SR-09-24-2013-3JCity Council Meeting: September 24, 2013
Agenda Item: 3T
To: Mayor and City Council
From: Gigi Decavalles- Hughes, Director of Finance
Subject: Maintenance Agreement - Big Blue Bus and Parking Meter Currency
Counting Room Equipment
Recommended Action
Staff recommends that the City Council award sole- source blanket purchase orders to
vendors whose cumulative authorized purchase amount would exceed $100,000 in
fiscal year 2013 -14, as follows:
a) Money Systems Technology, a Texas -based company, for maintenance of two
coin sorters /counters and conveyor belts used for currency counting operations
in the amount of $7,500 per year, for a total amount of $15,000 over a two -year
term, with future year funding contingent on Council budget approval; and
b) Richard's Coin & Currency Counters, a California -based company, for
maintenance of various equipment for currency counting operations in the
amount of $12,000 per year, for a total amount of $24,000 over a two -year term,
with future year funding contingent on Council budget approval.
Executive Summary
The City operates a processing center for currency collected through Big Blue Bus fare
boxes and on street parking meters. The center processes approximately $14 million in
coin and paper currency annually. Staff recommends sole source blanket purchase
orders with Money Systems Technology in the amount of $15,000 over a two -year term,
and with Richard's Coin & Currency in the amount of $24,000 over a two -year term, to
provide preventive maintenance and repair services on the currency counting room
equipment. The attached vendors exceed $100,000 for the same good or service in
fiscal year 2013 -14.
Discussion
Money Systems Technology (MST) and Richard's Coin & Currency Counters have been
providing installation, preventative maintenance and repair services to the City for
counting room equipment since 1999. The City purchased two coin sorter /counters
from MST in 2002 to process Big Blue Bus fare box currency. As the manufacturer,
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MST has provided maintenance for the equipment. Richard's Coin & Currency serves
as the exclusive local representative for MST, providing maintenance services for its
coin sorter /counters.
In addition to serving as the local agent and technician for MST since 1999, Richard's
Coin & Currency has provided maintenance services on peripheral equipment related to
the two MST coin sorter /counters, including loose coin conveyors, bag conveyors,
hydraulic bag carts, coin bag scales, and a loose coin verifier. Over the years, the
company has also custom built some equipment that it maintains, including a coin lift
used for parking meter currency processing. In addition to services provided for MST
equipment, Richard's Coin & Currency is an official representative of Billcon and
services the three Billcon paper currency counters used in the center.
The agreement with MST includes two service appointments per month, and labor and
parts to repair two MST coin sorters /counters.
The agreement with Richard's Coin & Currency includes all labor and parts pertaining to
other ancillary equipment, including conveyors, lifts, and paper currency counters. The
fee would include shipping and taxes for any parts needed for this equipment. Under
the requested blanket purchase order (BPO), the company would provide two service
appointments per month to inspect equipment performance. The company would
maintain a supply of parts stored on -site at the counting room in order to make repairs
promptly, including three paper currency counters and eight customized hydraulic bag
carts for the Revenue Collections Counting Room.
Since 1999 through FY2012 -13, the City has paid $290,910 to Richard's Coin &
Currency, which includes the cost of parts not covered by the MST maintenance
agreement, such as coin sorter plates. If Council approves staff's recommendation, at
the end of the two year term, the total amount paid to Richard's Coin & Currency since
1999 will be $314,910.
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Since 1999 through FY2012 -13, the City has paid $173,321 to MST for maintenance
services. Section 2.24.100(a) of the Santa Monica Municipal Code (SMMC) requires
contracts over $100,000 to be approved by Council. If Council approves staffs
recommendation, at the end of the two year term, the total amount paid to MST since
1999 will be $188,321.
These agreements were not brought to the Council previously due to a difference in
prior interpretation of the Municipal Code regarding the $100,000 limit for Council
approval of vendor goods and services. Previous interpretation of the Municipal Code
provisions in section 2.24.090 related to purchasing determined that the limit for
informal purchasing (not requiring Council approval) was based on the amount
approved for each vendor during a fiscal year. More recent interpretation of the Code,
facilitating a more transparent purchasing process, determines that vendor agreements
exceeding $100,000 in cumulative purchases over multiple fiscal years are subject to
Council approval.
Vendor Selection
In 1999, the City purchased MST coin counting equipment to process Big Blue Bus fare
box currency and has purchased MST maintenance for its equipment every year since.
On March 21, 2013, the City received a quote from MST to perform routine equipment
maintenance for the new budget cycle. MST is a well - established manufacturer and
supplier of coin sorter /counters, and the City has been utilizing MST equipment for more
than 10 years. This sole source is necessary in order to maintain the MST equipment.
In 1999, as part of its maintenance agreement with MST, Richard's Coin & Currency
served as the exclusive agent for MST and has provided other counting room
equipment, parts, and maintenance. On July 17, 2013, the City received a quote for
Richard's Coin & Currency to provide maintenance services for the new budget cycle.
A sole source process is necessary for Richard's Coin & Currency, as the exclusive
representative for MST, to service the proprietary equipment of MST, and the
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equipment built by Richard's Coin & Currency. Most of the equipment included in the
maintenance agreements is integrated; having one source for servicing the equipment
maintains greater compatibility and continuity. The services provided by both
companies are necessary to enable the counting room to operate smoothly and
continuously with minimal downtime.
Financial Impacts & Budget Actions
The blanket purchase order to be awarded to Money Systems Technology, Inc. is for an
amount not to exceed $15,000. Funds in the amount of $7,500 are included in the FY
2013 -14 adopted budget at account 01224.533120. Funds in the amount of $7,500 are
included in the FY 2014 -15 approved budget at account 01224.533120. Second year
funding is contingent on Council budget approval.
The blanket purchase order to be awarded to Richard's Coin & Currency is for an
amount not to exceed $24,000. Funds are available in the FY 2013 -14 Capital
Improvement Program budget in account 0410113.589000 - Computer Enhancements.
Prepared by: Salvador M. Valles, Business & Revenue Operations Manager
Approved:
Oigt-becaxKiles
Director of Finance
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Forwarded to Council:
-YD
Rod Gould
City Manager