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HomeMy WebLinkAbout10.A.1. Discussion of Status of Transit Service Consolidation Talks with MVTA 11111.1121 General Business 10. A. 1. SHAKO]'F_E TO: Mayor and City Council Mark McNeill, City Administrator FROM: R. Michael Leek, Community Development Director DATE: 06/17/2014 SUBJECT: Discussion of Status of Transit Service Consolidation Talks with MVTA (D) Action Sought A motion directing staff to bring the consolidation agreement as presented or with revisions and amended MVTA JPA back for Shakopee City Council action in July. Background In 2013, the Scott Transit Review Board, recommended, and the cities of Shakopee and Prior Lake agreed, that discussions about transit service consolidation should move forward with MVTA. To move these discussions forward a Technical Work Group (TWG) consisting of staff from the respective entities was established., as well as an Elected Work Group (EWG) consisting of members of the Shakopee and Prior Lake city councils and MVTA Board of Directors. Much of the discussion at these two committees has related to development of the consolidation agreement and amended MVTA JPA. Attached for the City Council's consideration are the most recent drafts of the consolidation agreement and draft MVTA JPA. The cities of Shakopee and Prior Lake raised numerous issues. A description of the issues with the noted provisions follows. Negotiations regarding these issues continue and are expected to be resolved. Section 3.2. This provision requires the transfer and assignment to MVTA of all transit assets/funds. The concern is that the Cities of Shakopee and Prior Lake will need these assets to operate until the date the services are consolidated with MVTA ("Consolidation Date"). The lawyers agreed to include some additional language wherein Prior Lake and Shakopee are expressly allowed to carry out their transit duties during the interim period between the effective date of the agreement and the Consolidation Date. Draft language is being worked on to be forward to the MVTA attorney. Section 3.5. This continues to be a significant issue in dispute. At the EWG meeting softening this language with language like "best efforts"was talked about. MVTA's attorney is working on revising it consistent with that. The MVTA wants the City of Shakopee to commit to a date certain prior to the Consolidation Date wherein it will bring the circulator into compliance. MVTA has also included an indemnification obligation which was not previously discussed. In addition to "general" concerns, the MVTA attorney says the main concern is with respect to the Circulator. Note in 5.2. Shakopee is also responsible for any discrepancies in the "collection or expenditure of transit funds" in the audit or otherwise and shall defend and indemnify MVTA. Section 4.1. It appears that MVTA's attorney will accept the Prior Lake attorney's revisions but may offer some additional language. Section 4.4. In this section, the MVTA attorney changed the language to require the immediate transfer of the 25%. Previously it was discussed that the transfers would be made in Feb. 2015 and Aug. 2015. It was agreed that staff would work this issue out. Section 4.5. The Prior Lake attorney's revisions are acceptable to the MVTA attorney. Section 5.1. At the end of this paragraph the MVTA attorney added some additional language imposing additional duties on Shakopee and Prior Lake. It has been agreed to revise the language to make them reciprocal obligations. Section 8.1 MVTA maintains it will use its best efforts to maintain "standards" but not "levels" of service. By levels we specifically mean the routes, number of routes, general times etc. It is suspected that thiswas a disconnect between MVTA staff and the Board. It was our impression at the meeting that the MVTA Board was agreeable to using its best efforts to maintain the level of service. Recommendation Because of concerns about recent unilateral changes to the consolidation agreement and amended JPA, staff is not making a specific recommendation to the City Council at this time. Budget Impact There is no impact on the City's general fund from the proposed transit service consolidation. The impacts to the City's transit funds are outlined in the draft consolidation agreement. Negotiations are continuing over the numerous issues. Relationship to Vision This item relates to City Goal D. Maintain improve and create strong partnerships with other public and private sector entities. Requested Action A motion directing staff to bring the consolidation agreement as presented or with revisions and amended MVTA JPA back to the Shakopee City Council for adoption in July. Attachments: MVTA agreements AGREEMENT TO CONSOLIDATE PUBLIC TRANSIT SERVICES THIS AGREEMENT ("Agreement") is effective this day of , 2014 ("Effective Date")by,between and among the Minnesota Valley Transit Authority, a municipal joint powers association ("MVTA"), the City of Shakopee, a Minnesota municipal corporation ("Shakopee") and the City of Prior Lake, a Minnesota municipal corporation ("Prior Lake"), (collectively referred to as the"Parties"). RECITALS A. The Parties each operate public transit service pursuant to Minn. Stat. § 473.384 and § 473.388 and other related statutes otherwise known as"Opt-Out"public transit services. B. Minnesota law allows municipalities to act in combination to carry out public functions they are otherwise authorized to perform,including public transit. C. The 2005 Scott County Unified Transit Management Plan("UTMP") and the 2011 Office of Legislative Auditor report identified the combining of Opt-Out transit providers as a means to enhance the cost-effective provision of public transit services. D. The Parties have closely reviewed their existing grants, service agreements, short and long term capital and operational