THE AVIATION DEPARTMENT RECOMMENDS APPROVAL OF THE ABOVE MOTION.
This action amends the Agreement to provide reimbursement to SP PLUS for increased costs for staffing and Workers' Compensation insurance, to increase the Agreement amount; and clarifies SP PLUS performing maintenance functions.
The Office of Economic and Small Business Development ("OESBD") established a 20% Airport Concession Disadvantaged Business Enterprise ("ACDBE") participation goal and SP PLUS committed to a 20% ACDBE goal for the Agreement. To date, SP PLUS has been paid $34,626,449 and has paid its subcontractors $8,256,619, for a 23.84% participation rate.
On November 12, 2013 (Item No. 49), the Board approved the initial Agreement with SP PLUS, then known as Standard Parking Corporation, to provide for management of FLL's public and employee parking facilities for the period of December 15, 2013 through December 14, 2018. SP PLUS provides management services for FLL's public and employee parking including, but not limited to, valet parking services.
On December 8, 2015 (Item No. 57), the Board approved the First Amendment, which removed the Airport Economy Parking Lot from the scope of services of the Agreement pending a change to a proposed bumper-to-bumper service.
On October 26, 2017, the Director of Purchasing approved the Second Amendment to allow SP PLUS to be compensated for valet tips and gratuities paid to the County by passengers using credit or debit cards.
The proposed Third Amendment permits the reimbursement of SP PLUS for increased staffing and Workers' Compensation insurance costs incurred due to the County's direct change in valet parking service provided at FLL, increases the Agreement amount for the remainder of the Agreement period, and clarifies the Agreement regarding parking facility maintenance functions to be performed by SP PLUS.
At the inception of the initial Agreement in 2013, the parking operation had recorded several consecutive years of decline in revenue. Staffing levels and associated expenses were established in accordance with that decline. During the early years of the Agreement, extensive market research was conducted, along with customer focus groups, to determine what could be done to reverse the slide in revenue. As a result, the Broward County Aviation Department implemented state-of-the-art programs through both technology and service level upgrades for the parking operation.
One often requested service level upgrade was the relocation of the valet parking service from a garage drop-off program to a terminal curbside program. This relocation, which occurred in 2015 and had not been contemplated in the original Agreement, was well received and resulted in a 15% increase in revenue (Fiscal Year 2017 versus Fiscal Year 2015). The upgraded valet parking service has caused increased staffing and other associated expenses, specifically Worker's Compensation insurance costs, for SP PLUS. As a result, the proposed Third Amendment provides for reimbursement of the increased staffing required for the curbside valet parking service and Worker's Compensation insurance costs to SP PLUS commensurate with the directed change in service provided. The estimated cost of Worker's Compensation insurance through the end of the Agreement is approximately $400,000.
This proposed Third Amendment increases the five-year estimated Agreement amount by $16,000,000 to an estimated amount of $46,069,985, through the termination date of December 14, 2018. The increase will fund the additional expenses incurred by SP PLUS for increased staffing levels to provide curbside valet parking service. For reference purposes, the overall parking operation now contributes, after taxes and operating expenses, approximately $35,000,000 annually in revenue. Over a five-year period, the contribution totals approximately $175,000,000.
The proposed Third Amendment also clarifies the Agreement regarding parking facility maintenance functions such as minor repairs, painting, and striping in the airport's parking facilities to be performed by SP PLUS.
The proposed Third Amendment has been reviewed and approved as to form by the Office of the County Attorney and the Risk Management Division.
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