lq, BOARD OF AIRPORT COMMISSIONERS / REPORT TO THE 'Los Angeles World Airports .._
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1 Date 1, I NIT RW JH 11:41 'Los Angeles World Airports REPORT TO THE BOARD OF AIRPORT COMMISSIONERS / ` ,4"k( /,,---if r ---71, Approved S' irlene Sue, Chief anagement Analyst :.',...".._ Reviewed by: Keith Wilschetz, Deputy Executive Director 'I Meeting Date: CAO Review: Reviewed for i 11/2/2017 lq, Completed Pending N/A Approval Status f_31 Desor71 ( _.,-- tiva Ad Executive Officer Finance 110/18/20171 MY N 7 NA 1 CEQA 110/13/ MY L ] N 1 Procurement 110/13/20171 MY ON Cond 1 i Guest Experience 110/18/20171 NY ON BY SUBJECT: First Amendment to ABM Parking Services, Inc. Agreement for Remote Employee Parking Operation and Management at Los Angeles International Airport Amend ABM Parking Services, Inc. Agreement (DA-4891) to: (1) adjust the financial terms to provide additional employee shuttle routes and parking lot management of LAX Employee Parking Lot E and continue operation of the overall LAX Employee Parking Lot program, and (2) increase contract authority by $21.4 million, for a total amount not-to-exceed $74.9 million over the seven-year term. RECOMMENDATIONS: Management RECOMMENDS that the Board of Airport Commissioners: 1. ADOPT the Staff Report. 2. DETERMINE that this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Article II, Section 2.f of the Los Angeles City CEQA Guidelines. 3. FIND that the work can be performed more economically or feasibly by an independent contractor than by City employees. 4. APPROVE the First Amendment to DA-4891 with ABM Parking Services, Inc. to adjust the financial terms of the agreement for additional transportation service and parking lot management of LAX Employee Parking Lot E and the continued operation of the overall LAX Employee Parking Lot program. Page 1 ABM First Arnendment.docx
2 5. APPROVE the monthly car parking rate of $55 per space for Employee Parking Lot E, effective January 1, APPROVE an increase in contract authority by $21.4 million, for a total amount not-toexceed $74.9 million over the seven-year term of the Agreement. 7. AUTHORIZE the appropriation of funds for these additional services in the amount of $1.6 million. 8. AUTHORIZE the Chief Executive Officer to execute the First Amendment to DA-4891 with ABM Parking Services, Inc. upon approval as to form by the City Attorney. DISCUSSION: 1. Purpose Increase ABM Parking Services, Inc. (ABM) scope of services to provide transportation services and management for LAX Employee Lot E, and continue operation of the overall LAX Employee Parking Lot program. 2. Prior Related Actions February 19, Resolution No The Board set the monthly parking rates in various surface parking lots at LAX at $55 per car parking space. March 18, Resolution No , DA-4891 The Board awarded a five-year agreement to ABM, DA-4891 (the Agreement') with two, one year extension options, commencing on July 16, 2014, to operate transportation systems and manage employee parking lots at Los Angeles International Airport (LAX) that will: (1) provide transportation and parking management services for the employee lots located at LAX; (2) design, install and maintain a new turn-key parking Access Control System (ACS) at LAX's remote employee parking lots; and (3) provide transportation between Metro's light rail station and the Central Terminal Area (CTA). The initial contract expenditure authority was $53.5 million for the entire term, including the two option years. 3. Current Action Currently LAX has three remote employee parking lots (Lot East, Lot West and Lot South), with a combined total of 5,349 spaces, located within the block of Jenny and Westchester Avenue/W. 96th Street (Attachment 1). These lots are operating at full capacity with an extensive waiting list. With a utilization rate of 2.7 vehicles per space, per day, more than 16,000 monthly employee parking permits are issued for these lots to airlines, government (e.g. TSA), ground handlers, and concessionaire employees. Impacts of Landside Access Modernization Plan (LAMP) Page 2 ABM First Amendment.docx
3 While employee parking demands increase, LAWA's LAMP construction of the Intermodal Transportation Facility-West (ITF-West) and Automated People Mover (APM) will require employee Lot South to be relocated by early This will reduce the employee parking capacity by approximately 590 spaces, displacing approximately 1,600 employee parkers. As part of LAWA's overall parking strategy to address the employee parking needs, LAWA (through the LAWA Utilities and LAMP Enabling Projects [LULEP] program) will re-purpose the defunct remote employee parking lot located at Aviation Blvd. and 111th Street ("Lot E"). Lot E will undergo a major facelift as part of LAMP's enabling projects. It will feature new parking stalls, improved lighting, reinforced/resurfaced roads, more secured fencing, and a new access control system. Construction is scheduled to be completed and the lot ready for occupancy in early A total of 1,700 new parking spaces will be made available, which can potentially accommodate approximately 4,000 employees; allowing for an increase of up to 2,400 new monthly employee parkers. LAX's employee parking needs will be further addressed within