SR-06-09-2015-3Eiiiiiiiiiiiiiiiii MIX • 0 1
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Santa Hanlon,
City Council Regular Meeting: June 9, 2015
Agenda Item: 13E:
To: Mayor and City Council
From: Susan Cline, Interim Director of Public Works
Subject: Contractual Service Agreement for Airport Landing Fee Services
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate a
contractual service agreement with Vector Airport Systems, a Virginia -based company,
to provide for the photo capture of aircraft operations; data management and reports;
billing and collections. The initial term is for three years through June 30, 2018 with two
one -year renewal options on the same terms and conditions through FY 2019 -20 at the
discretion of the City. This is a sole source contract in an amount based on 18% or 21 %
of gross monthly receipts dependent upon the gross revenue realized each month.
Executive Summary
On June 14, 2011, Council approved a contract with Vector -US, Inc. (now Vector Airport
Systems) to operate the Airport's Landing Fee Program to include photo capture of
aircraft operations; data management and reports; and billing and collections through
June 30, 2015 for an amount not -to- exceed $400,000. On April 30, 2013, Council
approved a first modification to Contract No. 9384 (CCS) in the amount of $58,344, for
the purchase and maintenance of two additional digital cameras to expand the existing
system to capture aircraft operations performed during certain patterned flying activities,
such as touch - and -go operations, for a total amount not to exceed $458,344. The
current contract will expire on June 30, 2015.
Staff recommends that Council approve a sole source contract with Vector Airport
Systems to operate the airports landing fee program through June 30, 2018 in an
amount based on 18% or 21% of gross monthly receipts dependent upon the gross
revenue realized each month with two additional one -year renewal options on the same
terms and conditions through FY 2019 -20.
Background
The City's current contract with Vector -US, Inc. (now Vector Airport Systems) to operate
the Airport's landing fee program was approved by Council on June 14, 2011
(attachment A). On April 30, 2013 (attachment B), Council adopted Resolution No.
10744 (CCS) to change the landing fee program from the current $2.07 per thousand
fine &.
pounds of certificated maximum gross landing weight to $5.48 and apply the fee to
itinerant and based aircraft at the Airport, effective August 1, 2013.
Additionally, during its April 30, 2013 meeting Council approved the first modification to
contract No. 9384 (CCS) to increase the not -to- exceed amount of the contract to
$458,344 to provide for the purchase of two additional digital cameras to expand the
system to capture aircraft operations performed during certain patterned flying activities
(e.g. touch - and -go operations). Although the contract amount was modified during this
amendment the term of the contract and the annual cap were not; therefore the contract
with Vector Airport Systems expires on June 30, 2015 and the annual cap for services
performed by Vector until the expiration of this contract remains at $100,000.
Discussion
Vector Airport Systems uses three overlapping technologies to capture aircraft
departing Santa Monica Airport, 24 hours a day, 7 days a week. The system includes:
solar - powered air traffic Imaging Systems (cameras); SCOUT Transponder Receiver (a
second layer information to identify aircraft in the air); and NextGen flight track data.
Vector's services include all necessary equipment including the maintenance of the on-
site camera system, servers, transponders, and staffing to support the billing and
collections associated with their service.
In 2011, when the Vector Airport Systems contract was initiated, the City's landing fee
revenue was approximately $360,000. This generated approximately $75,000 annually
in payments to Vector for their services, well below the established annual cap of
$100,000. Changes to the landing fee program in August 2013 resulted in increased
revenues of approximately $1.4 million annually. This resulted in Vector reaching the
$100,000 annual cap in the first three months of each contract year. Due to the
complex environment of Santa Monica Airport (SMO), the significant increase in the fee
structure, the requirements of specialized insurance, and costs associated with
collections necessitate that the current annual cap is no longer sustainable for Vector.
According to Vector, SMO is the only airport that they service with an annual cap.
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On March 12, 2015, Vector submitted a proposal to the City which included a new fee
rate that will fluctuate dependent upon the gross revenue realized each month. For
months that the gross monthly revenue exceeds $83,333.33 (currently monthly gross
revenue exceeds this amount) Vector's fee would be 18 %. For months that the gross
monthly revenue is less than $83,333.33 Vector's fee would be 21 %. The annual cap
would no longer apply. Vector proposes to eliminate the City's obligation to pay for the
annual maintenance costs of the touch - and -go camera system. Vector would provide
the City with the following upgrades to the existing system within the first three months
of the contract to enhance reliability and accuracy:
• Replace the wireless Ethernet radio system with a new, more robust system to
increase system reliability.
• Replace the selected components of the camera systems including higher
resolution cameras with better motion detection and better nighttime capability.
This would increase the accuracy of aircraft identification at SMO.
• Relocate cameras to eliminate certain known sighting problems, which can
create duplicate billings or missed aircraft under certain conditions.
• With enhanced software integrate radar data to create a streaming feed of data
into Vector's servers, contained with data from Vector's cameras, and use in
integrated data to provide more accurate aircraft billing with enhanced accuracy
and reliability.
• Provide all maintenance of all surveillance systems including the City's
purchased touch - and -go ID camera system. Ownership of this touch - and -go
camera system will remain with the City.
Staff recommends that Council approve a sole source contract with Vector Airport
Systems to operate the airports landing fee program for three years through June 30,
2018 in an amount based on 18% or 21 % of gross monthly receipts dependent upon the
gross revenue realized each month with two additional one -year renewal options at the
City's sole discretion on the same terms and conditions through FY 2019 -20. The City
at its sole discretion could terminate the contract with 30 days written notice to Vector.
Vendor Selection
On March 24, 2011, the City issued a Request for Proposals (RFP) for operating the
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Airport's landing fee program and advertised it nationwide. Four potential service
providers responded. After reviewing the proposals, staff from the Airport, Finance and
City Attorney's Office identified Vector Airport Systems as the best bidder. Vector
Airport Systems and one other proposer met all the City's criteria for aircraft tracking,
verification, billing, customer service, collection, and reporting. One other submittal met
the criteria of the RFP, but the price was significantly higher than Vector Airport
Systems. The other two submittals did not meet all the requirements of the RFP. To
date, Vector Airport Systems is the only company that staff could find to provide a total
solution of all the integrated parts associated with SMO's landing fee program. Staff
recommends Vector Airport Systems to furnish and to provide for the photo capture of
aircraft operations; data management and reports; and billing and collections associated
with the Airport's landing fee system on a sole source basis as specified in Santa
Monica Municipal Code 2.24.080 Subsection (d).
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Financial Impacts and Budget Actions
The contract to be awarded to Vector Airport Systems is for an amount based on 18%
or 21% of gross revenue receipts dependent upon the gross revenue realized each
month in landing fees. Landing fee revenues, which are landing fees collected less a
commission for Vector Airport Systems, are captured monthly and deposited into
account 33431.402170. By removing the annual cap, a revenue decrease of
approximately $170,000 is projected for FY 2015 -16. Revenue changes are included in
the FY 2015 -17 Proposed Biennial Budget. The percentage approach ensures that the
associated costs will be proportional to the revenues generated by the program. It also
ensures that fluctuations in the marketplace that aviation is subject to do not obligate
the City to extensive fixed costs.
Prepared By: Stelios Makrides, Airport Manager
Approved Forwarded to Council
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Susan Cline, Interim Director of F51BB 2! AB
Attachments:
A. June 14, 2011 Staff Report (web link)
B. April 30, 2013 Staff Report (web link)
Elaine M Polachek, Interim City M6rU06d5
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Reference:
Contract No. 10071
(CCS)