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City of Elk Grove City Council Staff Report

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City of Elk Grove City Council Staff Report AGENDA ITEM NO. 10.1 CITY OF ELK GROVE CITY COUNCIL STAFF REPORT AGENDA TITLE: Consider a resolution dispensing with the formal request for proposal procedures pursuant to Elk Grove Municipal Code section 3.42.188(B)(3) and authorizing the City Manager to execute a contract with Sacramento Regional Transit District (SacRT) to provide the City’s fixed-route local and commuter transit services, Americans with Disabilities Act (ADA) paratransit services, and supporting transit maintenance operations; and execute a Second Amendment to the Service Agreement between SacRT and the City of Elk Grove (C-17-290) modifying the proportionate share payment requirements upon execution of the contract with SacRT to provide the City’s transit services and maintenance operations MEETING DATE: February 27, 2019 PREPARED BY: Michael Costa, Transit System Manager DEPARTMENT HEAD: Robert Murdoch, P.E., Public Works Director/ City Engineer RECOMMENDED ACTION: Staff recommends that the City Council adopt a resolution: 1. Dispensing with the formal request for proposal procedures pursuant to Elk Grove Municipal Code section 3.42.188(B)(3) and authorizing the City Manager to execute a contract with Sacramento Regional Transit District (SacRT) to provide the City’s fixed-route local and commuter transit services, Americans with Disabilities Act (ADA) paratransit services, and supporting transit maintenance operations; and 1 Elk Grove City Council February 27, 2019 Page 2 of 6 2. Authorizing the City Manager to execute a Second Amendment to the Service Agreement between SacRT and the City of Elk Grove (C-17- 290), modifying the proportionate share payment requirements upon execution of the contract with SacRT to provide the City’s transit services and maintenance operations. BACKGROUND INFORMATION: On December 12, 2018, the City Council directed staff to negotiate a contract with SacRT for the operation of the City’s transit services and maintenance operations, to commence following the expiration of the City’s current contract with MV Transportation (MV) on June 30, 2019. The City Council further indicated that this contract could be precursor to the City’s annexation back into SacRT’s service district, pending evaluation of SacRT’s performance during the contract and the City’s acceptance of any negotiated annexation terms. Additional information regarding the context for the City Council’s direction to negotiate a contract with SacRT, and the Council’s consideration of annexation, can be found in Attachment 4 of this staff report. ANALYSIS/DISCUSSION: Following the City Council’s direction in December 2018, City and SacRT staff met multiples times, negotiated, and agreed upon terms, conditions and provisions for a contract for the operation and maintenance of Elk Grove’s transit services. The proposed contract is included as Attachment 2 to this report, and it describes the terms and conditions under which SacRT will provide transit services to the City beginning on July 1, 2019, and the City’s responsibilities during the five-year term of the contract. The contract also contains a provision that allows the City and SacRT to negotiate annexation terms and conditions at any time during, or after, the Contract’s term. The contract contains a number of the same performance requirements and operational standards that exist in the City’s current contract with MV Transportation, Inc. (MV), including the following: • SacRT will maintain all existing transit service levels, while also providing the City with the flexibility to modify service levels in order to meet the City’s needs; 2 Elk Grove City Council December 12, 2018 Page 3 of 6 • SacRT will adhere to applicable federal and state contract regulations, to maintain existing contracted administrative staff, bus operators (drivers), customer service and dispatch personnel, and maintenance (mechanics)/utility staff, provided that the individuals pass SacRT’s employment and security background review process and maintain satisfactory job performance/standing; • Key SacRT administrative personnel, who either report to, or interact directly with, the City’s Transit Manager and Fleet and Facilities Manager, must be approved by the City; • Liquidated damage assessments, which have been negotiated and agreed upon by City and SacRT staff, are defined and will be utilized to help ensure that SacRT adheres to the all of the contract’s key performance measures; • Customer service standards, bus preventive maintenance protocols, and bus and bus shelter washing schedules will all be maintained by SacRT in a manner similar to the City’s current contract with MV; • As a condition of the proposed contract with SacRT, SacRT has agreed to