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SR 11-27-2018 7A City Council Report City Council Meeting: November 27, 2018 Agenda Item: 7.A 1 of 1 To: Mayor and City Council From: Lane Dilg, City Attorney, City Attorney’s Office Subject: Second Reading and Adoption of Ordinance Amending and Extending a Taxicab Franchise Granted to TMAT Corporation Doing Business Taxi! Taxi! Recommended Action Staff recommends that City Council adopt the attached Ordinance. Executive Summary At its meeting on November 13, 2018, the City Council introduced for first reading an ordinance amending and extending a taxicab franchise granted to TMAT Corporation doing business as TAXI! TAXI!. The ordinance is now presented to City Council for adoption. Prepared By: Elsa Kapsinow, Executive Assistant to the City Attorney Approved Forwarded to Council Attachments: A. Ordinance - Taxicab taxi taxi franchise - 11272018 1 City Council Meeting: November 27, 2018 Santa Monica, California ORDINANCE NUMBER _________ (CCS) (City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AMENDING AND EXTENDING A TAXICAB FRANCHISE GRANTED TO TMAT CORPORATION DOING BUSINESS AS TAXI! TAXI! WHEREAS, on November 23, 2010, in accordance with City Charter Article XVI and Santa Monica Municipal Code Chapter 6.49, the City Council adopted Ordinance No. 2332 (CCS) granting a taxicab franchise to TMAT, Inc. (dba TAXI! TAXI!), which was subsequently amended by Ordinance Nos. 2342 (CCS), 2375 (CCS), 2506 (CCS), 2532 (CCS), and 2561 (CCS); and WHEREAS, the term of the taxicab franchise is currently set to expire on December 31, 2018; and WHEREAS, Assembly Bills 1069 and 939 were enacted to modernize and streamline the regulation of taxicab transportation services to better compete with other modes of transportation and to move taxicab permitting from the patchwork of various local requirements to limit permitting to the city or county in which the taxicab company is substantially located; and 2 WHEREAS, on November 13, 2018, the City Council adopted an ordinance to amend Santa Monica Municipal Code Chapter 6.49 relating to taxicab franchises in response to the changes in State law; and WHEREAS, for over 30 years, Taxi! Taxi! has been and is currently substantially located in the City and desires to continue providing taxicab transportation services within the City; and WHEREAS, considering that Taxi! Taxi! is in compliance with all provisions of Government Code sections 53075.5 and 53075.52, Santa Monica Municipal Code Chapter 6.49, and the terms and conditions of its current franchise, the City Council desires to extend the term of the franchise granted to Taxi! Taxi! for an additional five years; and WHEREAS, certain terms and conditions of the taxicab franchise must be adjusted to conform to legislative changes in State law and improve taxicab operations and efficiency within the City. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. DEFINITIONS. Unless it is apparent from the context that it has a different meaning, each of the following words and phrases has the meaning stated in this Section wherever it is used in this Franchise: (a) CITY means the City of Santa Monica, a municipal corporation duly organized and validly existing under the laws of the State of California with the power to 3 carry on its business as it is now being conducted under the statutes of the State of California and the Charter of the City; (b) CO-OPERATIVE, ASSOCIATION or MEMBERSHIP means an independent taxicab enterprise or organization owned and operated by its Members for the financial benefit of its Members. Each authorized taxicab fleet slot correlates to a share or ownership in the Co-operative, Association or Membership; (c) COUNCIL means the City Council of the City of Santa Monica; (d) DRIVER/MANAGER means any Member of a co-operative, association or membership Grantee, who drives, controls, and manages taxicabs for Grantee; (e) FRANCHISE YEAR means the calendar year from January to December to which the annual franchise fee is applied. (f) GRANTEE means TMAT Corporation (dba Taxi! Taxi!), a California corporation qualified to do business in the State of California and to which this Franchise has been granted; (g) INVESTOR/SHAREHOLDER means any Member of a co-operative, association or membership Grantee, who does not drive, control or manage taxicabs for Grantee; (h) LEASE DRIVER means a person who is an independent contractor possessing a valid Taxicab Driver’s Permit and who drives a taxicab for Grantee; (i) MEMBER means any individual person or Subchapter S corporation, as defined in the United States Internal Revenue Code Section 1361, who owns one or more taxicabs or shares, but not more than the maximum number authorized by this Ordinance, 4 in Grantee. Only those individuals applying for Investor/Shareholder membership status may apply as a Subchapter S corporation; (j) STREETS means the public streets, roads, highways, freeways, lanes, alleys, sidewalks or parkways which now exist or which may hereafter exist within the City; (k) TAXICAB DRIVER means any person possessing a valid Taxicab Driver’s Permit driving and in possession of a taxicab for the purpose of providing taxicab transportation services in the City. A taxicab driver may be an employee of, a lease driver of, or a Member of Grantee; (l) TAXICAB DRIVER’S PERMIT means a non-transferable authorization for a taxicab driver to provide taxicab transportation services in the City; (m) TAXICAB FLEET means the total number of authorized taxicabs that is managed and controlled completely by Grantee, and not by a Member of Grantee; (n) TAXICAB RULES means the administrative rules and regulations established for taxicab operations in the City; (o) TAXICAB VEHICLE PERMIT means a non-transferable authorization for a specific taxicab to be driven or operated within the City for the purpose of providing taxicab transportation services, whether as owner, lessor, lessee, or otherwise. SECTION 2. GRANT OF FRANCHISE. (a) Nature of Grant. The franchise hereby granted by City authorizes Grantee, subject to all the terms and conditions contained in this Ordinance, the Santa Monica Municipal