STAFF REPORT
DATE: May 23, 2023
TO: Justin Hess, City Manager
FROM: Patrick Prescott, Community Development Director VIA: David Kriske, Assistant Community Development Director BY: Karen B. Pan, Transportation Services Manager
SUBJECT: Update on the Procurement Plan for BurbankBus Fixed- Route Transit Services
RECOMMENDATION
Note and file.
BACKGROUND
MV Public Transportation, Inc. (MV) is the current contractor who operates the BurbankBus fixed- route transit services and maintains 17 City -owned buses. Council approved a Transit Operations and Maintenance Services Agreement (Agreement) with MV which began on March 30, 2021 and is set to expire in 2024. As part of this agreement, the City Manager has the authority to approve two, one- year options to extend the Agreement. If both options are exercised, the total term of the agreement would be five years and would expire in 2026.
The total annual direct cost to provide BurbankBus fixed- route services (the amount the City pays to MV to operate the service each year) increased this year. On February 14, 2023, Council approved an amendment to MV’s Agreement, to increase the total annual cost of service for the third year from $1,600,000 to $1,920,000, and also approved increased costs for the fourth and fifth option years of the A greement. At the meeting, staff explained that the 20% increased cost was due to labor wages, maintenance issues with the aging City fleet, and changes in the amount of service hours requested each year resulting from changes to existing BurbankBus fixed- routes. While approving the amendment, Vice Mayor Schultz requested that staff provide a subsequent update on the procurement plan for fixed -route operations after the expiration of the initial three- year
COMMUNITY
DEVELOPMENT
2 agreement term so that Council could provide feedback on whether to exercise the optional fourth year of the Agreement, if needed. The purpose of the Vice Mayor’s request was to assess whether there is an opportunity to explore other transit operators, bus services, and rates at this time. This staff report provides an overview and analysis of the procurement plan as well as next steps for BurbankBus.
DISCUSSION
Based on past procurements for fixed-route transit operations services, the development and issuance of a Request for Proposal s (RFP), proposal evaluation, and negotiation of final agreement with a potential transit operator generally take six to eight months to complete. If a new RFP were to be advertised, staff would prepare the RFP including a proposed the scope of work, solicit proposals, review proposals, negotiate with the top- ranked proposer for a final contract , and provide a recommendation to Council for consideration. This effort requires staff time from the Community Development Transportation Division and the Finance Department Purchasing Division, Public Works Fleet and Building Division, City Attorney’s Office, as well as staffing support from the City’s outside transit planning and marketing consultant, Moore & Associates.
Background on the Previous BurbankBus Procurement
MV was the City’s transit operations contractor under the previous transit operations agreement. While staff was generally satisfied with MV’s operation of BurbankBus , solicitation for a new transit operations contract was required due to the expiration of the previous Agreement. The need to issue an RFP provided an opportunity for the City to explore competitive hourly contract rates and to attract additional potential contractors for the City’s transit operations. On October 22, 2020, staff issued an RFP . The primary requirement of the RFP was to provide a total annual number of service hours to operate the City’s fixed-route network at a set hourly rate. The proposed rate by interested transit operators was one of the biggest financial factors impacting the City’s ability to provide fixed-route transit services because such services are funded exclusively by the City’s Transportation Local Return funds. This variable was therefore the most important criteria considered when evaluating bids.
The RFP also required that the contractor store and maintain the existing 17-vehicle City- owned BurbankBus fleet. The prospective contractor was required to secure an appropriate administrative, operations, and storage facility within or adjacent to the City.
Maintenance could be performed at a separate location from the administrative, operations, and storage facility provided the maintenance facility was in compliance with all applicable municipal codes for the duration of the agreement. The ability to provide this maintenance and storage facility in or near to Burbank has traditionally been a limiting factor in transit providers’ willingness to bid on the City’s RFPs.
3 As part of the RFP , the prospective contractor was required to conduct annual data reporting and vehicle inspection activities in response to various regulatory agencies such as the Metropolitan Transportation Authority (Metro), National Transit Database, and the California Highway Patrol where these activities are a requirement for transit funding or regulatory compliance. Finally, the prospective contractor was required to maintain adequate customer service, supervisory personnel, and other qual ity-of-service measures to respond to rider complaints, vehicle breakdowns, vehicle cleanliness, and other customer service activities. These are all typical requirements under a full -service operations agreement.
A non-mandatory pre-proposal video conference was held on October 29, 2020, and nine firms attended. Subsequently, staff received only two proposals from interested firms whose responses were considered at least minimally qualified by the City’s Purchasing Division. These proposals were rev iewed and respondents were interviewed by the Community Development Department, Public Wor ks Department, and Moore & Associates. The dynamic economic conditions associated with the COVID-19 Pandemic in late 2020 greatly affected local and regional ridership demand, and also impacted labor and operational factors of transit providers. Despite this uncertainty , MV was able to propose a very competitive service-hour rate while meeting all the other requirements of the RFP. Table 1 shows the hourly rate MV and the other contractor offered to charge the City based on the specific scope of work.
Table 1. Proposals for the BurbankBus Fixed-Route Transit Services Rank Proposer 1st Year Hourly Rate*
1 MV Public Transportation, Inc. (MV) $71.87
2 First Transit $116.27
* Each proposal includes a cost escalation factor for subsequent years.
