Broward County Commission Regular Meeting
Director's Name: Mark Gale
Department: Aviation Division: Administration
Information
Requested Action
title
A. MOTION TO APPROVE Seventh Amendment between Broward County and Keolis Transit Services, LLC, for Shuttle Bus and Other Transportation Services at Fort Lauderdale-Hollywood International Airport (“Airport”), attached hereto as Exhibit 1; and authorize the Mayor and Clerk to execute same.
ACTION: (T-11:22 AM) Approved. (Refer to minutes for full discussion.) (See Regular Meeting Additional Material, dated May 21, 2024, submitted at the request of Aviation Department.)
VOTE: 7-0. Commissioner Bogen and Vice-Mayor Furr were not present.
B. MOTION TO AUTHORIZE County Administrator to execute a Letter Agreement between Broward County, Keolis Transit Services, LLC, and Banc of America Leasing & Capital, LLC, in substantially the form attached hereto as Exhibit 2, pursuant to which Broward County will purchase 48 buses and four trams for a total cost of $5,826,608; and authorize the County Administrator to make changes to the Letter Agreement, provided that any changes do not materially increase the risk or exposure to Broward County and are approved as to legal sufficiency by the Office of the County Attorney, and to take all administrative and budgetary actions necessary for the implementation of the Letter Agreement.
ACTION: (T-11:22 AM) Approved. (Refer to minutes for full discussion.) (See Regular Meeting Additional Material, dated May 21, 2024, submitted at the request of Aviation Department.)
VOTE: 7-0. Commissioner Bogen and Vice-Mayor Furr were not present.
C. MOTION TO AUTHORIZE Director of Aviation, on behalf of the Broward County Aviation Department, and the County Administrator, on behalf of Broward County, to execute a Memorandum of Understanding between Broward County and the Broward County Aviation Department for the use of Shuttle Buses and Trams in substantially the form attached hereto as Exhibit 3.
ACTION: (T-11:22 AM) Approved. (Refer to minutes for full discussion.) (See Regular Meeting Additional Material, dated May 21, 2024, submitted at the request of Aviation Department.)
VOTE: 7-0. Commissioner Bogen and Vice-Mayor Furr were not present.
D. MOTION TO ADOPT budget Resolution transferring $5,826,608 from reserve in the General Fund to purchase 48 buses and four trams.
ACTION: (T-11:22 AM) Approved Resolution No. 2024-276. (Refer to minutes for full discussion.) (See Regular Meeting Additional Material, dated May 21, 2024, submitted at the request of Aviation Department.)
VOTE: 7-0. Commissioner Bogen and Vice-Mayor Furr were not present.
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Why Action is Necessary
MOTION A. Broward County Board of County Commissioners (“Board”) approval is required for the execution of the Seventh Amendment (“Seventh Amendment”) to the Agreement between Broward County (“County”) and Keolis Transit Services, LLC (“Keolis”), for Shuttle Bus and Other Transportation Services (“Agreement”) at the Airport.
MOTION B. Board approval is required to authorize the County Administrator to execute the Letter Agreement between the County, Keolis, and Banc of America Leasing & Capital, LLC (“Letter Agreement”) for the purchase of 48 buses and four trams (“Shuttle Buses and Trams”).
MOTION C. Board approval is required to memorialize the transfer of funds between the Broward County Aviation Department (“BCAD”) and the County’s General Fund for the right to have the Shuttle Buses and Trams used exclusively for Airport-related purposes.
MOTION D. Transfers from reserve require Board approval.
What Action Accomplishes
MOTION A. Approves the Seventh Amendment to the Agreement.
MOTION B. Authorizes the County Administrator to execute the Letter Agreement.
MOTION C. Authorizes the Director of Aviation and the County Administrator to execute the Memorandum of Understanding between the County and BCAD for the use of Shuttle Buses and Trams (“MOU”).
MOTION D. Provides one-time funds in the General Fund to purchase the buses and trams.
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Previous Action Taken
None
Summary Explanation/Background
THE AVIATION DEPARTMENT RECOMMENDS APPROVAL OF THE ABOVE MOTIONS.
MOTION A
This action approves the Seventh Amendment to the Agreement.
On March 28, 2019 (Item No. 2), the Board approved the Agreement for an initial five-year term. The term of the Agreement commenced on June 12, 2019, and expires on June 11, 2024. The Agreement has been amended six times.
