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HomeMy WebLinkAboutItem 09 - Authorize Amendment No. 4 with First Transit Inc. Department Name: Public Works Cost Center: 5201 (Transit) For Agenda of: May 4, 2021 Placement: Consent Estimated Time: N/A FROM: Matt Horn, Public Works Director Prepared By: Gamaliel Anguiano, Transit Manager SUBJECT: AUTHORIZE AMENDMENT NUMBER 4 TO THE TRANSIT OPERATIONS & MAINTENANCE CONTRACT WITH FIRST TRANSIT INC. RECOMMENDATION Authorize the Mayor to execute Amendment Number Four to the Transit Operations & Maintenance Agreement with First Transit Inc. to extend the term until June 30, 2022 at the agreed upon and negotiated rate to not exceed $2,883,946; as shown in Attachment A. DISCUSSION Background The City of San Luis Obispo operates a fixed-route public transit system within City limits and the California Polytechnic State University (Cal Poly) campus. Vehicle operations and maintenance have been outsourced and provided by third-party vendors since the 1990s. Throughout this time the City has continued to use various vendors/contractors to perform these duties and often does multi-year contracts with potential one-year extensions as allowed by the Federal Transit Administration (FTA). On June 16, 2015, the City Council approved the award of the Transit Operations and Maintenance contract to First Transit Inc. who was deemed to be the “best in value” vendor of the seven considered. The recommendation for the award came at the end of a successful Request for Proposal process where multiple vendors submitted proposals for this work and a competitive process arrived at the vendor that was deemed most appropriate to conduct the services. This contract called for a base four -year contract term with the potential for an additional three extensions in one-year increments. Thus far it has been beneficial for the City to exercise the first of the three possible extensions. Recommendations for exercising an extension are based on several factors including vendor performance, market indicators, and strategic operational benefits. Per the existing contract there are several key performance indicators (KPIs) with associated liquidated damages and incentives. These KPIs are designed to gauge the performance of the vendor. The City has a high standard for the expected level of service and the vendor has satisfactorily met these standards with improvements in safety, reliability, and on-time performance. The vendor has also demonstrated to be responsive and adapted to change to improve transit services offered based upon community needs. Item 9 Packet Page 11 Another consideration for recommending an extension are market indicators such as competitive pricing that may be available if a new RFP process were undertaken. This is usually somewhat offset by the additional costs for completing the RFP process and the lost time due to this additional work. Current pricing for the SLO Transit services is in line with current industry standards and the negotiated amounts are consistent with similar contracts. The negotiated price with the vendor, in a not exceed amount is consistent with the Transit Fund’s Fiscal Year 2021-22 forecast. With projected federal funds as part of various pandemic “rescue efforts” there should be sufficient revenue to cover these costs as ridership returns to pre- pandemic levels. The extension will also have strategic operational benefits. Staff is currently in negotiations with Cal Poly University for a new transit service agreement. Additionally, the impacts of electrification of the fleet will have impacts on operations and having a better understanding of the same before issuing an RFP will be important. Previous Council or Advisory Body Action City Council has previously approved exercising other contract amendments including exercising the first of three possible extensions. • On June 16, 2015, the City entered into an Agreement with Vendor for Transit Operations & Maintenance. • On April 5, 2018, the City and Contractor entered into an Amendment to Agreement No. 1, amending the scope of services to reflect changes in Revenue Service Hours as a result of the implementation of Short-Range Transit Plan. • On January 8, 2019, the City and Vendor entered into an Amendment to Agreement No. 2, amending the scope of services to reflect the pass-thru purchase of an Automatic Vehicle Location System. • On March 3, 2020 the City exercise the first of three possible extensions Amendment to Agreement No. 3 of the 2016 Transit Operations & Maintenance contract with First Transit Inc. Policy Context The City’ adopted Financial Management Manual states that contract’s greater than $100,000 fall under the purview of City Council for approval (page 46). Public Engagement At the May 4, 2021 City Council meeting, the public will have the opportunity to provide comment as part of the item. The public will also have an opportunity to submit letters or speak during Publi c Comment for this agenda item. