CITY OF SIGNAL HILL
STAFF REPORT
2175 Cherry Avenue • Signal
Hill, California 90755-3799
6/13/2023
AGENDA ITEM
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM: CARLO TOMAINO
CITY MANAGER
BY: THOMAS BEKELE
PUBLIC WORKS DIRECTOR
SUBJECT:
MAINTENANCE SERVICES AGREEMENT WITH CLEANSTREET, LLC
(CLEANSTREET) FOR CITYWIDE STREET SWEEPING
Summary:
The City Council will consider entering into a Maintenance Services Agreement with CleanStreet for citywide street sweeping services to maintain high standard of cleanliness and satisfy the California Municipal Separate Storm Sewer System (MS4) permit requirements. Following a bid process, the City received two bids which resulted in higher than expected costs due to recent legal developments with prevailing wage law. The proposed contract term is for three years with compensation not-toexceed $314,847.20 per year. The City’s Fiscal Year 2023-2024 Operating Budget includes sufficient funding to cover the cost of this service.
Recommendation:
1. Authorize the City Manager to enter into a Maintenance Services Agreement with CleanStreet to provide citywide street sweeping services, in a form approved by the City Attorney. The term of the agreement is for three years with compensation not-to-exceed $314,847.20 per year.
2. Authorize contingencies of $18,344.80 and up to a 180-day term extension pursuant to the City’s Purchasing and Contracting Guidelines, to be utilized for extra services or emergency response calls if approved by the Public Works Director.
Fiscal Impact:
The total annual cost of services to be provided by CleanStreet is a not-to-exceed amount of $314,847.20. The City’s Purchasing and Contracting Guidelines allow for an additional 10% compensation contingency. However, for this Agreement, the contingency amount is $18,344.80 (6%). The proposed budget for Fiscal year (FY) 2023-24 includes sufficient funds within the Public CITY OF SIGNAL HILL Page 1 of 6 Printed on 6/8/2023
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Works Department operating budget (Account No. 100-93-5525) for this service agreement.
Strategic Plan Objectives:
Goal No. 4: Maintain and improve the public infrastructure.
Goal No. 5: Ensure an enhanced quality of life for the residents.
Background:
The Public Works Department utilizes a contractor to provide street sweeping services citywide. The purpose of street sweeping is to clean debris from the streets to ensure free flow of water in the gutter and prevent debris and contaminants from entering the storm drain system. Regular street sweeping is a requirement of the California Regional Water Quality Control Board MS4 permit for the Los Angeles region, of which the City is a permittee. The permit requires the City to perform regular street sweeping of curbed streets on a biweekly, monthly, or yearly basis depending on the designated priority level of the street, which is a function of the volume of trash and/or debris produced. To maintain a high standard of cleanliness, the historical practice in the City has been to provide weekly street sweeping services for the City’s 115 curb miles of City Streets/Public Rights of Way, per the limits and schedule (Attachment 1).
Since 2017, the subject street sweeping services have been performed by contractor CR&R via a Contract Services Agreement with the City. On April 14, 2020, the City Council authorized the City Manager to execute Amendment No. 1 to the Contract Services Agreement with CR&R in a form approved by the City Attorney. The amendment extended the term of services for a three-year term through April 24, 2023, for a total contract cost of $419,754, in addition to annual Consumer Price Index (CPI) adjustments. The contract price for the final year of this Contract Services Agreement is $148,440.
On March 9, 2023, the City published a Notice Inviting Bids (NIB) for Citywide Street Sweeping Services to replace the expiring contract agreement with CR&R. The City posted the NIB at its public notice locations, through the City’s website, and posted the notice on PlanetBids, the City’s online bidding portal. A total of 17 prospective bidders downloaded the contract documents via PlanetBids.
On March 16, 2023, a total of four prospective bidders attended a pre-bid conference held by City staff for the purpose of reviewing contract requirements and service expectations.
Bid Results
The City received two bids by the due date of March 30, 2023. The bids received are shown in Table
1. CleanStreet, the lowest bidder, properly submitted all required items and documents prior to the bid closing date and time, including their hard copy bid bond. Staff determined CleanStreet to be the lowest responsible bidder submitting a responsive bid.
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The bids received represented a significant increase in the costs of the sweeping services. Staff determined that additional time was needed to investigate the cause of the increased costs and evaluate service alternatives before providing a recommendation to City Council. In the short term, staff engaged five vendors in an informal bid process to provide citywide street sweeping services for a two-month term within the City Manager’s purchasing authority level. This short-term arrangement provided uninterrupted street sweeping services and provided staff time to evaluate the best longterm options for the City. The City received a total of three bids by the April 19, 2023 deadline, as follows:
On April 24, 2023, the City Manager approved a short-term contract with CleanStreet to provide services at the above monthly rate through June 30, 2023, for a not-to-exceed cost of $50,000.
Analysis:
In response to the significant increase in the bids received for street sweeping services, City staff researched and discovered that recent developments in prevailing wage determinations were the primary reason for the higher cost of such services. In a letter dated October 4, 2021, the California Department of Industrial Relations (“DIR”), the State department responsible for enforcing the California Labor Code and prevailing wage law, issued a determination regarding coverage of a project involving the City of Elk Grove under California’s prevailing wage laws. The DIR determined that street sweeping maintenance services constitute public work under California prevailing wage law and is therefore subject to prevailing wage requirements.
