TO: Mayor and Members of City Council
THRU: Douglas Hewett, City Manager, ICMA-CM
FROM: Adam Lindsay, Assistant City Manager
Blair Hinkle, Freese & Nichols Consultant
DATE: May 5, 2025
RE:
Title
Construction Management Division Update
end
COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal 3 - Invested in Today and Tomorrow
Goal 4 - Highly desirable place to live, work and recreate
Goal 5 - Financially sound city providing exemplary city services
Executive Summary:
The Construction Management Division (CMD) is one of the City’s newest departments, established in 2019 to centralize resources for the successful completion of Segra Stadium. CMD continues to evolve and now manages most of the City's parks, public safety, and facilities construction projects. The Division handles initial cost estimation, project management, financial management, and coordination with client departments. Currently, CMD oversees more than 15 active projects totaling over $150 million.
The timing of standing up this department coincided with a global pandemic, historical swings in construction cost inflation, and significant shortages in available qualified contractors. Fayetteville, like many others, has faced significant challenges in some recent projects, and in response the City partnered with Freese and Nichols, Inc (FNI) to enhance project management practices. FNI has been providing oversight and assistance since November 2024, including managing specific projects and helping procure Owners Advisors for future projects. An assessment by FNI identified the need for increased capacity and more formalized project management processes. To implement these recommendations, staff is moving forward with a one-year contract with FNI to add resources and develop a more proactive and transparent project management framework
Background:
The Construction Management Division was created in 2019 as a way to centralize and focus resources towards the successful completion of Segra Stadium, home to the Fayetteville Woodpeckers. Since then, the Division has evolved to assume a centralized role in the delivery of capital facility projects for client departments throughout the City organization.
Today, the Division is responsible for managing most of the City’s parks, public safety, and facilities construction projects. Responsibilities of the Division include initial cost estimation, design- and construction-phase project management, reporting of project data, financial/budget management, and coordination with client departments. The Division has five authorized positions - three (3) Project and Contract Managers (PMs) (one currently vacant), an Administrative Manager, and a Director (currently vacant). The Division’s current project portfolio includes more than 15 active projects that are in planning, design, or construction, which total more than $150 million.
Over the last two years, the Division has had several projects that faced challenges due to contractor separation for varying reasons. These challenges highlighted a need to increase the level of sophistication with which projects are being managed in order to shift footing to a more proactive, formalized project management approach.
In order to improve project management and delivery, the City partnered with Freese and Nichols, Inc (FNI), a full-service regional engineering firm with expertise in managing municipal capital programs, project management, and program management best practices. An FNI program manager has been working in place in the Construction Management Division since November 2024 tasked to conduct an overall assessment of the Division, provide oversight to the division in the absence of a director, and assist in managing project issues as they arise. In addition, a separate, dedicated FNI project manager is managing the Veteran’s Park II and Cape Fear River Park projects.
FNI is assisting the City in procuring Owners Advisors for projects moving forward in order to ensure that City project managers have independent expertise at close hand to partner in the successful execution of projects.
As noted above, the FNI program manager was engaged to complete an assessment of the CMD organization, its processes, and its relationships and interactions with other departments in the performance of its duties. In general, an overarching need for increased capacity and formality in the documentation of processes were identified. Specific, actionable recommendations were provided to the City in the form of a findings memorandum.
Issues/Analysis:
In order to facilitate the successful implementation of these recommendations, as well as other industry best practices and oversight, staff is moving forward with a one-year Capital Facilities Program Management contract with FNI. This effort will add significant dedicated resources to the Division, including a deputy program manager, one or two additional project managers, resources for construction observation, and a significant back-office presence to assist in developing a long-lasting, more formalized and transparent project management framework. This contract is structured to allow FNI to bring significant resources to bear in the short term, and then to allow them to ramp down services as City staff and processes grow and strengthen to support the program framework in house.
While projects will always have their challenges, the goal of this effort is to develop the Construction Management Division into a more proactive, sophisticated, and transparent project management office.
Budget Impact:
Options:
Recommended Action:
Receive this information and provide consensus to the City Manager to proceed with contracting with Freese and Nichols, Inc to implement their recommendations for the Construction Management Division.
Do not proceed as recommended and provide further direction.
Attachments:
FNI Report