R2012-34 AUTHORIZING EXTENDING THE TRANSIT MANAGEMENT AGREEMENT WITH FIRST TRANSIT, INC.

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Mass Transit Memorandum No. 021312-1 February 13,2012 TO: Honorable Mayor McElroy and City Council Members FROM: Ryan McCrady, City Manager Paul McChancy, Mass Transit Administrator SUBJECT: Extending the Agreement with First Transit, Inc. SUMMARY Staff recommends that Council approve extending the term of the RECOMMENDATION: agreement with First Transit, Inc., exercising the first option year of the transit management contract. BACKGROUND: The City has a contract with First Transit, Inc., for the management of the Transit System. The company provides a Resident Manager, hires drivers,mechanics and all other necessary staff to operate the system, and provides technical expertise to the Transit System. The term of the original contract was from July 1, 2009, through June 30, 2012, with two option years that the City may exercise, if it chooses. The first option year would extend the contract from July 1, 2012, through June 30,2013. The management fee for the coming year, stated in the Agreement, would be $123,132, which is a 3.5% ($4,164) increase over this year's fee. The relationship between the City and First Transit has been very good, and there have been no significant issues raised during the term of this Agreement that would cause the City to wish to replace First Transit. Therefore staff recommends that the City exercise its option to extend the term of the Agreement through June 30, 2013. However, if Council wishes to replace First Transit and not extend the contract, then it is time to begin advertising for bids for a new management firm. POTENTIAL No known objection. OBJECTION: INPUT FROM Richard Foiles, Resident Manager OTHER SOURCES: First Transit, Inc. STAFF REFERENCE: Paul McChancy, Mass Transit Administrator BUDGET/TIME Exercising the option year means accepting the management fee IMPLICATIONS: which was pre-priced in the Agreement. The fee for the year beginning July 1, 2012, is 3.5 % ($4,164) above the current rate of $118,968. This would not represent a significant increase in Transit's annual budget.