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2015-29194 Reso RESOLUTION NO. 2015-29194 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER AND WAIVING, BY 517TH VOTE, THE COMPETITIVE BIDDING REQUIREMENT, FINDING SUCH WAIVER TO BE IN THE BEST INTEREST OF THE CITY, AND APPROVING AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AMENDMENT NO. 3 TO THE AGREEMENT BETWEEN THE CITY AND LIMOUSINES OF SOUTH FLORIDA, INC., DATED MAY 8, 2014, FOR TURN-KEY OPERATIONS AND MAINTENANCE SERVICES OF A MUNICIPAL TROLLEY SYSTEM FOR THE CITY OF MIAMI BEACH; SAID AMENDMENT INCREASING THE SCOPE OF THE AGREEMENT TO INCLUDE THE FOLLOWING: (1) THE ADDITION OF THE OPERATION AND MAINTENANCE SERVICES FOR TWO NEW ROUTES IN MIDDLE BEACH (THE MIDDLE BEACH LOOP AND THE COLLINS LINK); (2) THE ADDITION OF FOURTEEN (14) MODIFIED HIGH-FLOOR KNEELING TROLLEY VEHICLES FOR THE OPERATION OF THE NORTH BEACH AND MIDDLE BEACH ROUTES; (3) A NEGOTIATED NEW HOURLY RATE COMMENSURATE WITH THE COST OF SAID NEW TROLLEY VEHICLES AND THE ADDITIONAL SERVICES FOR THE NEW MIDDLE BEACH ROUTES; (4) THE EARLY EXERCISE OF THE TWO (2) RENEWAL OPTIONS, EXTENDING THE AGREEMENT TERM THROUGH MAY 7, 2021; (5) IN ADDITION TO THE TERM PROVIDED IN SUBSECTION (4) OF THIS RESOLUTION, FURTHER EXTENDING THE TERM, AS TO EACH ROUTE, TO INCLUDE A FULL SIXTY (60) MONTH TERM, COMMENCING AS OF THE ROLL-OUT DATE OF ALL THE NEW TROLLEY VEHICLES FOR EACH RESPECTIVE ROUTE; (6) AUTHORIZING THE CITY MANAGER TO APPROVE THE PURCHASE OF ADDITIONAL OPTIONAL EQUIPMENT FOR THE TROLLEY VEHICLES IN THE CITY FLEET, AS MAY BE NEEDED IN THE ADMINISTRATION'S DISCRETION, SUBJECT TO FUNDING AVAILABILITY; AND (7) AUTHORIZING THE ADMINISTRATION TO MAKE ANY ADDITIONAL MODIFICATIONS DEEMED NECESSARY WITH RESPECT TO THE ADDITIONAL SCOPE CONTEMPLATED BY THE AMENDMENT; SAID AMENDMENT INCREASING THE COST OF THE AGREEMENT, IN AN AMOUNT NOT TO EXCEED $6,700,000 ANNUALLY. WHEREAS, on April 30,.2014, the City Commission approved the award of Invitation to Bid (ITB) No. 2014-154-SR for Turnkey Trolley Operations and Maintenance Services to Limousines of South Florida, Inc. (LSF), and following the approval of the ITB, an Agreement between the City and LSF was executed on May 8, 2014; and WHEREAS, this ITB allowed for the operation of the existing North Beach Trolley service and included provisions for the addition of -routes at the City's sole discretion and subsequent re-negotiation of hourly rates if change in service increased or decreased by more than 20%; and WHEREAS, on July 30, 2014, the City Commission adopted Resolution No. 2014- 28708, authorizing the City to execute Amendment No. 1 to the Agreement, increasing the scope of the Agreement to include optional equipment, as well as additional automated stop announcement equipment, in an amount not to exceed $150,000; and WHEREAS, on October 22, 2014, the City Commission directed the Administration to proceed with planning and developing a Middle Beach Trolley route and service plan as part of a citywide interconnected trolley system; and WHEREAS, on March 18, 2015,. pursuant to Resolution No. 2015-28967, the City Commission approved Amendment No. 2 to the Agreement, increasing the scope of the Agreement in order to accommodate additional transportation expenses needed for the City's Centennial celebration during the 2014-2015 fiscal year, in an amount not to exceed $100,000; and WHEREAS, on April 15, 2015, the City Commission directed the Administration to use Low--Floor vehicles for the provision of present and future trolley services and also referred the discussion relating to the Middle Beach Trolley route and service plan to the Neighborhood Community Affairs Committee (NCAC)for a recommendation; and WHEREAS,on May 29, 2015, the Administration presented the proposed Middle Beach Loop and Collins Link routes to the NCAC, which Committee recommended the approval of said routes and service plans, and directed the Administration to secure the approval of the City Commission; and WHEREAS, on June 10, 2015, the City Commission passed Resolution No.2015-29055 accepting the recommendation of the NCAC regarding the proposed Middle Beach Trolley Routes and service plans and authorizing the Mayor and City Clerk to execute Interlocal Agreements with Miami-Dade County for the operation of two municipal circulator routes: the Middle Beach Loop and the Collins Link; and WHEREAS, the proposed trolley routes and Interlocal agreements were subsequently approved by Miami-Dade Transit (MDT), the County's Transit Services and Mobility Committee (TSMC) on August 26, 2015, and the Board of County Commissioners (BCC) on September 1, 2015, after concluding that the City's proposed trolley routes would not have an adverse impact on the existing MDT bus service; and WHEREAS, the Interlocal Agreements for the Middle Beach Loop and the Collins Link are-currently fully executed and in effect; WHEREAS, an Amendment to the existing Agreement between the City and LSF is required based on the addition of the Middle Beach Loop and Collins Link which represent an increase in service of more than 300%, from roughly 23,000 to 94,000 operating hours per year; and WHEREAS, LSF has proposed the following hourly rates in connection with the following three (3) vehicle options for the operation of the North Beach (4 vehicles), the Middle Beach Loop (6 vehicles), and the Collins Link (5 vehicles) routes: Low Floor(No-Lift): includes the purchase of fifteen (15) new trolley vehicles (no-lift), at the rate of $78.39 per operating hour; -Existing High-Floor/In-Step Lift: includes the purchase of fifteen (15) new