Final oversight report on South Regional Roads Maintenance Facility project
July 12, 2012
The South Regional Road Maintenance Facility (SRRMF) project was cancelled in March 2012. SRRMF was intended to construct a new facility at a King County (County) owned property in Ravensdale to consolidate operations from the Road Services Division’s (RSD) Black Diamond and Summit Pit road maintenance facilities to increase operational efficiency and reduce costs. Project funding was to come from the proceeds of selling the Summit Pit site. The County Executive (Executive) cancelled SRRMF after determining the county could not negotiate an acceptable price for the property. The Executive forecasts it will spend approximately $4.4 million on SRRMF. This includes packaging the preliminary design and permitting work already completed for future use. Approximately $2.9 million was spent on other RSD projects in anticipation of Summit Pit sale revenue. Three hundred sixty-thousand dollars was spent on the effort to sell Summit Pit.
This report summarizes the project history; reviews the scope, schedule and budget status at the time of cancellation; details revenue source issues; describes project alternatives considered by the Executive; and explores how cancellation of this project affects RSD’s update of its Facilities Master Plan. We identify lessons learned from this project and make one recommendation.
The Metropolitan King County Council (Council) added independent oversight of the SRRMF project to the King County Auditor’s Office (KCAO) work program in 2010. We provided an interim project status report to Council on October 21, 2011. This report closes out KCAO’s oversight effort.
Prior reports on this project are found below.
Of the 1 recommendation:
|DONE||1||Recommendation has been fully implemented. Auditor will no longer monitor.
|PROGRESS||0||Recommendations are in progress or partially implemented. Auditor will continue to monitor.
|OPEN||0||Recommendations remain unresolved. Auditor will continue to monitor.
|CLOSED||0||Recommendations are no longer applicable. Auditor will no longer monitor.|
Final project summary
This report provides a final assessment of the South Regional Road Maintenance Facility (SRRMF) project, cancelled in March 2012. SRRMF was intended to construct a new facility at a King County (County) owned property in Ravensdale to consolidate operations from the Road Services Division’s (RSD) Black Diamond and Summit Pit road maintenance facilities to increase operational efficiency and reduce costs. Project funding was to come from the proceeds of selling the Summit Pit site. The County Executive (Executive) cancelled the SRRMF project in March 2012 after determining it could not negotiate an acceptable price for the property. The Executive forecasts it will spend approximately $4.4 million on SRRMF. This includes packaging the preliminary design and permitting work already completed for future use. Approximately $2.9 million was spent on other RSD projects in anticipation of Summit Pit sale revenue. Three hundred sixty-thousand dollars was spent on the effort to sell Summit Pit.
The Executive’s immediate scope of work for SRRMF was limited to finishing preliminary design, SEPA review, and CUP work already in progress. Design and permitting was for constructing approximately 125,000 square feet of building space, including a crew headquarters building, vehicle and equipment storage and repair areas, and materials storage. Other features include a fueling station, equipment wash area, de-icing and street waste processing operations, site access roads, parking, material staging areas, access improvements to Kent-Kangley Road, and water supply and sewage disposal systems. The County was targeting a LEED Gold certification. After obtaining the CUP, FMD and RSD intended to set the project’s baseline scope, schedule, and budget. This plan was consistent with Executive policy and King County Code for appropriate timing for setting the baseline for accountability moving forward. The project team worked to minimize project expenditures until the sale of Summit Pit was certain.
When the project was cancelled, the preliminary design work was substantially complete. The SEPA work was pending. The CUP application had been submitted to the permitting agency,1 revised once, and resubmitted. The project team informed us they received a second round of comments on April 18, 2012 and submitted a brief response to clarify some code related questions before officially withdrawing the CUP application on June 12, 2012. Even though the application process was not completed, it will provide useful information for future design work on the Ravensdale site. Although the CUP would be valid for up to five years, the project team determined it would not be cost effective to do any additional work to obtain the permit at this time since the schedule for constructing SRRMF is uncertain.
The original schedule for the SRRMF project was driven by urgency to meet contractual obligations with the Summit Pit purchaser, Yarrow Bay. When Yarrow Bay did not exercise its purchase, the schedule was reset and the urgency diminished. The project schedule for submitting the CUP application for SRRMF slipped by two weeks from the December 19, 2011 target stated in KCAO’s October 21, 2011 report. The project team did not expect this to delay its mid-2012 target dates for finishing the SEPA work and receiving the CUP. The team continued to manage design consultants to meet contractual deliverable dates.
Council appropriated $6.4 million for design and permitting for SRRMF. The project team forecasts it will spend approximately $4.4 million on the project. Their forecast includes spending approximately $679,000 in addition to the life-to-date expenditures reported in the County’s accounting system through April 2012, summarized in Exhibit 1 in the report.
- The project team used a quantitative tool developed by FMD to evaluate delivery methods for SRRMF. This is a best practice supported by the Auditor’s Office and could be adapted for use by other County agencies considering alternative delivery methods.
- The Executive’s effort to solicit private developer interest in delivering the SRRMF project demonstrated this alternative delivery method could be feasible for a maintenance facility and site work project like SRRMF. The proposals also indicate some potential for capital project cost savings over the traditional design-bid-build delivery method.
In coordination with the Facilities Master Plan, RSD should explore the timing of combining the Black Diamond and Summit Pit maintenance operations, and the Executive should review the value of retaining the Black Diamond site for emergency response and other County uses.
Prior oversight reports
The project includes construction of approximately 125,000 square feet (sf) of enclosed and unenclosed building space, including a crew headquarters building, vehicle and equipment storage and repair areas, and materials storage. Other features include a fueling station, vehicle wash area, de-icing and street waste processing operations, parking, access road, and drilling a new water well or connecting to an existing well onsite.
The next major milestone is obtaining the conditional use permit (CUP), targeted for July 3, 2012. The CUP schedule has slipped by approximately nine months from the original estimate, and was revised to limit expenditures when it became evident that the initial Summit Pit sale plan might fall through in February.
Of the $6.4 million appropriated, approximately $3.4 million has been spent to date. FMD anticipates spending approximately $3.7 million on SRRMF by the time the CUP is obtained. The current total project cost estimate ranges from $41.6 million to $45 million, compared to the conceptual estimate of $36.9 million provided to council in 2008.
- The project revenue source is uncertain. Until this issue is resolved, the project cannot be finished.
- The proposed site is located over a critical aquifer protection area. Permitting requires extensive study of drainage, aquifer protection measures, uncertain mitigation obligations, and a risk of appeal.
- Continuing delay could result in the need for facility repairs at Black Diamond and Summit Pit estimated at $2.7 million in 2008.
FMD should verify that the SRRMF project is consistent with the Facilities Master Plan for Road Services before proceeding with any work beyond the preliminary design phase.
Tom Wood and Tina Rogers conducted this oversight report. If you have any questions or would like more information, please call the King County Auditor's Office at 206-477-1033 or contact us by email KCAO@kingcounty.gov.