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: August 16, 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. Approve a one (1) year extension to both the Transportation Services Agreement and the Lease
Agreement with MV Transportation, Inc., extending the terms of both agreements through
September 2, 2023; 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, the City entered
into a Lease Agreement with MVT 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.
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.
On March 1, 2022, City Council approved extending the transit service and lease agreements on a
month -to -month basis for no more than six months and provided direction for staff to contract directly
with Uber or Lyft for the Pilot Program.
DISCUSSION:
With the City's transportation evaluation expected to conclude at the end of September 2022, City
Council direction following the evaluation will serve as a basis for the scope of work for a Request for
Proposals (RFP) for transit services. The process to develop specifications, request and evaluate
proposals, award contract, and phase in a launch of service is expected to take up to a year. As the
extensions are set to expire on September 2, 2022, further extensions of the agreements with MVT are
needed to allow continued shuttle services to our residents.
To ensure service until the City completes the process, staff requested a proposal from MVT. MVT
provided a proposal (Attachment No. 1) to provide a status quo service level for a term of one (1) year.
Pursuant to Article 11 of the Agreement, as amended, party can terminate the Agreement at any time
with thirty (30) days' written notice to the other party. This termination clause will allow the City the
opportunity to continue to pursue alternative transit service.
Recent labor negotiations and wage increases have resulted in higher rates. 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. As an optional add -on, a cost was included for in -vehicle
tracking technology to improve ridership data collection.
OPTIONS:
The City Council has the following options:
1. Approve not to exceed one (1) year extensions of the existing agreements for transit services and
lease; or
2. Provide alternative direction.
Fiscal Impact
FISCAL IMPACT:
The proposal from MVT, for the term September 2022 - September 2023 is for an amount not to exceed
$1,549,709. This increase is due to a recent collective bargaining agreement which resulted in an
increase in driver wages.
Transit services are funded from the Public Services Transportation Operating Budget (Proposition C
and Measure R Local Returns). The approved FY 2022-2023 budget for the shuttle and dial -a -ride
services is summarized in the table below.
Program
Account
Amount
Shuttle
122.61.5142.6120
$ 290,500
122.61.5148.6120
484,000
224.61.5142.6120
193,200
Subtotal -Shuttle
$ 967,700
Dial -A -Ride
1 122.61.5143.6120
$ 530,500
Subtotal - Dial A Ride
$ 530,500
Total
$ 1,498,200
The months of July and August will be billed at rates under the prior amendment. At this time, it is
expected the budget will be sufficient to cover costs in Fiscal Year 2022-2023. Staff will return with a
budget amendment later in the fiscal year, if necessary. There is no impact to the General Fund.
Extension of the lease agreement will result $3,000 per month in General Fund revenue.
Attachments
Attachment No. 1-2022-08-03 MVT 1-Yr Extension Cost Proposal
ATTACHMENT NO. 1
APPENDIX E
COST SUMMARY MARTRIX
Fiscal Year 2022-2023
Fixed -route
Cost per Revenue Hour
$
57.34
Multiplied by Estimated
Revenue Hours x
11,600
11,600
Fixed -route TOTAL
Dial -A -Ride
Cost per Revenue Hour
$
$
665,091
47.03
Multiplied by Estimated
Revenue Hours x 7,600
7,600
DAR TOTAL
Multiplied by Estimated
Revenue Hours x
19,200
$
$
357,444
1,022,535
Annual Fixed Cost
$
527,174
Monthly Fixed Cost
$
43,931
GRAND TOTAL BY
FISCAL YEAR
$
1,549,709
In -Vehicle Technology Tracking Option $ 35,578.93