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City of Hermosa Beach --- 12-14-99SUBJECT: PARKING OPERATOR AWARD OF CONTRACT -
Recommendation: That the City Council:
Background : On August 8, 1999, the City issued a Request for Proposal
(RFP) for qualified parking operators to staff and operate both
the North Pier Parking Structure and Lot A parking facilities.
The RFP (Attachment No. 1) specified that submittals include
information on management and staffing, maintenance, security,
management fees, operating hours, budgeting, references and
firm background. Police, Public Works, Finance, Community
Resources, Risk Management and Community Development
Departments participated in the proposal evaluations and
interviews. Five proposals were received in conformance with
the RFP from Standard Parking, Parking Concepts Inc., Central
Parking, Parking Company of America and Ace Parking. The
proposals were evaluated on the above criteria and on the basis
of an oral interview conducted on September 15, 1999.
Analysis: Rating of Proposals and Firms: Based upon the proposal submittals, interviews and references the parking operators are rated as follows:
Parking Concepts Inc. was considered the most qualified firm
to provide parking operation services for the City. Four of the
five submittals were rated closely, however, Parking Concepts
Inc. had the highest overall rating. Parking Concepts Inc, was
also considered the firm providing the best maintenance
services by the Public Works Department. (Please See
Maintenance Section). Parking Company of America had the lowest
overall expense levels followed by Parking Concepts Inc.
(Please See Attachment No. 3).
Proposed Parking Operations Parking operations are proposed to be carried out on a management contract basis. This requires approving an annual parking operating budget each fiscal year for the parking operator including an approved management fee. Under the proposed management contract , the parking operator could not exceed expenditures beyond 5% of the approved budget without City Council approval. This form of managing the City’s parking facilities will provide better revenue control and increase the City’s parking revenues as the City will approve annual expenses and provide a management fee rather than sharing revenue generated by parking. Currently, the City’s parking facilities are operated on a revenue sharing basis with All Right Parking. All Right Parking (now a part of Central Parking Systems) receives 50% of the revenues generated from Lots A, B and C. The City is not concerned with the operating budget for All Right Parking which can maintain whatever operating budget it deems necessary to provide contract services. The parking facilities are proposed to be managed with three
staff people, an attendant/cashier and on-site supervisor who
would also patrol the facilities and report emergencies or
incidents to the City’s Police or Fire Departments.
Revenue & Expenses Based upon the rate of annual expenses to projected annual revenues Parking Concepts is the most efficient parking operator. The expenses varied from a low of $184,558 for Parking Company to high of $255,396 for Standard Parking. (Please See Attachment No. 3) For the purpose of evaluating the proposals the parking revenues for operating the City’s parking structure and Lot A were setat the following: 1
The parking facilities generate $944,374 in total annual
revenues. Comparing the three companies with the lowest annual
expenses to projected revenues, Parking Company has an expense
to revenue ratio of 20%, while the ratio for Parking Concepts
is 21% and Central Parking has a ratio of 22%. (Please See
Attachment No. 3)
Management & Staffing Proposed Staffing for most of the firms consists of an on-site supervisor and a cashier/attendant working at both Lot A and the parking structure. A facility manager is also typically available to assist on-site staff with reporting and scheduling. The supervisor is involved in any emergency activities including accidents, thefts and traffic control. An accident or incident report is prepared and a copy is issued to the City. Most complaints are handled by the most senior staff person on site and then referred to the facilities manager and most of the companies had written procedures for fielding and responding to customer complaints. All of the firms indicate that they have regular training and evaluation programs for personnel. Annual management fees ranged from $10,000 for Ace Parking
to $24,000 for Central Parking. (Please see Attachment No. 3).
Three of the proposals also contained annual "professional
fees" expenses (business licenses) ranging from $600 to $720
which would be required for the selected operator. The
management fees are the parking operators overhead and profit
and in some cases included the costs for mandatory audits.
Maintenance Maintenance for the parking structure and Lot A includes
daily removal of debris from the parking area, stairs and
elevator areas, degreasing twice annually, restriping twice
annually and installation of lamp bulbs and equipment repairs
as needed. Most of the proposals contained a maintenance
schedule for daily, weekly or monthly maintenance tasks,
however, the level of service varied among the companies. The
costs for maintenance ranged from a low of $3,540 to a high of
$12,900 reflecting the level of maintenance service. Parking
Concepts Inc. proposed to allocate $10,380 for maintenance
service and provided the best maintenance program.
Revenue Controls, Audits & Annual Budgets Revenue reporting and auditing programs varied among the proposals. Two companies (Standard Parking and Central Parking identified auditing costs of $7,500 and $2,400 respectively. The other proposals contained auditing costs in their management fees or did not show a cost indicating these costs would be the City’s. The recommended firm did not indicate a cost for audits which means that the City would need to conduct these services using a City approved Certified Public Accountant paid from the Downtown Enhancement Commission (DEC) Funds. The parking operator reporting and auditing programs included:
The system of internal revenue control includes
Each day parking ticket stubs are collected and reconciled with the number of auto entries counted by the automatic gate controller. A daily cash report is prepared for submittal to the City. All revenues collected are deposited daily (or no later than the next business day,) in a bank approved by the City and in a bank account identifying the funds as the property of the City. A copy of the deposit receipt is to be provided to the City within 3 days of the cash deposit or weekly deposit report may be considered via an "on-line" reporting system. Under the terms of the contract, the operator bears all risk of loss due to theft, fraud etc. whether by the operator’s employee or any other person or entity. The on-site supervisor and facilities manager will be responsible for monitoring and work hours and ensuring that time cards and payroll records are maintained. The supervisor and facilities manager will also be responsible for reconciling petty cash fund distribution, verify change funds to cashiers and maintain records for City audits. The City has installed a Smartouch Revenue Control System with construction of the parking structure, which includes a "RCSMM" software program to permit on-site programming of rates, cashiers, validations, receipts and daily, weekly and monthly revenue reports. A similar system will also need to be installed in Lot A. The City may consider a rate structure which varies daily and seasonally. Short term parking may be more costly and a flat entry rate could apply to parking after a particular time in the evening. These variable rates will be incorporated in the revenue control system. 1 Prior to the commencement of each fiscal year, the parking
operator will need to submit an annual operating budget
projection for City approval. The budget is to serve as the
basis for operating expenses incurred over the fiscal year.
Security The parking operator is required to have the on-site
supervisor walk the parking structure periodically and contact
the Hermosa Beach Police and Fire Department dispatch in the
event of the need for emergency services. The parking operation
offices are equipped with phones to contact City emergency
services. In addition, parking enforcement and the Police
Department foot patrol will also patrol the facility. The City
can increase the presence of security if the need arises.
Marketing Some of the firms recommended marketing programs as a means
to distinguish their companies, however, staff believes that
marketing the City’s parking facilities is not an
important function for the operator as parking demand is high
in the downtown on weekends, evening and during the summer
season. The marketing suggested in the proposals ranged from
simple give-a-ways or brochures to contests. Most of these
marketing programs would be subsidized by the City.
Insurance and Bonds The parking operator will be required to carry the following insurance:
Parking Concepts received exceptional recommendations from the references contacted. In the County of Orange, Parking Concepts has operated over 10,000 parking spaces for several years. The County Parking Administrator indicates that Parking Concepts is the best company that the County has had during her 12 year tenure. In the City of Los Angeles, the Department of Transportation Off-Street Parking Division has also written a letter in support of the firm.
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