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CPY Document Los Angeles World Airports February 27,2007 Trade, Commerce, and Tourism Committee City of Los Angeles City Council Room 395, City Hall 200 North Spring Street Los Angeles, CA 90012 Re: 07-0124-S1 LAX Dear Honorable Council Members: Ontario Van Nuys We have received and reviewed the City Council motion introduced by Palmdale Councilwoman Wendy Greuel regarding our contract with Authorized Taxicab Supervision, Inc. (ATS). Concerns have been raised in the recent audit of ATS City of Los Angeles conducted by the City Controller and we have already taken aggressive steps to Antori:o R. Vil!al-aigos3 Mayor remedy the problems identified. Board of Airport Commissioners Of note, at its February 5, 2007 meeting, the Board of Airport Commissioners 1\lari ¡. I,u:licribcrg (BOAC) authorized Los Angeles World Airports (LAWA) staff to prepare and p r l~s I (j c 11'. release within 45 days a Request for Proposals (RFP) for taxicab supervision Villu;il C. \icli:5CD and management services. All recommendations in the Controller's report will be V:cc f-iCSIG(~,'ì: implemented and the concerns identified will be fully addressed. Details, Jose;:h A. Ä:-ecas including a timeframe, are included in the attached copy of LAW A's response to \jic~aei ,A. 12'NSCHl the Controller's Office. ~~yv '" PcFsaouras r'ernandc M. TOIT8S-GI "iv'alte,-7itkin We take the concerns identified in the audit very seriously and appreciate the S21l'sor \¡Iengist" opportunity to share with you our plan of action. For further details and A::ti~g Exc~LJtl'Vc Jirecto! information, please feel free to contact me at (310)215-7662. Sincerely, 1Z:;~~:;stl/v-V\~ Acting Executive Director cc: Councilmember Janice Hahn Councilmember Bill Rosendahl Councilmember Jack Weiss Councilmember Wendy Greuel Councilmember Eric Garcetti Board of Airport Commissioners 1WoriLi "Nay PO Box 92216 Los l'Inr;eles California 90009-2216 Telephone 310646 5252 facsimile 3106460523 Internet \'.Nw.law8.0(g CITY OF LOS ANGELES INTER-DEPARTMENTAL CORRESPONDENCE Date: February 13, 2007 Memo To: Laura N. Chick City Controller dd From: Samson Mengistu . Acting Executive Dir cto , Los Angeles World Airports Subject: Action Plan - Audit of the City's Contract with Authorized Taxicab Supervision, Inc. Los Angeles World Airports (LAWA) has reviewed the "Audit of the City's Contract with Authorized Taxicab Supervision, Inc." and appreciates the analysis provided by your office. We take the findings and recommendations extremely seriously and have already taken aggressive steps to remedy the issues identified. At its meeting of February 5, 2007, the Board of Airport Commissioners (BOAC) authorized LAWA to prepare and release within 45 days a Request for Proposals (RFP) for taxicab supervision and management services. This RFP will be structured to provide for a performance-based approach to taxicab management and will not include the responsibility of revenue collection. All recommendations in the report will be implemented and the concerns outlined will be fully addressed. Detailed below are LAWA's responses to each of the recommendations found in the audit along with our estimate of the timeline for implementation. Recommendation 1 LAWA management should consider requiring using tokens or other non-cash method for taxicab drivers to remit payment of the LA surcharge. Department Action To handle this problem in the near term, LAWA will change the payment collection system within 60 days to use our Automated Vehicle Identification (AVI) system. Currently AVI transponders are installed in each taxicab and are used to monitor taxi activity at LAX. With this change, AVI-generated invoices will be sent to each taxi company monthly. The companies wil be required to submit payment directly to LAWA Recommendation 2 LAWA management should consider requiring automation of the holding lot functions including collections and booth operations to increase efficiency and reduce costs. Department Action LAWA is in the process of developing a taxicab revenue collection system. LAWA is studying several types of revenue collection systems used at airports, transportation centers and other facilities with large taxicab operations. Our revenue collection Ms. Laura Chick February 13, 2007 Page 2 program development will include a study of methods used and results achieved at these other locations. As noted in our response to Recommendation 1, an interim solution will be implemented within 60 days for all taxicabs. Recommendation 3 When renegotiating the contract for taxicab supervision, LAWA management should base contract specification requirements on desired outcomes (e.g., standards for lot cleanliness, dispatch response times, etc.) rather than defining the number of staff, thereby allowing the contractor