2006-04-05 CCPD PacketSOUTHLAKE CRIME CONTROL AND PREVENTION DISTRICT
112% SALES TAX REPORT
2005-06 Collected Budget Balance
Bud et to Date Balance Percent
$ 3,405,532 $1,338,086 2,067,445 60.71 %
Fiscal Year
Percent
Fiscal Year
Percent
Fiscal Year
Percent
2003-04
increase/
2004-05
Increasel
2005-06
Increase!
MONTH
Actual
(Decrease)
Actual
(Decrease)
Actual
(Decrease)
October $201,663
11.79%
$208,809
3.54°%
$461,119
120.83%
November 211,639
14.29%
235,483
11.27%
258,824
9,91%
December 282,041
446°%
336,549
19.33%
371,963
10.52%
January 205,901
16..760/6
221,418
7,54°%
246,180
11.18%
February 160,759
2.41%
205,904
28.08%
-
-100,00%
March 235,696
7.43%
295,147
25.22%
-
-100.00°%
April 218,828
6.94%
246,608
12.69%
-
-100.00°%
May 211,747
-4.62°%
245,721
16.04%
-
-100,00°%
June 249,035
7.70°%
280,578
12.67%
-
-100.00%
July 204,586
-0.33%
220.410
7.73%
-
-100.00%
August 205,111
5.06%
252,803
23.25%
-
-100.00%
September 246,122
8,67°%
276,077
12.17%
-
1 -100.00%
$3.025.507
$1,338.086
TOTAL $2.633.128
1
1
Three Year Revenue Comparison
by Month
$500,000
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
O -,qp Qm 0 PQ 0 Ir 5,
❑ Fiscal Year 2003-04 ® Fiscal Year 2004-05 0 Fiscal Year 2005-06
Actual
dge
Actual
Estimated
(budget-est.)
o%
2004-05
2005-06
2005-06
2005-06
D-dierence
Change
r
$ 208,809
225.513
$
461,119
$
461,119
$
235,606
130.60°%
yer
$ 235,483
254,322
$
258,824
$
258,824
$
4,502
2.43%
ter
$ 336,549
$ `
, 363,473
$
371,963
$
371,963
$
8,490
3.00°%
r
$ 221,418
$
,1
$
246.180
$
246,180
$
7,049
4.00°%
y
$ 205,904
$
, 76
$
-
$
222,376
$
-
0.00°%
$ 295,147
$
. 318,759
$
-
$
318,759
$
-
0..00%
$ 246,608
'
266,337
$
-
$
266,337
$
-
0..00°%
$ 245.721
; $
331,272
$
-
$
331,272
$
-
0.000%
$ 280,578,
$
322,665
$
-
$
322,665
$
-
0.00°%
$ 220,4,10
$
253.472
$
-
$
253,472
$
-
0.001yo
$ 252�803
$
290,723
$
-
$
290,723
$
-
0..000%
ber
$ 27r,077
$
317,489
$
-
$
317,489
$
-
0.000/0
TOTAL
$ U15,507
$ 3,405,532
$
1.338,086
$3,661.178
$
255,647
City of Southlake, Texas
afety
Date: March 30, 2006
To: Crime Control and Prevention District Board
From: Wade Goolsby, Chief of Police
Ref: Architectural Contract
Purpose:
The purpose of this memo is to explain the differences in construction delivery methods
and in particular, between the Construction Manager Agent and the Construction
Manager at Risk. This is provided so that the best decision can be made for the City of
Southlake in the design and construction of a new Public Safety facility. It is our
preference that we utilize the Construction Manager at Risk for this project.
Discussion:
Traditional Approach — Competitive Bid
Historically, public organizations have selected architects and engineers (AEs) based on
qualifications and general contractors (GCs) based on competitive bids. The rationale for
the difference in selection is that it is difficult to define and measure the experience,
wisdom or creativity of AEs. The AEs also typically represent their owner's interests
with a fiduciary responsibility so owners avoid bidding and look for the most qualified
firm instead of the least expensive.
On the other hand, construction has been considered a tangible product that can be
specified and measured, not a professional service. Therefore, historically, public entities
have purchased brick and mortar by competitive bid. The conventional wisdom is that
bidding construction work gives everybody an equal chance to do business on the public
dollar, prevents favoritism, and at least gives the appearance of the least cost.
The overall organizational structure of the traditional process is shown below.
Owner I
The overall
Design Contract Documents Bid $ Construction
In the traditional competitive bid process, the design of the facility is completed first.
The contract documents are then created from the design and upon completion, the
project is bid. Bids are received from a general contractor and selection of that contractor
is based on the low bid unless there is sufficient cause to disqualify that contractor. Upon
awarding the bid, construction begins and the project is built.
In recent years, legislation was passed that allowed public entities to utilize more options
in the delivery of construction projects.
Construction Manager (CM) Agent
The CM Agent is an approach that used by some government owners who select the
construction management organization under a professional service contract. It is a
process that allows an owner to select a CM based on qualifications and make the CM a
member of a collaborative team. In this process, the CM provides advice and budget
estimates during the design, takes bids for construction from multiple prime trade
contractors and then manages the prime trade contractors during the construction process.
