FRANK T. MARTINEZ e1TY OF LOS ANGEL. Office of the City Clerk CALIFORNIA CITY CLERK Council and Public Services KAREN E. KALFAYAN Room 395, City Hall Executive Officer , CA 90012 Council File Infonnation - (213) 978-1043 General Infonnation - (213) 978-1133 When making inquiries Fax: (213) 978-1040 relative to this matter refer to File No. HELEN GINSBURG ANTONIO R. VILLARAIGOSA Chier, Council and Pnbllc Services Division MAYOR 02-1610

PLACE IN FILES CD 15 SEP 1 4 2005

September 8, 2005 DEPUTY ct(

Councilmember Hahn City Attorney Board of Harbor Commissioners Controller, Room 300 Harbor Department Accounting Division, F&A City Administrative Officer Disbursement Division Chief Legislative Analyst A

RE: PROPOSED AMENDMENT NO. 1 TO AGREEMENT NO. 2241 WITH HERZOG TRANSIT SERVICES, INCORPORATED FOR OPERATION OF THE RED CAR LINE

At the meeting of the Council held September 6, 2005 , the following action was taken:

Attached report adopted ...... ·---=X-=---- Attached motion adopted() ...... ______Attached resolution adopted() ...... ______Motion adopted to approve attached report ...... ______Motion adopted to approve attached communication ...... ______FORTHWITH ...... ---=X-=---- Findings adopted ...... ______Negative Declaration adopted ...... ______Administrative exemption approved ...... ·---=X=---~ Generally exempt ...... ______

City Clerk et

AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER File No. 02-1610 TO THE COUNCIL OF THE • CITY OF LOS ANGELES

Your COMMERCE, ENERGY AND NATURAL RESOURCES COMMITTEE reports as follows: Yes No Public Comments xx ADMINISTRATIVEEXEMPTION,COMMERCE,ENERGYANDNATURALRESOURCESCOMMITTEE REPORT relative to proposed Amendment No. 1 to Agreement No. 2241 with Herzog Transit Services (Herzog), Incorporated for operation of the Red Car Line.

Recommendations for Council action:

1. FIND that Amendment No. 1 to Agreement No. 2241 with Herzog involves an administrative activity and as such, the proposed activities are exempt from the from the requirements of the California Environmental Quality Act (CEQA) as provided by Article II, Section 2 (f) of the Los Angeles CEQA Guidelines, as amended by the City Council on July 31, 2002.

2. CONCUR with Resolution No. 6364 as adopted by the Board of Harbor Commissioners (Board) on May 25, 2005, APPROVE the First Amendment to Agreement No. 2241 and AUTHORIZE the Executive Director of the (Port) to execute the First Amendment to Agreement No. 2241 with Herzog to extend the term of the Agreement for one year six months, for a total term of four years six months and with expenditures not to exceed $4,932,945 for the continued management, operation and maintenance of the Red Car Line.

Fiscal Impact Statement: The Board reports that it is anticipated that funds for Agreement No. 2241 will be expended as follows in Division No. 0310, Account No. 54290, Center No. 000. Funds for Fiscal Year (FY) 2005-06 have been budgeted. (FY 2005-06 =$1_,164,354 and FY 2006-07 =$952,342 for a total increase of $2,116,696)

TIME LIMIT FILE - SEPTEMBER 30, 2005

(LAST DAY FOR COUNCIL ACTION - SEPTEMBER 30, 2005)

Summary:

At its August 17, 2005 meeting, your Committee considered an August 4, 2005 Board report and July 18, 2005 City Administrative Officer (CAO) report relative to the proposed First Amendment to Agreement No. 2241 with Herzog to extend the term and provide continued management, operation, and maintenance services for the Red Car Line. The proposed First Amendment extends the term of Agreement No. 2241 for 18 months, from August 2005 to February 2007, and increase expenditures by $2,816,249, for a total amount of $4,932,945. ·

