HomeMy WebLinkAbout10A Master Lease Agreement
4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL AGENDA REPORT
MEETING DATE: FEBRUARY 6, 2012
AGENDA #: 10A
PREPARED BY : JANE KANSIER, ASSISTANT CITY MANAGER
PRESENTED BY: JANE KANSIER
AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING STAFF TO E X-
ECUTE THE MASTER LEASE AGREEMENT BY AND BETWEEN THE ME T-
ROPOLITAN COUNCIL AND THE CITY OF PRIOR LAKE FOR PUBLIC TRA N-
SIT VEHICLES
DISCUSSION: Introduction
The purpose of this agenda item is to authorize st aff to execute a Master Lease
Agreement for Public Transit Vehicles with the Metropolitan Council. The lease
agreement covers the four coach buses and the two small buses the City uses for
the Laker Lines and Laker Link transit services.
History
For many years, the primary funding source for transit was a property tax levied by
the Metropolitan Transit Commission, and later the Metropolitan Council when
these agencies were the transit provider for the region.
In 1984, the State Legislature adopt ed Minnesota Statute 473.388, allowing co m-
munities to “opt out” of the regional transit system. Twelve suburban communities,
including the City of Prior Lake, chose to take advantage of the opt - out provision.
Initially, the City was a member of the Minne sota Valley Transit Association
(MVTA), a joint powers entity, comprised of cities within a transit area, which
pooled their transit funding from the Metropolitan Council to provide transit service
within the t ransit area.
In 2001 because the transit ser vices to Prior Lake by MVTA remained minimal the
City Council voted to opt - out of the MVTA to operate its own bus service (Laker
Lines).
Although the City is responsible for operations, the Metropolitan Council purcha s-
es and owns all of the public transit buses in the region. The “opt - out” operators
lease the buses from the Metropolitan Council using the attached master agre e-
ment .
Current Circumstances
The City of Prior Lake currently operates four coach buses and two small buses
for public transit. The Metropolitan Council staff has prepared a revised master
lease agreement intended to supersede the existing 2005 agreement, and the
2006 amendment. Thi s iteration of the master lease agreement incorporates the
requirements of the Regional Fleet Management Policies and Procedures adopted
in 2010 over the objections of the Suburban Transit Association (STA). See the
issues section below.
The initial term of the lease is to the year 2016, with one - year automatic renewals.
As part of the agreement, the lessee (the City) acknowledges the Metropolitan
Council does not provide any express or implied warranties regarding the fitness
of the vehicles for their p urpose. The agreement further specifies the level of i n-
surance required for each vehicle, as well as the maintenance required.
Conclusion
The revised Master Lease Agreement is similar to the current lease agreements
the City has with the Metropolitan Council. The major difference is the reference
to the Regional Fleet Management Policies and Procedures.
ISSUES: The City Attorney reviewed the lease agreement and found no legal issues.
The major issue with the agreement is the incorporation of the Regional Fleet
Management Policies and Procedures. This policy, adopted by the Metropolitan
Council in 2010, primarily impacts the years of service for the buses in the fleet,
and increased ma intenance costs. The City of Prior Lake, along with other STA
members, communicated our objections to the Metropolitan Council, to no avail.
In spite of these concerns, the City has little choice in whether or not to sign the
master lease agreement. Oth er providers, such as Shakopee, have signed the
agreement with the comment the agreement should be reopened in the near future
to further address the issues with the regional policies.
If, because of funding shortfalls or dramatic loss of ridership, the C ity were to d e-
cide to drop its bus service, Section VII of this agreement gives the City the ability
to terminate the lease with 30 days’ notice, if the vehicles are no longer being used
for public transit purposes.
FINANCIAL There is no additional financial impact to the City’s transit budget as a result of this
IMPACT:
lease agreement.
ALTERNATIVES: 1. Adopt a resolution authorizing staff to execute a Master Lease Agreement for
Public Transit Vehicles with the Metropolitan Council.
2. Deny the resolution authorizing staff to execute a Master Lease Agreement for
Public Transit Vehicles with the Metropolitan Council.
3. Defer this item and provide staff with further direction.
RECOMMENDED A motion and second to adopt a resolution authoriz ing staff to execute a Master
MOTION:
Lease Agreement for Public Transit Vehicles with the Metropolitan Council.
2
4646 Dakota Street SE
Prior Lake, MN 55372
RESOLUTION 1 2 - xxx
A RESOLUTION
AUTHORIZING STAFF TO EXECUTE THE MASTER LEASE AGREEMENT
BY AND BETWEEN THE METROPOLITAN COUNCIL AND THE CITY OF PRIOR LAKE FOR
PUBLIC TRANSIT VEHICLES
Motion By: Second By:
WHEREAS, The City Council recognizes the value of providing quality, cost - effective transit services in
the Prior Lake community; and
WHEREAS, The City of Prior Lake currently operates four coach buses (Lake Lines) and two small
buses (Laker Link) for the purpose of providing public transportation; and
WHEREAS, The City of Prior Lake and the Metropolitan Council have an existing Master Lease
Agreement dated May 31, 2006, which covers all of the Metropolitan Council - owned
v ehicles in the City of Prior Lake’s possession; and
WHEREAS, The revised Master Lease Agreement is intended to supersede the current master lease
agreement in its entirety.
NOW THEREFORE , BE IT HEREBY RESOLVE D BY THE CITY COUNCI L OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
2. The City Council authorizes staff to execute the Master Lease Agreement by and between the
Metropolitan Council and the City of Prior Lake for Public Transit Vehicles.
PASSED AND ADOPTED THIS 6 DAY OF FEBRUARY 2012 .
TH
YES NO
Myser Myser
Erickson Erickson
Hedberg Hedberg
Keeney Keeney
Soukup Soukup
______________________________
Frank Boyles, City Manager
.docx
C: \ DOCUME~1 \ cgreen \ LOCALS~1 \ Temp \ ELF20120201_153051 \ 10A Master Lease Agreement Resolution