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SR-01-13-2015-8C
City Council Meeting: January 13 2015' figei,a_ Item: To: Mayor and City Council Prom: Gigi Decavalles-Hughes, Director of Finance Subject: Contract and As- Needed and Staffing Review Report Staff recommends that the City Council: 1) Review and comment on the attached As- Needed and Contracting Staffing Review (Report) and direct staff regarding prioritization of converting as- needed hours to permanent positions and a phased process to bring contracted services in- house; 2) Adopt the Policy Guiding Decisions to Hire Contracted or As- Needed Staff for Non- Professional Services, Attachment D to the Report. Executive Summary This staff report summarizes findings of the Contract and As- Needed Staffing Review: Policy, Practice, Recommendations report prepared by City staff at Council's direction. The report, included as Attachment A, examines when various types of staffing are used to provide services, what it would entail to convert as- needed and contract staffing to in- house permanent staffing, and includes a number of recommendations to convert certain as- needed and contract positions to in -house permanent positions. The report also presents a policy to guide City service provision practices moving forward. Background On Ajig i L26 2014, Council requested that City staff perform a comprehensive study of the City's contractual services, including an evaluation of the number of contracted employees and as- needed staff currently performing services for the City, and options to convert these jobs into permanent full time City positions. This study follows two previous reports to Council, in January 22001 and January 2009, in which staff presented an overview of the City's contracting practices and recommended specific criteria to 1 serve as the basis for contracting. On both occasions, Council agreed with the criteria to be used in making decisions about contracting for services. Discussion Between September and December 2014, staff researched best practices and gathered internal information on the City's contracting and as- needed staffing practices. For internal information, all City departments provided information on 1) all as- needed staffing and 2) all contractual services over $100,000 annually. Staff asked departments to identify the current status (what as- needed staff and contractual services the department uses and why), and what it would take to perform the service differently: with in -house staff, or with permanent versus as- needed staffing. Finally, staff asked departments to recommend any changes to current service provision methodology. Finance and other department staff reviewed this information and identified associated costs. Report conclusions indicate that staff has continued to limit the use of contracted staff to those services meeting the established criteria, that the City also uses certain criteria when making the determination to use as- needed staff, and that the City provides competitive remuneration and strong protections for in -house and contracted staff. The Report recommends converting approximately 55,000 as- needed hours to 25.65 new permanent full time equivalent positions, and bringing services related to five current contracts in- house, which would add 6.0 FTE to permanent staffing. These are areas in which staff tested current service provision against criteria, and the result indicated a need for change. The Report recommends maintaining remaining as- needed staff and contracted services in their current state, based on criteria identified in the study and staff analysis. The Report concludes with a recommended policy to guide non - professional service delivery decisions, built on the criteria identified in the study. This policy would provide consistent guidelines for managers and would reflect Council direction and community 2 values. Its adoption would reinforce the City's commitment to fair treatment, transparency, and responsible use of resources. The following is a summary of the findings: As- needed. Staff reviewed all possible as- needed conversions, and analyzed each position against criteria for appropriate as- needed use, listed below: • Fluctuating or Inconsistent Demand • Seasonal Work • Limited Daily Hours • Fill Vacancies • Pilot or Limited Term Program • Unbudgeted Additional Service Staff found that 47 percent of the total identified as- needed hours did not fit these criteria. Staff recommends converting these hours to 25.65 full time equivalent staff or 30 positions: 14.0 full time and 16.0 part time. This change would impact 40 -50 current as- needed employees filling these hours. The recommended positions represent areas in which increasing and consistent operational need makes permanent positions a better staffing choice. These include customer service for recreational programs, parking meter collections, maintenance work in City buildings and the Pier, and custodial work on the Beach. Staff estimates the net cost of these conversions at $1.0 million, of which $0.3 million is in the General Fund. Contracts. City staff follows the informal guidelines and criteria identified in the 2007 and 2009 review, and refined for clarity in the current study. • Workforce Flexibility • Specialized / Technical expertise • Space Requirements • Capital/ Equipment Requirements • Risk 3 ® Proprietary Control ® Short term / Pilot The City has 43 contracts over $100,000 annually, for a total of $23.9 million, or approximately 5 percent of the City's FY 2014 -15 operating budget; the same percentage as in the 2007 12009 reports. Staff estimates the net cost of providing all services in -house at $69.4 million. This cost includes a 371.7 FTE or 19 percent increase in the City's permanent work force, and an approximately 90,000 square foot increase in space to house new staff, vehicles, and other equipment. Based on a detailed review of each contract with these criteria, staff recommends converting five contracts providing general maintenance and repair, including bus facilities maintenance, city heating, ventilation and air conditioning (HVAC) installations and repairs, painting services, graffiti removal, and plan check and tree inspection services to in -house services. Staff estimates a one -time $0.8 million cost, with an ongoing $0.3 million cost above the current contract amounts for these conversions, of which $0.5 million one -time and $0.1 million ongoing is in the General Fund. Conversions would include 6.0 new full time equivalent positions. Remaining contracts definitively meet criteria for contracted service. Each contract meets one or more of the established criteria, while the eight largest contracts — which make up approximately 70 percent of the total dollar value — meet two to four of the criteria. The Report presents detailed analysis for each of these contracts, and identifies criteria for contracts with lower annual amounts. Policy. The recommended policy institutionalizes the contracted service and as- needed staff use criteria presented in the study. These are critical to ensuring that the City maintains its current practices, and that staff continues to provide City staff opportunities for delivering services if they can do so effectively. A policy would reinforce current practice, and would clearly state Council priorities and community values to current and potential City staff, contractors, and the community. Future staff lR reports recommending contractual services or as- needed changes would include an analysis of the need based on the policy to be adopted Implementation / Phasing, Staff recommends converting certain as- needed hours to permanent positions, and bringing currently contracted services in- house. Implementing changes simultaneously and within a short period of time would increase the City's overall budget by $1.8 million in year one ($0.8 million General Fund; $1.0 million other funds). The changes would also increase permanent staff by 31.7 FTE (10.5 FTE General Fund; 21.2 FTE positions in all other funds). Ongoing, the changes represent a $1.4 million increase ($0.5 million General Fund; $0.9 million other funds). Staff recommends a three -year process in phases to implement recommended changes: Phase I: Policy Adoption and Direction on Conversions (January 13 Council Meeting). Council adopts recommended policy and prioritizes as- needed conversion proposals. Phase II: Partial as- needed conversion (Five -Year Forecast / Midyear Budget) Based on Council direction, staff would create positions as directed and begin recruitment. Phase III: Contracted services and remaining as- needed conversion (FY 2015 -17 Biennial Budget). Staff would incorporate additional resource requests, including vehicle, space, and staffing, in department biennial budget request. Council would consider these in the context of the new budget and updated financial forecast. As Council prepares to consider the financial forecast, these resource decisions involve tradeoffs. Other pressures, including previously -noted capital needs, affordable housing, health care and retirement costs, emerging needs for fire and non -sworn police staffing, augmentation of workers' compensation funding, and public safety communications systems must be considered. Council will view these recommendations in the context of the City's overall priorities at its January 27 meeting. 5 Alternatives Council could direct staff to review additional areas, or to include greater orf�wer conversion recommendations in either the as- needed or contracted staff areas. ihesZ directions would have direct impacts on service quality, existing contracted or as- needed staff, managers, and resource availability. Council could not adopt the recommended policy, or could direct staff to revise the policy's contents. Not adopting the policy would mean staff` would continue to rely on existing informal policy and criteria to guide service provision'decisions. Flln' Mclal Impacts & Budget Actions No ,immediate budget actions are 'necessary as a result of this recommendation. Implementing the staff report recommendations will lead to a one -year $1.8 million cost, with an ongoing $1.4 million ongoing cost. Following Council direction, staff will include these costs as appropriate in the midyear changes to Council (January 27, 2015) and in the FY 2015 -17 Biennial Budget in May and June 2015. Prepared by: Stephanie Lazicki, Principal Administrative Analyst Approved: Gigi ®ecavalles- Hughes Director of Finance Forwarded to Council: Rod Gould City Manager Attachments: A. Contract and As- Needed Staffing Review: Policy, Practice, Recommendations 0 Contract and As- Needed Staffing Review Policy, Practice, Recommendations Introduction On August 26, 2014, the City Council directed staff to study and report on the City's use of non- professional, contractual services in an effort to understand how often and why services are contracted out rather than completed with in -house staff. The study looked at benchmark information, identified all major contract and as- needed staffing used in the City, reviewed operations carefully to identify the costs and operational requirements of these services if they were provided by permanent City employees, and documented existing criteria staff use to make service delivery decisions. This report summarizes the findings of the study, includes recommendations to convert certain contract or as- needed staffing to permanent staffing based on a reevaluation of current practices, and recommends policies to guide future decisions. Finding the most effective service delivery method_is complex. For most City functions, staff prefers using permanent employees to provide services in- house. Advantages to using permanent City staff include longevity, continuity, loyalty, pay equity, and retained expertise. Factors such as staffing flexibility, cost, capacity, risks, efficiencies, accountability and community goals shape policy decisions to contract out or perform services in -house with permanent or as- needed staff. When considering a new service or periodically assessing the quality and efficiency of ongoing services, the City's informal policy has been to first consider whether capacity is available in house to complete the service with permanent staff. If, after a thorough analysis, staff determines that permanent staff is not an effective option, managers consider using as- needed or contracted staff. The City's policy to consider in -house service delivery as a primary option is reflected in the fact that its contractual services over $100,000 account for approximately five percent of the City's total operating budget, less than one - third of national averages. The City's superior compensation structure for both permanent and as- needed staff also demonstrates the priority given to in -house services. The City can offer many services at a high level because it employs permanent staff for core services that most interact with the community and limits contracts with outside providers to specific areas of expertise, a need for fluctuating staffing levels, or where the connection to the community is not as strong. This balance provides more and better service within finite resources. In January 2007, and again in January 2009, Council directed staff to report on its use of contracted staffing to provide City services. In both reports, staff identified an informal policy, based on a set of criteria, used to help managers decide whether a service would be better delivered using in -house or contracted staff. Specifically, the 2007 report presented Council with policy options based on community and Council values for service provision to inform a potential citywide contracting policy. The 2009 report reviewed City practices, identified criteria by which staff determined whether to contract out for service, and recommended formalizing these criteria. Staff committed to use the identified criteria in service delivery decisions, to bring before Council each contract over $100,000 (recently increased to $175,000), and to maintain in -house custodial services in certain high profile City properties, such as City Hall and libraries. 