ANALYSIS:
Pursuant to NCAC’s direction on December 20, 2017, the City’s Transportation Department staff has reviewed the current Turnkey Trolley Operations and Maintenance Services contract (“Agreement”) with LSF, specifically the provisions for termination and liquidated damages due to LSF should the City wish to exercise its termination provision. Based on the current terms, an early termination of the Agreement for convenience may include a partial termination of the Agreement with respect to trolley services for one or more of the trolley routes, or a complete termination of the Agreement. Pursuant to the Agreement, should the City wish to exercise its right to termination for convenience, the City is required to reimburse the Contractor, as liquidated damages, an amount equal to the unamortized balance of the purchase price, with respect to the trolley vehicles which are the subject of the termination, as per the 5-year amortization schedule. In such case, the Contractor would be required to transfer to the City all titles and interest in said trolley vehicles.
Transportation Department staff has worked with LSF to determine the financial impacts of both termination options requested by the NCAC. It is worth noting that while LSF has stated that it has incurred start-up costs associated with the implementation of the current trolley routes (in addition to unamortized balance of purchase price of trolley vehicles), the current Agreement does not hold the City responsible for any cost other than the unamortized balance of the purchase price of the trolley vehicles. The financial impacts of both options requested by the NCAC are presented below (Options 1 and 2). Options 3 and 4 were also developed by the Administration for further consideration.
Option 1. Partial Termination of Agreement to Enable for Use of Low-Floor Trolleys Citywide
Should the City Commission believe that low-floor trolley vehicles are critical for the service, the Commission may elect to consider terminating the use of the 19 high-floor and modified high-floor/kneeling trolley vehicles currently operating along the Middle Beach Loop, Collins Express, and North Beach Loop, and purchasing 19 new low-floor trolley vehicles as replacements, resulting in the use of low-floor trolley vehicles along all trolley routes operating in the City. Based on the current 5-year amortization schedule and the unamortized balance of the purchase price of the 19 high-floor trolley vehicles impacted by this option, LSF has reported that the cost to the City of exercising this option is estimated to be approximately $2,586,677.44 (as of January 2018). The current annual operating cost of the Middle Beach Loop, Collins Express, and North Beach Loop combined is $6,380,937.60. If the high-floor and modified high-floor/kneeling trolley vehicles operating along these routes are replaced by low-floor trolley vehicles providing the same level of service, the total annual operating cost for these three (3) routes would be $7,499,856.00 ($1,118,918.40 more based on the current hourly operating cost of low-floor trolley vehicles). The City would retain ownership of the 19 high-floor trolley vehicles being replaced and could dispense the vehicles as it deems appropriate.
Option 2. Full Termination of Agreement and Pursue New Solicitation for Citywide Circulator Service
The City Commission may elect to consider terminating the current Agreement for convenience and re-issuing a bid to competitively procure Turnkey Transit Operations and Maintenance Services. Early termination of the Agreement for convenience would result in the City paying LSF for the un-amortized cost of all 31 trolley vehicles in the City’s fleet (19 high-floor and modified high-floor/kneeling vehicles and 12 low-floor trolley vehicles acquired recently for the South Beach Trolley service). Based on the current 5-year amortization schedule and unamortized balance of the purchase price of 12 low-floor trolley vehicles (approximately $3.9 million as of January 2018) and the unamortized balance of the purchase price of the 19 high-floor and modified high-floor/kneeling vehicles ($2,586,677.44 as presented in Option 1 above), LSF has reported that the cost to the City of exercising this option is estimated to be approximately $6.5 million (as of January 2018). The City would retain ownership of the 31 trolley vehicles being replaced and could dispense the vehicles as it deems appropriate.
Under this option, the following two (2) operating equipment scenarios could be considered:
a) Providing service using low-floor buses similar to the County buses used for the South Beach Local
The current annual operating cost of the citywide trolley service (South Beach Trolley, Middle Beach Loop, Collins Express, and North Beach Loop) is approximately $11.4 Million. Based on capital cost of low-floor bus acquisition and annual operation/maintenance cost provided by the County for operation of low-floor buses similar to the South Beach Local buses, the total annual operating cost for the City's four (4) existing routes under a turnkey contract is estimated to be $16.3 Million (approximately $4.9 Million more annually than our current annual operating cost for trolley service. However, based on our previous experience in procuring Turnkey Transit Operations and Maintenance Services, it is anticipated that the annual cost of service would be lower than estimated but higher than the current annual operating cost of the City's trolley service under a turnkey contract.
b) Providing service using cutaway vehicles
An alternative option to operating trolley vehicles or buses would be utilizing cutaway vehicles (see Attachment for sample photo). These vehicles are high-floor vehicles and can accommodate approximately 20 seating passengers or 16 seating plus 2 passengers in wheelchairs. Cutaways could accommodate 4-5 standing passengers if needed. Miami-Dade County is currently utilizing used cutaway vehicles on approximately a dozen routes at a cost of $45.09/hour/vehicle not including cost of fuel. Based on a conversation with our trolley operator who provides this service to the County, the cost of operating new vehicles of this type including fuel (i.e., full turnkey operation) would be approximately $58/hour/vehicle as compared to the current hourly cost of $65.81/hour/vehicle for high-floor trolleys and modified high-floor/kneeling trolley vehicles and $77.35/hour/vehicle for operation of low-floor trolley vehicles. Under this scenario, the annual operating cost of citywide transit service along the four (4) routes would be $9.4 Million (approximately $2 Million annually less than our current annual operating cost of trolley service). However, it is important to note that cutaway vehicles are not comparable type of vehicles to low-floor buses, low-floor trolleys, or high-floor trolleys as they offer less seating and standing capacity. While it may appear that there would be annual savings in operating cost, given the high ridership along the City's existing routes, more cutaway vehicles will likely be needed to meet existing passenger demand, which would increase the estimated annual operating cost. More importantly, cutaway vehicles would not address current accessibility concerns of the public as boarding this type of vehicle requires negotiating a few steps, and accommodating passengers in wheelchairs requires deployment of wheelchair lift in the rear of the vehicle. Alternatively, new cutaway vehicles with higher passenger capacity could be utilized; however, these cutaways would still be high-floor vehicles and their capital and operating costs would be higher than the $58/hour/vehicle for the smaller capacity cutaway vehicles.
Via 10 Street Loop
Pursuant to City Commission request at the January 17, 2018 Commission meeting, the table below depicts various operating scenarios of the South Beach Trolley, including options that do not eliminate the “Via 10 Street Loop”. However, it is worth noting that the average daily ridership at the three (3) stops along 10 Street is as follows:
The average headways and potential financial impact associated with each of the scenarios is presented below.
Should the City Commission choose Option 3, the Administration would pursue funding though the Fiscal Year 2018/19 budget process.