HomeMy WebLinkAbout2011-01-11 - AGENDA REPORTS - AMEND MV TRANSIT CONTR (2)CONSENT CALENDAR
DATE:
SUBJECT:
DEPARTMENT
Agenda Item: S,
CITY OF SANTA CLARITA
AGENDA REPORT
City Manager Approval:
Item to be presented by:
January 11, 2011
Adrian Aguilar
AMEND THE MV TRANSIT CONTRACT TO ADJUST THE
ON-TIME PERFORMANCE STANDARDS, AND REDUCE THE
LIMITS ON INCENTIVES AND LIQUIDATED DAMAGES
Administrative Services
RECOMMENDED ACTION
City Council:
Amend the MV Transit contract to adjust the on-time performance standards, and reduce the
level of incentives and liquidated damages, which may be earned by the contractor and
assessed by the City.
2. Authorize the City Manager or designee to execute all documents, subject to City Attorney
approval.
BACKGROUND
In an effort to prevent poor performance by the new contractor, staff incorporated performance
standards into the MV Transit contract that surpass industry standards, specifically in the area of
on-time performance.
The current contract with MV Transit requires a 95 percent on-time performance rate to avoid
penalties, compared to an industry standard of 90 percent. Because of penalties associated with
not meeting this standard, the primary focus of the contractor has become primarily schedule
adherence. While it is desirable to maintain a high on-time performance standard, the existing 95
percent standard has created unintended results in the area of customer service and fare
collections.
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For example, complaints related to driver courtesy and fare collection have remained high and
have not decreased at the same rate as other categories. In other words, because of existing
penalty structure, fare collection and driver courtesy has not received the same level of attention
as other service categories.
By adjusting the on-time performance standard to 90.5 percent, staff is confident the contractor
will be able to provide a more balanced service while maintaining an effective on-time
performance level.
To limit the City's exposure to extensive performance incentives under the adjusted performance
measures, staff has proposed and MV has agreed to lower limits for incentives and penalties.
Under the current contract, MV Transit can earn up to $26,000 per month in performance
incentives ($312,000 annually) and an additional $12,000 on an annual basis if the employee
turnover rate is below 20 percent. Staff recommends that incentives and penalties be capped at
$5,000 per month in the event the contactor exceeds the 90.5 percent on-time performance rates
and $15,000 per month should the performance fall below 90.5 percent for the month. The
higher limits for the lower performance tier would allow the City to assess additional damages
should the contractor's performance not meet the revised standards.
ALTERNATIVE ACTIONS
Other action as determined by the City Council
FISCAL IMPACT
Due to the reduced incentive and penalty limits, this amendment will not change the amount
budgeted for this contract.
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