2 AWARD OF YORK REGION TRANSIT S SOUTHWEST DIVISION BUS OPERATIONS AND MAINTENANCE CONTRACT

Transcription

1 2 AWARD OF YORK REGION TRANSIT S SOUTHWEST DIVISION BUS OPERATIONS AND MAINTENANCE CONTRACT The Transportation Services Committee recommends: 1. Receipt of the presentation by Ann-Marie Carroll, Manager, Operations, Transit Branch, Transportation Services Department; 2. Receipt of the deputation by David Wood, Executive Vice President, Tokmakjian Inc.; and 3. Adoption of the recommendations contained in the following report dated February 22, 2010, from the Commissioner of Transportation Services. 1. RECOMMENDATIONS It is recommended that: 1. Regional Council authorize entering into a contract with Veolia Transportation for Start-up and Transit Operations and Maintenance Service for York Region Transit s Southwest Division in the amount of $139,681,187.00, excluding taxes, which is based on the proposed start-up activities and estimated billable hours. 2. The term of the contract shall commence on April 5, 2010, with the start-up activities for the Conventional service, and an operating term of five years starting August 1, 2010, with an option for the Region to renew the contract for a further five years. 3. Regional Council authorize leasing the operations and maintenance facility located at 8300 Keele Street, City of Vaughan to Veolia for the term of the contract at nominal rent, provided that Veolia assumes the maintenance obligations for the facility. 2. PURPOSE This report seeks authorization to award contract RFP P-09-28, for the bus operation of York Region Transit s (YRT) Conventional, Community Bus and Mobility Plus bus services and for the maintenance of Region-owned buses assigned to Transit s Southwest Division.

2 It also requests authorization to enter into a lease agreement between the Region and Veolia Transportation for the Region s Transit Operations and Maintenance Facility located at 8300 Keele Street, City of Vaughan, during the term of the operating contract. 3. BACKGROUND YRT contracts out the bus operations and maintenance for its YRT/Viva, Community Bus and Mobility Plus services to private contractors. As well, the Toronto Transit Commission (TTC) operates a number of core routes across the Region to and from destination points in the City of Toronto. One of the challenges with the Region s service delivery model has been to achieve a truly competitive marketplace at the contract procurement stage. The primary issue is that it is extremely difficult for prospective bidders to secure property and set up bus maintenance garages and storage facilities. Regional Council endorsed a strategy in January 2006 to develop the facilities to store and maintain the Region s combined conventional and para-transit fleets to the year 2031 To deal with this issue, the strategy identified a total of seven facilities to be built by 2031, including the Southwest Division facility currently under construction at 8300 Keele Street in the City of Vaughan. Four of the seven operations and maintenance facilities proposed are included in the Year Capital Budget as shown in Table 1 below. Table 1 Transit Operations and Maintenance Facilities Included in the Year Capital Budget Transit Vehicle Garage Budget Year Estimated Budget (in millions) Southwest Division 8300 Keele Street, Vaughan 2010 $45. North Division 2012 $45. Southeast Division 2015 $71.25 Garage 4 - land only (Division to be determined) 2019 $15.

3 In October 2008, Regional Council authorized the key business and contract elements to be included in the 2010 and 2012 Transit Operations and Maintenance Contracts Between 2010 and 2012, four of the five Region s operations and maintenance contracts will expire, while the Toronto Transit Commission (TTC) contract is open-ended with termination rights with six months notice. Table 2 below is a summary of the five operations and maintenance contracts administered by YRT. Table 2 Summary of Existing O & M Contract Service Area Contractor Expiration Date Value ( 09) Southwest Tokmakjian July 2010 $21,120,679 Southeast Miller April 2011 $24,213,397 North First Canada April 2012 $9,715,702 Viva BRT Veolia September 2010* $19,471,994 TTC Contract TTC N/A $17,195,384 Total Value of Contracts $91,717,147 Outlined in this strategy is YRT s go-forward approach for the five operations and maintenance contracts administered by the Region and the on-going use of private contractors to deliver YRT/Viva, Community Bus and Mobility Plus services. The Southwest division contract is the first to expire in July The Southwest Division contract procurement included key business and contract elements developed on the basis of staff experience with existing performance-based bus operations and maintenance contracts, as well as best practices from North American transit systems using the private sector in their delivery The RFP included the following Council-approved business and contract provisions: The current number of transit operations and maintenance contracts (four) will be retained to coincide with the number of operations and maintenance facilities being proposed until The Region will continue to use multiple contractors in order to promote competition. For that reason, any one contractor will not be permitted to have more than two contracts. The RFP weighting for evaluating proposals is to be 50% technical and 50% financial. This is a change from the previous contracts which were weighted 70% and 30%, respectively. Technical criteria include: value-added and innovation; quality

