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SR-08-27-2013-3KCity Council Meeting: August 27, 2013 Agenda Item: 3K To: Mayor and City Council From: Gigi Decavalles- Hughes, Director of Finance Subject: Purchase New Parking Access and Revenue Control System Recommended Action Staff recommends that City Council approve Alternative 1 to staff's recommendation included in Agenda Item 3K and reject all proposals and direct staff to complete a new Request for Proposals (RFP) process. Executive Summary Since staff became aware of the legal issues described in the staff report, the City has continued to analyze the integrity of the selection process utilized to review the proposals for the Parking Access and Revenue Control System (PARCS) and to ensure that the City can operate Structure 6 when it is completed in December. After further review of all currently available information, including that described in detail in the staff report, and a complete review of alternative methods to operate parking in Structure 6 in December, staff recommends that Council approve Alternative 1 to staff's recommendation and reject all proposals and direct staff to complete a new Request for Proposals (RFP) process. Discussion As discussed in the staff report, following completion of the evaluation process, the City became aware that a member of the rating committee has a son that is employed by WPS, the recommended best bidder. Staff's primary concerns are to protect the integrity of the selection process while also ensuring that Structure 6 will have a functioning parking management system when it opens in December. Staff believes that the City should be able to open Structure 6 on time with an interim, yet functional, parking control system. Therefore, Staff recommends that Council approve Alternative 1 to the staff recommendation in Item 3K, rejecting all bids and directing staff to 1 complete a new competitive RFP process for the Parking Access and Revenue Control System (PARCS), in addition to finding an interim solution. Staff has been assessing various shorter term operational models for Structure 6 when it is completed in December, and has preliminarily identified a number of alternatives. Although none of these options offer the same high level of customer experience the City planned to provide upon the opening of the new structure through the PARCS, staff believes that the City should be able to operate an interim functioning structure with any of these options while the City solicits other proposals. Over the next week, staff will complete its assessment of costs and benefits of each option, seek quotes from vendors as necessary, gather stakeholder input, and return to Council with a recommendation. Additionally, in order to ensure the high level of integrity that the City requires in its contracting, staff will clearly establish conflict of interest disclosure requirements so that any future outside evaluator used by the City, either for this or any other project, must disclose potential conflicts of interest before the evaluator is selected. Staff will also consider other process improvements with its review of purchasing policies and procedures scheduled for Council consideration in the Fall. Financial Impacts & Budget Actions There are no immediate financial impacts as part of this alternative. Staff will return to Council with a recommendation for an alternative short term solution. Prepared by: Donald Patterson, Assistant Director — Finance Approved: Gigi Decav le Hughes Director of Finance PEI Forwarded to Council: Rod Gould City Manager To From: Subject: City of it unit Report Santa Momiled City Council Meeting: August 13, 2013 Agenda Item: 3 -K- Mayor and City Council Gigi Decavalles- Hughes, Director of Finance Purchase New Parking Access and Revenue Control System Recommended Action Staff recommends that City Council authorize the City Manager to negotiate and execute a contract with WPS USA Corporation (WPS), a Nevada -based company, in an amount not to exceed $4,800,000 for the purchase, installation, and maintenance of the Parking Access and Revenue Control System for the downtown parking structures, Main Library parking structure, Civic Center parking facilities, Ken Edwards Center, and Pier Deck parking lot, with three additional one year renewal options in the amount of $600,000, for a total amount not to exceed $5,400,000 over a ten year .period, with future year funding contingent on Council approval. The purchase and installation proposed amount is not to exceed $3,400,000, and a maintenance and service amount not to exceed $200,000 annually. Executive Summary The City currently utilizes a Parking Access and Revenue Control System (PARCS) in Downtown Parking Structures 1 -9, Civic Center and Main Library. This equipment was first installed in 2000 in Structures 1 -6 and its use has been expanded significantly over the past decade with the full automation of the Structures and the remodel of Structures 7 & 8. In addition to an ongoing maintenance and service agreement, the City has spent an average of $130,000 per year on non- covered parts. In 2012, Sentry Control notified the City that it would no longer be able to support significant portions of the system unless upgrades were made. Due to the age of the equipment and the cost of proposed upgrades, the Santa Monica Municipal Code requires the competitive procurement process that was conducted to either upgrade or replace the parking equipment. Although upgrading the equipment is lower cost, the selection committee recommends replacement of the equipment due to: • The proposed upgrade by the incumbent, Sentry Control Systems (Sentry) does not comply with the required response time for repairs specified in the Request for Proposals (RFP). As proposed, the City would incur additional cost for service calls placed after 11:00 a.m. Monday through Friday and on weekends. The recommended best bidder, WPS, complied with the service requirements of the RFP. 1 • Service — the City has a long history of delays in service and parts from Sentry control. Additionally, a Sentry technician is required for all changes to the equipment, such as programming event rates. WPS has a larger local inventory of parts and its equipment contains more readily available standardized parts. The WPS system also allows for client -based changes to numerous components, such as programming of event rates. • ADA Compliance — The WPS proposal includes all new equipment that complies with current ADA standards. The City's current equipment does not meet the latest ADA standards and Sentry's proposal does not include the modifications necessary to bring the pay -on -foot machines to the latest ADA standards. • Equipment Age — The City's current equipment inventory ranges in age from 3 years to more than 10 years old. The proposed upgrade would replace the most critical infrastructure pieces, such as non - supported controllers and outdated servers, but would maintain large portions of the existing, newer, inventory, which would continue to experience delays in parts and service as the equipment continues to age. A system replacement would provide all new parts throughout the City, ensuring increased reliability, decreased transaction timing and a more positive customer experience. Additionally, the recommended best bidder, WPS, includes additional flexibility in various components to meet the unique configurations of some lots, such as the wider driveways in the Civic Center lot. The proposed contract includes the necessary equipment for Downtown Structure 6. Without an award of a contract, the City will not have sufficient equipment to fully operate the $41 million, 700 space Structure 6 when it is scheduled to open in December 2013. This would negatively impact customer service in the City's newest structure. While the City completed a new procurement process, which would last 3 months, staff would have to institute a labor intensive, manual payment system to compliment the one pay -on -foot machine currently left from the old Structure 6. In addition to the replacement of the current equipment, the proposed contract would include purchase and installation of new parking equipment in Ken Edwards Center and the Pier Deck, for a total of 14 facilities in an amount not to exceed $3,400,000, and provide ongoing maintenance service for 7 years with an option to extend for 3 additional years with the cost estimated at $200,000 per year. Since the committee's recommendation became public with Council's August 13 agenda, Council has received communications from the incumbent, Sentry Control Systems (Sentry) regarding a variety of topics. Additionally, the City received a protest of the award on August 12, 2013. Staff has reviewed these communications, the protest letter received on August 12, and the process and protocols followed, and, in also weighing the need to provide equipment to Parking Structure 6 so as not to delay the opening, recommends that Council proceed with award of the contract to the best bidder, WPS. 2 Background The City first installed the current Ski Data PARCS equipment 13 years ago in seven downtown parking structures. Since then, five additional facilities have been added, as well as 37 pay —on -foot machines. On November 9, 2010, Council approved the purchase of additional equipment to fully automate the Downtown and Civic Center parking structures. The purchase was covered by a two -year warranty. This has provided for the centralization and full automation of the parking system which includes 13 facilities in Downtown and the Civic Center. -The centralized parking system processes approximately nine million transactions annually. The use of the centralized parking system provides Parking Operations staff the ability to consolidate reporting and revenue control functions and implement related operations. The average lifespan of parking equipment is seven years. A significant portion of the current PARCS in the City's gated parking facilities has outlived its lifespan and experiences frequent operating difficulties, while the newest equipment is beyond its 2 year warranty. In October 2012, staff received the attached letter (Attachment A) from Sentry Control Systems (Sentry), the City's current PARCS service provider, outlining what Sentry considered to be a series of serious deficiencies in the City's PARCS. On November 2, 2012, the City received a notice reporting the end of support for a significant portion of the City's current system. Currently, 47 of 95 coders (the portion of the system that allows transactions at the control panel office, entry and exit lanes) are not supported by Sentry and require replacement. In addition to the coders, the system's network, computers and servers have exceeded their life and need replacement in order to efficiently handle the current number of transactions and future expansions. The City is operating on Version 19 of the software program and cannot upgrade to the current Version 23 or future software upgrades that enhance PCI (credit card compliance) and PA/DSS (payment application and data security standards) due to incompatibility with the outdated coders. The current system frequently breaks down and has slow transaction processing times that cause delays in ingress and egress from the Structures. .i7 To the greatest extent possible, staff has been addressing the deficiencies in the system over the past year and prioritized the funding of an upgrade or replacement project in the second half of FY 2012 -13, when there was some clarity on how the City's existing capital improvement projects needs that were impacted by the dissolution of redevelopment would be addressed. For the remainder of FY 2012 -13, as staff completed the Request for Proposals (RFP) process for the project, the PARCS equipment continued to experience increased problems, as reflected in Sentry's letter received on August 12, 2013 and also attached (Attachment B). The increased incidents of failure and the end of support for a portion of the City's equipment resulted in Council's authorization of CIP funding for new or upgraded equipment as part of the FY 2013 -14 CIP budget. Discussion While the City suffers from a loss in revenue when equipment fails, customers' parking experience is also negatively impacted. Failure causes delays at the exits, which create traffic congestion and increased emissions from vehicles. In situations where equipment fails, the parking operator must deploy additional staff to manually facilitate the exit process, which results in increased labor costs. The replacement PARCS equipment would be able to perform reliably, reducing ingress and egress delays. It would also enable additional functions and reporting capabilities, such as developing an integrated value pass with the City's transit system. The replacement PARCS equipment would enhance the overall parking experience. To further enhance the current parking program, staff recommends including all gated parking facilities, including the Pier Deck parking lot, the new Parking Structure 6 and Ken Edwards Center, into the centralized PARCS. With these additional facilities, the new system is anticipated to handle over 11 million transactions annually. Vendor Selection In May 2013, the City issued a Request for Proposals on the City's online bidding site in accordance with the City Charter and Municipal Code provisions that require 0 competitive bidding for this project. During the RFP process, companies were allowed to propose to replace the PARCS or upgrade the existing equipment. Nine companies expressed an interest in the procurement process and six comprehensive proposals were submitted. One company, Sentry, submitted both a replacement and an upgrade proposal that were considered. A selection committee comprised of staff from the Finance and Information Systems Departments, City of Los Angeles Department of Transportation, and Macerich, reviewed the six proposals and short listed four companies to participate in an interview process. Macerich participated in the selection process pursuant to its lease agreement for Parking Structures 7 & 8. Upon adoption of the FY 2013 -14 Capital Improvement Budget and prior to the interviews, the short- listed companies were provided the opportunity to submit a best and final offer. At that stage, one company withdrew its proposal as the adopted budget was significantly lower than the company's initial proposal; all but WPS presented a best and final offer. The selection committee ranked the short- listed companies based on initial purchase price; long -term operating cost; quality of features, material and service; capacity to perform; character, reputation and training; project manager; and financial and inventory resources. Below is a 7 and 10 year total cost (installation and maintenance) comparison of the top three proposals, reflecting best and final offers submitted: Company 7 Year Cost 10 year Cost Datapark $3,827,956 $4,473,828 Sentry (Upgrade) $3,050,744 $3,876,116 WPS $3,927,730 $4,600,454 Based on the review, the selection committee determined that WPS USA Corporation provided the best combination of features, lowest ongoing maintenance cost, training and 24/7 support at no increased cost, and demonstrated performance at locations with high volume transient transactions and complicated parking rates and validations. Specifically, • WPS included a 4 hour response time 24 hours a day /7 days a week, consistent with the terms of the RFP. The lowest price proposer, Sentry, proposed "Sentry's 5 Assure Level 3 Maintenance Program." Assure Level 3, as described in Sentry's RFP response, is "Same Day if received by 11:00 am" and the service hours covered are "M -F," a response time less than required in the RFP. The City would incur additional charges for maintenance needs outside of these hours. As required in the City's RFP, the City needs a faster response time than this to meet the needs of a system that is heavily used well into the evening and