HomeMy WebLinkAboutIR 7422 INFORMAL REPORT TO CITY COUNCIL MEMBERS NO. 7422
To the Mayor and Members of the City Council October 10, 1989
Subject:
Contract Modifications Related to Workers' Compensation
Insurance for the Fort Worth Transportation Authority
On August 29, 1989 (M&C C-11833) the City Council authorized a five year contract
with McDonald Transit Associates for the provision of transit management services
for the Fort Worth Transportation Authority after a competitive selection process.
It was anticipated at that time thqt the contract would be very similar in format to
previous contracts awarded to McDonald. However, in early September the FWTA
Executive Committee and its General Counsel were advised that no bids were
received for renewal of the Workers' Compensation insurance coverage. Further, no
insurers were willing to write insurance coverage in Texas prior to the special
legislative session on workers' compensation slated for November. Accordingly, the
General Counsel and staff researched alternatives to ensure adequate protection at a
reasonable cost. Options considered included:
1. Participation in the assigned risk pool at an 'annual cost of
$777,000.
2. Self-insurance under the Worker Compensation Act (annual cost of
$380,245).
3. Becoming a non-subscriber to the Worker Compensation Act.
All possible options were reviewed as well. The staff recommendation was made to
the Executive Committee on September 28, 1989, to provide workers' compensation
coverage through a self-insurance plan under the self-insurance provisions of the
Worker Compensation Act (Article 8309h). The projected annual cost under this
plan would be $380,245.
FWTA contracts with the City for the provision of services. In turn, the City
contracts with a private firm for management and administration. Thus, there are
two contracts that authorize the transit services: (1) FWTA - City contract, and
(2) City's contract with McDonald Transit. FWTA's General Counsel advised the
Executive Committee that several modifications must be made to the two contracts in
order to proceed with this self-insurance plan for workers' compensation. These
changes have been reviewed by the City Attorney, and it is recommended that they
be accomplished in this manner:
1. The proposed City - McDonald Transit contract authorized by
City Council on August 29, 1989, reflect the necessary changes.
(The City McDonald Transit contract with underlined changes is
attached. )
2. The FWTA City contract be amended by the attached letter.
If the unstable climate for securing workers' compensation insurance changes, the
FWTA Executive Committee has directed other avenues be investigated. An M&C
authorizing these changes is on Tuesday's agenda.
David A. Ivory
'o
City Manager
-ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
the FomrwoRrmri?AAfSPOJ?rArIONAurmomirr
P.O. Box 1477 • Fort Worth, Texas 76101-1477 (817) 870-6221
September 28, 1989
Mr. David Ivory, Manager
City of Fort Worth
1000 Throckmorton Str.
Fort Worth, Texas 76102
Dear Mr. Ivory:
In order to make the Contract between the Fort Worth
Transportation Authority (FWTA) and the City of Fort Worth (City)
conform to the Transit Management Contract between the City and
McDonald Transit Associates, Inc. , I would propose this letter
agreement as a modification and amendment of our contract dated
October 11, 1984 (City Contract No. 14052) . Assuming the City is
agreeable to these modifications, I would request that you obtain
the appropriate signature on one of the copies of this letter,
and return that for our files.
The FWTA agrees that the City is not obligated to require
McDonald Transit Associates , Inc . to maintain worker' s
compensation insurance coverage under, the Transit Management
Contract with the City dated October 1, 1989, so long as an
alternative arrangement acceptable to the FWTA is put into
effect.
The City and FWTA also agree that the FWTA has the right to
control the details of the work and services performed, and all
persons performing such work and services under that Transit
Management Contract. FWTA hereby agrees to the terms of that
Transit Management Contract, becoming, along with city, a
contractor with McDonald Transit Associates, Inc.