4 assurance program; pay scale for the bus operators and mechanics; driver recruitment and training; financial strength of operator; and management team. Contracts to be awarded for an initial five-year term and a five-year renewal term are to be negotiated at the Region's sole discretion. The Mobility Plus bus service will be eventually divided into three separate contracts. Note: For the purpose of this RFP, the Contractor will be required to operate Mobility Plus services in the City of Vaughan, the Township of King and the Towns of Markham, Richmond Hill and Whitchurch-Stouffville. The cost of diesel fuel for the Revenue Service fleets (Conventional and Mobility Plus) will be assumed by the Region where transit services are operated from a Region-owned transit operations and maintenance facility. Other improvements proposed in the contract strategy include the following proposed contractual terms: Increase in the maximum annual contractor incentives by approximately double. Update of the driver training requirements. Update of the bus maintenance requirements. Compulsory use of the Region s fleet management software included. More explicit audit rights included. A Request for Proposal (RFP) for YRT s Southwest Division was released in October The RFP reflects the elements provided for in the Contract Strategy The Region s Southwest Division (formerly Division 4) contract is operated by Tokmakjian Incorporated (Inc.) with the term of contract expiring July 31, Tokmakjian and the Region entered into an agreement effective May 4, 2003, expiring April 29, 2006, to provide transit service in the Region s Southwest Division that primarily services the City of Vaughan with some crossover into the areas of Township of King and the Towns of Markham and Richmond Hill (see Attachment 1). Regional Council, at its meeting on October 27, 2005, authorized an agreement between the Region and Tokmakjian Inc. to provide transit service for a further term expiring on May 1, The expiry date was extended to July 31, 2010, to accommodate the construction timetable for the new Southwest Operations and Maintenance Facility located at 8300 Keele Street, Vaughan, Ontario, and the start-up of the new contract.

5 4. ANALYSIS AND OPTIONS The Region invited qualified transportation providers to submit proposals for the operation of Conventional, Community and Mobility Plus transit services within YRT s Southwest Division The RFP was issued on October 8, 2009, by the Region s Supplies and Services Branch. The notice was advertised on Biddingo ( and on the Canadian Urban Transit Association s Internet site. The RFP closed December 10, The scope of the RFP included the operations and maintenance of the assigned Conventional, Community Bus and Mobility Plus Revenue Service Fleet, and occupancy and maintenance of the new Region-owned facility located at 8300 Keele Street, in the City of Vaughan. The RFP was comprised of two parts: Part A being the general RFP terms and Part B, the draft Operations and Maintenance contract, detailing the Region s minimum requirements for service delivery, fleet and facility maintenance. In keeping with YRT s contract strategy the strategic elements identified in the strategy and a number of new initiatives were included in Part B of the RFP Part B of the RFP included a number of business enhancements based on lessons learned by YRT staff over the term of the existing contract and on the business information review held in the preparation of the RFP. The enhancements include: New and enhanced performance measures Service reliability (on-time performance/missed trips) o Overall revenue service vehicle maintenance program o On-board checks (Operator/vehicle in-service checks) Overall incentive and disincentive payment that a Contractor may receive has increased o From $144,000 to $289,000 for Conventional and Community Bus o From $25,000 to $50,000 for Mobility Plus Services Security improvements Vulnerable sector screening Contractor employee identification Increased staffing levels o 1 Truck and Coach 310T Certified Diesel Technician for every 6 vehicles o 1 Transit Inspector for every 25 revenue service vehicles o 2 Training Instructors Annual operator and maintenance training Security awareness training