treat the amounts paid by the City under the contract as the City’s proportionate share payment for the final year of the current Service Agreement that the City had executed with SacRT on on July 13, 2017 (C-17-290), and amended on June 7, 2018 (C-18- 343); and • Pending the identification of appropriate funding, and the establishment of an agreement with Paratransit, Inc. for providing the service, the City and SacRT will work towards implementing regional ADA paratransit service for ADA-eligible Elk Grove residents, which may be implemented by July 1, 2019, or shortly thereafter. It is important to note that there are two provisions within the proposed contract that deviate from the City’s current contract with MV. These two matters are summarized, below: • Indemnification: The City and SacRT have negotiated the terms of indemnification and defense, which allow for circumstances of mutual indemnity for both the City and SacRT. Per the City’s current contract with MV, MV must fully indemnify and defend the City and accept all liability for transit services and operations at all times, with the exception of events that are due to the City’s willful misconduct 3 Elk Grove City Council February 27, 2019 Page 4 of 6 and/or sole negligence. The City is not responsible for indemnifying or defending MV at any time. With mutual indemnification with SacRT, the City will accept liability under defined circumstances that require the City to indemnify and defend SacRT. The City’s existing insurance liability policies provide adequate coverage for the City’s indemnification of SacRT for non-transit related liability; however, additional costs to indemnify SacRT in the special circumstances defined in the proposed contract are unknown. As a public agency, SacRT requires the City to provide some level of mutual indemnification, and staff believes that the negotiated terms for this indemnification are fair and adequate. • Performance Bond: SacRT will not be required to provide a Performance Bond. The Performance Bond requirement is a typical contract provision that is intended to help the City financially in the event that a contractor either terminates the services, or fails to perform the required work. If this event were to occur, the City would be forced to immediately procure a new transit contractor to complete the contracted work, which would require the City to call upon the Performance Bond to pay for those services. SacRT has expressed concern with the costs to acquire a Performance Bond for the proposed contract. City staff does not anticipate that the removal of the Performance Bond requirement will result in any major financial risk for the City at this time, particularly since SacRT is a public agency. With regard to the proposed Second Amendment to the Service Agreement, the City is required by statute to pay a proportionate share payment to SacRT in order to become a participating entity in the Sacramento Regional Transit District. Currently, the City’s proportionate share payment is set at $350,000 per year. As noted above, the proposed contract with SacRT will serve to satisfy the City’s proportionate share payment requirement. The proposed Second Amendment to the Service Agreement (Attachment 3) provides that the proportionate share payment will not be owed for Fiscal Year 2020 (July 2019 to June 2020) provided the underlying agreement for operation and maintenance of the City’s transit system remains in place. Elk Grove Municipal Code section 3.42.188(B)(3) states that the City Council may dispense with the formal request for proposals procedure when, in the judgment of the City Council, compliance with the procedure is not in the best interest of the City. Due to the factors listed above, a formal 4 Elk Grove City Council December 12, 2018 Page 5 of 6 request for proposal process will not be in the best interest of the City. Pursuing the formal proposal process would result in an expenditure of time and money, and the process is not expected to result in an outcome more advantageous to the City than the proposed contract with SacRT. Additionally, staff contacted its representatives at the Federal Transit Administration (FTA) to discuss the proposed contract and procurement requirements. The FTA noted that a contract between the City and SacRT would be an intergovernmental agreement between two public entities, not a “procurement.” Therefore, the federal competitive procurement requirements are inapplicable. ALTERNATIVE ACTIONS: If the City Council does not wish to pursue the proposed contract with SacRT, the alternative would be to execute a one year extension to the contract with MV under the same terms and conditions as the City’s current contract. Following the City Council’s direction in December, 2018, staff received an unsolicited cost proposal from MV that identified
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