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SR 01-12-2021 3E City Council Report City Council Meeting: January 12, 2021 Agenda Item: 3.E 1 of 6 To: Mayor and City Council From: Edward F King, Director, Parking Operations (BBB) Subject: Approval of First Modification of Contractual Services Agreement with SKIDATA, Inc. for Parking Related Equipment Recommended Action Staff recommends that City Council: 1. Authorize the City Manager to negotiate and execute a first modification to agreement #10413 (CCS) in the amount of $1.8 million with SKIDATA, Inc. for the Parking Access and Revenue Control System (“PARCS”) ongoing system maintenance, software services, extended warranty, and miscellaneous spare parts in various Citywide parking facilities. The recommended modification is made as an exception to the competitive process pursuant to SMMC Section 2.24.250 (g) to ensure continuity of operations and revenue collection processes, and would extend the current agreement for up to two years for a new total not to exceed $6.5 million over a nine-year period, with future year funding contingent on Council budget approval. Summary The City contracts with SKIDATA, Inc. for a Parking Access and Revenue Control System (“PARCS”). The PARCS is used to facilitate controlled access and point-of- payment within the parking structures. Considering the impact of the COVID-19 pandemic on City services, staff recommends extending the agreement for an additional two years to provide continued equipment warranty and system maintenance, upgrade the existing parking system to the latest version of the SKIDATA software necessary to ensure ongoing compliance with the Payment Card Industry (“PCI”) transaction encryption and data security requirements, and introduce the option of contactless payment for customers. The City historically generates approximately $16.7 million in parking revenues annually in parking facilities with SKIDATA equipment. The recommended extension of the agreement would cover all equipment and service enhancements, as well as align the 3.E Packet Pg. 136 2 of 6 modified contract term with the anticipated November 2025 end of useful life of the PARCS equipment. The extension of the agreement is allowed as an exception to the bidding process pursuant to SMMC Section 2.24.250 (g). Discussion On January 10, 2017, Council authorized the City Manager to negotiate and execute an agreement #10413 (CCS) with Sentry Control Systems, Inc. for the purchase, refurbishment, and installation of the Parking Access and Revenue Control System (PARCS) equipment, five years of system maintenance and warranty, with an option to extend the agreement for an additional two years for a total amount not to exceed $4.7 million over a seven-year period. Sentry Control Systems, Inc. was later acquired by SKIDATA, Inc., and in November 2019, the City entered into an assignment and assumption agreement with SKIDATA that memorialized all terms and conditions set forth in the original agreement #10413 (CCS). The recommended modification to the agreement with SKIDATA will provide the following benefits outlined in the four sections below – A) Data Security, B) Customer Safety, C) Operational Efficiencies, and D) Asset Protection. A. Data Security The contract modification includes an upgrade to the existing Windows operating system from Windows 7 to Windows 10 (as recommended by the City’s Information Services Department for greater cyber security and support) and upgrade the SKIDATA software platform to the most recent version. Upgrading the existing SKIDATA software to the latest version is necessary to maintain compliance with the Payment Card Industry (PCI) transaction encryption and data security and provides a guaranteed path to future system upgrades throughout the life of the agreement. B. Customer Safety 3.E Packet Pg. 137 3 of 6 In early 2021, SKIDATA will introduce enhanced contactless customer payment options in addition to the existing payment options (coin, cash, debit and credit card) to improve customer safety and reduce the need for physical interactions with the City’s parking equipment. Currently, customers entering a City parking garage make contact with the surface of the ticketing kiosk by touching a green button which has been touched by other customers. Instead, touchless solution parking sensors generate a parking ticket when the customer pulls into the entry lane and waives their hand in front of the sensor. Also, upon exit, the contactless features have the ability to accept Near Field Communication (“NFC”) payments (e.g., Apple Pay, Google Wallet, and credit card tap), and Mobile Pay options (i.e. allows customers to conveniently pay for parking ticket online from their smartphone via a mobile pay QR code). These contactless payment options would provide safer payment options for the millions of customers who utilize the City’s Downtown parking system on an annual basis. Please see Attachment A for details about these contactless payment solutions now widely used in adjacent jurisdictions and private parking facilities. C. Operational Efficiencies The upgraded SKIDATA software platform will provide enhanced system functionality with user dashboards that facilitate improved productivity and operations management, higher system reliability, and enhanced reporting capabilities that facilitate compliance with audit recommendations made by Moss Adams, the City’s internal auditor, related to monthly parking permit keycard reconciliation, controls, and customer account management. 