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HomeMy WebLinkAboutMIN APRIL 22 1997 M I N U T E S -, CITY OF BEAUMONT Lulu L.Smith DAVID W. MOORE, MAYOR Andrew P. Cokinos, Mayor Pro Tem Guy N.Goodson CITY COUNCIL MEETING Becky Ames John K. Davis APRIL 22, 1997 Bobbie J. Patterson Lane Nichols, City Attorney Ray A. Riley, City Manager Patrice Fogarty, City Clerk The City Council of the City of Beaumont, Texas, met in a regular session on April 22, 1997, at the City Hall Council Chambers, 801 Main Street, Beaumont, Texas, at 1:30 p.m. to consider the following: OPENING *Invocation Pledge of Allegiance Roll Call *Presentations and Recognition *Public Comment: Persons may speak on scheduled agenda items *Consent Agenda Mayor Moore called the meeting to order at 1:36 p.m. Father Patrick Gahan, Saint Stephen's Episcopal Church, gave the invocation. Mr. Tony Jones led the pledge of allegiance. Present at the meeting were: Mayor Moore, Mayor Pro Tem Cokinos, Councilmembers Smith, Goodson , Ames, Davis, and Patterson. Also, present were Ray A. Riley, City Manager; Lane Nichols, City Attorney; Patrice Fogarty, City Clerk; and Barbara Liming, Deputy City Clerk. Three proclamations were issued: "Watch Your Car Awareness Week," April 21-27, 1997; "National Tissue and Organ Donor Week," April 20-26, 1997; and "Beta Sigma Phi Founders Day," April 24, 1997. * Citizens were invited to comment on the consent and main agenda items. (Councilmember Goodson arrived at 1:54 p.m.during comments made by the second speaker.) Ms. Mary Wright, 2440 Hybrook Lane, Ms. Sandra Thomas, 2035 Potts, Ms. Marian Cook, 1920 Longfellow, Mr. Carl Tyler, (no address given), Ms. Rosalyn Tyler, 3805 Cleveland, Ms. Esther Booker, 3720 Magnolia, and Mrs. Get Williams, 4495 Fortune Lane, all specifically addressed Council regarding the Triangle Interfaith (TIF) after school project. They reviewed the positive aspects of the program, asked that Council reconsider funding the program again, stated their concern for children, spoke of Council commitment to partner with B I S D, said repeat funding for some programs is warranted and that human development is economic development. Mr. Everett Phelps, 5645 Camellia, addressed Council regarding Item 2 approving a contract for construction of a landfill cell. Mr. Phelps spoke on behalf of Brystar Construction, the second low bidder for the project, and stated his experience as a contractor in Beaumont since 1957. He said there is only a difference of about $3,000 between the low and second low bid for a contract in excess of a million dollars with Brystar Construction being a local company who would spend locally. He also questioned the low bidder qualifying his bid and the legality of doing so. Mr. Ed Matuszak, regional manager for Foster Wheeler Environmental Corporation, addressed Council regarding Item 2. Mr. Matuszak said their bid was unconditional and in compliance with specifications, said they are a very local firm, reported previously having offices at 6010 M. L. King, Jr. Parkway and relocation to the airport for space constraints, reviewed jobs provided and the reliability of his company. He said they are a superfund, oversight contractor for Texas and addressed the "D" cell construction and protection function. He further stated anticipation in the construction and affirmed they feel they are "very local" and "very Beaumont." Mr. Brian Phelps, representing Brystar Construction, second low bidder for the landfill cell construction, reviewed past work his company has performed for the City, referred to a letter sent to Council regarding this project, said they were told after the bid opening by HDR Engineering that the three low bids were being evaluated because there were exceptions on the low bid, and said if the exceptions were withdrawn, they would like to withdraw $3,500 from their bid. He said that one concern of the engineering firm was regarding installation of the landfill liner and said they named themselves as the installer. Also, he said Addendum No. 4 was sent out after 2:00 p.m. on Friday with the bid due on Monday at 2:00 p.m. and did not allow much time for reevaluation. Mr. Phelps asked for consideration of award for this project. Mr. Raymond Chaisson, (1130 Lamar), addressed Council to request consideration for an intensive rehabilitation program to help the unfortunate who cannot repair their homes, especially the elderly who live on fixed incomes, and added his support for the after school programs. CONSENT AGENDA The following consent agenda items were considered: Approval of the minutes of the April 15, 1997 meeting; Confirmation of committee appointments - Resolution No. 97-85 Minutes;4/22/97;Page 2 A) Authorize the acquisition of property for the Charlton Pollard Neighborhood Revitalization Project (Parcel 283A: Tract 98, City Tax Plat F, David Brown Survey, Sunlight Baptist Church, $2,000) - Resolution No. 97-86 B) Authorize the settlement of lawsuits and claims (claim of Jackie Scott-Bodah, $26,000) - Resolution No. 97-87 and (lawsuit of Danise Wallace-Bill, $9,000) - Resolution No. 97-88 Councilmember Davis moved to approve the consent agenda. Councilmember Smith seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Cokinos, Councilmembers Smith, Goodson, Ames, Davis, and Patterson Noes: None GENERAL BUSINESS 1. Consider approving the 1997 HUD Consolidated Grant Program. Councilmember Davis moved to approve the resolution. Councilmember Ames seconded the motion. Mayor Moore requested that Section 3 of the resolution be voted upon separate. No vote was taken on this motion and second. Councilmember Smith moved to approve Section 1(adopting the 1997 HUD Consolidated Grant Program in the amount of $3,244,000) and Section 2 (establishing the Public Service budget and authorizing contracts with the organizations) of Resolution No. 97-89. Councilmember Davis seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Cokinos, Councilmembers Smith, Goodson, Ames, and Davis Noes: None Abstained: Councilmember Patterson Councilmember Davis moved to approve Section 3 (programming funds received in excess of original allocation from the 1996 HUD Consolidated Grant Program (CDBG portion) which are available) of Resolution No. 97-89. Councilmember Ames seconded the motion. MOTION PASSED Ayes: Mayor Pro Tem Cokinos, Councilmembers Smith, Goodson, Ames, and Davis Noes: None Abstained: Mayor Moore and Councilmember Patterson Minutes;4122197;Page 3 2. Consider approving a contract for the construction of a fourteen acre landfill cell. After a lengthy discussion concerning Addendum No. 4, possible litigation, application of the sales tax formula and construction projects, a request for possible review of the formula, mandatory pre-bid attendance for large projects, local preference and unfunded mandates, Mayor Pro Tem Cokinos moved to defer action on this item for one week to allow additional information to be provided to Council. Councilmember Davis seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Cokinos, Councilmembers Smith, Goodson, Ames, Davis, and Patterson Noes: None 3. Consider extending agreements with Trans Star EMS and Ameristat for the purpose of providing emergency medical services. Councilmember Goodson moved to approve Resolution No. 97-90 extending agreements for a period of two years with Trans Star EMS and Ameristat Mobil Medical Services, Inc. Councilmember Smith seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Cokinos, Councilmembers Smith, Goodson, Ames, Davis, and Patterson Noes: None 4. Consider authorizing the acquisition of property for the proposed Amelia Park. Mayor Pro Tem Cokinos moved to approve Resolution No. 97-91 authorizing acquisition of a 4.3139 acre tract, Lots 12 thru 17, Block 21, and Lots 5 thru 12, Block 22, in the Gulf Terrace Addition from Gulf Building and Loan in the amount of $30,500 for the proposed 7.2 acre Amelia Park. Councilmember Goodson seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Cokinos, Councilmembers Smith, Ames, Davis, and Patterson Noes: None Councilmembers thanked