trolley vehicles, at $65.81 per operating hour; and Modified/Kneeling/High-Floor/Rear End Lift: includes the purchase of fourteen (14) new trolley vehicles and use of one (1) existing North Beach trolley vehicle, at the rate of $65.81 per operating hour; and WHEREAS, funding, in the amount of $6,700,000, is budgeted in"FY-2015/16 to cover the anticipated costs of the operation of the North-Beach Loop, Collins Link and Middle Beach Loop; and WHEREAS, at the October 21, 2015 City Commission meeting, the City Commission approved the use of new modified high-floor kneeling trolley vehicles and authorized the Administration to execute Amendment No. 3 to the Agreement, based upon the following essential terms: 1. Performance Penalties — Given that performance penalties are currently based on the number of vehicles and operating hours, the daily fee cap will be adjusted proportionally to the growth in fleet and hours of operation. 2. New Vehicles — Purchase by LS-F of fourteen (14) new modified high-floor kneeling trolley vehicles required for the operation of the three (3) routes. Additionally, this provision will require that the four (4) out of the five (5) existing high-floor trolley vehicles currently operating in North Beach will serve as spare vehicles for the expanded trolley service. 3. Vehicle Ownership — A provision clarifying that LSF shall own the new trolley vehicles at the end of the term or early termination of the Agreement, as the negotiated hourly rate already includes a credit of $20,000 per vehicle, for the residual value of the Modified/Kneeling/High-Floor trolley vehicles. 4. Optional Equipment — Currently, the Agreement includes a provision for the purchase and installation of "optional equipment" at the City's sole discretion at a not-to-exceed cost of $200,000. This Amendment will include a provision giving authority to the City Manager to increase the cap as needed in order to secure the purchase and installation of optional equipment for new vehicles and service including, but not limited to, the GPS trackers, modems automatic passenger counters, monitors, and automated voice information systems. The increase will be subject to budget availability. 5. Hourly Rate — The current hourly operating rate of $66.91 is based on LSF providing 23,360 hours per year of turnkey trolley service for the North Beach Loop using four-(4) High-Floor/In-Step trolley vehicles (plus one spare trolley vehicle). The Amendment will include the final hourly rate proposed by LSF of $65.81 for modified high-floor kneeling trolley vehicles. Additionally, a provision addressing the commencement date of the new hourly operating rate will be included in the Amendment. 6. Term — Given that LSF's hourly rate is based on a 60-month term and that the delivery of trolley vehicles may take as much as nine (9) months after execution of Amendment No. 3, the contract term would need to be extended past the current initial term and available renewal terms. The 60-month term for each respective route would begin when the entire fleet for a particular route is ready to roll out, therefore each route would have a separate term. 7. Insurance and Performance Bond — Currently, these two items are built into the existing hourly operating rate. The amendment will provide that, at the option of the City, the City may opt to pay the insurance and performance bond components of the hourly operating rate as a pass-through, as an option to possibly reducing the hourly rate during the term; and WHEREAS, at the October 21, 2015 -City Commission meeting, the City Manager recommended that the City Commission waive, by a 5/7th vote, the competitive bidding requirement, finding said waiver to be in the best interest of the City, in that, by guaranteeing that LSF may amortize its investment over the minimum '60-month term, the City will be guaranteed the lower negotiated hourly operating rate. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby accept the recommendation of the City Manager and waive, by 517th vote, the competitive bidding requirement, finding such waiver to be in the best interest of the City, and approve and authorize the Mayor and City Clerk to execute Amendment No. 3 to the Agreement between the City and Limousines of South Florida, Inc., dated May 8, 2014, for Turn-Key Operations and Maintenance Services of a Municipal Trolley System for the City of Miami Beach; said Amendment increasing the scope of the Agreement to include the following: (1) the addition of the operation and maintenance services for two new routes in Middle Beach (the Middle Beach Loop and the Collins Link); (2) the addition of fourteen (14) new modified high-floor kneeling trolley vehicles for the operation of the North Beach and Middle Beach routes; (3) a negotiated new hourly rate commensurate with the cost of said new trolley vehicles and the additional services for the new Middle Beach routes; (4) the early exercise of the two (2) renewal options, extending the Agreement term through May 7, 2021; (5) in addition to the term provided in subsection (4) of this Resolution, further extending the term, as to each route, to include a full sixty (60) month term, commencing as of the roll-out date of all the new trolley vehicles for each respective route; (6) authorizing the City Manager to approve the purchase of additional optional equipment for the trolley vehicles in the City fleet, as may be needed in the administration's discretion, subject to funding availability; and (7) authorizing the Administration to make any additional modifications deemed necessary with respect to the additional scope contemplated by the Amendment; said Amendment increasing the cost of the Agreement, in an amount not to exceed $6,700,000 annually. PASSED and ADOPTED this 21st day of October, 2015. , ,, j,,_.