A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING, IN SUBSTANTIAL FORM, AMENDMENT NO. 7 TO THE AGREEMENT DATED MAY 8, 2014, BETWEEN THE CITY AND LIMOUSINES OF SOUTH FLORIDA (LSF), INC., FOR TURN-KEY OPERATIONS AND MAINTENANCE SERVICES OF A MUNICIPAL TROLLEY SYSTEM FOR THE CITY OF MIAMI BEACH; SAID AMENDMENT, IN MATERIAL PART, INCLUDING THE FOLLOWING MODIFICATIONS: (1) ADDING ONE (1) USED HIGH-FLOOR TROLLEY VEHICLE TO THE CITY'S TROLLEY FLEET TO BE USED AS A SPARE ONLY, INCLUDING THE INSTALLATION OF OPTIONAL EQUIPMENT, IN THE APPROXIMATE LUMP SUM COST TO THE CITY OF $3,500, WITH OPERATING/MAINTENANCE COSTS, IN THE APPROXIMATE ANNUAL AMOUNT OF $3,600, WHICH COSTS WILL REMAIN WITHIN THE CURRENT NOT TO EXCEED CONTRACT AMOUNT OF $12,000,000; (2) PERMITTING THE OPERATION OF ALL TROLLEY VEHICLE TYPES (HIGH-FLOOR, MODIFIED HIGH-FLOOR OR LOW-FLOOR) ALONG ANY OF THE CITY'S TROLLEY ROUTES, AS NEEDED, TO ENSURE PROPER SERVICE COVERAGE; AND (3) MODIFYING OTHER MISCELLANEOUS PROVISIONS OF THE AGREEMENT TO ADDRESS THE CURRENT OPERATING CONDITIONS OF THE TROLLEY SERVICES, WHICH INCLUDE (I) UPDATING THE TROLLEY ROUTES, (II) REDUCING THE ON- TIME PERFORMANCE GOAL FROM 95% TO 85% FOR ALL TROLLEY ROUTES, (III) CLARIFYING THE METHODOLOGY FOR DETERMINING FUEL CHARGE ADJUSTMENTS AND FOR CALCULATING ON-TIME PERFORMANCE, AND (IV) INCLUDING A RELEASE OF ANY ALLEGED CLAIMS (AGAINST THE CITY) BY LSF FOR FUEL CHARGE REIMBURSEMENTS AND A RELEASE OF ANY ALLEGED CLAIMS (AGAINST LSF) BY THE CITY FOR ON-TIME PERFORMANCE PENALTIES, BOTH THROUGH THE EFFECTIVE DATE OF THE AMENDMENT; AND FURTHER AUTHORIZING THE CITY MANAGER AND CITY CLERK TO EXECUTE THE FINAL NEGOTIATED AMENDMENT.

The Administration recommends that the Mayor and City Commission approve the Resolution authorizing the City Manager and City Clerk to execute Amendment No. 7, in substantial form attached, to the Agreement between the City and Limousines of South Florida, Inc. (LSF) for Turnkey Trolley Operation and Maintenance Services.

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 LSF. Following the approval of the ITB, an agreement between the City and LSF was executed on May 8, 2014. This Agreement allowed for the operation of the existing North Beach Trolley service and included provisions for additional routes at the City’s sole discretion.

On July 30, 2014, the City Commission adopted Resolution No. 2014-28708, authorizing the City to execute Amendment No. 1 to the Agreement, which increased the scope of the Agreement to include optional equipment, as well as additional automated stop announcement equipment, with capability of displaying public advertisements. Amendment No. 1 was executed on October 6, 2014. 

On March 18, 2015, the Mayor and the City Commission adopted Resolution No. 2015-28967, approving, and authorizing Amendment No. 2 to the Agreement, incorporating an enhanced Scope of Services to the Agreement in order to accommodate additional transportation expenses needed for the City’s Centennial celebration, increasing the cost of the agreement for said enhanced scope of services during the 2014-2015 fiscal year, solely. Amendment No. 2 was executed on March 24, 2015. 