According to the Port, the historic Red Car Line is a 1.5 mile rail trolley route linking the World Cruise Center with attractions along the San Pedro waterfront. In 1999, the Board approved a study for a rail­ based trolley system using the existing rail line along the World Cruise Center area and according to the study, vintage trolley operations have played key roles in the successful transformation of communities across the country. There are currently 17 such operations in other US cities and vintage trolley services have gained respect as a transportation mode to assist communities and businesses in meeting certain specialized mobility requirements. The Port recommended a trolley system based on the old Red Cars to attract passengers from the World Cruise Center and riders throughout the City who have fond memories of riding the old Red Cars. The Board subsequently awarded contracts to refurbish the rail tracks, design and install the overhead electrical system and initially restore and construct two replica Pacific Electric Red Cars. It was the first time in over 40 years that Red Cars had operated anywhere in the City.

The Port further stated that the Board approved Agreement No. 2241 with Herzog through a competitive Request for Proposals (RFP) process to provide operation and maintenance services for the Port Waterfront Red Car Line in July 2002. The Agreement with Herzog was for a term of one year with two one-year renewal options for a maximum of three years. The original Agreement began on August 21, e 2002 and will expire on August 20, 2005 and Herzog provided the following services: manage operations; staff each trolley car with a conductor (who also serves as a tour guide) and engineer; separate the Red Car Line from regular freight operations (at the start and end of the day); and maintain and inspect the trolley cars, rail infrastructure and records of inspections and maintenance.

The Red Car Line and Herzog will take a leading role in helping to revitalize the local business economy by enhancing the image of San Pedro as a tourist destination and improving access to local businesses and attractions. The Port noted that it believes that the Red Car Line is a vital tool in the economic development of the San Pedro waterfront and downtown business district. According to the Port, more than 1.1 million passengers pass through the World Cruise Center annually, with that number expected to rise in the years ahead and complement the commercial development and visitor attractions in the Port area. The Red Car Line has striven to capture a percentage of the cruise ship passengers, as well as tourists from throughout the City.

After further consideration and having provided an opportunity for public comment, your Committee moved to recommend that Council concur with Resolution No. 6364, approve the First Amendment to Agreement No. 2241, and authorize the Executive Director of the Port to execute the First Amendment to Agreement No. 2241 with Herzog.

This matter is now forwarded to the Council for its consideration.

Respectfully submitted,

COMMERCE, ENERGY AND NATURAL RESOURCES COMMITTEE

{(-pf ADOPTED MEMBER VOTE CARDENAS: YES SEP O 6 2005 HAHN: YES ROSENDAHL: YES

ARL ~~· lllGELES c,n .couKCIL ~ ___ ...... ~ #021610 A~~~,----. 8-18-05 CD15 FORTHWITH

Page 2 of 2 • '

COUNCIL VOTE

Sep 6, 2005 10:41:26 AM, #4

Items for Which Public Hearings Has Been Held - Items 17- 82 Voting on Item(s): 26,28,30,32-50,52-62,64-76,78-82 Roll Call

CARDENAS Yes GARCETTI Yes GREUEL Yes HAHN Yes LABONGE Yes PARKS Yes PERRY Yes REYES Yes ROSENDAHL Yes SMITH Yes WEISS Yes ZINE Yes *PADILLA Yes VACANT Absent VACANT Absent Present: 13, Yes: 13 No: 0 e

COMMERCE, ENERGY AND NATURAL RESOURCES COMMITIEE SUGGESTED NOTIFICATION OF COUNCIL ACTION 02 - J 61 0 Council File No. ------

D Petitioner/Communicant ______

181 Council Member(s) =C=D_1,._,,,5'------

181 0ffice of the Mayor

D Board of Airport Commissioners

D * Certify stamp and return Commission copy (on file)

D Department of Airports

181 Board of Harbor Commissioners

181 Harbor Department

D Board of Water and Power Commissioners

D Department of Water and Power

181 City Administrative Officer (CAO)

181 Chief Legislative Analyst (CLA)

181 City Attorney (vol "Bto~e~ (w/o Bluesheet)

181 Controller D D August 4, 2005

425 S. Palos Verdes Street Honorable Members of the

Post Office Box 151 City Council of the City of Los Angeles CDNo.15 / San Pedro, CA 90733-0151 SUBJECT: AMENDMENT NO. 1 - AGREEMENT NO. 2241 BETWEEN Tel/TDD 310 SEA-PORT THE CITY OF LOS ANGELES AND HERZOG TRANSIT SERVICES, INC. FOR OPERATION OF THE RED CAR LINE www.portoflosangeles.org Pursuant to Section 373 of the City Charter, enclosed for your approval is Amendment No. 1 to Agreement No. 2241, to be known as Harbor Department Agreement No. 2241-A, which was approved by the Board of Harbor Commissioners at its meeting held Wednesday, May 25, 2005.

