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Project Concern Minibus ContracCITY OF DUBUQUE, IOWA MEMORANDUM June 12, 2001 TO: FROM: SUBJECT: The Honorable Mayor and City Council Members Michael C. Van Milligen, City Manager FY 2001 Project Concern Minibus Contract Acting Economic Development Director Pam Myhre is recommending increasing the FY 01 Purchase of Service Agreement with Project Concern for minibus service from $195,000 to $21.3,000. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Pamela Myhre, Acting Economic Development Director KeyLine Transit 2401 Central Avenue Dubuque, Iowa 52,001-3302 (319) 589-4196 May 10, 2001 TO: FR: Subject: Michael C. Van Millgen Pamela Myhre, Acting Economic Development Director FY 2001 Project Concern Minibus Contract Purpose The purpose of this memo is to recommend a funding increase in the contract limit for the FY 2001 Purchase of Service Agreement with Project Concern covering minibus services. Background On March 15, 2001 the Project Concern Finance Committee met with Transit Division Manager Mark Munson to discuss a projected shortfall in the FY 01 Purchase of Service Agreement for minibus services. After that meeting, Project Concern Executive Director Steve Jacobs provided a written request to increase the FY 01 contract limit by $36,000 from $195,000 to $231,000. Upon review of the justifications for the increase with City Administrative Services Manager Pauline Joyce, it was determined that $18,900 of the requested increase was justified at this time (see attached memo dated April 18, 2001). The increase would cover unexpected increases in health insurance premiums, minibus vehicle maintenance and fuel costs. It was agreed that the FY 01 contract limit would be reviewed after actual expenses are determined at the close of the contract year June 30, 2001. Recommendation I would recommend increasing the FY 01 Purchase of Service Agreement with Project Concern for minibus service from $195 000 to $213,000. If approved, this increase would have no budget impact as overage would be covered from savings in personnel due to a vacancy in the transit maintenance activity. I would further recommend that the purchase of service agreement be reviewed again at the close of FY 01 to determine if any further adjustments need to be considered. Prepared by: Mark Munson, Transit Division Manager Serv/ce People Integrity Responsibility Innovation Teamwork Cet~tTa! Ay enLle Dubuque, Iowa 52001-3302 5894196 April 18, 2001 TO: FR: Subject: Michael C. Van Milligen, City Manager Mark Munson, Transit Division Manager Request to increase Project Concern FY 2001 Minibus contract Attached please find copies of the request I received from Steve Jacobs to raise the FY 2001 minibus contract limit by $36,000 as well as a copy of my recommended response. The current contract limit is for $195,000. The limit last year was set at $198,000 and then later increased to $201,000 after the agency's audit was complete. Pauline Joyce and I have reviewed the request and justifications and agreed that $18,900 of the original request seems justified at this time. Additional expenses could be justified after the books are closed at the end of the contract year, however it is our recommendation that only known expenses be considered at this time, and that efforts to reduce or contain costs should be attempted by the agency before any additional funds are al!ocated to the 0ontract. Please review my draft response to Project Concern, and advise if you have any questions, concerns or wish to add anything to the memo. Thank you. KeyLine Transit 2401 Central Avenue. Dubuque, Iowa 520~1-3302 (319) 589~96 April 18, 2001 Ms. Vickie Burkle Finance Committee Chair - Project Concern, Inc. c/o Honcamp Krueger Co. 2345 JFK Road Dubuque, IA 52002 RE: FY 2001 Project Concern Minibus Contract Dear Ms. Burkle, On April 6, 2001, t received a written request from Project Concern Executive Director Steve Jacobs relative to the current year minibus contract between the agency and the City of Dubuque. The request (copy attached) was for $36,000 additional city funding over the current contract limit of $195,000 for an adjusted contract limit of $231,000. The request asks that an additional $11,500 be added to the contract limit calculations for FY 2002. As I stated in my meeting with the Project Concern Finance Committee March 15, 2001, the agency to needed to provide specific justifications for any increase requested. I have reviewed Steve's request and justifications with City Administrative Services Manager Pauline Joyce, and would forward a request to the City Manager to immediately increase the contract limit $18,900 as follows: Health Insurance The increase health insurance expense from the increase in premiums for a total of $8200. Maintenance and Parts The increased maintenance and parts from approved purchases of wheelchair restraint replacements and aging equipment for a total of $4000. Fuel Costs The increased fuel costs due to higher gas prices at the pump and underestimate of overall fuel consumption for a total of $6700. Service People Integrity Respor~ibility Irmovation T~tmwork I have visited with Jim at O'Connor Brooks and he said the payroll adjustment figures from FY 2000 audit are no longer current and that any payroll adjustments for FY 2001 shouM be determined at the end of the fiscal year. The (;6000 difference between the current contract limit of $195,000 and last year's actual expense of $201,000 is included in the requested $36,000 increase although no specific explanation for the increase is provided. The fact that staff and administrative costs are down (;2600 from last year would suggest more justification for the increase is needed. As I've stated in my previous conversations, it is the City's position that the agency is responsible for the health insurance benefits awarded a driver who filed and won a grievance over agency scheduling practices. The contract sets an overall contract limit and does not define the wage and benefits of Project Concern's drivers operating under the minibus. That responsibility is placed with the agency's management. also reco'nmena that any changes in the :Y 2002 contract be