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Home My WebLink AboutStaff Report 2603-6080CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, June 01, 2026 Council Chambers & Hybrid 5:30 PM Agenda Item 11.Approval of Contract Amendment No. 3 to Contract Number C20176367 with LAZ Karp Associates, LLC to Increase the Compensation by $713,311 for a revised total not-to- exceed $3,035,596 and Extend the Term by 18 Months for the Parking Enforcement Program for Residential Preferential Parking Districts; CEQA Status - Not a Project. City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Transportation Meeting Date: June 1, 2026 Report #:2603-6080 TITLE Approval of Contract Amendment No. 3 to Contract Number C20176367 with LAZ Karp Associates, LLC to Increase the Compensation by $713,311 for a revised total not-to-exceed $3,035,596 and Extend the Term by 18 Months for the Parking Enforcement Program for Residential Preferential Parking Districts; CEQA Status - Not a Project. RECOMMENDATION Staff recommends that the City Council approve and authorize the City Manager or designee to execute Amendment No. 3 to Contract C20176367 with LAZ Karp Associates, LLC (Attachment A) to extend term by 18 months and increase compensation in an amount not to exceed $713,311 for Parking Enforcement Program for Residential Preferential Parking Districts. This amendment results in a revised total contract not-to-exceed amount of $3,035,596. BACKGROUND The Office of Transportation (OOT) is responsible for parking policies and program direction for 8 of the City’s 10 commercial and residential parking permit (RPP) programs that provide parking availability for employees and residents. OOT released an RFP to contract (C20176367) with LAZ Karp Associates (formerly Serco) to provide parking enforcement services for six Residential Preferential Parking districts1. On March 20, 2023, City Council approved a two-year, six-month extension of the original three-year parking enforcement contract, with the expectation that a competitive solicitation for parking enforcement services for the included Residential Permit Parking (RPP) areas would be completed by August 28, 2025. That solicitation was not completed within the extension period, and the contract term has lapsed. The primary issue was that Office of Transportation staff did not fully account for the 1 Staff Report #10874 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city- manager-reports-cmrs/year-archive/2020/10874.pdf?t=70665.01 March 20, 2020. level of workload capacity required to complete the request for proposals process before the extension expired. As a result, the solicitation timeline was not aligned with available staff resources and operational demands. ANALYSIS FISCAL/RESOURCE IMPACT Significant cost savings were previously achieved throughout the contract’s initial term, providing the opportunity to extend and renew the current services through early 2025 without increasing the existing $2,322,285 contract limit. These cost savings in RPP enforcement resulted from: 1) suspension of enforcement activities related to Covid-19 impacts in the last three contract years, and 2) the adoption and transition to automated license plate recognition enforcement and related modified staffing plans. Additional contract services authority is now needed to continue program services, at approximately $50,000 per month, while City staff procure a new contract for services to begin March 1, 2027. Funding for this extension is available within the FY 2026 Adopted Operating Budget, which includes a loan of $0.3 million from the General Fund to the Residential Preferential Parking Fund. STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Vers.: Aug. 5, 2019 Page 1 of 8 AMENDMENT NO. 3 TO CONTRACT NO. C20176367 BETWEEN THE CITY OF PALO ALTO AND LAZ KARP ASSOCIATES, LLC This Amendment No. 3 (this “Amendment”) to Contract No. C20176367 (the “Contract” as defined below) is entered into as of August 28,2025, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and LAZ KARP ASSOCIATES, LLC, a Connecticut corporation, located at One Financial Plaza, 14th Floor, Hartford, Connecticut 06103 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment. R E C I T A L S A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of parking enforcement services for the Downtown Residential Preferential Parking (RPP) district, as detailed therein. B. The Parties now wish to amend the Contract to extend the term through February 28, 2027, and increase the compensation by Seven Hundred Thirteen Thousand Three