2 The most recent study builds on the 2007 and 2009 reviews and considers as- needed staff use. The review of informal City policies, major City contractual services and as- needed staff use leads to the following findings: • Existing practice is consistent. City of Santa Monica departments follow common and generally consistent criteria for identifying how to deliver services or respond to City needs. • Providing all services in -house using permanent staff would pose significant operational challenges and costs. The report includes a comprehensive review of the potential estimated costs and operational considerations associated with converting all contracted and as- needed labor to permanent, in -house staff. These challenges are significant. Operationally, managers would lose staffing flexibility and the ability to offer service to meet needs, and therefore service quality could suffer. Currently employed as- needed staff and long -term contracted staff could lose jobs as they would be required to compete against a large applicant pool for a fewer number of jobs. And, the City's functions, the number of personnel it is responsible for, how much equipment and space it owns, leases and manages, how much risk it takes on, and its operating budget and long -term liabilities would change significantly. • The City could bring some currently contracted services in house and convert some as- needed positions to permanent full time or part time status. Staff has identified a number of conversions, based on study data, which would conform to existing criteria. • A written policy would improve decision - making. A formal policy clearly reflecting community goals and clarifying existing criteria would help provide consistent guidelines for managers, assure contracted and permanent employees of the City's goal to be fair and provide reasonable job security, and provide transparency for Council and the community. Types of Service Provislon The City uses three types of service provision: permanent staffing, as- needed staffing, and contracted staffing. When asked to perform a new service, staff's approach is to determine first whether there is capacity among existing City staff to perform the service; if not, staff considers whether new in -house or contracted staff should perform the increased service. This same process occurs when staff reviews ongoing services. The choice depends on factors such as skills required, number of staff, hours and locations, type and duration of service, level of associated risk, resources available to manage staff or the contract, the level of equipment and space needs, and budget available. When considering changes to the method in which existing services are provided, the overriding policy and practice of the City has been to limit involuntary employee job loss to extraordinary circumstances only. This is the case with permanent, as- needed, and contracted positions. For the purposes of this report, staff uses the following interpretations: Permanent Staff. Permanent employees work at least 20 hours a week and have relatively consistent work schedules. This is a common practice among local governments, and a long- term City practice. The hour threshold links to retirement guidelines, which include enrolling any employee working 1,000 hours annually in the CalPERS system. It is the City's practice to 3 use permanent employees for the majority of the services provided, especially when those tasks fill ongoing, predictable needs and core city functions. As- Needed Staff. The City identifies as- needed staff as those employees working on an as- needed basis: for a certain indefinite period of time, and, whenever possible, for fewer than 28 hours per week. As- needed employees are not required to have consistent work schedules. Several as- needed employees work more than one job either within or outside the City. Staff depends on as- needed employees to supply services with seasonal, unknown, or fluctuating demands, to temporarily fill those positions whose recruitments take multiple months to complete, to provide coverage for various staff leaves (sick, vacation, family leave, etc.), and to assist with short -term projects and special assignments. Because of the flexible hours, several as- needed individuals can fill one full time equivalent position (2,080 hours of work). This means that relative to permanent employees, as- needed hours or full time equivalent positions offer a greater number of employment opportunities. Contractual Services / Contracted Staff. This staff is employed by City - selected contractors who provide services. Contractual service providers generally fill roles in which they can fulfill a need for special expertise, flexibility, and efficiency. Contractors must abide by guidelines for fair pay, as set by living wage and prevailing wage legislation, to partner with the City. Many of these contracted employees have worked on City projects for many years. Report Framework The report follows the structure below. It provides background and best practices, and then a comprehensive review of scope and findings related to each described service delivery method. The report concludes with a discussion of next steps to implement recommendations. Service Provision Background and Best Practices Permanent Staffing As- needed Staffing Contracted Staffing Recommendations and Next Steps Service Provision ffackgraund an d Best Practices The International City / County Management Association (ICMA) conducts a survey of service delivery by local government every five years. These results provide an informative indicator of local government practice in the United States. Data from the 2012 study shows that direct public delivery continues to be the dominant form of local government service provision, accounting for 45% of delivery on average across all services. The percentage of total services provided through private delivery has remained relatively stable over the past 10 years (from 18 percent in 2002 to 16 percent in 2012). These services tend to be those where private markets are well established, where services tend to be easier to specify in a contract, and where services generally have low citizen contact. In its 2007 and 2009 reviews, staff reviewed contractual services practices and identified major services (those greater than $100,000 per year) provided by contracted staff. In 2007 and 2009, this number was about five percent of the City's operating budget. The current analysis indicates little change in the proportion of services contracted out, at five percent of the City's FY 2014 -15 operating budget. At less than a third of the national average noted in the ICMA study, Santa Monica's use of contracted staff to provide services is below the benchmark. Staff asked the cities of Beverly Hills, Burbank, Culver City, Glendale, Long Beach, Pasadena, Simi Valley, Thousand Oaks, Torrance and Ventura — cities the City commonly refers to for salary comparisons - for information about their contractual services practices. The City of Long Beach follows outsourcing guidelines contained in the city's charter, and Beverly Hills and Thousand Oaks reported informal outsourcing practices based on cost, human resources or bargaining unit requirements, or Council direction. Most cities report contracting out for larger scale citywide services - commercial waste, custodial, tree trimming; for routine maintenance - painting, heating and air conditioning; and for specialized tasks - security guards and locksmith services. The most commonly identified services contracted out, common to all cities surveyed, are custodial and landscaping. A summary of city responses is included as Attachment A. Santa Monica's contracted services are similar to those reported by others, and in many cases Santa Monica provides services, either partially or completely, in -house that comparison cities contract out: the Farmers' Market, Fire and Police dispatch, animal control, parking meter collection and maintenance, workers' compensation, fixed route bus service, residential and commercial trash collection and recycling services, some custodial and some landscape services, utility billing, tennis court reservations, library technical and cataloging services, parking enforcement, and print shop services. Pernraanen't taffingy Scope. The City currently has 1,998.7 Council- approved permanent full time equivalent (FTE) positions. This is 91% of the City's total workforce of 2,176.6, which includes permanent and as- needed staff. Compared to benchmark cities, Santa Monica ranks second, behind only Beverly Hills, in terms of General Fund city staff to population ratio. This staffing level indicates the City's commitment to high quality services provided by a stable, highly- trained workforce. As discussed above, the City of Santa Monica provides most services directly using in -house staff. The City has also brought a number of services once contracted out in -house to increase quality and efficiency. These include workers' compensation administration, business license audit, commercial trash collection, and Fire dispatch. Salaries and Benefits. Permanent employee salaries and benefits compared to surrounding municipalities demonstrate the City's commitment to attracting and retaining the highest quality employees, and reflect the community's value for fair treatment of its employees. The table below compares the average salaries of the employee classifications that are most used in the types of services examined in this study to those used in cities surveyed in Santa Monica's salary comparison 5 studies'. While these salaries reflect permanent classifications, as- needed employees are paid at the same rate as their permanent peers. Currently, 94% of the City's approximately 600 as- needed employees work in positions earning more than the $15.37 living wage; exceptions are Junior Lifeguards and Student Workers. The City's benefits for full -time (and part -time) permanent employees include participation in the California Public Employees Retirement System (CalPERS) pension program, medical, dental and vision insurance, deferred compensation and the Dependent Care Assistance Plan. Full time and permanent part time staff also receive paid vacation and sick leave (prorated based on FTE). Permanent part -time City employees hired after July 1, 2010 and before January 1, 2015, who work at least 20 and less than 32 budgeted hours per week have the option to elect from one of the City - provided HMO medical insurance plans for themselves and their dependents. Those permanent part -time employees hired after January 1, 2015 will have the option to elect from one of the City - provided HMO plans for themselves only. Permanent part -time City employees may, at their option, pay the difference between the premium of the HMO medical insurance plan and the Preferred Provider Organization (PPO). All employees contribute towards the cost of their healthcare premium. Considerations. The average recruitment time frame for permanent position recruitment is 12 weeks, with an additional four to eight weeks for candidates to pass a background check. The process begins with Human Resources staff working with a department that has a permanent vacancy to create an examination plan. Through the examination processes, Human Resources screens applicants, determines that they meet the minimum qualifications of the vacant position and tests their skills, knowledge and abilities to perform the duties of the position. Successful candidates are ultimately placed on an eligible list. The eligible list of qualified candidates is presented to the hiring authority for final selection. The candidate is then processed by Human Resources through the new employee orientation process where they are introduced to the City and advised of the benefits associated with being a permanent employee. This includes identification of the bargaining unit they will be represented by, their rights as a permanent employee and a full explanation of benefits they will receive. Departments often request to appoint an as- needed employee while the 12 -16 week permanent recruitment is in process and until a permanent employee is on board. i Beverly Hills, Burbank, Thousand Oaks, Culver City, Glendale, Long Beach, Pasadena, Simi Valley, Torrance, Ventura Permanent employees are by definition less flexible in terms of hours and scheduling. To fill in for their paid vacation, sick and family medical leave, and other contingencies, the City may hire as- needed staff. A permanent staff member also requires administration once he or she is hired, including training, application of civil service rules involving performance evaluations and disciplinary actions, accommodation through the workers' compensation process, and liability risk. Staff anticipates a 30% increase in workers' compensation costs in FY 2015 -16 as a result of increased claims and higher permanent disability costs based on new state laws, which in general favor workers' compensation claims by employees. These factors are a part of the civil service system as established by local law, and are not reasons to avoid permanent staff for service provision. Rather, these factors impact program implementation, timing, staffing composition, and expenses. As-Needed Skaf' in Scope. City staff surveyed departments for this report to ascertain the total hours worked and types of services provided by as- needed employees. The City currently employs approximately 600 people in an as- needed capacity. These individuals work approximately 409,000 hours, equivalent to 196.7 FTE, or 9% of the City's total staff hours. Several staff can fill each full time equivalent position's hours, demonstrated by the fact that the number of people working is much greater than the total full time equivalent position number. The total FY 2013 -14 cost for as- needed staff was approximately $8.0 million. The majority of these reported hours come from three departments: Community and Cultural Services (largely recreation and before and after school programs, such as the CREST programs); the Library (largely library pages); and the Public Works Department (largely laborer trainees engaged in custodial and maintenance work; and Resource Recovery and Recycling equipment operators). Other classifications identified include crossing guards, video production assistants, parking meter collection and counting room staff, and staff providing various administrative functions: a total of 53 different titles. As noted above, the City's practice is for permanent staff to work an average of 20 hours a week or more. Because this study is examining what positions could most logically be converted to permanent status, only the as- needed hours belonging to positions working an average of 20 hours a week or more will be discussed. This group includes approximately 85 individual employees (compared to 600 total as- needed employees). In a year, they work approximately 115,000 hours, or the equivalent of 59.0 FTE, and make up $4.8 million of the total $8.0 million cost. Fewer individuals work the hours represented in this group, demonstrating that most of the City's as- needed employees are in positions suited for less than full time employment. 7 Total As- Needed Hours Identified Salaries and Benefits. The City of Santa Monica offers its as- needed employees competitive compensation. The minimum wage for a non - student worker as- needed position is $15.37, reflecting the City's Living Wage rate, $6.37 per hour more than the California minimum wage. As noted above, 94% of current as- needed employees fill permanent job classifications that are paid at a rate comparable to that of their permanent peers; on average, these classifications are 8.8 - 14 percent higher than Santa Monica's benchmark cities. Additionally, market studies have also shown that the City's compensation for a number of recreational positions is higher than that offered by private service providers. As- needed staff positions are essentially hourly positions with minimal benefits. The City of Santa Monica provides a deferred compensation (457) retirement plan for its as- needed employees who are not eligible for coverage under the California Public Employees Retirement System (CaIPERS) (working less than 1000 hours per year). The City and the as- needed employee are each required to contribute 3.75% of wages to the deferred compensation plan. As- needed employee contributions are deducted from paychecks on a pre -tax basis. Any as- needed employee that works 1000 hours or more in a fiscal year automatically enters the City's pension plan according to Public Employee Retirement Law. A city's failure to sign up an employee in a timely manner will result in a $500 penalty. In this scenario, the City also takes on the new, unbudgeted ongoing cost of the pension contribution. Staff monitors hours to avoid these unplanned costs. As- needed staff use has taken on a greater operational significance with the Affordable Care Act (ACA) implementation. As a large employer under the ACA, the City must provide healthcare to all employees working an average of 30 hours a week over the period of a year or face significant penalties. In Spring 2014, staff evaluated all as- needed positions to determine which positions consistently required an individual to work 30 hours a week, and converted these as- needed hours to create 7.0 permanent employee positions in custodial, maintenance, and customer services areas. An additional 18 staff will be offered healthcare benefits on January 1 (and are included in recommendations to convert staff in this report) as it was later determined that their jobs required them to work over 30 hours a week during the past year. Staff will continue to monitor as- needed hours, as required by the ACA, and assess whether additional positions should be converted. The City will comply with the Healthy Workplaces, Healthy Families Act of 2014, which requires that an employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the commencement of employment is entitled to paid sick days for prescribed purposes, to be accrued at a rate of no less than one hour for every 30 hours worked. An