RPVCCA_SR_2011_03_15_11_MAX_UpdateCITY OF
MEMORANDUM
TO:HONORABLE MAYOR &CITY COUNCIL MEMBERS
FROM:DENNIS MCLEAN,DIRECTOR OF FINANCE AN
INFORMATION TECHNOLOGY
DATE:MARCH 15,2011
SUBJECT:MUNICIPAL AREA EXPRESS·UPDATE
REVIEWED:CAROLYN LEHR,CITY MANAGER
Staff Coordinator:Adam Raymond,Senior Administrative Analyst
Judy Huey,Senior Administrative Analyst
RECOMMENDATION
Reaffirm the Council's previous decision to direct Staff to notify the City of Torrance
(Lead Agency)and the other Member Agencies that Rancho Palos Verdes is
withdrawing from Municipal Area Express (MAX),effective June 30,2011.
EXECUTIVE SUMMARY
At its meeting on November 30,2011,the City Council unanimously directed Staff to
immediately notify the City of Torrance (Lead Agency)and the other Member Agencies
that Rancho Palos Verdes is withdrawing from MAX,effective June 30,2011.The City
Council authorized staff to work with MAX to address financial and legal concerns and
agreed to revisit the topic should the circumstances change substantially.
The Lead Agency staff has developed a plan that appears to reduce the City's operating
contribution,but binds the City to capital contributions for'replacement of 12 transit
vehicles for MAX that creates a long-term commitment to MAX.It appears as though
the combined estimated contributions to MAX and PV Transit will exceed the City's
annual transit revenue;thus requiring a General fund subsidy as early as FY11-12.The
City Council is faced with the significant policy decision whether or not to subsidize MAX
with General funds for the first time since its inception in 1990.During his presentation
on February 15,2011,the City's Financial Advisor advised the City Council to refrain
from making General Fund subsidies for programs like MAX that are suited for use of
transit funds only as a "best practice".City staff continues its recommendation that the
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City Council re-affirm its decision to withdraw from MAX,preserve its Proposition a
transit funds for its contribution to PV Transit,a service that provides ridership to
approximately 600 residents daily,compared with approximately 20 that ride MAX daily.
Notwithstanding its fiscal concerns described in the preceding paragraph and
elaborated upon in this report,City Staff recommends the discontinuance of the City's
participation in MAX,effective June 30,2011,based upon the lack of budgetary control
(by comparisons to actual by the PSC providing oversight),coupled with the non-audit
of the financial statements and ridership records and the lack of reporting of operating
revenue,expenditures and changes in fund balance.
BACKGROUND
Municipal Area Express (MAX)is a commuter transportation system which serves South
Bay residents who travel into the EI Segundo aerospace employment area.This system
is operated by Torrance Transit and funded by MTA grants,fare revenue and
contributions from the cities of Rancho Palos Verdes,Torrance,EI Segundo,Lawndale,
Lomita,Los Angeles and the County of Los Angeles using their respective restricted
transit funds.
Due to the downward trend of the City's transit revenues and concerns about the
necessity to use General fund monies in the future for MAX contributions,Staff brought
forward an analysis of the City's historical participation in MAX to the City Council on
November 16,2010 and November 30,2010.After careful consideration,the City
Council unanimously directed Staff to immediately notify the City of Torrance (Lead
Agency)and the other Member Agencies that Rancho Palos Verdes is withdrawing from
MAX,effective June 30,2011.The City Council authorized staff to work with MAX to
address financial and legal concerns and agreed to revisit the topic should the
circumstances change substantially.
On December 3,2010,the City issued a Notice of Withdrawal from MAX to all
appropriate parties.At its December 6,2010 Policy Steering Committee (PSC)
meeting,the PSC deferred consideration of a new,5-year Interagency Agreement,MAX
Operation Agreement and other matters,as a result of Rancho Palos Verdes'Notice to
Withdrawal.Furthermore,at the December 6,2010 meeting,the City Attorney from the
City of Torrance opined that the City's Notice to Withdrawal was invalid because it was
not received on March 30 th ,exactly 90 days prior to the end of the fiscal year.Despite
the disagreement between City Staff and RPV's legal counsel,the City of Torrance has
not changed their opinion.This interpretation of the contractual provision,as opined by
the City of Torrance City Attorney's Office,could lead to a vote by the PSC to dissolve
MAX,but does not allow for another agency to withdrawal individually,because the
other agency's notice would be received less than 90 days before the end of the fiscal
year.For example,if the City of Los Angeles were to remove itself from MAX,RPV's
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percentage in MAX would skyrocket,and yet the City would not have a chance to
withdraw from MAX.
From early December 2010 through mid February 2011,the Technical Advisory
Committee (TAC)members,consisting of staff from each Member Agency and the Lead
Agency,worked to together to address numerous issues including,a new formula
allocation for agency contributions,possible new routes,bus operator agreement
negotiations,and changes to the new Interagency Agreement that governs MAX.
At the February 7,2011 PSC meeting,Lead Agency staff had requested the PSC
provide direction and adopt several key changes to MAX.In a letter dated February 3,
2011,Mayor Pro-Tem Misetich outlined several concerns relating to the actions to be
considered by the PSC,including the draft Interagency Agreement and proposed
operating budget for FY11-12.The letter also asked about the source and reason why
nearly $1 million was reported as cash and unearned revenue in the financial
statements of MAX as of June 30,2010,unbeknown to the City,as well as other
agencies participating in MAX (discussed later in this report).In light of the letter,the
PSC again postponed a decision,aod agreed to hold a special meeting on March 7,
2011 to give the Lead Agency time to answer the questions and to develop a plan to
move forward.In a letter from the Lead Agency to Mayor Pro-Tem Misetich dated
February 17,2011,the Lead Agency partially answered the $1 million question asked
by the Mayor Pro-Tem,but many questions still remained unanswered.
It was the intention of both Mayor Pro-Tem Misetich and City Staff to bring forward this
update to the City Council on March 1,2011.However,due to a number of unanswered
questions,Staff was unable to develop a staff report that would provide the City Council
with sufficient information to make an informed decision to either re-affirm its decision to
withdraw or proceed as a member of MAX,subject to certain conditions that should be
included in the Interagency Agreement.In an attempt to clarify key financial and
contractual information and provide feedback regarding the proposed Interagency
Agreement,Staff sent a letter dated February 24,2011 to Lead Agency staff.
Furthermore,Staff reached out to Lead Agency Staff to talk about the letter,but was
informed by email from the Torrance Transit Administrative Director,"I have been
directed to send your letter dated February 24,2011 to the Lead Agency.Legal Counsel
for review.At the Special March 7,2011 PSC Meeting Lead Agency Staff will be
available to address any specific concerns the City of Rancho Palos Verdes may have".
The public PSC rT)eeting was not conducive to ask a series of detailed fiscal and legal
questions,especially regarding matters expected to be decided by the PSC (Le.agency
capital contributions for bus replacement).
At the March 7,2011 PSC meeting,Lead Agency staff requested formal direction on
approval of a new allocation formula for agency contributions;approval to move forward
with a new 2-year Interagency Agreement and MAX bus operator agreement;and
approval to allocate an MTA overpayment to credit agencies for the next 5 quarters of
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operating costs,set-aside money for the refurbishment of 12 MAX buses,and payoff a
contingent liability of 2 MAX buses from the $1 million that has been accumulated.
Although the proposed action items on the March 7,2011 agenda address a number of
the City's concerns,many issues relating to the Interagency Agreement,withdrawal
procedures,and financial management concerns were not addressed.City Staff and
the City Attorney have included the conditions they feel are essential to continue
participation in MAX in the attached draft Interagency Agreement.A detailed discussion
follows later in this report.
It is the recommendation of Staff that funds currently used to fund MAX can be better
allocated to other capital and transit projects.Combined with incomplete information,
lack of formal action taken by the PSC,and a deadline to formally withdraw from MAX
by March 30,2011,Staff recommends the City Council re-affirm its previous decision to
direct Staff to notify the City of Torrance (Lead Agency)and the other Member Agencies
that Rancho Palos Verdes is withdrawing from Municipal Area Express (MAX),and
hand deliver the notice to the City of Torrance on June 30,2011.
DISCUSSION
The discussion to continue participation in MAX first arose as a result of Staff's
preparation the City's 2010 Five-Year Financial Model.As reported with the 2010 Five-
Year Financial Model,MAX will continue to require annual General Fund subsidies to
meet the City's future obligations to MAX,based upon the current service level.Based
on information provided during the Finance Advisory Committee (FAC)review of the
draft 2010 Five-Year Financial Model,the FAC made the following recommendation to
the City Council:
The FAC recommends that Staff prepare a detailed cost-benefit analysis of Municipal
Area Express (MAX transit)services to the City,to be completed by the end of the
2010 calendar year.
Upon Staff's review of MAX,several additional concerns,over and above the City's
potential transit budget shortfall,came to light,including inequitable member agency
allocations based upon a formula that Lead Agency staff did not know the origin of or
basis for,fiscal accountability and transparency and contractual issues.Staff's
recommendation to withdraw from MAX was based on several factors,including the
important services PV Transit provides to a large number of Rancho Palos Verdes
Peninsula residents.Approximately 600-700 residents ride PV Transit daily,while only
about 20 residents use the MAX system daily.The City's Proposition A transit revenue
(also used to fund MAX)is currently equal to the annual contribution to the PV Transit
system.
At the November 30,2010 Rancho Palos Verdes City Council meeting,the City Council
unanimously voted to withdraw from MAX,but stated that if substantial changes are
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made to the MAX allocation formula,the City Council reserved the right to reconsider.
The City Council also indicated that before reconsideration would be made,additional
changes to the Interagency Agreement would need to be addressed.
The discussion below outlines the key issues/discussion points,which has lead Staff to
recommend the City Council to re-affirm their previous action to withdrawal from MAX.
Allocation of Member Costs and Ridership
MAX is funded through a combination of MTA funds,fare revenues,and contributions
from member agencies using their restricted transit funds.The net deficit between MTA
funds,fare revenues,and annual operating and capital expenses is funded by the
member agencies.Since the early 2000's the City of Rancho Palos Verdes'share
represents 16.04183%of the net costs of operating expenditures and revenues,even
though RPV's ridership percentage was between 4%to 6%of all boardings.According
to Section 6,Operating Fund and Payment for Services,of the current Agreement for
MAX:
"The Lead Agency (City of Torrance)shall obtain funds to operate MAX from
passenger fares and other sources as they are available.The remainder
required to fund MAX shall be provided by the Agencies (Rancho Palos Verdes,
EI Segundo,Lawndale,Lomita,City of Los Angeles,and County of Los Angeles).
Each Agency shall pay quarterly,upon receipt of an itemized billing from the
Lead Agency,one fourth of its annual share,which shall be established by the
PSC as part of the annual operating budget....Further,if any member jurisdiction
pays more than their budget share of actual costs,as determined by an annual
audit of the MAX budget,then an equal amount will be deducted from their next
quarterly billing in the subsequent budget year.If any member jurisdiction pays
less than their budget share of actual costs,as determined by annual audit of the
MAX budget,then an equal amount will be added to their next quarterly billing in
the subsequent budget year."
City staff had requested copies of the audited budget for each of the last three fiscal
years,and MAX staff informed the City that an audit to determine if each agency is
paying their fair share had never been completed.Furthermore,it was concluded that
Lead Agency staff did not know how each member agency's contribution was originally
created and knew that each member's contribution did not match any reasonable
allocation based on route miles in each agency's jurisdiction,the number of stops in
each jurisdiction,and each agency's percentage of ridership.
At the direction of the PSC on December 6,2010,Lead Agency Staff and staff from
each member agency met five times over the next two months (12/15/10,1/12/11,
1/19/11,1/26/11,and 2/16/11)to discuss developing a contribution percentage formula
that could be presented to the PSC and formally memorialized in the next Interagency
Agreement.
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After much discussion and analysis of data,the Technical Advisory Committee (TAC)
determined that a fair allocation for each agency should be based on a.m.boardings
and total route miles in each jurisdiction.Taking into consideration two daily a.m.and
p.m.trips being eliminated from Line 2,which runs through RPV along Hawthorne Blvd,
RPV's estimated contribution percentage would be reduced from approximately 16%to
5.3%.A discussion on the modified route is included later in this staff report.For a full
review of methodology behind the TAC's recommendation for a new formula,please
see the attached March 7,2011 MAX PSC agenda (item 50).
At the PSC meeting on March 7,2011,a motion to adopt the new methodology was
continued to the next meeting in April 2011.Although Staff does not foresee this to be a
significant issue,the fact that action was not taken prior to the deadline to withdraw
causes Staff to have some concerns.The fiscal information included in this report is
based upon City Staff's best understanding of the estimated future cost to proceed as a
participant in MAX.The PSC could make a subsequent decision regarding costs that
may bind the City based upon a majority vote of the PSC.Additionally,Lead Agency
Staff informed the City the new formula was adopted in a roundabout way through the
adoption of an allocation of next fiscal year's agency contribution amounts.A full
overview of the March 7,2011 PSC action item is included in this staff report.
Another issue brought forward to the Council previously was that Staff believed RPV
was being unfairly assigned ridership from the other three cities on the Peninsula.This
allocation of ridership has not changed.
The following chart is a summary of ridership statistics from October 2009 and an
update from August 2010.
October August Increase/(Decrease)of
Description 2009 2010 Boardings
(FY 09-10)(FY 10-11)#/$%
Total Monthly Boardings 542 388 (154)-28%
Boardings per Day (Based
on 5 days per week)27 19 (8)
Boarding per Departure
(based on 4 departures)7 5 (2)
Estimated Annual Costs $105,000 $95,375 $(9,625.00)-9%
Annual Cost Per
Boarding $16.14 $20.48 $4.34 27%
Using extrapolated data from the most recent ridership statistics provided by MAX staff,
ridership from last year is down approximately 28%.Using the FY09-10 and FY10-11
contributions to MAX and the average annual boarding by residents,the City paid
approximately $16.14 per boarding in FY 09-10 and $20.48 per boarding in FY 10-11.
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For the sake of comparison,all of the members of PV Transit provide a combined
subsidy of about $8 per boarding.
On Tuesday,February 22,2011,City Staff rode the MAX buses to test the
reasonableness of the ridership data.On the four bus departures, a total of 21
individuals boarded MAX Line 2 on Hawthorne from Palos Verdes Drive West to a point
slightly south of Pacific Coast Highway.Of those departures 10 individuals boarded the
first trip,five each on the second and third trip and 1 person boarded on the final trip.
Staff believes that as many as 4 riders were not City residents.Staff's concerns
regarding the audit of ridership data and its implications on the City's contribution can
be found later in this report.
MTA Double/Overpayment
In November 2010,Staff reviewed the City of Torrance's annual financial statements to
examine any potential liabilities that could arise if the City Council voted to withdraw
from MAX.Staff found that all funds for MAX were accounted for in an Agency Fund.
Agency Funds are used to account for assets held by a City (Torrance)in a fiduciary
capacity for individuals,governmental entities,and others.Specifically,the financial
statements indicate that,"The Municipal Area Express (MAX)Fund is used to account
for Federal,County and local revenues to finance a special commuter bus service in the
South Bay area of Los Angeles County."Monies that are reported in a City's agency
funds are only shown as balance sheet totals.As such,the activities or expenditures
and revenues are not reported,nor are they audited.
Pursuant to a review of the MAX agency fund,as of June 30,2010,Staff found that
MAX had a Deposits Payable liability of $997,266.After inquiring with Lead Agency
Staff,the amounts were classified as a Metropolitan Transit Authority (MTA)double
payment from FY 1996-97 ($411,000 payment +$245,252.11 interest),and a cash
balance of ($340,523.45)resulting from excess fare revenues,budget savings over
multiple years and interest earned.
City Staff requested that the MTA funds be returned to the MT A,as spending those
funds could be a potential liability for MAX and its members,if at some point in the
future MTA demands return of the monies.Subsequent to the City's request,MAX Staff
contacted MTA about a possible return of the funds.On February 9,2010 MTA wrote a
letter to the Lead Agency that stated:
"The result of the review is that our staff could not conclusively determine that
there has been an over payment.For this reason,Metro will not require
Torrance to return any funds pertaining to this issue and would consider this
matter closed.In addition,no agency participating in the MAX program will be
liable for any future liability related to this issue."
As Lead Agency staff explained to the agency members,the payment was originally
thought to be a double payment for the City of Torrance's 1997 Transit Service
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Expansion (TSE)program.Each year Torrance Transit receives TSE funding,a portion
of it appears to be passed through to MAX.According to MTA staff,funds are allocated
to certain agencies pursuant to a baseline year,with yearly increases based on CPI.
Lead Agency staff made the assertion at the March 7,2011 PSC meeting that the TSE
funds,which are being allowed to kept by the MTA,must be used for MAX operational
purposes (Item 5C of the March 7,2011 PSC agenda).Although this assertion was not
made in the letter from MTA to the City of Torrance,Lead Agency staff indicated that a
letter from the MTA to the PSC confirming such statements could be easily obtained.
However,on March 9,2011 Lead Agency Staff indicated that although the letter could
be easily obtained,they were not inclined to do so,without the formal direction of the
PSC.
City Staff contacted MTA to inquire about the use and restrictions of TSE funds.Staff
was told that the TSE funds are actually allocated to the City of Torrance -Torrance
Transit and that for all intents and purposes MAX and Torrance Transit are the same
agency.Although City ·staff was able to obtain Budgeted TSE funds for each year,
since the overpayment in 1996-97,staff was not able to obtain the total funding
provided to the City of Torrance.At the request of Lead Agency Staff,City Staff
obtained the last three annual MTA audits of the City's Transit System Fund.From the
reports City staff was able to obtain actual data for the past six years:
Proposition C •40%Discretionary Funds
Transit Service Expansion Funding eTSE)
TT MAX Total TT%MAX%
FY 10·11 267,757 437,748 705,505 38.0%62.0%
FY 09·10 250,885 437,748 688,633 36.4%63.6%
FY 08·09 237,714 437,748 675,462 35.2%64.8%
FY 07·08 225,510 437,748 663,258 34.0%66.0%
FY 06·07 209,649 437,748 647,397 32.4%67.6%
FY 05·06 193,242 437,748 630,990 30.6%69.4%
Net Increase*74,515 .74,515
%39%0%12%
*FY 10-11 Allocation less FY 05-06 Allocation
The three audit reports reviewed,indicated that the MAX portion of the funds were
accounted for in a separate fund,and therefore are not audited in the Transit System
Fund annual audit.Pursuant to a review of the City of Torrance's audited financial
statements (CAFR),due to the nature of the MAX Agency Fund,neither revenues or
expenditures are stated,nor are they audited.
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Although total TSE funds received increased by 12%,the amount allocated to MAX
remained the same.Per the City of Torrance Finance Department,the allocation of the
TSE funding is done at the direction of Torrance Transit.As this report is finalized,Staff
is awaiting information from the Lead Agency on how the amounts for MAX are
allocated.As previously stated,the TSE funds are allocated each year based on CPI
increases.According to past information the 1996-97 budgeted TSE allocation to MAX
was $384,661.The overpayment of TSE funding was approximately $411,500.This
would make the total TSE allocation approximately,$796,161,exceeding the FY 10-11
TSE allocation by approximately $90,000.
City Staff shared this view by its letter,dated February 24,2011 and with the PSC on
March 7,2011,and requested the Interagency Agreement language be changed to
allow for an annual financial audit,the costs of which could be allocated to each
member agency.In response to Staff's request,Lead Agency staff stated that MAX
was audited on an annual basis by the City of Torrance's independent auditor.As the
PSC did not take any formal action on the proposed 2-year Interagency Agreement,City
staff and Lead Agency staff agreed to address the difference of opinion on how finances
of MAX were accounted for.
On March 8,2011,staff sent an email to Lead Agency staff with links to the City of
Torrance's audited financial statements,which indicate that MAX is indeed accounted
for in an agency fund.City staff again,indicated the assertion,since the annual
revenues and expenditures for MAX are not audited,due to it's classification as an
agency fund (only balance sheet information is presented),that City staff would request
that an annual audit be performed,and that budget to actual reports be presented to
the PSC on a periodic basis.On March 9,2011,the Lead Agency responded in an
email stating:
"MAX fund is reported as a Trust and Agency Fund.This fund is separate from
the City and is part of the City's annual audit of all funds which includes the
General Fund,Transit Enterprise Fund,Internal Services etc.Another audit is
conducted annually by the Metropolitan Transportation Authority auditors which
involves Transit Service Expansion (TSE)Proposition C 40%funds.The most
current audit is for fiscal year 2009-10.
RPV's recommendation for having an independent annual audit is appreciated
and was considered at Monday's meeting by the PSC.As discussed at Monday
night's meeting and outlined in the "draft"Interagency Agreement,any
participating agency can request an independent audit (at their own expense)at
any time.The PSC itself is confident with the Lead Agency's Audit practices and
did not take any action to formalize an independent audit each year,but,did
agree that any agency can request an independent audit (again at their own
expense)."
This response causes City staff great concern about the Lead Agency's willingness for
financial transparency of MAX.Furthermore,the Lead agency appears to be indicating
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they will not take our request into consideration,even though formal action has not been
taken by the PSC,because,in their opinion,an audit is not needed.City staff and the
City Attorney strongly believe that an audit of the financial statements of MAX is
essential,especially in light of the discoveries its analysis has led to,including the
accumulation of $1 million.
As previously stated,approximately $340,500 classified as Deposits Payable in the
MAX Agency Fund on the City of Torrance's most recent audited financial statements,is
considered by the Lead Agency as the MAX fund balance or reserve.Due to the
classification of this amount in the financial statements,and the fact that it is comprised
of monies allocated by member agencies,Mayor Pro-Tem Misetich made a motion at
the March 7,2011 PSC meeting that if RPV withdraws from MAX,RPV should receive
approximately 16%of this money,based RPV's historical member contribution of 16%.
The Motion died for lack of a second.The PSC Board stated that withdrawing members
have never received a refund for prior contributions and were not required to pay any
costs to withdraw from MAX.
Lead Agency staff indicated that this.amount is really a reserve that could be used for
crediting agencies a quarterly payment,and it could be used as capital for new or
refurbished buses.It should be noted that the Agency Fund balance sheet does not
indicate that these funds are used as a reserve or restricted for certain uses.
Furthermore,City staff cannot recall when the total "reserve"was ever presented to the
PSC and when the future use of these funds was ever discussed.
Interagency Agreement and Operator Agreement
Organization,Accounting and Governance:
Background -Form of Governance
As was discussed above,MAX is operated and managed by Torrance Transit,a major
enterprise fund of the City of Torrance.MAX is accounted for in the financial
statements of the City of Torrance merely as an agency fund.As an agency fund,the
operating revenue,expenditures and changes in fund balance are NOT required to be
presented in the audited financial statements of the City.
MAX operates as a transit system,which would normally be accounted for as an
enterprise fund like Torrance Transit.City Staff discussed the accounting,budgeting
and financial reporting process with City of Torrance accounting staff.MAX is not
included in the budget process for the City of Torrance,not even as a program within
Torrance Transit.The revenue,expenditures and changes in fund balance of MAX are
not included in the financial statements of the City of Torrance.The day-to-day
accounting activities are recorded within the Torrance Transit enterprise fund,but NOT
included in the financial statements (except for the cash,liabilities and fund balance in
the Agency Fund).
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Based upon an inquiry with MTA,it appears as though MTA revenue (approximately
70%of total MAX revenue)is co-mingled with revenue of the Torrance Transit
operation.Co-mingling could result in the use of allocations of such revenue (especially
from MTA).Without a review of the allocations and records by an independent transit
expert,preferably through an audit by an independent Certified Public Accountant,no
validation of accuracy and fairness of allocations exist.It appears as though the
allocation of MTA revenues to MAX have been relatively flat,while total revenues to
Torrance Transit has increased normally.
For the sake of accountability and proper governance,budgeted and actual revenue,
expenditures and changes in fund balance should be presented to the PSC for approval
and oversight.Although the budget is presented and adopted by the PSC,no actual
operating revenue and expenditure results and comparisons with budget have been
presented to the PSC.This practice has led to the accumulation of a $1 million fund
balance without the knowledge of all PSC members.The City will never know how
much it may have overpaid MAX during the period of the $1 million fund balance
accumulation.
It is the judgment of City staff that accountability and transparency of MAX is
unacceptable.It appears as though the PSC merely adopts a budget that is developed
by Lead Agency staff,without review and inclusion in the process of the City as a whole,
and without comparison with operating results.Based upon the lack of budgetary
control (budgetary comparisons to actual with the PSC providing oversight),coupled
with the non-audit of the financial statements and ridership records,and the lack of
reporting of operating revenue,expenditures and changes in fund balance,City Staff
recommends the discontinuance of the City's participation in MAX.
The following recommendations have been made by City Staff to the Lead Agency
Staff.Except for the recommendation to form a joint powers authority,Staff believes
that the recommendations are conditions precedent to entering into a new Interagency
Agreement (presented with this staff report)and RPV's continuing participation in MAX.
Major Policy Decisions Made by Majority Vote of PSC without Approval by Participating
Agencies
Currently,the PSC,on a majority vote,may approve major policy decisions of MAX
without the approval of the governing board of each participating agency.This
governance model could bind a participating agency like the City to changes in the
annual operating contribution rate,the capital contribution rate for the replacement of
transit vehicles,the acquisition of transit vehicles and other major policy decisions,
subsequent to the adoption of the budget and approval of the Interagency Agreement,
without the knowledge or approval of each participating agency.
RPV Staff Recommendation:
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All such major policy decisions must require the approval of each participating agency.
MAX Staff Reply:
Staff provided this recommendation to Lead Agency Staff on February 24,2011 and has
received no reply.
Audited Financial Statements
RPV Staff Recommendation:
At a minimum,it is essential that the financial statements of MAX should be audited,
perhaps in conjunction with the audit of the City of Torrance.
Lead Agency (MAX)Staff reply:
"RPV's recommendation for having an independent annual audit is appreciated and was
considered at Monday's meeting by the PSC.As discussed at Monday night's meeting
and outlined in the "draft"Interagency Agreement,any participating agency can request
an independent audit (at their own expense)at any time.The PSC itself is confident
with the Lead Agency's Audit practices and did not take any action to formalize an
independent audit each year,but,did agree that any agency can request an
independent audit (again at their own expense)."The PSC took no action to require an
audit.
Comparison of Budget vs.Actual Revenue and Expenditures
RPV Staff Recommendation:
MAX Staff should present actual versus budgeted financial statements of revenue and.
expenditures to the PSC for approval.
