DISTRICT OF LAKE COUNTRY
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1 DISTRICT OF LAKE COUNTRY REPORT TO COUNCIL MEETING TYPE AND DATE: REGULAR MEETING MARCH 17, 2015 FROM: DIRECTOR OF ENGINEERING AND ENVIRONMENTAL SERVICES SUBJECT: TRANSIT OPERATING AGREEMENTS FILE #: ISSUE(S)/PURPOSE: Approval of the Kelowna Regional Transit System Cost and Revenue Sharing Agreement and Annual Operating Agreement Amendment #1 RECOMMENDATION(S): THAT the Kelowna Regional Transit System Cost and Revenue Sharing Agreement between the District of Lake Country, BC Transit and the local government partners be authorized; AND THAT the Annual Operating Agreement Amendment #1 between the District of Lake Country, BC Transit and First Canada ULC be authorized. EXECUTIVE SUMMARY: The Kelowna Regional Transit System Cost and Revenue Sharing Agreement formalizes and documents the methodology for cost and revenue sharing used between BC Transit and the six regional partner communities (District of Lake Country, City of Kelowna, Regional District of Central Okanagan, District of West Kelowna, Westbank First Nation and District of Peachland). The methodology used coupled with the included change management process provides each of the partners with an equitable allocation of costs and revenues for transit service along with a documented process for implementing service changes that will act to minimize unintended consequences and financial impacts to partner communities. Annual Operating Agreement Amendment #1 revises the Annual Operating Agreement authorized by Council in July 2014 to include service changes effective August 31 st, 2014 including route #32 service to The Lakes. BACKGROUND/HISTORY:
2 2 Cost and Revenue Sharing The Kelowna Regional Transit System operates as a single entity providing transit service to customers throughout the central Okanagan between Peachland and Lake Country. Each of the six local government partners (Lake Country, City of Kelowna, Regional District of Central Okanagan, District of West Kelowna, Westbank First Nation and District of Peachland) have individual Transit Service Agreements with BC Transit. While each partner has the ability to work with BC Transit to identify and implement their own levels of service (routing, frequency), any alteration to the system may have unintentional consequences for the other partners and impact on cost sharing. Cost Sharing Total operating costs and total lease fees will be shared based on the hours of scheduled service provided to each partner. Data provided by BC Transit will show each partners share of the transit service based on the proportion of service in their jurisdiction. The total service hours for each local government partner form the ratio of cost sharing for all aspects of the transit contract including, but not limited to, debt servicing, fixed costs and fleet maintenance. Details of the cost sharing methodology are provided in Attachment A to this report. Notably for Lake Country Route 23 trips that serve the airport will be shared with the City of Kelowna for the portion of the route that travels between the intersection of Old Vernon Road and Highway 97 and UBCO. Trips not serving the airport will be paid for by the District of Lake Country less the time spent serving the Regional District. Cost sharing ratios will be adjusted as required by service changes twice annually in April and September. Revenue Sharing 75% of revenue will be allocated based on ridership per local government partner and the remaining 25% of revenue will be allocated based on service hours cost per partner. All system revenues will be shared based on the most recent passenger count information available from BC Transit on each route. All revenues will be allocated to the City of Kelowna who will then distribute based on the agreed revenue splits. Change Management Along with the cost and revenue sharing methodologies, BC Transit has implemented a change management process. When a change (service review, reduction, expansion discussion document) is requested an MOU is initiated by the Regional Transit Manager and all partners affected by the proposed change will be required to signoff on the document prior to the change proceeding Annual Operating Agreement Amendment #1 In July 2014 Council authorized the Annual Operating Agreement for transit service between the District of Lake Country, BC Transit and First Transit ULC for the period from April 1, 2014 to March 31 st, Annual Operating Agreement Amendment #1 includes costs associated with transit service changes that took effect August 31 st, 2014 including implementation of route #32 service between The Lakes and Main Street in Lake Country. The cost and revenue sharing is based on the Cost and Revenue Sharing Agreement. The attached letter Attachment B to this report dated January 21, 2015 from Erin Felker, Senior Regional Transit Manager provides more detail regarding the Annual Operating Agreement Amendment.
3 DISCUSSION/ANALYSIS: The Cost and Revenue Sharing Agreement provides greater equity in cost and revenue allocation across local government partners and a clear process for implementing service change requests, and reductions or expansions to service that will act to minimize unintended consequences for other regional partners. There are other separate arrangements for HandyDART service (with BC Transit and the City of Kelowna), the Vernon to UBCO Connector (with BC Transit and the North Okanagan Regional District), and the Sustainable Transportation Partnership of the Central Okanagan (with all six local Central Okanagan jurisdictions). APPLICABLE POLICIES AND LEGISLATION: N/A INTERGOVERNMENTAL IMPLICATIONS: Lake Country s transit service is part of the larger Kelowna Regional Transit System. Regular consultation takes place with BC Transit, District of Peachland, District of West Kelowna, Westbank First Nation, Regional District of Central Okanagan and the City of Kelowna. 3 INTERDEPARTMENTAL IMPLICATIONS: COMMUNITY IMPLICATIONS: ENVIRONMENTAL IMPLICATIONS: ADHERENCE TO STRATEGIC OBJECTIVES: Support of transit service has been a Council s priority for a number of years and supports transportation objectives of the OCP. COST, BUDGET CONSIDERATIONS AND FINANCIAL IMPLICATIONS: The 2015 budget and financial plan were prepared in consideration of these agreements. IMPACT ON STAFF CAPACITY AND WORKLOAD: OPTIONAL RECOMMENDATIONS/ALTERNATIVES: SUMMARY/CONCLUSION: Respectfully Submitted, Michael J. Mercer, P.Eng. Director of Engineering and Environmental Services
4 4 This report has been prepared in consultation with the following listed departments: CONCURRENCES Department CAO Chief Financial Officer Name Alberto De Feo Rose Bronswyk Kassa ATTACHMENTS: Attachment A Letter from BC Transit, December 12, 2014 Attachment B Letter from Erin Felker, Senior Regional Transit Manager, January 22, 2015
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