Code, the Taxicab Rules, and all other applicable local, state, and federal law, rules and regulations pertaining to taxicab operations, to provide taxicab transportation 5 services within the City, including picking up persons and property by taxicab within City boundaries, transporting such persons and property for hire over any streets from within or to the City, and standing taxicabs at designated taxicab stands within the City. (b) Term of Franchise. This Franchise became effective as of January 1, 2011, and Grantee filed with the City Clerk, within 10 days after the adoption of Ordinance No. 2332 (CCS) granting this Franchise, a written instrument, addressed to Council, accepting and agreeing to comply with all the terms and conditions of this Franchise. This Franchise shall expire at 11:59 P.M., PST, on December 31, 2023, unless revoked or terminated earlier by City, or unless extended by City in its sole and absolute discretion. (c) Suspension of Franchise. City may, after due notice and an opportunity to be heard, suspend Grantee’s operations under this Franchise for one or more days pursuant to Santa Monica Municipal Code Section 6.49.040, under any of the following grounds: (1) Material noncompliance with any term or condition of this Franchise, the Santa Monica Municipal Code, Taxicab Rules, or other City orders or directives, when such noncompliance has not been cured after reasonable written notice thereof and opportunity to cure; (2) Grantee accumulates penalty points in a specified period of time in an amount greater than the allowed threshold level as provided by resolution of Council pursuant to Santa Monica Municipal Code Section 6.49.170; (3) Grantee fails to pay any monetary penalties in accordance with the procedures set forth in Santa Monica Municipal Code Section 6.49.170 and any resolutions or schedules adopted thereto; or 6 (4) Any of the grounds set forth in Santa Monica Municipal Code Section 6.49.040. Any suspension of Grantee’s taxicab operations may affect any extension of the term of this Franchise and may lead to assessment of monetary penalties in addition to or as an alternative to suspension, or recommendation for revocation of this Franchise. (d) Revocation of Franchise. City may, after due notice and an opportunity to be heard, revoke Grantee’s Franchise pursuant to Santa Monica Municipal Code Section 6.49.040, under any of the following grounds: (1) Grantee has illegally conducted any type of public transportation operation within the City; (2) Any term or condition of this Franchise becomes invalid or unenforceable and Council expressly finds that such term or condition was a consideration material to the grant of this Franchise; (3) The public interest would be served by revocation and termination of this Franchise; or (4) Any of the grounds set forth in Santa Monica Municipal Code Chapter 6.49. (e) Cumulative Remedies. City’s right to suspend, revoke or terminate this Franchise pursuant to this Section are in addition to all other rights and remedies which may otherwise accrue to City by reason of any failure or refusal of Grantee to perform any obligation imposed by the terms and conditions of this Franchise. SECTION 3. CONSTRUCTION OF FRANCHISE. (a) Interpretation. Unless otherwise specified, the following terms govern the 7 interpretation and construction of this Franchise: (1) The singular number includes the plural, and the plural number includes the singular; (2) Time is of the essence of this Franchise. Grantee will not be relieved of its obligation to promptly comply with any provision of this Franchise by any failure of City to enforce prompt compliance with the same or any other provisions; (3) Any right or power conferred, or duly imposed upon, any officer, employee, or department of City is subject to transfer by operation of law to any other officer, employee, or department of City; (4) Grantee will have no recourse whatsoever against City for any loss, cost, expense, or damage arising out of any provision or requirement of this Franchise or the enforcement thereof; (5) This Franchise does not relieve Grantee of any requirement of the City Charter, the Santa Monica Municipal Code, or any local ordinance, rule, or regulation, other than exceptions expressly set forth in this Franchise; and (6) This Franchise does not constitute an exclusive grant of any right to carry persons or property for hire within the City. (b) Limitations upon Grantee. (1) This Franchise does not grant or confer any privilege or exemption upon Grantee except as otherwise specifically provided herein. (2) This Franchise is a privilege to be held in personal trust by Grantee. Grantee shall not sell, lease, assign, hypothecate, or otherwise transfer or dispose of this Franchise or any interest herein directly or indirectly, by operation of law or otherwise, 8 without the prior written consent of City, expressed by ordinance, and then only under such terms and conditions as may be prescribed therein. Any debt secured with more than 50% of the Grantee’s assets constitutes an hypothecation for the purpose of this Franchise. Any attempt to do so without City’s consent shall be null and void, and any purchaser, lessee, assignee, hypothecatee or transferee shall acquire no right or interest by reason of such attempted sale, lease, assignment, hypothecation or transfer. Any such sale, lease, assignment, or other disposition of this Franchise shall be evidenced by a duly and jointly executed instrument in writing addressed to Council and filed with the City Clerk. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Grantee or of any general partner or joint venturer or Member of Grantee, if a partnership or joint venture or membership exists, which shall result in changing the control of Grantee, shall be construed as an assignment of this Franchise. Control means (50%) or more of the voting power of the organization. (c) Rights Reserved to City. (1) There is reserved to City every right and power that is allowed or provided by any provision of the City Charter and the Santa Monica Municipal Code, as may be amended from time to time. Grantee, by its acceptance of this Franchise, agrees to be bound by and to comply with any action or requirement of City in its exercise of any such right or power. (2) Neither the granting of this Franchise nor any of its provisions shall constitute a waiver or bar to the exercise of any governmental right or power of City. SECTION 4. COMPENSATION. (a) By its acceptance of this Franchise, Grantee agrees to pay to City all 9 applicable fees, including the annual franchise fee, Taxicab Vehicle Permit fee, and Taxicab Driver’s Permit fee for each authorized taxicab in Grantee’s taxicab fleet. (b) Grantee, at its sole expense, shall obtain and maintain during the term of this Franchise all required business and professional permits, licenses and certificates. SECTION 5. TAXICAB FLEET. (a) Fleet Size. Grantee is authorized by this Franchise to provide taxicab services in the City through a taxicab fleet as determined by Grantee, subject to the requirements set forth in this Section. (b) Fleet Makeup – Wheelchair Accessible Vehicles. At least 10% of Grantee’s taxicab fleet vehicles, proportional to its full time and part time vehicles, must be side- loading wheelchair accessible vehicles in compliance with the Americans with Disabilities Act (“ADA”), in accordance with 49 Code of Federal Regulations (CFR) Part 38, Society of Automobile Engineers (SAE) J2249 standard, applicable Federal Motor Vehicle Safety Standards (FMVSS), and Taxicab Rules. The City Manager or his or her designee may require that Grantee increase the minimum number of wheelchair accessible vehicles within its taxicab fleet and may specify vehicle service availability for general wheelchair accessible trips notwithstanding any existing contractual arrangements. (c) Fleet Makeup – Emissions. Grantee shall provide vehicles that are at the top of their class in terms of green house gas and smog ratings as demonstrated by a SmartWay or SmartWay Elite designation by the EPA. Vehicles approved by the City prior to January 1, 2016, are subject to the rules in effect at the time of the approval. (d) Grantee’s taxicab fleet must be fully operational in accordance with this Ordinance as of the effective date of this Franchise, unless otherwise authorized in writing 10 by the City Manager or his or her designee, in his or her sole and absolute discretion. (e) Continuous Operation. After Grantee shall have established taxicab services pursuant to this Franchise, Grantee must ensure that, except for necessary repairs, all its taxicabs are available for service at all times. Grantee may suspend the services of a taxicab, including the removal of that vehicle from its insurance policy, only during the period of time that the vehicle will be suspended from service. An updated copy of the proof of insurance must be submitted to the City within 5 business days following the suspension of a vehicle, and within 2 business days following the reinstatement of any vehicle under this provision. Grantee’s failure to comply with these provisions shall constitute a material breach of contract under which the City may immediately suspend or revoke and terminate this Franchise. Monetary penalties may also be assessed. SECTION 6. OPERATIONS AND SERVICE – GENERAL (a) Compliance with Laws. All vehicles, equipment and appurtenances used under this Franchise shall be operated and maintained in accordance with applicable local, state and federal laws, rules and regulations. Grantee is responsible for the compliance of its Members and drivers, whether employees, lease drivers, or otherwise, with all such laws, ordinances, rules and regulations. (b) Supervision. Grantee shall provide 24-hour road and office supervision. (c) Discounted Fare Reimbursement. Grantee shall reimburse its drivers the amount of any reduced taxicab fares that may be required to be provided to seniors and passengers with disabilities, as set by resolution of Council. 11 (d) Complaint Resolution Procedure. Grantee shall establish a procedure, subject to City approval, for the review and resolution of complaints from the public and violations of company rules and Taxicab Rules by Grantee’s officers, Members, employees, and drivers. Grantee shall maintain a monthly summary of the number of public complaints received. (e) Management Personnel Information. Grantee shall provide to City, and keep current, a list of the following: (1) The Board of Directors and officers; (2) All Members, by class of membership and the number of shares held by each Member; (3) All management and administrative personnel and their job titles; and (4) All lease and employee drivers. (f) Management Personnel. Grantee shall have full-time management, subject to City approval, which approval shall not be unreasonably withheld, to direct activities of the organization. City may review management credentials and background experience of management personnel, including a criminal history and fingerprint check. Responsibilities include, but are not limited to, establishing, maintaining and reporting the taxicab operations and records; collecting and paying applicable fees; conducting day to day activities, including but not limited to managing and operating the taxicab fleet; representing Grantee in disputes and discussions between regulatory agencies and Grantee, its drivers and Members; and adhering to Grantee’s Management/Business Plan. Management is not precluded from membership or ownership in Grantee. 