Sinc re
Hershel R. ne
Chairman
j
HRP/nkD
AGREED: City of Fort Worth
By:
Date: October 1989
CrY BUS SERVICE • SERVICE TO DFW INTERNATIONAL AIRPORT • SERVICE FOR THE MOBILITY IMPAIRED • CARPOOL&VANPODL MA'CHING
THE STATE OF TEXAS
COUNTY OF TARRANT
MANAGEMENT CONTRACT
TRANSPORTATION SYSTEM
THIS CONTRACT AND AGREEMENT made and entered into on this , the
-day of ? 1989, by and between the City of Fort Worth,
a municipal corporation located in Tarrant County, Texas , hereinafter
called "CITY," acting by and through David A. Ivory, its duly
authorized City Manager, and McDonald Transit Associates, Inc. , a
Texas corporation, hereinafter called "MTA," acting by and through
Louis L. Heil, - its duly authorized President.
W I T N E S S E T H
WHEREAS , CITY has determined that it will continue to require the
services of a professional management company for the transit system
which is being operated in CITY's area of jurisdiction on behalf of
the Fort Worth Transportation Authority (FWTA) ; and
WHEREAS , CITY is authorized to enter" into a contract for the
operation and management of said transportation system; and .
WHEREAS, CITY has selected MTA to continue providing management
services for the transportation system:
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS;
That the parties hereto do hereby covenant and agree as follows:
1.
CITY does hereby engage and retain MTA to manage and conduct the
operation of the FWTA public transportation system known as "The V
commencing on October 1, 1989. This system shall include regularly-
scheduled fixed-route bus service, special transportation serv-
ices including, but not limited to, services for the elderly and
handicapped, special events services, rideshare, carpool and vanpool
programs, charter service and other special transportation.
Transit Mgmt. Contract (2 )
10-01-89
2.
The term of this contract and agreement shall be for a period of
five ( 5) years beginning on October 1 , 1989 and ending on September
30, 1994 , unless either party shall serve at least sixty (60) days
written notice upon the other that it desires cancellation, revision
or modification of any provision or provisions of this agreement.
3 .
CITY agrees to pay to MTA as compensation for services rendered
hereunder a monthly base compensation payment according to the
following schedule:
Fiscal Year 1990 $11,500/mo.
1991 11,860/mo.
1992 12,175/mo.
1993 12,500/mo.
1994 12 ,800/mo.
CITY further agrees to provide such funds as may be necessary to
meet payroll and all other expenses of the operation of the
transportation system, excluding salaries and related payroll costs of
the resident manager and the cost of the fidelity bond on MTA officers
described in Section 10.
4.
Payment of base compensation for services performed hereunder
shall be made by CITY as follows:
Payment of the monthly base compensation as specified
herein commencing on October 15, 1989 and thereafter on the
fifteenth day of each succeeding month during the term
hereof.
5.
MTA covenants and agrees that it will continue to maintain, at
its sole cost and expense, the Texas Corporation, McDonald Transit,
Inc. , d.b.a. "The T11 , hereinafter called 11MTI ,11 to which this contract
and agreement shall be assigned, which corporation shall be. obligated
to perform the covenants and agreements herein contained.
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Transit Mgmt. contract ( 3 )
10-01-89
6.
MTI , as an independent contractor and FWTA, and subject to the
other terms of this contract, will employ all required and necessary
personnel for the performance of this contract and agreement,
including office personnel, mechanics, drivers and supervisors, except
the general manager provided by MTA as specified below.
Any contractual obligations or liability entered into or assumed
by MTI and approved by CITY and the FWTA, in connection with the
operation of the transit system, shall be binding upon MTI only for
the term of this agreement, as same may be extended, and thereafter
MTI shall have no further obligation. MTI will procure all goods and
services required to operate the system and provide a list of
procurements and costs to the City FWTA Administrator as requested.
MTA will reimburse FWTA for any procurements the City FWTA
Administrator disapproves.
7.
7. 1 MTA agrees to furnish a qualified, diligent, expert and
000' efficient executive who will reside in the Fort Worth area and who
will perform the functions of General Manager. The General Manager
will be responsible for overall management, implementation of FWTA
policy regarding its transit system, and operation of all components
of the system in an efficient and effective manner. This person will
report directly to CITY FWTA Administrator.
7 . 2 The selection and appointment of the General Manager and any
such subsequent appointees shall be the responsibility of MTA but
shall not be made without first obtaining the approval of CITY 'and
FWTA. In the event of the disability of the General Manager for a
period in excess of three ( 3 ) months, MTA covenants and agrees to
secure a qualified General Manager for as long as such disability may
continue or to replace the General Manager, if necessary, all subject
to the approval of CITY.
