Title
Request to Issue Shopping Cart Retrieval Contract RFP
Description
This report requests the Community and Cultural Investment Subcommittee recommend City Council approval for the Neighborhood Services Department to initiate a Request for Proposal to establish a new five-year Shopping Cart Retrieval contract to succeed the current contract expiring in November 2022.
THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.
Report
Summary
The Neighborhood Services Department's (NSD) Shopping Cart Retrieval Program picks up abandoned shopping carts throughout the city of Phoenix. The program was designed to address increasing resident concerns regarding hazards to pedestrians and motorists, and the visual blight created by abandoned shopping carts in neighborhoods. The program provides a timely response to community complaints regarding carts abandoned on sidewalks, along rights-of-way and in alleys. The City’s current contract expires in November 2022.
How the Program Works
Complaints can be submitted via NSD's phone, email, website or myPHX311 app. When a complaint for an abandoned shopping cart is received, program staff confirm the location and number of carts to be addressed, and forward a request to the current vendor, Arizona Cart Services (ACS). The contract with ACS provides two days to collect the cart and/or report back on the outcome of their attempt. Their reporting indicates if the cart(s) was found at the site, the number of carts collected, and whether the cart(s) were returned to an ACS contracted retailer. For fiscal year 2020-21, ACS average response time was 1.66 days.
In addition to responding to resident complaints, the cart retrieval vendor also performs strategic cart retrievals in areas that have been identified by NSD as focus areas for frequently abandoned carts. NSD works with residents, property/business owners, community stakeholders and other City departments to identify these focus areas to proactively address the safety and blight issues created by this activity.
Once the carts are removed, the contracted vendor returns them to the originating retailer. NSD educates retailers who utilize shopping carts regarding the issues their unattended carts can cause in surrounding neighborhoods and encourage them to utilize services to retrieve their carts and advancing technologies to retain their carts within their property boundaries. Retailers can also contract directly with ACS to proactively retrieve their carts to prevent complaints being reported to the City. Retailers that do not have a contract with ACS are billed $50 per cart by the City.
Program History
The Shopping Cart Retrieval Program was originally designed to be cost recovery through the revenue collected from fees billed to the retailers that did not have their own cart retrieval contracts, as few had contracted services in place to retrieve carts taken from their business premises. The fee was used as a tool to encourage retailers to implement measures to both prevent carts from being removed and to retrieve them when they are removed. As most large retailers contracted with the City’s vendor to have carts collected, the annual number of billable carts declined significantly beginning in fiscal year 2012-13. From fiscal year 2015-16 forward, the Shopping Cart Retrieval Program was no longer able to achieve cost recovery due to the continuing reduction in billable carts. By fiscal year 2016-17, the program only recovered 28 percent of cost. In 2017, City Council approved an increase of the $25 retrieval fee to $50 to increase recovery of program expenses and further incentivize retailers to manage cart inventories.
From fiscal year 2017-18 to fiscal year 2019-20, combined cart retrievals from complaints and proactive collections averaged nearly 3,200 shopping carts collected annually, with average contract billing of $18,050, and average City billing to retailers of $7,358. This equates to a three-year average of 41 percent cost recovery. In fiscal year 2020-21, abandoned carts retrieved rose substantially to 5,798, an increase of 67 percent from the prior year. Contract billing for the year was $26,406 and City billing to retailers reached $9,700, or 37 percent cost recovery. Early data from the first quarter of fiscal year 2021-22 indicate that cart retrievals are trending even higher than the previous year, with the potential to surpass 9,000 retrievals and drive the cost recovery percentage lower.
Procurement Information
Services will be procured in accordance with Administrative Regulations 3.10.
Financial Impact
Funding is available in the Neighborhood Services Department's General Fund Operating budget.
Department
Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Neighborhood Services Department.