City Council
Report
City Council Meeting: January 12, 2021
Agenda Item: 3.E
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To: Mayor and City Council
From: Edward F King, Director, Parking Operations (BBB) Subject: Approval of First Modification of Contractual Services Agreement with SKIDATA, Inc. for Parking Related Equipment
Recommended Action
Staff recommends that City Council:
1. Authorize the City Manager to negotiate and execute a first modification to agreement #10413 (CCS) in the amount of $1.8 million with SKIDATA, Inc. for the Parking Access and Revenue Control System (“PARCS”) ongoing system maintenance, software services, extended warranty, and miscellaneous spare parts in various Citywide parking facilities. The recommended modification is made as an exception to the competitive process pursuant to SMMC Section
2.24.250 (g) to ensure continuity of operations and revenue collection processes, and would extend the current agreement for up to two years for a new total not to exceed $6.5 million over a nine-year period, with future year funding contingent on Council budget approval.
Summary
The City contracts with SKIDATA, Inc. for a Parking Access and Revenue Control System (“PARCS”). The PARCS is used to facilitate controlled access and point-ofpayment within the parking structures. Considering the impact of the COVID-19 pandemic on City services, staff recommends extending the agreement for an additional two years to provide continued equipment warranty and system maintenance, upgrade the existing parking system to the latest version of the SKIDATA software necessary to ensure ongoing compliance with the Payment Card Industry (“PCI”) transaction encryption and data security requirements, and introduce the option of contactless payment for customers.
The City historically generates approximately $16.7 million in parking revenues annually in parking facilities with SKIDATA equipment. The recommended extension of the agreement would cover all equipment and service enhancements, as well as align the 2 of 6
modified contract term with the anticipated November 2025 end of useful life of the PARCS equipment. The extension of the agreement is allowed as an exception to the bidding process pursuant to SMMC Section 2.24.250 (g).
Discussion
On January 10, 2017, Council authorized the City Manager to negotiate and execute an agreement #10413 (CCS) with Sentry Control Systems, Inc. for the purchase, refurbishment, and installation of the Parking Access and Revenue Control System (PARCS) equipment, five years of system maintenance and warranty, with an option to extend the agreement for an additional two years for a total amount not to exceed $4.7 million over a seven-year period. Sentry Control Systems, Inc. was later acquired by SKIDATA, Inc., and in November 2019, the City entered into an assignment and assumption agreement with SKIDATA that memorialized all terms and conditions set forth in the original agreement #10413 (CCS).
The recommended modification to the agreement with SKIDATA will provide the following benefits outlined in the four sections below – A) Data Security, B) Customer Safety, C) Operational Efficiencies, and D) Asset Protection.
A. Data Security
The contract modification includes an upgrade to the existing Windows operating system from Windows 7 to Windows 10 (as recommended by the City’s Information Services Department for greater cyber security and support) and upgrade the SKIDATA software platform to the most recent version. Upgrading the existing SKIDATA software to the latest version is necessary to maintain compliance with the Payment Card Industry (PCI) transaction encryption and data security and provides a guaranteed path to future system upgrades throughout the life of the agreement.
B. Customer Safety
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In early 2021, SKIDATA will introduce
enhanced contactless customer payment
options in addition to the existing payment
options (coin, cash, debit and credit card) to
improve customer safety and reduce the need
for physical interactions with the City’s parking
equipment. Currently, customers entering a
City parking garage make contact with the
surface of the ticketing kiosk by touching a
green button which has been touched by
other customers. Instead, touchless solution
parking sensors generate a parking ticket
when the customer pulls into the entry lane
and waives their hand in front of the sensor.
Also, upon exit, the contactless features have the ability to accept Near Field Communication (“NFC”) payments (e.g., Apple Pay, Google Wallet, and credit card tap), and Mobile Pay options (i.e. allows customers to conveniently pay for parking ticket online from their smartphone via a mobile pay QR code). These contactless payment options would provide safer payment options for the millions of customers who utilize the City’s Downtown parking system on an annual basis. Please see Attachment A for details about these contactless payment solutions now widely used in adjacent jurisdictions and private parking facilities.
C. Operational Efficiencies
The upgraded SKIDATA software platform will provide enhanced system functionality with user dashboards that facilitate improved productivity and operations management, higher system reliability, and enhanced reporting capabilities that facilitate compliance with audit recommendations made by Moss Adams, the City’s internal auditor, related to monthly parking permit keycard reconciliation, controls, and customer account management.
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The SKIDATA software platform will also provide a 24-hour, web-based parking validation management portal that allows Downtown businesses to purchase online parking validation credits from the City in advance. Downtown businesses can, in turn, provide online parking validation credits to their customers who utilize the City’s parking structures as a reward for goods and services purchased in the Downtown shopping area. Presently, this type of transaction requires City staff to mail out the paper validations to the merchant, or an office visit once COVID-19 restrictions are eased.
D. Asset Protection
The SMMC regulation 2.24.250 (g) allows for procuring services as an exception to the competitive process if it is determined that the time necessary to undergo a traditional solicitation process would substantially disrupt City operations or result in substantial economic loss to the City due to circumstances outside of the City’s control. This exception applies here as, considering the COVID-19 pandemic, the time necessary for a traditional solicitation process would substantially disrupt the City’s parking operations. Extending this agreement for an additional two years would avoid substantial interference with a required City operation that generates approximately $16.7 million in parking revenue annually by allowing the City to maintain existing operations and revenue collection systems while the COVID-19 related economic disruptions normalize over the next few years. Moreover, the proposed agreement extension with SKIDATA would provide safer and more efficient revenue collection processes, thus ensuring the protection of the City’s valuable parking revenue streams.
Executing this amendment at this time provides an additional measure of surety that annual General Fund parking revenues will continue to flow as the PARCS equipment will be properly maintained. The premium extended equipment warranty and services package will also include expedited on-demand service response times, more frequent preventative maintenance, increased spare parts coverage for non-vandalized parts, and increased in-person and virtual training options for City and parking operator staff.
Past Council Actions
Meeting Date Description
01/10/2017 Attachment B – Original contract award to Sentry Control 5 of 6
Systems, Inc.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the General Fund to increase the amount of the SKIDATA, Inc. agreement for the parking access and revenue control systems.
Contract/Agreement/Purchase Order Modification Request
Agreement #
Current Authorized
Amount
FY 2020-21 Budget
Modified Request
Amount
Dept/CIP Account # Total Revised
Contract Amount
10413 $4.7 million $0.6 million 01600004.550010 $6,497,000 The City has spent approximately $3.5 million, or 74% of the total contract amount through November 2020. Staff anticipates the City will spend approximately $0.6 million annually from December 1, 2020 to November 30, 2025 for ongoing system maintenance, warranty, mobile payment solutions and spare parts, for a total amount not to exceed $6.5 million over a nine-year period. Extending the agreement through November 2025 would also align the contract terms with the anticipated end of end of useful life of the equipment.
Funds for the annual costs of the agreement are included in the FY 2020-21 Big Blue Bus Transit Services Department budget. Future year funding is contingent on Council budget approval.
Prepared By: Michael Towler, Principal Administrative Analyst Approved Forwarded to Council
Attachments:
A. SKIDATA Touchless Technology Info Sheet
B. Original Award to Sentry Control Systems, Inc. (2017-01-10) - Staff Report 6 of 6
C. Oaks Initiative Disclosure Form - Skidata