the development of the various LAMP components. Re-opening of Lot E requires management of the parking lot, operation of shuttle buses between Lot E and the CTA, monitoring and maintenance of the lot's access control system, security, and cleaning services. These requirements can be met from a cost efficiency standpoint by using the synergies that LAWA has with the current contract with ABM. The additional services for Lot E is estimated at $2 million for the initial year of implementation (CY ), for a total cost of $13.1 million for the remaining term of the contract, including the two option years. Rapid and Unanticipated Growth in Demand As LAX experiences unprecedented growth in passengers and aircraft activity, this robust airline growth brings the associated need for more agents, ground handlers, concession workers, etc., which has increased employee parking demands beyond projections and capacity. Currently, transportation services run from Lot East and Lot West, both routes stopping at Lot South. Transportation services are also provided to and from the CTA and the Metro Green Line station, running in tandem with Metro Green Line schedule. The travel time from the Lots to the CTA averages minutes in non-peak time and during peak time upwards of 60 minutes from parking to being dropped off at the terminal of choice. At the commencement of the contract, the shuttles were scheduled to maintain 7-10 minute headways; the time between buses. In the past three years the following circumstances have unexpectedly increased the parking and busing demands: In 2014 and 2015, LAX passenger activity and aircraft movements grew an average of 6.0%; growth the prior four years averaged less than 4%. In 2016, passenger growth was nearly 8% and aircraft movements increased by 9%. Since 2014, airlines and ground handling companies have added more than 330 additional monthly parkers. Page 3 ABM First Amendment. docx
4 April 2016, the Transportation Security Administration began providing a full parking subsidy to its employees, which resulted in an unanticipated spike in LAX employee parking demand of nearly 1,000 additional parkers per month. May 2016, LAWA agreements were executed for the new off-airport rental car depot on Century Blvd. Customers using the depot must use the Green Line shuttle. Since that time the number of customers using the Green Line shuttle to the off-airport rental car depot has continued to increase, with their luggage needs further reducing bus capacity. Also, as employee parking has become increasingly restricted, employees have sought other parking locations such as surrounding neighborhoods and ways to get to work via the CTA. As a result, neighborhood concerns and complaints have surfaced. Ridership on the Green Line shuttle has also been impacted, continuing to significantly increase demand. Additional transportation services are required to add capacity to the route. Additional parking service hours are also required to conduct validations to ensure the shuttle riders are legitimate Green Line patrons and prevent employees from parking in residential neighborhoods. July 2016, LAWA issued 400 temporary monthly passes to employees for public Lot C and Skyview to accommodate demand. Both Lot C and the Skyview Lot are temporary locations that will be eliminated with commencement of the LAMP construction, expected in early August 2016, LAWA implemented a policy that restricts parking permit sales to LAXbased/domiciled employees only. Non-domiciled employees have to obtain alternate parking accommodations; LAWA offered options of public parking at Skyview Center and Lot F. This policy affected approximately 400 parkers. Parking permits were quickly purchased by airlines and LAX-based employees. November 2016, the capacity of employee Lots East, West and South was reached. LAWA continued to sell 200 temporary monthly passes for Lot C and established an employee parking wait list. The increase in employee parking permit sales for the remote lots is shown below: Year Permits Sales Increase % Increase Capacity CY , ,200 CY ,560 10, % 193,200 CY ,067 4, % 193,200 The employee parking wait list now stands at approximately 500 and expands upwards of 1,200 during summer and holiday periods. Under existing conditions, due to increased numbers of employee parkers, increased traffic levels, construction activity in and around the airport, and the service provided to the remote car rental depot, additional transportation services have been required to maintain reasonable headways. Staff is constantly monitoring the routes and ridership demands, making adjustments where possible. Thus far, 14 separate authorizations have been made to adjust parking service and transportation hours; five specifically for the Green Line route. Even with the conservative additions, shuttle headways have increased, more frequently Page 4 ABM First Amendment. docx
