Report to/rapport au : Transit Commission Commission du transport en commun. and Council / et au Conseil. October 17, octobre 2012
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1 Report to/rapport au : Transit Commission Commission du transport en commun and Council / et au Conseil October 17, octobre 2012 Submitted by/soumis par : Steve Kanellakos, Deputy City Manager, City Operations / Directeur municipal adjoint, Opérations municipales Contact Person / Personne ressource: John Manconi, General Manager / Directeur général, Transit Services / Services du transport en commun x 2111, John.Manconi@transpo.ottawa.on.ca CITY WIDE / À L'ÉCHELLE DE LA VILLE Ref N : ACS 2012-COS-TRA-0012 SUBJECT: OBJET : PARA TRANSPO SERVICE-DELIVERY MODEL AND VEHICLE ACQUISITION LE MODÈLE DE PRESTATION DE SERVICES DE PARA TRANSPO ET L'ACQUISITION DE VÉHICULES REPORT RECOMMENDATIONS That the Transit Commission recommend that Council approve: 1. That OC Transpo continue to provide Para Transpo services through its internal mini-bus service and external taxi contract; and, 2. That OC Transpo staff be authorized to proceed with the procurement and acquisition of the replacement Para Transpo mini bus fleet. RECOMMANDATIONS DU RAPPORT Que la Commission du transport en commun recommande au Conseil d'approuver : 1. Qu'OC Transpo continue d'assurer des services pour Para Transpo dans le cadre de son contrat lié au service interne de minibus et aux taxis externes; 2. Que le personnel d'oc Transpo soit autorisé à procéder à l'approvisionnement et à l'acquisition du parc de minibus de remplacement de Para Transpo.
2 BACKGROUND Para Transpo is a door-to-door transportation service for persons with disabilities who are unable to use conventional transit services. The service delivery model used by Para Transpo is unique in that it meets the needs of its users through internal and external channels. The service delivery model is comprised of 91 City-owned, operated, and maintained mini-buses, as well as up to 80 taxi vehicles which are owned, operated and maintained by a contracted taxi company. On an annual basis, over 538,000 passenger trips are provided by the internal mini-bus service, and over 340,000 passenger trips are provided by the contracted taxi vehicles. Para Transpo provides transportation within the urban and rural areas of the City of Ottawa and to the Hull sector of Gatineau, Quebec. Service Delivery Model From January 1, 2002 to December 31, 2007, FirstBus Canada was contracted to provide the mini-bus service for Para Transpo. In July 2006, Council approved a managed competition for the Para Transpo mini-bus contract and endorsed the participation of an In-house Bid Team. Guidelines for the competition were agreed upon and formed part of an approved report. In April 2007 Council also approved that the sedan service component of the Para Transpo program would be transferred to a contracted taxi company. A Request for Tender (RFT) was released through the Internet based Merx bid distribution network on October 5, Twelve firms ordered the tender documents, however only one response was received by the tender due date. The In-house Bid Team was the only group to submit a proposal. The response was reviewed by an evaluation team, and was found to be in compliance with the criteria approved in advance by Council and contained in the tender. The tender from the In-house Bid Team met all the mandatory criteria and exceeded the minimum qualification score required. The financial offer was then analyzed. Based on the proposal from the In-house Bid Team, the average hourly cost for provision of the mini-bus service increased by 11.5 per cent between the final stage of the existing contract with FirstBus Canada in December 2007 and the start-up of the new contract with the In-house Bid Team in January It is important to note, however, that when the contract changed from Laidlaw to FirstBus Canada in 2002,, the increase in cost to the City was 35 per cent, and the unsuccessful financial submission from Laidlaw (the incumbent) requested a 77 per cent increase. Reasons for the 11.5 per cent increase in price included: The pre-determined maximum of three percent annual wage increases to labour (drivers);
3 The fact that maintenance of the fleet, previously not undertaken by unionized staff, became the responsibility of the City s Fleet Services Branch; The recognition of improved working conditions and benefits for staff, notably the OMERS pension plan coverage; The fact that fuel costs, based on the August 2006 benchmark stipulated in the RFT, were at the high end of the scale, at 93.9 cents per litre and had to be factored into the tender costs; The 11.5 per cent was a justifiable increase as evidenced by the fact that FirstBus Canada refrained from submitting a tender for the upcoming five-year contract, and, as such the In-house Bid Team was the only bidder; and, The tender submitted by the In-house Bid Team was inclusive of all known costs and contained a 2.5 per cent contingency allowance, which allowed for integration within the SAP payroll system without affecting the hourly rate. On May 9, 2007, Council approved the tender submission from the In-house Bid