Loading...
HomeMy WebLinkAbout14 - Maintenance of Bonita Canyon Sports ParkCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 14 June 28, 2005 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: General Services Department Michael Pisani, Acting Director, 949 - 644 -3055 mpisani @city.newport - beach.ca.us SUBJECT: Amendment to Agreement with TruGreen LandCare for Maintenance of Bonita Canyon Sports Park ISSUES: Should the City Council approve an amendment to the agreement with TruGreen LandCare for the maintenance of Bonita Canyon Sports Park, providing an increase in compensation to $164,337.60 per year and removing the contractor's right to cancel the agreement without cause? RECOMMENDATIONS: Approve Amendment No. 1 to the Agreement with TruGreen LandCare, L.L.C., increasing compensation paid to the contractor to $164,337.60 per year, and removing the contractor's right to cancel the agreement without cause prior to the expiration of the agreement. BACKGROUND: In April 2003, General Services Department staff mailed requests for proposals (RFPs) to ten landscape maintenance firms in preparation of the opening of Bonita Canyon Sports Park. Responses were received from four companies, and the quoted prices ranged from $116,736 to $411,600 per year for maintenance of the 40 acre facility. At its May 27, 2003 meeting, the City Council approved an agreement with the lowest bidder, TruGreen LandCare, to provide maintenance at the facility at an annual cost of $116,736. The agreement was executed on June 1, 2003. Amendment to Agreement with TruGreen LandCare for Maintenance of Bonita Canyon Sports Park June 28, 2005 Page 2 DISCUSSION: The 2003 agreement with TruGreen was for a one -year term, which could be automatically renewed on an annual basis for four additional terms. The agreement was renewed in June 2004 and again earlier this month. The agreement does not contain any provision for an increase in compensation to the contractor over its term and allows either party to cancel the Agreement for any reason upon 30 days written notice. Last month, TruGreen submitted a request for additional compensation in the amount of $47,601.60 per year effective July 1 for their services due to increases in fuel costs, insurance, and worker's compensation (a copy is included as Attachment A). Staff evaluated their request and determined that granting this increase in cost is justified for a number of reasons. First, as a service provider and employer, we are aware of the substantial increases in fuel and insurance costs over the past 24 months. Second, the TruGreen maintenance quote for the park was lower than staff estimates in 2003. As a matter of fact, the second lowest quote in 2003 was $200,568 per year, $83,832 higher than TruGreen, a figure that more closely approximated our estimated annual expenditure for maintenance of this facility. Third, at the present time, TruGreen is maintaining a high usage park in an above - average manner. TruGreen is required to staff the park with three full -time employees, plus utilize additional manpower as required, and they are meeting this requirement. Finally, TruGreen has the right to cancel the current agreement upon 30 days notice. If the contract is substantially unprofitable, there is a strong possibility that TruGreen will opt out, leaving staff to search for a replacement contractor on a short time frame at a substantially higher cost. In return for this one -time increase in compensation, TruGreen has accepted the City request to remove their right to cancel the agreement without cause upon 30 days' notice. In doing so, TruGreen will have no leverage to seek an increase through the Agreement's expiration in June 2008. The City Attorney's Office has prepared an amendment incorporating the changes to the existing agreement for your approval (Attachment B). ENVIRONMENTAL REVIEW: This activity is not a project as defined in the California Environmental Quality Act (CEQA) Implementing Guidelines. FUNDING AVAILABILITY: Funds for this increase in FY 05 -06 are included as an item on the Budget Checklist, to be considered at this meeting. Amendment to Agreement with TruGreen LandCare for Maintenance of Bonita Canyon Sports Park June 28, 2005 Page 3 SUMMARY: Staff from the General Services Department recommend approval of the Amendment No. 1 to the Agreement with TruGreen LandCare, L.L.C. for maintenance of Bonita Canyon Sports Park, as it will allow the contractor to continue to provide services to the City at a lower cost than we would be able to achieve from another contractor. Submitted by: Michael Pisani Acting General Services Director Attachments: (A) Letter dated June 7, 2005 from TruGreen LandCare regarding renewal of landscape services at Bonita Canyon Sports Park (B) Amendment No. 1 to Agreement with TruGreen LandCare, LLC for Landscape Maintenance Services for the Bonita Canyon Sports Park TRUGREEN LandCare June 7, 2005 Mr. Dan Sereno CITY OF NEWPORT BEACH 3300 Newport Blvd. Newport Beach, CA 92658 Fax: 949/650 -5643 Re: Renewal of Landscape Services at Bonita Canyon Sports Park Dear Mr. Sereno: TruGreen LandCare 1150 W. Trenton Ave Orange, CA 92867 Office: 714-28 -1010 Fax: 714-628 -1011 California Contractor's Licence #774548 TruGreen LandCare, Branch 6246 would be pleased to renew our existing contract with The City of Newport Beach for Landscape Maintenance Services at Bonita Canyon Sports Park. Our current price is $116,736.00 annually or $9782.00 monthly. At this time we would also like to request an increase due to the rise in fuel cost, insurance, workman's comp, etc; in the final analysis this increase would allow us to better meet the requirements of the contract, thus further fulfilling our commitment to The City of Newport Beach. This increase would bring the amount to $164,337.60 annually or $13,694.80 monthly. We feel that it would be beneficial to The City of Newport Beach, to continue the contract as noted above, which would allow the city to plan its budget well in advance. Extension of this contract would save the City the cost of going out to bid and should a new contractor be awarded the contract, the extra time, cost and energy your staff would be required to spend with a new contractor getting to know the areas. Please be informed that effective July 1, 2005 this new rate will be in effect. TruGreen - LandCare has been working with the