HomeMy WebLinkAboutC32980 - CA2 - El Paseo Seasonal Lighting & Decor PgrmCITY OF PALM DESERT
OFFICE OF THE CITY MANAGER
STAFF REPORT
REQUEST: CONSIDERATION OF AMENDMENT NO. 2 TO CONTRACT NO. C32980
FOR PURCHASING REPLACEMENT LIGHTING MATERIALS AND
APPROVING A LABOR COST INCREASE FOR THE CITY'S EL PASEO
SEASONAL LIGHTING AND DECOR PROGRAM IN THE AMOUNT OF
$79, 278.76.
SUBMITTED BY: Stephen Y. Aryan, Risk Manager
DATE: June 9, 2016
CONTENTS: Contract Amendment No. 2 w/ Exhibit "A"
Recommendation
By Minute Motion:
Approve Amendment No. 2 to Contract No. C32980 increasing annual labor costs
by $21,682.90 through 2018 and extending the current contract term through May
31, 2018, amongst other revisions.
2. Approve the purchase of new LED and snow tube lights for the City's El Paseo
Seasonal Lighting Program in the amount of $57,595.86 and appropriate
$57,595.86 from the FY 2015/16 Unobligated General Fund to Account No.
1104310-4391001.
3. Authorize the Interim City Manager to execute any contractual documents related
to these enhancements to the City's Seasonal Lighting and Decoration Program
(Contract No. C32980).
4. Declaring existing seasonal decor purchased in 2008 for the El Paseo medians,
with the exception of the seasonal trees/garland, as surplus and dispose of
appropriately.
Strategic Plan Obiective
This item is related to the Economic Development section of the Palm Desert Strategic Plan,
specifically under Prioritv 3: Create and attract entertainment and events to enhance and expand
the Palm Desert economv and lifestvle. The rationale is that such action enhances existing
businesses which attracts tourists. The City of Palm Desert El Paseo Seasonal Lighting and
Decor Program is very well received by businesses, residents, and visitors. It enhances the El
Paseo experience, attracting locals and tourists to shop and dine here, and improves the quality
of life in Palm Desert.
Subcommittee Recommendation
At the May 26, 2016, City Council meeting, the City Council formed a subcommittee consisting of
staff, Mayor Pro Tern Harnik, and Councilmember Weber to review and make recommendations
on the City's current El Paseo Seasonal Lighting and Decor Program. The subcommittee
recommended replacement of old lighting inventory, labor increases as outlined in this report,
Staff Report -El Paseo Seasonal Lighting & Decor Program
June 9, 2016
Page 2 of 4
designating existing decor as surplus, and requesting staff investigate seasonal decor in other
communities and return with a recommendation for replacement in early 2017.
Executive Summary
The City Council directed staff to maintain and keep current the City's Seasonal Lighting and
Decor Program for the commercial core. The City's current vendor, Premier Holiday Design,
indicates that the El Paseo median tree lights and decor need replacement to maintain a program
that enhances this vital shopping district. At City Council direction the median lights remain on
from early October through mid -May of each year. The current decor was purchased in 2008,
from a previous vendor, and is in poor condition. A Council formed subcommittee recommends
replacement of old lighting inventory, labor increases as outlined in this report, designating
existing decor as surplus, and requesting staff investigate seasonal decor in other communities
and return with a recommendation for replacement in early 2017. Please note that the contractor
requested labor rate adjustment is due to minimum wage increases and a miscalculation on the
costs for snow tube installation. The current contract term expires in April 2018, but staff is
recommending a one month extension to May 2018 in order to accommodate the revised median
tree light schedule.
Background
The City of Palm Desert updated its Seasonal Lighting and Decor Program in 2013 with the
award of the new program to Premier Holiday Design. Premier Holiday Design is a local, full
service holiday and special event production company in operation over twenty years. The
revised lighting program included lighting median palm and deciduous trees along the El Paseo
corridor, which has been positively received by businesses, visitors, and residents. Due to the
positive community feedback, the City Council directed staff in 2015 to extend the duration the
tree lights remain on from October through May.
