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HomeMy WebLinkAboutResolution - 092575B - Lease Extension Agreement - LBK Transit Corporation - 09_25_1975KJ:cab RESOLUTION 092 5rn, 6 THAT the MAYOR of the CITY OF LUBBOCK BE and is hereby authorize and directed to execute a LEASE EXTENSION AGREEMENT between the CITY OF LUBBOCK and the LUBBOCK TRANSIT CORPORATION, attached herewith which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolu- tion as if fully copied herein in detail. Passed by the City Council this 25thday of : September 1975, /j &—Z ROY ITALSS, MAYOR ATTEST: Tea Phillips, City S retary-Treasurer APPROVED AS TO FORM: ., CILty'Attorney THE STATE OF TEXAS § § LEASE EXTENSION AGREEMENT COUNTY OF LUBBOCK § WHEREAS, the CITY OF LUBBOCK and LUBBOCK TRANSIT CORPORA- TION entered into a Lease Management Agreement dated September 28, 1972; and, which was extended by Agreements dated September 27, 1973 and Octo- ber 10, 1974; and WHEREAS, the parties thereto desire to extend such agreement as shown below; NOW THEREFORE: WITNESSETH• THAT the CITY OF LUBBOCK and LUBBOCK TRANSIT CORPORATION do hereby agree to an extension of the Lease Management Agreement dated September 28, 1972, and extended on September 27, 1973 and October, 1974; This extension shall be upon the same terms and conditions as stated in the original agreement, except however, sub -sections (a)(b) of condition 10 :''of the original agreement is amended by changing the maximum consideration ,. to The term of this extension shall be on a month to month basis with the ,right of termination by either party on thirty days written notice to the other party. EXECUTED THIS �rL_DAY OF SEP7EMBER 1975. i CITY OF LUBBOCK his R Y ASS, MAYOR ATTEST: Treva Phillips, City ecretary-Treasurer APPROVED AS TO FORM: Fred O, Senter, Jr,, City Attorney LUBBOCK TRANSIT CORPORATION President ATTEST: ecretary LEASE 17ANAGF11ENT AGP ^ FNTENT THE STATE OF TEXAS X KNOW ALL MEN BY THESE PRESENTS: COUNTY OF LUBBOCK X THIS agreement entered into between the CITY OF LUBBOCK, a Home Rule Municipal Corporation, hereinafter called CITY and the LUBBOCK TRAN- SIT CORPORATION, a Texas Corporation, hereinafter called COMPANY. WITNESSETH; Company hereby leases to City the motor coaches, equipment thereon and other parts and equipment, real estate, office, garage and storage facil- ities, garage and office equipment, and all. other properties, assets and facil- ities located and situated in City of Lubbock, necessary and appropriate for a transit system to be operated in the City of Lubbock as more particularly des- cribed in the Exhibit "A" attached hereto and made a part hereof all upon the following terms and conditions; 1. The term of the lease period shall be one (1) year from January 1, 1971, and continuing thereafter under the terms and conditions mutually agree- able to parties hereto, subject to termination by either party on thirty (30) days prior written notice beyond the primary term. 2. City hereby employs Company, so long as its lease of equipment and its facilities exists, to furnish the managerial services hereinafter des- cribed appropriate for the operation and maintenance of the motor bus transit system conducted in and about the City of Lubbock, Texas, all for the account and on behalf of the City, upon the terms and conditions hereinafter set forth. 3. Company hereby agrees and obligates itself to provide and furnish for the operation of the transit system including the real estate, office, garage and storage facilities, motor coaches, herein leased to.City, all fuel, parts, oil and tires, shop and garage equipment,. office. equip -rent and all other proper- ties, assets, facilities and personnelnecessary or appropriate for the opera- tion of the transit system. It is further understood the the City may, at °its . ,f a descretion, furnish any or all of the above equipment and facilities, parts, supplies, etc. 4. Company shall in addition provide the management and supervisory services necessary for the operation of the transit system. Such management and supervisory services shall include, but shall not be limited to, the following: executive and administrative management of the transit system; supervision and employment of all personnel; operation of a driver safety program; supervision over the maintenance and replacement of equipment used in the transit system; recommendations relating to selection of replacement parts, fuel and au.Qther supplies required by the transit system, including the negotiations of fuel supply, tire rental or purchase agreements; overall planning, governing the scheduling and routing of the bus lines of the transit system, as well as supervision of the rate and fare structures of the transit system and recommendations to City in regard thereto; planning of the shop and garage layout; public relations and sales promotion; preparation of budgets; preparation of vouchers and checks; analysis of the financial and other matters pertaining to the operation of the transit system; administrative, clerical, statistical and bookkeeping services, including the preparation of monthly statements showing a comparison of the transit system's past performance. 