HomeMy WebLinkAboutStaff Report 6997
City of Palo Alto (ID # 6997)
City Council Staff Report
Report Type: Action Items Meeting Date: 10/4/2016
City of Palo Alto Page 1
Summary Title: Provide Direction for Citywide Bike Share System
Title: Review Options and Provide Direction for Citywide Bike Share System
Operated by Motivate, LLC and Finding That the Project is Exempt From
Review Under Sections 15061(b) (3) and 15303 of the California
Environmental Quality Act Guidelines
From: City Manager
Lead Department: Planning and Community Environment
Recommendation:
Staff recommends that the City Council direct staff to return to the City Council with a contract
to implement a 350-bicycle, Social Bicycles (SoBi) smart-bike system, operated by Motivate, LLC
as part of the Bay Area Bike Share System (BABS), and structured to allow for the participation
of other Peninsula cities and private entities. Staff also recommends Council find the project
exempt from review under Sections 15061(b) (3) and 15303 of the California Environmental
Quality Act Guidelines.
Executive Summary:
The City’s first experiment with a bike share program, implemented as part of a regional pilot
program, has not yielded the desired ridership numbers, due in large part to the low quantity of
bicycles and stations included in the initial system. Together with other cities on the Peninsula,
Palo Alto has been assessing opportunities to deploy a new, broader program, with a greater
potential for significant ridership using GPS enabled smart-bikes from SoBi. After a concerted
effort by Peninsula communities to move forward with an interoperable smart-bike system,
Motivate, LLC has agreed to operate SoBi equipment on the Peninsula as part of the regional
BABS system. Staff is seeking Council direction to negotiate an agreement with Motivate for a
bike share program using SoBi equipment to replace the current system and launch in June
2017. All new bike share equipment would be purchased by the City and ongoing operational
costs would be covered by Motivate for the term of the agreement. The total cost to the City
for capital equipment and installation is $1,160,803. The rollout of a citywide bike share
program is anticipated to require .5 to 1 new full-time employee not anticipated in the fiscal
year 2017 budget.
City of Palo Alto Page 2
Background:
The Metropolitan Transportation Commission (MTC) and Motivate, LLC entered into an
agreement on December 31, 2015 that included a large scale expansion of the Bay Area Bike
Share system from 700 bikes to 7,055 bikes. Peninsula communities that participated in the
pilot program were not included in the privately funded expansion underway in San Francisco,
San Jose, Oakland, Emeryville, and Berkeley. Palo Alto, Mountain View and Redwood City were
offered the ability to buy into the regional system by purchasing capital equipment, funding
ongoing operations, with minimal station-based advertising as the only mechanism to offset
ongoing operational fees.
At a study session on April 25, 2016, Council discussed bike share in the Peninsula and the
findings of a bike share strategic plan written by Toole Design Group on behalf of SamTrans.
The staff report (Attachment A) summarized the performance of the Motivate pilot on the
Peninsula and analyzed the cost to expand the current system, versus replacing it with a SoBi
smart-bike system. The report concluded that GPS-enabled smart-bikes are more cost effective
for Peninsula cities and more appropriate for land use patterns on the Peninsula as bikes are
not constrained by fixed dock locations.
Point-to-point, dock style bike share systems are better suited to high-density areas where
stations are located close together. The National Association of City Transportation Officials
(NACTO) recommends that bike share stations be located within a three- to five- minute walk of
each other. Outside of downtown Palo Alto and the California Avenue business district, this
type of station density would be infeasible in Palo Alto. The verbatim minutes from this Council
study session are included as Attachment B. On June 20, 2016, the Council approved a Program
Agreement to enable the existing Motivate, LLC-operated bike share system to remain in place
through November 30, 2016 (Attachment C).
Following the April 25, 2016 study session, staff pursued development of a term sheet with SoBi
to replace the City’s existing 37-bike system with a fleet of 350 GPS-enabled smart-bikes with
approximately 35 hubs located citywide. Since May 2016, staff has been participating in
regional discussions with neighboring Peninsula communities in an effort to ensure
coordination of an interoperable smart-bike system for the Peninsula.
While Motivate was initially reluctant to operate SoBi smart-bikes as part of the regional bike
share system, as it became clear that Peninsula communities were moving towards a sub-
regional system, and as Motivate had a favorable experience with SoBi equipment in its
Portland system, the company reconsidered its position. The Managers’ Mobility Partnership
held various meetings to convene staff and City Managers from Menlo Park, Mountain View,
Palo Alto and Redwood City to align on bike share and negotiate with Motivate as one entity.
Motivate has offered to fully fund the operating costs of a 350 bike SoBi system in Palo Alto.
Under the terms of this new proposal, the City would be responsible for up-front capital costs
for bicycles and hub equipment provided by SoBi ($1,160,803) (Attachment F) and Motivate
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would operate a 350 bike system for the life of the contract. Motivate has agreed to operate
SoBi equipment on the Peninsula and will allow neighboring communities to participate under
similar terms (Attachment E). Like Palo Alto, neighboring communities would be responsible for
capital and installation costs. However, Motivate has committed to two potential funding
scenarios to address operating costs in neighboring Peninsula communities. The first scenario is
to fully fund up to 350 bikes in each community based on support from the title sponsor,
recently announced to be the Ford Motor Company. Motivate has committed to making a
decision on this option by October 31, 2016. If Motivate does not fund operations of other
Peninsula systems, it has committed to allocating nearly all sponsorship assets to offset
operations costs to Peninsula cities (Attachment E). Sponsorship assets include the bicycle, bike
basket panels, hub eq uipment, skirt guard and signage at hub locations. The second option
would require a $100 per bike monthly operating fee paid by Peninsula cities.
Discussion:
A Motivate-operated SoBi system would require City funding for upfront capital costs such as
bicycles hub equipment, and installation costs. Total capital costs for a 350-bike system are
$1,160,803. Of this total capital cost, $171,429 would be covered by a TFCA grant through the
Santa Clara Valley Transportation Authority. The City would not be responsible for operational
costs, as Motivate, LLC is offering to cover operational costs for up to 350 bicycles for the life of
the contract. A second phase, envisioned for 2018, would add an additional 350 bikes to the
system using MTC funding to cover 88.53% of the capital costs. The City would then begin to
pay $420,000 per year in ongoing operating fees for the additional 350 bicycles.
Term Sheet:
If directed by Council to enter negotiations with Motivate for an expansion of a new SoBi bike
share program, staff will return to City Council in December 2016 with a contract. A six- to
seven-month period to launch the bike share system is anticipated from the time of equipment
purchase. The launch process would include a public outreach campaign, a suggest-a-hub
website, discussions with private property owners, and acquisition of encroachment permits.
Existing bike share equipment will remain in place to prevent a gap in service, while moving
forward with a full-scale replacement system.
Table 1. Estimated Launch Timeline
October – December 2016: Negotiation with Vendor & Contract Approval
December/January 2016: Purchase Order for Bicycles & Hub Equipment
February 2017: Station Siting Website & Public Outreach
May 2017: Equipment Testing & Demonstration Hub
June 2017: Bike Share Launch
Ongoing: Coordination with Private Entities
Ongoing: Coordination with Peninsula Communities & MTC
2018 (Upon Grant Award): Implementation of Phase II
Source: Palo Alto Planning & Community Environment, September 2016
City of Palo Alto Page 4
Proposed System:
The proposed initial system would include 350 smart-bikes distributed at approximately 35
hubs throughout the City. Operations and maintenance would be conducted by Motivate, LLC.
Motivate would be responsible for day-to-day operations of the program, which includes
repositioning the bikes between hubs, repairs, and maintenance of the bikes. SoBi would be in
charge of the web- and application-based membership and reservation system and the revenue
collection and remittance. The title sponsor of Bay Area Bike Share, now to be known as Ford
GoBike, will likely require a high level of customer service, system utilization and maintenance.
Private entities such as Facebook, Google, Stanford University Medical Center, and Stanford
Research Park have all expressed an interest in hosting bike share hubs for their employees.
Stanford University, a Platinum-level Bicycle Friendly University as designated by the League of
American Bicyclists, would be an ideal location for bike share if the university is amenable.
The following factors indicate the potential for a successful bike share program in Palo Alto:
1. The City has a high-quality network of bicycle facilities throughout the City, earning
it a Gold-level Bicycle Friendly Community designation from the League of
American Bicyclists.
2. Palo Alto has an 8.7% bicycle mode share for daily local trips, among the highest in
the nation.
3. The City has committed more than $25 million over the next five years to advance
significant bicycle and pedestrian infrastructure projects.
4. The City is a major jobs center, with a population that grows from 64,403 to over
150,000 daily.
5. The City has a well-established bicycle culture, with five bicycle shops within the
community.
Based on the factors listed above, a utilization rate of one trip per-bicycle per-day has been
identified as a target goal for the Palo Alto bike share program. This goal will give the City a
benchmark to measure success of the program. The City will leverage the data provided to
make adjustments to hub locations, number of bicycles available, bicycle parking and bicycle
facilities to improve ridership in order to reach this goal. The existing bike share program
utilization rate is 0.17 trips per bicycle, per day. Staff believes this is due to an inadequate
number of bicycles and hubs resulting in a small coverage area with a low hub density. The
selected vendor will report to Council semi-annually with an update on system performance
and utilization.