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15 378. Item 9 Packet Page 12 FISCAL IMPACT Budgeted: Yes Budget Year: 2021-22 Funding Identified: Yes Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost Transit Fund $576,790 State $1,153,578 Federal $1,153,578 Fees Other: Total $2,883,946 At First Transit Inc.’s request to the City, negotiations commenced in the Fall of 2020. Negotiations have brought down the initial request from a 7% increase to 3% for FY 2021-22. The additional costs requested by First Transit are largely attributable to the increased cost for maintaining an older fleet with 50% of the vehicles past their federally approved “useful -life”, the State mandated increase to minimum wages, increased costs for drivers’ wages, and increased cost for insurance. The total contract value of $2,883,946, is in line with the projected FY 2021-22 costs and revenue projections. ALTERNATIVES Deny the extension request and direct staff to go out to bid. This not recommended as any new long-term contract will take a significant work effort at this time and may not result in any cost savings and likely cannot be completed in a time for fiscal year end. Attachments: a - First Transit Amendment to Agreement No. 4 to Extend Contract b - COUNCIL READING FILE - First Transit Operation Contract - June 2016 Item 9 Packet Page 13 AMENDMENT TO AGREEMENT NO. 4 THIS AMENDMENT TO AGREEMENT is made this _______ day of ________, 2021, by and between the CITY OF SAN LUIS OBISPO a municipal corporation and charter city, hereinafter referred to as “CITY” and FIRST TRANSIT INC., hereinafter referred to as “CONTRACTOR.” WITNESSETH: WHEREAS, on June 16, 2015, the City entered into an Agreement with Contractor for Transit Operations & Maintenance (Agreement); and, WHEREAS, on April 5, 2018, the City and Contractor entered into an Amendment to Agreement No. 1, amending the scope of services to reflect changes in Revenue Service Hours as a result of the implementation of Short-Range Transit Plan; and WHEREAS, on January 8, 2019, the City and Contractor entered into an Amendment to Agreement No. 2, amending the scope of services to reflect the pass-thru purchase of an Automatic Vehicle Location System; and WHEREAS, on March 3, 2020, the City and Contractor entered into an Amendment to Agreement No. 3, to exercise the first of three possible extensions provisioned within the original contract at a negotiated price; and WHEREAS, the Agreement’s term is set to expire on June 30, 2021 and the City desires to exercise a second one-year contract extension option as indicated in the Agreement’s Section 2.c.; and WHEREAS, the Agreement requires the City and Contractor to negotiate the price formulas for the one-year contract extension; WHEREAS, the Contractor has submitted a proposal for this purpose and said proposal is acceptable to the City. Attached hereto as attachment A is a copy of the Contractor’s Proposal. NOW, THEREFORE, in consideration of their mutual promises, obligations, and covenants hereinafter contained, the parties hereto agree as follows: 1. TERM OF AGREEMENT Term. Subject to the terms and conditions of this agreement, the term of this agreement shall be from July 1, 2021 through and including June 30, 2022. 2. MAXIMUM OBLIGATION City agrees to pay Contractor in consideration for its services as described herein. The maximum cost to be paid by City to Contractor shall not exceed $_$2,883,946 _ based on services in Agreement’s Exhibit A. Item 9 Packet Page 14 3. PRICE FORMULA City agrees to pay Contractor for performance of the services set forth in this agreement as follows: a. Payment of a fixed hourly rate per vehicle service hour of $_38.92_ in Year One; A vehicle service hour is defined as on vehicle providing passenger service for one hour during the service hours specified herein. A vehicle service hour shall be deemed to have commenced when a vehicle leaves CITY’s Transit Center (located at 990 Palm Street) to provide the services required herein and shall not include any out-of-service vehicle time used for vehicle operator breaks or lunches. A vehicle service hour shall terminate when a vehicle returns to CITY Transit Center prior to any cleaning, servicing or fueling of the vehicle. The hourly rate shall include vehicle operator wages, fringe benefits, indirect labor and all consumable material costs that can be tracked by vehicle service hour such as vehicle maintenance parts and supplies including oil. b. Payment of a fixed monthly rate of $_100,201.89__ in Year One; to compensate CONTRACTOR for all work to be performed under this agreement as defined in Exhibit A, except that which is included under Paragraph 5(a) and Paragraph 7 of this agreement including, but not limited to: vehicle operator non-service wages; management, controller and maintenance employee wages and said employees fringe benefits and indirect labor costs; bus washing and cleaning supplies; uniforms; report reproduction; office supplies; project telephones; all other related operational costs; and the contract management fee. c. Payment of a fixed monthly rate of $_11,888.16__ in Year One; for the cost incurred in providing all vehicle and general liability insurance required under this agreement as such insurance is defined in this agreement. This amount shall be in excess of the fixed monthly rate as defined herein. CITY reserves the right, however, to alternatively secure all or part of the specified insurance coverage 4. EXTRA SERVICES Special promotional and community services shall be considered extra services and will be provided only with the authorization of City and the mutual consent of the Contractor. Such services shall be defined as those non-permanent service hours operated outside of the services identified in Exhibit A. Extra services shall be considered a change to this agreement as defined herein and shall be in excess of the maximum price defined in Paragraph 4. The costs for extra services will be determined at a rate per vehicle service hours of $38.92 in Year Four and billed separately from the services specified in the Agreement’s Exhibit A. 5. All other terms and conditions of the Agreement, Amendment No. 1, Amendment No. 2 and Amendment No. 3 remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed by and through their respective officers thereunto duly authorized on the date written below their signatures. ATTEST: CITY OF SAN LUIS OBISPO __________________________ By:_________________________ City Clerk Mayor APPROVED AS TO FORM: CONTRACTOR: First Transit Inc. Item 9 Packet Page 15 By: __________________________ J. Christine Dietrick Fadi Chakbazof City Attorney Its: Senior Vice President Item 9 Packet Page 16