considered after the :Y 2001 contract year is completed and actual expenses determined. Steve has said that serwce reductions would be necessary To make up for any portion of the $36 000 request not funded by the City of Dubueue. This obviously requires more specific information before any change could De considered, however I would review and consider any non-ADA service changes oresented by tine agency. Bear in mind however that all ADA mandated service must be maintained and cannot be reduced for the purpose of meeting a budget shortfall. The scheduling policy of non-ADA service on the minibus will 3e the sole topic of discussion at the next Operations Input Committee 10:00 A.M. April 25, 2001 in room 100 at the NICC building downtown. I believe this would be an excellent forum to discuss such a 'hatter. Please advise should you require further in this regard. Thank you. Sincerely, CC: Michael C. Van Miliigen, City Manager Pauline Joyce, Administrative Services Manager ~505 STOH~;~AH J~OAD SUIT[ #5 - I)UBUOU~ iA 5~002-521~ · (~1~) 5~-;~g~O - (~1 g) 5;~-bg~2 f~x TO: FROM: RE: Mark Munson, ~Transit Manager . Steve Jacobs Minibus Excess Cost Reimbursement The contract proposal given in October 1999 for Fiscal year 2001 was in error for several reasons. It was presumed that significant service changes would be implemented during the contract period of FY2001~Carter Gobles had already made recomg:]_~ndations including doubling the ride fare for Minibus riders and restructuring servici.~dt was also premised on the benefit of the inclusion of sophisticated ITS equipment. These changes could have significantly increased revenues (ride fare increase) and reduced driver costs by increasing productivity. Both of these fa/~ors would have caused a net reduction in the billed amount to the City of DubuquL~lt Was very premature and inaccurate to assume that Project Concern could implement any of these changes unilaterally during the contract year FY2001. The significant changes in service in FY2001 have been > a reductior in subscription services (ARC) and increase in demand resoonse services (these decreased productivity) > a significant change in the scheduling of return rides (this increased productivity) > significant increase in the number of individuals using Minibus (25% increase in persons. 11% increase in rides, January_ Statistics FY99 FY00 FY01 chg °/~hg RIDES 23994 23896 26616 2720 MILES 77595 80234 84914 HOURS 6813 7255 7197 11.4% 4680 5.8% -58 -0.8% increased significantly, but caused little increase in service cost. It se~ate to compare actual costs in FY2000 with 3rojected actual costs f~:~r--PY2001. Based on this the following changes account for the expected c_~nges. ~>' Health benefitS- projected increase of $11,605over FY2000 Union grievance resulted in two a~itional drivers being awarded health benefits in February 2000. This resulted fro~..Ck'iY4000 service~.hourdncrease~-FY200~ required in order to ~rovide service as required by the existing contract. This cost the Agency an additional $3400. In late May 2000, we received notice from our carrier tl~ health insurance premiums would increase more than 50%. This increase cost tht~C, gency an additional $8200. (~> Fuel costs- projected $6700 increase over FY 2000. Fuel costs went up dramatically in Spring and Summer 2000. There is an addi~iqnal 8000 vehicle miles projected as well. ~> Maintenance and Par[s- increased $4000 over FY2000. $1000 cost unbudgeted was the replacement of wheelchair restraints approved by Keyline in January 2001. Vehicles continue to age. They now have an average odometer reading of nearly 90,0Q0.. Yhes¢ are lnP,000-mile yehicles No clcar,.pattern of ma r~tenance prob ems ¥oluntc~r Opportunit~ (enter - (hild (~r~ i~sourcc & l~fcrrdl · ~¢nior (ircuit · ~inibu~ The net total affect was an increase in total productivity. The resulting service hours are largely the same as last year. Service miles increased about 6%. Ridershie has been determined. (~> O'Connor Brooks predicts that the audited final billing for FY2001 will show a net increase of ~$6000 for payroll costs resulting from accrual-based reporting of payroll costs. These are essentially costs originally billed in June 2000 but later adjusted as expenses affecting FY2001. No bill has been created to reflect that change. The exact figure cannot be determined until after the close of the fiscal year as a part of the auditing process. The projected cost increase for theSe four items totals $28,308. All other staff costs are down $1800 from FY2000. Ail other administrative costs are also down $800 from FY2000. ~ Based on these projections, we believe the contract for fiscal year 2001 will cost nearly $ 30,000 more than the contract for FY2000. The final billing to City of Dubuque for FY2000 was about $201,000. We respectfully request that the contract limit for Minibus t~in FY2001 be raised to $ 231,000. This amount exceeds the existing contract ($195,000) by¢S36-00 We also ask that the billed maximum for FY2002 be increased based on these adjusted costs. Adjusted City Cost FY2001 $231,000 (ddership increased 10%) Projected Cost increase 5% for FY2002 ' $242,500 Adjustment for six month contract ~$~_21,25~00 This adiusted amount does not include any administrative fee for services transferred in January 2002. That fiqure is a separate matter and, as vet, uncertain~ Sincerely,,.-~-.. Executive D~¢~ctor PS Concerninq the projected net cost increase from the anticipated FY2001 audit: These will not be determined until July 2001. For many years, the audited financial statement for Minibus has shown net variances from the internal financial statements $300-$1000. These modest variances, both shortfall and surplus, were accepted as immaterial. However, in FY2000. in the last month of the contract, we projected going over budget nearly $10,000. This being substantial, we looked closely at the impact of the audit adjustments. The City of Dubuque withheld paymentf(:~is bill pending audit analysis of its appropriateness. The preliminary audit suggesf~u=~¢$6000 of this cost pertained to expenses for FY2001 rather than FY2000. Consequently it is a current year cost not presently reflected in any existing billings.