employee would be entitled to use accrued sick days beginning on the 90th day of employment. The bill would authorize an employer to limit an employee's use of paid sick days to 24 hours or 3 days in each Hrs. FTE Total Current Cost Total 409,054 196.7 $8.OM 20 hrs. or more /week 114,598 59.0 $4.8M Salaries and Benefits. The City of Santa Monica offers its as- needed employees competitive compensation. The minimum wage for a non - student worker as- needed position is $15.37, reflecting the City's Living Wage rate, $6.37 per hour more than the California minimum wage. As noted above, 94% of current as- needed employees fill permanent job classifications that are paid at a rate comparable to that of their permanent peers; on average, these classifications are 8.8 - 14 percent higher than Santa Monica's benchmark cities. Additionally, market studies have also shown that the City's compensation for a number of recreational positions is higher than that offered by private service providers. As- needed staff positions are essentially hourly positions with minimal benefits. The City of Santa Monica provides a deferred compensation (457) retirement plan for its as- needed employees who are not eligible for coverage under the California Public Employees Retirement System (CaIPERS) (working less than 1000 hours per year). The City and the as- needed employee are each required to contribute 3.75% of wages to the deferred compensation plan. As- needed employee contributions are deducted from paychecks on a pre -tax basis. Any as- needed employee that works 1000 hours or more in a fiscal year automatically enters the City's pension plan according to Public Employee Retirement Law. A city's failure to sign up an employee in a timely manner will result in a $500 penalty. In this scenario, the City also takes on the new, unbudgeted ongoing cost of the pension contribution. Staff monitors hours to avoid these unplanned costs. As- needed staff use has taken on a greater operational significance with the Affordable Care Act (ACA) implementation. As a large employer under the ACA, the City must provide healthcare to all employees working an average of 30 hours a week over the period of a year or face significant penalties. In Spring 2014, staff evaluated all as- needed positions to determine which positions consistently required an individual to work 30 hours a week, and converted these as- needed hours to create 7.0 permanent employee positions in custodial, maintenance, and customer services areas. An additional 18 staff will be offered healthcare benefits on January 1 (and are included in recommendations to convert staff in this report) as it was later determined that their jobs required them to work over 30 hours a week during the past year. Staff will continue to monitor as- needed hours, as required by the ACA, and assess whether additional positions should be converted. The City will comply with the Healthy Workplaces, Healthy Families Act of 2014, which requires that an employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the commencement of employment is entitled to paid sick days for prescribed purposes, to be accrued at a rate of no less than one hour for every 30 hours worked. An employee would be entitled to use accrued sick days beginning on the 90th day of employment. The bill would authorize an employer to limit an employee's use of paid sick days to 24 hours or 3 days in each year of employment. The time will roll over if unspent in a given year with a maximum accrual cap of 48 hours. The City's permanent full and part time employees' paid sick leave exceeds this amount, while as- needed employees currently do not have access to paid leave. The City will incorporate this benefit into its practices and budget beginning on July 1, 2015; the impact is not anticipated to be significant. Considerations and Hiring Processes. A total of 244, or 12 percent, of the City's permanent employees began their careers with the City in an as- needed capacity, demonstrating that as- needed employment often acts as a portal for permanent employment. Thus, while currently as- needed employees must compete for permanent positions based on merit, they may benefit in the civil service recruitment process due to their knowledge of the City and its operations. For as- needed staff to be converted to permanent status, they must compete in an open competitive examination process according to Section 2.04.080 of the Santa Monica Municipal Code. All employment processes are job - related and conducted to assess qualifications of each candidate for particular positions. This is distinctly different than the hiring process for as- needed employees, which consists of a Training and Experience Assessment. Candidate names are then certified to the operating department. The department may then hire the best individual for the position without being restricted to the full civil service rules that must be applied when hiring permanent employees. The City of Santa Monica attracts a high volume of applicants for most open positions. In the last fiscal year, more than 15,000 individuals applied for a variety of positions with the City. With this volume, Human Resources must use a fair, equitable and job related merit system process to screen for the most qualified candidates to be placed on an eligible list for a particular position. One result of the competition for job openings and regulated application process is that existing as- needed employees applying for permanent positions are not guaranteed a position in the City. These individuals must successfully pass examination processes or place very high on an eligible list, as they may be competing with individuals with more education, training and experience who are willing to accept lower level positions just to gain access to City employment. Currently, 208 as- needed staff members have been employed by the City for over five years, working in assignments that are seasonal or require a limited number of hours per day. The City has very rarely elected to eliminate as- needed positions. However, in the event that this occurs, the City affords as- needed staff a level of protection. For example, Public Works' recommendation in August to contract out Beach custodial services included a provision that as- needed Beach Maintenance staff would be absorbed by the new contractor. In another instance, the Civic Auditorium closure in 2013 meant that 14 long -term as- needed employees would lose their jobs. Staff from the Human Resources and Community and Cultural Services Departments worked to find alternate employment within the City and provided a variety of job search workshops and skills coaching for the impacted employees. With this assistance, almost all staff members interested in continuing employment with the City successfully competed for positions and were placed. Cost of Services if Provided with Permanent Staff. As noted above, converting all as- needed positions working an average of 20 hours per week would affect 85 employees' current positions. 101 The additional cost would be roughly $2.6 million. This action would also increase total staff hours by 59.0 full time equivalent positions, or about 3% of the City's total permanent staff. As- Needed Positions Possible to Convert Hrs. FTE Net C 114,598 59.0 Applying Criteria to Determine Proper Use of As- Needed Staff. The analysis and criteria below show that a wholesale conversion of as- needed staff to permanent staff, without regard for the operational needs that these positions fulfill, is not a prudent use of taxpayer resources and therefore not a recommended business practice, nor is it the optimum way to provide services based on irregular schedules. Finally, it is not clearly in the best interest of as- needed employees. A critical consideration, and central to the question of employee fairness, is potential job loss. As- needed to permanent positions is not a one to one conversion, as several as- needed employees can fill one full time equivalent position. This means that conversion decreases the total number of employment opportunities. And, the City cannot guarantee currently employed as- needed staff these new positions. As described above, local law requires that as- needed staff must compete in a formal hiring process. In the survey, managers indicated fluctuating, unknown or inconsistent service need or seasonal work as the most common reasons, or criteria, for using as- needed staff. Managers also mentioned jobs with limited daily hours, filling vacancies, conducting limited or new assignments, or providing additional unbudgeted services using savings. The table below shows the frequency of each criterion as a primary reason for using as- needed staff. Limiter __.., 3% Reasons for As- Needed Use 10 The table below describes criteria in more detail and provides examples. These criteria are consistent with best practices and with general guidelines for as- needed work. a 1I w11a w1 F vvJumR.a . vwco vvnn MO-IMVVUd 4aLaII Service Criteria " Description Fluctuating or Service is not required on a consistent basis. Inconsistent May need many staff for a short period of Demand time and none at other times. Seasonal Work Service is only needed at a specific time of year. Limited Daily Service is required daily but only for a few Hours hours per day. Fill Vacancies Fill in for a variety of permanent employee leaves until employee's return. Example City TV video editors and producers. Need fluctuates with number of shows. RRR equipment operators. Staff needed to cover daily collection routes for permanent employees on FMLA leave, worker's compensation, and unscheduled absences. Lifeguards working primarily in the summer months. Library Pages re- shelving materials and maintaining stacks 4 -5 hours per day. Any classification. Pilot or Limited Service level and need is not fully known for The City does not have any Term Program a new program or facility. services of this type at this time. Unbudgeted Staff is responding to a new, unbudgeted Homeless initiatives Additional Service community request for additional service. administrative support after grant funding was completed. Staff identified the number of hours represented by employees working an average of 20 hours per week or more; including about 85 individuals. Staff recommends maintaining approximately half of these hours for as- needed positions, based on the criteria shown in the table above. Further explanation of these decisions is shown below with examples from the three departments with the greatest use of as- needed hours - Community and Cultural Services, Public Works, and the Library. Fluctuating or Inconsistent Demand / Seasonal Work / Limited Hours Recreational and educational after school programs, and library programs, are seasonal and have fluctuating demand throughout the year, requiring flexible staff that can work short or variable hours. Human Services programs serving school age children are at nine school sites from after school until 6:00pm during the school year, with expanded programming offered during the summer and school vacations; and at two parks after school, on weekends and during school vacations. These require a number of employees, (up to eight as- needed at each site) to coach, monitor activities, and conduct 11 programs, but only for two to three hours a day during the school year. Similarly, Library operations entail morning and evening program and service area staffing across five libraries open more than 230 hours per week, requiring a large array of staff with flexible schedules. As with seasonal activities, those that are based on customer demand also necessitate the use of as- needed staff, as these hours are not consistent throughout the year, or from one year to the next. An example of this is the as- needed staff that assists with Cemetery work based on need for services and availability of plots. Also, the majority of Library temporary staff work schedules are based on youth and adult program needs and patron demand. New / Pilot Programs Departments often use grant funds to pilot a new or enhanced service that is a community priority. For example, the Human Services Division received a number of grants in 2007 that provided funding for the implementation of several key homeless initiatives including Homeless Court. Existing staff was initially. used to help administer the grant funded activities, yet over time, the work and expectations grew and existing staff was no longer able to complete the work given their other responsibilities. As a result, CCS identified budget savings to pay for an as- needed position to assist in program administration. An evaluation of staff needs will be conducted during the upcoming FY 2015 -17 Budget process to ensure that such structural staffing needs are assessed and addressed. Another case in this category is new programs whose service levels are not known upon inception and therefore require a degree of flexibility, provided by as- needed staff, while proper levels of service, and resources to meet these service levels, are confirmed. This was the case with the Laborer Trainees providing custodial services at the newly- constructed Beach restrooms, and with Beach House staff. Once it is clear what the ongoing services needs are, staff will consider converting the positions to permanent status, as will be shown in the report recommendations. Operations In addition to the hours needed to perform a service, a permanent position's hours also include paid leave time, which increases the number of required hours by 20 percent. For those services that must continue despite staff absences, as is the case in custodial and maintenance services, Resource, Recovery and Recycling, Fleet Maintenance, and Big Blue Bus, managers use as- needed positions to fill short term vacancies during paid leave of permanent employees or to fill vacancies while recruitments are being conducted. Using as- needed positions allows departments to hire up to the number of hours that they require. When a position does not have a consistent work schedule throughout the year, the costs to the City of providing paid leave and health care outweigh the benefits to the employee and are not a prudent use of the City's limited resources. Without as- needed staff, Departments lose their ability to fill positions on a short term basis, to experiment with new levels of service, or to provide additional short term service using savings. Council and community members have expressed concern about the level of benefits offered with as- needed compared to permanent employment. Permanent employees do receive more benefits than as- needed staff. But, temporary employment has benefits in that it provides flexible positions 12 with salaries comparable to other Southern California cities and the private sector; its hiring process is faster and less competitive, and it provides employment opportunities to a segment of job seekers for whom part time and flexible work fits in with other activities and goals. Employment Opportunities The criteria above also can fill certain employment needs for certain job seekers desiring flexible hours and short or variable term positions. For example, many as- needed staff members, particularly in the Aquatics unit of the Community Recreation Division, are college students who are only able to work limited hours during the school year, but can fill additional hours during the summer when demand is high. Some seek these jobs with the intent to leave them after a short time due to college pursuits or other commitments. Many as- needed Library employees want flexible hours and are college and graduate students, mothers, retirees, or have second jobs. For those that may seek longer -term employment at the City, these positions provide the opportunity to gain work experience and exposure to City employment. Recommendations. In the study, staff identified the as- needed hours representing staff working an average of 20 hours per week, including about 85 people filling 59.0 full time equivalent positions, or about 115,000 hours. Based on criteria identified in the study, staff recommends converting about half, or roughly 55,000 hours, into permanent full and part time positions, representing a 25.65 full time equivalent staff increase, or 1% of the City's approved permanent full time equivalent positions, at an estimated cost of $1.0 million. These conversions would impact current employment for between 40 and 50 current as- needed employees, who would have to compete and might not be successful in the civil service selection process. In general, these conversions represent areas in which increasing and more consistent operational need makes permanent positions a better staffing choice. Recommended Conversions Fund Hrs. FTE Net Cost General Fund 15,496 7.5 $0.3M Other Funds 39,463 18.2 $0.7M Total 54,959 25.7 $1.OM The table below shows these conversions by fund and title. 