costs and mutual relationships with essential public transit partners such as the Metropolitan Council; Scott County; and the County Transit Improvement Board("CTIB"). E. Technical and Elected Work Groups formed by the Parties have carefully reviewed financial and operational issues and have agreed on certain Guiding Principles that are based on a community approach to services changes and are to be followed with the consolidation of the public transit services of the Parties. Those Guiding Principles are attached to this Agreement as Exhibit A and incorporated into this Agreement. F. Based on these premises and on the terms and conditions set forth below, the Parties deem it to be in their best long term interests to consolidate their respective public transit services and facilities under the terms and conditions set forth below and for Prior Lake and Shakopee to become members of the MVTA, creating an expanded MVTA public transit service operation. NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the Parties agree as follows: 1. Recitals. The Recitals are made a part of this Agreement. 2. Agreement Effective Date; Full Transit Service Consolidation. 2.1 The Parties acknowledge that this Agreement shall not have any force and effect until it is (i) duly signed by authorized signatories of the MVTA Board and by Prior Lake 1 and Shakopee, upon approval of their respective councils of both this Agreement and of that certain Third Amended and Restated Joint Powers Agreement of the Minnesota Valley Transit Authority("JPA") attached as Exhibit B and(ii) each of the MVTA members has ratified this Agreement by their respective authorized written signatures on the JPA. The Parties further acknowledge that the consolidation of public transit services contemplated by this Agreement requires the transfer and assignment of all rights, title and ownership interests in those assets of Prior Lake and/or Shakopee used in the operations of their transit services, including but not limited to dedicated funds for such services, and requires the consent of third parties such as the Met Council, the Shakopee Mdewakanton Sioux Community and Scott County as to grants, leases or service agreements. The Parties have reviewed the terms and conditions governing such necessary assignments and transfers and believe that each shall be approved as needed to effectuate this consolidation. The Parties also agree that all such transfer of these and other necessary conditions to the consolidation of transit services may not be completed by the date the last MVTA member signs the WA. Notwithstanding the above, the Effective Date of this Agreement shall be the date of the signature of the last MVTA member to approve the JPA as set forth in Exhibit B. Unless each of the MVTA members sign the JPA made part of this Agreement,this Agreement shall not have any force or effect. 2.2 On the Effective Date, this Agreement shall be enforceable and the Parties shall diligently proceed towards the achievement of full consolidation of what were separate MVTA and Prior Lake/Shakopee Opt-Out transit services into a fully consolidated system operated by the MVTA, with nine JPA members ("Transit Service Consolidation"). 2.3 The Parties shall use their best efforts to achieve full Transit Service Consolidation by,but no sooner than,January 1,2015 ("Consolidation Date"). 3. Actions upon Effective Date. The Parties agree that if not already completed by the Parties by the Effective Date, as soon after the Effective Date as possible and no later than the Consolidation Date, the following shall occur and/or continue until to completion by the identified Party below: 3.1 MVTA shall issue customer notices, provide all necessary driver and related training to personnel operating bus services for Prior Lake and Shakopee in accordance with the Work Plan set forth in Exhibit C, and issue scheduling modifications as set forth in Exhibit C, attached and incorporated into this Agreement. 3.2 The Parties shall complete all necessary transfers and assignments to MVTA of all right, title and interest in Prior Lake and Shakopee assets and funds used in transit operations, including obtaining all necessary consents of third parties. A checklist of said rights, funds and equipment to be transferred is attached as Exhibit D. Prior Lake and Shakopee further agree to do all things necessary to effectuate future transfers and assignments that may be necessary for the Transit Service Consolidation contemplated by this Agreement. 2 3.3 MVTA shall provide all necessary notices to and filings with all public, private and regulatory bodies of the consolidation and Consolidation Date and shall do all things necessary to complete the ministerial requirements of the Transit Service Consolidation. 3.4 Prior Lake and Shakopee representatives to the MVTA Board and MVTA committees shall be fully participating in MVTA matters. 3.5 Prior Lake and Shakopee shall ensure that their joint transit services are in compliance with regional policies, including but not limited to fares on the Shakopee Circulator, and do all things necessary to correct any noncompliance prior to MVTA's assumption of public transit services as set forth in paragraph 4.2 below, and shall indemnify, defend and hold MVTA harmless on and for any claims, demands, liabilities or proceedings arising out of any failure to bring such services into compliance. 4. Assets and Liabilities; Payable and Receivables; No Warranties. 4.1 If not otherwise completed on the Consolidation Date, all transit related property, real, personal and mixed, and all and every other transit related interest of or belonging to either Shakopee or Prior Lake shall be taken by and deemed to be transferred to and vested in the MVTA without further act or deed. The title to any interest otherwise vested by deed or otherwise in Shakopee or Prior Lake shall not revert or otherwise be impaired by reason of the consolidation. 