The DIR determined that street sweeping required by the City of Elk Grove is maintenance work because it is routine and recurring work that keeps public streets and facilities in a safe and continually usable condition for public use. The DIR’s determination, based on recent guidance from the DIR and Court of Appeal and the evolution of the law on the definition of maintenance, departed from a more than 15-year-old City of Santa Clarita Street Sweeping determination that concluded that street sweeping for aesthetic or environmental reasons is not maintenance work. While the City of Elk Grove determination is non-precedential, it is persuasive authority that can be relied on by courts in determining whether and to what extent prevailing wage may apply on a project.
In 2022, State Assembly Bill (AB) 1889 proposed to expand the definition of “public works” in the California Labor Code to include street sweeping, which would have expressly subjected street sweeping to prevailing wage law. AB 1889 did not pass in the State Senate. However, the DIR’s 2021 City of Elk Grove determination remains the DIR’s interpretation that sweeping services constitute maintenance work and is thus a public work subject to the payment of prevailing wages.
In February 2023, a class action lawsuit was brought against large municipal street sweeping contractors, Contract Sweeping Services and Sweeping Corp of America, for failing to pay prevailing wages on dozens of municipal contracts throughout California. The case is currently pending in CITY OF SIGNAL HILL Page 3 of 6 Printed on 6/8/2023
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wages on dozens of municipal contracts throughout California. The case is currently pending in Santa Clara County Superior Court. The lawsuit alleges that the street sweeping work being performed falls squarely within the California prevailing wage law’s definition of “maintenance work” which requires the payment of prevailing wages. While in the early stages of litigation, staff anticipates the outcome of this case will create legal precedent regarding prevailing wages unless the California legislature acts first by reviving AB 1889 or passing a similar bill.
Contract Service Adjustment
The City’s previous Contract Services Agreement with CR&R included the City’s standard prevailing wage language which makes the contractor responsible for complying with the prevailing wage law.
The above-described recent legal developments have led to contractors being unwilling to risk noncompliance with prevailing wage law and are therefore pricing new contracts to include the increased costs associated with prevailing wage compliance. Some contractors would not bid on the NIB published on March 9, 2023, without the City indemnifying and defending them from prevailing wage law requirements and any potential claims arising from failing to pay prevailing wages. Modifying the City’s standard prevailing wage contract language by removing the contractor’s responsibility to comply with prevailing wage laws would put the responsibility and liability on the City in the event the contractor failed to pay prevailing wages, which presents considerable legal and financial risk for the City. This approach would have shielded the contractor from liability and the City would have been responsible for defending the contractor in the event of any claims of the contractor failing to pay prevailing wages. Neither City staff nor City Attorney’s office recommend this approach.
The City attempted to negotiate a contract extension with CR&R to keep costs at the same level for the next year, however, CR&R requested similar indemnification and defense provisions to those described above. City staff and the City Attorney’s office reviewed their proposed terms and found them to be unacceptable from a legal and financial risk perspective. As a result, the City did not have the option to extend the current contract for CR&R to continue performing the work at current prices.
Street Sweeping Service Alternatives
Staff considered the following three service alternatives in lieu of the proposed maintenance services contract:
1) Perform street sweeping with in-house staff. This option presents challenges due to significant costs of the equipment and the need to hire additional staff to operate and maintain the equipment. Below is an average annual cost estimate for performing street sweeping with inhouse staff and leased equipment. Procurement lead times for street sweeping equipment are currently estimated at one year from the date of placing the order. Therefore, this option would not be implemented until at least summer 2024. Staff does not recommend this option at this time due to the high cost of equipment and the need to increase staffing levels to provide this service in-house. In addition, there may be other unanticipated costs associated with providing this service in-house that are not captured below.
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2) Contracting with City of Long Beach to perform street sweeping services. Staff discussed the option with City of Long Beach staff in regards to economic feasibility and service expectations. The City of Long Beach performs street sweeping with in-house staff and possesses the proper equipment and may be able to provide these services at lower rates.
However, City of Long Beach staff communicated that they do not currently have the staff to service Signal Hill at this time, but they do possess the necessary equipment. Staff will continue to work with Long Beach to obtain a cost proposal for these services in the future. An agreement likely cannot be considered until December 2023 or early 2024. 3) Reduction of street sweeping frequency from weekly to biweekly to reduce the increased cost of services. Although biweekly sweeping would remain compliant with the City’s MS4 stormwater permit, staff does not recommend this approach as biweekly sweeping would result in a decline in both street cleanliness and resident satisfaction. In addition, there would be costs associated with changing all the city’s street sweeping signage for that reduced frequency.
In summary, staff recommends that the City continue to contract for street sweeping services despite the increase in costs associated with recent legal developments in prevailing wage requirements.
Staff recommends City Council approval of the contract with CleanStreet, LLC in the amount of $314,847.20 per year for a three-year term, and authorize contingencies of $18,344.80 and up to a 180-day term extension pursuant to the City’s Purchasing and Contracting Guidelines.
The City Attorney’s office will continue following the developments related to the class action lawsuit filed in Santa Clara County Superior Court. If the court ruling supports that prevailing wage is not required for street sweeping services, staff will this contract and rebid the work accordingly.
Reviewed:
_________________________
Sharon del Rosario
Approved:
_________________________
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Carlo Tomaino
Attachment(s):
A. Street Sweeping Schedule Map
B. Maintenance Services Agreement
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