13 z The Current Hours reflect a vacancy in FY 2013 -14. This position is budgeted at 1,040 hours, the recommended conversion. 3 Position was previously budgeted in the Beach House (A FTE) and in the General Fund (A FTE). Hours remain the same 4 The hours not recommended for conversion will remain as as- needed positions in the RRR fund to provide coverage for permanent position vacancies and leaves. 14 Current Rec. Rec. Hours Hours FTE I Net Cost General Fund Community & Cltrl. Svcs. Guest Services Assistant 2,143 2,496 1.2 66,158 Cultural Affairs Coordinator' 308 1,040 0.5 17,993 Finance Revenue Collections Assistant 5,490 4,680 2.3 101,022 Public Works Custodian 1 3,144 1,040 0.5 26,212 Maintenance Worker 4,160 4,160 2.0 90,836 Street Services Worker 4,264 2,080 1.0 49,765 General Fund Total 19,509 14,456 7.5 $351,986 Other Funds Community & Cltrl. Svcs. Beach House Aquatics Program Coordinator' 709 1,664 0.8 50,363 Public Works Beach Beach Laborer 26,000 23,447 9.0 198,439 Custodian II 2,080 1.0 83,017 Beach House Custodian 1 4,599 5,200 4.0 171,564 Pier Painter 955 2,080 1.0 75,208 RRR RRR Equipment Operator' 17,458 4,992. 2.4 116,957 Other Fund Total 49,721 39,463 18.2 $695,548 Total All Funds 69,230 54,959 25.7 $1,047,534 z The Current Hours reflect a vacancy in FY 2013 -14. This position is budgeted at 1,040 hours, the recommended conversion. 3 Position was previously budgeted in the Beach House (A FTE) and in the General Fund (A FTE). Hours remain the same 4 The hours not recommended for conversion will remain as as- needed positions in the RRR fund to provide coverage for permanent position vacancies and leaves. 14 The table below summarizes the remaining hours for as- needed employees working over 20 hours per week by classification and excludes those who work extremely limited hours. Staff used the criteria described above to determine that the tasks completed using these hours are most appropriately completed by as- needed employees. Most fall into at least two categories, and those with the largest number of remaining hours fit into at least three. Fund / Title Hours not Rec. Based on Demand Seasonal Work Unbdgtd/ New Svc. Fill Vacancies General Fund Communications Operator 1,433 X Community & Cult Svs Leader 3,851 X X Facilities Attendant 3,811 X X X Library Assistant II 3,741 X X Library Page 6,077 X Library Services Officer 2,194 X Pool Lifeguard 1,083 X X Staff Assistant II 4,002 X X Staff Assistant III 1,050 X X Transp. Management Specialist 2,080 X Video Intern 1,096 X Video Production Coord. II 1,064 X Assistant Planner 1,973 X Other Funds Event Coordinator (Beach) 3,321 X X Guest Services Assistant (Beach) 1,274 X X Laborer Trainee (Beach) 23,069 X X Maintenance Worker (Beach) 1,421 X X Venue Services Assistant (Beach) 1,464 X X RRR Equipment Operator (RRR) 5,434 X Motor Coach Cleaner (Bus) 2,828 X Grand Total 72,803 15. 6 4 7 15 Contraaed StaffinFT. Scope. For the purposes of this study, the City conducted an internal survey of its contracted services that cost over $100,000 per year. Staff identified a total of 43 contracted services, with a total annual contract cost of approximately $24 million. The services represented by these contracts fall into three main categories: general services, specialized repair and maintenance, and specialized services, which includes services that require special knowledge, certifications, or equipment. Annual Amt. TYPE Contracts (millions) General Services 16 $10.8 Specialized Repair and Maintenance 14 $10.5 Specialized Services 13 $2.6 Grand Total 43 $23.9 Considerations. Local government experience indicates that contracting for services is most effective in areas where the private sector has considerable experience and is well established, offering competition, where the work scope and standards of performance are easily defined and monitored, and where the city has adequate contract monitoring and evaluation in place. The table below summarizes these practices, showing what should be true on the vendor side (private sector), and on the City's side, to make contracting out effective. The City's contractual services agreements include standards of performance that are evaluated and measured based on their scope. Some contracts are monitored daily /weekly and some are monthly /quarterly. Several performance measures considered are: scope and specification compliance, complaints /complaint resolutions, project schedules compliance, monthly reports and customer feedback. A sample Contractor Performance Form is included as Attachment B. Additionally, all contracts include a 30 day provision to cancel the "agreement. Contracting Best Practices Private sector city Experience Strong contract monitoring Participation / competition Staff /timing flexibility Accountability Contracted staff is protected in a number of ways, ranging from higher compensation to continued employment despite changes in contract firms. To begin with, most of the City's contractual services vendors (and all of the contracts included in this study) are subject to the City's Living Wage Ordinance (LWO) per Chapter 4.65 of the Santa Monica Municipal Code. The LWO establishes a Minimum Wage of $15.37 per hour (adjusted annually based on the Consumer Price Index) for employees of contractors providing services to the City where services exceed $54,200 or more. As noted earlier, this rate is $6.37 above the State's minimum wage of $9.00. The ordinance also requires contractors to provide the same health care and other benefits to employees' same sex W. spouses and domestic partners as are provided to other employees' spouses. An employee covered by the LWO is any person who does not actually work as a manager, supervisor, or confidential employee, and who is not required to possess an occupational license. Contractors are required to maintain payroll records to prove their compliance. Contractors with unionized and therefore represented employees are exempt from the living wage ordinance requirements. Additionally, a new State Senate bill, SB7, requires that, as of January 1, 2015, any contractor awarded a public works project by any general law or charter city in California must comply with prevailing wage provisions if it wishes to receive State funds. Public works is defined as construction, alteration, demolition, installation, or repair work done under contract and paid for, in whole or in part, out of public funds. While a previous California Supreme Court decision had held that a charter city may exempt itself from the state's prevailing wage requirements on locally funded projects, the City had not exempted itself from these requirements and had instead adopted a local prevailing wage ordinance for all of its public works projects in 1987. As a result, the City's compliance with this law will not have a discernible fiscal impact. The City will also ensure that contractors comply with paid sick leave requirements of the Healthy Workplaces, Healthy Families Act of 2014 beginning on July 1, 2015. To provide a complete analysis, the total contract costs in this study include the estimated costs associated with this law, and potential Affordable Care Act implementation costs that may be passed through to the City in the future,. The City also complies with the Displaced Janitor Opportunity Act of the California Labor Code Sections 1060 -1065. The City requires contractors and subcontractors that are awarded contracts for janitorial or building maintenance services to retain, for a period of 60 days, those employees who were employed at a specific site by the previous contractor or subcontractor. The act requires the successor contractors to offer continued employment to those employees if their performance during the 60 -day period is satisfactory. This has been the case with the City's custodial contracts, although the City has required contractors to extend the review period from 60 days to 6 months. Many of the City's currently contracted staff have worked at City locations, transferring from one contractor to another, for many years. Current custodial workers hold 1 year to 18 years of service at City locations. Additionally, the current custodial contractor offered to provide employee benefits, including seven paid holidays, five jury duty days, one week of vacation after the first year, and health benefits required by the Affordable Care Act. As noted above, contract management is essential to ensure that the work scope is being completed effectively and efficiently. Recently, the City conducted an audit of its tree maintenance contract to ensure compliance with these contract terms. Staff has incorporated industry- standard techniques of contract management, including clear work requirements, assignments and change order authorizations documented and confirmed with the contractor, a clear rate structure, and performance and compliance audits as needed. Cost of Services if Provided with Permanent Staff. Responding to Council's direction to study the potential of bringing contracted services in- house, staff analyzed each contract and considered how to implement each service in- house. The analysis included direct costs (staff salary, paid leave, benefits, and coverage for vacation and sick leave). Also included were the equipment, 17 facility /space, supplies, and training needed. Finally, indirect costs (overhead, worker's compensation, human resources, payroll, additional insurance), and additional resources necessary to house and manage an expanded work force and larger equipment and space inventory were added. To ensure a total cost comparison, staff included a cost to manage the contracts, at up to 25 percent of each contract's cost. Staff estimates that the 43 contracted services, if provided by in -house permanent staff, would cost approximately $98.8 million, as opposed to the current fully loaded contracted cost of $29.4 million, for a net year one cost of $69.4 million. The $98.8 million includes $59.9 million in ongoing staffing, vehicle and equipment maintenance, rent and overhead costs, and $38.9 million in one -time costs for vehicles and equipment and space tenant improvements. The net year -one cost represents 12 percent of the City's overall budget, over 100 percent of the City's contingency reserves, and more than six City departments' combined operating budgets (City Attorney, Council, City Manager, Human Resources, Information Systems, Library, and City Clerk). The ongoing cost represents 7 percent of the City's overall budget. Cost detail for each contract, broken out by category, is included as Attachment G. Cost: Contract Annual Mgt & TOTAL Cost Health $23.9M $5.4M $29.41M Services through Contract vs. In -House In -House NET COST NET COST Ongoing One- TOTAL YEAR 1 ONGOING Time $59.9M $38.9Ms $98.8M $69.4M $30.51M 5 Does not include construction cost of a transfer station, estimated at $10M. W The largest portion of this estimated cost is staffing, followed by equipment (includes vehicle purchases), administrative overhead, workers' compensation, and space, including one -time tenant improvement costs. Included in this cost is the projected increase in staffing, a total of 371.7 FTE (773,136 hours) representing a 19 percent increase in the City's total permanent work force, and a space increase of approximately 90,000 square feet to house new staff, vehicles, and equipment. A further analysis of the space requirements is in Attachment C. Breakdown of Costs to Bring Services In -House Training, Uniforms, C. -n- 19 Applying Criteria to Determine Proper Use of Contracted Staff. In the 2007 and 2009 contractual services studies presented to Council, staff listed a number of criteria used by managers to determine whether the City should consider using contracted staff to provide a service. According to the survey conducted for this study, these criteria are still used by staff and they also reflect local government best practice. RECOMMENDED CRITERIA LIST EXAMPLES Workforce Service is seasonal or unpredictable, but Parking facility operations; Landscape Elexibility requires multiple staff if service is Services; Custodial Services; Roof needed. Service continuity relies on large repair, Carpet and flooring, employee pool with numerous and Supplemental law enforcement immediately available backup options. Specialized / Service requires technical or special Roof and carpet repair and Technical expertise expertise that City staff could not or does replacement, and asbestos not provide, and is outside of core service removal. All of these require special mission of the department. licenses. Space The service requires substantial space to Solid waste processing and hauling Requirements house the staff and /or equipment to services; the City does not have a provide the service, which is not available transfer station facility. Transit bus within City facilities or cannot be leased. body painting and repair; this would require building and upfitting two new bus bays. Capital/ Equipment The service requires significant Waste Processing and Handling, Requirements equipment or other capital investment Tree trimming, Police Vehicle and maintenance, for which a private Upfitting, Transit bus body painting contractor could amortize the costs or and repair, Household hazardous maximize use of the equipment. waste collection, Fiber cable construction Risk Service entails risk that significantly Asbestos removal increases the City's potential liability. Security services Proprietary Control Service relies on software or equipment Parking meter installation and subject to proprietary control by monitoring. manufacturer / vendor/ sole source. Short term / Pilot Service is needed on an interim or The City does not have any services emergency basis, or for a pilot period of under this criterion at this time. time. Private sector contractor can better respond to expansions, contractions or special requirements of the service. In addition to these criteria, and as outlined in the 2007 Council study and in the proposed policy included as Attachment D, staff must also weigh the quality of the service, employee fairness and protection, and cost effectiveness when considering contracting out a service. An overview of the criteria that each of the 43 contracts reviewed in this study meets is included as Attachment E. The City's eight largest contracts in terms of annual amount make up approximately 20 70% of the total. Staff has prepared a detailed explanation of the way these criteria are used to evaluate whether contracting is the best way to provide each service using these contracts, shown in Attachment F. The Council might opt to override the criteria -based decision and choose to bring in a currently - contracted service. The following is a summary of the potential challenges that would need to be considered in these decisions. Workforce Flexibility Contractors are able to provide a large number of staff of varying classifications (including supervisors) at a certain time, and then decrease that staff at other times. Pooling of employees across a number of different clients allows a contractor to provide this flexibility efficiently and with minimal impact to contracted staff. For example, the City's parking facilities operations contract allows for increased staffing for major events such as GLOW and the Marathon. An additional benefit of pooled staffing is that many employees can be assigned to cover multiple facilities for short periods of time. This is the case with parking facilities staffing and landscape services. The City's landscape contractor provides trash collection services 27 City parks, and maintenance services at 28 City facilities and 289 public landscape sites, on a tight schedule. To maintain the schedule with in -house staff, the City would be required to hire an estimated 35 FTE, including new supervisors, to provide the same level of service at multiple locations at a given time. Similarly, the City's contracted custodial staff (the City also employs 59 in -house custodians) is required to service 13 locations at one time during a limited number of hours. Without the benefit of pooling, the City would be required to hire staff at the peak level, increasing service hours by almost 50 percent and staffing costs by 98 percent. While bringing in these services would result in a significant cost, the staffing level that accommodates peak periods would also not be sustainable throughout the year from an operational perspective. Specialized /Technical Expertise The City's operations rely on a number of systems and processes whose implementation requires a level of expertise that is not part of the City's core functions. For example, the 60 police vehicles that are replaced each year require upfitting with state of the art equipment that is frequently updated. This equipment must be installed to manufacturer specifications by certified technicians. Thus each employee completing this work is required to undergo specific training on an ongoing basis to complete work accurately. A contractor is able to spread this cost and the amount of time needed to complete the training among a large number of clients without additional cost as this training is an integral part of the service they provide. Providing the service in house would require building a new and specialized expertise within City staff that is not part of its core mission, applies only to that specific activity, and thus provides lower return in service provided on investment of financial and other resources. Tree trimming is another area that requires special certifications and experience. Performing this service correctly protects the community, properties, and the City's urban forest. 