Council will need to weigh the pros and cons of this proposal. Ultimately, Council is being asked to provide guidance to staff as to how to proceed:

Transcription

1 City Council Workshop Agenda Item #3 January 8, 2018 METRO Bus Service Proposal Approximately eighteen months ago, the METRO Greater Portland Transit District approached former City Manager Jim Gailey about providing a proposal to merge the South Portland Bus Department into METRO s regional service. This was not a new topic, and had been under discussion informally for many years. Mr. Gailey gave permission for City staff to work with METRO staff to compile all necessary data and budget information so that a proposal could be crafted by METRO for the City Council to ultimately consider. Due to the transition of City Managers, including an interim period, this process has taken longer than originally planned. After numerous meetings between METRO staff, our Finance Director Greg L Heureux, our Bus Director Art Handman, and I (and prior City Managers), METRO was able to submit a final proposal earlier this week. Attached is their proposal. I asked Mr. L Heureux to provide you with a financial analysis of the proposal and Mr. Handman to highlight areas of concern that Council should be aware of when considering this proposal. After METRO Director Greg Jordan provides you with an overview of his proposal, both Mr. L Heureux and Mr. Handman will review their memos with you. Council will need to weigh the pros and cons of this proposal. Ultimately, Council is being asked to provide guidance to staff as to how to proceed: 1. Is what METRO proposing something you wish for staff to continue to work on and flesh out further so that it can be formally considered at an upcoming business meeting? 2. Are there outstanding items that you want answered in a future workshop that will determine how you wish to proceed? 3. Have you heard enough and are not convinced that it is worthwhile to continue considering this proposal? Regardless of the outcome, I want to thank our staff for the time spent working with METRO to help ensure the proposal before you is based on the best data available. I also want to thank METRO staff for their work on putting together this document for your consideration. City Manager

2 Greater Portland Transit District 114 Valley Street Portland ME January 5, 2018 Mr. Scott Morelli City Manager City of South Portland 25 Cottage Road South Portland, ME Re: Proposal to Unify METRO and South Portland Bus Services Dear Mr. Morelli, On behalf of the Greater Portland Transit District s (METRO) Board of Directors, staff members and passengers, I am grateful for the opportunity to supply this proposal to unify South Portland s and METRO s bus services. I appreciate the partnership with city staff over the last 12 months to seriously and objectively evaluate the issues and concerns around this proposed initiative. In the attached document, our team has worked to provide a concise yet comprehensive proposal which is organized around the following sections: METRO Overview provides descriptive information on the METRO organization, current services and ridership. Benefits of Unifying contains assessments of passenger benefits as well as benefits to the City of South Portland and the region. o o o Passenger Benefits transit riders in South Portland and region-wide will benefit from a simpler transit system with a clear identity. South Portland residents will benefit from service improvements and customer enhancements that METRO is advancing including modernized buses, bus stop improvements, automated fare payments and high-volume transit pass programs. South Portland residents will also benefit by being brought into METRO s strong public involvement and community-based planning processes. City of South Portland Benefits by joining METRO, South Portland has the opportunity for significant annual cost savings while allowing its management and support functions (e.g., legal, human resources, finance, etc.) to devote more time across the rest of the city departments. Under a unified system, South Portland will still have local control of the transit services that are provided in its community while also having a strong voice on METRO s direction. System and Regional Benefits a unified transit agency will have the best chance of strategically planning and advancing transit policies, programs, services and infrastructure that aid our collective effort to preserve southern Maine s environment. More directly, we will improve our competitiveness for discretionary grant programs; reduce the scope,

3 Proposal to Unify METRO and South Portland Bus Services Page 2 burdens and costs associated with federal regulatory compliance; and optimize use of assets and reduce the number of buses needed which frees up federal funding for other needs. Unified Budget includes information on the estimated costs and funding sources for a unified system including a three (3) year financial forecast and specific local funding amounts for each member community based on METRO s current cost allocation policies. South Portland s Employees provides a brief overview of METRO s organizational culture, our assessment of labor requirements to operate South Portland s three bus routes, the general compensation impacts on South Portland employees, and our firm commitment to transition all willing South Portland employees. Governance outlines a proposal to ensure South Portland is equitably represented on METRO s Board of Directors. Timing and Next Steps subject to a desire to advance the discussion, this section provides a preliminary timeline with milestones which aims at a completed transition by July This aggressive timeline is in order to leverage the benefits of METRO s mid-2018 service expansion which would allow us to optimize bus operator labor needs and foster an easier transition on the matter of employee seniority. For your reference, I am also attaching Title 30-A, Chapter 163 of the Maine Revised Statutes which governs Maine s transit districts and forms the basis of METRO s by-laws. Our team recognizes this is a starting point for what must be a serious and in-depth review at the policy level. Our hope for the January 8, 2018 City Council workshop is to present the information we have developed so far, listen to council members questions and concerns, and participate in a follow-up workshop thereafter. Thank you for your time and consideration. Sincerely, Greg Jordan Gregory Jordan General Manager C: METRO Board of Directors Attachments (2) 2

4 Greater Portland Transit District 114 Valley Street Portland ME PROPOSAL TO UNIFY SOUTH PORTLAND AND METRO BUS SERVICES Submitted to City of South Portland: January 2018 METRO OVERVIEW METRO provides transit services to the communities of Brunswick, Falmouth, Freeport, Portland, South Portland, Westbrook and Yarmouth. With 38 Compressed Natural Gas (CNG) and diesel buses and 80 employees, our seven (7) LOCAL and one (1) EXPRESS bus routes are now providing 1.85 million boardings per year. As stipulated in state statute, METRO s Board of Directors is comprised of five representatives from Portland, three from Westbrook and two from Falmouth. METRO operates bus service to the Maine Mall area of South Portland although South Portland is not represented on the METRO Board. In April 2014 METRO adopted, and in 2016 re-affirmed, the following core values: We are committed to SAFETY - the safety of our customers, employees and the general public is priority number one. We are connected to our CUSTOMERS - Our customers are our top stakeholders in designing and providing a transit system that meets their transportation needs. We act with INTEGRITY - We work to uphold the highest standards of fairness, transparency, accountability, dependability and respect. We pursue SUSTAINABILITY - We strive to be responsible stewards of the environment and advocates of transitoriented regional economic growth and a strong community.

5 METRO s annual ridership has grown substantially since 2013 due to a range of core transit service improvements, reliability improvements, service expansion, new customer amenities and new ridership programs. Figure 1: METRO Annual Ridership WHY CONSIDER UNIFYING TRANSIT SERVICES? The most important question is how a unified transit system will benefit South Portland transit passengers and taxpayers as well as region-wide passengers and taxpayers. What follows is information that can inform a discussion with the South Portland City Council and residents in considering the benefits of joining METRO. Passenger Benefits The most important beneficiaries of unifying transit services are our present and future passengers. METRO contends the following passenger benefits will stem from an integrated system: Simplicity Public transportation is already perceived by many non-riders as complex and inconvenient. To attract new riders, public transit must be as simple to use as possible. Because people travel regionally, a single transit system and agency with a clear identity will be simpler for South Portland and METRO transit passengers to interact with and use. Service and fare policies can be unified, routes and schedules can be integrated, and customers can have a single point of contact for information and public transit concerns. Service Improvements By reducing duplication and operating more efficiently, more transit service can be implemented regionally and within South Portland. METRO s mission is to improve and 2

6 expand public transit service, infrastructure and customer amenities in every community we serve. Under a unified system, METRO would work directly with South Portland to grow its transit service to reflect its values, priorities and financial capacity. Subject to available funding, METRO would work to improve day-time frequencies on South Portland s routes, extend evening bus service, and vigorously pursue new ridership markets while preserving all the city has successfully built to date. The following specific improvements which would benefit South Portland residents are coming in 2018 and 2019: o USM Transit Pass Program under a unified system, South Portland residents who attend school or work at the University of Southern Maine would benefit from the Unlimited Access Transit Pass program (U-Pass) that METRO and USM are releasing in August o Transit West Expansion METRO is implementing the Transit West Project in August The Husky Line will connect the USM campuses, but also provide residents in Gorham, Westbrook and Portland with a new transit option. While not directly serving South Portland, the Husky Line is a major network improvement that will benefit all transit riders. The Blue Line represents new bus service connecting northwest Portland, Westbrook and South Portland. The Blue Line will provide South Portland residents with a transit option to access employment and destinations in Westbrook and northwest Portland without needing to transfer buses. The Blue Line will also improve transit service in South Portland by giving Westbrook and northwest Portland residents a more convenient transit option to get to the Maine Mall area. Figure 2: METRO Transit West Expansion 3