REPLACEMENT LED LIGHTING & SNOW TUBE LIGHTS
When the City first initiated the revised Seasonal Lighting and Decor Program in 2013, the lights
were to originally be on for a two month period. However, these lights have remained on for over
twelve months during the last two years, nearly tripling the amount of time they were active under
the initial agreement. The contractor indicated that he has had to replace over 350 strands this
year alone and that he did not charge the City any labor and material costs for replacement. He
further indicated that the fights will not last for another season and to maintain the current level of
display, these materials must be replaced. The cost for this replacement, including sales tax, is as
presented:
ITEM
New Warm White LED Lights
New Snow Tube Lights
TOTAL
COST
$46,422.72
$11,173.14
$57, 595.86
SURPLUS OF SEASONAL DECOR FOR EL PASEO MEDIANS
The existing decor component for the El Paseo Medians was purchased in 2008 and consists of:
1. Four (4) 48" Giant Fiberglass Presents
2. Three (3) 48" Giant High Gloss Ornaments
3. Two (2) 36" Giant High Gloss Ornament
4. Four (4) 36"Giant Fiberglass Presents
5. One (1) 24" Giant Fiberglass Present
6. Ten (10) 24" Grapevine Spheres
Staff Report -El Paseo Seasonal Lighting & Decor Program
June 9, 2016
Page 3of4
7. One (1 ) White Resting Deer
8. One (1) Standing Buck
9. One (1 ) White Doe
10. One (1) White Fawn
Please note that two 48" and one 24" fiberglass presents were delivered damaged by the
previous supplier and never put on display by the current vendor. These items are in poor
condition and d❑ not positively reflect the El Paseo experience and existing seasonal lighting
program. Staff recommends designating them as surplus. It is doubtful that given their current
condition that they would be of use to anyone, but Staff will determine if they can be auctioned.
Staff recommends investigating replacement options and returning with a recommendation to the
City Council in early 2017. Please note that any recommended seasonal decor would not be
installed until November 2017.
REVISED LABOR COSTS
Minimum Wage Increase
When the original agreement was executed in 2013, California's minimum wage was set at $8.00
per hour and is currently at $10.00 per hour (a 25% increase). The Governor recently signed
legislation raising California's minimum wage incrementally to $15 per hour by 2022. The first
incremental increase will occur in January 2017, when the minimum wage will be $10.50. The
contractor requests a 22% increase to his labor costs to cover these state mandated increases.
Snow Tube Labor Miscalculation
In addition, he indicated that there was a labor miscalculation, on his part, for the snow tube
fights. The miscalculation came when he charged $25 per set instead of $25 per tube (5 tubes to
a set). Although the contractor has absorbed the cost these last three years, he indicated he
cannot continue to take this loss going forward. He is not asking for any prorated reimbursement,
but wants to install each set of snow tube lights at a cost of $100 per set for the remainder of the
contract term. The City currently has 116 sets of snow tubes. As indicated below, the proposed
labor costs increase from $70,945.00 to $92,627.90 (a $21,682.90 increase).
Labor Increase Summary
ITEM
Current Labor Costs
Labor Increase of 220/6
Revised Snow Tube Labor Rate (116 sets x $100)
Labor Credit (for old decor installation & previous snow tube rate)
REVISED LABOR COST
COST
$70,945.00
$15,607.90
$11,600.00
($5,525.00)
$92,627.90
In conclusion, investment in seasonal lighting in the core commercial area has been well received
by businesses, residents, and visitors. In order to maintain the quality of the display, additional
investment is necessary at this time. Staff recommends approval of lighting replacement and
labor cost increases as presented.
Fiscal Analysis
Reoccurring Cost Impacts
The current Palm Desert Seasonal Decor & Lighting Program has an annual cost of $84,945.00.
The proposed labor cost increase would result in an annual reoccurring cost of $106,627.90 for
FY 2016/17 & FY 2017/18 as follows:
Staff Report -El Pase❑ Seasonal Lighting & Decor Program
June 9, 2016
Page 4 of 4
Annual Co$t for Seasonal Decor & Lighting Program
ITEM COST
Current Labor Rate $70,945.00
Current Transportation Costs $2,000.00
Current Storage Costs $12,000.00
Labor Increase of (22%) $15,607.90
Revised Snow Tube Labor Rate $11,600.00
Labor Credit ($5,525.00)
Storage Credit ($2,000.00)
TOTAL REOCCURRING COSTS $104,627.90
Staff also negotiated a reduction in the storage rate because the previous decor is recommended
for disposal. Funding is included in the FY 2016/17 Annual Comprehensive Financial Plan without
any further appropriation. The City Council is scheduled to review this plan at their June 30, 2016,
City Council Meeting.
