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Home My WebLink AboutItem 07 - 2019-20 Payment Reduction and approval of a Tranit Agreement with Cal Poly Department Name: Public Works Cost Center: 5201 For Agenda of: July 21, 2020 Placement: Consent Estimated Time: N/A FROM: Matt Horn, Public Works Director Prepared By: Gamaliel Anguiano, Transit Manager SUBJECT: 2019-20 PAYMENT REDUCTION AND APPROVAL OF A TRANSIT AGREEMENT EXTENSION BETWEEN THE CITY OF SAN LUIS OBISPO AND CAL POLY RECOMMENDATION 1. In response to changes in service usage under the terms of the 2019-20 Transit Agreement due to impacts of COVID-19 approve a reduction to Cal Poly’s payment for the 4th Quarter by $99,964; and 2. Approve a Resolution (Attachment B) authorizing the City Manager to execute an Extension of the existing Transit Agreement between the City and Cal Poly for 2020-21. DISCUSSION Background Since 1985, California State Polytechnic University (Cal Poly) and the City of San Luis Obispo have maintained a Transit Service Agreement (TSA) to allow Cal Poly to access the City’s transit services (SLO Transit). Through this Agreement, Cal Poly has paid an annual service fee to the City in exchange for a zero-fare program that allows students, staff, and faculty to ride SLO Transit at no charge to the rider. A valid Cal Poly Identification Card must be presented to participate in a zero-fare ride. The Agreement encourages students, faculty, and staff to make use of alternative transportation as a means of travel. Cal Poly trips represent approximately 65% of the annual trips on SLO Transit. Historically, the University has compensated the City for a portion of the costs for these trips from its Parking & Forfeitures Fund and with no direct contribution from students, staff, and faculty. Agreement Extension is Needed and Recommended The current Agreement, first entered into in 2011, has been extended twice. The term of the Agreement expired on June 30, 2020. The City and Cal Poly have been working to complete a new Agreement. Extensions were made to the existing Agreement initially because of complexities regarding costs of a new Transit Operations & Maintenance Contract (in 2016) and the implementation of the Short Range Transit Plan (2017) alongside anticipated changes to ridership levels (2018, 2019). Item 7 Packet Page 93 Today the ongoing impacts of COVID-19 (2020), requires another year extension and flexibility as outlined in Attachment A. Negotiating a new agreement with so much uncertainty about the duration of the pandemic, lingering real and perceived health risk, and future renegotiation of our contract transit service agreement are primary factors for renewing existing terms. Operational Changes Due to COVID-19 COVID-19 has required both Cal Poly and SLO Transit to significantly modify operational models. As of the writing of this staff report, for the 2020-21 Academic Year, Cal Poly anticipates on-campus housing to be limited to 5,000 to 7,000 students and the final amount will be guided by California Public Health guidance and consultation with County Public Health . In previous years, Cal Poly has not allowed first-year students to park on Cal Poly’s campus, but this restriction will be lifted allowing more students to bring their personal vehicles to campus. The efficacy of such restrictions have been questioned and while not validated, reports are that many first year students store their vehicles in the City in locations not covered by residential parking districts. As many as 85% of the classes are expected to be virtual while only 15% of classes will be held in person with reduced class sizes. Cal Poly faculty and staff will work remote when possible. The Campus Library, Recreation Center, and ASI events are expected to remain closed until Stage 3 Reopening plans are implemented. SLO Transit operations have been considerably impacted by the pandemic. SLO Transit ridership has declined approximately 80% compared to prior year s. In response, SLO Transit has implemented “Weekend Service” schedules. Passenger capacity is limited to 15 riders per bus to promote physical distancing and a secondary “Chase Bus” is dispatched when maximum capacity is reached. Systemwide cleaning and sanitization procedures have been expanded and personal protective equipment for drivers and staff has been procured. For the 2020-21 Academic Year, SLO Transit ridership levels are anticipated to remain low, but an increased service level is required. Increasing the service level to “Summer Service” schedules is necessary to allow for physical distancing. Regardless of service level, the City is committed to providing enhanced cleaning and sanitization measures to provide for community safety while using SLO Transit. Reduction in 4th Quarter Payment 2019-20 Given the reduction in ridership which arose as a result of stay at home orders and all of Cal Poly being virtual for Spring Quarter 2020 ridership plummeted. So to o did Cal Poly’s revenue source to