7 Expansion-Replacement Buses METRO will take delivery of 11 new replacement-expansion buses in An additional 8 replacement buses will be delivered between Thirteen (13) of these 19 buses will be fueled with Compressed Natural Gas and six (6) will be diesel powered. New Flyer was selected as the manufacturer following a 2016 competitive procurement. The buses will have a more modern appearance and improved passenger amenities compared to bus fleets in the region today. Please note the image below is a stock image by New Flyer. Updated METRO Logo and Paint Scheme METRO has implemented a process to update its logo and bus paint scheme. The purpose of the process is to help refresh and modernize public transit in our region and give non-riders a reason to take another look at using transit. The new logo will be formally released in mid-2018 along with the service expansions. New incoming buses will be painted with the new design. Later model buses in the current fleet will be repainted in such a way as to preserve revenue generating advertising opportunities, while older buses will not be repainted. 4

8 New Fare Payment Options METRO plans to implement an electronic fare collection system in The system will allow for the use of electronic passes and/or smart cards and mobile fare payments. As part of this project, METRO is aiming to implement a fare pricing model that rewards trips taken rather than dollars spent. Today s fare system provides discounts to those who can afford to pay more for a 10- ride ticket ($13.50) or a monthly pass ($45). A more equitable and affordable fare system would discount cost in relation to transit trips taken. Also, an electronic fare collection system will allow METRO to implement additional volume based pass program to schools and employers which could include South Portland High School. Outstanding Customer Service METRO applauds the outstanding customer service provided by South Portland s bus operators and support staff. We share the same values for excellence and customer engagement. Being connected to our customers is one of METRO s four core values. Although METRO may serve more riders throughout a larger area, we are a small agency and work hard to give every person we serve a great experience. For example, in early 2016, Portland s Convention and Visitors Bureau recognized one of METRO s Bus Operators for outstanding customer service. Should our systems unify and continue to grow, we will keep our focus on the people we serve. Passenger and Resident Outreach Transit riders travel regionally so their concerns are best addressed in the context of the whole transit network. METRO regularly engages with the communities we serve by holding annual public meetings in each municipality to gather feedback on rider concerns, satisfaction and priorities. In addition, METRO manages community planning processes for new services and routinely creates community based advisory groups to guide service development. o In 2015, METRO formed the BREEZ Task Force comprised of local elected officials from Freeport and Yarmouth, town staff and residents which guided the planning and development of the new service. The Task Force was expanded to include Brunswick officials and stakeholders in

9 o In 2015, METRO formed the Portland High School Transit Pass Program Advisory Team comprised of School Board Members, district staff, students and parents for the purpose of guiding the development and implementation of the transit pass program for Portland s 2,000 high school students. o In 2017, METRO formed the Transit West Project Task Force to guide the planning of the service improvements the project will advance. The task force is comprised of officials and stakeholders from Gorham, Westbrook, Portland and USM. City of South Portland Benefits By moving to an integrated system, METRO contends the following city benefits will stem from an integrated system: South Portland Cost Savings METRO and City of South Portland staff have worked to develop a unified budget in which 2018 is a transition year and 2019 would be the first full year of integrated operations. The 2018 and 2019 budget estimates and major assumptions are provided below on pages The unified budget model indicates that the City of South Portland would reduce its annual local cost by joining with METRO. The scope of cost savings is outlined in more detail by a memo provided by the city s Finance Director. In addition, South Portland would be able to avoid a $225,000 local match requirement to replace its three (3) 2011 Gillig buses after they exceed their useful life in Currently, the federal funding that supports these replacements is programmed by PACTS and is available in Under a unified system, these buses will still require replacement, but South Portland s financial participation in providing the local match will be based on its percentage of revenue miles in the METRO system which is projected to be 15%. Finally, it is important to note that METRO is working to bring new members to METRO. While the METRO BREEZ is currently in a pilot phase, we anticipate that Brunswick, Freeport and Yarmouth will join the agency in 2019 and share in the agency s fixed, overhead and capital costs. With more partners, these costs can be more broadly shared which has the effect of containing future local costs. Reduce Municipal Footprint By partnering with METRO, the city of South Portland would reduce the scope of services it directly provides, reduce the city s labor force, reduce the city s exposure to the 6

10 liabilities related to operating bus service and allow core internal city services (e.g., human resources, legal, finance, etc.) to distribute their focus across fewer functions and personnel. Continued Local Control METRO s approach to transit planning and operations is based on strong engagement with the member communities. Under a unified system, South Portland will still have control of the transit services that are provided in its community. To be clear, the Board of Directors as a body does not determine routes or service levels in individual communities. For transit planning initiatives and service or schedule changes that affect riders, METRO staff works directly with municipal staff, city/town councils, and residents. Before initiatives reach or are acted on by the METRO Board of Directors, staff has done their due diligence to work with member communities on the issues that affect them. System/Regional Level Benefits Improve Environmental Sustainability Public transit is a solution to increasing traffic congestion, worsening air quality and growth patterns that cater exclusively to the single occupant vehicle. A unified transit agency will be better positioned to work in partnership with cities/towns, regional planning agencies and the private sector on transit supportive economic and community development. Further, a unified transit agency will be more effective in strategically planning system growth and marketing transit s benefits to residents with choices. For these reasons, a unified transit agency will have the best chance of advancing policies, services and infrastructure that aid our collective effort to preserve southern Maine s environment. Improve Competitiveness for State and Federal Funding While most federal funds coming to the PACTS region are formula based and programmed to support base operational needs, a larger unified transit agency with higher ridership potential will be more competitive for discretionary grant programs. Integrated system planning and organizational management Implementation of the following functions can be effectively managed and made more efficient: short and long-range transit planning, transit asset management, Capital Improvement Program (CIP) planning and implementation, procurement of goods and services, and community outreach and marketing. Improving regional public transit is METRO s core mission and we are strengthening our professional capacity every day to ensure we are successful and add value to the communities we serve. Reduces Complexity at Federal Transit Administration (FTA) Under the present system, FTA must work with two designated grant recipients, review and approve two sets of grant programs, and audit and provide guidance to two transit organizations sometimes with different consultants who often offer contradictory guidance. A unified system reduces the oversight burden on FTA and local agencies 7

11 and improves overall governmental efficiency. In the end, more of your transit professionals time can be devoted to improving services for residents than managing duplicative grant programs, regulations and audits. Optimize use of existing vehicles, equipment and facilities Combining the METRO and South Portland bus fleets means fewer overall vehicles are needed to operate the unified system. METRO estimates that it would need only six of the seven buses that are currently in South Portland s fleet. Based on a unit cost of $500,000 per bus, this means that once every years, the region will be able to save or re-purpose $425,000 in federal and $75,000 in local funds. BUDGET DEVELOPMENT FOR UNIFIED SYSTEM Table 1 below details the estimated budget and local cost allocations for a unified transit system based on South Portland s current routes and schedules while also accounting for the Transit West service expansion in August The information below was developed in partnership with South Portland Finance and Transit staff to ensure as accurate a forecast as possible. Please note that future service changes, changes in state or federal funding levels and/or unforeseen economic variables could modify the estimated figures. Explanatory notes are provided below the table. Table 1: Unified Transit System Budget Estimates: Start-up Costs METRO staff estimates approximately $45,000 in start-up costs in 2018 related to the transition to a unified system. The elements which make up this estimate include costs for bus operator training, community outreach and marketing, and legal fees. METRO would seek to conduct bus repainting/decaling of South Portland buses in connection with regular mid-life rehabilitation projects subject to available federal funding. 8