3.E Packet Pg. 138 4 of 6 The SKIDATA software platform will also provide a 24-hour, web-based parking validation management portal that allows Downtown businesses to purchase online parking validation credits from the City in advance. Downtown businesses can, in turn, provide online parking validation credits to their customers who utilize the City’s parking structures as a reward for goods and services purchased in the Downtown shopping area. Presently, this type of transaction requires City staff to mail out the paper validations to the merchant, or an office visit once COVID-19 restrictions are eased. D. Asset Protection The SMMC regulation 2.24.250 (g) allows for procuring services as an exception to the competitive process if it is determined that the time necessary to undergo a traditional solicitation process would substantially disrupt City operations or result in substantial economic loss to the City due to circumstances outside of the City’s control. This exception applies here as, considering the COVID-19 pandemic, the time necessary for a traditional solicitation process would substantially disrupt the City’s parking operations. Extending this agreement for an additional two years would avoid substantial interference with a required City operation that generates approximately $16.7 million in parking revenue annually by allowing the City to maintain existing operations and revenue collection systems while the COVID-19 related economic disruptions normalize over the next few years. Moreover, the proposed agreement extension with SKIDATA would provide safer and more efficient revenue collection processes, thus ensuring the protection of the City’s valuable parking revenue streams. Executing this amendment at this time provides an additional measure of surety that annual General Fund parking revenues will continue to flow as the PARCS equipment will be properly maintained. The premium extended equipment warranty and services package will also include expedited on-demand service response times, more frequent preventative maintenance, increased spare parts coverage for non-vandalized parts, and increased in-person and virtual training options for City and parking operator staff. Past Council Actions Meeting Date Description 01/10/2017 Attachment B – Original contract award to Sentry Control 3.E Packet Pg. 139 5 of 6 Systems, Inc. Financial Impacts and Budget Actions Staff seeks authority to approve funding from the General Fund to increase the amount of the SKIDATA, Inc. agreement for the parking access and revenue control systems. Contract/Agreement/Purchase Order Modification Request Agreement # Current Authorized Amount FY 2020-21 Budget Modified Request Amount Dept/CIP Account # Total Revised Contract Amount 10413 $4.7 million $0.6 million 01600004.550010 $6,497,000 The City has spent approximately $3.5 million, or 74% of the total contract amount through November 2020. Staff anticipates the City will spend approximately $0.6 million annually from December 1, 2020 to November 30, 2025 for ongoing system maintenance, warranty, mobile payment solutions and spare parts, for a total amount not to exceed $6.5 million over a nine-year period. Extending the agreement through November 2025 would also align the contract terms with the anticipated end of end of useful life of the equipment. Funds for the annual costs of the agreement are included in the FY 2020-21 Big Blue Bus Transit Services Department budget. Future year funding is contingent on Council budget approval. Prepared By: Michael Towler, Principal Administrative Analyst Approved Forwarded to Council Attachments: A. SKIDATA Touchless Technology Info Sheet B. Original Award to Sentry Control Systems, Inc. (2017-01-10) - Staff Report 3.E Packet Pg. 140 6 of 6 C. Oaks Initiative Disclosure Form - Skidata 3.E Packet Pg. 141 1© SKIDATA | Company Confidential SKIDATA No Touch Ticket Button 3.E.a Packet Pg. 142 Attachment: SKIDATA Touchless Technology Info Sheet (4377 : First 2© SKIDATA | Company Confidential Waving the hand to get a parking ticket The SKIDATA No Touch Ticket Button –In a Nutshell •Avoiding physical contact when getting a parking ticket Simply by waving the hand in front of the entrance columns, your customers enter in your parking. •No need for major installation update Easy integration of sensor button into your existing parking system. •Instantly turn your parking into completely touchless e.g. in combination with Touchless payment sweb® Mobile Pay. •All from SKIDATA one single source. 