fund its usage of SLO Transit. Per the University’s request, Staff is recommending a 75% reduction to the University’s 4th Quarter Payment from $133,285 to $33,321 (a reduction of $99,964). This is possible for the Transit Fund as the infusion of CARES Act funds makes Transit whole for any losses in revenues as a result of the pandemic. Item 7 Packet Page 94 Conceptual Terms for Agreement Extension Given the operational uncertainty (and guesses at student, staff, and facility ridership), the terms of this extension are generally outlined in Attachment A. The basic approach is to provide flexibility and base payment on ridership numbers (usage) from July 2020 through June 2021. Public Engagement No public engagement is necessary as this is considered to be an administrative item. CONCURRENCE Cal Poly Administration has agreed to the terms and amounts included in the FY 2020 -21 extension agreement. ENVIRONMENTAL REVIEW The California Environmental Quality Act (CEQA) does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: Yes Budget Year: FY 2020/21 Funding Identified: N/A Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost Transit Fund N/A N/A State N/A Federal N/A Fees N/A Other: Total During the 2019-20 Financial Plan process, the Transit Fund assumed that a new long-term agreement with Cal Poly would have been achieved for future years. Given continued uncertainty in Transit use by Cal Poly this one-year extension reflects a tiered contribution approach whereby Cal Poly funds service based upon usage. Item 7 Packet Page 95 Proposed Fee Schedule: Ride Range (Cumulative Annual Trips) Fare Maximum Fee for Tier of Service Cumulative Fee Up To 100,000 Flat Fee (1st quarter payment) $150,000 $150,000 100,001 To 200,000 $1.25 per ride $125,000 $275,000 200,001 To 400,000 $0.75 per ride $150,000 $425,000 400,001 To 600,000 $0.50 per ride $100,000 $525,000 600,001 To Unlimited $0.25 per ride *Note: FY 19/20 CP annual ridership was 639,685 trips A flat fee of $150,000 is required at the beginning of the 1st Quarter of FY 2020-21. Subsequent payments will be due quarterly based on ridership. Ridership will be monitored via transit vehicle Farebox system. City will provide ridership numbers multiplied by applicable per ride cost based on the table above. The costs include a prorated share for basic service as well as cost of use. This approach provides an equitable solution for both organizations, as again, the infusion of CARES Act funds are anticipated to make the Transit Fund whole for any losses in revenue. There is no impact on the General Fund by approving the recommended action however this subsidy amount represents a significant portion of the locally generated funds for the Transit Enterprise Program. ALTERNATIVES 1. Deny/Defer FY 2020/21 Transit Agreement Extension. City Council may choose to deny or defer the University Transit Subsidy Agreement. Staff does not recommend this alternative as the impact of this alternative would significantly reduce ridership and revenues. As previously mentioned, both the City and Cal Poly agree to the terms of the new subsidy agreement. The continuation of the program helps foster the continued partnership of this mutually beneficial program. 2. Direct Staff to alter the fee schedule to some other level. Staff does not recommend this alternative as both the City and Cal Poly agree to the terms of the new subsidy agreement. The continuation of the program helps foster the continued partnership of this mutually beneficial program. Attachments: a - University Transit Agreement - 3rd Extension b - Draft Resolution c - Cal Poly 2011-16 Transit Agreement & Extentions Compiled d - Cal Poly Contract Tracking History Item 7 Packet Page 96 Item 7 Packet Page 97 Item 7 Packet Page 98 R ______ RESOLUTION NO. ____ (2020 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO EXECUTE AN EXTENSION OF THE 2011-2016 TRANSIT SUBSIDY AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND CAL POLY WHEREAS, the City of San Luis Obispo (referred hereinafter as the City) operates SLO Transit, a municipal public transit system; and WHEREAS, California Polytechnic University (referred hereinafter as the Cal Poly) is situated in an unincorporated area of San Luis Obispo County (hereinafter referred to as the County), immediately adjacent to the City, within the jurisdiction and service area of the County; and WHEREAS, since 1985, the City has received a subsidy from Cal Poly in accordance with a written transit subsidy agreement to allow Cal Poly students, staff, and faculty with valid Cal Poly identification to board any bus operated by SLO Transit without paying a fare; and WHEREAS, the parties most recently entered into a long-term transit subsidy agreement with a 2011-2016 term (hereinafter referred to as the 2011-2016 Subsidy Transit Agreement), which has been extended by the parties three (3) times; and WHEREAS, the third extension to the 2011-2016 Transit Subsidy Agreement expired on June 30, 2020; and