Team and awarded the contract accordingly. The contract is set to expire on December 31, Simultaneously, Council approved that the sedan component of the Para Transpo program be transferred to an independent taxi company. Traditionally, the delivery of the Para Transpo mini-bus service has been contracted out to independent firms. As noted above, in the years leading up to 2008, Laidlaw Transit Ltd. ( ), FirstBus Canada ( ) and others held the contracts. In 2004, the Amalgamated Transit Union Local 279 won their application for Sale of Business status from the Canadian Industrial Relations Board, and signed an agreement with the City of Ottawa, Laidlaw Transit Ltd, and FirstBus Canada. The agreement indicated, amongst other things, that all future service contracts had to respect the Collective Agreement negotiated by ATU-279 Para Transpo. More specifically, this meant that certain terms, such as the appropriate deductions and employer contributions to the OMERS plan had to be made, years of service had to be recognized, and appropriate severance pay had to be respected. These negotiated terms put additional constraints on independent contractors submitting a successful bid, and as noted above, when the RFT was released for the contract, there were no bids made by any independent firms. Despite the lack of external interest, the Union s executives and various stakeholders unanimously supported the City s In-house Bid Team. There were several reasons for this support. When the mini-bus service was provided externally, Para Transpo employee-employer relations were not always sound. There were conflicting expectations placed on the employees and as a result, several grievances and labour disputes with the Canadian Industrial Relations Board ensued. Given the City s reputation for providing a respectful and safe work environment, Union executives understood the positive effect that providing the service internally would have on employee morale. Not only have labour relations been sound since the mini-bus service has been provided internally, but several retrofits and improvements have been made to increase the quality of service. In 2007, a new fleet of Para Transpo mini-buses was purchased,
4 and in 2011, the Merivale garage was retrofitted for the maintenance and storage of Para Transpo mini-buses. Mini-Bus Fleet In 2006, as part of the procurement process for Para Transpo mini-bus service, bidders were asked to provide information on the vans they proposed to use for the service so that the City could purchase the vans. This was a condition of eligibility for provincial subsidy. The In-house Bid Team specified a Ford E450 and on that basis, Council s approval of $7.3 million was sought and received in the 2007 capital budget. Due to a legal dispute between Ford and its engine supplier, Ford was no longer taking orders for these vans and therefore an alternative was required to be identified to ensure no disruption in service. Supply Management conducted a procurement process to which there were 10 responses and awarded the contract to Overland Coach for GM C4500 chassis vans. Although the lowest compliant bid, these vans were more expensive than the original vehicle specified. Given the short lead time available and their ability to fill the order, coupled with the fact that the vans were larger, were of sturdier construction and had a longer expected service life, Overland was selected as the successful bidder and the additional funding of $1.2 million was secured through the Emergency of Special Circumstances provisions of the Delegation of Authority by-law (By-law ) DISCUSSION On May 16, 2012, the Transit Commission received the 2012 Departmental Priorities report for the Transit Services Department. One of the Department s priorities is to improve services to Para Transpo customers by not only replacing the Para Transpo mini-bus fleet, which is nearing the end of its life, but also by continuing to deliver the service using the existing service delivery model (internal mini-bus service and external taxi contracts.) Given that the procurement process of the mini-bus vehicles will take approximately 18 months to complete, this report is recommending that the procurement process for a new mini-bus fleet begin as soon as possible. In the 2012 Budget process, Council allocated $13 million to the lifecycle replacement of the aging Para Transpo fleet of mini buses, and as such, no additional funds are required. In keeping with OC Transpo s its commitment to customer satisfaction and service excellence, staff will ensure that the procurement process will include the input of the public, Para Transpo employees and other relevant stakeholders. This consultation process, which is supported by Supply Management, will not only help identify appropriate fleet specifications, but it will also help ensure best-value. Consequently, specifications deriving from the consultation process will guide Supply Management and staff through the entirety of the procurement process. Following the approval of this report, staff will commence the first phase of public consultation and will ensure an open line of communication with its users and affected parties.
