Agenda Item Wording:
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Authorize the City Manager to award the contract for Street Sweeping Services to SCA of CA, LLC for an annual amount of $1,868,741 for an initial 1-year term, renewable for four (4) additional one-year terms, and appropriate $115,797 from the General Fund and $390,202 from the Gas Tax Fund.
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Deadline for Action: 11/6/2023
Submitting Department: Public Works
Contact Name and Phone Number: Jason Serpa, Public Works Manager, jason.serpa@visalia.city, 713-4533 Nick Bartsch, Public Works Director, nick.bartsch@visalia.city, 713-4052
Department Recommendation:
Staff recommends that City Council authorize the City Manager to award a contract (RFB 22-23-31) to SCA of CA, LLC for the City-wide street sweeping service in the amount of $1,868,741, and appropriate $115,797 from the General Fund and $390,202 from the Gas Tax Fund.
Background Discussion:
The annual street sweeping contract provides for monthly sweeping of all public streets within City limits. The contract also covers City and Park parking lots, trails, and some alleys in the downtown area. There is an established “leaf” route that covers designated areas of the City with mature street trees, adding one additional sweep per month for 3 months during the fall leaf season. Additionally, some areas identified by the City, are swept more often, such as downtown streets, which are swept weekly.
Central Valley Sweeping, Inc. held the City’s prior street sweeping contract. In July of 2021, Central Valley Sweeping, Inc. was acquired, and the contract was assumed by SCA of CA, LLC. The contract terms remained the same. However, this contract expired on September 26, 2022, requiring that the City secure a month-to-month contract until a new RFB could be advertised and awarded.
Due to the October 4, 2021, Department of Industrial Relations ruling on Public Works Case No. 2022-005 - Street Sweeping Maintenance Services - City of Elk Grove, staff was informed by the City’s Finance department that the City’s new contract would be subject to prevailing wage requirements. This case determined that street sweeping is classified as a regular or routine maintenance activity, therefore constituting “public work”, and subjecting it to prevailing wage requirements. (See Attachment 1)
Before advertising for new bids, understanding that prevailing wage and other general industry conditions would likely increase the cost of the contract, City staff performed an analysis to identify the cost of an internal street sweeping operation. This analysis, although deemed impossible for the acquisition of equipment in the immediate future, was used as a comparison for the incoming bids. Further explanation of this analysis is shown in the fiscal impact section.
The City’s advertisement for RFB 22-23-31, Annual Contract for Street Sweeping, was published on August 15, 2023. This RFB included the general prevailing wage determinations and the City of Visalia Labor Compliance manual which identified prevailing wage requirements.
Only one bid was received and was submitted by the current contractor, SCA of CA, LLC. This bid was found to comply with all bid requirements of the RFB. The base bid of $1,763,366 plus an additional $105,375 of alternative items, resulted in an increase of $1,004,817 annually over the current contract. The breakdown is explained in detail in the fiscal impact section of this report. Staff has reviewed the bid from SCA of CA, LLC and have found it to meet all bid requirements and the scope of work. The contractor will invoice the City monthly and include any emergency or non-emergency sweep invoices to the designated departments that request the special sweep.
Fiscal Impact:
The cost of this contract is budgeted annually, and this bid requires an additional budget appropriation from the General Fund of $115,797 and the Gas Tax Fund of $390,202 for the remainder of the fiscal year. Due to the increase to the Solid Waste Fund items within the cost proposal, staff felt it was appropriate to recommend that the Gas Tax Fund contribute a share of the cost in the current and future years due to the nature of the street sweeping and the benefit it brings to the roadways.
The RFB contained a base bid section that included all required City streets, parking lots and intersections. The base bid was used for bid comparison purposes, although there were no other bids. The base bid also included the as-needed items of emergency sweep call outs at an hourly rate, but these were not used for bid comparison.
In addition to the base bid, the RFB contained two alternate items. Alternate Item #1 included additional sweeping services of all streets and medians already part of the base bid, increasing the service to twice per month. Alternate Item #2 included additional fall “leaf” sweeps, as needed.
The table below shows the cost of each Base Bid item, the additional services not included in the current contract, and the alternate as-needed items being recommended by staff:
As shown above, the recommendation of awarding the base bid and the additional alternate items to the sole bidder, SCA of CA, LLC, totals $1,868,741. The current non-prevailing wage contract that the City administers with the same contractor is $863,924 for the base contract price, a proposed increase of $1,004,817 per year. Alternate Bid Item #1, which included the increase of an additional sweep of all City streets and medians per month, would have added an additional $953,412 annually.This is not being recommended by staff due to the already significant increase in the total cost of the contract.
The future annual total cost for each fund would be as follows:
It is important to note that quantities are based on existing City limits and streets. Future additions, growth and/or development will be added to the contract in accordance with the terms and rates of the base bid.
Additional Appropriation needed:
The breakdown of the appropriation amounts requested from the funds in this report is as follows:
*Solid Waste amount shown with additional contracted sweep items for comparison purposes.
The increase to the current year budget will need an appropriation from the Gas Tax and General Fund to fund the components related to the increase of the new contract amount. This appropriation will keep the Measure N Fund and the Solid Waste Enterprise Fund within their current budgeted amounts. Future budget amounts will be approved through the normal City-wide budget process.
In-house street sweeping analysis:
Before advertising for bids, City staff preemptively conducted an analysis of the anticipated costs for the City to run its own street sweeping division. The costs included purchasing seven (7) sweepers of various configurations, hiring eight (8) staff including a new supervisor and an office hourly, and all the equipment, maintenance, disposal, and replacement costs.
Considering all of these factors, staff estimated that running a street sweeping division would cost $1,795,290 per year. The table below illustrates the current and future contracts, as compared to an in-house operation.
As shown above, a City-operated street sweeping division could result in a potential annual savings of $73,451 per year. However, despite the annual depreciation of equipment being included in the annual cost, it does not include the start-up costs of purchasing the equipment of $2,644,000. The estimate also assumes that staff can procure diesel operated sweepers at today’s prices. Any future equipment increases, or a switch to zero-emission sweepers would impact costs significantly.
Staff’s analysis is based on the routine operation of sweeping for the City and does not include additional operations that may be needed during the fall “leaf” season or other peak times. In these cases, due to the high cost of equipment, the City would most likely still rely on contractors to supplement its operations, rather than entertain a seasonal need for fluctuations in its own staff and equipment. This would again result in an added cost.
In addition, the inability for staff to mobilize personnel and equipment immediately due to equipment availability and staffing lead times, coupled with the uncertainty and risk of initiating and operating a new division, staff is recommending that a contractor be utilized for City-wide street sweeping services at this time. As operations progress, staff will continue to monitor conditions and evaluate alternatives in the future.
Prior Council Action: 9/5/2017 - Award of previous contract to Central Valley Sweeping, Inc.
Other: N/A
Alternatives: Alternative is to not award the contract to SCA of CA, LLC and direct staff to re-bid.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize the City Manager to award a contract (RFB 22-23-31) to SCA of CA, LLC for the City-wide street sweeping service in the amount of $1,868,741, and appropriate $115,797 from the General Fund and $390,202 from the Gas Tax Fund (111).
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Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments: Attachment 1 - DIR Public Works Case No. 2022-005 - Street Sweeping Maintenance Services - City of Elk Grove; RFB 22-23-31 - Street Sweeping Services; Bid from SCA of CA, LLC; Sample Contract