WHEREAS, the parties have attempted to negotiate and finalize a new long-term transit subsidy agreement, but those efforts have been delayed due to unforeseen circumstances and complexities including changes to ridership levels and the impacts of COVID-19; and WHEREAS, the parties agree that executing an additional one (1) year extension to the 2011-2016 Transit Subsidy Agreement, including all of its terms and conditions, serves the best interest of the parties, namely providing Cal Poly students, staff, and faculty continued subsidized access to SLO Transit while the parties negotiate and finalize a new long-term transit subsidy agreement; and WHEREAS, the City and Cal Poly desire to continue the program and have jointly developed a mutually acceptable solution. Item 7 Packet Page 99 Resolution No. _______ (2020 Series) Page 2 R ______ NOW THEREFORE, BE IT RESOLVED that the City Manager is authorized to execute the one (1) year extension to the parties’ 2011-2016 Transit Subsidy Agreement and approve any amendments during the term of the extended 2011-2016 Transit Subsidy Agreement. Upon motion of Council Member ________________, seconded by Council Member ____________________and on the following vote: AYES: NOES: ABSENT: ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington, City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ______________________________ Teresa Purrington City Clerk Item 7 Packet Page 100 Item 7 Packet Page 101 Item 7 Packet Page 102 Item 7 Packet Page 103 Item 7 Packet Page 104 Item 7 Packet Page 105 Item 7 Packet Page 106 RESOLUTION NO. 10300 (2011 Series) RESOLUTION OF THE CITY OF SAN LUIS OBISP O AUTHORIZING THE EXECUTION OF THE SERVICE AGREEMENT BETWEE N THE CITY OF SAN LUIS OBISPO AND CAL POL Y WHEREAS,the City of San Luis Obispo (referred hereinafter as the City) operates SL O Transit ; WHEREAS,the a public transit service receives a subsidy from the Californi a Polytechnic State University, San Luis Obispo (referred hereinafter as Cal Poly) in accordance t o the service agreement executed on July 1, 2006 ; WHEREAS,the City allows Cal Poly students, staff, and faculty with valid Cal Pol y identification to board any bus operated by SLO Transit without paying a fare ; WHEREAS,the 2006 service agreement expired on June 30, 2011 ; an d WHEREAS,the existing scope extended the 2006 subsidy on a month to month basis t o allow the City and Cal Poly to final the new service agreement ; an d WHEREAS,the City and Cal Poly desire to continue the program and have jointl y developed a mutually acceptable solution . NOW THEREFORE, BE IT RESOLVED that the City Manager is authorized t o execute the Agreement between the City and Cal Poly for the Cal Poly Subsidy Program, an d approve any amendments during the term of the agreement . Upon motion of Council Member Carter, seconded by Council Member Smith and on th e following vote : AYES : Council Members Carpenter, Carter and Smith, Vice Mayor Ashbaugh an d Mayor Marx NOES : None ABSENT : None R 10300 Item 7 Packet Page 107 Resolution No . 10300 (2011 Series ) Page 2 The foregoing resolution was adopted this 20 th day of September, 2011 . ATTEST : Elaina Can o City Clerk APPROVED AS TO FORM : J . Christine Die rick City Attorney Item 7 Packet Page 108 Item 7 Packet Page 109 Item 7 Packet Page 110 Item 7 Packet Page 111 FY Subsidy Change CP Ridership Change Cost Per Ride 1985‐86 69,124$ 1986‐87 67,063$ ‐3.07% 1987‐88 69,124$ 2.98% 1988‐89 74,086$ 6.70% 1989‐90 88,791$ 16.56% 286,400 0.31$ 1990‐91 98,825$ 10.15% 308,800 7% 0.32$ 1991‐92 135,132$ 26.87% 409,500 25% 0.33$ 1992‐93 177,010$ 23.66% 250,600 ‐63% 0.71$ 1993‐94 246,250$ 28.12% 583,300 57% 0.42$ 1994‐95 246,000$ ‐0.10% 531,700 ‐10% 0.46$ 1995‐96 229,424$ ‐7.23% 614,800 14% 0.37$ 1996‐97 169,000$ ‐35.75% 615,000 0% 0.27$ 1997‐98 169,000$ 0.00% 480,685 ‐28% 0.35$ 1998‐99 174,600$ 3.21% 544,938 12% 0.32$ 1999‐00 182,100$ 4.12% 671,949 19% 0.27$ 2000‐01 187,900$ 3.09% 561,745 ‐20% 0.33$ 2001‐02 239,536$ 21.56% 356,528 ‐58% 0.67$ 2002‐03 246,722$ 2.91% 316,325 ‐13% 0.78$ 2003‐04 254,124$ 2.91% 333,232 5% 0.76$ 2004‐05 261,748$ 2.91% 470,963 29% 0.56$ 2005‐06 269,600$ 2.91% 505,596 7% 0.53$ 2006‐07 322,000$ 16.27% 544,130 7% 0.59$ 2007‐08 322,000$ 0.00% 475,947 ‐14% 0.68$ 2008‐09 331,660$ 2.91% 518,870 8% 0.64$ 2009‐10 341,610$ 2.91% 630,304 18% 0.54$ 2010‐11 351,858$ 2.91% 664,194 5% 0.53$ 2011‐12 380,000$ 7.41% 664,197 0% 0.57$ 2012‐13 395,200$ 3.85% 689,784 4%0.57$ 2013‐14 403,104$ 1.96% 665,469 ‐4% 0.61$ 2014‐15 415,197$ 2.91% 632,473 ‐5% 0.66$ 2015‐16 427,653$ 2.91% 640,768 1% 0.67$ 2016‐17 439,810$ 2.76% 759,866 16% 0.58$ 2017‐18 453,697$ 3.06% 734,553 ‐3% 0.62$ 2018‐19 517,611$ 12.35% 588,217 ‐25% 0.88$ 2019‐20* 433,172$ ‐19.49% 639,685 8% 0.68$ University Transit Agreement Throughout the Years * As a direct result of COIVD related CalPoly suspension of on‐campus classes and corresponding transit service reductions, the 4th quarter payment for 2019‐ 20 was reduced by $99,963.75 Item 7 Packet Page 112