The United States Postal Service provides mail delivery service to residents through the use of post office boxes at the post office located on 5th Avenue between San Carlos Street and Dolores Street. As the City of Carmel-by-the- Sea does not have house numbers, the use of post office boxes is an alternative to having mail delivered directly to residential homes. The City has contracted with a courier service to provide residential home mail delivery services for residents who are physically unable to visit the post office or who, for some other reason, cannot obtain mail on a regular basis. Most recently, Council authorized an agreement with Peninsula Messenger Service for the home mail delivery service on January 8, 2019 and subsequently approved an amendment to the agreement on January 7, 2020.
The amendment extended the term of service through December 31, 2020 and increased the compensation amount by an additional $72,000. The total compensation, inclusive of the original agreement and the amendment, is for a not-to-exceed amount of $142,200 for courier services provided from January 1, 2019 to December 31, 2020. The City has spent $141,576 from January 2019 to November 2020 toward the authorization limit. This item is on the Council agenda for consideration of a Second Amendment to extend the term of the agreement with Peninsula Messenger Service through the current fiscal year to June 30, 2021 and increase the authorized compensation amount of the agreement by $58,000.
On April 7, 2020, Council adopted Resolution 2020-027 that modified the mail service program to incorporate eligibility criteria. In particular, moving forward, the City would only pay for courier services for residents that meet the eligibility criteria. However, as the program changes coincided with the emergence of the coronavirus and shelter in place protocols issued by the County of Monterey and the State of California, Council provided direction to defer the implementation of the new program requirements until 60 days after the shelter in place restrictions were lifted. As a result, there have been no changes to the program.
Conversely, there has been a steady increase in demand for this service over the last several months, rising from an average of 152 post office boxes in fiscal year 2019-2020 to 182 in November 2020. The current monthly cost for service is $7,462, which is based upon 182 post office boxes multiplied by the $41 monthly fee. However, there is a potential that the costs could increase as a result of the stay at home order issued by Monterey County on December 9, 2020. The Second Amendment to the mail service agreement extends the term of the agreement and authorizes an increase in compensation in an amount not to exceed $58,000. This amount is intended to cover the costs associated with up to 200 post office boxes for a seven month period of December 1, 2020 to June 30, 2021.
In addition to authorizing the City Administrator to execute the Second Amendment to the agreement, staff recommends Council approve a budget amendment to pay for the additional costs of the mail service program. The Fiscal Year 2020-2021 Adopted Budget included $50,040 for the mail service program and anticipated cost savings resulting from implementing the eligibility criteria. Cost savings have not materialized and demand for this service has increased. Fiscal year-to-date costs of the program (July 2020 to November 2020) total $36,900. Assuming that an additional $58,000 will be needed for this program, a budget amendment of $35,860 is required to augment that existing $22,140 that remains within the budget for mail service.