Following the Great Recession and withdrawal of an agency (City of Mountain View) previously receiving Animal services from Palo Alto, in May 2012 the City Council's Policy and Services Committee and Finance Committees discussed the City’s current service and revenue models. As a result, the City Council directed staff to take immediate steps to make the operation more self-sufficient to reduce reliance on the General Fund. After a series of subsequent actions and service changes, through Fiscal Year 2014 the goals of establishing sustainable service levels and expenses were not achieved. In fact, over time, the costs and general fund subsidy to shelter operations have increased.
In June 2014, the City Council referred a Colleagues Memo regarding the Palo Alto Humane Society’s (PAHS) interest in partnering with the City to the Finance Committee. The City Auditor was then engaged, and in April 2015 the City Auditor presented an audit concluding that Animal Services could not become revenue neutral under its current financial model, and faced challenges that were unlikely to be resolved if it continued operating as solely a city-managed function without a significant increase in general fund subsidy, donations, and/or revenue generating contracts. In approving the Fiscal Year 2016 budget, the City Council directed staff to pursue an alternative service model and allocated $250,000 to assist with possible transition costs.
During Fiscal Year 2016, the City Manager’s Office continued outreach and engagement with various community and City department stakeholders, including the Friends of the Palo Alto Animal Shelter (FoPAAS) and PAHS. With active participation from these stakeholders, staff conducted two Requests for Proposals (RFP) to assess the market for alternative services providers. Through the process of developing the first RFP and documenting the services and organizational support structure being sought, both FoPAAS and PAHS determined that they would not submit proposals.
The first RFP was issued on October 15, 2015 and closed December 11, 2015 with one respondent, Pets In Need, a local animal rescue service provider located in Redwood City. Due to the low response rate and in accordance with procurement best practices, staff conducted debriefing sessions with local animal care providers who did not submit a response to better understand current market conditions. These included Peninsula Humane Society, Silicon Valley Animal Control Authority, Humane Society of Silicon Valley and the County of Santa Clara. The consistent feedback was that the initial RFP was too prescriptive and limited their abilities to apply existing business models and best practices. City staff met with community stakeholders and the Services Employees International Union (SEIU) about the feedback. In collaboration with the stakeholders, the City re-issued a revised RFP with a less strictly defined scope. The new RFP was issued on January 27, 2016 and after one extension, closed on March 18, 2016. The City received one proposal from Pets In Need, a letter from the County of Santa Clara and a letter from the Humane Society of Silicon Valley. Staff conducted an evaluation of the responses and has concluded that the proposal most advantageous to the City is from Pets In Need. Staff therefore negotiated with Pets In Need to outline the terms of an agreement for animal care services. On September 6, 2016, City Council direct staff to proceed with exclusive negotiations with Pets In Need.
The City conducted a Request for Proposal to receive proposals from qualified firms to provide professional services for animal care operations to include, but not limited to, tracking all animals intake, billings, budget monitoring, financial reporting, annual audits, computerized financial system, report preparation, recruiting and training staff, and implementing volunteer services program, community education program, fundraising, facility management, facility improvement, and disaster preparedness. Two RFPs were issued:
RFP161631 (download) was issued on October 15, 2015 and closed on December 11, 2015 with one response from Pets In Need (download).
RFP161631A (download) was re-issued on January 27, 2016, and after one extension and revision (download), closed on March 18, 2016 with responses from Humane Society of Silicon Valley, the County of Santa Clara and Pets In Need (download).