2011-27767 Reso RESOLUTION NO. 2011 -27767
A RESOLUTION OF THE MAYOR AND CITY COMMISSION APPROVING AND
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A CONCESSION
AGREEMENT BETWEEN THE CITY AND THE HERTZ CORPORATION, AS THE
SUCCESSFUL PROPOSER PURSUANT TO REQUEST FOR PROPOSALS NO. 42- 07/08,
FOR THE IMPLEMENTATION, MANAGEMENT, AND OPERATION OF A SHARED CAR
SERVICE PROGRAM; SAID AGREEMENT HAVING AN INITIAL TERM OF FIVE (5)
YEARS, WITH A FIVE (5) YEAR RENEWAL TERM, TO BE EXERCISED AT THE CITY'S
SOLE OPTION AND DISCRETION.
WHEREAS, car - sharing programs are revolutionizing the way residents and tourists
commute within cities, and a shared car service with public access has been determined by
the City to be a desirable and valuable mode of alternative public transportation for the
community; and
WHEREAS, a shared car service will alleviate parking demand; vehicular traffic
congestion; reduce vehicle emissions and reliance on fossil fuels; and serving as a vital and
integral part of the community; and
WHEREAS, on September 10, 2008, the Mayor and City Commission authorized
the issuance of Request for Proposals No. 42 -07/08 to solicit proposals for the
implementation, management and operation of a shared car service available to the public
(the RFP); and
WHEREAS, at its December 10, 2008, meeting, the Mayor and City Commission
adopted Resolution No. 2008 - 26957, which accepted the recommendation of the City
Manager, pursuant to the RFP; and authorized the Administration to enter into negotiations
with The Hertz Corporation (Concessionaire), as the top- ranked responsive proposer; and
WHEREAS, accordingly, the City and Concessionaire have negotiated the
attached Agreement for the implementation, management and operation of an exclusive
shared car service program for the City.
NOW THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and
City Commission hereby approve and authorize the Mayor and City Clerk to execute
a Concession Agreement between the City and The Hertz Corporation, as the
successful proposer pursuant to Request for Proposals No. 42- 07/08, for the
implementation, management, and operation of a shared car service program; said
Agreement having an initial term of five (5) years, with a five (5) year renewal term,
to be exercised at the City's sole option and discretion.
PASSED AND ADOP �= 1 ��� 9
IS �,f DAY OF Odaber 2011.
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Robert Parcher : INCORP ORATED' " + a Herrer. Bower • PPROVED AS TO
CITY CLERK .1,.. • • ' h AYOR FORM & LANGUAGE
• ••.. �,, N_ & FOR EXECUTION
T:\AGENDA\2011 \October s tk u . it26:4 -08 Car Sharing Concession Agree: - ' ES
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COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution of the Mayor and City Commission Approving All Material and Substantive Terms of the Agreement
between the City and The Hertz Corporation, as the Successful Proposer Pursuant to Request for Proposals (RFP)
42- 07/08, for the Implementation, Management, and Operation of a Shared Car Service; Further Authorizing the
Mayor and City Clerk to Execute the Final Agreement; Said Agreement Having an Initial Term of Five (5) Years,
Commencing on the Operational Date and Ending Five (5) Years from the Operational Date, with a Five (5) Year
Renewal Term, to be Exercised at the City's Sole Option and Discretion.
Key Intended Outcome Supported:
Maintain or Improve Traffic Flow; Improve Parking Availability
Supporting Data (Surveys, Environmental Scan, etc.):
Residents in the 2007 Community Satisfaction Survey cited traffic congestion as the second most import factor
affecting their quality of life in the City.
Issue:
I Shall the City Commission approve the award of the contract or reject all bids?