7.3 In the event that the' General Manager is not performing the
duties of the position in a manner acceptable to CITY and FWTA, M'_1'A
will be notified in writing by CITY. A replacement acceptable to CITY
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Transit Mgmt. Contract (4)
10-01-89
r. and FWTA will be assigned by MTA in accordance with the provisions of
this Section.
7.4 MTA further covenants and agrees to furnish expert staff
services and/or consultation in all areas of the public transportation
industry, including but not limited to the following:
a. monitoring and evaluation of all operations ,
systems and procedures
b. operations and research
C. finance and accounting
d. safety, accident prevention and insurance
e. schedules, transportation and routing
f. maintenance and purchasing of equipment
g. sales promotion and public relations
h. governmental grant applications and processing as
necessary
i. procurement of goods and services.
7. 5 Notwithstanding any of the provisions of this Contract, FWTA
shall have the right to control the details' of the work and services
performed hereunder, and of the persons performing same, and may elect
to "borrow" such persons and make them its employees for purposes of
providing workers' compensation coverage for them and obtaining for
them the benefits to which employees of a subscriber under the
Workers ' Compensation Act of the State of Texas are entitled. These
provisions shall not, however, be construed as a waiver by MTA of its
rights as a subscriber employer under such Workers ' Compensation Act
to be relieved of liabilities to its employees in the event of their
injury or illness. Nor shall any provision of the Contract nor any
action of any party related to this Contract be construed to
constitute a waiver by any party of any immunities under the laws of
the State of Texas, including the Texas Tort Claims Act.
8.
MTA covenants and agrees that during the term hereof, 'it shall
continue to maintain its corporate offices and headquarters staff in
orb, the Fort Worth Metropolitan area.
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Transit Mgmt. Contract (5 )
10-01-89
In the event any services of non-Fort Worth area MTA personnel
are required (all of which shall be subject to the advance approval of
CITY and FWTA) , the compensation, cost of travel, subsistence, and any
long distance telephone calls necessary to the assistance rendered by
such non-resident personnel shall be reimbursed MTA upon submission of
the requisite invoices to CITY. Any such charges shall be submitted
monthly by MTA or its assignee.
9.
CITY will furnish MTI with all necessary offices, furniture,
equipment, materials, supplies, rolling stock, bus maintenance and
storage facilities and equipment, and automobile transportation which
may be required by MTA and MTI in the performance of this agreement,
exclusive of headquarters facilities and support, at no cost to
MTA/MTI .
10.
MTA, at its sole cost and expense, shall furnish to CITY and FWTA
opw all necessary fidelity and surety bonds to protect, save whole and
harmless, and indemnify CITY and FWTA from and against dishonesty,
fraud or theft occasioned by any officer or employee of MTA. Coverage
of each such employee shall be in an amount of not less than FIFTY
THOUSAND DOLLARS ( $50 ,000.00) .
Employees of MTI will be covered by a blanket fidelity bond, the
premium for which shall be considered as an operating expense.
11.
MTA covenants and agrees that it presently has no interest, and
will not acquire any interest, direct or indirect, which conflicts
with its efficient, diligent and faithful performance of the terms of
this contract and agreement.
CITY recognizes that MTA offers management and consulting
services to additional transit operations and that MTA may, from time
to time, desire to utilize MTI personnel for periods of short duration
in the conduct of this business. In this connection, MTA further
covenants and agrees that utilization of MTI personnel for such
purposes shall be subject to the following conditions:
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Transit Mgmt.. Contract ( 6)
10-01-89
a. First priority shall always be given to the operational
requirements of MTI d.b.a. "The T1111 including the timely
cooperation of "The T11 with FWTA and all departments of CITY
through the City FWTA Administrator;
b. Such work for MTA by MTI personnel shall be performed
on each person' s own personal time, including accrued leave
time, or, MTI d.b.a. "The T11 will be compensated by MTA for
such work at an hourly rate for each person, equal to MTI 's
cost of providing such person, including salary and fringe
benefits;
C. In addition to those costs to be reimbursed as defined
in (b) MTI d.b.a. "The T" shall also be reimbursed by MTA
the cost of travel, subsistence and any long distance
telephone calls, copies, supplies or materials not directly
related to the performance of this contract. Any such costs
shall be reimbursed on a monthly basis.
