Consideration and Approval of Contract:  Landscape Maintenance Services for BBB-funded Beautification Areas

Landscape maintenance of BBB Beautification Areas performed by Parks Division staff is more cost effective.

If the recommended action is the City Council's choice, the BBB Beautification Fund will save approximately $19,795 per year.  The City will realize additional savings (un-quantified) as the associated 4.5 FTE (full-time equivalent) staff positions also serve other programs.

Effective governance - The City recognizes that attractive and well-maintained landscapes are important to the City’s image and sense of place, and thus, the economic vitality of the City.  Thus maintenance of BBB-funded Beautification Areas performed by Parks Division staff effectively and efficiently uses revenues to support economic vitality.

No.

1)  Accept proposal received.
2)  Reject all proposals and continue landscape maintenance of BBB-funded Beautification Areas by the Parks Division (Recommended).
3)  Reject all proposals and re-issue the Request for Proposals seeking a lower cost of services.
4)  Provide staff with alternative direction.

The City of Flagstaff Parks Division currently maintains approximately 50 acres of landscaped areas throughout the city on behalf of the BBB Beautification Program.  Note that additional areas that are maintained by the Parks Division staff, such as parks, open space and streets, are separate (not a part of the BBB Beautification Program), were not included in this Request for Proposals, and are thus not addressed in this report.
 
To more effectively manage the maintenance of BBB-funded Beautification Areas, Community Design & Redevelopment (CD&R) staff prepared a detailed inventory of all landscaping installed and maintained under the BBB Beautification Program.  Individual areas were then evaluated according to health and visual quality, the potential need of capital reinvestment, the potential for alternative maintenance strategies, and any other special handling needs.  In addition, the City's current maintenance practices were evaluated and modified to reflect the needs of individual projects, and detailed specifications were then written by CD&R staff for maintenance work of BBB-funded Beautification Areas. 

Per City Council direction in the FY14 budget process, CD&R staff sought competitive qualifications-based proposals for private maintenance of the BBB-funded Beautification Areas.  Using the inventory work as a basis, approximately 28 acres of landscaping, and the written maintenance specifications were included in the scope of work.  To potentially allow more than one contractor to be awarded some of the work, the 28 acres were broken down into three (3) areas based on geographic proximity and are listed as separate contract areas on the accompanying table.  Proposers had the option of bidding on any or all of the three (3) areas.  In response to the RFP, one (1) proposal was received from Morning Dew Landscape.

The work of maintaining the remaining BBB-funded Beautification Areas, approximately 22 acres, would remain with the Parks Division until the special handling needs were addressed.  For example, for those individual projects that are in need of capital reinvestment, once the reinvestment work is done, the maintenance could be added to the maintenance contract.  Other areas, such as certain frontages of private properties, may not require future maintenance and would simply be removed from the inventory.
 
Concurrent with the advertisement for bid of this work, Parks Division put together an Inter-departmental Service Request (ISR) cost to continue to perform the landscape maintenance.  City departments can’t bid on City projects so the ISR method was selected as a way of obtaining a meaningful in-house number that could then be compared to private bids.  Since the maintenance specifications differed from current practices, the Parks Division was provided with the same information and based their fee on the same scope of services included in the RFP.  The fact that the Parks Division would be preparing a comparable number was noted in the RFP.

This ISR cost and the proposal received are summarized in the following table:
  

Contract Area	City Maintenance Department (ISR) Proposal			Morning Dew’s Proposal
	Cost	CD&R  Admin Cost	Total	Bid	CD&R   Admin Cost	Total
A	$140,702	$2,241	$142,943	$99,415.38	$5,327.66	$104,743.04
B	$82,068	$1,300	$83,368	$109,058.48	$5,954.44	$115,012.92
C	$57,852	$941	$58,793	$80,755.97	$4,387.48	$85,143.45
Total Fees	$280,622.00	$4,482.65	$285,104.65	$289,229.83	$15,669.58	$304,899.41

 
Note that the costs in the table are for one year of maintenance.

Albeit slight, the basic costs are less if the maintenance is performed by the Parks Division staff.  However, to accurately understand the cost of contracting for services, we must also consider the cost of administering the contract.  CD&R staff estimated the necessary tasks and the hours necessary to complete them, and estimate that administering the contract will add about 5.5%.  These tasks include some "contract" things such as gathering insurance and qualifications certificates, various contract paperwork, payment requests, performance inspections, seasonal shut-down and start-up, and annual reporting.  There are also a number of administrative ("non-contract") expenses that occur whether the work is performed by the Parks Division or by an external contractor.  These include quality control reviews, work coordination, monitoring irrigation usage, and looking for necessary upgrades and efficiencies.  Because the expenses for "contracting" are not required when the work is performed by the Parks Division, the comparison table reflects different costs for each option - contracted work versus work performed by the Parks Division.

And, the Parks Division’s intimate knowledge of each landscape area’s special needs is based on hands-on experience as well as scientific knowledge. They have excelled at performing this work for decades and if chosen to continue the work there will be no ‘learning curve’ as may be required by an outside contractor.  Also, the Parks Division already has on hand all the labor, equipment, vehicles, and materials necessary to perform the work.

The exercise of comparing internal costs to external costs is, in itself, a community benefit to assure the efficient use of public monies.  In this case, the exercise validated that the existing maintenance strategy is appropriate.  In addition, the work of preparing the inventory and maintenance specifications necessary for bidding yielded effective maintenance management tools that will serve both the BBB Beautification Program and Parks Division.

Involve

1.  Accept proposal received.  This would increase revenues for a local business, potentially create a few jobs, negligibly increase tax revenues, and cost the City an additional $19,795 per year.

2.  Reject all proposals and continue landscape maintenance of BBB-funded Beautification Areas by the Parks Division (Recommended). 

3.  Reject all proposals and re-issue the Request for Proposals seeking a lower cost of services.  This option is not likely to yield substantially different results.

4.  Provide staff with alternative direction.