TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Erick Lee, Public Works Director
Sean Roberts, Field Operations Manager
Nicky Petroff, Senior Management Analyst
SUBJECT:Title
Consideration of a Resolution Approving Amendment No. 7 to the Landscaping Services Agreement with Merchants Landscape Services Inc. for an Additional Year of Landscaping Services at a Total Annual Cost Not-to-Exceed $804,745 (Public Works Director Lee).
ADOPT RESOLUTION NO. 24-0071
Body
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RECOMMENDATION:
Staff recommends that the City Council Adopt Resolution No. 24-0071 approving Amendment No. 7 to the Agreement with Merchants Landscape Services, Inc. (Merchants) for an additional year of landscaping services at a total annual cost not-to-exceed $804,745.
FISCAL IMPLICATIONS:
Amendment No. 7 results in a total increase of $72,000 over a one-year period starting on September 1, 2024. Sufficient funds for the landscaping services under this agreement are available within the Department’s proposed budget for FY2024-2025.
BACKGROUND:
The City has historically contracted for landscape services, including shrub and ground cover maintenance, maintenance of parks and public plazas, and irrigation repair, maintenance, and monitoring. On September 1, 2018, following a competitive Request for Proposal process, the City entered into an agreement with Merchants for landscaping services. The agreement has a term of five years with two options to renew for two years each. As of August 31, 2023, one extension year has been used, and the agreement will expire on August 31, 2024 if not further extended by mutual agreement.
DISCUSSION:
The agreement with Merchants was secured before the COVID-19 pandemic at a cost of $565,644 per year. Since 2018, the Consumer Price Index (CPI) has increased by approximately 24%, while the base services of the agreement with Merchants have increased by only 16% during the same period. The agreement allows for rate adjustments once annually at the contract anniversary. However, adjustments are capped at a maximum increase of 3% per year. The current cost for base services is $655,744 per year.
In order to continue providing services in the new contract year, Merchants has requested an increase of $72,000 per year, which equates to an 11% increase over the current pricing and would result in annual costs of $727,745 for base services. If the agreement had been allowed to increase commensurate with CPI increases since 2018, the current base costs would be $707,556, and Merchants’ request would only equate to approximately a 3% increase.
In addition to the annual cost increase, Merchants has requested clarifying agreement language regarding the procurement of wood chips and infield mix. These materials are used for tot lots, the Veterans Parkway Greenbelt walking path, dog runs, and athletic fields. As the agreement is currently written, Merchants is responsible for ensuring sufficient infield mix and wood chips are procured throughout the year, subject to staff direction and inspection. This results in constraints for Merchants because there are no specified quantities in the agreement. As part of Amendment No. 7, the City agrees to accept a volume of these materials capped at 1200 cubic yards and 30 tons for wood chips and infield mix, respectively. If the City needs amounts above and beyond these thresholds, Merchants has agreed to install said materials purchased separately by the City at no additional cost.
In order to ensure continuity of services, staff recommends that the City Council Adopt Resolution No. 24-XXXX approving Amendment No. 7 to the Agreement with Merchants for an additional year of landscaping services at a total annual cost not-to-exceed $804,745. This amount includes $727,745 for base services, $20,000 for in additional costs the City previously agreed to pay to ensure non-organic pesticides are not used within the scope of this agreement, and additional contingency amount of $57,000 for unforeseen services or emergencies.
PUBLIC OUTREACH:
After analysis, staff determined that public outreach was not required for this issue.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has approved the amendment as to form.
ATTACHMENTS:
1. Resolution No. 24-0071
2. Amendment No. 7- Merchants Landscape Services, Inc.
3. Agreement and Amendment No. 1 - 6 - Merchants Landscape Services, Inc.