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Report 7, September 4, 2002

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Report 7, September 4, 2002 1 Report No. 7 of the Transit Committee THE REGIONAL MUNICIPALITY OF YORK REPORT NO. 7 OF THE REGIONAL TRANSIT COMMITTEE MEETING HELD ON SEPTEMBER 4, 2002 For Consideration by The Council of The Regional Municipality of York on September 19, 2002 Chair: Regional Councillor Diane Humeniuk, Chair Members: Regional Councillor Barrow Regional Councillor Joyce Frustaglio Mayor Tim Jones Regional Councillor Scarpitti Regional Chair B. Fisch Also Present: Mayor Wayne Emmerson Regional Councillor B. O'Donnell Staff Present: J. Barnes, P. Carlyle, S. Cartwright, M. Garrett, D. Gordon, P. May, E. Stevenson, K. Schipper, E. Wilson The Transit Committee began its meeting at 11:05 a.m. on September 4, 2002. 2 Report No. 7 of the Transit Committee TABLE OF CONTENTS Clause Page 1 YORK REGION TRANSIT 3 PERFORMANCE BASED OPERATING CONTRACTS 2 YORK REGION TRANSIT MOBILITY PLUS SERVICE 8 2001 SYSTEM PERFORMANCE REVIEW 3 YORK REGION TRANSIT 20 ONTARIO TRANSIT RENEWAL PROGRAM – REQUEST FOR ALLOCATION OF RENEWAL FUNDS 4 YORK REGION TRANSIT 24 BUS ADVERTISING CONTRACTS FOR MARKHAM AND RICHMOND HILL AREAS 5 YORK REGION TRANSIT MOBILITY PLUS SERVICE 26 AMENDMENT TO VAUGHAN SERVICE AREA CONTRACT 6 YORK REGION TRANSIT MOBILITY PLUS SERVICE 28 WHITCHURCH-STOUFFVILLE SERVICE AREA CONTRACT 7 YORK REGION TRANSIT MOBILITY PLUS SERVICE 30 KING AND EAST GWILLIMBURY SERVICE AREA CONTRACTS 8 UPDATE – COMMITTEE PROCEEDINGS 32 3 Report No. 7 of the Transit Committee 1 YORK REGION TRANSIT PERFORMANCE BASED OPERATING CONTRACTS The Transit Committee recommends: 1. The presentation by Rick Takagi, Manager, Operations, be received; and 2. The recommendations contained in the following report, August 26, 2002, from the Commissioner of Transportation and Works be adopted, subject to: (a) inserting the word "enhanced" before "principles of performance" in Recommendation 1; and (b) amending the figures in the presentation document under "Financial Impact", bullet points 3 and 4, to read $65,000 and $59,000 respectively. 1. RECOMMENDATIONS It is recommended that: 1. Staff be authorized to proceed with a procurement process for the operation of conventional transit services in 2003, based on the principles of performance and service quality as identified in this report. 2. Staff be authorized to negotiate a four month extension of the operating agreement with Can-Ar Coach Service, A Division of Tokmakjian Limited, to May 3, 2003, for transit service in the Vaughan area; a three month extension of the operating agreement with Laidlaw Transit Limited, to June 28, 2003, for transit service in the Newmarket and Aurora areas; and a four month extension of the operating agreement with Pacific Western Limited to May 31, 2003, for transit service in the Richmond Hill area. 2. PURPOSE The purpose of this report is to inform Transit Committee and Regional Council of York Region Transit’s (YRT) ongoing effort to update, improve and standardize the terms and specifications of the operating contract and procurement document for the delivery of contracted conventional transit services. As part of this process, staff have investigated the opportunity to include performance-based provisions in the contract. In order to accommodate the schedule to introduce performance based contracts and also stagger the completion dates of existing contracts, authorization is being sought to negotiate a short term extension to the existing service agreements in the Vaughan, Richmond Hill and 4 Report No. 7 of the Transit Committee Newmarket/Aurora areas. It is considered more manageable from an administrative point of view to have the contracts end at approximately one month intervals. 3. BACKGROUND Prior to York Region assuming responsibility for the delivery of public transit services, operating contracts for the different area municipalities varied to suit local needs. Since three of the four major service contracts are coming to the conclusion of their terms between January and June, 2003, there is an opportunity to standardize these contracts and update the specifications. The goals of the Region’s 25-year strategic plan, Vision 2026, include increasing public accountability in the delivery of cost-effective, high-quality service to residents and businesses. In keeping with this vision, staff is proposing the introduction of service quality provisions in all transit contracts. For example, the introduction of performance measures, which could provide financial incentives and disincentives to the service providers, is being proposed. 