6 Technological systems o Computer-Aided Dispatch/Automatic Vehicle Locator (CAD/AVL) o Maintenance management o Fuel management The enhancements included in the RFP will result in real improvements in customer service and longer asset life while better managing the Region s risk The increase in the ratio of bus maintenance staff to buses from a ratio of 1:8 to 1:6 will allow for better preventative maintenance to the YRT fleet thereby saving long-term bus breakdown costs and improving safety. A more dependable fleet will improve reliability of service to customers on the street. The increase in field supervision from 1 inspector to 30 buses to 1 inspector to 25 buses will also ensure more timely arrival of buses and improve service reliability for customers. An increased emphasis on safety training and other training for the contractor s operators from once every 3 years to annually, will manage safety and operator risks for the Region and enhance customer service by having better supported and trained bus operators. Proponents were instructed to include in their submission a detailed description of how they would perform all requirements contained in Part B. They were to demonstrate full understanding of the contract and how services are to be provided. In addition, they were to identify their management team, provide details of their company s qualifications and experience, and to offer innovative solutions and value-added services, such as: Quality management planning. Employee retention, development and training. Safety and training programs. Greening initiatives. A competitive procurement process was used and KPMG was hired as a Fairness Monitor The role of the Fairness Monitor was to: Participate in the procurement process prior to the release of the RFP by testing the procurement process against its ability to meet the expected results. Confirm that the Region s procurement process has been followed by the internal team. Review the process to ensure it was conducted in a fair, open and transparent manner. A Proponents meeting was held on October 22, They were invited to attend an information session at YRT s office, 50 High Tech Road, Richmond Hill, and a site visit of the new Southwest Facility located at 8300 Keele Street, Vaughan.

7 During the bidding period, proponents were encouraged to questions to the Region s Supplies and Services Branch. Transit staff replied to approximately 145 questions in the form of Addenda. A total of 11 Addenda were issued over the nine-week period answering all of the proponents questions. There were 20 copies of the RFP document purchased and the Region received five proposals. The five proponents were: Coach Canada, First Canada, Miller Transit, Tokmakjian Incorporated and Veolia Transportation. The submission process included a two envelope system, Envelope A Technical Proposal and Envelope B - Financial Proposal The evaluation was based on a total score of 100 points: 50 points allocated to technical merit and 50 points allocated to the fee structure. To be considered for award, proponents had to achieve a minimum technical score of 60% (30 points) of the potential 50 points allocated to technical merit. Proposals which failed to score a minimum of 30 points for the technical component were disqualified from further consideration and the Financial Proposal was not evaluated and was returned to the proponent unopened. The 50 technical and 50 financial point allocation was endorsed by Council in October 2008 as part of the Contract Strategy. MANDATORY SUBMISSION REQUIREMENTS Prior to the proposals being forwarded to Transit s Evaluation Team, representatives of the Region s Finance Department, Supplies and Services Branch, reviewed the submissions to confirm that the mandatory documents were submitted by all proponents. The mandatory requirements were: Three years audited financial statements. Letter from the principal bank of the proponent. Credit report prepared by Dun and Bradstreet. Statement in writing agreeing to the Region performing any and all due diligence necessary in its sole discretion to determine the financial stability, capability and capacity of the proponent in relation to performing the services described under the RFP. These mandatory documents provided the Region the ability to assess the financial viability of each proponent. Each proponent s financial viability was evaluated on a pass/fail basis.