RECOMMENDATION: The City Council approve proposed Amendment No.1 to Agreement No. 2241 James K. Hahn, Mayor City of Los Angeles between the City of Los Angeles and Herzog Transit Services, Inc. for operation of the Red Car Line. Board of Harbor Commissioners ENVIRONMENTAL REVIEW: Nicholas G. Tonsich, President The proposed project involves an administrative activity and as such, the Director of Environmental Management has determined that the proposed Elwood Lui, Vice President activities are exempt from the California Environmental Quality Act (CEQA) in accordance with Article II, Section 2(f) of the City's CEQA Guidelines. James E. Acevedo FISCAL IMPACT STATEMENT: Carr.,::a Townsend It is anticipated funds for this agreement will be expended as follows in Division No. 0310, Account No. 54290, Center No. 000. Funds for fiscal year 2005/2006 Thomas H. Warren have been budgeted. (Fiscal Year 2005-2006 $1,164,354; and Fiscal Year 2006- 2007 $952,342 for a total increase of $2,116,696.) Bruce E. Seaton Interim Executive Director Respectfully submitted, #~ =YA&KI Commission Secretary AY:rd Enclosures

cc: Commerce, Energy & Natural Resources Committee Councilman Cardenas, encs. Councilwoman Hahn, encs. Councilman Rosendahl, encs. Adam Lid, City Clerk's office, encs. AUG O 9 2005 COti1~AERCE ENGY 8~ NAT RES

An Affirmative Action/ w Equal Opportunity Employer Recycled and Recyclable '6¢i zms AUG -8 M1 9: SL\ CITY CLERK

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• .. ARECOMMENDATION APPROVED; A -SOLUTION NO. 6364 ADOPTED; AND W AGREEMENT NO. 2241-A APPROVED ''" BY THE BOARD OF HARBOR COMMISSIONERS

May 25, 2005 {k.d,,_.~;t/" ~ Executive Director's SEC AR._f/ Report to the DATE: MAY 18, 2005 Board of Harbor Commissioners

SUBJECT: AMENDMENT NO. 1 - AGREEMENT NO. 2241 BETWEEN THE CITY OF LOS ANGELES AND HERZOG TRANSIT SERVICES, INC. FOR OPERATION OF THE RED CAR LINE

SUMMARY:

Agreement No. 2241 provides the Port of Los Angeles with management, operation and maintenance services for the Red Car Line, by Herzog Transit Services, Inc. Amendment No. 1 allows the Port to extend the Agreement one year six months for a total term of four years six months for a not to exceed amount of $4,932,945.

RECOMMENDATIONS:

It is recommended that the Board of Harbor Commissioners:

1. Approve Amendment No. 1 to Agreement No. 2241 with Herzog Transportation Services, Inc. extending the agreement one year six months for a total term of four years six months and increasing the not to exceed amount from $2,816,249 to $4,932,945 as follows:

A. Fiscal Year 2005-2006 $1,164,354 B. Fiscal Year 2006-2007 $ 952,342 Total Increase $2,116,696

2. Find that work under the Agreement can be performed more feasibly by an independent contractor than by City employees as required by Section 1022 of the City Charter.

3. Authorize the transfer of $952,342 from the Unappropriated Fund Balance to Division No. 0310, Account No. 54290, Program 000 for future year 2006/2007.

4. Authorize the Executive Director to execute and the Board Secretary to attest to this amendment for and on behalf of the Board.

5. Direct the Board Secretary to forward this Amendment to the City Council for its approval pursuant to Section 373 of the City Charter.