On October 21, 2015, the Mayor and City Commission adopted Resolution No. 2015-29194, waiving, by 5/7^th vote, the competitive bidding requirement, exercising provisions of the contract allowing for additional routes at the City’s sole discretion, and approving Amendment No. 3 to the Agreement; said amendment providing for the following: 1) the addition of the operation and maintenance services for two (2) new routes in Middle Beach (the Middle Beach Loop and the Collins Link); 2) the addition of fourteen (14) new modified/kneeling high-floor/rear end wheel chair lift trolley vehicles (New Modified/High Floor trolley vehicles) for the operation of the North Beach and Middle Beach routes, in an amount not to exceed $6,700,000 annually; 3) a negotiated new hourly rate commensurate with the cost of said 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 to May 7, 2021; 5) in addition to the term provided in the previous subsection (4), 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 modified high-floor trolley vehicles for each respective route; and 6) authorizing the City Manager to approve the purchase of additional optional equipment for the New Modified/HIgh Floor Trolley vehicles. Amendment No. 3 was executed on January 14, 2016.

On July 20, 2016, the Mayor and City Commission adopted Resolution No. 2016-29519, accepting the recommendation of the City Manager and waiving, by 5/7^th vote, the competitive bidding requirement, finding such waiver to be in the best interest of the City, exercising provisions of the contract allowing for additional routes at the City’s sole discretion, and approving Amendment No. 4 to the Agreement in substantial form, increasing the scope of the Agreement to include the following: 1) the addition of one (1) bi-directional route in South Beach for a term of sixty (60) months, commencing as of the roll-out date for the Low-Floor trolley vehicles; 2) the addition of twelve (12) new Low-Floor trolley vehicles for use in all City trolley routes; 3) a negotiated new hourly rate for the Low-Floor trolley vehicles and additional associated services; and 4) increasing the annual cost of the Agreement, from a not to exceed cost of $6,700,000 to a not to exceed cost of $12,000,000; authorizing the City Manager to approve the purchase of additional optional equipment for the Low-Floor trolley vehicles, as may be needed in the Administration’s discretion, subject to funding availability; authorizing the City Manager to terminate the existing Interlocal Agreement (for the South Beach Local), in connection with the negotiation of a new Interlocal Agreement with Miami-Dade County for the South Beach Trolley route; and further authorizing the Mayor and City Clerk to execute the final negotiated Interlocal Agreement and Amendment No. 4.  Amendment No. 4 was executed on March 29, 2017.

On May 17, 2017, the Mayor and City Commission adopted Resolution No. 2017-29873, approving and authorizing the City Manager and City Clerk to execute Amendment No. 5 to the Agreement; approving the replacement of Collins Link route alignment with Collins Express route, at no additional cost to the City, to provide more direct intrarcity connectivity between Washington Avenue/Lincoln Road and 88 Street.  Amendment No. 5 was executed on October 26, 2017.

On October 18, 2017, the Mayor and City Commission adopted Ordinance No. 2017-4143, amending certain provisions of the City Living Wage Ordinance as codified in Sections 2-407 through 2-410 of the City Code. The primary purpose of the amendment to the Ordinance was to adjust and increase the hourly living wage rate and health benefit paid by service contractors covered under the Ordinance to their covered employees, with the proposed increased for the calendar year 2018 to be “phased-in” over a three (3) year period commencing on January 1, 2018. In order to assure that covered service contractors doing business with the City, including LSF, continue to comply with the provisions of the Ordinance as amended, Amendment No. 6 to the agreement with LSF is in the process of being executed.

Amendment No. 7 (Attachment A) to the Agreement with LSF is required for various reasons described below:

INCORPORATING PREVIOUSLY-APPROVED OPERATIONAL MODIFICATIONS TO VARIOUS LOOPS

SOUTH BEACH LOOPS:

The Agreement currently depicts an initial route alignment that is no longer valid.  Based on community feedback, staff determined that changes to the initial South Beach trolley service plan were warranted.  The South Beach Trolley service currently consists of (3) distinct loops: 1) “Loop A” operating in a clockwise direction; 2) “Loop B” operating in a counter-clockwise direction; and 3) “Via 10 Street Loop” operating in a “figure 8” configuration to serve the Flamingo Park neighborhood and provide a direct east-west connection between Alton Road and Washington Avenue -  via a temporary detour on 10^th Street given that 11^th Street is currently under construction.

This modification was transmitted via LTC No. 557-2017 (Attachment B).

Additionally, pursuant to direction from the City Commission on January 17, 2018, the South Beach Loops A (Clockwise) and B (Counter-Clockwise) were extended on January 22, 2018 to serve the Collins Park neighborhood, while service on the “Via 10 Street Loop” has remained the same. As a result of the above route modification, the average frequency of service along the bi-directional loops (Loop A and Loop B) was revised to 20 minutes while the average frequency of service along “Via 10 Street Loop” was revised to approximately 40 minutes.

This route modification and revised frequency of service was transmitted via LTC No. 030-2018 (Attachment C).

