Honorable Mayor and Members of the City Council. Contract: IPS Group, Inc. for Credit-Card Enabled Parking Meters and Data Management System

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1 Office of the City Manager CONSENT CALENDAR September 27, 2011 To: From: Honorable Mayor and Members of the City Council Phil Kamlarz, City Manager Submitted by: Andrew Clough, Acting Director, Public Works Subject: Contract: IPS Group, Inc. for Credit-Card Enabled Parking Meters and Data Management System RECOMMENDATION Adopt a Resolution authorizing the City Manager to execute a 3-year contract with IPS Group, Inc. to provide parking meter parts and meter management software effective October 1, 2011 through June 30, 2014 for an amount not to exceed $1,614,805; with an option to extend the contract for an additional 1-year period through June 30, 2015 for an amount not to exceed $230,000 and a total contract amount not to exceed $1,844,805 for the period October 1, 2011 through June 30, SUMMARY Duncan Solutions, manufacturer of the City s existing 2,169 single-space parking meters, gave us notice that certain replacement parts required to support operation of these meters can no longer be purchased. This will result in broken on-street parking meters that cannot be repaired, the loss of up to $2,000 per day of parking revenue, and complications for meter enforcement. During the 2010 calendar year, Parking Services staff conducted a pilot test of credit-card enabled parking meters in the North Shattuck Business District, with positive results for customer use, parking revenue, and meter maintenance. The consequence of Duncan s notice and the conditions of the existing single-space meters, is that the City must upgrade the parking meter system as soon as possible. Based on the success of the pilot test with credit-card enabled parking meters, staff recommends the IPS Group system to replace the existing and soon-to-be obsolete single-space meters. FISCAL IMPACTS OF RECOMMENDATION The cost of a 3-year contract to purchase and install credit card enabled meter replacement parts, and access to a web-based meter software data management system, is $1,614,805. The option to extend the contract for another 1-year period in FY 2015 would be $230,000 for a total contract amount not to exceed $1,844,805. The City was awarded $2.9 million in grant funds from 2 sources, the MTC Climate Initiatives Grant Fund Program (Federal CMAQ funds) to the Berkeley Transportation Action Plan (B-TAP) project and the Federal Highway Administration Value Pricing Pilot 2180 Milvia Street, Berkeley, CA Tel: (510) TDD: (510) Fax: (510) manager@cityofberkeley.info Website:

2 Program Grant in a partnership with UC Berkeley. A total of $614,805 from these grants in addition to $1 million from the City s Parking Meter Fund will provide the funding for this contract. Summary of IPS Credit-Card Enabled Meters Expenses for the 3-year term (includes meter purchase, installation, extended warranty and annual on-going costs): Fund Source Parking Meter Fund 840 FHA Value Pricing Grant Fund 674 Climate Initiatives Grant Fund 614 Total # IPS Meters Year 1 FY 2012 Year 2 FY 2013 Year 3 FY 2014 Total Funding 1,165 $400,000 $300,000 $300,000 $1,000, $318,325 $59,850 N/A $378, $199,181 $37,449 N/A $236,630 1,734 $917,506 $397,299 $300,000 $1,614,805 Funding will be appropriated in the FY 2012 budget through the first amendment to the appropriations ordinance as follows: Parking Meter Fund ( )... $294,972 Parking Meter Fund ( )... $105,028 FHA Value Pricing Grant Fund ( )... $230,475 FHA Value Pricing Grant Fund ( )... $87,850 Climate Initiatives Grant Fund ( )... $144,212 Climate Initiatives Grant Fund ( ) $54,969 TOTAL $917,506 Funding for the remaining contract years is subject to appropriation in the FY 2013 ($397,299) and FY 2014 ($300,000) budgets. The Contract Management System number for this contract is RW6RS. New Revenue New revenue from the IPS meters is expected to range from $118,700 to $197,900 annually in high volume parking areas such as; the Downtown perimeter streets, Elmwood and Solano Avenue districts, and 4 th Street. This reflects a 12% to 20% revenue increase and is based on our IPS pilot data analysis. In lower volume parking locations such as University Avenue, Adeline, San Pablo Avenue and Telegraph Avenue, a 5% to 10% revenue increase is projected ranging from $39,551 to $79,103 annually, based on current parking trends. Page 2

