Project Management in Public Projects

Author

Antonia Botero
October 22, 2022

For context:

I put together my thoughts based on @moseskagan's shout-out in a comment on a Twitter post of the Noe Valley bathroom estimate.

While I'm less familiar with this specific project, I have worked on public-private partnership projects and have seen up-close the wasteful spending that plagues public projects.

My thoughts on this subject aren't novel and I know many people in the design/development and construction industries who think similarly. This was simply an opportunity to gather some of these thoughts and perhaps provide some helpful suggestions.

This is not meant to be a write-up to impart blame.

Ground rules and assumptions to begin:

For the sake of a productive argument, I’m not assuming corruption of any kind.

I’m not an expert on SF of SF law but have a general understanding of what rules apply to public projects.

With that in mind, here is my opinion on the issue of public projects— using the Noe Valley restroom as an example.

These thoughts can apply to all public projects in jurisdictions that have fallen victim to gross professional complacency.

1- The wastefulness of public projects is not unique to CA nor a recent issue.

This is not to say this is ok. Any public official that says wasteful spending on public projects is the norm and people should accept it should be ashamed. Either they don’t know their local market, or they don’t care to know it. Obviously, this applies to staff up and down the chain who have any involvement in public projects. Why should they be held to a different standard than the one a private investor holds a developer? If anything, spending taxpayer money should require a higher bar of expertise.

If I ever had a PM on a project say “We put the project out to bid — these are the numbers that we’re getting” (excerpt from the 6sqft article linked above), they would soon be unemployed. The lack of personal and professional pride in this is a subject for another time, but this level of complacency from anyone who serves the public should be an outrage to all taxpayers.

2- I honestly believe this is a result of incompetence, not corruption.

Unfortunately, most public employees have never held private jobs. They don’t have the ‘reps’ to be excellent at the work, and they are so far removed from the people that are hurt the most by this wasteful spending that they don’t have a ‘front of mind’ reason to improve processes. This is less about blame & more about resources. If you never teach someone how to run a project, they will likely never figure it out to the excellence that should be required.

3- This is also a result of unreasonable public project requirements that have piled up over the years.

Most public project insurance and qualification requirements far exceed private requirements (usually as a result of previous lawsuits). Compliance with these regulations is usually done in one of two ways: by statute, or by making compliance a condition of funding. The requirements that are not related to previous lawsuits (like the 12X statute) usually become one of those situations where a city will cut off its nose to spite its face. Again, there is some nuance and good faith required here (like the one I’m exercising by assuming no corruption). I’m not saying to remove all laws and requirements, but rather that a closer look at those rules in light of how they hurt funding for other public services may be in order.

4 - These are some things that towns/cities could begin to do now.

Perhaps a less than ‘all or nothing’ approach could be a better solution when implementing laws that limit who a city can do business with. Jurisdictions should also begin looking at public project review periods & implementing maximums per statute. Public projects should jump the line every time over private projects when it comes to jurisdictional review. Reviewing a 150SF structure should not take more than 4 weeks. Period. They should also move to implement maximum construction times— as any self-respecting HOA across the country does. After a certain period of time, the team in charge of the project should be held accountable for delays.

5- There is something we can do about the incompetence & the ridiculous requirements without having to go through years of changing the law (which should be done anyway): public/private partnerships.

I know public projects require extra care & this is not about foregoing the highest standard of care. I’m suggesting the opposite. By partnering with private companies, public projects can benefit from the perspective of the for-profit world. Private providers/consultants who often work on projects that must be built to the highest standards or else they won’t be acceptable are likely to have the expertise required to raise the bar on public projects.

While this route will still require compliance with public project standards, administering those paths to compliance will look wildly different when in the hands of an expert team. This route will still cost more than a private project would— but the difference is unlikely to be over 100% of what an equivalent private project would cost.

With this in mind, let’s run two exercises.

1-Mark up the original estimate if I was running the project with my team:

Anybody worth their salt in the design & construction world should be able to see this & point out all of the things I noted. It’s very tough to believe that nobody on a town/city’s team has this minimum level of expertise. Again, these estimates are rarely seen by a single person— especially at a public entity. Usually, it’s a full team with differing levels of involvement that lay their eyes on these projects. The complacency it takes to get to this point is tough to overcome, but I really think there is a lot to be done.

2-Throw around rough construction numbers based on the market:

The range of projects in CA that I’ve seen in the last 6 months for a market rate finish range from $400-$600/SF.

Luxury product is being built for $1000-$2000/SF. By this, I mean houses in Malibu with insane material finishes.

Let’s be sensible & assume a range of $600-$1500/SF (remember this is only construction).

Let’s return to the plot: 150SF of a public restroom (no fancy finishes required). I would think this should be at the lower end of the range, but for the sake of this exercise, let’s establish the full range.

$90,000 to $225,000.

The lower end of Noe Valley’s estimate for construction is $450,000— coincidentally, twice the higher end of the range for the local market— it’s $3,000/SF. The only people I know who are building for that are building custom homes, not even ultra-high-end condo projects in the most expensive markets are hitting that number for hard costs.

Regardless of how you slice it, this is unacceptable. It would not fly in the private sector and it should not fly for a public project.