Report to Mayor and City Council
Tuesday, December 15, 2020
Consent
SUBJECT:
Title
CONSIDER APPROVING SETTLEMENT AGREEMENT WITH MV TRANSPORTATION, INC. FOR PAYMENT OF FIXED EXPENSES INCURRED DURING THE COVID-19 BUS SERVICE SUSPENSION (CITY COUNCIL)
Body
I. SUMMARY
The City's fixed-route bus service, the Carson Circuit, was suspended effective March 28, 2020, out of safety concerns related to the COVID-19 pandemic and the possibility of spreading the virus to passengers and bus operators. The City had a contract with MV Transportation, Inc. ("MV"), providing for operation of the Carson Circuit. (Exhibit No. 1) (the "Contract"). MV adhered to the City's notice of suspension of Carson Circuit operations (which was issued on March 24, 2020 with an effective date of March 28, 2020), ceasing bus operations as requested. During the suspension period (which ended on or about November 7, 2020, when the parties' contract was terminated pursuant to a notice of termination issued by City on October 8, 2020), MV was not able to generate billable revenue, resulting in MV submitting a request to City on June 30, 2020 for financial assistance for its ongoing fixed expenses (Exhibit No. 2).
Staff engaged in discussions with MV in regard to MV's request, and the discussions resulted in the attached proposed settlement agreement, which was prepared by the City and which has been signed by MV. (Exhibit No. 4). The settlement agreement provides for City to make a one-time payment to MV in the amount of $54,825 and for a mutual release of claims related to the suspension of services, the request for payment of fixed costs, and the termination of the contract.
Upon City Council approval and full execution of the settlement agreement, City would be obligated to make the one-time payment to MV within ten (10) City business days. City has grant funding available to cover the payment amount.
II. RECOMMENDATION
Recommendation
TAKE the following actions:
1. APPROVE the attached...
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