1 STAFF REPORT
DATE: January 28, 2025
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: Approval to Amend the Transit Operations and Maintenance Agreement with MV Public Transportation, Inc. and Approval of a Budget Amendment for Fiscal Year 2024-25
RECOMMENDATION
1. Approve Amendment No. 3 to the Transit Operations and Maintenance Agreement with MV Public Transportation, Inc. (MV) (Attachment 1); and
2. Amend the Fiscal Year (FY) 2024-25 Budget by appropriating $202,440 Prop C Transportation funds.
BACKGROUND
BurbankBus offers two local fixed-routes that provide easy access to employment hubs and convenient connections to local amenities and regional transportation services. This transit service is operated and maintained by MV Public Transportation, Inc. (MV). MV has had a long-standing partnership with the City since 2011, and they also assist other neighboring cities, such as Glendale.
In 2021, the City entered into a Transit Operations and Maintenance Services Agreement (Agreement) with MV for a three- year term, with two, one- year options to extend the agreement. The Agreement price was approximately $1.6 million per year. On February 14, 2023, Council approved Amendment No. 1 (Attachment 3) to the Agreement that increased pricing annually for the remaining years of the contract (Years 2 and 3), as well as the optional extension years (Years 4 and 5). The actual rate increase for cost of service was on average of 18.4% and this was due to wages and maintenance issues with the existing City fleet. MV indicated difficulty in its ability to remain market competitive
COMMUNITY
DEVELOPMENT
2 with hiring, recruiting, and retaining bus operators during the COVID -19 Pandemic, as well as impacts from labor negotiations at that time. Regarding vehicle maintenance, the City was in the process of procuring six replacement compressed natural gas, or CNG, vehicles for its oldest vehicles, resulting in increased costs to maintain the older vehicles until they were replaced.
In January 2024, the parties administratively approved Amendment No. 2 to the Agreement to exercise the first one- year option (Year 4) that extended the Agreement Term to March 31, 2025 (Attachment 2).
Now, staff and MV would like enter into Amendment No. 3 to extend the Agreement to March 30, 2026 (Year 5). For this third extension, MV renegotiated pricing to include a cost increase of an additional $202,400 to account for increased labor costs.
DISCUSSION
Current Operations and Budget
The total annual direct cost to provide BurbankBus fixed-route services (the cost the City pays to MV to operate the service each year) is approximately $2, 200,000 per year. MV contacted City staff in October 2024 to express interest in exercis ing the last one-year contract option (Year 5) and to request that the City renegotiate the cost of the Agreement due to continued increases in union labor costs and increased rental costs to retain the MV facility where the buses are stored and maintained.
MV is requesting to increase the cost of the second and final one- year contract option (Year 5) by $202,440 (9.19% salary increase) for a new annual total cost of $2,404,500, starting in April 2025. Table 1 outlines a comparison of the current Agreement costs for FY 2025-26 and the proposed cost increase.
Table 1. Contractor Compensation for Weekday Service (Tier 1 Hours) Terms of Amendment
No. 1, executed 2/14/23
Proposed Terms of
Amendment No. 3
Year 2025-2026 2025-2026
Cost per Revenue Hour $104.86 $114.50
Percentage Increase from
Previous Agreement +30.85% +9.19%
Estimated Annual Revenue Hours 21,000 21,000
Total Projected Annual Revenue $2,202,060 $2,404,500
Proposed New Cost to the City +$202,440
Justification for Amendment No. 3
The reason for the requested cost increase is to address continued increases in labor costs needed to recruit and retain bus operators. Addressing the labor market is essential 3 for attracting and retaining qualified personnel. MV’s goal is to raise the starting pay for bus operators by an additional $3.50 per hour, establishing a minimum starting wage of $24.00 per hour. This proposed pay increase will impact various levels within the wage progression structure and other hourly classifications such as Road Supervisor, Operations Supervisor, and Vehicle Technicians. With this increase, BurbankBus should be able to remain competitive in the labor market, attract and retain talented employees, and continue providing excellent service to Burbank residents and visitors. Table 2 outlines bus operators’ starting hourly rate compared to other neighboring transit agencies today. BurbankBus currently has the lowest starting hourly rate of $20.50 per hour.