Item Summary /Recommendation:
RFP No. 42 -07/08 was issued on September 11, 2008, with an opening date of October 14, 2008. The City issued
bid notices to 390 prospective Proposers via e-mail, BidSync, and /or Bidnet, which resulted in the receipt of one
proposal from The Hertz Corporation. Following discussion at its regular meeting on December 10, 2008, the Mayor
and City Commission adopted Resolution No. 2008 -26957 authorizing the City Administration to enter into
negotiations with The Hertz Corporation for an agreement to manage and operate a Shared Car Service.
The shared -car model is a membership based program which operates with a distributed fleet of private motor
vehicles parked at varying reserved locations, initially at our municipal parking garages and if successful at other
locations throughout the City. Shared -Cars are made available to members primarily for hourly or other short term
use through a self - service, fully automated system not requiring a separate contract for each use. The operation
generally is to take pods of cars and place them at the City's parking garages so the user can walk from their home,
condominium, or business to get the car, use it and bring it back.
Revenue to the City • No payment to the City in first six months of operations.
• $75 per space after the initial six months.
• 0.50% of Gross Revenues in Year 3
• 0.75% of Gross Revenues in Year 4
• 1% of Gross Revenues in Year 5
Concession Locations • 7 Street Garage /Municipal Garage No .1
• 12 Street Garage /Municipal Garage No. 2
• 13 Street Garage /Municipal Garage No. 3
• 16 Street Garage /Municipal Garage No. 4
• 17 Street Garage/ Municipal Garage No. 5
• 42 Street Garage /Municipal Garage No. 6
• City Hall Garage /Municipal Garage No. 7
• 5 and Alton Garage No. 8
Program Scope & Launch The rollout schedule may be altered contingent upon the demand for
the Shared Car Service, with a minimum of 20 vehicles and a maximum
of 100 vehicles.
Parking Spaces • Up to 100 parking spaces.
Payments to the City • No payments shall be due to the City in the first six (6) months
of operations. Hertz shall submit monthly payments pursuant
to the Agreement thereafter.
Advisory Board Recommendation: -
The following Committees endorsed the Shared Car Service Agreement: Transportation & Parking Committee on
November 2, 2009; Finance and Citywide Projects Committee on October 29, 2009; and Sustainability Committee on
October 27, 2009.
Financial Information:
Source of Amount Account Approved
Funds: 1 N/A
OBPI Total
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Saul Frances Ext. 6483
Sign -Offs:
Departme yo irector Assistant Ci :; er Ci a • er
SF JGG JMIIK
T:\AGENDA\2011 \Octoberl9 \Consent \RFP 42 -07/08 — Shared T . c oncession Agreement — SUMMARY.doc/
ea M BE . . ACH
AGENDA ITEM C 7 j
DATE io-ta —ii
trl MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager • ao
DATE: October 19, 2011
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION APPROVING ALL
MATERIAL AND SUBSTANTIVE TERMS OF THE AGREEMENT BETWEEN THE
CITY AND THE HERTZ CORPORATION, AS THE SUCCESSFUL PROPOSER
PURSUANT TO REQUEST FOR PROPOSALS (RFP) 42- 07/08, FOR THE
IMPLEMENTATION, MANAGEMENT, AND OPERATION OF A SHARED CAR
SERVICE; FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE THE FINAL AGREEMENT; SAID AGREEMENT HAVING AN INITIAL
TERM OF FIVE (5) YEARS, COMMENCING ON THE OPERATIONAL DATE AND
ENDING FIVE (5) YEARS FROM THE OPERATIONAL DATE, WITH A FIVE (5)
YEAR RENEWAL TERM, TO BE EXERCISED AT THE CITY'S SOLE OPTION AND
DISCRETION.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
On September 10, 2008, the Mayor and City Commission approved the issuance of Request for
Proposals (RFP) No. 42- 07/08, for a concession agreement for a shared -car program for residents
and visitors of the City of Miami Beach, (the "RFP "). On December 10, 2008, the Mayor and
Commission selected the Hertz Corporation (single respondent) as highest ranked proposer and
directed the Administration to negotiate an agreement with Hertz for said service.