4.2 On and after the Consolidation Date, all revenue and expenditures incurred for Prior Lake or Shakopee transit operations shall be assumed by or inure to the benefit of MVTA. All such transit accounts payable and receivable incurred by Prior Lake or Shakopee for transit operations prior to the Consolidation Date shall remain as the sole right or responsibility of Prior Lake or Shakopee, or both, as the case may be, and Prior Lake and Shakopee shall indemnify, defend and hold MVTA harmless from and against any claims or liabilities arising out of such payables or receivables incurred before the Consolidation Date. 4.3 Subject to other provisions in this Agreement, MVTA agrees to assume the operations of Shakopee and Prior Lake public transit services on the Consolidation Date. 4.4 Prior Lake and Shakopee shall promptly transfer a minimum fund balance from their joint transit operations equal to 25% of the budgeted 2015 expenditures. Any fund balance exceeding the required minimum fund balance transfer may be expended or legally obligated for transit related expenses, or allocated for liabilities Prior Lake and Shakopee are responsible for pursuant to paragraphs 5.1 and 5.2 herein. The fund balances which are not expended or legally obligated for transit related services, or allocated for a specific purpose as of the Consolidation Date shall be transferred to 3 MVTA as follows: 75%of the required minimum fund balance shall be transferred by February 15, 2015 and the remaining fund balance as per the financial statements shall be transferred by August 15,2015. 4.5 Prior Lake and Shakopee shall transfer their respective rights to the buses and other equipment to be used in the consolidated transit services (list attached in Exhibit D) by the Consolidation Date. Prior Lake and Shakopee make no warranties or representations to MVTA concerning the condition of said leased assets, which are subject to MVTA inspection and approval. Notwithstanding, the foregoing, Prior Lake and Shakopee shall assign to MVTA all rights Prior Lake and Shakopee have in the manufacturer's or other third party warranties applicable to buses and other equipment. 5. Liabilities not Assumed by MVTA. 5.1 MVTA shall not assume any responsibility for claims or demands by third parties against either Prior Lake or Shakopee, or both, relating to their joint transit services, in which such third parties allege breach of contract,negligence, intentional wrongful acts or any other claim giving rise to liability of Prior Lake or Shakopee, or both, where the asserted liability arises prior to the Effective Date of this Agreement, regardless of whether the claim or demand is made after the Effective Date. Such obligations and all issues arising out of said claims or demands shall be the sole responsibility of Shakopee and/or Prior Lake, and they shall defend, indemnify and hold harmless MVTA from any and all claims or demands arising thereunder. On and after the Effective Date, Prior Lake and Shakopee agree that they shall promptly provide MVTA with notice of all proposed transit service contracts or other pending transactions to allow MVTA to work with Prior Lake and Shakopee, or both, to negotiate said contracts or transactions. Unless otherwise agreed,MVTA shall be the signatory on all contracts entered relevant to transit services provided by or for either Prior Lake or Shakopee. 5.2 If any discrepancies are found in the collection or expenditure of transit funds either in the audit described in paragraph 17 below, or otherwise, Prior Lake and Shakopee shall be solely responsible for all necessary corrections, penalties, proceedings, costs of investigation or other costs and liabilities arising out of such transit operations revenue collection or expenditure and shall defend, indemnify and hold MVTA harmless therefrom. 6. Shakopee and Prior Lake Membership in MVTA. On the Effective Date and unless otherwise provided in this Agreement, Shakopee and Prior Lake shall become members of the MVTA on the terms and conditions set forth in the JPA and Bylaws as they may be amended from time to time, and fully participate at the MVTA Board and committee levels on an equal basis as the other seven MVTA members. 7. Minimum Length of Initial Membership. Notwithstanding paragraph 11 of the JPA, Prior Lake and Shakopee shall remain a member of MVTA at least until December 31, 4 2017 as provided herein. To effectuate a December 31, 2017 withdrawal, notice of withdrawal by Prior Lake or Shakopee, or both, shall be given to the MVTA Board no later than June 30, 2016. Notice of withdrawal given after June 30, 2016 shall be effective for a December 31, 2018 withdrawal and no earlier. On January 1, 2018, this paragraph 7 shall expire and both Prior Lake and Shakopee may withdraw from the MVTA in accordance with paragraph 11 of the JPA, as it may be amended from time to time. The Parties agree that this initial membership commitment of Prior Lake and Shakopee is necessary to allow for effective consolidation of transit services, including the establishment of CMAQ grant funded additions. 8. System-wide Service Programs and Standards. 8.1 Prior Lake and Shakopee acknowledge and agree that as members of the MVTA, their respective public transit services, individually and in combination, become a part of and subject to the MVTA system-wide standards of service and will not be subject to programs or standards of service applicable only to Prior Lake or Shakopee, or both. MVTA shall use its best efforts to provide the same standard of services to customers of the Prior Lake and Shakopee that are provided as of the Effective Date and as are required to be provided by law to customers in Prior Lake and Shakopee, and to all MVTA customers. When evaluating increases or decreases in service, MVTA shall consider applicable regional standards, such as subsidy per passenger. MVTA's goal is to provide the best service possible to all MVTA customers within the funding guidelines of its operations. 