SR 05-09-2017 3C
Ci ty Council
Report
City Council Meeting : May 9, 2017
Ag enda Item: 3.C
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To: Mayor and City Council
From: David Martin, Director , Parking Operations (PCD)
Gigi Decavalles -Hughes, Director, Finance Department
Subject: Fourth Modification to Agreement 9210 (CCS) for Parking Citation
Processing, Parking Permit Fulfillment, and Payment Processing Services
Recommended Action
Staff recommends that the City Council:
1. Assign agreement #9210 (CCS) from Xerox State & Local Solutions, Inc. to
Conduent State & Local Solutions, Inc.
2. Authorize the City Manager to negotiate and execu te a fourth modification to
agreement #9210 (CCS) in the estimated amount of $1.9 million (includes 10%
contingency) with Conduent State & Local Solutions, Inc., a New -Jersey -based
company, for parking citation processing, parking permit fulfillment, and p ayment
processing services. This will result in a nine -year amended agreement with an
estimated agreement amount of $14.5 million, with future year funding contingent
on Council budget approval.
Executive Summary
The City currently contracts with Xerox S tate & Local Solutions, Inc. (Xerox) for parking
citation processing, parking permit fulfillment, and payment processing services based
on the recommendations in the 2009 Walker Parking Study for an integrated parking
management system to improve the effic iency and effectiveness of managing the City’s
parking resources. In February 2017 Xerox State & Local Solutions, Inc. formally
changed its name to Conduent State & Local Solutions, Inc. (Conduent), requiring
assignment of the agreement from Xerox to Condu ent. The current contract expires on
June 30, 2017 with a two -year renewal option remaining. Staff recommends a fourth
modification to agreement #9210 (CCS) to assign the agreement to Conduent; extend
the current term to June 30, 2018 only, leaving one rem aining one -year renewal option;
and modify the agreement to include additional conditions that conform to the City
standards for contractual services. The proposed fourth modification will result in an
estimated increase of $1.9 million (includes 10% conti ngency) in the contracted amount
for a total estimated agreement amount of $14.5 million .
Background
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On November 23, 2009, the three Westside cities of Santa Monica, West Hollywood,
and Beverly Hills jointly issued a Request for Proposals (RFP) for citat ion processing,
handheld devices, license plate readers, and permit processing systems. The objectives
stated in the RFP conform to the recommendations in the 2009 Walker Parking Study
for an integrated parking management solution. The intended benefit of a joint RFP was
economies of scale and working collaboratively as one entity in terms of service and
performance standards, but each of the three Westside cities would award its own
contract with the selected vendor. Four proposals were received and Xerox (then ACS
State & Local Solutions, Inc.) was unanimously selected as the best bidder based on
price, range of products and services offered, ability to address the Westside cities’
issues, and commitment to implement an integrated parking solution.
On May 11, 2010, Council authorized the City Manager to negotiate and execute
agreement # 9210 (CCS) with ACS State & Local Solutions, Inc. in the estimated
average amount of $1,400,000 per year for a period of five years, with two additional
two -year renewal op tions, to provide parking citation processing, parking permit
fulfillment, and payment processing services. The parking permit fulfillment portion of
the agreement would be implemented in four phases as Xerox had to build new
software solutions to provide the services. In April 2012 agreement #9210 (CCS) was
assigned to Xerox following the name change as a result of ACS State & Local
Solutions, Inc. being acquired by Xerox.
There have been three modifications to agreement #92 10 (CCS) through administrative
procedures as these modifications did not alter the terms or contract amount. On July
10, 2012, the City issued a first modification to accommodate new functionality and
clarify services to be provided by Xerox, including allowing Xerox to also accept
Ame rican Express payments in addition to VISA and MasterCard and allowing the City
to purchase permit stock from Xerox per the City’s specifications. On February 13,
2013, the City issued a second modification to accommodate reimbursement to Xerox
for postage and mailing costs related to the services provided. On June 23, 2015, the
City issued a third modification to exercise the first renewal option and extend the term
to June 30, 2017, clarify the additional services to be performed by Xerox per the
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original agreement, and revise the pricing schedule.