PREVIOUS BOARD ACTION:

The Board of Harbor Commissioners approved Agreement No. 2241 for one year with two one­ year options for a not to exceed amount of $2,816,249 on July 24, 2002. "

DATE: MAY 18, 2005 Page 2 of 3 . '!·~, . ~ ' SUBJECT: AMENDMENT NO. 1 - AGREEMENT NO. 2241 BETWEEN THE CITY OF LOS ANGELES AND HERZOG TRANSIT SERVICES, INC. FOR OPERATION OF THE RED CAR LINE

DISCUSSION:

1. The Mission Statement of the Port's Waterfront Red Car Line is "To serve as a goodwill ambassador for the Port and the community of San Pedro by providing safe, reliable, enjoyable and environmentally-friendly transportation for the thousands of people who visit San Pedro each year. The Red Car Line will take a leading role in revitalizing the local business economy by enhancing San Ped.ro's image as a tourist destination and improving access to local businesses and attractions." The management of Herzog has ensured its operations accomplished the mission.

2. Herzog provides services, which include staffing each trolley car with a conductor and engineer, separates the Red Car Line from regular freight operations at the start of the day and restores the tracks to freight operations at the end of the day, maintains the cars, conducts inspections of the cars and rail infrastructure, maintains records of the inspections and maintenance, and manages the operation.

3. Herzog was an integral part of the original Port team which completed construction of the first two replica cars built for the Red Car Line. The Port would benefit from maintaining Herzog as the operator of the Red Car Line and utilizing their expertise and experience in the planning, specifying, and procurement of four to seven new replica cars. In addition, Herzog's expertise and experience gained in construction of the original Red Car Line would benefit in optimizing the design of the extension of the Red Car Line.

4. The Port is well along the process of transforming the historic San Pedro Waterfront into a· thriving recreational and cultural attraction. Herzog has operated the Red Car Line from its inception and maintains the highest level of respect from the community for its on-time operations. Herzog has shown an amazing ability to modify their operations to minimize the impacts to the riders of the Red Car Line during the construction of the San Pedro Waterfront. Construction will be ongoing during the next one and one half years and impacts to the riders, construction companies, and community have a high likelihood of increasing by switching operators at this time. The Port would benefit from maintaining Herzog as the operator of the Red Car Line and utilizing their proven ability to minimize impacts through the remainder of the ongoing construction and future construction at Ports O'Call Village. ,· ' ..f

DATE: MAY 18, 2005 Page 3 of 4

SUBJECT: AMENDMENT NO. 1 - AGREEMENT NO. 2241 BETWEEN THE CITY OF LOS ANGELES AND HERZOG TRANSIT SERVICES, INC. FOR OPERATION OF THE RED CAR LINE

5. On September 27, 2000, requests for proposals to operate the Port's Waterfront Red Car Line were sent to the Burlington Northern Santa Fe Railway, the Los Angeles Junction Railway, the , the Southern California Regional Rail Authority, , the and Herzog. Pacific Harbor Line and Herzog responded to the request for proposals. After reviewing the qualifications of both firms, staff believed both firms were equally qualified and selected Herzog because they were the lowest bidder. Staff believes the same firms would respond to a new request for proposal and similar results would be achieved. Continuing with Herzog would ensure that no temporary reduction in the quality of service would occur when a new firm started learning the service.

6. Herzog will continue to comply with City's contracting requirements. The agreement is in conformance with the Service Contract Worker Retention and the Living Wage Ordinances of the City.

ENVIRONMENTAL ASSESSMENT:

The proposed project involves an administrative activity and as such, the Director of Environmental Management has determined that the proposed activities are exempt from the California Environmental Quality Act (CEQA) in accordance with Article II, Section 2(f) of the City's CEQA guidelines.

FINANCIAL IMPACT:

It is anticipated funds for this agreement will be expended as follows in Division No. 0310, Account No. 54290, Center No. 000. Funds for fiscal year 2005/2006 have been budgeted.

Fiscal Year 2005-2006 $ 1,164,354 Fiscal Year 2006-2007 $ 952,342 Total Increase $2,116,696

CITY ATTORNEY:

The City Attorney has approved the amendment as to form. /, 1,_.J • ., •,.