Lead Agency (MAX)Staff reply:
"Although discussed during the MAX Policy Steering Committee meeting on March 7th ,
no action was taken."
Joint Powers Authority
RPV Staff Recommendation:
It appears that MAX should be operated and managed using the joint powers authority
form of government to enable separation from the City of Torrance and clear
transparency.
MAX Staff Reply:
"Staff provided this recommendation to Lead Agency Staff on February 24,2011,and
has received no reply."
.Chairmanship of Policy Steering Committee
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MAX is operated in accordance with an Interagency Agreement.Each participating
Agency appoints one elected official (or its City Manager)to serve on the PSC of MAX.
The Interagency Agreement makes no provision for the selection of the Chair of the
PSC.The current Chair,a council member for the City of EI Segundo,the primary
beneficiary of MAX riders into its employment centers,appears to have served as Chair
for multiple years intermittently over a period of more than 20 years.
RPV Staff Recommendation:
The PSC should formalize a procedure to appoint a Chair based upon Roberts Rules of
Order.The appointment should not exceed a 2-3 year consecutive term.The Vice
Chair should also be appointed based upon Roberts Rules of Order.
MAX Staff Reply:
"Staff did not consider this recommendation until after the March t h meeting of the
Policy Steering Committee."
Ridership Audit
RPV Staff Recommendation and MAX Steering Committee's Consideration:
Lead Agency (MAX)Staff has advised the PSC that MAX will adopt the use of an
electronic ridership tracking and data system as recommended by City Staff.However,
at its March t h meeting,the PSC discussed,but did not adopt,City Staff's
recommendation to expand the scope of the proposed annual audit of MAX to include
an audit of the ridership statistics that are used to determine the annual contribution
formulas by each agency.
Agency Termination
RPV Staff Recommendation:
The termination provision should require that terminating agency be responsible for:(1)
removal of stop and route signage,(2)changes to system signage due to route
changes;and (3)cost of printing new brochures.Such AGECNY will not be entitled to
any share of revenue or accumulated fund balance.However,such AGENCY shall be
entitled to a full refund for any advance payments made prior to acquisition of said
buses.
MAX Steering Committee's Consideration:
City staff advised the Lead (MAX)Staff and the PSC that the City is entitled to its pro-
rata share of the $1 million fund balance upon termination.Mayor Pro-Tem Misetich
made a motion that MAX shall refund the City its pro-rata share of the fund balance
(about $160,000).The motion failed for lack of a second.The Chair of the PSC stated
that agencies that terminated previously were not refunded their share of the fund
balance.Lead (MAX)Agency staff advised the PSC that the fund balance amount
11-13
MUNICIPAL AREA EXPRESS -UPDATE
March 15,2011
Page 14 of 19
attributable to the alleged overpayment by MTA was a restricted fund;therefore,that
portion of the fund balance could not be refunded the City.
Potential Transit Budget Shortfall
Proposition A is a %cent tax sales tax in Los Angeles County,which was established in
1980 to fund transportation.With increasing expenditures,and decreasing Proposition
A revenue over the last several years,the City has .whittled down a previously
accumulated Proposition A fund balance.Additionally,the City used General Fund
money to purchase $65,000 of Proposition A money for $0.75 per $1.00 ($48,750)from
the City of Rolling Hills during FY10-11.With the infusion of $48,750 of General Fund
money,the City's FY1 0-11 Transit budget is balanced.
Staff estimates that costs associated with MAX and PV Transit will continue to increase
and outpace any economic growth of Proposition A revenue for the foreseeable future.
Current year Proposition A revenue estimates are at FY 03-04 levels,down
approximately $127,OOO'or 18%from its peak in FY 2006-07.
Proposition A Allocations
FY 2003-04:$586,738
FY 2004-05:$623,682
FY 2005-06:$689,198
FY 2006-07:$704,171
FY 2007-08:$686,698
FY 2008-09:$621,569
FY 2009-10:$546,518
FY 2010-11:$576,854(estimated)
Currently,the City's Transit program is funded with about $50,000 of restricted revenue
from the Air Quality Management District,and the remainder has been funded with
restricted Proposition A revenue as summarized above.The City's annual Proposition
A revenue could increase by approximately 2%per year for the foreseeable future.For
FY 09-10,the City's annual transit contribution totaled about $675,000,which included
about $570,000 to the Palos Verdes Peninsula Transit Authority (PV Transit)and about
$105,000 to MAX.Going forward,assuming continued participation in MAX,the Transit
operating budget is expected to be underfunded starting in FY11-12;thus,likely
requiring additional General fund subsidies.Additionally,Staff is developing a plan to
utilize AQMD funding for the orderly replacement of the City vehicle fleet with qualifying
hybrid low emission vehicles;thus,saving General fund monies for other uses.
Actual MAX Contributions
FY 2003-04:$52,100
FY 2004-05:$52,100
FY 2005-06:$60,203
FY 2006-07:$56,868
11-14
MUNICIPAL AREA EXPRESS -UPDATE
March 15,2011
Page 15 of 19
FY 2007-08:$61,897
FY 2008-09:$104,723
FY 2009-10:$105,758
FY 2010-11:$109,179 (estimated)
As an alternative to the General fund subsidy,the Council could elect to re-allocate
Proposition C and/or Measure R funds already included in the Capital Improvement
Program for designated arterial roadway projects.Staff does not recommend such re-
allocation at this time.
The City's financial advisor,Tim Schaefer of Magis Advisors,advised the City Council
that it is if financially prudent to "Use transit funds for transit,restricted funds for
restricted purposes,and General Fund revenues for General Fund related
expenditures"during his presentation to the City Council on February 15,2011.
Furthermore,Staff believes there are more relevant uses of the City's transit funds.For
example,possible necessary increases in the City's contribution to PV Transit
(especially if state funding allocated to transit agencies is reduced with the continuing
state local budget crisis),and reconstruction of bus pads and other street improvements
to avoid using other funding that may be used as a portion of the City's San Ramon
Canyon stormwater grant application matching requirement.
Future Costs
One of the biggest concerns of City staff,when the City Council moved to withdraw from
MAX on November 30,2010,was future capital acquisition costs and associated
contingent liabilities.At the March 7,2011 PSC meeting,Lead Agency staff addressed
a number of these issues and presented a plan for the next several fiscal years,
including capital costs.
The Lead Agency's plan centered on the allocation of the entire Deposits Payable
balance of $997,265.56 to avoid invoicing the member agencies for the 4th quarter of
FY10-11 ($163,647)and for FY 11-12 ($502,083).Furthermore,Lead Agency staff
requested the PSC approve the early retirement of 2 MAX buses ($36,800)and set
aside funds for the refurbishment of 12 MAX buses ($313,183).For a comprehensive
review of these recommendations,see item 5C in the attached March 7,2011 PSC
meeting agenda packet.
It was difficult to follow the actions taken by the PSC at its meeting on March 7th •After
discussion among the members of the PSC pursuant to the recommendations by the
Lead Agency Staff,City Staff believes the following is a summary of the actions taken
and not taken.
1)The PSC voted for the Lead Agency Staff to not invoice agencies for the FY 10-
11 4th quarter using TSE funds from the 1997 overpayment to cover the cost to
operate MAX for that quarter.As described below,Lead Agency staff has
11-15
MUNICIPAL AREA EXPRESS -UPDATE
March 15,2011
Page 16 of 19
advised City Staff that the PSC acted to invoice the FY10-11 4th quarter payment
at 50%of the new formula for the budgeted operational contribution.This would
amount to a 4
th quarter City payment of $13,126 (50%of $26,252).
2)PSC voted for Lead Agency Staff to use TSE funds from the MTA Overpayment
in FY11-12 to credit the FY11-12 operating costs.
3)PSC voted for Lead Agency Staff to invoice each agency for 50%of the
estimated budged operational contribution for FY11-12,using the newly
proposed contribution percentage and budget allocation,and apply that amount
to future capital needs.
4)Formal action was not taken to set aside funds for the refurbishment of the 12
buses.During the PSC meeting,staff noted the monies allocated to capital
reserves were not designated for refurbishment of existing buses or the purchase
of new buses.The designations of "reserves"are not found in the annual budget
for the City of Torrance or in the City of Torrance's annual audited financial
statements.
5)Also missing from the vote was a motion and a second to adopt the new
contribution percentages,although one specific action taken by the PSC involved
the use of the new contribution percentages,so action to approve the new
percentages could be inferred.Lead Agency staff has advised City Staff that the
PSC acted to adopt the new contribution rates;however to be used for the
determination of the capital contributions in FY11-12.
The discussion at the PSC meeting included reconsideration of the basis for and
allocation of future funds.To verify our understanding,Staff wrote an email to Lead
Agency Staff on March 8,2011.On March 9th ,City staff was informed that Lead
Agency staff did not agree with RPV Staff's interpretation of several actions taken (or
not taken)by the PSC.Specifically,the Lead Agency Staff disagreed with:
1)Lead Agency Staff believes the 4th quarter invoicing was to be billed at 50%of
the operating budget,and that amount would be allocated to capital costs.FY10-
11 operations would be backfilled using TSE funds from the 1997 overpayment.
City staff strongly disagrees with this assertion.Mayor Pro-Tem Misetich clearly
stated at the meeting that he moved for the 4th quarter invoicing to be waived.
Staff and the City Attorney (who attended the meeting)believe the motion was
adopted by the PSC.If adopted,it would preserve $26,252 of the City's transit
funds.
2)Lead Agency Staff indicated that the revised member contribution formula for
FY11-12 would be used to determine participating agencies'contributions,and
that 50%of those contributions would be allocated to capital and 50%would be
allocated to operations.The operating costs would be backfilled by the 1997
11-16
MUNICIPAL AREA EXPRESS·UPDATE
March 15,2011
Page 17 of 19
overpayment of TSE funds.Again,City Staff does not believe there was a
motion,a second and a vote to specifically adopt the new agency contribution
percentages.It should be noted that the proposed changes to the contribution
percentages are memorialized in the draft Interagency Agreement that was not
adopted,and that was continued to the meeting in April 2011.Nonetheless,City
Staff does believe this is a prudent financial and operational decision,and would
welcome verification of the vote in the minutes (if the vote occurred)or
subsequent action by the PSC to make this decision.
A summary of the potential future capital costs and the corresponding percentages are
as follows:
Refurbish
Current Proposed
Allocation Allocation Difference
Allocation Percentage 16.04183%5.32227%
Cost Per Bus $130,493 $130,493
12 Buses $1,565,913 $1,565,913
20%Local Match $313,183 $313,183
RPV's Share $50,240 $16,668 $33,572)
RPV's Contingent Liability $200,961 $66,674 $(134,287)
Purchase
Current Proposed
Allocation Allocation Difference
Allocation Percentage 16.04183%5.32227%
Cost Per Bus $555,000 $555,000
12 Buses $6,660,000 $6,660,000
20%Local Match $1,332,000 $1,332,000
RPV's Share -$213,677 $70,893 $(142,785)
RPV's Contingent Liability $854,709 $283,571 $(571,138)
Transit Alternatives if RPV Withdraws from MAX
If the City Council votes to re-affirm their position to withdraw from MAX,City Staff have
identified two alternatives for the RPVand Rolling Hills Estates residents that ride MAX
Line 2.
Use LADOT 448 -Comprised of six morning and evening trips that runs from Crenshaw
to Hawthorne along Crest,and along Hawthorne to PCH before heading to the 110
Freeway and into Downtown.This alternative will stop at all the Stops MAX uses,with
the exception of two stops along Hawthorne between Palos Verdes Drive West and
11-17
MUNICIPAL AREA EXPRESS·UPDATE
March 15,2011
Page 18 of 19
Crest.With six trips,residents will be able to make the transition to MAX Line 2,which
will be truncated at PCH and Hawthorne if RPV withdraws.
Use METRO 344 -There are several routes that run along Hawthorne from Palos
Verdes Drive West to PCH.The Metro/MTA bus stops at the same locations as MAX
Line 2 within the RPV and Rolling Hills Estates City limits and would allow a secondary
option for those willing to continue riding MAX to the EI Segundo employment area.
Best Decision Point in Time for the City
It appears as though the alternative to extend the MAX Agreement for one year may not
be a viable alternative when it's expected to be accompanied with a commitment to
refurbish and/or replace buses with a 5 to 10-year estimated useful life.Because 80%
of the cost of refurbished and/or replacement buses will be funded by the County and/or
federal government,the City may be liable to refund its proportionate share of the cost if
it were to withdraw from MAX during the life of the buses.The City's proportionate
liability for new buses could be as much as $300,000 in the year acquired.Therefore,it
appears as though the City currently ·has a window in which it may withdraw from MAX
with little or no liability.If the City continues to participate in MAX for one or more years,
the City may be faced with a long-term commitment that follows the useful life of the
buses,if MAX commits to a refurbishment/replacement contract before the City
withdraws from MAX.
FISCAL IMPACT
Based on current transit funding levels and Proposition A revenue projections,the City's
transit expenditures will be underfunded by at least $15,000 to $20,000 in FY11-12 and
will continue to be underfunded by an increasing amount each fiscal year for the
foreseeable future.The cumulative deficit by FY15-16 could reach approximately
$150,000,requiring future annual General Fund subsidies or a reallocation of monies
previously programmed for arterial street improvements (i.e.Proposition C and Measure
R funds).
If the City withdraws from MAX,effective June 30,2011,and the remaining agencies
wish to continue their participation in MAX,it appears the City would not be responsible
for any additional costs other than operating costs for the current fiscal year.Based
upon a review of the new Interagency Agreement,if MAX were to cease operations,it is
not easily determinable what the City's obligations,if any,would be to MAX.
If the City elects to withdraw from participation in MAX,and the City's contributions to
PV Transit do not significantly increase,it appears that future Proposition A revenue will
be sufficient to fund the City's Transit budget over the next five years.
11-18
MUNICIPAL AREA EXPRESS -UPDATE
March 15,2011
Page 19 of 19
FY 10/11 FY 11/12 FY 12/13 FY 13/14 FY 14/15 FY 15/16
Proposition A $571,386 $582,814 $594,470 $606,359 $618,487 $630,856
Additional Prop A
Purchased $65,000
AQMD (AB2766)$50,000
Net Revenues $686,386 $582,814 $594,470 $606,359 $618,487 $630,856
Operating $81,750 .$28,473 $29,327 $30,207 $31,113
Capital $13,625 $13,363 $16,668 .$14,179 $14,179
Net MAX
Expenditures $95,375 $13,363 $45,141 $29,327 $44,386 $45,292
PV Transit $570,000 $581,400 $593,028 $604,889 $616,986 $629,326
Net Transit Costs $665,375 $594,763 $638,169 $634,216 $661,372 $674,618
Net Difference $21,011 ($11,949)($43,699)($27,857)($42,885)($43,762)
Cumulative Net
Difference $21,011 $9,062 ($34,637)($62,494)($105,379)($149,141)
ATTACHMENTS
Notification Letter to MAX -Dated December 3,2010
Letter from City Staff Regarding PSC Meeting -Dated December 8,2010
Letter from Mayor Pro-Tem Misetich to Lead Agency -Dated February 3,2011
Letter from Lead Agency to Mayor Pro-Tem Misetich -Dated February 17,2011
Letter from City Staff to Lead Agency -Dated February 24,2011
Email From Lead Agency Staff to City Staff -Dated February 25,2011
MAX Policy Steering Committee Agenda -Dated March 7,2011
City of Torrance Audited Financial Statements -MAX Agency Fund
11-19
AGREEMENT FOR MAX COMMUTER BUS SERVICE
THIS AGREEMENT is made and entered into this day of ,
.29_!_~!_~X_~~_~_~!~~~Il_!~~_g}~x_~f}:~_t:I.:~~~_{~~!:~!~~it_~~_~~f~!!:~~_~<.>_~~_~~I;:~~_~g}~'~~gx:~'}_~~------{,--D_e_le_te_d_:_20_08 -'
the City ofEI Segundo,the City of Lawndale,the City of Los Angeles,the City of Rancho Palos
Verdes,City of Lomita,and the County of Los Angeles,(hereinafter referred to as
"AGENCIES"or individually as "AGENCY").
RECITALS
A.LEAD AGENCY and AGENCIES are located in the South Bay area of Los Angeles
County,a region which continues to experience a high level of peak-hour traffic.
B.The AGENCIES have previously jointly funded a commuter transportation transit service
known as Municipal Area Express (MAX),which provides a much-needed bus service to
and within the South Bay aerospace employment center.
C.The AGENCIES recognize the potential cost savings and increased transit efficiency of
providing a network of commuter transportation services and a connection to the Metro
Green Line in the South Bay by coordinating transit services,administration and
marketing.
D.Each AGENCY is willing to fund a share of the cost of MAX by using each AGENCY's
Proposition A and/orProposition C Local Return Funds.
E.The operation of this joint program is eligible for regional monies to partially fund the
cost of MAX.
F.Since 1990,MAX has operated a viable,effective commuter transit alternative for South
Bay residents.
(Deleted:2008
i Deleted:2011
--I;Deleted:20110307 Item 3F-:i Attachment #I-Interagency agreement
FY12-13 RPV staff,revisionsCarol Dennis edits.DOC
-Deleted:20110307 Item 3F-i Attachment #I-Interagency agreement
FYI2-13_RPV staff,revisionsCarol Dennis edits
(2).DOC20110307_Item 3F-Attachment
#I-Interagency agreement FYI2-13 RPV
staff revisions (2).DOC20 11 0307_Item
3F-Attachment #I-Interagency agreement
FY12-13 RPV staff
revisions20110307 Item 3F-Attachment
#I-Interagency agreement FYI2-13_RPV
staff revisions.DOC2011 0307_Item 3F-
Attachment #l-Interagency agreement
FYI2-13Item 3F-Interagency agreement
FYI2-13.DOCItem 3C-Interagency
agreement FYI2-16FY2009-2011 3yr
Agreement -Final.DOC
The LEAD AGENCY shall implement and administer MAX on behalf of AGENCIES.
Administration of Service
AGREEMENT:
2.
-----,-,-,
--§:-,'
-----'----,--,--,'
---\"~::.--.--
Term of Agreement I !i
This agreement shall be effective as of July 1,2:Qn~~_~_J::~g_~J.C.P}!:~_~IlJ1!~~}Q<2.:QJAm_j1/
unless the Agreement is terminated earlier as provided in Sections twelve (12)and ii
fourteen (14).This agreement thereafter may be extended on a year to year basis upon ii
the consent of AGENCIES.ii-,
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:
[20110315 Interagency Agreement FINAL with SR.DOC;;L m l m m m m m -1
1.
11-20
3.Organization
A.Policy for MAX shall be set by The Policy Steering Committee ("PSC").The
LEAD AGENCY and each AGENCY shall have the right to appoint either its
Mayor,or one member of its City Councilor Board,or its City Manager to the
PSC.Each member of the PSC shall have one vote.The LEAD AGENCY and
each AGENCY shall also appoint an alternate member who shall be its Mayor,a
member ofits City Councilor Board,or a permanent deputy to the Councilor
Board member representative,or its City Manager.The alternate shall have all of
the powers and duties of the regular member at any PSC meeting which the
regular member does not attend.Regular and alternate members shall serve at the
pleasure of their AGENCY and until their successors are appointed and qualified.
Each AGENCY shall notify the LEAD AGENCY staff of its appointees and of
any change thereof.
(1)The PSC shall set policy for MAX on the following:
Formatted:Indent:Left:36 pt
Deleted:However,
Formatted:Body Text Indent 2,
Indent:Left:72 pt
Deleted:this AGREEMENT,as well as
"Formatted:Font:Not Bold,No
underline
Deleted:11
Deleted:20110307 Item 3F-i Attachment #1-Interagency agreement
FY12-13 RPV staff.revisionsCarol Dennis edits.DOC
Deleted:20110307 Item 3F-i Attachment #1-Interagency agreement
FYI2-13 RPV staff
revisionsCarol Dennis edits
(2).DOC20110307_Item 3F-Attachment
#I-Interagency agreement FYI2-13_RPV
staff revisions (2).DOC20 I 10307_Item
3F-Attachment #I-Interagency agreement
FY12-13 RPV staff
revisions20110307 Item 3F-Attachment
#I-Interagency agrOement FYI2-13_RPV
staffrevisions.DOC20110307 Item 3F-
Attachment #I-Interagency agreement
FYI2-13ltem 3F-Interagency agreement
FYI2-13.DOCltem 3C-Interagency
agreement FYI2-16FY2009-2011 3yr
Agreement-Final.DOC
(i)
G)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
The PSC shall elect its Chair at the first meeting of the fiscal year in accordance
with Roberts Rules of Order.The Chair shall serve one year terms,but not to .
exceed two consecutive terms.The PSC Chair will lead business meetings.The
PSC shall elect its Vice Chair at the first meeting of the fiscal year in accordance
with Roberts Rules of Order.The Vice Chair shall serve one year terms,but not
B.
B.
C.
Fares
Route Structure
Award of Contracts
Annual Operating Budget
Participating AGENCY Funding Shares
Lease or Purchase of Transit Vehicles
Increase or Decrease in Scope of Overall Service
Approval of program funding agreements entered into by the
LEAD AGENCY
Insurance ,,
Governmental mandates that may require direction for compliance ,/./,,/....'/,"
.B~~_~~~!J__~~_~~_~~~~1]._~_~l?~X_(~:~:_~j1X_~g~~~!!!_~_l?~~~_l?f~_I:lR~_ryj~l?~t~X_~~~!!~//
participating AGENCY shall approve~!1:¥.._~~~~~~~!1:!X~!:_th~P~~~_~~~Lti:l..l.!!!l.~i!!g_,---_,/
operating lease and/or refurbishment of Transit Vehicles to be used by MAX in
delivery of services pursuant to Exhibit "A"and "B"(attached hereto and
incorporated herein as MAX Service Requirements and the MAX Routes,
respectively)and Participating AGENCY funding Shares pursuant to Exhibit "c"
(attached hereto and inCOll'orated herein asi.:~~l:ll~X()!:E_~!~~_~!~_~_~~~Lmmmj /:
Operating Funding by AGENCY),in addition to approval of the PSC./ ;
All decisions of the PSC shall be made by majority vote.For the purpose of !!:
f.()!1:~"I:l~!~l..lK~I:l_~~_~~~,__~_ql:l~~~f~~_~~~_~_~~g_~~:t.J:lP~~_~_~U1~p~~~_~~!{~.Q~2 j !j
plus one of all the member AGENCIES represented on the PSc.!!
"'.'.""""""""""::
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[20110315 Interagency Agreement FINAL with SR.D0Q m .2 m __m m m m J
11-21
Deleted:The PSC Chair will lead
business meetings.The Vice-Chair will
assume the role ofChair when the PSC
Chair is not present.The Vice-Chair will
be selected alphabetically by participating
agencies based on members'participation
exceeding 60%of attendance within a
two-year period on an annual basis,
during the October meeting.Annually the
incoming Vice-Chair will be selected
based on the attendance requirements and
the prior Vice-Chair will be moved to
PSC Chair.
-Deleted:"
Deleted::
--Deleted::..
Deleted::(attached hereto and
incorporated herein as MAX Service
Requirements and the MAX Routes,
respectively)
Formatted:Body Text Indent 2,
Adjust space between Latin and
Asian text,Adjust space between
Asian text and numbers
Deleted:The remainder required to
fund MAX shall be provided by the
AGENCIES.
Deleted:shall be distributed
detennined by
Deleted:created
Formatted:Font:Not Bold,No
underline
Deleted:This fonnula will comprise of
two variables.The variables will be total
a.m.boardings by jurisdiction as well as
total a.m.and p.m.mileage by
jurisdiction.These two variables will be
weighted at 50%each for a total of 100%.
The fonnula shall be audited on an annual
basis using National Transit Database's
generally accepted Sampling Method.
The fonnula and boarding infonnation
,will be adjusted on an annual basis using
,the prior fiscal year's data.
Deleted:April
,
Deleted:,or any other reasonable costs
approve by the PSCbudget
Formatted:Indent:Left:36 pt
Formatted:Font:Not Bold
Formatted:Font:Not Bold
Deleted:Further,ifany member
jurisdiction pays more than their em
Deleted:If material findings are found
tliat would change fonnuIa,LEf\.LI ...2
,Deleted:20110307 Item 3F-
,Attaclnnent #1.Interagency agree~
Deleted:20110307 Item 3F·
Attachment #1.Interagency agree'Cl'41
Operating and Capital Funds and Payment for Service
The LEAD AGENCY shall implement MAX as described in ExhibitsAand~
Substantive changes to Service may only be authorized by the PSC..----.-----------------:\~::---
\::-
Fares '<,
The PSC shall establish and authorize changes to the fare structure for patrons utilizing
MAX.The annual fare revenues shall be utilized by the LEAD AGENCY to fund the
annual expense of operating MAX.
Subject to approval by the governing body for each AGENCY and the PSC,each .-...__.
AGENCY shall make a capital contribution towards the rtmlacement of transit vehicles in
accordance with Exhibit C,.f..<:>~~!~.KO!.f.f!p.!!~!.!:~~_~i!!~!>.x.~Q~NfX:..Il]..~.~3!pi~~!/.---
contributions shall be based upon a long-term capital budget approved by the PSC:.
m
•••••••
'I~----------------------------------------------------..
to exceed two consecutive terms.The Vice-Chair will assume the role of Chair
when the PSC Chair is not present.The Chair and the Vice-Chair must have /
attended 60%ofPSC meetings within a two-year period'L ..__m ••:_•••••/
Provision of Service
D.Technical assistance shall be provided to the PSC by the LEAD AGENCY Staff.
The LEAD AGENCY shall obtain funds to operate MAX from passenger fares and other ./
sources (i.e.governmental transit grants and revenues)as they are available.J~~...//
remainder amount shall be funded by the AGENCIES in accordance with.;tf~~l!!!!m __•__
S!<:>}:'~.~_~¥.5.h~R!!~!~_i12~~i_~~~Q~~~_~~~g,_tE~_p.~~.~!!~Lf!!!a.c~~~.!<:>_~~!~_Ag!~~_~~~5jls_..
