Board of Directors Budget Workshop #1 and Special Meeting


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Meeting Date: 08/16/2021  

SUBJECT MATTER:
Receive, consider and act upon an award of bid for streetscape maintenance services (C-2021-0122);
FISCAL IMPACT:
$6,010,871 is currently allocated in the 2021 budget for Streetscape Services, including contracting for landscape maintenance and utilities (water, electric). Brightview is the current landscape maintenance contractor through December 31, 2021, with optional renewal.  Over the course of the past five years (2016-2020), the Township has paid Brightview and/or The Woodlands Development Company an average of $5,074,351 to perform the entire streetscape scope (not including utilities).   
 
The following provides analysis of the lowest cost for each service provided separately ($3,446,926.39), cost for a single vendor to perform all services ($4,280,537.35) and all services performed in-house ($4,932,839). Please note that this does not include materials and parts, estimated at $630,000 per year, plus utilities, which have averaged $750,000 per year over the course of the past five years.
 
For the in-house model, an additional cost for system-wide utilities is not included (estimated at $750,000), plus first-year capital expenses related to equipment ($2,869,922) and a facility ($1,238,072).
 
Additional options are presented below which include a hybrid approach to providing streetscape services (in-house and contracted).
BACKGROUND:
Prior to 2020, The Woodlands Development Company, a subsidiary of the Howard Hughes Corporation, procured, administered, and managed the contracted streetscape maintenance services with the Township funding a proportionate share of the cost of the services. Effective January 1, 2020, the contract was assigned to The Woodlands Township, making the Township responsible for the administration and management of the streetscape maintenance contract and oversight of the program (Attachment A)  The Streetscape Maintenance Services Contract expires December 31, 2021, unless extended (Attachment B).
 
The streetscapes system includes, but is not limited to, landscape maintenance services for 317 +/- lane miles of right-of-way and 631 +/- community entrances. Among the most recognizable areas of the streetscapes system are The Woodlands’ entries, with enhanced landscape and wildlife statues. Along with these entries, streetscape also encompasses the maintenance of the village and neighborhood entries. Other areas of maintenance include the right-of-way mowing, wildflower propagation and street sweeping. It is understood that the streetscapes system is one of the most visible services offered by the Township to our residents, in addition to Town Center landscape maintenance, street sweeping and forestry operations.
 
A Request for Qualifications (RFQ) was developed to identify vendors who can facilitate a contract of this size and scope.  This process allowed the Board to qualify vendors who met certain criteria as it pertains to the Township’s operations. Eight vendors submitted qualifications, including six for the overall scope, one for Town Center only, and one for street sweeping only.  Staff familiar with the streetscape system and landscape maintenance reviewed the proposals based on the following criteria:
 
  • Qualifications - Based on resumes, personnel, similar projects, and organization
  • Financial strength - Income, balance sheets, cash flow, and resources
  • Relevant experience regarding scope of services - Streetscape system experience
  • Organization Strength and Project Management - Methodology, sustainability, and planning
  • References
 
The Board accepted the qualifications for the following companies and identified scope, which permitted them to submit a bid in their respective service.
 
Firm Service
Brightview Landscape Services All Services
Yellowstone Landscape All Services
Westco Grounds Maintenance All Services
Rotolo Consultants All Services
Davey Tree & Landscape All Services
Berkeley Outside Services Town Center
Mister Sweeper Street Sweeping
    
Streetscape Bids
The overall bid document contains seven projects/scopes of services. Vendors who qualified as “all services” have the ability to provide a bid on all of the services: Community & Neighborhood Entries, Right-of-Way (ROW) Maintenance, ROW Trash and Litter Removal, Street Sweeping Maintenance, Forestry Services, Interstate 45 Underpass Maintenance, and Town Center Streetscape Maintenance Services. Bids were for a five-year term (January 2022 to December 2026), with the option to extend for two three-year renewal periods, pending Board approval. Per the bid document (1.10), “If deemed advantageous, the Township reserves the right to award all projects to the lowest responsive bidder, as well as award individual contracts for respective projects that were bid upon. If the primary bidder that was awarded neglects to accept the terms and conditions of the awarded project then the bid may be discussed for a public re-opening, or default to the second lowest bidder for all projects, or each specific project.” Overall, this provides the Township the ability to select multiple vendors and/or in-house crews to perform part, or all, of the streetscape scope. Please see below for an overall bid tabulation.
 