Hundred Ten Dollars and Fifty Three Cents ($713,310.53), from Two Million Three Hundred Twenty Two Thousand Two Hundred Eighty Five Dollars ($2,322,285) to a revised Not-to Exceed total compensation of Three Million Thirty- Five Thousand Five Hundred Ninety-Five Dollars and Fifty Three Cents ($3,035,595.53) , for a continuation of services. C. As the Contract as amended by Amendment No. 2 lapsed on August 28, 2025, the parties intend to revive the Contract through this Amendment No 3. Should applicable law require that the Contract be revived, then all terms of the Contract as defined below are hereby restated and in force, subject to the changes in Sections 2, 3, and 4 of this Amendment No. 3. New consideration is being given as detailed in Section 3 “Not to Exceed Compensation”. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. Definitions. The following definitions shall apply to this Amendment: a. Contract. The term “Contract” shall mean Contract No. C20176367 between CONSULTANT and CITY, dated March 24, 2020, as amended by: • Amendment No.1, dated February 16, 2023 and • Amendment No.2, dated February 12, 2025 b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. Docusign Envelope ID: FEDD5AAD-9BF5-4B03-83FF-98FB2C25C8E2 Vers.: Aug. 5, 2019 Page 2 of 8 SECTION 2. Section 2, “TERM”, of the Contract is hereby amended to read as follows: “The term of this Agreement shall be from the date of its full execution through February 28, 2027, unless terminated earlier pursuant to Section 19 (Termination) of this Agreement” SECTION 3. Section 4, “NOT TO EXCEED COMPENSATION”, of the Contract is hereby amended to read as follows: The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Three Million Thirty- Five Thousand Five Hundred Ninety-Five Dollars and Fifty-Three Cents ($3,035,595.53). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “SCHEDULE OF RATES,” which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 4. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit “C” entitled “COMPENSATION, AMENDMENT NO. 3”, AMENDED, REPLACES PREVIOUS. b. Exhibit “C-1” entitled “SCHEDULE OF RATES, AMENDMENT NO. 3”,AMENDED, REPLACES PREVIOUS. SECTION 5. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 6. Incorporation of Recitals. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) Docusign Envelope ID: FEDD5AAD-9BF5-4B03-83FF-98FB2C25C8E2 Vers.: Aug. 5, 2019 Page 3 of 8 SIGNATURES OF THE PARTIES IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. CITY OF PALO ALTO City Manager APPROVED AS TO FORM: City Attorney or Designee LAZ KARP ASSOCIATES, LLC Officer 1 By: Name: Title: Officer 2 By: Name: Title: Attachments: EXHIBIT “C” entitled “COMPENSATION, AMENDMENT NO. 3” (AMENDED, REPLACES PREVIOUS) EXHIBIT “C-1” entitled “SCHEDULE OF RATES, AMENDMENT NO.3” (AMENDED, REPLACES PREVIOUS) Docusign Envelope ID: FEDD5AAD-9BF5-4B03-83FF-98FB2C25C8E2 COO Mike Kuziak President John Svendblad Vers.: Aug. 5, 2019 Page 4 of 8 EXHIBIT “C” COMPENSATION, AMENDMENT NO.3 (AMENDED, REPLACES PREVIOUS) The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement based on the hourly rate schedule attached as Exhibit C-1. The compensation to be paid to CONSULTANT under this Agreement for all services, additional services, and reimbursable expenses shall not exceed the amount(s) stated in Section 4 of this Agreement. CONSULTANT agrees to complete all Services and Additional Services, including reimbursable expenses, within this/these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY. 1. Year One (3/1/2020 through 2/28/2021) Not to Exceed $748,672.00 2. Year Two (3/1/2021 through 2/28/2022) Not to Exceed $771,132.00 3. Year Three (3/1/2022 through 2/28/2023) Not to Exceed $802,481.00 4. Year Four (3/1/2023 through 2/28/2024) Not to Exceed $842,579.00 5. Year Five (3/1/2024 through 2/28/2025) Not to Exceed $884,708.00 or the remaining balance of the maximum total compensation under this Agreement, whichever is less. Actual Compensation as of August 28, 2025 for years 1 through 6 (Yr 6: March 1, 2025 –August 28, 2025): $2,145,920.53 6. Year Six (08/29/2025 through 2/28/2026) Not to Exceed $289,675.00 7. Year Seven (3/01/2026 through 2/28/2027) Not to Exceed $600,000.00 Reimbursable Expenses: None Maximum Total Compensation: $3,035,595.53 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: None Docusign Envelope ID: FEDD5AAD-9BF5-4B03-83FF-98FB2C25C8E2 Vers.: Aug. 5, 2019 Page 5 of 8 All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. Docusign Envelope ID: FEDD5AAD-9BF5-4B03-83FF-98FB2C25C8E2 Vers.: Aug. 5, 2019 Page 6 of 8 EXHIBIT “C-1” SCHEDULE OF RATES, AMENDMENT NO. 3 (AMENDED REPLACES PREVIOUS) CONSULTANT shall be paid hourly for each officer and project manager that maintains a parking facility. The tables below include the payment compensation schedule for the program including pre-defined pricing for implementation of the program. The compensation tables shall remain fixed for term of the contract. Compensation Terms – Year 1 Project Manager – Direct Labor Rate 1,920 $49.67 $95,355 Overhead Rate (including Fridge, G&A and Fee) 1,920 $38.43 $73,791 Project Manager (fully burdened) 1,920 $88.10 $169,146 Parking Enforcement Officers – Direct Labor Rate 15,360 $19.00 $291,840 Overhead Rate (including Fringe, G&A and Fee) 15,360 $14.70 $225,844 Parking Enforcement Officer (fully burdened) 15,360 $33.70 $517,684 ODCs/Materials to include: bicycles/vehicles, uniforms, fuel, cellphones, and other misc. Officers (7 FT PEOs + 1 FT Supervisor) and Compensation Terms – Year 2* Project Manager – Direct Labor Rate 1,920 $51.15 $98,215 Overhead Rate (including Fridge, G&A and Fee) 1,920 $39.59 $76,005 Project Manager (fully burdened) 1,920 $90.74 $174,220 Parking Enforcement Officers – Direct Labor Rate 15,360 $19.57 $300,595 Overhead Rate (including Fringe, G&A and Fee) 15,360 $15.14 $232,619 Parking Enforcement Officer (fully burdened) 15,360 $34.71 $533,214 ODCs/Materials to include: bicycles/vehicles, uniforms, fuel, cellphones, and other misc. Officers (7 FT PEOs + 1 FT Supervisor) and *3% cost of living increase Docusign Envelope ID: FEDD5AAD-9BF5-4B03-83FF-98FB2C25C8E2 Vers.: Aug. 5, 2019 Page 7 of 8 Compensation Terms – Year 3** Project Manager – Direct Labor Rate 1,920 $52.18 $100,179 Overhead Rate (including Fridge, G&A and Fee) 1,920 $40.35 $77,477 Project Manager (fully burdened) 1,920 $92.53 $177,657 Parking Enforcement Officers – Direct Labor Rate 15,360 $20.60 $316,416 Overhead Rate (including Fringe, G&A and Fee) 15,360 $15.93 $244,711 Parking Enforcement Officer (fully burdened) 15,360 $36.53 $561,127 ODCs/Materials to include: bicycles/vehicles, uniforms, fuel, cellphones, and other misc. Officers (7 FT PEOs + 1 FT Supervisor) and **3% cost of living increase Compensation Terms – Year 4*** Labor Categories Est Hours Hourly Rate Extended Rate Project Manager – Direct Labor Rate 1,920 $54.79 $105,195 Overhead Rate (including Fridge, G&A and Fee) 1,920 $42.37 $81,346 Project Manager (fully burdened) 1,920 $97.16 $186,540 Parking Enforcement Officers – Direct Labor Rate 15,360 $21.63 $332,237 Overhead Rate (including Fringe, G&A and Fee) 15,360 $16.73 $256,919 Parking Enforcement Officer (fully burdened) 15,360 $38.36 $589,156 ODCs/Materials to include: bicycles/vehicles, uniforms, fuel, cellphones, and other misc. N/A $55,968 Burdens and Fee G&A ODCs and Materials (fully burdened) Project Manager (1), Parking Enforcement Officers (7 FT PEOs + 1 FT Supervisor) and N/A $842,579 Docusign Envelope ID: FEDD5AAD-9BF5-4B03-83FF-98FB2C25C8E2 Vers.: Aug. 5, 2019 Page 8 of 8 Compensation Terms – Year 5 Labor Categories Est Hours Hourly Rate Extended Rate Project Manager – Direct Labor Rate 1,920 $57.53 $110,455 Overhead Rate (including Fridge, G&A and Fee) 1,920 $44.49 $85,413 Project Manager (fully burdened) 1,920 $102.01 $195,868 Parking Enforcement Officers – Direct Labor Rate 15,360 $22.71 $348,849 Overhead Rate (including Fringe, G&A and Fee) 15,360 $17.56 $269,765 Parking Enforcement Officer (fully burdened) 15,360 $40.27 $618,614 ODCs/Materials to include: bicycles/vehicles, uniforms, fuel, cellphones, and other misc. N/A $58,767 Burdens and Fee G&A ODCs and Materials (fully burdened) Project Manager (1), Parking Enforcement Officers (7 FT PEOs + 1 FT Supervisor) and N/A $884,708 ***5% cost of living increase (based on Bay Area CPI 12/22) Year 5 shall not exceed $884,708.00 or the remaining balance of the maximum total compensation under this Agreement, whichever is lower. Compensation Terms – Year 6 through Year 7 Labor Categories Rate Project Manager – Direct Labor Rate $57.53/hr Overhead Rate (including Fridge, G&A and Fee) $44.49/hr Project Manager (fully burdened) $102.01/hr Parking Enforcement Officers – Direct Labor Rate $22.71/hr Overhead Rate (including Fringe, G&A and Fee) $17.56/hr Parking Enforcement Officer (fully burdened) $40.27/hr ODCs/Materials to include: bicycles/vehicles, uniforms, fuel, cellphones, and other misc. $0.00 $0.00 $0.00 Officers (7 FT PEOs + 1 FT Supervisor) and ODCs/Materials (all fully burdened) To be determined based on actual use and hourly rates above. Docusign Envelope ID: FEDD5AAD-9BF5-4B03-83FF-98FB2C25C8E2