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HomeMy WebLinkAbout06-17-2013 c9 street sweepingcounctL âqenòâ Repopt Meeting Date 6117113 Iteh Number C9 FROM: Prepared By: CITY OF SAN LUIS OBISPO Daryl R. Grigsby, Director of Public Works Barbara Lynch, Deputy Director of Public Works SUBJECT: STREET SV/EEPING RECOMMENDATIONS Reject all Street Sweeping proposals and direct staff to resume City sweeping operations. Authorize the Director of Finance and IT to reallocate the Flood Control budget appropriations in order to provide the resources needed to continue the street sweeping program in-house and return 542,978 to fund balance in each year of the 2013-15 Financial Plan. DISCUSSION At its February 19, 2013 meeting, the City Council authorized staff to advertise a Request for Proposal (RFP) to provide ongoing, citywide street sweeping services via contract (Attachment 1). The service was to replace street sweeping services historically provided by City staff. Cost proposals were received on March 27, 2013 after which the proposals were reviewed and references checked. Cost proposals were all above the estimated cost for sweeping services identilred at the time of authorization to advertise the RFP (Attachment 2). As part of the Council report authorizing the advertising of the RFP, it was noted that the award would return to the Council for final consideration if the costs were higher than estimated. If bids received were within the estimate and available funds, staff would proceed with awarding a street sweeping contract. However, the bids received were beyond both the estimate and the available funding. Therefore staff is recommending this service be retained in-house. Based on the bids, a contract will be approximately $60,000 more per year than in-house services, and when vehicle replacements and repairs are considered, $20,000 more per year. F'ISCAL IMPACT The estimated per mile cost to sweep by contract provided at the time of authorization to advertise, was $21.50 per curb mile swept. The proposal received by SP Maintenance, the lowest cost proposer, was $22.85 per curb mile swept ($166,805 annually), resulting in a higher annual cost for services than estimated. The difference in cost between that estimated at the time the Council authorized the advertising of the proposals and that received in the proposals, results in an average additional cost of $17,130 per year over that originally estimated. This is due to the higher than estimated per mile swept cost and a lower budgeted salary for the Sweeper Operation position in the 20I3-I5 Financial Plan (due to the position being funded at the top step of the salary range in the 2012-13 budget, but funded at mid-range in the 2013-15 budget.) c9-1 Street Sweeping Page 2 Funding:20rJ-14 20r4-15 Existing Sweeping Contract Employee Salary & Benefits Fuel Hauling Re gular Ope rating Budget: 2/ 19 I 13 Council Augmentation Total Funding Available Proposed Contract Cost: Additional Funds Needed Cost Over ln-House Operation: Future Savings: s6,500 Downtown Friday morning sweep , $zt,+oo. $81,600i $l1,897 Sll,897 $10,000 s10,000 : $106,6971 $109,997;Nomraloperatingcosts I : S+Zplt: 542,978 Shown in 2013-15 operating budget assumed for Year 2 funds for contl'act seruices $60,108;s60,103, $40,127'nepair parts & vehicle replacenrent 49,675$ $40,1271 Net Increased Cost:, $19,981. $19,976 It should be noted that if the Council approves in-house sweeping operations, the $42,978 augmentation funding will be available from the operating program budget for other pu{poses, as these funds were only required if contract services was implemented. Interim sweeping work is being paid for with salary savings from the vacant sweeper operator position, which will continue through the remainder of the fiscal year. ALTERNATIVES l. Award a contrøct to SP Møintenønce in the amount of 8166,805 for Street Sweeping Contract Services. A contract can be awarded to SP Maintenance to provide contract sweeping. An additional $17,130 will be needed each year to augment the operating program budget, in addition to the funds already added to the operating program in anticipation of contract services. Staff continues to support the concept of contract sweeping as a way to provide reliable and consistent service, as highlighted in the Council report requesting authorization to advertise the RFP. The higher than anticipated cost, of an ongoing nature, was the primary consideration in recommending City provided sweeping services. Funding for the 2013-15 years could be obtained from the sale of the sweeper or from the General Fund Reserve; however, these are onetime funding sources for an ongoing expense. 2, Reduce sweeping frequencies to match øvailøble funds. This is not a reconìmended altemative for several reasons. 1) It is contrary to the Council's Neighborhood Wellness Goal and prior service standards. 