DATE: MAY 18, 2005 Page 4 of 4

SUBJECT: AMENDMENT NO. 1 - AGREEMENT NO. 2241 BETWEEN THE CITY OF LOS ANGELES AND HERZOG TRANSIT SERVICES, INC. FOR OPERATION OF THE RED CAR LINE

_ TRANSMITTAL:

1. First Amendment to Agreement No.2241 Between the City of Los Angeles and Herzog Transit Services, Inc. for Operation and Maintenance of the Red Car Line.

~· 50,,_o_ / ANTONIO V. GIOIELLO STACEYG.JONES if'~~ Chief Harbor Engineer Dir. of Engineering Development

KLA:py A224lb01

APPROVED:

~··'7~ BRUCEE. SEATON }{ Interim Executive Director FIRST AMENDMENT TO AGREEMENT NO. 2241 BETWEEN THE CITY OF LOS ANGELES AND HERZOG TRANSIT SERVICES, INC. FOR OPERATION AND MAINTENANCE OF THE RED CAR LINE

THIS FIRST AMENDMENT is made between the City of Los Angeles, a municipal corporation, acting by and through its Board of Harbor Commissioners (hereinafter called "City"), and Herzog Transit Services, Inc. (hereinafter called "Contractor").

RECITALS:

WHEREAS, City entered into Agreement No 2241 with Contractor on August 21, 2002 to operate and maintain the City's Red Car Line at the Port of Los Angeles starting September 6, 2002; and

WHEREAS, operation and maintenance of the City's Red Car Line by the Contractor will extend beyond the initial termination date of this agreement but Contractor must discontinue work on that date unless the Agreement is extended; and

WHEREAS, the City needs to utilize the Contractor to continue operation and maintenance of the City's Red Car Line; and

WHEREAS, the City would benefit from utilizing the Contractor's expertise and experience in planning extension to the present route: and

WHEREAS, the City would benefit from utilizing the Contractor's expertise and experience in the procurement of additional Red Cars for operations of the expanded Red Car Line: and

WHEREAS, the City would benefit from the Contractor's expertise to address demands and requests for improved operations supported by the Community, tenants, and the Port Community Advisory Committee: and

WHEREAS, the Community's demand for Services requires the City to increase the number of Red Car trips, Services will be expanded to operate two Red Cars continuously from 10:00 am to 6:00 pm.

NOW THEREFORE, in consideration of the foregoing recitals and terms and conditions, the parties agree as follows:

I. The Last Sentence of Section 6, Payments, is amended to read as follows:

A. Total compensation paid to the Contractor under this Contract shall not exceed $4,932,945.00 (Exhibit "H"). This sum does not include changes in payments for performance of extra Services pursuant to section 7.D.3.

1 II. New subsection 7 .D is added to read as follows

D. Authority of the Director

1. Acceptability of Services~

Director shall decide any and all questions which may arise as to the quality or acceptability of the Services performed, and as to compensation due Contractor. The Director may disapprove Services if, in his sole opinion, the Services do not conform to the requirements of this Agreement, or is impractical, uneconomical or unsuited in any way for the purpose for which the Contractor is retained. No approval, disapproval or omission to approve or disapprove the Services shall relieve Contractor of any responsibility under this Agreement. Subject to Section 7.D.2 below, Director's decision shall be final, and he shall have authority to enforce and make effective such decisions and orders with respect to the performance of this Agreement.

2. Disputes as to Acceptability of Services:

If Contractor and Director cannot agree as to the quality or acceptability of the Services, or whether a change in the Services are required and/or the compensation payable to Contractor under this Agreement, Director or Contractor may promptly give to the other a written notice thereof and, within ten (10) days thereafter, Contractor and Director shall each prepare a report which support their position. Director's report shall include any possible claims against City, including the amount of additional compensation requested. The Contractor and Director shall exchange copies of their reports. As soon as practicable thereafter, in the ordinary course of business, the Board will hold a hearing where the reports, and such other evidence as the parties may present, are received. Thereafter, Board shall, with reasonable diligence, determine the quality or acceptability of Services, or whether a change in the Services is required, and/or the compensation payable to Contractor. Submittal of the matter to Board, as required by this Subsection, is a prerequisite to the right of Contractor to contest any such matter in a court and Contractor expressly waives any right to so contest any decision(s) of Director unless it has first presented the matter to the Board.

