That the City Council:
A. Approve and authorize the City Manager to execute Amendment No. 3 to the City's tree maintenance agreement with West Coast Arborists, Inc.; and,

B. Authorize the City Manager to modify the existing purchase order with West Coast Arborists, Inc. from the current annual amount of $333,147.87 to the proposed annual amount of $343,142.31, to provide for a three percent (3.0%) increase in costs for tree maintenance services.

The City's tree maintenance program and services are currently provided by West Coast Arborists (WCA).  Under the terms of the agreement, WCA provides routine maintenance of City-owned street and park trees. The current agreement had an initial five-year (5) term that ended June 30, 2019, along with five (5) additional one-year extensions. The City and WCA are currently in the fifth and final extension year, which expires on June 30, 2024.

In Spring 2023, WCA notified the City that uncontrollable rising costs for labor, materials, parts, and other overhead costs were significantly impacting their ability to sustain reliable service to the City on a going forward basis. WCA expressed that, as a result of these inflationary costs, they needed to propose a rate adjustment in the final year of their contract with the City. As a result of these inflationary factors, WCA requested that the City consider a 3.7% Consumer Price Index (CPI) rate adjustment to their contract. City staff reviewed WCA's request, as well as the CPI data for the Southern California market, along with information regarding WCA's operating costs. The most recent release of the Los Angeles/Anaheim/Long Beach CPI from the Bureau of Labor Statistics (BLS) showed a monthly increase of 0.2% for the month of June 2023, and an annual increase of 3.0% from the prior year (June 2022). Staff discussed these issues with WCA staff and were able to negotiate a reduction to WCA's requested contract adjustment to 3.0%. WCA's revised proposal better reflects the recent changes in regional annual average CPI.

The contract component recommended for modification is as follows:

If approved by City Council, this contract amendment will increase tree maintenance costs for the current fiscal year by $9,994.44. WCA continues to demonstrate that they are a reliable service provider and City staff have had a positive working relationship with WCA over the years. It should also be noted that WCA has a practice of being very responsive to the City's requests for routine or emergency service, and do so in a timely manner. Staff recommends that City Council approve Amendment No. 3 to the WCA agreement that will increase the contracted rates for tree maintenance services by three percent (3%) for Fiscal Year 2023-2024.

The City Council approved and adopted the Fiscal Year 2023-2024 Budget which appropriates funding in the Public Works Department budget for tree maintenance services. This budget included the anticipated cost increase for tree trimming services; therefore, there are sufficient budgeted funds to cover the additional $9,994.44 increase for the City's tree trimming contract with WCA for the remainder of Fiscal Year 2023-2024.

GENERAL PLAN RELEVANCE
LU 7.5    Walkable Neighborhoods.
LU 9.4    Streetscapes.
LU 11.9  Retail Streetscapes.
LU 14.2  Places of Community and Neighborhood Identity and Activity.
OS 2.14 Healthy Parks.
OS 2.13 Sustainable Parks.
OS 1.4   Aesthetic Buffer.
AQ 1.1   Ambient Air Quality Standards.
AQ 1.2   Greenhouse Gas Emission Targets.
AQ 2.8   Emissions Reduction.
AQ 3.1   Best Practices.

CITY COUNCIL GOALS AND OBJECTIVES:
Goal 3 – Maintenance and Improvement of City Infrastructure
Objective B - Maintain and upgrade City buildings, facilities, and parks.