on weekends, and is operational 24 hours a day, 365 days a year. • WPS is manufactured in North America and has a large inventory of parts in California. The company is headquartered in The Netherlands and has been in business 25 years. WPS equipment issues more than 7.5 million parking tickets daily worldwide. Staff considers the ability to promptly provide replacement parts important and the availability of local parts inventory can significantly assist in prompt repairs. Staff has a history of long wait times for parts from Sentry. Recent examples include: • On Wednesday August 7th, 2013 at 9:00 a.m. staff notified Sentry of failed equipment in the Civic Center. The part finally arrived six days later. • Sentry has failed to provide a solution for an ongoing issue of water leaking into the equipment on outdoor units that has continuously occurred since equipment was installed in outdoor locations. • On December 17, 2012 staff ordered a replacement validator for the Santa Monica Courthouse. The validator was delivered on March 11, 2013. • WPS proposed a Payment Card Industry (PQ compliant credit card processing system that eliminates the need for the additional third -party gateway that currently costs the City approximately $80,000 per year. This cost is paid under a separate contract and is in addition to the equipment cost for the other two proposers. • WPS offered a more extensive training and support program. WPS also provides for City staff to perform more functions than the current equipment. For example, with WPS, staff can program event rates instead of using a company technician. This allows staff to be more responsive to changing needs during events and to C have the ability to test and fix problems with rates before and during events. Sentry's system requires its technicians to make changes to the program, including event rates. ® WPS provides additional customer - friendly options, such as a phone app that provides for mobile validation of customer's tickets. WPS access control equipment is more flexible for different installation environments. As an example, it is capable of supporting different length access gate arms for specialized locations, increasing access control. ® The majority of WPS hardware parts use standard technologies (e.g. "off -the- shelf') which make equipment repair more efficient through increased local availability of parts. • The WPS proposal includes all new equipment that complies with current ADA standards. The City's current equipment does not meet the latest ADA standards and Sentry's proposal does not include the modifications necessary to bring the pay -on -foot machines to the latest ADA standards. WPS's proposal includes all new equipment that will ensure a reliable system. The upgrade proposal replaces components of the existing equipment and provides new equipment for the new locations, however the City would still have a significant portion of the equipment that will require replacement throughout the contract term. Based on these factors, WPS is recommended as the best bidder. The results of the evaluation (based on a maximum score of 100) for the short- listed firms were: WPS USA Corporation 82 Datapark M. Sentry Control Systems (SkiData) 77 Legal Issues After the recommendation to award to WPS became public, Sentry informed the City that the LA DOT representative has a son who is employed by WPS in Technical /Project Support. The City was further advised that public records indicate 7 that the LA DOT representative owns the home in which this son resides. The LA DOT representative was later questioned about this. He said that his son pays no rent. Based on the facts presented to the City, the City analyzed whether under applicable law the LA DOT representative did have a conflict of interest, thereby leaving the selection process, and, therefore, contract award, improper and potentially vulnerable to challenge. California statutes govern financial conflicts of interest and prohibit public officials from participating in governmental decisions affecting their own economic interests. Specifically, the Political Reform Act establishes that a public official may not make, participate in, or influence a governmental decision that will have a reasonably foreseeable and material financial effect on the official's economic interests. And, Government Code section 1090 prohibits a city official from having a financial interest in a city contract that she /he participates in the "making ". A person who violates section 1090 has committed a crime, and the resulting contract is void. WPS is a large international company and the employee does not appear to be either in a high -level position within the organization or to be a source of income to his father. Thus, the LA DOT representative apparently did not have a financial stake in the award, and a statutory conflict under either the Political Reform Act or section 1090 appears unlikely based on currently available information. In addition to the statutory prohibitions against conflicts, California courts also recognize a common law prohibition against the appearance of conflicts of interest. The common law doctrine prohibits public officials from placing themselves in a position where their private, personal interests may reasonably appear to be in conflict with their official duties. The common law is concerned with the "appearance" of a conflict of interest, and not necessarily with whether an actual conflict of interest existed. In this particular instance, a court would need to determine whether the LA DOT representative was in a position where it was reasonably likely that the average person 0 would conclude that he appeared to place his personal interests ahead of his official duties so as to create the appearance of a conflict of interest in determining which bidder was the best bidder for purposes of awarding a contract pursuant to the RFP. To some, the fact that the LA DOT Representative's son works for WPS certainly may suggest bias. Whether this alone is sufficient for a court to conclude that the common law was violated is much less clear. However, it should be noted that the selection committee's scores that appear above on page 6 of this Staff Report represent the averages of the scores that the five members of the selection committee submitted. If the LA DOT representative's scores were not included in those averages, WPS would have the same score although the spread between it and the other bidders would increase. WPS's score would be 82; Sentry's score would be 75, and Datapark's score would be 76. Therefore, any bias on the part of the LA DOT representative appears not to have affected the result. And, the Council could make the recommended award based on the other committee members' scoring. Nonetheless, if a legal challenge was brought based on facts presently unknown to the City or on an alleged common law conflict of interest, it is somewhat uncertain how a court would rule. Therefore, staff recommends that in making its decision, Council consider this risk and any attendant impact on public confidence and also consider the practical impacts of delaying the purchase and installation of new equipment, which would include a delayed opening for structure 6. Alternatives Council could consider two alternatives to staff's recommendation. 1) Council could reject all proposals and direct staff to complete a new RFP process. This alternative would result in delay of award of this contract by approximately 3 months while a new process is completed. The City would be unable to procure equipment for Structure 6, necessitating opening the new structure with minimal equipment and increased labor cost. This would likely result in a negative customer experience in the new Structure. 