12 Operating Costs Based on current service levels, the financial forecast escalates annual operating costs by 2.5% per year. The following components make up the majority of operating costs. Personnel Costs An analysis of the revenue miles currently operated by the City of South Portland in conjunction with the revenue miles operated by METRO formed the basis of a manpower assessment for bus operators, maintenance staff and dispatchers. Under the unified system, METRO has determined a need for the following additional staff: 10 Bus Operators, 1 Mechanic and 1 Supervisor/Dispatcher. In response to South Portland staff concerns that METRO s labor assessment did not sufficiently account for cover needs (e.g., responding to service disruptions such as Casco Bay Bridge delays), METRO increased the net staffing level to 11 Bus Operators. The fully burdened cost associated with these positions at each employee s anticipated ACTUAL salary and benefits levels under METRO s current union contract terms was incorporated into METRO s model for estimating annual personnel expense. Fleet maintenance costs was estimated using METRO's existing maintenance cost per mile. Fuel cost was estimated using METRO s and South Portland s vehicle miles, system speed, and fuel efficiency statistics. METRO s diesel and CNG fuel prices were used as factors based on existing fuel supply contracts and pricing. Vehicle insurance costs were estimated based on METRO s existing auto collision and liability rates for different classes and model years for different buses, then applied to the seven (7) buses that would transition from South Portland to METRO. METRO s base budget for marketing and community outreach was increased by $5,000 to account for community outreach, public meetings and advertising efforts related to the unification and ongoing engagement. METRO s base budget for bus stop and shelter maintenance repair costs was increased by $5,000 to account for preventive and corrective maintenance, snow clearing and cleaning of South Portland s bus shelters. METRO s base budgets in the areas of electricity, water usage, fare media, GPCOG services and miscellaneous services were increased by incremental amounts. Revenue Sources The unified budget model assumes all applicable South Portland revenue sources transition to METRO. These include passenger fare revenue, state and federal funding, and revenue from advertising. Passenger Fare Revenue to develop the passenger fare revenue estimate, METRO combined the fare revenue estimates provided by South Portland s Finance Director and METRO s FY 2018 budget. Please also note that fare revenue increases related to the Transit West expansion and USM Pass 9

13 Program are also incorporated into 2018, which reflects a partial year of service, followed by a full year in The financial forecast assumes there is a fare increase in 2019 as well as fare revenue gains related to expanding the USM pass program to cover South Portland. The region is overdue for a fare increase as the last adjustment to the base one-way cash fare was made in 2010 while the monthly pass was raised in As noted earlier, METRO is examining a fare pricing and payment model that rewards trips versus pass cost so that we can improve the equity of discounts and overall affordability of transit. METRO has purposefully delayed a fare increase or technology changes so that South Portland could be a part of that discussion on the Board of Directors. Federal Funding as with fare revenue, METRO combined the federal funding figures for Operating Assistance and Preventive Maintenance from South Portland s FY Municipal Budget and METRO s FY 2017 budget. In accordance with current practice at PACTS, the assumption for increasing annual federal Operating Assistance and Preventive Maintenance is 2% per year. State Funding as with federal funding, METRO combined the state funding figures for operating assistance from South Portland s FY Municipal Budget and METRO s FY 2017 budget. The budget estimates assume static funding levels through Miscellaneous Funding miscellaneous funding includes revenue from advertising, facility lease revenue and sales of compressed natural gas. Local Funding METRO s policy for determining local contributions is based on three steps: Ascertain the NET COST by applying all non-local funding sources to the total cost of implementing the desired services; Allocate the NET COST to the local communities based on each community s proportionate share of REVENUE MILES; Under the unified budget, the REVENUE MILES that South Portland currently operates within the City of Portland on Route 21, 24A and 24B would be chargeable to Portland; Likewise, REVENUE MILES operated in South Portland today by METRO on the Route 5 and which are currently absorbed by Falmouth, Portland and Westbrook will, under the unified system, be chargeable to South Portland. Apply Board approved CREDITS and allocate net costs for NON-MEMBER COMMUNITIES proportionately among the member communities. For example: Currently, METRO s member communities (Falmouth, Portland and Westbrook) share proportionately in the cost to operate the Route 5 within South Portland. 10

14 Likewise, the unified budget recognizes that South Portland operates bus service within the Town of Scarborough without any local funding from that community. In keeping with METRO s cost allocation policies, the local cost of service operated in Scarborough would be shared among the member communities of Falmouth, Portland, South Portland and Westbrook in proportion to the REVENUE MILES in each of those communities. This procedure would apply and is budgeted to begin in Credit for Invested Local Match on South Portland s Seven (7) Buses In response to South Portland staff request, METRO supports a credit in which METRO credits South Portland annually for Portland, Westbrook and Falmouth s proportional share of the depreciated remaining local match on the 7 buses. The credit starts at $23,090 per year would be applied annually though phasing down through Credit for METRO Debt Incurred Before 2018 In response to South Portland staff request, METRO supports holding South Portland harmless from debt incurred prior to This credit is about $15,000 per year and phases down through 2025 as these prior obligations are met. Under the proposal, South Portland would participate in debt incurred in to support the local match on bus purchases and this is reflected in the 2019 budget estimates. METRO will be working to identify options for state support of local match costs which would lower the local contributions needed. ADA Complementary Paratransit The prepared budget estimates include all costs and funding related to ADA paratransit. Under a unified system, METRO would assume the oversight role in managing ADA paratransit just as it now does for its current service area. METRO has negotiated a new agreement with the Regional Transportation Program (RTP) which reduced the cost per trip and seeks to strengthen oversight of federal requirements and customer service performance standards. METRO staff is planning to competitively procure and more closely manage ADA paratransit service beginning in Passenger volumes and costs have skyrocketed for METRO and South Portland as a result of client-shifting by MaineCare s transportation broker, Logisticare. The increase in costs impacts municipal budgets and is draining federal funding reserves in the region. By unifying our transit and paratransit systems, we can 1) improve the competitiveness of a future procurement for ADA paratransit services and yield better pricing, and 2) gain greater leverage in negotiating fare pricing with Logisticare which will increase paratransit fare revenue. South Portland s FTA Funded Assets City of South Portland and METRO staff are in the process of coordinating with FTA on how to manage South Portland s FTA funded assets. The major issues and questions are outlined below: Guidance on transfer of federally funded buses and miscellaneous federally funded equipment. Status and treatment of FTA supported design costs in South Portland s Public Works Facility. 11

15 Treatment of any FTA funded construction costs related to the Public Works Facility or equipment which cannot be transferred. Handling and/or transition to METRO of South Portland s open FTA grants. Treatment of land donation by South Portland as part of local match toward the construction of the Mill Creek Transit Hub. General guidance on federal issues to be mindful of when considering the consolidation. SOUTH PORTLAND S EMPLOYEES METRO has determined a need for the following additional staff to operate the unified system: 11 Bus Operators, 1 Mechanic and 1 Supervisor/Dispatcher. South Portland s Municipal Budget indicates that the City employs the following full-time permanent employees: 15 Bus Operators, 1 Mechanic, and 1 Supervisor/Dispatcher. Under a unified scenario, METRO would transition all willing South Portland employees. Should a unification with South Portland take place in mid-2018, METRO can optimize the bus operator staff by not needing to hire as many new bus operators to support the Transit West service expansion. South Portland employees would find METRO to be a great organization with a healthy and productive work environment. The well-being and health of our employees is one of our top concerns. We offer competitive salaries and benefits and we involve employees in planning, problem solving and decision-making. For example, our Labor-Management Committee is a forum in which union employees work with management staff to ensure good communication, improve front-line operations and solve problems proactively before they turn into labor disputes. Each year we hold an Employee Appreciation Cook-out in July; a Holiday Celebration in December in which we recognize employees for safe driving, customer service, longevity and attendance; and we typically hold several retirement celebrations throughout the year. METRO recognizes that considering this initiative creates uncertainty and stress for South Portland s employees. As part of the evaluation and discussion of this proposal, METRO welcomes the opportunity to participate in a forum with South Portland employees. In such a setting, we could ensure South Portland s employees receive full and accurate information about what it means to join METRO while providing an opportunity for employees to ask questions and voice concerns. Wages and Benefits METRO holds a Collective Bargaining Agreement (CBA) with Amalgamated Transit Union (ATU) Local 714 which covers Bus Operators and Maintenance personnel. All South Portland s employees, except the Dispatcher, would be covered by the CBA. METRO staff is optimistic that the union membership will approve South Portland s employees receiving wage rates consistent with their years of service. The 12

