Agenda Item 10 - CONSIDERATION OF TRANSPORTATION AND LEASE AGREEMENTS WITH MV TRANSPORTATION, INC.AGENDA ITEM NO. 10
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: March 1, 2022
TO: Mayor and City Council
FROM: David Carmany
City Manager
SUBJECT: CONSIDERATION OF TRANSPORTATION AND LEASE AGREEMENTS WITH MV
TRANSPORTATION, INC.
RECOMMENDATION:
It is recommended that the City Council take the following actions:
1. Provide direction regarding the transit services and lease agreements; and
2. Authorize the City Manager to negotiate and execute all necessary
documents, in such final form as approved by the City Attorney, to carry out the City Council's
direction.
BACKGROUND:
Fixed -route transportation systems use buses, vans, light rail, and other vehicles to operate on a
predetermined route according to a predetermined schedule. These types of systems have printed or
posted timetables and designated stops where riders are picked up and dropped off. The City of West
Covina is conducting an evaluation of its current transit services to define the future of transit/mobility in
the community.
On December 17, 2013, the City Council approved a Transportation Services Agreement with MV
Transportation, Inc. (MVT), to provide fixed route and dial a -ride transit services that began on March 3,
2014. Separate, but concurrent and related to the Transportation Services Agreement, MVT entered into
a Lease Agreement with the City on January 22, 2014 to use space at the City Yard for a mobile office
and vehicle parking.
The Transportation Services Agreement had an initial term of five (5) years with a provision for two (2)
one (1)-year extension options. Both options were exercised, extending the term through March 2, 2021.
MVT's compensation during the initial five-year term for the Transportation Services Agreement totaled
$4,953,125.
Pursuant to the Lease Agreement, MVT agreed to pay the City $2,700 per month. The Lease Agreement
was subsequently amended twice. Pursuant to the Second Amendment in 2019, the monthly rent was
increased to $3,000 due to additional parking spaces requested by MVT and the term was extended term
through March 2, 2021 to coincide with the term of the Transportation Services Agreement. The City has
received approximately $234,000 in rent from MVT under the Lease Agreement.
On March 2, 2021, the City Council approved additional extensions of both the transit service and lease
agreements with MVT, on a month -to -month basis, for up to 12 months, to enable the City to conduct a
formal solicitation for transportation services. The transit service amendment included a provision for the
parties to promptly meet to negotiate revised rates if volume fluctuated by more than 20%. It also allowed
either party to terminate the agreement with a 30-day notice to the other party.
MVT has staffed and managed the City of West Covina's Fixed Route Shuttle (Shuttle) and Dial A -Ride
(DAR) services with oversight by the Public Services Department. The Shuttle service consists of three
alignments (Red, Blue, and Green) that operate Monday -Friday. The estimated annual hours of operation
for the Shuttle service are 11,600. In October 2021, service reductions were made to the Red and Blue
lines as a cost saving measure. Currently, the lines run as follows:
. Red runs 6:30am to 5:52pm (No Service 9:10a to 10:06a and 2:46pm to 3:42pm)
. Blue runs 7:07am to 4:47pm
. Green runs 6:30am to 6:25pm (North) and 6:30am to 6:30pm (South)
The DAR operates Monday -Friday from 8:00 a.m. to 5:30 p.m., and Sunday from 8:00 a.m. to 2:30 p.m.
The estimated annual hours of operation for the DAR service are 7,600.
On May 4, 2021, the transit service agreement with MVT was amended to include a six-month
"On -Demand Ride -Hailing" Pilot Program to be carried out by Uber that would supplement the current
Dial -A -Ride program. The City budgeted $50,000 for the pilot program. MVT was to receive 10% for
administering the program, including arranging rides for those without the app. Only recently has the
program been ready to launch. The City suspended the launch given the short timeframe before the end
of the current extension, as well as the pending RFP process.
DISCUSSION:
A consultant was hired by the City to conduct an evaluation and analysis of the existing transit service
and identify alternatives. The evaluation will be presented at the March 15, 2022 City Council meeting.
City Council direction following the presentation of the evaluation will serve as a basis for the scope of
work for a Request for Proposals for transit services.
To ensure service during the process, staff requested a proposal from MVT. MVT provided a proposal
(Attachment No. 1) to continue a month -to -month agreement at a status quo level. In anticipation of labor
negotiations and wage increases, the cost proposal rates are month -to -month and not to exceed six
months. The attached proposal reflects the 6-month term.
The rates reflect an increase of 5.74% in light of a 7.5% increase in CPI. The proposal delineates
variable costs by service and overall fixed costs. With fixed costs met, service modifications, i.e.,
reductions, may be implemented if desired.