12 (g) Grantee shall conduct itself in a professional manner at all times and resolve all disputes with other taxicab companies, the business community, and the general public, with a goal of maintaining a favorable public image for the taxicab industry and the City. (h) Management/Business Plan (“Plan”). Grantee shall provide to the City an updated management plan annually on April 20th of each year, with a summary of all changes. The Plan shall establish Grantee’s approach and methods to be used in meeting the requirements of this Franchise, the Santa Monica Municipal Code, the Taxicab Rules, and City, state and federal law, rules and regulations. The Plan will be used as the basis for evaluating Grantee’s capability to provide taxicab services in accordance with the service demands of the public and City standards, and in compliance with applicable laws and regulations. Any specific sub-items and components under each Plan category will be supplied by City, as may be amended from time to time. Minimum categories to be addressed in the Plan include: (1) Grantee Organizational Structure and Procedures; (2) Management/Administrative Structure and Procedures; (3) Financial Status and Related Information; (4) Dispatch, Hailing, and Communications - Description of Facilities, Personnel and Technology; (5) Taxicab rate programs, including flat, promotional or seasonal programs, and event and corporate programs. Grantee must provide the City with advance notice of any changes to taxicab rate programs; (6) Operating Location(s), Storage/Parking of Vehicles, Maintenance 13 and Inspection - Description of Facilities and Personnel; (7) Programs and Activities for Driver Training, Testing, Supervision and Social Benefits; (8) Vehicle Maintenance and Inspection; (9) Procedures for Maintaining Service Levels, Programs for Addressing Service Deficiencies; (10) Service/Operation Procedures for Discipline, Driver Evaluation, Complaint Processing and Accident/Safety Control; (11) Special Programs, Agreements and Services; (12) Record Keeping; and (13) Grantee’s Plan Evaluation & Response to Changes or Additions. (i) Grantee shall comply with its Plan at all times. City may review Grantee’s adherence to the Plan at any time as deemed necessary by City. Grantee shall reimburse overcharges to its customers. (j) Passenger Property. Grantee, and its officers, Members, employees, and drivers, may not charge a customer to return his or her property and must at a minimum make the property available for the customer to retrieve his or her property from the Grantee’s main office location. (k) Trip Data. Grantee shall collect and submit trip data in accordance with the Taxicab Rules, this Franchise, and Government Code section 53075.52. SECTION 7. OPERATIONS AND SERVICE – TAXICABS (a) Taxicab Vehicle Permits. Grantee is responsible for paying the annual taxicab vehicle permit fee for all taxicabs in its fleet, in accordance with the fee specified 14 by resolution of Council, as may be amended from time to time. Taxicab vehicle permits expire each December 31st thereafter, and Grantee is responsible for paying the annual taxicab vehicle permit fees and obtaining annual taxicab vehicle permits for all taxicabs in its fleet in accordance with Santa Monica Municipal Code Section 6.49.060. (b) Taxicab Operations. All taxicabs used by Grantee within the City must be operated in accordance with, and Grantee shall not permit any taxicab to be driven which is in violation of, this Franchise, the Santa Monica Municipal Code, the California Vehicle Code, Taxicab Rules, and any other applicable law or regulation. (c) Registration and Acquisition of Vehicles. All taxicabs operated under this Franchise must be registered to either Grantee or a Member of Grantee. Taxicabs must either be owned by Grantee, a Member, a commercial lending agency, or leased from a licensed leasing agency whose primary business is the sale or leasing of vehicles. Any taxicab utilized by Grantee which is owned by it or one of its Members shall have been acquired by way of bona fide purchase, lease, or other transaction approved by the City. Grantee or Member shall submit to City, upon request, the method utilized for vehicle acquisition. Members may sell or transfer a share or taxicab under these same provisions. (d) General Vehicle Maintenance and Repairs. Grantee shall maintain its taxicabs in a safe operating condition, in compliance with the Vehicle Code, subject to annual inspection by the City, at a facility that is certified by the National Institute for Automotive Service Excellence or a facility registered with the California Bureau of Automotive Repair. Grantee shall, at its sole expense, monitor and be responsible for all maintenance, repair, and replacement of Grantee’s and any driver/manager Member’s managed taxicabs. Preventative maintenance must be performed at least in accordance 15 with manufacture recommendations for each taxicab or by an Automotive Repair Dealer (ARD) licensed by the California Bureau of Automotive Repair. Grantee shall have in place and continuously keep up to date all inspection, preventative maintenance, maintenance repair, and any other vehicle service records for each taxicab, filed by taxicab. A copy of maintenance inspection reports, including any repair documentation, shall be maintained by Grantee. Vehicles must be kept clean and in good repair as defined in the Taxicab Rules. (e) Age of Vehicles. No taxicab fleet vehicle operating pursuant to this Franchise shall be in excess of the years of age set forth in the Taxicab Rules unless otherwise authorized in writing by City in its sole and absolute discretion. (f) Advertising. Grantee may display commercial advertising in or on its taxicabs, provided that any such advertisement is in compliance with all applicable local, state, and federal law related to advertising. (g) Off-Street Parking Facilities. Grantee shall provide garaging or other off- street parking facilities within one-half mile of its main operating location(s), or as specified by the City, where Grantee’s taxicabs are to be parked when not in service or when not being repaired or when not in the possession of a taxicab driver. Grantee shall have sufficient vehicle parking capacity within the main operating location(s) or the garaging or off-street parking facilities to meet the requirements for Grantee’s operations, including but not limited to vehicle inspection and maintenance, administrative functions, and training. SECTION 8. OPERATIONS AND SERVICE – DRIVERS (a) Authorized Drivers. Grantee shall not issue or dispatch any taxicab 16 operated on behalf of this Franchise to any driver who is in violation of any terms of this Franchise, the Santa Monica Municipal Code, Taxicab Rules, or any other applicable law, rule or regulation. Grantee shall not allow any person to operate a taxicab without a valid and current Taxicab Driver’s