CITY COUNCIL STAFF REPORT
March 19, 2024 {{section.number}}b
CONSIDER APPROVAL OF A SERVICE AGREEMENT WITH CIRCUIT TRANSIT INC. FOR A
NEIGHBORHOOD ELECTRIC VEHICLE PILOT PROGRAM, PROVIDE DIRECTION ON
CONTRACT TERMS AND FUNDING, AND AUTHORIZE THE CITY MANAGER TO EXECUTE
THE CONTRACT
RECOMMENDATION:
Consider approval of a service agreement, approved as to form by the City Attorney, with Circuit Transit Inc. for the implementation of a neighborhood electric vehicle (NEV) pilot program, authorize the City Manager to execute the contract, and as appropriate, direct the necessary appropriation of funds from the General Fund reserve and authorize the corresponding amendment of the FY 2023-24 Budget.
BACKGROUND:
On June 6, 2023, the City Council approved a Climate Action Plan (CAP) Implementation Plan and directed staff to work with Circuit, an electric vehicle transportation operator, to develop a proposal for an electric mini shuttle pilot program that would provide a zero-emission, door-todoor transportation service for Coronado residents.
The City Council voted on September 5th, 2023, to approve the six-month pilot program with Circuit. Staff worked with Circuit to develop a proposal for a six-month pilot program that would serve residents in the Village and the Cays. This program aims to gather data and test the feasibility and effectiveness of the service, enabling informed decision-making regarding the potential expansion to full-scale service.
ANALYSIS:
Pilot Program
Circuit Transit Inc. is a climate friendly NEV shuttle service that is a mobile phone app-based, first-mile, and last-mile travel that provides a zero-emission alternative to trips with fossil fuel powered vehicles and traditional modes of public transportation. Circuit currently operates programs for U.S. and Southern California cities, including San Diego, Chula Vista, Oceanside, Huntington Beach, and Santa Monica.
The proposed Circuit pilot program includes a service in the village with a fleet of six GEM E6 vehicles (five standard and one ADA accessible) to provide door-to-door pick up with the goal of providing service within 10-minutes of being called (i.e., 10-minute headways). The Coronado Cays service will include two eight-seat electric passenger vans (one standard and one ADA accessible), as GEM cars cannot legally operate on roadways with speed limits over 35 milesper-hour. Circuit will operate their mini shuttle program seven days/week between the hours of 10 a.m. – 9 p.m. Sunday-Thursday and 9 a.m. – 10 p.m. on Friday and Saturday.
If the contract is approved, Circuit indicated that service could begin in May 2024.
Contract Negotiations
Circuit is a pre-approved vendor for SANDAG’s Regional Flexible Fleets Services program which allows any member agency to contract with Circuit to provide an electric mini shuttle service with pre-established terms, conditions, and rates. While the service that would operate in the Village area could be implemented through the Flexible Fleet Services program, the SANDAG contract only allows procurement of GEM E6 vehicles that cannot legally drive on the Silver Strand. Consequently, Coronado has to use a standalone City contract in order to include both the Village and Cays in one service agreement.
City staff worked with the City Attorney to prepare the attached service agreement containing the City’s standard terms (Attachment 1) for the six-month pilot program. Ongoing conversations with Circuit have taken place since last fall in an attempt to reach agreement on contract terms. Several key points remain unresolved, as Circuit has not agreed to the City’s standard contract language or has requested revisions to contract terms. Specifically, the remaining contract issues are:
Payment Terms
Circuit objects to the City’s standard payment terms that stipulate that a contractor is not guaranteed to receive payment of the full contract value if actual services provided are less than specified in the scope of work (see contract Section 1.2 on page 2 and Section C on page 27). Circuit has requested edits to the contract language that include addition of language regarding increasing or decreasing service levels, and removal of the specification of an “adjustable” fee. The proposed contract with Circuit is a service-level agreement whereby the contractor is entitled to be compensated only for actual services provided. This provision is a standard term in nearly all public agency contracts because it protects an agency from being charged for services not rendered.
During the September 5, 2023, City Council meeting, Circuit representatives testified that the City would be able to adjust the service levels to align with customer demand; in other words, Circuit would allow the City to reduce the number of vehicles, hours of operations, or other service parameters and costs would be proportionately reduced. The requested contract revision would allow Circuit to charge the City the full rate for providing a reduced service.
The recommendation is for the City Council to retain the standard contract language and payment terms to ensure that Circuit’s compensation is commensurate with the level of service provided.
Vehicle Staging, Storage, and Charging
Staff requested that Circuit identify where they intend to stage their vehicles while waiting for fares and where vehicles will be stored and charged when not in service. Staff suggested that Circuit should identify staging areas outside the downtown business district and along Ocean Boulevard to avoid displacing high-demand, visitor serving, public parking spots.
Circuit has indicated that they will not agree to any geographic limits on vehicle staging, but would ask their drivers not to idly park in any spot for more than 15 minutes. Staff is concerned that the proposed 15-minute limits would be unenforceable unless the City dedicate staff to monitor Circuit’s parking practices.
Circuit has also declined to identify where they intend to store and charge their vehicles when not in service, stating that they typically do not spend resources identifying storage and charging locations until they have an executed contract. Circuit has indicated that they are confident that they can procure a private storage and charging location; however, it remains uncertain whether the few property owners in Coronado that have adequate space and charging capacity to accommodate Circuit’s fleet will be willing to enter into an agreement with Circuit. Circuit has indicated that a storage and charging facility in the City of Coronado is necessary for them to operate.
Staff recommends the City Council consider whether Circuit’s staging areas should be geographically limited and if Circuit should identify its proposed storage and charging areas as a condition precedent of City approving the contract.
Customer Call Center
In response to a Councilmember question, a Circuit representative indicated during the September 5, 2023, meeting that they could provide a phone service for customers to reserve rides without using the Circuit cellphone app. Circuit subsequently informed staff that their call center does not have adequate personnel to offer phone reservations for Coronado customers and that it would cost $2,268 per month if the City still wanted the service. This cost is not included in the $601,696 contract value and would add $13,608 to the cost of the six-month pilot program.
Staff has included the customer call center as an optional service in the contract that can be added at the discretion of the Contract Officer; however, given the cost increase to the pilot program, staff requests that City Council provide direction on whether or not to include this service.
FISCAL IMPACT:
The cost for the six-month pilot program in the Village is $399,090, and $202,606 for service to the Cays, for a total cost of $601,696. This expenditure is programmed in the City’s adopted 2023- 24 Budget. If the City Council proceeds with a pilot program and elects for the additional customer call center service, staff requests for an additional appropriation of $13,608 ($2,268 per month x 6-months) to be programmed in the General Fund 100-10000-80320.
ALTERNATIVE:
The City Council may choose to modify the attached contract, or may choose not to enter into a contract with Circuit.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
Not a project as defined in CEQA
PUBLIC NOTICE:
No notice required.
ATTACHMENTS:
1. Standard Services Agreement for City of Coronado and Circuit Inc.
2. Excerpted Sections of Agreement with Circuit Inc. Proposed Changes Submitted By: Community Development Department / Tricia Olsen