16 budget estimates assume that transitioning South Portland employees receive wages rates based on their years of service as applied to METRO s wage scale. The Human Resource Directors from METRO and the City of South Portland completed a compensation analysis (wages and benefits) to determine the actual financial impacts of a transition on South Portland employees. The analysis indicates that all but one South Portland employee would gain financially and total employee compensation would increase by 10-15% on average. The gains vary due to differences in employees years of service with South Portland. Open questions include: 1) how METRO would accommodate the single employee that appears to become worse off financially, 2) treatment of three employees with high sick leave balances, and 3) issues related to those employees participating in the Maine State Retirement System. Employee Seniority METRO staff is working to develop an agreement with ATU Local 714 on the matter of South Portland employee seniority levels for the purposes of shift and vacation bidding. METRO s goal is to integrate South Portland employees to the seniority system in a way that is fair and equitable to both METRO and South Portland employees. For this initiative to come together, both employee groups may be asked to share the impacts of an integration. GOVERNANCE METRO s by-laws are excerpted from Title 30-A, Chapter 163 (Transportation) of the Maine Revised Statutes. The statute stipulates that, in general, Transit Districts Boards of Directors are to be based on 1 Board Member per 10,000 residents (rounded up) for each member community. For transit districts generally in the state of Maine (except METRO), state statute calls for the number of directors from a single municipality serving on a transit district board to equal 1 for every 10,000 residents (i.e., 0-10,000 = 1; 10,000-20,000 = 2, 20,000-30,000 = 3; etc.). For METRO, the statute specifically stipulates 5 directors for Portland, 3 for Westbrook and 2 for Falmouth. METRO s allocation of directors represents a political solution that is loosely based on population but limits Portland s representation to 50% to ensure regional decision-making. The statute also gives the Board the power to accept new municipalities into the district (as long as they are in the PACTS region) and to determine the number of directors. Table 2: Current Board of Directors In order to integrate South Portland in a fair and equitable manner, METRO proposes the following arrangement: 13

17 Table 3: Proposed Board of Directors This proposal strives to apportion board representation in a manner that generally (not exactly) reflects population and level of service while balancing several considerations: Given Portland s relatively high population and service levels it is important to maintain that city s representation at no less than 50%. Likewise, the Portland delegation and the full Board recognize that no one city should possess a majority of Board seats. Although the proposed arrangement increases the number of seats, Portland s actual voting power remains the same. Under this arrangement, Portland s board representation is below its population and service level percentages. Please note that METRO may consider leaving Portland s actual seats at 5, but apply a weighted voting method to ensure the 50% weight is achieved. The reason for this is concern with creating too large a board and recruiting sufficient qualified and interested members. Although Westbrook s population suggests it should possess two board seats, the city s significantly increased service levels commencing in 2018 justify maintaining the three (3) board seats it has had for the last ten years or more. Under this arrangement, Westbrook s board representation is slightly over its population percentage but on par with its expanded service levels. Under the proposed arrangement, Falmouth s board representation is unchanged though its relative standing declines while coming into closer alignment with both its population and service levels. The proposed three (3) seats for South Portland is reasonable as it is in close alignment with population and exceeds its service levels. If comparing to Westbrook, the logic is that the 3 seats for both cities makes sense: Westbrook has a lower population but higher level of service while South Portland has a higher population but lower level of service. TIMING AND NEXT STEPS If there is a desire to further consider unifying the two services, METRO is open to discussing appropriate timing and will rely on South Portland direction to guide next steps. As a starting point for discussion, METRO proposes the following timeline and milestones leading to a July 2018 transition. 14

18 Table 4: Timeline and Milestones Timeline Milestones Jan 2018 METRO submits initial proposal. Introductory presentation to South Portland City Council. Information forums with South Portland employees. Feb 2018 Meetings with City of South Portland stakeholders. Public meetings with South Portland residents and transit users. Conclude negotiations with ATU Local 714 on matters of employee transition terms. Second workshop meeting with South Portland City Council. Mar 2018 Possible joint meeting of South Portland City Council and METRO Board of Directors to develop consensus on priorities and resolve any major open questions. Action by South Portland City Council. Apr-May 2018 If unification is approved, develop transition agreement with performance standards subject to council and board approval. Implementation planning. South Portland employee orientations. Jun 2018 METRO and South Portland employee training. Implement transitional operations approach if needed. South Portland fleet inspections and transfer preparations. Administrative preparations for transferring employees. Jul 2017 Implement transition on July 1, Oct 2018 Progress report provided to South Portland City Council. Jan-Dec 2019 Regular performance briefings to South Portland City Council. Regular public meetings with South Portland riders and residents. 15

19 Title 30-A: MUNICIPALITIES AND COUNTIES Chapter 163: TRANSPORTATION Table of Contents Part 2. MUNICIPALITIES... Subpart 5. HEALTH, WELFARE AND IMPROVEMENTS... Section DEFINITIONS... 3 Section FORMATION; POWERS... 4 Section APPLICATION FOR MEMBERSHIP... 5 Section MANAGEMENT... 5 Section SINGLE MUNICIPAL OR REGIONAL TRANSPORTATION DISTRICT... 7 Section OFFICERS; MEETINGS; EMPLOYEES... 7 Section INTEREST IN CONTRACTS... 8 Section CERTIFICATE OF ORGANIZATION... 8 Section POWERS OF DIRECTORS... 9 Section EMINENT DOMAIN; APPEAL Section EXEMPT FROM TAXATION; FUEL TAX REFUND Section NOTES; SECURITIES Section COLLECTIVE BARGAINING; RIGHTS OF EMPLOYEES Section LIMITATION ON CHARTER SERVICE Section ROUTES AND FARES; SINKING FUND Section ESTIMATE OF EXPENDITURES; CONTRIBUTIONS; BUDGET Section WARRANT FOR TAXES Section WITHDRAWAL Section DISSOLUTION i

20 MRS Title 30-A, Chapter 163: TRANSPORTATION Text current through October 1, 2016, see disclaimer at end of document. ii

21 Maine Revised Statutes Title 30-A: MUNICIPALITIES AND COUNTIES Chapter 163: TRANSPORTATION DEFINITIONS As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) 1. District. "District" or "transit district" includes: A. A district created by vote of a single municipality; [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) B. A district created by vote of a group of municipalities; [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) C. A municipality voting to provide mass transportation service without the creation of a district; and [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) D. A regional transportation corporation, except that sections 3510, 3512 and 3517 do not apply to a regional transportation corporation. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) [ 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD); 1989, c. 726, 1 (AMD) 2. Regional transportation corporation. "Regional transportation corporation" means any private, nonprofit corporation formed for the express purpose of providing public transportation services to more than one municipality but which is not wholly or partly owned by the municipalities. The corporation must be approved, for the purpose of providing public transportation services, by the municipal officers of each community to receive public transportation services from the corporation. After being approved by the municipal officers of 5 or more communities, such a corporation shall be duly certified as a regional transportation corporation by the Department of Transportation and is subject to all applicable Public Utilities Commission rules governing charter and rates of fare. Generated Definitions 3

