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HomeMy WebLinkAboutResolution - 111876A - Lease Management Agreement - Transit Division - 11_18_1976J:lb / e ` RESOLUTION ,E, r E IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Lease Manage- ent Agreement in favor of Lubbock Transit Division of American Transit orporation, attached herewith which shall be spread upon the minutes of the ouncil and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. assed by the City Council this 18th day of November 1976. ROY ASS, MAYOR s, uirvbecretary-'Treasurer APPROVED AS TO FORM: red O. Senter, Jr., i LEASE MANAGEMENT AGREEMENT THE STATE OF TEXAS COUNTY OF LUBBOCK 0 KNOW ALL MEN BY THESE PRESENTS: THIS AGREEMENT entered into between the CITY OF LUBBOCK, a Home Rule Municipal Corporation, hereinafter called "CITY" and LUBBOCK TRANSIT DIVISION, American Transit Corp., hereinafter, called "COMPANY". WITNESSETH: WHEREAS, City has acquired or is in the process of acquiring motor coaches, service vehicles, service and maintenance and office equipment; and spare equip- ment, and certain other supporting assets more particularly described in Exhibit A attached hereto and made a part hereof and Company has the office and garage facilities, motor coaches, parts, garage and office equipment, more particularly described in Exhibit B attached hereto and made a part hereof; and WHEREAS, the assets contained in both Exhibit A and Exhibit B are necessary and appropriate for the Transit System to be operated in the City of Lubbock; and WHEREAS, City is desirous of utilizing the assets of Company in the said Transit System and of obtaining the transit management services of Company appropriate to the conduct and operation of said Transit System; and WHEREAS, Company is willing to LEASE said assets included in Exhibit B and is desirous of providing such management services. NOW THEREFORE, in consideration of the foregoing recitals and covenants of each of the parties herein set forth the parties hereto do agree as follows: 1. City hereby employs Company to furnish the managerial services herein- after described appropriate for the operation and maintenance of the Transit System conducted in and about the City of Lubbock, Texas, including Texas Tech University, (herein called the "Transit System") all for the account and on behalf of the City upon the terms and. conditions hereinafter set forth. 2. For the operation of the Transit System, the City will provide and furnish the assets described in Exhibit A and Company will provide and furnish the assets described in Exhibit 'z, and hereby leases the same to the City. 3. Company will provide and furnish the inventory of parts and supplies necessary to maintain the motor coaches described in Exhibits A and B with such parts and supplies becoming a gross operating expense as hereinafter des- cribed as such parts are used in the Transit System. In the event vehicles fur- nished by the City described in Exhibit A are withdrawn from service during the period covered by this contract, the City shall have'the following options concerning the inventory of parts maintained at reasonable levels by the Company for maintenance of said buses: A. Purchase the parts inventory at cost. B. Approve disposition of the inventory by methods recommended by the . Company and reinburse the Company -for any loss sustained -by such disposition. 4. City may replace the assets of Company contained in Eichibit B upon giving of ninety (90) days advance written notice. 5. Company shall in addition provide the management and supervisory services necessary for the operation of the Transit System. Such management and super- visory services shall include, but shall not be limited to, the following: Executive and administrative management of the Transit System; supervision and employ- ment of all personnel, operation of a driver safety program; supervision over the maintenance and replacement of equipment used in the Transit System; manage- ment of selection of replacement parts, fuel and all other suppliesrequired by the Transit System, including the negotiation 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 and assistance in the preparation of budgets to meet the City's schedule requirements. 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 Resident Manager who shall be responsible for the day-to-day operations of the Transit System, and who shall be selected, supervised and directed by the Company. The Company shall employ during the term of the contract sufficient operating person- nel, including, but not limited to, drivers, mechanics, supervisors, maintenance -2- 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 ap- proval of the City Manager. 7. City shall pay to Company as compensation for As management services a monthly fee of ONE THOUSAND SEVEN HUNDRED FIFTY ($1, 750.00) DOLLARS for the first year and increasing six (616) percent each year thereafter for the initial three (3) year period with any increases thereafter to be re -negotiated. In addition, the City shall pay to Company as a separate item, THREE HUNDRED FIFTY AND NO/ 100 ($350. 