City Staff, the Neighborhood Association and everyone involved in moving forward to make this neighborhood park a reality. COMMENTS * Councilmembers comment on various matters Minutes;4/22/97;Page 4 Councilmember Smith expressed approval that the vote was taken for CDBG funding and told the audience, particular those of the Triangle Interfaith organization, "that we all are interested in children," and no one has cornered the market in caring. She said budgeting these funds is always difficult, because there are so many worthy projects with very limited funds. Councilmember Smith reviewed past funding of social services with virtually no housing stock for low to moderate income families. She said Council made a commitment to spend dollars primarily for affordable housing and has honored that commitment. She said all of the projects presented are worthy, but government is limited and some things are better done by the private sector and non-profit organizations, and the after school project may be one of those. Councilmember Goodson commented about the success of the Neches River Festival, thanked the ACORN Neighborhood Association for their contribution in making the acquisition of a park site for the Amelia area, congratulated (Buddy Hebert) one of the Golden Rule Award winners, and those who add much to our community illustrated by the number of upcoming events. Councilmember Goodson applauded the efforts of Triangle Interfaith, joins with Councilmember Smith to state that Council has tried very hard to spread the limited funds available as far as possible to social service projects and not concentrated them on an annual basis to one organization. He said the after school program needs to be funded by the entire community, that Austin is completely restructuring school district funding, and maybe the impetus of this project should be directed in that direction. Councilmember Goodson congratulated the Teen Court for holding their annual meeting Thursday evening when volunteers will be recognized, said there is an upcoming "I Have a Dream" program and the annual beach clean-up and said that when Councilmembers meet with B I S D Monday evening, the topic of the after school program will likely continue in discussion, and that Council has never indicated an unwillingness to progress with this discussion, but it must be done in a manner that will not inhibit other non-profit or public-interest organizations from having opportunity to receive CDBG funding. Councilmember Davis concurred with Councilmember Smith's comments and said some of the language from citizens referring to caring for children may be a bit strong in inferring that Council does not care about children. He said Council found a way to fund the program last year with some difficulty, but wanted to show support to B I S D. Councilmember Davis said the schools could spend their priority allocation to fund after school programs, and that he would be receptive to a true partnership, not the City paying for the total program. He asked citizens to realize these are tax dollars, that citizens want tax dollars paid to the school district to be spent wisely and how they are spent to be decided by their elected representation. Councilmember Davis said he is pleased with approval of the CDBG budget and told Charlton-Pollard residents that housing projects will continue. Councilmember Davis thanked Public Works Director Tom Warner for attending the neighborhood association meeting at the Christo Rey Catholic Church and for his enthusiasm in answering residents' questions. He reported to Mr. Riley and Mr. Warner a call received about failure of a transformer on Sycamore Street and asked that a resolve to the problem with Minutes;4/22/97;Page 5 Entergy Corporation be attempted. Councilmember Davis thanked Mr. Benny Mendosa and Mrs. Paubla Ydrogo for their work in the Avenues Neighborhood Association for the betterment of their community and for attending City Council meetings regularly and informed them that their requests are being addressed. Councilmember Patterson thanked the Parks and Recreation Department and all of the volunteers for a successful Neighbors in the Park last Sunday at Sprott Park. She said that Beaumont is blessed and fortunate to have a tremendous amount of volunteers who give their time, talent and skills to others. Councilmember Patterson said she was part of the judging team for the J. C. Penney Golden Rules Award that recognized winners yesterday, congratulated all the winners and commended J. C. Penney for awarding these citizens. Mayor Moore thanked Community Services Director Maurine Gray for hostessing visitors from Beaumont-sur-Oise, France two days last week, said Councilmembers Smith and Ames attended a dinner in their honor, said the visitors were very pleased with their visit to Beaumont, and he had a wonderful time talking to them about our city. Mayor Moore commented about the new information center at the library that allows citizens to use a computerized system for grant information. He reported that this morning members of St. Elizabeth Hospital, local law enforcement officers, Child Protective Services, and Attorney General Morales were present at a seminar addressing domestic violence, children abuse and rape. Mayor Moore announced that Beaumont has been recognized by HUD for best practices in the nation which is a great compliment to our staff and the way CDBG's monies have been spent. Mayor Moore reviewed his request to Council last year to participate in an after school pilot program and the support received from Council. He told the audience that today he thinks Council has been "unfairly beaten upon the head," and it has come across that Council does not care about children, and "nothing could be further from the truth." Mayor Moore said the City cannot fund Triangle Interfaith, this project was helped through the Beaumont Independent School District and was supposed to be a one year pilot program and was made very clear at that time. This was a demonstration for parents, grandparents and school personnel to get involved with children to establish a meaningful program. The City kept their commitment to help get the program started. He restated that the City will partner with B I S D to provide quality care for children. Mayor Moore discussed importance of all children, neighborhood schools, leveraging tax dollars and Beaumont not having to increase taxes for the past five years and expressed disappointment at the criticism received from the ones who have been helped. Mayor Moore congratulated Buddy Hebert for being a recipient of the J. C. Penney Golden Rule award, said he was also acknowledged at the 100 Club's dinner as a member of Citizens on Patrol which speaks well of his commitment and said the South Park Neighborhood Association is very proud of Mr. Hebert. Also, Mayor Moore announced that Tim Geen received the Officer of the Year award from the 100 Club and said that volunteers were acknowledged last week by Baptist Hospital when they opened their new lobby. * Public Comment (Persons are limited to 3 minutes) Minutes;4/22/97;Page 6 Dr. Kelley Kays, 2396 Dowlen Road, addressed Council as a veterinarian to offer a proposal for cremation of animal disposal to the City of Beaumont. Mrs. Levert Mollett, 2990 Roberts, on behalf of the Beaumont Chapter of Alpha Omega Omega Chapter of Alpha Kappa Alpha Sorority, Inc. cited a recent commendation Mayor Moore received at the 65th South Central Regional Conference in Houston, Texas, hosted by the Southeast Texas Cluster comprised of 23 chapters of undergraduates and alumni. Mrs. Mollett exhibited the trophy Mayor Moore received that displayed a bronze eagle mounted on a wood and marble base that said "Alpha Kappa Alpha Sorority, Inc., 65th South Central Regional Conference, Distinguished Community Leadership Award presented to DAVID MOORE for Community Service in the field of Business, April 19, 1997, Houston, Texas." Mayor Moore expressed his appreciation for the honor. Mr. Tony Jones, 508 Garland, addressed Council to report