Existing Agreement Terms
Today, MV’s rate is $91.26 per hour at the third year of the Agreement, after accounting for the originally planned cost escalation and the amendment that was approved in February 2023. This rate continues to be significantly lower in comparison to the other competing proposal from 2020. Issuing a new RFP in advance of the 2024 expiration of the initial three-year term of the current agreement may have similar or increased service- hour pricing offers as transit agencies continue to struggle with poor ridership and higher labor and vehicle costs. This analysis is based on the financial impacts that other neighboring transit agencies are experiencing, as well as the inherent difficulty a new operator would likely experience in securing an appropriate operations and maintenance facility.
4 Neighboring Transit Agencies Operations
The hourly rates of the City’s current contract, as well as the rates listed in Table 1 from the City’s prior procurement are tailored to the specific service hours and scope of work needed for BurbankBus operations and may not be easy to compare to other transit agencies. However, the change in rates experienced by other agencies through new RFPs or amendments to existing agreements is an indication of the increased operational costs the City may experience if a new RFP were issued. Examples include:
• Baldwin Park – City of Baldwin Park has an agreement with Southland Transit, Inc. for both a fixed-route and Dial-a-Ride Program. Baldwin Park recently amended the agreement adding a 12.9% increase on December 21, 2022, due to minimum wage and payroll related costs.
• Glendale – City of Glendale recently issued an RFP for their fixed- route and Dial-a- Ride Program in March 2023, and staff will continue to monitor the progress. Their most recent agreement with MV was amended on January 21, 2020, to add $2,005,738 in annual operational costs due to changes to their operations as well as costs related to overhauling buses and increased labor costs needed for new service changes.
• Pasadena – City of Pasadena has an agreement with First Transit for $41,068,924 from January 2021 to June 30, 2026. Due to the increased labor market costs, the contract increased by 11.93% in January 2023, adding $4,901,437 to their agreement. • Torrance – City of Torrance provides fixed-route transit services in- house, but has made changes to their organization to manage the increased operational costs they are experiencing. This included creating a job classification series of different types of drivers and salaries based on experience.
Staff’s Procurement Plan
Based on staff time needed to conduct a new RFP, the continued competitiveness of the rates in MV’s Agreement, the higher costs other agencies are incurring, and the continued uncertainty in the transit market, staff is anticipating exercising the first option to an extend the Agreement with M V for one additional year and will continue to monitor their performance. By maintaining the City’s relationship with MV for another year, utilizing the first one-year extension will allow City staff to prioritize and address upcoming changes to the BurbankBus operations. Additionally, issuing an RFP at this time will likely result in offers of higher hourly rates from transit operators. Based on the structure of the current agreement, an RFP will need to be issued within two years if both options are exercised.
In the meantime , staff will be focusing on goals and action items of the Burbank2035 General Plan as well as Council requests related to BurbankBus. These include:
5 1. Proposed Changes to Existing and New Fixed-Routes
Staff will work with the community, Transportation Commission, and Council to make changes to the existing fixed-routes and potentially design a new fixed route for residents and commuters.
2. Zero-emission Bus Rollout Plan
Staff will act on the Transit Vehicle Electrification Policy approved by Council in 2022. This policy includes working with the City of Glendale to investigate whether to co -locate and coordinate transit services with the City of Glendale Beeline service by 2026. The effor t to electrify the City’s transit fleet and co -locate with Glendale would require a $12 million investment for Burbank, and the estimated cost of this policy includes the transition cost to Battery Electric Buses (BEBs) and construction of associated infrastructure. To meet this goal, staff will prepare a Zero-emission Bus R ollout Plan this summer as required by the California Air Resources Board.
3. Grant Opportunities
Staff has secured outside grant funding for the rollout of zero-emission buses and will continue to apply for grants to reach the $12 million investment goal of the Zero-emission Bus Rollout Plan.
4. Review of Bus Fares
Staff will review and present information about the feasibility of eliminating bus fares and expanding transit options for youth, as requested by Mayor Anthony.
5. Ordering and Delivery of Six Compressed Natural Gas (CNG) Buses On March 28, 2023, Council approved the purchase and replacement of six CNG buses. MV is familiar with the inspection and delivery process and understands the City’s transit vehicle requirements. MV previously assisted the City with a bus purchase in 2016.
ENVIRONMENTAL REVIEW
This report is informational only. Council’s receipt of this report to note and file has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and as such, is not a “project” subject to the requirements of the California Environmental Quality Act (CEQA) 14 Cal. Code Regs § 15378.
6 FISCAL IMPACT
There is no fiscal impact to the City’s General Fund by providing an update on the procurement plan for BurbankBus fixed-route transit services. The operations and maintenance of BurbankBus is fully funded by the City’s Transportation Local Return funds.
CONCLUSION
Transit agencies are experiencing an increased cost to operate and maintain fixed-route bus services across the region. Continuing with the current Agreement with MV will help the City maintain services to the community within budget , while allowing staff to focus on implementing General Plan and Council goals for BurbankBus . Staff recommends Council note and file this report. Based on the structure of the current agreement approved by Council, an RFP for a new transit operator will be advertised within the next two years, giving the City a new opportunity to test the market for transit operations while allowing the transit landscape to advance as ridership trends improve and other cost factors stabilize.
ATTACHMENT
None.