Loading...
02-02-1999 - Tow Services ContractDATE: February 2, 1999 TO: Dan Hobbs, City Manager FROM: Artie Fields, Assistant City Manager SUBJECT: Tow Services Contract SUMMARY: City of West Covina Memorandum - AGENDA ITEM NO. G- la DATE 2-2-99 ®PRINTED ON RECYCLED PAPER City staff has completed its review of the Tow Service RFP's and is recommending that the City Council approve franchise agreements with Blackard's Towing Inc., Budget Towing, and Haddick's Towing, Inc. It is also recommended that the City Council direct the City Manager, or his designee, to negotiate a contract with the aforementioned tow companies. The revenue generated by these franchise agreements will generate $57,000 annually for the General Fund for the next five -years. BACKGROUND: In the early 1990's, the City began to experience an increase in the demand for tow services in the southern section of town. This increase, in demand resulted in higher response times from two tow service companies working in the City. In order to combat the increase in response time, staff added a third. tow service operator and assigned a geographic portion of the City to each operator. None of the tow service companies operated under a formal contract with the City during this period. On November 16, 1998, the City .Council approved a Request for Proposals (RFP) for tow services and directed the Police Department to. call for responses. The City mailed five RFPs . and appropriately noticed the RFP to the public. As a result, fiveRFP responses were received by the December 16, 1998, deadline. All responses remained sealed until opened on January 6, 1999, by the City Clerk. A Tow Services Committee was established by assembling staff from the City Manager's Office, Police Department and Finance Department. The first order of business for the Committee included a review of all the proposals to determine if each of the tow service . operators met the requirements as stated in the RFP. Due to inconsistencies in the manner in which information was submitted, each tow service company was contacted and asked to submit additional information, which clarified their ability and willingness to meet the RFP requirements. This process allowed the Committee to replace any "implied" intentions to comply with the RFP with written documentation that each tow service company understood and agreed to each element of the RFP. The Committee proceeded with its analysis of the RFPs after receiving the requested information; from each tow service company. ANALYSIS: The process for determining which of the tow service companies to recommend included reviewing all proposals for: 1. Completeness (Did each tow service company meet the RFP stated criteria?), 2. Financial benefit to the City, and 3. Logistical appropriateness. As stated in the background section of this report, the City received completed proposals from five tow service companies.. All of the towing companies met the, minimum requirements set forth in the RFP. Due to criteria established by the City Council and set forth in. the RFP, none of the tow service companies could receive a franchise for more than one service area. This meant that City staff must recommend the selection of three tow service companies. The following process was utilized by staff to determine which three of the five tow service companies would generate the most revenue for the City: 1. Staff identified how much each tow service company was willing to pay for each service area (see chart A). 2. Staff 'identified the top revenue producing proposal in each service area. (see chart A bolded numbers). 3. Alternative. tow service configurations were then developed by using the top four revenue -generating proposals (see charts B, C, D, and E). 4. The two tow service alternatives that generated the most revenue were then identified (see Chart D [Alternative. I] and Chart E [Alternative II]). 5. In order to make a final decision, the Committee then focused on the two companies that served as a variable in the two alternatives. This process required' that "the Committee revisit the RFP criteria to determine which of the two company's best met -the requirements. The two RFP requirements utilized for this purpose stated the City will -review each RFP based upon: A. A tow service company's storage facility in relationship to the area from which the vehicles are towed. B. Proposed revenue to the City. 1. Individual Bid. 2. Total revenue when combined with Haddick's and Budget. Blackard's storage facility is located within the service area, while Walnut Valley Towing is approximately a mile away from its service area. Although Blackard's Towing had the highest individual bid of the two, Walnut Valley Towing would allow the City to obtain a greater revenue stream overall by $500. .Due to the fact that criteria B above could be argued in favor either company, the Committee identified two additional criteria to assist in making a final -recommendation: C: - Length of past service to the City. D. Is the business located in West Covina? Blackard's Towing is the preferred company as a result of items C and D listed above. Blackard's, is a West Covina business that has been doing business with the City for 53 years. A summary of this information is presented below: ( A ) Logistical proximity to Located within service area Located approximately one Service area. #1. mile away. (B 1) Individual bid $12,000 . $7,500 (B2) Total revenue $57,000 - $72,000 annually. $57,000 - 72,500 annually. generated when (Alternative 2) (Alternative 1) combined with - Haddick's and Budget. C )Length of past service 53 years Approximately three years. ( D ) Business location, I City of West Covina City of Walnut Chart A tjasura's N/A 4,000/$20,000 Blackard's* $12,000/$60,000 N/A Budget* $20,000 to $20,000 to $35,000/$145,000 $35,000/$145,000 Haddick's* $30,000/$150,000 $15,000/$75,000 Walnut Valley* N/A $ 7,500/$37,500 * Top four revenue -generating proposals. C`harr R N/A N/A $15,000 to $25,000/$100,000 $25,000/$1255000 $ 7,500/$37,500 i • - $12,000/$60,000 Haddick'sIII III I 0 1 • Chart C Chart D (Alternative I) Chart E.(Alternative Haddick's Area 41 $30,000/$150,000 Budget" Area #2 $20,000435,000/$145 000 Walnut Valley Area #3 $7,500/$37,500 TOTAL REVENUE $57,500-72,500/$332,500 "Budget Towing will pay $20,000 (year 1), $25,000 (year 2), $30,000 (year 3), $35,000 (year 4) and $35,000 (year 5). OPTIONS: Alternative I Alternative I would award franchise agreements to the top two revenue generating proposals (Haddick's Towing and Budget Towing). This would result in the' City awarding Blackard's Towing service area #1 by default. As indicated on Chart A, only three tow service companies presented bids for area #1 (Blackard's Towing, Budget Towing and Haddick's Towing). Budget Towing and Haddick's Towing are eliminated from receiving consideration in area #1, because they are recommended for areas #2 and #3 under this alternative. Alternative II Alternative II would also award franchise agreements to the top two revenue generating proposals (Haddick's Towing and Budget Towing) for service areas #1 and #2.. This would result in the City awarding Walnut Valley Towing service area #3 by default. As indicated on Chart A, only three tow service companies presented bids for area ;three (Walnut Valley Towing, Budget Towing.and Haddick's). Budget Towing and Haddick's Towing are eliminated from receiving consideration in area #3, because they are recommended for areas #1 and #2 under this alternative. The two key differences between Alternatives I and II are that: A. Blackard's Towing and Walnut Valley Towing are exchanged, and B. Alternative II will produce $500 more in annual revenue than Alternative I. FISCAL IMPACT: Approval of Alternative #1 will produce from $57,500 to $72,00 in revenue annually for the General Fund. RECOMMENDATION: It is recommended that the City Council approve alternative I, and award franchise agreements to Blackard's Towing Inc. (Area #1), Budget Towing (Area #2), and Haddick's Towing, Inc. (Area #3), and direct the City Manger, or his designee, to negotiate a contract with the aforementioned tow companies. The Tow Service Committee has prepared and agreed with the content of this report.