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4. Authorize the City Manager to approve amendments to the agreements with Interwest Consulting Group, RK Associates, and 4Leaf, Inc., if required to meet service demand. FINANCIAL STATEMENT The increase in the contract amount allows payment for plan review and inspection services anticipated for this fiscal year. The building and fire permit fees pay for much of the cost for plan review and inspection services, and, therefore, the cost to the City is minimal. BACKGROUND The City has historically utilized contract services to review plans and building permit documents for compliance with the provisions of the City's Building, Fire, Electrical, Plumbing, Mechanical, and Housing Codes; related Building Division policies; and State and local laws. In addition, these services provide inspections and investigations as may be required by the City's Ordinances and duly adopted policies to help facilitate the plan review and building permit processes. Such services include the duties related to the Chief Building Official as set forth in the Pleasanton Municipal Code and as described in the attached Agreement. Contract plan review provides flexible service levels to handle variations in construction activity and plan review workload and expertise in a wide variety of construction specialties, including projects ranging from new large custom homes and high-tech commercial offices to remodeling of historic structures. The City currently maintains agreements with RK Associates, Inc. and Interwest Consulting Group for these services. However, in anticipation of increased service activity, staff is recommending an agreement with 4Leaf, Inc. for similar services. This third agreement will assure that there are adequate services available to meet demand should building activity continue to increase. Plan check services equaled approximately $394,000 in FY 2010-11 and increased to $450,000 in FY 2011-12, and are anticipated to increase to $500,000 in this fiscal year. Consultants receive 55 percent of the plan review fee collected by the City. However, if revisions and additional review are required, including services for non-permit fee projects, the City will be billed at an hourly rate. Approximately $3,000 (0.6%) of the total plan review fees paid last year were not reimbursed from fee revenue. As indicated, adding the third plan review firm will not increase overall costs unless used to meet demand. During FY 2011-12, the amount charged by the City's two plan review consultants exceeded the combined not-to-exceed amount of their contracts by $249,598. Because the contracts do not include a mechanism to go beyond the not-to-exceed amount, this report requests authorization to make these payments to the two consulting groups based on the services provided. To address this issue in the future, staff is recommending an increase to the not-to-exceed amount from $275,000 to $400,000 for Interwest Consulting Group, a new agreement with 4Leaf, Inc. for a not-to-exceed amount of $250,000, and authorization for the City Manager to approve amendments as necessary to meet service demands. Staff anticipates that the total combined fees from all three agreements will be approximately $500,000. Page 2 of 3