The goal of the Miami Beach Shared -Car Service is to combine Transportation Demand
Management (TDM) strategies and measures, which aim to reduce automobile travel demand, with
support from a menu of alternative and multimodal transportation arrangements. TDM strategies
include bicycling, walking, electronic substitute for travel such as telecommuting, and a variety of
shared and public transportation strategies.
Shared car programs provide a convenience for individuals who do not own or lease a private
vehicle. Benefits to the City include reduced traffic congestion, improved air quality, and increased
parking availability. It is anticipated that the shared car service would also be integrated with other
alternative modes of transportation, such as transit and bicycle sharing programs, and may promote
walking, since users can easily switch between these modes. The various travel modes will also be
coordinated with the City's various parking facilities. A shared car service will contribute to the City's
Commission Memorandum — Concession Agreement Pursuant to RFP#42 -07/08 For A Shared
Car Service
October 19, 2011
Page 2
effort to promote multi -modal transportation options, which will help to facilitate mobility throughout
the City.
The shared -car model is a membership based program which operates with a distributed fleet of
private motor vehicles parked at varying reserved locations, initially at our municipal parking
garages, and if successful at other locations throughout the City. Shared -Cars are made available
to members primarily for hourly or other short term use through a self - service, fully automated
system not requiring a separate contract for each use. The operation generally is to take pods of
cars and place them at the City's parking garages so the user can walk from their home,
condominium, or business to get the car, use it and bring it back. The Shared Car concept differs
from a traditional car rental program in that its member based so that users are pre - qualified and
cars are used only for trips to and from the same location. Hertz on Demand is a subsidiary and the
shared car provider of the Hertz Corporation. Therefore, Hertz on Demand is an entity that is
separate and apart of the Hertz Corporation conventional rental car service. It is important to note
that they are not competing services as their rental and rate structures are markedly different as is
the intended user base. The Hertz on Demand Service is separate from the conventional Hertz
rental car program and the two programs do not intermingle and are not allowed to do so under the
City's concession agreement. All financial matters between the two entities are managed separately
RFP PROCESS
RFP No. 42 -07/08 was issued on September 11, 2008, with an opening date of October 14, 2008.
The City issued bid notices to 390 prospective Proposers via e-mail, BidSync, and /or Bidnet, which
resulted in the receipt of proposals from one proposer, The Hertz Corporation.
At its regular meeting on December 10, 2008, the Mayor and City Commission adopted Resolution
No. 2008 -26957 authorizing the City Administration to enter into negotiations with The Hertz
Corporation for an agreement to manage and operate a shared car service.
COMMITTEE ENDORSEMENTS
The City's Finance and Citywide Projects Committee (FCPC) reviewed and discussed the Shared
Car Agreement with Hertz on June 25, 2009 and October 29, 2009. At the June 25 meeting, the
FCPC directed the Administration to: (1) further negotiate an improvement to the financial return to
the City, which at the time was $107,825, over a five year term and (2) Hertz was directed to pursue
potential shared car locations at privately owned and /or operated parking garages in the City.
The Administration followed the FCPC directives and negotiated the following:
• Hertz initially proposed that the parking spaces contemplated for Shared Car use in the
City's garages be placed on the ground level in high traffic areas. In order to minimize the
loss of parking revenues, the City countered that using less utilized spaces (such as rooftop
or one level below) would help close the potential parking revenue loss gap projected by the
City. Hertz agreed to utilize the parking spaces at the rooftop or one level below the rooftop
for the Shared Car Program at all City garages. The revenue generated from parking
spaces that are lower in demand and /or utilization on the upper parking levels is closer to the
revenue generated by City monthly parking rates of $70. Therefore, the negotiated baseline
for Hertz' financial return to the City is based on the monthly parking rate of $75 per space
Commission Memorandum — Concession Agreement Pursuant to RFP#42 -07/08 For A Shared
Car Service
October 19, 2011
Page 3
and Hertz will pay to the City an average annual commission of 0.45% over the five year
term (0% in Year One; 0% in Year Two; 0.5% in Year Three; 0.75% in Year Four; and 1% in
Year Five). This equates to an additional $18,840 over the five year term for a total of
$175,740.
