Recommendation to adopt Specifications No. RFP FM17-009 and award a contract to Utility Cost Management, LLC, of Fresno, CA, to perform an electric utility billing audit, for a period of two years, with the option to renew for two additional one-year periods, and authorize City Manager, or designee, to execute all documents necessary to enter the contract, including any necessary amendments.  (Citywide)
This motion carries. Item 17 Report from Financial Management Recommendation to award a contract to Utility Coast Management to perform an electric utility billing audit citywide. Vice Mayor Richardson Utility. Staff Report, please. John GROSS Mayor and Council Members, thank you. This is a was an RFP and a recommendation to award for a service where we're trying to make sure that the city's electric bills are appropriate and that we're being charged at the right level. So we are we put out an RFP for audit services. We got four responses. All of these responses use the standard method of compensation. They get a percentage of the savings. So there is no net outlay to the city, there is only a savings. And again, the firm will get a percentage of the savings. We had a selection committee review the proposals and unanimously the committee unanimously selected a firm called Utility Cost Management UCM and that is our recommendation to award. And we would hope that when their work is done that there will be savings to the city and we would be sharing those savings with the company for about 24 months. That's the end of my report. That's me, Richardson. Thank you. And anytime we can, we can look for more savings. As always. Great. I had a conversation with City Manager a while back. It seems similar, but we talked about selecting a firm or going through a similar process. Take a look at our phone lines and other things. How does this how do we anticipate doing something like this before we move to the new civic center? Or is this an opportunity to save more money? To look at some of our other services in addition to electric? And we, in fact, are going to look at this. And then I would not be surprised if we find that it will be beneficial to move on to other services also. So I think you have a good idea. Thank you. That's a woman. Pierce, do you ever get comments? No. Okay. Any public comment on 17? Yes, Your Honor. Yes. Please come forward. I may. Thank you, Mayor Garcia. Vice Mayor Richardson. My name's Cliff Smith. I'm the Southern California representative of Troy and Banks, Inc, one of the bidders for this contract. I'm joined by Kathy State Cock, who's a Northern California state shark, who is the Northern California representative of Troy and Banks. As a side note, I was born in Long Beach at the Long gone Seaside Memorial Hospital. I learned how to swim on the beach in front of the old Pacific Coast Club, and my grandmother took me to the pike when it was the pike. And it's certainly a vastly improved area down there from what a child remembers. Troy And this contract is not minor. The RFP calls for and essentially the language is to identify and recover past overcharges. However, the contract awarded to the firm UCM does not provide for identifying and recovering past overcharges. For one simple reason Try and Banks is the largest company in the United States that identifies utility cost overcharges. It has recovered over $500 million in charges from for over 10,000 clients. It's the nation's leader in this business and what exactly is involved here? This is a four year lookback that looks at nearly $70 million of utility charges that Long Beach has paid the we object to the award for two UCM for three reasons. One, the bid price trillion banks is by far the lowest bidder, which you seem will have to identify a dollar 45 in savings compared to the dollar that Troy and Banks would get in order for Long Beach to break even. The you cannot audit utility bills unless you physically inspect every street light and every installation in the city. I will note that in the RFP at section 3.4, it calls for the bidder to examine and identify non-existent equipment. However, the staff report drops that requirement. Now that may be in there in the contract someplace, but it is cost it is absolutely cost intensive to put a staff person into a city to count. That's what Troy and Banks does. That's how Troy and Banks found over 3700 missing street lights in the city of Buffalo, New York. They start this week for the same function in the county of San Diego. And one of the issues that that financial management raised in awarding this to you seem was that, well, you seem knows California Troy and Banks was selected by the United States Postal Service to audit all the facilities in California, including every single service area of Southern California. Edison, Troy and Banks today is now going doing this work for the city of Manhattan Beach, for the city of Corona City, the City of Hope, National Medical Center and the Beard of Troy. And banks included putting a permanent, say, a full time staff inside the city of Long Beach to physically count and examine all your streetlights. All of your back meters. Is 3 minutes a person. So if I can have others from from your group speak over. You have 3 minutes if you'd like. I may. This is a serious contract. It is. But also each person is only allowed 3 minutes per the rule. And so if she'd like to speak for 3 minutes, she's welcome to do so. And I guess you go ahead. Go ahead. And can she give me her three minute? We we don't do that. The only if that if the council wanted to vote and extend your time, that that would be up to them. But each person's 3 minutes but she definitely gets 3 minutes. Well. If there's an interest from the council. He's going to extend. Okay. It's okay. If there's interest in that from the council, I'm happy to extend. Okay. So so I will give you an additional 2 minutes. Thank you. Go ahead. Appreciate that. That's all I'll need. The the issue is the price. The second is the scope of service. The scope of service provided by TRAI and banks is vastly superior to you. Seems you seem does not even have the experience or background. In addition, Troy in Banks for six years has been the utility auditor for the Port Authority of New York and New Jersey. You seem has no experience with major airports and major commercial terminals and seaports. That's exactly what Troy and Banks does. That's why it was the number one choice. But as far as doing this audit, how do you audit a bill when you do not go out and physically check every single thing you're being charged for? And that is what the city of Long Beach will end up. If this contract with UCM is approved and Troy and Banks puts a team of 4 to 6 people inside the city, drives around, checks GPS, takes a look at everything. And that's what they're starting in San Diego this week. And that's what was not. We tried to make this case to the financial management people and then we're told, well, you don't know California. And that's just simply not it. If this contract is approved, all we can say is that Long Beach will leave a lot of money on the table, because once you have resolved this audit with a once over with Southern California Edison, you don't go back. Thank you for your time. That's. Thank you, sir. Anybody else? Public comment? Yes, sir. So maybe I can come to you. Okay? Okay, sir. Good evening. Thank you. I just want to be clear while I be given 5 minutes as well. I'm