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Home My WebLink AboutReceived after the posting of the agenda Robin Roberts From: Robert Goldberg <rgoldberg @live.com> � Sent Sunday, December 11, 2016 3:30 PM To: Jill Ingram;Jim Basham; Ellery A. Deaton; Mike Varipapa; Sandra M Issa-Lavitt Cc: Robin Roberts; Tim Kelsey CH� Subject: Landscaping Contract,Item L Attachments: Landscape Maintenance Services Contract.supplemental info.doc; Landscape.budget amendment.xls; Landscaping in house salaries.xls Dear Council and Staff, Please,see the attached comments regarding the Landscaping contract. Ihave-also attached two spreadsheets that display my calculations. Thank you in advance for your consideration, Robert Goldberg • 1 RE: Landscape Maintenance Services Contract (Item H) Dear Council and Staff, I submit the following for your consideration Monday night regarding the above issue. • Supplemental Background Information: The prior landscaping contract with SpectrumCare was approved by Council on 7/22/13 ("L"). Pricing was aggregated into two major programs: (1) regularly scheduled maintenance and (2) extraordinary work. The latter was defined as "the installation of new plant material, repair of irrigation systems, and installation of new treesjcompleted only on an as-needed basis at the direction of the City and in conjunction with funding availability." The accepted bid amount for annual costs (fixed during contract term) were ai follows: Contractor Landscape Extraordinary Total BidlIAmount Maintenance Work SpectrumCare $351,577.00 $129,530.00 $481,107.00 Although payment of "prevailing wage" was not:a City requirement at the time, the 2013 RFP did require disclosure of labor rates. The following hourly rates were submitted by SpectrumCare: Supervisor -- No Charge Foreman -- $28 Irrigator -- $35 Laborer -- $20 The vast majority of the landscape maintenance involves parks, streets, and buildings. Therefore, the vast majority of the costs are budgeted within various] "Contract Professional" accounts within the General Fund. However, some landscaping services are provided to Community Facility (Improvement) Districts and Water/Sewer pump stations, so these separate funds are "billed" also. The breakdown for the apportionment of the costs for regularly scheduled maintenance ($351,577) in 2013 was given as follows: Fund Facilities Percent General Fund Streets (medians/parkways) 88.9% Parks, Facilities, Tennis Center Tidelands (transferred $$ from General Fund) Water Operations Water facilities 15% Sewer Operations Sewer facilities 0.'8 % 1 Bixby/Old Ranch CFD Medians on SB Blvd/Lampson 615% Pacific Gateway CFD Parkways/open space around Boeing 213% Current Bids: Inspection of the current pricing proposals (available in the City Clerk's Office) revealed the following annual costs: Landscape Maintenance Vendor ("Base Bid") Extra Work Total Bid Amount Merchants $504,345 $99,770 $604,115 SoCal $496,298 $150,350 $646,648 Brightview $631,458 $158,659 $790,117 Complete $666,423 $165,630 $832,053 Master $1,068,484 $315,355 $1,383,839 Merchants is the low bidder if the full schedule of Extra (optional) Work were to be performed each year. This would appear to be highly unlikely. However, even if, say, 50% of the Extra Work were performed per year, the net cost from Merchants (Base + /z Extra = $554,230) would still be substantially lower than the equivalent cost with SoCal ($571,473). Therefore, Merchants should be declared the low bidder. For compliance with prevailing wage laws, Merchants submitted the following information on their pay scales: Supervisor -- $40 Foreman -- $25 Irrigator -- $38 Laborer -- $23 Fiscal Analysis: Merchants' low bid represents a substantial increase in costs compared to the City's canceled contract with SpectrumCare. If 50% of the "Extra Work" schedule is performed annually, the increase would be $137,888 (33%). The pro-rated amount for the remaining 6'1A months of FY 16-17 would be $74,689. This increased cost, would be partially offset from savings realized over the last two months. Following SpectrumCare termination their contract on October 6th staff has restricted the cost of