a cost saving idea for the Transit System gleaned while in New Jersey. He said they regularly schedule use of paratransit vans and pick up several people instead of one person for each trip. However, they are obligated to honor on-demand calls. Mr. Jerry Whittington, 2164 Cable, addressed Council as president of the Cable Street Neighborhood Association to speak about the timing of street signals at Mariposa and the Interstate near Burger King and to request street repair consideration of Caldwell Street. Mr. Whittington said steering wheels are loosened by the roughness of the street and also said that large trucks from a furniture store are creating a problem. Mr. Whittington thanked the Police Department for participating with the neighborhood association in a program to introduce children to local police personnel. Councilmember Davis complimented Mr. Whittington for accepting a difficult challenge in reaching out to the young people in his neighborhood. Mr. Lynn DeMary, 430 East Elgie, extended congratulations to Mayor Moore for receipt of his award, to Buddy Hebert and the others for recognition of their service to the community, and to the Amelia Neighborhood Association and the City for their cooperation for meeting the park and recreation needs of part of our community. He said the cost of the landfill cell points out the value of recycling program and other efforts to reduce the amount of waste deposited at the landfill. Mr. DeMary said he particularly wants to recognize Mobil's efforts in earning an OSHA Star Award for safety. Mobil is one of four refineries in the nation to received this recognition. Mr. DeMary thanked Mr. Warner, the Public Works Department, and the City Council for the street improvements in South Park through the annual street revitalization program and distributed copies of the Jouma/ recognizing Mobil and the Neches River Festival to Council. Mr. Ed Matuszak, LaPorte, Texas, addressed Council to state that he served nine years as a member of the LaPorte City Council and empathizes with the dilemma of purchasing local versus out of town, and said if Council is going to have a policy of Minutes;4/22/97;Page 7 negotiating after construction bids, his company would like to participate. He said their full intent is to use local sub-contractors, when possible, use local hire for construction, and restated that they have been a community participant for many years and spoke about a policy of having a list of pre-qualified list of contractors for construction projects over $250,000. Mr. Matuszak said he wants to work with the City to resolve any questions. Mr. Brian Phelps, representing Brystar Construction, addressed Council to explain his position on naming subcontractors, again spoke of Addendum No. 4 received Friday before the bid opening on Monday and problems with the quote. He said his company has worked with subcontractors to achieve a viable plan to work with minorities. Mrs. Paubla Ydrogo, 1590 Gilbert, a member of the Avenues Neighborhood Association, addressed Council to compliment the Mayor for his community efforts, the City Council and especially to thank Councilmember Davis for his support. Mrs. Ydrogo thank the Police Department and Public Works Director Tom Warner for support given whenever they call and announced the next meeting of their neighborhood association will be May 19, 1997 and welcomed attendance. Mrs. Marilyn Whittington, 2164 Cable, addressed Council to complain about the condition of the Harvest Club floor, especially for those renting the facility for dances. The meeting was recessed at 4:00 p.m. and reconvened at 4:20 p.m. with all Councilmembers, the City Manager, City Attorney and City Clerk present. OTHER BUSINESS * Receive report relating to Beaumont Municipal Transit operations. Traffic Engineer Jim Cline reviewed the Transit System operations and discussed portions of a review submitted by McDonald Transit Associates, Inc. outlined in Exhibit A. Mr. Cline's informational review included: BACKGROUND: Generally low income, transit dependent riders, no other choice. BMT is "not broken" but has areas in need of improvement. Federal funding is in peril. Fixed route service is reasonably efficient. Paratransit needs change. Costs are excessive. Minutes;4/22/97;Page 8 System administration/organization is well in line with peer systems. Vehicle maintenance operation appears to not be as efficient as peer systems. There is clear need for affordable and sustainable transit system in Beaumont. FIXED ROUTE: Consider improved service to Census Tracts 21 and 6. SERVICE: Consider focussed accessible bus service. Consider implementation of remote transfer points in addition to downtown center. No additional buses considered. PARATRANSIT Improve scheduling and van utilization. SERVICE: Eliminate reservation system at some cost (look at inequities). Negotiate higher cost recovery with state agencies. Consider STS fixed route service. Consider cab vouchers or subcontractor. Consider eligibility review. Consider elimination of monthly passes. Consider non-profit provider. Supplement limited STS service with alternative service. Consider low-cost bus passes for STS eligible riders. MAINTENANCE Verify the number of maintenance personnel is appropriate. OPERATION: Verify that shift schedule is appropriate. Consider outside shop for major jobs that are performed. TRANSIT SYSTEM Consider fare decrease. FUNDING: Consider fare increase. Minutes;4/22/97;Page 9 Consider no change to fare structure. Consider service reduction. Consider local funding increase. CONCLUSION: Many operational areas are candidates for change. No easy solutions, but solutions must be found. Must remember the needs and capability of ridership. Recommendation on this consideration will be in the 3rd quarter. Council discussion included adequacy of the transfer station, reduced fares for summer ridership for children to go to the Pruitt Center, the Y's, Salvation Army or libraries, cameras on the buses, federal funding, contingency plans, ADA requirements, ridership and community need and bus sizes. EXECUTIVE SESSION Executive Session in accordance with Section 551.071 of the Government Code to discuss contemplated or pending litigation: Claim of Joseph Pete There being no further business, the meeting adjourned at 5:05 p.m. r Mayor David W. Moore Patrice Fogarty, ay-—Clerk' Minutes;4/22/97;Page 10 CITY OF BEAUMONT PUBLIC WORKS INTER-OFFICE MEMORANDUM � c Date: April 10, 1997 TO: Ray Riley, City Manager FROM: Tom Warner, Public Works Director SUBJECT: COUNCIL ITINERARY- April 15, 1997 TRANSIT SYSTEM RvjpROVEMENT WORKSHOP COMMENTS In January of this year, McDonald Transit Associates, Inc. completed a detailed study of Beaumont Municipal Transit(BMT) operations. This study included a comparison of peer transit systems, an on-board survey, and detailed analysis of operating procedures and methods. An executive summary is attached which summarizes the findings and recommendations provided in the study. Based on this information and further analysis, the Public Works Department developed an action plan to refine improvements which will ensure the maximum efficiency and effectiveness for the BMT system. This action plan is recommended for presentation in the City Council Workshop. Tom Warner Attachment "EXHIBIT A Final Report for a Beaumont Transit System Review :..::... Jx ' i V. .":......... � 4. .dry; •. •........ :::..y::v........ .::...:. v ...:....:.... ..... ....::::.... "- ...... �.•�.�•:':;i:R:; :_:¢ ':t;}:;I:ii%:ii::iit}i'::,'.'