Exhibit C,I~~~t~.f-~r.~~5!!!!~.t.~~.~.\;l!!t.Qp.~!.f!!i~,g.!:~~!!'!&EX.~Q~~~X:..I~!~A~!~"'.··---·
will include 100%boarding counts by stops.The formula and boarding information will --::--.
be adjusted annually using the prior calendar year's ridership data and presented at the \,
f._~!>.l}}_~rx_~~.~.~.~~"~iEgf.9!.!~~.v12£<:>~!ng_!}~~!!tx~~!·_~3!~E.~.Q~~~X.~.l].!!tt.P!!y.g~~.r.t.~!h::t._,'
upon receipt of an itemized billing from the LEAD AGENCY,one fourth of its annual \
share,which shall be established by the PSC as part of the annual operating budget.\"""""""
In addition,each AGENCY agrees to pay the LEAD AGENCY any additional funds as
authorized by the PSC which might be required to provide service during any budget year
should the costs be greater than anticipated,provided,however,that such additional
funds shall not exceed twenty (20)percent of the amount adopted in the annual operating
budgeV9_~_<:>!!~y.~~~..N!.!>.!!!~.s~..~~l!!!.~.~1'.~i~.~y..~.f!~E.~Q~~~X.~!!~.!!Jit!y.QQ2_<l~y.~_..__
of receipt of an itemized billing by the LEAD AGENCY.----_,
't'.~........'......
5.
7.Permits and Licenses
.,(/
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[20110315 Interagency Agreement FINAL with SR.DOQ •.3 .........m ..I·
4.
I 6.
11-22
The LEAD AGENCY shall secure and maintain all permits and licenses required by law
for the provision of MAX.
8.Marketing
The LEAD AGENCY shall undertake a marketing program to promote MAX.This
program may be implemented either by the LEAD AGENCY staff or under a consultant
contract,whichever approach is approved by the PSC.All costs for said marketing shall
be considered as a portion of the total costs of MAX for purposes of this Agreement,and
shall be authorized annually as part of the MAX budget.
9.Service
The LEAD AGENCY shall prepare a Request for Proposals for a private entity to provide
the driving,dispatching,and maintenance for the.t~_~~}_t_:,:~l].i~!~~_.J:1~_~~_~X_~:__,!:l].~_mm __------{,__D_e_le_te_d_:_bu_se_s ~
LEAD AGENCY shall enter into an agreement with the respondent approved by the PSC,
which hereinafter shall be referred to as "CONTRACTOR".
10.Liabilitv
A.LEAD AGENCY agrees to indemnify,hold harmless and defend each Agency for
any claim,legal action or liability arising out of this Agreement.
B.Notwithstanding the provisions of Subsection A,each AGENCY hereby agrees to
indemnify,hold harmless and defend LEAD AGENCY and every other
AGENCY for any claim,legal action or liability arising out of this Agreement
that is"-~~J_~!~_!9__t.1?-~_c:9_~~i5i~~_()K.!h~_~~Q~~gy'_~_~5!_~~_t_~t_~!~~~~!~~,_<?!.'?!!!~!------{'__D_e_le_te_d_:_an_d ~
public improvements.
11.Insurance
Deleted:20110307 Item 3F-
i Attacbment #I-Interagency agreement
:FYI2-13 RPV staff!revisionsCarol Dennis edits.DOC
The LEAD AGENCY shall require the CONTRACTOR providing MAX services
to obtain and maintain in force at all times during the term of the Agreement with
the CONTRACTOR commercial general liability and property damage insurance
in amounts of not less than ten million dollars ($10,000.000)for injury or death
arising out of anyone incident;three million dollars ($3,000,000)for injury or
death to anyone person;and one million dollars ($1,000,000)for property
damage.The CONTRACTOR shall also obtain automobile insurance,including
collision and comprehensive vehicular liability insurance coverage for all vehicles
used to provide MAX services,in amounts of not less than ten million dollars
($10,000,000)for injury or death arising out of anyone accident;three million
dollars ($3,000,000)for injury or death to anyone person;and one million dollars
($1,000,000)for property damage.Each of the insurance policies shall be issued
by an insurer that is rated at least A-VII by A.M.Best's.
A.
f Deleted:20110307 Item 3F-t:Attachment #l-Interagency agreement
:f FY12-13 RPV staff
II revisionsCarol Dennis edits
ff (2).DOC2011030Utem 3F-Attacbment
ff #I-Interagency agreement FYI2-13_RPV
::staff'revisions (2).DOC20110307 Itemf!~~~~~~~~-:teragency agreement
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B.Certificate of Insurance.The LEAD AGENCY in its agreement with the
CONTRACTOR shall require the CONTRACTOR to provide LEAD AGENCY
certificates of insurance and a signed agreement form evidencing compliance with
Subsection A,above,not less than ten (10)days prior to the commencement of
MAX under the Agreement with the CONTRACTOR.Said certificates shall
name LEAD AGENCY and each AGENCY and their respective officers,
employees and agents,as additional insureds.Each policy shall provide that it
may not be canceled or reduced in coverage without sixty (60)days written notice
to LEAD AGENCY and each AGENCY.
C.Workers Compensation Insurance.Throughout the term of the Agreement,the
CONTRACTOR will be required to obtain and maintain worker's compensation
and employer's liability insurance as required by the laws of the State of
California with limits of at least one million dollars ($1,000,000).A certificate
evidencing such insurance coverage shall be filed with LEAD AGENCY and
AGENCIES not less than ten (10)days prior to commencement of MAX
hereunder.
D.The insurance provisions of this section shall only be changed by the agreement
of both the LEAD AGENCY and the PSC.
12.Failure to Provide Insurance
Failure on the part of the CONTRACTOR to maintain the required insurance shall
constitute grounds for any AGENCY to terminate this Agreement.No such termination
initiated by an AGENCY may occur until the AGENCY has given the LEAD AGENCY
fourteen (14)calendar days written notice of its intention to do so and the Contractor has
failed to obtain the insurance during this time.
13.Independent Contractor Status
Deleted:20110307 Item 3F-
:Attachment #1-Interagency agreement
:FY12-13 RPV staff
f revisionsCarol_Dennis edits.DOC
In addition to the grounds of termination provided in Section twelve (12),any
AGENCY may withdraw from this Agreement at the end of a given fiscal year by
giving written notice to the LEAD AGENCY and the PSC of such intent to
terminate no less than ninety (90)days prior to the end of any given fiscal year,
Termination of Agreement
A.
No employee of the LEAD AGENCY or any AGENCY shall become an employee or
officer of the other AGENCY by virtue of entering into this Agreement,and this
Agreement shall not create the relationship of agent,servant,employee,partnership,or
joint venture between the AGENCIES.No employee or contractor of the LEAD
AGENCY will be considered an employee of any AGENCY for purposes of workers'
compensation liability.Each AGENCY shall bear full responsibility for furnishing
workers'compensation benefits to any of its employees for injuries arising from or
connected with activities performed by said employee pursuant to this Agreement.
14.
i Deleted:20110307 Item 3F-f!Attachment #l-Interagency agreementi:FY12-13_RPV staff
:f revisionsCarol Dennis editsii(2).DOC2011030Utem 3F-Attachmentii#1-Interagency agreement FY12-13_RPV
::staff revisions (2).DOC20110307 Item!!~~~~~~~:~:teragency agfeement
::revisions20110307 Item 3F-Attachment
ii #1-Interagency agreement FY12-13_RPViistaffrevisions.DOC20110307_Item 3F-
::Attachment #1-Interagency agreementiiFY12-13Item 3F-Interagency agreement
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[20110315 Interagencv Agreement FINAL with SR.DOC;;L m_5__m __m_m mm mm mJ
11-24
which ends on June 30.Within thirty (30)days after such notice is received by
the PSC,or at its next regularly scheduled meeting,the PSC shall meet and
determine whether to terminate MAX or re-apportion the respective share of any
AGENCY terminating participation in MAX.In the event the PSC decides to
terminate MAX,the LEAD AGENCY shall terminate all agreements with its
CONTRACTOR.AGENCIES shall be responsible for the following._'?~~!.s m __m __------{Deleted:all reasonable
resulting from termination,including the costs resulting from termination of the
CONTRACTOR agreements,;,n n mn n_nm m m_nn ------{Deleted:.>===========<
.....------Formatted:Indent:Left:36 pt,No
An AGENCY that terminates its participation in MAX shall be responsible for the bullets or numbering
following reasonable costs resulting from termination:(1)removal of stop and
route signage,(2)changes to system signage due to route changes:and (3)cost of
printing new brochures.Such AGECNY will not be entitled to any share of
revenue or accumulated fund balance.However,such AGENCY shall be entitled
to full refund for any advance payments made for future replacement,.,\?!..[~~t:J._~~.:-m__------{Deleted:improvements,refurbishment
lease of transit vehicle\Rti<!E_t_~_~~9.J.:l.i_~t!t<!E_~r~~i_~.J~_~t!_~~~.i_~!~_~:m n <:-----{>=D=e=le=te=d=:=bU=S=eS=======<
"'•--'--i>=D=e=le=te=d=:=b=US=e=s=======<
B.This Agreement may also be terminated at any time by agreement of the PSC.In --.._-{Deleted:~
the event the PSC decides to terminate MAX,the LEAD AGENCY shall '--__'----1
terminate all agreements with its CONTRACTOR.AGENCIES shall be
responsible for all reasonable costs resulting from termination,including the costs
resulting from termination of the CONTRACTOR agreements.LEAD AGENCY
shall administe~_!~~_<!!..~~~!X_~!.s_~<!J_~!!~~_~f~~Lt~'?!!_!~iEg_~_~_~i_~R~.s.i_!igE_<!f-'~!!------{'__D_e_le_te_d_:r_ate ~
assets and settlement of outstanding liabilities.As an alternative,the PSC may
elect to retain a consultant and/or contractor with transit expertise and experience
to administrate the orderly dissolution of MAX.
C.J~_tJ.1~_~~~E!_!h~_9_~.s_!~_<!X_~~~_~!!()_t:J._~~_1~~.s_!!!~_t:J._!h~_.s~~~_h~l~_~_¥_!h~_I:-E_k\!?------
AGENCY,the LEAD AGENCY shall remit,within thirty (30)days after all
termination costs have been paid,each AGENCY's proportionate share of the
remaining balance based upon the formula attached as Exhibit C.
Deleted:Each AGENCY shall be
responsible for its respective share ofthe
termination costs as provided in the
annual MAX budget.
Inability to Perform
Record Keeping,Reporting,Budgeting and Auditing
The LEAD AGENCY will not be required to administer or provide MAX during the time
and to the extent that it is prevented from performing by acts of God,fire,strike,civil
disorder,loss of transportation facilities,loss of funding,lockout,commandeering of
materials,products,plants,or facilities by the federal government or any other cause
beyond the reasonable control of the LEAD AGENCY.
15.,Formatted:Indent:Left:36 pt
!Deleted:20110307 Item 3F-
':Attachment #I-Interagency agreement
•FY12-13 RPV staff
•revisionsCarol Dennis edits.DOC!!>-=============<!:Deleted:20110307 Item 3F-
":J Attachment #l-Interagency agreement
::FY12-13 RPV staff
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!i!(2).DOC20110307 Item 3F-Attachment!1!#I-Interagency agreement FYI2-13 RPV
:::staff revisions (2).DOC20110307 Iiem!i!3F-Attachment #I-Interagency agreement
:::FYI2-13_RPV staff
LEAD AGENCY will present an operating and capital budget for approval by the PSC no....if revisions20110307 Item 3F-Attachment
less than 120 days prior to the commencement of the next fiscal year.The operating i,!#I-Interagency ag,.eement FYI2-13 RPV
------- -staffrevisions.DOC20110307 Item3F-
contribution for the next fiscal year will be based upon the budget approved by the PSC i!Attachment #I-Interagency aieement
and the formula contained in Exhibit C.The presentation of the operating budget shall !!FYI 2-13 Item 3F-Interagency agreement
"FYI2-13.DOCItem 3C-Interagency
include the computation of LEAD AGENCY's allocation of transit revenues received by 1!agreementFYI2-16FY2009-20113yr
:Agreement -Final.DOCi
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I 16.
11-25
Deleted:ate
Deleted:records of
Deleted:costs:
LEAD AGENCY shall timely present the Statement of Revenues,Expenditures,and
Changes in Fund Balance and the Balance Sheet of MAX quarterly to the PSC.LEAD ,/
AGENCY will administe~~!!~_~9..l).~~~~_ot!h~_~~~!_l:i.l:l~!!_<?Lt!!~_ti_l).~!l:~!~t~~~~l!l_~!l:t~_<?Ln/
MAX by independent Certified Public Accountants with transit expertise and experience.
The audited [mancial statements,and all accompanying reports and findings by the
auditor,shall be presented to the PSC at its meeting on or before 6 months after fiscal
year end.All AGENCIES will share the cost of such audit as a normal operating
expenditure of MAX in accordance with the formula contained in Exhibit C.
The LEAD AGENCY shall cause to be supplied sufficient and adequate vehicles,
including backup vehicles,to insure that MAX is provided on an uninterrupted basis.All
equipment and facilities shall meet all requirements of applicable federal,state and local
ordinances and laws.
17.
the City of Torrance from federal,state and county agencies to be allocated between {.
Torrance.:Iransit and MAX..---Deleted.t
= -----------------------------------------------------------------------------------------------------------_....
18.
/:{Deleted:A.:.;=========<I:!Deleted:proceduresi.:/f·'"~~....;~~~~~~~=<:::!Deleted:C
::::':::::Deleted:is
~!!:.:;=========<.,..ii Deleted:ing,;/./f:'?==~~"";~~~~~~~-<'.ii Deleted:If material f"mdings are foundS!iii:that would change formula,LEAD
The LEAD AGENCY will provide access to all records in its possession relating to MAX II Iii:AGNECY will reimburse that AGENCY=~~",~=~=~~':,,~~~;::~~~~,;~~:_e~J II!=:~:=CY'"accounting,J;?ti~~.iP!~~Lg;g~I?_~I?_l).~~1_~~_~_~~~E~B;~~~!!~P:~_~~_iE_~~9..l?!..~~_~I?_~!!h~I?__mmj f!i.its own expense,may conduct an audit of
requirements of any entity providing funding.The LEAD AGENCY shall retain all Ii iii the LEAD AGENCY regarding MAX.If
records for a minimum of five (5)years following the close of that fiscal year.t!ii such audit f"mds that the cost of operating~::1 MAX are less than previously indicated~."by the LEAD AGENCY and LEAD
Each AGENCY has the right to audit the operational,ridership and accounting records,~i ii AGENCY agrees with the results of said-- - -- -f;1 audit,the member AGENCY agrees the
as well as the financial statements of MAX by an independent Certified Public i ii difference may,in the sole discretion of
Accountant with transit experience and expertise at the cost of that AGENCY.If the iii the LEAD AGENCY,be:1f
findings of such audit shall result in the revision of the annual operational funding by III ~epaid forthwith by the LEAD AGENCY
AGENCY (or AGENCIES),the retroactive adjustment for AGENCY funding shall be :::to the AGENCIES in the proportionate
f if shares provided in the annual MAXmadewiththesubsequentquarterlybillingandforeachbillingthereafteruntilAGENCYiiibudget,or1f
is refunded in full.In the event AGFJ'!fX_p..~<?_':'i~~_~J.:l_l?!!~_~_~U~~!~~!!~!l:~~!!~nm_m i ii ~redited against any future payments
participation in MAX,payment shall be made by MAX to AGENCY,if overfunded,or i :~owed hereunder to the LEAD AGENCY.
by AGENCY to MAX,if underfunded,within 60 days of issuance of the audit findings.i Ii Deleted:If such audit f"mds that the
In the event the audit [mdings result in a determination of overfunding or underfunding it costs of operating the program are greater
among all participating AGENCIES,the formula contained in Exhibit C shall be used..}!.:::'';:;::~e:'~d=h~~::'~~~~~'
I LEAD AGENCY by the AGENCIES,i based upon each AGENCY's
I proportionate share adopted in the most
I.recent MAX budget.1f
j.Deleted:20110307 Item 3F-
't.--- - - ----.-- --- - - - - ---------------- - ------ - - - - - ---- - ------ - - - ----------- --.--------------------- - ---- - ---- - - -------- -----_.1 :Attachment #I-Interagency agreement
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:Deleted:20110307 Item 3F-.i Attachment #I-Interagency agreement
.------ - - - ---- - - - -------------- ---- - - - - - - - --- --------------- --- ---- - - - - ----- ------- - ---- ------------------------ - ------------J :FY12-13 RPV staff
Vehicles i i revisionsCarol Dennis edits
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11-26
A.Notices required to be given pursuant to this Agreement shall be given by
enclosing the same in a sealed envelope addressed to the party for whom intended
and by depositing such envelope with postage prepaid for delivery by Certified
Mail in the United States Mail.
1.Personal delivery.When personally delivered to the recipient:notice is
effective on delivery.
2.First Class Mail.When mailed first class to the last address of the
recipient known to the party giving notice:notice is effective three mail
delivery days after deposit in an United States Postal Service office or
mailbox.
3.Certified Mail.When mailed Certified Mail,return receipt requested:
notice is effective on receipt,if delivery is confirmed by a return receipt.
4.Overnight delivery.When delivered by an overnight delivery service,
charges prepaid or charged to the sender's account:notice is effective on
delivery,if delivery is confirmed by the delivery service.Notices required
to be given pursuant to this Agreement shall be given by enclosing the
same in a sealed envelope addressed to the party for whom intended and
by depositing such an envelope with postage prepaid for delivery by
Certified Mail in the United States Mail.
5.Addresses for purpose of giving notice are as follows:
a.LEAD AGENCY at the following address:
City of Torrance
Office of the City Manager
3031 Torrance Boulevard
Torrance,CA 90503
Deleted:20110307 Item 3F-i Attachment #I-Interagency agreement
:FY12-13 RPV stafff~evisionsCarol Dennis edits.DOC
City of Lawndale
Office of the City Administrator
14717 Burin Avenue
Lawndale,CA 90260
City of Torrance
City Clerk
3031 Torrance Boulevard
Torrance,CA 90503
With a copy to:
b.Any such notice containing same to each AGENCY shall be addressed
as follows:
City of El Segundo
Office of the City Manager
350 Main Street
El Segundo,CA 90245
i Deleted:20110307 Item 3F-:!Attachment #l-Interagency agreementi:FYI2-I3_RPV staff
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[20110315 Interagency Agreement FINAl.with SR.DOQ .8 -1
11-27
Los Angeles County Department
Of Public Works
Transit Operation Section
POBox 1460
Alhambra,CA 91802-1460
City of Los Angeles
Office of the General Manager
Department of Transportation
200 North Spring Street
Los Angeles,CA 90012
City of Rancho Palos Verdes
Office of the City Manager
30940 Hawthorne Blvd.
Rancho Palos Verdes,CA 90274
City of Lomita
Office of the City Administrator
P.O.Box 339
Lomita,CA 90717
19.New Parties
The PSC can accept new AGENCIES as participants in MAX.In such an event,this
Agreement shall be amended to provid"'~_~~~_AQ~~fX_~j.th_!h~_~~gl_~_!'!~~~_s._~~-----'
obligations of each other participating AGENCY.The PSC shall determine the
percentage contribution required for said entity and the obligation of each signatory to the
Agreement reflected in the annual MAX budget shall be proportionately reduced to
reflect the percentage allocated to the new AGENCY.
Deleted:the LEAD AGENCY sItall
enter into an agreement with said
AGENCY providing
20.Governing Law;Jurisdiction
This Agreement will be administered and interpreted under the laws of the State of
California.Jurisdiction of any litigation arising from the Agreement will be in Los
Angeles County,California.
21.Integration;Amendment
Deleted:20110307 Item 3F-
:Attachment #1-Interagency agreement
:FY12-13 RPV staff
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Interpretation
Severability
This Agreement represents the entire understanding of LEAD AGENCY and each
AGENCY as to those matters contained in it.No prior oral or written understanding will
be of any force or effect with respect to the terms of this Agreement.The Agreement
may not be modified or altered except in writing signed by all parties.The Agreement
may be executed in multiple counterparts.
The terms of this Agreement should be construed in accordance with the meaning of the
language used and should not be construed for or against either party by reason of the
authorship of this Agreement or any other rule of construction that might otherwise
apply.
22.
23.
1 Deleted:20110307 Item 3F-!!~~~e~t=agency agreement
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::staffrevisions (2).DOC20110307 ItemIi3F-Attachment #1-Interagency agreementifFYI2-13_RPV staff
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::FYI2-13.DOCitem 3C-InteragencyiiagreementFYI2-16FY2009-2011 3yrfAgreement-Final.DOC
I
[20110315 Interagency Agreement FINAL with SR.DOGiL 9 J
11-28
If any part of this Agreement is found to be in conflict with applicable laws,that part will
be inoperative,null and void insofar as it is in conflict with any applicable laws,but the
remainder of the Agreement will remain in full force and effect.
24.Waiver of Breach
No delay or omission in the exercise of any right or remedy by a nondefaulting party on
any default will impair the right or remedy or be construed as a waiver.A party's
consent or approval of any act by the other party requiring the party's consent or approval
will not be deemed to waive or render unnecessary the other party's consent to or
approval of any subsequent act.Any waiver by either party of any default must be in
writing and will not be a waiver of any default concerning the same or any other
provision of this Agreement.
IN WITNESS WHEREOF,this Agreement is executed by the parties as follows:
CITY OF TORRANCE
LEAD AGENCY
Frank Scotto
Mayor
ATTEST:
Sue Herbers
City Clerk
Deleted:20110307 Item 3F-
:Attachment#I-Interagencyagreement
:FYI2-I3 RPV staff!revisionsCarol Dennis edits.DOC
APPROVED AS TO FORM:
John L.Fellows III
City Attorney
By:,_
i Deleted:20110307 Item 3F-i:Attachment #1-Interagency agreementijFYI2-13_RPV staff
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11-29
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IN WITNESS WHEREOF,this Agreement is executed by the parties as follows:
CITY OF EL SEGUNDO
,g~~J?.u_s.~~m mm_-------{Deleted:Kelly McDowell
Mayor
ATTEST:
Cindy Mortesen
City Clerk
APPROVED AS TO FORM:
Mark Hensley
City Attorney
Deleted:20110307 Item 3F-
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I IN WITNESS WHEREOF,this Agreement is executed by the parties as follows:
CITY OF LAWNDALE
Harold Hofmann
Mayor
ATTEST:
Paula Hartwill
City Clerk
APPROVED AS TO FORM:
Jjf~~~¥_I'_!~~~~!m mu m m u ------{Deleted:William W.Wynder
City Attorney
Deleted:20110307 Item 3F-
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[20110315 Interagency Agreement FINAL with SRDOQ_mnmn12mmm_mmmnnmmm_mmnn_m_m mm J
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I IN WITNESS WHEREOF,this Agreement is executed by the parties as follows:
CITY OF LOS ANGELES
DEPARTMENT OF TRANSPORTATION
.ftmi.t.:_~_t:9.:~4Lhh h mm m __-------{Deleted:Wayne K.Tanda
Acting General Manager
ATTEST:
1~~_~_~g~~X n m n __m n __m m_m __nn_n n m nn nn __m_n __m __n __n ------{Deleted:Frank Martinez
City Clerk .
APPROVED AS TO FORM:
Deleted:Asst
Deleted:20110307 Item 3F-
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Deleted:20110307 Item 3F-i Attachment #I-Interagency agreement
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11-32
IN WITNESS WHEREOF,the parties hereto have caused this AGREEMENT to be +-------{Formatted:Left
executed by their respective officers,duly authorized,by m-mm-oiimmm--m-,-m-m-----{:=D=e=le=te=d=:=========<
2011,and by the DIRECTOR OF PUBLIC WORKS on ,2011.
COUNTY OF LOS ANGELES
___Director of Public Works
APPROVED AS TO FORM:
~Eo~I~~~~sei------------------------m-----------------------m---m------------m-------------------------------····-1?:Ieted:RAYMOND G.FORTNER,
By _
Deputy
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11-33
CITY OF RANCHO PALOS VERDES
Thomas D.Long
Mayor
ATTEST:
Carla Morreale
City Clerk
APPROVED AS TO FORM:
Carol Lynch
City Attorney
Deleted:20110307 Item 3F-i Attachment #I-Interagency agreement
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11-34
Christi Hogin
City Attorney
CITY OF LOMITA
Jf~_I!_~J~<?~~<?~~u_u __m u u uu -------{Deleted:MarkWaronek
Mayor
ATTEST:
Dawn Tomita
City Clerk
APPROVED AS TO FORM:
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11-35
EXHIBIT A
MAX Service Requirements
MAX shall operate during peak weekday commuting hours,on a schedule approved by the
Policy Steering Committee.MAX will operate Monday through Friday,with the exception of
the following holidays:New Year's Day,Memorial Day,Independence Day,Labor Day,
Thanksgiving Day and the day after,and Christmas Day.
MAX shall be provided on routes in the South Bay area of Los Angeles County as identified in
Exhibit B to this Agreement.MAX service shall be open to the general public and provided as a
commuter bus.
MAX shall utilize a fleet of 14 transit coaches with commuter-style amenities such as reclining
seats,reading lights and climate control.All MAX coaches shall be fully wheelchair accessible
in compliance with the Americans with Disabilities Act.
Deleted:20110307 Item 3F-
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11-36
EXlllBITB
MUNICIPAL AalA IXPRI"
2 .....'..'...111
3San~:r ......,...../511..-.
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11-37
EXIDBITC .....------{Formatted:Centered
Formula for Estimated Annual Operating Funding by AGENCY m __mm_mmm__m __mmm -------{Formatted:Font:Bold,Underline
The operating contribution of each AGENCY for FYll-12 shall be based upon "Attachment A,
RPV remains participant,2 Line 2 runs",as presented to the PSC during its meeting on March 7,
2011.However,upon a majority vote of the PSC,the FYll-12 contribution shall be reduced by
its pro-rata portion of the use of the accumulated fund balance of MAX.
Unless otherwise agreed to by the AGENCIES,the formula described below .'.'I.'9..'!.1<!_!>.t:_~Xft:.<~!!Y_t:_m_------;:=D_e=le=te=d=:=th_at=-=-=-====(
at the beginningJ:!f.f-YJ2..-U:m m m m ~------;:=D=e=le=te=d=:~=or=======<
LEAD AGENCY will perform an accounting annually of the boarding statistics provided by ,:,:::~~~>=~=:=::=:=:=;:=~==-======<
CONTRACTOR for each service line route segregated by AGENCY on a calendar basis.The
boarding statistics will be converted to percentage ratios for the purpose of calculating the
proportionate share of cost sharing and determination of the annual operating contribution
formula.This formula will comprise of two variables.The variables will be total a.m.boardings
by jurisdiction as well as total a.m.and p.m.mileage by jurisdiction.These two variables will be
weighted at 50%each for a total of 100%.