Permit. (b) Taxicab Driver’s Permits. Grantee is responsible for paying the taxicab driver’s permit fee for all its taxicab drivers, in accordance with the fee specified by resolution of Council, as may be amended from time to time. Grantee is responsible for paying the taxicab driver’s permit fees and obtaining taxicab driver’s permits for all its taxicab drivers in accordance with Santa Monica Municipal Code Sections 6.49.050 and 6.49.060. (c) Work Shifts. Drivers must check in with Grantee at the beginning and end of each shift, and such activity shall be recorded by Grantee. Grantee must maintain daily logs to indicate the vehicle and driver assignments for each shift at all times. Grantee or a driver/manager Member shall make all such assignments. Grantee shall issue and collect waybills in the manner and within the time limits established by the Taxicab Rules. Independent Contractor Drivers. Grantee and its driver/manager Members are authorized to provide taxicab services through a contracting or leasing type of operation with an independent contractor driver. No independent contractor driver may subcontract or sublease the vehicle, or the right to operate the vehicle, to another person. All contracting or leasing arrangements shall be evidenced in writing and subject to City approval. Such lease contract shall provide for the collection and documentation of lease fees by Grantee and driver/manager Members. The lease contract shall not be instituted or changed without City approval. The independent contractor driver shall not use a 17 taxicab as the driver’s personal vehicle within the City except when driving to or from the beginning or ending of a work shift. Grantee shall maintain current files of all lease contracts in a central location, filed by driver, to verify compliance with these requirements. (d) Training Program. Grantee shall provide a comprehensive screening, testing and training program for all its drivers, including independent contractor drivers. The training program, including curriculum and delivery, must be approved by City and must include City and state rules and regulations; geography, including map reading and/or GPS navigation, major points of interest in the City, and familiarity with the City and surrounding areas; driver safety and defensive driving; vehicle safety and maintenance/inspection checks; customer service and relations; sensitivity guidelines for disabled, frail and elderly passengers; behind the wheel driver training; disabled access education on compliance with the federal Americans with Disabilities Act (42 U.S.C. Sec. 12010 et seq.) and State disability rights laws; and accessible vehicle operation training and CPR certification or equivalent for accessible vehicle drivers. City may authorize or require additional training program components, a change in delivery of program components, or a training facilitator or program outside of Grantee’s program at Grantee’s or driver’s cost if City deems such change will best serve the public interest. (e) Drug and Alcohol Testing. Grantee must have in place a drug and alcohol program that meets the requirements of California Government Code Section 53075.5 and the United States Department of Transportation, Prevention of Prohibited Drug Use in Transit Operations (49 CFR 653), Prevention of Alcohol Misuse in Transit Operations (49 CFR 654), and Procedures for Transportation Workplace Drug and Alcohol Testing 18 Programs (49 CFR 40), and maintain compliance with these provisions. A copy of this program must be provided to the City. Modifications to the program must be provided to the City in advance of taking effect, or if not practicable, within 5 business days. Testing shall be conducted as a condition for initial driver permit authorization. Annual testing shall be conducted as a condition of the permit and renewal of the permit. Random testing may be conducted and additional tests may be required, including post accident testing, rehabilitation and return-to-service testing, and reasonable suspicion testing. Drivers must show a valid California driver’s license at the time and place of testing. Grantee shall contract with a consultant (program administrator) and authorized lab approved under the Federal Register to facilitate the program and shall provide a copy of the contracts to City. In the case of self-employed independent drivers, information shall be supplied directly to the City pertaining to test results. In all other cases, test results shall be reported directly to the Grantee who shall notify the City of positive test results, which notice shall include driver name, identifying information, and driver permit status, including any entry into a rehabilitation program. Specific driver test results shall remain confidential, on file by driver with Grantee, but testing information, including date of annual test and random test, and positive or negative results, shall be available for the City’s review. Cost of testing shall be the driver’s responsibility, if the driver is an independent contractor of Grantee, or Grantee’s responsibility, if the driver is an employee. In accordance with the Federal Code of Regulations, Grantee’s certification program must include information regarding the controlled substance and alcohol use policy and procedures as well as educational materials made available to all drivers and 19 other pertinent staff. Grantee or its authorized agency must advise drivers of the resources available to them to resolve problems associated with misuse of alcohol and controlled substances. Materials for education and company policies must be made available to all current and potential drivers and a signed statement of their receipt shall be in every permitted driver’s file and retained by Grantee. Grantee shall train supervisory personnel in accordance with federal guidelines in order to determine whether reasonable suspicion exists to require a driver to undergo additional testing. Grantee shall use custody and control forms similar to that used under the federal testing guidelines. Any changes in the federal program guidelines or other state mandates will be considered