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sr-051011-3hCity Council Meeting: May 10, 2011 Agenda Item: ~'-' To: Mayor and City Council From: Barbara Stinchfield, Community and Cultural Services Director Subject: Authorization for the City Manager to Negotiate and Execute a Comprehensive Urban Forest Maintenance Program Contract with West Coast Arborists, Inc. Recommended Action Staff recommends that City Council authorize the City Manager to negotiate and execute afive-year contract with five additional one-year renewal options with West Coast Arborists, Inc. in the amount of $6,286,926 for five years for comprehensive urban forest maintenance program services. Executive Summary The vendor will conduct the maintenance of the City's more than 33,800 public trees under the oversight of the Public Landscape Division. Services provided by the vendor include, but are not limited to, tree pruning for traffic clearance and pedestrian safety, tree removal and replacement for trees that pose a risk to public safety, and management of the electronic tree inventory. The five-year contract will not exceed $6,286,926. Background In 2001, bid number 2835 was awarded to West Coast Arborists, Inc. for one year with nine one-year renewal options. The City exercised all nine one-year renewal options as West Coast Arborists, Inc. satisfactorily completed all work in accordance with contract specifications. The current and final one-year option expires July 10, 2011. Discussion In response to a notice of request for proposals for a comprehensive urban forest maintenance program issued by the City on February 14th, 2011, one bid from West Coast Arborists, Inc. was received and publicly opened and read on March 14, 2011. Two "no bid" forms were received from other prospective bidders due to the inability to 1 meet certain requirements and insufficient resources. Staff evaluated the bid submitted by West Coast Arborists, Inc. and determined that it meets the requirements of the City. During the ten-year length of the prior urban forest maintenance program contract, the flat rate for tree pruning was $144 per tree. With the new proposed five-year contract with West Coast Arborists, Inc., the flat rate for tree pruning is $174 (21% increase) and will remain fixed throughout the five-year contract term. The change in the tree pruning flat rate is due to increases in the costs of fuel, insurance, medical benefits, and a higher living wage. Utilizing current appropriated funding, staff estimates 5,400 trees will be trimmed annually {1,100 or 17% fewer trees trimmed estimated fo.r FY10-11 }due to the increase of the tree pruning flat rate. However, with the proposed in-house tree trimming efficiencies that are part of the FY11-13 budget to be considered by Council, staff estimates that this number can be mitigated to 275 {4%}fewer trees trimmed. Alternatives The alternative to executing a comprehensive urban forest maintenance program contract with West Coast Arborists, Inc. is to replace contracted staff with newly-hired City employees. This action would require the following additional staff, vehicles, equipment, and resources to maintain the current level of productivity delivered by the contractor: ® 17 full-time employees (FTEs) -including tree trimmers, groundskeepers, and equipment operators Employee uniforms, safety boots, tools and communication devices • 19 vehicles - including a crane, tower trucks, stump grinders, chippers ® Vehicle and equipment maintenance ® Vehicle fuel ® Training and professional licenses and professional association memberships 2 Cost Comparison The table below depicts the estimated costs of providing an urban forest maintenance program of equal productivity in-house compared to contracted staff during the proposed contract term. In addition to the cost of vehicles, equipment and associated maintenance and resources, the second column assumes the City's estimated costs using an inflation factor of 2.5%' and 4% for employee salaries in FY12-13 and FY13- 16 respectively, and a conservative inflation factor of 12% for employee benefits during FY12-16. The contractor's salaries comply with the City's Living Wage Ordinance. The third column {contracted costs) illustrates the amount the City has budgeted for an urban forest maintenance program, including a 10% contingency for new projects or requests by departments, and assumes a conservative inflation factor of 4% for FY13- 16. FiscaFYear In-House Costs Contractor Costs Cost Difference FY11-12 $4,071,939 $1,174,550 $2;897,389 FY12-13 $2,412,720 $1,203,914 $1,208,806 FY13-14 $2,515,159 $1,252,070 $1,263,089 FY14-15 $2,626,339 $1,302,153 $1,324,186 FY15-16 $2,747,165 $1,354,239 $1,392,926 Total $t4,373,322 $6,286,926 ':$8,086;396 Financial Impacts & Budget Acticns The five-year contract amount to be awarded to West Coast Arborists, Inc. will not exceed $6,286,926. Funding for the length of the five-year contract is contingent upon Council appropriations in each biennial budget. For FY11-13, funds are included in the budget at account 015553.555010 {Community and Cultural Services Department - Public Landscape Division). During this year's budget planning process, the City used an inflation factor of 1.25% and 2.5% for FY11-12 and FY12-13 respectively. 3 The budget for urban forest maintenance in Fiscal Year 2011-12 is $1,174,550, which includes a 10% contingency of $106,777 in the event that urban forest maintenance is required due to unforeseen needs. During the term of the five-year contract, the amount budgeted for urban forest maintenance will increase by the annual inflation factor equivalent to the annual cost escalator used to develop City departments' supplies and expenses budget. If the City chooses to exercise one-year renewal options after the five-year term of the contract, contract pricing may be adjusted for an inflation factor. Budget authority for any one-year renewal option will be included in each biennial budget cycle. Prepared by: Carlos Collard, Senior Administrative Analyst Approved: Cu-(rcw,,.~ ~ , ~ Barbara Stinchfield Director, Community and Cultural Services Forwarded to Council: G Rod Gould City Manager 4 Reference Contract No. 9370 (CCS).