Table 2. Capital Cost Estimate
Item Quantity Price Per Unit Total
Smart Bicycle 350 $1,705 $596,750
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Hub (station) 35 $9,515 $333,025
Program Setup, Shipping N/A N/A $91,028
Station Installation Fee 35 $4,000 $140,000
Total Capital Costs: $1,160,803
Fiscal considerations not included in the table above include:
1. Funding of a City staff position (or a portion of) dedicated to monitoring bike
share program;
2. Replacement of stolen, vandalized, or damaged equipment as necessary;
3. Minor work such as pavement markings, concrete work, parklets, bollards, etc.,
which may be necessary or desirable at popular bike share hubs.
4. Operating costs when the system expands beyond 350 bicycles.
Vendor/Operator Selection Process
The City of Santa Monica went through an extensive, federally compliant, procurement process
that included neighboring jurisdictions to select SoBi equipment for a sub-regional bike share
system which was approved by the Santa Monica City Council in 2014. Given the
comprehensive review process and similar equipment qualities desired in Palo Alto, staff
believes that a new procurement process is unnecessary as it would yield identical results. Palo
Alto’s municipal code allows for sole source awards in section 2.30.360, Exemptions from
competitive solicitation requirements.
Electric Bicycles:
Staff has also been approached by the manufacturer of a solar-powered electric bicycle and
personal mobility device charging system called Swift Mile, based in San Mateo. Electric bicycles
show promise to increase bike share use, particularly in peripheral areas of Palo Alto and also
where topography is not well-suited to bike share use. However, Swift Mile’s equipment has
not been comprehensively tested and may benefit from further testing and development. Staff
has been in communication with Swift Mile regarding a potential small scale demonstration
project that could connect Stanford Research Park employees to the Caltrain California Avenue
Station. SoBi has also been developing a new e-bike option that will be fully compatible with its
system and is currently undergoing product testing.
Fare Structure:
The Motivate fare has been established in the MTC Agreement with Motivate, LLC (Attachment
C) and is $9 per day for unlimited 30 minute rides, $22 for a three day pass, and $149 for an
annual pass. A $3 out-of-hub fee is charged to users who lock bicycles to bike racks outside of
designated hub areas. Hubs are areas where bike share parking occurs, and a geo-fence may be
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created around a hub’s perimeter to enable locking to additional bike racks within a hub with
no penalty. Users that pick up a bike from an out-of-hub area and return it to a hub location
receive a $3 credit to their account. This incentive helps to rebalance the system and reduces
the need for motor vehicle use in daily operations. Some cities have elected to designate entire
intersections as hub areas, allowing bike share users to lock bicycles at hubs or public bicycle
racks without an added fee. Other jurisdictions have designated entire downtown business
districts as a hub, eliminating the out of hub fee for that area.
Regional Bike Share Interoperability:
A Motivate operated bike share expansion would be fully integrated with the regional Bay Area
Bike Share system; however, it would not be immediately compatible with the City of San
Mateo’s Bay Bikes system. Motivate and SoBi may be able to establish membership reciprocity
to enable customers to use both systems until San Mateo joins the regional system.
Bay Area Bike Share Program Agreement:
The Bay Area Bike Share system is administered by the Metropolitan Transportation
Commission (MTC), and operated by Motivate, LLC. A Program Agreement was entered
between Bay Area Motivate, LLC and the MTC on December 31, 2015. The City of San Francisco,
City of Berkeley, City of Oakland, City of Emeryville, and City of San Jose all have Continuation
Agreements that tier off of the overarching master Program Agreement that contain details of
each system. Palo Alto currently has a Program Agreement with Motivate for the existing
system, which expires on November 31, 2016. Staff will return to City Council in the fall with a
clean agreement that contains terms for a SoBi Peninsula system including a “me-too” clause
for neighboring communities with similar terms and pricing. The new agreement will be
completely separate from the MTC Program Agreement. This will enable the City to enter a five
year agreement, with two, three-year extensions in place of the MTC’s ten year existing
agreement. The MTC has also suggested that Peninsula communities enter separate
agreements due to the complexity of the existing MTC Program Agreement (Attachment D).
Policy Implications:
Development of an expanded bike share system is consistent with the following Comprehensive
Plan and Bicycle + Pedestrian Transportation Plan goals, policies and projects:
Comprehensive Plan:
Goal T-1: Less Reliance on Single-Occupant Vehicles
Policy T-3: Support the development and expansion of comprehensive, effective
programs to reduce auto use at both local and regional levels.
Bicycle + Pedestrian Transportation Plan:
PR-5 Bike Share Program
Bike share is consistent with goals outlined in the draft Sustainability and Climate Action Plan
(SCAP) and has emerged as an important area of regional collaboration. Bike share was
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discussed at recent meetings of the City Manager’s Mobility Partnership (MMP), which includes
Stanford University, the City of Menlo Park, the City of Mountain View, the City of Palo Alto, the
City of Redwood City and Joint Ventures Silicon Valley. This has successfully aligned positions on
bike share and enabled Palo Alto to negotiate with Motivate of behalf of the Peninsula.
Resource Impact:
Funding is available for the first year in the Fiscal Year 2017 Adopted Capital Budget for the bike
share program capital costs, operational costs, and local match to the MTC bike share capital
grant in CIP PL-04010, Bicycle + Pedestrian Transportation Plan Implementation. Bike share is in
the planned budget for subsequent years, however, if Council chooses to expand beyond the
350 bikes currently recommended in this report, additional operating budget of approximately
$420,000 per year will be needed. A one-time local match of $114,820 for the MTC grant
would also be needed, as discussed below. The total up front capital costs for a 350-bike,
Motivate/SoBi bike share system is $1,160,803 and includes 350 bicycles, hubs (stations),
program setup, and other associated costs. This estimate does not include minor costs to
replace stolen, vandalized, or damaged equipment; minor work such as pavement markings,
concrete work, parklets, bollards, etc., which may be necessary at some bike share hubs,
estimated to be less than $60,000. Sufficient funding is available in CIP PL-04010 to cover these
costs, as estimated.
Operations & Maintenance:
Motivate will be providing free operations and maintenance for up to 350 bicycles in Palo Alto.
When the bike share system grows beyond 350 bicycles, the City will reimburse Motivate at a
rate of $100 per bicycle, per month for operational costs. At the projected buildout of 700
bikes, the City would be responsible for $420,000 in operating costs annually. These operating
costs are not included in the FY 2017 Adopted Operating Budget and expansion from 350 to 700
bikes would require a subsequent action by the City Council if desired after the initial phase.
Staff Resources:
A large, citywide bike share system will likely need 0.5 to 1.0 new full-time employee at a cost
of approximately $100,000 to $200,000 per year as the bike share program grows in size. A bike
share system operates similar to a public transit system and a staff position would oversee daily
operations, system planning, management of the Motivate contract, grant procurement and
management, coordination with private entities participating in the system, and reporting to
Council on bike share system performance.
Grant Funding:
Staff has submitted a Letter of Interest to the Metropolitan Transportation Commission (MTC)
Capital Bike Share funding requesting $1,001,050 for a second phase of the system to launch in
2018 with up to 350 additional bikes. The MTC Capital Bike Share grant has an 11.47% local
match requirement, which would be $114,820. The City has also been awarded $171,429 in
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TFCA funds with a local match of $740,000, for use on bike share expansion in Palo Alto. TFCA
grant funds can be used to offset the initial capital costs of bike share, and MTC funds can be
used to expand the bike share system in phase two of deployment. Following direction from
Council on bike share, staff will process the funding agreement to enable the allocation of TFCA
funds in anticipation of submitting a purchase order for smart-bikes and station equipment,
which has a manufacturing lead time of up to six months.
Environmental Review:
The proposed bike share project is exempt from the provisions of the California Environmental
Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b) (3) because it can be seen
with certainty that the project will have no significant effect on the environment. In addition,
the project is exempt under Section 15303, which provides a specific exemption for the
construction and location of limited numbers of new small facilities or structures. The
prevalence of bike share in Palo Alto is expected to improve, rather than detract from
environmental conditions, offering an alternative to automobile transport for those who are
able to make use of the system. The only physical footprint of the project would consist of the
assembly of bike hubs, the majority of which will require little or no physical construction.
Attachments:
Attachment A - City Manager Report 6324 Mid-Peninsula Bike Share Study Session April
25, 2016 (PDF)
Attachment B - City Council Meeting Transcript April 25, 2016 (PDF)
Attachment C - City of Palo Alto and Motivate, LLC Program Agreement (PDF)
Attachment D - MTC and Motivate, LLC Bay Area Bike Share Agreement (PDF)
Attachment E - New Motivate Term Sheet with SoBi Bikes (PDF)
Attachment F - Social Bicycles Equipment Cost Proposal (PDF)
Attachment G - SoBi Hardware Overview (PDF)
City of Palo Alto (ID # 6324)
City Council Staff Report
Report Type: Study Session Meeting Date: 4/25/2016
City of Palo Alto Page 1
Summary Title: Update on the Mid-Peninsula Bicycle Sharing System Study
Title: Receive and Review the Report on the Mid-Peninsula Bicycle Sharing
System Study
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that the City Council receive and review the report on the Mid-Peninsula
Bicycle Sharing System Study. This is a study session, and no action is requested.