by City for modification to Grantee’s program. (g) Pull Program. Grantee shall enroll all permitted drivers in the DMV Pull Notice Program and shall review and maintain such records for all drivers for compliance with all requirements of the Santa Monica Municipal Code, Taxicab Rules, this Franchise, and Grantee’s policies at least annually and as additional updates are received. Grantee shall file such records, by driver, in a central location. Grantee shall notify the City if a driver’s record or ability to operate a taxicab fails to meet the Taxicab Driver’s Permit requirements in accordance with the reporting requirements of this Franchise and the Taxicab Rules. (h) Social Benefits Programs. Grantee shall comply with all applicable local, state and federal law, rules, and regulations concerning mandated social benefits programs for employees. It shall be the sole responsibility of Grantee to determine whether legislation concerning these social benefits applies to Grantee's operations. 20 SECTION 9. OPERATIONS AND SERVICE – DISPATCH, COMMUNICATION AND SERVICE REPORTING. (a) Radio Frequencies. Grantee shall have authorized usage of an FCC- assigned radio frequency(s) and shall maintain the capability of two-way voice radio communication in working order in each taxicab operating within the City under the authorized frequency(s). Grantees operating within the same areas of the City must use separate frequencies within the same areas. Grantee shall notify the City in writing of such frequency(s) to be used in all areas of the City. (b) Trip Data. Grantee shall implement and maintain a computer dispatch system capable of digital data communication and geographically identifying each service call. The computer dispatch record keeping system must also be capable of determining who is driving a particular taxicab at any time. Grantee shall record and store service data using computer dispatch time stamping for each request for service received and include time request was received, time of order reservation, time of order acceptance by driver, time of arrival at service location, time of taximeter activation, time of taximeter deactivation, and length of trip in miles in accordance with the Taxicab Rules. Grantee shall provide total telephonic or other equivalent service order data to the City monthly, within the first week of the following month in which data was collected, in a transfer and data format as prescribed by the City. This requirement does not preclude City personnel from reviewing Grantee’s dispatch records via a modem or equivalent connection, or an online interface, and browsing or retrieving information. Grantee shall also supply summary monthly data reports from telephonic or other equivalent service calls as prescribed by the City, and as may be changed from time to 21 time by the City, with minimum reporting requirements required at the beginning of this Franchise to include service response data summaries by the following categories: service area; vehicle; wheelchair accessible vehicle; and wheelchair accessible vehicle, for wheelchair accessible requested trips, aggregated for all vehicles in service. Each of the foregoing categories will include the total number of trips separated into response categories, including response time up to 15 minutes, between 16 and 30 minutes, between 31 and 60 minutes, greater than 60 minutes, and no show or no load. The City may require that trips completed through requests from outside contracts or agreements be reported separately. Response time is defined as the period of time from dispatch of the fare (when the trip is first offered or designated by dispatcher) to activation of the taximeter as denoted in the dispatch record. Arrival time may be used in lieu of taximeter activation if the taxicab is equipped with an automatic vehicle location system that can identify and verify in the dispatch record that the vehicle was within one-quarter (1/4) mile of the arrival target, or as otherwise defined, established and authorized by the City. (c) Telephonic Service Order Response Data. Grantee shall provide a computerized method or telephone company switching program to obtain information pertaining to telephonic or other equivalent order response. The system must be capable of identifying and storing information pertaining to each call received, including the length of time required to answer the call and the length of time each call was placed on hold, if at all. Grantee shall provide total telephonic or other equivalent service order response data to the City monthly, within the first week of the following month in which data was 22 collected, in a transfer and data format as prescribed by the City. Grantee shall also supply summary monthly data reports aggregated from total telephonic or other equivalent service order response data, as prescribed by the City, with minimum reporting requirements required at the beginning of the Franchise to include: (1) Total number of telephonic or other equivalent service calls received; (2) Total number of telephonic or other equivalent service calls answered in more than 45 seconds; and (3) Total number of telephonic or other equivalent service calls placed on hold longer than two minutes during any period of the reservation process. (d) Statistical Operating Data. Grantee shall provide summary statistical operating data to the City monthly in written form pertaining to all taxicabs and types of service requests provided within the City. Summary data shall include at minimum the total number of all trips provided, total shifts assigned, and total number of telephonic or other equivalent service orders received. The City may in its discretion direct Grantee to supply additional information. SECTION 10. INSPECTION OF PROPERTY AND RECORDS. (a) At all reasonable times at the City’s request, Grantee shall permit any authorized officer, employee or agent of the City to inspect all property of Grantee, and to examine and transcribe any and all books, accounts, papers, maps, and other records kept or maintained by Grantee with respect to Grantee’s operations, affairs, transactions, property or financial