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HomeMy WebLinkAbout1995 CON McDonald Transit Bus Contract ExtensionCity of National City, California COUNCIL AGENDA STATEMENT MEETING DATE June 13, 1995 AGENDA ITEM NO. 4 % ITEM TITLE RESOLUTION AUTHORIZING AMENDMENT OF CONTRACT WITH MCDONALD TRANSIT ASSOCIATES, INC. PREPARED BY A.Rios, Jr. DEPARTMENT National City Transit EXPLANATION - The contract with McDonald Transit Associates, Inc. for the operation of public bus service in National City expires June 30, 1995. The City has the option to renew the contract for an additional two years. The attached resolution authorizes an amendment to the contract to accomplish this. Funding is considered separately when National City Transit's budget is reviewed along with the rest of the City's budget. The City's transit operation is funded with Transportation Development Act funds. Environmental Review X N/A Financial Statement This action involves TDA funds only. The City's General Fund is no involved. Account No. STAFF RECOMMENDATION Staff recommends approval. BOARD/COMMISSION RECOMMENDATION ATTACHMENTS (Listed Below) Resolution No. 95-$4 :1_ Resolution Letter from McDonald Transit Associates, Inc. Report on Comparative Performance Statistics Amendment to Contrac.t A-200 (Rev. 9/80) RESOLUTION NO. 95-84 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE AN AMENDMENT TO CONTRACT WITH MC DONALD TRANSIT ASSOCIATES, INC., WHEREAS, the City and Mc Donald Transit Associates, Inc., entered into a contract executed on the 25th day of April 1979, for the operation of public bus transportaion service in the city of National City; and WHEREAS, that original contract has been renewed and extended, with certain changes mutually agreed by the parties; and WHEREAS, the term of the current contract and extension expires on June 30, 1995, with the provision that the City shall have the option to renew and extend the contract for an additional two (2) years; and WHEREAS, the City and Mc Donald Transit desire to amend Section 2 of the contract to provide for a contract term of July 1, 1995, through June 30, 1997. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of National City that the Mayor is hereby authorized to execute an Amend- ment to contract with McDonald Transit Associates, Inc. Said Amendment to contract is on file in the office of the City Clerk Continued on Page Two Resolution No. 9 5 - 8 4 Page 2 of 2 PASSED and ADOPTED this 13th day of June, 1995. George H. Waters, Mayor A 1 1'EST: . Anne Peoples,13 LC) City Clerk APPROVED AS TO FORM: or George H. Eiser, III City Attorney Passed and adopted by the Council of the City of National City, California, on June 13, 1995 by the following vote, to -wit: Ayes: Council Members Inzunza, Morrison, Zarate, Waters. Nays: None Absent: Beauchamp Abstain: None AUTHENTICATED BY: GEORGE H. WATERS Mayor of the City of National City, California City lerk of the City of National C tyf , California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 95-82 of the City of National City, California, passed and adopted by the Council of said City on June 13, 1995. City Clerk of the City of National City, California By: Deputy AMENDMENT TO CONTRACT THIS AMENDMENT TO CONTRACT, made and entered into on this the 13 t hday of June , 1995, by and between the CITY OF NATIONAL CITY, a municipal corporation located in San Diego County, hereinafter called "City", acting by and through its duly authorized Mayor, and McDONALD TRANSIT ASSOCIATES, INC., a Texas Corporation, hereinafter called "McDT", acting by and through its duly authorized President, RECITALS A. City and McDT entered into a contract and agreement executed on the 25th day of April, 1979, for the operation of public bus transportation service in the City of National City. B. That original contract has been renewed and extended, with certain changes mutually agreed by the parties. C. The term of the current amendment and extension expires on June 30, 1995, with the provision that the City shall have the option to renew and extend the contract and agreement for an additional two (2) years. D. The current contract parties desire to amend Section 2 of the contract to provide for a contract term of July 1, 1995, through June 30, 1997. NOW, THEREFORE, in consideration of the foregoing recitals and covenants and agreements of each of the parties herein set forth, the parties hereby agree as follows: I. Section 2 of the contract is amended to read as follows: '2. TERM: The term of this contract and agreement shall be for a period of twenty-four (24) months, from July 1, 1995. However, it is covenanted and agreed by and between the parties that the City shall have the option to renew and extend this contract and agreement for an additional two (2) years beyond such twenty-four (24) month term on the same terms and conditions as herein set forth. City shall have a right of cancellation of this agreement if funding to City from the Local Transit Fund of the State of California is eliminated or reduced so that the undertakings in the agreement cannot be met, or any changes in State or Federal law or regulation which limits the ability of City to operate transit services as herein described." II. Except as otherwise provided herein, all of the terms and conditions of the Contract to Establish and Operate Transit Service," dated April 25, 1979, as currently amended, shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Contract on the 13 t h day of June , A.D. 1995, as of the date and year aforesaid. ATTEST: Loaf Anne Peoples City Clerk APPROVED AS TO FORM AND LEGALITY George H. Eiser, III City Attorney A'"TEST: Karen L. Neil Secretary CITY OF NATIONAL CITY, CALIFORNIA George Waters Mayor McDONALD TRANSIT ASSOCIATES, INC. McD011ALD TRANSIT ASSOCIATES, Inc. 4040 FOSSIL CREEK BOULEVARD, SUITE 200 • FORT WORTH, TEXAS 76137 (817) 232-9551 • (817) 232-9560 FAX June 7, 1995 Mr. Tom G. McCabe City Manager City of National City 1234 National City Avenue National City, California 92050 Dear Tom: As we discussed in your office May 4, it is again time to consider extension of our agreement for operation and management of National City Transit. The City's transportation service continues to show improved performance For the first ten months of this fiscal year, ridership is up 4.2%, and passengers -per -mile increased 4.6% over the previous year, setting new records. National City Transit's superior performance in passengers -per -mile, farebox recovery, and cost per passenger, compared with East County Suburban and Chula Vista, was documented in Freddy Rios's March 3 memo to you. The triennial performance audit conducted in December, 1994, by Crain & Associates, Inc., concluded: "Based on these findings, the auditor offers no recommendations." We wish to continue our service to the City, and look forward with particular enthusiasm to assisting in the establishment of an operating facility for National City Transit. A draft or -tract t extending the term June 30, 1997, is enclosed for contract an32r�di2iC.�i., c,at.,,,..,..g to your review. Thank you for your consideration. Enclosure March 3, 1995 To: Tom McCabe, City Manager From: A. Rios, Jr., National City Transit Subject: Report on Comparative Performance Statistics This report compares National City Transit's performance statistics with other local transit systems in the San Diego region. The data will show that National City Transit is one of the most cost-effective, and productive transit systems in the County. For this comparison to be relevant, only systems which operate similar types of service are examined. Comparing an urban system, such as San Diego Transit, with a local system such as National City, or Chula Vista Transit, does not provide useful information because the nature of the services are essentially different. For example, San Diego Transit operates service in the dense Central Business District. There is no value in comparing those ridership numbers with those of a system that operates in less dense suburban areas, such as National City. For the purpose of this report only the following local suburban systems are included: • National City Transit • Chula Vista Transit • East County Suburban (El Cajon, Santee, Lakeside) One exception is the inclusion of the MTDB Contract Services. These are essentially urban routes, operating between the Mexican boarder and downtown San Diego, and between San Diego and the naval base on Coronado. Since there may be an interest in seeing how National City's service compares with these routes, it is included. The following is a discussion of several important performance indicators. Passengers per Mile National City Transit has been extremely effective people. For fiscal year 1994, NCT carried 3.41 passengers per revenue mile, significantly more than any of the other local operators (Figure 1). NCT carried nearly double the amount of riders for every mile of its operation than did Chula Vista Transit or