.'iiti%:l:i:^%:w:. :. Prepared for the City of Beaumont, Texas Submitted by McDonald Transit Associates, Inc. Wilbur Smith Associates L.R. Creed Consulting January 23, 1997 Beaumont Transit System Review Beaumont, Texas XII. Summary of Recommendations The following findings and recommendations result from this project: 1. Organizational Options There are a number of options as far as service, funding and organization that the City could pursue. After reviewing these options, it seems clear that: • it would be nearly impossible to increase the City's contribution to the cost of operating the public transportation service enough to offset the possible loss in Federal funds; • while efficiency improvements appear possible, different operating strategies by themselves will not offset the loss of Federal funds; • a combination of fare and other revenue increases, efficiency improvements, service reductions and increased City contribution could result in a workable solution to the loss of Federal funds; • an expansion to a county-wide or regional approach to transit would broaden the tax base but, without Federal funds, could be a relatively unattractive option to other local governments; and • study of an entirely new transit tax should be considered for possible submission to the State Legislature, particularly if State transit funds are reduced. 2. Management Contract- Management Fee Structure According to the current management contract, the Resident Manager is included in the payroll of the local transit system. This is unusual. We discussed with the City staff whether the parties would be open to shifting the Resident Manager's salary and benefits and related expenses to the management contract. The City agreed that the Resident Manager's salary and benefits should be taken out of the payroll of the operation, and �� McDonald Transit Associates, Inc. Page XII - 1 Beaumont Transit System Review Beaumont, Texas made part of the management firm's set fee structure.. Recommendation: The preface of section 4 of the current contract should be amended to include the salary and benefits of the Resident Manager as part of the managerial services provided by the company at no cost to the City other than the stated fee. Also, in Section 11(4) remove the Resident Manager's salary and benefits from the payroll of the operation. It is recommended that the management contract be restructured to the format included as Appendix A. 3. Management Contract- Cost Escalation Fee Clause The"common cost allocation" used in the current contract is an unusual means to agree on a price for a professional transit management service. The City indicated that it is ready to drop the common cost allocation method and requested to see some suggested wording for an alternative cost or fee escalation clause. Recommendation: Two basic approaches for dealing with cost escalation are used in a variety of similar contracts, either could be chosen: • Consumer price index: The contract rate is increased each year by the percent increase of the CPI-U(consumer price index-urban) or some ration (80% * CPI, 90% * CPI) of that rate. • City government employee wage scale: The contract rate is increased each year by the basic wage increase authorized for city government employees. 4. Management Contract- Incentives A concern of the City was that under the current contract there was no incentive for the management firm to keep expenses down. It is difficult to hold a manager or management firm accountable for everything that can happen. Yet, the City would like to see some incentive in the contract for the transit manager to operate as efficiently as possible. On a similar issue, the City Council is on record against given someone a bonus for doing what they are supposed to do. A wide variety of performance penalty/bonus clauses are available. McDonald Transit Associates, Inc. Page XII - 2 Beaumont Transit System Review Beaumont, Texas Recommendation: While an incentive system of penalties and bonuses could be instituted, there are a number of reasons for rejecting this option • It would be hard to avoid the impression that the City was giving someone a bonus for doing the job that they are supposed to do. • The City would have to invest City staff time in monitoring the incentive standards that are established. • It would be relatively easy for the management company to propose standards that it knows it can meet, thus earning bonuses. Ultimately, the most effective incentive that the City has, if it wants to encourage a more cost effective operation, is the power to deny renewal of the management contract. For this reason we recommend a"Performance Goal" method for gaining renewal of the management contract, rather than an"Incentive Bonus" method. This Performance Goal method should incorporate the following principles • Contract renewal should be contingent upon satisfactory performance. Section 1 and Section 14 of the current contract, providing that the contract is automatically renewed every two years unless either party gives the other ninety days prior notice, should be deleted from the contract. Recommended is a two-year contract with optional renewal for each of the next three years up to, but not exceeding a total of five years, with renewal contingent upon a satisfactory performance review. • An independent, professional, performance review (or a performance audit) should be scheduled by the city in the second year of such a contract. • A quarterly budget review should be scheduled with the city, to permit closer financial monitoring and control. A clause for the management contract that incorporates this principle of measurable performance goals and objectives can be found as Article M of the sample management contract in the Appendix. 5. Labor Contract- Recommended Amendments McDonald Transit Associates, Inc. Page XII - 3 Beaumont Transit System Review Beaumont, Texas Many of the recommendations concerning the labor contract were concerned with fairly specific changes in the wording of that contract. Some substantial changes recommended include: • Delete the requirement of paying overtime for hours in excess of eight per day. Make the requirement dependent upon more than 40 hours per week. This will allow company to introduce more straight runs (i.e., nine hour days, four day work weeks). The current requirement builds automatic overtime into the payment of operators. • Implement a new set of operator's disciplinary procedures. An example was included as Chapter IV- Attachment One. The current policy is vague in determining discipline. The proposed policy expressly defines what will happen if the policy is not followed. • Implement a new incentive program(included as Chapter IV-Attachment Two). This program is more generous than the current program, and successful implementation is beneficial to the company. 6. Market Analysis Recommendations Chapter VI provided a map of the primary and secondary transit potential census tracts in the City of Beaumont. Based upon this market analysis, we found underserved market potential in the following census tract areas: • Census tract 21 on the near southwest side, and census tract 6 on the north periphery are both underserved and possibly have untapped market potential because of the current routing of Route 4 (South Eleventh) and Route 8 (College) in census tract 21, and Route 1 (Magnolia) and Route 2 (Parkdale) in census tract 6. • Census tracts 3.04 and 13.01 on the west side of town show secondary transit market potential that currently seems to be underserved by Route 3 (Calder). • Census tract 1.03 on the north side of town may possibly have untapped market potential_ Route 1 (Magnolia) comes closest to this potential market. McDonald Transit Associates, Inc. Page XII - 4 Beaumont Transit System Review Beaumont, Texas Our recommendation is to consider a routing study that could include the following elements: • Take a closer look at the population within potential market census tracts, by doing a more detailed block by block analysis using 1990 census data. • Complete a boarding and alighting survey of the existing bus routes in order to identify segments of routes that are not currently generating ridership, as well as those segments that are currently significant trip generators. • Inventory transit trip generators within the City of Beaumont (i.e., malls and major retail centers, hospitals and medical offices, government offices, schools, etc.) • Complete a survey of transit trip origins and destinations. These elements of a routing study would provide the tools necessary to design bus route alternatives that would maximize the service being provided to potential markets and result in increased ridership. 