landscaping to a $28,000 purchase order with Brightview. For the same period of time, SpectrumCare would have charged approximately $69,390 (assuming Extra Work performed at 50% max rate). Thus, the resultant savings has 2 been approximately $41,390. After consideration of these savings, the net increased cost for the remaining 6% months of FY 16-17 would be approximately $33,299. Based on the apportionment of costs for landscaping services (see table above), approximately 89% of the increased cost would need to be paid for by the General Fund. Thus, the increased cost to the General fund for the remaining 6% months of FY 16-17 would be approximately $29,636. Staff has suggested cancelling all bids and studying the potential cost savings of performing the services in-house. However, a comparison of the City salary structure to that of low bidder suggests that cost savings would be very difficult to achieve. The lowest base salary (Grade 1) for full-time City employees is approximately $18.70 (Step 1 , new hire) to $22.73 (Step 5 @. 3.5 years). Benefits add at least 35% to base salary costs for a total compensation cost of $25.25-$30.69 per hour. If a 7/1/16 COLA of 2% is added, these costs rise to $25.75-$31 .30. These hourly costs significantly exceed those paid by Merchants for Laborer and Foreman. The Merchants' Irrigator does make substantially more, at $38/hour. However, the lowest paid current full-time job classification in the City is Maintenance Worker at Grade 8 with a total compensation rate (including benefits 8,d COLA) of $30.75-$37.37. Given that this is the lowest paid full-time employee in the City, it is unlikely that we would pay what sounds like the skilled position of Irrigator'at a lower Grade. In summary, there does not appear to be an opportunity for meaningful cost savings based on comparative salaries. The cost of the contract does includes more than salaries, i.e., material costs!and profit. These are not quantified in the bid so they cannot be directly assessed without further analysis. Whether the City could realize a net savings by purchasing materials at a lower cost is an open question. However, any material savings and profit;avoidance would have to exceed likely increases in total compensation costs by bringing this service in-house. Recommendation: Award the contract immediately to the low bidder, Merchants. If necessary, pass a $30,000 Budget Amendment to cover increased General Fund operating expenditures for the remaining 6% months of FY 16-17. Thank you for your consideration, Robert Goldberg Seal Beach 3 100% Extraordinary Work Normal Extraordinary Total Work Work Amount Spectrum $ 351,577 $ 129,530 $ 481,107 Merchants $ 504,345 $ 99,770 $ 604,115 Difference $ 152,768 $ (29,760) $ 123,008 6.5 Month Budget Increase 2 Month Savings Based on $28,000 Charge Budget Increase for 6.5 months 50% Extraordinary Work Normal Extraordinary Total Work Work Amount Spectrum $ 351,577 $ 64,765 $ 416,342 Merchants $ 504,345 $ 49,885 $ 554,230 Difference $ 152,768 $ (14,880) $ 137,888 6.5 Month 6.5 Month Budget Increase Budget Increase I 2 Month Savings 2 Month Savings Based on $28,000 Charge Based on $28,000'Charge Budget Budget Increase for 6.5'months Increase for 6.5 months 0.0% Extraordinary'Work Normal Extraordinary Total Work Work Amount Spectrum $ 351,577 $ - $ 351,577 Merchants $ 504,345 $ - $ 504,345 Difference $ 152,768 $ - $ 152,768 6.5 Month Budget Increase 2 Month Savings Based on $28,000 Charge Budget Increase for 6.5 months Monthly Rate $ 40,092 $ 50,343 $ 10,251 $ 66,629 $ 52,185 $ 14,445 Monthly ' Rate $ 34,695 $ 46,186 $ 11,491 All Funds Gen Fund $ 74,689 89% $66,474 $ 41,390 89% $36,837 $ 33,299 89% $ 29,636 Monthly Rate $ 29,298 $ 42,029 $ 12,731 $ 82,749 $ 30,596 $ 52,153 +benefits @35% Maintenance step 5 grade 8 $ 27.14 $36.64 $37.37 2% COLA Worker step 1 $22.33 $30.14 $30.75 2% COLA grade 7 $26.46 $35.72 $21.77 $29.39 grade 6 $25.80 $34.83 $21.23 $28.66 grade 5 $25.16 $33.96 $20.70 $27.94 grade 4 $24.53 $33.11 $20.18 $27.24 grade 3 $23.91 $32.28 $19.67 $26.56 grade 2 $23:32 $31.48 $19.18 $25.90 grade 1 $22.73 $30.69 $31.30 2%COLA $18.70 $25.25 $25.75 66.47351