't:------{-.:D:...:e:.:.;le:...:te=.:d__:-"-~~
Formula for Capital Funding by A.GENCY
"Formatted:Font:Bold,Underline
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The amount of the capital contribution of each AGENCY for FYll-12 shall be based upon 50%
of operating contributions "Attachment A,RPV remains participant.2 Line 2 runs",as presented
to the PSC during its meeting on March 7,2011.Unless otherwise agreed to by the AGENCIES,
the formula described below .'.'I.'9_1:!-!~_~_~_~X~t:~!~y~~~_!!!~_~~_gi~i_l)..g_9XX.Y1J_-_!2:m .,::::--{>=D.,;e,;;le;;;,te=d=:s;..ha;..l1===-====<
\"'-1 Deleted:for
LEAD AGENCY will perform an accounting annually of the boarding statistics provided by \:'1 Deleted:2
CONTRACTOR for each service line route segregated by AGENCY on a calendar basis.The \i>=D=e=le=te=d=:3========<
boarding statistics will be converted to percentage ratios for the purpose of calculating the
proportionate share of capital contribution formula.This formula will comprise of two variables.
The variables will be total a.m.boardings by jurisdiction as well as total a.m.and p.m.mileage
by jurisdiction.These two variables will be weighted at 50%each for a total of 100%.
A ~.~•••••,
11-38
Further,if any member jurisdiction pays more than their budget share of actual
costs,as determined by an annual audit ofthe MAX budget,then an equal amount
will be deducted from their nexta future quarterly billing in the a subsequent
budget year,at the direction of the PSc.If any member jurisdiction pays less than
their budget share of actual costs,as determined by annual audit of the MAX
budget,then an equal amount will be added to their next quarterly billing in the
subsequent budget year.
If material findings are found that woul~change formula,LEAD AGNECY will
reimburse that AGENCY for the cost of the audit.
20110307_Item 3F-Attachment #1-Interagency agreement FYI2-13_RPV staff revisionsCarol_Dennis edits.DOC
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3C-Interagency agreement FYI2-16FY2009-20 11 3yr Agreement -Final.DOC
11-39
December 3,2010
CITYOF RANCHO PALOS VERDES
OFFICE OF THE CITY MANAGER
Leroy J.Jackson,City Manager
City of Torrance
3031 Torrance Boulevard
Torrance,CA 90503
DearMr~eA~
On November 17,2010,I wrote you to inform the City of Torrance,as the Lead A~ency
for the Municipal Area Express and other member agencies that on November 30 ,the
Rancho Palos Verdes City Council was scheduled to consider the City's continued
participation in Municipal Area Express (MAX).
At that meeting,Rancho Palos Verdes Staff informed the City Council that with the
decline of Proposition A revenues and the increase of transit related expenditures,Staff
anticipates that the City of Rancho Palos Verdes would be forced to use a General
Fund subsidy of approximately $1.2 million to continue participation in MAX over the
next 7 years.In addition,the City's ridership (4%),compared to our allocation of the
MAX budget (16%),provides for a subsidy per boarding of almost $27.
As a result of the information provided by Staff,the City Council Directed Staff to
immediately notify the City of Torrance and other Member Agencies that Rancho Palos
Verdes is withdrawing from Municipal Area Express (MAX),effective June 30,2011.
Pursuant to the direction from the City Council,and Section 14(A)of the MAX Inter-
Agency Agreement,this letter serves as the City of Rancho Palos Verdes'formal notice
of termination of our participation in MAX,effective June 30,2011.Although the City
Council welcomed further discussion between City staff and MAX,financial projections
show that the City will not have sufficient transit revenues to contribute any of its
proportional share of the cost of the necessary refurbishment and/or replacement of the
MAX fleet of buses.
The Inter-Agency Agreement also provides that within thirty days after such notice is
received by the MAX Policy Steering Committee (PSC),the PSC must meet and
determine whether to terminate MAX or to re-apportion the respective share of any
Agency terminating its participation in MAX among the remaining entities.As the next
regularly scheduled PSC meeting is on Monday,December 6tn ,we anticipate that a
special meeting be held for this vote.However,the City did receive notice that the
outcome of our City Council's decision will be discussed on the December 6th agenda.
We request that the discussion regarding the City Council's decision be heard by the
30940 HAWTHORNE BLVD./RANCHO PALDS VERDES,CA 90275-5391/(310)544-5205/FAX (310)544-5291
E-MAIL:CLEHR@RPV.COM I WWW.PALOSVERDES.COM!RPV
PRINTED ON RECYCLED PAPER
~0 ATTACHMENT 11-1
Leroy J.Jackson
City of Torrance
December 3,2010
Page 2 of3
PSC before,and not after,discussion of the possible five year extension of the MAX
Inter-Agency Agreement'and the possible extension of the MV Transportation
Agreement,as the agenda currently states.The discussion regarding the City's
termination from MAX effective June 30,2011 should precede the discussion regarding
the MV Transportation Agreement to afford an open discussion regarding its potential
impact on the resultant re-allocation of the cost upon each Member Agency and the
future of MAX.
Rancho Palos Verdes Staff has also learned there is a deposit payable to the
Metropolitan Transit Authority (MTA)of approximately $800,000,which is a result of a
duplicate payment made to MAX by the MTA in 1996.The extra payment of
approximately $400,000 has grown,due to interest earned over the past 14 years,and
appears to represent a significant liability to the member agencies of MAX.The City of
Rancho Palos Verdes requests that these funds be returned to the MTA immediately.
Please feel free to contact Adam Raymond,Senior Administrative Analyst,with any
questions or concerns at (310)544-5213.
Regards,
Carolyn Lehr
City Manager
Cc:
City of Torrance
City Clerk
3031 Torrance Boulevard
Torrance,CA 90503
City of EI Segundo
Office of the City Manager
350 Main Street
EI Segundo,CA 90245
City of Lawndale
Office of the City Administrator
14717 Burin Avenue
Lawndale,CA 90260
City of Los Angeles
2
ATTACHMENT 11-2
Leroy J.Jackson
City of Torrance
December 3,2010
Page 3 of3
Office of the General Manager
Department of Transportation
200 North Spring Street
Los Angeles,CA 90012
City of Lomita
Office of the City Administrator
P.O.Box 339
Lomita,CA 90717
Los Angeles County
Department of Public Works
Transit Operation Section
P.O.Box 1460
Alhambra,CA 91802
Torrance Transit System
City of Torrance
20500 Madrona Avenue
Torrance,CA 90503-3692
3
ATTACHMENT 11-3
December 8,2010
CITYOF RANCHO PALOS VERDES
OFFICE OF THE CITY MANAGER
Leroy J.Jackson,City Manager
City of Torrance
3031 Torrance Boulevard
Torrance,CA 90503
DearMr.~~
Rancho Palos Verdes Staff attended the December 6,2010 Municipal Area Express
(MAX)Policy Steering Committee (PSC)meeting along with Rancho Palos Verdes City
Councilmember Anthony Misetich.At the meeting,the PSC discussed the Rancho
Palos Verdes Notice of Intention to Withdraw from MAX,dated December 3,2010,and
the ramifications it may have on MAX.I understand that Torrance Transit staff did a
great job of outlining our City's reasons for providing notice,including the decline of
Proposition A funds and increases in transit expenditures that would make continued
participation in MAX by Rancho Palos Verdes unfeasible.After discussion among the
PSC members,it was decided that any decision about the future of MAX would take
place at the next scheduled PSC meeting in February 2011.
During the PSC meeting,Torrance Transit staff advised the PSC members that a
Technical Staff Advisory Committee Meeting will take place on December 15,2010,to
discuss a possible re-allocation of costs that more closely mirror each participating
agencies'ridership and possible scenarios that would account for the withdraw of
Rancho Palos Verdes.I request that Torrance Transit staff consider scenarios that do
not include the City of Rancho Palos Verdes as a future participant.Even if the City's
current 16%percent of the budget allocation was re-adjusted to the 4%to 6%range,
the City of Rancho Palos Verdes could still not afford to participate in operations or pay
for a share of the refurbishment or replacement of new buses.
At the PSC meeting,legal counsel for the City of Torrance and MAX opined that the
Rancho Palos Verdes Letter of Intention to Withdraw from MAX,effective June 30,
2011,would not become valid until 90 days prior to that date.Based on this opinion,
legal council explained that the PSC is not subject to a vote to continue participation in
MAX within 30 days of the receipt of the Notice,as stated in Section 14 of the MAX
Inter-:-Agency Agreement.Rancho Palos Verdes staff expressed its disagreement with
this analysis at the meeting,and I am formally doing so again in this letter.Our legal
counsel does not foresee this becoming an issue;however,I must insist that any
decision made at any future PSC meeting will not bind the Rancho Palos Verdes to any
future financial commitment or liability.
30940 HAWTHORNE BLVD./RANCHO PALOS VERDES,CA 90275-5391 /(310)544-5205/FAX (310)544-5291
E-MAIL:CLEHR@RPv.COM I WWW.PALOSVERDES.COM/RPV
PRINTED ON RECYCLED PAPER
l~~~l ATTACHMENT 11-4
Leroy J.Jackson
City of Torrance
December 8,2010
Page 2 of2
Please feel free to contact Adam Raymond,Senior Administrative Analyst,with any
questions or concerns at (310)544-5213.
~a~dsl .
~~~
Carolyn Lehr
City Manager
Cc:
City of Torrance
City Clerk
3031 Torrance Boulevard
Torrance,CA 90503
City of EI Segundo
Office of the City Manager
350 Main Street
EI Segundo,CA 90245
City of Lawndale
Office of the City Administrator
14717 Burin Avenue
Lawndale,CA 90260
City of Los Angeles
Office of the General Manager
Department of Transportation
200 North Spring Street
Los Angeles,CA 90012
City of Lomita
Office of the City Administrator
P.O.Box 339
Lomita,CA 90717
Los Angeles County
Department of Public Works
Transit Operation Section
P.O.Box 1460
Alhambra,CA 91802
Torrance Transit System
City of Torrance
20500 Madrona Avenue
Torrance,CA 90503-3692
2
ATTACHMENT 11-5
CITVOF
THOMAS D.LONG,MAYOR
ANTHONY M.MISETICH,MAYOR PRO TEM
BRIAN CAMPBELL,COUNCILMAN
DOUGLAS W.STERN.COUNCILMAN
STEFAN WOLOWICZ,COUNCILMAN
February 3,2011
Jim Mills,Administration Manager
Torrance Transit
City of Torrance
3031 Torrance Boulevard
Torrance,CA 90503
Dear Mr.Mills:
RANCHO PALOS VERDES
I would like to thank Lead Agency staff and staff from the Technical Advisory Committee
for their hard work since the last Municipal Area Express (MAX)Policy Steering
Committee (PSC)meeting on December 6,2010.As a councilman,I have a fiduciary
responsibility to the City and residents of Rancho Palos Verdes.After reviewing the
MAX PSC meeting agenda for Monday,February 7,2011,I have some concerns I
would like addressed prior to the meeting.In addition,I feel the PSC is missing some
key information and should not be making any final or binding decisions on any of the
items requiring action that are presented on the agenda for the February 7th meeting.
I am troubled by several statements made in the summary of the December 6,2010
PSC minutes.It appears that Torrance Transit (Lead Agency)staff and the City of
Torrance's City Attorney's Office have opined,that in order for Rancho Palos Verdes'
letter of intent to withdraw from MAX to be effective,the City must re-submit the letter
on March 30,2011.As Rancho Palos Verdes staff indicated at the PSC meeting on
December 6th ,our City Attorney does not agree with this interpretation of the current
Interagency Agreement.By providing notice of intent to withdrawal from MAX on
December 3,2011,the City of Rancho Palos Verdes provided ample time for all of the
member agencies and Lead Agency staff to work with the PSC to determine options to
move forward.If Rancho Palos Verdes had simply provided notice on March 30,2011,
Lead Agency Staff and the other member agencies would have had merely 30 days to
make a decision about the fate of MAX.This would not allow time for another member
agency to provide a notice of termination pursuant to the 90-day rule,as stated in the
current Interagency Agreement.Rather than wasting time and effort debating the
interpretation of the termination provisions of the Agreement,based on the prior
direction from the Rancho Palos Verdes City Council,the City of Rancho Palos Verdes
will provide another termination letter dated March 30,2011,to avoid any potential
dispute about this issue and its right to withdraw from MAX.
30940 HAWTHORNE BLVD./RANCHO PALOS VERDES,CA 90275-5391/(310)544-5205/FAX (310)544-5291/WWW.PALOSVERDES.COM/RPV
:PRINTED ON RECYCLED PAPER
ATTACHMENT 11-6
Jim Mills
City of Torrance
February 3,2011
Page 2 of5
At our upcoming meeting,Lead Agency staff will ask the PSC to allocate MTA funds to
cover the expenses of operating MAX for the current FY 10/11 year 4th quart~r billing.
More significant though,is Lead Agency staff's request to allocate MTA funds
accumulated over many years to the cover the cost to operate MAX for the entire FY
11/12 fiscal year and thereby eliminate the need for contributions from the member
agencies,and for any remaining funds to be applied towards the FY 12/13 operating
expenses and agency contributions.Since the staff report does not provide sufficient
details regarding this issue,please provide background on how these funds were given
to MAX.Are these the funds that were the result of a reported double payment from the
MTA that was never returned to the MTA?Prior to the upcoming PSC meeting,please
provide the PSC with all of the written correspondence with the MTA about this matter
and any formal documentation that the MTA has authorized MAX to keep the funds and
is not required to return them.I also would like Staff to provide the exact amount the
PSC would be allocating for the upcoming expenditures.I do not believe it is financially
responsible to make a decision to allocate approximately $800,000 without the proper
documentation and authority to do so.Without that documentation and authorization
from the MTA,the member agencies could be subjecting themselves to future liability
for that expenditure.
In order to move forward with the approval of the MV Transportation agreement for
operation of the MAX fleet,the PSC is missing some key information.I understand that
recent negotiations provide little time for a draft agreement to be provided to the PSC
for review.However,without a draft agreement,the PSC will be unable to answer
several key questions or make a decision whether to approve the agreement.For
example,would the second year of the agreement be guaranteed?What happens if an
agency submits a notice of intention to withdraw from MAX as of the end of FY 11/12?
Is that agency liable for its share of MAX operations during the second year of the
Agreement?
The PSC also is being asked for approval to proceed with a new 2-Year Interagency
Agreement. Although I think the changes proposed are necessary,during my
preliminary review,I,as well as the City's Staff,believe there are some areas that still
need to be changed and/or clarified:
-Section 4.Provision of Service,states that the Lead Agency shall implement
MAX as described in Exhibits A and B.Upon review of Exhibit A,it appears
that MAX is still going to operate 14 buses.With the City of Rancho Palos
Verdes'noticed withdrawal,it's is the understanding of our City Staff that
MAX will operate 12 buses.
-Section 6,Operating Funds and Payment for Service of Funds,incorporates
the new methodology for the formula used to distribute the net difference
between the MTA funds,fare revenues and budgeted expenditures.To avoid
confusion,staff might consider a new section or sub-section for this language.
Furthermore,Section 6 states the new formula will be audited each year,but
does not state when and by whom the review will be performed.
ATTACHMENT 11-7
Jim Mills
City of Torrance
February 3,2011
Page 30f5
-The audit process in Section 6 appears to conflict with Section 16,Record
Keeping,Reporting and Auditing.Please provide clarification.
-The proposed agreement does not address the capital requirement of each
agency,nor the liability associated with the purchase or refurbishment of
buses.
-The agreement continues to be silent concerning the possible liabilities to an
agency choosing to withdraw from MAX,including indemnification of any
withdrawing agency for any liability arising from the expenditure of the funds
that were overpaid by the MTA.
The process for review the Interagency Agreement needs improvement.PSC members
have not had adequate time for staff and legal counsel to review the changes.If the
City of Torrance legal counselor any of the attorneys representing any of the other
member agencies have changes,we need to ensure that there is a process whereby
any changes would be presented to the PSC before they are forwarded to each
member agency for final review and approval.
An area of concern not addressed on the February 7,2011 MAX PSC meeting agenda
is the liability relating to the possibility of two unused buses.According to City of
Rancho Palos Verdes Staff,if the Rancho Palos Verdes City Council does not reverse
its decision to withdraw from MAX,Line 2 would most likely be truncated at Hawthorne
and PCH,with two daily trips eliminated.Staff also indicated that the MAX buses will be
9 years old as of June 30,2011,and each bus has a useful life of 10 years.The FTA
declined to waive the final year of depreciation,and each bus could be potentially an
$18,000 liability.Please address this possibility prior to the meeting.
The PSC is being asked to make financial decisions about FY 11/12 (applying MTA
funds,agreements,etc.),but is not voting on a proposed budget for FY 11/12.It is
financially prudent to review a formal proposed budget,taking into any consideration the
multiple financial assumptions (decreased fare revenue,capital needs,etc),before the
PSC makes these decisions.In addition,another agency may provide notice to
withdraw from MAX by March 30,2011 ..
As you may recall,at the November 30,2010 Rancho Palos Verdes City Council
meeting,the City Council voted to withdraw from MAX,but stated that if substantial
changes are made to the MAX allocation formula,the City Council reserved the right to
change course.The City Council also indicated that before reconsideration would be
made,additional changes to the Interagency Agreement would need to be addressed.
Many of those changes are outlined in this letter.In order to allow time for Lead Agency
Staff to provide the PSC with complete information and for City of Rancho Palos Verdes
Staff to place an item on a future agenda for the possible reconsideration by the Rancho
Palos Verdes City Council of its decision to withdraw from MAX,I request all matters
relating to the February 7,2011 PSC meeting be continued to a special meeting on
March 21,2011.
ATTACHMENT 11-8
Jim Mills
City of Torrance
February 3,2011
Page 4 of 5
Please feel free to contact Dennis McLean,Director of Finance and Information
Technology at (310)377-0360,or Carol Lynch,City Attorney at (213)626-8484_with any
questions or concerns.
Very truly yours,
~~
Anthony Misetich
Mayor Pro Tern
City of Rancho Palos Verdes
Cc:
City Manager
City of Torrance
3031 Torrance Boulevard
Torrance,CA 90503
City of Torrance
City Clerk
3031 Torrance Boulevard
Torrance,CA 90503
City of EI Segundo
Office of the City Manager
350 Main Street
EI Segundo,CA 90245
City of Lawndale
Office of the City Ac!ministrator
14717 Burin Avenue
Lawndale,CA 90260
City of Los Angeles
Office of the General Manager
Department of Transportation
200 North Spring Street
Los Angeles,CA 90012
City of Lomita
Office of the City Administrator
P.O.Box 339
Lomita,CA 90717
ATTACHMENT 11-9
Jim Mills
City of Torrance
February 3,2011
Page 50f5
Los Angeles County
Department of Public Works
Transit Operation Section
P.O.Box 1460
Alhambra,CA 91802
Torrance Transit System
City of Torrance
20500 Madrona Avenue
Torrance,CA 90503-3692
ATTACHMENT 11-10
CITY O-F
TORRANCE
TRANSIT DEPARTMENT
Administration Division
Kim Turner
Transit Director
JimMllIs
Administration Manager
February 17,2011
Anthony M.Misetich,Mayor Pro Tem
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes,California 90275-5391
Dear Mayor Pro Tem Misetich:
Jim Mills
Transit Administration Manager
310-618-6291
jmills@TorranceCa.Gov
On half of the Municipal Area Express (MAX)Lead Agency,thank you for your letter of
February 3,2011 outlining a number of issues that require further discussion and
consideration.Pursuant to your request at the February 7,2011 Municipal Area Express
Policy Steering Committee (PSC)meeting,staff is responding to your correspondence prior
to the Special PSC meeting on March 7,2011.
In regards to your inquiry regarding the 90-day notice to terminate clause,the Lead Agency
legal counsel,has reviewed your letter and will responding accordingly to your concerns.
The MAX Lead Agency is pleased to report that the issue of a possible over payment of the
FY 97 Transit Service Expansion (TSE)has been resolved.Please find attached a letter
from the MTA which reports that it could not conclusively determine that there had been any
over payment.Metro will not require the Lead Agency to return any funds pertaining to the
issue and considers the matter closed.The letter goes on to mention that no agency
participating in the MAX program will be liable for any future liability.The total amount of the
TSE funds breakdowns in the following distribution:
97 TSE:
Accrued Interest:
$411,490.00
$245,252.11
$656,742.11
With the issue now resolved,the MAX Lead Agency staff will return to the special March 7,
2011 MAX Policy Steering Committee with various options for the PSC to consider in
allocating the funds.
20500 Madrona Avenue.Torrance,California 90503 •Telephone 310n81-6930.Fax 310/618-6229
Visit Torrance's home page:http://www.TorranceCA.Gov
ATTACHMENT 11-11
The MV Transportation operating agreement proposed options were negotiated in a very
short time frame.There is a current agreement,in place which has two one-year options
should the PSC elect to exercise them.MV Transportation has tendered what we consider a
significant ($172,286)adjusted proposal for FY 12.For FY 13 they are requesting an
increase of 3%($32,252)which reflects the aging fleet and cost of doing business.Various
options will be presented to the PSC for direction.Should the PSC direct staff to proceed
with a specific option the MAX Lead Agency legal counsel will prepare the appropriate
contract documents for final review and approval.
In your letter you have cited numerous areas in the Interagency Agreement that you feel
need to be changed and lor clarified.All participating agencies are encouraged to submit to
the MAX Lead Agency staff on or before February 21 st recommendations that will be .
fOlwarQed for to the PSC for adoption.
Thank you for your kind comments regarding the efforts by the MAX Lead Agency staff and
the Technical Advisory Committee.We look forward to further addressing all concerns at
the March 7,2011 Special Municipal Area Express Policy Steering Committee meeting.
Please feel free to contact me at (31q)618-6291 if you have any questions or concerns.
Very truly yours,
..~
-r-~im~Mllls
rogram Manager,MAX Lead Agency Staff
Administration Manager .
Torrance Transit System
Attachment:
Metro Letter to MAX Lead Agency
Cc:
City Manager
City of Rancho Palos Verdes
30940 Hawthorne Blvd
Rancho Palos Verdes,CA 90275-5391
City Manager
City of Torrance
3031 Torrance Blvd
Torrance,Ca 90503
ATTACHMENT 11-12
City of Torrance
City Clerk
3031 Torrance Blvd
Torrance,CA 90503
City of EI Segundo
Office of the City Manager
350 Main Street
EI Segundo,CA 90245
City of Lawndale
Office of the Administrator
14717 Burin Avenue
Lawndale,CA 90260
City of Los Angeles
Office of the General Manager
Department of Transportation
200 North Spring Street
-Los Angeles,CA 90012
City of Lomita
Office of the Administrator
P.O.Box 339
Lomita,Ca 90717
Los Angeles County
[)epartment of Public works
Transit Operations Section
P.O.Box 1460
Alhambra,CA 91802
Councilman Carl Jacobson
City of EI Segundo
350 Main Street
EI Segundo,CA 90245
Councilman Pat Kearney
City of Lawndale
14918 Mansel Avenue
Lawndale,CA 90260
ATTACHMENT 11-13
Councilman Ken Blackwood
City of Lomita
P.O.Box 90717
Lomita,CA 90717
Ms.Erika Velazquez/District Director
Councilwoman Janice Hahn's Office
638 S>Beacon St Ste 552
San Pedro,CA 90731
Councilman Tom Brewer
City of Torrance
3031 Torrance Blvd
Torrance,CA 90503
Mr.Steve Napolitano/Deputy
Supervisor Don Knabe
County of Los Angeles.
825 Maple Avenue #150
Torrance,CA 90503
ATTACHMENT 11-14
Metropolitan Transportation Authority
Metro
February 9,2011
Jim Mills
Administration Manager
Torrance Transit
City of Torrance
20500 Madrona Blvd
Torrance,CA 90503
Dear Mr.Mills,
One Gateway Plaza
los Angeles,CA 90012-2952
213.922.2000 Tel
metro.net
This letter is in reference to the issue of double payment of Torrance's 1997 TSE
program.
The staff from Metro's audit,accounting and local programming during the past
two weeks,thoroughly reviewed all the financial information records and physical
documentation available as well as evaluated Metro's internal control
procedures.
The result of the review is that our staff could not conclusively determine that
there has been an over payment.For this reason,Metro will not require
Torrance to return any funds pertaining to this issue and would consider this
matter closed.In addition,no agency participating in the MAX program will be
liable for any future liability related to this issue.
Thank you for your support and cooperation and if you have any questions,
please contact me or my staff member Carlos Vendiola at 213-922-4527.
-.
Sincerely,
NctL0 w-cfJf .
Nalini Ahuja ~
Interim Executive Office~
Office of Management and Budget
LACMTA
ATTACHMENT 11-15
CITVOF
February 24,2011
Jim Mills,Administration Manager
Torrance Transit
City of Torrance
3031 Torrance Boulevard
Torrance,CA 90503
Dear Jim:
RANCHO PALOS VERDES
OFFICE OF THE CITY MANAGER
As you already know,the City Council decided to withdraw from MAX at its meeting on
November 30,2011.
This letter serves to offer suggestions regarding the proposed Interagency Agreement
(the "IA Agreement");restate several unanswered questions,comments and requests
attributable to the letter sent to you,dated February 3,2011,and provide several other
comments,ideas and requests for additional information.
City Staff cannot proceed to make an informed recommendation to the Rancho Palos
Verdes City Council regarding any possible reconsideration of its decision to withdraw
from MAX without timely answers to the questions contained herein.Therefore,City
Staff requests answers to questions previously asked,as well as answers to new
questions included in this letter,to be received on or before March 2,2011,to enable
City staff the ability to make a well informed recommendation to the City Council at its
meeting on March 15,2011.City Staff believes some answers should be provided to
the entire Policy Steering Committee (the "PSC")on March 7,2011,and some
information should be provided beforehand to allow meaningful discussion by the PSC,
as well as well-informed decision to be made at the meeting.
City staff appreciates the competiog demands that MAX Lead Agency Staff experience
and are willing to meet to facilitate receipt of timely replies in a spirit of cooperation.
Because the nature of the content of this letter may seem critical at times,City Staff
wishes to acknowledge the difficulty that current Lead Agency staff has experienced
while attempting to transition the management of an organizational legacy that proceeds
current MAX management.
