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Home My WebLink AboutINS-11-042 - Capital Project Approval ProcessStaff Re~p~r~ I~~rc~~nT~~ lnfrastrurture Services Department REPORT TO: Council DATE OF MEETING: May 9, 2011 www.kitchenerca SUBMITTED BY: Pauline Houston, Deputy CAO Infrastructure Services Department (ext. 2646) PREPARED BY: Pauline Houston, Deputy CAO Infrastructure Services Department (ext. 2646) WARD(S) INVOLVED: All DATE OF REPORT: April 29th , 2011 REPORT NO.: INS-11-042 SUBJECT: COUNCIL ORIENTATION -CAPITAL PROJECT APPROVAL PROCESS RECOMMENDATION: For Information. BACKGROUND: As part of the orientation program for the incoming Council, matters most directly relevant to the 2011 budget deliberations were brought forward in the December to February period. This report is part of the ongoing orientation program. REPORT: The presentation slides for this orientation are attached. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: Capital Project Approval Process aligns most closely to the foundation Theme for Efficient and Effective Government. The relevant strategic directions include: Financial Management o Invest and manage assets strategically o Ensure the effective and responsible stewardship of public funds within a supportive policy framework o Ensure corporate fiscal targets are consistently met o Maximize value through cost effective service delivery o Ensure openness and transparency of city finances 1(a)-1 Staff Re~p~r~ ~1ITCH~1`r?E~ 1lI~CQStrl~fl?'UC~ Se!'VICES D~p(1rf1?1~11~ w~+w.kitthenerca Public Sector Leadership o Ensure accountability and transparency in all public processes FINANCIAL IMPLICATIONS: N/A. COMMUNITY ENGAGEMENT: No prior community engagement required. Through the City's website this report is being made available to the community as part of the standing committee agenda. ACKNOWLEDGED BY: Pauline Houston, Deputy CAO, Infrastructure Services Department Attachment: Presentation Slides 1(a)-2 ~~~ ~:i"~'~:':e Iii. ~f~~ ., _ _ , Capital Project Approval ~, 1 Process Information Session Presented to City of Kitchener Council May 9, 2011 ~ 1(a)-3 Presentation Agenda .~_~~ ~i What are Council's governance '" roles in the capital approvals ~' ~~ process? ,. ~~ How are the needs for capital renewal or expansion determined? • How are capital needs prioritized and funded? • How is the project or program delivered? 1 (a) - 4 Roles i n Governance ~_ ~o~°e~n~n~e ~ ~`. ~4anam~~t Le~dersh~~ • ~~~re~~entii~~ tl~e ~~r~r~~r~i ~~ # ~et~ir,~ p~~~~p ar~d directi~r~ €~t~b~i~h~ir~~, 'and %rr~l~r~~en~i~ ~~~,~?°n~r~c~ framew~~ • Pr~•~r~din~ ste~r~ard~l~i~ and ~~c ~untat~ilit ~~~~t~~ ~ h~ ~~~r~~~ir~~~ the Chi+e Adm~r~i~kr~ti~+e ~fii~er • ~Cr~mm~~r~icat%r~~ a r~~i~ian ar~~ ~4 • .~~.i~n;ir~ p~~pl~ end r~~r~~s +~~itl~ ~iyi~n one ~,r~al~ baCin~ c~~~fli~tin~ into r~st~ • ~41o~iv~t~r~~ ar~d ir~~pirir~ • S~ttin~ ieh~ t~n~ ~r~d mod~elin~ b~el~~vic~ur~ ~a~~~Ur~ • ~1e~~urin~; pro~r~s~ • Suiting ~Ca~~~cil dir~~ti~n ~~ttir~ • Er~~lem~rtir~~ ur~ci l d~ci si:+~ r~ ~ • f~~~~idir~~,cr;,~n~t~-ar~~l ~ead~ershi~ ^ Suortin~ ~o~r~cil ~~e~~~rd~f-~i~ and ~~: ~.an~~t~ilit;~ ^ upportin~ €~ff~~,ti~~ ~o~~rnan~e 1(a)-5 Roles in Governance ~,.. ~ r ~ F n-~~1 Sets strategic priorities and directions ,~ ~~ ~~~~~°~R .;m., ~hj ,~ ~ Delegates authorities .. ~: Directs and approves budgets • Ensures administrative and controllership policies are in place • Monitors financial integrity • Monitors administrative effectiveness and efficiency • Ensures public transparency 1(a)-6 _~~ Tvbes of Cacital Projects ~,&~~ 3 ~~~~~~_i ~r ~ Buildings and Structures e~ Engineering Construction Projects ~" ~ Vehicles/Equipment Purchases • Studies/Research Projects ~,~ Park Development and Rehab • Technology Infrastructure 1(a)-7 Business Planning ~ FramPw~rk ~~~~~~~~ ~~~ .. ~~ ~,~ Strategic Plan ~, Strategies & ~~~~~~~~~ Master Plans Business Planning drive and support Business Plans Budget e.g. support Business Plans Parks Master Plan, process and content Growth Management Strategy, ~ ~ ~ y Economic ~ ~ ~ ~ _ ~ >+ Development Strategy v ~ ~ ~ .~_ ~ ~ ~ C - v~ - ~ to E ~ ~ o ~ ~ ca ~ ~ ~, N Q ca ~ '~ •~ i t a ~ ~ i J ~ _ ~ ~ O ~ ~w U 1 (a) - 8 Capital Project Approvals Process; ;~ 1z ~,~~,~~,,R A~.a, ,~ 1 (a) - 9 Key Decision Points Council Approves Business Case or Study A~ Council Approv Priorities and i Budget Council Approve Procurement Recommendatio Council Approve Significant ~,~ _ ~~:'~a~eat ~tra~wes _~,. ~~~ ~:i"~'~:':e iii. ~f~~ Needs Assessment & Project Definition Budget Estimating & Prioritization Procurement Project Management: Updates 1(a)-10 Needs Assessment & Pro~ect ~ J ~~ f~Pfinitinn iii t.:e I~-.~k:l~~ -~,.~- Purpose: to assess the need and scope of project, such as: - expand, retrofit, rehabilitate, decommission, build/acquire new infrastructure (Asset Management Program) - purchase new equipment or vehicles - change levels of service - conduct further research to define a problem. • Inputs - public/sfakeh~lde~ input - asset condition assessments - risk assessments Inputs What is Outputs - Industry best practices the Need? • Outputs - Business Case - Feasibility Study - Environmental Assessment Study - Cost/benefit analysis - Return on investment 1(a)-11 Needs Assessment & Pro~ect ~ ~ . ~_~~ f~Pfi n itinn L,~.r~ t.:~ t~-.~k;~~ l -~,.~- • Need for change identified or requested • Terms of reference developed • Corporate Leadership Team endorsement • Council endorsement • Business Case/Feasibility Study/Budget Issue Paper • Council endorsement • Project Portfolio Management/Business planning prioritization 1(a)-12 Budget Estimating & ~ Prinriti~atinn a.-~-~, 1 1L I L 4. ~. L I l °'~ i 1& -~,-, ~IaM,l~l-le ~~_~,~.. ~:~, Purpose: • to review budget estimates/funding source(s) • approve project timing and relative priorities compared to other budgets • Project Portfolio Management Process • Business Planning Process • Capital Budget process 1(a)-13 -~. -~,.~- et Estimating & Prioritization ~~~ ~i"~'~:':e Iii. ~f~~ • High level cost estimates (ranges) developed as part of terms of reference/needs assessment • Budgets refined as feasibility study or business case is developed • Further refinement through detailed design, specification development (for tender) 1(a)-14 ~~ et Estlmatlnq & Prlorltlzatlon ~~.i-~~~:`~1-:ter ~~~~~ Project/Program prioritization occurs initially at '~ ~' the Divisional level ~.~~a: • Corporate Project portfolio prioritized through _ process with CLT • Priorities set through a matrix process • Final project plan presented to Council as part of the annual Capital Budget process • Once capital plans are approved, work begins. 1(a)-15 i Procurement ,.: ;~~~, ~. 1.1 L. C :l lJ .- R l .~i ~ "~ `~"~~ Purpose: to ensure a fair and transparent vendor ~~ selection T.~I`r,l NI1!