21 Risk Risk is closely related to specialized and technical expertise. Like most business entities, the City manages risk exposure to protect tax payers from financial liability associated with risky work. By engaging outside parties specializing in a service or activity, the City responsibly transfers or spreads risk to other parties specifically set up to manage that risk. Risk always exists; however, certain activities present specialized and /or extraordinary risks that are more easily mitigated by contract staff than in -house staff. The reasons behind this vary, but asbestos removal services and tree maintenance services provide at least two examples. In the case of asbestos removal, this service is considered a high risk peril — it poses serious health and safety risks and requires highly specialized personnel. At the same time, the City only needs asbestos removal services on an intermittent basis. This combination of conditions (i.e., high risk, low frequency) has the potential to create unsafe working conditions for in -house employees due to the difficulty of keeping critical technical skills fresh when employed on an intermittent basis. Therefore, from a safety perspective, the City is better served to rely on professionally trained contractors dedicated to asbestos removal services as opposed to in -house staff. Tree maintenance services represent another area where using contractors can be more advantageous than in -house staff. This too, is considered a high risk area — employee injuries and third -party liability claims are common and have the potential to create extraordinary losses for the City. The City's workers' compensation and liability expenses will likely always be higher than its private sector counterparts with sound safety and liability loss records. This is due to a variety of reasons — the most common relating to higher claim filing rates and greater compensation expectations. Transferring tree maintenance services to a private contractor cannot eliminate these risks, but it can help to mitigate the City's exposure. Space and Capital Requirements Many of the City's contracted services rely on contractors to purchase and maintain large, expensive equipment, and to house such equipment, as well as staff, off -site. As with pooled staffing, contractors have the ability to spread the cost of equipment and space among a large number of clients. As an example, the City chose to contract out Solid Waste Transfer and Hauling Services due to costly construction as well as operations — it would cost approximately $10.0 million for a modification of 8,000 sq. ft. to the existing transfer facility. Maintaining the City's landscape would require purchasing and maintaining 20 vehicles and 31 types of equipment, at a cost of $1.1 million in the first year and $200,000 on an ongoing basis. The Police Upfitting contract, brought in- house, would require an additional 3,000 square feet of additional work space to house staff and equipment, including vehicle maintenance bays. At this time, current facilities meet only 60 percent of staffing and parking space needs at the City's Corporation Yard. This lack of space has required that in -house public landscape staff use the Colorado Yards site, purchased for park use, for office, storage and parking needs. Staff believes that converting all contracts in -house would require the acquisition and improvement of new office and storage space. As a result, additional space would take time to amass and would require additional maintenance and management. Quantifying this premium, conversion of all contracts would require 90,332 22 square feet of space for staff offices and lockers, equipment storage, and vehicles, including 43,000 square feet for landscape, custodial, and tree trimming vehicle parking. Staff estimates annual costs of $1.8 million to $5.4 million if the City were to lease space in addition to one -time tenant improvements of $7.1 to $11.8 million 6. Proprietary Control In the case of the parking meter installation and monitoring contract, the proprietary equipment and software requires that contract staff complete the work. If the City were to bring the service in- house, it would be required to purchase, install and maintain new meters. Attachment G lists and quantifies the impacts of contracting in services for all 43 contracts. Recommendations. While staff has used these criteria informally when making the service delivery decision to contract out, as part of the most recent review, staff again evaluated each contract, using the above criteria, to ensure that the current delivery method provides the best and most effective service to the community. From this review, staff recommends bringing in -house two contracts over the $100,000 annual threshold, reviewed in this study,. and three additional smaller contracts, at an approximate additional cost one -time to the City of $0.8 million; with an ongoing cost of approximately $0.3 million, of which $0.5 million one -time and $0.1 million ongoing is in the General Fund. The following table shows detail for the services recommended to bring in- house. 6 The range is based on a variety of factors that commonly impact lease values. Attachment C provides additional detail. 23 Recommended Contractual Services to be converted to In -House Services Contracts over $100,000 HVAC. This contract, for heating, ventilation and air conditioning (HVAC) installations and repairs may be provided by in -house staff with minimal changes. The cost to provide this service in -house would be about $0.4 million. Services would be provided by 4.0 FTE HVAC Technicians (three existing and one new). The HVAC contractor services of approximately $80,000 annually would still be needed to perform large /complex HVAC installation and repairs. Bus Facility Maintenance and Repair. In evaluating this service based on the criteria, it was clear that there are no operational, technical, capital or cost challenges related to completing this service with in -house staff. The conversion includes 2.0 permanent staff, and minor space and equipment needs. The conversion will make the best use of existing in -house staff and resources. Other Contracts In addition to the services over $100,000 that were reviewed as part of this study, as part of ongoing contract and service review, staff recommends converting three additional contracts to in- ' Includes contract management and estimated health care costs. 8 Includes staff and equipment. Higher one -time costs compared to ongoing indicate large equipment purchases. 9 Additional HVAC contractor services of $80,000 a year would still be required 10 Net costs include an offset of 1.0 FTE trades intern vacant position deletion. 24 Contract In -house Rec. Year Ongoing Type /Fund / Service Cost Cost$ FTE Net Cost Net Cost CONTRACTS >,$100,0000 General Fund HVAC Installations and Repairs' 199,930 417,530 1.0 217,600 13,050 Big Blue Bus Fund Bus Facilities Repair 172,541 413,276 2.0 240,735 112,735 TOTAL $372,471 $830,806 3.0 $458,335 $125,785 OTHER CONTRACTS General Fund Graffiti Removal 68,250 238,741 1.0 170,491 52,891 Plan Check and Tree Inspection10 52,500 191,973 1.0 88,909 57,169 subtotal $120,750 $430,714 2.0 $259,400 $110,060 Pier Fund Painting 47,250 124,505 1.0 77,255 69,655 TOTAL $168,000 $555,219 3.0 $336,655 $179,715 Total General Fund $320,680 $848,244 3.0 $477,000 $123,110 Total Other Funds $219,791 $537,781 3.0 $317,990 $182,390 TOTAL ALL CONTRACTS / FUNDS $540,471 $1,386,025 6.0 $794,990 $305,500 Contracts over $100,000 HVAC. This contract, for heating, ventilation and air conditioning (HVAC) installations and repairs may be provided by in -house staff with minimal changes. The cost to provide this service in -house would be about $0.4 million. Services would be provided by 4.0 FTE HVAC Technicians (three existing and one new). The HVAC contractor services of approximately $80,000 annually would still be needed to perform large /complex HVAC installation and repairs. Bus Facility Maintenance and Repair. In evaluating this service based on the criteria, it was clear that there are no operational, technical, capital or cost challenges related to completing this service with in -house staff. The conversion includes 2.0 permanent staff, and minor space and equipment needs. The conversion will make the best use of existing in -house staff and resources. Other Contracts In addition to the services over $100,000 that were reviewed as part of this study, as part of ongoing contract and service review, staff recommends converting three additional contracts to in- ' Includes contract management and estimated health care costs. 8 Includes staff and equipment. Higher one -time costs compared to ongoing indicate large equipment purchases. 9 Additional HVAC contractor services of $80,000 a year would still be required 10 Net costs include an offset of 1.0 FTE trades intern vacant position deletion. 24 house services. These are areas where staff has identified existing in -house capacity, and where criteria identified above do not apply: ® Graffiti removal services / power washing services in the amount of $65,000. Services are provided 3 days per week focusing on the Pico Neighborhood. The cost to provide this service in -house would be approximately $239,000 comprised of $85,000 for salaries /benefits, $141,000 for space /equipment costs (first year) and $6,000 for ongoing equipment /materials costs. Services would be provided by 1.0 FTE Graffiti Removal Technician. Net cost would be $170,491. ® Plan check & tree protection inspection services in the amount of $50,000 annually. Services would be provided by 1.0 FTE Urban Forest Supervisor at a cost of approximately $192,000 comprised of $127,000 for salaries /benefits, $32,800 to configure new office . space, and purchase phone and miscellaneous tools (first year) and $9,200 in ongoing costs including tools, phone and vehicle maintenance. Staff plans to offset this cost by deleting a vacant trades intern position at $50,564, leading to a net cost of $88,909. ® Painting services at the Pier provided 35 hours per week at a cost of $45,000. Services would be provided by 1.0 FTE Trades Intern at a cost of $124,505 comprised of $96,000 in salaries /benefits, $7,600 equipment costs (one -time) and $5,100 in ongoing equipment costs. Net cost would be $77,255. Of the remaining contracts, the average contract met two of the eight criteria, and many met more than two. The most frequent reasons to contract for these services are capital and space requirements, specialized or technical expertise, and workforce flexibility. Table 1 contains a full list of the identified contracts, and ties each to the appropriate criteria. Recornmendatlons and Next Step, Staff recommends the following service delivery changes based on study results: As- needed. Staff recommends converting as- needed hours to permanent positions in maintenance, custodial, resource recovery, customer service and administrative areas; a total new 25.7 full time equivalent positions. This change would result in 30 new full time (14) and part time (16) positions, for a net ongoing cost of $1.0 million. The recommended change would also impact the approximately 40 -50 current as- needed employees currently filling these roles, who would not be guaranteed positions. Contracts. Staff recommends converting five maintenance and repair contracts to in -house services. This change would create 6.0 new full time equivalent positions, for a one -time $0.8 million and ongoing $0.3 million additional cost citywide. The recommended change would also impact the contracted workers associated with the City's current vendors for these services. 25 RECOMMENDED CONVERSIONS Fund FTE Changes Net Cost Year 1 Net Cost Ongoing AS- NEEDED POSITIONS General Fund 7.5 351,986 351,986 Other Funds 18.2 695,548 695,548 Total 25.7 $1,047,534 $1,047,534 CONTRACTS General Fund 3.0 477,000 123,110 Other Funds 3.0 317,990 182,390 Total 6.0 $794,990 $305,500 ALL CONVERSIONS General Fund 10.5 828,986 475,096 Other Funds 21.2 1,013,538 877,938 Total 31.7 $1,842,524 $1,353,034 If implemented at one time, these changes would increase the City's overall budget by $1.8 million in year one: $0.8 million in the General Fund and $1.0 million in all other funds. The changes would also increase permanent staff by 31.7 FTE; 10.5 FTE positions in the General Fund and 21.2 FTE positions in all other funds. Ongoing changes total $1.4 million, with $0.5 million in the General Fund and $0.9 million in all other funds. Staff believes that these changes, along with the adoption of a policy guiding the use of contracted and as- needed staff, can be incorporated in the City's budget over time with no adverse impact on services. However, it is important that the changes occur incrementally. The phased implementation would begin with the January 13, 2015 Council Meeting, continuing to the January 27, 2015 Midyear Budget Council Meeting, and then throughout the FY 2015 -17 Biennial Budget period. We have outlined our recommended next steps based on this timeline: Phase 1: January 13, 2015: Recommendation for Council to review and adopt Policy for Hiring Contracted or As- Needed Staff for Non - Professional Services (Attachment D). This policy outlines the criteria to be used when considering the method of providing services for a particular program or project. Over the long term, staff would include within their staff reports requesting authorization for contracted services a discussion of the criteria that they used to justify the contracted service. Phase II: January 27, 2015: Five Year Forecast and Midyear Budget Council Meeting. Council would consider the first part of a phased implementation of conversions. Council would at this time be able to review the recommended changes along with other needs and requests, and F. with the City's updated financial picture. Implementing these changes would require prioritizing among community concerns and considering tradeoffs. As noted in the report, the Civil Service recruitment process will take an average of 12 weeks, with an additional 4 to 8 weeks for candidates to pass a background check. In addition, if necessary, staff will require time to acquire space, complete tenant improvements, and purchase equipment as necessary. Once staff has been hired, there will be a need for training and completion of certification requirements by the employee. For this reason, staff recommends that the conversions occur gradually over two and a half years., beginning with the Midyear Budget. Staff will include recommended early conversions as part of the Midyear Budget staff report. Phase III: June 2015 -June 2017: Biennial Budget. Staff recommends a two -year implementation schedule for the remaining as- needed conversions and all recommended contract conversions. Contract conversions will require additional time due to space and equipment needs, additional training and certifications that might be required, and ensuring a smooth transition from the contract service to the in -house service. Attachments Attachment A: Comparison Cities Survey Attachment B: Contractor Performance Form Attachment C: Space Needs Attachment D: Policy for Hiring Contracted or As- Needed Staff for Non - Professional Services Attachment E: Contracted Services Criteria Met Attachment F: Analysis of 8 Largest Contracts Attachment G: Contractual Services Summary and Conversion Factors 27 M 1- Y m 0 O n 0 Q F Z W a Q g `v o'o E '? `w y'= E c�E oN w 5 E o w°« E m w w ,w. E w m 0 w °moo. v8 3° 0 c > o v N w .