Under this process the owner holds the contracts with all prime trades and the CM is in a
professional position working for the owner. The owner is also responsible for the direct
payments to the trades and the CM. It is not unusual for owners and CMs in this
relationship to use a fast -track procedure. When this occurs, the CM may provide a
professional guarantee early in the project. The guarantee generally states that if the
project bids come in over the budget, the CM will work with the architect to reduce the
cost of the project.
The Pros and Cons of CM Agent:
Pros
- Team effort
- Constant budget updates during design
- Considered better value vs. design, bid, build
- Subs selected on criteria vs. low bid
- Owner involved in project
- Owner controls process
- Rarely lien issues
Cons
- Owner time requirements
- Owner executes contracts
- Owner pays subs monthly
- Potential legal disputes with subs
- CM can only perform work if
contract modified
- Bond required on all sub contracts
over $25,000
Under the CM Agent delivery method the Owner is much more involved in the entire
project and generally there is a project manager who specifically tracts the project.
Depending on the Owner's structure and desires, this can be a positive or a negative.
Under this delivery method the Owner controls more details and has more responsibility
than under any other delivery method.
The overall organizational structure of the CM Agent process is shown below.
Owner
The overall project process is as follows:
Design Contract Documents
Bid $i Construction
Bid $I Construction
Bid $ � Construction
Construction Manager at Risk
The CM at Risk is similar to established private sector methods of construction
contracting and is gaining popularity in the public sector. It is a process that allows an
owner to select a CM based on qualifications and make the CM a member of a
collaborative team. In this process, the CM provides advice and budget estimates during
the design, takes bids for construction from multiple prime trade contractors and then
manages the prime trade contractors during the construction process. Under this process
the owner has one contract with the CM, the CM contracts directly with the prime trades,
the CM provides a bonded guaranteed maximum price and delivers the project with less
owner management.
The Pros and Cons of CM at risk:
Pros
- Team effort
- Constant budget updates during design
- Considered better value vs. design, bid, build
- Subs can be selected on criteria vs. low bid
- CM can perform work (must bid)
- Guaranteed maximum price
- CM executes contracts
- CM pays subs monthly
Cons
- Owner less involved
- Can be lien issues
- Oversight of self -performing work
by CM
Under the CM at Risk delivery method the owner is much less involved in the entire
project and generally there is an owner contact, but not a project manager.. Depending on
the Owner's structure and desires, this can be a positive or a negative. Under this delivery
method the Owner controls few details and has less responsibility than under the CM
Agent.
The overall organizational structure of the CM at Risk process is shown below.
The overall project process is as follows:
Design I
Contract Documents �--=>l GMP $ Construction
Under both of the scenarios using Construction Managers, it is in their best interest to
perform well and finish the project with a happy owner since the selection process used
for CMs is not based on price, but on qualifications, recommendations, and reputation.
In summary, each of the three listed options has its strengths and weaknesses. Of course,
there are variations of each and contracts can be modified or adjusted to help compensate
for areas of weakness. The listed information is general in nature and it must be
remembered that the final contract will detail the actual working relationship.
The traditional competitive bid process is characterized by high risk. In this process, the
subcontractor bids are verbally collected in a time frame of a few weeks and there is little
legal support and there are frequent misunderstandings about scope responsibility among
subcontractors and general contractors. In the bidding process subcontractors float high
bids in the early part of the bidding cycle but as the bid deadline approaches, the prices
often drop. In reality, the general contractor (GC) is aligned with the subcontractors,
manufacturers, and suppliers in opposition to the AE and the owner.
The CM Agent helps reduce some of these issues. This process allows the CM to be part
of the design team and provide construction expertise to the design process. The CM is
aligned with the AE and the owner and this eliminates the adversarial position of the GC
as in the traditional approach. The CM serves as an agent of the owner and selects the
subcontractors but does not actually hold the contracts with the subcontractors. The
owner enters directly into contractual relationships with the subcontractors and pays the
subcontractors directly upon approval of the CM. The CM typically performs no work
on the project unless the contract is modified to allow the CM to do so. The positive side
of this process is that (at least in theory) the project is completed at the best price with the
CM responsible for the quality of work in all areas of the project. The negative side of
this process is the amount of work that is directed to the owner. The management of a
multitude of contracts with multiple monthly payments being issued can put a strain on a
small organization.
The CM at Risk uses the same working relationship described above but the CM handles
all of the subcontractors' contracts and payments. The owner only has one contract with
the CM and therefore, one monthly payment related to the construction. In this process,
the CM defines a Guaranteed Maximum Price and has to absorb the cost if the project
exceeds that price. In reality, there is very little risk because the CM is going to define a
price that is easily attainable. The end result is that the owner may pay a little more for
the project than the CM Agent, but the trade off is the work that is passed back to the CM
related to the management of the subcontractors' contracts.
In reality, there is no perfect method to ensure a successful project. Each method has its
flaws and each method relies on the integrity of the parties involved.
It is our goal to complete this project with the best use of the taxpayers' money, resulting
in the best possible quality, in the smoothest, most efficient manner.
Recommendation
Based on the issues with each methodology, and the limitations and experience of the
City in these matters, it is our preference that we use the Construction Manager at Risk
method to deliver the Southlake Public Safety facility.
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