condition. If any of the books, accounts, papers, maps, or other records referenced in this Section are kept outside the City and the City determines that an examination of such materials is necessary or appropriate, then all travel and 23 maintenance expenses necessarily incurred in making such examination shall be paid by Grantee. (b) Grantee shall prepare and furnish to the City, at all times and in the form prescribed by the City, such data with respect to Grantee’s operations, affairs, transactions, property or financial condition as may be reasonably necessary or appropriate. Requested data may include but is not limited to: membership, lease driver, and employee records; maintenance records; financial records and statements; loan agreements; insurance policies; taxicab fleet schedules; dispatch records and passenger trip data, including GPS and data from smartphone applications; complaint records; advertising and promotion records; vehicle acquisition, loan, registration, and maintenance records; affirmative action records; and contracts. (c) Failure to comply with any City request for any information may in the City’s sole and absolute discretion result in temporary suspension of Grantee’s operations. (d) All records shall be maintained in accordance with generally accepted accounting principles and clearly identified and readily accessible. Representatives of the City or its designees shall be allowed free access to Grantee’s books and records, and have the rights to examine, audit and make transcripts therefrom as necessary, and inspect all work, data, documents, proceedings and activities related to this Franchise. (e) Grantee shall provide the City with an address of an office or terminal where the property and records pertaining to all matters addressed in this Franchise may be inspected by the City at all reasonable times. SECTION 11. INSURANCE REQUIREMENTS (a) In accordance with the requirements of the Santa Monica Municipal Code 24 and Taxicab Rules, Grantee shall procure and at all times maintain an insurance policy covering all vehicles operating under this Franchise. Insurance premiums must be paid in advance for a minimum six-month period. Any vehicle operating without the required coverage shall be considered under suspension, regardless of whether the City is aware of the lack of coverage. (b) Grantee shall obtain comprehensive general liability insurance, to include contractual liability, in such amounts as the City’s Risk Manager may from time to time require, insuring against any claims arising out of the activities of Grantee and its Members, employees and drivers. (c) Grantee shall file evidence of insurance with the City, along with proof of payment of the minimum six-month premium, in such form as required by and subject to the approval of the City’s Risk Manager, prior to the commencement of operations under this Franchise. Grantee shall maintain such evidence on file with the City throughout the term of this Franchise. (d) Grantee’s failure to procure and maintain the required insurance shall constitute a material breach of contract under which the City may immediately suspend or revoke and terminate this Franchise. Monetary penalties may also be assessed. (e) Grantee shall submit to the City a quarterly summary of all taxicab accidents including date of accident, driver name and identifying information, and vehicle number. The City may direct Grantee to supply additional information or specify a form for such reporting. SECTION 12. INDEMNIFICATION, DEFENSE, HOLD HARMLESS. Except for the sole and active negligence or willful misconduct of the City, Grantee agrees to defend, 25 indemnify and hold harmless City (including but not limited to the City’s departments, members of its Council, boards and commissions, officials, officers, agents, employees, volunteers, assigns, and successors in interest) from and against all suits and causes of action, claims, losses, demands and expenses, including but not limited to: attorney’s fees and cost of litigation; damage or liability of any nature whatsoever; death or injury to any person, including Grantee and any of Grantee’s Members, employees and agents; or damage or destruction of any property of either party hereto or of third parties, arising in any manner by reason of, or incident to, the performance of this Franchise on the part of Grantee or subcontractor of any tier. Grantee shall give the City prompt and timely written notice of any claim made or suit instituted coming to Grantee’s knowledge which may in any way directly or indirectly, contingently or otherwise, affect either party, and both shall have the right to participate in the defense of same to the extent of its own interest. Approval of insurance policies by the City shall in no way affect or change the terms and conditions of this indemnity agreement. SECTION 13. NONDISCRIMINATION. Grantee shall not discriminate in its membership or employment practices against any Member or employee or applicant for membership or employment, and shall not discriminate in providing taxicab services under this Franchise, because of race, color, religion, national origin, ancestry, sex, age, sexual orientation, gender, gender identity, gender expression, military or veteran status, marital status, genetic information, medical condition, HIV/AIDS or disability, and shall comply with the requirements of City, state and federal law, rules and regulations. 