DATE: NOVEMBER 1, 2022
DEPARTMENT: PUBLIC WORKS, TRANSPORTATION & TRAFFIC DIVISION FROM: DAVID JACOBS, PUBLIC WORKS DIRECTOR
BY: ANDREW EASTERLING, TRAFFIC ENGINEER
TITLE: MONTEREY STREET PARKING GARAGE MANAGEMENT AGREEMENT AMENDMENT NO. 2 RECOMMENDED MOTION:
A motion to approve a Resolution 1) approving Amendment No. 2 to the Agreement for Professional Services between the City of Salinas and LAZ Parking California, LLC for the management of the Monterey Street Garage, and an increase of up to $355,000.00 per year for the agreement with LAZ Parking California, LLC, and use of Downtown Parking District (6801) enterprise fund balance for the continued management of the Monterey Street Garage; 2) authorizing a transfer of up to $30,000 from the General Fund to the Downtown Parking District Fund; and 3) authorizing an increase of the Downtown Parking District Fund appropriation of up to $100,000.
BACKGROUND:
The City approved an agreement (Attachment 2) with LAZ Parking California, LLC (Laz Parking, henceforth in this report) in November 2018 for the management of the Monterey Street Parking Garage at a cost of $280,039 annually. The award allowed the City to control costs at a fixed amount for two years while seeking rate changes that would improve the overall fiscal health of the Downtown Parking District. LAZ Parking has been a good partner to the City providing a more personal service to downtown customers and working with the City through the proposed rate changes, validation program and communication with customers. They have worked to accommodate special parking needs associated with events on Main Street. They have extended opening hours when Maya Cinema has late showings of blockbuster films that allowed movie patrons to retrieve their vehicles safely at the garage. Throughout, the company has been able to provide downtown visitors the services of a staffed garage including answering questions and providing directions for downtown visitors.
LAZ Parking staff ensure equipment (ticket machines, gates, elevators, bathrooms) are in operating order. They ensure supplies necessary for the operation of the garage are stocked (parking passes, signs, cones, etc.) They open and close the garage daily for business, ensure the garage is clean and secure for customers. LAZ Parking staff handles routine maintenance needs of a working garage and informs city staff of larger maintenance issues.
On December 8th, 2020, the City approved an amendment to the agreement for the management of the Monterey Street Parking Garage (Attachment 3). The amendment extended the agreement through December 31, 2024. Additionally in response to the pandemic and concerns of reduced downtown activity and parking demand, the amendment also reduced the hour of operations and annual cost not to exceed to $259,186,16. However concerns of the pandemic may have over estimated impacts to downtown parking and throughout 2021 and 2022 downtown activity and transient parking has increased. According to LAZ Parking the increased parking demand has resulted in the need for additional parking staff.
LAZ Parking agreed to provide certain services in exchange for a set amount of compensation and the City did not require any performance bonds for this agreement. LAZ Parking has been submitting monthly invoices to the City for their services, and the City has been making payments in good faith. However, in August, 2022 it was recognized that LAZ’s invoices were forecasted to exceed the contract amount, and the City began disapproving invoices that appeared to be overbilling the City. In October an invoice was submitted for the month of September which exceeded the annual cost not to exceed budget. The City cannot pay any additional compensation unless the agreement can be amended. City staff and LAZ Parking have negotiated a potential amendment for LAZ Parking to continue providing management services for the Monterey Street Garage. The draft amendment No. 2 (Attachment 1) proposes increasing the annual cost not to exceed to $355,000 annually, and increase the hours of operation. The proposed new hours of operation would keep the garage open Monday-Friday 5:30am-2:00am, and Saturday-Sunday 8:00am-2:00am. The amendment also requires that LAZ Parking provide a performance bond equal to the annual contract price for the duration of the contract.
CEQA CONSIDERATION:
Not a Project. The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).
STRATEGIC PLAN INITIATIVE:
Continuing operations of the Monterey Street Parking Garage benefits the downtown business community that contributes to the City’s economic health. This action supports the Council’s goal of “Economic Development”.
DEPARTMENTAL COORDINATION:
Public Works manages the City’s parking enterprises toward sustainability. Public Works Maintenance staff oversee the operations of the parking garage. The Finance Department provide fiscal monitoring and reporting information for the parking district.
FISCAL AND SUSTAINABILITY IMPACT:
This action authorizes an increase of up to $355,000.00 per year for the agreement with LAZ Parking California, LLC, and use of Downtown Parking District (6801) enterprise fund balance for the continued management of the Monterey Street Garage.
The Salinas Plan identified the Downtown Parking Enterprise Fund as a structural deficit within the City’s operating budget. The Salinas Plan recommended increasing parking rates to eliminate this deficit. In 2019 City Council approved a Resolution to increase downtown off-street parking rates incrementally between fiscal years 19/20-21/22. The final rates went into effect the beginning of this fiscal year. This was the first fiscal year where district revenues are currently on track to cover expenses, and the district is healthy. If approved, this action will increase the district expenses, exceeding the current revenues and will require continued subsidies from the General Fund to cover costs. The estimated impact to the General Fund is $30,000 per year.
ATTACHMENTS:
Resolution
Attachment 1: Amendment No. 2 to the Agreement for Professional Services between the City of Salinas and LAZ Parking California, LLC Attachment 2: Agreement for Professional Services between the City of Salinas and LAZ Parking California, LLC Attachment 3: Amendment No. 1 to the Agreement for Professional Services between the City of Salinas and LAZ Parking California, LLC Page | 2
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