--- //le ATTEST: / ja i PHI P LY IN.E, MAYOR Mai ( L.- zZi1 i RAFAEL E. GRANAtiat`-"--''At ERK ' 7.• l e,...x... 1;::, , r� :INCORP ORATED:/40 .=.. ' . , APPROVED AS TO- * E AP UAG 4.,." .� .... ��` FORM &LANG ��� ' 26 >' &FOR EXECUTION (3.40‘. . . .. I.L. o. (5 City Attorney } Date Agenda/October 21, 2015/Transportation/Amendment No. 3 to Turnkey Trolley Operations and Maintenance Services Agreement RESO for Modified High-Floor Kneeling trolley vehicles COMMISSION ITEM SUMMARY Condensed Title: A Resolution Accepting The Recommendation Of The City Manager,Waiving By 5/7`n Vote The Competitive Bidding Requirement, Approving And Authorizing The Mayor And City Clerk To Execute Amendment No. 3 To The Agreement With Limousines Of South Florida, Inc., Approving Fifteen New Low Floor Trolley Vehicles For The North Beach And Middle Beach Routes For Trolley Operations In An Amount Not To Exceed $7,880,000 Annually. Key Intended Outcome Supported: Ensure Comprehensive Mobility Addressing All Modes Throughout The City. Supporting Data: As recently indicated in the 2014 City of Miami Beach Community Satisfaction Final Report, citywide Traffic Flow, Parking Availability and Road Conditions have been rated as very poor and appear in a down trend. Additionally, according to the same report, 49% of Miami Beach residents would be willing to use local bus circulators as an alternate mode of transportation. Item Summary/Recommendation: On April 30,2014,the City Commission approved the award of Bid No.2014-154-SR for Turnkey Trolley Operations and Maintenance Services to Limousines of South Florida, Inc. (LSF), providing for the operation of the existing North Beach Trolley service and included provisions for additional routes at the City's sole discretion.On April 15,2015,as a result of concerns regarding the accessibility of High-Floor trolley vehicles by elderly and disabled persons,the City Commission directed the Administration to use Low-Floor trolley vehicles for the provision of present and future trolley service. In addition, on June 10, 2015 the City Commission approved the Middle Beach Loop and the Collins Link routes. The implementation of the Middle Beach Loop and the Collins Link requires an Amendment to the existing Agreement with LSF. The provisions included in this Agreement provide that the hourly rate shall be negotiated if the change in service is increased or reduced by more than 20%.The addition of these routes would represent an increase of more than 300%,from approximately 23,000 to 94,000 total operating hours per year. During negotiations, the Administration focused on reducing the hourly rate based on LSF's savings on fixed overhead costs (e.g. facilities, security, admin, etc.) as a result of the substantial increase in the number of operating hours (economies of scale). The Administration also focused on the decrease in fuel prices over recent months,pursuant to the index adjustment provided in the contract.The last significant point of focus was the increase in hourly rate due to the change from In-Step trolley vehicles to low-floor(which doubles capital investment by LSF). LSF,however,raised concerns about potential unforeseen costs that may result from the operation and maintenance of the new Low-Floor trolley vehicles. LSF advised that the proposed hourly rate for the Low-Floor vehicle option includes an added cost due to potential"unforeseen/unknown conditions". LSF does not have experience with the operation and maintenance of the proposed vehicles given that Low-Floor trolleys were introduced in the market in 2015.LSF has provided little to no documentation to support the higher maintenance costs,in particular,information to substantiate the"unforeseen"costs included in this hourly rate.The initial hourly rate proposed by LSF for low floor trolley vehicles was$82.33 prior to negotiations. The final hourly rate proposed by LSF is$78.39, a decrease in the annual cost of$329,000. LSF proposed that two (2) additional trolley vehicle options be considered (i.e., a High-Floor/In-Step Lift trolley vehicle option and a Modified/'Kneeling' High-Floor/Rear-End Lift trolley vehicle option). With all vehicle options, the City was not able to review supporting documentation for a charge in the fuel rate calculation proposed by LSF.In addition,the proposed rates did not reflect any significant economies of scale for the increased hours. However, LSF's hourly rate for the bid in April 2014 was approximately$18.00 less than the second bidder and LSF is the only turnkey trolley operator in Miami-Dade County at this time. RECOMMENDATION Pursuant to the City Commission motion on April 15,2015 directing the Administration to use low-floor trolley vehicles for the existing and future trolley routes in the City, the attached Resolution approves and authorizes the Mayor and City Clerk to execute Amendment No. 3 to the Agreement between the City and LSF for the addition of the Middle Beach Trolley routes and service plan using low-floor trolley vehicles at a cost of$7,880,000 annually. However,given the$1,180,000 annual cost differential between the use of low-floor vehicles and high-floor vehicles,the Administration suggests that the Commission consider the use of the modified/'kneeling'high-floor trolley vehicles. Further,as an alternative,should the City Commission believe that low-floor trolley vehicles for the service are critical,the Commission may elect to consider issuing a bid for the Middle Beach Loop and Collins Link. Please note that issuing a bid for the Middle Beach routes will delay implementation of the Middle Beach Loop and Collins Link by approximately 3-4 months and,further,there is a possibility that LSF may be the only bidder and/or that the resulting hourly rates may be higher than those proposed by LSF at this time. Advisory Board Recommendation: Financial Information: Source of Funds: Amount Account $6,052,000 FY 2015/16; 106-9615-000349 Transportation Fund $1,828,000 . FY 2015/16; 187-6300-000349 PTP Fund Total $7,880,000 City Clerk's Office Legislative Tracking: Jose R. Gonzalez, Ext. 6768 Sign-Offs: De artmeDirecto Assistant Ci a 4 er City anager JRG A JW ►1 KGB JLM S1 T:\AGENDA\2015\O: ber\Amen.. ent N6.3 to Turnkey Trolley Opera.