Executive Summary
Bike Share is a transportation system which provide a fleet of bicycles for use by anyone within
the service area for an established time-based price. Typically, bikes must be picked up and
returned to fixed docking stations, but some systems contain onboard locking systems allowing
users to leave bikes anywhere within the service area. Bike share providers typically price rides
to encourage short trips and funtion as a “last mile” solution for transit riders to reach their
destinations which may be inconvenient or too far for walking or by local transit.
Bike share systems of varying sizes are currently active across the United States and within Palo
Alto and the regional Bay Area Bike Share system. The existing Bay Area Bike Share (BABS)
program is a fixed-station system with 700 bicycles variably distributed across five cities: San
Francisco, Redwood City, Palo Alto, Mountain View, and San Jose. Five stations and 50 bikes are
currently located within the City of Palo Alto. The five city pilot program launced in 2013 under
an agreement between the Bay Area Air Qauality Management District and local parter
agencies to oversee implementation.
Since implemetnation, Motivate, the BABS vendor, monitored system performance and in May
2015 entered into an agreement with the Metropolitain Transportation Commission (MTC) to
expand the system within San Francisco, Oakland, Berkeley, and San Jose with no public
funding. These cities were selected for expansion based on positive correlations between bike
share trips and population density, diversity of land uses, and concentration of bike share
stations.
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Under the terms of this agreement, the remaining Peninsula cities, including Palo Alto may
choose to continue, expand and continue, or discontinue participation in Motivate’s Bay Area
Bike Share system. Continuing or expanding the current system includes both capital and
ongoing costs. Both of which could be completely or partially offset with advertising and/or
increased use based on the terms of the agreement.
As the end of the initial pilot period drew near, Palo Alto, Redwood City and Mountain View
partnered with SamTrans to conduct a study of the various options for bike share in the
Peninsula moving forward. A common desire among all cities is to expand the number of bikes
available and increase the number of destinations accessible to users of the system to
complement transit as an alternative to driving. However, the various alternatives have
differing financial and logistal challenges.
Background
Bay Area Bike Share Program Pilot
The existing Bay Area Bike Share (BABS) pilot program is a 70-station/700-bicycle/1,236-
dock fixed -station regional bicycle sharing system operating in the cities of San Francisco,
Redwood City, Palo Alto, Mountain View, and San Jose in San Francisco, San Mateo, and Santa
Clara Counties.
The five-city pilot program was established using federal Congestion Mitigation Air Quality and
local Transportation Funds for Clean Air resources totalling $4.29 million. The five city pilot
program launced in 2013 under the Bay Area Air Quality Management District (BAAQMD)
administering the program with an intergovernmental agreement between the Santa Clara
Valley Transportation Authority (VTA), San Mateo County Transit (SamTrans), San Mateo
County, and the San Francisco Municipal Transportation Agency (SFMTA). The Air District owns
the equipment and the intergovernmetnal agreement outlines the decision-making process for
decisions affecting the system.
One of the primary and unique goals of the pilot system was to provide a “last mile” connection
for transit riders arriving and departing from the Caltrain stations within the service area.
Despite the many agencies, the system has universal branding, fee structure, and payment
system which allows users to access the system in multiple cities with one membership.
Since implementation, results of system data analysis reveal BABS’s strongest performing city is
San Francisco, followed by Mountain View, San Jose, Palo Alto, and Redwood City. While the
urban form of San Francisco is signficantly different than the other cities, evaluation of
performance data from the Bay Area Bike Share-Peninsula Communities Strategic Plan show a
combination of factors positively correlate with greater bike share trip counts within smaller
systems, such as the Peninsula locations, including: number and of bike share stations, service
area, and to a lesser degree land use diversity and bike share station concentraion. The table
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below shows the breakdown of bikes and use by city. A key performance metrc used to
evaluate bike share systems is the number of trips per bike per day.
City System Statistics Ridership Trips / Bike /
Day
Stations Docks Bikes Trips Percent
San Francisco 35 665 350 321,108 90.7% 2.51
Redwood City 7 115 70 2,007 0.6% 0.08
Palo Alto 5 75 50 3,093 0.9% 0.17
Mountain View 7 117 70 9,989 2.8% 0.39
San Jose 16 264 160 17,956 5.1% 0.31
Total 70 1,236 700 326,915 100% 1.39
Ridership Statistics for Bay Area Bike Share (September 1, 2014 to August 31, 2015) Source: Bay Area Bike Share-Peninsula
Communities Strategic Plan
In response to performance data and projections, Motivate, the current BABS operator and the
Metropolitain Transportation Commission (MTC) agreed to expand the existing system to 7,000
bikes within San Francisco, Oakland, Berkeley, and San Jose without public funding. As part of
this agreement, the Peninsula cities, including Palo Alto, that participated in the pilot program,
may continue the bike share program but must pay a monthly premium to retain the current
number of bikes and pay capital and operations costs for system expansion. The costs to
continue or expand the existing system are included in Attachment A. If the Peninsula cities
elect not to continue to participate in Bay Area Bike Share, the pilot will come to an end on June
30, 2016 and Motivate will remove the five existing stations within Palo Alto during the first
week of July. The pilot program has already been extended through agreement from December
31, 2015 to June 30, 2016. Motivate has requested official notification from the Peninsula cities
by May 31, 2016.
Bay Area Bike Share – Peninsula Communities Strategic Plan
In October 2015, the Metropolitan Transportation Commission released funding to SamTrans to
help Redwood City, Palo Alto, and Mountain View make a decision on how to move forward
with bike share after the end of the Bay Area Bike Share pilot on June 30, 2016. This plan,
scheduled for completion in May 2016, provides background information including a summary
of how the pilot program performed in the Peninsula cities, an overview of travel behaviors to,
from, and within the peninsula, an analysis of the ideal system size and form in each
community, and a summary of the Motivate pricing proposal and how that compares to the
capital and operating costs of other equipment providers and operators. The first three
deliverables from the study are attached as Attachments B, C and D. By analyzing successful
bike sharing systems in suburban communities similar to Palo Alto, the consultant identified the
characteristics of these systems and mapped the high-demand areas within the City of Palo
Alto. Based on this geographic modeling, and a qualitative assessment of trip generators, the
ideal bike share system size for Palo Alto was estimated to be 35 stations. These stations would
be concentrated in the downtown core, California Avenue business district, Stanford Medical
Center, and Stanford Research Park, with the remainder dispersed at major attractions and
public facilities throughout the city.
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City of San Mateo Pilot Bike Share System
In November 2015, the San Mateo City Council approved a contract in the amount of $85,000
to purchase 40 Social Bicycles smart bikes for a pilot bicycle share system. The council staff
report is included as Attachment E and the purchase contract is included as Attachment F. The
council also approved a service contract with Bikes Make Life Better, Inc. to operate and
maintain a 50-bike smart bike system for $90,000 per year. This contract is included as
Attachment G. San Mateo was approached by an alternative bike share provider, Social Bicycles
(SoBi), to implement a 50-bike pilot bike share program within San Mateo. SoBi operates bike
share programs within several North American cities, including Long Beach, Phoenix, Santa
Monica, San Ramon, Tampa, and Hamilton, Ontario, and is in the process of launching a new
system in Portland, Oregon. The City of Santa Monica went through an extensive procurement
process to select SoBi, and, based on this, the City of San Mateo staff recommended a sole-
source award of the bike share system to SoBi, which was approved by that city council. San
Mateo’s municipal code permits this type of sole source award if staff believes that a new
request for proposals will not result in a more favorable proposal.
On March 7, 2016, staff submitted an application to the Santa Clara Valley Transportation
Authority for funding through the Transportation Fund for Clean Air - Program Manager Funds.
The City requested $171,429 in capital funds, with the assumption that the City would identify
$911,428 in local funding over the five-year project period. This would enable the City to add
three new stations and 30 new bicycles to the existing BABS system. It is also assumed that the
City would be able to add five additional privately-funded stations. The application is included
as Attachment H. Letters of support were received from both the Stanford Medical Center and
Stanford Research Park. The letters are included as Attachments I and J.
MTC Bike Share Capital Program
The Metropolitan Transportation Commission (MTC) set aside up to $4.5 million for a Bike
Share Capital Program in Bay Area communities outside of the BABS expansion area at its May
2015 meeting. The Bike Share Capital Program will award grants over two phases, with the
timing of the second phase to be determined following Phase 1. The funding is a one-time
funding source to help project sponsors with capital purchase and initial implementation costs
and will not be an on-going grant program. It will also not fund operations due to constraints on
the federal Congestion Mitigation and Air Quality (CMAQ) funds committed to the program. A
memo from MTC outlining the draft program guidelines is included as Attachment K.