00) DOLLARS per month to compensate the Company for providing working capital, including inventories, necessary to operate and maintain the transit system. 8. Company will receive all revenues and make disbursements _for all opera- ting expenditures and Company shall properly account for all said revenues and expenditures. It shall be the obligation of 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. 9. (a) As used herein the term "gross operating revenues" shall mean and include all revenues derived from the operation of the Transit System, including but not limited to, all passenger fares, transportation contracts; local charter payments, advertising fees, and proceeds from outside sales and maintenance, but excluding the sale of assets furnished by Company in Exhibit B and revenue received from the City. (b) As used herein the term "gross operating expenses" of the Transit System shall mean and include (without limitation) all wages and compensation of all personnel including the Resident Manager of the Transit System, all payroll, social security and other taxes pertaining to the operation of the Transit System, all rentals, fees, association dues, expenses, insurance and bond costs, depre- ciation and/or rental on all equipment and facilities furnished by Company, taxes other than income taxes, the cost of all fuel, other supplies and parts, and all other charges, costs and expenses incident to the operation of the Transit Systeri. -3- 4 Gross operating expenses shall also include accounting and administrative expense of Company's home office, at the rate of three (3 jo) percent of the gross operating revenues of the Transit System, excluding income from the lease of equipment and facilities and revenue received from the City. (c) If the gross operating revenues are less than the gross operating expenses City will pay to Company an amount equal to such deficiency. If the gross operating revenues exceed the gross operating expenses Company will pay to City an amount equal to such excess. The payment'of the fees as provided in Paragraph 7 shall be in addition to any payments necessary under the provision, provided, however, that the total consideration to be paid by the City to the Company in any Fiscal Year shall not exceed the amount budgeted by the City for . this purpose; in such event, the Company's obligation for operation of said system under this agreement shall cease, subject to the notice required in Paragraph 19. 10. All payments pursuant to Paragraphs 7 and 9 shall be made monthly and within twenty (20) days after receipt of invoices from Company certifying revenues and expenses from the transit operation. In no event shall Company be obligated to lend funds or advance funds to the City to meet its obligations under this agree- ment. 11. City or its designated accountant or auditor shall have the right of access to and the inspection of all books and records of. Company at any and all reasonable times in order to verify and ascertain gross operating revenues and expenses incurred in the operation and maintenance of said Transit System. Following the completion of each and every calendar month operation the Company shall submit to the designated official of City a statement of gross receipts received and all expenses resulting from all operations. The Company shall establish and main- tain such accounting procedures as are customarily maintained by the transit industry as they now exist. 12. The City of Lubbock shall obtain appropriate forms of insurance cover- age to be in effect during the term of this contract and any extension thereof cus= tomarily maintained by the transit industry with respect to similar transit opera- tions, including but not limited to, personal injury and property damage insurance, -4- providing single limit coverage in an amount as shown on the attached Certificate of Insurance (Exhibit C) and in no event less than requirements under the applicable Texas law. Such.policies shall be obtained by the City in the name of the City of Lubbock with Lubbock Transit, American Transit Corp., Chromalloy American Corporation, and the Board of Regents of Texas Tech University named as addi- tional insured. 13. The City shall also throughout the term of this contract procure and main- . tain with an insurance company workmen's gompensation insurance covering the Transit System's employees in an amount as shown on the attached Certificate of Insurance (Exhibit C) and in no event less than the requirements under the appli- cable Texas law. Such policies shall be obtained by the City in the name of the City of Lubbock with Lubbock Transit, American Transit Corp., Chromalloy American Corporation and the Board of Regents of Texas Tech University named as additional insured. 