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Staff analysis finds limited net savings from bringing construction management in‑house; short‑term hire of engineering tech recommended
Summary
A fiscal review of in‑house construction management showed potential savings but also significant fully burdened staffing costs; staff recommended adding an engineering technician or senior capital projects manager as the most cost‑effective near‑term step and to revisit fuller in‑house options during the next budget cycle.
PISMO BEACH — A staff analysis presented Feb. 6 indicated bringing construction management entirely in‑house could offer only modest net savings unless the city sustains a steady pipeline of capital projects and funds a dedicated team.
Consultant and capital‑projects staff summarized a multi‑year review of recent and anticipated projects and estimated the portion of construction‑management work that could be transferred from consultants to city staff. The analysis found potential gross savings on consultant fees but also identified fully loaded personnel costs (including benefits, CalPERS and other burdens) that offset much of those savings.
“The direct simple answer is no,” staff said when asked whether an in‑house construction‑management team, by itself, would save money. The fuller analysis found that adding positions to create a stable in‑house team could narrow the gap but would likely require careful project scheduling to keep staff fully utilized.
As a near‑term step, staff recommended hiring an engineering technician or a senior capital projects manager before committing to a full construction‑management team; the engineering‑tech hire would cover inspection needs, encroachment reviews and reduce consultant costs immediately, staff said.
Council members expressed support for a phased approach. Some members asked that staff return with full burdened costs, vehicle/equipment needs and a plan showing how an in‑house team would be kept busy without creating idle staff costs. Staff said they would propose the engineering‑tech position as part of the next two‑year budget process and return with a detailed cost‑benefit if the council wanted to pursue fuller in‑house services.
What happens next: Staff will return with refined fully burdened cost estimates, options for a phased staffing plan (engineering tech first), and a recruitment proposal timed to the next budget cycle.