Discussion
With the initial BAAQMD pilot program concluding on June 30, 2016, staff has been considering the
following options for the city’s bike share system. Under all expansion alternatives, bike share station
locations, number of bikes, and costs would be informed by recommendations in the Bay Area Bike
Share – Peninsula Communities Strategic Plan.
1. Continue and modestly expand existing BABS system with eight new stations
2. Implement small new smart bike system with ten hubs
3. Continue and agressively expand existing BABS system with 29 new stations
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4. Implement large new smart bike system with 35 hubs
Under options two and four, the Bay Area Bike Share – Peninsula Communities Strategic Plan
assumes the new equipment vendor would be Social Bicycles as a means to limit complications
and confusion from introducing a third vendor to the region. Social Bicycles through Bikes Make
Life Better, Inc. is the current equipment vendor for the City of San Mateo’s pilot bike share
system and other cities could potentially add on to the Bikes Make Life Better/Social Bicycles
agreement. Based on data from the Bay Area Bike Share – Peninsula Communities Strategic
Plan, system expansion with more bikes and stations within a smaller system in a suburban
setting is projected to result in increased performance.
Costs
Capital and net operating costs were calculated for each of the scenarios and the following
table shows a breakdown of capital (including installation) costs, operating costs, estimates of
potential user revenues (from membership and overage fees), and net operating costs for each
city and for the collective program.
Capital and operating costs are generally well-known and are outlined in the table footnotes.
User revenues are more difficult to calculate are a combination of annual and casual
membership sales and usage fees. Annual and casual membership sales are calculated as the
number of annual or casual members (assumed to grow from existing membership levels in
proportion to the number of stations in the system) multiplied by the cost of an annual or
casual membership ($88 or $9 respectively). Usage fees are calculated first by estimating the
number of annual trips from the equations included in Attachment B (and assuming a station
density of eight stations per square mile). Trips are then broken down into annual and casual
member trips based on existing ratios in each city. Annual member trips are multiplied by the
average overage fee recouped per annual member trip for the pilot program of $0.12 per trip.
Casual user trips are multiplied by the average overage fee recouped per casual user trip for the
pilot program of $8.79 per trip.
STATUS QUO OPTION 1 OPTION 2 OPTION 3 OPTION 4
Existing system,
current vendor
Minor expansion,
current vendor
(no gap in
service)
Minor expansion,
new vendors
Major expansion,
current vendor
Major expansion,
new vendors
CAPITAL Motivate Motivate Social Bicycles Motivate Social Bicycles
Capital Cost
Number of
stations
$0 $415,000 $400,000 $1,785,000 $1,075,000
Five existing stations,
no new stations
Five existing stations,
one used station
from RWC, seven
new stations
Ten new hubs Five existing stations,
29 new stations 35 new hubs
Total Capital
Cost $0 $595,000 $885,000 $5,115,000 $3,225,000
OPERATIONS Motivate Motivate New Operator Motivate New Operator
Operations
(Revenue)
Net Cost
$335,000 $290,000 $900,000 $735,000
$101,000 ($115,000) ($115,000) ($565,000) ($565,000)
$220,000 $175,000 $335,000 $170,000
City of Palo Alto Page 6
Total Five-
year Cost to
City
$505,000 $1,695,000 $1,760,000 $6,790,000 $4,075,000
TFCA Funding
(Application
Pending)
$0 $171,429* $0 $171,429* $0
Regionwide
MTC Funding
($4.5M in
FY2017)
$0 $0 $500,000* $500,000* $500,000*
*Funding not secured. City of Palo Alto must compete regionally for these funding programs.
Policy Implications
Development of an expanded bike share system is consistent with the following Comprehensive
Plan and Bicycle + Pedestrian Transportation Plan goals, policies and projects:
Comprehensive Plan:
Goal T-1: Less Reliance on Single-Occupant Vehicles
Policy T-3: Support the development and expansion of comprehensive, effective
programs to reduce auto use at both local and regional levels.
Bicycle + Pedestrian Transportation Plan:
PR-5 Bike Share Program
Environmental Review
This is a study action and exempt from review under the California Environmental Quality Act.
Attachments:
Attachment A: BABS Motivate Expansion Proposal Term Sheet (PDF)
Attachment B: BABS Toole Peninsula Cities Plan Deliverable 1 (PDF)
Attachment C: BABS Toole Peninsula Cities Plan Deliverable 2 Draft (PDF)
Attachment D: BABS Toole Peninsula Cities Plan Deliverable 3 Draft (PDF)
Attachment E: San Mateo Council Administrative Report (PDF)
Attachment F: San Mateo-SoBi Purchase Contract (PDF)
Attachment G: San Mateo-BMLB Service Agreement (PDF)
Attachment H: Palo Alto TFCA Application (PDF)
Attachment I: Stanford MC TFCA Support Letter (PDF)
Attachment J: Stanford RP TFCA Support Letter (PDF)
Attachment K: MTC Bike Share Capital Memo (PDF)
TO: Administration Committee DATE: May 6, 2015
FR: Executive Director
RE: Bike Share Expansion Proposal: Motivate International, Inc.
Background
At your meeting on April 8, 2015, staff presented a bike share expansion proposal from Motivate
International, Inc. (Motivate) which, if approved, would provide 7,000 bikes in Berkeley,
Emeryville, Oakland, San Francisco, and San Jose by 2017 at no cost to the taxpayer. While the
Committee voted to refer the item to the full Commission in May, staff was directed to report
back to this Committee on several issues, including funding alternatives for pilot cities on the
Peninsula and other potential expansions of the bike share program.
During the robust Committee discussion, there was concern expressed about what options may
be available to new communities that become interested in bike share in the future. A similar
concern was raised by the Bay Area Air Quality Management District’s (BAAQMD) Mobile
Source Committee, which voted to support the transfer of the pilot program and assets to MTC
with a request that $4.5 million in funding be set aside to expand bike share to emerging
communities beyond the five cities included in the Motivate proposal. This Committee also
asked for more detail in the following areas: (1) how the proposal would ensure compliance with
the American with Disabilities Act; (2) substantiation of the sole source justification; and (3)
options and timing for investing the more than $16 million in federal and state funds that would
not be needed to expand bike share should the Commission authorize a contract with Motivate.
Staff is therefore submitting this report as an informational item for Committee review in
advance of consideration of approval to enter into an agreement with Motivate at the May
Commission meeting.
National and International Comparison on Bike Share
Before providing responses to the issue areas, staff wanted to provide some additional helpful
context about successful bike sharing in this country and abroad in hopes of putting a finer point
on why Motivate chose to focus on five cities. A 2013 study of fourteen U.S. and international
bike share systems shows positive correlation between population density and bike share usage.
The chart below displays the average trips per bike per day for cities that have fewer than 5,000
people per square mile, between 5,000 and 15,000 people per square mile, and more than 15,000
people per square mile. For comparison, San Francisco has more than 15,000 people per square
mile, and the other four proposed cities each have more than 5,000 people per square mile. The
average population density for the entire Bay Area is a little more than 1,000 people per square
mile.
Attachment B
Administration Committee Agenda Item 3
May 6, 2015
Page 2
The following chart compares the five pilot cities to other U.S. and international systems in
terms of trips per bike per day:
Proposal to Continue Bike Share in Pilot Cities
In response to Commissioner feedback and subsequent meetings with staff of the pilot cities,
Motivate has offered terms regarding pricing, discounts, and sponsorship for Mountain View,
Palo Alto, and Redwood City. Please note that the City of San Mateo has decided not to pursue
bike share along these terms at this time. San Mateo officials instead requested consideration to
redirect some of the $1.3 million in funding capacity that would have gone into bike share in
their community to other elements of their bike and pedestrian program.
Administration Committee Agenda Item 3
May 6, 2015
Page 3
The three remaining pilot cities would not be required to purchase new equipment, but would
instead pay a monthly premium to cover the cost of retrofitting the existing pilot bikes and
stations. If a city wants to expand, new equipment is priced to match the pilot program prices,
plus 10%. Ongoing operations and maintenance for new equipment would cost $100 per dock
per month. The table below shows the proposed costs for these three cities.
City Bikes Docks Cost per dock
per month Annual cost
Mountain View 54 117 $112.50 $158,000
Palo Alto 37 75 $112.50 $101,000
Redwood City 52 117 $112.50 $158,000
Total 143 309 $112.50 $417,000
If these cities reach agreements with Motivate, there are two primary ways to offset or reduce
ongoing operating costs. First, cities will be able to offer recognition for local sponsors on one ad
panel at each station, which has been shown to cover approximately half of a station’s annual
cost. Second, cities would receive discounts for achieving the ridership levels shown below.
Therefore, if a pilot city can attract a sponsor and maintain an average ridership of 1.5 trips per
bike per day, it is likely that there would be no public funds required to continue the bike share
program.
Trips per bike per day Discount
1.0 25%
1.5 50%
3.0 100%
The cities have requested up to one year to explore sponsorship options as well as continue to
refine service locations to see if they can improve system use before making a decision about
whether to continue bike share at the costs noted above. Motivate has agreed to operate the
current equipment in these cities through December 31 at no cost, and MTC staff proposes to
subsidize the cities through June 30, 2016 for approximately $200,000. Cities wishing to
continue must notify Motivate by May 31; for cities that decide not to continue by this time,
Motivate will plan to relocate the equipment in July 2016.
