HomeMy WebLinkAbout2023-12-12 - AGENDA REPORTS - CONTR AMEND CITY BUS SYSTEMAgenda Item: 13
1. CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR
CITY MANAGER APPROVAL: '
DATE: December 12, 2023
SUBJECT: CONTRACT AMENDMENT BETWEEN THE CITY AND MV
TRANSPORTATION FOR THE OPERATION AND MAINTENANCE
OF THE CITY'S BUS SYSTEM
DEPARTMENT: Economic Development
PRESENTER: Adrian Aguilar
RECOMMENDED ACTION
City Council:
1. Amend the Transit budget for Fiscal Year (FY) 2023-24 to do the following: appropriate a
total amount of $1,222,372 from fund balance of the Transit Fund (Fund 700) to increase
expenditure accounts 7003700-516116 (Local and On -Demand) by $653,236; 7003700-
511617 (Dial -A -Ride) by $202,000; 7003700-516118 (Commuter) by $70,836; and
7003700-516119 (Administration) by $296,300.
2. Adjust the FY 2023-24 billing rates for MV Transportation as follows: local and special
services to $91.32 per revenue hour, Dial -A -Ride to $46.98 per trip, commuter services to
$91.32 per revenue hour, on -demand service to $78.87 per revenue hour, and administration
fee to $405,292.46 per month.
3. Increase the annual Consumer Price Index cap from three percent to four percent, allow MV
to subcontract up to 20 percent of the Dial -A -Ride and ADA trips to a City -approved
contractor, and amend the contract so that the two-year optional contract extensions
beginning FY 2027-28 require mutual agreement.
4. Authorize the City Manager or designee to exercise the two-year option beginning in
FY 2024-25, not to exceed the adjusted cost of FY 2023-24, plus an adjustment based on the
Consumer Price Index with a minimum of two percent and not to exceed an adjustment of
four percent, contingent upon the appropriation of funds by the City Council in the annual
budget for such fiscal year; and execute all documents subject to City Attorney approval.
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BACKGROUND
In 2018, the City Council awarded a four-year contract, with three two-year renewal options, to
MV Transportation (MV) for the operation and maintenance of the City of Santa Clarita's (City)
transit service system. Following the expiration of the initial contract in 2022, the City elected to
exercise the first of the two-year renewal options based on overall performance outcomes.
When the contract was awarded to MV, the proposed wage scale for staff was within industry
and regional standards. As a result of the COVID-19 pandemic, the economy experienced
significant inflation, which caused increases across all sectors, including labor. By 2023,
inflation had outpaced the wage scale used to develop MV's pricing model, and the billing rates
could not support the wage demands from the bus drivers' union, Teamsters Local 572 (Union).
Following approximately 12 months of negotiations beginning in 2022, MV and the Union were
unable to reach a labor agreement. Consequently, the Union went on strike on October 9, 2023.
Following an eight -week strike and extensive discussions with MV staff, the City agreed to
contract modifications that create flexibility for MV and allowed them to reach an agreement
with the Union.
MV's proposal was presented to the Union membership on Sunday, December 3, 2023, and was
approved. The bus drivers, as well as mechanics, dispatchers, road supervisors, and call center
staff, returned to work on Monday, December 4, 2023.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
There is no fiscal impact to the General Fund associated with this action. Adequate Transit Fund
in the amount of $1,222,372, will be available upon approval of the recommended action in the
following expenditure accounts: 7003700-516116; 7003700-511617; 7003700-516118; and
7003700-516119.
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