Agenda Item Wording:
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Transit Operations and Maintenance Contract - Second reading and adoption of Ordinance No. 2024-08 authorizing a lease of the Transit Operations and Maintenance Facility located at 525 N. Cain St in Visalia, to RATP Dev for a term of up to ten (10) years, and authorize the City Manager to execute all necessary contractual documents for the Transit Management, Operations and Maintenance Agreement between the City and RATP Dev with a 5-year base contract not to exceed $109,000,000, and the option to have five (5) single option years up to ten (10) years.
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Deadline for Action: 8/12/2024
Submitting Department: Administration - Transit Division
Contact Name and Phone Number:
Angelina DeRossett, Transit Manager, Angelina.DeRossett@Visalia.City (559) 713-4591, John Lollis, Assistant City Manager, John.Lollis@visalia.city, (559)713-4323.
Department Recommendation:
Staff recommends the City Council conduct the Second reading and adoption of Ordinance No. 24-08 authorizing a lease of the Transit Operations and Maintenance Facility located at 525 N. Cain St in Visalia to RATP Dev for a term of up to ten (10) years, and authorize the City Manager to execute all necessary contractual documents for the Transit Management, Operations and Maintenance agreement between the City and RATP Dev with a 5-year base contract not to exceed $109,000,000, and the option to have five (5) single option years up to ten (10) years.
Background Discussion:
At its meeting on Monday, August 5, 2024, Transit staff brought a recommendation to Council for authorization to award the Transit Management, Operations and Maintenance contract to RATP Dev with a base contract of five (5) years not to exceed $109,000,000 and authorization to allow five (5) single year options up to a total term of ten (10) years. The first reading of Ordinance 24.08 was conducted at the August 5, 2024, meeting and all necessary funds for the first year of the contract were appropriated at that time.
As the new operations and maintenance contractor, RATP Dev will be operating all Fixed Route, Paratransit, V-LINE, and Sequoia Shuttle services, as well as maintaining the Visalia Transit fleet. RATP Dev will require the use of the City owned Transit operations and maintenance facility located at 525 N. Cain street in Visalia to provide these services. For indemnification purposes, the use of this facility requires a lease agreement between the City and RATP Dev, and the City Charter requires that any lease of City owned property with a term lasting longer than five (5) years requires an Ordinance with two readings.
Upon completion of the second reading of Ordinance 24-08, and authorization for the City Manager to execute the contract between the City and RATP Dev, the turnover of Transit service will commence. The turnover process will include an extensive maintenance audit in preparation for the transfer of the facility and vehicles to the new contractor. RATP Dev will begin its mobilization process immediately, which includes the onboarding of all new and existing Transit staff. The effective date of the new operations and maintenance contract will be October 1, 2024, and RATP Dev will become solely responsible for the services under the contract on that date.
Fiscal Impact:
The contract associated with this Agenda item is an ongoing and budgeted annual expense in the Transit Operations Fund (451). Based upon the $14,863,200 currently budgeted for this contract in the 2024/2025 Fiscal Year budget, Council approved an additional appropriation of $6,000,000 from Transit Fund balance to provide for the first-year contract amount and associated expenses which are project to total $21.6 million.
Additional fund balance use is expected for the first three (3) years of the contract. As discussed in the August 5, 2024, Council Agenda item (24-0264), this contract is projected to require a total of $17 million in Transit Fund balance in the first three (3) years. The Transit Fund (451) ended the 2023/2024 Fiscal Year with a fund balance of over $40 million and has the resources to cover this requirement. The use of fund balance will allow Transit staff time to evaluate and adjust service levels to bring the cost of this new operations and maintenance contract within the limits of the annual funding received on an ongoing basis. The necessary service adjustments are expected to be completed prior to the beginning of the fourth year of this contract. The remaining Transit Fund balance, over the amount needed for this contract, will be retained to provide ongoing cash flow for Transit operations.
Additional funding information for this contract has been provided in the August 5, 2024, Council Agenda item (24-0264) which is an attachment to this item.
Prior Council Action:
August 5, 2024: First reading of Ordinance No. 24-08 and recommendation for RATP Dev
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to introduce the second reading of Ordinance No. 24-08 authorizing a lease of the Transit Operations and Maintenance Facility located at 525 N. Cain St in Visalia to RATP Dev for a term of up to ten (10) years, and authorize the City Manager to execute all necessary contractual documents for the Transit Management, Operations and Maintenance Agreement between the City and RATP Dev with a 5-year base contract not to exceed $109,000,000, and the option to have five (5) single option years up to ten (10) years.
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Environmental Assessment Status:
N/A
CEQA Review:
N/A
Attachments:
● Operations and Maintenance Staff Report
● Ordinance No. 24-08
● Contract agreement