Terms for Other Interested Bay Area Communities
Motivate has established similar terms for any Bay Area community that would like to join the
system after the 7,000-bike expansion is completed. The capital cost for new bikes is the same as
for the pilot cities. For a typical configuration, full capital costs are approximately $5,600/bike,
plus $4,000 per new station for installation activities. For example, five stations with 50 bikes
would cost approximately $300,000. Ongoing operations and maintenance would cost $130 per
dock per month, or just over $150,000 annually in the five station example. The discount levels
described above are available for all Bay Area cities based on ridership, and all cities will be able
to capitalize on local sponsorship. In addition, and as described more below under funding, staff
is proposing to set aside $4.5 million in funding for capital expenses associated with emerging
Administration Committee Agenda Item 3
May 6, 2015
Page 4
communities interested in bike share. This would follow the installation of the 7,000-bike
proposed expansion and would be conditioned on communities covering the ongoing annual
operating costs through local funds, sponsorship, ridership discounts, or a combination thereof.
Compliance with the Americans with Disability Act (ADA)
The term sheet has been revised to reflect how Motivate will comply with ADA requirements,
including for both physical components of the system and the system website. The website and
mobile app will utilize adaptive design and will be accessible and usable on desktop computers,
tablets, and mobile devices. Ecommerce functionality will comply with Section 508 of the
Rehabilitation Act of 1973. Station positioning protocol and individual station components will
also comply with ADA requirements.
Sole Source Substantiation
To expand on the April discussion of the compelling business reasons for entering into a sole
source with Motivate, staff is quantifying the monetary savings for the Bay Area of this approach
in the table below, which assumes 80% farebox recovery and no advertising or sponsorship
revenue.
Bike Share Cost Element Estimated Annual
Expenses
10-Year Value
(2015 dollars, 3% discount rate)
Capital cost for 6,300 expansion
bikes / roughly 630 station sites
- $37.6 million
Annual operating and maintenance
Cost above 80% farebox recovery
$3.2 million
$21.4 million
Staff oversight, marketing and
contract management
$1.0 million $6.7 million
Total $4.2 million $65.7 million
In addition to the approximately $65 million value of the sole source contract for no public
investment over the 10 year time period, the Motivate proposal also offers the opportunity to
launch the robust 7,000 bike system quickly within 2.5 years, thereby attracting stronger usage
earlier, in line with the Bay Area’s aggressive greenhouse gas reduction targets. A pay-as-you go
model at the level of investment to-date would likely require five or more years to complete.
Funding
As described at the April Administration Committee meeting, fully private funding means that
public funds originally intended for bikes and stations can instead be reprogrammed. The $19.1
million that the Commission approved from 2012 to 2014 for the pilot and the continuation and
expansion of Bay Area Bike Share includes both federal Congestion Mitigation and Air Quality
Improvement (CMAQ) and state Active Transportation Program (ATP) funds as summarized in
the table below.
Administration Committee Agenda Item 3
May 6, 2015
Page 5
Program Fund
Source
Unreimbursed
Amount
($ in millions)
STP/CMAQ Cycle 1: Pilot CMAQ $2.7
STP/CMAQ Cycle 1: Expansion CMAQ $2.7
STP/CMAQ Cycle 2 (OBAG):
Expansion
CMAQ $6.0
Regional ATP Cycle 1: Expansion ATP $7.7
Total $19.1
The ATP funds have strict timely use of funds as well as competitive process selection
requirements. Therefore, to avoid loss of those funds and in line with the last month’s discussion
at the Programming and Allocations Committee meeting, staff recommends that $7.7 million be
allocated to ready-to-go contingency ATP projects. Additional detail is included in agenda item
4a on today’s Programming and Allocations Committee agenda.
Staff further recommends directing $4.5 million to address the concerns raised by several
Commissioners as well as the BAAQMD Mobile Source Committee members (this may require
a funding exchange given the sole source nature of the agreement with Motivate and federal
rules). These funds would be set-aside for capital costs associated with bike share expansion in
emerging communities. Staff would conduct a call for projects to solicit interest from
communities in a timeframe to allow expansion to begin following installation of the 7,000-bike
expansion. This funding level would support acquisition of an additional 750 bikes, roughly the
size of the current pilot, in emerging communities.
In addition, staff is recommending that $0.5 million in CMAQ be provided to the city of San
Mateo to advance its bicycle and pedestrian program. Staff is proposing that the remaining $6.4
million be subject to the broader discussion of priorities for OBAG2 as the Commission
considers a draft framework next month at the Programming and Allocations Committee
meeting.
Other Clarifications
Further, based on questions by Commissioners and city staff, the term sheet has been revised to
clarify the following areas:
Exclusivity: Motivate has clarified the terms attached to this report to show that the proposed
exclusivity provision only applies to public right-of-way in Berkeley, Emeryville, Oakland,
San Francisco, and San Jose. Moreover, the exclusivity provision does not apply to an
existing pilot electric bike share program, facilitated by City CarShare and planned for
Berkeley and San Francisco. The approximately 90 electric bikes at 25 planned stations will
be available only to members of City CarShare.
System Size: Motivate has agreed to maintain a 2:1 dock-to-bicycle ratio in Mountain View,
Palo Alto, and Redwood City during the extended grace period and continuing forward if
those cities decide to continue with their current systems. Under current station
configurations, a 2:1 ratio represents 155 bikes across these three cities. This adds 55 bikes to
the original proposal for a total of up to 7,055 bikes across eight cities. If fewer than all three
Attachment A
Page 1
Attachment A
Motivate-MTC Proposed Term Sheet
This term sheet is intended to be used to facilitate discussions between the Metropolitan
Transportation Commission (“MTC”) and Motivate International Inc. (“Motivate”) in order to
develop a contract for the acquisition, launch and operation of a bike share system in the Bay
Area.
Contract Topic Contract Terms
Equipment Ownership If required by the FHWA, Motivate will be obligated to purchase
the equipment initially acquired with federal funds according to the
terms of the FHWA agreement.
As currently outlined in the FHWA agreement, any item with a
current per-unit FMV of less than $5,000 will be transferred to
Motivate at no cost. For items with a current per-unit FMV of more
than $5,000, the purchase price will be based on the share of federal
funding for the project multiplied by the equipment’s FMV, as
established by past sales of comparable equipment.
System Size 7,000-7,055 bikes total
4,500 in SF
1,000 in San Jose
1,400 in East Bay (850 in Oakland, 100 in Emeryville, 400
in Berkeley, 50 TBD based on additional system planning
analysis)
Between 100 and 155 to be determined:
- If Mountain View, Palo Alto, and Redwood City all
decide to agree with Motivate and continue bike share,
Motivate will provide 155 bikes among the three cities.
- If one or two of the three pilot cities listed above decide
to continue bike share, Motivate will provide enough
bikes to maintain a 2:1 dock to bike ratio with the docks
currently stationed in each city. If this is less than 100
bikes, Motivate will deliver enough bikes to another city
to reach a program total of at least 7,000.
- If none of the three pilot cities listed above decides to
continue bike share, 100 bikes to be determined among
SF, San Jose, and the East Bay.
Launch Dates Sites representing 25% of the total bikes for San Jose, East Bay
and San Francisco should be approved and permitted by
December 30, 2015. Motivate will install these bikes by June 1,
2016.
Attachment A
Page 2
Contract Topic Contract Terms
Launch Dates
(continued)
Sites representing an additional 15% of bikes for San Jose, East
Bay and SF should be approved and permitted by April 30, 2016.
Motivate will install these bikes by October 1, 2016.
Sites representing the remaining 60% of bikes for the East Bay
should be approved and permitted by July 30, 2016. Motivate will
install these bikes by January 1, 2017.
Sites representing an additional 30% of bikes for San Jose and SF
should be approved and permitted by November 30, 2016.
Motivate will install these bikes by April 1, 2017.
Sites for the remaining bikes in San Jose and SF should be
approved and permitted by May 31, 2017. The remainder of bikes
shall be installed no later than November1, 2017.
Delays in receiving permitted and approved sites by specified
dates will result in extension of the installation dates in an amount
equal to the delay.
The above dates are based on completion of the contract with the
MTC by July 31, 2015. If Motivate is negotiating in good faith
and the contract signing occurs after July 31, 2015, the above
dates will be extended by a duration equal to the difference
between the contract signing date and July 31, 2015.
Term 10 year term, reduced to 5 years if Motivate does not achieve the
aggregate bike target numbers described above (includes provisions
for force majeure and siting issues) or if Motivate is in persistent
and material breach of its contractual obligations as of the time
renewal is considered in the fourth year.
The contract may be extended for two additional five-year terms
upon mutual agreement of the MTC and Motivate. If Motivate is in
substantial compliance with the terms of the contract, MTC will
engage in good faith negotiations to renew the contract on
substantially equivalent terms one year prior to the expiration of the
current term.
MTC will provide notification of non-renewal no later than six
months prior to the end of the term. If neither party provides no
notice of non-renewal by six months, the contract should be
extended for five years on the same terms.