Onetime Cost Impacts
The proposed purchase of replacement median seasonal tree lighting is a onetime cost of
$57,595.86, as follows:
ITEM
COST
New Warm White LED Lights $46,422.72
New Snow Tube Lights $11,173.14
TOTAL ONETIME COSTS $57,595.86
This amount is not currently budgeted and will require an ,4,,. ),j,',:.&on in the amount of
$57,595.86 from the FY 2015/16 Unobligated General Fund.
Submitted YByStephenRisk Manage
Reviewed By:
ganet oore, Director of Finance/City Treasurer
L
Approval:
Ju n cCarthy, Interim pity M er
AMENDMENT NO. 2 TO CONTRACT NO C32980
AMENDMENT NO. 2 TO
CONTRACT NO. C32980
This Amendment No. 2 (this "Amendment") is dated as of June 9, 2016,
and is made by and between the City of Palm Desert and Premier Holiday
Design.
RECITALS:
A. The parties to Contract No. C32980, dated as of July 11, 2013 (the
"Agreement"), desire to amend the Agreement as follows:
NOW, THEREFORE, the City of Palm Desert and Premier Holiday Design
agree as follows:
Section 3.2 Term -The term of this Agreement shall be from July 11, 2013
throucih Mav 31. 2018, unless earlier terminated as provided herein.
Section 3.4 (a) Fees and Pavments: Compensation -Reoccurring costs
for the installation, removal, and storage of new and existing holiday lighting and
decor shall not exceed $104.627.90 annually, as set forth in Exhibit "A" and
subject to an annual budget appropriation by the Palm Desert City Council.
Exhibit "A" -Premier Holiday Design's "Holiday Season 2016-2017,
Contract Amendment No. 2, Exhibit A Proposal" is made part of the Exhibit "A"
documentation.
ALL TERMS AND CONDITIONS OF THE EXISTING CONTRACT NO.
C32980 DATED JULY 11, 2013, EXCEPT AS PREVIOUSLY MODIFIED, AND
LETTER OF CLARIFICATION DATED MAY 8, 2015, BE THE SAME AND
REMAIN IN FULL FORCE AND EFFECT.
AMENDMENT NO. 2 TO CONTRACT NO C32980
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date indicated below.
Date:
DATE:
REVIEWED AS TO FORM:
CITY ATTORNEY
ATTEST:
CITY CLERK
PREMIER HOLIDAY DESIGN
By:
MARCUS BLUMBERG
Title: PRESIDENT
CITY OF PALM DESERT
By:
JUSTIN MCCARTHY
Title: INTERIM CITY MANAGER
CONTRACT NO. C32980
EXHIBIT A
PREMIER HOLIDAY DESIGN
HOLIDAY SEASON 2016-2017
CONTRACT AMENDMENT NO. 2
EXHIBIT "A" PROPOSAL
Premier Holiday Design
A FULL SERVICE HOLIDAY DECOR COMPANY
P.O. Box 4596 Palm Desert, CA 92261
Ph: 760-601-6517 Fax: 760-262-3020
Email: hlightingdesign@aol.com
Steven Aryan
Risk Manager
The City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
Dear Stephen
June 2, 2016
Ref: New Product Needs
Per our meeting on May 31, 2016, 1 would like to take this opportunity to "fine tune" our talks and
include some pertinent information on The City of Palm Desert's holiday lighting & decor presentation.
First of all, I want to thank you and your team for all your support in assisting Premier Holiday Design
in bringing The City of Palm Desert a beautiful holiday presentation.
The lighting presentation on El Paseo has generated great reviews the last three years. We continue
to hear praise from out of town guests, as well as the community. Even other cities marvel at the
lighting of the trees & palm trees on El Paseo for The City of Palm Desert.
Truth be told, when I submitted my bid back in 2013, 1 was quite elated to receive the winning bid. My
passion desire was to give The City of Palm Desert the best in holiday lighting & decor. My passion &
desires still exists...
Originally, the lighting was to be installed and functioning from November through January 15th. Then
it was changed from October through April 151h. And finally last year it was changed once again from
October through May 15th. While gladly accepting the terms of changes, a learning curve was
developed.
From January 2016 through today, Premier Holiday Design has replaced approximately 350 strands
of LED mini lights. Just this last week, we replaced 223 strands of lights from Portola to Monterey.
The labor just for those 3 days of maintenance was approximately 200 hours. In 2015 several more
strands were replaced.
The bottom line is: Your strands of mini lights are fading out and or completely dieing out. These
strands have been an the last couple years for 7 & 8 months a year.
