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CITY OF VANCOUVER ADMINISTRATIVE REPORT |
Date: |
October 15, 2003 | |
Author: |
Bob Macdonald | |
Phone No.: |
604 873 7347 | |
RTS No.: |
3360 | |
CC File No.: |
5653 | |
Meeting Date: |
February 26, 2004 |
TO: |
Standing Committee on City Services and Budgets |
FROM: |
General Manager of Engineering Services |
SUBJECT: |
Bentall V Parkade - Parking Operation |
RECOMMENDATION
A. THAT pursuant to the terms of the operating agreement between Bentall and the City, the City requires the Parking Corporation of Vancouver (EasyPark) be hired for a three year term as manager of the Bentall V parkade at an annual management fee not to exceed 2.5%.
B. THAT Council reject all submissions in the City issued RFP PS020948 (Parking Operating Services Bentall 5 Parkade).
C. THAT all legal documentation be to the satisfaction of the City's Director of Legal Services and General Manager of Engineering Services.
COUNCIL POLICY
Management of the Bentall V parking facility is shared between the City and Bentall in accordance with a contract dated January 17, 1996.
Contracts with a value over $300,000 are referred to Council for approval.
PURPOSE
This report reviews a trial extension of the EasyPark operation of the Bentall V parkade.
BACKGROUND
The City has an agreement with Bentall for the provision of 400 City parking spaces in the Bentall Tower V development as part of a joint venture between Bentall, the YWCA and the City. There are now a total of 965 parking spaces in the facility and its operation is governed by an agreement between the City and the building owners effective from October 31 1994.
The parkade is to be operated and managed as a single parking facility with the parkade operated to a standard of a first class parking facility in downtown Vancouver. One important clause in the agreement allows the City to specify that its parking operator, the Parking Corporation of Vancouver (EasyPark), operate the parkade with a management cost fee ceiling. This clause was negotiated by the City for its potential benefit as part of the overall negotiation which governs the various parties' benefits and obligations, and has been discussed on a number of occasions subsequently.
In 2002 Council authorized the issuance of an RFP for the operation of the parkade as the parkade was expanding and the Tower V office was opening. Council also felt it would be an opportunity to review the competitiveness of the EasyPark operation, which had been in place since the opening of the parking facility. Advanced Parking submitted the lowest bid. Our partner Bentall reported they provide excellent service, and an award to Advanced Parking was recommended by staff to Council in a report dated April 7, 2003.
In April 2003, with the agreement of Bentall, Council reviewed the RFP and resolved:
"THAT Council extend the contract with the Parking Corporation of Vancouver (EasyPark) for a four month period with the following terms:
i) the City of Vancouver and Bentall Management Committee develop terms that reflect the needs of Bentall Tower V owners, tenants and transient parkers and that safety, security and cleanliness are top priorities;
ii) staff report back to Council in three months;
iii) if, in the opinion of staff, the Parking Corporation of Vancouver (EasyPark) has not performed to the expectations of Council, the RFP be awarded to Advanced Parking Systems.
AND FURTHER THAT staff report back on management and other aspects that have lead to this problem."
Bentall initially delayed any performance review while it considered its position and the City and Bentall finally met in June to agree to a review process. It was agreed that the review of the Bentall V parkade operations would take place over the summer and the Management Committee would set the evaluation criteria.
The Management Committee then established a detailed set of criteria for the evaluation. This involved rating the operation on a list of 14 criteria involving cleanliness, mechanical operation, public service, etc. The criteria were then combined into a rating on a scale of 1 to 5. The Committee also developed a review program, including frequent inspections of the Bentall V parkade, and the Bentall Tower I parkade operated by Advanced Parking. The City also included a review of three other 1st class triple A office complex parkades as comparables (Park Place, HSBC and Royal Centre), each of which had a different management company.
DISCUSSION
In June, the Management Committee met with EasyPark and shared the evaluation criteria and expectations of the review and parking operations. This review included all aspects of the parkade operation, and the checklist used in the evaluation is attached as Appendix A.