Attachment A
Page 3
Contract Topic Contract Terms
Exclusivity During the Term of this Agreement, Motivate shall have the
exclusive right to operate a bike sharing program that utilizes
public property and public right of way anywhere within San
Francisco, Berkeley, Oakland, San Jose and Emeryville.
The exclusivity provision does not apply to an existing pilot electric
bike share program, facilitated by City CarShare and planned for
Berkeley and San Francisco. The approximately 90 electric bikes at
25 planned stations will be available only to members of City
CarShare.
System Buy-In San Jose, San Francisco, Berkeley, Emeryville, and Oakland may
contribute public funding for additional bikes and stations that are
interoperable with the existing system. Costs to cities for
purchasing, installing and operating the equipment is as follows:
Capital Equipment: Aggregate pricing for bike share
solution as specified in the Air District contract + 10%.
Adjusted annually by the producer price index.
Installation: $4,000 per station, including site planning and
drawings, growing at CPI.
Operations and maintenance of the equipment: $100 per
dock per month, growing at CPI
Motivate is obligated to maintain equipment purchased by
the cities in a state-of-good repair throughout the term. At
the end of the term, Motivate shall return the equipment to
the city in good working order acknowledging that there is
expected to be normal wear and tear from use.
San Mateo and existing pilot cities other than San Francisco and
San Jose that want to continue and/or expand existing system
operations after the expiration of the BAAQMD contract can
develop a new service agreement with Motivate using their own
sources of funds. Costs to cities for purchasing, installing and
operating the equipment is as follows:
Existing equipment upgrade cost: $12.50 per dock per
month, growing at PPI.
New capital equipment: Aggregate pricing for bike share
solution as specified in the Air District contract + 10%.
Adjusted annually by the producer price index.
Installation of new equipment: $4,000 per station, including
site planning and drawings, growing at CPI
Operations and maintenance of the equipment: $100 per
dock per month, growing at CPI.
Attachment A
Page 4
Contract Topic Contract Terms
System Buy-In
(continued)
- Price is reduced to $75 per dock, adjusted by CPI, if an
average of 1 ride per bike per day citywide occurs for a
12 month period
- Price is reduced to $50 per dock, adjusted by CPI, if an
average of 1.5 rides per bike per day citywide occurs for
a 12 month period
- Price is reduced to $0 per dock, adjusted by CPI, if an
average of 3 rides per bike per day citywide occurs for a
12 month period
Motivate is obligated to maintain equipment purchased by
the cities in a state-of-good repair throughout the term. At
the end of the term, Motivate shall return the equipment to
the city in good working order, acknowledging that there is
expected to be normal wear and tear from use.
Cities are able to raise sponsorship to offset the costs of
purchasing and operating the bike share system in their
locality. Local sponsorship packages may include
recognition of the sponsor on one side of one ad panel on
the station. System naming rights, bike branding, and other
branding of physical assets will be determined by Motivate
in conjunction with title sponsor and in compliance with
local advertising regulations. Local sponsors cannot be in
the same category as the title sponsor, unless approved by
Motivate.
Motivate will operate the current configurations of stations
and docks, following the expiration of the BAAQMD
contract, with enough bikes to provide a 2:1 ratio of bikes to
docks, at no cost until December 31, 2015.
MTC will pay $100 per dock per month to Motivate from
January 1, 2016 through June 30, 2016 to maintain
operations in the pilot cities.
Cities must decide whether or not to continue and/or expand
bike share by May 31, 2016. Motivate will begin relocating
equipment in cities that decide not to continue in July 2016.
Subsequent to deployment of 7,000 bikes within San Francisco,
San Jose, Oakland, Berkeley and Emeryville, other cities in the
MTC region that want to participate in the regional bike share
system can develop a service agreement with Motivate using their
own sources of funds. Costs to cities for purchasing, installing and
operating the equipment is as follows:
Attachment A
Page 5
Contract Topic Contract Terms
System Buy-In
(continued)
New capital Equipment: Aggregate pricing for bike share
solution as specified in the Air District contract + 10%.
Adjusted annually by the producer price index.
Installation: $4,000 per station, including site planning and
drawings, growing at CPI
Operations and maintenance of the equipment: $130 per
dock per month, growing at CPI.
- Price is reduced to $97.50 per dock, adjusted by CPI, if
an average of 1 ride per bike per day citywide occurs for
a 12 month period
- Price is reduced to $65 per dock, adjusted by CPI, if an
average of 1.5 rides per bike per day citywide occurs for
a 12 month period
- Price is reduced to $0 per dock, adjusted by CPI, if an
average of 3 rides per bike per day citywide occurs for a
12 month period
Motivate is obligated to maintain equipment purchased by
the cities in a state-of-good repair throughout the term. At
the end of the term, Motivate shall return the equipment to
the city in good working order, acknowledging that there is
expected to be normal wear and tear from use.
Cities are able to raise sponsorship to offset the costs of
purchasing and operating the bike share system in their
locality. Local sponsorship packages may include
recognition of the sponsor on one side of one ad panel on
the station. System naming rights, bike branding, and other
branding of physical assets will be determined by Motivate
in conjunction with title sponsor and in compliance with
local advertising regulations. Local sponsors cannot be in
the same category as the title sponsor, unless approved by
Motivate.
In addition, Motivate has the right to contract with private entities
that want to provide funding for stations and bikes that are situated
on privately-owned property.
Pricing $149 annual pass that can be increased no more than CPI + 2%
annually.
Annual pass can be paid in 12-monthly installments of no more
than $15.00
All other pricing can be set at Motivate’s discretion.
Motivate will offer a discounted pass set at 40% of the annual
price. The discount will be available to customers who are eligible
and enrolled in Bay Area utility lifeline programs. If participation
Attachment A
Page 6
Contract Topic Contract Terms
Pricing (continued) in the discounted program is below expectations, Motivate and
MTC may mutually agree on other eligibility criteria so long as the
eligibility is determined by a third-party.
Revenue Share User Revenue: 5% of user revenue above $18,000,000 earned by
Motivate (in accordance with GAAP) in any year will be paid to
MTC. Amounts owed will be paid within 120 days of the end of the
calendar year.
Sponsorship Revenue: 5% of sponsorship revenue in excess of
$7,000,000 earned by Motivate (in accordance with GAAP) in any
year will be paid to MTC. Amounts owed under the sponsorship
revenue share agreement in years 1-5 will be deferred and paid in
equal installments in years 6-10. For years 6-10, amounts owed
under the sponsorship revenue share agreement will be paid within
120 days of the end of the calendar year.
The revenue share hurdle will be adjusted for CPI starting in year 2.
Brand Development and
Sponsorship
Motivate is responsible for identifying sponsors and developing
system name, color, logo and placement of system assets. MTC, in
consultation with the cities, will have approval rights over title
sponsorship and branding.
Motivate will abide by cities’ existing guidelines and
restrictions with regards to outdoor advertising. Motivate
will not choose sponsors that are in age-restricted
categories (alcohol, tobacco or firearms), products banned
by the local government, or deemed offensive to the
general public. Rejection of proposed sponsors by
municipalities are limited to the grounds above.
Advertising Motivate will have the right to sell advertising on physical and
digital assets. Advertising on physical assets are subject to local
restrictions on outdoor advertising.
Siting Motivate to develop site locations, which will be prioritized based
on demand. Motivate will also use city analyses and
recommendations already developed where possible.
If a city does not approve a proposed site location, they must
provide an alternative within one-block.
Motivate to provide a 20% minimum placement in communities of
concern system-wide. Participating cities may designate other areas
for 20% minimum placement instead of communities of concern.
Attachment A
Page 7
Contract Topic Contract Terms
Siting (continued) Motivate will work together with cities on community engagement
and outreach as part of the station siting process, including
necessary business associations and city meetings.
Motivate can relocate or resize underperforming stations while
maintaining minimum placements in communities of concern.
Motivate will hire planning and engineering firms to minimize the
cities’ costs and resources related to planning. Motivate will discuss
staff time requirements with each city and determine ways to
reduce demands on staff. If staff time exceeds estimates due to
errors or omissions or by Motivate or its contractors, Motivate will
reimburse cities for reasonable and documented direct staff time
related to these issues.
Cities to provide estimates on costs of permits within seven days of
signing term sheet. If costs of permits are significant, Motivate will
seek a waiver on permit costs given the public benefits of the
project. If Motivate and Cities cannot reach agreement on a waiver,
Motivate may consider reimbursing actual direct costs incurred by
the city to provide the permit (e.g, a field visit by an inspector).
Security Fund Motivate will provide $250,000 into a Security Fund account
controlled by MTC prior to the installation of the first new station.
The Security Fund shall serve as security for the faithful
performance by Motivate of all obligations under the contract.
MTC may make withdrawals from the Security Fund of such
amounts as necessary to satisfy (to the degree possible) Motivate’s
obligations under this Agreement that are not otherwise satisfied
and to reimburse the MTC or cities for costs, losses or damages
incurred as the result of Motivate’s failure to satisfy its obligations.