22 MRS Title 30-A, Chapter 163: TRANSPORTATION 3. Portland Area Comprehensive Transportation System. "Portland Area Comprehensive Transportation System" means the federally designated planning organization for the Portland region established to improve the coordination of transportation planning and investment decisions by state, municipal and public transportation organizations. [ 2009, c. 18, 1 (NEW) SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD). 1989, c. 726, 1 (AMD). 2009, c. 18, 1 (AMD) FORMATION; POWERS 1. Formation. By vote of its legislative body, any municipality may by itself, or in cooperation with one or more other municipalities, form a transit district for the purposes provided in this chapter. A. Municipalities not in the same geographic public transportation region must gain approval from the Department of Transportation before forming a transit district under this section. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) B. With the consent of the Department of Transportation and of the municipal officers of any municipality not included in a transit district, a transit district may provide transportation services within that municipality. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8 and 10 (AMD) 2. General powers; area of service. The district formed under subsection 1 is a body politic and corporate, and may sue, be sued, plead and be impleaded, adopt a name, adopt and alter a common seal and do all things necessary to furnish motor vehicle mass transportation within that district, including charter service, for public purposes in the interest of the health, safety, comfort and convenience of the inhabitants of the municipality or municipalities comprising the district. 3. Incidental rights. All incidental powers, rights and privileges necessary to accomplish the main objective set forth in this chapter are granted to a district created. Such a district is subject to the jurisdiction of the Public Utilities Commission only to the extent provided in this chapter. 4. Prohibition. Except for the following items, a transit district may not sell, rent or lease goods or services to any entity other than the State, a municipality, quasi-municipal corporation or transit district, unless those goods or services are essential to the purchaser and are not available from another source: A. Advertising space on vehicles owned by the transit district; [1989, c. 726, 2 (NEW) Formation; powers Generated

23 MRS Title 30-A, Chapter 163: TRANSPORTATION B. Existing vacant office or storage space owned by the transit district; and [1989, c. 726, 2 (NEW) C. Used equipment not originally purchased for resale. [1989, c. 726, 2 (NEW) Transit districts subject to regulation by the Public Utilities Commission under Title 35-A, Part 5, are exempt from this subsection. [ 1989, c. 726, 2 (NEW) 5. Penalty. Any transit district violating subsection 4, is subject to a civil penalty of not more than $5,000, payable to the State, and recoverable in a civil action. [ 1989, c. 726, 2 (NEW) SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD). 1989, c. 726, 2 (AMD) APPLICATION FOR MEMBERSHIP Any municipality which is contiguous to any other municipality authorized to provide transportation services under this chapter or contiguous to any municipality which is a member of the transit district may apply to the transit district and the board of directors may accept or refuse the application for membership. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD) MANAGEMENT The affairs of a district formed under section 3502 shall be managed by a board of directors chosen from the inhabitants of the municipality or municipalities comprising the district. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) 1. Number of directors. Except as provided in subsection 3, each municipality is entitled to one director for each 10,000 inhabitants of the municipality or fraction of that number, as determined by the latest Federal Decennial Census, in accordance with the following schedule: A. 0 to 10,000--1; [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) B. 10,001 to 20,000--2; [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) C. 20,001 to 30,000--3; [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) D. 30,001 to 40,000--4; [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) Generated Application for membership 5

24 MRS Title 30-A, Chapter 163: TRANSPORTATION E. 40,001 to 50,000--5; [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) F. 50,001 to 60,000--6; [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) G. 60,001 to 70,000--7; and [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) H. Over 70, [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) 2. Appointment; terms; quorum. The municipal officers of each municipality shall appoint the directors of a transit district. Initially, the directors' terms of office shall be determined by lot at their first organizational meeting as follows: One-third of those appointed shall serve for 3 years, 1/3 for 2 years and the remaining number for one year. All subsequent appointments are for a term of 3 years. Directors shall serve until their successors have been appointed, with vacancies being filled for the unexpired portion of the respective terms. A majority of the directors constitutes a quorum for the transaction of business. Action taken by 2/3 of the directors present at any meeting at which a quorum is in attendance is considered to be the action of the full board of directors. 3. Greater Portland Transit District. The board of directors of the Greater Portland Transit District, composed of the City of Portland, the City of Westbrook and the Town of Falmouth, consists of 5 directors appointed from the City of Portland, 3 directors appointed from the City of Westbrook and 2 directors appointed from the Town of Falmouth. Notwithstanding the other provisions of this chapter, the board of directors of the Greater Portland Transit District may receive and accept applications for membership from other municipalities located wholly or partially within the Portland Area Comprehensive Transportation System whether or not they are contiguous to other members of the Greater Portland Transit District and may determine the number of directors to be appointed from those municipalities to the board of directors of the Greater Portland Transit District on any basis that is mutually agreed upon by the municipality applying for membership and the board of directors of the Greater Portland Transit District. The member municipalities may, by ordinance, provide that their appointees serve at the will of the appointing power or for terms that are shorter than those established in subsection 2. [ 2009, c. 18, 2 (AMD) SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD). 2009, c. 18, 2 (AMD) Single municipal or regional transportation district Generated

25 MRS Title 30-A, Chapter 163: TRANSPORTATION SINGLE MUNICIPAL OR REGIONAL TRANSPORTATION DISTRICT 1. Formation of district. If a single municipality votes to create a transit district, its municipal officers shall appoint 5 directors from the inhabitants of the municipality. These directors have the same terms of office, powers, duties and privileges as set forth in this chapter. 2. Operation without forming district. A single municipality, by vote of its legislative body, or a regional transportation corporation, by vote of its board of directors, may be empowered to perform the functions provided in this chapter without creating a district. Thereafter, that single municipality or regional transportation corporation has all of the powers, duties and privileges established applicable to a district, unless specifically excluded. The municipal officers of that municipality or directors of that regional transportation corporation have the same powers, duties and privileges granted under this chapter to the board of directors of a district. SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD) OFFICERS; MEETINGS; EMPLOYEES 1. Officers; bylaws. The directors shall elect from among their members a president, treasurer, clerk and any other officers that they desire and shall adopt bylaws and regulations for the conduct of the district's affairs. 2. Meetings. The directors shall meet at least 4 times a year or more often if required by the bylaws, and upon the call of the president. The president shall call any other meetings that are requested in writing directed to the president and signed by at least 1/3 of the members of the board of directors. [ 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. A, 31 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) 3. District manager; employees. The directors shall appoint and fix the salary of a district manager who may not be a director. The district manager is the chief executive officer of the district. The district manager shall appoint any other employees that are required for district purposes and fix the salaries of those employees. The directors may, by resolution, indicate which appointments by the manager and salaries established by the manager will require confirmation of the board of directors. SECTION HISTORY Generated Officers; meetings; employees 7

26 MRS Title 30-A, Chapter 163: TRANSPORTATION 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, A31,C8,C10 (AMD) INTEREST IN CONTRACTS No director, officer or employee of the district may be interested directly or indirectly in any contract entered into by or in behalf of a district for work or material, or the purchase of material, or in any property acquired or to be acquired by the district. All contracts made in violation of this section are void. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD) CERTIFICATE OF ORGANIZATION After its organization, the district shall file a certificate with the Secretary of State setting forth the following information: [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) 1. Name. Name of the district; 2. Purposes. Its purposes; 3. Municipalities included. Municipalities included within the district; 4. Location. Location of the principal office; 5. Names of directors. Number and names of the directors and their addresses; and Interest in contracts Generated

27 MRS Title 30-A, Chapter 163: TRANSPORTATION 6. Names of officers. Names and addresses of the officers. This certificate shall be signed by the president and treasurer and a majority of the directors, and the president or treasurer shall swear that the signatures set forth in the certificate are true. From time to time as changes occur, the district shall file an amended certificate with the Secretary of State setting forth those changes. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD) POWERS OF DIRECTORS For the purpose of providing mass transportation services wholly or partially within the municipalities comprising the district, the directors of a district may: [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) 1. Powers over property. Take, purchase, hold, maintain, operate, lease, rent, mortgage and convey any real and personal property; 2. Leasing property. Lease or sublease any real and personal property; 3. Private contracts. Enter into contracts with private companies; or 4. Government contracts. Contract with the Federal Government, State Government and municipal governments for donations, loans, grants, gifts or other assistance. The directors may agree in these contracts to be bound by all applicable provisions of federal, state or municipal laws, regulations and rules. SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD). Generated Powers of directors 9