2) The original rationale of a contract providing more reliability is lost with a reduction in sweeping. 3) Reduction of sweeping will result in the City not meeting its obligations under its approved Stormwater Permit adopted as part of the State regulated General Stormwater Permit. 4) Reduced sweeping will increase the burden for the stormdrain cleaning c9-2 Street Sweepinq Page 3 crew who will have higher accumulations of debris in the inlets, increasing the overall cost for the City of debris removal. Service reductions to accommodate the contract cost could be achieved with the following changes, including; a) no sweeping anywhere in the City for a month, b) reducing residential area sweeping by one month, reducing alI arteúal street sweeping by about half, but leaving downtown sweeping in place, c) reducing residential area sweeping by 3 months, leaving arterial and downtown sweeping in place. The reductions may be greater if the vendor unit cost increases, as a result of the City awarding a smaller contract. ATTACHMENTS 1. Council Agenda Report Authorizing Advertising of Request for Proposals 2. Proposal Summary sweep c9-3 counctL âqenòâ Repopt ATTACHMENT 1 - 1 Veeting Dâte )-19-1? tem Nunrber FROM: Prepared By: CITY OF SAN LUIS OBISPO Daryl Grigsby, Public V/orks Director Barbara Lynch, Deputy Director of Public Works SUBJECT: STREET SWEEPING OPERATIONS RECOMMENDATIONS 1. Authorize staff to advertise a Request for Proposals for Citywide Street Sweeping Services. Z. Authorize the City Manager to award a contract for Citywide Street Sweeping Services il proposals are within the estimated cost. 3. Authorize the reduction of staff levels by 1.0 FTE (Heavy Equipment Operator I) in the Flood Control program, pending acceptance of a contract proposal for Citywide Sweeping Services and completion of meet and confer requirements. 4. Authorize the surplus designation of the sweeper, Fleet Asset No. 0909, by sale, auction, trade- in or other method in accordance with the City's policies and procedures as prescribed in the Financial Management Manual Section 405-C, pending acceptance and implementation of a contract proposal for Citywide Sweeping Services. DISCUSSION City street sweeping has historically been performed by full-time regular City employees who sweep approximately 7,000 curb-miles per year. In 2010, the City established a small contract with SP Maintenance to sweep portions of the downtown after Farmer's Market, totaling about 260 curb- miles per year. On October 2,2012, the City Manager approved an amendment to the agreement to have SP Maintenance perform City-wide sweeping temporarily after the City's long-time sweeper operator retired leaving the positionvacant, to allow the City time to evaluate alternative strategies for sweeping service. Contract sweeping services aÍe an available altemative to the City's employment of a full time Heavy Equipment Operator 1 (Sweeper Operator). Some municipal functions, particularly those which do not vary in complexity or where consistent coverage is problematic, are well performed by private contract services. A few examples are residential and commercial trash collection recycling collection, and street sweeping. With an eye to improving the consistency and reliability of sweeping operations, the option of converting this work to contract services was analyzed to assist the City in considering this change in service delivery method. The table below summarizes pros and cons from various sources regarding City operated sweeping efforts and contract services. c9-4 Street Sweeping Operations ATTACHMENT 1 - 2 Page 2 . Challenging to cover absences. ljncovered absences results in missed or delayed sweeping; impacting both customer service levels and the City's stormwater permit-related sweeping frequencies . Operator develops relationships and knowledge of community. Good quality. Extra work can be readily accommodated at no extra cost. Quicker availability for emergencies Pros: Cons . Good Quality. Better absence coverage for consistency and reliability of service levels. Fleet reduction. Easier to reduce or expand services Road crew covers ad hoc sweeping needs - emergency needs Less cost control (cost is a function of bidding / not City salary negotiations) Pros: Cons: Fewer public complaints on quality Pros t . No need for backup vehicles or personnel. Option for alternative fuel vehicle were provided. Less expensive (see cons) ' Quality is acceptable (see cons) . About the same cost (see pros). Quality is 'terrible' (see pros). Any extra work is extra cost. Difficult to track disposal costs - are you paying for disposal of other's debris?. Difficult to define in the contract what is "clean," leading to potential conflicts on contract compliance Pros: Cons: From other Agencies (List Serve - l9 cities responded) Cit¡' of San Luis Obispo staff (line staff, supervisor, division manager) C Serryice:Contract Service: C Service:Contract Service: Pros & Cons - Table 1 The service comparisons indicate the primary benefits of in-house service are quicker emergency response and easier extra work accommodation. The primary benef,rts of contract service are increased reliability and consistency for the operation, and service level flexibility. After careful consideration of the above factors, it is stafls recommendation that the most important element of a successful sweeping program is a consistent schedule and flexible responsiveness. Therefore, a private contract is the recommended and preferred method of service delivery. c9-5 Street Sweeping Operations ATTACHMENT 1 - 3 Page 3 Cost Com Estimate - Table 2 rOperation Bpenses Currently Budgeted (available to : Sweeper Operator Compens ation :fuel for Sweeper and Hauling iDisposal Fees I subtotal: i Btimated Contract S ervice Cos t 17,000 Curb Miles @ $21.5O/mile r Ànnuali apply to contract service) $85,625iIncludes all compensation costs with PERS at the future ' : compensation rate - Employee paid 8% PERS ' $11,897i Operation Bu@et Increase for Contract Sweeping:$42,978 i(Estinnted cost) - (Available budget) Additional funding would be needed beyond this if e>ûra work services are desired. Operation Expenses Not Currently Budgeted (funds not currently ar,ailable to apply to contract service) Equipment RepairParts $13,839;Materials budget is currently underfunded Veh icle Annualized Replacement Cost $26,288 ìVehicle replacement is currently underfunded Additional Btimated Cost for Contract Sweeping s40,127: $2,852,Accounts for both budgeted and unbudgeted items While the 540,127 total is not in the cuffent budget, those are actual costs which in the past have been borne by shifting other funds, and are the subject of a future additional budget request. If a shift is made to contract services, the cost evaluation shows that initially, and under the current Financial Plan, $43,000 on an annual basis will be needed to augment the operating budget to allow contract sweeping. The actual bids received could vary from the estimated $150,000 shown above. In addition, accounting for projected (underfunded) annual vehicle costs, the actual augmentation to the City's costs is closer to $3,000 annually. These costs are approximate based on known information of City operations, conversations with a contract sweeping company, and reasonable estimations. These costs assume no extra work. The additional amount required is dependent upon the actual bids received from the private sector. Contract service costs are less within the control of the City than with in-house operations. While the City periodically advertises its contract service agreements for new proposals, the unit costs will be dictated by the companies submitting proposals, reflecting their staff and operation costs. The City received three sweeping proposals in September of 2010 for $23, $25, and $50 per curb mile for a small contract. The cost analysis shown in Table 2 above, used a per mile cost of $21.50, based on conversations with the current service provider indicating a unit price reduction could be anticipated with a larger contract. A moderate adjustment in curb mile costs from $21.50 to $23 changes the needed budget augmentation to $53,000 from $43,000. Conversely a curb mile cost of $20 reduces the augmentation to $33,000. Fleet Reduction The City will be able to reduce its fleet if sweeping shifts permanently to contract, as the company will be required to provide the equipment. Reducing the size of the fleet reduces ongoing fleet replacement and equipment repair costs identified in Table 2, and associated maintenance efforts. btotal:Su Street Sweepi Cost Evnlr¡ation c9-6 ATTACHMENT 1 -4 Street Sweeping Operations Page 4 Once the City shifts to contract services, going back to in-house operations will take a capital investment to restore a sweeper to the fleet. Projected sweeper replacemerf cost is 5272,000, tentatively scheduled for 2016-17 . The Contract Management Contract oversight is anticipated to be slightly more time intensive for the Street Maintenance Supervisor, than oversight of a regular employee. This is due to the need to review monthly reporling and compare it to historical sweeping miles to verify accuracy before payment, and periodic re-advertising of the contract. However, management of the in-house operation has become challenging without a backup operator to provide coverage. Recommendation Summary Contract services appear to be the right direction for the City to go to provide street sweeping. The primary benefit of contracting over in-house operation is reliability and consistency of sweeping operations. Generally, City service standards and Stormwater permit regulations were met with City operations. The exception was weekend sweeping which was eliminated to reduce operating progtam costs. On occasion the weekday sweeping