30940 HAWTHORNE BLVD./RANCHO PALOS VERDES,CA 90275-5391 /(310)544-5205 /FAX (310)544-5291
E-MAIL:CLEHR@RPV.COM !WWW.PALDSVERDES.COM!RPV
PRINTED ON RECYCLED PAPER
4~~ATTACHMENT 11-16
Jim Mills
City of Torrance
February 24,2011
Page 2 of8
IA Agreement
Should the City Council of Rancho Palos Verdes reverse its action to withdraw from
MAX,the City Attorney will perform a review of the IA Agreement presented to the PSC
on Match 7,2011 and offer comments on behalf of the City prior to any approval by the
City Council.However,the City Staff offers the following "business"comments
regarding the proposed Interagency Agreement (the IA Agreement")presented to the
Policy Steering Committee ("PSC")on February 7,2011.
Section 4.Provision of Service
The provision states that the Lead Agency shall implement MAX as described in
Exhibits A and B.Upon review of the proposed Exhibit A,it appears that MAX is still
going to operate 14 buses.With the City of Rancho Palos Verdes'noticed withdrawal,it
is the understanding of City Staff that MAX will operate 12 buses.Based upon the
City's withdrawal,will 12 or 14 buses be operated?
Section 6.Operating Funds and Payment for Service
The IA Agreement should require the Lead Agency,or its designees,to conduct a
ridership audit during the month of August (or another appropriate month)each year
that is referenced in Section 6 of the proposed IA Agreement presented to the PSC on
February 7,2011.The ridership audit should be conducted by an independent agency.
Perhaps the Lead Agency staff should consider the cost and merits of an electronic
system that would include the use of rider ID cards,scanners and database software
that could provide more accurate real-time ridership information as an alternative to the
ridership audit?
The provision to pay for costs in excess of what is anticipated (limited to 20%)should
also be limited to operating costs,or any other reasonable costs approved by the PSC.
If it has not already done so,Lead Agency Staff may wish to consider attaching the
computation of the participating agency cost sharing formula as an exhibit to the IA
Agreement.
Section 14.Termination of Agreement
City staff believes that the notice of termination provision contained in Section 14 is
clear.However,it's our understanding that Lead Agency staff reported that Lead
Agency counsel expressed that notice of termination could not be provided any earlier
than March 30,2011.Therefore,City staff suggests that the notice of termination
provision should be written to enable notice to be given at any time during the fiscal
year,but no later than March 31,and that the notice will be effective on the last day of
the fiscal year,June 30 th •
ATTACHMENT 11-17
Jim Mills
City of Torrance
February 24,2011
Page 3 of 8
The current IA Agreement is silent about the valuation and settlement procedure to be
followed upon termination of a member agency.City staff encourages more clear
language that requires a year-end accounting,the valuation of the assets and liabilities
of MAX and a determination of the net asset value of a terminating agency member
within 90 days of the year-end.A participating agency,including a terminating agency,
should have the right to review the year-end and termination accounting.Perhaps the
termination accounting should include a settlement agreement that would include the
final settlement amount,and the IA should include indemnification provisions and other
standard provisions for termination?
The pro-rata net assets should be based upon the average cost sharing ratio while
participating in MAX.In the event the Lead Agency and the terminating agency cannot
agree on the settlement amount,perhaps mandated arbitration provisions should be
included in the termination provision of the IA?
In the event MAX is dissolved,the settlement amount should be distributed to all
participating agencies within 180 days.MAX Staff shall be responsible for prudent,
orderly sale of MAX buses.Otherwise,the termination accounting and settlement
procedure would follow the general provisions described above.
Section 16.Record Keeping.Reporting and Auditing
It is City Staff's understanding that the financial activities of MAX are included in the
financial statements of the City of Torrance.At a minimum,City staff recommends that
that assets,liabilities and the operating activities of MAX be distributed to member
agencies and presented to the PSC annually and compared with the operating budget
for each such year-end.At a minimum,City Staff encourages the Lead Agency Staff to
establish a proprietary fund,rather than the existing agency fund,for the governance,
accounting and operation of MAX,effective July 1,20'11.As a more prudent alternative,
City Staff encourages all participating members to consider the formation of a joint
powers authority for the operation of MAX,to provide accountability and segregation of
the affairs of MAX from the City of Torrance.
Additional Provisions
The proposed IA Agreement should establish a list of significant activities that require
the approval of the governing body of each participating agency,including capital
reserves and purchases (i.e.buses),long-term contracts for services,significant
changes of the funding shares of participating agencies,as well as the decision whether
to continue or dissolve MAX upon receipt of notice of termination by a member agency.
ATTACHMENT 11-18
Jim Mills
City of Torrance
February 24,2011
Page 4 of 8
Unanswered Questions,Comments and Requests -Letter dated February 3,2011
Lead Agency Staffs Request To Allocate MTA Funds Accumulated Over Many Years
To The Cover The Cost To Operate MAX For The Entire FY 11-12 Fiscal Year And
Thereby Eliminate The Need For Contributions From The Member Agencies
The following excerpt from Mayor Pro-Tem Misetich's letter to you,dated February 3,
2011,and your email,dated February 22,2011,set-up a series of assertions,questions
and comments:
"At our upcoming meeting,Lead Agency staff will ask the PSC to allocate MTA
funds to cover the expenses of operating MAX for the current FY 10/11 year 4th
quarter billing.More significant though,is Lead Agency staff's request to allocate
MTA funds accumulated over many years to the cover the cost to operate MAX
for the entire FY 11/12 fiscal year and thereby eliminate the need for
contributions from the member agencies,and for any remaining funds to be
applied towards the FY 12/13 operating expenses and agency contributions.
Since the staff report does not·provide sufficient details regarding this issue,
please provide background on how these funds were given to MAX.Are these
the funds that were the result of a reported double payment from the MTA that
was never returned to the MTA?Prior to the upcoming PSC meeting,please
provide the PSC with all of the written correspondence with the MTA about this
matter and any formal documentation that the MTA has authorized MAX to keep
the funds and is not required to return them.I also would like Staff to provide the
exact amount the PSC would be allocating for the upcoming expenditures.I do
not believe it is financially responsible to make a decision to allocate
approximately $800,000 without the proper documentation and authority to do so.
Without that documentation and authorization from the MTA,the member
agencies could be subjecting themselves to future liability for that expenditure."
Your email,dated February 22,2011,states:
"The exact balance is $997,265.56.The 97 TSE accounts for $656.142.11 with a
balance of $340,523.45.The $340,523.45 are the MAX annual reserves which
are budget efficiencies,increased revenue from fares,participant contributions,
and interest earned."
It is City Staffs understanding that the PSC had no knowledge of the size of the reserve
until City Staff recently brought its existence to light.Had City Staff known that nearly
2/3 thirds of the reserve has been carried as a liability in the financial statements of the
City of Torrance since 1997,it would have questioned its appropriateness.While
understanding the reluctance of Lead Agency staff to spend the money until now,City
Staff wonders whether contribution amounts paid by all participating agencies in at least
the last several years could have been substantially less,utilizing the additional
reserves accumulated through favorable budget variances and cost savings initiated by
MAX.
ATTACHMENT 11-19
Jim Mills
City of Torrance
February 24,2011
Page 50fa
Based upon a presumption that all participating agencies have made annual
contributions over time in accordance with the FY1 0-11 contribution rate,it is City Staff's
assertion that each participating agency owns a pro-rata interest in the balance of
$997,265 (hereafter referred to as the "reserve"),net of outstanding liabilities.
City Staff requests that Lead Agency staff offer the option of refunding a prudent
amount of the reserve as of June 30,2011,to the participating agencies.Participating
agencies can then utilize the refund proceeds for other transit needs,as well as its pro-
rata contribution for FY11-12.
Assuming the City Council sustains its decision to withdraw from MAX,City Staff hereby
advises MAX that it requests a refund of its pro-rata share of about $160,000,based
upon 16%of the near $1 million reserve,net of its pro-rata share of outstanding
liabilities as of June 30,2011.
MV Transportation Agreement
Why is the agreement for operations of the MAX system by MV transportation entered
into with Torrance Transit,rather than MAX?
Is their an agreement or memorandum that binds participating members of MAX to the
provisions of the MV Agreement?
Has the existing agreement with MV Transportation been assigned to MAX?
Assuming an agreement is entered into with MV Transportation for FY 11-12 and FY12-
13,and a participating agency withdraws effective June 30,2012,what liabilities and
other commitments would the withdrawing agency be subject to attributable to the MV
Transportation agreement that continues through FY12-13?
Similarly,assuming an agreement is entered into with MV Transportation for FY 11-12
and FY12-13 and the PSC decides to dissolve MAX effective June 30,2012,what
liabilities and other commitments would all withdrawing agency be subject to?
Governance,Operating Budget and the IA Agreement
As requested previously,participating agency staff and legal counsel must be provided
sufficient time to review the proposed fA Agreement,the proposed MV Transportation
agreement,the short-term and long-term bus refurbishment and/or replacement capital
plan and operating budget together.Some participating agencies,like the City,may be
required to review,present,recommend and seek approval of such documents by its
respective City Council or similar governing boards.In light of the possibility that the
City may reverse its decision to withdraw,City staff requests the Lead Agency Staff to
present the proposed IA Agreement,the proposed MV Transportation agreement,the
short-term and long-term bus refurbishment and/or replacement capital plan and
ATTACHMENT 11-20
Jim Mills
City of Torrance
February 24,2011
Page 6 of8
operating budget (and any other relevant documents and plans)together,provide
sufficient time for both participating agency staff and PSC board members sufficient
time to review,ask questions and make a recommendation to their respective governing
bodies prior to the public PSC meeting at which decisions shall be made.
Several comments sprinkled throughout this letter lead to a core issue:Does the
governance form that MAX operates within provide sufficient oversight,accountability
and satisfactory decision making for all of its participants,as well as taxpayers?
Although it would cost more,a joint powers authority may be a more appropriate form of
governance for MAX to ensure accountability.If interested,participating members may
wish to view the governance model of Palos Verdes Peninsula Transit Authority for
consideration.
Capital Requirements for MAX Bus Refurbishments and/or Replacement
With one year of useful lives left on the 14 MAX busses,a plan for the refurbishment
and/or purchase of buses needs to be brought before the PSC before a final budget for
FY 11-12 can be adopted.
Based on estimates provided to City Staff,it appears as though the following costs are
associated for the capital replacement:
Cost of 14 MAX Buses
(Refurbish):
MTA 80%contribution:
Agency Contribution Total
Cost of 14 MAX Buses (New):
MTA 80%contribution:
Agency Contribution Total
$1,830,000
$1,464,000
$366,000
$10,500,000
$8,400,000
$2,100,000
Given approximately $2.5 million needed in capital over the next several years,how
does Lead Agency staff propose to fund these reqUirements?
Has MAX received approval for funding of the refurbishment of the 14 MAX buses?
If not,when could approval be attained and what is the timeframe?
If approval is not given,will each agency be faced with financing the entire cost?
It is important for each agency,that a capital plan/timeline is laid out,with funding
required each year,and estimated financial impacts on each agency clearly explained.
ATTACHMENT 11-21
Jim Mills
City of Torrance
February 24,2011
Page 70f8
Potential Liability for Unamortized Use of 2 Buses
As stated in the previous letter,its City Staff's understanding that Line 2 would most
likely be truncated at Hawthorne and PCH,with two daily trips eliminated.It's also our
understanding that MAX buses will be 9 years old as of June 30,2011,and each bus
has a useful life of 10 years.It's our understanding that the FTA1MTA declined to waive
the final year of depreciation.It's our understanding that for each bus not in service for
FY 11-12,that FTAIMTA may establish a liability of $18,000 to MAX.
Who would be responsible for this liability and how would it be allocated?
Has the Lead Agency contacted the FTA about a waiver on the final year?
What scenarios are available to limit the liability to MAX (e.g.spare ratio,sale of bus,
etc.)?
However,it's our understanding that.2 buses would be taken out of service and rotated
as spares.Please immediately advise City Staff what your redeployment plan is.
Again,the nature of this letter may seem critical.We want to re-express our desire to
work together to develop a well informed recommendation to the City Council.Please
feel free to contact City Staff at (310)377-0360,or Carol Lynch,City Attorney at (213)
626-8484 with any questions or concerns.
Very truly yours,
~:p\
Director of Finance &Information Technology
Q~8tJJv
Carolyn Lehr
City Manager
Cc:
City Manager
City of Torrance
3031 Torrance Boulevard
Torrance,CA 90503
City of Torrance
City Clerk
3031 Torrance Boulevard
Torrance,CA 90503
ATTACHMENT 11-22
Jim Mills
City of Torrance
February 24,2011
Page a ofa
City of EI Segundo
Office of the City Manager
350 Main Street
EI Segundo,CA 90245
City of Lawndale
Office of the City Administrator
14717 Burin Avenue
Lawndale,CA 90260
City of Los Angeles
Office of the General Manager
Department of Transportation
200 North Spring Street
Los Angeles,CA 90012
City of Lomita
Office of the City Administrator
P.O.Box 339
Lomita,CA 90717
Los Angeles County
Department of Public Works
Transit Operation Section
P.O.Box 1460
Alhambra,CA 91802
Torrance Transit System
City of Torrance
20500 Madrona Avenue
Torrance,CA 90503-3692
ATTACHMENT 11-23
MUNICIPAL AREA EXPRESS
Torrance Transit System
20500 Madrona Ave.
Torrance,CA 90503·3692
1·310·618·6266 (telephone)
1-310-618-6229 (facsimile)
A South Bay commuter
Bus service sponsored by:
City of EI Segundo
City of Lawndale
City of Lomita
City of Los Angeles
City of Rancho Palos Verdes
City of Torrance
County of Los Angeles
POLICY STEERING COMMITTEE MEETING
Monday,March 7,2011
5:00 p.m.
West Annex Commission Meeting Room
Torrance City Hall -West Annex
3031 Torrance Blvd.
Torrance,California 90503
City Clerk Please Post
AGENDA
1.Call to Order
2.Pledge of Allegiance
3.Oral Communications
4.Items from Lead Agency Staff
A.City of Rancho Palos Verdes Letter to Lead Agency Staff
5.Action Items
A.Approval of February 7,2011 Minutes
B.Approval of motion to accept and file the report from the City Clerk on
posting of the MAX agenda
C.MTAlTorrance Reconciliation and Invoicing Recommendation
D.Updated Operating Budget Formula
E.Extension of current MAX contract with MV Transportation
ATTACHMENT 11-24
F.Approval to proceed forward on new Interagency Agreement
6.Report from MV Transportation
A.Service Update
7.Items from the Policy Steering Committee
8.Executive Session
•None
9.Adjournment
Next Meeting:
Monday,April 4,2011
5:00 p.m.
Torrance City Hall-West Annex
Commission Meeting Room
Municipal Area Express
Policy Steering Committee
Agenda
March 7,2011
Page 2 of2
ATTACHMENT 11-25
ITEM 4A
MUNICIPAL AREA EXPRESS
March 7,2011
TO:
FROM:
Policy Steering Committee
Lead Agency Staff
SUBJECT:City of Rancho Palos Verdes Letter to Lead Agency Staff
INFORMATION ITEM
The attached letter from the City of Rancho Palos Verdes was received by the
Lead Agency Staff on February 24,2011.
Lead Agency Staff believe that thE?agenda items for the March 7,2011 Policy
Steering Committee meeting address the concerns shared in the letter.
Respectfully submitted,
Jim Mills
Administration Manager/Lead Agency
Attachment A-02/24/11 RPV Letter to Lead Agency Staff
ATTACHMENT 11-26
CITVOF
February 24,2011
Jim Mills,Administration Manager
Torrance Transit
City of Torrance
3031 Torrance Boulevard
Torrance,CA 90503
Dear Jim:
Attachment A
RANCHO PALOS VERDES
OFFICE OFTHE CITY MANAGER
As you already know,the City Council decided to withdraw from MAX at its meeting on
November 30,2011.
This letter serves to offer suggestions regarding the proposed Interagency Agreement
(the "IA Agreement");restate several unanswered questions,comments and requests
attributable to the letter sent to you,dated February 3,2011,and provide several other
comments,ideas and requests for additional information.
City Staff cannot proceed to make an informed recommendation to the Rancho Palos
Verdes City Council regarding any possible reconsideration of its decision to withdraw
from MAX without timely answers to the questions contained herein.Therefore,City
Staff requests answers to questions previously asked,as well as answers to new
questions included in this letter,to be received on or before March 2,2011,to enable
City staff the ability to make a well informed recommendation to the City Council at its
meeting on March 15,2011.City Staff believes some answers should be provided to
the entire Policy Steering Committee (the "PSC")on March 7,2011,and some
information should be provided beforehand to allow meaningful discussion by the PSC,
as well as well-informed decision to be made at the meeting.
City staff appreciates the competing demands that MAX Lead Agency Staff experience
and are willing to meet to facilitate receipt of timely replies ·in a spirit of cooperation.
Because the nature of the content of this letter may seem critical at times,City Staff
wishes to acknowledge the difficulty that current Lead Agency staff has experienced
while attempting to transition the management of an organizational legacy that proceeds
current MAX management.
30940 HAWTHORNE BLVD./RANCHO PAlOS VERDES,CA 90275-5391 /(310)544-5205 /FAX (310)544-5291
E-MAIL:CLEHR@RPIJ.COM/WWW.PAlOSVERDE5.COM/RPV
PRINTED ON RECYCLED PAPER
~g~~~
ATTACHMENT 11-27
Jim Mills
City of Torrance
February 24,2011
Page 2 of8
IA Agreement
Should the City Council of Rancho Palos Verdes reverse its action to withdraw from
MAX,the City Attorney will perform a review of the IA Agreement presented to the PSC
on Match 7,2011 and offer comments on behalf of the City prior to any approval by the
City Council.However,the City Staff offers the following "business"comments
regarding the proposed Interagency Agreement (the IA Agreemenf')presented to the
Policy Steering Committee ("PSC")on February 7,2011.
Section 4.Provision of Service
The provision states that the Lead Agency shall implement MAX as described in
Exhibits A and B.Upon review of the proposed Exhibit A,it appears that MAX is still
going to operate 14 buses.With the City of Rancho Palos Verdes'noticed withdrawal,it
is the understanding of City Staff that MAX will operate 12 buses.Based upon the
City's withdrawal,will 12 or 14 buses be operated?
Section 6.Operating Funds and Payment for Service
The IA Agreement should require the Lead Agency,or its designees,to conduct a
ridership audit during the month of August (or another appropriate month)each year
that is referenced in Section 6 of the proposed IA Agreement presented to the PSC on
February 7,2011.The ridership audit should be conducted by an independent agency.
Perhaps the Lead Agency staff should consider the cost and merits of an electronic
system that would include the use of rider ID cards,scanners and database software
that could provide more accurate real-time ridership information as an alternative to the
ridership audit?
The provision to pay for costs in excess of what is anticipated (limited to 20%)should
also be limited to operating costs,or any other reasonable costs approved by the PSC.
If it has not already done so,Lead Agency Staff may wish to consider attaching the
computation of the participating agency cost sharing formula as an exhibit to the IA
Agreement.
Section 14.Termination of Agreement
City staff believes that the notice of termination provision contained in Section 14 is
clear.However,it's our understanding that Lead Agency staff reported that Lead
Agency counsel expressed that notice of termination could not be provided any earlier
than March 30,2011.Therefore,City staff suggests that the notice of termination
provision should be written to enable notice to be given at any time during the fiscal
year,but no later than March 31,and that the notice will be effective on the last day of
the fiscal year,June 30 th •
ATTACHMENT 11-28
Jim Mills
City of Torrance
February 24,2011
Page 3 of 8
The current IA Agreement is silent about the valuation and settlement procedure to be
followed upon termination of a member agency.City staff encourages more clear
language that requires a year-end accounting,the valuation of the assets and liabilities
of MAX and a determination of the net asset value of a terminating agency member
within 90 days of the year-end.A participating agency,including a terminating agency,
should have the right to review the year-end and termination accounting.Perhaps the
termination accounting should include a settlement agreement that would include the
final settlement amount,and the IA should include indemnification provisions and other
standard provisions for termination?
The pro-rata net assets should be based upon the average cost sharing ratio while
participating in MAX.In the event the Lead Agency and the terminating agency cannot
agree on the settlement amount,perhaps mandated arbitration provisions should be
included in the termination provision of the IA?
In the event MAX is dissolved,the settlement amount should be distributed to all
participating agencies within 180 days.MAX Staff shall be responsible for prudent,
orderly sale of MAX buses.Otherwise,the termination accounting and settlement
procedure would follow the general provisions described above.
Section 16.Record Keeping,Reporting and Auditing
It is City Staff's understanding that the financial activities of MAX are included in the
financial statements of the City of Torrance.At a minimum,City staff recommends that
that assets,liabilities and the operating activities of MAX be distributed to member
agencies and presented to the PSC annually and compared with the operating bUdget
for each such year-end.At a minimum,City Staff encourages the Lead Agency Staff to
establish a proprietary fund,rather than the existing agency fund,for the governance,
accounting and operation of MAX,effective July 1,2011.As a more prudent alternative,
City Staff encourages all participating members to consider the formation of a joint
powers authority for the operation of MAX,to provide accountability and segregation of
the affairs of MAX from the City of Torrance,
Additional Provisions
The proposed IA Agreement should establish a list of significant activities that require
the approval of the governing body of each participating agency, inclUding capital
reserves and purchases (i.e,buses),long-term contracts for services,significant
changes of the funding shares of participating agencies,as well as the decision whether
to continue or dissolve MAX upon receipt of notice of termination by a member agency.
ATTACHMENT 11-29
Jim Mills
City of Torrance
February 24,2011
Page 4 of8
Unanswered Questions,Comments and Requests -Letter dated February 3,2011
Lead Agency Staff's Request To Allocate MTA Funds Accumulated Over Many Years
To The Cover The Cost To Operate MAX For The Entire FY 11-12 Fiscal Year And
Thereby Eliminate The Need For Contributions From The Member Agencies
The following excerpt from Mayor Pro-Tern Misetich's letter to you,dated February 3,
2011,and your email,dated February 22,2011,set-up a series of assertions,questions
and comments:
"At our upcoming meeting,Lead Agency staff will ask the PSC to allocate MTA
funds to cover the expenses of operating MAX for the current FY 10/11 year 4th
quarter billing.More significant though,is Lead Agency staff's request to allocate
MTA funds accumulated over many vears to the cover the cost to operate MAX
for the entire FY 11/12 fiscal year and thereby eliminate the need for
contributions from the member agencies,and for any remaining funds to be
applied towards the FY 12/13 operating expenses and agency contributions.
Since the staff report does nof provide sufficient details regarding this issue,
please provide background on how these funds were given to MAX.Are these
the funds that were the result of a reported double payment from the MTA that
was never returned to the MTA?Prior to the upcoming PSC meeting,please
provide the PSC with all of the written correspondence with the MTA about this
matter and any formal documentation that the MTA has authorized MAX to keep
the funds and is not required to return them.I also would like Staff to provide the
exact amount the PSC would be allocating for the upcoming expenditures.I do
not believe it is financially responsible to make a decision to allocate
approximately $800,000 without the proper documentation and authority to do so.
Without that documentation and authorization from the MTA,the member
agencies could be subjecting themselves to future liability for that expenditure."
Your email,dated February 22,2011,states:
"The exact balance is $997,265.56.The 97 TSE accounts for $656,742.11 with a
balance of $340,523.45.The $340,523.45 are the MAX annual reserves which
are bUdget efficiencies,increased revenue from fares,participant contributions,
and interest earned.".
It is City Staff's understanding that the PSC had no knowledge of the size of the reserve
until City Staff recently brought its existence to light.Had City Staff known that nearly
2/3 thirds of the reserve has been carried as a liability in the financial statements of the
City of Torrance since 1997,it would have questioned its appropriateness.While
understanding the reluctance of Lead Agency staff to spend the money until now,City
Staff wonders whether contribution amounts paid by all participating agencies in at least
the last several years could have been'substantially less,utilizing the additional
reserves accumulated through favorable budget variances and cost savings initiated by
MAX.
ATTACHMENT 11-30
Jim Mills
City of Torrance
.February 24,2011
Page 50f8
Based upon a presumption that all participating agencies have made annual
contributions over time in accordance with the FY10-11 co.ntribution rate,it is City Staff's
assertion that each participating agency owns a pro-rata interest in the balance of
$997,265 (hereafter referred to as the "reserve"),net of outstanding liabilities.
City Staff requests that Lead Agency staff offer the option of refunding a prudent
amount of the reserve as of June 30,2011,to the participating agencies.Participating
agencies can then utilize the refund proceeds for other transit needs,as well as its pro-
rata contribution for FY11-12.
Assuming the City Council sustainS its deCision to Withdraw from MAX,City Staff hereby
advises MAX that it requests a refund of its pro-rata share of about $160.000,based
upon 16%of the near $1 million reserve,net of its pro-rata share of outstanding
liabilities as of June 30,2011.
MY Traosporta~ion Agreement
Why is the agreement for operations of the MAX system by MV transportation entered
into with Torrance Transit.rather than MAX?
Is their an agreement or memorandum that binds participating members of MAX to the
provisions of the MV Agreement?
Has the existing agreement with MV Transportation been assigned to MAX?
Assuming an agreement is entered into with MV Transportation for FY 11-12 and FY12-
13.and a partiCipating agency withdraws effective June 30,2012,what liabilities and
other commitments would the withdrawing agency be subject to attributable to the MV
Transportation agreement that continues through FY12-13?
Similarly,assuming an agreement is entered into with MV Transportation forFY 11-12
and FY12-13 and the PSC decides to dissolve MAX effective June 30,2012,what
liabilities and other commitments would all withdrawing agency be subject to?
Governance.Operating Budget and the IA Agreement
As requested previously,particlpating agency staff and legal counsel m'ust be provided
sufficient time to review the proposed IA Agreement,the proposed MV Transportation
agreement,the short-term and long-term bus refurbishment and/or replacement capital
plan and operating budget together.Some participating agencies,like the City.may be
required to review.present,recommend and seek approval of such documents by its
respective City Council or similar governing boards.In light of the possibility that the
City may reverse its decision to withdraw,City staff requests the Lead Agency Staff to
present the proposed fA Agreement,the proposed MV Transportation agreement,the
short-term and long-term bus refurbishment and/or replacement capital plan and
ATTACHMENT 11-31
Jim Mills
City of Torrance
February 24,2011
Page 60f8
operating budget (and any other relevant documents and plans)together,provide
sufficient time for both participating agency staff and PSC·board members sufficient
time to review,ask questions and make a recommendation to their respective governing
bodies prior to the public PSC meeting at which decisions shall be made.