Keolis, in connection with the Agreement, entered into lease agreements (“Lease Agreements”) with Banc of America Leasing & Capital, LLC (“BOA”) for the Shuttle Buses and Trams that Keolis currently utilizes to perform its services under the Agreement. It is the County’s position that Keolis materially breached the Agreement by executing the Lease Agreements without obtaining the Director of Aviation’s approval, but Keolis disagrees with this position (“the Dispute”).
Although the Agreement authorizes the County to reimburse Keolis for costs and expenses associated with the lease of the Shuttle Buses and Trams, the County, as a result of the Dispute, has reimbursed Keolis reduced lease payment amounts for the Shuttle Buses and Trams. As of April 1, 2024, the total aggregate amount that Keolis has paid under the Lease Agreements without reimbursement from the County is $1,520,936.
The proposed Seventh Amendment will, among other things, extend the term of the Agreement by one year (from June 12, 2024, through June 11, 2025) (“Year 1 Extension Term”), and retroactively (i.e., from October 1, 2023) increase the compensation payable to Keolis under the Agreement. In addition, the parties, as part of the Seventh Amendment, have agreed to fully resolve the Dispute in exchange for the County making a one-time payment to Keolis in the amount of $150,000.
MOTION B
This action authorizes the County Administrator to execute the Letter Agreement.
The Lease Agreements between Keolis and BOA expire on June 12, 2024. The Lease Agreements provide Keolis with an option to purchase the Shuttle Buses and Trams on or before June 12, 2024 (“Purchase Option”) for a price equal to the fair market value of the Shuttle Buses and Trams plus any outstanding amounts due and owing under the Lease Agreements. Because the Shuttle Buses and Trams were specifically designed for the Airport and are needed to meet the Airport’s ground transportation needs, the County would like to enter into the proposed Letter Agreement, attached hereto as Exhibit 2, which effectuates an assignment of the Purchase Option from Keolis to the County and sets forth the terms of the County’s purchase of the Shuttle Buses and Trams from BOA.
In accordance with the appraisal procedure set forth in the Lease Agreements, the County and BOA have agreed that the fair market value of the Shuttle Buses and Trams is $5,826,608 (“Agreed FMV”). As such, the County, pursuant to the Letter Agreement, will purchase the Shuttle Buses and Trams from BOA for the Agreed FMV and Keolis will pay any outstanding amounts due and owing to BOA under the Lease Agreements (“Other Amounts”).
Upon receipt of the Agreed FMV and Other Amounts by BOA, BOA will immediately sell and transfer to the County all of BOA’s rights, title, and interest in and to the Shuttle Buses and Trams.
MOTION C
This action authorizes the Director of Aviation, on behalf of BCAD, and the County Administrator, on behalf of the County, to execute the MOU.
Pursuant to the Letter Agreement referenced in Motion B, the County is purchasing the Shuttle Buses and Trams from BOA for the Agreed FMV, using funds from the County’s General Fund, with no financial contribution from BCAD.
Because the Shuttle Buses and Trams were specifically designed for the Airport and are needed to meet the Airport’s ground transportation needs, BCAD has agreed to compensate the County the annual payment amounts set forth in the MOU for the right to have the Shuttle Buses and Trams used exclusively for Airport-related purposes. To obtain the availability and use of the Shuttle Buses and Trams exclusively for Airport-related purposes during the term, BCAD will make annual payments to the County in accordance with Exhibit B of the MOU. Upon the expiration of the MOU, in exchange for BCAD’s payment to the County of $50, the Shuttle Buses and Trams shall be automatically deemed an asset of BCAD.
MOTION D
This action authorizes the transfer of $5,826,608 from reserve within the General Fund for the purchase of 48 Shuttle Buses and four Trams.
At the time of submission for this action, the Letter Agreement associated with Motion B (Exhibit 2) was not finalized. Exhibit 2 will be submitted as additional material prior to the Board meeting.
Source of Additional Information
Mark E. Gale, A.A.E. CEO/Director Aviation, 954-359-6199.
Fiscal Impact
Fiscal Impact/Cost Summary
Motion A. The estimated cost for the Agreement one-year extension is $22,455,000 and will be funded through the Aviation Department’s Operating Budget, Fund 40100.
Motion B. The cost to the County for the purchase of the Shuttle Buses and Trams is $5,826,608.
Motion C. BCAD will make annual payments to the County in accordance with Exhibit B of the MOU. Upon the expiration of the MOU, BCAD will pay the County $50 for the Shuttle Buses and Trams through the Aviation Department’s Capital Fund 40350.
Motion D. Pursuant to the Letter Agreement, this action transfers $5,826,608 from reserve in the General Fund for the County to purchase the Shuttle Buses and Trams.