8.2 Prior Lake and Shakopee agree to do all things necessary to effectuate the assignment of their respective rights to MVTA as Subrecipient of funds from those certain Subrecipient Grant Agreements ("SGA") that Prior Lake and Shakopee anticipate receiving in 2014 for the purpose of use on the BlueXpress. Prior Lake and Shakopee further agree to do all things necessary to order SGA funded buses on a timely basis relative to the operative dates in this Agreement. MVTA agrees to perform and complete the"Workscopes" as defined and described in the SGAs,to comply with all other SGA terms and conditions, and to use the SGA funds in accordance with SGA terms. 8.3 In the event MVTA seeks to eliminate a route in Prior Lake and/or Shakopee, the MVTA shall, for all routes, regardless of type of ridership, utilize the Major Service Change Policy found in MVTA's Title VI Plan, attached hereto is Exhibit E and incorporated into this Agreement. This Policy is found in FTA Circular 4702.1B, Chapter IV-12, as it may be amended by the FTA from time to time, and found in (http.//www.fta.dot.gov/legislation law/12349 14792.html) and specifically includes, but is not limited to,public outreach as required in the Policy. Prior to eliminating a route that is the subject of this subparagraph, the MVTA Board must approve the service equity analysis for Major Service Changes as provided in the Plan. 9. Long Range Service Plan. At the earliest possible time, MVTA agrees to conduct a transit market study for northern Scott County to evaluate existing service, connections, 5 and unmet needs. The Scott County Transit Operations and Capital Plan will be used as the starting point of this study. The results of this study will be prioritized and used as the basis for service in northern Scott County. Should Scott County enact a transit sales tax or join CTIB, the sales tax dollars allocated to Scott County will be used to operate this service. 10. Return of Assets upon Withdrawal. 10.1 The Parties acknowledge that based on assumptions contained in that certain financial analysis conducted by Springsted dated April 11,2014, reserves of each of the Parties as separate public transit entities, or as consolidated hereby, may be depleted within the first three years of the consolidation. MVTA will not own any additional physical assets as a result of the consolidation. If Prior Lake and/or Shakopee withdraw pursuant to section 7 above, Prior Lake and Shakopee shall be responsible to work with the Met Council and other parties to effectuate transfers and otherwise re-establish all necessary funding for the delivery of public transit services as independent Opt-Outs after withdrawal. MVTA will cooperate in • assisting Prior Lake and Shakopee: (i) to effectuate the transfer of vehicle leases to Prior Lake and/or Shakopee of the buses transferred to MVTA as part of this consolidation or buses of equal quality, recognizing that the subject buses are owned by the Met Council; (ii) to effectuate the transfer of leases or negotiation of use agreements for park and ride facilities between Prior Lake and/or Shakopee and Scott County and the Shakopee Mdewakanton Sioux Community, (iii) in support of their requests to the Met Council for new funding after withdrawal from the MVTA in amounts necessary for each city, or both in combination, to reestablish independent transit services at appropriate levels. 10.2 MVTA agrees to work with Met Council and the withdrawing Party or Parties to determine fleet reassignments of"like buses in similar condition." 10.3 MVTA also agrees to work with Scott County and do all necessary acts to assign MVTA rights in the facilities to the withdrawing Party or Parties effective the date of withdrawal. 11. Party Representation of Rights to Provide Transit Services. The Parties represent and warrant to each other that as of the Effective Date, they are duly authorized to operate as "Opt-Out" public transit providers and have authority to do all things necessary to fulfill their respective duties in the provision of public transit services to the public. They further warrant that the terms of this Agreement and the act of entering into this Agreement do not impair their rights to provide "Opt-Out" services or otherwise breach a covenant in any contracts entered into or grants received that would affect MVTA and its ability to continue public transit services in the Shakopee and Prior Lake service areas, or in other MVTA service areas. 12. No Threatened Litigation. Shakopee and Prior Lake are aware of no threatened litigation that could affect MVTA rights and obligations to carry out public transit services after the Effective Date. Shakopee and Prior Lake agree to defend, indemnify and hold MVTA harmless from and against any and all claims that may be brought after 6 the Effective Date that arose out of acts and omissions of Shakopee and/or Prior Lake that occurred prior to the Effective Date. 13. Employee Impact. Shakopee and Prior Lake agree that each is responsible for any and all impacts on employees affected by this Agreement,if any, and shall defend, indemnify and hold harmless the MVTA from any and all claims by their employees arising out of this consolidation of transit services. 14. Appointed Board Commissioners, Alternates. Prior Lake and Shakopee shall, by the Effective Date, appoint a commissioner and alternate to the MVTA Board as set forth in the Third amended and Restated Joint Powers Agreement of the Minnesota Valley Transit Authority. 15. No Separate Operational Staff. After the Effective Date, all MVTA operations shall be carried out by MVTA staff as constituted on the Effective Date and as it may be expanded or contracted from time to time thereafter. 