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Home My WebLink AboutIR 7769 INFORMAL REPORT TO Ch . COUNCIL MEMBERS No. 7769 �Rrfp, 50P;1'2 To the Mayor and Members of the City Council November 2, 1993 0 Subject: EXPEDITING PAYMENT FOR CONSTRUCTION WORK Contractors for City construction projects have consistently complained about lengthy delays in receiving payment for completed work. In fact, contractors have told City staff that they usually bid a higher cost for City construction projects to compensate for these delays. The Associated General Contractors organization has asked City officials to expedite payment for contract work, where possible. Staff has reviewed payment procedures, and this review has indicated that some relaxation of controls could be introduced without significantly reducing Council's role in monitoring capital expenditures. Moreover, controls on capital expenditures are already in place through State statutes or City ordinances, which provide that: --Funds approved in a Capital Improvement Program must be used for the construc- tion of projects specified in the program; if surplus funds are available, they must be used for projects within the voted purposes of the bonds; --Contracts in excess of $15,000 must be advertised for competitive bids; --The City Council must approve contracts in excess of $15,000. --The City Council must approve contract change orders in excess of $15,000. --No contract may be entered into, nor any change order approved, unless the total funding required has been appropriated by the City Council. With these provisions as the bases, Staff has prepared for City Council review three regulations to streamline the process of payment to contractors. They are: Administrative Regulation C-5, Administrative Approval of Change Orders; Administrative Regulation C-6, Final Payments on Construction Contracts; Administrative Regulation C- 7, Capital Improvement Program Management and Accounting. These proposed regulations institute internal controls and documentation require- ments, while at the same time promoting increased efficiencies and providing time lines. They have been developed with the close involvement of those departments with responsibility for contracting and managing construction projects. OFFICIAL RECORD CITy Srpr FT. WORTH, TI, ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO Ch f COUNCIL MEMBERS No. 7769 P T(M, f oj�p To the Mayor and Members of the City Council Page 2 of 3 X 0 November 2, 1993 rxa Subject: EXPEDITING PAYMENT FOR CONSTRUCTION WORK Administrative Regulation C-5, Administrative Approval of Change Orders, allows for the administrative processing of all construction contract change orders in amounts of $15,000 or less, provided that a) the cumulative total of all change orders for a particular contract does not increase the contract price by more than 25%, and b) appropriated funds are available to cover the cost of the change order. This means that all change orders that meet these stipulations will not be coming to City Council for approval, but will be executed administratively by the City Manager's Office. Administrative Regulation C-6, Final Payments on Construction Contracts, describes procedures for administrative approval of final payments on construction projects that reduce the time period between completion of a construction project and receipt of final payment by the general contractor. This means that final payments for construction projects will not be coming to City Council for approval, but will be processed administratively. In order to provide accountability, at the close of each quarter, staff will consolidate and summarize that quarter's completed and accepted projects in an Informal Report to the City Council. Administrative Regulation C-7, Capital Improvement Program Management and Accounting, establishes procedures for all transfers of capital funds for accounting purposes related to the use of the funds as appropriated. Included with this regulation is a proposed ordinance that defines the levels of management approval that are required for the intradepartmental transfer of funds that have been previously appropriated by the City Council for capital improvement projects. This means that bond fund transfers will not be coming to the City Council for approval, but will be executed administratively according to the requirements of the proposed ordinance. Again, to provide accountability, at the close of each quarter, staff will provide a status report on capital projects to the City Council. An ordinance will be presented to the City Council on the November 9, 1993, agenda which authorizes "Intradepartmental Transfer of Funds for Capital