5. The Company shall, as part of the management agreement, maintain and keep in working order the leased motor coaches and equipment described herein, but, no major repairs or overhaul, not consistent with customary and normal expenditures as reflected by Company's records for the three years preceding the term of this lease, or replacement of motor coaches or motors shall take place or obligations incurred without the prior consent of the City as given to the Company by the governing body of City as evidenced in writing by the City Manager. 6. During the term of this contract, the .Company shall provide sufficient executive and administrative personnel as shall be necessary and required to perform its duties and obligations under the terms hereof, including a Vesident A,Tan- ger who shall be responsible for the day-to-day operations of the transit -2- system, and who shall be selected, supervised and directed by the Company. The Company shall employ during the term of the contract sufficient operating personnel, including, but not limited to, drivers, mechanics, supervisors, maintenance and other shop personnel, office and administrative personnel, as required from time to time. The personnel shall be employees of the Company. The cost of and compensation payable to all personnel employed shall be subject . to the approval of the City Manager. 7. The Company shall obtain appropriate forms of insurance coverage to be in effect during the term of this contract, customarily maintained by the Transit industry with respect to similar transit operations including, but not limited to, personal injury and property damage insurance, providing, single limit coverage in.an amount not less than the requirements under the applicable Texas law. All policies providing such coverage by their terms or by specific endorsement shall designate the City and the Company as co-insured under the terms thereof. 8. The Company shall also, throughout the term of this contract, pro- cure and maintain with an insurance company acceptable to the City, Workmen's Compensation Insurance covering the transit systems employees as required by the laws of the State of Texas. 9. During the period that this contract shall be in effect, the Company shall cause its Resident Manager and any other appropriate personnel to be. covered under an appropriate bond, covering employee dishonesty, protecting the City from theft and other similar losses up to the amount of $20, 000. 00, with respect to any one occurrence, the cost of same to be charged as an op- erating expense, 10. The City shall pay to the Company as consideration for the equipment and facilities to be leased hereunder and for the managerial and supervisory services to be performed by the Company hereunder the following amounts; (a) The consideration to be paid by City to Company for equip- ment and facilities shall not exceed TWENTY-TWO THOUSAND ($22, 000. 00) DOLLARS for the primary term, which the Company agrees shall be credited -3- s to and be. applied to gross operating revenues. Payment shall be made in monthly installments upon receipt by the City of.a statement showing the gross operating revenues and expenses as hereinafter defined for the pre- ceding month, (b) If at the end of the initial year there is a cumulative net pro- fit for such period, such profit shall be returned to City. In the event the consideration reaches the sum of $22, 000, 00, Company shall be obligated to continue operation of said system under the terms and conditions of the man- agement agreement herein described. (c) In the event the operating ratio of the Transit System exceeds 100016, the Company shall certify this fact to the City, together with the statement of the rates of fare and/or schedules deemed necessary to restore the opera- ting ratio to 100ojo. Within ten (10) days of receipt thereof by the City, the Company and City shall arrange a meeting to negotiate the recommendation made by Company, but in no event shall the revised rates and/or schedules go into effect without the approval of the City. Provided, however, in the event t the operating ratio exceeds 10216, the Company shall certify this fact to the City Manager, together with a statement of the rates it deems necessary to restore the operating ratio to 100°fo and after ten (10) days from receipt there- of by the City Manager, the Company may put the new rates of fare and/or schedules into