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HomeMy WebLinkAboutItem 6f. Approve a Transit Service Agreement Between the City and Cal Poly Item 6f Department: Public Works Cost Center: 5201 For Agenda of: 7/19/2022 Placement: Consent Estimated Time: N/A FROM: Matt Horn, Public Works Director Prepared By: Austin O’Dell, Interim Transit Manager SUBJECT: TRANSIT SERVICE AGREEMENT BETWEEN CITY AND CAL POLY RECOMMENDATION Authorize the City Manager to enter into a Transit Service Agreement with California State Polytechnic University to provide Transit Service for Fiscal Years 2022-23 and 2023-24. POLICY CONTEXT Transit services, and by extension this Transit Service Agreement (TSA) with California State Polytechnic University (Cal Poly), supports the Major City Goal of Climate Action, Open Space and Sustainable Transportation. Additionally, transit is a key modal objective in the General Plan, Active Transportation Plan, and included in Pillar four (4) Connected Community of the Climate Action Plan. DISCUSSION Background Since 1985, Cal Poly and the City of San Luis Obispo have maintained a TSA to allow Cal Poly to access the City's transit services (SLO Transit). Through this Agreement, Cal Poly pays an annual service fee to the City in exchange for a zero-fare program that allow 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. Historically, the University has compensated the City for a portion of the costs for these trips from its Parking & Forfeitures Fund with out any direct contribution from students, staff, and faculty. In addition, mitigation measures from the Cal Poly Master Plan require Cal Poly to pay a fair share towards the Cit y’s transit service. The current TSA, first entered into in 2011, has been extended multiple times. Extensions were provided to the TSA initially because of complexities regarding costs of a new Transit Operations and Maintenance contract that was executed with Frist Transit, the City’s contractor that operates SLO Transit, in 2016, and the implementation of a new Short Range Transit Plan that was developed in 2017. Page 105 of 753 Item 6f Both the new Transit Operations and Maintenance contract and the implementation of the Short-Range Transit Plan impacted cost and ridership and due to these unknowns, it was better for both the City and Cal Poly to extend the existing TSA rather than develop a new long-term TSA. In March 2020, the State of California issued a Stay-at-Home order, which heavily impacted SLO Transit ridership, reducing use by 80%. While ridership demand is increasing again, there is a national shortage of transit drivers further reducing SLO Transit’s ability to provide full pre-pandemic service levels. In August 2021, SLO Transit therefore introduced a modified academic service that addresses demand to the maximum extent practical while still providing reliable transit service. There have been numerous issues since the expiration of the original TSA with Cal Poly that have complicated development and agreement of a long-term TSA. Issues included changing contracts with service providers, changing service levels with the Short-Range Transit Plan, the COVID-19 pandemic, and driver shortages as mentioned above. Recommended TSA Included as Attachment A is the recommended TSA with Cal Poly that will provide for continued no fare service for students, faculty, and staff for Cal Poly. The TSA length is two years and will provide the City a fixed funding amount of $600,000 for fiscal year 2022-23 and $750,000 in fiscal year 2023 -24. All terms and conditions of the TSA are consistent with previous TSAs with Cal Poly. Future TSA While the proposed TSA with Cal Poly does not achieve the City’s long-term objectives of providing an equitable cost recovery for transit services provided, it is considered a” bridge agreement” until the City and Cal Poly are able to come to resolution as to how to best memorialize for the long-term transit services operational and capital costs. Additionally, this provides the City with secured funds to assist with service delivery as SLO Transit ramps up operations to provide full Academic Schedule service. Cal Poly has assigned a new negotiations point of contact for the future agreement and staff believes this is a positive step. Staff’s objectives for a future TSA include a contract term from 5 to 10 years, cost recovery per trip to match the City’s general ridership rate, and an agreement that provides funding for capital improvements to the transit system. Public Engagement No public engagement is necessary as this is considered an administrative item. CONCURRENCE Cal Poly Administration has reviewed the attached contract and has executed the agreement on behalf of Cal Poly. Page 106 of 753 Item 6f 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: 2022-23 Funding Identified: N/A Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund - - - - State - - - - Federal - - - - Fees - - - - Other: Transit Fund - - - - Total - - - - TSA Revenues to Transit Fund Funding Sources Current Contribution FY 2021 -22 Cal Poly Contribution FY 2022-23 Cal Poly Contribution FY 2023-24 Transit Fund $ 537,500 $ 600,000 $ 750,000 There is a positive fiscal impact by entering into a TSA with Cal Poly for Transit Services as shown in the table above. The City is mandated to maintain a 20% farebox ratio to remain eligible for state funding. Without Cal Poly’s contribution, the farebox ratio would be below the mandated threshold and the City would be ineligible for state funding. ALTERNATIVES Deny Transit Services Agreement. City Council may choose to deny entering in the TSA. Staff does not recommend this alternative as this alternative could reduce ridership revenues. The continuation of this TSA assists the continued partnership of this mutually beneficial program. ATTACHMENTS A - Transit Services Agreement with Cal Poly Page 107 of 753 Page 108 of 753 1 BUS SERVICE AGREEMENT BY AND BETWEEN CALIFORNIA POLYTECHNIC STATE UNIVERSITY AND THE CITY OF SAN LUIS OBISPO 1. Preamble The City of San Luis Obispo (“the City”) operates a public transportation system in and around the San Luis