ATTACHMENT 1

February 10, 2003

FINAL DRAFT

MEMORANDUM OF UNDERSTANDING FOR

CONTRACTING, OPERATING AND COST SHARING FOR

PUBLIC TRANSPORTATION SERVICES BETWEEN

THE TOWN OF CHAPEL HILL AND THE TOWN OF CARRBORO AND

THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL

W I T N E S S E T H:

THAT WHEREAS, the Town of Chapel Hill, the Town of Carrboro and The University of North Carolina at Chapel Hill have worked together to provide public transportation services since the 1970s and desire to continue to work together to provide these services; and

WHEREAS, the Town of Chapel Hill,  the Town of Carrboro and The University of North Carolina at Chapel Hill desire to establish an ongoing process to allow mutual cooperation in the operation of public transportation services; and

WHEREAS, the Town of Chapel Hill has operated the public transit system since 1974 and shared the costs with the Town of Carrboro and The University of North Carolina at Chapel Hill;

NOW THEREFORE, the following Memorandum of Understanding is hereby entered into by the Town of Chapel Hill, the Town of Carrboro, and The University of North Carolina at Chapel Hill.

SECTION I

It is hereby agreed that the Town of Chapel Hill, hereinafter referred to as "Chapel Hill”, and the Town of Carrboro, hereinafter referred to as "Carrboro”, and The University of North Carolina at Chapel Hill, hereinafter referred to as the "University", will participate in a continuing program for the operation of public transportation services which will be specified in separate annual contracts for services.  Collectively all parties to this Memorandum of Understanding (MOU) will be referred to as the “Local Partners”.  The Local Partners acknowledge that Chapel Hill has the fiduciary responsibility for operation of the public transit system. Individual and shared responsibilities in this effort shall be as follows:

SECTION II

SHARED RESPONSIBILITIES OF CHAPEL HILL AND CARRBORO AND THE UNIVERSITY IN THE OPERATION OF PUBLIC TRANSPORTATION SERVICES

1.         Each Local Partner will appoint 2 representatives to a Public Transit Committee (PTC) to review current and new policies. The PTC will receive updates and recommendations from the staff work group (established pursuant to Section II, Item 2 below) on general transit services, service levels, fares and budget. The PTC will meet at least three times per year during the following periods: October/November; February/March; May/June. The PTC will make reports and recommendations to the Chapel Hill Town Council concerning general transit policies, service levels, fares, budgets, services for the disabled, information systems, environmentally sensitive technologies and other matters of concern to the PTC.  Copies of said reports will be furnished to Carrboro and the University.

2.         Each Local Partner will designate at least 2 staff to participate in a staff work group to monitor transit services.  The staff work group will meet at least three times per year during the fall, winter and spring prior to the meetings of the PTC.  The staff work group will review and recommend a set of service standards for the operation of transit services. The staff work group will review the proposed service levels, routes, fares and budget for transit services and make recommendations to the PTC.   

3.         For the term of this MOU, the Local Partners will share the local net cost of transit services in the same proportions as the population that each Local Partner represents to the total population of all three partners as defined below:

a.         The local net cost of transit service will be the total cost of providing transit services including all operating, transit planning, administrative overhead (as authorized by the Federal Transit Administration), and capital costs, less all revenues derived from the operation of the service, less all federal and State assistance received for transit support.

b.         The total population for all Local Partners will be the sum of the population represented by each Local Partner, to be derived as follows:

            (1) For Chapel Hill and Carrboro:  the latest annual population figures for each municipality as published each fall by the North Carolina Office of Budget and Management.

            (2) For the University:

a) the total of all registered graduate and undergraduate students included in the  “Student Headcount” as compiled by the University Registrar each fall; and,

            b) the total of all permanent full-time and part-time faculty and staff for the University and for UNC Hospitals as compiled by the University’s Department of Human Resources, and the UNC Hospital’s Data Center Services, as of the  payday  closest to the student head count date.

            (3) The population counts for each Local Partner should be submitted in writing and certified as the latest and most accurate counts available.

4.         During the negotiations for any service agreement, the Local Partners may make exceptions to the population-based local net cost sharing in the following situations:

a.         For any new services or routes requested by a Local Partner, the total net operating cost of that service will be the responsibility of that partner for the first year that such service operates, unless all three partners agree that such route(s) are important to the system as a whole and therefore should be added as a shared cost route from inception.

b.         Funding for routes identified as University routes will be provided by the University on a continuing basis.  University routes are defined as those routes that are express service from any park-and-ride lots to the campus, routes that serve University destinations only, and other routes agreed upon by the Local Partners.

c.         Any routes whose productivity rate (riders per bus hour for the most recently completed six month period) falls below the service standard for the transit  system, which is one-half of the average productivity rate for all other routes in the same schedule period (weekdays, evenings, weekends), should be reviewed and modified as appropriate in the following service year, or the net operating cost of such route(s) should, in the following  service year, become the responsibility of the requesting  Local Partner(s), unless all three partners agree that such route(s) are important to the system as a whole and therefore should  remain.

5.         The Local Partners will be responsible and cooperative in considering any request for service cuts for financial rather than productivity reasons. Savings from any service cuts will consist of the operating cost of such service and will be shared by the Local Partners in the same proportion as they each funded the service at the time of the service cut.  It is recognized that elimination of productive routes could become necessary because of the financial constraints of any individual partner.