~~le -.. ''° Governed by Council approved Purchasing By-law and Policy • Tender processes, consultant selection processes, management approval processes 1(a)-16 i Procurement . v~, ,r ¢ n--~,.Ti~ } Requests for Tender: ~~ • Applies to Purchases greater than $100,000 ~.._ '~ ~~°a°~~ Requirements/specifications and tender documents prepared and reviewed ~'$ Tender advertisement • Tender public opening • Bids received are evaluated to determine the successful bidder • Tender report to Council prepared • Council approval • Contract or purchase order issued 1(a)-17 . ~_~ Procurement ~ ,.~.,.~~._~Ti, ~. 1.1 L. C :l lJ ." R l .~i ~ ''~~ Requests for Proposals: r` ~: ,~ •applies to purchases greater than $100,000 and where the ~,;,;,,,~A~. a v selection of a supplier is to be made on the basis of performance ~Ij ;~, rather than on price alone the purchase shall be made by formal "~~~ Request for Proposal. ,~ • Requirements/specifications are prepared • The Proposal is advertised • Proposals received are evaluated by a review committee made up of Supply Services and the User Department to evaluate and rate the proposals. • Tender report to Council prepared • Council approval •Contract or purchase order issued 1(a)-18 ~' Procurement ~~:~~.~ Expressions of Interest in excess of $20,000, but less than $100,000: ~' m~ • Applies to Consulting and/or Professional Services °'u" ~ ~,, ~ Terms of Reference are prepared • Supply Services prepares an Expression of Interest and issues to the selected Consultants (three to six qualified consultants). - After closing a rating package is prepared • The review committee may elect to interview or request detailed costing from the shortlisted nominees. •Tender report to Council prepared • Council approval •Consulting agreement and purchase order issued 1(a)-19 i Procurement ~.~~~~~ ~' -~~"~~ Expressions of Interest in excess of $100,000: ~~ ~~,~,~~R ,,~;,,~,A. ~ Applies to Consulting or Professional Services ~~ Terms of Reference are prepared • Expression of Interest is advertised • After closing a rating package is prepared for evaluation • review committee shortlist and interviews >3 and <6 proponents • Tender report to Council prepared • Council approval • Consulting agreement and purchase order issued 1 (a) - 20 Pro~ect Mana ement iti~~ L '~ Purpose: to ensure implementation of successful project (on time, on budget, meet stakeholder objectives/ deliverables) J .~ :. ~~: _ ~~ 4 ';. ` , [s 1(a)-21 J Standard Project Management _ T1z Project Prioritization/Selection Process Division,vepartment Corporate Leadership Team C~OU1lC11 ar~~~~N9~,ir.na.~i a.~,_. ~,z Project Director/Manager _ Project _' Initiating Project strncture; Charter Resourcin~ Worn Management Roles' ualih Design Estiinate ~ Planning Activities Breakdown/ Processes ResponsiUilities Measurement Schedules Costs Defined Defined Track Preventative Cost Scope Risk Time ESeCtition actions Management Management Qualit< Pr~~ress ` M:uuigemeut Close E~alnation Lessons Closing Contracts Learned Source: Project Management Institute 1 (a) - 22 Capital Project Approvals Process; ;~ 1z Council Approves Needs Assessment & Project Business Case or study Definition A~ Council Approves Priorities and i Budget Council Approves Procurement Recommendation Council Approves Significant Scope / Budget Changes, Budget Estimating & Prioritization Procurement Project Management: Updates 1 (a) - 23 ~L eaver said SI~~~ V~ e and pans t 1 «~~ wa :._ O bxing nttiO i~ ~~ ~hoa~u' ~ a;~,~en~e S~ ~ '" 1. ~ o Cllsra ~p t~e~~ ~1e ut,~ have ,-, n~ to a ~;s~ of veu appxo a;~;aentin~ 1(a)-24 Questions ~~~ T' I"r ' f i i ~ `~,: f 1 (a) - 25