci.piedmont.ca.us/html/govern/staffreports/2014-01-06/project_risk_management.pdf.
A key element running through the procedure is the "determination of balance" -- checkpoints in which project cost estimates developed by city staff are compared with available funding for the project.
The first determination is done by staff, and if balance is found, staff must seek authorization from City Council to hire a consultant for implementation of the next phases. As complexity and detail are added to the project, multiple determinations of balance between staff and consultant cost estimates are made and if balance is found again, council authorization is requested to move onto the next phase. Council authorization will occur at a public meeting so the public will be aware of project progression. And it is at these checkpoints that the formal risk management analysis of the project and how each risk is proposed to be mitigated or managed is presented to the public. Cost and risk are to be estimated at each checkpoint.
For public/private partnerships, it is not clear how these determinations of balance are to be conducted. For public/private projects, the procedure stipulates: "If donations are anticipated for the project, (the city will) enter into an agreement with the private party proponents that specifies how the donations for the project are to be collected, held, and disbursed for the project development."
That makes sense, but do all private donations have to be in hand at the time of the determinations of balance? That has not been the practice -- project approval usually precedes fundraising -- so this area of the procedure needs further clarification.
So can mice and men rest easy now that Piedmont has this policy? Probably not, as no one is perfect and while we have capable staff, as someone said at the meeting, "trust but verify." Perhaps the best way to achieve that is through vigorous application of the first policy of the document: "Open Governance: The City's management of major capital projects shall be conducted in a manner that is open and transparent to the Piedmont residents. Timely, regular and written public reporting shall be required for all key checkpoints."
The cost overruns of the Piedmont Hills undergrounding project occurred during the construction phase with the discovery of extensive bedrock, but could the overruns have been prevented if bid documents for the lowest bidder showing zero contingency for bedrock been made public early on? Likewise, had the undergrounding contracts been shown to City Council and the public at the time of project award would the language holding the city liable have been discovered?
Under the City Charter, is it the city administrator's responsibility to conduct this level of oversight or see that it is done. Council does hold the city administrator accountable but until last month, the last performance review of that position occurred in September of 2009, just months before the news of the overruns came to light. Simple public disclosure of project documents during the risk management process envisioned by this new policy can't help but assist council with its oversight role.
This new policy is not the end of the story. Other recommendations for risk management and fiscal oversight by the City Council's Audit Subcommittee and Municipal Tax Review Committee are available at http://www.ci.piedmont.ca.us/committees/ccasc/recommendation_matrix.pdf.
Garrett Keating is a Pied- mont City Council member.