City of Newport Beach over the last few years, and we all work very hard to provide the quality of service that the City expects and deserves. With out the above noted increase, servicing the Bonita Canyon Sports Park contract at the current level would prove to be a difficult task. We would like to continue this business relationship well into the future. In the context of the above increase, TruGreen LandCare will eliminate the 30 day notice of cancellation as stated in the Bonita Canyon Sports Park Landscape Maintenance Services Contract ; and will honor the proposed new fixed rate for a period of three years hence forth. Should you have any questions or concerns please do not hesitate to contact me. Joel Gay Branch M nager 6246 c.c. Mike Risani, Sergio Hernandez AMENDMENT NO. 1 TO AGREEMENT WITH TRUGREEN LANDCARE, LLC FOR LANDSCAPE MAINTENANCE SERVICES FOR THE BONITA CANYON SPORTS PARK THIS AMENDMENT NO. 1 TO CONTRACTOR AGREEMENT, entered into this day of June, 2005, by and between the CITY OF NEWPORT BEACH, a municipal corporation (hereinafter referred to as "City "), and TRUGREEN LANDCARE, L.L.C., a limited liability corporation, whose office is located at 1150 W. Trenton Avenue, Orange, California, 92867 (hereinafter referred to as "Contractor'), is made with reference to the following: RECITALS A. On June 1, 2003, City and Contractor entered into an Agreement in which Contractor was hired to provide landscape maintenance services at Bonita Canyon Sports Park, located on Bonita Canyon Road and Mesa Drive in the City of Newport Beach (hereinafter referred to as the "Agreement "). B. Total compensation due Contractor under the Agreement was $116,736.00 per year, or $9,728 per month. The term of the Agreement was for one year, but it was automatically renewable on an annual basis by City for an additional four (4) years. The Agreement was automatically renewed for additional one year periods in June 2004, and 2005. C. The Agreement also provided that Contractor may terminate the Agreement at anytime without cause on thirty (30) days written notice. Specifically, Paragraph 23.B. of the Agreement read as follows: "This Agreement may be terminated at anytime, without cause by City or Contractor, upon thirty (30) days written notice. Upon termination, City shall pay to Contractor that portion of compensation specified in the Agreement that is earned and unpaid prior to the effective date of termination." D. In May 2005, Contractor notified City that it intended to exercise its option to terminate the Agreement unless the compensation under the Agreement was increased. Contractor said the Agreement was no longer economically profitable for the Contractor because of the rise in fuel costs, insurance, workman's compensation, and other expenses. E. City has agreed to increase Contractor's compensation under the Agreement by $3,966.80 per month ($47,601.60 per year), provided that Contractor agrees to provide all of the services outlined in the Agreement for the remainder of the Agreement's term, or until June 1, 2008. F. In addition, Contractor has agreed that the provision allowing it to cancel the Agreement on thirty (30) days written notice shall be deleted. Contractor may only terminate the Agreement in the event of nonpayment by City if the City does not cure said breach as specified in this Amendment. G. To this end, City and Contractor mutually desire to amend the Agreement, as provided in this Amendment No. 1. NOW, THEREFORE, the parties hereto agree as follows: 1. Paragraph 1 of the Agreement shall be revised to read as follows: "The term of this Agreement shall be for a period of one (1) year. The term shall commence within ten (10) working days of City Council Approval and upon receipt and approval of all required bonds and insurance. The term of this Agreement shall automatically be extended for four (4) additional one (1) year terms (automatic extensions) with the extensions to automatically commence upon the expiration of the initial term or any extended term, unless the City notifies the Contractor in writing at least thirty (30) days before the end of the initial term or any extended term, of its intent to terminate this Agreement at the conclusion of the initial term or any extension. Contractor agrees to provide the services outlined in the Agreement for an additional three years, until June 1, 2008, unless City terminates the Agreement earlier, as provided in the Agreement." 2. Paragraph 4 of the Agreement shall be revised to read as follows: "Beginning July 1, 2005, the City shall pay Contractor the sum of Thirteen Thousand Six Hundred Ninety -Four Dollars and Eighty Cents ($13,694.80) per month for all services to be rendered pursuant to the Agreement and this Amendment No. 1 including, but not limited to, all reimbursable items and subcontractor fees. Contractor shall submit invoices to City on a monthly basis. City shall pay invoices within thirty (30) days after receipt by the City. Payment shall be deemed made when deposited in the United States mail, first class postage pre -paid, and addressed to Contractor as specified in the Section entitled 'Notices. "' 3. Paragraph 23 (B) of the Agreement shall be revised to read as follows: "This Agreement may be terminated at anytime, without cause by City, upon thirty (30) days written notice. Upon termination, City shall pay to Contractor that portion of compensation specified in the Agreement that is earned and unpaid prior to the effective date of termination. The Contractor may only terminate the Agreement in the event of nonpayment by the City. In the event of nonpayment by the City, Contractor shall give the City thirty (30) days written notice thereof and the City shall have fifteen (15) working days to cure the alleged breach." 4. Except as expressly modified herein, all other provisions, terms, and covenants set forth in the Agreement shall remain unchanged and shall be in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 on the date first above written. APPROVED AS TO FORM: Aaron C. Harp, Assistant City Attorney for the City of Newport Beach ATTEST: LaVonne Harkless, City Clerk IAUSERMAT\Shared\AMTRUGREEN AMENDMENT.doc CITY OF NEWPORT BEACH, A Municipal Corporation Steve Bromberg, Mayor for the City of Newport Beach CONSULTANT: TRUGREEN LANDCARE, L.L.C. (Corporate Officer) Title: Print Name: By: (Financial Officer) Title: Print Na