The FCPC held extensive discussions regarding the City's subsidy to provide the Shared
Car Service. This subsidy was substantially mitigated when Hertz agreed to use the parking
spaces at the rooftop or one level below as opposed to their initial position of utilizing ground
floor high use parking spaces. Typically, the municipal garages contemplated for the shared
car program only reach capacity during a handful of major events throughout the year with
the exception of the 7 Street Garage which may reach capacity slightly more often than the
balance of the system. The recovery of lost revenue is substantially mitigated by Hertz' $75
monthly payment per space. The potential revenue loss is the gap between the monthly rate
and the transient revenue these rooftop parking spaces would generate when the garage is
at capacity. Unfortunately, this difference in revenue is difficult to project; however, it was
deemed as an acceptable level of subsidy for the City to proceed with the shared car
program. It is important to note that the attached Agreement contains provisions for the City
to terminate the Concession Agreement for various reasons, including for convenience.
• Pursuant to the second directive from the FCPC to have Hertz pursue negotiations with
private parking garage owners /operators to provide a Shared Car Program, the
Administration provided Hertz with contact information for the private parking garage owners/
and /or operators on Miami Beach. Hertz has indicated that they have had conversations
with various private operators; however, there have been no firm commitments to date.
On October 27, 2009, the City's Sustainability Committee endorsed the Shared Car Agreement with
the Hertz Corporation; and on October 29, 2009, the FCPC endorsed the Shared Car Agreement,
including the above stated revised financial return to the City; and on November 2, 2009, the City's
Transportation and Parking Committee (TPC) endorsed the Shared Car Agreement with the Hertz
Corporation.
CONTRACT NEGOTIATIONS FOR HERTZ ON DEMAND (SHARED CAR SERVICE)
The attached Agreement delineates the negotiated terms in key elements of the Agreement (see
Exhibit 1). The following outlines the Agreement's key terms:
Term Five (5) years with five (5) year renewal option exercised at City's sole discretion.
Revenues to • No payment to the City in first six months of operations.
the City • $75 per space /per month after the initial six months.
• 0.50% of Gross Revenues in Year 3
• 0.75% of Gross Revenues in Year 4
• 1% of Gross Revenues in Year 5
Concession Concession Locations:
Locations, 7 Street Garage /Municipal Garage No .1
Vehicle 12 Street Garage /Municipal Garage No. 2
Classes, and 13 Street Garage /Municipal Garage No. 3
Rates 16 Street Garage /Municipal Garage No. 4
17 Street Garage/ Municipal Garage No. 5
42 Street Garage /Municipal Garage No. 6
City Hall Garage /Municipal Garage No. 7
5 & Alton Garage /Municipal Garage No. 8
Commission Memorandum - Concession Agreement Pursuant to RFP#42 -07/08 For A Shared
Car Service
October 19, 2011
Page 4
Rate Rate Rate Rate
(A) Economy Car $9.00 $11.00 $63.00 $108.00
(A4) Smart Cars $7.00 $7.00 $60.00 $66.00
(B) Compact Car $12.50 $14.50 $87.50 $139.50
(C) Intermediate $11.75 $13.50 $82.25 $130.50
(E6 /J) Prius & Electric $10.50 $12.00 $73.50 $117.00
(F) Fullsize $13.00 $15.00 $91.00 $144.00
(H4 /L4 /P4) Mercedes /Large
SUV $15.00 $17.00 $135.00 $170.00
(US) 5 Pass SUV or PickUp
Trk $14.25 $15.75 $114.00 $157.50
(P6) Cadillac Escalade $22.50 $24.50 $209.00 $235.00
(Q4) Midsize SUV $14.00 $15.50 $98.00 $155.00
(X4) Volvo C70 Convertible $14.25 $15.75 $99.75 $170.00
Application Fee (one time only) - FREE
Annual Membership Fee - FREE
Other Penalties and Fees:
Fuel Tank - $25 for returning vehicle with 1 /4 tank or less at the end of the reservation.