28 MRS Title 30-A, Chapter 163: TRANSPORTATION EMINENT DOMAIN; APPEAL A district may acquire for the public purposes of a district by purchase or by the exercise of the power of eminent domain any and all real property of any person, including the real and personal property and franchise of any person operating a local mass transportation service within any municipality comprising a district. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) 1. Determination of damages. If the district and the owner are unable to agree on a price within 60 days after the district has notified the owner of its intention to exercise its power of eminent domain, the board of directors of a district may, by resolution, take and acquire all or any part of the real and personal property and franchise of that owner, and shall determine the amount to be paid to the owner for that taking. Upon payment of this amount, or if payment is refused, upon depositing this amount with the treasurer of the district to be held in trust separate and apart from other funds of the district, the district may take and become the owner of the real and personal property and franchise set forth in the resolution. A. Within 30 days after payment or tender, the board of directors shall have recorded in the registry of deeds in the county where the land and property is located: (1) A certified copy of the resolution; and (2) A description of any real property and a plan of the real property, together with a description of any personal property taken under this section. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) B. The district shall have a certified copy of the resolution of the board of directors and a certified copy of the filing in the registry of deeds either delivered personally to the owner or the owner's agent or sent by registered mail to the owner. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) C. If the district acquires, by eminent domain, real or personal property in connection with a project involving federal participation under the United States Urban Mass Transportation Act of 1964, Public Law , the district shall, in that acquisition, comply with all of the procedures established under that Act for acquiring real or personal property. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) 2. Appeal to Superior Court. If the owner is aggrieved at the damages awarded for a taking under this section, the owner may appeal from the award to the Superior Court of the county in which the property lies by filing a complaint in that court and serving the district with a copy of the complaint within 60 days from the date of the recording in the registry of deeds. The complaint must set forth substantially the facts, but shall not state the amount of the damages previously awarded to the owner. The damages may be determined in the Superior Court by a committee of reference if the parties so agree, or by a verdict of its jury. The committee of reference shall be allowed a reasonable compensation for their services, to be fixed by the court upon the Eminent domain; appeal Generated

29 MRS Title 30-A, Chapter 163: TRANSPORTATION presentation of their report and paid from the county treasury upon the certificate of the clerk of courts. If the damages are increased, the district shall pay the damages and costs; otherwise, the appellant shall pay the costs. 3. Appeal to Law Court. An appeal may be taken by any party from the Superior Court's judgment to the Supreme Judicial Court as in other cases. SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD) EXEMPT FROM TAXATION; FUEL TAX REFUND The property, both real and personal, of a district, whether held and operated by itself or leased to a private operator, for the purpose of providing mass transportation as provided in this chapter, is exempt from all registration fees, real, personal, excise, sales and use, and any other taxes which are assessed by the State or any political subdivision of the State. A district, or its lessee, or any person contracting with the district for the purpose of furnishing mass transportation, is entitled to be reimbursed and paid to the extent of the full amount of the tax paid for fuel used in motor vehicles owned and operated by them for that purpose. That district, lessee or person shall present its claim to the State Tax Assessor in the form and with any information that the State Tax Assessor requires, accompanied by original invoices showing the purchases. Applications for refunds as provided must be filed with the State Tax Assessor within 9 months from the date of purchase. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD) NOTES; SECURITIES 1. Securities defined. As used in this section, "securities" means negotiable bonds or notes issued by the district, including temporary notes. 2. Notes and securities authorized. For accomplishing the purposes of this chapter and for paying any indebtedness and any necessary expenses and liabilities incurred for that purpose, including organizational and other necessary expenses, the district by vote of its board of directors may: A. Borrow money temporarily and issue its negotiable notes for that money; and [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) Generated Exempt from taxation; fuel tax refund 11

30 MRS Title 30-A, Chapter 163: TRANSPORTATION B. From time to time, issue securities of the district in one series or in separate series in such amount or amounts, bearing interest at such rate or rates and having such terms and provisions as the board of directors determines. These securities may be issued with or without provision for calling the securities before maturity and, if callable, may be made callable at par or at any premium determined by the board of directors. The board of directors may from time to time issue its securities in one series or in separate series for the purpose of paying, redeeming or refunding outstanding securities. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) 3. Form of notes and securities. All negotiable notes authorized for temporary borrowing shall be signed on behalf of the district by its treasurer and countersigned by its president. All securities shall have the corporate name of the district inscribed on their face, shall be signed by the treasurer and countersigned by the president and, if coupon bonds are issued, the interest coupons attached to the securities shall bear the facsimile of the treasurer's signature. 4. Legal obligations; investment by banks; tax exempt. All securities issued by the district are legal obligations of the district. The district is deemed to be a quasi-municipal corporation within the meaning of section 2604, subsection 3, and that section applies to the district. All securities issued under this section are legal investments for savings banks in this State and are tax-exempt. 5. Sinking fund. If the securities are to be payable for a specified term of years, the board of directors shall establish a sinking fund for the purpose of paying or redeeming the securities when they become due. The board of directors shall determine annually the sum, with interest, to be paid into the sinking fund by each municipality comprising the district. This sum shall be based on the same formula used in computing the operating deficit payment. SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD) Collective bargaining; rights of employees Generated

31 MRS Title 30-A, Chapter 163: TRANSPORTATION COLLECTIVE BARGAINING; RIGHTS OF EMPLOYEES 1. Bargaining authorized; contracts. The directors of a district may bargain collectively and enter into written contracts with duly authorized labor organizations representing employees other than executive, administrative or professional personnel. These contracts may provide for wages, salaries, hours, working conditions and benefits, including, but not limited to, provisions pertaining to health and welfare, insurance, vacations, holidays, sick leave, seniority, arbitration, pensions and retirement. 2. Rights of employees. It is declared to be the public policy of this State for the protection of the public health, safety and welfare that employees covered by contracts made under this section shall be accorded all of the rights of labor, except for the right to strike or engage in any work stoppage or slowdown. 3. Employees of acquired transportation system. Whenever a district acquires any local mass transportation system under this chapter and operates that system or leases or contracts for the operation of that system under this chapter, the individual employees of that system shall be retained in positions the same as, or no worse than, their positions before the district's acquisition of the system to the fullest extent possible consistent with sound management and to the extent required by the service to be rendered from time to time by the district, its lessee or contractor. Any such employee not retained or laid off after retention because of lack of work or curtailment of service shall be assured priority of employment or reemployment when a position for which that employee is qualified becomes available. SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD) LIMITATION ON CHARTER SERVICE Charter service provided by the district must originate or terminate at some point within that district. Charter service provided by a district is in all respects subject to the jurisdiction of the Public Utilities Commission in the same manner and to the same extent as private companies providing charter service, except that a regional transportation corporation may not provide any charter service other than that specifically provided for under the conditions of any license granted the corporation by the Public Utilities Commission. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD). Generated Limitation on charter service 13

32 MRS Title 30-A, Chapter 163: TRANSPORTATION ROUTES AND FARES; SINKING FUND 1. Establishment of routes and fares. Except as provided in paragraphs A and B, the directors of a district shall establish such routes and fix such rates of fare to be charged for the mass transportation service as will, to the extent possible, reasonably ensure sufficient income to meet the cost of the service, including, but not limited to, operating expenses, insurance, taxes, rentals, annual serial bond payments, interest, allocation for a reserve account and an allowance for depreciation. A. The directors of a district that participates in a locally coordinated plan for regional transit that has been approved in accordance with Title 23, section 4209 shall establish routes and fixed fares in accordance with the plan whenever the plan requires. [2015, c. 182, 9 (AMD) B. The director of a regional transportation corporation shall not fix any rates of fare to be charged for mass transportation other than that specifically provided for under the conditions of any license granted the corporation by the Department of Transportation. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) [ 2015, c. 182, 9 (AMD) 2. Use of surplus; sinking fund. If, after all such obligations have been met, a surplus remains, the directors may deposit all or any part of the surplus in a reserve account or in the sinking fund created by this chapter. If all or any part of the surplus is deposited in the sinking fund, the amount of the annual commitment to the tax assessors of the municipalities comprising the district covering payments to the sinking fund shall be reduced by the amount of that deposit. 3. Hearing required. The board of directors shall hold a public hearing before making any major changes in routes in the district or in the fare structure of the district. SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD). 2015, c. 182, 9 (AMD) ESTIMATE OF EXPENDITURES; CONTRIBUTIONS; BUDGET 1. Estimate of expenditures and revenues. By November 1st of each year, the board of directors shall prepare and submit to the municipal officers of the municipalities comprising the district an itemized estimate of expenditures and revenues for the following calendar year, which shall be the fiscal year. This estimate must include the following: A. An itemized estimate of anticipated revenues during the ensuing fiscal year from each source; [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) Estimate of expenditures; contributions; budget Generated

