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SR-112707-1PCity Council Meeting: November 27, 2007 Agenda Item: ~` To: Mayor and City Council From: Eileen Fogarty, Director, Planning and Community Development Subject: Modification of Agreement with Parking Concepts, Incorporated for Parking Management Services and Appropriation of Funds for Contract Modification Recommended Action Staff recommends that the City Council: 1. Authorize the City Manager to execute a Second Modification to Agreement number 83760 (CCS) with Parking Concepts, Incorporated (PCI) which exercises the option to extend the agreement to June 2008 for the total of $3,605,980, and appropriate funds of $244,000 for the contract modification. 2. Authorize the City Manager to negotiate an additional one-year option to the PCI Agreement for the period June 2008 through May 2009, for an estimated amount of $3,740,000. This would allow staff adequate time to prepare an RFP and complete a competitive procurement process for the next parking operations contract. Executive Summary The City operates its off-street parking services pursuant to a consolidated parking management contract with PCI. The contract to PCI was awarded in June 2004 for three years, with two one-year renewal options. The contract term ended in June 2007. Staff initiated renewal discussions with the contractor and stakeholders as early as January 2007; these discussions have been protracted to address service concerns identified by the Bayside District. The original agreement has continued on a month to month basis since July 1, 2007, during which PCI has continued to provide service to the City. Staff had also requested that PCI expand services during this time to cover increased service needs including the bike attendant program for the Farmer's Market and operations of the Civic Center Parking Structure. 1 The first modification would formally exercise the option to extend the contract through June 2008 and recognize the costs paid since July 1; 2007. It would also reflect services directed by the City which have not been formally included in the contract budget. Lastly, it would add new service improvements, such as improved elevator maintenance, and increased labor at exit lines and peak beach days. Staff is in the process of evaluating improvements to parking operations in conjunction with Economic Development Division staff. The evaluation's conclusions will be incorporated into an RFP for the next parking operations contract. To allow time to complete these processes, staff is also requesting that Council authorize the second option to extend the contract from July 2008 to May 2009. Staff also recognizes that Council may consider bringing services in-house or requiring that additional benefits be paid by the contractor to its employees, as part of Council's citywide evaluation of contracting for services. The. PCI contract and all options and modifications will allow the City to terminate the contractor's services with 30 days notice, should and when the City decides to implement any changes to its contracting polices. Background In June 2004, PCI was awarded a contract with athree-year term and two one-year renewal options following a competitive procurement process that included input of proposal review and evaluation by staff from Finance, Resource Management, Community and Cultural Services, Environmental and Public Works, Resource Management, Pier Restoration Corporation, Bayside District Corporation, Macerich (owner of Santa Monica Place) and the City of Pasadena. Council authorized the first modification to the agreement in November 2005 to allow for the operation of the Library and Civic Center structures, parking lots on Main Street and Ocean Avenue in the Civic Center area and to provide for some additional service in the downtown. This modification included a budget through June 2007. Staff initiated negotiations related to the renewal in early 2007. These negotiations have been protracted in order to address community concerns and concerns identified by the Bayside District. The original agreement provides that the agreement will continue on a month to month basis while negotiations of a contract extension are underway, and PCI has been providing service to the City on that basis since July 1, 2 2007. Under the terms of the annual agreement, the operator is provided atwo-month advance to cover operating costs while monthly invoices are prepared by the contractor and reviewed and processed by the City. Because the month-to-month agreement does not provide for. such an advance, the contractor experienced. atypical cash flow challenges while invoices were prepared and processed. Finance Division has helped parking operations to expedite payments to address this problem, and, with the approval of the extension and the budget; the City will be able to provide the two-month advance anticipated by the terms of the agreement. In this second modification, staff is recommending that the Council authorize the first one-year extension with a budget that includes funding to cover costs related to the following: Operations previously authorized by Council but not incorporated in the contract budget.