Title
Intergovernmental Agreement with Regional Public Transportation Authority and Valley Metro Rail for Fare Revenue Receipt, Counting, and Deposit (Ordinance S-50779)
Description
Request to authorize the City Manager, or his designee, to enter into an Intergovernmental Agreement (IGA) with the Regional Public Transportation Authority (RPTA) and Valley Metro Rail, Inc. (VMR) for combined transit fare revenue receipt, counting, and deposit. There is no cost to the City of Phoenix for this IGA. Further request to authorize the City Treasurer to accept funds related to this request.
Report
Summary
The City of Phoenix Public Transit Department (PTD) currently receives, counts, and deposits fare revenues from bus services for Phoenix and RPTA. VMR has used a third-party vendor to provide fare revenue receipt, counting, and deposit for fares received from light rail platform fare vending machines. This IGA will consolidate fare revenue processing services, with RPTA and VMR delivering fares to PTD staff for documented receipt, counting, and deposit.
PTD has been performing fare revenue counting and deposit functions for Phoenix fare revenues for several decades. Combining fare counting and deposit for the region provides process efficiency and savings. Additionally, the unique elements of collecting and counting fares from ticket vending machines on light rail platforms has deterred third-party vendors from continuing to contract for this work. Bringing these services in-house between the agencies ensures the collection of several millions of dollars in annual transit fare revenues continues uninterrupted.
Under this IGA, RPTA and VMR will pay PTD for all costs related to the transition and their share of revenue counting and deposit costs, including staffing and equipment.
Contract Term
The IGA term will be effective on or about May 8, 2024, through June 30, 2029, with one option to extend for an additional five years through June 30, 2034, if an extension is in the City’s best interests.
Financial Impact
There is no cost to the City of Phoenix for this IGA. RPTA and VMR will pay PTD for the cost of this service based on their respective percentage of total revenues collected, but at no time less than the cost for additional staffing required to cover the increase in workload resulting from the agreement. The estimated combined annual payment to PTD for these services from VMR and RPTA is $290,400.
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Public Transit Department.