6.         The Local Partners will apply any federal, State or other non-local assistance received for the transit system to offset the cost of transit service.

7.         The Local Partners will carry over any losses or surpluses from the operation of the transportation system and incorporate such losses or surpluses in the next year’s budget for transit services allocating such losses or surpluses proportionately to the partners, taking into consideration all routes, whether cost-shared or single payer routes.

8.         The Local Partners will on a timely basis review and negotiate their respective annual contracts for public transportation services with terms in substantial agreement with the terms of this MOU.

9.         The Local Partners will support the operation of public transit services consistent with the terms of this MOU and any associated annual agreements.

10.       Each Local Partner will operate ticket sales outlets where individuals can purchase transit tickets: maintain detailed records on the sales of tickets; and submit those records, along with all revenues received from ticket sales, to the Town of Chapel Hill.  Chapel Hill will deposit the revenues received from each Local Partner in the Transportation Fund on a monthly schedule.

SECTION III

ADDITIONAL RESPONSIBILITIES OF CHAPEL HILL

Chapel Hill will:

1.         Maintain and manage a transportation department with sufficient personnel, equipment and facilities to operate the agreed upon public transportation services in the community, including the federally required services to the disabled and public shuttle services to University and other special events.

2.         Provide the technical expertise necessary for operating public transportation services.

3.         Provide marketing and public information services on transit operations including the preparation and distribution of timetables and other route and schedule information.

4.         Prepare preliminary budget estimates, productivity reports and service summaries each year sufficiently in advance of Town Council consideration to allow for analysis and input to the Council by the PTC. These documents can be used by the Local Partners for planning in advance of the Chapel Hill Town Manager’s Recommended Annual Budget and would provide the basis for negotiating annual service agreements.

5.         Apply for and obtain available State and federal operating, planning or capital assistance for the transportation program, and operate services in accordance with the laws and regulations pertinent to the receipt of those funds.

6.         Provide a copy of the current transit service operating budget upon adoption and the annual financial audit for transit services upon receipt to the other Local Partners.

7.         Provide a copy of the current annual contracts to the other Local Partners.

8.         Provide monthly ridership reports by route and day to the other Local Partners along with information on route overloads by the 15^th of each month or as soon as possible thereafter.

9.         Implement policies and procedures that encourage the use of public transportation.

10.       Attempt to identify resources and facilities for use as potential park and ride lots.

SECTION IV

ADDITIONAL RESPONSIBILITIES OF CARRBORO

Carrboro will:

1.         During the period of this MOU, not request that Chapel Hill Transit eliminate or reduce established service under this  MOU with the intention of replacing that service, either directly with  Carrboro resources or through a subcontractor, unless such change in service is mutually agreed to by the other Local Partners.

2.         Implement policies and procedures that encourage the use of public transportation.

3.         Attempt to identify resources and facilities for use as potential park and ride lots.

SECTION V

ADDITIONAL RESPONSIBILITIES OF THE UNIVERSITY

The University will:

1.         To the maximum extent appropriate, use the public transit services under this MOU as its on-campus transit system and not support or operate separate transit services that would be in direct competition with these services, unless Chapel Hill Transit has indicated that it is unable to provide such services at a reasonable cost.

Point-to-Point services, which consist of on demand individual transportation services (including for disabled individuals), and fixed route shuttle service between campus and central business district destinations during evening and night hours, both of which are operated exclusively for University and Hospital employees, students, contractors, and guests at the University’s own cost,  shall not be considered competitive to these services.

2.         During the period of this MOU, not request that Chapel Hill Transit eliminate or reduce established fixed route service under this  MOU with the intention of replacing that service, either directly with University resources or through a subcontractor, unless such change in service is mutually agreed upon by the other Local Partners.

3.         Operate at its own cost a demand responsive transportation system for all disabled students and employees to accommodate trips between University and Hospital buildings.  Such a system shall not be considered separate transit services in direct competition with Chapel Hill Transit.

4.         Implement policies and procedures that encourage use of public transportation.

5.         Attempt to identify resources and facilities for use as potential park and ride lots.

SECTION VI

The parties to this MOU agree that the term of this MOU shall be 3 years unless terminated earlier by any party and may be renewed for an additional 2 years by written agreement of the parties.

Any party may terminate its participation in this MOU by giving at least 180 days written notice prior to the date of termination of any annual operating contract. The termination of the MOU will not affect the responsibilities established in any annual operating contract for transportation services that may be in effect at that time.

SECTION VII

Any party to this Memorandum of Understanding may request an amendment to the MOU by written request to the other parties. The parties agree that they will meet to discuss any requested amendment within thirty days of receipt of such request. Amendments to this MOU will be effective only after approval in writing by all parties.

IN WITNESS WHEREOF, the parties to this Memorandum of Understanding have been authorized to sign the same, Chapel Hill and Carrboro by their Town Managers, and The University of North Carolina at Chapel Hill by its Vice Chancellor for Finance and Administration.

This the __________day of_______________, 2003.

         TOWN OF                                       TOWN OF                                    UNIVERSITY OF

      CHAPEL HILL                                  CARRBORO                                NORTH CAROLINA

                                                                                                                        AT CHAPEL HILL

   _______________                           _______________                  ________________________

       Town Manager                                  Town Manager                               Vice Chancellor for

                                                                                                                Finance and Administration

           ATTEST:                                          ATTEST:                                             ATTEST: 

   _______________                         _________________                        ______________________

   Title                                                   Title                                                      Title