3. Changes in Services:

a. The City reserves the right, at any time during the life of the Contract and without invalidating same, to change the

2 character of Services or quantity of Services provided the total arithmetic dollar values of all such changes, both additive and deductive, does not exceed 25 percent of the total contract price. Should it become necessary to exceed the limitation, the change shall be by written supplemental agreement between the Contractor and City.

b. Each change in compensation of One Hundred Fifty Thousand Dollars ($150,000) or less shall require approval of the Director. Each change in compensation of more than One Hundred Fifty Thousand Dollars ($150,000) shall require approval of the Board, however, that if the cumulative change orders result in increasing the authorized compensation by more than twenty-five percent (25% ), Board approval shall be required for all such change orders.

c. All such changes, additions or deletions shall be by written change order and shall include the amount of additional compensation or credit for said change, if any. The change order shall be signed by Contractor before any additional Services are done pursuant to said order. Changes in compensation as a result of said change order shall be in accordance with this subsection. Contractor understands that the Charter of City limits the manner in which contracts must be carried out and extra Services may be authorized. Contractor further understands that no officer, agent or employee of City has the authority to require Services other than as allowed by this Agreement.

III. Section 10 Subsection A is amended to read as follows:

A. Term: The contract term shall commence upon execution by the Executive Director. The contract shall terminate four years and six months after the date of commencement of this Contract.

IV. Section 14 is amended to name Bruce Seaton as Interim Executive Director on notices sent to City.

V. Exhibit H, Schedule of Pricing, is replaced in its entirety with the attached revised Exhibit H.

3 ..

Except as amended herein, all remaining terms and conditions of Agreement No. 2241 remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment on the date to the left of their signatures. '

THE CITY OF LOS ANGELES

Executive Director

Attest: ------Secretary

Date: L s_/~3/0I I

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TRANSMITTAL TO DATE COUNCIL FILE NO. Bruce E. Seaton, Interim Executive Director Harbor Department AU O3 2005 FROM COUNCIL DISTRICT The Mayor 15

PROPOSED FIRST AMENDMENT TO AGREEMENT NO. 2241 WITH HERZOG TRANSIT SERVICES, INC. FOR OPERATION OF THE RED CAR LINE

Transmitted for further processing. See the City Ad · trative Officer report attached.

MAYOR

WTF:ABN:10060013t

CAO 649-d e REPORT FROM

OFFICE OF THE CITY ADMINISTRATIVE OFFICER

Date: July 18, 2005 CAO File No. 0220-04038-0000 Council File No. Council District: 15 To: The Mayor

From: William T Fujioka, City Administrative Officer J~

Reference: Harbor Department Transmittal, referred by the Mayor for report

Subject: PROPOSED FIRST AMENDMENT TO AGREEMENT NO. 2241 WITH HERZOG TRANSIT SERVICES, INC. FOR OPERATION OF THE RED CAR LINE

SUMMARY

The Harbor Department (Port) requests approval of a proposed First Amendment to Agreement No. 2241 with Herzog Transit Services Inc. (Herzog) for operation and maintenance of the Red Car Line. The historic Red Car Line is a 1.5 mile rail trolley route linking the World Cruise Center with attractions along the San Pedro waterfront. The proposed Amendment will extend the Agreement by 18 months, from August 2005 to February 2007, for a total term of four years and six months and increase compensation by a maximum of $2, 116,696, from the existing Agreement amount of $2,816,249, for a total amount of $4,932,945. According to the Port, proposed costs will increase an average of 50 percent per year due to an increase in costs for additional operating hours and staffing requirements, cost of living adjustments, higher than anticipated maintenance and construction costs, and general contingency costs. In accordance with Charter Section 373, the proposed Amendment requires Council approval because the Agreement extends beyond three years.

