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APPROVE MOTION TO AUTHORIZE A CONTRACT EXTENSION FOR THE STREETSCAPE LANDSCAPE MAINTENANCE PROJECT
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RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Approve findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process.
2. Authorize the City Manager to execute a three-year extension to the Service Contract with Al Fresco Landscaping, Inc. of Hollister, CA, in the amount of $7,234,026.95, for a new total not to exceed amount of $17,444,364.13 for the Streetscape Landscape Maintenance, Project No. OM-19-010.
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.
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Summary
On February 5, 2019, by Motion No. 2019-02-05-1118, Council awarded a three-year Service Contract with the option of two one-year extensions in the amount of $5,739,375 to Al Fresco Landscaping, Inc. of Hollister, CA, for the Streetscape Landscape Maintenance, Project No. OM-19-010.
Al Fresco Landscaping, Inc.’s second and final extension is set to expire on June 30, 2024. In preparing to bid out the new Streetscape Landscape Maintenance contract, staff found significant cost increases throughout the landscaping industry. Staff found that a three-year extension with Al Fresco Landscaping, Inc. could result in savings estimated between $1,300,000 to $1,500,000 for the City. It is not in the best interest of the City to solicit bids for a new Streetscape Landscape Maintenance contract.
Staff recommends approval of a three-year extension to the Service Contract with Al Fresco Landscaping, Inc. of Hollister, CA, in the amount of $7,234,026.95, with the first two-year extensions in the amount of $2,333,557.08 and a third-year extension in the amount of $2,566,912.79, for a new total not to exceed the amount of $17,444,364.13 (Attachment A). The Service Contract with Al Fresco Landscaping, Inc. for Streetscape Landscape Maintenance, Project No. OM-19-010, would expire on June 30, 2027.
DISCUSSION
Background
The City contracts for landscape maintenance and weed control services along streets, public open spaces, and City facilities throughout the City of Stockton. The City utilizes a multi-year Service Contract to maintain streetscape landscaping. This includes all arterial road tree wells, median landscaping, back-up wall landscaping, public building landscaping (including PD Main, Teen Center, City Hall, Civic Center, and all Libraries), six public parking lots, and undeveloped public rights-of-way. All non-park landscaping within the Stockton Consolidated Landscape Maintenance Assessment District No. 96-2 is also maintained by the same contract. Contracted maintenance services primarily include litter and leaf collection, shrubs, ground cover, tree pruning, irrigation and vandalism repairs, pump maintenance, and weed removal and control.
On February 5, 2019, by Motion No. 2019-02-05-1118, Council awarded a three-year Service Contract in the amount of $5,739,375 to Al Fresco Landscaping Inc. of Hollister, CA, for the Streetscape Landscape Maintenance, Project No. OM-19-010. The Service Contract had an initial expiration date of June 30, 2022, with two optional one-year extensions.
On May 5, 2022, the City Manager approved Extension No. 1 to the Service Contract in the amount of $1,967,500.36 to continue streetscape landscape maintenance services through June 30, 2023. On June 8, 2023, the City Manager approved Extension No. 2 to the Service Contract in the amount of $2,047,011.12 to continue streetscape landscape maintenance services through June 30, 2024.
Present Situation
The City is in its second and final year extension of the current Service Contract with Al Fresco Landscaping, Inc. for Streetscape Landscaping Services. In December 2023, City staff began preparing bid documents for Streetscape Services, at the same time staff was preparing the Parks Maintenance staff report for Council approval. Staff recognized there was a very low bidder response for the park’s maintenance contract; only two bidders responded. Additionally, staff realized the bids received for the Parks Maintenance contract were 77 percent higher than the current contract. Respondents noted increased costs due to minimum wage, fuel, and material costs. Staff consulted the City Attorney’s Office on the ability to negotiate a favorable contract extension based on the potential savings to the City. The City Attorney’s Office confirmed the contract could be extended if Council made appropriate findings pursuant to Stockton Municipal Code (SMC) section 3.68.070, such as finding that the results of the extension would result in more favorable terms than bidding out the contract. The extension will also revise the original specifications for the contract allowing the contract to extend more than five years. Al Fresco Landscaping, Inc. confirmed their interest in the extension, but indicated that they would like a price increase over the 2019 contract rates based on the recent San Francisco-Oakland-San Jose All Urban Consumer Price Index (CPI) increase.
Al Fresco Landscaping, Inc. and the City negotiated a 10.1 percent increase for the first two years of the extension. The 10.1 percent increase was based on the combined CPI increases for the two previous calendar years. Al Fresco Landscaping, Inc. and the City negotiated another increase based on CPI for the third year of the extension. The increase for the third year shall be equal to the increase for the CPI from January 1, 2025, to December 31, 2025.
In evaluating the merits of an extension with Al Fresco staff used the two proposals from the Parks Maintenance contract to estimate a minimum 35% increase in price for the Streetscape contract, should it be rebid. An extension with Al Fresco with a 10.1% increase would save the City between $1,300,000 to $1,500,000 over the 3 years of the extension versus a potential 35% increase if the contract was rebid.
Staff recommends Council approve a motion authorizing the City Manager to execute a three-year extension to the Service Contract with Al Fresco Landscaping, Inc. of Hollister, CA, in the amount of $7,234,026.95, for a new total not to exceed amount of $17,444,364.13 with an expiration date of June 30, 2027 (Attachment A).
Findings
Pursuant to SMC section 3.68.070, Council may approve findings which support an exception to the competitive bidding process. These findings include:
1. The City does not have staffing available to perform streetscape landscape maintenance service needs.
2. The City must continue maintenance of streetscape landscaping under their jurisdiction.
3. The City researched similar-sized local jurisdictions that received limited bid responses and high bids for goods and services for similar projects.
4. Solicitations for a new contract would result in a significant cost increase over the current contract.
5. Extending the contract with the current vendor will result in significant savings for the City which is in the City’s best interest.
6. On February 5, 2019, by Motion No. 2019-02-05-1118, Council awarded the original contract to Al Fresco Landscaping, Inc. that followed the bid procedures of SMC 3.68.
FINANCIAL SUMMARY
There is sufficient funding budgeted in the Public Works Park Maintenance General Fund, Landscape Maintenance District Operating Budgets, and the Community Services’ Departmental Maintenance Funds to award the three-year extension to the Service Contract with Al Fresco Landscaping, Inc. in the amount of $7,234,026.95 for a new total not to exceed the amount of $17,444,364.13 for the Streetscape Landscape Maintenance, Project No. OM-19-010.
There is an impact to the City’s General Fund as a result of taking the recommended action.
Attachment A - Standard Agreement Amendment No. 3