Planning, design work proves costly for city

By Suzanne Roig
Advertiser East Honolulu Writer

A growing portion of the $71 million set aside for neighborhood improvements on O'ahu is being spent on planning and design costs that occasionally overshadow the price of seemingly simple projects.

The Kuli'ou'ou project will include soil tests and the reconstruction of tennis and basketball courts, along with restroom repair and rebuilding of a softball field. Total construction costs are budgeted at $750,000. Cory Lum • The Honolulu Advertiser

While acknowledging the need for project planning, neighborhood activists say they are increasingly frustrated by consultants' expenses that seem to fail the common sense test.

"The courts are there, the lines are on them, what do you need to design?" said Ed Schell, a member of the Kuli'ou'ou-Kalani Iki Neighborhood Board, referring to the park repairs in his community. "There is no design needed. Paint the lines? They're already there. It's ridiculous."

City officials say the cost of design follows the industry standard of 10 percent of the estimated construction costs. But figures for the $71 million worth of neighborhood board and vision team projects budgeted for fiscal 2003 show design costs at about $12.6 million, or 18 percent of the total.

"Most of the community is oblivious," said Michelle Matson, a member of the Diamond Head/Kapahulu/St. Louis Heights Neighborhood Board. "The community gets its heart and soul involved in a project, but nothing gets built because all the money is eaten up by consultant work."

City officials and those involved in planning say that without thorough design work, contractors can run across unanticipated problems, resulting in changes being ordered as well as cost overruns. Planning and design work can also cover the cost of holding community meetings and involving residents in determining what they're trying to achieve, said Rae Loui, director of the city Department of Design and Constructions.

For example, design costs for the Kuli'ou'ou project will cover soil tests and the reconstruction of the courts, including the subsurface, surface and the striping, irrigation improvements in the softball field, and renovation of the dugouts and bathrooms, Loui said. Construction costs are budgeted at $750,000 and inspection fees at $50,000.

"We're trying to do the best we can for the budget," she said. "The project estimate could turn out to be way low or way high. We try to keep the costs down."

In Kuli'ou'ou, the city will spend $75,000 on plans that include rebuilding the park's tennis courts. A member of the neighborhood board says that while repairs are needed, redesign is not. Cory Lum • The Honolulu Advertiser

"It's not necessary" to spend so much for inspection, said Ted Ashworth, another Kuli'ou'ou-Kalani Iki Neighborhood Board member. "The board commented they'd do the inspection themselves. It might be necessary, but why is it so expensive?"

Loui said the outside inspector's job is to ensure that the work follows the specifications, codes and rules and to follow up with changes and negotiate with the contractors.

City inspectors, on the other hand, typically are responsible for ensuring that the projects are built to the design. In the city Planning Department, inspectors ensure that buildings meet city code regulations.

The city has 36 project inspectors to oversee more than 800 ongoing construction projects, Loui said. There are not enough inspectors to cover all the projects, which forces the city to hire consultants.

"We send all construction projects out to bid, which is required by law," said Ben Lee, city managing director. "Documents are prepared by the consultants, not by city workers. It's difficult to do in-house because we're looking at civil, electrical and mechanical consultants and planners to do these documents. The coordination of the various design trades requires an outside consultant to do the work. If the city had to do all the work, we'd need a lot, lot more people to do the job. Most cities contract the work out."

Most cities hire consultants on the basis of their skills and levels of expertise, not the amount they estimate their design contract will cost, said Phil Simon, spokesman for The American Institute of Architects. He said there is no industry standard for design costs because so much depends upon the complexity of the job, the permits required and the number of public hearings required.

That's how it's done in Honolulu in a no-bid process, said city spokeswoman Carol Costa.

In Honolulu, the city doesn't ask for bids but asks consultants to submit their qualifications each year. A panel of employees reviews them and comes up with a list of qualified consultants. When a project comes up, the first consultant on the list is contacted. If the firm is available, then the city begins to negotiate the fee for the job. If the consultant isn't available, the city then goes to the second consultant on the list, Costa said.

Many cities and counties supplement their own design and planning staffs with outside consultants, depending on the project.

In Kern County, Calif., which has about 600,000 people, about half the projects are designed and planned by a staff of 21 county architects, engineers and inspectors. The other half are contracted out on a qualification-based selection.

Recently, Kern County drew up the design and planning documents for a $10 million Department of Public Health building. Those documents came to 6.5 percent of the construction cost, said Mark Russell, the county architect and construction services division manager.

"Recently, we did a planning and engineering job for 7 percent in-house (on some work required to comply with the Americans With Disabilities Act) and the outside architects were coming in at 28 percent of the construction cost," Russell said.

So the California county chose to do the design work in-house because the consultants' fees were too high, Russell said. "It's politically unpopular to have in-house architects, but for the taxpayers, it makes sense," Russell said. "Psychologically, the consultants know we can turn them down and do the work in-house if their fees are too high."

In Honolulu, it's virtually impossible to hire experienced architects and engineers to work in city government because of the salary being offered, Loui said. There are only 11 architects on staff, which includes department supervisors.

Lowell Kalapa of the Tax Foundation of Hawai'i, a private, nonprofit organization that serves as a tax watchdog, believes that the city's no-bid process makes for higher prices, noting that Honolulu's administrative costs have doubled in the past 10 years.

In the private sector, a company would put a project out to bid, asking several companies to come up with the plans and designs for a project, he said.

Among the projects in the 2003 budget with significant percentages of total costs going to planning and design:

• Near Royal School on Pele Street, the city says it will cost $60,000 to design a small community park near H-1 Freeway, $10,000 to buy the land from the state and $80,000 to build the park. Portion going to design costs: 40 percent.
• On Pi'ikoi Street, the city plans to landscape the median strip between the Ala Moana thoroughfare and Kapi'olani Boulevard. The city says it will cost $60,000 for designing and planning and $10,000 to build it. Design and planning costs: 86 percent.
• At Makakilo Community Park, the community wants to build a baseball backstop and bleachers. The city says it needs $50,000 for design and the construction will cost $150,000. Design costs: 25 percent.

"The amounts of our capital improvement projects represent what we feel the community wants through the vision and neighborhood board process and some of the mayor's personal projects," city spokeswoman Costa said. "The majority of the projects is what the community is asking for. Everyone loses sight of that."

City Council Budget Committee Chairwoman Ann Kobayashi has heard the questions about design costs and has some questions of her own as the council reviews the proposed budget.

"It's just unbelievable," Kobayashi said.

"Why not just go around and ask the residents where to put the picnic benches at Sheridan Park on Pi'ikoi Street?" she said, referring to another project where the city plans to hire a planner for $10,000. "You can go through the budget and find all kinds of expenses. I'm concerned about these."

Reach Suzanne Roig at sroig@honoluluadvertiser.com or 395-8831.