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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. 2 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 3 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. 4 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 5 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. 6 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 7 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 8 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. 9 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 th 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. 10 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 11 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 12