with my name's Michael Krikorian. I'm with Utility Cost Management. So unless there's any objection. Go ahead, sir. All right. Thank you. Utility costs. Management has an unmatched 26 year record of success reviewing electricity bills and obtaining refunds and savings for California customers. We have worked for more than 250 public entities in California, including more than 100 cities. We have recovered. We have reduced California electricity bills by hundreds of millions of dollars and have recovered more than $50 million in refunds. We have received universally positive reviews from clients and have provided dozens of references from public entities to the city of Long Beach. Troy Banks has achieved some success as well, reviewing. Utility bills, but their success. Has been limited almost. Exclusively to New. York. Electric utilities are regulated at the state level. Every charge that the city of Long Beach pays to Southern California Edison is regulated by the PUC. And so what happens in New York has almost zero correlation to their ability to perform here. Yes, they point to a few customers in California that they have worked with a handful, maybe three or four cities, but they cannot provide a single example of success they have had with customers in California. Not one. Troy Banks is new to California and quite simply is not qualified to audit California customers. Electricity charges, especially the charges for one for a customer as large as the city of Long Beach. So what they do is they engage in aggressive marketing practices and hire lobbyists like the the previous speaker in an attempt to overcome these deficiencies. Any firm can throw out a cut rate price and cast aspersions, false aspersions on their competitors. But if the city is hiring any professional, whether an accountant, a lawyer, the city needs qualified representation. There's simply too much at stake. Let me be clear we welcome competition and are happy to engage in an honest debate comparing Ukraine's qualifications, experience and achievements to theirs. However, what we find very troubling are Troy and banks misrepresentations and totally unsubstantiated and false allegations all espoused to council members except for tonight outside of the city's normal procurement process, making it impossible for us to respond. Except for the time I've been given here. Here are the facts. You seem performs the most thorough, complete and sophisticated analysis of electricity costs available. We have we've provided ample references to support this statement. California has by far the most complex electricity regulatory environment, environment in the nation. We lead the nation with all the programs when it comes to electricity. You seem works in this environment every day. Troy and banks does not. So if they were to be retained by the city, a lot of what they would be doing would be new to them. Troy Banks has never, not once appeared before the California Public Utilities Commission. This fact alone makes the firm unqualified to review the city's electricity charges. The CPSC approves every charge you pay. And in contrast, UCM has been involved at the CPAC for decades, has testified dozens of times before. The CPC. Regularly participates in Edison's general rate case process and has obtained over $20 million in refunds through the CPC process alone. We work with Edison and CPC personnel at the highest levels every day and this is what enables us to get results. Simply put, UCM provides a far superior and different service for Edison customers than Troy and Banks. And I. I believe the record makes this clear. The city staff concurs, and I urge you to approve the recommendation to approve to retain utility costs management. Thank you. Thank you, sir. Okay. We're going to go in and go back to the city council. Councilmember Austin. Thank you. And I appreciate the comments from the the I guess the applicants, their potential contractors. This appears to be a very complex issue, and I don't think I'm personally prepared to to vote on this evening. And so I'd like to move to the table, this item, to give us an opportunity to to study this issue a little bit longer. Mr. GROSS, is there a time sensitivity on this matter? No. So I'd like to make the motion to do that, if possible. Okay. Motion for how long? I think we need 30 days. Okay. So we want to schedule it back for another 30 days? Yes. Okay. So there's a motion in a second to schedule this item delayed over for 30 days. Councilmember Superdome. I had a question for staff. One of the speakers mentioned port and airport. Would that be the case that that this those areas would be reviewed or which is the city of Long Beach? This this contract does not include the port. It doesn't include the harbor. It does not include the harbor. It does include the airport. Okay. Thank you. Okay. Thank you, Councilwoman Mongo. Does the port have a separate contract? That's for the similar services? I do not know. Can we make sure we find that out before we come back to council? And then specifically. And I'll happy to meet offline about this. I'd like to know. Why auditing the port or airport or whatever port of that was included was not included. And if it's different, why that's not included in the qualifications or how that was come about. I'm sure there's a staff logic to it. I can answer that. Oh, wonderful. Great. The the harbor is not under our direct control. That's. And the airport is. Right. But the airport was not included as a qualification. No, it is it is included in our contract. That's what I was saying. And does the current recommended provider currently provide services to airports? The current provider is currently auditing an airport. The the it is as far as I know, absolutely correct that Troy and banks has audited airports. That's my understanding. But we don't see that overall. We do not see that as an issue. Okay. I'm looking forward to doing more research over the next 30 days. Thank you. But I actually, sir, that actually no, sir. Sorry. Vice Mayor Richardson. Says we're heading down this path. I'll just ask I'd like to know if there was a bottom line difference between the two contractors. I mean, the whole point of order then to see if there's a return for the city, was there a difference? Because there were some claims here tonight that I was unaware of that state. The scope of what folks responded to might have been different, might have had different numbers. So either we can respond to that tonight or when it comes back, maybe an outline of who generates more money, because that's what it's about. And I'd also like to, you know, think about maybe we could talk offline, you know, what are the other opportunities? So we talked about phones, but what else like what else can we audit and take a look at? And it just seems seems interesting to me. Maybe it's an expertize, but I would imagine that within the scope of what the Auditor City already does, we should maybe have a list of things that the city doesn't do. So we could take a look at those things. Thanks. Okay. There's a motion and a second on the floor to lay this over for 30 days. Is there any other council comments on this case? None. Members, please go and cast your votes. Motion carries. Okay. That completes a consent calendar. So this will be back in 30 days in front of the council, and I'm sure that staff will be in touch with folks that are involved in this. Moving on next as item three.