33 MRS Title 30-A, Chapter 163: TRANSPORTATION B. An itemized estimate of expenditures for each classification for the ensuing fiscal year, including payments of principal and interest on bonds or notes issued or to be issued by the district; [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) C. After the first year of operation, an itemized statement of all actual receipts from all sources to, and including September 30th of each previous fiscal year, with estimated receipts from those sources shown for the balance of the year; [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) D. After the first year of operation, an itemized statement of all actual expenditures, up to and including September 30th of each previous fiscal year, with estimated expenditures shown for the balance of the year; and [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) E. An estimate of revenue surplus or deficit of the district for the fiscal year for which estimates are being prepared. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) 2. Determination of municipal contributions. Each year, before submitting the estimates required by subsection 1 to the municipal officers, the board of directors of the district, by a 2/3 vote of its entire membership, shall establish a formula for contributions to be made by each municipality in order to defray any projected deficit. This formula and estimated amount of the contribution required from each municipality shall be shown in the estimates filed with the municipal officers of each municipality. A. The formula shall be based upon such items as route mileage, profit or loss resulting from the service to the municipality, population and any other factors that the board of directors considers relevant. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) B. If the board of directors is unable to establish the formula by a 2/3 vote of its entire membership, it shall, by November 1st: (1) Petition the Public Utilities Commission; and (2) Include with its submission of the estimates to the municipal officers of each municipality a statement that a formula has not been established but that a petition has been made to the Public Utilities Commission for findings and a decision with respect to a formula. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) C. If a municipality refuses to accept a formula established by the board of directors and submitted to it by November 1st, the municipal officers of the municipality shall, within 30 days after the submission, notify the board of directors of their refusal. The board of directors shall then, by December 15th, petition the Public Utilities Commission as provided in paragraph B. Upon the filing of the district's petition, the Public Utilities Commission, after notice to all the municipalities comprising the district and a hearing, shall consider the formula and make its findings and decision with respect to the formula within 60 days from the filing of the district's petition. The findings and decision of the Public Utilities Commission are binding upon the district and the municipalities. The district or any municipality may appeal from the findings and decision of the Public Utilities Commission in accordance with Title 35- Generated Estimate of expenditures; contributions; budget 15

34 MRS Title 30-A, Chapter 163: TRANSPORTATION A, section [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) 3. Budget; payment of allocations. By March 1st of each year, the board of directors shall adopt a final budget for that year which shall be itemized in the same manner as the estimate of expenditures and revenues under subsection 1. This budget shall be submitted immediately to the municipal officers of the municipalities comprising the district and the amounts allocated to each municipality to defray any projected revenue deficit in the budget shall be included in the warrant to the assessors of each municipality as provided in section A. If an appeal from any findings and decision of the Public Utilities Commission as provided in subsection 2, paragraph C, is pending on March 1st, the allocations shall be made in accordance with the findings and decision of the Public Utilities Commission from which the appeal was taken. Any adjustments to these allocations required to be made in accordance with the decision upon any such appeal shall be made as follows. (1) If the allocation to any municipality is increased, the additional payment shall be included in the current assessment or, if the increase is made after April 1st, the additional payment shall be certified to the municipal officers of the municipality who shall appropriate the amount of the increase out of unappropriated surplus, a contingency fund or shall raise that amount by issuing temporary notes which must be payable within one year from their dates. (2) If the allocation to any municipality is decreased, the amount of the decrease shall be deducted from the current assessment or, if the decrease is made after April 1st, shall be paid by the district to the treasurer of the municipality from funds received from municipalities whose allocation is increased. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD) WARRANT FOR TAXES Before April 1st of each year, the directors shall issue their warrant in the same form as the warrant of the Treasurer of State for taxes, with proper changes, to the assessors of the municipalities comprising the district. The warrant shall require the municipalities to assess the sum allocated to each municipality for payment of the operating deficit and the sum allocated to each municipality for payment into the sinking fund, if any, upon the taxable estates within those municipalities and to commit their assessment to the constable or collector of the municipalities. The constable or collector has all the authority and powers to collect these taxes as is vested by law to collect state, county and municipal taxes. Within 30 days after the date fixed by the municipality on which its taxes are due, the treasurer of the municipality shall pay the amount of the tax assessed under this section to the treasurer of the district. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) Warrant for taxes Generated

35 MRS Title 30-A, Chapter 163: TRANSPORTATION 1. Failure to pay. If the treasurer of a municipality fails to pay the sum assessed under this section, or fails to pay any part of the sum by the date set in the year in which the tax is levied, the treasurer of the district may issue a warrant for the amount of the tax, or so much of the tax as remains unpaid, to the sheriff of the appropriate county, requiring the sheriff to levy by distress and sale on real and personal property of any of the inhabitants of the municipality. The sheriff or any of the deputies shall execute the warrant. SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD) WITHDRAWAL A municipality may withdraw from the district at the end of a fiscal year provided that it has given the board of directors at least one year's written notice of its intention to do so. The municipality must pay its proportionate share of the current indebtedness of the district before withdrawal and must agree by appropriate written document to pay its proportionate share of any long-term indebtedness of the district as that indebtedness becomes due and payable. During the period of notice, the withdrawing municipality does not become liable for any capital expenditures or borrowings which may be made by the district. The proportionate share of the withdrawing municipality in any current and long-term indebtedness of the district shall be in accordance with the formula then in effect for payment of the current and long-term indebtedness. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD) DISSOLUTION At such time as a district has discharged all of its obligations and paid or provided for the payment of all of its bonded indebtedness, the board of directors may, by 2/3 vote of its membership, dissolve the district and dispose of all of its property, real and personal, in the manner authorized and directed by the board of directors. The treasurer may execute any deeds, bills of sales or any documents required for that purpose. All money, if any, remaining in the hands of the treasurer of the district shall be paid to the municipalities comprising the district as of the date of dissolution in accordance with the formula then in effect for the payment of any operating deficit. [1987, c. 737, Pt. A, 2 (NEW); 1987, c. 737, Pt. C, 106 (NEW); 1989, c. 6, (AMD); 1989, c. 9, 2 (AMD); 1989, c. 104, Pt. C, 8, 10 (AMD) SECTION HISTORY 1987, c. 737, A2,C106 (NEW). 1989, c. 6, (AMD). 1989, c. 9, 2 (AMD). 1989, c. 104, C8,10 (AMD). The State of Maine claims a copyright in its codified statutes. If you intend to republish this material, we require that you include the following disclaimer in your publication: All copyrights and other rights to statutory text are reserved by the State of Maine. The text included in this publication reflects changes made through the Second Regular Session of the 127th Maine Legislature and is current through October 1, The text is subject to Generated Withdrawal 17

36 MRS Title 30-A, Chapter 163: TRANSPORTATION change without notice. It is a version that has not been officially certified by the Secretary of State. Refer to the Maine Revised Statutes Annotated and supplements for certified text. The Office of the Revisor of Statutes also requests that you send us one copy of any statutory publication you may produce. Our goal is not to restrict publishing activity, but to keep track of who is publishing what, to identify any needless duplication and to preserve the State's copyright rights. PLEASE NOTE: The Revisor's Office cannot perform research for or provide legal advice or interpretation of Maine law to the public. If you need legal assistance, please contact a qualified attorney Dissolution Generated