An Invitation For Bid (IFB) was sent to contractors deemed qualified by the Board of Directors.  These maintenance service contracts include services based on the outlined maintenance standards and specifications for a term of 60 months (five years) beginning January 1, 2022 and ending December 31, 2026. A virtual pre-bid meeting was held on May 14, 2021. The deadline for qualified vendors to submit bids was July 2, 2021.  All qualified vendors submitted bids for services for which they were deemed qualified.
 
Bid review meetings (Attachment C) were held with each vendor on July 7.  All vendors responded that a four-month lead time would be sufficient to commence work on January 1, 2022. Further analysis is required to ensure there is an “apples to apples” comparison between the vendors.
 
 
  Entries ROW Trash and Litter Street
Sweeping
Forestry I-45 Town Center All Projects Total
Berkeley             $471,992.50  
BrightView $1,806,622.30 $875,491.44 $608,156.64 $300,270.48 $65,110.00 $4,330.44 $752,943.80 $4,412,925.10
Davey Tree $2,472,361.06 $996,498.58 $236,652.00 $766,993.68 $564,625.00 $3,936.00 $756,409.26 $5,797,475.58
Mister Sweeper n/a n/a n/a $575,244.00 n/a n/a n/a  
Rotolo $1,776,021.92 $592,943.49 $405,653.04 $399,956.64 $1,261,550.00 $10,499.40 $826,136.69 $5,272,761.18
WestCo $1,953,800.00 $829,255.00 $315,900.00 $1,585,650.00 $614,000.00 $6,300.00 $781,085.00 $6,085,990.00
Yellowstone $1,862,060.00 $1,136,302.00 $451,620.00   $473,900.00 $16,476.00 $1,940,381.00 $5,880,739.00

Using the lowest cost provided for each service separately, the total streetscape services program cost would be $3,446,926.39: 
  • Rotolo – Entries: $1,776,021.92, and ROW: $592,943.49
  • Davey Tree – Trash and Litter: $236,652. and I-45 Underpass: $3,936
  • Brightview - Street Sweeping: $300,270.48, and Forestry: $65,110
  • Berkley - Town Center: $471,992.50
These costs do not include materials and parts, estimated at $630,000 per year, plus utilities which have averaged $750,000 per year over the course of the past five years.  The lowest bid does not necessarily mean the “best bid” or the “lowest responsible bid”.  To determine the best value, the following (among other items) can be considered: price; the reputation of the bidder and of the bidder’s goods or services; the quality of the bidder’s goods or services; the total long-term cost to the municipality to acquire the bidder’s goods or services.
 
The lowest cost for a single vendor to perform all services is $4,412,925 (Brightview). Brightview indicated a 3% discount would apply if awarded the bid for all services, reducing their bid total to $4,280,537.35. Furthermore, this would not include materials and parts, estimated at $630,000 per year, plus utilities, which have averaged $750,000 per year over the course of the past five years.
 
As part of the bid review process, organizational charts and staffing levels were requested of each vendor. The purpose of this exercise was to gain an understanding of each vendor’s plan as to how it would provide the service(s) as outlined in the bid.
 
Staffing Analysis A- Entries B- ROW C- ROW Trash D- Street Sweeping E- Forestry F- I-45 G- Town Center Total
Brightview 29 22 10 2 9 Inc 14 86
Yellowstone 27 17 12   8 2 19 85
Davey 28 13 3 2 4 Inc 8 58
Westco 23 15 3 Sub Sub 3 13 57
Rotolo 23 9 6 3 Sub 3 10 54
Rotolo             10 10
Mister Sweeper       2       2
Average 25 14 7 2 7 1 9  
   
There are benefits to utilizing both a single vendor and multiple vendors for the streetscape program. Multiple vendors allows staff to address perceived challenges with some of the vendors’ bids while also leveraging the strengths of each contractor. Additionally, having multiple contractors would permit a “back up” plan for some services with the other contractor, similar to what is currently being done with the Park Maintenance program. 
 
In-House Model Development and Analysis
Since assuming the responsibility and cost for the streetscape system on January 1, 2020, extensive review of the current contractor’s operation and other best practices in the green industry have been performed. This review includes shadowing the current contractor to understand staffing and equipment requirements, facility needs, and routing challenges and opportunities, while also operationally defining all standards and specifications within the overall streetscape scope.
 