Improvement Projects." This ordinance, upon adoption, will permit the City Manager and Department Heads to transfer funds within a department which have previously been appropriated by the Council. This ability to transfer funds will permit the implementation of the above described Administrative Regulations. OFFICIAL IRECORD CITY SECRETARY �-I D. i ff. WORTH, i 'A ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS — INFORMAL REPORT TO Cl) t COUNCIL MEMBERS No. 7769 Page 3 of 3 f 0 J?r 6 To the Mayor and Members of the City Council November 2, 1993 Subject: EXPEDITING PAYMENT FOR CONSTRUCTION WORK Simplifying the procedures for financing and approving contracts, contract change orders, and final payments through the implementation of these regulations will reduce bureaucratic delays in both construction work and payment for such. This should improve the City's relationship with the construction community and reduce the costs of construction projects. The provisions of this regulation will be communicated to members of the Associated General Contractors and other affected bodies. Additional information will be supplied upon request. Bob Terrell City Manager Attachments - ---------- Of ICIAL RECORD 4 CITY S11CRET1114111y F IIfflfffl, T. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS ORDINANCE NO. AN ORDINANCE AMENDING CHAPTER 2, "ADMINISTRATION", OF THE CODE OF THE CITY OF FORT WORTH ( 1986) BY ADDING SECTION 2-11, "INTRADEPARTMENTAL TRANSFER OF FUNDS FOR CAPITAL IMPROVEMENT PROJECTS" ; PROVIDING THAT THIS ORDINANCE IS CUMULATIVE OF ALL ORDINANCES; PROVIDING A SEVERABILITY CLAUSE, AND PROVIDING FOR AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS. SECTION 1. That Chapter 2, "Administration" , of the Code of the City of Fort Worth ( 1986) , as amended, is hereby further amended by adding a new section 2-11, "Intradepartmental Transfer of Funds for Capital Improvement Projects" , which shall' be and read as follows: "Sec. 2-11. Intradepartmental Transfer of Funds for Capital Improvement Projects. " The following levels of management approval are required for the intradepartmental transfer of funds that have been previously appropriated by the City Council for capital .improvement projects: a. Fund transfers for preliminary and miscellaneous expenditures related to capital projects (subject to City and State regulations governing expenditures and purchases) : $15,000 or less Department Director Greater than $15,000 City Manager b. Fund transfers for award of construction contracts: $15,000 or less Department Director Greater than $15,000 City Manager C. Fund transfers for change orders to construction contracts: $15,000 or less Department Director Greater than $15,000 City Manager d. Fund transfers for projects constructed by City forces: $15,000 or less Department Dir OfFICIAE RECORD CITY SECRETARY FT. WORTH, TES, Greater than $15,000 City Manager e. Fund transfers for changes to projects constructed by City forces, if change increases total project cost to the following amounts: $15,000 or less Department Director Greater than $15,000 City Manager f. Fund transfers from one unspecified center to another within a subfund for accounting and tracking purposes: No dollar limit Department Director 9. Fund transfers to move surplus funds from a completed project to an undesignated account: No dollar limit Department Director" SECTION 2 . This ordinance shall be cumulative of all provisions of ordinances and of the Code of the City of Fort Worth, Texas ( 1986 ) , as amended, except where the provisions of this ordinance are in direct conflict with the provisions of such ordinances and such Code, in which event conflicting provisions of such ordinances and such Code are hereby repealed. SECTION 3 . It is hereby declared to be the intention of the City Council that the sections, paragraphs, sentences, clauses and phrases of this ordinance are severable, and, if any phrase, clause sentence, paragraph or section of this ordinance shall be declared unconstitutional by the valid Judgment or decree of any court of competent jurisdiction, such unconstitutionality shall not affect any or the remaining phrases, clauses, sentences, paragraphs and sections of this ordinance, since the same would have been enacted -2- OFFICIAL RENGRO CITY Sfcimay 1 1 FT. WORTHY by the City Council without the incorporation in this ordinance of any such unconstitutional phrase, clause, sentence, paragraph or section. SECTION 4 . This ordinance shall take effect and be in full force and effect from and after its passage, and it is so ordained. APPROVED AS TO FORM AND LEGALITY: City Attorney Date: ADOPTED: EFFECTIVE: r 3,1 OFFICIAL p LU CITY SECIRIEIFARY FT. WORTH, TM