SR-417-010 (11)
F:\PCD\parkingoperator.doc Santa Monica, California
City Council Meeting June 13, 2000
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Award of Contract for Downtown, Pier and Beach Parking
Operations to Standard Parking, Inc.
Introduction
This report recommends award of a contract for a consolidated downtown, pier and
beach parking operation to Standard Parking. In addition to reviewing the operator
selection process, this report identifies proposed service improvements and identifies
potential revenue sources to cover additional costs with associated service
improvements.
Background
The recommendation represents a joint effort by four City departments--Community and
Cultural Services, Resource Management, Environmental and Public Works
Management, and Planning and Community Development, to coordinate and improve
the quality of contract parking operations throughout the City. The four departments
have proposed that additional resources be devoted to parking management, and that
management of the parking operations be consolidated within the Planning and
Community Development Department.
The fiscal year 2000-01 proposed budget includes funding for a parking operations
office within the downtown to manage all visitor and commercial parking operations
including this contract, which will replace contracts formerly managed by Planning and
Community Development, Community and Cultural Services and Resource
Management for the downtown structures, beach lots and pier deck. If this
recommendation is approved, Standard Parking would assume responsibility for the
downtown parking structures as of July, 1, 2000 and the beach and pier lots on October
1, 2000.
To date, parking management has been one of many responsibilities for the staff in the
departments of Planning and Community Development, Resource Management,
Environmental and Public Works Management, and Community and Cultural Services.
As a result, coordination, management of and strategic planning for parking resources
has been difficult. In order to have a comprehensive approach to parking management,
there must be centralized management of all related parking resources including street
meters, private lots, public structures, public surface lots and valet operations.
Additional staffing resources, enhanced maintenance and management of parking
facilities will support the program and improve communication between interested
departments and other agencies. Increased user fees are identified as a source of
revenue to fund the program.
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Discussion
Operator Selection Process
Planning and Community Development staff prepared a request for proposals with
input from all four departments as well as Finance, the City Manager?s office, and staff
from the Pier Restoration Corporation and the Bayside District Corporation. Seven
firms attended a pre-bid conference and tour, six submitted proposals and an eleven-
member panel interviewed three. The panel included City staff from Finance,
Community and Cultural Services, Resource Management, Environmental and Public
Works, Planning and Community Development as well as the Executive Directors of the
Bayside District Corporation and the Pier Restoration Corporation and the Parking
Operations Manager from the City of Beverly Hills.
Proposals received were evaluated according to the following:
1. References (pass/fail)
2. Financial Stability (pass/fail)
3. Operations Plan (20 points)
4. Budget Plan (20 points)
5. Marketing & Customer Service Plan (20 points)
6. Level of on site and off site supervision (15 points)
7. Price (10 points)
8. Oral Interview (15 points)
Total 100 points
Standard Parking received the highest rating from the panel and is the recommended
operator. Standard provided references from similar operations including Redondo
Beach Pier, City of Burbank, and Phoenix Civic Plaza. Those references were
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contacted and all had high recommendations about Standard and Executive Parking,
as its local operation was previously known. In addition to outside reference
information, the City has first-hand experience with Standard Parking. Standard is the
current operator of the pier lot and, as Executive Parking, formerly operated the beach
lots. Standard Parking exhibited a solid understanding of the challenges faced by the
City?s parking operations and impressed the panel with its commitment to the success
of the proposed consolidated operation.
Scope of Services
The parking operator is charged with operating the City?s public parking facilities
according to the highest standards of customer service. The operator is required to
manage parking operations, collect and deposit revenue, coordinate all work in the
facilities and communicate effectively with the users of the facilities including visitors,
merchants whose customers and employees use the facilities, as well as the Bayside
District Corporation and the Pier Restoration Corporation.
The contract includes management of over 8,309 parking spaces in the downtown, and
at the beach and pier. It also includes replacement of the access and revenue control
equipment for downtown facilities, provision of parking revenue control equipment for
the beach lots, and enhanced customer services. Although all facilities are managed
under one contract, the operator must account separately for revenues, costs and
staffing for downtown structures, beach lots and pier lot.
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Modifications from existing operations
The proposed contract includes a number of provisions designed to reduce problems
associated with current parking management operations, including congestion and
delays in exiting the structures and entering beach lots, and to provide improved
reporting, financial accountability and customer care.