Several comments sprinkled throughout this letter lead to a core issue:Does the
governance form that MAX operates within provide sufficient oversight,accountability
and satisfactory decision making for all of its participants,as well as taxpayers?
Although it would cost more,a joint powers authority may be a more appropriate form of
governance for MAX to ensure accountability.If interested,participating members may
wish to view the governance model of Palos Verdes Peninsula Transit Authority for
consideration.
Capital Requirements for MAX Bus Refurbishments and/or Replacement
With one year of useful lives left on the 14 MAX busses,a plan for the refurbishment
and/or purchase of buses needs to be brought before the PSC before a final budget for
FY 11-12 can be adopted.
Based on estimates provided to City Staff,it appears as though the following costs are
associated for the capital replacement:
Cost of 14 MAX Buses
(Refurbish):
MTA 80%contribution:
Agency Contribution Total
Cost of 14 MAX Buses (New):
MTA 80%contribution:
Agency Contribution Total
$1,830,000
$1,464,000
$366,000
$10,500,000
$8,400,000
$2,100,000
Given approximately $2.5 million needed in capital over the next several years,how
does Lead Agency staff propose to fund these reqUirements?.
Has MAX received approval for funding of the refurbishment of the 14 MAx buses?
If not,when could approval be attained and what is the timeframe?
If approval is not given,will each agency be faced with financing the entire cost?
It is important for each agency,that a capital plan/tlmeline is laid out,with funding
required each year,and estimated financial impacts on each agency clearly explained.
ATTACHMENT 11-32
Jim Mills
City of Torrance
February 24.2011
Page 7 of 8
Potential Liability for Unamortized Use of 2 Buses
As stated in the previous letter,its City Staff's understanding that Line 2 would most
likely be truncated at Hawthorne and PCH,with two daily trips eliminated.It's also our
understanding that MAX buses will be 9 years old as of June 30,2011,and each bus
has a useful life of 10 years.It's our understanding that the FTAIMTA declined to waive
the final year of depreciation.It's our understanding that for each bus not in service for
FY 11-12,that FTAIMTA may establish a liability of $18,000 to MAX.
Who would be responsible for this liability and how would it be allocated?
Has the Lead Agency contacted the FTA about a waiver on the final year?
What scenarios are available to limit the liability to MAX (e.g.spare ratio,sale of bus,
etc.)?
However,it's our understanding that·2 buses would be taken out of service and rotated
as spares.~Iease immediately advise City Staff what your redeployment plan is.
Again,the nature of this letter may seem critical.We want to re-express our desire to
work together to develop a well informed recommendation to the City Council.Please
feel free to contact City Staff at (310)377-0360,or Carol Lynch,City Attorney at (213)
626-8484 with any questions or concerns.
Very truly yours,
~ea9\
Director of Finance &Information Technology
Q~8uJuv
Carolyn Lehr
City Manager
Cc:
City Manager
City of Torrance
3031 Torrance Boulevard
Torrance,CA 90503
City of Torrance
City Clerk
3031 Torrance Boulevard
Torrance,CA 90503
ATTACHMENT 11-33
Jim Mills
City of Torrance
February 24,2011
Page a ofa
City of EI Segundo
Office of the City Manager
350 Main Street
EI Segundo,CA 90245
City of Lawndale
Office of the City Administrator
14717 Burin Avenue
Lawndale,CA 90260
City of Los Angeles
Office of the General Manager
Department of Transportation
200 North Spring Street
Los Angeles,CA 90012
City of Lomita
Office of the City Administrator
P.O.Box 339
Lomita,CA 90717
Los Angeles County
Department of Public Works
Transit Operation Section
P.O.Box 1460
Alhambra,CA 91802
Torrance Transit System
City of Torrance
20500 Madrona Avenue
Torrance,CA 90503-3692
ATTACHMENT 11-34
MV Transportation Staff:
Kory Corothers
Stephen Allan
ITEM5A
Municipal Area Express
Policy Steering Committee
Minutes for
February 7,2011
1.Call to Order
Recognizing a quorum,C.Jacobson called the meeting to order at 5:00 pm.
Committee Members and Lead Agency Staff in attendance were as follows:
Committee Members:
Jurisdiction Member/Alternate
1:::::m::::::::I::::::::::::::l::I1IIi~_~m:fm:mH:mfilfII:mJfiI@;mmmm®fiJfJ{Im;jJEllil::iil::l~lI::~:::m::lm:H:::t::::
Lomita Ken Blackwood
il:::::1:::::::j:l:::l::::llitiiBii~!.._:mlJi;::::m:!.;:mm:®mgm;mfa~~_iJ::::l:::m:::::!.::::m:::::ml::
Torrance Not Present
Lead Agency Staff:
Ian Dailey
James Lee
Jim Mills
Patrick Sullivan,City Attorney's Office
2.Pledge of Allegiance
Patrick Kearney led the Pledge of Allegiance.
3.Action Items
A.Approval of minutes
Committee approved the minutes of December 6,2010.
Motion/Second:K.Blackwood/P.Kearney
Motion passed:5-0
B.Approval of motion to accept and file the report from the City Clerk
on posting agenda
Motion/Second:P.Kearney/K.Blackwood
Motion passed:5-0
It was then requested by A.Misetich to first discuss the letter from Rancho
Palos Verdes dated February 4,2011 as an item received subsequent to
the posting of the agenda,and to push Items 3C-3F to a later meeting
date because of Rancho Palos Verdes concerns in the letter.
1
ATTACHMENT 11-35
ITEM5A
4.Items from the Lead Agency Staff
C.Supplemental Material to Policy Steering Committee Agenda
J.Mills discussed the letter received February 4,2011 and the concerns
that Rancho Palos Verdes had with the items of the February 7,2011
agenda.It was understood that Rancho Palos Verdes still had concerns
with outstanding items,and wanted them addressed prior to voting on
Items 3C-3F of the agenda.J.Mills pointed out that March 21,2011 would
be a tight date for a special PSC meeting and that all issues should be
addressed prior, and that March 7,2011 might be more appropriate.
C.Jacobson agreed with Lead Agency Staff that March 21,2011 would be
tight with the April meeting being shortly after.-C.Jacobson also pointed
out that many agencies might want to present to their City Council prior to
the April meeting.It was decided that March 7,2011 was a more
appropriate date for the special PSC meeting.
A.Misetich notified the PSC that his intention was to give enough time for
other cities to go to their council.
A.Misetich asked for updates on the items of concern.
J.Mills explained that Lead Agency Staff was still waiting on MTA
for-their decision regarding the MTA/Torrance Billing Issue.
J.Mills also pointed out that if any agency would like to see
changes made to the Interagency Agreement,to forward their input
to Lead Agency Staff by February 21,2011 and these changes
would be incorporated and presented to the PSC at the March 7,
2011 special PSC meeting.
C.Jacobson suggested that if the MTA money was awarded to MAX,that
the funds should be used for capital expenses,such as the
repower/refurbishment.J.Mills said this would be explored and included in
the staff report for the March 7,2011 special PSC meeting.
K.Blackwood asked if formula would change much and what Lead
Agency Staff would be seeking at the next meeting.
J.Mills described that the formula should not change much with
any of the further discussions at the Technical level.K.Blackwood
expressed his desire to have on their next City Council meeting to
discuss their increase in the formula.
A.Misetich pointed out that he would like to get the responses to the
February 4,2011 letter as soon as possible in order to present at their
upcoming City Council meeting.
P.Sullivan advised that as long as the items were on the PSC
agenda,that they can be sent with no issues.
S.Napolitano reminded Lead Agency Staff that the technical member for
the County had voiced concerns about mileage traveled in the formula.
C.Jacobson further discussed the boarding sheets and suggested
digitizing them from MV Transportation so that less work would be
required of Lead Agency Staff.
J.Mills said this option would be explored with MV Transportation
and the outcome would be incorporated in the upcoming March 7,
2011 special PSC meeting.
S.Napolitano inquired about August boarding data being used for
the initial formula calculation,suggesting that some vacations can
2
ATTACHMENT 11-36
ITEM5A
be taken during the summer.J.Mills responded that it was the best
month available,and was consistent with the average aggregate
boardings over the last several months.
A.Submittal of 2011 Call for Projects Application
J.Mills discussed the application for the 2011 Call For Projects outlining
that provided MAX is successful the monies would be available in 2016 or
2017.
A.Misetich asked about the two buses being removed from service and
the potential liability faced by the participating agencies.
J.Mills answered that taking two buses out of service one year
before reaching their useful life would require Lead Agency Staff to write
to the FTA.Lead Agency Staff would notify the FTA that two buses were
being removed from service with one year left of their expected useful life,
Lead Agency Staff would then proceed at their direction.
B.MAX Fare Increase Status Update
J.Mills presented the item describing that fare revenues were slightly
lower than expected.It was mentioned that there are sufficient reserves to
cover and potential shortfall.
C.Jacobson asked if dr:ivers noticed any reduction in riders.
J.Mills reported that during the NTD runs passengers had voiced to
him that they would very much not like to see service completely
cut.
3.Action Items
c.MTAITorrance Billing Reconciliation and Invoicing Recommendation
This item was postponed to the March 7,2011 special PSC meeting.
d.Updated Operating Budget Formula
This item was postponed to the March 7,2011 special PSC meeting.
e.Extension of current MAX contract with MV Transportation
This item was postponed to the March 7,2011 special PSC meeting.
f.Approval to proceed forward on new Interagency Agreement
This item was postponed to the March 7,2011 special PSC meeting.
4.Items from MV Transpiration
a.Service update report
None.
6.Items from the Policy Steering Committee
None.
7.Oral/Public Communications
None..
3
ATTACHMENT 11-37
ITEM5A
8.Executive Session
None.
9.Adjournment
The Policy Steering Committee meeting was adjourned at 5:25 p.m.
Next meeting is scheduled for Monday,March 7,2011 at 5:00 pm in the
Torrance City Hall West Annex Commission Meeting Room.
4
ATTACHMENT 11-38
ITEM 5C
MUNICIPAL AREA EXPRESS
March 7,2011
TO:
FROM:
Policy Steering Committee
Lead Agency Staff
SUBJECT:MTA/Torrance Reconciliation and Invoicing Recommendation
ACTION ITEM
Recommendation
Lead Agency Staff recommends that the Policy Steering Committee approve the
following:
•Direct Lead Agency Staff to not invoice the participating agencies for
the Fourth Quarter of FY11 ;
•Direct Lead Agency Staff to reallocate the MTAITorrance funds
towards the operating FY12 cost of the program;
•Direct Lead Agency Staff to not invoice the participating agencies of
the MAX program for FY12 and/or;
•Direct Lead Agency to seek federal,state or local grant funding for the
refurbishing of MAX vehicles and use a portion ($313,183)of the
reserve funds to meet the a local matching requirement and/or;
•Direct Lead Agency Staff to place the balance of the remaining funds
as a reserve fund to pay the cost to retire two vehicles prior to
reaching their expected useful life.
Background/Analysis
At the December 6,2010 MAX Policy Steering Committee member meeting,it
was discussed that there was an outstanding fund balance in the MAX account
dating back to 1996.Lead Agency Staff provided as much an update as was
known at the time regarding the additional funds that had come in from MTA
approximately 15 years ago.
ATTACHMENT 11-39
ITEM 5C
Following the December 6,2010 Policy Steering Committee meeting,Lead
Agency Staff met with MTA staff to further discuss the billing reconciliation issue.
Lead Agency staff met with MTA auditors on multiple occasions,and held
multiple phone conversations regarding the issue.On February 9,2011 Lead
Agency staff received a letter from Nalini Ahuja,Interim Executive Officer of the
Metro Office of Management and Budget (Attachment A).In Ms.Ahuja's letter it
is noted that metro auditors could not conclusively determine that there had been
an overpayment.Metro will not require Lead Agency to return funds pertaining to
the issue and considers the matter closed.Additionally,no agency participating
in the MAX program will be liable for any future liability related to the issue.With
the issue now resolved,Lead Agency is recommending utilization the funds
towards the operating cost of the MAX to assist in reducing each agencies cost.
The Metro funds are as follows:
97 TSE:
Accrued Interest:
$411,490.00
$245,252.11
$656,742.11
Per Metro direction TSE funds are only eligible for use on the MAX service.
Carry-over Reserves:$340,523.45
(Consists of annual budget efficiencies,fare revenues over budget requirements,
participating agency contributions and accrued interest)
TOTAL:$997,265.56
Lead Agency Staff recommends the utilization of the funds in the following ways:
1)Not invoice the participating agencies for the Fourth Quarter of FY11 =
$163,647;
2)Not invoice agencies for FY12=$502,083/$482,297 (with and without RPV)
and/or;
3)Refurbish the 12 buses to add 5 Years=$313,183 Local matching
requirement.Cost per bus to refurbish $130,493.75 x 12 buses=$1,569,913.
80%grant funding=$1,252,731 +20%Local match of $313,182.60 and/or;
Attachment B outlines the MAX Bus Refurbishment and Replacement Plans.
4)Place remaining funds in reserve to pay for the early retirement (one year)of
two MAX buses.
ATTACHMENT 11-40
ITEM 5C
The approximate amount to be reimbursed to the FTA could be $36,800 It is
calculated as follows:The original purchase price of $230,000 x 80%(federal
share)=$184,000/depreciated over 10 years (life of vehicle)=$18,400 per
year x 1 year =$18,400 x 2 buses=$36,800).
Ray Tellis,Team Leader of the Federal Transit Administration (FTA)Los
Angeles Metropolitan Office informed Lead Agency Staff that the FTA will not
grant a waiver of the federal regulation for the early bus retirement penalty.
The estimated reserve balance for FY 13 would be:-$18,447.44/+$1,338.56
(with and without RPV).
Respectfully submitted,
Jim Mills
Administration Manager
Attachment A:Metro letter to Lead Agency Staff
Attachment B:MAX Bus Capital Plan:Refurbishment and Replacement
ATTACHMENT 11-41
Metropolitan Transportation Authority
Metro
February 9,2011
Jim Mills
Administration Manager
Torrance Transit
City of Torrance
20500 Madrona Blvd
Torrance,CA 90503
Dear Mr.Mills,
One Gateway Plaza
Los Angeles,CA 90012-2952
213.922.2000 Tel
metro.net
Attachment A
This letter is in reference to the issue of double payment of Torrance's 1997 TSE
program.
The staff from Metro's audit,accounting and local programming during the past
two weeks,thoroughly reviewed all the financial information records and physical
documentation available as well as evaluated Metro's internal control
procedures.
The result of the review is that our staff could not conclusively determine that
there has been an over payment.For this reason,Metro will not require
Torrance to return any funds pertaining to this issue and would consider this
matter closed.In addition,no agency participating in the MAX program will be
liable for any'future liability related to this issue.
Thank you for your support and cooperation and if you have any questions,
please contact me or my staff member Carlos Vendiola at 213-922-4527.
.__"~-"---'"-. .-_..'_,"-..,".
Sincerely,
NLt00~dJf:;1'
Nalini Ahuja .
Interim Executive Office
Office of Management and Budget
LACMTA
ATTACHMENT 11-42
Attachment B
MAX CAPITAL PLAN
In consultation and after inspection of the MAX fleet with the Lead Agency Service
Manager Art Estrada,it is felt that the MAX buses life span could be extend from
10years (June 2012)to 12 years (June 2014).At the PSC direction,either
refurbishment or replacement would begin during FY 15.Listed below are the projected
timelines and costs for both options.
Refurbishment
Refurbishment of the MAX fleet of 12 buses would extend the life of the buses for five
(5)additional years until FY 19.The buses would require replacement after FY 19-20.
The current fleet will be reduced from 14 buses to 12 buses due the elimination of 2
runs on Line #2 effective July 1,2011.Federal regulation allow for only a 20%spare
ratio.The 2 buses being removed carmot be retained as they would increase the spare
ration beyond the allowable 20%.At the PSC discretion,the 2 buses can be donated or
sent to auction with the proceeds returning to the MAX reserve account.
Listed below are components and costs of a refurbishment project.Lead Agency would
seek out federal,state or local grant funding ($1,252,731)to provide 80%of the costs
and the participating agencies would provide the 20%($313,183)local matching
requirement.
Project
Estimated
Cost per Bus
Total Cost per
Bus (with tax)
Cost for 12
buses
20%local
match amount
Repower/refurb of 32-foot
diesel buses $118,900.00 $130,492.75 $1,565,913.00 $313,182.60
Repower/Refurb Breakdown
Complete Engine Cradle rebuild
Paint Job
Operator's Seat
$100,000.00
$3,000.00
$1,600.00
ATTACHMENT 11-43
Passenger Seat Upholstery
Front Door repair &upgrade
Undercoating of undercarriage
Plastic driver's side panel
Detail interior &exterior of bus
Total
$9,000.00
$2,400.00
$2,000.00
$300.00
$600.00
$118,900.00
Replacement
Attachment B
If the refurbishment project is implemented new buses would be required in FY 19-20.
Lead Agency Staff would seek federal,state or local funding to fund 80%of the cost
and the participating agencies would be required to contribute 20%,the local matching
requirement.Because of the magnitude of the local match required,Lead Agency staff
recommends the development of a five (5)year capital Reserve Account beginning in
FY 2015 (July 1,2014).
The current cost of a 40 foot Compressed Natural Gas (CNG)bus including sales tax
(based on a current CNG bus order of Lead Agency)is approximately $555,000.The
cost of 12 buses using 2012 dollars would be $6,660,000.The federal share (80%)
would be $5,328,000.The local share (20%)would be $1,332,000.Beginning in FY 15
each year for five years a total of $266,400 would be collected so that by FY19-20
sufficient matching funds would be available.Each agency would pay their amount
based on their percentage share of the operating cost at a calendar year date to be
determined by the PSC.
FY 2015 (July 1,2014-June 30,2015:$266,400
FY 2016 (July 1,2015- June 30,2016:$266,400
FY 2017 (July 1,2016- June 30,2017:$266,400
FY 2018 (July 1,2017-June 30.2018:$266,400
FY 2019 (July 1,2018-June 30,2019:$266,400
TOTAL:$1,332,000
ATTACHMENT 11-44
ITEM 50
MUNICIPAL AREA EXPRESS
March 7,2011
TO:
FROM:
Policy Steering Committee
Lead Agency Staff
SUBJECT:Updated Operating Budget Formula
ACTION ITEM
Recommendation
Lead Agency Staff recommend that the Policy Steering Committee adopt the
attached formula to determine the participating agencies annual cost of the MAX
operating budget.
Background/Analysis
Due to the inability to replicate the current formula in place for the operating budget,
Lead Agency Staff met with the Technical Staff members to examine a fair and
equitable formula for each of the participating agencies.
Following the December 6,2010 Policy Steering Committee meeting,Lead
Agency Staff met with the Technical Staff members to discuss the issue of the
formula distribution and equity with all participating agencies.The Technical Staff
members subsequently met:
•December 15,2010
•January 12,2011
•January 19,2011
•January 26,2011
•February 16,2011
During these meetings the formula for the operating budget was discussed with
the various representative members of the Technical Staff.Initially discussions
focused on a conceptual basis with the continuation or discontinuation of Line 2,
with the potential Rancho Palos Verdes withdrawal.Other topics discussed were
how to create a formula that was equitable for all participating agencies as well.
After the conclusion of the December 15,2010 meeting the Technical Staff
members agreed that the following research was needed:
•Compile more recent by-stop ridership data.Compile stops &
mileage information by jurisdiction
•Use boardings,stops,and mileage for potential factors in formula
•Examine the boardings per hour on each of the lines
ATTACHMENT 11-45
ITEM 5D
•Look at potential future scenarios for the MAX service (Le.
truncating Line 2,before it reaches Rancho Palos Verdes,
removing Line 2 altogether,or a compromise in between)
•Create formula situations with updated data and the potential future
scenarios using the various weightings of boardings,jurisdictional
mileage,and stops.
Lead Agency Staff then began looking at past month's data to see which month
should be examined.Lead Agency Staff decided that August 2010 was a good
month,indicative of the average boardings that we had seen over the prior 6
months of service.Lead Agency staff compiled the data from the spreadsheets
supplied by MV Transportation including all 528 individual runs completed that
month.After this boarding information was put together Lead Agency Staff also
compiled all data pertaining to stops for each jurisdiction,and mileage traveled
within each jurisdiction for the three MAX lines.Lead Agency Staff compiled five
different scenarios with twelve different weightings of the three factors that were
decided to be examined.The five scenarios were as follows:
•Services levels remain as-is;Rancho Palos Verdes remains
participant .
•Services levels remain as-is;Rancho Palos Verdes decides to
withdraw from the program
•Line 2 is removed entirely;Rancho Palos Verdes decides to
withdraw from the program
•Line 2 is truncated at Pacific Coast Highway &Hawthorne Blvd.
(Torrance);and RPV withdraws.Four daily a.m.and p.m.runs are
still operated
•Line 2 is truncated at Pacific Coast Highway &Hawthorne Blvd.
(Torrance);and RPV withdraws.Service is reduced to two daily
a.m.and p.m.runs.
These five scenarios were examined by the Lead Agency Staff using the
boarding,stops,and mileage data compiled and used twelve weighting scenarios
for the Technical Staff members to review and decide.This information was then
all presented to the Technical Staff members on January 12,2011.During this
meeting the various Technical Staff members provided feedback on the variables
in the formula,which scenario was most attractive,and how to deal with the large
increase in EI Segundo's participation share which jumped from 8.488%to
anywhere from 25.26%to 38.67%,depending on the weighting and the scenario.
Each of the agencies agreed that the last scenario was the most attractive,
assuming Rancho Palos Verdes withdrew from the program.The Technical Staff
Members came to the following conclusions after the January 12,2011 meeting:
•EI Segundo needed to be normalized due to their high p.m.
boarding amounts,and it was suggested only examining a.m.
boarding information
•Begin discussion with MV Transportation regarding Scenario #5,
which was Line 2 becoming truncated at Pacific Coast Highway &
Hawthorne Blvd.and only running two a.m.and p.m.runs.
•Look at the total boardings for each run to examine productivity
ATTACHMENT 11-46
ITEM 50
•Forward the adopted budget to all members for review
•Total a.m.and p.m.boardings by jurisdiction and line
At the direction of the Technical Staff meeting Lead Agency Staff began
discussions with MV Transportation to get preliminary numbers about the
scenario where Rancho Palos Verdes withdraws,Line 2 is truncated at Pacific
Coast Highway &Hawthorne Blvd,and only two a.m.and p.m.runs are
operated.Lead Agency Staff also examined normalizing EI Segundo's share due
for their increased p.m.boardings.Lead Agency Staff felt that examining a.m.
boardings was fair;however a.m.&p.m.mileage and stops should always be
examined.The other requested information was collected and distributed to the
Technical Staff members at the January 19,2011 Technical Staff Meeting.The
following items were distributed to the Technical Staff members:
•FY2011 adopted budget
•August 2010 boardings by jurisdiction by line
•Total boarding amounts by each run for each line;to examine
productivity of each run
•Potential percentage share scenarios,including adjustments to EI
Segundo to normalize their increase in share
•Potential dollar amo'unts for each of the participating agencies,for
each of the various scenarios,since updated figures from MV
Transportation had not been received
At the January 19,2011 Technical Staff meeting the normalization for EI
Segundo was examined.It was agreed by the members of the Technical Staff
that examining all agencies a.m.boardings and maintaining a.m.and p.m.
mileage and stops was most logical.EI Segundo raised their interest in a
50%/50%split between boarding and mileage as the two variables in the
formula,and each agency agreed that was a fair distribution.Each Technical
Staff member agreed that stops was not an adequate measure for the formula as
a variable.Lead Agency Staff also updated the Technical Staff group on their
discussions with MV Transportation,stating that updated figures had not been
received but it was expected that they should by the next meeting.Lead Agency
staff presented the very preliminary figures that might be received by adjusting
hours of service for each of the scenarios.Lead Agency Staff also provided an
additional scenario where Rancho Palos Verdes would remain a participant and
that only two a.m.&p.m.runs would be operated.The Technical Staff members
instructed Lead Agency Staff to do the following:.
•Continue discussions with MV Transportation to update the contract
amount
•Update figures and spreadsheets to reflect the 50%/50%split
between boardings &mileage
•Only examine 2 situations:
o Line 2 truncated at Pacific Coast Highway &Hawthorne
Blvd.and Rancho Palos Verdes no longer participates
o Rancho Palos Verdes remains a participant and only two
Line 2 runs are operated
ATTACHMENT 11-47
ITEM 50
Lead Agency Staff continued discussions with MV Transportation to obtain the
potential updated figures for the upcoming January 26,2011 meeting.The morning
of January 26,2011 Lead Agency Staff received updated figures from MV
Transportation for the truncated Line 2,where Rancho Palos Verdes does not
participate.These figures were updated into the spreadsheet for the Technical Staff
members to review.Adjustments were made to the figures for the second scenario
where Rancho Palos Verdes remains a participant by increasing the hours need
accordingly,and these numbers were included.
The January 26,2011 meeting was held to discuss the best potential formula for
recommendation to the Policy Steering Committee.Each of the participating
members agreed that a 50%/50%distribution for boardings and mileage was the
best formula for calculating each member's share of the cost.The Technical Staff
members also agreed that only a.m.boardings by stop would be examined for all
agencies and that a.m.&p.m.mileage would be examined within jurisdictional
boundaries.
At the request of the County of Los Angeles a meeting on February 16,2011 was
held.The county had expressed concerns regarding their mileage calculation on the
3X line regarding the travel on the 110 and 405 freeways.Two options were
presented to the Technical Advisory staff present (Rancho Palos Verdes,EI
Segundo and Torrance).The options were:1)use the exact mileage traveled in each
jurisdiction regardless of boardings,or 2)use a distribution method where the
percentage of mileage that boarding service occurs (on local streets)dictates the
distribution of freeway miles.The jurisdictions who have either boardings before or
after travel on the freeways absorb this mileage.After further discussion with the
county representative Lead Agency Staff recommends option #2 be used to
calculate freeway mileage.
It was agreed that each year in February the Technical Advisory Staff will revisit the
formula to assure its accuracy and validity.Formula allocation will be calculated
using the prior calendar year data.100%electronic boarding/alighting data by stop
will be provided from the operator of the service.