3 CURRENT SITUATION AND ITS EFFECTS There are 3,752 metered spaces in the City: 1,583 are controlled by multi-space Payand-Display (P&D) stations; and 2,169 have Duncan Solutions Eagle 2000 coin operated single-space meters. The Duncan meters are obsolete, replacement parts are no longer available for Eagle 2000 meters, and they must be replaced. Our existing single-space meter equipment was purchased and installed twelve years ago in Currently to perform meter collections and /or maintenance tasks requires use of a handheld device that runs a diagnostic and detects certain malfunctions. The handhelds must be downloaded when staff returns from the field generating a report alerting staff of the required meter repairs. There could be a delay of up to a day from malfunction to detection to repair, with lost revenue during the down-time. Costs for maintenance have exceeded $300,000 during each of the last two years, and include: o Duncan single-space meters require staff time to physically check each meter to determine if there is a malfunction, and the malfunction detection has proved unreliable. o Duncan meter down-time can be up to two weeks during rainy weather, since the rain can inhibit use of the handheld for detection, and make on-site physical repair difficult. o Duncan software has had numerous bugs affecting the current handhelds, which were purchased in Duncan no longer supports these handheld devices, and now promotes a newer, heavier, larger (chunkier) handheld (the AutoCITE) at a cost of $3,000 each, which are required with any Duncan Solutions meter. Any upgrades of single-space meters with Duncan Solutions or other parking companies will provide more meters that accept coins only. A Duncan meter upgrade costs approximately $195 for each meter or $364,000 for 1,700 meters. Additionally, the purchase of 10 new handheld devices, an annual maintenance agreement and new spare parts inventory would be required in order for staff to upload revenue and maintenance data from the meters (approximately $60,000 in one-time costs and $10,000 recurring each year for maintenance). Without being able to purchase replacement meter parts for the current meters, and if we remain with Duncan, we will be forced to up-grade to another coin-operated only version. These meter types do not offer real-time maintenance stats for servicing, therefore, our meter operation would remain in the passive mode of servicing meters as we run into malfunctions in the field or via customer complaint. An immediate change from some Duncan single-space meters to IPS meters will enable us to allocate the limited supply of Duncan spare parts to fewer meters while upgrading current inventory. The base cost of an IPS meter is $495 each. The staff recommendation is to purchase mechanisms, doors, and other parts to replace and upgrade 1,700 single-space meters. Staff believes the remaining 469 spaces would best be served by installation of P&D stations, based on the volume of parking activity Page 3

4 at those locations. Customer payment trends, averaged Citywide at the City s multispace P&D stations, are 70% coin payments and 30% credit transactions; and the option to pay parking meter fees by credit card is a desirable alternative to a coin-only payment. Staff issued RFP Specification No C for a Single-Space Parking Meter and Management System in May The RFP sought to use our existing meter housings (body) and poles, and replace the meter mechanisms (brains) to accept coins and credit cards, as well as communicate over a wireless system, so handheld devices are not required to gather revenue data during meter collections. One proposal was received in response to the City s RFP, submitted by IPS Group, Inc. Based on current available technology and the functions that were specified, staff determined the proposal IPS Group submitted met the requirements and was acceptable. IPS Group has installations in several notable jurisdictions, among them: San Francisco, Los Angeles County, Walnut Creek, Washington DC, and Denver. While other parking meter companies are developing credit-card enabled single space meters, their new products had not passed beta-testing modes at the RFP issue date, and they did not have an established product with performance history upon which to submit a proposal. BACKGROUND Duncan Solutions gave informal, verbal notice to the City in May 2009 that certain replacement parts required to support operation of their meters would no longer be manufactured, and could no longer be purchased. This rendered our single-space parking meter inventory obsolete. During calendar year 2010, staff implemented a Pilot Field Test of 30 IPS credit-card enabled single-space meters. Throughout the Pilot period, IPS meters had a 22% increase in revenue compared to the revenue generated from Duncan meters in the previous 12-month calendar year. Staff found the coin intake amounts from both meter types during the Pilot period remained constant, and the revenue increase from the IPS meters was from credit card use. Overall for the year, IPS payment transactions were 74% coin and 26% credit card, for a total of $81,682 compared to $64,108 in coin revenue from the 30 Duncan meters in the same locations. The $17,574 of new/additional revenue is attributed to credit card transactions. The frequency of collections from IPS meters did not decrease, however the collection time per IPS meter was reduced, since IPS meters transmit data and equipment malfunctions wirelessly, and don t require use of a handheld device to download data. The average meter downtime during the Pilot was one-hour. With the Duncan meters, the down time could be up to 4 or 5 days until the malfunction is discovered by a meter technician performing revenue collections. Additionally, inclement weather did not adversely affect the ability to receive collection data from the IPS meters, as it does with use of our current handheld devices. We learned the following information during the pilot: Page 4