•ns and Maintenance Services Agreement SUMM MIAMIBEACH AGENDA IT 4), R7I SATE /0-.2/45- .111MBr. ■. • -�•■1111111111111111i City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov CO MISSION MEMORANDUM TO: Mayor Philip Levine and Members of the City mmission FROM: Jimmy L. Morales, City Manager DATE: October 21, 2015 SUBJECT:A RESOLUTION OF THE MAY R AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER AND WAIVING, BY 5/7TH VOTE, THE COMPETITIVE BIDDING REQUIREMENT, FINDING SUCH WAIVER TO BE IN THE BEST INTEREST OF THE CITY, AND APPROVING AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AMENDMENT NO. 3 TO THE AGREEMENT, DATED MAY 8,2014,BETWEEN THE CITY AND LIMOUSINES OF SOUTH FLORIDA, INC., FOR TURN-KEY OPERATIONS AND MAINTENANCE SERVICES OF A MUNICIPAL TROLLEY SYSTEM FOR THE CITY OF MIAMI BEACH; SAID AMENDMENT INCREASING THE SCOPE OF THE AGREEMENT TO INCLUDE THE FOLLOWING: (1) THE ADDITION OF THE OPERATION AND MAINTENANCE SERVICES FOR TWO NEW ROUTES IN MIDDLE BEACH (THE MIDDLE BEACH LOOP AND THE COLLINS LINK); (2) THE ADDITION OF FIFTEEN (15) NEW LOW FLOOR TROLLEY VEHICLES FOR THE OPERATION OF THE NORTH BEACH AND MIDDLE BEACH ROUTES; (3) A NEGOTIATED NEW HOURLY RATE COMMENSURATE WITH THE COST OF SAID NEW TROLLEY VEHICLES AND THE ADDITIONAL SERVICES FOR THE NEW MIDDLE BEACH ROUTES; (4)THE EARLY EXERCISE OF THE TWO(2)RENEWAL OPTIONS, EXTENDING THE AGREEMENT TERM THROUGH MAY 7, 2021; (5) IN ADDITION TO THE TERM PROVIDED IN SUBSECTION (4) OF THIS RESOLUTION, FURTHER EXTENDING THE TERM,AS TO EACH ROUTE,TO INCLUDE A FULL SIXTY (60) MONTH TERM, COMMENCING AS OF THE ROLL-OUT DATE OF ALL THE NEW TROLLEY VEHICLES FOR EACH RESPECTIVE ROUTE; (6) AUTHORIZING THE CITY MANAGER TO APPROVE THE PURCHASE OF ADDITIONAL OPTIONAL EQUIPMENT FOR THE TROLLEY VEHICLES IN THE CITY FLEET,AS MAY BE NEEDED IN THE ADMINISTRATION'S DISCRETION,SUBJECT TO FUNDING AVAILABILITY; AND(7)ANY ADDITIONAL MODIFICATIONS DEEMED NECESSARY BY THE ADMINISTRATION WITH RESPECT TO THE ADDITIONAL SCOPE CONTEMPLATED BY THE AMENDMENT; SAID AMENDMENT INCREASING THE COST OF THE AGREEMENT, IN AN AMOUNT NOT TO EXCEED $7,880,000 ANNUALLY. Commission Memorandum—Amendment No. 3 to Turnkey Trolley Operations and Maintenance Services Agreement October 21,2015 Page 2 of 8 BACKGROUND On April 30,2014,the City Commission approved the award of Invitation to Bid (ITB) No. 2014-154- SR for Turnkey Trolley Operations and Maintenance Services to Limousines of South Florida, Inc. (LSF). Following the approval of the ITB, an Agreement between the City and LSF was executed on May 8, 2014. This ITB allowed for the operation of the existing North Beach Trolley service and included provisions for additional routes at the City's sole discretion. On October 22, 2014, the City Commission made a motion directing the Administration to proceed with planning and developing a Middle Beach Trolley route and service plan as part of a citywide interconnected trolley system. On April 15, 2015, as a result of some concerns from the Administration regarding the accessibility of High-Floor trolley vehicles by elderly and disabled persons and the impact on headways,the City Commission passed a motion directing the Administration to use Low-Floor trolley vehicles for the provision of present and future trolley service.At this meeting,the City Commission also referred the Middle Beach Trolley route and service plan to the Neighborhood/Community Affairs Committee (NCAC) for discussion. On May 29, 2015,the Administration presented a proposed Middle Beach Loop and the Collins Link routes and service plans to the NCAC. The Committee passed a motion recommending the approval of the proposed Middle Beach Trolley route and service plan (as presented by the Administration)which was subsequently approved by the City Commission on June 10,2015. At the same time, the City Commission authorized the Mayor and City Clerk to execute Interlocal Agreements with Miami-Dade County for the operation of two (2) municipal circulator routes. The proposed trolley routes and Interlocal agreements were subsequently approved by Miami-Dade Transit(MDT), the County's Transit Services and Mobility Committee(TSMC)on August 26, 2015, and the Board of County Commissioners (BCC) on September 1, 2015 after concluding that the City's proposed trolley routes would not have an adverse impact on the existing MDT bus service. The documents have been executed and have been filed with the City Clerk's office. ANALYSIS Low-Floor Trolley Vehicles (No-Lift) As the Administration reported to the City Commission at its January 10, 2015 meeting, the implementation of the Middle Beach Trolley routes(Middle Beach Loop and Collins Link)requires an Amendment to the existing Agreement with LSF, which was executed based solely on the North Beach Trolley