8 Meyers Norris Penny (MNP), Chartered Accountants, were engaged for financial consulting services to review, assess and report on the financial viability of each proponent The Region s Director of Audit Services hired, on Transit s behalf, Meyers Norris Penny to perform financial consulting services to evaluate the proponents mandatory financial documents. The financial services consultant was required to perform additional research to identify significant, recent developments for each proponent which have been disclosed to the public. For the purpose of the review, the Region and KPMG developed a Financial Viability Assessment tool that identified an industry-specific benchmark pertaining to operating, liquidity and coverage ratios and long-term debt levels. Based on the proponents submissions, either their parent or subsidiary company was measured against the benchmarks to produce a final score. The financial services consultant, using the assessment tool, prepared a final report detailing their findings and overall conclusions on each of the proponents financial viability. As part of each assessment, it was the responsibility of the financial services consultant to use their professional judgment to determine whether each proponent s financial viability should achieve a pass or fail. All five proponents received a pass and moved on to the technical review. Region staff provided oversight and due diligence on the work performed by the financial services consultant. TECHNICAL PROPOSAL Technical proposals were evaluated by an expert panel and were scored on the basis of all information provided by the proponents The panel consisted of staff from Transportation Services including: YRT s Operations, Capital Assets and Mobility Plus. In addition, expert opinions were provided by Safety and Training, Fleet, Enforcement and Transit Management Systems staff as well as the Region s Property Services Branch. Each proposal was reviewed and scored by the individual team members then consensus meetings were held to collectively determine the proponent s final technical score.

9 Selection of the best overall proposal was evaluated against predetermined criteria: Qualifications and experience - Mandatory five years related experience (20 points). Responsiveness to the RFP, completeness/comprehensiveness of submission and demonstrated willingness to comply with the terms and conditions of the RFP including a start-up plan (20 points). Innovative solutions and value-added services including a Quality Management Plan, incentive programs to promote employee retention, development and safety, innovated training programs and practices for the management, greening initiatives, fuel efficiencies, facility energy conservation (10 points). Total = 50 points Three of the five proposals evaluated met the required technical score of more than 30 points (60% of total 50 points assigned) in order for the Region to open their financial proposal. FINANCIAL PROPOSAL The proponents were required to provide pricing for start-up activities as well as estimated billable hourly rates for Conventional and Community Bus and Mobility Plus Services. The lowest financial proposal scored the full 50 points available. The other two proponents financial scores were pro-rated. The pro-rating is the percentage difference between each of their financial proposals and the lowest financial proposal. This difference is then subtracted from the full 50 to determine their financial proposal score. SUMMARY OF EVALUATION Table 3 below provides a brief summary of the results of the technical and financial evaluations. Proponent Technical Proposal Score (Out of 50) Table 3 Proposal Evaluation Results Financial Proposal Financial Proposal Score (Out of 50) Total Score (Out of 100) Relative Standing Veolia 38.4 $139,681, Transportation Tokmakjian Inc $142,006, Coach Canada 30.8 $157,852, Miller Transit and First Canada did not achieve the minimum required technical score of 30 points. Their financial proposals were not opened.

10 Veolia s proposal was comprehensive and overall the strongest demonstration of understanding the project Veolia Transportation received the highest technical score and provided the lowest financial proposal. Based on this result, Veolia Transportation is the recommended proponent. Veolia Transportation is the largest private-sector operator of multiple modes of transit in North America, including bus, rail, Para transit, shuttle, sedan and taxi services. Veolia is currently our operating contractor for Viva. A detailed start-up plan is included in Veolia s proposal The plan includes activities that need to be completed during the period between contract award and the first day of operation, August 1, In summary, the plan identifies 10 areas of activity, including: Management Team Placement. Employee recruitment and retention. Employee training and safety programs. Labour relations. Administration. Operations and safety. Fleet transfer. Maintenance. Facility and equipment commissioning. Organizational culture, transition and transformation (Respect for our customers and fellow employees). YRT staff will work with Tokmakjian, the current contractor, and Veolia to facilitate the transitioning of the services. Our objective will be to have a seamless transition of the services with the least possible disruption to our customers and the contractor s employees. LEASING OF THE FACILITY The Region will provide to Veolia Transportation its facility located at 8300 Keele Street in the City of Vaughan Veolia Transportation will enter into a lease agreement with the Region for the use of the facility for the term of the Contract. The terms and conditions of the Lease between the Region, as the landlord, and Veolia, as the tenant, will be finalized in advance of the execution of the contract.

