City of Lawrence

Public Transit

TO:	Dave Corliss, City Manager
FROM:	Cliff Galante, Public Transit Administrator
CC:	Cynthia Boecker, Assistant City Manager Diane Stoddard, Assistant City Manager
Date:	December 12, 2007
RE:	Agenda Item: Joint RFP for Contracted Transportation Services beyond 2008 for City and University of Kansas Transit Operations.

Please place the following item on the City Commission regular agenda for consideration at their December 18, 2007 meeting:

Authorize staff to issue a joint Request for Proposal for contracted transportation services for City and University of Kansas transit operations beyond 2008 on January 8, 2008.  The City and University would be seeking a single price proposal to provide transit services under a combined contract.  Proposers would be expected to submit a proposal to operate service for the City and University according to consortium “combined” pricing.  Price proposals are also being solicited through this procurement for the separate operation of service for either the City or University should for any reason a combined contract not be awarded.  Proposers will be able to submit a proposal on any or all pieces of work.

It would be the City’s and University’s intent that any contract awarded pursuant to this RFP be for a five (5) year term effective January 1, 2009 through December 31, 2013 subject to annual appropriation.   

Background Information:

In an effort to further coordinate and improve transportation services in the community provided by the City of Lawrence and University of Kansas where possible operational and cost efficiencies could be realized, each has agreed to jointly solicit the services of a contracted transportation service provider to operate service beyond 2008.

This effort builds upon previous efforts over the past two years where the feasibility of further coordination and/or consolidating transit systems has been explored.   

It is important to note that coordination between City and University transportation services does already occur.  The City and University work together on offering a discounted bus pass program for University students, participating in public outreach opportunities with students, and distributing information about each other’s services to the public.  Furthermore, the City last year assisted the University in acquiring transit vehicles to serve the newly constructed University Park and Ride facility that links West Campus to Main Campus.  Also, the City and University operate transit services out of shared facility provided by our contractor where both vehicle fleets are housed and maintained. 

The current contract the City has with MV Transportation, Inc. expires on December 31, 2008.  The University earlier this year entered into a seventeen month contract with MV Transportation, Inc. that coincides with expiration of the City contract.  The University intentionally structured the contract term in this manner to provide the opportunity for the City and University to pursue a joint procurement of services in the future where possible operational and cost efficiencies could be realized. 

There are some significant changes in this draft RFP as compared to the past RFP for contracted transportation services.  The RFP is still in draft form at this time and has been sent to the Federal Transit Administration for their review so that the City and University can incorporate any suggested changes or revisions into the procurement document.

Some of the significant changes are highlighted below:

First, the scope of work is separated into two sections.  One section discusses City transit operations and the other section discusses University transit operations. 

Second, included in the City scope of work is transit shelter cleaning and maintenance; and snow/ice removal activities currently conducted under separate contracts.  The reason for this change is to determine if cost savings and efficiencies could be realized by having one contractor handle both transit operations, maintenance of vehicles, and maintenance and cleaning of other transit related equipment and infrastructure.  Historically, shelter cleaning/maintenance and snow/ice removal activities were handled under separate contracting opportunities.

Third, regarding City transit services, the RFP as drafted is seeking price proposals based on different service levels. Proposers would provide pricing based on the current level of service provided which totals 67,018 revenue hours annually.  Proposers would also provide alternate pricing based on a 30% reduction in service operating 46,913 revenue hours of service annually, and a 50% reduction in service operating 33,509 revenue hours of service annually.  The final level of service to be provided will be negotiated based upon pricing received. 

If Contractors submit a proposal for both City and University services, they will be required to submit Price Proposal and Cost Breakdown sheets by year where costs are clearly allocated between City and University operations so that expenses and any possible cost savings for each party can be clearly identified.  Cost allocations are to be determined on total revenue hours of service by the City and University and will fluctuate based on varying service levels. 

Staff anticipates that the annual costs of a future operating contract for the City is going to be substantially more than what is currently being spent for transit service, regardless of coordination of transit services.  Cost factors to consider are rising fuel, insurance, personnel wages and benefits, vehicle maintenance, and facility expenses of a potentially shared operating facility.  Based on these rising costs, it is highly unlikely that the City will be able to provide the current level of service in the future at the amount it is currently spending without additional resources being dedicated.

Staff believes that the initial investment in a facility to adequately house the operation of both City and University transit services over the term of the contract may off-set any cost savings that would be otherwise realized through shared staffing or other cost efficiencies.  The current facility used by MV Transportation, Inc. to operate both City and University transit services is obsolete and is not an ideal or sustainable arrangement in the long-term.  Either that facility would require major upgrades or another location would need to be identified.  Based upon staff research, most commercial or industrial space that is available in Lawrence in not suitable for transit purposes and would need to be upgraded or retrofitted for such use.  It is also unlikely a private transportation provider would construct a suitable facility for a five year contract term and that such facility would also be available to operate service from beginning in January 2009. 

Other noteworthy changes to the RFP as drafted are highlighted below:

· Better define all staff positions and the minimum number of staffing for various functions suitable for an operation of our size.

· Raised minimum starting wage rate set by City in prior RFP from $9.00 to $9.75 based on a 2% annual COL wage adjustment and require the contractor to increase this starting wage by 2% annually over the duration of the contract period.

· Included language about the contractor assisting the City with public awareness and public education program efforts, about using vehicles for emergency preparedness drills and exercises, and use of transit vehicles to respond to man-made and natural disasters.

· For new or replacement diesel vehicles put into revenue service, bio-diesel at a blend of 5% is the preferred fueling option as long as it is no more than 5% above the price rate of standard ultra-low sulfur diesel and as long as it does not adversely impact OEM engine warranty or performance.  Note: Contractor is to provide pricing in their proposal if they were to pay for fuel directly and as direct pass through to the City.

· For gasoline powered non-flex fuel vehicles used in revenue service, ethanol blend of no greater than 10% is the preferred fueling option as long as it is no more than 5% above the price rate of standard 87 octane gasoline and as long as it does not adversely impact OEM engine warranty or performance.  

· The Contractor is encouraged to incorporate long-term, sustainability measures into work areas and work practices (including, but not limited to, maintenance/bus wash, administration, drivers, buses, and custodial).  Furthermore, the City encourages all waste, include shop and bus waste, shall be recycled along with utilizing green cleaning products and adhering to green cleaning practices.

· The Contractor shall maintain a clear and separate detailed accounting of all contracted activities and expenses of work performed if staffing, facilities, or equipment are shared with other non-CITY transit operations in accordance with Generally Accepted Accounting Principles (GAAP).  The Contractor shall also maintain written or electronic support documentation, such as timesheets, for the duration of the contract of how time and materials expenses between CITY funded and Non-CITY funded transit activities were allocated to receive payment.  The Contractor, upon request, shall make this information readily available to the CITY or Non-CITY transit operation to inspect at any time during the contract period.

· Require Contractor to include in their monthly reports to City Vehicle Downtime and Fuel Usage reports.

· Included additional requirements regarding contracted employee candidate background checks for safety-sensitive employees.

· Revised some contracted employee minimum training requirements for supervisory and maintenance personnel.

· Revised Insurance requirements for transit operations to raise Employer’s Liability from $100,000 to $500,000 per occurrence based on Risk Management Department recommendations.