MTC shall not make any withdrawals by reason of any breach for
which Motivate has not been given notice and an opportunity to
cure in accordance with the Agreement.
If funds are withdrawn from the Security Fund, Motivate will be
required to replenish the Security Fund to an amount equal to
$250,000 on a quarterly basis.
Interest in account accrues to Motivate.
90 days after the end of the term, any remaining funds will be
returned to Motivate.
Attachment A
Page 8
Contract Topic Contract Terms
Liability Motivate shall defend, indemnify and hold MTC and its officers
and employees harmless, to the fullest extent permitted by law, etc.
Similar indemnities for cities.
Default Termination and default clauses include the option to require
Motivate to remove equipment, assign or transfer equipment and IP
to a third party. IP assignment is limited to the extent needed for a
third-party to maintain and operate the system.
Data All data owned by Motivate. Cities granted a non-exclusive, royalty
free, perpetual license to use all non-personal data.
Monthly Reports shall be provided for each of the above KPIs and
other system data, to be determined.
Responsibilities of
Motivate
Brand development, station siting, design, permitting, purchase of
equipment and software, installation of bikes and stations, station
relocation, equipment replacement, bike share safety training,
monthly operating meetings with MTC and cities, marketing, sales
and sponsorship, operations and maintenance of system including
customer service.
Station relocation by public agencies will require reimbursement of
costs incurred by Motivate. However, if a newly installed station is
found to be unsuitable by a city for its location, the city may
request within 30 days of installation the relocation of a station at
Motivate’s cost. The number of available free station moves is
equal to 10% of the installed station base less any prior moves. For
example, if a city has 100 stations installed, they have a total of 10
free station moves less any free station moves used to date. If the
system grows to 200 stations, they then have 20 station moves less
any station moves used to date.
Site Design and Planning Motivate will hire a planning and engineering firm with experience
in the specific locality to do surveying, site design and permit
submission. Motivate will solicit input from each city to help
determine its planning and engineering partners.
Motivate will hire a community relations firm to assist with
organizing and hosting community meetings and to conduct
outreach to local residents and businesses.
Motivate will use commercially reasonable efforts to subcontract
the work to DBEs where possible.
Each municipality should provide a point of contact to coordinate
the community engagement efforts and the permitting process.
Attachment A
Page 9
Contract Topic Contract Terms
Marketing MTC, in consultation with the cities, has final approval of
marketing plans and activities.
MTC, in consultation with the cities has approval over marketing
and outreach plans for low-income communities, non-native
English speaking populations, and disadvantaged communities.
Motivate must do outreach and marketing in Spanish, Chinese and
Vietnamese. MTC retains the ability to conduct outreach and
program support in low-income and Limited English Proficiency
neighborhoods.
Motivate’s other marketing activities must comply with MTC and
local standards for decency and not offend the general public.
Motivate will not advertise or promote any products in prohibited
categories (tobacco, alcohol, etc.).
Parking Meter Revenue Motivate must make best effort to avoid taking metered parking
spaces. If a city requires reimbursement of lost parking meter
revenue for a given site, the city must also provide an alternative
site location within one city block that is not sited in metered
parking areas. Motivate can choose to locate in either site.
KPIs Key Performance Indicators:
1. Rebalancing: no station will remain full or empty for more
than 3 consecutive hours between 6AM and 10PM.
2. Bicycle Availability: the number of bikes available for rent
on an average, monthly basis shall be at least 90% of all
bikes in service.
3. Station Deactivation, Removal, Relocation, and
Reinstallation: as notified by MTC, perform the necessary
action within the number of days in the established schedule
for each task.
4. Station/Bike Maintenance, Inspection & Cleaning: check
each bike and station at least once per month and resolve
each issue within a given time frame.
5. Program, Website, and Call Center Functionality: the
system, website, and call center shall each be operational
and responsive 24/7, 365 days a year.
Liquidated damages related to KPIs may not exceed 4% of annual
user revenue for the year.
Attachment A
Page 10
Contract Topic Contract Terms
Transition of Project
from Bay Air Quality
Management District
(BAAQMD) to MTC
Subject to Air District Board approval, BAAQMD, MTC and
Motivate will cooperatively develop a plan to effectuate the transfer
of the project from the BAAQMD to MTC. The plan will provide
for the implementation of new pricing, the continuation of existing
memberships, the transfer of system data, the transfer of assets, and
any other provision to ensure a seamless transfer and provide
Motivate with the ability to operate the system under the MTC
contract.
Resolution of Terms with
BAAQMD
Resolution includes:
Motivate will settle all outstanding claims with the Air
District for the amount of $150,000.
Air District agrees to release funds withheld for billed
expenses and to pay all legitimate past and documented
unbilled expenses totaling $582,872 less the $150,000
settlement amount.
On a go-forward basis, Motivate will be paid for all eligible
reimbursable costs per month to the maximum amount of
one twelfth of the Annual Operations Fee, or $136,638.67
per month. Cost caps within categories will not be relevant.
This agreement will resolve prior SLA claims and any other
prior potential claims that could be asserted through the date
of Settlement
Americans with
Disability Act (ADA)
Provisions
In implementing and operating the bicycle sharing system,
Motivate shall comply with all applicable requirements of the
Americans with Disabilities Act, Section 508 of the Rehabilitation
Act of 1973, and all other applicable federal, state and local
requirements relating to accessibility for persons with disabilities,
including any rules or regulations promulgated thereunder. Such
compliance shall extend to the location and design of system
equipment and related facilities as well as the system website and
any mobile application for the system.
April 24, 2015
Hon. Dave Cortese
Chair and MTC Commissioner Representing Santa Clara County
President, Santa Clara County Board of Supervisors
70 West Hedding Street
Tenth Floor – East Wing
San Jose, CA 95110
RE: Bay Area Bike Share Expansion Proposal: Motivate International, Inc.
Dear Mr. Cortese:
On April 2, 2015 the City of Redwood City (City) learned that the Metropolitan Transportation
Commission’s Administration Committee planned to discuss, at its April 8 meeting, a proposal
received from Motivate International, Inc. The proposal outlines Motivate’s recommendation to
expand the existing Bay Area Bike Share pilot system from 700 bicycles to 7,000 bicycles using no
public funds. Per the proposal, the current bike share pilot project cities of Redwood City, Palo Alto,
and Mountain View are excluded, but may “buy-in” at their own cost.
Redwood City and the cities between San Francisco and San Jose form critical links in the Bay Area’s
transportation networks, including the Bay Area Bike Share system. This is particularly true for
Peninsula cities along the Caltrain line, including the bike share pilot cities of Redwood City, Palo Alto,
and Mountain View. As with any transportation system, it’s important to provide access and
connections at both the beginning and end of the user’s trip (first and last mile).
Up and down the Peninsula, Redwood City and our neighbors to our north and south are bringing
significant transit-oriented developments to our city centers, collectively enabling thousands of new
residents and employees to connect to local and regional transit. For example, an additional 1,635
apartments are being constructed within a half mile of Redwood City’s Caltrain station. One third of
these units are completed, with the balance to be finished and occupied within one year.
Additionally, Box, Inc. is moving its corporate headquarters to Redwood City. The new office,
currently under construction and adjacent to Redwood City’s Caltrain station, will bring an additional
1,200 employees to downtown Redwood City later this year.
The timing of the Bay Area Bike Share pilot was a bit early for Redwood City given our downtown
development timeline, but nonetheless the City joined the team and dedicated significant staff time
to all phases of the pilot program, including planning, design, development, launch, and ongoing
operations. Throughout the 5-year pilot process our staff contributed input, ideas, and feedback to
City Hall
1017 Middlefield Road
Redwood City, CA 94063
Voice (650) 780-7220
Fax (650) 261-9102
mail@redwoodcity.org
www.redwoodcity.org
Mayor Jeff Gee
Vice Mayor Rosanne Foust
Council Members
Alicia Aguirre
Ian Bain
Diane Howard
Barbara Pierce
John Seybert
support the program and help ensure its success, laying the groundwork for other cities to join the
post-pilot expansion throughout the Bay Area.
Given Redwood City’s considerable investment of resources, and in light of our downtown
development schedule (new construction to be completed in early 2016), we ask to remain a bike
share partner for one year beyond the end of the pilot program, at no “buy-in” cost to Redwood City.
This one-year period is needed to evaluate the options and considerations for moving ahead with the
sole-source agreement proposed by Motivate. Given Motivate’s post-pilot target launch date of June
2016 (initial expansion), this should not impact or overlap with the expansion.
The proposal being considered is a non-solicited sole-source (non-competitive) proposal received
from the current operator of the bike share pilot program. Many challenges, problems, and delays
were encountered throughout the design, development, launch, and operation phases of the pilot
program. Therefore, we additionally recommend and request that MTC staff coordinate with the
pilot partners and the Bay Area Air Quality Management District to ensure that the contract terms
build from lessons learned during the pilot program, in order to:
• Protect the public interest and investment in the program to date
• Identify and address operational shortcomings experienced during the pilot
• Outline alternatives for cities who choose to buy into the system, e.g. allow those cities to use
sponsor revenue to subsidize local costs
We appreciate your attention to this matter and thank you in advance.