3.E.a Packet Pg. 143 Attachment: SKIDATA Touchless Technology Info Sheet (4377 : First 3© SKIDATA | Company Confidential Article Availability First sets available end of June 2020 Waving the hand to get a parking ticket The SKIDATA No Touch Ticket Button –Article Details Article Name 946200862 Power.Gate/Lite.Gate | No touch ticket button ultrasonic RETRO Article Facts Ultrasonic technology Activate by waving in front of column Easy to install as RETRO kit Works in any environment and weather condition Can be used in combination with your existing access methods (QR codes, reservations, keycards, credit card in / out, etc.) Installation in Lite.Gate in OEM area possible 3.E.a Packet Pg. 144 Attachment: SKIDATA Touchless Technology Info Sheet (4377 : First City Council Report City Council Meeting: January 10, 2017 Agenda Item: 3.H 1 of 8 To: Mayor and City Council From: David Martin, Director, Planning and Community Development, Administration Subject: Purchase of New Parking Access and Revenue Control Equipment Recommended Action Staff recommends that City Council: 1. Authorize the City Manager to negotiate and execute a contract with Sentry Control Systems, Inc., a California based company, in an amount not to exceed $4,700,000 for the purchase, installation, and up to 7 years of maintenance of the Parking Access and Revenue Control System for various City owned parking facilities, with future year maintenance funding contingent on Council approval; and 2. Authorize the budget changes as outlined in the Financial Impacts and Budget Actions section of the report. Executive Summary The City of Santa Monica operates parking facilities 24 hours/7 days per week generating approximately $32 million in revenue annually. Parking Revenue and Access Control Systems are used to provide controlled access to the parking facilities, payment options for parking fees that includes credit cards and debit cards, and management reports. Sentry Control Systems, Inc. (Sentry) is recommended as the best proposer to provide a new Parking Access and Revenue Control System for the City’s parking operations. The contract would include purchase and installation of new parking equipment for 14 parking facilities for an amount not to exceed $2,300,000, and provide ongoing maintenance service for five years with an option to extend for two additional years for a total seven-year amount not to exceed $2,400,000. An agreement to cover up to seven years of maintenance is recommended as the average life expectancy of parking equipment is seven to ten years. Background At its January 14, 2014 meeting (Attachment A), Council authorized the City Manager to execute an agreement with DataPark USA, Inc. (DataPark) for the purchase, installation, and up to ten years of maintenance of the Parking Access and Revenue Control System (PARCS) with License Plate Recognition (LPR) for the downtown parking structures, Main Library parking structure, Civic Center parking facilities, Ken 3.E.b Packet Pg. 145 Attachment: Original Award to Sentry Control Systems, Inc. (2017-01-10) - Staff Report (4377 : First Modification to SKIDATA, Inc. Revenue 2 of 8 Edwards Center, and Pier Deck parking lot. PARCS equipment includes items such as computer servers, terminals for payment, and entry/exit gates within the parking facilities. The system manages the access in and out of the parking facilities. Parkers must present a valid parking credential such as a key card or pull a ticket to make payment. The system also accepts validations. The system provides revenue control for short term (i.e. transient) and monthly (i.e. non-transient) parking management solutions with payment options either before or after the time period parked as well as reporting capabilities on revenues and length of parking session. Fees can be incremental by time or a flat rate. Parking Structure 6 opened to the public on December 19, 2013. In order to avoid a delay of the operation, the City issued a Request for Quotes in September 2013 for temporary leasing of a standalone PARC System for the new facility. The City received quotes from DataPark and WPS as well as a “No Bid” form from Sentry Systems. DataPark was selected based on providing the lowest cost to meet all required specifications. The system was delivered and installed prior to the January 14th Council meeting noted above to support the grand opening of Parking Structure 6. On May 12, 2015 meeting (Attachment B), Council authorized the City Manager to execute a first modification to contract #9860 in the amount of $160,000 with DataPark USA, Inc. to provide a Point of Sale system at the five cashier-staffed beach parking lots (Lots 4, 5 South, 1 North, 3 North, and 8 North). Due to installation issues, staff postponed the installation of this additional equipment. The equipment was never installed. In 2012 DataPark USA, Inc. was purchased by FAAC Group. In 2013 Hub Parking Technologies was reorganized as FAAC’s Parking Business unit and DataPark USA, Inc. was subsequently reorganized as a product line of HUB Parking Technologies (HUB Parking) and is no longer a separate corporate entity. For the purposes of this staff report, the name HUB Parking will be used instead of DataPark since this is now the corporate entity name. 3.E.b Packet Pg. 146 Attachment: Original Award to Sentry Control Systems, Inc. (2017-01-10) - Staff Report (4377 : First Modification to SKIDATA, Inc. Revenue 3 of 8 Discussion In May 2014, following the installation of HUB PARCS equipment in parking structure 6, the City began installation of the HUB Parking PARCS equipment in the remaining