effect. By the term 'operating ratio" as used herein is declared by the parties hereto as meaning the ratio obtained by dividing gross operating expense by gross operating revenue. (d) City shall pay to Company as compensation for its manage- ment services, $1500.00 per month, il. Company will receive all revenues and make disbursements for all operating expenditures, and Company shall properly account for all said rev- enues and expenditures. It shall be the obligation of"the Company to collect all bus fare revenues, advertising or other revenues and to deposit said funds at regular intervals at a bank approved by the City Manager, (a) ,,As used herein the term "gross operating revenues"- shall mean -4- and include all revenues derived from the operation of the transit system, in- cluding, but not limited to, all amounts paid by City as provided in Sub -section 10(a) above expressly excluding the management fee provided in Sub -section 10(b), all passenger fares, transportation contracts, local charter payments, advertising fees, proceeds from outside sales and maintenance, but excluding the sale of assets made upon approval of City, as shown on the attached State - meet of Income attached hereto and made a part of this agreement as Exhibit (b) As used herein the term "gross operating expenses" of the tran- sit system shall mean and include, all wages and compensation of all personnel of the transit system, all payroll, social security and other taxes, all rentals, fees, expenses, insurance and bond cost, depreciation on all equipment and facilities furnished by Company, federal and state income and .state business receipt taxes, the costs of all fuel, other supplies and parts, and all other charges, costs and expenses incident to the operation of the transit system, as shown on the attached Statement of Operating Expenses attached hereto and made a part of this agreement as Exhibit "C". 12. Employees of AMERICAN TRANSIT CORP., the parent company of LUBBOCK TRANSIT CORPORATION, shall not receive salaries from the transit system. However, such employees shall be entitled to reimbursement for all reasonable travel, lodging, food and other expenses incurred by them attribu- table to services performed by and for the transit system. 13. The Company herewith agrees to submit to the City a monthly operating revenue report indicating the operatirb ratio for the preceding month and at the end of the term of this agreement, the Company shall submit to the City a detailed financial statement certified by an officer of the Company show- ing the results of the operation, and the. City shall have the right to inspect the Company's books at any time during the term of this agreement, and further, the City shall have the right at any time.during the term of this agreement to inspect and analyze the accounting methods utilized by the Company in the prep arat`.on of its mon— hly operating revenue reports. -5- A 14. The provisions of this agreement are hereby made inseparable, and in the event any provision hereof is determined to be null and void, the entire agreement shall be null and void. 15. At the expiration of the term of this agreement or of any renewal thereof or in the event this lease and agreement is canceled or terminated prior . to the expiration of the term hereof, or of any renewal thereof, or is null and void, all right, title and interest in and to all the equipment leased hereunder shall revert to the Company in the condition therein at time of such termination and the City shall be liable for any costs and expenses of the operation, main-: tenance, management, and supervision of the transit system which are then unpaid. Any amount thereafter remaining in or subsequently paid into said transit account in excess of the.then unpaid costs and expenses of operation, maintenance, management, and supervision of the transit system, and after satisfaction of all obligations incurred by the Company hereunder shall be paid by the Company to the City, 16.. The Company, its successors and assigns, shall indemnify and hold harmless the City, its officers, agents and employees from liability of any nature or kind, including damage and cost in defending actions arising out of or attributable to this lease and operation and management of the transit system without limitation. 17. All notices hereunder, and communications with respect to this contract shall be effective upon the mailing thereof by registered or certi- fied mail, return receipt requested, postage prepaid and addressed as follows: If to Company: Lubbock. Transit Corporation 1809 Avenue C Lubbock, Texas 79401 If to City: City of Lubbock, Texas City Hall P. O. Sox 2000 Lubbock, Texas 79401 Attention; City Manager or to such other address as either party shall designate by written notice: ..6 _ - No Text