� m v K �CtN Z m Oa _ V . O cu tnJN - 02 c �� w w c O v v O D C U y O x D o C O N x o V O v= ova= U °EE m u m„oc =� 9vUOt° mEoo� 16 mV'o .SJ 3 COO E�a'� 'o vU oo ovc So j$ z 6 rvn u 3 z Z Q m o a 3 i Z z 'rr� oUOn O.9 v o Y u n > 6.0 Es a'm 'o vU° 'Svc _o N � N N m N N N (7 N (9 N N N W lw V° N Ul m N N N V UI m V N N LL d° t9 j m N N N N °t y j 0 p N O N N C 2 Z` C N tO'O. Uf9 CCU' � w NO_(J 'W U NC�r .�-dUw U NAT m n N°. Uf9 U' (9 IJy �°n2ULLwU� (° 'O. UIL fA U• (V z N 0 2 v N ro ro U U \ \ \\ \ \ME }\ \ \ \ \/ of . i § \, \\ \ \)/ ie ala:;l:»;! #!a!§ lz , 0 \ } \ / \ \ } \\\\ ATTACHMENT B City of Santa Monica Contract or Purchase Order Performance Review Departments must monitor the vendor's performance throughout the term of the contract. Every effort is to be made to make sure that problems are identified, documented, addressed and corrected as they arise. Dates Covered in the Quarter At the completion of each 3 month period (quarter) of the Contract Purchase Order term the department must review the vendors performance as it relates to the tasks (deliverables) identified in the original RFP or BID. The City Project Manager must fill out this Performance Review Form. The completed form is to be kept by Project Manager and filed with vendor's Contract or Purchase Order. #2 Department Department Contact Name Department Contact Phone No ❑ Yes Describe below a summary of the performance issues and any corrective action that was re uested of the vendor /firm. Description of Products or Services 3 "Vendor /Firm Name '- Contract/PO Annual Amount Additional Comments: Term of Contract /PO Renewal Options? to ❑ No Q Yes Additional years: Quarterl Dates Covered in the Quarter Have there been any complaints during the quarter? Explain below. #1 to Q -- No - ❑ Yes Describe below a summary of the performance issues and any corrective action that was requested of the vendor /firm. Quarterl Dates Covered in the Quarter Have there been any complaints during the quarter? Explain below. #2 to 0 No Q Yes Describe below s-u-mmary of the performance issues and any corrective action that was requested of the vendor /firm.' No ❑ Yes Quarter Dates Covered in the Quarter Have there been any complaints during the quarter? Explain below.' #3 to 1 Q No ❑ Yes Describe below a summary of the performance issues and any corrective action that was re uested of the vendor /firm. Quarterl Dates Covered in the Quarter Have there been any complaints during the quarter? Explain below. #4 to 1 0 No 0 Yes Describe below a summary of the performance issues and any corrective action that was requested of the vendor /firm. Correspondence to Vendor /Firm Please attach all copy of all correspondence made to the vendor /firm regarding performance issues. Indicate below the date and topic of each correspondence. Attachment# Topic Date 1 2 3 Additional Comments: Attachment C Contractual Services Study Space Needs and Cost Considerations Based on the space requirements identified by the various City departments with contractual services, the City would need approximately 90,332 square feet of additional space to accommodate personnel, equipment, storage and vehicles in the event existing contractual services were brought in- house. At this time, the City is already experiencing a shortage of space. Current facilities meet only 60 percent of staffing and parking space needs at the City's Corporation Yard. This lack of space has required that in -house public landscape staff use the Colorado Yards site, purchased for park use, for office, storage and parking needs. As a result, the conversion of contracted services to in -house services would require the acquisition and improvement of additional office and storage space. The costs to lease suitably zoned and sized buildings within Santa Monica to meet the City's additional space needs can range from $1.65 to $5.00 per square foot per month based on a search of available properties found on November 4, 2014 using the Costar real estate database. The costs vary due to differences in location, quality of building and amenities which are factored into the asking price per square feet. Additional considerations include inventory of comparable properties, number of parking spaces onsite, supply of available leasable square footage and load factor which is the multiplier to a tenant's useable space that accounts for the tenant's proportionate share of the common area (restrooms, mechanical rooms, etc.). In addition, rents typically escalate annually, based either on changes to the CPI or negotiations between landlord and tenant. Due to limited inventory, it is probable that the City would have to enter into several leases at various locations to meet the City's overall space needs. The City's space costs, consequently, would be contingent on which buildings are ultimately leased and at what cost per square feet, per month. Given these variables, conservatively, using the cost ranges currently found on Costar, the space rental costs could range from $149,048 to $451,660 per month or $1,788,574 to $5,419,920 annually, excluding costs including but not limited to utilities, insurance and maintenance. Moreover, tenant improvement costs for the identified square feet could range from $150 to $250 per square foot, resulting in an upfront expense of $7.1 million to $11.8 million to build out or configure the spaces for the various needs of the user groups. In summary, to lease approximately 90,332 sq. ft. of appropriately zoned properties in the M1 or light industrial sections of the City is anticipated to cost: Low High Estimated Monthly Costs Annual Costs One Time Costs Rent /SF /Mo: $1.65 $5.00 $149,048 - $451,660 $1,788,574- $5,419,920 Utilities: Insurance: Maintenance: Tenant Improvements: $150 $250 $7.1 million - $11.8 million Attachment C Sources: CoStar Real Estate Database (for available leasable properties) City's Architecture Services Division (for the range of tenant improvement costs per sq. ft.) Notes: The maximum tenant improvement amount is based on the total square footage identified excepting large parking areas for landscape, custodial services, and tree trimming vehicles (47,332 square feet). Staff anticipates the remaining space (43,000) requiring little to no improvements. ATTACHMENT D POLICY FOR HIRING CONTRACTED OR AS- NEEDED STAFF FOR NON- PROFESSIONAL SERVICES When considering the provision of routine, manual or physical services that require staff to work less than full -time or irregular schedules throughout the year, or where the service is subject to higher costs, risk, or training needs, the City may compare the benefits and costs of contracting out the service or hiring as- needed staff as opposed to using permanent civil service staff to complete the service. The use of contracted or as- needed staffing will be restricted to those services that meet the criteria below. If, over time, staff identifies new criteria, those will be noted and added to this policy, pending Council approval. When comparing the cost of providing the service by a private sector contractor to in -house performance of the service, staff will include indirect, direct and contract administration costs. If the criteria and findings of the review suggest that the public would benefit from the service being contracted out due to cost, risk or expertise, staff will provide this recommendation to Council, along with the findings. For programs and activities currently provided by City employees, conversions to contract services will generally be made through attrition, reassignment or absorption by the contractor. For services that are contracted out, the City will provide adequate staff to monitor and enforce the work, to ensure that contractors are following laws related to wages, healthcare benefits, and paid sick leave, and to check performance based on agreed upon standards. Decisions related to contracting out services will be based on the following objectives: • Assurance of responsive and high quality service to the community, • Fairness and protections for existing employees and contracted workers, and • Assurance of financially feasible options, in the short and longer term. Evaluation Criteria for Contracted Services Within the general policy guidelines stated above, the effectiveness of contract services in meeting established service levels will be determined on a case -by -case basis using the following criteria: 1. Specialized /Technical expertise: Service requires technical or special expertise that City staff could not or does not provide, and is outside of core service mission of the department. 2. Short term / Pilot: Service is needed on an interim or emergency basis, or for a pilot period of time. Private sector contractor can better respond to expansions, contractions or special requirements of the service. These efficiencies reduce the cost of providing services from labor cost increases. 3. Space Requirements: The service requires substantial space to house the staff and /or equipment to provide the service, which is not available within City facilities or cannot be leased. Private vendors can bear the cost on behalf of the City. 4. Capital / Equipment Requirements: The service requires significant equipment or other capital investment and maintenance, for which a private contractor could better amortize 1 ATTACHMENT D the costs or maximize use of the equipment compared to the City. Economies of scale shield the city from equipment cost increases over the length of the contract. 5. Risk: Service entails risk that significantly increases the City's potential liability. 6. Proprietary Control: Service relies on software or equipment subject to proprietary control by manufacturer / vendor / sole source. 7. Workforce Flexibility: Service is seasonal or unpredictable, but requires multiple staff if service is needed. Service continuity relies on large employee pool with numerous and immediately available backup options. The use of contract'services provides the City with an opportunity to redefine or adjust service levels. 8. Ability to quantify and adequately assess contract services provided. Evaluation Criteria for Use of As- Needed Staffing The use of as- needed staffing will be considered on a case -by -case basis to assist staff with program implementation using the following criteria: 1. Fluctuating or Inconsistent Demand: Service is not required on a consistent basis. May need many people for a short period of time and non at other times. 2. Seasonal Work: Service is only needed at specific times of the year. 3. Limited Daily Hours: Service is required daily but only for a few hours per day. 4. Filling Vacancies: To fill in for a variety of permanent employee leaves. S. Pilot or Limited Term Program: Service level and need is not clear for a new program or facility. 6. 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N U m 00 L U m C v v Q -o v o o U U c Ln 0-� E m c `w v O w C i N m Q N E = m = w O U:L E E O N K � '06 N O 0 'Q m c N J W 5 Attachment F Analyses of 8 Largest Contracts This section contains detail for the City's largest dollar value contracts, and explains staff's analysis and decision making process for contracting these services, with reference to specific criteria. Parking Services Central Parking Services manages the City's 42 parking facilities. The contractor hires and schedules personnel, provides and launders employee uniforms, manages administrative operations, maintains parking equipment cleans and stripes parking lots and structures, collects revenue and provides security. The contractor also hires employees on an as- needed basis and pulls existing employees from other areas around Southern California as necessary to manage workload needs. Central Parking staff is unionized. Contract In -House New FTE Hours 183,444 hrs. 205,920 hrs. 99.0 FTE COSTS ($ in millions) Contract In -House Net Contract & Contract Management 6.8 In -house staff _ 11.1 Equipment & Training 0.4 Additional Payroll /HR Staff Cost 0.1 Overhead 1.6 Total Year 1 $6.8M $13.2M $6.4M Total Ongoing $6.8M $13.OM $6.2M Parking services primarily meet the following criteria for contracting out the service: Workforce Flexibility • The contractor manages large fluctuations in staffing demand. Parking staffing needs shift significantly with seasons, which makes hiring and managing with only permanent staff challenging. Major events like GLOW and the LA Marathon require two to three times the number of parking staff for one or two days only during the year. • Daily needs require staffing at 15 to 20 different parking lots and structures, requiring a large number of staff at once working much less than full time hours. • The large work force requires supervision of different types and at different levels, which would mean the City would need to hire a significant number of new supervisors. • To provide the same level of service performed by the contractor, the City would need to hire 99 FTE permanent staff, almost 5% of the City's current permanent workforce, requiring additional human resources and payroll staffing. This level of staffing would provide the minimum coverage but would result in excess staff hours for permanent staff to achieve the 20 hour a week minimum. Staffing would have to increase to 130 FTE during the summer months; this short term increase cannot be accommodated using permanent staff. As a result, the City .would not be able to sufficiently staff large events without using contracted services; these would require contracted staff for each instance, at approximately $25,000 annually. 