structures in the downtown and the Pier deck. The City experienced significant issues with the installation of the new system including system wide failures and inadequate hardware. Additionally, because the requirements to enter system testing were not met, acceptance testing of the system was not completed. Although the city was able to collect revenues on most days, there were many instances during the first year of installation where the city was not able to collect revenues from parkers due to system failures. On June 30, 2016, after working with HUB for several months and being unable to correct certain issues with the system staff issued a letter of default to HUB Parking and is exercising the City’s rights under the agreement to cancel the agreement during the installation period of the agreement. Staff subsequently began the selection process for a new PARCS provider. Vendor Selection On October 17, 2013, the City issued a RFP via the City’s online bidding site in accordance with the City Charter and Municipal Code provision that require competitive bidding for this project. The evaluation committee, comprised of staff from the Finance and Information System Departments, City of West Hollywood Parking Operations, Downtown Santa Monica, Inc. and Macerich, reviewed all four proposals received. Walker Parking Consultants also reviewed all the proposals and provided comments based on their professional experience to the committee without providing a recommendations. The selection committee met twice and had extensive discussions on all evaluation criteria, including but not limited to pricing, proposed solutions, capacity of service performance, ongoing operating costs, financial and inventory resources, and system compliance levels. 3.E.b Packet Pg. 147 Attachment: Original Award to Sentry Control Systems, Inc. (2017-01-10) - Staff Report (4377 : First Modification to SKIDATA, Inc. Revenue 4 of 8 The evaluation committee recommended DataPark USA Inc. (now Hub Parking) as the best proposer, ranking the four qualified proposers. The results of the evaluation (based on a maximum average score of 10 for all four companies were: Proposer Score DataPark 8.19 WPS 7.44 Sentry 6.53 Zeag 6.28 Due to the recent process that was completed in 2013 to select a new vendor, staff used the existing qualified list of proposers. WPS and Sentry were both invited to update their proposals for consideration by a newly formed selection committee. Zeag was not invited to participate since the company is also now a product line of HUB Parking Technologies. The two finalists were invited on June 30, 2016 to submit updates to their original proposals as part of an amendment to the original procurement process. Both proposers submitted updated proposals. Each proposer was also provided a list of the evaluation committee members with an opportunity to report any conflicts of interest. Each evaluation committee member was also required to submit a signed acknowledgement that they had no conflicts. No conflicts were reported by either the proposers or evaluation committee members. The evaluation committee included representatives from Planning & Community Development, Finance, Information Systems, Santa Monica Place/Macerich, and the City of West Hollywood Parking Operations division. Macerich participated in the evaluation process pursuant to its lease agreement for Parking Structures 7 and 8. Representatives of SP+ Municipal Services, the City’s parking operator, also reviewed the proposals and participated in interviews held with each proposer. SP+ provided 3.E.b Packet Pg. 148 Attachment: Original Award to Sentry Control Systems, Inc. (2017-01-10) - Staff Report (4377 : First Modification to SKIDATA, Inc. Revenue 5 of 8 comments to the committee as subject matter experts in parking operations and PARC systems, their experience as the City’s parking operator, and familiarity with the City’s operations. SP+ provided objective feedback to the committee in a consultative role. SP+ did not score the proposals. Based on the proposals submitted the companies achieved the following average scores from the committee members out of a total of 300 points possible: Proposer Score Sentry 243 WPS 203 Following are the costs (installation and maintenance) proposed by the two companies: Proposer Cost with 7 Year Warranty/Service Installation Extended Warranty, Maintenance, Service, and Validations Total Sentry $2,428,563* $3,466,896 $5,646,459 WPS $2,566,366 $1,635,111 $4,201,477 *Sentry’s pricing is based on redeploying some existing Skidata equipment owned by the City of Santa Monica Although not the lowest priced proposer originally, the evaluation committee scored Sentry the highest overall and recommends Sentry as the best proposer overall due to the following critical categories where it rated higher than WPS:  Demonstrated capacity to perform  Character, Reputation, Experience, and Stability  Qualifications of Project Manager and Staffing Commitment for Installation 3.E.b Packet Pg. 149 Attachment: Original Award to Sentry Control Systems, Inc. (2017-01-10) - Staff Report (4377 : First Modification to SKIDATA, Inc. Revenue 6 of 8 Sentry demonstrated a greater understanding of the resources