NORTH BEACH LOOP:

In response to concerns from trolley users with regard to the long walking distance to the closest trolley stop along Hawthorne Avenue between 81 Street and 77 Street, a minor modification to the route alignment, including incorporation of an additional stop between 81 Street and 77 Street was implemented on September 5, 2018. This modification has helped improve passenger convenience by reducing walking distance and better serving the community in the vicinity of Crespi Park.  While this route modification did not affect service frequency, the average frequency of service along the North Beach Loop is being revised to 15 minutes.

This route modification was transmitted via LTC No. 480-2018 (Attachment D) which depicts the current North Beach Loop route alignment.

VEHICLE REASSIGNMENT BETWEEN COLLINS EXPRESS AND MIDDLE BEACH LOOP

Given the more direct and convenient service being provided between North Beach and South Beach by the new Collins Express, this loop has experienced an increase in ridership as compared to its predecessor, the Collins Link from the time of its implementation (November 1, 2017). Based on an evaluation of ridership data, on January 23, 2018, the Transportation Department reassigned one (1) of the Middle Beach Loop vehicles to the Collins Express. While minimally affecting service frequency along the Middle Beach Loop, this operational modification enabled the Collins Express service to better meet high passenger demand along the route, improve service reliability and service frequency. The average service frequency along the Collins Express is below 17 minutes and the average service frequency along the Middle Beach Loop is approximately 15 minutes. 

This route modification and revised frequency of service was transmitted via LTC No. 030-2018 (Attachment C). 

ON-TIME PERFORMANCE (OTP) GOAL

As per the Exhibit C, Section 11 of the Agreement, service reliability of the City’s trolley service is set to 95% OTP (with no more than 5 minutes late at any of the stops). Furthermore, the contract establishes performance penalties for not meeting set OTP goal.

Based on staff's evaluation of OTP data over the past year, including research of OTP goals for other transit agencies in the country that operate fixed route bus service in mixed traffic, it was determined that the existing goal of 95% OTP for the City's trolley service is not feasible and should be revised. For example, the current 95% OTP goal of the City’s trolley service is the same as the County’s OTP goal for Metrorail service which operates along an exclusive right-of-way, thus not affected by adverse traffic conditions.

The City staff met with LSF staff on March 20, 2018 to discuss the need to establish a procedure/methodology for calculating OTP of the City’s trolley service. Subsequent to the meeting, key stops associated with each of the trolley routes were selected and mutually agreed to by LSF and City staff for the purpose of prospectively tracking OTP. Since then, the City staff has been advising LSF as to operational deficiencies, including vehicle bunching which directly impacts OTP.  The methodology is described in Exhibit F of the Agreement (Attachment A). 

The City staff met with LSF staff on October 10 and October 23, 2018 to discuss reliability of trolley service and other housekeeping items that would be addressed as part of Amendment No.7. As an outcome of these discussions and negotiations, the City staff and LSF established a new OTP goal of 85% for all trolley routes in operation.  When evaluating OTP, the City will exercise judgment and discretion, particularly during events and incidents that adversely affect the flow of traffic, such as major lane closures, special events, major accidents/incidents, major detours and other factors that are outside LSF’s control and adversely affect trolley service reliability.

FUEL-RELATED ADJUSTMENTS

LSF's hourly rate includes a fuel component which may fluctuate up or down depending on the quarterly cost of fuel (i.e. average daily rack rate for the new quarter as compared to the rate of the previous adjustment). While LSF believes that they are entitled to retroactive reimbursement for the absorbed increase in fuel cost from October 1, 2015 pursuant to Section 5 of the Agreement, LSF is willing to forgo any fuel related reimbursement requests until the effective date of Amendment No. 7 if the City forgoes charging on-time performance penalties from October 1, 2018 until the effective date of Amendment No. 7.  Although the City disputes LSF’s interpretation of Section 5 of the Agreement with respect to adjustments to the fuel price component of the fixed fee hourly rate, the City and LSF have agreed to forgo the prior alleged claims and move forward by clarifying the terms of the Agreement, including amending Section 5 of the Agreement to update the Oil Price Information Service (OPIS) average daily rack price to that of October 1, 2017 ($1.9364 per gallon of fuel), as the most recent amendment to the Agreement that established current hourly operating rates was executed in October of 2017.  Under this scenario, the current hourly rates would prevail for the quarter following execution of Amendment No. 7.  Going forward, the average daily rack price of fuel could be analyzed on the first day of each quarter and compared to the last price/adjustment to determine if at least a ten percent (10%) change up or down has occurred since the last adjustment of the fuel component.  As such, the hourly operating cost of the City's Trolley service may fluctuate up or down throughout the year to reflect any changes in fuel cost.  Revision of this section clarifies the procedure that will be used to calculate changes in fuel price and associated changes in hourly operating rates.  

