HomeMy WebLinkAboutItem 5c - Transit Agreement Extension Between City of SLO and CalPoly for FY21-22 Item 5c
Department: Public Works
Cost Center: 5201
For Agenda of: 8/24/2021
Placement: Consent
Estimated Time: N/A
FROM: Matt Horn, Public Works Director
Prepared By: Austin O’Dell, Interim Transit Manager
SUBJECT: TRANSIT SERVICE AGREEMENT EXTENSION BETW EEN THE CITY OF
SAN LUIS OBISPO AND CAL POLY FOR FISCAL YEAR 2021-22
RECOMMENDATION
Authorize the City Manager to execute a Transit Services Agreement Extension with Cal
Poly for Fiscal Year 2021-22.
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 (SLO Transit) services. 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.
City Council approved the last long-term TSA with Cal Poly in 2011 which expired in 2016.
One year service extensions have been executed annually while both agencies work to
negotiate a new Transit Services Agreement. 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 transit services from its Parking & Forfeitures
Fund and with no direct contribution from students, staff, and faculty.
Transit Service Agreement Negotiations
Cal Poly and the City have been in negotiations for a new long-term TSA for many years.
The City’s primary position during these negotiations for a new long-term TSA is that Cal
Poly should pay a larger share since Cal Poly consumes about 65% of the rides SLO
Transit provides, requires a high level of service and data exchange, and obtains rides at
a cost of roughly 60% of the standard consumer rate. It should be noted that the standard
customer rates only funds 43% of the actual operation cost excluding necessary capital
cost for items such as bus replacement and facility maintenance.
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Item 5c
Fortunately, transit services are heavily subsidized by both State and Federal funds to be
able to provide a high level of service to the community at low rates, but the State does
require that transit service revenue meet or exceed 20% of their operating costs from
farebox revenue. Cal Poly’s TSA funding is vital to the City to maintain the State
mandated farebox ratio in order to remain eligible for State transit funding.
Transit Service Agreement Extension 2021-22
The pandemic has had large impacts to both Cal Poly and Transit Service operations. So
far during COVID 19, Cal Poly classes have been primarily virtual and transit use by the
community has been greatly reduced. Due to these changes in use over the last year
and a half, neither Cal Poly nor the City know how quickly Cal Poly’s use of the transit
services will rebound over the course of 2021-22. Due to this uncertainty, continuing with
the status quo agreement, since 2016 and approving another one-year extension meet
both agencies’ needs for FY 2021-22.
The proposed agreement extension will provide Cal Poly students, faculty, and staff
transit service until June 30, 2022, upon presentation of valid Cal Poly Identification Card
at no cost to the rider. Cal Poly will fund the City with a total amount of $537,500 pai d
quarterly in the amount of $134,375. Below is table that show Cal Poly’s previous annual
transit service funding contributions.
Fiscal Year Cal Poly Transit Service
Funding Amount
2011-12 $380,000
2012-13 $395,200
2013-14 $403,104
2014-15 $415,197
2015-16 $427,653
2016-17 $440,482
2017-18 $453,697
2018-19 $517,611
2019-20 $533,139
2020-21 $150,000*
2021-22 $537,500
*Funding reduced due to reduced demand during pandemic
During the FY 2021-22, the City and Cal Poly will continue to negotiate a new longer term
Transit Service Agreement as both agencies will better understand transit trends coming
out of the pandemic. Prior to the expiration of this one-year extension, staff will return to
Council with either a mutually agreeable transit partnership agreement that reflects
payment for services provided and investment in infrastructure or a recommendation to
not extend the Transit Service Agreement with Cal Poly and identification of what the
impacts of that would be.
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Item 5c
Previous Council or Advisory Body Action
City Council approved the Transit Service Agreement with Cal Poly on September 20,
2011. This agreement expired on June 30, 2016. City Council has approved transit
service extensions with Cal Poly on August 15, 2016, June 27, 2017, and July 15, 2019,
and July 21, 2020.
Policy Context
Approving this extension will allow the conformance with the financial and operating
assumptions in the City’s adopted Short Range Transit Plan. In add ition, approving this
extension will advance Major City Goal work programs for Climate Action, Open Space
and Sustainable Transportation as well as Diversity, Equity and Inclusion
Public Engagement
No public engagement is necessary as this is considered to be an administrative item.
CONCURRENCE
Cal Poly concurs with the Transit Service Agreement Extension as presented to Council
for the Fiscal Year 2021-22.
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: 2021-22
Funding Identified: N/A
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
Transit Fund N/A
State N/A
Federal N/A
Fees N/A
Other: N/A
Total
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Item 5c
During the 2021-23 Financial Plan process, the Transit Fund assumed that a new long -
term agreement with Cal Poly would not be in place due to the impacts of COVID-19.
This extension provides the City with certainty of $537,500 of funding, as both the City
and Cal Poly reopen and negotiate a longer-term agreement. The Cal Poly funding is an
important revenue component for the Transit Fund and represents a significant portion of
the locally generated farebox revenue to meet the State mandated 20% local revenue
contribution. With the Cal Poly contribution intact for FY 2019-20, SLO Transit achieved
a 18% ratio despite the lock-down in the last quarter of the fiscal year. However, given
the reduction for FY 2020-21 (see page 2), local revenue will be far below the required
ratio. Fortunately, this farebox ratio requirement has been suspended due to the
pandemic. When the current health crisis ends, the State will likely reinstate the farebox
ratio mandate of 20%. Transit operators will have three years to comply with the State
mandate. Cal Poly’s revenue is a vital part of the Transit Enterprise Fund’s strategy to
achieve the locally generated revenue amounts to remain eligible for State transit funding
usually accounting for 70% of the farebox revenue.
ALTERNATIVES
1. Deny/Defer FY 2021/22 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 – Cal Poly 2011-16 Transit Agreement with Extensions
B – Fourth Transit Service Agreement Extension
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R 11154
RESOLUTION NO. 11154 (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.
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Resolution No. 11154 (2020 Series) Page 2
R 11154
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 Christianson, seconded by Council Member Stewart, and
on the following roll call vote:
AYES: Council Member Christianson, Pease, Stewart, Vice Mayor Gomez and
Mayor Harmon
NOES: None
ABSENT: None
The foregoing resolution was adopted this 18th day of August 2020.
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
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