and timeline needed for implementation. Sentry’s demonstrated capacity to perform is critical for the City’s large parking operations. In addition to preventative care, the warranty provided by Sentry includes enhanced service for remedial maintenance as well as ongoing customized training on topics determined by City staff. This type of training increases performance and helps staff to resolve issues more quickly. The agreement would include support services 24 hours per day 7 days per week including holidays, which is vital to ensure minimal downtime. The service included in the proposal by Sentry includes a dedicated service technician as well as preventative maintenance. Sentry is a market proven industry leader with strong financials. The company is based in Los Angeles with a warehouse support inventory facility in Van Nuys, making easy access to parts and equipment for service needs. Sentry’s system is installed in over 275 sites within California and 10,000 installations in 100 countries. Sentry equipment is installed in large facilities such as the LA Live/Staples Center/Convention Center, multiple UCLA sites including the Santa Monica Medical Center, the Irvine Spectrum, Orange County, as well as other local municipalities such as Beverly Hills. The company is also installed in all MGM Casinos in Las Vegas which include hotels such as New York New York, Mandalay Bay, and Aria. Following the committee’s completion of its scoring, staff was successful in securing a reduced total cost from Sentry as the highest scorer, particularly with service and warranty fees prior to submission of this staff report which the Financial Impacts section totals are based on. The best and final amount offered by Sentry for equipment were reduced to $2,275,310 from $2,428,563; the best and final amounts offered by Sentry for Extended Warranty, Maintenance, Service, and Validations were reduced from $3,466,896 to $2,401,556, bringing the total cost with a 7 year warranty and service to $4,676,866, a reduction of approximately 17% over the original pricing proposal. Protest The two finalist where notified on December 9, 2016 of the evaluation committee’s recommendation of Sentry as the best bidder. On December 19, 2016 WPS submitted 3.E.b Packet Pg. 150 Attachment: Original Award to Sentry Control Systems, Inc. (2017-01-10) - Staff Report (4377 : First Modification to SKIDATA, Inc. Revenue 7 of 8 a protest of the committee’s decision. On December 22, 2016 the Finance Director rejected the protest on procedural grounds based on the protest not being filed timely, even after WPS was provided with an extension to the protest deadline. However, the Finance Director noted that the even had the protest been filed timely, the protest would have still been denied based on insufficient grounds. Based on the Finance Director’s final determination staff recommends that the contract be awarded to Sentry as the best bidder. Alternatively, Council may reject all bids, and, in its discretion instruct staff to initiate a new Request for Proposals. Financial Impacts & Budget Actions The contract to be awarded to Sentry Control Systems, Inc. is for an amount not to exceed $4,700,000, including the purchase, installation, and up to seven years of maintenance. The up-front equipment purchase will cost approximately $2,300,000. A portion of these expenditures are recoverable under the original HUB Parking termination clause of the agreement. Staff is exercising all options to ensure full recovery. Additionally, Macerich will continue to make its contributions of $1,120,031.97 as deductions from revenue sharing agreements for Parking Structures 7 and 8. Funds of $468,975 are available in the FY 2016-17 Capital Improvement Program budget. Award of the contract requires the following budget actions, with the net increase coming from capital project contingency funds with the anticipation of cost recovery: 1. Transfer $200,000 from account 01417PY.555010 to C010715.589000; 2. Appropriate $470,000 in FY 2015-16 savings to account C010715.589000; 3. Release of fund balance from reserve account 1.380006 (capital project contingency) of $1,161,025; 4. Appropriate $1,161,025 to account C010715.589000. 3.E.b Packet Pg. 151 Attachment: Original Award to Sentry Control Systems, Inc. (2017-01-10) - Staff Report (4377 : First Modification to SKIDATA, Inc. Revenue 8 of 8 The contract will be charged to account C010715.589000. Future year maintenance funding will be included in the operating budget and is contingent on Council budget approval. Prepared By: Salvador Valles, Assistant Director of PCD Approved Forwarded to Council Attachments: A. January 14, 2014 Staff Report B. May 12, 2015 Staff Report C. Oaks for Contract Approval for PARC System 3.E.b Packet Pg. 152 Attachment: Original Award to Sentry Control Systems, Inc. (2017-01-10) - Staff Report (4377 : First Modification to SKIDATA, Inc. Revenue 3.E.c Packet Pg. 153 Attachment: Oaks Initiative Disclosure Form - Skidata (4377 : First Modification to SKIDATA, Inc. Revenue Control System Agreement) 3.E.c Packet Pg. 154 Attachment: Oaks Initiative Disclosure Form - Skidata (4377 : First Modification to SKIDATA, Inc. Revenue Control System Agreement)