Discussion
The City has had an agreement with Xerox since July 2010 for parking citation
processing, parking permit fulfillment, and payment processing services. Agreement
#9210 (CCS) with Xerox expires on June 30, 2017 with one remaining two -year renewal
option.
Xerox assists the City with the administrative processes of the parking citations the City
issues. Xerox processes the citations by uploading the citations to its citation and permit
management system daily; accepting citation payments in person, by mail or online;
responding to phone inquiries; and mailing legal and payment notices to the vehicles’
registered owners. The California vehicle code entitles register ed owners to certain
appeal process es aft er a citation is issued. These appeal procedures consist of an initial
review and/or an administrative hearing. Xerox is tasked with the intake of these
appeals, assign ing them to the appropriate departments for response, manag ing the
administrative hearin g schedules, and notify ing the register owners of the appeal
decisions. In addition, Xerox is tasked with the collection of unpaid citations. Xerox, on
behalf of the City, notifies the California Department of Motor Vehicles (DMV) and/or
Franchise Tax Boar d (FTB) of any unpaid citations, tracks the remittances intercepted
by these agencies, and appl ies them to the appropriate citations accordingly.
In 2016 the City issued over 280,000 parking citations. Approximately 18,500 of these
citations resulted in the customers requesting an initial review for the validity of the
citation, and 1,800 of the customers found to be liable proceeded to request an
administrative hearing from the City’s hearing officer for an independent review. As a
result, Xerox responde d to over 40,000 phone inquiries, and mailed 13,000 unpaid
notices to DMV and 1,000 notices to FTB respectively.
For parking permit processing, Xerox is responsible for processing over 50,000 parking
permit renewals every year for the preferential parkin g program. There are four renewal
cycles every calendar year with a total of over 20,000 customer accounts. Xerox works
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closely with staff to send out renewal notices to existing account holders and process
the renewals accordingly. Customers can renew the ir permits online or by mail. Xerox
houses and maintains the permit stock on the City’s behalf.
Finally, Xerox provides payment processing services related to parking citation
processing and parking permit fulfillment including lockbox services, which hel ps
simplify collection and processing of receivable payments.
Assignment of Agreement
On January 29, 2016, Xerox announced its plan to separate into two independent,
publicly traded Fortune 500 companies: a document technology company known as
Xerox Corpo ration and a business process outsourcing company known as Conduent
Incorporated. The separation concluded and , as of January 1, 2017, the business
process services provided by Xerox Corporation is now conducted under the new name
Conduent, Inc. As of Febr uary 16, 2017, Xerox State & Local Solutions, Inc., an indirect
but wholly owned subsidiary of Conduent, Inc. changed its name to Conduent State &
Local Solutions, Inc. to align itself more clearly with the Conduent brand. The name
change does not affect t he contract between Conduent and its customers and business
partners as Conduent State & Local Solutions, Inc. remains the same legal entity with
the same employer identification number (EIN) after the name change.
Contract Extension
Staff explored the po ssibility of issuing a new RFP to obtain a new service provider for
the range of services currently provided by Xerox. This exploration was also intended to
identify available new technologies relating to citation/permit issuance and management
since the c ontract was executed. While new and improved technologies exist, there are
few companies that are able to provide the full range of services desired by the City.
Staff recommends extending the agreement with Xerox to minimize any service
interruptions whil e continuing to allow staff to ex plore other possibilities for the best
integrated parking solution.
Contract Modifications
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The amount of the agreement is dependent on the number of citations and parking
permits issued. The original agreement was approved at an estimated amount of
$1,400,000 per year , or $12.6 million for the duration of the agreement if all renewal
options were exercised. The City has spent close to $9.4 million since the inception of
the agreement through FY 2015 -16 , and is projected to spend an estimated additional
amount of $4.6 million between FY 2016 -17 and FY 2018 -19 on all contracted services,
bringing the estimated total to $14 million for the duration of the agreement. Staff
recommends a fourth modification in the estimated amount of $1.9 million (includes
10% contingency ), with an estimated agreement amount of $14.5 million, with future
year funding contingent on Council budget approval.
Staff also recommends a fourth modification of the agreement to include some
provisions that are now City standards for contractual services such as terminating an
agreement at the City ’s convenience .
