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CM:CARS:LCB:BFM:JS:dvm:srepir Santa Monica, California
City Council Meeting: June 18, 1991
STAFF REPORT
TO: Mayor and City Council
FROM: City staff
SUBJECT: RECOMMENDATION TO AUTHORIZE THE CITY MANAGER TO
NEGOTIATE AND EXECUTE AN AMENDED AGREEMENT WITH
EXECUTIVE PARKING, INC. TO MANAGE AND OPERATE FOURTEEN
CITY BEACH PARKING LOTS.
INTRODUCTION
This, report recommends that City council authorize the City
Manager to negotiate and executive an amended agreement with
Executive Parking, Inc. (EPI) to manage and operate the City's
fourteen beach parking lots for the period from July 1, 1991
through June 30, 1993.
BACKGROUND
In the spring of 1988, the city undertook a competitive proposal
process in order to select an operator for the City-operated
beach parking lots. On May 24, 1988, city council authorized the
City Manager to negotiate and execute an agreement with EPI for a
two year period plus two one year options. EPI assumed
management of the lots on July 1, 1988. To date, the City has
utilized the original contract period as well as one of the two
option periods.
On June 4, 1991 the City Council approved an increase in the
beach parking lot rates. Due to this rate change, City staff and
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EPI have renegotiated the financial terms of the operating
agreement.
DISCUSSION
The following are the proposed changes to the terms and
conditions of the agreement:
Current 1st Year 2nd Year
Agreement FY 91/92 FY 92/93
Minimum Yearly Payment $2,150,000 $2,500,000 $2,500,000
Base Revenue 1,881,547+ 2,081,000+ 2,081,000+
55%* 60%* 62.5%*
*This is the percentage of the excess gross revenue over base
revenue which is paid to the city. The City receives the greater
of the minimum or base revenue plus %.
Further, the new agreement specifies that any gross revenue over
$3,200,000 will be split SO/50 for both FY 91/92 and FY 92/93.
It is proposed that the City apply these renegotiated terms to
the remaining one year option period as well as to add an
additional one year option to the term. This would result in a
5-year agreement which is in line with state guidelines.
In addition, under the revised agreement EPI will increase the
amount of litter pick-up performed by their staff and addresses
the possibility of sharing revenues from City-approved
advertising. All other terms and conditions of the original
agreement will remain in full force and effect.
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BUDGET/FINANCIAL IMPACT
In the current fiscal year, the estimated revenue from EPI is
$2,325,700. In FY 91/92, estimated EPI payments to the City are
$2,738,000 (an increase of $412,300 from what is reflected in the
Proposed Budget). However, when the 35.5% payment to L.A. County
for lifeguard services of $146,367 is calculated, the net revenue
increase to the City is $265,933.
Therefore, staff recommends that the proposed FY 91/92 City
Budget be revised as follows: Beach Fund revenue account
#11-400-501-00000-0126-10000 be increased by $412,300 to
$2,738,000 and the Beach Fund expenditure account
#11-400-522-00000-5506-00000 (for lifeguard services) be
increased by $146,367 to $1,116,063.
RECOMMENDATION
City staff recommends that the city Council authorize the city
Manager to negotiate and execute an amended agreement with
Executive Parking, Inc. to operate the City'S fourteen beach
parking lots for two one year terms for FY 91/92 and FY 92/93,
and direct staff to revise the Proposed City Budget for FY 91/92
as indicated above.
Prepared by: Lynne C. Barrette,
Assistant City Manager
Barbara Franklin-Moran, Director
Cultural and Recreation Services Department
Jerry Shuster
Consultant
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