11 The terms and conditions upon which Veolia shall occupy and maintain the facility will be in accordance with the requirements set out in Part B of the RFP, specifically Schedule H, "Southwest Operations and Maintenance Facility", and corresponding Annex documents. At its cost, Veolia will be responsible for the care and up-keep of the facility, including all utilities, and the repair and maintenance of the building components identified as the responsibility of the Tenant in the Service Responsibility Guide that was included in the RFP. An annual nominal rent will be paid to the Region by Veolia for the occupancy of the facility and use of equipment provided by the Region. Veolia shall not use the facility to perform work other than services specified under the contract unless prior approval by the Region is given. 5. FINANCIAL IMPLICATIONS Veolia s submitted price of $139,681,412.80, taxes excluded, is calculated based on proposed start-up activities and estimated billable hours for Year 1 through Year 5 for the Conventional, Community Bus and Mobility Plus Services As approved by Council on November 19, 2009, pricing was calculated assuming a Conventional Transit and Community Bus revenue service vehicle having a life-cycle of 12 years and the Mobility Plus revenue service vehicle fleet having a life-cycle of 10 years. The proponent s Year one hourly rate will be used as a base line for estimating Years two to five of the Contract. The hourly rate will be increased annually, on August 1 of each year of the contract by an amount equal to Statistics Canada August year-over-year cumulative Consumer Price Index rate or 2.5%, whichever is less. Table 4 below provides the pricing summary for the start-up activities for the Conventional, Community Bus and Mobility Plus Services and the estimated costs for Year 1 through Year 5. Table 4 Pricing Summary (Start-up + Year 1 through Year 5, inclusive) Activity Pricing Start-up Activity - Conventional Transit Services $772, Start-up Activity - Community Bus & Mobility Plus Services $38, Conventional Transit and Community Bus Service $128,838, Mobility Plus Service $10,032, Total (excludes taxes) $139,681,412.80

12 Sufficient operating funding is included in the 2010 Business Plan and Budget. Years 2 through 5 will be subject to the service design as outlined in the Region s Transit Five- Year Service Plan and annual operating budget approval. Tables 5 and 6 provide a summary of the operating budget based on estimated billable service hours over the five-year contract term for the Conventional and Community Bus and Mobility Plus services. Table 5 Estimated 5-Year Operating Budget Conventional & Community Bus Contract Year Hourly Rate Estimated Billable Hours Pricing Year 1 $ ,149 $22,330, Year 2 $ ,038 $24,315, Year 3 $ ,904 $25,795, Year 4 $ ,186 $27,365, Year 5 $ ,898 $29,031, Total (excludes taxes) $128,838, Table 6 Estimated 5-Year Operating Budget Mobility Plus Contract Year Hourly Rate Estimated Billable Hours Pricing Year 1 $ ,499 $825, Year 2 $ ,596 $2,101, Year 3 $ ,422 $2,229, Year 4 $ ,277 $2,365, Year 5 $ ,161 $2,509, Total (excludes taxes) $10,032, Table 7 compares the hourly operating rates of the current operating contracts and Veolia s proposed hourly rate for Year 1 of the Southwest division. The effective hourly rate is an apples-to-apples comparison where costs such as fuel, fuel escalation and facility lease costs have been adjusted to make the rates comparable.