11 Attachment F Specialized /technical expertise ® The parking staff is required to know basic elevator resets in the event the elevators get stuck. Staff also needs to know low level equipment repair and maintenance and traffic direction. Attachment F Solid Waste Transfer and Hauling Services In 2008, the City contracted with a private company to provide transfer and hauling services of the City's mixed waste, green waste, food waste, construction and demolition debris, street sweeping and other materials to approved disposal facilities because the City facility had reached its capacity. The existing facility didn't meet regulatory requirements associated with a facility transferring solid waste. These services primarily meet the following criteria for contracting out: Space Requirements ® Staff evaluated the construction of a new facility but the project was cancelled due to costly construction estimate of approximately $10.0 million for a modification of 8,000 sq. ft. to the existing transfer facility. Instead, Council directed staff to develop a new materials processing plan in conjunction with a private company adjacent to the City Yards. Capital /Equipment Requirements ® In addition to space, bringing this service in -house would require purchasing over $3.0 million in vehicles and equipment, including five semi - trucks, which require significant space to house and are costly to maintain. Not included in this estimate are ongoing facilities maintenance and utilities costs. While the ongoing cost of this service, if brought in- house, seems to be very close to the contracted service, the key challenge in bringing this service in -house is that it requires a transfer station facility with the capacity to process the City's estimated annual hauling of 85,800 tons of material. As noted above, the construction of a transfer station facility that meets regulatory requirements would cost approximately $10.0 million. Since the City is not prepared to spend funds on a pay -as- you-go basis to build a facility, staff anticipates using debt financing to cover the cost, with an ongoing approximately $1.2 million annual debt service charge over 15 years. ' This contract is based on tons processed versus hours, so a comparison is not applicable. Staff estimates requiring 10.0 FTE to perform the services currently covered under the contract. Contract In -House New FTE Hours n /al 20,800 hrs. 10.0 FTE Space 8,000 ft2 COSTS ($ in millions) Contract In -House Net Contract & Contract Management 2.8 In -house staff 0.9 Equipment & Training (year 1) 3.1 Space Costs 1.4 Overhead 0.4 Total Year 1 $2.8M $5.8M $3.OM Ongoing $2.8M $3.1M $0.3M These services primarily meet the following criteria for contracting out: Space Requirements ® Staff evaluated the construction of a new facility but the project was cancelled due to costly construction estimate of approximately $10.0 million for a modification of 8,000 sq. ft. to the existing transfer facility. Instead, Council directed staff to develop a new materials processing plan in conjunction with a private company adjacent to the City Yards. Capital /Equipment Requirements ® In addition to space, bringing this service in -house would require purchasing over $3.0 million in vehicles and equipment, including five semi - trucks, which require significant space to house and are costly to maintain. Not included in this estimate are ongoing facilities maintenance and utilities costs. While the ongoing cost of this service, if brought in- house, seems to be very close to the contracted service, the key challenge in bringing this service in -house is that it requires a transfer station facility with the capacity to process the City's estimated annual hauling of 85,800 tons of material. As noted above, the construction of a transfer station facility that meets regulatory requirements would cost approximately $10.0 million. Since the City is not prepared to spend funds on a pay -as- you-go basis to build a facility, staff anticipates using debt financing to cover the cost, with an ongoing approximately $1.2 million annual debt service charge over 15 years. ' This contract is based on tons processed versus hours, so a comparison is not applicable. Staff estimates requiring 10.0 FTE to perform the services currently covered under the contract. Attachment F Tree Care and Maintenance The service contract is for the maintenance of the City's more than 33,000 public trees. Services include tree pruning for tree health, traffic clearance and pedestrian safety, and community aesthetics, tree removal and replacement for trees that pose a risk to public safety, and management of the electronic tree inventory. Tree trimming is important for community safety, and for the health and safety of the City's urban forest. Tree trimming was previously provided with in -house staff. However, this service was gradually transitioned to a contract through attrition. The City still retains 2.0 FTE tree trimming staff in -house to carry out issues of immediate need and concern such as sight distance, small tree pruning, and resident requests and inquiries. Hours Space Contract 42,848 hrs. In -House New FTE 49,920 hrs. 24.0 FTE 16,300 ft' COSTS ($ in millions) Contract In -House Net Contract & Contract Management 2.4 In -house staff 2.5 Equipment & Training (year 1) _ 3.5 Space Costs 1.0 Overhead 1.7 Total Year 1 $2.4M $83M $63M OnkOInQ $2.4M $5.9M $3.5M Tree care services primarily meet the following criteria for contracting out the service: Capital /Equipment Requirements ® Tree care requires specific and costly vehicles and equipment, including 22 heavy trucks /equipment, and specific machinery, with an estimated total cost of $3.5 million for vehicle purchase, depreciation and ongoing maintenance. Ongoing costs are over $800,000 per yea r. Specialized / Technical Expertise ® Tree trimmers and senior tree trimmers require arborist certifications; other senior tree trimmers and urban forest supervisor require supervision and safety training. . Risk ® Failure to provide proper training increases risk of employee injury and the City's liability from falling branches or trees. The City's workers' compensation and liability expenses will likely always be higher than its private sector counterparts with sound safety and liability loss records. This is due to a variety of reasons — the most common relating to higher claim filing rates and greater compensation expectations. Maintaining tree maintenance services with a private contractor cannot eliminate these risks, but it can help to mitigate the City's exposure. 0 Attachment F Space Requirements ® An additional 24.0 FTE would be required to provide tree care and maintenance. Office space of 200 sq. ft. would be required to accommodate an administrative analyst and a supervisor at an estimated $12,000 annually. Additional break room /locker space would not be necessary as there is existing space to accommodate field staff. Additional parking space of 16,100 square feet for 22 City vehicles and 24 personal vehicles would cost approximately $1.0 million per year ongoing. This is a need that cannot be accommodated at the Colorado Yards or the Corporation Yard. It should also be noted that Colorado Yards, currently used for exiting in -house landscape and tree care staff and equipment, was purchased for park use and is therefore not being utilized as planned. If staff overlooked the capital, technical expertise, and risk challenges to bringing the service in- house, other costs are also significant. Staff estimates requiring 24.0 FTE to maintain the City's trees, and provide proper oversight for this process, at an estimated total cost of $2.5 million. With all costs accounted for, staff estimates the net first year net cost at $6.3 million in year one, and $3.5 million ongoing. Attachment F Landscape Services The City's contracted landscape maintenance services cover emptying trash cans at 27 City parks and basic /routine maintenance at 5 City parks, 28 City facilities, and 289 public landscape sites (e.g. parkways, medians, curb extensions, etc.). Basic /routine services provided by the contractor include turf mowing, edging, line trimming, hardscape grooming, planter beds, sand raking, and minor irrigation work. The City currently pays $1.7 million annually for this service, which includes about 62,000 hours of staff work per year. The City has contracted out landscape services for more than 20 years. However, the City retains 44.0 FTE in -house staff to provide landscape maintenance services at 24 City parks including amenity repairs to benches, playground equipment, fencing, tables, drinking fountains, sports fields, bleachers as well as repairs to irrigation main lines, laterals, valves, and clocks. Services are coordinated with park staff to cause minimal disruption to park programs and the public. Landscape services primarily meet the following criteria for contracting out: Capital /Equipment Requirements • Providing all landscape maintenance services in -house would require purchasing and maintaining 20 vehicles and 31 specific equipment types. The first year cost to purchase and begin maintenance on the equipment is $1.1 million, with ongoing costs of $245,000 annually. Space Requirements Additional parking space of 18,200 square feet for 20 City vehicles and 35 personal vehicles would cost approximately $1.1 million per year. Workforce Flexibility To provide this work in- house, the City would need to hire an estimated 35.0 FTE, including new supervisors, to comply with the City's maintenance schedule at 350 locations. • Contract staff provides trash collection at multiple sites seven days per week. While capital requirements are the largest operational hindrance to bringing services in- house, staffing and other costs are also significant. The staffing increase includes an additional 35.0 FTE to provide necessary service coverage and additional supervision, at a cost of $3.1 million, and along Contract In -House New FTE Hours 61,984 hrs. 72,800 hrs. 35 FTE Space 18,200 ft' COSTS ($ in millions) Contract In -House Net Contract & Contract Management 2.3 In -house staff 3.1 Equipment & Training (year 1) 1.1 Space Costs 1.1 Overhead 0.7 Total Year 1 $23M $6.OM $3.7M Ongoing $23M $5.2M $2.9M Landscape services primarily meet the following criteria for contracting out: Capital /Equipment Requirements • Providing all landscape maintenance services in -house would require purchasing and maintaining 20 vehicles and 31 specific equipment types. The first year cost to purchase and begin maintenance on the equipment is $1.1 million, with ongoing costs of $245,000 annually. Space Requirements Additional parking space of 18,200 square feet for 20 City vehicles and 35 personal vehicles would cost approximately $1.1 million per year. Workforce Flexibility To provide this work in- house, the City would need to hire an estimated 35.0 FTE, including new supervisors, to comply with the City's maintenance schedule at 350 locations. • Contract staff provides trash collection at multiple sites seven days per week. While capital requirements are the largest operational hindrance to bringing services in- house, staffing and other costs are also significant. The staffing increase includes an additional 35.0 FTE to provide necessary service coverage and additional supervision, at a cost of $3.1 million, and along Attachment F with this indirect costs for administrative overhead associated with new staffing. The cost to bring the contract in is a net $3.7 million one -time and $2.9 million ongoing cost. 7 Attachment F Parking Citations and Residential Parking Permits Processing The City has employed contractors for parking citation services since 2003, and added permit processing in 2010. Services include payment processing, scheduling of hearings, customer service, collection of delinquent accounts, and other related services. Prompt citation processing and handling leads to revenue for the city, and to short response times for contested tickets; and permit processing leads to community members having faster access to necessary permits. Contract In -House New FTE Hours 24,960 hrs. 31,200 hrs. 15:0 FTE Space 2;500 ft' COSTS ($ in millions) Contract & Contract Management 2.0 In -house staff 1.6 Equipment & Training (year 1) 0.9 _ Space Costs _ 0.8 Overhead _ 0.2 Total Year 1 $2.OM $3.5M $1.5M Oneoine $2.OM $2.1M $0.1M These services primarily meet the following criteria for contracting out: Proprietary Control • The contractor has proprietary software and equipment with which it is able to quickly and efficiently create, monitor, and maintain accurate records for approximately 700,000 citations per year. The process is highly automated, making it faster and less prone to error. Specialized /Technical Expertise • Unlike other areas of enforcement, fines and the administration of parking citations is regulated by the State, which creates consistencies across jurisdictions, creating opportunities for Cities to share resources. In fact, the current contract is structured as a partnership between Santa Monica, Beverly Hills, and West Hollywood. By contracting with an Application Service Provider that specializes in this area and who also provides customer service, the City benefits from economies of scale from the highly specialized experiences the provider brings. Technical issues can be resolved more quickly, referrals to the Franchise Tax Board and DMV for intercepts on citations not paid can be processed more efficiently, customers have more payment option locations and can pay parking tickets from multiple jurisdictions in one location, and best practices can be shared more effectively. Additionally, shared customer service infrastructure, which includes call center technology, knowledge management software, and staffing of customer service centers, allows for higher levels of customer service. Capital /Equipment Requirements • Staff estimates that a new software and related equipment would cost approximately $700,000 with additional ongoing maintenance expenses of approximately $50,000. L Attachment F Space Requirements ® An additional 15 FTE would be required to process citations and permits. Staff does not have existing office space for these employees, so estimates requiring an additional 2,500 square feet for staff offices and break rooms, with an additional one -time cost for space tenant improvements. E Attachment F Parking Meter Installation and Monitoring On October 25, 2011, Council awarded a contract to IPS Group to deliver and install 5,816 parking meters throughout the city. These meters accept credit cards, and include ground sensors to provide real -time parking data. The contractor installed all meters in 2012, with an expected seven to ten year life span. The current contract is a sole source agreement based on the technology included in the meters, and provides software maintenance, software - related repairs on meter, and installation of new meters. City staff maintains the meters. This service primarily meets the following criteria for contracting out: Proprietary Control ® The contractor operating the City's meters owns and maintains the software running these meters, and was the only provider able to deliver the City's request for a single -space product. ® The City owns its existing operating meters, which should continue to function for the next five to seven years. Labor associated with this contract is minimal, and is limited to meter installation if needed. Meters are maintained and emptied of cash by in -house staff. Specialized /Technical expertise ® Contractor staff has specific knowledge of the parking meter technology and associated software maintenance. The City would not be able to fully bring this service in house, since part of the contract is related to maintaining proprietary software. If the City were to bring the service in -house when new meters become necessary, staff estimates requiring an initial $5.4 million investment for meter and software purchase and installation, and an additional $0.7 million ongoing for meter and software depreciation and maintenance costs. This does not include the cost of developing and maintaining expertise in this software, which is not a core service of the City. Due to the proprietary nature of this contract, a comparison of costs is not relevant. a Attachment F Custodial Services The City has historically provided custodial services for City -owned and City - leased locations with a combination of contracted and in -house employees. This combination maximizes City resources dedicated to custodial work, maintains City properties at a high level, and ensures uninterrupted service at all hours. The City currently contracts with six vendors to provide custodial services at the Santa Monica Pier, the Public Safety Facility, and City offices at various locations — areas with seasonal demands and leased office spaces. The City maintains park restrooms, community centers, libraries, City Hall, the Annenberg Beach House, and the Santa Monica Pier with 59.0 FTE in -house staff, and employs as- needed staff for beach restroom cleaning at the Santa Monica State Beach. Services include regular daily and monthly services, and quarterly specialty services, such as carpet