Obispo area, primarily composed of its “SLO Transit” bus service (“Bus Service”). California Polytechnic State University (“Cal Poly”) is a public university situated adjacent to the City. The students, faculty and staff at Cal Poly enjoy the benefits of these Bus Services. Cal Poly students constitute a significant portion of bus ridership. Cal Poly wishes to encourage students, faculty, and staff to use these Bus Services as part of its overall transportation and sustainability strategies and as a convenience to its students. City has adopted its Climate Action Plan (CAP) with the goal of carbon neutrality by 2030. The CAP identified the City’s public transportation system as a vital component to meet this goal. The City wishes to provide public transportation services to the community to comply with the CAP. The City of San Luis Obispo and Cal Poly commit to partner in a joint process to develop a revised financial model that will provide each entity a multi -year, sustainable financial path related to transit cost recovery/costs for services required to serve the Cal Poly community. This process, and model, will be completed by August 2023 and is intended to address long term proportional demands placed on system for capital and to address transit needs for the short, medium and long term related to the build out of the Cal Poly Master Plan. In furtherance of these mutual goals and benefits, the parties hereby enter into the following Agreement. 2. Term The term of this Agreement will commence on July 1, 2022 and end June 30, 2024. This Agreement supersedes all terms and conditions contained in the previous agreement between the parties on the same subject with a term ending June 30, 2022. Page 109 of 753 2 3. Bus Services a. No Fare: In exchange for the consideration described in Section 4, no fare of any kind shall be charged to Cal Poly students, faculty, and staff upon presentation of a valid Cal Poly ID card. b. Base Transit Service i. Definition: “Base Transit Service” shall be defined as all Bus Services, including all daytime and evening routes servicing the Cal Poly campus (“Cal Poly Routes”), in operation as of July 1, 2019. ii. Changes to Base Transit Service 1. No changes will be made to Base Transit Service without first notifying Cal Poly’s Director of Transportation and Parking Services (“DTPS”) or designee. Upon request, the City will meet and confer with the DTPS to discuss any such changes and their potential impacts on the Cal Poly community. During this meet and confer process, the City will, in good faith, consider any alternatives presented by Cal Poly. The City further agrees to include the DTPS in its planning and development process to the extent changes in Base Transit Service may result. 2. No changes will be made to Cal Poly Routes without having met and conferred with Cal Poly. 3. To the extent changes to Base Transit Service, whether consented to or otherwise, materially impact Cal Poly’s beneficial use Bus Services provided by the City, the parties will meet and confer to discuss potential reduction of consideration as described in Section 4. 4. Consideration Cal Poly agrees to pay the City in exchange for the services described in this Agreement in accordance with the following terms and conditions: a. Payment: Cal Poly will make annual fixed payments to the City for bus services as described in Section 3(a) based on the below schedule. Payment will be made in arrears quarterly. Page 110 of 753 3 Period Annual Payment Quarterly Payment July 1, 2022 through June 30, 2023 $600,000 $150,000 July 1, 2023 through June 30, 2024 $750,000 $187,500 b. Fare Changes: City is mandated to maintain a 20% farebox ratio to remain eligible for state funding. The City will increase fares if state funding is in jeopardy. The City will meet and confer with CAS Coordinator to discuss any fare increase. Any new fare will be used to determine quarterly payments under Section 4(a) while that fare is in effect. 5. Full Disclosure The City agrees to share with Cal Poly all relevant information and documentation relating to City’s operation of Bus Services. Reports and related documents on the subjects enumerated below will be provided to Cal Poly’s Director of Transportation and Parking Services or designee on a regular basis as prepared during the ordinary course of business. The City will provide any other relevant documents or information upon request. a. Revenue and expenses (operational costs) b. Ridership c. Farebox ratio d. Bus Replacement e. Discretionary Grant Applications Cal Poly agrees to share with City all relevant information and documentation relating to the parking fund and funding to the zero-fare bus pass program. 6. Cooperation It is in the interest of both parties to cooperatively pursue any and all opportunities to reduce costs, increase revenues and to execute plans for a more efficient transportation system. To this end, both parties agree to make their respective resources available to advance the following goals and activities: a. Bus Service promotion and marketing b. Identify and apply for grants c. Rider surveys d. Bus Service planning and development e. Cal Poly Master Plan development Page 111 of 753 4 7. Insurance The City and Cal Poly are self-insured entities. The City and Cal Poly, and each of their respective officers, employees and agents, shall be named as additional insureds under the comprehensive general liability insurance policy maintained by the transit service provider contracted with by City to provide public bus transit services in and around the City of San Luis Obispo. 8. Entire Agreement, Amendments This Agreement constitutes the entire agreement between the parties and supersedes any and all prior discussions, negotiations or agreements, whether written or oral, that are not fully set forth in this Agreement. This Agreement may only be amended, modified, or extended by a writing executed by all Parties. AGREED: CAL POLY CITY OF SAN LUIS OBISPO Dru Zachmeyer Assistant Vice President Strategic Business Services Derek Johnson City Manager City of San Luis Obispo Date Date Page 112 of 753