CITY OF SEATTLE
RESOLUTION __________________
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A RESOLUTION establishing enhanced reporting requirements for the City’s Capital Improvement Program projects and establishing the City’s intent to use a stage-gate appropriation process for selected projects.
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WHEREAS, Seattle’s Capital Improvement Program (CIP) identifies planned spending and revenues for City capital projects during the upcoming six-year period; and
WHEREAS, updates to the CIP are adopted by the Seattle City Council (“Council”) as part of the annual and supplemental budget process; and
WHEREAS, CIP oversight is a critical function of the Council; and
WHEREAS, effective CIP oversight ensures transparent, accountable use of public dollars; and
WHEREAS, the Council’s ability to perform effective capital oversight is dependent on access to thorough information and the opportunity to review and process this information in a timely manner; and
WHEREAS, City capital projects such as the Elliott Bay Seawall Project and the utilities’ New Customer Information System cost millions of dollars over their original proposed budget and enhanced, timely reporting could have improved the Council’s oversight by communicating potential project risks before the risks were realized; and
WHEREAS, oversight for the 2018-2023 Adopted CIP was improved via Council and City Budget Office review of capital project development and delivery, including seeking information from and holding conversations with some of the major capital departments on their project management practices and contingency budgeting, and conducting meetings to jointly discuss capital project issues across departments; and
WHEREAS, there is opportunity to improve CIP reporting and accountability to the Council and to use the Council’s budgeting authority to improve financial oversight; and
WHEREAS, the City benefits from effective Executive management controls and Council oversight for projects that have a significant financial, policy, or programmatic impact on the City and its residents; and
WHEREAS, the Levy to Move Seattle Oversight Committee members sent a letter to the Mayor and the Council on August 23, 2018, recommending “regularly reporting on progress and challenges as projects move through their development process, especially as the true cost to deliver these projects comes into greater focus”; and
WHEREAS, in November 2016 the Council adopted and the Mayor signed Resolution 31720 to “institute new rigor in capital project oversight that will increase appropriate and timely oversight and provide more transparency to the public,” through, among other things, “[e]nhanced regular CIP reporting developed in conjunction with the City Budget Office, including but not limited to quarterly reports to the Budget Committee on project scope, schedule, or budget deviations”; and
WHEREAS, in order to provide uniformity across City departments, and to communicate progress of projects during the budget process and in monitoring reports, City capital departments agreed to use common terminology identifying project stages; and
WHEREAS, the City Council has imposed stage-based provisos for selected projects in 2018, to allow spending of authorized appropriations only for specified activities unless and until the City Council passes future separate ordinances lifting such provisos; and
WHEREAS, the City Council Briefings Committee reviewed and provided feedback on May 7, 2018, to the City Budget Office and the Council’s Central Staff on a proposed new quarterly report format with more in-depth budget, schedule, and scope information about a limited number of capital projects; and
WHEREAS, the City Budget Office transmitted on September 5, 2018, the first quarterly capital projects “Watch List” report and summary information about discrete and programmatic projects with more in-depth information about capital projects; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEATTLE, THE MAYOR CONCURRING, THAT:
Section 1. Each year by January 15, the Mayor will submit to the City Council (“Council”) a proposed Watch List of large, complex, discrete capital projects that will require enhanced quarterly monitoring reports for the next calendar year. Each year by February 15, the Council intends to adopt by resolution a final Watch List that is either the Mayor’s proposed Watch List or one that adds and/or removes projects from the proposed Watch List. The Mayor may add projects to the Watch List at any time throughout the year; and the City Council may add projects to the Watch List by adopting a subsequent resolution during the year. Criteria for inclusion may include but are not limited to total project cost, a known change from previously identified cost estimates, risk profile, or community and Council interest.
Section 2. The City Council requests that the Executive submit quarterly reports on all Watch List projects substantially in the form provided in Attachment A to this resolution, Reader’s Guide to Watch List Monitoring Report. The City Council requests that the Executive submit such quarterly reports within eight weeks of the end of each calendar quarter (for example, the Executive should submit by approximately May 24 a report for the quarter ending March 31).
Each quarterly report should include the following elements:
A. Watch List project report: in-depth reporting on each discrete capital project that is:
1. Identified in the City Council’s annual Watch List resolution,
2. Identified in any subsequent Watch List resolution during the year, and
3. Determined by the Mayor to be appropriate for the Council-approved Watch List;
B. Discrete projects report: summary information for each of the City’s discrete capital projects; and
C. Ongoing programs report: summary information for each of the City’s programmatic capital projects.
Section 4. The City Council intends to continue its strategic use of stage-based appropriations for selected projects. Stage-based appropriations take the form of spending restrictions (sometimes referred to as “provisos”) that place limits on how capital appropriations may be spent on certain phases or activities in a capital project.
Section 5. All capital projects on the Watch List are eligible projects for stage-based appropriations. Further, the Council may choose to impose a stage-based appropriation on any other project in the Capital Improvement Program.
Section 6. Stage-based appropriations allow spending on unrestricted project development activities but prevent spending on a subset of specified activities; for instance, the Council may appropriate funding for a project but specify that none of those appropriations may be used for final design or construction (thereby allowing appropriations to be used for other activities such as real estate acquisition or other early design activities). The Council can decide to place a stage-based spending restriction on a project for any reason. However, the Council intends to provide heightened oversight and impose such spending restrictions on selected capital projects with unclear scopes; shifting estimated costs; uncertain capital funding plans; ill-defined operating costs, plans, or funding plans; and other perceived significant questions about scope, schedule, and budget. Generally, the spending restriction remains in place until either (A) the City Council takes separate action to pass a future ordinance lifting the proviso or (B) the project reaches an identified milestone (such as the Mayor submitting to the Council a report describing a funding plan, bids from contractors, or notice of a grant award).
Section 7. The Council recognizes that stage-based appropriations and other spending restrictions carry the risk of delaying a project schedule or jeopardizing funding. Therefore, the Council and Executive will prioritize consideration of proposals to remove spending restrictions.
Section 8. The Council’s committees with subject matter oversight may review quarterly reports.
Section 9. The Council requests the Executive work with the Council’s Central Staff to develop a method for enhanced reporting for selected ongoing programs, or components of ongoing programs, for potential inclusion in the Watch List.
Adopted by the City Council the ________ day of _________________________, 2018, and signed by me in open session in authentication of its adoption this ________ day of _________________________, 2018.
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President ____________ of the City Council
The Mayor concurred the ________ day of _________________________, 2018.
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Jenny A. Durkan, Mayor
Filed by me this ________ day of _________________________, 2018.
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Monica Martinez Simmons, City Clerk
(Seal)
Attachments:
Attachment A - Reader’s Guide to Watch List Monitoring Report