Historically, The Woodlands Township and the predecessor Association’s contracted out services to manage costs (I.e., staff, capital, facility). There are many positives and challenges with moving streetscape services (some or all) from a contracted platform to an in-house model. 
 
  • Opportunities
    • Local control of streetscape maintenance operations (or portions of)
    • Ability to respond to resident issues in a timelier manner
    • During declared disasters, potential ability to use force labor accounting to track labor cost and obtain reimbursement from FEMA
  • Challenges
    • Departure with long-term contracting philosophy
    • Initial capital funding requirement (equipment/facility)
    • Long-term cost for support equipment replacement and facility renovation
    • Additional full-time staff/benefit load
    • Impact to Workers’ Compensation cost
    • Additional risk exposure related to the direct provision of the landscape services (i.e., tree removal, ROW mowing)
 If all services were performed in-house, the total annual cost would be $4,932,839 per year, inclusive of materials, chemicals, building operation, etc.  There would be no additional cost for sightline visibility as there is capacity to handle this scope within the forestry unit of the streetscape program. An additional cost not included would be system-wide utilities ($750,000). The total cost for the in-house model would be $5,682,839.  Additionally, there would be first year capital expenses related to equipment ($2,869,922) and a facility ($1,238,072), which are further described below.
 
Township Model A- Entries B- ROW C- ROW Trash D- Street Sweeping E- Forestry F- I-45 G- Town Center Total
Staff Assigned 35 14 7 1 5 0.1 10 72.1
Initial Capital $987,471.00 $737,697 $162,700 $250,000 $500,147 $0.00 $231,277 $2,869,292
Staffing $1,818,572.02 $725,531.91 $341,987.76 $52,834.02 $262,752.68 $4,819.23 $508,355.86 $3,714,853.47
Capital (.10) $98,747.10 $73,769.70 $16,270.00 $25,000.00 $50,014.70 $0.00 $23,127.70 $286,929.20
Operational $469,414.00 $88,008.00 $28,910.00 $32,174.00 $41,833.00 $62.00 $220,656.00 $881,057.00
Building Ops $15,000.00 $15,000.00 $5,000.00 $2,500.00 $7,500.00 $1,000.00 $4,000.00 $50,000.00
Total $2,386,733.12 $887,309.61 $387,167.76 $110,008.02 $354,600.38 $4,881.23 $752,139.56 $4,932,839.67
 
Space allocation within the current PARDES Campus is an additional challenge.  If certain services are identified to be brought in-house, there is the ability to house them on the current campus; however, alternate plans will need to be made regarding the entire streetscape operation.  The Township has acquired a parcel of land through the Comprehensive Community Services Agreement to the north of the Bear Branch Recreation Center for the purposes of a “public works” facility.  Initial site restoration costs total $61,000, which would provide a 35,000 ft² fenced-in lot, with no office or support facilities. It is estimated that a facility for the entire scope of streetscapes services will cost $1,238,072, inclusive of building, design/engineering, testing and fixtures, furniture and equipment (FFE).  (Attachment D - Facility plan and pro forma.)
 
Financial models have been developed for performing these services in-house (staff, equipment, operational). The Board can select options that are in the best interest of the Township (all contract, all in-house, hybrid model). Each model has been developed independently to provide the Board flexibility in how it can provide streetscape services. Additionally, each model has been developed to highlight the in-house cost of service as opposed to the lowest bidder and attempts to forecast cost for the service through 2031, inclusive of capital replacement (10% of total per year).  (Attachment E – In-house models -staff, capital and equipment.)
 
One of the largest challenges is related to the current supply chain issues for the procurement of equipment (mowers, tractors, trailers and trucks). From discussions with vendors, the delivery of certain equipment may be as long as two months and up to one year.  However, some of the vendors bidding on the streetscape scope have national accounts with equipment and vehicle manufacturers whose orders have higher priority. The unknown delivery dates of equipment could also impact hiring and training of staff, and it may be extremely difficult to retain contractors on a month-by-month basis during a transition period. If the Board determines the streetscape operation be moved in-house, this could not be accomplished by January 1, 2022. However, certain segments that are not related to procurement of trucks/equipment could be achieved by this date. Please note the total cost for the equipment for all services is $2,869,292.  (Attachment F - Complete list of equipment.)
 