13 Proponent Table 7 Hourly Operating Rate Comparison Actual Hourly Rate (Conventional Community Bus) **Effective Hourly Rate (Conventional Community Bus) Actual Hourly Rate (Mobility Plus) *the proposed rate for the new Southwest contract does not include fuel. Region is responsible for the purchase of fuel **is a cost comparison applying fuel cost/fuel escalation and facility lease cost as it relates to each contract **Effective Hourly Rate (Mobility Plus) Southwest (new)* $69.97 $95 $86.91 $89.61 Southwest (current) $64.37 $80 $68.57 $70.70 Southeast $70.17 $95 North $72.37 $80 Viva $79.47 $97 6. LOCAL MUNICIPAL IMPACT The local municipal residents who use public transit will benefit from the higher standards imposed upon the operating Contractor, particularly in the areas of service delivery and vehicle maintenance. New contract requirements and enhanced performance standards will bring to its users a quality public transit service that is safe and reliable. 7. CONCLUSION Based on the results of the RFP process, it is recommended that Regional Council authorize entering into a five-year contract with Veolia Transportation for the operations and maintenance of York Region Transit s Southwest Division. Further, it is recommended that the Region enter into a lease agreement with Veolia Transportation for the Region s Operations and Maintenance Facility located at 8300 Keele Street in the City of Vaughan. For more information on this report, please contact Ann-Marie Carroll, Manager, Operations, at Ext The Senior Management Group has reviewed this report. (The attachment referred to in this clause was included in the agenda for the March 3, 2010 Committee meeting).

14 P.M. Only P.M. 88 Gamble 19th Av Old Kennedy Ravineview Dr Devonsleigh 88E Steeles Av E Yonge St Vista Gt 107F Shaftsbury Av Subrisco Av Milliken A.M. Bernard P.M. Canyon Av Bayview Av 83 91A 88 Hill Av 86 91E Woodriver 88AE St Keele St Teston Teston Elgin Mills Bernard Terminal Yorkland St 91ABE Mosque Gt 107C Elgin Mills Hwy 27 KLEINBURG Ahmadiyya Av Brandon Lady Via Gate Dr Drummond Dr Fenyrose Romano Jacey Ann Dr America Av Newkirk N Canada Dr Av Regent St Av 91 Shirley Taylor Mills Nashville Dr 165F 87 Dimarino 83A Pugsley St Dr Cranston 20 Melville 23 John Deisman Pk Av 22 McNaughton Dr Crosby Av 13 Av 4 Mill St Hall St 83A Red Tierra Av McNaughton Queen Filomena Av Centre Farmstead Cityview Seasonal Bathurst St Trench St Wright St Dunlop St St 82 Maple York Central Richmond Hill 4A Islington Av 165D Maria Antonia 4A 4A Valley Vista Dr Harding Essex Av Canada s MAPLE Wonderland 105B Dufferin St 83A RICHMOND 165F Ilan Lebovic Ramon Weldrick Kersey 86 Bayview Av 85A 85B Melville Av Peter Campus Dr Jane St Cr Rupert Av HILL 86 Spadin Ashberry PEAK Weldrick Napa Valley Fossil Hill Dr Vellore Baif 91 Av Woods Springside Springhead OFF- 34 pt OFF- Gdns Rutherford Rutherford Thomas 91ABE P PEAK PEAK Comdel Cook Av 85A 85A Carrville Hillcrest 85 85B 85AB 86 85AB 85B Rutherford Rutherford Vaughan OFF- 165 Westbourne Autumn Hill PEAK Avenue Yonge St Silver Linden Valleymede Mills DF Dr Dr Dr Granton Edgeley Locke St Edgar Av Bantry Weston CF 88AE Av 83A 82 85B Martin Grove Creditstone Ten Oaks VAUGHAN Thornhill Pearson Av E W Four Red Maple Basaltic Woods Dr West Beaver E P Hwy 27 Valley 12 Confederation Summeridge Dr Garden Av High Tech Keele St 87 Hunters Richmond Creek Islington Av Dr Edilcan Dr Langstaff Pkwy Pleasant Point Dr Hill Centre 7 WOODBRIDGE Langstaff Courtland Ridge Av 25D Av Langstaff Planchet 107B B 1 Kipling Av Maple 10 Creditstone Langstaff 12 Sugar La Hwy 7 North Langstaff Medallion Forest Dr Aberdeen Millway Av 105B Rivermede 23 Av Pippin Times Av South 11 35D Bathurst St Morning Ansley Q Vaughan Pk CONCORD 82 Valley Star Dr Woodbridge Av Chancellor Grove Dr Dufferin St 10 Edgeley Portage Pkwy Rivermede Willowbrook Martin Rainbow Zenway Grove 3B 3B Centre St Atkinson Av Creek Dr Hwy 7 Hwy 7 99 Royal Orchard 3 3B To Bramalea City Centre A 77 Strada Dr Whitmore Hwy 7 Promenade Henderson Winges Interchange After Av 11 Way Keele 9:30am Clark Av 7 THORNHILL D St Royal Regal Rowntree Jane St Before :30am Bayview Group Cr Crest Ct Hwy 407 Dairy Don Mills BCF Hilda Av New Av Hwy 427 Pine Valley Dr DF 5 Westminster A Islington Av 2 91A Weston 77A Glen Shields Dr Doncaster Av Simonston Hwy 27 Steeles Av W Av B 60 88AE 53 R Steeles Av W Steeles Av W Petrolia Steeles Av W Steeles Av E 160 3B York U. 105 Shoreham York Canarctic Dr University Dr 105B Keele St Old Cummer Islington Av Bathurst St Martin Grove Finch Av W Dufferin St Finch GO Bus F Finch Av W Terminal Lepage 107 Ct Finch Av E 7 Weston Jane St B Yonge St Ceramic Chesswood Dr Don Mills Steeprock Dr Humber College Humber N thc S Only MARTIN GROVE KIPLING ISLINGTON 37D To Islington Subway Elson St PINE VALLEY 165 DF A.M. Eastvale Dr Major Mackenzie Dr Major Mackenzie Dr ANSLEY GROVE To Wilson Subway WESTON To Jane 35D Subway VAUGHAN CORPORATE CtrCTR CTR INTERCHANGE WAY MURRAY ROSS (future) KEELE-FINCH St Regis Cr T Gt KEELE 107 CF future routing effective 2010 DUFFERIN -FINCH (future) Whitehorse DUFFERIN ATKINSON NORTH YORK CENTRE ROYAL ORCHARD Arnold Cr CLARK STEELES WELDRICK 16TH CARRVILLE BANTRY CENTRE ATTACHMENT 1 ELGIN MILLS CROSBY MAJOR MAC Marshall St TORONTO 16th Av BAYVIEW VALLEYMEDE John St Green La Major Ma L W BEAVER