A mid-term review meeting was held with EasyPark in July. In this meeting concerns were raised by the Management Committee that EasyPark was not yet meeting expectations. At this stage EasyPark was just acquiring uniforms for its employees, the "meet and greet" by employees was not at an acceptable standard, and there were concerns about the quality of maintenance. The Management Committee also felt that EasyPark should be more proactive in bringing forward items which may contribute to improvements to the parkade operations.
On the performance scale of 5.0 EasyPark gradually improved over the trial, eventually achieving a rating of 3.9. This compares to an average of 3.8 for other 1st class triple A office buildings (including Bentall 1), but less than the rating of 4.6 achieved by Advanced Parking.
The final review of the operation indicates that EasyPark improved its performance to a level of 4, which was seen as a target; however, there remain significant differences between EasyPark's performance and Bentall's expectations.
City's Position
The review of the operation during the trial period indicates that, while EasyPark did not match the performance of Advanced Parking, it did provide a level of service similar to other operators of 1st class triple A office buildings in the Downtown. This summary of the review is attached as Appendix B. Also, EasyPark's performance during the review notably improved, particularly the performance of staff. EasyPark still has challenges in the area of responsiveness, staff consistency, and general maintenance. Regarding maintenance, EasyPark has submitted a detailed parkade improvement program for consideration, although this was received only at the end of the review. This recommends increased maintenance at an estimated $65,000 cost, and parkade improvements including some painting and entrance improvements. It also contains suggestions on rate changes.
Bentall's Position
Bentall continues to feel strongly that EasyPark is not providing the level of service it wishes to have at its flagship building. Bentall also claims that many of its tenants, who are also used to the quality of the Advanced Parking operation at the other Bentall parkades, share this sentiment. Furthermore, an EasyPark operation will cost Bentall more than Advanced Parking.
The City included other 1st class triple A office buildings in the review to better compare the operations. Bentall disagreed with this, although it initially felt Park Place could be used as a comparable.
City's Rights
City/Bentall agreement
Under this agreement the City has the right to require EasyPark as the operator:
"The City and Tower shall hire a manager to operate the Parkade on their behalf. The Manager shall be qualified to operate the Parkade and be experienced in operating parking garages similar to the Parkade. The terms and conditions of the management contract with the Manager shall be determined by the Management Committee. Subject to the foregoing, the City shall have the right to require that parties hire CVPC (EasyPark) as Manager at an annual management fee not to exceed 2.5% of Gross Revenue received during each year of the term of the management contract, pro-rated for any partial year, ...."
RFP
Under the RFP the City has the right to negotiate and enter into a contract with any or none of the proponents.
FINANCIAL IMPLICATIONS
The financial situation is complex, as the Class B (non voting but dividend earning) shares of EasyPark are wholly owned by the City. The attached financial analysis (Appendix C) outlines the financial implications of each of the EasyPark and Advanced Parking bids received in the RFP issued by the City for the operation of the Bentall V parkade. The costs and revenues sharing shown in this financial analysis is governed by an agreement between the City and Bentall. This evaluation shows that the City would have up to a $60,000 greater return by selecting EasyPark. This is with the assumption that EasyPark's overheads and lot supervisory costs would not be reduced if it was awarded this operation, and with EasyPark's proposed added maintenance costs. Advanced Parking's costs are lower overall.
CONCLUSION
There has been an intensive review period of the Bentall V parkade and EasyPark's operation over the past months. Bentall clearly feels that the operation should be given to Advanced Parking. It has experienced excellent service with Advanced Parking and would enjoy significant financial savings. During the review period Bentall strongly felt that EasyPark did not act responsively to address concerns raised by the Management Committee.
Although EasyPark is still behind in the quality of operations set by Advanced Parking, it is at a level with other 1st class triple A office building operations compared by the City. Through this period EasyPark has improved its operations, particularly with regard to the Management Committee's expectations of front line staff performance. It is expected that EasyPark would continue improving its operation, and in this regard it has submitted a detailed proposal for improvements to maintenance, building appearance and operations as well as other parkade issues, at additional cost. Even if this increased cost is agreed to the City is potentially $60,000 ahead by continuing the EasyPark operation.
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