City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Transportation
Meeting Date: June 1, 2026
Report #:2603-6080
TITLE
Approval of Contract Amendment No. 3 to Contract Number C20176367 with LAZ Karp Associates, LLC to Increase the Compensation by $713,311 for a revised total not-to-exceed $3,035,596 and Extend the Term by 18 Months for the Parking Enforcement Program for Residential Preferential Parking Districts; CEQA Status - Not a Project.
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or designee to execute Amendment No. 3 to Contract C20176367 with LAZ Karp Associates, LLC (Attachment A) to extend term by 18 months and increase compensation in an amount not to exceed $713,311 for Parking Enforcement Program for Residential Preferential Parking Districts. This amendment results in a revised total contract not-to-exceed amount of $3,035,596.
BACKGROUND
The Office of Transportation (OOT) is responsible for parking policies and program direction for 8 of the City’s 10 commercial and residential parking permit (RPP) programs that provide parking availability for employees and residents. OOT released an RFP to contract (C20176367) with LAZ Karp Associates (formerly Serco) to provide parking enforcement services for six Residential Preferential Parking districts1.
On March 20, 2023, City Council approved a two-year, six-month extension of the original three-year parking enforcement contract, with the expectation that a competitive solicitation for parking enforcement services for the included Residential Permit Parking (RPP) areas would be completed by August 28, 2025.
That solicitation was not completed within the extension period, and the contract term has lapsed. The primary issue was that Office of Transportation staff did not fully account for the 1 Staff Report #10874 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city- manager-reports-cmrs/year-archive/2020/10874.pdf?t=70665.01 March 20, 2020.
level of workload capacity required to complete the request for proposals process before the extension expired. As a result, the solicitation timeline was not aligned with available staff resources and operational demands.
Progress was further affected by staffing constraints during this period. Key vacancies, including the Chief Transportation Official, Senior Management Analyst, and Administrative Assistant positions, as well as an extended staff leave, limited the Office’s ability to advance the work on the anticipated schedule.
Staff is providing this update so Council has a clear understanding of how the lapse occurred, and recognizes the importance of aligning contract timelines, procurement planning, and organizational capacity to avoid similar outcomes in the future and is applying those lessons to current and upcoming work.
Staff will return to Council with any necessary next steps related to continuation of parking enforcement services and the competitive procurement process. Staff plan to release an RFP early in Fiscal Year 2026-2027 to ensure that a new contract is established and in place before the requested contract extension expires.
ANALYSIS
Contract amendment no. 3 with LAZ Parking will provide continued RPP parking enforcement while staff procure a new contract for service via an RFP process. An exemption from competitive solicitation pursuant to Palo Alto Municipal Code section 2.30.360(b) was approved by the City Manager.
The Office anticipates completing an RFP for a new contract for enforcement no later than the end of contract expiration February 28, 2027. This RFP will be developed in coordination with the Police Department and other parking services vendors, including a new Permit and Citation Management vendor, TurboData, who is being onboarded concurrently. Given the reduction in parking demand since the original contract, the RFP will feature performance metrics to ensure that future enforcement contracts are financially self-sustaining.
FISCAL/RESOURCE IMPACT
Significant cost savings were previously achieved throughout the contract’s initial term, providing the opportunity to extend and renew the current services through early 2025 without increasing the existing $2,322,285 contract limit. These cost savings in RPP enforcement resulted from: 1) suspension of enforcement activities related to Covid-19 impacts in the last three contract years, and 2) the adoption and transition to automated license plate recognition enforcement and related modified staffing plans. Additional contract services authority is now needed to continue program services, at approximately $50,000 per month, while City staff procure a new contract for services to begin March 1, 2027. Funding for this extension is available within the FY 2026 Adopted Operating Budget, which includes a loan of $0.3 million from the General Fund to the Residential Preferential Parking Fund.
STAKEHOLDER ENGAGEMENT
OOT staff are in regular communication with RPP program customers and receive input and feedback from constituents on an ongoing basis.
ENVIRONMENTAL REVIEW
The proposed actions are not a project under the California Environmental Quality Act (CEQA).
In the event the proposed actions are deemed a project under CEQA, they are exempt under CEQA regulation 15321 (Enforcement Actions by Regulatory Agencies).
ATTACHMENTS
Attachment A: Amendment No. 3 to Contract Number C20176367 APPROVED BY:
Ria Hutabarat Lo, Chief Transportation Official