Respectfully submitted,
Jim Mills
Administration Manager
Attachment A-MAX Operating Budget percentage shares
ATTACHMENT 11-48
Attachment A
100.00%
2.59358%
6.82773%
6.09313%
0.00000%
49.09093%
16.52150%
18.87233%
Percentage Share
100.00%
8.48800%
1.62943%
3.21514%
1.62881%
32.25238%
36.74440%
16.04183%
Truncated Line 2 @ PCH &Hawthorne,RPV drops out
(two a.m.and two p.m.runs)
Current Percentage
Share
Total
Weightings
Boardings
Mileage
50.0%
50.0%
RPV remains participant,2 Line 2 runs
Current Percentage
Share Percentage Share
Total
8.48800%
1.62943%
1.62881%
32.25238%
3.21514%
16.04183%
36.74440%
100.00%
15.58610%
2.42518%
5.74938%
46.34483%
6.44751%
5.32270%
18.12282%
100.00%
Weightings
Boardings
Mileage
50.0%
50.0%
ATTACHMENT 11-49
ITEM 5E
MUNICIPAL AREA EXPRESS
March 7,2011
TO:
FROM:
Policy Steering Committee
Lead Agency Staff
SUBJECT:Extension of current MAX contract with MV Transportation
ACTION ITEM
Recommendation
Lead Agency staff recommends that the Policy Steering Committee consider
contract extension options with MV Transportation and provide direction.
Background/Analysis
In 2008,the MAX Policy Steering Committee (PSC)approved a three-year
contract with MV Transportation to operate the MAX Commuter Service from
FY09 to FY11.The contract with MV Transportation will expire on June 30,
2011.
With the end of the contract approaching,Lead Agency staff sought direction
from the PSC at its December 6,2010 meeting.Three options listed below were
discussed with the PSC directing Lead Agency staff to attempt to renegotiate the
terms with MV Transportation.
•Exercise the two one-year extensions of the MV contract at the current
FY11 rates
•Attempt to renegotiate the terms with MV Transportation
•Decline to exercise the extensions and go out to bid for another 3 year
contract
Lead Agency Staff have met with MV representatives on multiple occasions to
discuss route modifications and budget adjustments.On January 26,2011 MV
verbally provided the following proposal for FY 12 and 13,also in the attached
letter (Attachment C)dated February 23,2011 :
•For FY12 adjust the current contract from $1,247,346 to $1,075,060 for
reduction of $172,286.
•For FY13 increase the FY 12 contract by 3%from $1,075,060 to
$1,107,312 for an increase of $32,252.
ATTACHMENT 11-50
ITEM 5E
The reduction would include the elimination of two of the four morning and
afternoon runs on Line #2.Should the city of Rancho Palos Verdes terminate its
participation the MAX program the line #2 would be truncated at Pacific Coast
Highway and Hawthorne Boulevard.
Subsequent to receipt of the proposal MV has agreed to tabulate the daily
boardings and alightings by stops and provide the data to the Lead Agency Staff
electronically on a monthly basis.This action will provide 100%boardings and
alightings data and eliminate the need for the sampling of data and selection of
the ideal month to compile data for formula purposes.
Lead Agency Staff have received e-mails from residents of the City of Rancho
Palos Verdes regarding the proposed elimination of Line #2 service.Please see
Attachment D for those correspondences.
Discussion of the elimination of a run on Line 3 and 3X could also be considered
but is not currently being recommended.Elimination of a run on Line 3 would
realize approximately a $33,000 savings,and elimination of a run on Line 3X
would realize approximately $49,000 in savings,based on the reduction of
service hours.
Should the PSC direct Lead Agency Staff to exercise contract extensions,Lead
Agency Staff legal counsel will prepare the necessary documents for approval at
the April 4,2011 Policy Steering Committee meeting.
Staff has included for your review the projected FY 12 and 13 budgets
(Attachments A and B)along with the MV proposal (Attachment C).
Respectfully submitted,
{J~
Jim Mills
Administration Manager/Lead Agency
Attachment A-Updated FY 12 potential budget
Attachment B-Updated FY 13 potential budget
Attachment C-MV service proposal FY 12 and FY 13
Attachment D-E-mails received regarding Line #2 service reductions
ATTACHMENT 11-51
Potential Contribution Amounts for MAX Service in FY12 Potential Contribution Amounts for MAX Service in FY12
Attachment A
FY2011-12
Proposed Variance,$%Share
FY201o-11 FY2011-12
Adopted Proposed Variance,$%Share
Revenues
Prop C Discretionary -Service Expansion $437,748 $437,748 $
Passenger Fares $198,021 $198,021 $
TOTAL $635,769 $635,769 $
New Qtrly Share
Revenues
Prop C Discretionary -Service Expansion
Passenger Fares
TOTAL
FY201O-11
Adopted
$437,748 $
$198,021 $
$635,769 $
437,748 $
198,021 $
635,769 $
New Qtrly Share
Participant Contributions (if RPV withdraws from program)
EI Segundo $55,561 $79,683 $24,122 16.52150%$
Lawndale $10,666 $12,509 $1,843 2.59358%$
Lomita $10,662 $29,387 $18,725 6.09313%$
Los Angeles $211,120 $236,766 $25,646 49.09093%$
L.A.County $21,046 $32,930 $11,884 6.82773%$
Rancho Palos Verdes $105,008 $$(105,008)0.00000%$
Torrance $240,523 $91,021 $(149,502)18.87233%$
19,920.84
3,127.22
7,346.80
59,191.51
8,232.55
22,755.36
Participant Contributians (if RPV remains in program)
EI Segundo $55,561 $78,256 $22,695 15.58610%$
Lawndale $10,666 $12,177 $1,511 2.42518%$
Lomita $10,662 $28,867 $18,205 5.74938%$
Los Angeles $211,120 $232,693 $21,573 46.34483%$
L.A.County $21,046 $32,372 $11,326 6.44751%$
Rancho Palos Verdes $105,008 $26,725 $(78,283)5.32270%$
Torrance $240,523 $90,993 $(149,531)18.12282%$
19,564.07
3,044.15
7,216.76
58,173.19
8,093.07
6,681.18
22,748.21
Total Revenue
Operating Expenditures
Salaries and Benefits
Printed Forms and Maps
Special Materials and Supplies
Professional/Technical Services
Advertising and Publishing
Special or Contract Services
Indirect Costs
$1,290,355 $1,118,066 $(172,289)100.00%$
FY201o-11 FY2011-12
Adopted Proposed Variance,$
$16,200 $16,200 $
$3,000 $3,000 $
$1,500 $1,500 $
$12,222 $12,222 $
$7,000 $7,000 $
$1,247,346 $1,075,060 $(172,286)
$3,088 $3,088 $
120,574.28 Total Revenue
Operating Expenditures
Salaries and Benefits
Printed Forms and Maps
Special Materials and Supplies
Professional/Technical Services
Advertising and Publishing
Special or Contract Services
Indirect Costs
$1,290,355 $1,137,852 $(152,504)100.00%$
FY201O-11 FY2011-12
Adopted Proposed Variance,$
$16,200 $16,200 $
$3,000 $3,000 $
$1,500 $1,500 $
$12,222 $12,222 $
$7,000 $7,000 $
$1,247,346 $1,094,849 $(152,497)
$3,088 $3,088 $
125,520.63
$1,290,356 $1,118,070 $(172,28b)$1,290,356 $1,137,859 $(152,497)
ATTACHMENT 11-52
Potential Contribution Amounts for MAX Service in FY13 Potential Contribution Amounts for MAX Service in FY13
Attachment B
FY2011-12 FY2012-13
Proposed Proposed Variance,$%Share New Qtrly Share
FYZ0l1-12
Proposed
FY2012-13
Proposed Variance,$%Share New Qtrly Share
Revenues
Prop C Discretionary -Service Expansion
Passenger Fares
TOTAL
$437,748 $437,748 $
$198,021 $198,021 $
$635,769 $635,769 $
Revenues
Prop C Discretionary -Service Expansion
Passenger Fares
TOTAL
$437,748 $
$198,021 $
$635,769 $
437,748 $
198,021 $
635,769 $
Participant Contributions (if RPV withdraws from program)
EI Segundo $55,561 $85,012 $29,450 16.52150%$
Lawndale $10,666 $13,345 $2,679 2.59358%$
Lomita $10,662 $31,352 $20,690 6.09313%$
Los Angeles $211,120 $252,599 $41,479 49.09093%$
L.A.County $21,046 $35,132 $14,086 6.82773%$
Rancho Palos Verdes $105,008 $$(105,008)0.00000%$
Torrance $240,523 $97,108 $(143,415)18.87233%$
21,252.96
3,336.33
7,838.09
63,149.69
8,783.07
24,271.02
Participant Contributions (if RPV remains in program)
EISegundo $55,561 $83,376 $27,814 15.58610%$
Lawndale $10,666 $12,973 $2,307 2.42518%$
lomita $10,662 $30,755 $20,093 5.74938%$
los Angeles $211,120 $247,915 $36,795 46.34483%$
L.A.County $21,046 $34,490 $13,444 6.44751%$
Rancho Palos Verdes $105,008 $28,473 $(76,535)5.32270%$
Torrance $240,523 $96,945 $(143,578)18.12282%$
20,843.90
3,243.29
7,688.87
61,978.73
8,622.50
7,118.25
24,236.34
Total Revenue
Operating Expenditures
Salaries and Benefits
Printed Forms and Maps
Special Materials and Supplies
Professional/fechnical Services
Advertising and Publishing
Special or Contract Services
Indirect Costs
$1,290,355 $1,150,318 $(140,038)100.00%$
FY2011-12 FY2012-13
Proposed Proposed Variance,$
$16,200 $16,200 $
$3,000 $3,000 $
$1,500 $1,500 $
$12,222 $12,222 $
$7,000 $7,000 $
$1,247,346 $1,107,312 $(140,034)
$3,088 $3,088 $
$1,290,356 $1,150,322 $(140,034)
128,637.16 Total Revenue
Operating Expenditures
Salaries and Benefits
Printed Forms and Maps
Special Material~and Supplies
Professional/fechnical Services
Advertising and Publishing
Special or Contract Services
Indirect Costs
$1,290,355 $1,170,697 $(119,659)100.00%
FY2011-12 FY2012-13
Proposed Proposed Variance,$
$16,200 $16,200 $
$3,000 $3,000 $
$1,500 $1,500 $
$12,222 $12,222 $
$7,000 $7,000 $
$1,247,346 $1,127,694 $(119,652)
$3,088 $3,088 $
$1,290,356 $1,170,704 $(119,652)
133,731.88
ATTACHMENT 11-53
February 23,~011
To:Jim Mills
Admj~jstration Manager
City oT Torrance·,
From:Dan rvjcKeehan
MV Tr,ansportation
Re:Price ~roposal MAX Contract
Attachment C
."....
","':".',':,_.",~•'•.:j"
MV Transporltationis seeking a..two y-ea.Lcontr~ct ext~n$ion.Our pricing !.nduq.e$..eliminating ...._.
two Rancho Palos Verde'routes;redudng theremainirig two'routeshy 50%:-elimination of Roaer'
Supervision and internal MV reductions.
We are proposing a rate of $1,075,065,per year for July 1,2011 thru June 20,2012.We
respectfully ~equest a 3%increase for July 1,2012 thru June 30,2013.
Best Regards;
Dan McKeen~n
ATTACHMENT 11-54
Attachment D
Dailey,Ian
From:
Sent:
To:
Subject:
Hello,
Elaine M Lim [Elaine.M.Lim@aero.org]
Sunday,February 13,2011 3:56 PM
Dailey,Ian
Keepthe MAX 2 line going!
J am a resident of Rancho Palos Verdes who has ridden the MAX2A (driven by Mr.Merrill Norwood)for the past 3+years.
In our efforts to reduce pollution and to encourage use of ridesharing/public transit,our family got rid of one of our cars.so
this is my only way in to work and back home.Having the MAX bus around to get to the Palos Verdes Peninsula has
been really great -no need to transf~r to another bus line,and riders are assured a timely and predictable bus schedule -
not to mention a safe ride home.
When the RPV City Council meeting announcing intentions to withdraw from the MAX bus program {with incomplete and
incorrect information},it caused an uproar with the MAX bus riders from Line 2.RPV City Council made no effort to
consider alternatives (such as reduced schedule,etc.).RPV City Council's decision at that meeting was
unacceptable,One of the riders who spoke at the meeting (an old hand at riding public transportation with 20+years'
experience of the local bus schedules)provided first-hand experience of trying to take the Metro 344,switching at PCH to
Torrance Transit #8.Getting to work was a 2+hour ordeal.assuming he made the connection at PCH on time (missing it
would increase commute time to 3+hours).Imagine what that commute might be like in inclement weather.For safety
reasons,I would prefer riding just one bus to get to alid from work without transfers.MAX 2 is that only option.
The MAX bus LinE!l2 is an environmentally friendly option to getting to work.Given the recent hikes in gas prices with no
forseeable prospect of these prices coming down,I believe there will be an increase in ridership on the MAX 2.I hope
that Torrance Transit and participating cities (namely City of RPV)will seriously consider finding a middle ground that is
acceptable to RPV residents who use the bus to get to work,whether it be reduced bus schedule (for Line 2,that would
mean 2 runs,rather than 4)or consider the option of leasing buses,or a combination of the two.
Thanks for listening and for your consideration in keeping MAX 2 in operation,
Elaine M.Lim
mailto:elaine.m.lim@aero.org
1
ATTACHMENT 11-55
Dailey,Ian
From:
Sent:
To:
Subject:
Dear lan-
Ann K Reynolds [Ann.K.Reynolds@aero.org)
Monday,February 14,2011 12:49 PM
Dailey,Ian
Re:Please email to Torrance Transit:About MAX 2
After ten years as a MAX2 rider,I stopped riding MAX in Sept 2010 because two bus drivers,Amber and Tonya,had such
bad attitudes that the stress of dealing with them was more than the benefit of riding MAX2.At the first MAX bus stop in
the morning at Golden Cove,Amber and Tonya would both make me stand outside,refusing to open the bus door until a
few minutes after the bus was scheduled to depart,even though I'm in my 60s,with aching hips and knees.At the end of
the day,both drivers made their own rules and insisted that I disembark on the eastbound lane instead of the official MAX
stop on the westbound lane of PV Drive South,because it was more convenient for them.Amber even lied after my initial
request,telling me that MAX management moved the official stop to the eastbound lane.I called MAX to verify this and
was told that this was not true,and that both of them would be informed.Nonetheless,they both continued to dump me off
on the eastbound side,which lacks a sidewalk,is always either dusty,or muddy from rain and/or sprinklers,and badly lit.
In addition,unprotected wind exposure during cold weather,while waiting for the interminably slow crosswalk light on PV
Drive South,tempts passengers to unsafely jay walk.All Golden Cove passengers appreciate that the official stop is on
tile westbound side,as it is safer and 'better for passengers.
AdditionallY,Tonya and Amber have both driven past me without stopping,despite the fact that I was clearly waiting at an
official MAX bus stop.Tanya actually told passengers \vho alerted her that I had told her I didn't want to ride her bus
anymore.This was a blatant lie as I neither said nor implied this in any way.On another occasion,Amber hurled past
several of us without stopping at the Douglas and EI Segundo stop one afternoon.We jumped on the MAX3 bus that
came along 45-60 seconds later,and asked the driver to ask Amber to wait for us at Space Pari<so we cpuld transfer to
her bus.Another bus rider stated that Amber had also driven past him as well at a prior MAX stop.The MAX3 bus driver
called Amber immediately.Amber claimed we were not at the MAX stop and that she was already past Space Park,at
Inglewood and Manhattan Beach Blvd.Again,these were both lies,as all of us were at the proper bus stop,and it was
impossible to drive from Douglas/EI Segundo to Inglewood/Manhattan Beach Blvd in under 3 minutes at that time of day.
The MAX3 bus driver urged us to call MAX.I did so and was told that the MAX manager would call me the next day.
Although I called three times,MAX management never got back with me.As a result,I stopped riding MAX2.
If all the bus drivers were more like Merrill,Norman,Michael,Tina,and Lulu,with their service-orientation,friendliness
and kindness,I would not have stopped using MAX2.However,I cannot support a system that hires and protects drivers
who exhibit consistently bad attitUdes,lie,and make their own rules,as well as managers who don't bother to return calls.
One morning when I was waiting for Norman to pick me at Golden Cove on MAX2 bus #D,Tanya showed up as his
substitute driver.When I politely asked if this was her new schedule she replied "Shit,I hope the hell not...I didn't say
anything,but that kind of belligerent attitude is a higl"\ly unpleasant way to start and end a workday.I began to wonder if it
was even wise to put my safety in the hands of people with such a vile mood.
I would appreciate a reply before tomorrow afternoon with information as to whether Tanya and Amber are still MAX2
drivers,either as regUlar or substitute drivers.If they are no longer employed by MAX,or iilt least not assigned to MAX2,
then I will attend the RPV City Council meeting tomorrow evening to urge continuity of the MAX2 route in RPV.Thank
you.
Regards,
Ann Reynolds
*********************************************
Ann Reynolds
Manager,Civil and Commercial Pricing
The Aerospace Corporation
Phone 310/336-7307
Fax 310/563-7670
1
ATTACHMENT 11-56
Dailey.Ian
From:
Sent:
To:
Cc:
Subject:
C Jean Wang [CJean.Wang@aero.orgl
Monday,February 14,2011 8:30 PM
Dailey,Ian
Mills,Jim
Keep MAX #2 servicing RPV
Hi,
J'm a resident in RPV.For the past 4 years I have been riding MAX #2A operated by Mr.Meryl
Norwood.My stops are @Hawthorne&Vallon and @EI Segundo&Aviation.
When I first started riding MAX #2,there was no stop @Hawthorne&Vallo and I walked about 3/4
miles from home to that bus stop.I wrote to Torrance Transit requesting a stop @Hawthorne&Vallon.
Torrance Transit did a very thorough trade off considering rider counts and stop usages and finally
granted my request,that made Ole a very happy customer.I believe that Torrance Transit
management and leadership really treat the customers (riders)needs as their number one priority.
I have been riding MAX #2 every working days except my Friday day offs and the days J'm on
vacation or business travel.I truly enjoy the ~ervice provided by Mr.Norwood and the other MAX 2
drivers.This bus route gives me a very convenient commute from home to work in EI Segundo with
no hassle of bus transfer.It is a very pleasant ride because the passengers on this route are
professionals working in El Sengudo area.
I sincerely hope that your office and RPV city council can reach agreement to keep MAX 2 running.
understand that currently there are two options being considered,1)keep the same route with less
buses and 2)keep the same number of buses starting the route @Hawthorne&PCH.My preference
is keeping the same route but cut the buses from 4 to 2.I would suggest to review your rider counts
on the 4 MAX 2 buses and consider to run the two buses with different schedule.The new schedule
may better accommodate work schedules for the riders who work 9 hours from Monday to Thursday
and 8 hours on Friday (get every other Friday off).
We,MAX #2 riders from PV,are doing everything we can to urge RPV city council to keep MAX #2
running servicing their residents and keeping the environment clean (both air and traffic).
Thank you for listening.
vIr,
Jean Wang
310-336-8498
cjean.wang@aero.org
1
ATTACHMENT 11-57
Dailey,Ian
From:
Sent:
To:
Subject:
Mr.Da!ley,
Wayne T Otsuki [Wayne.T.Otsuki@aero.org]
Monday.February 28.2011 8:04 AM
Dailey,Ian
MAX 2 Bus
I live in Rancho Palos Verdes and have been a MAX 2 rider since it started.l ride almost daily when I'm in my office in El
Segundo.The benefits of having the MAX 2 bus are sUbstantial,and I hope that the service can continue.
Based on the cost projections that were presented at the Rancho Palos Verdes city council meeting,it seems to me
apparent that the four-bus service will not be affordable.I believe that two-bus service will be adeq uate for most of the
riders.If MAX 2 were to go to two-bus service.the buses that are taken out of service could be used to help maintain the
existing buses for a longer period of time.And when the buses need to be replaced.the cost for the replacement buses
would be substantially less.Whil~this would increase the costs for other cities,the Rancho Palos Verdes city council
may be more receptive to having their costs more consistent with the ridership from Rancho Palos Verdes.Also,other
sources of funding may be possible.For example,some of the companies whose employees use the bus may be willing
to contribute,and,although it might not result in a substantial increase in revenue,fare increases could be considered.
Many of us use monthly passes.I assume th.at the NITA contributes to the MAX 2 revenue.Is there some possibility that
this contribution could be increased?
I'm sure your organization has already considered these possibilities along with many others.Hopefully lower cost
alternatives to the scenario presented to the Rancho Palos Verdes city council can be developed and presented at the
March 14 city council meeting.
The MAX 2 ridership is appreciative of your efforts.
Thank you.
vyayne Otsuki
ATTACHMENT 11-58
ITEM 5F
I
MUNICIPAL AREA EXPRESS
March 7,2011
TO:
FROM:
Policy Steering Committee
Lead Agency Staff
SUBJECT:Approval to proceed forward on new Interagency Agreement
ACTION ITEM
Recommendation
Lead Agency staff recommends that the Policy Steering Committee (PSC)approve
changes to a two year Interagency Agreement Extension
Background/Analysis
The current interagency agreement for the MAX Commuter Service has a term of
three (3)years and expires on June 30,2011.
Lead Agency staff is recommending a two (2)year agreement extension,while
still maintaining the option of any participating agency to opt out of the agreement
of any fiscal year,as long as it is greater than 90 days prior to June 30 of that
fiscal year.
The changes include clearer language on the election of PSC Chair and Vice-chair,
extending the agreement for an additional two (2)years,updated signature page
information,inclusion of the adopted formula,among other adjustments.Input from
all participating agencies was solicited.A draft copy of the Interagency Agreement
has been attached for the committee for review and approve of changes.
With the PSC approval,Lead Agency staff will submit the updated agreement to
Torrance City Attorney's office for review.Once reviewed and approved by the
Torrance City Attorney's office,Lead Agency staff will forward to the participating
agencies to be signed and executed.
Respectfully submitted,
Jim Mills
Administration Manager/Lead Agency
Attachment A:Revised Interagency Agreement
ATTACHMENT 11-59
Attachment A
AGREEMENT FOR MAX COMMUTER BUS SERVICE
THIS AGREEMENT is made and entered into this day of ,
~2011,by and between the City of Torrance (hereinafter referred to as "LEAD AGENCY")
and the City ofEl Segundo,the City of Lawndale,the City of Los Angeles,the City of Rancho
Palos Verdes,City of Lomita,and the County of Los Angeles,(hereinafter referred to as
"AGENCIES"or individually as "AGENCY").
RECITALS
A.LEAD AGENCY and AGENCIES are located in the South Bay area of Los Angeles
County,a region which continues to experience a high level of peak-hour traffic.
B.The AGENCIES have previously jointly funded a commuter transportation transit service
known as Municipal Area Express (MAX),which provides a much-needed bus service to
and within the South Bay aerospace employment center.
C.The AGENCIES recognize the potential cost savings and increased transit efficiency of
providing a network of commuter transportation services and a connection to the Metro
Green Line in the South Bay by coordinating transit services,administration and
marketing.
D.Each AGENCY is willing to fund a share of the cost of MAX by using each AGENCY's
Proposition A and/or Proposition C Local Return Funds.
E.The operation of this joint program is eligible for regional monies to partially fund the
cost of MAX.
F.Since 1990,MAX has operated a viable,effective commuter transit alternative for South
Bay residents.
AGREEMENT:
1.Administration of Service
The LEAD AGENCY shall implement and administer MAX on behalf of AGENCIES.
2.Term of Agreement
This agreement shall be effective as of July 1,~20 11 and shall expire on June 30,
~2013,unless the Agreement is terminated earlier as provided in Sections twelve (12)
and fourteen (14).This agreement thereafter may be extended on a year to year basis
upon the consent of AGENCIES.
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ATTACHMENT 11-60
Attachment A
3.Orgmrization
A.Policy for MAX shall be set by The Policy Steering Committee ("PSC").The
LEAD AGENCY and each AGENCY shall have the right to appoint either its
Mayor,or one member of its City Councilor Board,or its City Manager to the
PSC.Each member of the PSC shall have one vote.The LEAD AGENCY and
each AGENCY shall also appoint an alternate member who shall be its Mayor,a
member of its City Councilor Board,or a permanent deputy to the Councilor
Board member representative,or its City Manager.The alternate shall have all of
the powers and duties of the regular member at any PSC meeting which the
regular member does not attend.Regular and alternate members shall serve at the
pleasure of their AGENCY and until their successors are appointed and qualified.
Each AGENCY shall notify the LEAD AGENCY staff of its appointees and of
any change thereof.
(1)The PSC shall set policy for MAX on the following:
(a)'Fares
(b)Route Structure
(c)Award of Contracts
(d)Annual Operating Budget
(e)Participating AGENCY Funding Shares
(f)Lease or Purchase of Vehicles
(g)Increase or Decrease in Scope of Overall Service
(h)Approval of program funding agreements entered into by the
LEAD AGENCY
(i)Insurance
CD Governmental mandates that may require direction for compliance
B.All decisions of the PSC shall be made by majority vote.For the purpose of
conducting business,a quorum of the PSC shall comprise of fifty percent (50%)
plus one of all the member AGENCIES represented on the PSC.
C.The PSC Chair will lead business meetings.The Vice-Chair will assume the role
of Chair when the PSC Chair is not present.The Vice-Chair will be selected
alphabetically by participating agencies based on members'participation
exceeding 60%of attendance within a two-year period on an annual basis,during
the October meeting.Annually the incoming Vice-Chair will be selected based on
the attendance requirements and the prior Vice-Chair will be moved to PSC
Chair.
D.Technical assistance shall be provided to the PSC by the LEAD AGENCY Staff.
4.Provision of Service
The LEAD AGENCY shall implement MAX as described in Exhibits "A"and "B"
(attached hereto and incorporated herein as MAX Service Requirements and the MAX
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ATTACHMENT 11-61
Attachment A
Routes,respectively).Substantive changes to Service may only be authorized by the
PSC.
5.Fares
The PSC shall establish and authorize changes to the fare structure for patrons utilizing
MAX.The annual fare revenues shall be utilized by the LEAD AGENCY to fund the
annual expense of operating MAX.
