SR-112707-1N~_
~;tYof City Council Report
Santa Monicam
City Council Meeting: November 27, 2007
Agenda Item: ~- N
To: Mayor and City Council
From: Mona Miyasato, Deputy City Manager
Subject: Authorization to Negotiate and Execute a Professional Services
Agreement on Financial Strategies and Operations Analysis for the Big
Blue Bus and Appropriation of Funds for the Agreement
Recommended Action
Staff recommends that the City Council:
1. authorize the City Manager to negotiate and execute a professional services
agreement with TransTrack Systems, Inc. in the amount of $91,501 on
financial strategies and operations analysis for the Big Blue Bus; and
2. approve appropriate of funds in the amount of $91,501.
Executive Summary
Over the past few years, due to increasing operating and capital expenses coupled with
unstable subsidy funding from the Los Angeles County Metropolitan Transportation
Authority (Metro), the Big Blue Bus has shown a projected structural budget deficit. To
guide future forecast and service assumptions, an independent analysis of the financial
capacity of the Big Blue Bus is proposed. This analysis will include a financial review to
look at operating cost growth, infrastructure needs, and regional funding trends. The
study will also review service productivity and efficiencies and benchmark key
performance indicators with other peer operations. The information provided by this
study will guide forecasting assumptions that are used during the annual budget
process.
Discussion
Transit systems in the Los Angeles regional area have three major revenue sources for
day-to-day operations: locally -generated revenues (passenger fares, charter and
advertising revenues, lease revenues, etc.); countywide sales tax revenues (Proposition
A Discretionary funds); and state transit subsidies (Transportation Development Act,
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and State Transit Assistance Funds). Countywide and state subsidies are distributed by
Metro on a formula basis. While formula funds may be used for operating or capital
sources, the Big Blue Bus also receives transit capital funding from Federal Transit
Administration which is also allocated through Metro.
Similar to other transit systems, Big Blue Bus experienced operating cost growth
outpacing the revenue growth in recent years, while the demand for services has
increased. This trend has resulted in the Big Blue Bus increasing its use of federal
funding for its capital needs and seeking more discretionary funding sources for both
operating and capital needs.
To gain a more thorough understanding of the financial capacity of the Big Blue Bus a
study by consultants to analyze current financial trends and operating strategies is
proposed. In addition to reviewing current trends, the project will examine Big Blue Bus
operating efficiencies, service productivity and infrastructure needs. The study will also
benchmark Big Blue bus key performance indicators with other peer operations.
Contractor/Consultant Selection
In May 2007, a Request for Proposals was issued and sent to thirteen vendors.
Subsequently three proposals were received by the deadline in June. Finance,. Big Blue
Bus and City Manager staff reviewed the proposals and recommended TransTrack
Systems, Inc. as the firm most qualified to meet the needs of the City. TransTrack
showed excellent project understanding and analytical approach, strong operational
knowledge, expertise in process re-engineering and change management, and
extensive knowledge of transit financing in Los Angeles County.
Financial Impacts & Budget Actions
The study will provide a basis for future financial forecasting assumptions that are used
during the annual budget process.
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An appropriation of $91,501 is required from Proposition A Local Return grant funds at
account 20640.555060 for this professional services agreement with TransTrack
Systems, Inc.
Prepared by:
Carol Swindell, Finance Director
Stephanie Negriff, Transit Services Director
Approved:
Mona Miyasato
Deputy City Ma
Forwarded to Council:
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Reference Contract
Nos. 8863 (CCS)