12 .
MTA, its officers, agents, employees and Assignees, covenant and
agree to maintain close contact and to cooperate with FWTA and the
staff of CITY through CITY' s FWTA Administrator. Said FWTA
Administrator shall convey to MTA the policy and long-range goals for
the transit system.
13.
MTA agrees to comply with, ensure the compliance of its
successors and assigns with, and assist in compliance with the
provisions of Section 13 (c) of the Urban Mass Transportation Act of
1964, as amended.
MTA further agrees to comply with all terms and conditions of
Urban Mass Transportation Administration grant contracts between the
United States and the City of Fort Worth, or the Fort Worth
Transportation Authority, the application, assurance, and all other
applicable laws and regulations which apply , in carrying out the
accomplishment of the program.
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Transit Mgmt. Contract (7)
10-01-89
14.
14.1 MTA or MTI will maintain and will require its contractors to
maintain a policy or policies of insurance, including worker's
compensation insurance, insuring against claims and suits arising out
of the performance of this contract, naming CITY and the FWTA, their
officers, directors, and employees, as insureds with coverages, limits
and provisions, and issued by companies, approved by the FWTA or, with
the FWTA' s approval, provided by self-insurance. The coverages,
limits and provisions of such insurance will be not less than those
presently carried.
whatever liability of MTA or MTI; including, but not limited to,
employment related matters, personal injury or property damage; that
may be incurred by MTA, MTI or any of its officers, directors, or
employees, to third parties in connection with or arising out of the
operation of the transportation system by MTA and MTI, and the costs,
expenses and attorneys ' fees thereof; including any and all liability
of MTI , its agents, servants or employees; shall be part of the costs
and expenses incurred by CITY in the operation of the transit system
and shall be reimbursed to MTI by CITY. MTA or MTI agrees to advise
CITY of any and all such claims not covered under 14B and, 14C below,
and agrees that CITY may participate in any way in any proceedings
brought with regard to such claims and MTA or MTI agrees to abide by
any decisions CITY makes with regard to such claims.
14. 2 MTA or MTI shall take out and maintain during the life of
this contract such public liability and property damage insurance as
shall protect them, CITY and the FWTA from claims for damages for
personal injuries, including death, as well as from claims for
property damages which may arise from operations or the performance of
the work and services contemplated hereunder. The cost of carrying
such insurance or self-insurance of any primary risk shall be an
operating expense.
14. 3 Public liability insurance or a program of self-insurance in
an amount specified annually by CITY'.s FWTA Administrator shall be
obtained. In this connection, MTA or MTI shall furnish CITY with
satisfactory proof of the insurance required.
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Transit Mgmt. Contract ( 8)
10-01-89
14.4 Notwithstanding the above, MTA and/or MTI may, with the
approval of FWTA, cease to be subscriber(s) and/or participant(s) in
the Worker' s Compensation System of the State of Texas, and cease to
carry worker' s compensation insurance. As a condition of its approval
of such actions, FWTA may require that MTA and/or MTI obtain and
maintain such other insurance coverages as FWTA deems appropriate.
15.
MTA and MTI shall be required to continue a retirement benefit
plan for transit employees and shall establish appropriate age limits.
16.
This contract and agreement shall not be sold, assigned or
transferred by MTA without the prior written consent of CITY. In the
event that CITY should transfer responsibility for operation and
support of "The V to another duly constituted agency or authority,
CITY may assign this contract and agreement to said agency or
authority.
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Transit Mgmt. Contract (9)
10-01-89
IN WITNESS WHEREOF, the parties hereto have caused this contract
and agreement to be executed at Fort Worth, Texas by their duly
authorized representatives on this, the day of
1989.
ATTEST: CITY OF FORT WORTH
By:
Ruth Howard, David A. Ivory,
City Secretary City Manager
APPROVED AS TO FORM AND LEGALITY:
City Attorney
Date:
ATTEST: McDONALD TRANSIT ASSOCIATES, INC.
By:
Secretary Louis L. Heil ,
President
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