7. Fixed Route On-Board Survey Analysis Findings The BMT Market: The fixed route on-board survey supported the findings discussed in the market analysis chapter. Respondents were fairly positive about the Beaumont fixed route service. Safety and driver courtesy were generally viewed positively, and bus cleanliness and the transfer facility were not too far behind. Areas of Dissatisfaction: The strongest negative ratings were reserved for the three elements of buses being on time, the frequency of service, and the bus schedule information. A close route by route look at the areas of dissatisfaction revealed in the onboard survey shows that: • Route 8 (College) had the highest dissatisfaction rate, ranking first in two elements and second in the third. • Route 3 (Calder) was second, ranking first in one element and third in another. McDonald Transit Associates, Inc. Page X11 - 5 Beaumont Transit System Review Beaumont, Texas • Routes 1, 5, and 6 were next, with dissatisfaction ratings in the top three on at least one element. Serious consideration should be given to making changes in all of these routes, but the interlined routes 8 and 3 should get top priority. High Rate of Transfers: Overall, only 25 percent of the respondents said that they planned to make no transfers. This is extremely high. The highest transfer rates were: • Route 4 (South Eleventh) with 85 percent transferring during their trip. • Route 3 (Calder) was second highest with 80 percent transferring. • Route 8 (College)was third with 79 percent, and • Route 1 (Magnolia)was fourth with 76 percent. A full 53 percent of all riders transfer at the downtown transfer facility. A serious study of alternative routing patterns could potentially bring the number of transfers down to 25 percent, with 75 percent traveling on one route. This would result in increased ridership. Attitudes toward dropping of Saturday service: It is difficult to estimate what the precise impact would be on ridership if Saturday service were eliminated. Weekday ridership might drop by as much as 10 percent since trips previously on Saturday would not offset the loss of riders who claim to need Saturday service. Fare Increase vs. Service Reduction: Riders were directly asked whether they would prefer an increase in fares or a reduction in service if budget reductions were necessary. By nearly a two to one ratio, riders would prefer a fare increase over a reduction in service. Higher Fare for Better Service: Riders would be willing to pay a higher fare for better service. A total of 71 percent of the riders would be willing to pay a $.50 higher fare for improved service. Sunday Service: The most popular (33 percent) improvement among all riders was picked by nearly half(46 percent) of those willing to pay a higher fare: Sunday service. McDonald Transit Associates, Inc. Page XII - 6 Beaumont Transit System Review Beaumont, Texas 8. Resource Utilization Review Recommendations: The Resource Utilization Review Chapter looked at the areas of administration, maintenance, and driver scheduling. In our office operations interview process, two specific observations emerged: • The assistant GM feels that there is a strong need to update the main frame and computer software used by the management company to handle accounting functions from the remote Jacksonville location. • There are no clearly defined system or individual performance goals and objectives. The work is being done, but the personnel seem to have slipped into a level of complacency. They seem to be going through the motions of their job, ensuring that the system continues as is, but they lack the motivation to improve that derives from performance goal setting. Specific office operations recommendations are: • The payroll function should be shifted back to the secretary, and the parts clerk could become a part-time position. As a small transit system, the size of the inventory does not justify a full-time parts clerk position. Also, the parts clerk, who has a maintenance function, should report to the maintenance foreman rather than the assistant GM. • The secretary should report directly to the GM and take back the payroll and administrative purchasing functions. The secretary could also begin handling purchasing functions that do not affect the parts inventory. • The receptionist should begin reporting directly to the assistant GM, thus centralizing the STS function. • Establish a system of goal setting and performance monitoring as a part of the budget process. • Develop a formalized system of reporting to the City that compares performance with goals established through the budget process. • Investigate the use of maintenance software for a desktop PC to track inventory and generate reports such as regularly scheduled preventive McDonald Transit Associates, Inc. Page X11 - 7 Beaumont Transit System Review Beaumont, Texas maintenance, vehicle history, etc. • Upgrade the computer system to Pentium desktops, and begin using in- house accounting software, to allow the general manager to keep closer track of financial goals. Maintenance Function Review Our analysis of the BMT maintenance function showed that: • BMT has more maintenance staff than the average peer system, • BMT spends more on maintenance than the average peer system, and • BMT still has more maintenance related service interruptions than the average peer system. Maintenance Function Recommendations: • Investigate decreasing the number of mechanics and altering shifts so that most work occurs in the evening after the buses have come off the street and all are available for maintenance. • Investigate the possibility of contracting out more maintenance work such as body repairs, and the rebuilding of engines and transmissions. For a small system, it is often more cost-effective to contract out such work when the job becomes necessary rather than to try to keep additional people on the payroll at all times. Driver Scheduling Analysis: Because of the terms of the current labor contract, the scheduling of drivers almost guarantees driver overtime. There are two elements to the labor contract that combine to bring this about: 1- Article 16, Section 4: Each driver is guaranteed to be paid for no less than an eight-hour day if they drive any regularly assigned run that day. 2. Article 26, Section 1: Each driver gets overtime if they work more than McDonald Transit Associates, Inc. Page XII - 8 Beaumont Transit System Review Beaumont, Texas eight hours in any one day. These two elements mean that it is cheaper to schedule drivers to work overtime than it is to schedule them to work less than eight hour runs. If a driver works seven hours in one day, for example, then they are paid for an eighth hour even though they are not providing service. To cover that eighth hour, someone else will be paid at the regular rate for that hour, so you are, in effect, paying double time for that one hour of service. If you bring someone in and have them work nine hours, instead of eight, then you get that extra hour of service for the cost of one and one half hours. Thus working people overtime is cheaper than working them undertime with a guaranteed eight hours. A series of problems results from these policies: • Expense-Both overtime and "undertime" cost the system money. • Lack of Service Flexibility --there is no flexibility to create longer or shorter runs even if they would provide the best service to the public. For example, it might be better for service effectiveness to have a ten-hour run scheduled, where a driver could be scheduled ten hours a day for four days out of the week, or a six hour run might be the most effective run. • Absenteeism -During our staff interviews it.was noted that there is a problem of excessive absenteeism among the drivers. This problem is not helped by the overtime policy, since a driver who can earn overtime on each of four days actually worked can miss a day without losing