Memorandum

City of Lawrence

Public Transit Office

DATE:	12/11/13
TO:	David L. Corliss, City Manager
FROM:	Robert A. Nugent, Transit Administrator
CC:	Diane Stoddard, Assistant City Manager Cynthia Wagner, Assistant City Manager
RE:	RFP R1316 - Contracted Public Transportation Services for the City of Lawrence and University of Kansas

Please place the following item on the City Commission agenda for consideration at their December 17, 2013 meeting:

Authorize City Manager to enter into a contract with MV Transportation, Inc. for public transportation services beginning January 1, 2014. 

Background

The current contract with MV Transportation, Inc. to provide public transportation services expires December 31, 2013. In August of 2013, the City and the University of Kansas issued a joint Request for Proposals for public transportation services from January 1, 2014 through December 31, 2018.  The City received bids from First Transit, Inc. and MV Transportation, Inc.  After reviewing the proposals, interviewing the candidates, and receiving several rounds of follow up questions, the Purchase Negotiating Committee (PNC) comprised of both City and University staff recommended selecting MV as the contract provider.  The City Commission accepted that recommendation and authorized staff to enter into negotiations with MV on
October 8, 2013. Although the RFP was jointly issued, each entity is negotiating a separate contract.

Contract Summary

The contract was drafted using the existing contract as a starting point.  It incorporates by reference the RFP, MV’s Proposal, and addendum. The Scope of Work is contained in Part II of the RFP, as revised by addendum and shall constitute all of work to be provided. The highlights, as well as any changes are summarized below.

• Service Hours - The estimated annual service hours for the fixed route and paratransit system combined total 76,925 hours.

• Fixed Route Service - The number of routes and the number of vehicles in revenue service remain the same as we currently operate. The City funds eight (8) routes and jointly funds two (2) additional routes. However, due to the uncertainty in the location of a transit center and the possibility of significant changes in service the RFP clearly states they are subject to change.

• ADA Complimentary Paratransit Service - The scope of work continues to include complimentary ADA accessible service as mandated by federal law. The scope of work also continues to include the certification process as required under the Americans with Disability Act (ADA.) 

• Demand Response Services - The City currently operates demand response services in the form of Flex and Nightline. These services were included in the scope of work. However, due to the fact that the NightLine service is operating as a pilot project the continuation of this service is yet to be determined.

• Facility - All services under the scope of work will be operated out of the University of Kansas Transit Facility located at 1260 Timberedge Road.

· Vehicles - The City will provide all revenue hour vehicles for this contract. This includes both fixed route and paratransit vehicles.

• Fuel - The City will bear the cost of all fuel consumed in the course of carrying out the scope of work, except for no-revenue support vehicles that are provided by MV.

• Staffing - Staffing levels would remain the same under the proposed contract.  MV’s proposal states bus operators now be hired on a two-tiered scale with new hires will have a lower rate that is in line with the current labor market. Existing operators will remain under the existing progression. Under the new scale operators will earn at least $11.00 per hour with a minimum increase of 2% annually. 

• Fare Revenues - The City and MV will work together to transition the responsibility of fare revenues over to MV. At the present time no internal process or space is available for this transition. If it is determined that the transition can be made all funds would be credited toward the monthly service invoice.

• Major Component Replacement - Under this new contract the City would bear the cost of major component (more than $1,000) replacement.

• Compensation - Payments will continue to be made utilizing bi-monthly progress payments and will be based on fixed costs and revenue vehicle service hours.  The cost will be as follows (rates do not include fuel or major components):

Contract Period	Rate / Revenue Hour (Variable)	Rate / Service Month (Fixed)	Cost of MV  Contract
1/1/14  to 12/31/14	36.32	65,203	$3,576,161
1/1/2015 to 12/31/2015	35.16	65,192	$3,486,808
1/1/2016 to 12/31/2016	35.46	67,273	$3,534,960
1/1/2017 to 12/31/2017	35.71	69,043	$3,575,466
1/1/2018 to 12/31/2018	36.32	71,150	$3,647,987

For comparison purposes the rates under the existing contract are as follows:

Contract Period	Rate / Revenue Hour (Variable)	Rate / Service Month (Fixed)
1/1/09 to 12/31/09	30.77	72,291
1/1/10 to 12/31/10	31.93	75,307
1/1/11 to 12/31/11	32.54	65,515
1/1/12 to 12/31/12	33.90	68,075
1/1/13 to 12/31/13	35.41	70,593

The new contract also notes that the rates are subject to change pending cost allocation review between the City and University.  Pricing in MV’s response to the RFP assumed that the City would pay 56% of the total costs while the University would pay 44% based on the percentage of total service hours to be provided

• Liquidated Damages - As stated in Part II, Section 13 of the RFP the City will impose liquidated damages “...after the Contractor has had opportunities to make corrections and failed to meet the needs of the City…”. Under this contract there will be no incentives provided for performing above and beyond the standards stated in the RFP.

• Scholarship / Internship -  $5,000 per year is available as part of the Contractor Proposal. The City and the Contractor agree to begin developing a Scholarship/ Internship program that will begin in the second half 2014 and continue into the first half of 2019.

• Maintenance Assistance for Regional Providers - The Contractor will provide maintenance for regional transportation providers at a labor rate of $58 per hour plus parts. This would be available to voting members of the Regional Transit Advisory Committee (RTAC) of the Lawrence Douglas County Metropolitan Planning Organization. Work would only be performed on FTA or KDOT funded vehicles. All work would be preapproved by the City or University in order to not interfere with the current services being provided for the City and the University. The Contractor will directly invoice each provider for labor and parts associated with the work.

• Real Time Products - The Contractor has developed two products (texting and Mobi) to provide real time bus information to the general public. The Contractor has worked with the City and the University to make improvements and/or changes to products over the last few months prior to making them available to the general public.

The Contractor has also been developing a smart phone “app” that will also be made available to the general public. Although not finished the Contractor commits to provide the City and the University versions of the new “app” in the immediate future. The Contractor is also committed to having the “app” ready to be provided to the general public on January 20, 2014.

• Rate Adjustments - There are limited occurrences following which the City or MV may request renegotiation.  Under the new contract, renegotiation can be requested if the number of revenue service hours increases or decreases ten percent (10%) or more. In addition the City or MV may request renegotiation if, due to the full implementation of the Affordable Health Care Act, significant negative impacts are experienced.

Contract Funding

The table below compares the annual total operating cost to the projected revenue generated by FTA annual formula grant funds, Kansas CTP grant, the 0.2% sales tax, and farebox proceeds.

	2014	2015	2016	2017	2018
Carry Forward		5,820	86,205	393,247	696,379
Estimated Revenues:
FTA Section 5307 Grant	2,220,420	220,420	2,220,420	2,220,420	2,220,420	Assumes 0% annual
Kansas CTP Grant	529,148	529,148	529,148	529,148	529,148	Assumes 0% annual
Local .20% Sales Tax	2,955,738	2,985,295	3,015,148	3,045,299	3,075,752	Assumes 1% annual
Fare Revenue	317,498	320,672	323,879	327,118	330,389	Assumes 1% annual
TOTAL REVENUES	6,022,804	6,161,355	6,374,800	6,815,232	7,252,088
Estimated Expenditures:
Personnel	$                      278,415	283,983	289,663	295,456	301,365	Assumes 2% annual
Operating Contract	3,576,161	3,486,808	3,534,960	3,575,466	3,647,987	At no additional service
Route Enhancements	715,232	697,362	706,992	715,093	729,597	Assumes 20%
Other Contractual	100,000	102,000	104,040	106,121	108,243	Assumes 2% annual
Commodities	731,426	767,997	806,397	846,717	889,053	Assumes 5% annual
Capital Outlay	615,750	637,000	339,500	280,000	280,000
TOTAL EXPENDITURES	6,016,984	5,975,150	5,781,552	5,818,853	5,9856,246
Balance:	5,820	86,205	393,247	696,379	895,842

Recommendation

Staff recommends the City Commission authorize the City Manager to enter into a contract with MV Transportation for public transportation services from January 1, 2014 to December 31, 2018. 

Requested Action

Staff seeks City Commission authorization to enter into a contract with MV Transportation for public transportation services.