5 reaching between minutes. As a result, employee complaints have increased. These additional transportation service hours added over $600,000 annually in expenditures during the first three years of the contract. From July 2014 thru August 2017, LAWA expended about $25 million of the approved $53.5 million for the seven-year contract term; nearly 47% of the total authorized amount was spent. In the original contract award, expenditures were projected to decrease after the completed implementation of a new access control system (ACS). The new ACS would allow permits to be renewed and parking payments made online, thereby reducing parking services expenses for office staff and security services. The ACS was brought online in February With the ACS now in full operation, reductions in parking services have subsequently been realized; however, the concurrent required increases in transportation service hours have negated and surpassed the projected savings. As a result of the unanticipated increases in employee demand and increased transportation spending to sustain existing employee parking operations, the contract requires approximately $8.3 million in additional funding through Option Year 2. Combined Impacts Attachment 2 shows original projected expenditures, actual, and revised projected expenditures for each contract year, and revenues. The total amount required for continued operation of the existing Employee Lot Program and new Lot E operation is $21.4 million for the remaining term of the Agreement and option years. Action Requested As provided for under the contract with ABM, for economic impacts from significant additions of a new shuttle route, parking facility and transportation service hours, staff requests approval of a First Amendment to Agreement DA-4891 to: (1) adjust the financial terms due to the increase in ABM's scope of services, and (2) increase contract authority by $21.4 million, for a total amount not-to-exceed $74.9 million over the seven-year term. In addition, staff requests that the Board authorize an appropriation of funds in the amount of $1.6 million to cover the increased expenses in Fiscal Year Staff also requests the Board establish the monthly vehicle parking rate of $55 per space for Employee Parking Lot E, effective January 1, This is the same rate currently being charged at other surface employee parking lots at LAX. In conjunction with the Employee Lot South relocation, staff further requests that the Board maintain the Employee Lot South prevailing monthly rate of $55 per space. Fiscal Impact In FY 2017, LAWA generated $10,870,709 in parking revenue after tax from the Employee Parking Lot Program. The Employee Lot Parking Program expects to generate approximately $80.5 million in parking revenues (after parking occupancy taxes) over the seven-year term of the Agreement or approximately, $11.5 million per year. Of this amount, LAWA will generate approximately $2.64 million annually (approx. 4,000 parkers x $55 x 12 mos.) for Lot E. Page 5 ABM First Amendment. docx
6 This action will result in an additional expenditure not-to-exceed $21.4 million, which covers costs to maintain the Employee Lot operations and funds required to operate the 'Parking Facilities' described in the contract for the remaining term, including the two option years (from CY2018 through CY2021). Bus maintenance and fuel costs add approximately $3.05 million to annual operational expenses. Operational costs exceed revenue by approximately $2.2 million annually; a deficit that will grow to approximately $15.7 million over the sevenyear term of the Agreement. Given the increasing costs of operating the employee parking facilities and new investments in additional facilities and equipment, staff will return to the Board for approval to adjust the parking rates in the coming year. The requested appropriation of funds will increase the total FY LAWA Operating Budget by the amount requested. The costs related to this contract will be recovered partially through parking fees. 4. Alternatives Considered Alternate Entity to Operate Lot E An alternative was to lease the property and have the lessee manage Lot E and provide the transportation shuttle services to and from the CTA. This option was considered but operational experience, the proposal for rent credits, and high cost projections determined it was not economically sensible for LAWA. Alternate Entity to Operate Lot E Shuttle Services An alternative for this project was to bifurcate services within parking Lot E; wherein, an alternate entity would operate the busing program and LAWA would manage the parking lot. LAWA actually received an initial proposal from the lessee for this alternative. Under this alternative, LAWA would provide a rent credit to the lessee to operate its own busing program. Based on the proposal received, LAWA could have the services performed (by ABM) for $1 million less annually. APPROPRIATIONS: Funds for this Amendment in the amount of $1.6 million will be appropriated and allocated from the LAX Revenue Fund to the FY LAWA Operating Budget in LAX Cost Center Landside Management and Airport Permit Services, Commitment Item Contractual Services. Funding for subsequent Fiscal Years will be requested as part of the annual budget process. STANDARD PROVISIONS: 1. This item, as a continuing administrative, maintenance and personnel-related activity, is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Article II, Section 2.f. of the Los Angeles City CEQA Guidelines. 2. This agreement will be approved as to form by the City Attorney. Page 6 ABM First Amendment.docx