They simply will NOT last another season. The problem at hand is, I am certain that at least 60% to
70 % of your lights will not be in acceptable working condition come next year.
It does NOT make sense to purchase a large portion of needed lights, as it will become a massive
prob€em of rotating "bad lights" meaning The City of Palm Desert will be spending good money in
trying to keep a degrading product lighting program 100% lit when it will be somewhat impossible.
Why???? Because the remaining lights will either fade down or g❑ out next year!
Although your LED mini lights had a 2-year warranty, I am NOT charging The City of Palm Desert for
the replacement strands that were replaced this year. This was a substantial cost to my company, not
to mention the excessive labor costs involved.
My professional recommendation is: Purchase new LED lights for your holiday lighting program.
Holiday 2016 New LED Lighting Product Needs — The City of Palm Desert
Exterior Lighting Product:
LED 'Mini Lights:
Palm Trees on El Paseo Center Median
1. Purchase of warm white LED mini lights for palm trees an center median of El Paseo.
1 a. Twenty-four (24) thick palm trees @ 12 strands per
Total needs - 288 strands @ $18.00 per (Freight Included)
Cost - $5184.00
Tax - $414.72
Total cost - $5598.72
2. Purchase of warm white LED mini lights for palm trees on center median of El Paseo.
2a. Twenty-seven (27) thin palm trees @ 5 strands per
Total needs —135 strands @ $18.00 per (Freight Included)
Cost - $2430.00
Tax - $194.40
Total cost - $2624.40
3. Purchase of warm white LED mini lights for trees on center median of El Paseo.
3a. Twenty-eight (28) trees
Total needs — 1750 strands @ $18.00 per (Freight Included)
Cost - $31,500.00
Tax - $2520.00
Total cost - $34,020.00
4. 10 % additional strands for maintenance.
Total needs - 215 strands @ $18.00 per (Freight Included)
Cost - $3870.00
Tax - $309.60
Total cost - $4179.60
Total Warm White LED Mini Light Cost - $46,422.72 (2388 strands)
Snow Tubes:
After approval of the ❑riginal contract approved in
Director of Operations that there was a substantial
Tube Lights.
Snow Tube Product
2013, it was brought to my attention from my
miscalculation ❑n the product & labor fees for
There are now 116 sets of tube lights ❑n 28 trees on El Paseo. One tree was taken out, due to the
city taking the tree out. Last year the city added 3 new trees. There were 12 sets of tube lights
purchased last year for these trees, bringing your total to 89 sets purchased of tube lights for all lit
trees on El Paseo.
As you can see, I personally purchased 27 more tube light sets to accommodate your needs to
facilitate the lighting of all trees. The first year your trees needed more tube lights than the proposal
and contract stated. The approximate cost for those 27 sets of tube lights was around $4800.00,
which my company absorbed.
I am not asking for reimbursement cost of these tube lights.
Please note: There are several tube lights that are not in working order due to aged product and or
weather elements. Here is the information on snow tube lights that need replacement, should you
elect to continue the "Snow Tube" presentation for 2016 & 2017.
Snow Tubes Lights - Replacement
Snow Tubes Lights
5. Purchase of replacement warm white 570 mm LED Large Snow Tubes for 18 trees on center
median of El Paseo.
Total needs - 42 sets @ $214.50 per (Freight Included)
Cost - $9009.00
Tax - $720.72
Total cost - $9729.72
6. Purchase of replacement warm white 511 mm LED Medium Snow Tubes for 18 trees on center
median of El Paseo.
Total needs - 9 sets @ $148.50 per (Freight Included)
Cost - $1336.50
Tax - $106.92
Total cost - $1443.42
Total LED Snow Tubes Cost - $11,173.14
Total new product cost - $57,595.86 [Includes new LED mini lights & Snow Tube Lights]
Payment terms: Balance due July 1, 2016.
Snow Tube Labor
Unfortunately on the original contract executed in 2013, 1 quoted labor per set of snow tube lights at
$25 per set. This was a major miscalculation, as the labor should have been $125.00 per set. The
miscalculation came where I charged $25.00 per set instead of $25.00 per tube.
There are 5 tubes in a set. The total labor quoted in 2013 to install & take down your tube lights in the
original contract was $1925.00. This calculation was submitted as 77 sets x $25.00 per set, totally
$1925.00. It should have been $125.00 x 77 = $9625,00.
