Meeting_Body
PLANNING AND PROGRAMMING COMMITTEE
JULY 18, 2018
Subject
SUBJECT: MEASURE R AND MEASURE M
COST MANAGEMENT POLICY
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
ADOPT the revised Measure R and new Measure M Cost Management Policy (Attachment A).
Issue
ISSUE
The center of the expenditure plans for both Measure R and Measure M is the significant capital project portfolio. Managing a mix of projects - either several large or "mega" capital projects with multi-year timelines, or a multitude of small capital projects - comes with inherent uncertainties that can affect costs. To effectively manage the complex capital program, the Board adopted a cost management policy for Measure R; with the recent passage of Measure M, an update of the cost management policy is in order.
The revised Measure R and Measure M Cost Management Policy (Policy) updates the original Measure R Cost Management Policy to provide consistency between the existing policy and the Measure M Cost Management Policy in the Measure M Guidelines. The updated Policy also addresses ambiguity in the application of the Policy with projects that are between development phases.
Background
BACKGROUND
The Metro Board adopted the original Measure R Cost Management Policy in 2011 to help document and address potential cost increases for the capital program. The Policy identifies key events in a project's development when costs are to be evaluated and steps to address cost increases, including value engineering, local agency funding, shorter segmentation, cost reductions to other projects, and prioritizing the funding and scheduling of projects.
In 2015, the Metro Board amended the Policy to include regional facilities. Regional facilities are generally defined as airports, seaports, and Union Station. This amendment allowed Metro projects within the boundary of those facilities to be exempted from corridor and subregional cost reduction requirements.
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