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HomeMy WebLinkAboutItem 6e. Transit Service Agreement between the City of San Luis Obispo and Cal Poly Item 6e Department: Public Works Cost Center: 5201 For Agenda of: 4/16/2024 Placement: Consent Estimated Time: N/A FROM: Matt Horn, Public Works Director Prepared By: Alex Fuchs, Mobility Services Business Manager SUBJECT: APPROVE TRANSIT SERVICE AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO 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 2024-25, 2025-26, and 2026-27. POLICY CONTEXT The execution of a Transit Service Agreement with California State Polytechnic University (Cal Poly) directly supports the Major City Goal of Climate Action, Open Space, and Sustainable Transportation. Increasing transit ridership also supports th e City’s mode split objectives of the Circulation Element of the General Plan, the Active Transportation Plan, and of the Climate Action Plan. DISCUSSION In 1985, the City and Cal Poly executed the first Transit Service Agreement (TSA) to allow Cal Poly students, faculty, and staff free access to SLO Transit in exchange for an annual service fee paid directly by Cal Poly. Through this agreement, students, faculty, and staff must only present a valid identification card upon boarding to ride for free. The main purpose of the agreement is to encourage students, faculty, and staff to use mass transportation to commute to and from campus. The Environmental Impact Report (EIR) for Cal Poly’s 2035 Master Plan identified potential significant transportation impacts with the plan’s implementation. Specifically, Impact 3.13-21 states that implementation of the plan “would increase demand for transit, which may require investments in additional transit service and/or facilities to maintain the level and quality of service necessary to retain and expand ridership.” Mitigation of this impact requires Cal Poly to work with SLO Transit support implementation of transit services and facilities including fair share contributions based on university -related ridership. 1 https://afd.calpoly.edu/facilities/planning-capital-projects/ceqa/master-plan/docs/feir/2020-05- 01_cp2035mp-feir_3-13.pdf Page 207 of 328 Item 6e The current TSA was executed on July 20, 2022, and expires on June 30, 2024. The TSA does not provide options for term extensions, so a new agreement is necessary. City staff and Cal Poly have successfully negotiated a new agreement included with this repo rt as Attachment A. The new agreement term commences on July 1, 2024, and ends on June 30, 2027, and provides an option to extend the term for an additional two years upon mutual approval of both parties. If approved, staff will route the TSA for signature by the City Manager and send Cal Poly a fully executed copy. The new TSA is a three-year initial term with an option for a two-year extension if agreed upon by both parties. The agreement does allow parties to reopen the contract for renegotiation if either of the following occur: 1) Cal Poly ridership increases or decreases 10% or more in any year, or 2) City of SLO increase in fare box rate of 25% over the duration of the contract. However, this is meant to be a bridge agreement to allow SLO Transit time to fully recover from impacts of the pandemic. As a reminder, current City provided transit services is below pre-pandemic levels of service because recruiting and retaining transit workers continues to be a challenge. The 3A fixed route line that services Cal Poly is still running a limited service due to these driver shortages. Driver shortages are one of multiple variables affecting ridership. Other factors like on-time performance, cleanliness, and safety concerns that may be limiting ridership are also being addressed. Council has authorized additional driver funding and staff is working with the City’s transit operations and maintenance contractor as well as the transit worker’s union to negotiate and finalize the hiring incentives terms. Once complete and staffing levels increase, full restoration of pre-pandemic transit services will be available, which is a key component to increasing ridership and a key component to obtaining a long-term agreement with Cal Poly. Service restoration is a key but not the only component necessary to increase ridership. A Short Range Transit Plan update is underway to identify, prioritize, and recommend service changes to better meet the community needs with the intent to return ridership levels to pre-pandemic normal. Previous Council Action On July 19, 2022, City Council authorized the City Manager to enter into a two -year Transit Service Agreement with Cal Poly which expires on June 30, 2024. Public Engagement Members of the Public will have an opportunity to provide public comment prior to or during the City Council meeting. CONCURRENCE Cal Poly’s President’s Office concurs with the terms of the agreement and supports continued transit service to their campus. Page 208 of 328 Item 6e ENVIRONMENTAL REVIEW The California Environmental Quality Act (CEQA) does not apply to the recommended action because the action does not constitute a “project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: Yes Budget Year: 2024-25 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 Total $ $ $ $ Transit Service Agreement Revenues to the Transit Fund Funding Sources FY 2023-24 (Current Contribution) FY 2024-25 FY 2025-26 FY 2026-27 Transit Fund $ 750,000 $ 750,000 $ 750,000 $ 750,000 The revenue from the TSA contributes toward SLO Transit’s cash fares which is used to calculate its Farebox Recovery Ratio (FRR). SLO Transit’s FRR for fiscal year was 23.2% which is above the 20% minimum required by the State of California to qualify for certain funding opportunities. The TSA revenue makes up about 77% of all cash fares received annually and is used to support on-going operations and maintenance of SLO Transit’s fleet, bus stops, and bus facilities that is not covered by federal and state grant funds. ALTERNATIVES Council could decide not to approve the Transit Service Agreement with Cal Poly. This action is not recommended by staff because Cal Poly makes up a majority of SLO Transit’s ridership and helps SLO Transit to maintain a 20% minimum farebox recovery ratio. The agreement also provides a significant amount of the cash fares SLO Transit uses to cover operating costs. ATTACHMENTS A - Transit Service Agreement with Cal Poly Page 209 of 328 Page 210 of 328 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, on behalf of the CSU Board of Trustees, (“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 partnered in a joint process to develop a financial model that provides each entity a multi-year, sustainable financial path related to transit cost recovery/costs for services required to serve the Cal Poly community. 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, 2024, and end June 30, 2027. This Agreement supersedes all terms and conditions contained in all previous agreements between the parties. This Agreement may be extended for two additional years upon mutual written agreement of the parties. Page 211 of 328 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”) located at 1 Grand Avenue, San Luis Obispo, CA 93407. ii. Changes to Base Transit Service 1. No changes will be made to Base Transit Service without first notifying Cal Poly’s Associate Vice President for Financial Services (AVP) or designee. Upon request, the City will meet and confer with the AVP 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 AVP 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 of Bus Services provided by the City, the parties will meet and confer to discuss potential reduction of consideration as described in Section 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 212 of 328 3 Period Annual Payment Quarterly Payment July 1, 2024 through June 30, 2025 $750,000 $187,500 July 1, 2025 through June 30, 2026 $750,000 $187,500 July 1, 2026 through June 30, 2027 $750,000 $187,500 July 1, 2027 through June 30, 2028 $750,000 ** $187,500 July 1, 2028 through June 30, 2029 $750,000 ** $187,500 ** If extended 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. c. Reopener: The parties retain the option to request a contract reopener if the following events occur: 1) Cal Poly ridership increases or decreases 10% or more in any year, or 2) City of SLO increase in fare box rate of 25% over the duration of the contract. If neither occurs the annual payment amount shall remain as listed in Section 4(a). 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, including but not limited to the following: 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 Page 213 of 328 4 this end, both parties agree to make their respective resources available to advance the following goals and activities including: 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 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 commercial 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 ON BEHALF OF CITY OF SAN LUIS OBISPO CSU BOARD OF TRUSTEES Signature Dru Zachmeyer Signature Name Assistant Vice President, SBS Name Title Title Date Date Page 214 of 328