16. Start-Up Costs. The Parties have identified certain actions that have been or will be necessary to effectuate the consolidation of Prior Lake and Shakopee transit services with MVTA. Costs and estimated costs for these actions include, but are not limited to, those items listed in Exhibit F, attached and incorporated into this Agreement. MVTA agrees to assist Prior Lake and Shakopee in carrying out these actions and Prior Lake and Shakopee agree to assume all reasonable costs associated with these actions. 17. Audit. As part of the standard annual audit for the calendar year ending December 31, 2014, Shakopee and Prior Lake shall include an audit of their respective transit funds. Prior Lake and Shakopee shall direct its auditors to conduct a sufficiently in-depth review of fare collection and transit expenditures to provide MVTA with assurance of Prior Lake and Shakopee compliance with any and all applicable federal and state requirements through December 31, 2014 and with generally accepted accounting principles. Additional audit costs incurred, if any, for the foregoing transit funds audit shall be considered start-up costs and included in Exhibit F. 18. Counterparts. This Agreement may be executed in any number of counterparts and each executed counterpart shall be deemed to be an original instrument. IN WITNESS WHEREOF, the authorized signatories below bind the parties on whose behalf they signed as of the date indicated. 7 Adopted this day of ,2014 MVTA BOARD OF COMMISSIONERS By: Its: Chair ATTEST: By: Its: Executive Director STATE OF MINNESOTA ss. COUNTY OF DAKOTA On this day of 20 , before me a Notary Public within and for said County personally appeared fit and , to be personally known, who being each by me duly sworn, each did say that they are respectively the Chair and Executive Director of the MVTA BOARD OF COMMISSIONERS, the joint powers association named in the foregoing instrument, and that the seal affixed to said instrument was signed and sealed in behalf of said joint powers association by authority of its Board, and said Chair and Executive Director acknowledged said instrument to be the free act and deed of said joint powers association. 8 Adopted this day of ,2014 CITY OF PRIOR LAKE By: Its: ATTEST: By: Its: STATE OF MINNESOTA ss. COUNTY OF SCOTT On this day of 20 , before me a Notary Public within and for said County personally appeared fit and , to be personally known, who being each by me duly sworn, each did say that they are respectively the Mayor and Clerk of the CITY OF PRIOR LAKE,the municipality named in the foregoing instrument, and that the seal affixed to said instrument was signed and sealed in behalf of said municipality by authority of its City Council, and said Mayor and Clerk acknowledged said instrument to be the free act and deed of said municipality. 9 Adopted this day of ,2014 CITY OF SHAKOPEE By: Its: ATTEST: By: Its: STATE OF MINNESOTA ss. COUNTY OF SCOTT On this day of 20 , before me a Notary Public within and for said County personally appeared fit and , to be personally known, who being each by me duly sworn, each did say that they are respectively the Mayor and Clerk of the CITY OF SHAKOPEE, the municipality named in the foregoing instrument, and that the seal affixed to said instrument was signed and sealed in behalf of said municipality by authority of its City Council, and said Mayor and Clerk acknowledged said instrument to be the free act and deed of said municipality. 10 Exhibit A Guiding Principles for Consolidated MVTA,Prior Lake, and Shakopee Transit Services The following are transit services goals and standards the MVTA seeks to achieve or carry out, as adopted by the Technical and Elected Official Consolidation Work Groups comprised of representatives from MVTA,Prior Lake and Shakopee: 1. Focus on customer service and strive to increase service and partnerships 2. Maintain existing level of all services while seeking to raise the level of all services 3. Maintain and upgrade existing capital assets 4. Review overall service plan (express, local, and unmet needs),update plan and consider service adjustments 5. Establish priorities based on updated service plan Exhibit B Third Amended and Restated Joint Powers Agreement of the Minnesota Valley Transit Authority (Effective upon the date of signature of the last MVTA member to approve.) THIRD AMENDED AND RESTATED JOINT POWERS AGREEMENT OF THE MINNESOTA VALLEY TRANSIT AUTHORITY THIS THIRD AMENDED AND RESTATED JOINT POWERS AGREEMENT ("Agreement") is by and among the Cities of Apple Valley, Burnsville, Eagan, Prior Lake, Rosemount, Savage, and Shakopee ("Cities") municipal corporations organized under the laws of the State of Minnesota, and Dakota County and Scott County ("Counties"), political subdivisions under the laws of the State of Minnesota. This Agreement amends, restates and replaces the Minnesota Valley Transit Authority ("MVTA") Second Amended and Restated Joint Powers Agreement adopted in October 2012. The Agreement is made pursuant to the authority conferred upon the Parties by Minnesota Statutes, Sections 473.384, 473.388, and 471.59 and related statutes. WHEREAS, since 1990, the MVTA has operated as a legislatively-authorized "opt-out" provider of Metropolitan Transit Service in and for the areas of cities that have been members of the MVTA; WHEREAS,the Cities of Prior Lake and Shakopee seek to add their public transit services to the MVTA by becoming members of the MVTA and continue the provision of high quality transit services to their customers through the MVTA; WHEREAS, the MVTA, by and through its board and constituent members, seeks to add Prior Lake and Shakopee as new MVTA members and incorporate their public transit services and customer service areas into the MVTA while maintaining high quality services to those customers in Prior Lake and Shakopee as well as to those in the MVTA's service area existing prior to this merger of transit services;and WHEREAS,the MVTA also seeks to amend the Agreement to simplify the process under this Agreement of future addition or subtraction of MVTA members. NOW, THEREFORE, BE IT RESOLVED, in consideration of the mutual covenants contained herein, it is hereby agreed by and among the Cities and Counties: 1. Name. The name of this joint powers organization is the Minnesota Valley Transit Authority, also known as the MVTA. 2. Purpose. The purpose of this Agreement is to provide public transit service in and for persons within the Cities and within the Metropolitan Area pursuant to Minnesota Statutes, Sections 473.388,473.384,471.59 and related statutes. 