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City Council Report

 

City Council Meeting: September 24, 2013

Agenda Item:3-J

To:†††††††††††††† Mayor and City Council

From:†††††††††† Gigi Decavalles-Hughes, Director of Finance

Subject:††††††† Maintenance Agreement - Big Blue Bus and Parking Meter Currency Counting Room Equipment

 

 

Recommended Action

Staff recommends that the City Council award sole-source blanket purchase orders to vendors whose cumulative authorized purchase amount would exceed $100,000 in fiscal year 2013-14, as follows:

a)    Money Systems Technology, a Texas-based company, for maintenance of two coin sorters/counters and conveyor belts used for currency counting operations in the amount of $7,500 per year, for a total amount of $15,000 over a two-year term, with future year funding contingent on Council budget approval; and

b)    Richardís Coin & Currency Counters, a California-based company, for maintenance of various equipment for currency counting operations in the amount of $12,000 per year, for a total amount of $24,000 over a two-year term, with future year funding contingent on Council budget approval.

 

Executive Summary

The City operates a processing center for currency collected through Big Blue Bus fare boxes and on street parking meters.The center processes approximately $14 million in coin and paper currency annually.Staff recommends sole source blanket purchase orders with Money Systems Technology in the amount of $15,000 over a two-year term, and with Richardís Coin & Currency in the amount of $24,000 over a two-year term, to provide preventive maintenance and repair services on the currency counting room equipment. ††The attached vendors exceed $100,000 for the same good or service in fiscal year 2013-14.  

 

Discussion

 

Money Systems Technology (MST) and Richardís Coin & Currency Counters have been providing installation, preventative maintenance and repair services to the City for counting room equipment since 1999.The City purchased two coin sorter/counters from MST in 2002 to process Big Blue Bus fare box currency.As the manufacturer, MST has provided maintenance for the equipment. Richardís Coin & Currency serves as the exclusive local representative for MST, providing maintenance services for its coin sorter/counters.

 

In addition to serving as the local agent and technician for MST since 1999, Richardís Coin & Currency has provided maintenance services on peripheral equipment related to the two MST coin sorter/counters, including loose coin conveyors, bag conveyors, hydraulic bag carts, coin bag scales, and a loose coin verifier.†† Over the years, the company has also custom built some equipment that it maintains, including a coin lift used for parking meter currency processing. In addition to services provided for MST equipment, Richardís Coin & Currency is an official representative of Billcon and services the three Billcon paper currency counters used in the center.

 

The agreement with MST includes two service appointments per month, and labor and parts to repair two MST coin sorters/counters.

 

The agreement with Richardís Coin & Currency includes all labor and parts pertaining to other ancillary equipment, including conveyors, lifts, and paper currency counters. The fee would include shipping and taxes for any parts needed for this equipment.Under the requested blanket purchase order (BPO), the company would provide two service appointments per month to inspect equipment performance.The company would maintain a supply of parts stored on-site at the counting room in order to make repairs promptly, including three paper currency counters and eight customized hydraulic bag carts for the Revenue Collections Counting Room.

 

Since 1999 through FY2012-13, the City has paid $290,910 to Richardís Coin & Currency, which includes the cost of parts not covered by the MST maintenance agreement, such as coin sorter plates.If Council approves staffís recommendation, at the end of the two year term, the total amount paid to Richardís Coin & Currency since 1999 will be $314,910.

Since 1999 through FY2012-13, the City has paid $173,321 to MST for maintenance services.Section 2.24.100(a) of the Santa Monica Municipal Code (SMMC) requires contracts over $100,000 to be approved by Council.If Council approves staffís recommendation, at the end of the two year term, the total amount paid to MST since 1999 will be $188,321.

 

These agreements were not brought to the Council previously due to a difference in prior interpretation of the Municipal Code regarding the $100,000 limit for Council approval of vendor goods and services. Previous interpretation of the Municipal Code provisions in section 2.24.090 related to purchasing determined that the limit for informal purchasing (not requiring Council approval) was based on the amount approved for each vendor during a fiscal year. More recent interpretation of the Code, facilitating a more transparent purchasing process, determines that vendor agreements exceeding $100,000 in cumulative purchases over multiple fiscal years are subject to Council approval.

 

Vendor Selection

In 1999, the City purchased MST coin counting equipment to process Big Blue Bus fare box currency and has purchased MST maintenance for its equipment every year since.On March 21, 2013, the City received a quote from MST to perform routine equipment maintenance for the new budget cycle.MST is a well-established manufacturer and supplier of coin sorter/counters, and the City has been utilizing MST equipment for more than 10 years.This sole source is necessary in order to maintain the MST equipment.

 

In 1999, as part of its maintenance agreement with MST, Richardís Coin & Currency served as the exclusive agent for MST and has provided other counting room equipment, parts, and maintenance.On July 17, 2013, the City received a quote for Richardís Coin & Currency to provide maintenance services for the new budget cycle.A sole source process is necessary for Richardís Coin & Currency, as the exclusive representative for MST, to service the proprietary equipment of MST, and the equipment built by Richardís Coin & Currency.Most of the equipment included in the maintenance agreements is integrated; having one source for servicing the equipment maintains greater compatibility and continuity.The services provided by both companies are necessary to enable the counting room to operate smoothly and continuously with minimal downtime.

 

Financial Impacts & Budget Actions

The blanket purchase order to be awarded to Money Systems Technology, Inc. is for an amount not to exceed $15,000. Funds in the amount of $7,500 are included in the FY 2013-14 adopted budget at account 01224.533120. Funds in the amount of $7,500 are included in the FY 2014-15 approved budget at account 01224.533120. Second year funding is contingent on Council budget approval.

 

The blanket purchase order to be awarded to Richard's Coin & Currency is for an amount not to exceed $24,000. Funds are available in the FY 2013-14 Capital Improvement Program budget in account C410113.589000 - Computer Enhancements.

 

Prepared by: Salvador M. Valles, Business & Revenue Operations Manager

 

Approved:

 

Forwarded to Council:

 

 

 

 

 

 

Gigi Decavalles

Director of Finance

 

 

Rod Gould

City Manager