5 This report is also recommending that the current service delivery model of Para Transpo be upheld. At present, Para Transpo s service delivery model is combined of mini-buses operated in-house and contracted taxi vehicles. The combination of operating mini-buses in-house and contracting taxi vehicles allows Para Transpo to effectively respond to the needs of all its customers in the most efficient way. The combined in-house/contracted service model offers Para Transpo the flexibility to schedule specific vehicle types to those customers whose disability may restrict them from using one type of vehicle over another. It also allows for various types of service to be used by citizens with disabilities, such as charter service, transportation to adult day programs, summer programs, coordinated special event service and regular day to day transportation. Para Transpo s current service delivery model also benefits from the contracted taxi service in a number of ways, one of which is the ability to offset unexpected service delays by scheduling trips to them on short notice. There are important differences in service characteristics and costs (i.e. start-up costs) that favour an in-house service. Maintaining services internally allows for more control over the quality of the service and prioritizes service availability and customer satisfaction, in contrast to a private contractor who would also need to consider bottomline profits. Since service has been operated internally, a healthy relationship has been fostered between the City, the Union, and the employees. Should the recommendations of this report be approved, the City will continue to maintain these relations and will continue to be the primary negotiator of future Collective Agreements. Employee engagement and employee morale have a huge bearing on the quality of service provided. A content workforce, who believes that their employer will provide them with the adequate resources to do their job, will undoubtedly maintain a high quality of service. The graphs below illustrate the progress that has been made since the mini-bus service has been operated internally. The continuous increase in productivity can be attributed to a variety of conscious initiatives such as, a) leveraging scheduling software through enhanced scheduling practices, b) embarking on employee engagement initiatives aimed at a team approach to scheduling practices, and c) ensuring staff is trained in the most current scheduling techniques and best practices through regular contact with other Para service providers and user group training programs. Trips per Revenue hour/mini-bus
6 Although demand in service has increased 12 per cent over the past 4 years, unaccommodated trips have only increased 1 per cent since 2008 due to efficiencies in service provided, resulting in an 11 per cent increase in trips provided from Para Transpo s increased productivity over the past four years can be attributed to the current service model, as it allows for the right mix scheduling control, service flexibility and cost sharing between contracted taxi vehicles and in-house mini buses. This well balanced mix provides the opportunity for Para Transpo to engage employees, control scheduling techniques and leverage from efficiencies offered through contracting taxi vehicles, ultimately providing a well balanced Para service to Ottawa s disabled community. RURAL IMPLICATIONS There are no rural implications associated with this report. CONSULTATION No specific consultation has been carried for this report; however in 2007, consultation with Union executives and various stakeholders was undertaken to gain feedback on whether or not the mini-bus service should operate internally. All parties unanimously agreed that the service should remain internal. LEGAL IMPLICATIONS In terms of labour relations, it may be noted that the collective agreement between the City and the Amalgamated Transit Union, Local 279 (the Union ), does not restrict the City s right to have the Para Transpo service delivered by an external contractor, as was the case in past years. However, it should be noted that the collective agreement is set to expire on December 31, As a result, should City Council decide to continue to provide the Para Transpo service in-house, it will be necessary to serve a Notice to Bargain later this year, in accordance with the timelines prescribed by the collective agreement and the Canada Labour Code, with a view to negotiating a renewal collective agreement with the Union. In the event that City Council elects to have the service provided by an external contractor, the respective rights and obligations of the Union
7 and of that external contractor will be determined in accordance with the relevant Canada Labour Code provisions. RISK MANAGEMENT IMPLICATIONS There are no risk implications associated with this report. FINANCIAL IMPLICATIONS The draft 2013 Transit Operating Budget has been prepared on the basis of the continuation of the in-house mini-bus service contract for Para Transpo. Past experience found that there was no market interest from third parties in bidding on this service, and given no changes to the terms of providing the service, the belief is that there would be no financial benefit from tendering the contract. The capital authority for replacement of the mini bus fleet was approved in the 2012 Capital Budget for Transit under Project # for $13 million. ACCESSIBILITY IMPACTS There are no accessibility impacts associated with this report. ENVIRONMENTAL IMPLICATIONS There are no environmental implications associated with this report. TECHNOLOGY IMPLICATIONS There are no direct technical implications associated with this report. TERM OF COUNCIL PRIORITIES This report s recommendations support the following objectives of the Term of Council Priorities: TM1: Ensure sustainable transit services TM4: Provide alternative mobility choices SE1: Ensure a positive experience for every client interaction DISPOSITION Following approval of this report, staff will initiate the procurement process with Supply Management and the first phase of public consultation will begin.
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