The contract consolidates management of all parking operations to increase
accountability, and allow coordination of operations, public information, permit sales
and overall parking policy. This will significantly facilitate City oversight and will result
in a coordinated parking operation that delivers a higher level of service to customers
and beach guests. For the first time, communications and operations will be
coordinated among all facilities. This will allow more effective use of facilities and a
single source of communication to the public regarding all facilities.
The contract requires the operator to provide and upgrade tools to manage traffic flow
in and out of facilities at peak periods. These tools include pay-on-foot stations,
additional automated exit/entrance lanes to reduce exit queues for patrons of the
garages, additional cashiers for peak periods, and automated queue sensors and
incentives for the operator to monitor and address problems as they arise. To alleviate
peak congestion, additional cashiers are recommended for Friday and Saturday
evenings in the structures and peak summer months at the entrance to the 1440/1550
Pacific Coast Highway facility. The operator is also required to provide a more
effective capacity (car counting and lot full) monitoring system that can reliably indicate
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and track which structures and lots are actually full at any given time, to display this
real time capacity information on electronic signs visible from the street, and to back up
information on capacity utilization with increased on-site management and staffing as
needed during peak operating periods (including nights and weekends). The new
system will also significantly reduce operational problems through providing more
reliable equipment, improved revenue control, shorter exiting time for customers, and
communication within the operation and between the operation and City, Bayside and
Pier Restoration Corporation staff.
Revenue collection capability is improved and auditing capability is enhanced. The
City?s parking operations collect $9.3-$10.3 million in revenue per year (depending on
the beach season), enough to justify additional controls and annual audits. Every
operator who submitted a proposal for this contract estimated a significant increase in
revenues, from 10-15% due to the degree of control and operational improvements
required by the request for proposals. Under this contract, revenue collection is
increasingly automated, and the operator is required to accommodate various types of
payment including credit and debit cards. For the first time, equipment provided at the
beach will provide a means to verify beach revenues against actual car counts.
Increased asset security is provided through budgeting for armored car service for
transporting revenues from all facilities. The operator will also provide for an annual
third party audit under City direction.
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In addition to targeted operational changes, this contract focuses more on the details of
customer care. The contract requires the operator to implement a customer service
plan and provides for a unique ?parking host? service to allow the operator to respond
to complaints and problems in a timely way and effectively monitor of the level of
maintenance. Together with centralized management from the City and enhanced
commitment to maintenance and cleaning, these changes should provide noticeable
service improvements for residents and visitors. They are discussed in more detail
below.
Standard Parking, Inc. proposes dedicating a full-time customer service position to this
contract to develop staff, communicate with clients and the public and resolve
problems. The overall customer care program will include new employee orientation,
training in customer service, reward and recognition programs. It will also include fast
response to service issues regarding products, facilities and staffing, customer surveys,
rate surveys, promotion of new services including pay on foot and debit cards,
informing patrons of changes, providing printed information and implementing new
marketing and customer service ideas. The program costs $60,000 annually.
Standard Parking, Inc. proposes to enhance the feeling of safety and customer care in
the structures by providing a ?Parking Host? service. The parking host would be
deployed to address problems relating to customer care. The parking host would
provide immediate response to and monitoring of structure cleaning, ensure that
restrooms are empty at night prior to lock-up, as well as provide on-call customer
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assistance. A significant portion of the maintenance and cleaning cost, and many of
the complaints regarding the structures are attributed to the impacts of their heavy use.
The parking host will assure a visible presence within the garages to discourage
people from using facilities improperly, report cleaning and maintenance problems
before they become the subjects of a user complaint and report suspicious activity.
Over the life of the contract, parking host services may be redeployed to address
pressing needs. The cost of the proposed service is $193,000 annually.
Finally, the minimum wage required in the proposed agreement provides for wages that
are higher than are currently paid to parking attendants. Operators were asked to
submit budget proposals based on three minimum wage rates: the market wage, a
minimum wage comparable to the Los Angeles County living wage and, a wage rate of
$10.69/hour. The proposed contract price is based on the second option, the minimum
wage rate comparable to that adopted by Los Angeles City. This wage will improve the
desirability of these jobs and should be an effective tool to reduce staff turnover and
improve performance. The proposed contract also includes a requirement that the
operator implement a different wage rate increase at the City?s discretion at some later
date.