15 PRESENTATION Award of YRT s Southwest Division Bus Operations & Maintenance Contract Presentation to Transportation Services Committee Ann-Marie Carroll March 3, 2010 Existing Contract Tokmakjian Inc. since May 2003 as performance based contract (previous Vaughan Transit operator) 30 Routes, 125 Buses Costs (September 2009 to August 2010) $20,925,150 Current Contract Term April 30, 2006 to May 1, 2010 Extension to July 31, 2010 to co-ordinate with 8300 Keele Street Slide 2 1

16 Facility Strategy Regional Council endorsed a strategy which identified seven facilities to be built by 2031 in order to assist with providing a more competitive marketplace The facility for the Southwest Division, located at 8300 Keele Street in the City of Vaughan, is currently under construction Slide 3 Contract Strategy Key Business & Contract Elements Regional Council endorsed a strategy which identified business and contract elements to be included in the Region s operations and maintenance contracts, including; Council Approved Business & Contract Provisions Four transit operations and maintenance contracts be retained Continue to use multiple contractors in order to promote competition. (No more than two contracts for any one contractor) Contracts to be awarded for an initial five-year term and a five-year renewal term to be negotiated at the Region's sole discretion Region assume the cost of diesel fuel for the Revenue Service fleets (Conventional and Mobility Plus) Rationale Business Reason Business Reason Business Reason Business Reason Slide 4 2