5 The average # of transactions per month was 12,470. Just over 1,300 transactions per month were by credit card The average cash transaction per month was 45 or 18-minutes of parking The average credit card transaction per month was $1.24 or 57-minutes of parking Each meter made an average of $218 per month during the pilot program There were 62 meter malfunctions, (jams) The average down time for a malfunctioning meter has been less than 1 hour The solar-powered IPS mechanisms are more environmentally sustainable than our existing single-space meters: They require fewer batteries (and less disposal) when compared to existing Duncan mechanisms during the same time interval. In addition, real-time communications provided timely information/statistics/maintenance, which reduced meter down-time. The IPS meters provided greater reliability for parking enforcement staff and have more robust displays for users. The technology also includes a broader range of payment options including payment by credit card. RATIONALE FOR RECOMMENDATION IPS Group is experienced, trained and qualified to perform the special services required to upgrade the City s single-space meter inventory, and their equipment will help improve the City s revenue from increased meter uptime and operating efficiencies. In addition, these meters have solar panels to provide their own energy for operation. IPS programming and reporting capabilities include: A web-based management application so meters can be remotely monitored, programmed, and controlled. Remote adjustments for parking rates (such as increases or exceptions like Winter Holiday Saturday Free Parking ), time limits, and other restrictions; rather than meter staff having to individually re/program meters on-site. Eliminates the need to maintain handheld (computer) devices for collections. Meters can be programmed to register different parking rates and time limits during different hours of the day, or days of the week. These credit-card enabled IPS Group meters will improve the integrity and efficiency for our on-street parking meter system. Any forecast of revenue increases will largely depend on the use and trends of credit card transactions, which are typically higher than transactions paid for with coins. ALTERNATIVE ACTIONS CONSIDERED 1. Upgrading to new coin-only operated meter mechanisms was considered, but staff determined that credit card-enabled meters are better suited for our current on-street parking program. Placing multi-space meters in our low-volume areas carries a much longer rate of return than using a lower cost single-space meter. Page 5

6 2. The City could allow metered parking areas to resort to no fee time restriction zones enforced by Parking Enforcement staff. Not recommended. 3. The City could strategically replace meters only in the higher demand areas (Downtown) and leave the existing meters where we have low revenue, until the parts wear out. Not recommended. CONTACT PERSON Farid Javandel, Transportation Manager, Public Works, Danette Perry, Parking Services Manager, Public Works, Attachments: 1. Resolution Page 6

7 RESOLUTION NO. ##,###-N.S. CONTRACT: IPS GROUP INC. FOR CREDIT CARD ENABLED SINGLE-SPACE METER MECHANISMS, PARTS AND METER DATABASE MANAGEMENT WHEREAS, the City s existing single-space meters are no longer supported by their manufacturer, Duncan Solutions; and WHEREAS, Duncan Solutions has notified the City that we can no longer purchase certain replacement parts required to support operation of our Duncan parking meters; and WHEREAS, in May 2011 the City issued Request for Proposal Specification No C for a Single-space Parking Meter and Management System; and WHEREAS, in response to City s RFP, IPS Group submitted a proposal and is experienced, trained and qualified to perform the special services required to upgrade the City s single-space meter inventory; and WHEREAS, the solar-powered IPS mechanisms are more environmentally sustainable, require fewer batteries and less disposal, provide real-time communications, a broader range of payment options, reduced meter down-time which increases revenues; and WHEREAS, this contract has been entered in the City s contract management database and assigned CMS No. RW6RS; and WHEREAS, funds will be appropriated in the FY 2012 budget through the first amendment to the appropriations ordinance as follows: Parking Meter Fund: $294,972 ( ), $105,028 ( ), and FHA Value Pricing Grant Fund: $230,475 ( ), ( ) $87,850; and Climate Initiatives Grant Fund $144,212 ( /30-38), $54,969 ( ); and WHEREAS, funding for the remaining contract years is subject to appropriation in the FY 2013 and FY 2014 budgets. NOW THEREFORE, BE IT RESOLVED by the Council of the City of Berkeley that the City Manager is authorized to enter into a contract agreement with IPS Group, Inc. for a total amount not to exceed $1,614,805 for the period of October 1, 2011 through June 30, 2014, with an option to extend the contract for an additional 1-year period through June 30, 2015 for an amount not to exceed $230,000 and a total contract amount not to exceed $1,844,805 for the period October 1, 2011 through June 30, 2015.

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