SR-303-003 (3)
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303-003
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.." " r MAY 2 4 196B
Santa Monica, California
May 24, 1988
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TO:
Mayor and City Council
FROM:
City Staff
SUBJECT:
Recommendation to Authorize the City Manager to
Negotiate and Execute a Contract with Executive
Parking, Inc. to Manage and Operate Fourteen city
Beach Parking Lots
INTRODUCTION
On March 28, 1988, the city issued a Request for Proposals (RFP)
to manage and operate the fourteen beach parking lots currently
operated by the Beach Parking Division of the CUltural and
Recreation Services Department. Four proposals were received and
carefully reviewed by a City selection team. Based on that
review, city staff recommends that the City council authorize the
City Manager to negotiate and execute a contract with Executive
Parking, Inc. to manage and operate the beach parking lots for a
two year term.
BACKGROUND
The city currently manages and operates fourteen beach parking
lots, which are comprised of 4,597 parking spaces (see Exhibit
I). The Beach Parking Division employs two permanent staff and
18.3 as-needed Parking Lot Attendants to provide year-round
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MAY 2 4 1988
management of the lots. The direct costs of the Cityrs beach
parking operation will total approximately $602,847 in FYl987/88.
Over the past several months, City staff has explored several
revenue generating options for the Beach Fund which finances the
City's beach parking lot operation, beach maintenance services,
the County lifeguard contract, and additional police coverage of
the beach area by overtime police officers.
Contract Management
One potential revenue generating option for the Beach Fund is
contract management of the fourteen beach parking lots. The
City's experience with contract management of the Pier parking
lot by Executive Parking, Inc. has shown that private parking
companies have the potential to increase the efficiency and
profitability of parking lot operations due to their professional
expertise in parking management, while at the same time saving
the city the cost of direct management. As a result of contract
management of the Pier parking lot, gross parking revenues
increased 50% in FY1986/87, net of the parking fee increase. The
County of Los Angeles, which contracted with a private contractor
for a three year term in March, 1986 to manage its 28 beach
parking lots, experienced a 20% increase in their beach parking
lot revenues in the first year of contract operation.
In addition to the increased revenue generating potential of a
private contract operation, such contractors can afford to make
significant capital improvements to the City'S beach parking lots
in order to maximize parking potential, such as improved entrance
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and exit configurations and restriping. These are improvements
which the City has not been able to afford given the limited
financial resources available in the Beach Fund.
DISCUSSION
Given the increased parking revenues which were generated for the
pier and the County as a result of contract management, City
staff prepared a Request for Proposals designed to determine the
viability of contract management of the city's beach parking lot
system. The RFP required that proposals insure a guaranteed
minimum payment of $1,881,547 (the net beach parking lot proceeds
for calendar year 1987) plus a fixed percentage of the revenues
earned above that minimum. The RFP's were issued on March 28,
1988 to 40 area parking lot companies. Four proposals were
received on April 22, 1988 from Executive Parking, Inc. (EPI),
AMPCO Parking, Inc., Parking Concepts, Inc. (PCI), and Allright
Cal Inc.
A City selection team comprised of representatives from the city
Manager's Office, General services and cultural and Recreation
Services Departments, and the Airport reviewed the proposals and
interviewed three of the four proposers, EPI, AMPCO and PCl.
Selection criteria set forth in the RFP and utilized by the team
included the completeness of the management and operating plan
proposed, the experience of the manaqement team, and the
financial return to the city.
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Based on the criteria outlined above, city staff recommends that
the City contract with Executive Parking, Inc. to operate and
manage its fourteen beach parking lots. EPI1s proposal
represents the best financial return to the City (see Exhibit
II), increasing revenue to the Beach Fund from $140,000 to
$750,000 over that which would be generated by the City operation
depending on the total gross revenue which is achieved in a given
year. For example, should EPI generate the same amount of
revenue currently projected to be earned by the City's operation
in FY1988/89 ($2,400,000), the city will earn an additional
$320,092 in beach parking revenue as a result of cost savings
attributed to contract management. EPI's performance on the
Pier, combined with their detailed proposal, demonstrate their
strong revenue control systems and location management
techniques. The company currently manages over 70 parking
facilities throughout Southern California, including 20 parking
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facilities in Santa Monica, the City of Beverly Hills surface
parking lots, and the Ventura pier parking lot. They have also
consulted to the city of Newport Beach in the redesign of their
beach parking lot operation. City staff has found them to be
highly responsive to pier needs in their management of the Pier
parking lot and they have made significant capital improvements
to the pier lot to maximize parking.
Transition to Contract Management
The City plans to turn over management of the beach parking lots
to EPI on July 1, 1988. The as-needed Parking Lot Attendants
currently employed by the City will be interviewed by EPI and,
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should they meet EPI's requirements, will be offered employment
in Santa Monica. It is City staff's intention to place the two
permanent staffmembers in other comparable positions in the city.
BUDGET/FINANCIAL IMPACT
Depending on the amount of gross revenue generated by EPI,
contract management will generate an additional $140,000 to
$750,000 in beach parking revenues for the city. For example,
should EPI generate the same amount of revenue currently
projected to be earned by the City's operation in FY1988/89
($2,400,000), the City will earn an additional $320,092 in beach
parking revenue as a result of cost savings attributed to
contract management (see Exhibit II). Appropriate adjustments
will be made to the current revenue projection for the beach
parking operation for FY19BB/B9 once contract negotiations have
been completed with EPI.
RECOMMENDATION
City staff recommends that the City Council authorize the City
Manager to negotiate and execute a contract with Executive
Parking, Inc. to operate the city's fourteen beach parking lots
for a two year term with two one year extensions at the city's
option.
Prepared by: Julia N. Griffin
Senior Management Analyst
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Attachments: Beach Parking Lot Data Sheet
Revenue Comparisons for City and EPI
(bpkingll)
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EXHIBIT I
SANTA MONICA BEACH PARKING LOTS
Address Number of Spaces
530 Pacific Coast Highway 76
810 Pacific Coast Highway 209
930 Pacific Coast Highway 91
950 Pacific Coast Highway 78
1030 Pacific Coast Highway 59
1060 Pacific Coast Highway 100
1150 Pacific Coast Highway 487
1440 Pacific Coast Highway 150
1550 Pacific Coast Highway 706
1640 Appian Way 75
1670 Appian Way 64
1750 Appian Way 117
2030 Barnard Way 1,525
2600 Barnard Way 860
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4,597
(bprfp1)
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PROJECTED
GROSS REVENUE
$1,900,000
$2,000,000
$2,100,000
$2,200,000
$2,300,000
$2,400,000
$2,500,000
$2,600,000
$2,700,000
$2,800,000
(BPKING12)
EXHIBIT II
REVENUE COMPARISON: CITY AND EPI
CITY - REVENUE EPI - REVENUE
NET OF OP. COSTS TO CITY
$1,380,604 $2,150,000
$1,446,604 $2,150,000
$1,546,604 $2,150,000
$1,646,604 $2,150,000
$1,746,604 $2,150,000
$1,846,604 $2,166,696
$1,946,604 $2,221,696
$2,046,604 $2,276,696
$2,146,604 $2,331,696
$2,246,604 $2,386,696
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