Labor Market
Table 2. Bus Operator Starting Rate
Transit Agency Bus Operator Starting Hourly Rate
BurbankBus $20.50 per hour (proposed $24.00 per hour)
Glendale Beeline $24.13 per hour
Los Angeles Metro (LACMTA) $25.81 per hour
Los Angeles City Department of
Transportation (LADOT)
$25.36 per hour
Pasadena $23.39 per hour
BurbankBus Ridership Information
Ridership continues to gradually increase since March 2020. Figure 1 outlines ridership per month. For FY 2023-24, ridership was 181,241.
Figure 1. Ridership per Month
4 Legend: Green Route (Green), Orange Route (Orange), Pink Route (Pink), and All Combined Routes (Bold Yellow).
Next Steps
A Request for Proposal will be released in Summer 2025 to select an operator and maintenance team for BurbankBus, which will be presented to the City Council for approval in early 2026 . A Comprehensive Operational Analysis (COA) is also being conducted to examine BurbankBus’ current operations to improve efficiency, enhance performance, and increase ridership for residents and visitors. Once a thorough public outreach and examination is completed, the COA will be presented to City Council in late 2025.
The City Council could elect not to approve MV’s cost renegotiation and direct staff to only approve the administrative, second one- year option under the terms of the existing agreement. However, executing the contract option is optional for both MV and the City, and MV could decide that they are not able to execute the option without the cost increase. Given the status of the transit operator market and the other cost proposals received by the City during the last procurement, it is more cost effective for the City to execute Amendment No. 3 to the Agreement (with MV’s cost increase) rather than bidding out the contract at this time.
ENVIRONMENTAL REVIEW
0 5,000
10,000
15,000
20,000
25,000
J-19 A-19 J-19 O-
19 J-20 A-20 J-20 O-
20 J-21 A-21 J-21 O-
21 J-22 A-22 J-22 O-
22 J-23 A-23 J-23 O-
23 J-24 A-24 J-24 O-
24 5
This activity 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. This amendment only increases the cost of service, and there are no changes to the operations or timetables for BurbankBus.
FISCAL IMPACT
Staff is requesting City Council authority to amend the FY 2024- 25 Adopted Budget by appropriating $202,440 from revenue account number 105.ND000.40029.0000.000000 (Proposition C, Non- Departmental, Local Return) to expenditure account number 105.CD32B.62170.0000.000000 (Proposition C, Community Development Burbank Bus Operations, Private Contractual Services) to cover the cost of amending the Transit Operations and Maintenance Agreement with MV. There is no fiscal impact to the General Fund.
CONCLUSION
BurbankBus is a critical component of the City’s transportation network and infrastructure.
Transit service is a lso an important service to the community to help reduce single- occupancy vehicles off streets and help the City meet its greenhouse gas reduction target goals. MV assists the City in operating BurbankBus and maintaining the fleet. Staff is recommending Council approve the amendment to the Transit Operations and Maintenance Agreement to address the gap in the cost of service while working together on the adopted goals for the BurbankBus transit program . Staff’s recommendation also includes a budget amendment in FY 2024- 25 of $202,440 to cover this new cost of service.
ATTACHMENTS
Attachment 1 – Amendment No. 3 – Operations and Maintenance Agreement with MV Public Transportation, Inc.
Attachment 2 – Amendment No. 2 – Operations and Maintenance Agreement with MV Public Transportation, Inc.
Attachment 3 – Amendment No. 1 – Operations and Maintenance Agreement with MV Public Transportation, Inc.
Attachment 4 – Agreement for BurbankBus Transit Operations and Maintenance Services
Attachment 5 – City Council Staff Report Dated February 14, 2023 Attachment 6 – BurbankBus Route Map