The Department of Public Works' Bureaus of Engineering and Architecture pay for staff time from project funding. Except for the Hall of Justice, streets and public right of way projects, and other various projects that are under the Department jurisdiction, the Bureaus of Engineering and Architecture receive project funding from other City departments and the San Francisco Unified School District.

The Bureaus of Engineering and Architecture budgets include Department overhead, bureau overhead, and project costs. Department and bureau overhead costs are allocated to projects through the indirect cost rate, as discussed in Section 17 of this report. The Bureaus' senior managers charge their time to overhead, but all other bureau staff are expected to charge all their time to projects. The Bureaus' overhead makes up approximately 25 percent of the Bureaus' annual budgets.

Capital Projects and Staffing

The Bureau of Engineering and the Bureau of Architecture solicit and receive projects similar to a private engineering and architecture firm without the staffing flexibility of a private firm. Although under the Administrative Code the Department of Public Works manages all City General Fund department capital projects, the City departments that have their own capital project contracting authority can manage their own projects or contract with the Department of Public Works to manage their projects. The Department's share of City capital projects has declined over time as the Public Utilities Commission, Municipal Transportation Agency, Recreation and Park Department, and other City departments with contracting authority have assumed management of their own projects.

Over the next year, both the Recreation and Park Department and the Municipal Transportation Agency will take on more responsibility for their own capital projects. As the Municipal Transportation Agency completes its large capital projects, such as the Third Street Light Rail project, the Agency is taking back smaller electrical projects, such as traffic signals, that have been performed by the Department of Public Works staff. The loss of the Municipal Transportation Agency electrical work creates project, work load, and staffing problems for the Bureau of Engineering's electrical engineering section.

In FY 2006-2007, the Recreation and Park Department is assuming project management of its recreation center and park projects that have previously been managed by the Department of Public Works project managers. The Department of Public Works and the Recreation and Park Department completed a Memorandum of Understanding in September 2006 on the impact of the Recreation and Park Department's project management plan. Under the Memorandum of Understanding, the Recreation and Park Department will manage all the Department's capital projects by may allocate project planning, design, and construction management work to the Department of Public Works. As noted by the Budget Analyst during the FY 2006-2007 budget review, the Department of Public Works Bureau of Engineering and Bureau of Architecture will have surplus positions if the Department's project managers who currently manage Recreation and Park Department projects do not move into Recreation and Park Department project manager positions.

The Bureaus of Engineering and Architecture Staffing Procedures

Both the Bureaus of Engineering and Architecture are concerned about uncertainties in project funding and the impact on staffing. The Bureaus' full time positions in the annual budget have decreased over the past five fiscal years but project funding has also varied or declined.

Table 10.1
The Bureaus of Engineering and Architecture Budgeted Full Time Equivalent Positions
FY 2002-2003 to FY 2006-2007

Source: Annual Salary Ordinance

During this period, the Public Utilities Commission and Municipal Transportation Agency have taken on more of their own capital project work; funding for large street projects, such as the mid-Embarcardero and Octavia Boulevard projects has declined; and Library projects, funded by general obligation bonds, are concluding. The number of filled positions in the Bureaus of Engineering and Architecture is less than the number of budgeted positions. In FY 2005-2006, approximately 70 of the Bureau of Architecture's 98 full time equivalent positions were filled and approximately 132 of the Bureau of Engineering's 190 full time equivalent positions were filled.

The Bureaus of Engineering and Architecture have permanent positions to perform their routine and expected work. Additionally, each Bureau maintains a pool of as-needed contractors to provide services during peak work load and hires consultants with expertise in specialized work, such as designing bridges, hospitals, and jails. The Department of Public Works can use as-needed contractors for smaller projects with up to $200,000 in fees but undergoes a formal bidding process to select architects and engineers for large projects.

The Bureau of Engineering's Work Load and Staffing Plans

Section managers within the Bureaus of Engineering and Architecture monitor project funding and develop work load projections for their section. The Bureau of Engineering has six sections, defined by engineering discipline, which provide engineering planning and design services.

Landscape Architecture

The landscape architecture section serves two major clients, the Recreation and Park Department and the Public Utilities Commission. The Recreation and Park Department bond-funded program has stopped and started in the past few years, due to changes in administration and program priorities. The Public Utilities Commission work has been more stable. The section has accommodated changes in staffing needs by rotating staff to other work, including construction management.

Streets and Highways

The streets and highways section has two major components: street renovation and curb ramp improvements. These projects, which are funded mostly, by the ½ cent sales tax, administered by the San Francisco County Transportation Authority, are sponsored by the Department of Public Works, which has responsibility for the public right of way. Some street or curb ramp projects are funded by other City departments. In FY 2006-2007, the General Fund provided $15 million in funding for street projects.