route. However, the Agreement includes provisions that allow for the addition of routes at the City's discretion. The provisions included in this Agreement also indicate that the hourly rate shall be negotiated if the change in service is increased or reduced by more than 20%. It is important to note that the addition of the Middle Beach Loop and Collins Link would represent an increase of more than 300%, from approximately 23,000 to 94,000 total operating hours per year. The negotiations between the Administration and LSF focused on reducing the current hourly rate for LSF's overhead costs(e.g.facilities, security,administration, supervision,etc.)due to economies of scale resulting from the proposed increase in total number of operating hours. The Administration also focused on reducing the hourly rate based on savings on fuel as oil prices have dropped significantly within the last twelve (12) months. The current Agreement includes provisions for adjustments in the hourly rate when fuel price fluctuations are greater than 10%. The fuel index included in the contract has declined 49.5% since contract execution. The hourly rate provided by LSF in April 2014 for the fuel component of the rate was $9.60. Commission Memorandum—Amendment No. 3 to Turnkey Trolley Operations and Maintenance Services Agreement October 21,2015 Page 3 of 8 The last focus of negotiation was the increase in hourly rate due to the change in vehicle type from the current In-Step trolley vehicles to Low-Floor vehicles. This component represented a significant change as the capital cost of each Low-Floor trolley vehicle is nearly double the cost of an In-Step trolley vehicle.As stated above, Low-Floor trolley vehicles were recommended by City Commission for an hourly rate not to exceed $79.91 per hour(15%above the current hourly rate).An hourly rate for operation of trolley services in both North and Middle Beach with new Low-Floor vehicles was proposed by LSF and is presented below. For the low-floor trolley service LSF will purchase fifteen (15) new Low-Floor trolley vehicles in addition to the existing five(5) High-Floor In-Step trolley vehicles currently providing service in North Beach. The existing five (5) North Beach trolley vehicles would serve as spares for the entire fleet (North Beach and Mid Beach) while the proposed fifteen (15) trolley vehicles would be used to operate the North Beach Loop and the Middle Beach Loops. It is important to note that during the negotiations between the Administration and LSF for the addition of the Middle Beach Loop and the Collins Link to the existing Agreement, LSF raised concerns about manufacturer warranty being voided due to after-market modifications to the vehicle chassis as well as potential unforeseen costs that may result from the operation and maintenance of the new Low-Floor trolley vehicles. In particular, LSF expressed concerns with the reduced useful life of the tires due to the vehicle's lower suspension. Due to these stated concerns, LSF advised that the proposed hourly rate for the Low-Floor vehicle option includes an added cost due to potential "unforeseen/unknown conditions". It is important to note that LSF has not had experience with the operation and maintenance of the proposed vehicles given that Low-Floor trolleys were introduced in the market in 2015. Additionally, LSF has provided little to no documentation to support the higher maintenance costs, in particular, information to substantiate the "unforeseen" costs included in the hourly rate for low-floor trolley vehicles. The initial hourly rate proposed by LSF for low floor trolley vehicles was$82.33 prior to negotiations. The final hourly rate proposed by LSF is $78.39, representing a decrease in the annual cost of $329,000. Despite this decrease, the Administration continues to have the following concerns: 1. While the LSF-proposed hourly rate includes a fuel adjustment, LSF has subsequently informed the City that the $9.60 hourly rate currently in effect included additives, fueling personnel, and maintenance-related costs in addition to fuel, and that the fuel component was really only $5.24 per hour. In addition, LSF's proposed rate includes a contingency factor of 9% of fuel cost in case fuel prices increase. As a result, even if the City were to continue with the existing service, the fuel decrease proposed by LSF is $2.58 instead of $4.75(i.e., $9.60 x 49.5%). While LSF has explained the components to staff, staff has not been able to review or verify any supporting documentation. 2. Similarly, LSF has explained that they believe they will have increased costs due to the expanded fleet (e.g., storage facilities, increased supplies, etc.), thereby offsetting any overhead savings. However, without review of supporting documentation, the City cannot verify the costs. 