REPORT TO COUNCIL
SUBJECT
Title
Action on an Agreement with Data Ticket, Inc. for Citation Management with an Option to Expand Services to Include Permit Processing
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The Police Department oversees the City’s parking citation program. The program is a source of City revenue that has netted $1,439,220 over the past six fiscal years, as shown below. The COVID-19 pandemic negatively impacted revenues in Fiscal Years 2019/20 and 2020/21. However, the Police Department expects revenues to return to pre-COVID-19 levels with increased parking demand and as staffing levels increase to conduct enforcement.
Table 1
|
Fiscal Year |
Number of Citations Processed |
Gross Revenue |
Refunds Issued by Data Ticket |
Amount Paid in Taxes |
Amount Retained by Data Ticket |
Net Revenue to the City |
|
2016/17 |
4,820 |
$366,188 |
$1,640 |
$100,695 |
$31,349 |
$232,505 |
|
2017/18 |
6,627 |
$510,348 |
$4,010 |
$135,550 |
$43,644 |
$327,143 |
|
2018/19 |
7,738 |
$597,715 |
$5,405 |
$147,385 |
$45,685 |
$399,241 |
|
2019/20 |
4,763 |
$381,665 |
$2,851 |
$95,191 |
$38,155 |
$245,468 |
|
2020/21 |
1,732 |
$143,199 |
$4,318 |
$36,408 |
$14,719 |
$87,754 |
|
2021/22 * |
2,866 |
$220,371 |
$1,176 |
$51,813 |
$20,272 |
$147,109 |
|
TOTAL |
28,546 |
$2,219,486 |
$19,400 |
$567,042 |
$193,824 |
$1,439,220 |
*FY 2021/22 metrics are incomplete; citations paid are from July 1, 2021 through June 10, 2022, whereas the financial metrics are from July 1, 2021 through April 20, 2022
The Police Department has been successful in controlling costs and maximizing net revenues to the City by outsourcing the task of processing citations, issuing notices, collecting payments, and pursuing collection efforts for delinquent accounts. Currently, the City is under contract with Data Ticket, Inc. for these services. The agreement with Data Ticket is set to expire on August 31, 2022.
DISCUSSION
Pursuant to City Code Section 2.105.330, a formal Request for Proposals (RFP) was conducted for this procurement, with the award recommendation based on “best value.” The factors considered in the award were quality and completeness of proposal, experience, technical capability, and cost.
On February 14, 2022, the City published an RFP for parking citation processing, management, and collection services. Two proposals were received from Data Ticket, Inc. and T2 Systems, Inc.
The proposals were independently evaluated by a three-member evaluation team with representation from the Police and Information Technology Departments. The proposals were evaluated and ranked against the criteria published in the RFP. Both vendors were invited to participate in oral and product demonstrations.
Based on receiving the highest overall score, staff recommends awarding the contract to Data Ticket, Inc. Data Ticket’s proposal met or exceeded all the RFP requirements, and their proposal was rated superior in the following key areas:
• Data Ticket has 33 years of experience processing parking citations and has over 400 clients nationwide.
• Data Ticket fees are highly competitive, resulting in significant savings to the City.
• Data Ticket provides an enhanced software solution and comprehensive services enabling operational efficiencies.
The initial term of the proposed agreement with Data Ticket is five years, effective from September 1, 2022 to August 31, 2027. The City has the option to extend the term for up to five additional one-year terms through August 31, 2032. Under the agreement, Data Ticket will provide a turnkey parking citation processing services which includes the provision of a secure cloud-hosted citation processing/data management system, customer support, and various payment channels for patrons to view and pay their fines via mail, telephone and online.
With the exception of rate adjustments due to actual increases in postage costs, Data Ticket’s fees will remain fixed for the term of the agreement including all option periods. Citation processing is based on per unit pricing. For delinquent accounts, Data Ticket retains a percent of the amount collected. As a result of the competitive procurement process, Data Ticket reduced its fees (e.g., from $0.60 to $0.50 to process electronic citations and from 30% to 26% of revenue collected for delinquent accounts). This will result in higher net revenues to the City under the new agreement.
Data Ticket will process parking citations, collect payment from patrons, deduct its service fees from the amount collected, and return the balance to the City each month. Therefore, the agreement does not include a maximum compensation amount under this invoice model. The Finance and Police Departments will work collaboratively to develop and implement audit procedures for routine review of the invoice and balance transferred.
Data Ticket will also provide hardware, software and consumables including handheld ticket writers, printers, ticket stocks, charging racks, and the back-end software to log and track all transactions. The City will issue separate Purchase Order(s) for these items to provide the Police Department the flexibility to select the proper combination and number of handheld devices, peripherals and accessories required over the term of the agreement. The estimated cost is $22,225, inclusive of annual software, support, and maintenance fees, over five years to equip seven Community Service Officers.
Additionally, the Police Department is considering utilizing Data Ticket’s online permit processing application for the Residential Parking Permit program. Should the Police Department implement this service, the annual fee is estimated to be $5,000.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
An agreement with Data Ticket creates operational efficiencies within the Police and Finance Departments. Data Ticket will deduct their costs from the revenues submitted to the City and will provide documentation on those costs. For accounting purposes, the City will record the gross revenue from Data Ticket and the associated expenditures in the Police Department’s operating budget, instead of the net. Due to this accounting change for FY 2022/23, a budget amendment is recommended below to recognize revenue from parking citations to cover the Data Ticket costs.
Budget Amendment
FY 2022/23
|
|
Current |
Increase/ (Decrease) |
Revised |
|
General Fund |
|
|
|
|
Revenue |
|
|
|
|
Fines & Penalties |
$1,465,000 |
$150,000 |
$1,615,000 |
|
|
|
|
|
|
Expenditure |
|
|
|
|
Police Department - Material/Services/Supplies |
$3,565,421 |
$24,000 |
$3,589,421 |
COORDINATION
This report was coordinated with the Finance Department, City Attorney’s Office and Information Technology Department.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to execute an agreement with Data Ticket, Inc. for
parking citation and optional permit processing services for an initial term starting on September 1, 2022 and ending on August 31, 2027;
2. Authorize the City Manager to execute up to five one-year options to extend the
agreement after the initial five-year term, with the final term ending on August 31, 2032 if all options are exercised, subject to appropriation of funds;
3. Authorize the City Manager to execute Purchase Orders with Data Ticket, Inc. for
the purchase of handheld ticket writers, peripherals and accessories as may be required, subject to the annual appropriation of funds; and,
4. Approve the FY 2022/23 budget amendment in the General Fund to recognize citation revenue in the amount of $150,000 and increase the Police Department appropriation in the amount of $24,000 (five affirmative Council votes required to appropriate additional revenue)
Staff
Reviewed by: Patrick Nikolai, Chief of Police
Approved by: Rajeev Batra, City Manager
ATTACHMENTS
1. Agreement for Services between the City of Santa Clara and Data Ticket, Inc.