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City of Virginia Beach Ieawnary 18, 2002, ‘The Honorable Willian D. Sessoons, Jr. Mayor Mombers a City Counell Subjests Oceanfront Lifeguard Servieus Py icy Report Dear Mayo and Council Member As you Inow, the most cevent five-year Qcow unt Liftguand Services cowtaet expived in Octiber 2011, On August 46, 2011, the Depurtment of Firergeney Medical Services songhc policy guidarce on how to proceed with selecting the Cily's lfegueerd sexvives for the fire. Counc ditected stall i excctie 4 request for provosel (RTP) und eemeurrently prepare ae govemmcatat cstinate. Stall would hen cvaluate the responsiveness of the vendo! propos wt osts compared to the governnvent esti uly one company, Vinginia Beech Litesaviog (WITS) responded to tho REP, The City's estimere was preyural prior % uhe bid openine tor compariser. There is a significant price dlifforence between tle wo. Botl ELS and the Cily ace highly qguakfied sand ca dsfivering the lifeguard services at he Ocsantent Armaed isthe Occantont Lifeguard Services Pulicy Report, Tais repost outlincs the issucs and ‘nsideretions associated with selecting either a privude soplaclur or expanding ou existise ENS Tireguard proyram We look farval. ta your cisiderative amd dire, With Ptide in Our ( Attachment Policy Report Backcrouno Since 1929, the City of Virginia Beach has relied on private contractors to provide liteguare services on the Resort Area, Croatan, and $7" Street Beaches. Tha City spocifias standards of servine to be provided by'the contractor. These standards include minimum requirements for staffing, training, and equipment including licensure as an EMS agency. The contract with the current vendor, Virginia Beach Lifesaving Service {VBLS}, expired October 31, 2014 Over the last decade, lfeguarding services have changed across the country. Lifeguards are now expected to be full pariners in public safety response: equipped with the latest training and technology. They are pariners in public education and community marketing. The higher standards have led most communities to shift from a contracted to a public delivery model. No major West Coast heach community utllzes private contractors, Virginia Beach and Myrle Beach are the anly remaining major east coast beach destinations served by contractors. Ocean City, Atlantic City, Jacksonville Beach, and Daytona Boach have all developed municipal programs, ‘On August 16, 2011, the Dopartment of Emergency Medical Services (VBEMS) sought public policy guidance on haw to proceed with selecting the City’s Oceanfront Lifeguard Sorvices for ‘the future. Council directed City staff to execute a request for proposal (RFP) process and concurrently prepare a best governmental estimate (BGE). Staff would then evaluate responsivonoss af the vendor proposal and costs compared io BGE. VBLS was the only private vendor ta submit a bid, Its bid for 2012 was $1,445,000, which includes $50,000 in one-time start up costs, with 2% annual incrcases over the retaining four yoars of a five-year contract. The estimate for a comparable municipal service is $1,210,586 tor the 2012 Season, which includes $100,176 in one-time start up costs. The VBEMS proposal did aot istentity any cast incteases over the five year term. Before any adjustments are made, the \VBEMS proposal is $1,657,410 less than the VBLS proposal over the five year period. As will be discussed in more detail below, this five year differential is teduced to $1,262,467 ‘when allowance is made for potential VBEMS cost increases, indirect costs and diminished revenue streams, CONSIDERATIONS While citizens and visitors alike have been woll sorved by the current lifcguard agreoment, contractual arrangements offer limited room for growth or Hexiblty. Fired escalation costs must be fully funded even in the face of economic and budgetary dewntums. Any emerging changes in service requirements (12. expanded hours or beach areas} can only be supported if the contractor is wiling ta negotiate a change. On the other hand, municipal resources can be reallocated or modified based on emergent requitements and competing community needs, BIS has a long hislory of providing ovean lifeguard services to the community. They have a .good management team and have provided effective water rescue and basic fe Support (BLS) services avor the mast recant seven year contract VBFMS also has a lony history of emergency modical and marine rescue services. The department answers 39,000 calls annually providing advanced life support (ALS) care citywide. EMS has, for many years, served as the contract administrator for the oceanfront Wequard services, requiring that the rsponeible officers be familiar with all aspects. of lfeguarding and emergency beach response. VBEMS operates a valunteer marine rescuc team with over a combined 100 years of experience answering all types of water femergencios from the Chesapeake Bay to Back Bay. VBEMS has resort liteguarding experience and has supplemented the VBLS service in the past by operating feguard stands oon the resort beaches during evening hours, which has proven ta be thc most crucial time for drowning occurrences. For the past two years EMS has provided full-ims lfaguard services ‘with cxperienced guards and supervisors on 14 stands and roving patrols covering all Sandbridge beaches. Expetience in Sandbridge has demonstrated that both VBEMS and VBLS draw on tha same labor poo! for lifeguards and first line supervisors. The avorage rank and file employee #5 leaking for a job on the beach and to be treated well in the work place. Public vs, private ‘employment is not a factor. Senior managers are typically affitated only wilh their