3. Definitions. (A) "MVTA"means the organization created by this Agreement. (B) "BOARD" means the Board of Commissioners of the MVTA. (C) "MVTA BOND BOARD"means the board established under Section 6 of this Agreement. (D) "METROPOLITAN COUNCIL" means the Metropolitan Council as • established by Minnesota Statutes, Section 473.123. (E) "PARTY" or "PARTIES" means any one or more of the Cities or Counties that has entered into this Agreement, and cities or counties that may become Parties subsequent to the effective date of this Third Amended and Restated Agreement. Each Party to the Agreement is a member of the MVTA. (F) "TECHNICAL WORK GROUP" is a committee consisting of one staff member of each City and County represented on the Board,which shall act as technical advisors to the Board. 4. Party Addition or Withdrawal. After the effective date of this Agreement, if new Parties join the MVTA or existing Parties withdraw and no other amendment is made to this Agreement at the time, the following process shall be used for such addition or withdrawal. New MVTA Parties shall be added to this Agreement upon the filing with the MVTA of a resolution duly adopted by the new Party or Parties agreeing to the terms of this Agreement, as it may be amended from time to time, and upon the filing of a resolution by each then existing MVTA Party, approving the addition of the new Party. All such resolutions shall be attached and become a part of this Agreement. Party withdrawal shall be effectuated in accordance with paragraph 11 of this Agreement. Upon the effective date of such withdrawal,the notice of withdrawal shall be attached to and become a part of this Agreement. No change in governmental boundaries, structure, organizational status or character shall affect the eligibility of any Party to a member of the MVTA so long as such Party continues to exist as a separate political subdivision. 5. Board of Commissioners. (A) Except as otherwise provided under Section 6 hereof, the governing body of the MVTA shall be its Board which will consist of a representative of each MVTA Party as provided in this Agreement. Each Party shall appoint one commissioner, one alternate commissioner, and a staff member who shall serve on the Technical Work Group. The alternate commissioner and the Technical Work Group member may be the same person. The commissioner appointed by each Party shall be a member of that Party's governing body;the alternate commissioner need not be a member of the Party's governing body. Each Party has one vote. If a Party's commissioner is not present at a meeting of the Board of Commissioners, the alternate may vote. Metropolitan Council members who represent the Cities of the MVTA may serve as non-voting ex officio members of the Board. The terms of office of each commissioner and alternate commissioner shall be determined by the Party making the appointment. In January of each year, or as soon thereafter as the Party representatives to the Board are appointed, the Party shall provide to the MVTA in writing the name(s) of the appointed representative(s). (B) A commissioner or alternate may be removed by the Party appointing the commissioner with or without cause. (C) Commissioners and alternates shall serve without compensation from the MVTA. (D) A majority of the MVTA commissioners (including alternates, in the absence of commissioners) shall constitute a quorum of the Board. Attendance by a quorum of the Board shall be necessary for conducting a meeting of the Board. The Board may take action at a meeting upon the affirmative vote of a majority of the commissioners present at a meeting, (E) The Board may adopt Bylaws to govern its meetings. (F) As the first order of business at the January meeting of each year, the Board shall elect a chair, a vice chair, a secretary-treasurer, and such other officers as it deems necessary to conduct its business and affairs. The current chair shall facilitate these elections. In the event that the current chair is no longer his/her Party's representative to the MVTA, the vice chair shall facilitate the election process. In the event that both the vice chair and chair are no longer its Party's representative to the MVTA, the Board shall decide on another Board member to preside over the elections. The newly-elected chair shall then preside over the remainder of the meeting, and all meetings henceforth until a new chair is elected. In no event may an alternate commissioner act as an officer of the Board in the absence of the commissioner who holds that office. 