0 2) Council could award the contract to the second best bidder, Datapark, or the third best bidder, Sentry. Neither proposal from these bidders reflected the range of services proposed by the recommended bidder and would likely result in decreased customer service and a diminished user experience. Balancing the need to procure parking equipment for the redeveloped Structure 6 with the legal issues discussed above, and the fact that the overall recommendation of the selection committee would be unchanged when considering the ranking without the City of Los Angeles' representative, staff recommends the Council proceed with authorizing the agreement with WPS. Financial Impacts & Budget Actions The contract to be awarded to WPS USA Corporation is for an amount not to exceed $5,400,000. Funds in the amount of $3,000,000 are included in the FY 2013 -14 Capital Improvement Program budget in account 0010715.589000 (Parking Access and Revenue Control System) and $400,000 budget in account 0014049.589000 (Parking Structure 6 Construction). Funds in the amount of $200,000 for FY 2014 -15 expenses are included in the FY 2014 -15 budgets at account 01225.555010. Future- year funding is contingent on Council budget approval. No maintenance or service costs are anticipated during the first year. Prepared by: Frank Ching, Parking Administrator Forwarded to Council: F`� r C F> Rod Gould City Manager ATTACHMENTS: Attachment A - Email from Sentry on the end of equipment life Attachment B - Letter from Sentry on RFP Iff Attachment A From: "Shurtleff, Seth" <SShurtleff(a)PARKING.COM> Date: November 2, 2012, 8:29:48 AM PDT To: "Mansoor, Muhammad" <MMansoor(a-PARKING.COM >, "Smigel, Andrew" <ASmigeU�PARKING.COM >, "Roesler, Robb" <RRoesler(a)PARKING.COM >, "Macerato, Yvette" <YMacerato @PARKING.COM >, "Rennella, Ernesto" <ERennella a@PARKING.COM >, "Alvarez, Augusto" <AAlvarez(a(<PARKING.COM> Subject: Fwd: Important information to note about SKIDATA locations FYI Seth Shurtleff VP -LA Region C- 617.417.0170 E- sshurtleff(acaparking.com Begin forwarded message: From: "Stone, Jason" <JStone(a)PARKING.COM> Date: November 2, 2012, 7:50:20 AM PDT To: EDL_Skidata Facilities <EDL SkidataFacilities()PARKING.COM> Cc: *EDL Regional_Managers <EDL Regional ManagerS(a PARKING. COM> Subject: Important information to note about SKIDATA locations To ALL Managers of SKIDATA locations: Skidata has notified us, and your local vendors, of some changes in software support and end of life for certain parts of their system in the coming months. The purpose of this email is to communicate these changes with you so you can begin planning to address these necessary changes where needed, with your local service providers. 1. Parking System prior to R23 / V6 will only work on the Windows XP and Windows Server 2003 platforms. This means that after April 8, 2014 — these versions of the parking system running on Windows XP and Windows Server 2003 will no longer be running in a PCI compliant manner as the Operating System will no longer be supported. You will need to work with your local service provider to plan to upgrade your systems that are running a version older than this, prior to the April 2014 date. I realize that this is still a year and a half away, but we don't want to wait until the last minute for budget planning purposes, so please get with your local vendor soon, to get appropriate pricing, so you may budget appropriately for this required upgrade should your system be running a version prior to R23 / V6. 2. End of support for the coder 450's is March 31, 2013 which is only 6 months from now. Please be aware that as we approach this date SKIDATA anticipates challenges and changes relative to the supply demands. After 31 March 2013: No Parts / spare parts supply, No Repair services, No Ticket Supplier qualification process, No Product Support for the coder 450. This means that if your SKIDATA location operates with a 11 Attachment A coder 450, you need to make plans NOW to replace this through your local service provider, in hopes of avoiding system failures without the ability to repair. Your local service provider may have already communicated with you about these changes. If they have not, please don't wait for them to approach you about these necessary upgrades, especially #2 above, as well as planning for #1 above. Thank you for your prompt attention to these matters, and as always, please let me know if you have any questions. Jason Stone - Director of Field Operations 615- 850 - 6336(0) 615- 308- 4539(C) istoneo.parking.com Legal Notice: This message is intended for the addressee(s) only and, unless expressly stated otherwise, is confidential and may be privileged. If you are not an addressee, (i) please inform the sender immediately and permanently delete and destroy the original and any copies or printouts of this message, and (ii) be advised that any disclosure, copying or use of the information in this message is unauthorized and may be unlawful. 12 7777 7 11111,� 110, _y. MIAMI; III I I August 12th, 2013 Councilmember Gleam Davis City Hall 1685 Main St., Room 209 Santa Monica, CA 90401 Subject: August 13, 2013 Council Meeting— Agenda Item 3 -K Dear Councilmember Davis: We are respectfully asking you to remove Item 3 -K from the consent agenda for the Tuesday, August 13, 2013 Santa Monica City Council meeting so discussion can take place concerning the staff recommendation. The basis for this request is: 1. The premise for budgeting $3.5 million for system replacement was not presented with complete and accurate information. The Staff budgetary thesis was simply "the PARCS has lasted beyond its expected life and, as of March 2013, the equipment vendor can no longer support the current equipment." This is incorrect. a. $2.5 million was invested in 2010 & 2011 for the expansion of the system at Santa Monica Place and the Pay -On -Foot deployment across all the facilities. This work is still under warranty and has not lasted beyond its expected life. b. Staff had Morley Construction contract in October 2012 for the current PARCS system to be deployed at the new Structure 6, understanding the system was not "beyond its expected life ". c. The Staff has deployed 10 new software versions since the original installations. The software is as current as software sold only two years ago. It is not beyond its expected life. d. Sentry has been advising Staff for more than a year to immediately address key issues. These issues were outlined in detail in a letter to Frank Ching in October 2012 (EXHIBIT A). The letter warned of serious issues if the IT infrastructure, servers, software, and 31 ticket mechanisms were not updated. Our price for this work was $729,000. If this work were completed, 70% of the 500 reported issues annually would be addressed and that would set the City of Santa Monica up for a very reliable system handling 15.5 million ticket transactions per year. 2. The cost for the recommended system is $2.0 million more than our solution. Sentry submitted pricing to upgrade the current system or replace the entire current system as defined in the RFP. Sentry's pricing relative to WPS is represented in the below table. Sentry's price for the purchase & installation is $2,000,000 less than the WPS price. The purchase & install of an entirely new system is more than $1,000,000 less than the WPS price. Sentry's price to install the upgrade and maintain the system for the next 7 years is less than the WPS price just for installing a system. Please see EXHIBIT B (Financial Bid Comparison). Sentry Comm I Systems Inc 16611 Odessa Aven tae Van Nuys, CA 91406 (o) 818- 252 -5700 (f) 818- 786 -2910 1 www.wntiycontroI.corn fi Afflzmm- C G h l H O L S Y S I{ ]y !, 3. The Staff Report recommending the award of the PARCS contract has misinformation. Please see Exhibit C (Staff Report Rebuttal) 4. Service issues are being improperly blamed on an aged system. Our large installation client sites currently using similar systems as the City of Santa Monica include: the City of Beverly Hills, The Grove, Burbank Airport, John Wayne Airport, Long Beach Airport, County of Orange, The Getty, LA Live, City of San Rafael, UCLA, City of West Hollywood and City of Santa Barbara. As previously stated, the system at the City of Santa Monica handles more than 15.5 million transactions a year with as few as 500 issues, 70% of which could have been avoided with the system upgrades Sentry recommended. Please see Exhibit D (Skidata Letter), regarding the performance of the system currently installed at the City of Santa Monica. 