TO: HONORABLE MAYOR FROM: Rick Bruneau
AND CITY COUNCIL
SUBJECT: SEE BELOW DATE: July 31, 2023
Approved Date
8/7/23
SUBJECT: AMENDMENT TO THE AGREEMENT WITH TRANSDEV SERVICES, INC.
FOR AIRPORT SHUTTLE BUS SERVICES
RECOMMENDATION
Adopt a resolution authorizing the City Manager or designee to negotiate and execute the Third Amendment to the Restated Agreement for Airport Shuttle Bus Services at the San José Mineta International Airport with Transdev Services, Inc. (Lombard, IL) to extend services for up to two additional one-year option terms for a total of eight options through August 31, 2025 under the same material terms and conditions as the original restated agreement, subject to the appropriation of funds.
SUMMARY AND OUTCOME
Authorizing the City Manager to take this action provides ongoing shuttle bus services at the San José Mineta International Airport (Airport) to meet demand until a solicitation and new agreement are completed.
BACKGROUND
The Airport currently provides shuttle services for passengers and staff to travel between terminals, rental car facilities, long-term parking garages, and employee parking facilities. In addition to providing shuttle services, Transdev Services Inc. is responsible for fueling, cleaning the interior and washing the exterior of shuttle buses, providing driver training and certification, and reporting to Airport staff on all shuttle bus activities.
COUNCIL AGENDA: 8/22/23
FILE: 23-1082
ITEM: 3.3
HONORABLE MAYOR AND CITY COUNCIL
July 31, 2023
Subject: Amendment to the Agreement with Transdev Services, Inc. for Airport Shuttle Bus Services
In August 2013,1 City Council authorized staff to execute an agreement with Veolia Transportation Services, Inc. (now known as Transdev Services, Inc.) to provide shuttle bus services between Airport terminals, parking lots, and the rental car center for an initial four-year term ending August 31, 2017 with the first year compensation not to exceed $3,861,542 and up to six one-year options to extend the agreement through August 31, 2023. The total four-year initial term maximum compensation set forth in the final agreement was $16,155,248. In August 2017, staff executed the First Amendment to the agreement to retroactively memorialize the change to the vendor’s corporate name from Veolia Transportation Services, Inc. to Transdev Services, Inc., and adjust routes, schedules, and associated compensation for the remote aircraft boarding program for a revised maximum compensation of $16,033,269 for the four-year initial term. In January 2019, 2 City Council authorized staff to execute the
Second Amendment to the agreement to eliminate the 3% cap on adjustments provided applicable prevailing wages increased by more than 3% and allow compensation adjustments to cover increases in wages necessary to retain staff and comply with labor union pay rates with no revision to the four-year initial term maximum compensation.
Following the initial term, staff subsequently executed six one-year options to extend the term of the agreement through August 31, 2023. Yearly maximum compensations increased each year based on current pricing, need, and demand and were subject to the appropriation of funds with option year one maximum compensation of $5,775,427, increasing to an option year six maximum compensation of $7,503,606.
The Airport Department submitted its solicitation request to the Department of Finance in February 2023.
The solicitation is currently in development and targeted for release within the next few months. The current option will end on August 31, 2023, and there are currently no additional options available in the agreement.
ANALYSIS
The Third Amendment recommended in this City Council action will add up to two additional one- year option terms for a total of eight options to extend the agreement with Transdev Services, Inc. through August 31, 2025 and ensure no lapse in services. The next option term, if approved, will begin September 1, 2023 and end on August 31, 2024, and will include an estimated not-to-exceed maximum compensation of $7,728,992 reflecting a 3% increase in management fees and an increase of up to 7% for hourly rates subject to the vendor’s union negotiations. Hourly rate and actual billed hours will be subject to vendor justification in accordance with the terms of the agreement and review and approval by the Airport Department at the time of invoice. Any additional adjustments to option term compensation are subject to the appropriation of funds.
Approval of this recommendation will ensure continuity of shuttle bus operations and services at the Airport and allow staff sufficient time to complete the competitive procurement and execute a new contract. The City will terminate the current agreement with 30 days’ written notice to the vendor upon execution of the new agreement.
1 2013 City Council Resolution: https://records.sanjoseca.gov/Resolutions/RES76775.PDF 2 2019 City Council Action Request: 18-1829 - Memorandum (legistar.com)
HONORABLE MAYOR AND CITY COUNCIL
July 31, 2023
Subject: Amendment to the Agreement with Transdev Services, Inc. for Airport Shuttle Bus Services
EVALUATION AND FOLLOW-UP
The memorandum will not require any follow-up from staff.
COST SUMMARY/IMPLICATIONS
This action is consistent with the City’s 2023-2024 Adopted Operating Budget City Service Areas Delivery Framework for Performance Driven Government for Transportation and Aviation Services: 1) Provide Safe and Secure Transportation Systems; 2) Provide Viable Transportation Choices that Promote a Strong Economy; and 3) Travelers Have a Positive, Reliable, and Efficient Experience. The operating and maintenance cost to operate shuttle bus service at the Airport is anticipated to be $7.7 million. This funding is already factored into the 2023-2024 Adopted Budget of the Airport Department.
NOT TO
EXCEED
1. AMOUNT OF RECOMMENDATION $7,728,992
2. COST ELEMENTS (for next annual option beginning 9/1/2023) - Monthly Management Fee $1,545,103
- Variable Hourly Rate Based on usage* $6,183,889 - Transit Visualization System Installation, Monthly Service, and Maintenance
Included
Option Total Not to Exceed $ 7,728,992
* Final hourly rate subject to vendor justification and Airport Department review and approval at time of invoice.
BUDGET REFERENCE
The table below identifies the fund and appropriations to fund the contract recommended in this memorandum and remaining project costs, including project delivery, construction, and contingency costs.
Fund
#
Appn
# Appn. Name
Total
Appn
Amt. for
Contract
2023-2024
Proposed
Operating
Budget Page*
Last Budget
Action (Date,
Ord. No.)
523 0802 Airport Non-
Personal/
Equipment
$54,811,76
7 $6,100,000 846 06/20/2023,
30933
519 0802 Airport Non-
Personal/
Equipment
$2,229,460 $1,628,992 844 06/20/2023,
30933
* The 2023-2024 Adopted Operating Budget was approved on June 13, 2023 and adopted on June 20, 2023 by the City Council.
HONORABLE MAYOR AND CITY COUNCIL
July 31, 2023
Subject: Amendment to the Agreement with Transdev Services, Inc. for Airport Shuttle Bus Services
COORDINATION
This memorandum has been coordinated with the Airport Department, the City Attorney’s Office, and the City Manager’s Budget Office.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the August 22, 2023 City Council meeting.
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Not a Project, File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
RICK BRUNEAU
Director of Finance
For procurement- and contract-related questions, please contact, Albie Udom, Deputy Director of Finance – Purchasing and Risk Management, at [email protected]. For program-related questions, please contact Rosalyn Bond, Deputy Director of Airport Operations, at [email protected].