Structural Engineering

The structural engineering section provides services to other City departments, as well as providing some General Fund services for structural inspections and responses to landslides. The structural engineering projects tend to be small, discrete projects, and funding for these projects varies during the course of the year. According to the section manager, funding can be insufficient to pay staff costs for more than 10 to 12 days in advance, requiring the section manager to actively seek more work or transfer staff temporarily to other assignments.

Mechanical Engineering

The mechanical engineering section provides planning and design services for other City departments and capital projects, including building systems, industrial facilities, and underground utilities. The mechanical engineering section has stable funding for building services, which is an ongoing need for City departments, and provides services to the Public Utilities Commission for its capital program. If existing mechanical engineering design projects are insufficient to pay for staff, the section manager actively seeks work from client departments.

Electrical Engineering

The Bureau of Engineering considers the electrical engineering section to be problematic. Two major areas of work, underground utilities and traffic signal projects, are nearly completed or losing funding. Although the electrical engineering section has been successful in obtaining funding from the Public Utilities Commission for wastewater electrical design projects, the Public Utilities Commission also uses its own electrical engineers to design projects. The Bureau of Engineering is actively seeking additional work for this section, but will also rotate staff to other projects or functions, if necessary.

Hydraulic Engineering

The hydraulic engineering section provides planning and design services to the Public Utilities Commission's Wastewater Enterprise, including planning and hydraulic studies, sewer repair and replacement projects, and wastewater treatment facilities capital projects. The section receives regular annual funding from the Public Utilities Commission to pay for the services.

As shown in Table 10.2, except for the hydraulic engineering and streets and highways sections, the Bureau of Engineering can only project available funding and staffing for two to four months. Consequently, the Bureau has to actively seek work from other City agencies or rotate staff to other duties, often construction management, to avoid inappropriate charges to overhead or lay-off of staff.

Table 10.2

Number of Months for Which Project Funding is Available to Fund Existing Bureau of Engineering Staff, as of July 31, 2006

Source: Bureau of Engineering

The Bureau of Architecture's Work Load and Staffing Plans

The Bureau of Architecture proposed laying off permanent staff in FY 2004-2005, resulting in the early retirement of eight employees. Prior to the reduction in staff, the Bureau incurred cost overruns in its overhead budget due to insufficient project funding to cover staff costs. In FY 2004-2005, the Bureau of Architecture overspent its overhead budget allocation for salaries and fringe benefits by $343,000, which the Department of Public Works offset by reducing the Bureau's overhead budget non-salary expenditures.

According to the Bureau of Architecture, the FY 2004-2005 staff reduction was the first for the Bureau. The Bureau of Architecture receives all its project funding for services performed for other City departments. Unlike the Bureau of Engineering, which sponsors street and other projects under the Department of Public Works jurisdiction and has regular funding from the Public Utilities Commission for hydraulic engineering services, the Bureau of Architecture lacks routine or predictable funding sources. The Bureau must rely on the City's General Fund departments bond-funded projects, established relationships with City clients, and marketing to receive project funding for design services.

The Bureau of Architecture divides project responsibilities by City department, including Fire Department, Library, Performing Arts, Public Health, Recreation and Park, and San Francisco Unified School District projects. The senior architects are responsible for monitoring work load and planing staff needs for each of their sections. The assistant bureau managers plan overall Bureau of Architecture staffing. Section managers state that planning work load over long periods is difficult because project funding is not known. Even if City departments have funding to implement capital projects, the departments do not necessarily allocate project planning and design work to the Bureau of Architecture. The Bureau of Architecture, by necessity, has to build client relationships to ensure adequate project funding to support staff costs. The Bureau of Architecture has developed relationships with some City departments that has provided stable funding. For example, the Department of Public Health funds two architect positions on a part-time basis to help plan for the Department's facility needs. The Bureau of Architecture has been able to obtain other City department design projects by working with the respective department to show that the Bureau of Architecture can deliver quality design projects in a timely manner.

Planning Bureau of Architecture's Work Load and Staffing Needs

According to the Bureau of Architecture, the Bureau acts much like a private firm in developing client relations and planning staffing needs. However, the Bureau's existence is "hand to mouth", according to one Bureau manager. The Bureau's salary costs are relatively fixed, due to Civil Service restrictions, although funding is not. While the Bureau of Architecture can increase its flexibility by using as-needed consultants to meet peak work load needs, the Bureau has limited marketing opportunities since it can only provide services to City departments and the San Francisco Unified School District.

The Bureau of Architecture anticipates its staffing needs by developing a work plan that inputs project funding, timelines and staff allocation. According to the Bureau, the Bureau can only anticipate project funding going forward for up to six months. Funding estimates after that point are less certain. Each of the senior managers develops work load and staffing projections for their sections. The assistant bureau manager develops work load and staffing projections for the Bureau as a whole.