While Xerox has primarily met its contractual obligations, there have been a few
performance issues since contract inception. During the same time period, the Parking
Operations Division experienced several staff turnovers, which created continuity issues
and made contract oversight more challenging. In 2016 staff met with Xerox
management on multiple occasions to address the performance issues. Xero x’s
contract performance has greatly improved and staff is working closely with the Xerox
team to continue to improve and ensure a seamless contracting relationship.
To more effectively manage this agreement, staff recommends the following conditions
in t he fourth modification:
Extend the term to June 30, 2018 and provide one remaining one -year renewal
option. The total contract term remains at nine years. Following the last option
period, staff will issue a new RFP for citation and permit processing ser vices.
Include an option for the City to terminate the agreement for convenience.
Include an option to allow the City to terminate the agreement in parts or in
whole.
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Revise the performance standards for parking permit fulfillment to include a
penalt y provision so it is consistent for all contracted services.
Vendor Selection
On November 23, 2009, the three Westside cities of Santa Monica, West Hollywood,
and Beverly Hills jointly issued a RFP for citation processing, handheld devices, license
plate readers, and permit processing systems. The RFP was broadly publicized by all
three cities. Four proposals were received to deliver all requested services; one
proposal was received for only handheld citation devices. A selection committee of
representativ es from all three cities reviewed the proposals and unanimously selected
Xerox (then ACS State & Local Solutions, Inc.) as the best bidder based on price, range
of products and services offered, ability to address the Westside cities’ issues, and
commitmen t to implement an integrated parking solution.
Financial Impacts and Budget Actions
The agreement modification to be awarded to Conduent State & Local Solutions, Inc. is
$1.9 million, for an amended estimated agreement amount of $14.5 million. Funds are
a vailable in the FY 2017 -19 proposed budget in the Finance and Planning & Community
Development d epartment s . The agreement will be charged to 012241.555010 for
parking citation costs and 01417.555010 for parking permit fulfillment costs. F uture year
funding is contingent on Council budget approval .
Prepared By: Caline Evans, Administrative Analyst
Approved
Forwarded to Council
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Attachments:
A. Oaks - Xerox State & Local Solutions
B. May 11, 2010 Staff Report
C. Oaks - Conduent State & Local Solutions 2017
Officers and Directors of
Xerox State Local Solutions, Inc.
Name Title
David A. Amoriell President
Troy R. Anderson Vice President
Richard J. Bastan Vice President
Nicholas Bevilacqua Assistant Secretary
Glen Scott Bienacker Chief Financial Officer
Rich Castranova Vice President
Michael Cerone Vice President
Jay Chu Vice President
Nancy Collins Senior Vice President
R. G. Conlee Vice President
David P. Cummins Senior Vice President
Michael M. Davis Senior Vice President
Michael Festa Director, Treasurer, Vice President
Stephanie Grossman Assistant Secretary
James Haddow Assistant Secretary
David Hamilton Senior Vice President
Donald Hubicki Vice President
David R. Jarrett, Jr.Vice President - Real Estate
Eric Jean Vice President
Alan R. Jolly Vice President
Sherry Jones Senior Vice President
Zahoor A. Karamally Vice President
Jeremy Katz Vice President
Michael Langenohl Vice President
David Lemoine Vice President
Michael L. Moore Senior Vice President
J. Michael Peffer Director, Vice President, Secretary
John Polk Vice President
John F. Rivera Assistant Treasurer
Laura Rossi Vice President
Richard J. Russin Senior Vice President, Assistant Secretary
Officers and Directors of
Xerox State Local Solutions, Inc.
Name Title
Nancy A. Schnepf Vice President
Louis J. Schiavone Vice President
Lauretta Sechrest Vice President
Allen Shutt Senior Vice President
David A. Splitt Senior Vice President
Robert H. Strasser Assistant Secretary
Zouhair Tahri Vice President
Mark J. Talbot Senior Vice President
Craig Venet Vice President
Ann Vezina Senior Vice President
Nancy P. Vineyard Vice President
Charlie Watts Vice President
Paul R. Webber, IV Assistant Secretary
David Wright Senior Vice President
REFERENCE:
Modified Agreement
No. 9210
(CCS)