additional flexibility and control to effectively manage costs, while adhering to performance standards. Department Action These suggestions will be incorporated into the RFP for the new contract for taxicab supervision and management services. Recommendation 4 When renegotiating the contract for taxicab supervision, LAWA management should identify which duties are specifically desired and required by the contractor and include them in the contract. Department Action LAWA agrees with this recommendation and will incorporate this suggestion into the RFP for the new contract for taxicab supervision and management services. Recommendation 5 When renegotiating the contract for taxicab supervision, LAWA should consider conducting a competitive process to promote effectiveness through innovation; maximize the City's retention of fee revenue; and/or consider altering the payment structure. Department Action LAWA has received direction from the BOAC to conduct a competitive process to contract for taxicab supervision and management services. Through this process we will encourage automation of taxicab dispatch functions to the fullest extent possible. In addition, LAWA will give strong consideration to companies with a proven track record of successful taxicab operations at airports, transportation centers and other facilities with large scale taxi operations. As part of our evaluation, LAWA will also conduct an analysis of the benefits of using City employees to perform these tasks. Recommendation 6 LAWA should improve its oversight of the contracted taxicab supervision function to ensure compliance with the Agreement and to ensure that the contractor's actions are in the best interest of the City. Department Action Existing LAWA staff will develop guidelines for use in monitoring A TS. Ms. Laura Chick February 13, 2007 Page 3 Recommendation 7 LAWA should immediately execute a land lease agreement with ATS, and require proper written authorization for related sub-lease with catering truck operator. Department Action LAWA's Property Division has drafted a lease agreement that will be included in the RFP for taxicab supervision and management. The existing ATS agreement allows for catering trucks to provide services in the taxi holding lot, but oniy with the express written approval of the Executive Director. LAWA has asked ATS to return the $24,000 in fees collected from this operator, as LAWA had not given permission to ATS to collect these fees. Recommendation 8 LAWA should pursue integrating the physical and electronic systems to control commercial vehicle access and to better ensure that A Vi provides an accurate count of taxicabs entering LAX arrival areas. Department Action In addition to the information contained in our response to Recommendations 1 and 2, LAWA is studying the possibility of reconfiguring the taxicab holding area. This reconfiguration would provide for better control, taxi access to the CTA, and address the concern that the AVI system does not capture all taxis exiting the holding lot. The complete reconfiguration of the taxicab holding area is expected to be completed within six months. Recommendation 9 Unless, and until, the AVI system can be relied upon to provide an accurate count of taxicabs entering LA, LAWA should require ATS to provide an electronic file of Trip Record serial numbers, which should be reconciled to the fee remittance data provided. Department Action LAWA agrees with this recommendation and has notified ATS in writing to begin implementing this process commencing with the January 2007 Trip Records. Recommendation 10 LAWA should require ATS to maintain adequate support for all expenditures and ensure that financial information is consistently recorded and accurately reported. Department Action LAWA's Landside Operations Division has informed A TS of this requirement and will work with LAWA's Revenue and Billing Audit Division to monitor expenditures and review financial records. Ms. Laura Chick February 13, 2007 Page 4 Recommendation 11 LAWA should review ATS costs for reasonableness, as compared to the fee revenue received, and consider altering the fee structure and/or letting a competitive selection process to maximize program effectiveness while minimizing the costs to City and/or ratepayers. Department Action LAWA's Landside Operations Division will work closely with the Revenue and Billing Audit Division of Finance to implement this recommendation immediately. Recommendation 12 LAWA should require ATS to comply with all State requirements regarding workers compensation regulations. Department Action LAWA has notified A TS in writing of the requirement to comply with State regulations regarding workers compensation. Recommendation 13 LAWA should ensure all contractors operating on
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