East County Suburban. (Since initiating service in 1979, National City Transit's ridership has increased 327%.) in its mission of transporting Passengers per Revenue Mile FY 1994 National City Transit East County Suburban Chula Vista Transit MTDB Contract Service 0.0 1.0 2.0 3.0 Figure 1 Tax Subsidy per Passenger FY 1994 National City Transit East County Suburban Chula Vista Transit MTDB Contract Service $O.00 $0.20 $0.40 $0.60 $0.80 Figure 3 Report nn Cnmparativp PPrtormancP Statictirs Farebox Recovery Rate One way of measuring the cost effectiveness of a system is to see how much of its operating costs are recovered through the farebox. For the last fiscal year, 54% of NCT's costs were paid by passengers (Figure 2). This exceeded Chula Vista and East County Suburban, which recorded 45% and 44% respectively. Only the MTDB contract service recorded a higher rate, benefiting from Route 932 which began as a privately operated route using no public subsidy by paying low driver wage rates. Since its first year of operation, in fiscal year 1980, NCT has steadily increased its recovery rate from a low of less than 20%. It now has one of the most positive rates in the country, not just the in San Diego region. Recovery Rate FY 1994 National City Transit East County Suburban Chula Vista Transit MTDB Contract Service 0% 20% 40% 60% 80% Figure 2 Subsidy per Passenger One of the best ways of evaluating how effectively a system is using funding resources is to look at "subsidy per passenger." This indicates the amount of tax money necessary to cover the expenses of a passenger trip after the fare is paid. The lower the subsidy per passenger, the Tess additional funding is required to cover the costs of the system. National City Transit has one of the lowest subsidy per passenger rates of any bus system (Figure 3). At the end of fiscal year 1994, NCT needed only 49 cents of additional funding for each passenger, significantly less than either East County Suburban or Chula Vista Transit, which required 79 cents and 75 cents respectively. Only the MTDB Contract Service had a lower subsidy per passenger (42 cents). This data indicates that taxpayers are getting more service (passengers carried) for each dollar contributed to NCT than for the other local operators. Page 2 RPpnrt nn CnmparativP Pprfnrmanrp S.tatictir_c Cost per Passenger The only indicator which appears to show National City Transit to be less effective than its peers is the cost per mile (Figure 4). NCT does have a higher operating cost per mile than the other local operators (although it does operate at more than a dollar a mile Tess than San Diego Transit). There are two important reasons. First, NCT operates far less miles of service than any of the other providers. In fiscal year 1994, NCT operated 405,000 miles compared to 1.2 million for Chula Vista Transit, 1.8 million for East County Suburban, and 1.7 million for MTDB Contract Service. This means NCT has less miles to spread its fixed overhead costs. National City Transit could bring its cost per mile figure down by operating more miles, whether or not people were there to ride, but this would have a negative impact of its passenger per mile and subsidy per mile figures. NCT has chosen to place buses in service only when they are truly needed. Second, NCT has a senior labor force. Unlike East County Suburban and Chula Vista Transit which have changed contractors over the years, NCT has a core of employees who have been with the system for a number of years, some as many as 14. Wage increases have been negotiated over the years (NCT is a union operation) and its average bus operator wage rate, while significantly less than San Diego Transit's, has grown past the other local operators. NCT believes there are inherent advantages in treating its employees well, including less turnover and a higher level of professionalism. The amount of taxes used to subsidize the service is very low, so NCT is very effective in the way it uses tax funding. Cost per Mile FY 1994 National City Transit East County Suburban Chula Vista Transit MTDB Contract Service $0.00 $1.00 $2.00 $3.00 $4.00 Figure 4 Summary It is proven that National City Transit: • carries more passengers per mile than any other local provider, • has one of the highest farebox recovery rates in the region, • and requires Tess tax funding than nearly every other operator. National City Transit is one of the most productive, cost effective bus systems in San Diego County. Page 3