17 Contract Strategy Council Approved Business & Contract Provisions The RFP weighting for evaluating proposals is to be 50% technical and 50% financial The Mobility Plus bus service to be eventually divided into three separate contracts under combined contracts with Conventional Increase the maximum annual contractor incentives by approximately double Update the driver training requirements Update the bus maintenance requirements Include compulsory use of the Region s fleet management software Include more explicit audit rights Rationale Service Improvement Service Improvement Service Improvement Service Improvement Service Improvement Service Improvement Service Improvement Slide 5 Current Contract Process Standard competitive purchasing processes monitored by a Fairness Commissioner Request for Information Issued: April 2009 Feedback on business practice Request for Proposal Issued: October 2009 Proponents Meeting: October 2009 Closed: December 2009 Evaluation: January 2010 Anticipated Award: March 2010 Independent financial review to assess and report on the financial viability of each Proponent Slide 6 3

18 Outcome Proponent Technical and Management Proposal Score (Out of 50) Financial Proposal Estimated Cost Financial Proposal Score (Out of 50) Total Score (Out of 100) Relative Standing Veolia Transportation 38.4 $139,681, Tokmakjian Inc $142,006, Coach Canada 30.8 $157,852, Slide 7 Outcome Contractor Effective Hourly Rates as of September 2010 North $80 Southwest $95 Southeast $95 Viva $97 Note: Effective hourly rate is a cost comparison applying fuel cost/fuel escalation and facility lease costs as it relates to each contract Year 1 - Costs (September 2010 to August 2011) $26,831,851 Slide 8 4

19 Contract Benefits Enhancements New and enhanced performance measures Service reliability (on-time performance/missed trips) Overall Revenue Service Vehicle Fleet Maintenance program On-board checks (Operator/vehicle in-service check) Overall incentive and disincentive payment that a Contractor may receive has increased From $144,000 to $289,000 for Conventional & Community Bus Services From $25,000 to $50,000 for Mobility Services Security Vulnerable sector screening Contractor employee identification Slide 9 Enhancements Contract Benefits Increased staffing levels 1 Truck and Coach 310T Certified Diesel Technician for every 6 vehicles 1 Transit Inspector for every 25 revenue service vehicles 2 Training Instructors Safety & Training Annual operator and maintenance training Security Awareness training Technological Systems CAD/AVL Maintenance Management Fuel Management Southwest Division Preventable and Non-Preventable Accidents Preventable Slide 10 Non-Preventable Total 5

20 Contract Benefits Conventional, Community and Mobility Plus bus services will operate as a family of services under one contract which will improve contract oversight and vehicle maintenance Sedan and minivan services remain under a separate contract Annual increase based on a CPI increase up to a maximum of 2.5%. Previous contract pricing included a minimum annual increase of 2.5% or CPI, whichever was greater. CPI never exceeded 2.5%. Cost Drivers All interested vendors are now unionized Unknown cost of operating and maintaining 8300 Keele Street (i.e. indoor bus storage) Increased insurance deductible (from $10K to $25K) Additional staff requirements and training Slide 11 Transition YRT staff will work with Tokmakjian, the current contractor, and Veolia to facilitate the transitioning of our services Objective is a seamless transition of the service The detailed start-up plan includes the following activities; Management Team Placement Employee recruitment and retention Employee training and safety programs Labour relations and administration Operations and safety Fleet transfer & maintenance Facility and equipment commissioning Organizational culture, transition and transformation Slide 12 6

21 Recommendations It is recommended that: 1. Regional Council authorize entering into a contract with Veolia Transportation for Start-up and Transit Operations and Maintenance Service for York Region Transit's Southwest Division in the amount of $139,681,187.00, excluding taxes, which is based on the proposed start-up activities and estimated billable hours. 2. The term of the contract shall commence on April 5, 2010, with the start-up activities for the Conventional service, and an operating term of five years starting August 1, 2010, with an option for the Region to renew the contract for a further five years. 3. Regional Council authorize leasing the operations and maintenance facility located at 8300 Keele Street, City of Vaughan to Veolia for the term of the contract at nominal rent, provided that Veolia assumes the maintenance obligations for the facility. Slide 13 7