14. Company shall procure and maintain other forms of insurance coverage mutually agreeable by the parties hereto as being necessary and appropriate for the operation of the Transit System. The premiums applicable to Paragraph 12 and 13 shall be paid by the City and premiums for additional insurance, as pro- vided in this paragraph, shall be paid by Company as a gross operating expense. Company shall not be required to obtain collision or comprehensive insurance coverage for losses of and damage to motor coaches used in the Transit System. City at its discretion may obtain such coverage. The cost of repairing damage to or the total loss of vehicles not to exceed net book value which is not reim- burseable by insurance shall be charged as gross operating expense. 15. 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 and protecting the City from theft and other similar losses up to the amount of TWENTY THOUSAND ($20, 000. 00) DOLLARS with respect to any one occurrence, the cost of same to be charged as a gross operating expense. -5- 16. Employees of American Transit Corp., the parent Company of Lubbock Transit Division shall not receive salaries from the Transit System, however, such employees shall be entitled to reimbursement•for all reasonable travel, lodging, meals and other expenses incurred by them and attributable to services performed for the Transit System. 17.. Company shall not be liable for any failure, delay or interruption of ser- vice of for failure or delay in the performances thereof by any contingency beyond its control, including, without limitation, strikes, walkouts, acts of God, enemy action, civil commotion, governmental action, unavoidable casualty, short or re= duced supply of fuel. 18. This agreement shall be in effect for a period of three- (3) years commencin November 1, 1976 and ending October 31, 1979. This agreement shall be automati cally renewable from year to year thereafter unless or until either party shall give the other party ninety 190) days written notice of its intent to terminate this agree- ment prior to the'end of the original three year period or ninety (90) days written notice prior to the end of any extended year, provided, however, management cost increases, as set forth in Paragraph 7, shall be re -negotiated each extended year. 19. All notices hereunder and communications with respect to this contract shall be effective upon the mailing thereof by registered or certified mail, return receipt requested, postage prepaid and addressed as follows: If to Company: Lubbock Transit Division 1809 Avenue C Lubbock, Texas 79401 with copy to: American Transit Corp. 120 South Central Avenue St. Louis, Missouri. 63105 If to City: City of Lubbock City Hall P.O. Box 2000 Lubbock, Texas 79401 Attention: Transit Coordinator or to such other addresses as either party shall designate by written notice. -6- 20. This contract shall supercede and cancel any prior agreement heretofore existing between the parties. EXECUTED this 18th day of November 1976. CITY OF 1BBOCK BY S C 5 ATTEgXr jjjjj'trt,r ) r (9b hL) APPROVED AS TO FORM: (/ LUBBOCK TRANSIT DIVISION American Transit Corp. BY D. A. Richter, President ATTEST: (SEAL) -7- THE STATE OF TEXAS § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF LUBBOCK § THIS AGREEMENT entered into between the CITY OF LUBBOCK, a Home Rule Municipal Corporation, hereinafter called "CITY" and LUBBOCK TRANSIT DIVISION, American Transit Corp., hereinafter called "COMPANY". WITNESSETH: WHEREAS, City has acquired or is in the process of acquiring motor coaches, service vehicles, service and maintenance and office equipment, and spare equip- ment, and certain other supporting assets more particularly described in Exhibit A. attached hereto and made a part hereof and Company has the office and garage facilities, motor coaches, parts, garage and office equipment, more particularly described in Exhibit B attached hereto and made a part hereof; and } WHEREAS, the assets contained in both Exhibit A and Exhibit B are necessary and appropriate for the Transit System to be operated in the City of Lubbock; and WHEREAS, City is desirous of utilizing the assets of Company in the said Transit System and of obtaining the transit management services of Company appropriate to the conduct and operation of said Transit System; and WHEREAS, Company is willing to LEASE said assets included in Exhibit B and is desirous of providing such management services. NOW THEREFORE, in consideration of the foregoing recitals and covenants of each of the parties herein set forth the parties hereto do agree as follows: 1. City hereby employs Company to furnish the managerial services herein- after described appropriate for the operation and maintenance of the Transit System conducted in and about the City of Lubbock, Texas, including Texas Tech University, (herein called the "Transit System") all for the account and on behalf of the City upon the terms and conditions hereinafter set forth. j 2. For the operation of the Transit System, the City will provide and furnish the assets described in Exhibit A and Company will provide and furnish the assets described in Exhibit B, and hereby leases the same to the City. ' 3. Company will provide and furnish the inventory of parts and supplies necessary to maintain the motor coaches described in Exhibits A and B with such parts and supplies becoming a gross operating expense as hereinafter des- cribed as such parts are used in the Transit System. In the event vehicles fur- nished by the City described in Exhibit A. are withdrawn from service during the period covered by this contract, the City shall have the following options concerning the inventory of parts maintained at reasonable levels by the Company for maintenance of said buses: A. Purchase the parts inventory at cost. B. Approve disposition of the inventory by methods recommended by the Company and reinburse the Company for any loss sustained ,by such disposition. 