6. MVTA Bond Board. (A) There is hereby established the board designated as the "MVTA Bond Board." The MTVA Bond Board shall consist of a representative of each MVTA Party, each of whom is a member of the respective Parties' governing body, and is each Party's appointed commissioner on the Board. If both the Board commissioner and the Board alternate appointed by a Party are members of that Party's governing body, only the designated commissioner shall represent that Party on the MVTA Bond Board. In no event shall any alternate commissioner on the Board serve in any capacity on the MVTA Bond Board. The terms of office of each member of the MVTA Bond Board shall be the same as their terms on the Board,determined by each Party as described in Section 5(A). (B) The MVTA Bond Board may issue bonds or obligations on behalf of the Parties,under any law by which any Party may independently issue bonds or obligations, and may use the proceeds of the bonds or obligations to carry out the purposes of the law under which the bonds or obligations are issued; provided that such bonds or obligations shall be issued only to carry out the powers and duties of MVTA described in Section 7 hereof. (C) The MVTA Bond Board may issue bonds and obligations only in accordance with express authority granted by the action of the governing bodies of each Party, which bodies must each approve the Bond Board decision to issue bonds and obligations. The MVTA may not pledge the full faith and credit or taxing power of any Party to any bonds or obligations issued by the MVTA Bond Board. The bonds or obligations must be issued in the same manner and subject to the same conditions and limitations that would apply if the bonds or obligations were incurred by one of the Parties,provided that any reference to a governmental unit in the statute, law, or charter provision authorizing issuance of the bonds or obligations is considered a reference to the MVTA Bond Board. (D) A member of the MVTA Bond Board may be removed by the Party appointing that member with our without cause; provided that if a member is removed from the MVTA Bond Board,that person shall also be deemed removed from the Board; and if a member is removed from the Board, that person shall be deemed removed from the MVTA Bond Board. (E) The rules for compensation under section 5(C) and for a quorum under section 5(D)also apply to the MVTA Board. (F) Bylaws adopted by the Board under Section 5(E) also apply to the MTVA Board. (G) The officers of the MVTA Bond Board shall be the same as the officers of the Board described in Section 5(F). 7. Powers and Duties of the MVTA. (A) General. The MVTA has the powers and duties to establish a program pursuant to Minnesota Statutes, Sections 473.384 and 473.388 to provide public transit service for persons within the Parties and on such routes within the Metropolitan Area that the MVTA may operate to provide such service pursuant to the authority granted the MVTA under Minnesota Statutes, Sections 473.384, 473.388, 16A.88, and other applicable statutes, if any. The MVTA shall have all powers necessary to discharge its duties. (B) The MVTA may acquire, own, hold, use, improve, operate, maintain, lease, exchange, transfer, sell, or otherwise dispose of equipment, property, or property rights as deemed necessary to carry out the purposes of the MVTA. (C) The MVTA may enter into such contracts to carry out the purposes of the MVTA. (D) The MVTA may establish bank accounts as the Board shall from time to time determine. (E) The MVTA may employ an executive director whose duties shall be to administer policies as established by the MVTA. The executive director shall be an employee of the MVTA. The MVTA shall hire and terminate personnel and provide for compensation,insurance, and other terms and conditions that it deems necessary. (F) The MVTA may enter into a contract for management services. (G) The MVTA may sue or be sued. (H) The MVTA shall cause to be made an annual audit of the books and accounts of the MVTA and shall make and file the report to its Parties at least once each year. (I) The MVTA shall maintain books, reports, and records of its business and affairs which shall be available for and open to inspection by the Parties at all reasonable times. (J) The MVTA may contract to purchase services from any one of the Parties. (K) The MVTA may finance the acquisition of any real or personal property under a lease-purchase agreement pursuant to Minnesota Statutes, Section 465.71, including without limitation through issuance of certificates of participation in such lease (together, a"Financing Lease"); and each Party hereby expressly approves and authorizes any Financing Lease entered into by the MVTA on behalf of the Parties. 8. Operating and Capital Costs, Budgets, and Financial Liability. The MVTA shall have a fiscal year beginning January 1 and ending December 31. The executive director shall prepare an estimated budget for the next fiscal year including an estimate of expenditures, operating costs, capital costs and revenues and submit it to the Board for preliminary approval. The executive director shall also submit the preliminary budget to the Parties for comment within thirty (30) days of the date of submittal. The budget shall be deemed approved by a Party unless the Party objects to the preliminary budget within said thirty (30) days. The Board shall approve, or approve as modified, a final budget and submit the final budget by December 15 to the Metropolitan Council for approval. The Board may adjust the budget from time to time on the basis of actual costs incurred or changes in estimated revenue or expenditures. In the event of an adjustment of the budget, the Board shall furnish to each Party a computation of the adjustment. 