schedule lapsed when the Sweeper Operator was on approved leave and coverage was not available with other staff. The issue is expected to be resolved under contract services, as a contractor, once provided the service standards and contract specifications, must staff the operation accordingly to meet those objectives. Service flexibility will be a benefit of contract services as well. The RFP includes a cost request to resume weekend sweeping in the downtown core, and pricing for extra services. Weekend sweeping and special event cleanup will be included in the service agreement if the overall quotation for services is lower than anticipated. Accident clean-ups, and "emergencies" need a quick response, and should continue to be provided by staff with the sweeping equipment assigned to the Street Maintenance program. Oversight of the contract, relative to staff operations, is currently anticipated to provide little additional workload to the Street Supervisor. This will be monitored during the initial conversion to determine if there are unusual circumstances of oversight not foreseen by the analysis. Costs are anticipated to be very similar to in-house operations. Costs will be confirmed with the opening and award of a proposal for service, and no changes will be made in staffrng or operating programs until it is clear the contract service is a reasonable cost alternative. Sweepin g Effectiveness Concerns have surfaced periodically regarding the effectiveness of sweeping operations in neighborhoods with heavy on-street parking. This issue is present regardless of the method of service delivery. Staff will incorporate review of options to address this as part the 2013-14 work program and bring a recommendation forward for consideration. Meet and Confer Requirements Assignment of duties including the decision to use contract services, is a management right; however, the City must meet and confer with the affected labor group (SLOCEA) regarding potential impacts of the change to the labor unit. SLOCEA will be notified of the City's intent to make this change upon approval of this request by Council. SLOCEA will be provided the c9-7 ATTACHMENÏ 1 - 5 Street Sweeping Operations Page 5 opportunity to identify potential impacts of eliminating this currently unhlled position and the parties will meet and confer in good faith over those impacts prior to full implementation. F'ISCAL IMPACT Funding of this contract operation will require approximately $43,000 in annual funding augmentation to the operating program, along with a shift in operating expenses of approximately $107,500 from other program areas as noted in Table 2. Contract service costs for the remainder of the current fiscal year will be covered by salary savings at an estimated cost of $8,000 per month. Costs going forward will be documented for Council airproval as a Significant Operating Program Change in the 2013-15 Financial Plan. If upon receiving cost proposals for sweeping services, per-mile costs come in higher than anticipated, staff will return the item to the City Council for a ftnal determination. The Council could determine aI that time to continue with City operations and complete the recruitment for a City Heavy Equipment Operator I position. The City will have a one-time income from the resale of the sweeper if it shifts to contract services. The curent value of this unit is estimated at $20,000, which could assist in offsetting the initial year of contract service. The sale of the sweeper should be delayed until a new contract is awarded. ALTERNATIVES City Staff Operation. Sweeping could continue to be provided with a staff person. No changes would be needed in operation budgets or in sweeping operations to retain the existing service levels and costs. Contract Services - Reduced Frequency. Contract services could be used, but frequencies reduced such that there would be no net increase to the operating budget. To reduce the contract cost to the current operating budget (reduce costs by $43,000) a30Yo reduction in sweeping would occur. Reducing sweeping to account for the current operating budget plus unbudgeted capital investment costs is a2o/o reduction or $3,000. A30% reduction in sweeping volume is not recommended because 1) a service reduction would be contrary to the City's Neighborhood Wellness goal and prior service standards; 2) the City's current obligation under its Stormwater Management Plan would not be met; and 3) increased effort will result for the stormdrain cleaning staff to remove higher accumulations of debris in the inlets. A $3,000 reduction is reasonable, but such a minor savings does not warrant the high level of effort that would be necessary to revise the routes. Additionally, Stormwater obligations would not be met. ATTACHMENTS 1. Request for Proposals to provide contract sweeping services 2. 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