cleaning, window cleaning and stripping and sealing composition floors. For health and safety reasons, custodial services must be continuous and are a high City priority, and contractors maintain City facilities in excellent condition. The contractor has strong incentives to perform well related to industry competition and the need to win a subsequent bid, and staffing flexibility makes this high level of service dependable. Custodial Services primarily meets the following criteria for contracting out the service: Capital /Equipment Requirements ® Providing all custodial services in -house would require purchasing and maintaining 7 vehicles and 14 specific equipment types. The first year cost for equipment is $0.3 million, with ongoing costs of $0.11VI annually. Space Requirements ® Additional parking space of 11,150 sq. ft. for 7 City vehicles and 29 personal vehicles would be required at a cost of approximately $0.7 million per year. An additional 510 sq. ft. would be required for materials storage and employee break room /locker space, at an estimated $30,600 11 Contract In- House New FTE Hours 40,779 hrs. 60,320 hrs. 29.0 FTE Space 11,660 ft' COSTS ($ in millions) Contract & Contract Management 1.8 In -house staff 2.3 Equipment & Training (year 1) . _ 0.3 Space Costs 1.4 Overhead 0.5 Total Year 1 $1.8M $4.5M $23M Ongoing $1.8M $3.6M $1.8M Custodial Services primarily meets the following criteria for contracting out the service: Capital /Equipment Requirements ® Providing all custodial services in -house would require purchasing and maintaining 7 vehicles and 14 specific equipment types. The first year cost for equipment is $0.3 million, with ongoing costs of $0.11VI annually. Space Requirements ® Additional parking space of 11,150 sq. ft. for 7 City vehicles and 29 personal vehicles would be required at a cost of approximately $0.7 million per year. An additional 510 sq. ft. would be required for materials storage and employee break room /locker space, at an estimated $30,600 11 Attachment F per year. In addition, staff estimates a one -time $0.7 million cost for tenant improvements related to all space acquisitions. Workforce Flexibility • Various work sites, like the Santa Monica Pier restrooms, have seasonal demands that require flexible staffing. • Staff must be available to perform services at 13 locations at one time. The City would need to hire additional staff to be present at multiple locations, and also manage a variety of hours to avoid impacting operations. • Staff absences for vacation or sick leave would require additional and duplicative hours in overtime or as- needed hours to provide service effectively. During staff leave, daily services such as trash pickup and restroom cleaning are not performed unless staff is pulled from other areas, resulting in deferral of weekly tasks. The additional coverage would require a 48% increase in hours over what is currently contracted —the equivalent of 9.4 FTE. 12 Attachment F Police Vehicle Up-fitting Services As a part of the City's equipment replacement program, staff anticipates replacing 60 Police Department vehicles per year that would require up- fitting services. New vehicles must be equipped with emergency lighting /warning equipment, police radio, prisoner transport systems, and mobile computers and camera systems. Up- fitting services are required on a continuous basis, as older vehicles reach the end of their service life. Contract In -House New FTE Hours 2,714 hrs. 6240 hrs. 3.0 FTE Space 3,000 ft2 COSTS ($ in millions) Contract In- House Net Contract & Contract Management 0.9 In -house staff 0.4 Equipment & Training (year 1) 0.7 Space Costs _ 0.9 Overhead 0.1 Total Year 1 $0.9M $2.1M $1.2M Ongoing $0.9M $13M - $0.4M Vehicle Up- fitting Services primarily meet the following criteria for contracting out the service: Specialized /technical expertise ® The service requires specialized equipment that must be installed to manufacturer specifications by a certified technician. City staff does not have the necessary certifications to install such equipment. A significant amount of training would be required for employees to obtain certifications at a cost of $48,000 in the first year. As new equipment models are released, additional training would be required to maintain certification. Capital /Equipment Requirements ® The service requires installation equipment and machinery /tools that are not available within City facilities and would cost $63,000 to purchase in the first year, and $484,000 for materials and other ongoing costs per year. The ongoing cost includes $0.5 million in materials costs, wh which the contractor currently provides. Space requirements ® The service requires 3,000 square feet of additional work space to house the staff and equipment to provide the service, which is not available within City facilities, at a cost of approximately $1.1 million to build out and configure work space. 13 ATTACHMENTG CITY OF SANTA MONICA CONTRACTUAL SERVICES COST SUMMARY Contract ANNUAL OVERHEAD WORKERS' ADVIL ADDLCOST /- Management ffof Contract CONTRACT CONTRACT ACA /Sick (TOTAL HE for L.- EQUIPMENT SPACE OTHER TOTAL EQUIPMENT SPACE ONE OTHER TOTALONE -; =TOTAL (onongoing COMP STAFF (HR TOTAL - TOTALW /'.. SAVINGSWIN SERVICE CONTRACTOR °b HRS AMT. MGMT. COST Leave CONTRACTCOST House SO FT : STAFFING ONGOING ONGOING ONGOING ONGOING ONE -TIME TIME (TI) : ONETIME TIME DIRECLCOSTS direct costs( (on salaries( Payroll( INDIRECT INDIRECT:! HOUSE Landscape services TruGreen Landcare 26% 61,984 1,731,113 444,469.49 135,332 2,310,914 35.0 18,20 3,100,703 245,472 1,092,000 480 4,438,655 903,820 - 903820 ' "5342475: 602,398 94,850 37,382 734,629 6,077,104 3,766,190' Tree care and maintenance West Coast Arbon Is 25% 42,848 1,8132]3 453,318 _93,551 2,360,143 25.0 16,300 2,4]1,]89 815,844 9]8,000 2,400 4,268,033 2,692,580 50,00 2742580 - ]010613 1,241,4]5 387,344 25,633 1,654,452 8,665,065' 6,304,921 Custodial Services Various Custodial 25% 40,779 1,343,476 335,869 89,034 1,768,379 29.0 11,660 2,315,931 111,011 699,6DO 3,126,542 223,240 740,000. - 963,240 4089,]82: 326,555 94,055 30,973 451,584 4,541,365! _ 2,772_986::. All Access Doors / Lawrence Door repair and replacement Doors / Specialty Doors 12% 500 100,000 12,000 1,092 113,092 2.0 900 163,702 .400 54,000 - 218,102 16,600 225,0001 241 fi00 '�. 459,]02 22,081 6,487 2,136 30,]03 490,405 377,314; Apex Roofing/ Bast Contracting/ Roof repairs & replacement Testa So Cai 12% 1,20D 325,000 39,00 2,620 366,620 4.0 1,200 355,092 - 72,000 _.,,..427,092_ 20,000 300,000 - 32000 .' 74],092. 47,779 12,973 4,272 65,020 812,117: 445,497_ Airwave Communication Police Department Vehlde Up Outing __ Enterprises 12% 2,714 792,OOD 95,040 5,926 892,966 3.0 r3,o0D 355,927 483,975 180,000 112,936 1,132,838 62,888 750,000 48,000 860888 .1,993,]26! 124,666 11,252 3,204 139,122 2,132,848 1,239,883' On -site security guard services Currently out for bid 12% 8,736 450,000 54,000 19,074 523,074 30.0 - 941,021 16,793 - 600 950,413 50,000 1,990 51990 -, 1,010,403 68,214 67,333 10,680 146,227 1,156,631' 633,551 Cummins engine services on LNC /CNG _ _ powered City transit buses Cummins engines Cummins Pacific LLC 12% 1,016 3 1i'000 41,280 2,218 387,498 110 .:3,600 118,642 210,300 216,OOD 7,500 552,"2 2,000 900,000 7,500 ' 909,500 1461,942: 23,946 6,733 1,068 31,747 1,493,689 Y,106,19L: ZF transmission overhaul services Harbor Diesel& Equipment, Inc. 12% 200 125,000 15,000 437 140,437 1.0 600 118,642 215,308 36,000 7,500 _ 37 _7450 137,00 150,000 7,5UO 294,500 .; 6]1,950$ 24,302 6,733 1,068 32,109 704,053 _563,617:. Technical support for electronic support - equipment Intercon Technologies 12% 1,034 114,750 13,770 2,258 130,778 1.0 400 118,642 52,370 24,000 7,500 202 c512_ 12,000 100,000 7,500 119,5001 322,O1Y; - 12,705 6,733 1,068 20,50 _ 342,519 211,741. Engine In- frame /overhaul services for Detroit 50 Series LNG powered engines Valley Power Systems, Inc. 12% 1,019 208,360 25,003 2,225 235,588 2.0 3,600 237,284 202,370 216,000 7500 663,154 12,000 900,040 7,500 - 919,500 - .;3582,654 _ 31,826 13,467 2,136 47,428 11630,083 1,394,495; LNG CNG fuel systems maintenance and repair. Agility Fuel Systems 12% 2,000 40D,000 48,000 4,367 452,367 3.0 112 331,955 159,419 6,720 2,600 500,694 15,000 28,000 - 43,000 ;' 543634 35,158 20,200 _ 3,204 58,562 602,256 149,889 Bus HVAC maintenance and repair Bus Systems Unlimited_ _ 12% _ 3,500 175,000 21,000 7,642 203,642 3.0 112 _ 355,927 6,720 81000 _383,303 - 28,000 28,000 913,303! 26,803 20,200 3,204 50,207 461,509' 257,8681 Bus detailing and cleaning Uniserve Facility Maintenance 123A 4,160 I30,00D 13,20 9,083 132,283 3.0 1121 243,363 4,256 6,720 3,384 257,523 28,00 28,000 - r 285,523 17,851 _ _20,200 3,204 41,255 326,778_ 194,495: LCNC fueling facility maintenance and repair- Clean Energy 12% 900 250,000 30,000 1,965 281,965 4.0 112 660,749 155,656 6,720 2,600 825,725 28,000 28,000 I 853,725 58,292 _26,933 4,272 89,497 943,222 661,257': Bus stop furniture and stgnage cleaning and maintenance Shelter Clean 12% 4,160 150,000 18,00 9,083 177,083 9.0 112 245,553 79,930 6,720 2,600 334,803 170,160 ]28,000 198,160 -s 532,9639 23,351 20,200 ,._3,204 _46,755 579,718 402,636' Bus Facilities Maintenance and Repair Vehlde Technical Consultants 12% 2,080 150,000 18,000 4,541 172,541 2.0 112 239,826 1,656 6,720 4,000 252,202 100,DOD _ 28,000 - ^, 128,000 - 380,202• 17,472 13,467 2,136 33,075 413,276 240,735: Bus transmission overhauls Westerns States Converters 12% 295 125,000 15,000 694 140,644 1.0 600 118,642 300 36,000 15,000 169,942 335,000 150,000 485,000 '- 654,942 9,533_ -: 30,465 _ 6,733 6,487 1,068 2,136 1]335 39,087 6]2,27]_ 531,633_ General Contractor Services RAMCO /Omega construction 12% 3,500 350,000 42,000 7,642 399,642 2.0 600 217,637 8,776 36,000 - 262,413 69,800 350,000 2,00 ; 221,80 ; 489,213 523,301 123,659 LEC Service / Masters Mechanical Heating,ventilation,and HVAC /West Coast Air 12% 1,800 175,000 21,000 3,930 199,930 -1A =.600 121,525 8,644 36,000 22,022 188,191 44,550 150,000 30,000' 2mkSSG 392,741. 20,478 3,243 1,068 24,789 417,530 217,600. Al Fiestas / ENL Service / Stolle Painting Services Painting 12% 4,900 174,999 21,000 10,698 206,697 3.0 '9o0 22,564 54,000 __ 389,6501D1,990 225,000 3,750 _ 330,650 _- 73Q30D, 45,163 _ 9,730 3,204 58,097 7]9,39] 571,699.: ,313,086 _ _ _ - CDMT/The Lighthart Plumbing Services Goom /Wilner Plumbing 12% 1,_600 174,999 21,000 3,493 199,492 10 x.600 221,452 16,528 36,000 22,022 296,002 86,800 150,000 236,800 - 532,8021 34,984 6,487 ._ 2,136 . 43,607 576,409 316,917 Asbestos /Hazardous Materials Mitigation Services Cesdarock Environment 12% 1,000 10,000 12,000 2,183 114,183 7.0 1,200 761,174 72,000 - 937,374 20,000 300,000 14,000 ' 334,00 { 1,171,374: 102,984 22,703 7,476 133,163 1,304,537 1,190,354: Carpet and Flooring Repair Services Elite Fioorcovering 12% 1,600 300,000...... 3,493 339,493 _ 5.0 2.0 1,500 - 556,002_- 175,640 ___4,20D _ - 2,400 _ _ 90,000 - _ _ - _ _ 646,002 178,040 4,000 _ 375,000 - _ _ 51,520 375,00 55,520 1,021,002;. 233,560 74,812 15,627 16,216 ..20,14] 5,340 2,136 96,369 _ 3],910 1,11],3]2 __ 2]1,4]0 777,878' _ 123,793 Bulky Item collection services Chrysalis _ _ _ _ _36,000 _ 12% 2,080 127,800 15,336 4,541 _ _ _ 147,6]] ATTACHM ENT G CITY OF SANTA MONICA CONTRACTUAL SERVICES COST SUMMARY Contract ANNUAL OVERHEAD WORKERS' ADD'L ADDLCOST /- Management Bof Contract CONTRACT CONTRACT ACA /Sick TOTAL HE for In. EQUIPMENT SPACE OTHER TOTAL EQUIPMENT SPACE ONE -: OTHER TOTALONJE , TOTAL " (on ongoing COMP STAFF (HR + TOTAL TOTALW /; SAVINGSwIN SERVICE CONTRACTOR % Hip; AMT MGMT. COST leave CONTRACTCOST House` SQ FT STAFFING ONGOING ONGOING ONGOING ONGOING ONE -TIME TIME(TI) ONE -TIME TIME OINECf COSTS'.. direct costs) (onsalaties) Payroll) INDIRECT_ INDIRECT'.. HOUSE Maintenance, Repair Service, and Replacement Equipment for Water Pumps Qtywide General Pump 12% 1,000 259,600 31,152 .2,183 292,935 14.0 6,000 1,585,704 23,500 360,000 - 1,969,204 900,000 1,500,000 13,860 241 38604m3 X064 135,320 26,120 14,953 176,392 4,559,456'. 4,266,520 Operations, Maintenance, and Management Services (OMMS) for the Charnock Well Field Evoqua Water Technologies 12% 6,240 278,024 33,363 13,624 325,011 3.0 - 444,873 2,700 - 405 447,978 - - 600x'. 600 a 448578! 37,671 5,597 3,204 46,472 495,050! 170,0391. Hazardous Waste Transportation, Management, and Recyc11ng /Disposal PSC Environmental 12% 10D 100,000 12,000 218 112,210 :3.7 2,350 384,825 33,572 141,000 8,340 567,737 340,000 587,500 ! 92]500 w140%237 37,456 37,271 3,952 78,679 1,573,916: 1,461,697= Maintenance, Repair Service, and Replacement Equipment for Six (6) Wastewater Pumping Plants Pumpman 12% 200 250,000 30,000 437 280,437 12.0 5,750 1,330,441 271,000 345,000 8,880 1,955,321 1,015,000 1437,500 11,880 2464380 ' 4419 >701. 105,499 28,524 , _ 12,817 146,890 4,566,541_ 4,286,104'. MSW Process and Hauling Services Southern California Disposal 12% 2,50000D 300,000 - 2,800,000 10.0 600 552,900 36,000 30,000 1,598,257 2,465,660 150;000 38,740 2654,400 'A 202657- i ]6026]: 250,000 100,734 10,680 361,414 4,564,072 1,764,072 ; Door -to -Door HHW Collection WM Curbside, Inc _ _ -_ 12% 832 200,000 24,000 1,817 225,817 20 300 236,867 185,700 18,000 - 440,567 193,700 75,000 51,000: 319,700 37,090 20,147 2,136 59,373 639,690 593,8231 Pler Carousel Operation and Maintenance Roth Management 12% 5,532 248,322 29,799 12,078 290,199 5.0 - 457,614 1,000 - - 958,619 s -' 3,601 3601 ! 462211. 67,555 - 5,340 72,895 535,111. 241,912 _ _. Marketing, Event Production, Performer Monitoring, Policy Recommendations to Council Santa Monica Pier Corporation _ - _ 12% _ 15,000 494,257 59,311 32,750 586,318 7.0 - 1,159,235 - - 1,159,235 = - - } 159235. 370,758 7,476 178,234 13� 37,469_ 751,151; Fiber Cable Construction Dynalactric 12% 1,100 130,213 15,626 2,402 148,241 4.0800, 454,011 19,654 48,000 - 521,665 47,500 200,000 24],500 a;'; ]59,365! 32,735 3,355 4,272 90,362 809,527 661,286 24/7 Network Operations Center Mosalc451 12% 8,736 72,500 8,700 19,074 10D,274 5.0 600 814,736 - 36,000 - 850,736 - 150,000 2,000 152000 %1002]36` 48,437 4,193 5,340 57,971 1,060]0] 96RA33_ Los Angeles County Sheriff's Prisoner Transportation Office Prisoner Transport 12% - 99,183 11,902 - 111,065 3.0 509,667 9,056 - - 518,723 ]0,000 31000! 73,000 591723: _- 30,342 24,233 3,204 57,779 649,502. 538,417= Los Angeles County Sheriff's Office - Supplemental Suupplemental Law Enforcement Services Enforcement 12% 800 2fi0000 31,200 1,747 292,947 22.0 3,849,499 - - - 3,849499 __ __ _ "3,:1849499. _190,161 177,707 23,497 391,365 4,240,864 3,947,918!, Maintain City parking facilities and staff City events Central Parking _ 25% 183,444 5,090,000 1,272,500 400520 6,763, @0 99.0 - 11,112,577 140,740 - 13,253,31] 234,160 - 234,160 " „31487397] 1,616,129 - 105,]3] 1,721,865 13,209,342 6,446,322,_ Provide and maintain Parking Access and Revenue Control System DataPark USA, Inc. 12% - 190,000 22,800 - 212,600 1.0 300 173,260 500 18,000 - 191,760 3,225,000 ]5,000 3300,000 3991],60; _. -..r.. 24,954 _- 1,068 26,022 3,517,782 31304,982 ___. Parking meter /sensor Installation and monitoring IPSGroup, Inc. 25% - 1,293,800 323,450 - 1,617,250 - - 717,500 - 717,50D 5,400,000 - 5,400000 ,� 6,117,500' 103,043 - 103,043 6,220,543 4,603,293`. _ Parking citations and residential parking Xerox State and Local Solutions, permits processing Inc. 25% 24,960 1,535,000 383,750 54,496 1,973,246 150 2,500 1,574,911 92,500 150,000 - 1,817,411 759,350 625,000 1384,350 3 201 761, 239,963_ - 16,021 255,483 3,457,244 1,483,998'. _ _ _ _ __. Transit bus body repair and painting services as needed by BBB Carlos Guzman Inc. 12% 14,062 614,250 73,710 30,702 718,662 9.0 5,000 982,496 56,840 300,000 94,212 1,433,548 ':7,020,000 1,250,000 2,600 8,272,600 : 9,706,148 80,679 - 9,612 90,291 9,796,439 9,077,777. Unarmed Security (Beach House) Eagle Security Services 12% 8,300 158,400 19,008 18,1221 195,530 '4.0 346,345 300 346,645 346,645! 35,275 4,272 39,547 386,192 190,662- TOTAL 1 465,911 23,883,319 4,542,556 1,017,240 1 29,443,115 371.7 90,332 41,206,123 4,938,288 5,419,920 370,481 51,934,813 26,749,708 11,833,000 200,591 90,806,062'. 6,281,485 1,398,787 396,993 8,027,265 98,833,327 69,990,212'