7 3. Actions taken on this item by the Board of Airport Commissioners will become final pursuant to the provisions of Los Angeles City Charter Section ABM Parking Services will comply with the provisions of the Living Wage/Service Contractor Worker Retention Ordinances. 5. Procurement Services reviewed this action (File No. 6225) and established a goal of 10% Airport Concessions Disadvantaged Business Enterprise (ACDBE). ABM Parking Services proposed 11.38% ACDBE participation and has achieved 13.88% to date. 6. ABM Parking Services will comply with the provisions of the Affirmative Action Program. 7. ABM Parking Services has been assigned Business Tax Registration Certificate No ABM Parking Services will comply with the provisions of the Child Support Obligations Ordinance. 9. ABM Parking Services has approved insurance documents, in the terms and amounts required, on file with the Los Angeles World Airports. 10. Pursuant to Charter Section 1022, staff determined the work specified on the proposed contract can be performed more feasibly or economically by an Independent Contractor than by City employees. 11. ABM Parking Services has submitted the Contractor Responsibility Program Questionnaire and Pledge of Compliance and will comply with the provisions of the Contractor Responsibility Program. 12. ABM Parking Services must be determined by Public Works, Office of Contract Compliance, to be in compliance with the provisions of the Equal Benefits Ordinance prior to execution of the amendment. 13. ABM Parking Services will be required to comply with the provisions of the First Source Hiring Program for all non-trade Airport jobs. 14. ABM Parking Services has submitted the Bidder Contributions CEC Form 55 and will comply with its provisions. Attachment 1: LAX Employee Parking Lots Attachment 2: Approved Contract Authority vs. Annual Expenses Page 7 ABM First Amendment.docx
8 Attachment 1 - LAX Employee Parking Lots IiimalmaLIVIanchester north 4\60' \9* Employee Lot West Employee Lot East Lincoln Arbor Vitae Co- a) Century Blvd. 4/11M/IMAINfit Employee Lot South Lot E Parking Employees / RVs migaw. Imperial Highway 105 Century Frwy. 111th St. Bus Stop Imperial Highway
9 Attachment 2 ABM Parking Services, Inc. Approved Contract Authority vs. Annual Expenses, by Contract Year (DA-4891) Original fact Expediture Actual Contract Year (CY) Projections Expenditures Difference (+/-) Comments Initial authority, per month: 12,219 transportation service hours, (- 407 hrs/day) 4,102 parking service hours, (-135 hrs/day) 487 cleaning service hours (-16 hrs/day) Parking Revenues after Tax (Fiscal Year) CY $ 7,043,900 $ 7,704,616 $ July 25, 2014-October 31, 2014: Add! Parking Services Not to Exceed (NTE) hours 54 hrs/month for in-office permit sales July 16, 2014-September 30, 2014: Add'I Parking Services of 128 hours/month for TAP validations at the Green Line Station Oct, 2014-May 31, 2015: Add] Transportation hours NTE 417 hrs/day due to increased ridership demands 274 hours to support services impacted by construction projects (e.g. Metro Century Bridge (660,716), Project) $ 10,660,750 CY $ 7,792,077 $ 8,405,845 $ March 1, 2015-June 30, 2015 Add] Transportation hours of 4 hr/day for TAP June 1, 2015: Add'I Transportation hours of 50 hrs/day for Green Line September 15, 2015-March 31, 2016: (613,768). Add! Parking Service of 8 hrs/week for TAP. $ 12,629,093 CY $ 8,126,889 $ 8,824,539 $ January 1, 2016: Parking Services NTE 135 hrs/day, Transportation hours NTE 451 hrs/day and Cleaning Service hours NTE 16 hrs/day. October 2016: Additional Cleaning hours 3 hour/month. July 25, 2016-September 5, 2016: Transportation hours NTE 476 hrs/day. Dec 1, 2016, Parking Service hours reduced to 64 hrs/day. Transportation hours increased (697,650). from 451 hrs/day to NTE 466 hrs/day. $ 10,870,709 Subtotal to Date $ 22,962,866 $ 24,935,000 $ (1,972,134) $ 34,160,552 CY $ 7,408,179 $ 8,100,000 $ (691,821 ), Jun 19, 2017 Parking Service hours increased to hrs/day for Green Line supervision. Transportation hours increased avg 466 hrs/day to hrs/day peak hours, hrs/day non-peak hours. Aug 3, 2017: 48 hrs for daily guard service for Lot East construction $ 11,200,709 CY $ 7,668,872 $ 9,246,000 $ (1,577,128). Original projections anticipated savings from online payment system and reduction of Parking $ 11,530,709 CY (Option Yr. 1) $ 7,939,279 $ 9,600,000 $ (1,660,721). Services hours. Conversely, have had to increase Transportation hours due to impacts of $ 11,728,709 CY (Option Yr. 2) $ 7,520,804 $ 9,919,203 $ (2,398,399) construction (LAMP) and increased traffic levels in CTA. $ 11,926,709 Total $ 53,500,000 $ 61,800,203 $ (8,300,203) $ 80,547,388 *Projected Additional Expenditures for Lot E: Projected Contract Year (CY) Expenses (in $ millions) CY $ 2.00 CY $ 3.60 CY (Option Yr. 1) $ 3.70 CY (Option Yr. 2) $ 3.80 Total Lot E Expenses: $13.10 Consolidated Shortfall w/lot E GRAY - Projected amounts "NOTE: Projected expenses include contract-required annual adjustments for Mgm't Fee (2%) and parking staff, transportation and cleaning hourly billable rates (4%). Note: Separate contract (DA-5075) provides for bus maintenance and fueling; adding expenditures of approximately $3.05M per year. 10/23/2017
v Deborah Flint - Chief ecutive e, ficer
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