26 SECTION 14. WAIVER. A waiver by City of any breach of any term, covenant, or condition contained in this Franchise shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained in Franchise. SECTION 15. MONETARY PENALTIES FOR VIOLATIONS OF FRANCHISE ORDINANCE TERMS AND CONDITIONS. The City may levy a monetary penalty on Grantee for failure to abide by the terms and conditions of this Franchise, as an alternative to, or in addition to, suspension or revocation of this Franchise. Any of the following activities constitute a violation of the terms and conditions of this Franchise and may subject Grantee to a monetary penalty. The City’s monetary assessment for a second, third and subsequent offense, as noted in the schedule herein, may be applied to any combination of offenses. (a) Failure to submit to the City any requested or required information as specified in this Ordinance. (b) Fraudulent reporting to the City of any requested or required information, including any tampering of files, data, or reports necessary to provide the required information. (c) Operation of unlicensed or unauthorized vehicles as taxicabs in the City, including but not limited to the operation of previously approved taxicabs with suspended, canceled or revoked vehicle permits. (d) Conducting any illegal or unauthorized type of public transportation operation. (e) Unauthorized sale, lease, assignment, hypothecation, or other disposition 27 of this Franchise. (f) Falsification of or failure to inform membership/share ownership changes. (g) Operation of a taxicab without approved insurance on file with the City. (h) Failure to timely submit required taxicab insurance documents to the City. (i) Failure to provide taxicab preventative maintenance service. (j) Failure to provide drivers, Members or personnel with training as specified in this Ordinance or as detailed in Grantee’s Plan. (k) Failure to adhere to the policies and procedures in Grantee’s Plan. (l) Failure to provide City personnel access to Grantee’s property and records. Monetary penalties that may be imposed are pursuant to the schedule adopted pursuant to and are subject to the hearing procedure specified in Santa Monica Municipal Code Section 6.49.170, as may be amended from time to time SECTION 16. REQUIREMENTS OF A CO-OPERATIVE, ASSOCIATION OR MEMBERSHIP ORGANIZATION. If Grantee is a membership organization, the following restrictions apply: (a) The number of Members and shares shall each be limited to the total number of taxicabs authorized for Grantee under this Franchise. Joint Memberships are prohibited. (b) Members shall be limited to owning a maximum of 5% of the total taxicabs and shares authorized for Grantee with the maximum figure determined by rounding the number of vehicles and shares equivalent to 5% of the fleet to the nearest whole number. (c) An Investor/Shareholder Member shall not drive, control or manage any taxicab in Grantee. All taxicabs owned by an Investor/Shareholder shall be controlled 28 and managed completely by Grantee, on the Investor/Shareholder’s behalf, pursuant to a City-approved contract, between the Investor/Shareholder and Grantee. The Investor/Shareholder shall have no control over or perform any function for a taxicab under the control of Grantee other than being the registered owner of the taxicab. (d) A Driver/Manager Member may not control or manage more than 3 taxicabs in Grantee. All taxicabs owned by a Driver/Manager in excess of 3 and any others that the Member does not control or manage shall be classified as Investor/Shareholder memberships and shall be controlled and managed completely by Grantee, on the Member’s behalf, pursuant to a City-approved contract, between the Member and Grantee. Grantee shall ensure that all Driver/Manager Members comply with all City laws, rules and regulations and this Ordinance relating to the number of vehicles managed. (e) Members must qualify for a Taxicab Vehicle Permit under the current standards established by the City. (f) If any Taxicab Vehicle Permit is revoked, any Driver/Manager Member who was the cause of such revocation or cancellation will be subject to revocation or cancellation of his or her Taxicab Driver’s Permit and will be precluded from operating a taxicab or exercising any other rights granted by such Taxicab Driver’s Permit. Any Driver/Manager Member whose Taxicab Driver’s Permit is revoked or canceled must convert all Driver/Manager memberships into Investor/Shareholder memberships or transfer membership and any other taxicabs owned by the Member shall be operated, controlled and managed by Grantee on the Member’s behalf, pursuant to a City-approved contract, between the Member and Grantee. 29 (g) Grantee shall ensure that each Driver/Manager Member is aware of and complies with any requirement of the City regarding the filing of an annual profit and loss statement. Grantee shall submit the required statistical information quarterly or as directed by the City. (h) Grantee shall require all Members to enter into a security agreement, subject to City approval, as a condition of membership in Grantee. By such agreement, the Member grants to Grantee a security interest in the Member's taxicabs to ensure the Member's compliance with his or her obligations as a Member. (i) Grantee shall establish a procedure for the approval, transfer, and sale of memberships and a procedure for dismissal of Members. Grantee shall provide information to each Member pertaining to the Member’s role in the organization, the City and the taxicab industry, basic record keeping and reporting requirements, the City’s rules and regulations, and any other information required by the City. (j) All agreements, including any security or membership agreements, and all contracts, including those under which the co-operative operates vehicles on behalf of its Members, that affect the method by which taxicabs are operated or service is provided, shall be subject to review and approval by the City. (k) Grantee shall obtain vehicle liability insurance for all vehicles in the taxicab fleet; contract with lease drivers for all vehicles in the taxicab fleet; provide maintenance for all vehicles in the taxicab fleet; provide a computer dispatch service; collect and maintain all records, including waybills, trip data, pertinent to its taxicab operations; collect vehicle lease fees for vehicles in the taxicab fleet; notify Driver/Manager Members and drivers of violations and hearings; and make all vehicle and driver assignments for all 30 vehicles it controls on behalf of Members. SECTION 17. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 18. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 19. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective 30 days from its adoption. APPROVED AS TO FORM: _________________________ LANE DILG City Attorney REFERENCE: Ordinance No. 2593 (CCS)