Although trolley service is currently suspended, there are various monthly fixed costs associated with protection of the program assets (33 trolley vehicles) for which LSF has requested financial assistance from the City. Fixed costs are incurred whether or not the City’s trolley service is operating and are accumulating daily during trolley suspension period. City staff had multiple discussions with LSF regarding their fixed costs and, through negotiations, staff was able to reduce LSF’s initial request from $182,709.59/month to $167,095.00/month. These costs include approximately $11,000 per month of wages of LSF personnel who, due to suspension of trolley service, the City believes did not have to be kept active on LSF’s payroll. Furthermore, an additional approximately $20,000/month of fixed cost claimed by LSF requires further backup. LSF claims that by the end of July 2020, its accrued fixed costs are estimated to be over $700,000.
Due to social distancing on-board transit vehicles, Miami-Dade County (County) has limited vehicle capacity to 16 passengers per regular 40-foot bus, and 36 passengers per larger 60-foot articulated bus. Reduction in vehicle capacity is resulting in missed trips and longer passenger wait times. Based on a County report it is estimated that over 2,500 passengers were unable to board the buses along routes serving Miami Beach (113, 119 and 120), due to limited vehicle capacity from July 1 through July 20. To compensate for reduced capacity County approached the City and LSF, approximately one week ago, requesting the temporary use of the City’s trolley vehicles along some of the County routes via the same provider (LSF) to supplement their bus service.
Pursuant to the current Agreement, LSF cannot enter into an agreement with any other party for use of equipment and/or personnel dedicated to the City’s trolley services without prior approval from the City. It is important to note that the temporary assignment of City’s trolley vehicles to supplement the County’s transit routes operated by LSF would be at no cost to the City and, would, in addition to providing for higher level of service quality and reliability of County bus routes serving Miami Beach, assist in offsetting the fixed cost associated with service suspension, as well as possibly reducing hourly rate of the City’s trolley service once trolley service resumes.
The City staff reviewed the County’s request and is recommending that the City approve the temporary assignment of the City’s trolley vehicles for use along County’s bus routes under the following conditions:
· City’s trolley vehicles are to be primarily used along routes that serve Miami Beach;
· The City would be granting LSF a temporary and revocable right. Upon written notification from the City, LSF would make available for the City’s use any number of trolley vehicles from the City’s fleet within 30 days of the notification;
· The requirement to indemnify and hold harmless the City for operation of the City’s trolley vehicles; the requirement to maintain insurance; and the requirement to maintain the vehicles will not be modified through this temporary arrangement;
· Prior to commencing use of trolley vehicles from the City’s fleet along any of the County routes, LSF will be covering (via partial wrap or similar solution) all City of Miami Beach logos, decals, branding and any other exterior or interior design elements that associate vehicles with Miami Beach, including customer service number. Prior to assignment of any of the vehicles from the City’s fleet to any of the County routes, the City staff will inspect debranding of vehicle interior and exterior. Vehicles can be used only after debranding is reviewed and approved by the City;
· The City shall retain all advertisement revenue generated from exterior and interior advertisement on trolley vehicles (requires further discussion with the County);
· Any mechanical, exterior or interior damages of the trolley vehicles shall be corrected prior to returning vehicles to operation of the City’s trolley service;
· All interior and exterior vehicle branding and Miami Beach identifiers shall be restored prior to returning vehicles to operation of City’s trolley service;
· LSF shall provide, on a monthly basis, or more frequently as requested by the City, detailed reports specifying scheduled number of vehicles in service, route assignment, number of scheduled and actual service hours provided;
The City will use all service hours of the County’s transit service using City’s trolley vehicles during complete or partial suspension, as a credit, to offset various monthly fixed costs owed to LSF which are associated with LSF’s protection of the City’s trolley fleet. For every hour that the County operates a City trolley vehicle, one hour of fixed cost incurred by LSF due to complete or partial suspension of the City’s trolley service would be offset.
The City and LSF agree to conduct a reconciliation of the City’s accrued credits and debits (fixed cost balance owed to LSF) within 90 days of the earliest expiration date of the contract term (November 21, 2021). If there is any fixed cost balance owed to LSF, at the time of reconciliation, in lieu of providing LSF with a lump sum payment to cover any shortfall, the Administration could consider a contract extension of up to four months for each month of service suspension to allow LSF to recover the fixed cost associated with the suspension period. Said contract extension would be brought to the City Commission for approval at a future date.
Finally, pursuant to the Section 2-256 of the Code of the City of Miami Beach, the Amendment also includes the addition of the Office of Inspector General audit rights.