R2008-58 EXERCISING FINAL OPTION YEAR OF THE TRANSIT MANAGEMENT AGREEMENT

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., Mass Transit Memorandum No. 041508-2 April 15, 2008 TO: Honorable Mayor Osborne and City Council Members FROM: Steve Garman, City Manager Paul McChancy, Mass Transit Administrator SUBJECT: Contract Extension: First Transit, Inc. SUMMARY Staff recommends that Council approve a resolution to exercise RECOMMENDATION: the final option year of the transit management contract with First Transit, Inc. 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, 2004, through June 30, 2007, with two option years that the City may exercise, if it chooses. The final option year would run from July 1, 2008, through June 30, 2009. The management fee for the coming year, � stated in the Agreement, would be $106,020, which is a 3% increase over this year's fee. The relationship between the City and First Transit has been excellent and there have been no significant issues raised during the term of this Agreement which would cause the City to wish to replace First Transit. Therefore staff recommends that the City exercise it's option to extend the term of the contract through June 30, 2009. POTENTIAL No known objection to the proposed resolution. 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, 2008, is 3% above the current rate. This would not represent a significant increase in Transit's annual budget.