3. The final hourly rate proposed by LSF for service using low-floor trolley vehicles is $78.39. This rate is $12.58 higher than the service using either type of high floor trolley vehicle. While the City concurs that these vehicles have increased maintenance and fuel costs and are more expensive to purchase, staff was not provided with supportive documentation for review. Nonetheless, it is worth noting that when the Invitation to Bid for Turnkey Trolley Operations and Maintenance Services was issued in April 2014, LSF's hourly rate($69.49)was approximately$18 Commission Memorandum—Amendment No. 3 to Turnkey Trolley Operations and Maintenance Services Agreement October 21,2015 Page4of8 . lower than the second bidder (MV Transportation); although, MV Transportation bid on a more expensive high floor trolley vehicle. Further, LSF is the only entity operating full turn-key trolley service in Miami-Dade County at this time and it is possible that if the City were to rebid these services, the hourly rate could be higher than LSF's proposed rates. As an example, the City of Miami Gardens recently entered into a contract with LSF for full turnkey trolley services at an hourly rate of $72.40 which is $2.91 higher than our current rate for the same type of high floor trolley vehicle. Due to the concerns expressed by LSF with regards to Low-Floor trolley vehicles, LSF proposed that two (2) additional trolley vehicle options be considered by the City (i.e., a High-Floor/In-Step Lift trolley vehicle option and a Modified/'Kneeling' High-Floor/Rear-End Lift trolley vehicle option). Below are the initial (prior to negotiations) and final hourly rates proposed by LSF for each option. Images of each vehicle option are depicted in Attachment B. Option 1 - Existing High-Floor/In-Step Lift Trolley Vehicles This option includes the purchase by LSF of fifteen (15) new High-Floor/In-Step trolley vehicles (same type of vehicle currently used for the North Beach Loop) in addition to the existing five (5) vehicles currently providing service in North Beach.The existing five(5) North Beach trolley vehicles would serve as spares for the entire fleet (North Beach and Middle Beach) while the proposed fifteen (15) trolley vehicles would be used to operate the North Beach Loop and the Middle Beach Loops. The initial hourly rate proposed by LSF for this vehicle option was $69.49 prior to negotiation. The final hourly rate proposed by LSF is $65.81. Option 2— Modified/"Kneeling" High-Floor/Rear-End Lift Trolley Vehicle This option includes the purchase by LSF of fourteen(14)new High-Floor/Rear-Lift"kneeling"trolley vehicles in addition to the existing five (5) High-Floor/in-step lift trolley vehicles currently providing service in North Beach. Four(4)of the existing five(5) North Beach Trolley vehicles would serve as spares for the entire fleet while the new fourteen (14) vehicles and one (1) of the existing North Beach Trolley vehicles would be used to operate the expanded service(North Beach Loop and the Middle Beach Loops). The initial hourly rate proposed by LSF for this vehicle option was$69.49 prior to negotiations. The final hourly rate proposed by LSF is $65.81. COMPARISON OF PROS AND CONS FOR EACH TROLLEY VEHICLE OPTION Below is a list of pros/cons developed by Transportation Department staff for each of the trolley vehicle options presented by LSF. Low-Floor Trolley Vehicle (No-Lift) According to the TCRP Report 41, Chapter 2, of the Transportation Research Board titled "New Design and Operating Experiences with Low-Floor Buses", sponsored by the Federal Transit Administration (FTA), the following major pros and cons were identified by transit agencies (nationwide) using Low-Floor vehicles: Pros • Improved accessibility for all • Positive impact on ridership • Improves customer's perception of service and reliability • Encourages use by disable patrons • Improves maneuverability (steering/handling) • Much less cost of maintenance for access equipment (ramp) Commission Memorandum—Amendment No. 3 to Turnkey Trolley Operations and Maintenance Services Agreement October 21,2015 Page 5 of 8 • 5 to 6 times less road-calls/breakdowns for access issues • Minimal changes to maintenance facilities required • Better driver eye contact with passengers Cons • Reduced seating capacity as compared to the same size High-Floor vehicle • Roughly 20 % shorter life of tires • Some agencies identified sporadic wheel damage • Higher capital cost of vehicle Option 1 - Existing High-Floor/In-Step Lift Trolley Vehicle Pros • Lower capital cost of vehicle • LSF's familiarity with operation and maintenance of the vehicle Cons • Frequent lift breakdowns • Delays in service due to breakdowns or accessibility issues • Perceived as inconvenient and unsafe by disable and elderly passengers Option 2 - Modified/Kneeling High-Floor/Rear-End Lift Trolley Vehicle Pros • Lowest capital cost of vehicle • LSF's familiarity with operation and maintenance of the vehicle • Modified step raiser (partially enhanced access) Cons • Frequent lift breakdowns • Delays in service due to breakdowns or accessibility issues • Perceived as inconvenient and unsafe by disable and elderly passengers • ADA passenger sits at rear of vehicle (out of reach/unattended) • Adversely impacts interior vehicle aesthetics • Consumes interior space in the rear of the vehicle (less leg room) Additionally, staff found that currently more than 90% of the vehicles used for transit service in the nation (including Miami-Dade Transit)are low-floor vehicles. It is important to note that most transit agencies use low-floor buses. Only a handful of transit agencies use trolley vehicles and even fewer have low-floor trolley vehicles since this type of vehicle was only recently introduced in the market. The cities of Coral Gables and Virginia Beach have recently purchased low-floor trolley vehicles and both cities have indicated to staff that they are pleased with the performance of their new vehicles. Staff also looked into the lift-related breakdowns and deployments on the City's existing North Beach Trolley and Alton-West Trolley service. Staff found that from April to August 2015,the North Beach Trolley service, which operates with High-Floor trolley vehicles with in-step hydraulic lifts, experienced an average of 108 lift deployments per month. If we consider that every lift deployment can potentially delay the affected