Ignition Key Replacement - $200 for failing to return an ignition key (covers our cost) Additional
Mileage Fee - $0.45 cents per mile (after the first 180 miles) - per 24 hours fee.
Hertz The following is estimated to be the financial return to the City utilizing Hertz' projections:
ProForma -
Y1 Y2 Y3 Y4 Y5
Feb 1 2011 - Oct 1 2012 - Oct 1 2013 - Oct 1 2014 - Oct 1 2015 -
Sept 30 2012 Sept 30 2013 Sept 30 2014 Sept 30 2015 Sept 30 2016
Total
Hertz On
Demand $ 72,000 $ 220,800 $ 420,000 $ 720,000 $ 1,134,000 $ 2,566,800
Revenue
Commission
0% 0% 0.50% 0.75% 1%
Commission
$ $ - $ - $ 2,100 $ 5,400 $ 11,340 $ 18,840
Space Rental
(Monthly
Rate) $ 3,000 $ 20,700 $ 31,500 $ 45,000 $ 56,700 $ 156,900
Total to CMB $ 3,000 $ 20,700 $ 33,600 $ 50,400 $ 68,040 $ 175,740
No. of Spaces
20 23 35 50 63
Monthly
Revenue per
space $ 18.75 $ 75.00 $ 80.00 $ 84.00 $ 90.00
Notes:
No payment for the spaces to the City in first six months of operations. $75 per space after the initial six
months.
Commission Memorandum — Concession Agreement Pursuant to RFP#42 -07/08 For A Shared
Car Service
October 19, 2011
Page 5
The following rollout schedule may be altered contingent upon the demand for the Shared Car
Program Service, with a minimum of 20 vehicles and a maximum of 100 vehicles.
Scope & Year 1: 20 Vehicles
Launch Year 2: 23 Vehicles
Year 3: 35 Vehicles
Year 4: 50 Vehicles
Year 5: 63 Vehicles
Parking Up to 100 parking spaces will be necessary to establish the program in municipal garages Citywide.
Spaces There is little to no projected annual revenue loss per space as the Shared Car parking spaces shall be
located on the next to last level below the rooftop which have little to no utilization, except during a handful
of major events (Boat Show, Auto Show, Home Show, and Art Basel).
Payment to No payments for the spaces shall be due to the City in the first six (6) months of operations. Hertz shall
the City submit monthly payments pursuant to the Agreement thereafter.
CONCLUSION
The attached Agreement represents the outcome of numerous negotiations sessions, as well as
one that improves upon Hertz' original proposal and addresses the key areas discussed during
Commission and Committee deliberations.
Overall, this program serves to meet the City's goals and objectives of being environmentally -
conscious by promoting a vision to make car sharing an integral part of daily life for Miami Beach
residents and visitors. Benefits from this program will include reduced traffic congestion, improved
air quality, and increased parking availability.
It is recommended that a Resolution of the Mayor and City Commission of the City of Miami Beach,
Florida, approve all material and substantive terms of the Agreement between the City and the Hertz
Corporation as the successful proposer pursuant to Request for Proposals No. 42- 07/08, for the
implementation, management, and operation of a Shared Car Service; further authorizing the Mayor
and City Clerk to execute the Agreement having an initial term of five (5) years commencing on the
Operational Date and ending five (5) years from the Operational Date, with a five (5) year renewal
term to be exercised at the Citys sole option and discretion.
Attachments
Exhibit 1 - Concession Agreement
JMG /JGG /SF
T:12011 /Oct19/ Consent/ RFP42- 07- 08CarSharingConcessionAgreement- Memo.doc