9. Indemnification. Except as may be otherwise provided in this Agreement, the Parties transfer to the MVTA all responsibility and control for actions taken pursuant to this Agreement. The MVTA shall defend and indemnify the Parties, and their officers, elected officials, employees, and volunteers, from and against all claims, damages, losses, and expenses, including attorney's fees, arising out of the acts or omissions of the Joint Powers Board or the Bond Board in carrying out the terms of this Agreement or acts or omissions otherwise occurring in the course of carrying out MVTA operations. This Agreement does not constitute a waiver of the limitations of liability set forth in Minnesota Statutes, Section 466.04. Nothing herein shall be construed to provide insurance coverage or indemnification to an officer, employee, or volunteer of any Party for any act or omission for which the officer, employee, or volunteer is guilty of malfeasance in office, willful neglect of duty, or bad faith. To the fullest extent permitted by law, actions by the Parties to this Agreement are intended to be and shall be construed as a"cooperative activity" and it is the intent of the Parties that they shall be deemed a "single governmental unit" for the purposes of liability, as set forth in Minnesota Statutes, Section 471.59, subd. la(a), provided further that for purposes of that statute, each Party to this Agreement expressly declines responsibility for the acts or omissions of another party. The parties to this Agreement are not liable for the acts or omissions of another Party to this Agreement except to the extent they have agreed in writing to be responsible for such acts or omissions of the other Parties. 10. Insurance. The MVTA shall purchase liability insurance coverage to cover the activities of the MVTA. The MVTA shall provide all Parties with copies of the liability insurance coverage documents. The liability insurance coverage shall provide all Parties with sixty (60) days notice of cancellation, material change or termination of coverage. In the event the liability insurance coverage is cancelled, or otherwise becomes unavailable, the MVTA shall procure similar liability insurance coverage from another entity. The MVTA shall purchase insurance in addition to liability insurance in such amounts and on such terms as the MVTA shall determine. 11. Duration of Agreement. This Agreement shall continue in force from the effective date of this Agreement from year to year, subject to termination by all Parties. Withdrawal by any Party or Parties shall not affect the duration of this Agreement unless and until all Parties duly terminate this Agreement and dissolve the MVTA. Party withdrawal shall be initiated by serving written notice upon the MVTA no later than February 15' of the year at the end of which such Party withdrawal is to be effective. Withdrawal from the Agreement by any Party at the end of the calendar year shall not affect the obligation of that Party to perform the Agreement during the period it remains a Party to the Agreement. Withdrawal of any Party or termination of the Agreement by all Parties shall not terminate or limit any liability, contingent, asserted or unasserted, of any Party arising out of that Party's participation in the Agreement. In the event a Party withdrawal or other change renders one or more provisions of this Agreement inapplicable, those inapplicable provisions shall be severed from the Agreement and the balance of the Agreement shall remain in full force and effect. 12. Distribution of Assets. (A) In the event of the withdrawal of any Party from this Agreement and subject to the return of assets set forth in subparagraph 10.1 of that certain Agreement to Consolidate Public Transit Services dated , 2014, attached as Exhibit A, the withdrawing Party shall not be reimbursed for or be entitled to the return of any costs incurred for, or contributions of property made to, the MVTA. The MVTA and the withdrawing Party shall do all things necessary to effectuate promptly the reimbursement or other form of property transfer agreed upon. The withdrawing Party shall be responsible for all reasonable costs incurred by the MVTA in effectuating the reimbursement or property transfer. (B) In the event of termination of this Agreement by all Parties, all of the assets that remain, if any, after payment of debts and obligations that are not required by terms of state statutes, federal statutes, or contracts with the Metropolitan Council or federal agencies to be available for regional use for transit purposes or to be transferred to the Metropolitan Council or federal agencies, shall be distributed among the Parties to this Agreement immediately prior to its termination in accordance with the following formula: Each Party shall receive that percentage of remaining assets determined by dividing the total then current asset value the receiving Party contributed to the MVTA by the total remaining asset value contributed by all the Parties that are Parties to this Agreement immediately prior to its termination. (C) The amount of the distribution to any Party pursuant to this Agreement, including upon withdrawal, shall be reduced by any amounts owed by the Party to the MVTA. 13. Effective Date. This Agreement shall be in full force and effect when all Parties sign this Agreement as amended and restated herein. This Agreement may be signed in counterpart. The signed Agreement shall be filed with the executive director,who shall notify all Parties at the earliest Board meeting of its effective date. IN WITNESS WHEREOF, the undersigned government units, by action of their governing bodies, have caused this Agreement to be executed in accordance with the authority of Minnesota Statutes, Section 471.59. Adopted this day of ,2014 CITY OF APPLE VALLEY By: Its: ATTEST: By: Its: STATE OF MINNESOTA ss. COUNTY OF DAKOTA On this day of 20 , before me a Notary Public within and for said County personally appeared fit and , to be personally known, who being each by me duly sworn, each did say that they are respectively the Mayor and Clerk of the CITY OF APPLE VALLEY,the municipality named in the foregoing instrument, and that the seal affixed to said instrument was signed and sealed in behalf of said municipality by authority of its City Council, and said Mayor and Clerk acknowledged said instrument to be the free act and deed of said municipality.