particular agency. lesue I: The City has li service. «d control over tho daily operations of a cantractad lifeguard The City does not have the ability to direct the activites of individual feguards or job tasks. The only required training is that which is spectied in the contract, Shou a special nce be identified (eg. providing message pointa to visitors about swimming after hours), the City must fst receive he concurrence of the contractor before the lfeguards can be assigned the ew duties. Meetings and exchange of correspondence hetween staff and contractor often Gelay the process. Likewise, citzen concerns can only be referred to the Weguard agency. The City has very ltl input in the resolution of complains, even though most beachgoers perceive the lifeguards 2s a City reprosontatives. ‘The contracting of a public safety service raisess voacems of perfarmance and accountability. Itis often difficult to integrate a commercial vendor into the defined authority and response roles that our City has in placa for its 3 public safety agencies. This has proved to be the case ‘over the span af the last contract period, With Ge exception of Myrtle Beach, ocean lifeguard services in every other major city on the east coast and all major cities and towns on lhe west coast are provided by state or municipal public safety agencies. Accountability and pubic safety system integration are major factors for municipal based lifeguard services. ths fact that govemments do not operate for profit allows governments to provide lifeguard and ather public safety sorvicas at a lower cost than private providers and facilitales a higher degree of flexbility in dally operations. Issue Ik The City and VBLS have offered different levels of service in thoir estimatesbid Both VBEMS and VBLS provide comparable equigment for rescue and fret response care. \VBEMS has offered enhanced services fo includo a surf rescue boat as part of fs operation and can de $0 as an enhancement utiizing current human resources and VBEMIS equipment. VBEMS will provide advanced life support (ALS} response while VBLS will provide basic life suppor (BLS) care. VBEMS var more readily adapt ta the demand of entertainment events as well as natural storm vents at the beach by drawing on inherent City resources by order of the City manager versus entering ints cmergency contract negotiations. Issue I: The management teams of both groups offer a wealth of experience. ‘The leaders of VBLS have a wealth of experience operating a lifeguard service on the ‘oceanfront boachos. Their professionalism and capability is unquestioned, | ikewise, ‘VBEMS officers have been providing public safety and marine rescue leadership for many years. The suesess in providing lifeguards at Sandbridge suggosts that the City has tho ability to manage and operate a large lifeguard service. Issue IV: Thara is a significant difference in costs between a municipal service and the RFP bid. ‘VBEMS has proposed a first year cost of $1,210,586, including start up. VBLS has proposed a first year cost of $1,445.00. including their startup needs. The first year bid is a 16% variance from the City's estimate for the 2012 Season. For the following years, a VBLS Contract will requite ¢ 2% annual escalation. The Ciy estimate relies on the annual budget process to drive future funding availabilty, so projecting future City escalations is somewhat problematic. For sake of comparison, applying the same 2% escalation to the City operation still provides a lower estimated cos! of $1,430,841 over the life of the tive year conbrac. EMS / VBLS Lifeguard services cost gt Analysis EMS § Variance”. 3 Variance yeaa” 3121058600 14.001 16% ‘ear? lass “pomig am Years 1358 70.75 fg Seq 75 veard . uanson Ge mess aes tend a2onade.c0 § sonowasi "20% five vest Gimilaive tol § “Sua 595 RNR, € To. o1 a FM amount adlusted to assume 2 annual increase vady fellect a 2% annual increas Even accounting for acldtional indirect costs, including Hiabilty insurance and worker's ‘compensation coverage increases as well as the cos! of the conlracto’s performance bond and the loss of BPOL and personal property fax revenues directly ansociated with the private contract, thete is still a $1.2 M or 17% variance over the life of the contract as shown boow: EMS / VBLS Lifeguard Services Cost Analysis TMS ERBIMESIEYS "Ss variance _% Variance year) ¢ aienao & $208 ak Year? rase.24 SN Zoo 186 ear taesesr hits pean 1 Yeon a ne Years ieaza da Five Yea Connulative Total 1245/16 Above snrountfaxzarin the following: ‘amount adjusted to ascumo 2%, annual inersane workers Compensation Risk Factor of $7,500 ner year Lity Purchase of Lability Insurance of 2M mullign wer yeor apuronimnately $20k pex your “Loss of PUL und Business Property Tax revenue attrinutable to private comract $50,776, OPERATIONAUIMAINTENANCE Current practice for the Resort Area is to execute a contract with a private vendor. Over the lc of the’ agreement, an officer irom VBEMS interacts with the vendar and ensures contract compliance. In the event adjustnents are needed, discussions are held at this level with the involvernent of the Chief of EMS, as necessary. Areas of coverage are defined by dale and fime. Once the contracted lifequards go off duly, the City assumes responsibilty for water Fescue response. VBLS has offered a proposal which continues this practice, ‘Tho proposed municipal service would provide lifeguards and retated services on the beach at of above the standards eet forth in the recent RFP. VBEMS wil integrate existing City resources and capabilities to the greatest extent possible to maximize efficiencies, ORGANIZATIONAL ‘The Chief of EMS is the process manager for beach safety