The Board of Harbor Commissioners (Board) approved a study for a rail based trolley system using the existing rail line along the World Cruise Center area in 1999. The Port study showed that vintage trolley operations have played key roles in the successful transformation of communities across the country. There are currently 17 such operations in other U.S. cites and the vintage trolley services have gained respect as a transportation mode to assist communities and businesses in meeting certain specialized mobility requirements. The Port recommended a trolley system based on the old Pacific Electric Red Cars to attract passengers from the World Cruise Center and riders throughout Los Angeles who have fond members of riding the old Red Cars. The Board subsequently awarded contracts to refurbish the rail tracks, design and install the overhead electrical system and initially restore and construct two replica Pacific Electric Red Cars. It was the first time in over 40 years that Red Cars had operated anywhere in Los Angeles.

The Board approved the Agreement with Herzog, a professional operator of railway passenger services, through a competitive Request for Proposals (RFP) process to provide operation and maintenance services for the Port Waterfront Red Car Line in July 2002. In August 2002, the e e CAO File No. PAGE 0220-04038-0000 2

Council, by a two-thirds vote pursuant to Charter Section 245(b), approved a Motion authorizing the Board approval of the Agreement with Herzog so that the contractor could begin the work immediately (C.F. 02-1610). The Agreement was for one year with two one-year options for a maximum of three years. The original Agreement began on August 21, 2002 and will expire on August 20, 2005. Herzog will provide the following: manage operations; staff each trolley car with a conductor (who also serves as a tour guide) and engineer; separate the Red Car Line from regular freight operations (at the start and end of the day); and maintain and inspect the trolley cars, rail infrastructure and records of inspections and maintenance.

The Red Car Line and Herzog will take a leading role in helping to revitalize the local business economy by enhancing the image of San Pedro as a tourist destination and improving access to local businesses and attractions. The Port believes that the Red Car Line is a vital tool in the economic development of the San Pedro waterfront and downtown business district. According to the Port, more than 1.1 million passengers pass through the World Cruise Center annually, with that number expected to rise in the years ahead and complement the commercial development and visitor attractions in the Port area. The Red Car Line has striven to capture a percentage of the cruise ship passengers, as well as tourists from throughout Los Angeles.

Approval of the First Amendment will allow the Port to continue using Herzog services to provide its experience and expertise to manage, operate and maintain equipment for the Red Car Line now and in the future. According to the Port, Herzog has done an excellent job in operating the Red Car Line, maintaining on-time operations, and responding to requests from the Department to modify services during ongoing construction projects along the waterfront. The Port plans to expand the route and services for the Red Car Line. Herzog will assist the Port in future plans to construct, maintain, procure and expand the trolley cars services. Future Port plans under discussion include: increase the number of replica trolley cars; construct a maintenance building and adjacent Red Car Museum; and extend the 1.5 mile trolley route to Cabrillo Beach, the new cruise terminal at the Outer Harbor and downtown San Pedro. The Port states that since construction will be ongoing during the next 18 months, releasing a new RFP and possibly switching operators would have an adverse delay and impact to riders, construction companies and the community. However, the Port plans to release a new RFP to operate and maintain the Red Car Line at the end of the 18 month contract extension.

The proposed First Amendment has been reviewed and approved by the City Attorney as to form. In accordance with Charter Section 1022, the Board determined that it was more feasible to hire consultants than City employees, because the work required specialized training, expertise and certification to operate and maintain the trolley cars. The Port states that there are no City classifications for this specialized work and the employees are essentially railroad workers. The original Agreement was determined to be in compliance with all applicable City requirements, including the City Living Wage and Service Worker Retention Ordinances and Affirmative Action compliance. The proprietary departments, including the Port, have not yet adopted a policy regarding City Ordinances for Slavery Disclosure and Contractor Responsibility. The Port Director of Environmental .Management has determined that the proposed action is exempt from the requirements of the California Environmental Quality Act (CEQA) as provided by Article II, Section 2(f) of the City CEQA guidelines. e CAO File No. PAGE • 0220-04038-0000 3

RECOMMENDATION

That the Mayor approve the proposed First Amendment to extend Agreement No. 2241 by 18 months between the Harbor Department and Herzog Transit Services, Inc. for the operation and maintenance of the Red Car Line and return it to the Board of Harbor Commissioners for further processing, including Council consideration.