as much of a full weeks pay. Calculating overtime on the basis of a forty-hour week would mean that a driver who misses a day of work loses not only that day's pay, but also the overtime pay accumulated for that week. Driver Scheduling Recommendations • We recommend, again. that the labor contract be renegotiated to pay overtime on the basis of a forty-hour week rather than an eight-hour day. • Consider utilization of part time drivers to cover potential shorter runs, without giving them a guaranteed eight-hour day for that shorter run. McDonald Transit Associates, Inc. Page XII - 9 Beaumont Transit System Review Beaumont, Texas 9. Facilities Review Findings: • The administrative office space is adequate for the normal management staff and support personnel to perform daily responsibilities involving general administration, accounting, scheduling, dispatching, report preparation and business functions for a transit system of forty-five (45) employees. • BMT's operations area including both supervisory and operator personnel space is well designed to service the daily operations needs of the agency. The space of the facility is adequate to accommodate the existing personnel as well as additional personnel in the future. • A future consideration of BMT may be to construct an indoor bus storage facility or an overhead covered.parking area to accommodate the full transit vehicle fleet, including srvice and support vehicles. The purpose of the facility would be to provide shelter for the vehicles to prevent damage from inclement weather as well as to prevent weathering of the vehicle finishes. • The existing service area of BMT is adequate to provide routine maintenance and service to the 16 vehicle transit fleet. The seven (7) bays have sufficient clearance and interior lighting. Currently the building is not equipped with an exhaust system to ventilate vehicle emissions, particularly during the winter months. BMT may, therefore, want to consider the installation of an exhaust ventilation system. • The BMT transit center is well designed and sufficient in size and capacity to efficiently accommodate the current use of the facility. In addition, there is capacity available to accommodate increased service and operation activity. The transit center is well equipped with office space for administrative support, maintenance space and facilities and room for operations. The facility improvement needs are limited as a result of good management practices and modern equipment and facilities. Potential facility improvement needs identified as part of this facility review include the following: • An emissions exhaust system with either overhead collection points to duct McDonald Transit Associates, Inc. Page XII - 10 Beaumont Transit System Review Beaumont, Texas vehicle exhaust outside or special air circulation fans; • Re-stripe the bus stalls from 8' x 40' to 12' x 40' to accommodate adequate vehicle maneuvering; and, • Portable steam cleaning equipment for the vehicle day-clean position. 10. Paratransit System Review: The 1996 STS ridership, according to the fiscal year figures supplied by BMT, was 20,171 trips. This is a 21 percent increase in ridership over the preceding year. The projection of the STS cost for FY1996 is $489,151. This would bean increase of 37 percent over FYI 995 costs, with an increase in the cost per trip from $21.45 to $24.25. What our analysis revealed in terms of service effectiveness is the following: • In the service effectiveness measure of trips per mile, Beaumont, with 0.130 trips per mile, is 44 percent less effective than the average. The range is from a low of 0.130 shared by Beaumont with Amarillo, to a high of 0.642 in High Point, North Carolina. • In the service effectiveness measure of trip completions per hour, Beaumont with 1.79 is 37 percent less effective than the average of 2.46. The range is from a low of 1.29 trip completions per hour in Lafayette, Louisiana, to a high of 6.12 in High Point, North Carolina. In terms of cost effectiveness: • Beaumont, with a cost per trip of$20.23, is 61 percent more expensive than the average system. The range was from a low $4.57 per trip in Jackson, Tennessee, to Beaumont's high cost of$20.23. In terms of cost efficiency: • Beaumont, with a cost per mile of$2.63 is more than 18 percent more expensive per mile than the average system. The range was from a low of $0.81 per mile in Jackson, Tennessee, to a high of$3.26 in both Port Arthur, Texas, and High Point, North Carolina. McDonald Transit Associates, Inc. Page XII - 11 Beaumont Transit System Review Beaumont, Texas The STS system of Beaumont Municipal Transit needs to make improvements in both efficiency and effectiveness. STS Schedule Analysis: None of the three primary destinations, nor the trip originator, are directly on a fixed route bus line. The feasibility of serving these four locations by wheelchair accessible fixed route buses should be studied further. Findings of Paratransit System Review: Each transit system must operate within its own community context. An entrepreneurial approach to paratransit service should maintain flexibility, but should also recognize that those who want a higher level of service than is required by ADA should pay for the higher costs of that service. Paratransit System Recommendations • It is essential that performance goals be established for the STS service, and that some systems for the close monitoring of costs are established. • Between 1995 and 1996 the STS service has increased actual vehicle hours by 40 percent and actual vehicle miles by 102%, with just a 21 percent increase in ridership. It is recommended that BMT consider a reduction in the number of vehicles and drivers being used for the STS service. • Be strict about ADA eligibility. Consider using an in-person assessment if there is doubt about the degree of disability. Ask questions of new applicants about how they are currently getting around, and refuse service to those who could ride the fixed route bus service. • Consider subcontracting the entire paratransit service. • STS trips will always be more expensive than fixed route trips. It is recommended that a program be established to reduce the number of persons riding on the STS service. ADA eligible persons should be provided incentives to use fixed route service instead of paratransit_ Free bus passes for ADA eligible riders and training on how to ride the fixed route system can save significant amounts of money. My ;�,� McDonald Transit Associates, Inc. Page XI - 12 Beaumont Transit System Review Beaumont, Texas • Consider a cab voucher system for the 41 percent of STS riders who do not require a wheelchair accessible vehicle and said in the STS rider survey that they would be willing to ride in a private automobile. There is currently an image problem for the local cab service, but this could be dealt with. • Whenever possible, support coordinated transportation systems with government health and human services agencies and nonprofit agencies that provide transportation. These agencies can often serve ADA eligible persons that would otherwise be riding on the transit system's paratransit service. Even if the transit system pays the nonprofit agencies for each ADA eligible trip, they can often do it significantly cheaper than if the transit system directly provided the trip itself. • Consider refusing to carry subscription trips with the STS program. Do, however, negotiate fees for providing subscription services to agencies that want to pay for a self-supporting supplemental service. • Consider the purchase of a paratransit scheduling software package. While such a package may not directly increase scheduling efficiency, it can simplify record-keeping and permit ongoing analysis. There are a number of reasonably priced options currently available on the market. • For the current number of trips being provided daily by STS a software.program that allows for trip placement by a scheduler, that prints driver manifests, and that produces accounts receivable and payable reports is