5. A conflict of interest complaint has been filed with the City Attorney and City Manager and deserves a complete investigation prior to contract negotiation is approved by Council. PLEASE SEE EXHIBIT E (Letter to City Attorney /City Manager) Thank you for taking the time to review our attached materials. Please do not hesitate to contact us with any questions you may have. Sincerely, Frank Flanagan CEO /Owner (c) 858 -504 -0510 fflanagan@sei)trycontrol.com CC: Rod Gould, City Manager Timoth Hagan Principal /Owner (c) 818- 919 -3292 tflanagan@sentrvcontrol com -- 2 -- �ksli 111111 111111 VIII 800 246 6662 �a AYI'd jd ij jSHlj� Exhibit "A" - Page 1 of 3 October 10, 2012 Mr. Frank Ching CITY OF SANTA MONICA 1717 4th Street #105 Santa Monica, CA 90401 Dear Mr. Ching: The purpose of this letter is to draw your attention to the concerns Sentry Control Systems has regarding your Parking and Revenue Control System ( PARCS). Your PARCS system has increased in size over the last few years with the addition of new structures and POF machines. This increase in size has created an additional demand for network bandwidth. The existing network infrastructure, which our system depends on, has become unstable and creates regular interruption of the system's ability to collect revenue, In addition to the network related issues, your servers and process PCs are no longer up to the task of supporting your growing database. The problems you are experiencing today with system speed, reporting ability and offline events are only going to increase as time goes on. The eventual failure of the system's ability to collect revenue will occur. The problems we are seeing today are the warning signs of this imminent failure. Moreover, you should be aware of an additional concern regarding the new rules and regulations associated with the Payment Card Industry (PCI) and the Payment Application Data Security Standard ( PADSS). These requirements change over time. What this means is that you, as the merchant, must meet the new requirements on your own. There is a new version of the SKIDATA application that is validated per the most recent standard. Addressing the server and process PC issue, mentioned above, allows us to install this new version of software and address the new PADSS requirements. For a better understanding of this, we recommend you engage Sentry, or your Parking Operator, to hire a Qualified Security Assessor on your behalf. This will facilitate a better understanding of your risk and exposure. There are many aspects to PADSS that are completely outside of the PARCS. The two items mentioned above represent the most acute issues we are facing. We strongly encourage you to take action immediately. Sentry is capable of providing, all or part of the resolution and will support the city in however it chooses to proceed. Please see below for our recommendations to address these items. 6611 Odessa Ave Van Nuys CA 91406 P; 800.280.6662 F:818.786,2910 www.sentrycontrol.coni -3- rmy IIIIIIIIIIIIIIIIII I.,A� N NUMlaE Exhibit "A" - Page 2 of 3 Recommendations: 1. NETWORK The recommended changes to the network include replacing and recertifying the network cabling in structures 1 -6 and replacing the network switches in the parking booths. It is also our understanding that the Santa Monica IT department has provided a list of specific items that need to be changed along with a proposal for the changes. We highly recommend you take these recommendations from the IT department seriously and proceed as soon as possible with the upgrade. This will result in a marketable improvement in the overall stability of the SKIDATA system and support today's activity, as well as the future's. The network infrastructure should be able to support a 1 Gigabyte per second network. For PCI /PADSS reasons and ease of troubleshooting, we are recommending as much logical and physical separation of these networks as possible. 2. REPLACING PC'S & SERVERS WITH OEM COMPUTERS The plan for the City of Santa Monica's process PCs and servers is to take advantage of VMware technology. We use this as our standard on large locations, such as John Wayne Airport or the City of Beverly Hills, and would recommend this for the City of Santa Monica. This technology, installed on a Hewlett Packard DL380 G7 server, will provide the necessary processing power for smooth uninterrupted operation. In addition, we would need to change the process PCs in the field to the Dell XE. These changes provide an excellent foundation for efficient and effective revenue collection, increased transaction processing speeds, long term data retention and improved customer service —all of this can be purchased and installed by Sentry or your IT department. 3. PCI /PADSS COMPLIANCY Once these critical updates to the system are complete, we will be able to update the PARCS software with the current version that is validated with the most recent PCI /PADSS standards. In addition to complying with the new data security standards, the current version has many new features that will enhance the customer experience, provide tighter revenue control and increased functionality. 6611 Odessa Ave Van Nuys CA 91406 P: 809.246.6662 F: 618.786.2910 www.sonhycontrol.com -4- i ?46 6662 .11 4. HARDWARE UPGRADES Following the completion of these three very important upgrades above, it leaves only one outstanding upgrade beyond that to completely overhaul your SKIDATA system and leave you without the need to perform any further upgrades for some time. This upgrade would involve replacing the legacy -based encoding mechanisms (Coder 450) in all of your ticket handling devices to the latest and current encoding mechanisms (Coder 460)— SKIDATA introduced the 460, and discontinued supplying the 450 in 2007. The Coder 460 marked a dramatic improvement in efficiency and reliability versus its predecessor. Sentry has installed over 100 SKIDATA locations with the Coder 460 since 2007. The availability of parts is dwindling on the 450 product. For the time being, parts can still be repaired. We have received notice from the manufacture that the coder 450 will no longer be supported in any fashion as of May 2013. There may be some parts available beyond this date, but, it is the intent of the manufacturer to be completely out of old /new stock by this date. It has become apparent that a proactive approach is now needed to mitigate any possible catastrophe. The relationship between Sentry, the City of Santa Monica and your Operator will continue to be of the utmost importance to us, and we will continue to maintain the equipment as best we can, We sincerely appreciate your business and look forward to any questions or concerns you may have. Sincerely, Lester Mascon VP of Operations 66110dessa Ave Van Nuys CA 91406 P:800.246.6662 F:818.786.2910 www.sentrycontrol.coni 5- '11111111111111 1 IN!! iiiiiiiiiiiiiiiiiiiij, I0. /EII:31lic FINANCIAL BID COMPARISON TABLE 1 UPGRADE COMPARED TO WPS WPS Sentry Upgrade Sentry Upgrade With Maintenance Prepaid Pricing Pricing Variance Pricing Variance Purchase & Install $ 3,400,000 $ 1,400,000 I$ 2,000 00( $ 1,400,000 $ 2,000,000 7 Years maintenance $ 1,400,000 $ 1,650,744 $ (250,744) $ 1,400,000 $ Total 7 Year price $ 4,800,000 $ 3,050,744 $ 1,749,256 $ 2,800,000 $ 2,000,000 Maint. Option $ 600,000 $ 825,372 $ (225,372) $ 314,400 $ 285,600 Total 10 year Price $ 5,400,000 $ 3,876,116 $ 1,523,884 $ 3;114 40'( $ 2,285,600 TABLE 1 REPLACEMENT COMPARED TO WPS WPS Sentry Replacement Sentry Replacement With Maintenance Prepaid Pricing Pricing Variance Pricing Variance Purchase &Install $ 3,400,000 $ 2,278,716 $1721;2 $ 2,278,716 $ 1,121,284 7 Years maintenance $ 1,400,000 $ 1,434,744 $ (34,744) $ 1,132,384 $ 267,616 Total 7 Year price $ 4,800,000 $ 3,713,460. $ 1,086,540 $ 3,411,100 $ 1,388,900 Maint. Option $ 600,000 $ 717,372 $ (117,372) $ 431,000 $ 169,000 Total 10 year Price $ 5,400,000 $ 4,430,832 $ 969,168 $ 3,842,100 $ 1,557,900 WPS numbers are from Staff Report and Sentry numbers are from Best & Final Offer Sentry recommends the upgrade to address all issues discussed in Oct 2012 Letter (EXHIBIT A) Sentry included option to pre pay maintenance and this allows City to save even more Positive variance represents savings to City of Santa Monica --6-- i EXHIBIT C August 13, 2013 Staff Report Agenda Item: 3 -K Rebuttal Staff Report: "The PARCS replacement project is one of the Capital Improvement Projects for fiscal year 2013 -14... WPS USA Corporation is recommended as the best bidder to provide the new PARCS system. The contract would include purchase and installation of the new parking equipment for 14 parking facilities for an amount not to exceed $3,400,000.." Sentry Comments: The PARCS replacement project was approved as a Capital Improvement Project for fiscal 2013 -14, but this approval was based on a premise that is not accurate. Following the May budget study sessions, Council requested staff responses requiring lengthier or more complicated explanations. The PARCS budget request was one of these items and staff wrote in Attachment Al to the June 25, 2013 City Council Agenda Item 9 -A the following statement: "The City's PARCS in place in eleven of the City Parking Structures.... has lasted beyond its expected life and, as of March 2013, the equipment vendor can no longer support the current equipment." The City of Santa Monica spent $2,500;000 to install new PARCS equipment for Santa Monica Place and the Pay -On -Foot project across all parking facilities in 2010 & 2011. This deployment represents more than 70% of the PARCS transactions. This expansion of the PARCS has not lasted beyond its expected life and all the equipment is currently support by the equipment vendor (EXHIBIT B). In fact, all this equipment is currently within its warranty. During 2012 there were numerous discussions between Sentry and the City's Parking Administrator about how the expansion of the PARCS was creating network bandwidth issues. These discussions culminated in a series of Sentry recommendations, which were documented in the October 10, 2012 letter from Sentry to the Parking Administrator (EXHIBIT A). This letter documented the following issues needed immediate attention: 1. Network, PC's & Server Upgrades 2. Payment Card Industry Compliancy 3. Hardware Upgrades to Replace the Model 450 Ticket Mechanism (there are 31 units out of 94 that need replacement. Sentry subsequently provided a quotation to perform this work for $729,000. If this work were performed, the system would be on a new IT infrastructure, the most current version of software, and 100% of the PARCS equipment across the City of Santa Monica would be the most current equipment offered by the manufacturer and supportable for a minimum of 10 years. There is no need for the City to spend $3,400,000 to replace the entire system, especially when 50% is still under warranty. --7-- w Staff Report: "The average Iifespan of parking equipment is seven years. The current PARCS in the City's gated parking facilities has outlived its Iifespan and experiences frequent operating difficulties. It needs replacement and infrastructure upgrades." Sentry Comments: Sentry is not clear where Staff is getting the notion that parking equipment has a Iifespan of seven years. This may be true of some systems that are neglected or not kept current with the times. This is not true of the current PARCS installed in the City of Santa Monica. The most important factors influencing the longevity of systems we support are the following factors: 1. Software — The City's PARCS software started with Release 9 and today the City has Release 19. The City's current software vendor is the only firm in the parking industry that releases a new world wide software version each year. This enables the City to update its software to the same version as what new customers purchase 10 years or even 20 years after the City's initial installation. The City stopped doing routine annual (or every other year) software upgrades approximately 3 years ago. 2. Preventive Maintenance —The City has invested in a regular and ongoing preventive as well as repair program since the original sites were installed in 2001. This program has kept the equipment in excellent condition and overtime entirely new components have replaced the original parts, 3. Equipment Design —The current PARCS is designed for harsh climates as well as the challenging environments of ocean communities. Salt air can have problematic affects on our buildings, equipment, and infrastructure. The equipment installed in Santa Monica has not suffered these normal issues because it was designed to not rust and physically deteriorate due to environmental conditions. 4. IT Infrastructure —The most critical element to our system's longevity is the IT infrastructure. The City should follow the standards established by the IT department and it is common to address computer, server, and network issues as volumes and databases increase. Most of our customers involve their IT staff in planning these requirements on an annual basis. S. PCI PA /DSS Compliance for Merchants — in recent years this has been a major driver for merchants and it represents a material liability risk to any merchant if their system is not supported by a validated payment application. We have had a validated payment application in place for 100% of the Payment Card Industry standards that have been introduced over the last 6 years. Ours is the only system that can make this claim. We recommended deployment of the most current validated payment application in October 2012 but that recommendation has not been followed. If the City follows the same regimen it practiced in the first 10 years of the present parking system, then there is no reason to discard what is currently installed. Unfortunately, the parking system's software, credit card compliancy, and IT Infrastructure have not been kept current. The core Equipment Design is intact and the preventive maintenance has continued. Neglecting to continue addressing 3 of these 5 tenants to system upkeep has created a false impression the whole system must be replaced. Our October 10, 2012 letter (EXHIBIT A) makes this very clear and our recommendations, if followed, will save the City $2,000,000 to $3,000,000 in FY 2013 -14 and untold interruptions and patron inconveniences caused by the unnecessary wholesale replacement of the current PARCS. II IIII� II'I II ;III I I I C O N T R O L Staff Report: "As of March 2013, the manufacturer no longer supports or supplies replacement parts for major portions of the City's system. The frequent failure of the equipment has caused the City to lose up to $80,000 per month in revenue during equipment down - time." Sentry Comments: This statement is a misrepresentation of the facts. Essentially, staff is suggesting because major portions of the system are no longer supported, this is causing equipment failures that are costing the City up to $80,000 per month in revenue. This is not true. The City's parking revenues have increased over the last two years. The most significant vulnerability the City has at this time is the network, servers, and software need to be upgraded. This has been repeatedly recommended by Sentry and we even warned of negative repercussions in October 2012 (EXHIBIT A). Separately, we noted in the same letter there are 31 ticket mechanisms (Coder 450) that need to be replaced. Sentry has spare parts and continues to support these devices. It is true these devices need to be replaced. The manufacturer provided seven (7) years notice in 2006 that they would no longer support the mechanism in 2013 (EXHIBIT B). The City has been migrating to the replacement mechanism since 2006 and today 70% of