In addition, the following items were proffered by LSF during negotiations and are being included in Amendment No. 7 to the Agreement:

ADDITION OF ONE (1) USED HIGH-FLOOR TROLLEY VEHICLE TO CITY’S FLEET TO BE USED AS A SPARE ONLY

The City‘s current trolley fleet consists of 31 trolley vehicles (5 high-floor trolley vehicles, 14 modified/high-floor kneeling, and 12 low-floor trolley vehicles). Twenty-five (25) vehicles are used in operation and six (6) vehicles are used as spare vehicles. Based on statements made by LSF’s staff, some of the vehicle repairs are taking longer than expected due to lack of availability of parts or the need to have vehicles under warranty repaired at an authorized dealer rather than at LSF's maintenance facility. LSF proffered the addition of one (1) 2013 used high-floor trolley vehicle, previously acquired by LSF, to the City’s fleet, enabling for an additional spare vehicle to help improve overall service reliability. LSF also committed to investing $8,500 for the installation of optional equipment on this vehicle including, but not limited to, GPS trackers, modems, automatic passenger counters, monitors, video system, and automated voice information systems. The remaining cost of optional equipment (approximately $3,500) would be paid by the City. The City would be responsible for the reoccurring monthly cost of operation/maintenance of the optional equipment in the amount of approximately $300/month (or $3,600 annually).

It is important to note that this additional trolley vehicle will only be used as a spare vehicle when needed (i.e. to replace a trolley that is taken out of service for maintenance/repair reasons), thus not increasing the number of vehicles in operation and the City's annual operations and maintenance cost of the City's trolley service.

VEHICLE ASSIGNMENT TO ROUTES

Based on direction from the City Commission in October 2016, only low-floor trolleys are to be used for operation on the South Beach Trolley Loops. The South Beach Trolley fleet consists of twelve (12) low-floor vehicles. Ten (10) vehicles are used for service and two (2) are used as spare vehicles. However, there have been numerous occasions over the past several months when no low-floor spare vehicle was  available to replace a broken-down low-floor trolley on the South Beach Loops resulting in sub-standard service coverage.  For example, the South Beach Trolley service experienced 214 hours of lost service in August 2018 and 412 hours of lost service in September 2018.  LSF staff contributed the loss in service hours primarily to unavailability of parts for the low-floor vehicles. Given the impact that this issue has had on the reliability of the South Beach Trolley service in the past few months, LSF has requested that the City allow for the operation of high-floor vehicles along the South Beach Loops only under exigent circumstances to enable for proper service coverage.  LSF has committed to ensuring that every effort is taken to repair low-floor vehicles quickly, enabling for primarily low-floor vehicles to be used on the South Beach Loops. To substantiate their request, LSF contacted the manufacturer of our low-floor trolley vehicles (Hometown Trolley) who responded via a formal letter (Attachment E) affirming the lack of availability of parts, limited inventory and back-orders, and parts-related national recalls.

Conversely, LSF requested that the City allow for the use of low-floor vehicles on loops other than the South Beach Loops (i.e. North Beach Loop, Collins Express, and Middle Beach Loop) only if absolutely necessary to maintain service coverage on those loops and subject to the conditions described above.

The Administration believes that the addition of one (1) trolley vehicle to the City's fleet and the ability to assign any trolley vehicle type (high floor, modified high floor, or low floor) to any of the routes as needed to ensure proper service coverage will improve the overall reliability of the City's trolley service.  As such, these provisions, in addition to the new OTP goal for each loop, have been included in Amendment No. 7.     

The existing agreement with LSF has a staggered term with each of the trolley service areas (routes) having a five (5) year term, commencing as of the service commencement date.  The Administration anticipates issuing a new competitive solicitation in 2021 for turnkey trolley operation and maintenance services for all trolley routes currently in operation.

The addition of one (1) high-floor vehicle to the City’s fleet to be used as a spare vehicle only would result in a fiscal impact of approximately $7,100 in the first year and approximately $3,600 for any year thereafter throughout the term of the Agreement. 

Additionally, it is anticipated that any increases in fuel price which will consequently increase the hourly operating rate for the City's Trolley service would be off-set by trolley operating savings throughout the current fiscal year.