probably sufficient. An example would be Dispatch Manager (1-800-881-0088), currently running around $600. • If you were thinking of future expansion and crossover to Fixed route planning capabilities, two high end systems are MIDAS-PT, which will start at $60,000, and Trapeze -FX, which starts at $30,000 Computer software technology advances so quickly that we would recommend going to the Texas PublicTransportation Conference in Austin in March, and checking out what the vendors there have available. McDonald Transit Associates, Inc. Page XII - 13 Beaumont Transit System Review Beaumont, Texas 11. Financial Strategy: Although the decrease in Federal assistance is partially at fault for the projected deficit, two other causes are: (1) the rapidly increasing cost of the STS paratransit service; and (2) the increasing costs and decreasing ridership on the fixed route service. When faced with deficits of this magnitude both revenue enhancement possibilities (including fare increases) and expense reductions must be considered. Revenue Enhancements: Four fare increase options were investigated. These were: • Option #1 - $1.00 Base Fare Under this option, the adult base fare is increased by $0.25, to $1.00, and all other fares are increased accordingly. The STS fares are increased to twice the adult fares. Option#1 results in an increase in revenue, but also a significant decrease in ridership. • Option#2 - $1.25 Base Fare The adult cash fare is increased by $0.50, to $1.25, with proportional increases in all other categories. The STS fares are increased to twice the adult fares. Option#2 shows a large increase in revenue but also results in the largest reduction in ridership. • Option#3 - Per Boarding There are no free transfers in this option. The adult cash fare is set at $.50 and other fares are set accordingly. The STS fares are increased to twice the adult fares. Option#3 results in a decrease in both revenue and ridership and, therefore, is an inferior option. • Option #4 - $1.00 Base Discount McDonald Transit Associates, Inc. Page XII - 14 Beaumont Transit System Review Beaumont, Texas The adult cash fare is increased to $1.00 in this option with proportional increases in all other cash categories, but passes are kept at current levels. The 10-ride ticket is discounted by 20%. The STS fares are increased to twice the adult fares. Option#4 has the largest increase in revenue, with a smaller reduction in ridership than either Option#1, or Option#2. There are, of course, many other options that could be assessed. The decision of which option to pursue will depend on the amount of revenue needed, and what expense reductions are instituted. Option#1 increases the fare revenue by approximately $34,000, Option#2 by nearly $60,000 and Option 44 by about $80,000. Fare Increase Recommendation: Our recommendation is that fare increase Option#4 be considered. This option raises the adult cash fare to $1.00, with_proportional increases in all other cash categories, but passes are kept at the current levels. The 10-ride ticket is discounted by 20%. The STS fares are increased to twice the adult fares. Advertising Recommendations • Interior advertising would probably not generate much revenue, but since it cannot be seen outside the bus, it should be pursued. • Due to the small size of Beaumont Municipal Transit's bus fleet, standard bus exterior advertising would only generate about $18,000 per year while possibly generating negative feelings in the community. Wrapped bus advertising has the potential of producing significantly more revenue, and in light of impending funding shortfalls, should be investigated. • Also, due to diminishing available federal subsidies, it would be to the city's advantage to look into having an advertiser take over the bench and shelter programs. Expense Reductions As noted previously, revenue enhancements alone will not be sufficient to overcome McDonald Transit Associates, Inc. Page XII - 15 Beaumont Transit System Review Beaumont, Texas reductions in Federal funding. A number of areas with expense reduction potential have been identified above. Other elements that could be considered include: • Elimination of Saturday service(both fixed route and demand response) • Reduce to hourly headways on all fixed route runs. • Elimination of less productive fixed route runs. McDonald Transit Associates, Inc. Page XI - 16 Appendix A SAMPLE MANAGEMENT CONTRACT- TRANSPORTATION SYSTEM THIS CONTRACT AND AGREEMENT, made and entered into this the day of A.D., 19_, by and between the CITY OF BEAUMONT, a municipal corporation located in Jefferson County, Texas, hereinafter called "City", and a corporation, hereinafter called "Management Firm". WITNESSETH: WHEREAS,the City has acquired garage and office facilities, motor coach equipment and other assets sufficient for the operation of a bus transportation system in and around the City of Beaumont; and WHEREAS,the City has determined that it will require the services of a professional management company for the City-owned transit system which is being operated in its area of jurisdiction, and WHEREAS, the City is authorized to enter into a contract for the operation and management of said transportation system, and WHEREAS,Management Firm is engaged in the business of providing advisory and management services for the operation of transit systems and has trained, experienced personnel available for that purpose, and is desirous of providing such advisory and management services for the City, and WHEREAS, the City has made the determination that Management Firm is qualified to provide the services above set forth and the employment of Management Firm would serve the best interests and welfare of the public utilizing the transit system operated by the City, NOW, THEREFORE, in consideration of the foregoing recitals and covenants and agreements of each of the parties herein set forth, the parties hereto do agree as follows: I. The City does hereby engage Management Firm to manage and operate the motor bus transit system conducted in and about the City as an independent contractor, on the terms and conditions hereinafter set forth. II. The City agrees to furnish to Management Firm all necessary office, garage, and storage facilities, office furniture, equipment, materials, supplies, rolling stock, bus maintenance equipment, automobile transportation and other equipment necessary or appropriate for the operation of the bus transit system. III. The term of this contract and agreement shall be for a period of years beginning , 1, 19 . However, this contract and agreement may be extended for up to a total of five years, contingent upon satisfactory performance in meeting goals to be established by the City in consultation with the management firm. IV. Management Firm agrees to furnish a qualified, diligent, expert, and efficient executive who,will reside in the Beaumont area and who-will be assigned to, and perform the function of, the position of Resident General Manager who will serve as operating officer and be responsible for the day-to-day operation of all departments of the system in an efficient and effective manner. The selection and appointment of the Resident General Manager, and any such subsequent appointees, shall be the responsibility of Management Firm but shall not be made without first obtaining the advice and consent of the City. In the event of the disability of any person acting in this position of Resident General Manager for a period in excess of one(1) month, Management Firm covenants and agrees to secure a qualified individual to fill said position for as long as such disability may continue, or to replace such individual if necessary, all subject to the advice and consent of the City. Management Firm further covenants and agrees to furnish expert management services and/or consultation in all areas of the public bus transportation industry, including but not limited to the following: 1. Overall management and policy direction a. Operations; systems and procedures; and research b. Finance and accounting 