I am sure that you will understand that my company cannot absorb the loss of revenues going
forward to install these tube lights. Miscalculations totaled $7700.00 per year for 3 years totaling
$23,100.00
am not asking for reimbursements in my miscalculations. It was my error.
am willing to install & take down all tube sets going forward for the remainder of our contract for
$100.00 a set, which would total $11,600.00 per year (115 sets of Snow Tube Lights).
Payment terms: Labor costs & terms to be included in amended annual contract.
hope this letter will serve as informative and please know that it is my only desire to ensure that The
City of Palm Desert present and receive the best in holiday lighting & decor.
A classy holiday lighting & decor presentation not only showcases your quality properties for the
holidays, but also creates an ambiance of warmth and presence.
We look forward in meeting all your holiday needs in the future.
Sincerely,
Marcus Blumberg
President
Premier Holiday Design
Premier Holiday Design
A FULL SERVICE HOLIDAY DECOR COMPANY
P.O. Box 4596 Palm Desert, CA 92261
Ph: 760-601-6517 Fax: 760-262-3020
Email: hlightingdesign@aol.com
Steven Aryan June 2, 2016
Risk Manager
The City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
Dear Stephen
Per our meeting on May 31, 2016, 1 would like to take this opportunity to reiterate our discussion on
the current labor challenges, Premier Holiday Design faces, plus new LED lighting product needed to
facilitate the holiday lighting program on El Paseo.
I would appreciate if you could forward this letter to the proper personnel & City Council.
As I am sure you are aware, minimum labor in The State of California has increased from $8.00 an
hour to $10.00 an hour in the last three years. That is a 25% increase. other expenses such as real
estate leases, insurances & transportation costs have risen as well.
The holiday project for The City of Palm Desert is an all labor except for storage fees and
transportation. I have not increased any of my pricing in the last 8 years, yet our quality has never
wavered. Premier Holiday Design continues to lead in holiday lighting & decor presentations.
am requesting that The City of Palm Desert provide Premier Holiday Design the needed and
applicable labor increase for Holiday 2016 & 2017. My company just cannot absorb these increases,
as our first mission is to continue to give The City of Palm Desert the best in holiday decor & lighting. .
Per our discussion on May 31, 2016, 1 am submitting below a summary of decor & lighting deletions
going forward per your request, along with the labor increase for Holiday 2016 & 2017.
Labor deletions:
Tube lights-$1925.00
Decor - $3600.00
1. Two (2) 48" Giant Fiberglass Presents
2. Three (3) 48" Giant High Gloss Ornaments
3. Two (2) 36" Giant High Glass ornament
4. Four (4) 36"Giant Fiberglass Presents
5. Ten (10) 24" Grapevine Sphere
6. One White Resting Deer
7. One (1) Standing Buck
8. One (1) White Doe
9. White Fawn
Total Labor Deletions - $5,525.00
Labor Increase & Contract Summary:
Current Labor Cost -
$70,945.00
Labor Increase of 22% -
$15,607.90 (Holiday 2016 & 2017)
Sub Total Revised Labor Cost -
$86,552.90
Labor Credit — Items 1-8
($5.525.00)-Decor & Tube Lights
Total Revised Labor Cost -
$81,027.90 (Annual)
Revised Tube Lights Labor -
$11,600.00
Transportation -
$2,000.00
Storaae -
$10.000.00 ($2.000 deduction for decor no lonaer stored)
Total Holiday 2016 & 2017 Annually-$104,627.90 (New Amended Contract wl Tube Lights Labor)
A classy holiday lighting & decor presentation not only showcases your quality properties for the
holidays, but also creates an ambiance of warmth and presence.
If you have any questions, please feel free in reaching out to me. We look forward in meeting all your
holiday needs in the future.
Sincerely,
Marcus Blumberg
President
Premier Holiday Design
Premier Holiday Design
A FULL SERVICE HOLIDAY DECOR COMPANY
P.O. Box 4596 Palm Desert, CA 92261
Ph: 760-601-6517 Fax: 760-262-3020
Email: hlightingdesign@aol.com
Steven Aryan
Risk Manager
The City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
Dear Stephen
June 1, 2016
Ref: 2016 & 2017 Storage
This is to confirm that storage for Holiday 2016 & 2017 will be $10,000.00 annually instead of
$12,000.00. In the event that The City of Palm Desert elects to purchase additional decor for the
Holiday 2017 season, storage will be adjusted accordingly, but will not exceed $12,000.00.
If you have any questions, please feel free in reaching out to me.
Best Regards,
Marcus Blumberg
President
Premier Holiday Design