Hybrid Model
For the past 18 months, staff has spent extensive time monitoring the current contractor and studying the standards and specifications. A challenge of the current standards and specifications is that they lack detail and depth similar to what staff has developed within its other services (parks, sports turf, all weather turf, lake and pond). It is believed that, if the services are provided in-house, through a contractor or a hybrid model, residents should see an improved adherence to the streetscape standards and specifications. Additionally, the in-house bid developed for ROW trash and street sweeping is the lowest cost for their respective service and has been factored into the various options.
 
Except for the in-house model, an option to enhance service levels, contract monitoring, and to ensure timely responses to residents, staff has added of two supervisors and a four-person in-house crew.  The responsibilities of this staff and crew includes addressing urgent issues; providing back up to contractors, if there are missed locations; overseeing the sightline visibility (reducing landscape enhancements by $105,000), and enhancing monitoring and oversight of the contract.  Staff costs are estimated at $237,321 (2023) and requires $141,200 in initial capital expenses (Attachment G).  The table below includes the cost of the crew and the subtraction of the sightline visibility pruning costs ($100,000).
The options presented below are based on the lowest responsible bidders.  There is an inherent challenge in comparing one contractor to another as staffing levels and/or equipment used can differ. One method in which to illustrate the approaches used is to estimate time for tasks to be conducted based on the number of service cycles. The difference in levels of project staff and time required to complete cycles is significantly different between the lowest bid vendors and vendors with additional project staff.  (Attachment H - Staff analysis based on cycles for select services and an in-house vs contractor comparison.)

The overall intent of contracting services is to provide a high-quality streetscape system with little to no frustration on the part of The Woodlands Township or its businesses, residents, and visitors. The three examples above provide concern as to how desired outcomes, which are derived by the standards and specifications, would be achieved using a time analysis for some of the vendors. The Woodlands Township has the responsibility to select the lowest responsive bidder. Due to these concerns, the bids of Brightview (all services, except Town Center and ROW Trash) and Berkley (Town Center) are being recommended. These bids, coupled with dedicated contractor management supervisors and an in-house crew to address immediate resident concerns, will afford the Township the best ability to meet residents’ expectations. It is estimated that this will result in $462,129 in savings per year. Additional savings may be realized as several time and material services being completed in the current contract are included as base services.  With this recommendation, there would be no reduction in cost due to leasing of the land for a service yard as these vendors have established yards in the areas. Other vendors estimated a deduct of $1,000-$2,000 per month.
 
 
  Brightview/Berkley
(Town Center),
TWT- Trash
Brightview/Berkley (TC),
TWT- SS
Brightview/Berkley
(TC)
Lowest Vendor
(One Contractor)
Staff/Op/Equipment $3,910,984.44 $3,941,710.70 $4,131,972.68 $4,280,536.26
Landscape Enhancements $525,000.00 $525,000.00 $525,000.00 $525,000.00
Utilities $750,000.00 $750,000.00 $750,000.00 $750,000.00
Total $5,185,984.44 $5,216,710.70 $5,406,972.68 $5,555,536.26
In-House Crew/Supervision $362,757 $362,757 $362,757 $362,757
2021 Streetscape Budget $6,010,871.00 $6,010,871.00 $6,010,871.00 $6,010,871.00
Savings from 2021 Budget $462,129.56 $431,403.30 $241,141.32 $92,577.74
Initial Capital $303,900.00 $391,200.00 $141,200.00 $141,200.00
RECOMMENDATION:
Award the streetscape bids Project 1 (Community and Neighborhood Entries), Project 2 (ROW Maintenance), Project 4 (Street Sweeping), Project 5 (Tree Removal) and Project 6 (Interstate 45 Underpass Maintenance) to Brightview at a base cost of $3,051,824; Award Project 7 (Town Center) to Berkley at a base cost of $471,992; reallocate dollars from contracted service to staff and maintenance expense line items to provide supervision, a trash ROW crew, and a landscape maintenance crew; and allocate $303,900 from capital reserves to support required equipment.
Attachments
Attachment A-2019-0451 Assumption of Services Agreement TWMDC
Attachment B- Brickman BV Streetscape Agreement combined
Attachment C - Bid Review Meeting Notes
Attachment D_Facility Plan and Pro Forma
Attachment E - In-House Comparisons
Attachment F - Complete list of equipment needs
Attachment G - In-house Crew Analysis
Attachment H - Cycle Analysis


    

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