SR-04-24-1979-6I - 308-002-02Santa Monica, California
T0: Mayor and City Council
Apr:'" 17, 1979
FROM: City Staff APR 2 4 1979
SUBJECT: Recommendation to reject bids received and to authorize
direct negotiation for lease of the beach equipment rental
concession.
Introduction
This report concerns rejection of bids received to operate the beach
equipment rental concession and the authorization of the City Manager
to negotiate directly for lease of this concession from May 15, 1979
through May 14, 1982.
Background
In response to published Notice Inviting Bids to operate six (6) stands
for the rental of umbrellas, chairs, aquatic sports equipment and related
items, two (2) responsive bids were received and publicly opened and read
April 5, 1979. Proposal packages were mailed to twenty -three (23) pros-
pective bidders and notices were advertised in accordance with City
Charter and Municipal Code provisions. This call for bids was issued
subsequent to the City's termination of the existing concession agreement
for lessee's failure to comply with the rental payment and bond requirements.
The two (2) bids received were:
K & D Beach Rentals First Year: $8,500.00
Second & Third Years: $8,500.00
plus percentage of change in
Consumer Price Index plus 5 per cent.
Butterfield, Ltd. Inc. All years: $6,000.00 minimum plus
ten per cent (10 %) of the gross
receipts.
Following the bid opening, Butterfield, Ltd. Inc., called for bid results
and, at the time was advised that the percentage of gross offer was not con-
sidered to be in the City's interest. Shortly thereafter, an alternate
bid was received from Butterfield, Ltd. Inc., calling for a flat $11,000.00
first year rental to be increased yearly by the percentage of change in the
Santa Mon= -a, California Ap;`1 17, 1979
T0: Mayor and City Council
Background continued:
Consumer Price Index plus an additional three per cent (3 %). Both the
Invitation to Bid and the Proposal Form state "The City of Santa Monica
reserves the right to reject any and all bids and to waive all minor
irregularities."
The Staff considers that its responsibility in this instance lies in
obtaining the maximum guaranteed revenue for the City.
It should be noted also that Butterfield Ltd. Inc., doing business as
Cap'tn Jim Beach Rentals, is the current operator of similar beach equip-
ment rental stands for San Diego County and has been favorably recommended.
The background information submitted by K & D Beach Rentals cited only
previous experience outside of the United States.
Alternatives
1. To reject all bids and to issue a new call for bids. This will entail
additional expense with no assurance of benefit and also delay that
may curtail the first year rental revenue.
2. To accept the bid of K & D Beach Rentals. While adhering to a narrow
interpretation of the purchasing code, this will provide a first year
rental revenue substantially less than that known to be available
($8,500.00 vs. $11,000.00 or 29% during the first year and at least
that much for each of the subsequent years).
3. To reject all bids and to authorize the City Manager to negotiate
directly for the beach equipment rental concession. The initial year's
rent to be not less than $11,000.00 and the rental for each succeeding
year to be increased by at least the percentage of change in the
Consumer Price Index plus three per cent (3 %). This will insure the
maximum revenue to the City, and give all potential bidders the
opportunity to compete.
Recommendation
It is recommended that all bids received for the beach equipment rental
concession be rejected as not in the City's best interest and that the City
Manager be authorized to negotiate directly for this lease. It is further
recommended that the attached Resolution be adopted. It shall be stipulated
that the minimum rental shall be $11,000.00 for the first year
Santa Mor a, California i .:)ri1 17, 1979
T0: Mayor and City Council
Recommendation continued
and that succeeding year rentals shall be increased by at least the per-
centage of change in the Consumer Price Index.plus an additional three
per cent (3 %).
Prepared By: R.N. Aronoff,
Purchasing Agent
D.T. Arnett,
Director of Recreation and Parks
RESOLUTION NO.5288 CCS'
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA REJECTING ALL BIDS
RECEIVED AND AUTHORIZING THE CITY
MANAGER TO NEGOTIATE DIRECTLY FOR LEASE
OF THE BEACH EQUIPMENT RENTAL CONCESSION.
WHEREAS, the City of Santa Monica has solicited and has received
formal bids for the operation of the beach equipment rental concession; and
WHEREAS, the City subsequently was made aware of the opportunity
to lease this concession for a rate at least 29% higher than the highest
bid received; and
WHEREAS, the City specifically reserved the right to reject any
and all bids both in the Invitation to Bid and in the Proposal Form; and
WHEREAS, the City's best interest is served by authorizing
negotiation with bidders responding to this proposal
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONCIA
DOES RESOLVE AS FOLLOWS:
SECTION 1: That the acceptance of any bid formally tendered for
operation of the beach equipment rental concession would not be in the
City's interest.
SECTION 2: That all bids submitted for this concession are
rejected. -
SECTION 3: That the City Manager is authorized to negotiate
directly for the lease of the beach equipment rental concession, at a
minimum annual return of $11,000.00 with yearly increases equal to the
percentage increase in the Consumer Price Index plus 3 %.
APPROVED AS TO FORM: j
City Attorney ��
ADOPTED AND APPROVED THIS 24th DAY
OF April 1979,
MAYOR
I HEREBY CERTIFY THAT THE FOREGOING RESOLUTION,
N0, 5288 , WAS DULY ADOPTED BY THE CITY COUNCIL OF THE CITY
OF SANTA MONICA AT A REGULAR MEETING THEREOF HELD ON
April 24 , 1979 BY THE FOLLOWING COUNCIL VOTE:
AYES: COUNCILMEMBERS: Bambrick, Jennings, Reed, Scott,
Swink, Yannatta, van den Steenhoven
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
ABSTAIN: COUNCILMEMBERS: None
ATTEST:
Agenda Item 6 -I: Presented at this time was a resolution rejecting bids
and requesting the City Manager to negotiate directly for beach equip-
ment and rental concession. After discussion, Ma or Pro Tempore Reed
moved to adopt Resolution No. 5288(CCS) entitle "A RESOLUTION OF 1HE
CITY COUNCIL OF THE CITY OF SANTA MONICA REJECTING ALL BIDS RECEIVED AND
AUTHORIZING THE CITY MANAGER TO NEGOTIATE DIRECTLY FOR LEASE OF THE
BEACH EQUIPMENT RENTAL CONCESSION ", reading by title only and waiving
further reading thereof. Second by Mayor van den Steenhoven.
Council Vote: Unanimously approved 7 -0
City Council Meeting - April 24, 1979