37 CITY OF SOUTH PORTLAND TRANSPORTATION DEPARTMENT 929 Highland Avenue South Portland, Maine (207) MEMO TO: Scott Morelli City Manager FROM: Art Handman Transportation (Bus Service) Director DATE: Revision of January 5, 2018 SUBJECT: Notes to City Council Re: METRO Merger Proposal Workshop January 8, 2018 Service Standards and Quality of Service One of the first things I did when I assumed Directorship over the South Portland Bus Service (SPBS) was to install a speaker in my office tuned into the two-way radio communications between and among my drivers and dispatch personnel. Through the monitoring of those radio chatters, I quickly gleaned the fact that the SPBS provided a highly personalized service to its riders. Our drivers know most of our regular passengers by name and look out for them at bus stops. They routinely provide other assists to our mentally and physically challenged riders. For example, SPBS provides bus use training for visually impaired citizens in cooperation with the cognizant State agency. Drivers will also call other drivers to alert them to a transferring passenger or to a missing regular passenger. When the drawbridge opens or weather and construction delays wreak havoc with our schedules, dispatchers will work their magic to get buses back on schedule as quickly as possible. Other specialized service items that the SPBS provides are summarized below: SPBS provides live information service provided during all hours of service including weekends. SPBS works cooperatively with City General Assistance and School Departments to provide complementary tickets for clients and students as a part of their program delivery. SPBS provides extensive, personalized rider education on the telephone and through site visits such as STRIVE education training and public school class visits. SPBS s bus stops and new routes are determined by ridership demand. Bus stops are not arbitrarily removed to speed up service. Further SPBS is responsive to City Councilors recommendations based on their constituents needs. Bus shelters are installed and route extensions have been put in place based on Councilors requests. SPBS s fleet of seven buses has none older than six years (3 buses), with two buses that are three-years old, and two buses that are only one-year old. METRO s fleet is much older. SPBS participates in community events providing on-site buses for rider information and orientation. SPBS conducts a weekly 10-ride ticket lottery awarding a free 10-ride ticket to a few lucky riders. SPBS takes great pride in providing clean buses every day. The proximity of the SPBS garage to its routes enables bus replacement to occur quickly should a bus become unserviceable for mechanical or sanitary reasons. Maintenance of Service under METRO Proposal

38 Memo to City Manager Page 2 After several meetings with METRO staff, it is not clear to me that there would be any substantial improvement of service under a merged operation, irrespective of any cost savings. Many of the above listed specialized services are not provided by METRO policy or are impractical to be accomplished by them, primarily due to its size. Further, while the METRO proposal may show reduced costs when compared to SPBS, this is due in large part to reducing drivers from 15 to 12. METRO uses a model to determine that number whereas SPBS uses direct run by run assignment of drivers to arrive at our needs. It is not clear that METRO has an adequate number of extra drivers to cover normal days off due to vacation and sickness to cover all the SPBS runs. In fact, there have been days when SPBS was utilizing all available drivers to cover its runs. Two other issues applicable to SPBS in a merger are fare increases and transfer policy. In its financial proposal, METRO has a 10% increase in revenue accomplished by a fare increase. METRO s proposed cost savings are realized in part by the implementation of that fare increase. Such an increase would adversely affect a significant number of transit dependent SPBS riders. Further, METRO is considering eliminating paper transfers once it installs electronic fare boxes. Riders would need smart cards to board their buses. The SPBS is laid out with a transfer hub in Mill Creek. Without transfers, a Route 21 passenger going to the Mall, for example, would have to pay another fare to ride the 24A or 24 B route to the Maine Mall, which would be a financial burden to a significant number of riders. Further, the Greater Portland Council of Governments (GPCOG) has just completed two extensive planning projects looking at transit operations in the region. One dealt with the region as a whole; the other dealt with a Portland-South Portland corridor. Both projects produced a modicum of transit improvements focusing on coordination of schedules and other cooperative efforts among the transit operators. Neither Project concluded that a merger of METRO and South Portland Bus Service was warranted. Further, previously conducted telephone surveys over 600 region residents by GPCOG produced only one suggestion to merge the bus services in the region. Governance The control of the SPBS is totally under the governance of the City Council through the City Manager. In a merged operation, the control of the bus service would be under the control of the METRO Board of Directors. The constitution of that Board is determined by State Statute and would reduce South Portland s control of its bus system dramatically (19% as opposed to 100%). Thus, South Portland would lose a major portion of its control over its bus routes, fares, and schedules. It would also be obligated to assume a portion of the overall METRO s operations and capital costs in the future. METRO is proposing a three-year agreement. It is not clear in the original proposal whether that would be through a contract or South Portland physically joining the Greater Portland Transit District. In any event, withdrawal after three years would be very difficult for the City because it would have no buses nor other infrastructure to resume bus operations. In practical terms, merging with METRO would in fact be a permanent situation. Labor (Driver) Issues Section 5333(b) of the Federal Transit law requires that arrangements be made to protect certain rights of mass transit employees affected by grants of Federal funds for the acquisition, improvement, or operation of a transit system. These rights include the preservation of rights, privileges, and benefits under existing collective bargaining agreements, the continuation of collective bargaining rights, the protection of individual employees against a worsening of their positions related to employment, assurances of

39 Memo to City Manager Page 3 employment to employees of acquired mass transportation systems, priority of reemployment, and paid training or retraining. The Federal Transit Administration (FTA) has advised the City of South Portland that the above cited Section would apply to City employees affected by any merger with METRO. METRO is aware of this situation and is working to determine required equity in wages and fringe benefits. However, there is significant disparity between the labor rates and fringe benefits with respect to SPBS and METRO drivers. METRO s wages are generally higher than those of SPBS but METRO s fringe benefit package is not as generous as that of SPBS. There are also issues related to pension vesting and expectations of continuing employer contribution and ultimate retirement benefit amounts for SPBS drivers. In addition, the issue of recognition and transference of driver seniority has not been resolved. METRO is still negotiating with its collective bargaining unit with regard to this issue. One suggestion proffered by METRO is that South Portland drivers would retain their seniority only for driving South Portland routes. This proposal would be problematic for a transferred South Portland driver with significant seniority who might wish to drive a METRO route instead of a South Portland route. S/he would be at the bottom of the seniority list when competing for those routes. Without written acceptance by METRO s collective bargaining unit of equitably integrating South Portland s drivers seniority into METRO drivers seniority structure, the METRO proposal appears to be out of compliance with Federal law. Conclusion In light of the above analysis, it would seem that the current systems operated by SPBS and METRO have significant differences in service quality and governance controls. Further, the lack of resolution of transference of driver wages, benefits, and seniority is a major legal obstacle to any merger. In addition, there is no recent planning effort justification for a merger. There are no major improvements nor even a guarantee of maintenance of current service proposed by METRO. The cost savings merely reflect the salary and fringes of the SPBS s Director. That savings does not justify South Portland losing significant control over its bus service with possible cost increases and service changes to its riders.

40 FINANCE DEPARTMENT GREGORY N. L HEUREUX Finance Director (207) Kristie Bradbury Deputy Finance Director (207) Memorandum TO: City Council; Scott Morelli, City Manager FROM: Gregory L Heureux, Finance Director DATE: January 5, 2018 RE: METRO Proposal Financial Overview ****************************************************************************** Over the past year, I have been actively involved in the review of the METRO Consolidation proposal process. For me, the decision to consolidate with METRO is more than a simple budget numbers calculation. Don Gerrish summarized the decision process nicely in that there are 4 key elements that need to be considered (I ve listed in no particular order): 1. Governance 2. Service 3. Annual Net Costs 4. Employee Transition Concerns I am going to discuss only Costs and Employee Transition Concerns as my contribution to this discussion. Annual Net Cost Historical Costs: Looking at costs, the Bus Service s departmental budget only provides a partial view of costs and, in working with METRO, we want to make sure we are showing a complete picture of the bottom line net cost to the City. The below summary shows the historical and budgeted FY18 costs for the bus system at present. Actual Actual Actual Budget FY15 FY16 FY17 FY18 Expenditures: Operations $1,119,797 $1,144,409 $1,309,016 $1,357,928 Benefits $ 292,504 $ 311,423 $ 368,568 $ 389,146 Property Insurance (est) $ 19,500 $ 20,000 $ 21,239 $ 19,636 Capital $ 54,027 $ 74,600 $ 94,069 $ - Total Expenditures $1,485,828 $1,550,432 $1,792,892 $1,766,710 Revenues Fare box and Other $(313,609) $(283,920) $(255,430) $(295,000) Fed & State Subsidies $(461,665) $(542,227) $(711,766) $ (731,988) Subtotal Revenues $(775,274) $(826,147) $(967,196) $(1,026,988) Net City Costs $ 710,554 $ 724,285 $ 825,696 $ 739, Cottage Road P.O. Box 9422 South Portland, Maine Telephone (207) Fax (207) Monday through Friday 8:00 A.M. - 4:30 P.M. Thursday 8:00 A.M. - 6:30 P.M.