FISCAL IMPACT STATEMENT

There is no financial impact on the City General Fund. The existing three-year Agreement is for a total of $2,816,249 and will expire in August 2005. The proposed Amendment will extend the Agreement by 18 months, for a total term of four one-half years, and increase compensation by a maximum of $2,116,696, for a total contract amount of $4,932,945. Since the Port is only bound by the City Debt Management Policies and the proposed action will not impact the .City General Fund, the City Financial Policies are not applicable.

WTF: ABN:10060013 J. MICHAEL CAREY t9rv OF LOS ANGELE. Office of the City Clerk CALIFORNIA CITY CLERK Council and Public Services FRANK T. MARTINEZ Room 395, City Hall Executive Officer Los Angeles, CA 90012 Council File Information - (213) 978-1043 General Information - (213) 978-1133 When making inquiries Fax: (213) 978-1040 relative to this matter refer to File No. HELEN GINSBURG JAMES K. HAHN Chief, Council and Public Services Division MAYOR 02-1610

PLACE IN FILES CD 15 AUG O 9 20021.JI' DEPUTY Vo August 7, 2002

Councilmember Hahn Councilmember LaBonge Harbor Department Board of Harbor Commissioners City Attorney City Administrative Officer Chief Legislative Analyst

RE: WAIVING COUNCIL REVIEW OF AN AGREEMENT BETWEEN THE BOARD OF HARBOR COMMISSIONERS AND HERZOG TRANSIT SERVICES, INC.

At the meeting of the Council held August 6, 2002, the following action was taken:

Attached report adopted ...... ______Attached motion () adopted ...... ····------Attached resolution (Hahn - LaBonge) adopted ...... ····---=X-=--- FORTHWITH ...... -----=-X"'---- Ordinance adopted ...... ···~------Motion adopted to approve communication recommendation(s) ... ···~------

City Clerk jr steno\021610

AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER Recyclable aoo made from recycled waste. @ r - ...... ~ .._. /\ ·--r,,"·N~1· "N NE>/T1 \ TO (T'.·y C~L?I'\ :dl\ r·L1l.,:,~1t , u " #54 M0Tl6Nt.E COUNCIL ~/3:NDA TO 6E POSTED I Jl\L 3 0 On July 24, 2002, the Board of Harbor Commissioners approved an agreement with Herzog Transit Services, Inc. for Herzog to provide operational and maintenance services for the Port of Los Angeles Waterfront Red Car Line. Herzog will hire and train the operators and maintainers of the Red Cars and also provide maintenance service for the electrical components of the Red Car line.

The Port ofLos Angeles Waterfront Red Car Line is a vital tool in the economic development of the San Pedro waterfront and the downtown San Pedro business district. It will attract riders not only from the World Cruise Center but also from throughout Los Angeles.

The port is planning to run historic Red Car 1058 during the Festival of Sail on September 6-10, and begin full operations soon thereafter.

Section 245 of the Los Angeles City Charter states that actions of boards of commissioners shall become final at the expiration of five regular meeting days of the City Council. However, Section 245(b) permits the waiver, by resolution, of this provision by a two-thirds vote of the Council.

I THEREFORE MOVE that the Council, by a two-thirds vote pursuant to Charter Section 245(b ), :1 resolve to waive its review of the Harbor Department's approval of the Board of Harbor Commissioners' approval of the agreement with Herzog Transit Services, Inc. so that Herzog may begin work immediately to inaugurate operations of the Red Car Line.

PRESENTED BY:

SECONDED BY:

July 24, 2002

l"tt<>ft ~ J'\, ADOPTED AUG O 6 LUUl

LOS ANGELES CITY COUNCIL FORTHWITH •

COUNCIL VOTE

Aug 6, 2002 10:29:20 AM, #4

Items for Which Public Hearing Have Not Been Held - Items 19-44 Voting on Item(s): 27-:3a, 3'1a 44 ')" --'O..~ ..,..- 1-. (p--Y L{ Roll Call