• • Full-year of operation of the Civic Center structure $104,000 • Main Street Farmers' Market services $25,800 Costs related to increased activity the downtown: • Peak period staffing $86,000 (8 mos. $58,000) • Ticket stock $6,000 Costs related to increased activity at the beach (8 mos. $58, 000) • Additional supervisor $32,000 • Peak period staffing $54,000 Service Improvements • Improved elevator maintenance (downtown) $9000 • Armored transport for funds (from beach) $9000 3 Some of these service costs were appropriated with the FY 2007-08 budget; other service cost will be appropriated with the year-end budget actions. Discussion Parking activity is high. There were approximately 3.8 million structure visitors in Fiscal Year 2006-2007, up almost 200,000 from 2004-2005 and over 300,000 (10%) since the year before PCI began operating the facilities. Annual revenue from these facilities has increased about $900,000 (18%) over the same period. The revenue increase reflects both the increase in overall activity and improvements in operations and revenue control. Bayside District Corporation has been very interested in the quality of parking services, especially the ability of the facilities to operate well during the busiest periods ih downtown. There have been numerous discussions and meetings with Bayside to address their concerns. The proposed contract budget includes additional resources for peak period staffing, and elevator maintenance. The following issues are addressed by providing additional resources in the modification: • Increased staffing for peak periods ($86,000) • Improved elevator maintenance ($9,000) Additional staff efforts to improve parking operations which will not require additional funds to the parking operator also include: • Outside review of operating procedures and policies • Allowing credit card payments in exit lines and at pay stations • Additional effort to direct motorists to available parking o Directional signage o Traffic and parking radio 4 Bayside has also requested that the City implement a bicycle valet program downtown, and look at comprehensive restructuring of pricing and the way services are provided. Programmatic Changes for Parking Operations To improve parking operations of the City's structure, the Transportation Management Division is working collaboratively with the Housing and Economic Development Department and Bayside to procure a consultant that will provide expertise in developing objectives and specific recommendations to improve the City's parking operations. The goal is to identify operational and programmatic changes and incorporate them into the next request for proposal process for a parking operator. As this process is lengthy, staff is seeking authorization for the second one-year extension as part of this report to allow sufficient time for the recommendations to be fully developed into a new RFP, for the procurement process to be completed, contract negotiations to be finalized and Council authorization to occur by May 2009. Pursuant to the first modification, the budget for the any option year shall be the budget that the Council approves as part of its annual City budget. Financial Impacts and Budget Actions The contract modification proposes a service plan of $3,605,980 for the current fiscal year. The plan covers services to Downtown Structures 1-6, Structure #9, Civic Center Parking, Main Library Parking, Pier lots, Beach lots, Main Street and Ocean Avenue. The entire contract is to be budgeted in the Parking Operations Division of the Planning and Community Development, General Fund; however, the actual will be charged to General, Beach, Pier, and Parking Authority funds based on usage. The contract amount reflects: • The expenditures incurred from July to October 2007 on the month-to-month term and the continuation of the services at the FY2006-07 level through June 2008. 5 • Services of $25,800 for Sunday Farmers' Market including attendants for Market refund and bike valet. • Additional or new services: o Costs for full year operations of the Civic Center Parking Structure $104,000 o $9,000 for improved elevator maintenance o $9,000 for armored transport from beach facilities o $6,000 for ticket stock 0 8 months of additional peak period staffing • $58,000 beach • $58,000 downtown FY2007-08 Adopted Budget has included $3,336,180 for the parking management services (01417.555010) and $25,800 (01268.566260) for Sunday Farmers' Market services. An additional appropriation of $244,000 is required at account 01417.555010. The additional one-year option to extend the contract from June 2008 to May 2009 would cost approximately $ 3,740,000, which will be included in the FY2008-09 Proposed Budget for Council's review and approval. Prepared by: Lucy Dyke, Transportation Planning Manager, Planning & Community Development Department Approved: Eileen Comm Forwarded to Council: ~((nont Ewell Manager 6 Reference Contract Nos. 8360 (CCS)