trolley for nearly ten (10) minutes, the total amount of lost service hours can escalate to 18 hour or more per month. In addition, staff noted that,on average,five(5)to seven (7)lift-related malfunctions occur each month on the North Beach Trolley service. It has been documented that each lift malfunction delays the impacted vehicle by approximately 30 minutes and often requires an LSF supervisor to drive to the location of the affected trolley vehicle and repair the Commission Memorandum—Amendment No. 3 to Turnkey Trolley Operations and Maintenance Services Agreement October 21, 2015 Page 6 of 8 malfunctioning in-step lift. It is important to note that in addition to the loss of service hours, the delays caused by lift deployments and lift malfunctions also have a significant impact on the advertised headways. In regards to the Alton-West trolley,which uses a rear-end hydraulic lift, staffs analysis showed that, on average, this service reported ten (10) deployments per month. However, staff has found this type of lift to be often non-functional when inspected. The City of Miami also uses this type of lift on its trolley vehicles, and staff from the City of Miami has also reported experiencing significant issues with this type of lift. The use of high floor vehicles versus low floor vehicles for the expanded trolley service was discussed at the Transportation, Parking, and Bicycle-Pedestrian Facilities Committee on October 12, 2015. At the meeting, the Committee recommended the use of low-floor trolley vehicles while recognizing the higher cost associated with this type of vehicle. Regardless of the vehicle option selected, upon approval of the Amendment by the City Commission, LSF will have all necessary guarantees to order vehicles for the operation of the Middle Beach Loop and Collins Link routes. It is important to note that upon ordering the trolley vehicles, the manufacturing and delivery of the vehicles may take from four (4) — nine (9) months depending on the type of trolley vehicle selected and the current level of demand experienced by the manufacturer once the order is submitted. The Administration will work with trolley manufacturer to expedite the manufacturing and delivery of the trolley vehicles to the extent possible. The following material changes to the current Agreement with LSF will be included in Amendment No.3: 1. Performance Penalties — Given that performance penalties are currently based on the number of vehicles and operating hours, the daily fee cap will be adjusted proportionally to the growth in fleet and hours of operation. 2. New Vehicles — Depending on the vehicle option approved by City Commission, the proposed Amendment will include provisions for the purchase by LSF of trolley vehicles required for the operation of the following three (3) routes: North Beach Loop, Collins Link, and Middle Beach Loop at the desired service headways of approximately 10 minutes. Additionally, this provision will require that the existing High-Floor/In-Step trolley vehicles currently operating in North Beach serve as spare vehicles for the expanded trolley service. 3. Vehicle Ownership—Ownership of vehicles at the end of the contract term is not currently addressed in the Agreement. A provision addressing the ownership of the vehicle at the end of the contract term will be included in this Amendment. The hourly rate proposed by LSF for each of the (3) vehicle options presented herein are based on LSF providing a credit (built into the hourly rate) to the City of approximately$20,000 per high-floor trolley vehicle and $50,000 for low-floor trolley vehicle for the residual value of each vehicle at the end of the contract term and LSF owning the vehicles at the end of the contract term. 4. Optional Equipment—Currently, the Agreement includes a provision for the purchase and installation of "optional equipment" at the City's sole discretion at a not-to-exceed cost of $200,000. This Amendment will include a provision giving authority to the City Manager to increase the cap as needed in order to secure the purchase and installation of optional equipment for new vehicles and service including, but not limited to, the GPS trackers, modems automatic passenger counters, monitors, and automated voice information systems. The increase will be subject to budget availability. 5. Hourly Rate—The current hourly operating rate of$69.49 is based on LSF providing 23,360 Commission Memorandum—Amendment No. 3 to Turnkey Trolley Operations and Maintenance Services Agreement October 21,2015 Page 7 of 8 hours per year of turnkey trolley service for the North Beach Loop using four (4) High- Floor/In-Step trolley vehicles (plus one spare trolley vehicle). The Amendment will include the final hourly rate proposed by LSF of$78.39 for low-floor trolleys.Additionally,a provision addressing the commencement date of the new hourly operating rate will be included in the Amendment. 6. Term—Given that LSF's hourly operating rate is based on a 60-month vehicle amortization schedule, and since the delivery of trolley vehicles may take as much as nine (9) months from the time the order is placed, thereby extending the contract term beyond all approved renewal terms, the Administration is recommending that the City Commission waive competitive bidding for the period of time required to guarantee a minimum of 60-month operation with the negotiated hourly operating rate, in order to ensure LSF receives a return on its investment. 