6.Operating Funds and Payment for Service
The LEAD AGENCY shall obtain funds to operate MAX from passenger fares and other
sources as they are available.The remainder required to fund MAX shall be provided by
the AGENCIES.The remainder amount funded by the AGENCIES shall be distributed
by a formula created by the participating AGENCIES.This formula will comprise of two
variables.The variables will be total a.m.boardings by jurisdiction as well as total a.m.
and p.m.mileage by jurisdiction.These two variables will be weighted at 50%each for a
total of 100%.The formula shall be audited on an annual basis using data supplied by
CONTRACTOR.This data will include 100%boarding counts by stops.The formula and
boarding information will be adjusted annually using the prior calendar year's data and
presented at the April PSC meeting for the upcoming fiscal year.Each AGENCY has the
right to have the boarding data supplied by the CONTRACTOR audited:however this is
at the cost of that AGENCY.Each AGENCY shall pay quarterly,upon receipt ofan
itemized billing from the LEAD AGENCY,one fourth of its annual share,which shall be
established by the PSC as part of the annual operating budget.
In addition,each AGENCY agrees to pay the LEAD AGENCY any additional funds as
authorized by the PSC which might be required to provide service during any budget year
should the costs be greater than anticipated,provided,however,that such additional
funds shall not exceed twenty (20)percent of the amount adopted in the annual operating
budget,or any other reasonable costs approve by the PSC,for one year.All billings shall
be paid by each AGENCY within thirty (30)days of receipt of an itemized billing by the
LEAD AGENCY.Further,if any member jurisdiction pays more than their budget share
of actual costs,as determined by an annual audit of the MAX budget,then an equal
amount will be deducted from their n~(ta future quarterly billing in the-a subsequent
budget year,at the direction of the PSC.If any member jurisdiction pays less than their
budget share of actual costs,as determined by annual audit of the MAX budget,then an
equal amount will be added to their next quarterly billing in the subsequent budget year.
7.Permits and Licenses
The LEAD AGENCY shall secure and maintain all permits and licenses required by law
for the provision of MAX.
8.Marketing
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ATTACHMENT 11-62
Attachment A
The LEAD AGENCY shall undertake a marketing program to promote MAX.This
program may be implemented either by the LEAD AGENCY staff or under a consultant
contract,whichever approach is approved by the PSC.All costs for said marketing shall
be considered as a portion of the total costs of MAX for purposes of this Agreement,and
shall be authorized annually as part ofthe MAX budget.
9.Service
The LEAD AGENCY shall prepare a Request for Proposals for a private entity to provide
the driving,dispatching,and maintenance for the buses used by MAX.The LEAD
AGENCY shall enter into an agreement with the respondent approved by the PSC,which
hereinafter shall be referred to as "CONTRACTOR".
10.Liability
A.LEAD AGENCY agrees to indemnify,hold harmless and defend each Agency for
any claim,legal action or liability arising out of this Agreement.
B.Notwithstanding the provisions of Subsection A,each AGENCY hereby agrees to
indemnify,hold harmless and defend LEAD AGENCY and every other
AGENCY for any claim,legal action or liability arising out of this Agreement and
related to the condition of that AGENCY's streets,sidewalks,or other public
improvements.
11.Insurance
A.The LEAD AGENCY shall require the CONTRACTOR providing MAX services
to obtain and maintain in force at all times during the term of the Agreement with
the CONTRACTOR commercial general liability and property damage insurance
in amounts of not less than ten million dollars ($10,000.000)for injury or death
arising out of anyone incident;three million dollars ($3,000,000)for injury or
death to anyone person;and one million dollars ($1,000,000)for property
damage.The CONTRACTOR shall also obtain automobile insurance,including
collision and comprehensive vehicular liability insurance coverage for all vehicles
used to provide MAX services,in amounts of not less than ten million dollars
($10,000,000)for injury or death arising out of anyone accident;three million
dollars ($3,000,000)for injury or death to anyone person;and one million dollars
($1,000,000)for property damage.
B.Certificate of Insurance.The LEAD AGENCY in its agreement with the
CONTRACTOR shall require the CONTRACTOR to provide LEAD AGENCY
certificates of insurance and a signed agreement form evidencing compliance with
Subsection A,above,not less than ten (10)days prior to the commencement of
MAX under the Agreement with the CONTRACTOR.Said certificates shall
name LEAD AGENCY and each AGENCY and their respective officers,
employees and agents,as additional insureds.Each policy shall provide that it
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ATTACHMENT 11-63
Attachment A
may not be canceled or reduced in coverage without sixty (60)days written notice
to LEAD AGENCY and each AGENCY.
C.Workers Compensation Insurance.Throughout the term of the Agreement,the
CONTRACTOR will be required to obtain and maintain worker's compensation
and employer's liability insurance as required by the laws ofthe State of
California with limits of at least one million dollars ($1,000,000).A certificate
evidencing such insurance coverage shall be filed with LEAD AGENCY and
AGENCIES not less than ten (10)days prior to commencement of MAX
hereunder.
D.The insurance provisions of this section shall only be changed by the agreement
of both the LEAD AGENCY and the PSC.
12.Failure to Provide Insurance
Failure on the part of the CONTRACTOR to maintain the required insurance shall
constitute grounds for any AGENCY to terminate this Agreement.No such termination
initiated by an AGENCY may occur until the AGENCY has given the LEAD AGENCY
fourteen (14)calendar days written notice of its intention to do so and the Contractor has
failed to obtain the insurance during this time.
13.Independent Contractor Status
No employee of the LEAD AGENCY or any AGENCY shall become an employee or
officer of the other AGENCY by virtue of entering into this Agreement,and this
Agreement shall not create the relationship of agent,servant,employee,partnership,or
joint venture between the AGENCIES.No employee or contractor of the LEAD
AGENCY will be considered an employee of any AGENCY for purposes of workers'
compensation liability.Each AGENCY shall bear full responsibility for furnishing
workers'compensation benefits to any of its employees for injuries arising from or
connected with activities performed by said employee pursuant to this Agreement.
14.Termination of Agreement
A.In addition to the grounds of termination provided in Section twelve (12),any
AGENCY may withdraw from this Agreement at the end of a given fiscal year by
giving written notice to the LEAD AGENCY and the PSC of such intent to
terminate ninety (90)days prior to the end of any given fiscal year,which ends on
June 30.Within thirty (30)days after such notice is received by the PSC,or at its
next regularly scheduled meeting,the PSC shall meet and determine whether to
terminate MAX or re-apportion the respective share of any AGENCY terminating
participation in MAX.In the event the PSC decides to terminate MAX,the
LEAD AGENCY shall terminate all agreements with its CONTRACTOR.
AGENCIES shall be responsible for all costs resulting from termination,
including the costs resulting from termination of the CONTRACTOR agreements.
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ATTACHMENT 11-64
Attachment A
A:-B.An AGENCY that terminates its participation in MAX is responsible for all costs
resulting from termination including,but are not limited to,the following:(1)
Removal of stop and route signage,(2)changes to system signage due to route
changes,(3)cost of printing new brochures,(4)costs of updating the website,(5)
lead agency administrative costs using the composite hourly of state,and (6)as
appropriate,the cost of early retirement of vehicles from the MAX fleet.
.g.,.~This Agreement may also be terminated at any time by agreement of the PSC.In
the event the PSC decides to terminate MAX,the LEAD AGENCY shall
terminate all agreements with its CONTRACTOR.AGENCIES shall be
responsible for all costs resulting from termination,including the costs resulting
from termination of the CONTRACTOR agreements.
G:-~Each AGENCY shall be responsible for its respective share of the termination
costs as proVided in the annual MAX budget.In the event the costs of termination
are less than the sums held by the LEAD AGENCY,the LEAD AGENCY shall
remit,within thirty (30)days after all termination costs have been paid,each
AGENCY~s proportionate share ofthe remaining balance.
15.Inability to Perform
The LEAD AGENCY will not be required to administer or provide MAX during the time
and to the extent that it is prevented from performing by acts of God,fire,strike,civil
disorder,loss of transportation facilities,loss of funding,lockout,commandeering of
materials,products,plants,or facilities by the federal government or any other cause
beyond the reasonable control of the LEAD AGENCY.
16.Record Keeping,Reporting and Auditing
The LEAD AGENCY will provide access to all records in its possession relating to MAX
during normal working hours of the LEAD AGENCY.The LEAD AGENCY shall keep
records of all operating costs of MAX in Accordance with generally acceptable
accounting procedures and in accordance with the requirements of any entity providing
funding.The LEAD AGENCY shall retain all records for a minimum of five (5)years
following the close of that fiscal year.At any time,any AGENCY,at its own expense,
may conduct an audit of the LEAD AGENCY regarding MAX.If such audit finds that
the cost of operating MAX are less than previously indicated by the LEAD AGENCY
and LEAD AGENCY agrees with the results of said audit,the member AGENCY agrees
the difference may,in the sole discretion of the LEAD AGENCY,be:
1.repaid forthwith by the LEAD AGENCY to the AGENCIES in the proportionate
shares provided in the annual MAX budget,or
2.credited against any future payments owed hereunder to the LEAD AGENCY.
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ATTACHMENT 11-65
Attachment A
If such audit fmds that the costs of operating the program are greater than payments made
by the AGENCY,then the difference shall be paid to the LEAD AGENCY by the
AGENCIES,based upon each AGENCY's proportionate share adopted in the most recent
MAX budget.
17 .Vehicles
The LEAD AGENCY shall cause to be supplied sufficient and adequate vehicles,
including backup vehicles,to insure that MAX is provided on an uninterrupted basis.All
equipment and facilities shall meet all requirements of applicable federal,state and local
ordinances and laws.
18.Notices
A.Notices required to be given pursuant to this Agreement shall be given by
enclosing the same in a sealed envelope addressed to the party for whom intended
and by depositing such envelope with postage prepaid for delivery by Certified
Mail in the United States MaiL
1.Personal delivery.When personally delivered to the recipient:notice is
effective on delivery.
2.First Class MaiL When mailed first class to the last address of the
recipient known to the party giving notice:notice is effective three mail
delivery days after deposit in an United States Postal Service office or
mailbox.
3.Certified MaiL When mailed Certified Mail,return receipt requested:
notice is effective on receipt,if delivery is confirmed by a return receipt.
4.Overnight delivery.When delivered by an overnight delivery service,
charges prepaid or charged to the sender's account:notice is effective on
delivery,if delivery is confirmed by the delivery service.Notices required
to be given pursuant to this Agreement shall be given by enclosing the
same in a sealed envelope addressed to the party for whom intended and
by depositing such an envelope with postage prepaid for delivery by
Certified Mail in the United States MaiL
5.Addresses for purpose of giving notice are as follows:
a.LEAD AGENCY at the following address:
City of Torrance
Office of the City Manager
3031 Torrance Boulevard
Torrance,CA 90503
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ATTACHMENT 11-66
Attachment A
With a copy to:
City of Torrance
City Clerk
3031 Torrance Boulevard
Torrance,CA 90503
b.Any such notice containing same to each AGENCY shall be addressed
as follows:
City ofEl Segundo
Office of the City Manager
350 Main Street
El Segundo,CA 90245
Los Angeles County Department
Of Public Works
Transit Operation Section
PO Box 1460
Alhambra,CA 91802-1460
City of Rancho Palos Verdes
Office of the City Manager
30940 Hawthorne Blvd.
Rancho Palos Verdes,CA 90274
19.New Parties
City of Lawndale
Office of the City Administrator
14717 Burin Avenue
Lawndale,CA 90260
City of Los Angeles
Office of the General Manager
Department of Transportation
200 North Spring Street
Los Angeles,CA 90012
City of Lomita
Office of the City Administrator
P.O.Box 339
Lomita,CA 90717
The PSC can accept new AGENCIES as participants in MAX.In such an event,the
LEAD AGENCY shall enter into an agreement with said AGENCY providing said
AGENCY with the same rights and obligations of each other participating AGENCY.
The PSC shall determine the percentage contribution required for said entity and the
obligation of each signatory to the Agreement reflected in the annual MAX budget shall
be proportionately reduced to reflect the percentage allocated to the new AGENCY.
20.Governing Law;Jurisdiction
This Agreement will be administered and interpreted under the laws of the State of
California.Jurisdiction of any litigation arising from the Agreement will be in Los
Angeles County,California.
21.Integration;Amendment
This Agreement represents the entire understanding of LEAD AGENCY and each
AGENCY as to those matters contained in it.No prior oral or written understanding will
be of any force or effect with respect to the terms of this Agreement.The Agreement
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ATTACHMENT 11-67
Attachment A
may not be modified or altered except in writing signed by all parties.The Agreement
may be executed in multiple counterparts.
22.Intemretation
The terms of this Agreement should be construed in accordance with the meaning of the
language used and should not be construed for or against either party by reason of the
authorship of this Agreement or any other rule of construction that might otherwise
apply.
23.Severability
If any part of this Agreement is found to be in conflict with applicable laws,that part will
be inoperative,null and void insofar as it is in conflict with any applicable laws,but the
remainder of the Agreement will remain in full force and effect.
24..Waiver of Breach
No delay or omission in the exeroise of any right or remedy by a nondefaulting party on
any default will impair the right or remedy or be construed as a waiver.A party's
consent or approval of any act by the other party requiring the party's consent or approval
will not be deemed to waive or render unnecessary the other party's consent to or
approval of any subsequent act.Any waiver by either party of any default must be in
writing and will not be a waiver of any default concerning the same or any other
provision of this Agreement.
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ATTACHMENT 11-68
Attachment A
IN WITNESS WHEREOF,this A.greemeftt AGREEMENT FOR MAX COMMUTER BUS
SERVICE-is executed by the parties as follows:
CITY OF TORRANCE
LEAD AGENCY
Frank Scotto
Mayor
ATTEST:
Sue Herbers
City Clerk
APPROVED AS TO FORM:
John L.Fellows III
City Attorney
By:_
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ATTACHMENT 11-69
Attachment A
IN WITNESS WHEREOF,this AGREEMENT FOR MAX COMMUTER BUS SERVICE is
executed by the parties as follows:
CITY OF EL SEGUNDO
Kelly MeDsT,vellEric Busch
Mayor
ATTEST:
Cindy Mortesen
City Clerk
APPROVED AS TO FORM:
Mark Hensley
City Attorney
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ATTACHMENT 11-70
Attachment A
IN WITNESS WHEREOF,this AGREEMENT FOR MAX COMMUTER BUS SERVICE is
executed by the parties as follows:
CITY OF LAWNDALE
Harold Hofmann
Mayor
ATTEST:
Paula Hartwill
City Clerk
APPROVED AS TO FORM:
Willia:B.i 'N.W)'BderTiffany J.Israel
City Attorney
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ATTACHMENT 11-71
Attachment A
IN WITNESS WHEREOF,this AGREEMENT FOR MAX COMMUTER BUS SERVICE is
executed by the parties as follows:
CITY OF LOS ANGELES
DEPARTMENT OF TRANSPORTATION
Wa;'B:e K.TandaAmir Sedadi
Acting General Manager
ATTEST:
FFaBk MartineiiJune Lagmay
City Clerk
APPROVED AS TO FORM:
Shelley I.SmithMichael Nagle
:A:sst:-Deputy City Attorney
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ATTACHMENT 11-72
Attachment A
IN WITNESS WHEREOF,the parties hereto have caused this AGREEMENT FOR
MAX COMMUTER BUS SERVICE to be executed by their respective officers,duly authorized,
by on,2011,and by the DIRECTOR OF PUBLIC WORKS on
,2011.
COUNTY OF LOS ANGELES
By:
____.Director of Public Works
APPROVED AS TO FORM:
Rl\YMOND G.FORTIffiR,JRRobert E.Kalunian.
Acting County Counsel
By _
Deputy
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ATTACHMENT 11-73
Attachment A
IN WITNESS WHEREOF,this AGREEMENT FOR MAX COMMUTER BUS SERVICE is
executed by the parties as follows:
CITY OF RANCHO PALOS VERDES
Thomas D.Long
Mayor
ATTEST:
Carla Morreale
City Clerk
APPROVED AS TO FORM:
Carol Lynch
City Attorney
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ATTACHMENT 11-74
Attachment A
IN WITNESS WHEREOF,this AGREEMENT FOR MAX COMMUTER BUS SERVICE is
executed by the parties as follows:
CITY OF LOMITA
Maxk WaroB:ekKen Blackwood
Mayor
ATTEST:
Dawn Tomita
City Clerk
APPROVED AS TO FORM:
Christi Hogin
City Attorney
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ATTACHMENT 11-75
Attachment A
EXHIBIT A
MAX Service Requirements
MAX shall operate during peak weekday commuting hours,on a schedule approved by the
Policy Steering Committee.MAX will operate Monday through Friday,with the exception of
the following holidays:New Year's Day,Memorial Day,Independence Day,Labor Day,
Thanksgiving Day and the day after,and Christmas Day.
MAX shall be provided on routes in the South Bay area of Los Angeles County as identified in
Exhibit B to this Agreement.MAX service shall be open to the general public and provided as a
commuter bus.
MAX shall utilize a fleet of +4-li..transit coaches with commuter-style amenities such as
reclining seats,reading lights and climate control.All MAX coaches shall be fully wheelchair
accessible in compliance with the Americans with Disabilities Act.
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ATTACHMENT 11-76
Attachment A
EXIllBITB
MUNICIPAL A.IA IX ••I ••
2"'·""3""/flnlet:r ........./$11 ..
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ATTACHMENT 11-77
Sent:
To:
Cc:
--------_......:::..._--------------._.-_._-----
Page 1 of3
Adam Raymond
From:Mills,Jim [JMILLS@TorranceCA.gov]
Wednesday,March 09,2011 1:29 PM
Adam Raymond;Lee,James;Dailey,Ian
Carl Jacobson;Brewer,Tom;Ken Blackwood;Pat Kearney;snapolitano@lacbos.org;
anthony.misetich@rpv.com;Turner,Kim;Sullivan,Patrick
Subject:FW:3/7/2011 PSC Meeting Clarification-follow Up
Dear Adam,
Per your request,please find responses in red from the Lead Agency staff to your questions.The meeting was
very long,the responses are based on the minutes taken by Lead Agency staff.
If anyone reading this has other recollections from the March 7,2011 MAX PSC meeting,please let us know
and we'll revise as necessary.
Sincerely,
Jim Mills
From:Adam Raymond [mailto:adamr@rpv.com]
Sent:Tuesday,March 08,201110:19 AM
To:Mills,Jim;Dailey,Ian
Cc:'Dennis McLean';'JudyH'
Subject:3/7/2011 PSC Meeting Clarification
Good Morning Jim and lan,
I'm not sure if last night's MAX meeting set a record as the longest meeting,but from several comments of the
PSC,it appears that way.As you know,we have a meeting on March 15,in which we will request further input
and possible reconsideration from the City Council to withdrawal from MAX.In order to write an accurate report,I
was hoping you could provide some clarification to the action items,or lack thereof from last night.
For clarification purposes,during last night's meeting there was some discussion and disagreement as to the
status of funds accounted for in MAX -an agency fund versus an enterprise fund.Pursuant to the most recently
audited financial statements (6/30/10)for the City of Torrance,MAX funds are reported in an agency fund.
Agency Funds are used to account for assets held by the City (Torrance)in a fiduciary capacity for individuals,
governmental entities,and others.Specifically,the financial statements indicate that,"The Municipal Area
Express (MAX)Fund is used to account for Federal,County and local revenues to finance a special commuter
bus service in the South Bay area of Los Angeles County."The link below will take you to the financial
statements.The information you will be looking for begins on Page 161 (of 196).The MAX balance sheet
information will be on page 164 (of 196)on the PDF or on page 110 if you have a hard copy of the audited
financials.The oldest audited financials available on the City of Torrance's website are from FY 04-05.These
statements also indicate that MAX funds were accounted for in an agency fund.
http://www.ci.torrance.ca.us/Documents/CAFR FY2009-10.pdf
http://www.torranceca.gov/PDF/2004-05 CAFR.pdf
MAX fund is reported as a Trust and Agency Fund.This fund is separate from the City and is part of the City's
annual audit of all funds which includes the General Fund,Transit Enterprise Fund,Internal Services etc.
Another audit is conducted annually by the Metropolitan Transportation Authority auditors which involves
Transit Service Expansion (TSE)Proposition C 40%funds.The most current audit is for fiscal year 2009-10.
3/10/2011 ATTACHMENT 11-78
Page 2 of3
After discussing the meeting last night,Dennis and I wanted to make sure you understood the reasons we think
an audit is necessary and in the best interest of the PSC,Lead Agency and other member agencies.Monies that
are reported in a City's agency funds are only shown as balance sheet totals.As such,the activities or
expenditures and revenues are not reported,or substantially audited for that matter.We feel that for
transparency and validation that all funds are being accounted for property are necessary safeguards for the PSC,
Lead Agency and Member Agencies.The cost for any audit can be added on to the City's annual audit at a
nominal cost and could be shared by each participating MAX agency.
RPV's recommendation for having an independent annual audit is appreciated and was considered at Monday's
meeting by the PSC ..As discussed at Monday night's meeting and outlined in the "draft"Interagency Agreement,
any participating agency can request an independent audit (at their own expense)at any time.The PSC itself is
confident with the Lead Agency's Audit practices and did not take any action to formalize an independent audit
each year,but,did agree that any agency can request an independent audit (again at their own expense)..
With regards to the MTAlTorrance letter,Lead Agency staff indicated that a second letter from MTA,confirming
the specific use of the funds,was being drafted.Do you know when the letter is expected?This is information
RPV staff would like to include in our staff report and would request a copy of the letter is passed along as quickly
as possible.
This was not the statement made by lead agency staff.Lead Agency staff indicated that a second letter from
metro could easily be obtained that would clarify that TSE funds are to be used for Operating purposes only,but
did not state that a letter was on the way.There was no request by the PSC to Lead Agency staff to request a
second letter.
Last night there was a lengthy discussion on possible changes to the proposed Interagency Agreement.Staff will
be working with our City Attorney to provide Lead Agency staff with our understanding of the changes discussed
last night,and provide additional changes we feel are necessary to provide the most comprehensive,sound,and
fair agreement to all participating MAX agencies.As you indicated last night,it is the goal of Lead Staff to make
sure the Interagency Agreement is as good as it can be,and RPV staff could not agree more.Could you please
provide a Word version of the most recent Interagency Agreement,with the changes proposed by Lead Agency
staff in Item 5F from last night's meeting?
Please find attached a Word version of the Interagency Agreement that was included in the 3/7/11 agenda.
Item 5C:MTAflorrance Reconciliation and Invoicing Recommendations
Motion to Direct Lead Agency Staff to not invoice the participating agencies by allocating MTAlTorrancelTSE
funds for the Fourth Quarter of FY11 :APPROVED
Lead Agency was directed to invoice the participating agencies for only 50%of their Fourth Quarter of FYll
using the current formula percentages.
Motion to Direct Lead Agency Staff to reallocate the MTAlTorrancelTSE funds towards the operating FY 11-12
cost of the program:APPROVED
CONCUR
EI Segundo PSC Member Jacobson's Motion to invoice each agency for 50%of the estimated FY11-12 operating
contribution,based on the proposed agency allocation (Item 5D),and allocate those funds for future capital costs:
APPROVED
CONCUR,using the FY 12 PSC approved formula percentages.
RPV PSC Member Misetich's Motion to return reserve funds to RPV if RPV withdrawals:Died for lack of a
second
3/10/2011 ATTACHMENT 11-79
Page 3 of3
CONCUR
Motion to Direct Lead Agency Staff to place the balance of the remaining funds as a reserve to pay the cost to
retire two vehicles prior to reaching their expected useful life:CONTINUED
Not accurate.The PSC approved the Lead Agency to use $36,800 of the reserves to pay the cost of retiring two
buses prior to reaching their expected useful life.
Direct Lead Agency to seek federal,state or local grant fuMing for the refurbishing of MAX vehicles:
APPROVED
CONCUR
Direct Lead Agency to use a portion of the reserve funds to meet the local matching requirement for the
refurbishment of two busses:FAILED
Not correct.Lead Agency Staff made no recommendation to refurbishment the two buses that are being retired
early.Please see the Capital Plan that notes only 12 buses are to be refurbished.
Item 5D:Updated Operating Budget Formula
Motion to Direct Lead Agency staff to use the new formula:CONTINUED
Not correct.The PSC approved the use of the FY 12 formula to determine the 50%share of the FY 12
participating agencies contribution.
Item 5E:Extension of current MAX contract with MV Transportation
Motion to consider a contract extension options with MV Transportation:CONTINUED
CONCUR
Item 5F:New Interagency Agreement
Motion to proceed forward on new Interagency Agreement:CONTINUED
CONCUR
Please let me know if you have any questions.
Thanks,
Adam
Adam Raymond
City of Rancho Palos Verdes
30940 Hawthorne Blvd.
Rancho Palos Verdes,CA 90275
www.palosverdes.com/rpv
p:(310)544-5213
f:(310)544-5291
3/10/2011 ATTACHMENT 11-80
CITY OF TORRANCE,CALIFORNIA
Statement of Changes in Fiduciary Fund Assets and Liabilities -Agency Funds
Year ended June 30,2010
Balance Balance
for fiscal for fiscal
year ended year ended
June 30,2009 Additions Deductions June 30,2010
Municipal Area Express Fund
ASSETS
Pooled cash and investments $1,048,133 $$(60,821)$987,312
Accrued interest receivable 11,832 (3,377)8,455
Due frorp other governments 75,195 28,497 103,692
Total assets $1,135,160 $28,497 $(64,198)$1,099,459
LIABILITIES
Accounts payable $194,605 $$(92,412)$102,193
Deposits payable 940,555 56,711 997,266
Total liabilities $1,135,160 $56,711 $(92,412)$1,099,459
Special Deposits Fund
ASSETS
Pooled cash and investments $1,026,362 $175,901 $$1,202,263
Total assets $1,026,362 $175,901 $$1,202,263
LIABILITIES
Deposits payable $1,026,362 $242,394 $(66,493)$1,202,2.63
Total liabilities $1,026,362 $242,394 $(66,493)$1,202,263
110
ATTACHMENT 11-81
From:
To:
cc:
Subject:
Start:
End:
Location:
Mills,Jim
dennism@rpv.com;
Turner,Kim;Sullivan,Patrick;
Declined:MAX
Friday,February 25,2011 3:30:00 PM
Friday,February 25,2011 4:00:00 PM
Conference Call
I have been directed to send your letter dated February 24,2011 to the Lead Agency Legal Counsel for
review.At the Special March 7,2011 Policy Steering Committee Meeting Lead Agency Staff will be
available to address any specific concerns the City of Rancho Palos Verdes may have.
ATTACHMENT B 11-1