these mechanisms are the newest model. Relative to the characterization the manufacturer does not support or supply parts for major portions of the system, please keep in perspective the replacement of the 31 ticket mechanisms will cost the City $600,000. This $600,000 expenditure is a subset of the $729,000 proposal we provided subsequent to the October 2012 letter (EXHIBIT A). That is far less expensive than buying a new system for $3,400,000. The suggestion in the staff's above paragraph is frequent failures of the equipment have caused the City to lose $80,000 per month. There is no possible way this is associated with the one component we are recommending be replaced (ticket mechanism). The IT infrastructure investment and software update we recommended represented $129,000 of our total proposal for the $729,000 in improvements. These upgrades would position the City for an IT infrastructure with capacity for a 50% increase in volumes relative to today's transaction levels. Staff Report: The staff report includes a discussion of other issues caused by "equipment failure" and these issues include serious matters such as customer experience, delays at exit, traffic congestion, increased emissions, additional staffing needs, and customerwait times. Sentry Comments: In Sentry's view, these are all serious matters and they need to be addressed immediately. The staff report clearly has identified symptoms that require a fix. The staffs diagnosis of the root cause is completely off base. Our October 2012 letter (EXHIBIT A) clearly defines what must be done to address all these symptoms and as previously stated, these symptoms (which were predicted to increase in frequency) can be addressed for a total outlay of $729,000. S� 7777 .. 7777777, 77-77 '77-77 777 77777777777, 77 Subsequent Comments from Staff Commentary Staff Comment: It has been reported to us staff has represented WPS is a United States based enterprise and its manufacturing is based in the United States. Sentry Comments: Staff has recommended the City of Santa Monica negotiate a contract for this project with WPS USA which is incorporated under the laws of Nevada. Research on this enterprise reveals the Nevada Secretary of State records reflect Derek J. Kiley is the president of this entity. Derek's address on the Secretary of State web site is 5630 Tomken Rd, Mississauga, Ontario Canada. This address is the HQ offices for WPS Canada. Other than a New York based attorney, all the other officers and Board members were based out of the WPS Canada Address The WPS Canada website clearly states: "Since its foundation in 1985, WPS has seen many highlights. In its 25 years of existence, WPS has grown from a local Dutch supplier of parking systems to an international provider of parking management solutions with its own global R &D, production facilities and sales offices." The web site for WPS Canada reflects a timeline which indicates in "1997 WPS becomes part of the Imtech Group, the European technical service provider." According to the financial report available on this web site, Imtech is a Netherlands corporation and is actually known as Royal Imtech N.V. Further inspection of the web site http: / /www.wpsparkingsolutions .com /underconstruction / shows a series of entities established in different countries. It clearly shows the WPS Head Office is in the Netherlands. In addition, the various web sites for WPS show legal notices are governed by the laws of the Netherlands and all the web sites reflect the following copyright notice: "© 2013 WPS Parking Systems B.V." The "B.V:' is a Dutch designation for a private limited liability corporation. Imtech Annual Report 2012 (5.54MB PDF). WPS is referenced on pages 15 and 58 of the Report. http: //a nnualreport. imtech. com / assets/ Jaarverslag20l2 /PdfsZlmtechAnnua [Report2012. pdf Country of incorporation was not identified as part of the RFP selection criteria. However, if it is a factor, we welcome the opportunity to compare our credentials to those of an enterprise owned by a foreign corporation. Sentry is a California Corporation and is owned by two California residents, Frank and Tim Flanagan. Sentry has operated under this ownership for 25 years. The City of Santa Monica contract would be with Sentry. Sentry and Sentry's owners pay taxes per California's tax code. Sentry has a contract to distribute and support products sold to Sentry by SKIDATA Inc. SKIDATA Inc. is a Delaware Corporation. Several of SKIDATA Inc.'s officers are United States citizens. SKIDATA Inc. is owned by SKIDATA AG based in Austria. Given this structure, the support for the SKIDATA system at the City of Santa Monica is provided by Sentry Control Systems, based in Van Nuys, CA. Our main warehouse is located 10 miles away as the crow flies, just on the north side of the Sepulveda pass. We warehouse $2.5 million of inventory in Southern California which can be validated by our bank references as well as our CPA firm. Sentry's inventory is distributed across our main warehouse and the 30 vehicles we stock in Southern California to service our customer base. In addition to our inventory investment, Sentry utilizes a state of the art ERP system for resource deployment. No firm in this industry has more factory trained technicians --10-- 1 based in Los Angeles and our installation resources are separate from our service resources. That means if we are engaged in a large install, we are not taking resources away from a customer who needs service. Sentry is the only firm in the industry with the depth to offer this. Sentry has more service technicians in the LA Basin than WPS has employees in the United States. SKIDATA Inc., a Delaware Corporation based in New Jersey, serves as the North American support office for its dealer network. SKIDATA warehouses inventory, provides programming resources, and adds value to the SKIDATA platform to support the unique needs of the North American market. Most equipment is manufactured by SKIDATA AG and there is some manufacturing and value adds done in the United States by SKIDATA, Inc. Staff Comment: It has been reported to us, subsequent to the staff report, that service issues are mounting and specific acute examples have been referenced concerning lack of parts availability and poor service performance Sentry Comment: The parking system at the City of Santa Monica handled an annualized volume of 15.5 million transactions during the period January through June 2013. This measurement represents all transactions at entry, exit, and Pay -On- Foots. Sentry tracked every incident and there were an annualized rate of 500 incidents (not all reported because some things addressed proactively during preventive services). We have shared this with staff and we estimate 70% of these incidents relate to the priorities we documented in our October 2012 letter (EXHIBIT A). The City's volumes are significant and based on simple ratio analysis there are 31,000 transactions per incident and if the network /server infrastructure were updated we would see that improve to 100,000 transactions per incident. Ina parking environment, those are considered solid reliability indicators. -- 11 -- EXHIBIT "D "Page Iof 2 K U D r L 8 K I C, ,1 U August 8` ", 2013 Santa Monica City Council City Hall 1685 Main St., Room 209 Santa Monica, CA 90401 Subject: SKIDATA Parking Controls & Automated Systems Dear Members of the City Council: It has been brought to my attention the City of Santa Monica has approved the purchase of a new PARCS based on a resolution that is incorrect. This letter is intended to set the record straight because the parking system manufactured by SKIDATA has been falsely represented. The incorrect statement I am referring to comes from the staff report claiming: "The City's PARCS in place in eleven City Parking Structures.... has lasted beyond its expected life and, as of March 2013, the equipment vendor can no longer support the current equipment." It is true that a minor portion of the system installed at the City