4. City may replace the assets of Company contained in Exhibit B upon giving of ninety (90) days advance written notice. 5. Company shall in addition provide the management and supervisory services necessary for the operation of the Transit System. Such management and super- visory services shall include, but shall not be limited to, the following: Executive and administrative management of the Transit System; supervision and employ- ment of all personnel, operation of a driver safety program; supervision over the maintenance and replacement of equipment used in the Transit System; manage- ment of selection of replacement parts, fuel and all other supplies required by the Transit System, including the negotiation 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 and assistance in thepreparation of budgets to meet the City's schedule requirements. 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 Resident Manager who shall be responsible for the day-to-day operations of the Transit System, and who shall be selected, supervised and directed by the Company. The Company shall employ during the term of the contract sufficient operating person- nel, including, but not limited to, drivers, mechanics, supervisors, maintenance -2- 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 ap- proval of the City Manager. 7. City shall pay to Company as compensation for its management services a monthly fee of ONE THOUSAND SEVEN HUNDRED FIFTY ($1, 750.00) DOLLARS for the first year and increasing six (616) percent each year thereafter for the initial three (3) year period with any increases thereafter to be re -negotiated. In addition, the City shall pay to Company as a separate item, THREE HUNDRED FIFTY AND NO/ 100 ($350. 00) DOLLARS per month to compensate the Company for providing working capital, including inventories, necessary to operate and j maintain the transit system. 8. Company will receive all revenues and make disbursements .for all opera- ting expenditures and Company shall properly account for all said revenues and expenditures. It shall be the obligation of 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. 9. (a) As used herein the term "gross operating revenues" shall mean and include all revenues derived from the operation of the Transit System, including but not limited to, all passenger fares, transportation contracts, local charter payments, advertising fees, and proceeds from outside sales and maintenance, but excluding the sale of assets furnished by Company in Exhibit B and revenue received from the City. (b) As used herein the term "gross operating expenses" of the Transit System shall mean and include (without limitation) all wages and compensation of all personnel including the Resident Manager of the Transit System, all payroll, social security and other taxes pertaining to the operation of the Transit System, all rentals, fees, association dues, expenses, insurance and bond costs, depre- ciation and/or rental on all equipment and facilities furnished by Company. taxes other than income taxes, the cost of all fuel, other supplies and parts, and all other charges, costs and expenses incident to the operation of the Transit System. -3- Gross operating expenses shall also include accounting and administrative expense of Company's home office, at the rate of three (3%) percent of the gross operating revenues of the Transit System, excluding income from the lease of equipment and facilities and revenue received from the City. (c) If the gross operating revenues are less than the gross operating expenses City will pay to Company an amount equal to such deficiency. If the gross operating revenues exceed the gross operating expenses Company will pay to City an amount equal to such excess. The payment of the fees as provided in Paragraph 7 shall be in addition to any payments necessary under the provision, provided, however, that the total consideration to be paid by the City to the Company in any Fiscal Year shall not exceed the amount budgeted by the City for this purpose; in such event, the Company's obligation for operation of said system under this agreement shall cease, subject to the notice required in Paragraph 19. 