As of July 2006, the Bureau of Architecture shows 93 percent of its staff allocated to projects, declining to 81 percent as of December 2006. During the FY 2006-2007 budget review, the Bureau of Architecture documented expected work load increases as the City developed a capital plan and prepared to fund capital projects going forward. However, the Bureau may incur surplus staff if the Department of Public Works project managers, who are currently assigned to Recreation and Park Department projects, return to their former architect positions when the Recreation and Park Department assumes management of its own projects.

Engineer and Architect Staffing and the City's Capital Plan

The Department of Public Works cannot adequately plan its need for engineers and architects if information on available capital projects and funding is insufficient and coordination with other City departments is inadequate. Internally, the Department of Public Works lacks a consistent staffing tool to measure staffing needs. The Bureaus of Engineering and Architecture approach funding and staffing projections differently, using different information and planning tools to determine staffing needs. The Department of Public Works should standardize work load planning and reporting to allow executive managers to better assess overall funding and staffing needs.

The Department of Public Works also needs to evaluate short-term and long-term engineer and architect staffing to ensure that high staff costs compared to project funding does not lead to increased overhead rates. Currently, the Bureau of Engineering rotates staff to other functions, such as construction management, if engineering design work is unavailable. However, the Department faces longer term staffing surpluses, especially for electrical engineers, that need to be resolved. The Department of Public Works could have more architect staff than anticipated if the Department's project managers, currently managing Recreation and Park projects, return to their former positions.

The Department of Public Works' indirect cost rates for the Bureaus of Engineering and Architecture have increased from 154 percent in FY 2003-2004 to 174 percent in FY 2005-2006, as discussed in Section 2 of this report. While this is not high compared to other City departments with capital programs, it exceeds the rates reported by five other California agencies in the seven agency California Multi-Agency CIP Benchmarking Study, Annual Report Update 2005. The Department of Public Works needs to ensure that indirect cost rates do not increase due to staffing pressures.

The City's Capital Plan

Bureau of Engineering and Bureau of Architecture staff were hopeful that the City's current capital planning process, authorized by the Board of Supervisors and included in the Administrative Code in August 2005, will allow the Department of Public Works to better plan for capital projects.

A citywide task force was convened in January 2005 to look at engineering and architecture services provided by the Port, Airport, Municipal Transportation Agency, Public Utilities Commission, Recreation and Park Department, and the Department of Public Works. The task force was to evaluate areas of improved efficiency, including centralization of capital project and engineering and architect functions.

The task force did not find much redundancy in actual engineering and associated positions among the six departments. The Engineering Services Task Force Consolidated Committee Findings and Recommendation report found that, if each department with capital project contracting authority performs effective and efficient strategic capital planning, fluctuations in permanent division staff could be minimized.

According to the report, if departments do not perform strategic planning effectively, the resulting staff work loads become unstable. At the same time, staff work loads require detailed planning and coordination to successfully complete capital programs. The task force recommended that the Mayor and the Board of Supervisors establish a body legislatively that would be empowered to make decisions spanning multiple departments and processes. This body would address, among other topics, current personnel processes to implement standards for organization upsizing and downsizing when initiating or completing major capital programs.

The City Administrator, who oversees the Department of Public Works as part of the General Services Agency, chairs the City's Capital Planning Committee. The City Administrator is responsible for developing the capital expenditure plan, and the Capital Planning Committee sets priorities and assessment criteria, reviews the capital expenditure plan prior to submission to the Mayor and Board of Supervisors, and reviews the budget and any proposed use of long term debt.

Currently, the City's process for planning capital projects and resource needs is decentralized. Consequently, as project funding fluctuates, City departments can have insufficient, surplus, or misallocated staff. For example, as the Municipal Transportation Agency project funding declines, the Agency is performing more electrical engineering work in-house, resulting in potential overstaffing of electrical engineers in the Department of Public Works. The City Administrator, as part of the capital planning process, should assist City departments, including the Department of Public Works, in planning capital project staff resources. The City's ten year capital plan provides a basis for identifying what the type and scope of projects to be funded in the short-term and long-term. The City Administrator, in conjunction with the Department of Public Works and other City departments that manage capital projects, assess the need for engineering and architect general and specialized skills and resources overall and how these resources should be allocated.

Conclusion

Because the City's system of capital planning and project implementation is decentralized, the Department of Public Works can not anticipate project funding or project work over the long term. Currently, the Department seeks capital project work from other City departments in addition to performing its own work. In effect, the Department acts like a private engineering and architecture firm, soliciting clients and projects, although the Department is constrained by the City system, with a limited pool of clients to solicit work and limited flexibility in managing staffing and performance. The City Administrator, as part of the Citywide capital planning process, should work with the Department of Public Works and other City departments in planning capital staff resources.

Recommendations

The Deputy Director for Engineering should:

Costs and Benefits

By implementing these recommendations, the Department would be able to project staffing needs more accurately and match position requirements with available funding.