1) annual budget 2) quarterly and annual reports c. Safety, accident prevention and insurance d. Schedules, transportation and routing e. Maintenance and purchasing of equipment f. Sales promotion and public relations g. Governmental grant application and administration h. Security 2. Management continuity 3. Management personnel development and training 4. Compliance with Federal, State, and local guidelines and requirements i.e., Section 504, Title VI, EEO, DBE, Section 15, etc. 5. Personnel and labor relations including bargaining unit contract negotiations. V. Management Firm covenants and agrees that it will maintain at its sole cost and expense the Corporation, Transit Management, Inc., hereinafter called "XTM", which corporation shall serve as employer of Beaumont-based transit employees, excluding the Resident General Manager. Any contractual obligations or liability entered into or assumed by XTM and approved by City, in connection with the operation of the transit system, shall be binding upon Management Firm only for the term of this Agreement, as same may be extended, and thereafter Management Firm shall have no further obligations. VI. As compensation for all services and obligations as set forth in IV, V, and VII, City shall pay Management Firm the sum of per month during the term of this agreement. City further agrees to provide such funds as may be necessary to meet payroll and all other expenses of the operation of the bus transportation system, excluding salaries and related payroll costs of the Resident General Manager, the cost of the fidelity bond on Management Firm officers as described in Section VII, and the cost of non-resident advisory services described in Section IV. VII. Management Firm at its sole cost and expense shall furnish to City all necessary fidelity and surety bonds to protect, save whole and harmless, and indemnify City from and against dishonesty, fraud or theft occasioned by any officer, or employee of Management Firm. Coverage of each such employee shall be in an amount of not less than One Million Dollars ($1,000,000). Beaumont-based transit employees, excluding the Resident General Manager, will be covered by a blanket fidelity bond, the premium for which shall be considered as an operating expense. VIII. Management Firm covenants and agrees that in connection with the performance of this contract and agreement, it will not discriminate against any individual with respect to compensation terms or privileges of employment by reason of such individual's race, color, religion, sex, national origin, age, or handicap(except as exempted by a bonafide occupational qualification). IX. Management Firm covenants and agrees that it presently has no interest, and will not acquire any interest, direct or indirect, which conflicts with its efficient, diligent and faithful performance of the terms of this contract and agreement. X. Management Firm, its officers, agents, employees and assignees, covenant and agree to maintain close contact and cooperate witfrthe staff of City through a City staff member specifically designated for such purpose, and to furnish to said City staff member regular reports on the operations of the bus transportation system. XI. Management Firm covenants and agrees to cooperate with the staff of City through the City staff' member specifically designated for such purpose, to formulate annual performance goals and objectives for the City bus transportation system. Reports on progress towards such goals and objectives shall be among those furnished to said City staff member on a regularly scheduled basis. Such annual goals and objectives shall be subject to an independent performance audit, to be scheduled by City as deemed appropriate by City, utilizing a professional firm qualified to perform such performance audits. The extension of this management contract beyond the initial contract period as detailed in Article III, shall be contingent, in part, upon satisfactory progress towards performance goals and objectives. XH. Management Firm acknowledges and agrees that it shall comply with all terms and conditions of Federal Transportation Administration grant contracts between the United States and the City, the City's applications, assurances, and all other applicable laws and regulations which may apply in carrying out the accomplishment of the programs, including but not limited to Equal Employment Opportunity and Disadvantaged Business Enterprise. XIII. Management Firm, its successors and assigns, covenant and agree to prepare, submit and recommend a proposed annual budget for the operation of the bus transportation system for the same fiscal year under which City operates, i.e., the period commencing October 1st and ending September 30th of each year. Such proposed budget shall be prepared and submitted in accordance with a schedule of presentation and submission approved by the City Manager or his duly authorized representatives. XIV. All services to be rendered by Management Firm shall be subject to the reasonable supervision and control of the City. Management Firm shall make recommendations, or the City may request information or recommendations, as to any areas of operation which are deemed appropriate and proper and the decision of the City shall be binding and final in regards thereto. XV. Management Firm shall obtain appropriate forms of insurance coverage, to be in effect during the term of this contract, customarily maintained by the transit industry with respect to similar transit operations, including but not limited to personal injury and property damage insurance, providing single limit coverage in amounts as may be designated by the City from time to time. All policies providing such coverage by their terms or by specific endorsement shall designate the City and Management Firm as co-insureds under the terms thereof. The cost of such insurance or self-insurance of any primary risk shall be an operating expense. Whatever liability, whether tort, contractual or otherwise, including, but not limited to, employment related matters, or bodily injury or property damage, which exceeds the insurance provided hereinabove, other than liability for intentional personal injury or punitive damages, which may be incurred to third parties in connection with or arising out of the management of the transportation system by Management Firm or XTM and the City, the costs and expenses thereof, including any and all liability of XTM and/or Management Firm, its agents, servants or employees, except that required in Section VII hereof, will be part of the costs and expenses incurred by the City in the operation of the transit system and will be reimbursed by the City to XTM or Management Firm as may be appropriate. Management Firm will, however, be liable for any dishonesty or fraudulent misconduct committed or directed by any officer of Management Firm or any subsidiary of Management Firm and for any breach of this Agreement on the part of Management Firm, XTM, or any such subsidiary. X V1. This contract and agreement shall not be assigned or transferred by Management Firm without the prior written consent of City. XVII. All notices hereunder and communications with respect to this contract shall be effective upon the mailing thereof by Registered or Certified Mail, return receipt requested, postage prepaid, and addressed as follows: A. If to Management Firm: B_ If to City: City Manager, or to such other address as either party shall designate by written notice. XVIII. Management Finn shall not be liable to the City for any failure, delay or interruption of service, nor for failure or delay in performance-of any obligations under this agreement due to strikes, lockouts, acts of God, governmental restrictions, availability of fuel and supplies, enemy action, civil commotion, unavoidable casualty or similar acts beyond the control of Management Firm and the Resident General Manager. IN WITNESS WHEREOF, the parties hereto have executed this contract and agreement in the_day of , A.D., 19 of the date and year aforesaid.