Budget Committee moves Serco parking contract to full Board after trimming proposed three‑year extension to one year

The San Francisco Board of Supervisors Budget and Finance Committee on an initial hearing moved a proposed contract amendment with CIRCO Management System Incorporated (doing business as Serco) to the full Board after amending the sponsor’s request to shorten a proposed three‑year extension to one year.

Chair Chris Dailey opened the discussion after the clerk read Item 1, a resolution to approve a fourth amendment to Serco’s five‑year contract that would extend the agreement by three years and raise the not‑to‑exceed amount from $50,000,000 to $61,000,000. Sponsor remarks noted the item was before the committee to give the public an opportunity to air concerns and that the sponsor was not fully comfortable with the three‑year term. “I will be suggesting a lot less than 3 years,” the sponsor said, urging the committee to press MTA for a faster process.

Justin True (MTA), presenting for the Municipal Transportation Agency, said the three‑year extension would allow the city time to complete parking technology pilots, pay off financing on roughly 24,000 meters and undertake a robust RFP incorporating pilot results and stakeholder input. True described services included in the amendment—coin collection, software support, upgraded handhelds and armored car services—and said the extension would let the city “make sure that the technology is stable” before selecting a new vendor.

Ken Bruce of the Budget Analyst’s Office told the committee the amendment increases the contract cap from $50 million to $61 million and noted items in the analyst’s report, including a delayed smart‑card implementation under the current contract. Christine Martin highlighted a controller’s internal control review that produced 12 recommendations addressing controls over keys, vault seals and supervisory review; she emphasized the review was a process control review rather than a financial audit.

Supervisors pressing MTA included Supervisor Amiano, who questioned a $22 million expenditure tied to meter replacements and lease financing; MTA stated the meters were financed and the payoff date was scheduled for October 2009. MTA also said a discrepancy between coins collected and software‑reported deposits dropped from about $600,000 in FY2005–06 to roughly $60,000 (about 0.3%) in the most recent reporting period.

Multiple supervisors, including the sponsor, urged a shorter extension and specific reporting requirements. The committee heard public comment (two speakers) and received a legal clarification from the city attorney that adopting a narrower term would require a signed one‑year agreement be filed before final contract approval at the Board.

On the committee motion, Supervisor Amiano moved and Supervisor Mercarimi seconded an amendment limiting the extension to one year. The committee took the motion "without objection" and voted to forward the item to the full Board with the one‑year amendment and the committee’s recommendation as amended. MTA said it would work over the coming days to try to negotiate terms acceptable to the committee.

The committee’s action is procedural: the item is now expected to appear on the Board of Supervisors’ consent calendar or as a regular item with the proposed one‑year amendment and any negotiated contract attached. No final contract award occurred at the committee; the Board must still approve the final contract and appropriation actions as required.

What’s next: MTA was asked to return with a signed agreement reflecting the one‑year amendment (or alternative terms agreed with Serco) for Board consideration at the next available meeting. If Serco declines a one‑year term, committee staff advised the committee that the vendor and MTA would need to further negotiate terms and that Board approval remains required for any final contract.