Staff conferred with the transit evaluation consultant for potential reductions that could be implemented.
Two alternatives were posed: eliminating the Blue Line or reducing service on the Green Line, from two
buses to one. From an equity of service perspective, the Green Line alternative was the more palatable
of the two. Either alternative would result in a savings of approximately $9,000 per month. It was
cautioned, however, that making short-term changes could lower rider confidence in the consistency of
the service.
In regard to an "On -Demand Ride -Hailing" Pilot Program, while Uber recently advised that it is ready to
launch as previously planned under the previous amendment with MVT, staff has contacted both Uber
and Lyft regarding contracting directly with the City. The City Attorney's Office has made a preliminary
review of the template agreements for both companies. If directed, staff will present a proposed
agreement to City Council for consideration at a future meeting.
LEGAL REVIEW:
The City Attorney's Office will work with staff based on the City Council's direction and approve any
agreements or amendments as to form prior to execution.
OPTIONS:
The City Council has the following options:
1. Approve an extension of the existing agreements for transit services, including an "On -Demand
Ride Hailing" Pilot Program carried out by Uber, and lease on a month -to -month basis not to
exceed six months;
2. Approve an extension of the existing agreements for transit services and lease on a
month -to -month basis not to exceed six months and direct staff to contract directly with Uber or Lyft
to carry out an "On -Demand Ride Hailing" Pilot Program;
3. Approve an extension of the existing agreements for transit services, with reduced service, and
lease on a month -to -month basis not to exceed six months; or
4. Provide alternative direction.
SUMMARY OF OBLIGATIONS TO MVT FOR SIX-MONTH EXTENSION BY OPTION
Service Option 1
Option 2 Option 3
Fixed Route $261,330
$261,330 * $207,330
Dial -A -Ride F 140,124
$140,124 $140,124
Fixed Costs F $ 48,242
7$ 48,242 $ 48,242
Pilot Program $ 50,000
** **
Total, $740,909
$690,909 $636,909
* Assumes $9,000 per month savings resulting from implementation of one of the
alternatives discussed above.
** If City contracts directly with a provider for the Pilot Program, budgeted funding would
be obligated to that provider.
Prepared by: Kelly McDonald, Public Services Manager
Fiscal Impact
FISCAL IMPACT:
The proposed rates for extending the transit services agreement represent a 5.74% increase in light of
a 7.5% increase in CPI. Transit services are funded from the Public Services Transportation Operating
Budget (Proposition C and Measure R Local Returns). The fixed route budget is included in Account
Nos. 122.61.5142.6120, 122.61.5148.6120, and 224.61.5142.6120 and dial -a -ride services in Account
No. 122.61.5143.6120. The increase occurring in Fiscal Year 2021-2022 is expected to be absorbed by
savings in the current budget. Anticipated costs will be incorporated into the Fiscal Year 2022-2023
budget, accordingly. There is no impact to the General Fund. $50,000 is budgeted for the On -Demand
Ride -Hailing Pilot Program. If administered by MVT, the City will pay a 10% administrative fee.
Local Return Funds are based on sales tax and must be expended in a three-year period. In FY 21-22,
the City received approximately
$2.1 M in Proposition A;
$1.8M in Proposition C;
$1.3M in Measure R; and
$1.5M in Measure M.
In recent years, the City has exchanged its Proposition A funds with other agencies for General funds.
Extension of the lease agreement will result $3,000 per month in General Fund revenue.
Attachments
Attachment No. 1 - MV Proposal for Extension
CITY COUNCIL GOALS & OBJECTIVES: Enhance City Image and Effectiveness
ATTACHMENT NO. 1
We provide freedom.
APPENDIX E
COST SUMMARY MATRIX 6 MONTHS
Fiscal Year 2022-2023
Fixed -Route
Cost per Revenue Hour
$
45.06
Multiplied by Estimated
Revenue Hours x
5,800
5,800
Fixed -Route TOTAL
$
261,330
Dial -A -Ride
Cost per Revenue Hour
$
36.87
Multiplied by Estimated
Revenue Hours x 3800
3,800
DAR TOTAL
$
140,124
Multiplied by Estimated
Revenue Hours x
9,600
$
401,454
Total 6 Month Fixed Cost
$
289,455
Monthly Fixed Cost
$
48,242
GRAND TOTAL FOR
6 MONTHS
$
690,909
Cost Proposal rates are month to month, not to exceed 6 months.
MV Transportation, Inc. 2711 N. Haskell Ave. I Suite 1500-1-132 1 Dallas, TX 75204