10. All payments pursuant to Paragraphs 7 and 9 shall be made monthly and within twenty (20) days after receipt of invoices from Company certifying revenues and expenses from the transit operation. In no event shall Company be obligated to lend funds or advance funds to the City to meet its obligations under this agree- ment. 11. City or its designated accountant or auditor shall have the right of access to and the inspection of all books and records of Company at any and all reasonable times in order to verify and ascertain gross operating revenues and expenses incurred in the operation and maintenance of said Transit System. Following the completion of each and every calendar month operation the Company shall submit to the designated official of City a statement of gross receipts received and all expenses resulting from all operations. The Company shall establish and main- tain such accounting procedures as are customarily maintained by the transit industry as they now exist. 12. The City of Lubbock shall obtain appropriate forms of insurance cover- age to be in effect during the term of this contract and any extension thereof cus- tomarily maintained by the transit industry with respect to similar transit opera- tions, including but not limited to, personal injury and property damage insurance,. -4 providing single limit coverage in an amount as shown on the attached Certificate of Insurance (Exhibit C) and in no event less than requirements under the applicable Texas law. Such policies shall be obtained by the City in the name of the City of Lubbock with Lubbock Transit, American Transit Corp. Chromalloy American Corporation, and the Board of Regents of Texas Tech University named as addi- tional insured. 13. . The City shall also throughout the term of this contract procure and main- tain with an insurance company workmen!s compensation insurance covering the Transit System's employees in an amount as shown on the attached Certificate of Insurance (Exhibit C) and in no event less than the requirements under the appli- cable Texas law. Such policies shall be obtained by the City in the name of the City of Lubbock with Lubbock Transit, American Transit Corp., Chromalloy American Corporation and the Board of Regents of Texas Tech University, named as additional insured. 14. Company shall procure and maintain other forms of insurance coverage mutually agreeable by the parties hereto as being necessary and appropriate for the operation of the Transit System. The premiums applicable to Paragraph 12 and 13 shall be paid by the City and premiums for additional insurance, as pro- vided in this paragraph, shall be paid by Company as a gross operating expense. Company shall not be required to obtain collision or comprehensive insurance coverage for losses of and damage to motor coaches used in the Transit System. City at its discretion may obtain such coverage. The cost of repairing damage to or the total loss of vehicles not to exceed net book value which is not reim- burseable by insurance shall be charged as gross operating expense. 15. 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 and protecting the City from theft and other similar losses up to the amount of TWENTY THOUSAND ($20, 000. 00) DOLLARS with respect to any one occurrence, the cost of same to be charged as a gross operating expense. -5- 16. Employees of American Transit Corp., the parent Company of Lubbock Transit Division shall not receive salaries from the Transit System, however, such employees shall be entitled to reimbursement for all reasonable travel, lodging, meals and other expenses incurred by them and attributable to services performed for the Transit System. 17. Company shall not be liable for any failure, delay or interruption of ser- vice of for failure or delay in the performances thereof by any contingency beyond its control, including, without limitation, strikes, walkouts, acts of God, enemy action, civil commotion, governmental action, unavoidable casualty, short or re- duced supply of fuel. 18. This agreement shall be in effect for a period of three (3) years commencing November 1, 1976 and ending October 31, 1979. This agreement shall be automati- cally renewable from year to year thereafter unless or until either party shall give the other party ninety (90) days written notice of its intent to terminate this agree- ment prior to the end of the original three year period or ninety (90) days written notice prior to the end of any extended year, provided, however, management cost I increases, as set forth in Paragraph 7, shall be re -negotiated each extended year. 19. All notices hereunder and communications with respect to this contract shall be effective upon the mailing thereof by registered or certified mail, return receipt requested, postage prepaid and addressed as follows: If to Company: Lubbock Transit Division 1809 Avenue C Lubbock, Texas 79401 with copy to: American Transit Corp. 120 South Central Avenue St. Louis, Missouri 63105 If to City: City of Lubbock City Hall P.O. Box 2000 Lubbock, Texas 79401 Attention: Transit Coordinator or to such other addresses as either party shall designateby written notice. -6- 20. This contract shall supercede and cancel any prior agreement heretofore existing between the parties. EXECUTED this 18 day of HOVEMBER 1976. CITY OOFL/UUBBBOCK BY L LXJLt l �,15�� ATTEST: (SEAL) APPROVED AS TO FORM: I f ATTEST: (SEAL) LUBBOCK TRANSIT DIVISION American Transit Corp. BY D. A. Richter, President -7-