Item No. 7
Town of Atherton
CITY COUNCIL STAFF REPORT – CONSENT AGENDA
TO: HONORABLE MAYOR AND CITY COUNCIL
GEORGE RODERICKS, CITY MANAGER
FROM: ROBERT OVADIA, PUBLIC WORKS DIRECTOR
DATE: SEPTEMBER 16, 2026
SUBJECT: MCE CORPORATION PUBLIC WORKS MAINTENANCE AND
MAINTENANCE MANAGEMENT SERVICES CONTRACT
EXTENSION
RECOMMENDATION
It is recommended that the Council authorize a 3-year contract extension with MCE Corporation for the continuation of Public Works Maintenance and Maintenance Management Services; direct the City Attorney to prepare the extension; and authorize the City Manager to execute the extension on behalf of the Town.
BACKGROUND
MCE Corporation became the Towns provider of Public Works Maintenance and Maintenance Management services following a competitive process in September 2011. The process involved the evaluation of proposals from interested and capable companies. MCE Corporation provides the Town both routine and emergency services in most phases of public works maintenance services including street and storm drain maintenance, facility and park maintenance, and event staffing when required. The current contract provides for four (4) MCE personnel based in Atherton, with additional support provided on an as-needed basis. MCE staff is also available for the Town’s needs on an on-call basis.
This contract is a task-oriented contract and actual costs are based on a work-performed basis only.
The current agreement with MCE expired at the end of the 2025-26 fiscal year and MCE has been providing maintenance services on a month-to-month basis at the new wage rates pending approval of the extension.
ANALYSIS
In May 2026, Town staff actively began negotiations with MCE to extend their existing services contract with the Town for a period of three (3) years plus.
Public Works Maintenance Services
Agreement Extension
SEPTEMBER 16, 2026
The proposed contract extension with MCE Corporation predominantly includes adjustments to base wage rates as well as addressing gaps in prevailing wage compensation. A summary of these changes include:
1) Employee Wage Increases
This proposed contract extension includes a wage increase for MCE Atherton staff for costof-living adjustments. It is important to note that MCE staff continues to perform at a high level. Staff believes this speaks directly to their dedication to MCE and the Town of Atherton.
2) State-Mandated Prevailing Wage Adjustments
There are 6 activities in the budget and work program that are infrequently performed by MCE that require the use of prevailing wage rates as mandated by the State of California.
These wage rates are set by the State Department of Industrial Relations based upon the certain trade collective bargaining agreements. The six activities are: Carpentry, Construction Laborer, Light Fixture Technician, Painter/Striper, Plumber and Traffic Sign Maintenance Laborer. These rates adjust annually in our contract with MCE to correspond with the State levels. The prevailing wage work has increased over time and is budgeted at approximately 30% of total budget hours.
3) Cost of Living Adjustments (COLA)
MCE has requested an annual Cost of Living Adjustment not to exceed 3% for each year of the extension. The COLA would become effective on July 1st of each calendar year. The contract COLA will be based on the US Department of Labor, Bureau of Labor Statistics Consumer Price Index (CPI), April Release for the San Francisco-OaklandHayward Area, with an adjustment not to exceed 3% annually. MCE is seeking a 3% adjustment for FY 2026-27. Prevailing wage rates are updated and posted by the California Department of Industrial Relations (DIR) and adjustments are not within MCE control.
Wage rates would be adjusted annually for each activity based on the DIR determinations.
4) Community Gift
MCE has agreed to maintain its Community Gift of 1% with no expense labor.
The Town‘s Public Works Maintenance Manager meets regularly with MCE staff and management a regular basis to refine and improve the management and cost-effective deployment of contract maintenance staff to ensure the Town is getting maximum value.
FISCAL IMPACT
Public Works Maintenance Services
Agreement Extension
SEPTEMBER 16, 2026
The approved Fiscal Year 2026/27 operating budget has sufficient funds to pay for these services out of the General Fund and revenue/special funds as described below:
Budget Area Amount
Streets & Drainage $458,000
Town Facilities $175000
Park Maintenance $90,000
Library $40,000
Event Services $10,000
Total $773,000
MCE has agreed to lock the budget for the 3-year term of this contract extension with the exception of items requiring State-mandated prevailing wage work and the agreed upon CPI adjustments.
The prevailing wage index will be looked at annually and adjustment will be requested (increases or decreases) to comply with any changes. Staff does not see significant financial exposure in this area.
Costs for services under the MCE Contract for the last two fiscal years have been as follows:
Contract Year Budget Actual
FY 2024/25 $722,000 $613,988
FY 2025/26 $737,000 $567,388
GOAL ALIGNMENT
This Report and its contents are in alignment with the following Council Policy Goals:
• Goal A - Preserve Small Town Character & Quality of Life • Goal C - Maintain Conservative Fiscal Policies and Financial Transparency • Goal E - Maintain and Improve Public Infrastructure
POLICY FOCUS
The City Council discussion should focus on the extension of the contract with our current provider versus a competitive rebid and felt that the current contract arrangement has been beneficial to the Town practically and economically. The Town has contracted for Public Works Maintenance and Management Services since September 2011 (15 years).
PUBLIC NOTICE
Public Works Maintenance Services
Agreement Extension
SEPTEMBER 16, 2026
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately 1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders –to include, but be not limited to, media outlets, school districts, Menlo Park Fire Protection District, service provides (water, power, and sewer), and regional elected officials.
COMMISSION/COMMITTEE FEEDBACK/REFERRAL
This item has not been before a Town Committee or Commission
ATTACHMENTS
1. MCE Rate Sheet – FY 2026-2027