Option Regarding Cleaning and Maintenance
The proposal required operators to separate out costs for cleaning and routine
maintenance. City crews currently provide these services. Some observers believe
that maintenance quality could be improved by placing the responsibility for cleaning
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and maintenance solely with the parking operator. This would reduce the need for
coordination among various parties and reduce confusion about who is responsible for
the general cleanliness of the facilities.
The Standard Parking, Inc. proposal indicates that it could provide the enhanced level
of service incorporated in the City Manager?s recommended budget at a cost savings of
approximately $100,000 compared to the proposed budget enhancement allocated to
the solid waste division. The cost differential may be attributable to lower wage rates
for people who operate powerwasher and sweeping equipment by subcontract to the
operator as well as a lower wages and benefits paid to Standard employees than City
maintenance workers. It may also underestimate the time and materials required to do
an adequate job of cleaning each facility, and the staffing required for cleaning at
nights and on weekends.
The cost estimates are based on the commitment to cleaning services at two levels
specified in the request for proposals. The first is the cleaning schedule currently used
by the City, the second is the cleaning schedule proposed as an enhancement in the
2000-2001 budget. The City provides the service by using one large crew allocated to
both the structures and the Promenade, and it does heavy cleaning with its own power
scrubber machine operated by this crew. Standard Parking proposes to assign one
janitor to each structure and to subcontract for sweeper, steam cleaning and spot
degreasing services. A comparison of current and proposed maintenance follows.
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Current Cleaning Schedule Proposed Enhanced Cleaning
City $463,271 $585,271
Operator $475,000 $475,000
Staff recommends that these services continue to be provided by City staff. However, if
the Council chooses to accept the operator?s proposal for contract cleaning and routine
maintenance, the City would have $585,000 in Solid Waste Division resources to
redeploy.
Budget/Financial Impact
Total costs for downtown, beach and Pier parking operation during FY 2000-01 will be
$2,900,000. The year one contract with Standard Parking, Inc. cost is $2,900,000.
This includes a full year of operation for the downtown structures, nine months of
operation of the beach and pier lots as well as nine months of operation of the structure
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under construction at 4 and Wilshire which is estimated to be completed by October,
2000. The cost is approximately $1 million per year higher than what the City is
currently paying. The higher costs are attributable to enhanced services and
capitalization of parking access and revenue control (PARC) equipment in the
operating budget. The City has previously purchased parking access and revenue
control equipment through its capital budget. This contract includes replacing and
upgrading that equipment. It is currently at the end of its useful life and frequent
repairs contribute to problems in the structures.
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Parkers themselves will be the primary beneficiaries of the enhanced service and could
be asked to pay increased rates to cover the additional costs. Two options are
available?increased monthly charges and increased transient parking charges. Each
is discussed below.
Increase monthly parking rates
Monthly parking rates in the City?s downtown structures are lower than market rates.
There are waiting lists for monthly parking at the current rates. Increasing the rate from
$65 to $75 per month could raise $120,000 per year.
Increase hourly parking rates
Hourly rates in the downtown structures apply after the first two hours. If the rate for
hourly parking were to increase by $0.25 per half-hour to $1.00 per half-hour, the City
could raise approximately $980,000 annually to offset the cost of service and
maintenance enhancements.
Staff recommends that the proposed operator contract be approved, with Standard
Parking, Inc. as the operator. The two revenue measures that are proposed to offset
the cost of the enhanced services?a $10 increase in the monthly permit fee and a
$0.25 per half-hour increase in the hourly parking rate?are incorporated in the final
budget recommendations. These revenue measures would be phased so that the
monthly fee increase would go into effect in August, 2000 and the hourly increase
would go into effect on January 15, 2000, after the service improvements have been
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implemented. A resolution implementing these revenue measures will be included with
the final budget adoption staff report.
Recommendation:
Authorize the City Manager to negotiate and execute a three-year agreement with
Standard Parking, Inc. The FY 2000/01 cost of $2,900,000 and associated revenues
will be incorporated in the final budget changes to be presented for Council action on
June 20, 2000.
Prepared By: Suzanne Frick, Director of Planning and Community Development
Lucy Dyke, Transportation Planning Manager
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