Fiscal Note
Sufficient funds are available in the Parking Utility and Overture Center operating budgets to cover the respective costs associated with these agencies. An unexpended balance of $799,727 remains in Contingent Reserve, sufficient to fund the Transit portion of this payment. (fiscal note approved by D. Brasser)
Title
Authorizing a payment of $20,903 to Cintas Corporation to reimburse for unrecoverable costs associated with the short-term provision of uniform services and appropriating $15,466 from Contingent Reserve to the Transit operating budget to fund Madison Metro's portion of these costs.
Body
During 2004, City staff conducted an extensive Request For Proposals (RFP) process to select a vendor for uniform rental, embroidery, delivery, cleaning and related services. The process brought together the uniform requirements of all City departments which had historically been fragmented among several different vendors. Dane County's uniform service needs were also included in the RFP, in an attempt to achieve the most advantageous volume pricing. While most of the existing City uniform agreements do not expire until December 31st of this year, the agreement in place for Madison Metro expired on Dec 31, 2003, the Overture Center agreement expired on June 30th of 2004.
On April 21, 2004, the City/County RFP evaluation committee unanimously recommended Cintas Corporation to be the winning bidder, at a price structure that resulted in a substantial savings from the individual department pricing previously in place. Agencies such as Madison Metro Transit had delayed ordering new or replacement uniforms in anticipation of a new service contract being available. Comptroller's Office staff authorized Cintas to begin providing uniform services to the Transit department under the terms of their proposal on May 17, 2004. Cintas also began service for the Overture Center in anticipation of the September 18th grand opening. On June 15, 2004 a resolution was introduced to gain Common Council authorization of the new Cintas uniform contract, given the substantial size and multi-year term of the City-wide contract. However, upon recommendation of the Board of Estimates, the Common Council voted to award the uniform services contract to Aramark Uniform Services, the second runner-up, on Aug 3, 2004 (see Resolution # 61736).
Subsequently, Cintas provided City staff with an accounting of its costs associated with the commencement and subsequent termination of uniform rental services to Metro and Overture, using the prices and depreciation schedule outlined in its unsuccessful bid. Comptroller staff learned during the RFP process that typically, uniform suppliers do not realize a profit until several months or years into a rental contract, and prices are bid according to the anticipated duration of the rental agreement and depreciation of rental garments. It is also standard in the industry to pay the vendor for custom embroidered items at the end of a contract, regardless of the duration. With knowledge of these standards, the Comptroller and City Attorney have negotiated an equitable buyout of $20,903 to compensate Cintas for reasonable costs incurred prior to the transition of uniform services to Aramark. Of these costs, $15,466 for Transit and $2,184 for Overture are related to uniform stock purchased, embroidered and, in the case of Transit, delivered by the vendor and put into use. Custom embroidered items still in possession of Cintas will become the property of the City. The remaining $3,253 represents reimbursement for temporary price reduction offered to the Parking Utility and correction to reflect the higher prices that would have been paid under Parking Utility's existing contract with Cintas.
WHEREAS, based on representations made by City staff, Cintas Corporation began providing uniform rental services to Madison Metro Transit, Overture Center and the Parking Utility under the terms of its proposal submitted pursuant to the City's RFP, and
WHEREAS, Cintas' service was terminated and replaced by another uniform vendor prior to the term anticipated in Cintas' proposal, resulting in costs to Cintas of $20,903 for purchase and preparation of uniforms for the City which would have been borne by the city throughout the life of the contract but are now unrecoverable, and
WHEREAS, the $15,466 portion of this cost attributable to Madison Metro Transit is not available within budgeted resources.
NOW THEREFORE BE IT RESOLVED, that the Common Council authorizes a payment of $20,903 to Cintas Corporation to reimburse for its unrecoverable costs associated with the provision of uniform services to the City during 2004, and
BE IT FURTHER RESOLVED, that $15,466 of this cost will be allocated to Transit, $2,184 to the Overture Center, and $3,253 to the Parking Utility, and
BE IT FINALLY RESOLVED, that $15,466 be appropriated from Contingent Reserve to the Madison Metro Transit operating budget to fund the Transit portion of this payment.