4. ANALYSIS AND OPTIONS YRT utilizes four different major contractors to operate conventional transit service in the Region. Each contractor provides transit service on designated routes within sometimes overlapping service areas. Buses are stationed at storage and maintenance facilities owned by the respective contractors and located in each service area. Since three of the four contracts are scheduled to end in 2003, staff is preparing new contract and procurement documents which standardize and update the specifications. The procurement process will also enable the combining of contracts where deemed appropriate. For example, there are likely to be economies of scale associated with having two contractors to serve the Markham, Vaughan and Richmond Hill areas, rather than three. Staff have reviewed opportunities to include performance measures and related financial rewards and penalties to encourage the delivery of quality service. It should be noted that the TTC is also contracted by YRT to extend their routes from Toronto into York Region. In addition, Miller Transit, whose contract expires in December 2005, provides transit service in the Markham area. Neither the TTC’s, nor Miller’s operating agreements are included in this review. 4.1 Standardized Transit Operating Contracts The Region’s transit contractors are compensated on the basis of an hourly rate for each bus that is put into revenue service. Each agreement also has compensation variables that affect both contract administration and costs. These include leased buses, communication equipment, driver training, insurance, equipment repair charges, taxation on maintenance, fuel escalation charges, and ‘dead-head’ charges. 5 Report No. 7 of the Transit Committee Having standardized operating contracts Region-wide will ensure seamless and a more consistent quality of conventional transit services. Moreover, a common contract document will allow for easier and consistent contract administration. 4.2 Performance-Based Operating Contracts The existing operating contracts were typically awarded based on the contractor meeting specifications and having the lowest bid price. There are currently no financial or other incentives in the contracts to promote quality performance, except for limited financial penalties for not providing service. An internal staff team, comprised of representatives from York Region Transit, Legal, and Supplies and Services, was established to develop a new model contract. Among other things, the team reviewed the opportunity to incorporate performance provisions into future contracts. Performance is measured using various benchmarks. There are often incentives for contractors who achieve levels higher than the set benchmark, and disincentives for those who perform below the set benchmark. Additionally, statistics collected over the term of the contract can be used in future procurement processes. The following performance standard categories are being proposed for inclusion in the new contract document: S Schedule Adherence S Vehicle Maintenance S Safety S Customer Satisfaction S Reporting Requirements The addition of performance standards and measures into operating contracts is intended to improve the overall quality of conventional transit services. Considerable research has been conducted across North America to identify which measurements should be introduced into future agreements and how they will be monitored. For each performance standard category, a financial incentive or bonus is proposed to be paid if a particular standard is achieved. On the other hand, if the standard is not achieved a disincentive or penalty would be levied against the contractor. The total value of the proposed incentive package would be $65,000 annually, and $59,000 annually in disincentives. Depending on the contract, these amounts represent approximately 1% of the individual contract values. 4.3 Service Quality Improvements In addition to performance measurements, staff is also considering the following items improve service quality and image: S Standardized training programs S Minimum training hours S Common uniforms and operator appearance improvements 6 Report No. 7 of the Transit Committee 4.4 Rapid Transit York Region Council recently approved York Consortium 2002 as the successful partner for the York Rapid Transit Plan. This proposal includes staged rapid transit along the Yonge and Highway 7 corridors, as well as corridors connecting to the Spadina subway line in the west and the Sheppard subway line in the east. The proposed performance based operating contracts will need to accommodate any transitional issues between existing transit services and the rapid transit proposal. 4.5 Service Agreement Schedule Below is a preliminary schedule of dates for implementing the performance-based contracts. The contract start dates in the different geographical areas occur over a three month period in order that potential transitional issues are resolved in each area of the Region. S RFP/Tender release
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