of Santa Monica requires replacement. SKIDATA redesigned the ticket mechanism in 2006. The City of Santa Monica has been installing the new ticket mechanism since 2006. In fact, almost 70% of the ticket mechanisms installed in Santa Monica are the newest version. As a manufacturer of highly sophisticated systems understand better than anyone of the importance to update as technology evolves. It is also important to update technology and allow the older technology to work concurrently so gradual upgrades are possible. The city of Santa Monica has been gradually upgrading the PARCS for the past seven years. The majority of the ticket mechanisms installed (63 out of 94) represented the latest technology offered by SKIDATA. It is only the original six garages that have lane equipment that requires upgrading. These garages have the fewest number of lanes so they do not represent a "major' part of the system. The system at the City of Santa Monica has been installed and serviced by SKIDATA'S largest distributor in the United States. Sentry Control Systems is, in fact, the largest distributor of SKIDATA systems in the world. Sentry has been responsibly notifying the parking administrator of the upgrades necessary. The Director of Operations at Sentry sent a letter to the parking administrator clearly describing the upgrade required. I have read the letter provided to the city and it breaks out the reasoning for the upgrade requirement very clearly. Besides the ticket mechanism, the network infrastructure needs to be addressed. After all, the system has more than doubled in size since the current infrastructure design. Finally, the staff report states it is generally known parking systems last seven years. This may be true for other systems however it is not true for SKIDATA. Munich Airport is a good example Pg 1 of 2 SKIDATA Inc. One Harvard Way, Suite 5 Hillsborough • NJ 08844 P 908.243.0000 F 908243.0660 SKIDATA® is a registered tradernark of SKIDATA AG in the USA, the European Union and other countries. 12 EXHIBIT "D" Page 2of 2 K G G= L G K I G H G G of a SKIDATA system that has been installed since 1988. The SKIDATA system allows for annual software upgrades which allow our customers to enjoy new functionality features as well as new security features and new operating systems. The investment in hardware upgrades at Munich Airport, along with the annual software updates, has saved the Airport a tremendous amount in the long term. The investment the City of Santa Monica has made in the SKIDATA system over the last thirteen years has been sensible. An upgrade to the system will put the City in a position to avoid the inevitable cost of aggravation that will come from a full system replacement. There are very few companies in the world that can successfully orchestrate a full system replacement for a project this of this size. There are many companies that will say they can but in my 30 years' experience it is rare they actually deliver. SKIDATA and Sentry can commit to the City of Santa Monica an upgrade to the existing PARCS will be the best economic decision for the long term. Making the decision to upgrade is the logical choice based on the investment history of the City of Santa Monica. The City effectively made the decision to upgrade when it purchased $2,500,000 in the system two years ago. The remaining investment required for completing the upgrade is a fraction (a third) of what was recently invested. The concept of upgrading a PARCS versus replacing a system might be new to some in the industry. It is not a new concept to the City of Beverly Hills, City of West Hollywood, City of Pasadena, The Grove, UCLA, The Getty Center, and Bob Hope Airport. These are just a few SKIDATA accounts that have made an investment so they could avoid a full system replacement every seven years. Thank you for your time and consideration. I hope the City of Santa Monica will consider continuing what has been a thirteen year relationship with SKIDATA and Sentry Control systems and we hope to continue as partners for decades to come. Sincerely, Thomas H. Rollo Chief Executive Officer SKIDATA, Inc. Pg2of2 SKIDATA Inc. One Harvard Way, Suite 5 Hillsborough • NJ 08844 P 908.243.0000 F 908.243.0660 SKIDATA(R) is a registered tradernark of SKIDATA AG in the USA, the European Union and other countries. -13- am EXHIBIT E August 12th, 2013 Ms. Marsha Jones Moutrie City Attorney 1685 Main Street, Room 310 Santa Monica, CA 90410 Mr. Rod Gould City Manager 1685 Main St., Room 209 Santa Monica, CA 90401 Dear Ms. Jones Moutrie and Mr. Gould: Sentry Control Systems recently participated in the Request for Proposal (RFP) process for the Parking Access and Revenue Controls System (PARCS) at the City of Santa Monica. We have a strong reason to believe one of the members of the RFP review panel has a conflict of interest that affected the outcome of the panel's ultimate decision. Our concern is with a pet-son on the selection panel by the name of Rene Sagles. Mr. Sagles' son, Ralph Gian Sagles, works for the company (WPS USA) which has been selected by the panel to be awarded the PARCS contract. Ralph Sagels is currently employed at WPS USA and holds the position of Technical /Project Support for WPS in the office located at 335 Mira Loma Avenue in Glendale, California. The conflict is of financial nature. The home in which Ralph Sagles lives is located at 714 Wing Street, Glendale, California and the home ownership is in the name of Rene Sagles and Grace Sagles. We believe the City of Santa Monica Charter, section 608 has been violated. Specifically, "Such an ordinance should preserve public confidence in the integrity and openness of the City contracting process, protect public funds, and insure that the City obtains materials or service of appropriate quality." We are requesting you investigate this allegation and reject the current RFP process and, thus, the panel's selection recommendation. Thank you for your attention and please contact me with any questions Sincerel , Timothy Flanagan Principal /Owner Sentry Control Systems Inc 1 6611 Odessa Avenue Van Nuys, CA 91406 (o) 818 -252 -5700 (f) 87.8 -786 -2910 www.sentrycontrol.com -14- Ng� IN Rim August 12 "', 2013 Ms. Marsha Jones Moutrie City Attorney 1685 Main Street, Room 310 Santa Monica, CA 90410 Mr, Rod Gould City Manager 1685 Main St„ Room 209 Santa Monica, CA 90401 Dear Ms. Jones Moutrie and Mr. Gould: Sentry Control Systems recently participated in the Request for Proposal (RFP) process for the Parking Access and Revenue Controls System (PARCS) at the City of Santa Monica. We have a strong reason to believe one of the members of the RFP review panel has a conflict of interest that affected the outcome of the panel's ultimate decision. Our concern is with a person on the selection panel by the name of Rene Sagles. Mr. Sagles' son, Ralph Gian Sagles, works for the company (WPS USA) which has been selected by the panel to be awarded the PARCS contract. Ralph Sagels is currently employed at WPS USA and holds the position of Technical /Project Support for WPS in the office located at 335 Mira Loma Avenue in Glendale, California. The conflict is of financial nature. The home in which Ralph Sagles lives is located at 714 Wing Street, Glendale, California and the home ownership is in the name of Rene Sagles and Grace Sagles. We believe the City of Santa Monica Charter, section 608 has been violated. Specifically, "Such an ordinance should preserve public confidence in the integrity and openness of the City contracting process, protect public funds, and insure that the City obtains materials or service of appropriate quality." We are requesting you investigate this allegation and reject the current RFP process and, thus, the panel's selection recommendation. Thank you for your attention and please contact me with any questions. Sincerely, Timothy Flanagan Principal /Owner Sentry Control Systems Inc 1 6611 Odessa Avenue Van Nuys, CA 91406 )o) 818- 252- 5700 (f) 818 - 786 -29101 vyww.sentrycontroI.con)