7. Insurance and Performance Bond—Currently,the cost of these two items are included in the current hourly operating rate of $69.49 for the North Beach Trolley. The Administration recommends that the proposed Amendment include language providing for the City to pay LSF for these costs as a pass-through/direct reimbursable (actual cost to be provided separately by LSF). This modification is intended to result in a lower hourly operating rate based on current actual costs paid by LSF for insurance and performance bond. FISCAL IMPACT Cost—If approved by the City Commission,this Amendment will result in the implementation of two (2) new trolley routes(the Middle Beach Loop and Collins Link) in addition to the continuation of the existing North Beach Loop.A breakdown of the annual operating costs for each vehicle option has been included in the table below. For comparison purposes, it should be noted that the annual operating cost (1.) of the existing North Beach Loop is approximately $1,630,000. Annual Costs Applicable to Amendment No. 3 Low-Floor (Based on final hourly rates proposed by LSF) (No-Lift) 1. North Beach Loop (Existing Hours of Ops) $1,830,000 2. North Beach Loop (Increased Hours of Ops) $ 140,000 3. Middle Beach Loop (New) $2,950,000 4. Collins Link (New) _ $2,460,000 5. Other Costs $ 500,000 Total $7,880,000 Should the City Commission wish to consider the use of high-floor trolley vehicles for the ex.anded service, the followin. costs would be a. •licable: Annual Costs Applicable to Amendment No. 3 Option 1 Option 2 (Based on final hourly rates proposed by LSF) High-Floor High-Floor (In-Step Lift) (Rear Lift) 1. North Beach Loop (Existing Hours of Ops) $1,540,000 $1,540,000 2. North Beach Loop(Increased Hours of Ops) $ 120,000 $ 120,000 3. Middle Beach Loop (New) $2,480,000 $2,480,000 4. Collins Link (New) $2,060,000 $2,060,000 5. Other Costs $ 500,000 $ 500,000 Total $6,700,000 $6,700,000 i Commission Memorandum—Amendment No. 3 to Turnkey Trolley Operations and Maintenance Services Agreement October 21, 2015 Page 8 of 8 Funding Source—Funding for the above costs.will be provided from the Transportation Fund and People's Transportation Plan (PTP) Fund as included in the FY2015/16 budget. The City's Trolley budget for. Fiscal Year 2015/16 has been calculated based on an anticipated turnkey hourly rate of $76.00 and has been recommended by the Finance and Citywide Projects Committee (FCWPC) and accepted by the Mayor and City Commission. It is important to note that the final hourly rate proposed by LSF for service with Low-Floor vehicles is $2.39 per hour higher than budgeted. However, a maximum hourly rate of$79.91 (15% increase over the current hourly operating rate of $69.49) has been approved by the City Commission for the implementation of citywide trolley services with new Low-Floor vehicles. Should the City Commission wish to move forward with the Low-Floor option presented in this memo (final hourly rate proposed by LSF of $78.39), the Administration would use funding currently allocated to the proposed South Beach Trolley which will not start operations at the beginning of the fiscal year as originally budgeted. The City is currently in discussions with the County on the proposed route for the South Beach Trolley which is anticipated to be implemented later in the fiscal year. RECOMMENDATION Pursuant to the City Commission motion on April 15, 2015 directing the Administration to use low- floor trolley vehicles for the existing and future trolley routes in the City, the attached Resolution approves and authorizes the Mayor and City Clerk to execute Amendment No. 3 to the Agreement between the City and LSF for the addition of the Middle Beach Trolley routes and service plan using low-floor trolley vehicles at a cost of$7,880,000 annually. However, given the $1,180,000 annual cost differential between the use of low-floor vehicles and high-floor vehicles, the Administration suggests that the Commission consider the use of the modified/'kneeling' high-floor trolley vehicles. Further, as an alternative,should the City Commission believe that low-floor trolley vehicles for the service are critical, the Commission may elect to consider issuing a bid for the Middle Beach Loop and Collins Link given that LSF does not have experience with the operation of low-floor trolley vehicles and staff cannot provide supportive analysis for the hourly rate proposed by LSF for operation of low-floor trolley vehicles. Please note that issuing a bid for the Middle Beach routes will delay implementation of the Middle Beach Loop and Collins Link by approximately 3 -4 months and, further, there is a possibility that LSF may be the only bidder and/or that the resulting hourly rates may be higher than those proposed by LSF at this time. Attachments: A. Route map and service plan for Middle Beach Loop and Collins Link B Images of vehicle options proposed by LSF JLM/KG / 14 T::IAGENDAI20151October 141Amendment No3 to Turnkey Trolley Operations and Maintenance Services Agreement MEMO.doc 1 .E s.ufw. Attachment A '—I, -r.. -_ . ._: - , . ...iii, t i, a e.o,, KM: C.M.M. ill;ti !'''' . pnv emt rvoRe ( ':` °� �i_ x q - - , lI[1PAIE �...y0livi 'f 41 COLLINS LINK: s` „t„ ''" ,, Frequency-10-15 Minutes ' o ,.� ,.x Number of Vehicles 5 4, Direction Counterclockwise • Lenght-6 Miles MM s.M ern r 1%) sNo sn- !O H •1 M4N".-..l j" ■ .Ya a1TM - cn it i 4 , .,: .: ,,, .rxs x .„. b a 4-- _. °:, . fMM^'•7.Y 'h H - i 3 iN aN YRO l^' /�1� ATM. ,. �"�"=A °" mM MIDDLE BEACH LOOP: ,6,., Frequency-10-15 Minutes 7 i Direction-Counterclockwise ockwise S.„ $ ...t "" "' ' Lenght 8 Miles dip av a#, auto �y� w t' 1 v, i - vxEOe .. '_ .,r, - T i .I a ..vim ,. 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