issues, VBEMS and the volunteer rescue squads have been invalved with water safely education and emergency response for nearly 60 years. An EMS Division Chief is responsible for administering the Hfeguard services contract as one of his job functions, VBLS has the corporate organization in place to provide lifeguards on the beach. Any additional equipment offered in their proposal can bo procured in timo for the summer season. \VBEMS has the infrastructure in place to expand its existing Sandridge operation to cover the Resort avea. Logistics support and training will be provided by existing staff. Two full time officers will be hired to manage daily operations. Ambulance stating will not be impacted by the municipal program. Lifeguards and supervisors are part time personnel. Lesa, As a preliminary matter, there is no legal requirement to provide lifeguard services on the beach, nor is there a requirement to utilize a contractual lfequard service sather than City staff. “The potential liability ramifications of providing these services by City employees instead of an independent contractor will vary based upon the specific facts of each olaim However, as a goneral matter, the City should be found statutorily immune from claims of simple negligence arising from the provision of lffeguar serviens an the beach. Moreover, we believe the City should be found to have cammon law immunity fram lability for gross negligence because leguarding services are analogous to emergency medical servives for which a Citys absolutely immune from liabilily. City employees coud still be potentially abla for grass nagligenca claims depending on the factual circumstances of the claim. As a general matter, the City indemnifes is eriployees for lability arising out of and in the course of thei employment with the Cily, The City is self insured for such claims up to a threshold of $2 millon and than has a $10 millon excess liability policy. We are advised that the oxcess liabity insurance premium ‘would not change should VBEMS assume responsibilty for these lifequard services. Should the City Council so direct. generat liability coverage for the self insured portion ($2 million lim) coukd be obtained for approximately $10,400 per year. Bupserary The Ciy’s estimate lo provide a Resort Lifeguard Service in 2012 is 81:210,586, including start up costs. uturo year costs and subsequent changes, if any required, wil be handled through the normal City budget process. Tor example, f City employees are given a 1% pay raise, ifeguard salaries will go up 1%. VBLS has offered a bid af $1,445,000 far the first your with automatic 2% anaual escalations The City budget has $311,724 allocated in the curent fiseal year budget for Ooeantront Lifeguards, An additional $50,167 would be required to fully fund the start up and operating costs of a municipal service this fiscal year if Cily Council so diracts. There is adequate funding in the fy12 budget to support the first VBL payment (15% of contract price = $216,750) iF Cty Council decides to retain the private contract for service. PUBLIC INFORMATION The lifeguard RFP process is traditionally a high visiilly subject, so media attention will be likely. This policy report will be publicly distributed and will be discussed in open session on January 24 2012, Further public education can be conducted via VBTV programyming and ews contacts. ALTERNATIVE COURSES oF AcTION Alternative I: Establish a municipatlifequard service forthe summer of 2012, Advantages: * Offers the lowest cosl service, saving an estimated $1.4M over five years. + Allows maximum flaxibility ta madify servioas ta meat emargent ar evalving needs. # City has complete command and vantral of lifeguard program, + Provides ALS matical response. Disadvantages: * Increased City infrastructure and staft + One-time setup cast will require higher loval of funding in fist year of service. Alternative Il: Award the contract to VBLS, Advantages: + Continues a successful approach to guarding the beuch » No additional City infrastnucture is requited aver the long ferm. + The private vendor inay be financially responsible to citizens and visitors for negligence in situations where the City could have immunity if it provided the service internally. Disadvantages: © Higher cost. » City lacks complete command and control over Iteguards. + Ability to mest emergent needs is limited. + Provides only BLS medical response. RecowMenpanions 4 is recommended that the City Council adopt Alternative #1. This option provides comprehensive water rescue and BLS first response services at the lowest cost. A unified approach to public safely lfeguarding will be provided from Fart Story to Litt Istand Park. The muricipal madol will pravide higher loves af sarvica than offered by VBLS, including ALS level emergency care, in the coming years, the City wil have flexibility to’ adjusl service levels based on evolving needs and fiscal realities, Ifthe Gity Council elects to adopt Alternative #1. it would direct the City Manager to terminate the RFP process and expand the exising FMS municipal lfequard service to cover the Oceanfront Beaches. Budget ordinances will be required to authorize funding transfers and create the associated positions for fy12. Specifically, this would involve transfer of $311,724 currently appropriated for contracwal seivices with the Deparment of EMS budget ‘and transfer of $50,167 from the Goneral Fund Reserve for Contingencies to enable VEEMS to begin the hiring process for personnel and purchase equipment for service startup in May of 2012, ‘Submitted by: Poel tea Qe Bruce W. Edwards, EMS Ghist Approved by gdwves b. Byer Q James K. Spore, Cily Manager gon Date 4202012 Date