Sincerely,
Jeffrey Gee, Mayor
City of Redwood City
C: City Council, Redwood City
Bob Bell, City Manager
MTC Commissioners
Steve Heminger, Executive Director, MTC
COMMUNITY DEVELOPMENT DEPARTMENT
ENGINEERING & TRANSPORTATION
1017 Middlefield Road
P.O. Box 391
Redwood City, CA 94064
Telephone: 650.780.7380
Facsimile: 650.780.7309
www.redwoodcity.org
April 7, 2015
Steve Heminger (transmitted via email)
Metropolitan Transportation Commission
101 Eighth Street
Oakland, CA 94607
Subject: MTC Administration Committee Agenda Item 4: Bike Share
Expansion Proposal: Motivate International, Inc.
Dear Mr. Heminger,
Motivate’s proposal to expand bike sharing could be an extraordinary opportunity
to establish bike share as a meaningful transit system for the Bay Area. We
share MTC’s enthusiasm and support moving ahead with negotiations to expand
the regional bike share program.
Because we only learned of Motivate’s proposal on April 2, 2015, we are unable
to provide detailed input at this time. However, we encourage MTC to address
the following points as you refine your term sheet and negotiate a contract with
Motivate:
Identify how the key performance indicators and contract terms reflect
lessons learned during the pilot program. The staff report includes
information on the system costs and number of trips taken, but it does not
provide background on the performance of Motivate, previously Alta
Bicycle Share, in terms of delivering the service.
Clarify what it means for Motivate to be the ‘exclusive supplier and
operator of bike share in the Bay Area.’ Smaller communities, corporate
campuses, universities or similar entities may find the cost to buy into this
system to be cost-prohibitive, requiring them to pursue a different system
within their jurisdictions.
Determine how the current pilot cities (those not selected for the
expansion program) can preserve their public investment in the pilot.
Identify the cost and process for the current pilot cities to buy into the
system, keeping in mind:
o A considerable investment of staff resources have gone into
designing, developing, launching, and operating the pilot program
and siting existing stations.
o Non-expansion, pilot cities wanting to continue service would have
the existing equipment sold to Motivate, only to have to pay to have
the equipment put back.
o Smaller communities’ ability to subsidize capital and/or operating
costs could be compromised if Motivate has exclusive rights to sell
advertising and is entitled to all sponsorship revenue.
o The cost to provide service and the revenues associated with it will
depend on usage.
Identify the process by which Bay Area Bike Share members who live or
use the system in Redwood City would be notified of its departure and
when the system would be removed.
Although the current bike share system in Redwood City has not been used as
extensively as we would have liked, it is important that our ability to participate in
the system is preserved. Similarly, all Bay Area communities should be able to
reap the benefits of bike sharing, where and when it may be appropriate – and
the contract terms should reflect this.
Thank you for your consideration and I look forward to continued communication
with your staff to ensure that we leverage our experience in the bike share pilot
project to get the best possible bike share system for the Bay Area.
Sincerely,
Jessica Manzi, PE
Senior Transportation Coordinator
cc: Administrative Committee members
Dr. Robert B. Bell, City Manager - Redwood City
Jeff Gee, Mayor - Redwood City
Alicia Aguirre, Redwood City Councilmember & MTC Commissioner
MEMORANDUM
This memorandum is the first of a series of memoranda to help Redwood City, Palo Alto, and Mountain
View (referred to as “the peninsula cities”) make their decision on how to move forward with bike share.
It provides background information including a summary of how the pilot program performed in the
peninsula cities, an overview of travel behaviors to, from, and within the peninsula, an analysis of the
ideal system size and form in each community, and a summary of the Motivate pricing proposal and how
that compares to the capital and operating costs of other equipment providers and operators.
1. Program Background
The existing Bay Area Bike Share (BABS) pilot program is a 70 station / 700 bicycle / 1,236 dock bike
share system operating in the cities of San Francisco, Redwood City, Palo Alto, Mountain View, and San
Jose in San Francisco, San Mateo, and Santa Clara Counties.
The pilot program was established using federal Congestion Mitigation Air Quality (CMAQ) and local
Transportation Funds for Clean Air (TFCA) funds administered by the Bay Area Air Quality Management
District (BAAQMD – “the Air District”). The Air District programmed $4.29 million that was used to
administer bike share through an Intergovernmental Agreement (IGA) entered into with the San
Francisco Municipal Transportation Agency (SFMTA), San Mateo County Transit (SamTrans), Redwood
City, San Mateo County, and Santa Clara Valley Transportation Authority (VTA). The Air District owns the
equipment and is the administrator and fiscal agent of the system and executes agreements with
vendors to carry out the program. The IGA outlines the decision making process for decisions affecting
Project: Bay Area Bike Share – Peninsula Communities Strategic Plan
Subject: Deliverable 1 – Summary of Pilot Program and Option 1: Buying into the
Motivate Program
Date: December 28, 2015
To: Melissa Reggiardo, SamTrans
From: Sean Co and Adrian Witte, TDG
CC: Peninsula Bike Share Working Group
Bay Area Bike Share Page | 2
Peninsula Cities Analysis
the system. For issues that are not decided through consensus, each voting member gets one vote with
the Air District retaining the authority to veto a decision as the ultimate provider of the system.
Currently not all IGA partners are voting members with SamTrans acting as the voting member for
Redwood City and the San Mateo County partners collectively.
Equipment and operations were procured through a single RFP process. Alta Bicycle Share was selected
as the operator of the system with a one‐year initial contract term plus four one‐year optional renewal
terms. As part of that contract, equipment was provided by the Public Bike Share Company (PBSC),
including the station hardware (i.e., technical platforms, docking points, kiosks, etc.), bikes, and the
software back‐end (that utilizes the vendor’s own software platform).
Motivate has purchased Alta Bicycle Share and now operates the program and provides equipment
through its own supply chain. Under the initial contract, which now applies to Motivate, the operator is
expected to meet certain performance standards and payment is based on actual expenses incurred up
to a maximum fee established in the contract plus a management fee of 10‐percent of the sum of labor
and direct costs. A new contract is being negotiated between MTC and Motivate for the new expanded
system moving forward.
2. Commuter Behavior
The following section provides an overview of commuter flows and mode splits to provide background
on existing travel patterns to, from, and within the peninsula cities.
Intercounty and Intercity Commute Flows
A review of intercounty commute flows obtained from the American Community Survey demonstrates
how residents move between counties on the peninsula (see Table 1). Based on data from 2009 to 2013,
San Mateo County residents (which includes Daly City, South San Francisco, San Mateo, and Redwood
City) have the highest intercounty commute rates with approximately 79,000 (or 23% of San Mateo
County workers) commuting north to San Francisco and approximately 53,000 (15% of San Mateo
County workers) commuting south to Santa Clara County (which includes Palo Alto, Mountain View, and
San Jose). Conversely, San Mateo County sees approximately 45,000 commuters come into the county
from both San Francisco and Santa Clara Counties. Fewer commuters make the longer distance trip
between San Francisco and Santa Clara counties with approximately 11,000 commuters travelling north
from Santa Clara County to San Francisco and 22,000 commuting in the opposite direction.
Table 1 County‐to‐County Commute Flows
San Francisco County San Mateo County Santa Clara County
San Francisco County 340,735 45,216 22,423
San Mateo County 78,720 211,700 52,988
Santa Clara County 11,245 43,128 732,765
Bay Area Bike Share Page | 3
Peninsula Cities Analysis
Intercity commute flows are calculated in the U.S. Census Bureau’s American Community Survey and are
expressed as the flow of workers aged over 16 between each of the six cities shown in Table 2. Not
surprisingly, a high proportion of people live and work in the same city, though there are significant
intercity commute flows including some cross‐peninsula movement to access employment.
Table 2 shows that the percentage of workers commuting to San Francisco drops off as the distance
increases. The peninsula cities have commuting levels between 2 and 6 percent of workers travelling to
and from San Francisco.
The most significant cross‐peninsula flows are:
16 percent of Mountain View residents work in Palo Alto
9 percent of Redwood City residents work in Palo Alto
6 percent of Palo Alto residents work in Mountain View
6 percent of Redwood City residents work in San Mateo and vice versa
5 percent of Palo Alto residents work in Redwood City
Table 2 Intercity Commute Flows as a Percentage of Total Working Population Over Age 16 (2010)1
RE
S
I
D
E
N
C
E
WORKPLACE
San
Francisco
South San
Francisco
City
San Mateo Redwood Palo Alto* Mountain
View
San Francisco 76% 2% 1% 1% 1% 1%
South San Francisco 33% 24% 4% 2% 1% < 1%
San Mateo 13% 5% 29% 6% 4% 2%
Redwood City 6% 3% 6% 28% 9% 3%
Palo Alto* 4% 1% 2% 5% 35% 6%
Mountain View 2% 1% 1% 3% 16% 27%
*Includes East Palo Alto
Commuter Mode Split
While driving alone is the most common mode of travel to work, residents of the peninsula cities also
use public transportation, walk, bike, and telecommute (see Table 3). Amongst the cities studied, Palo
Alto has the highest bicycle commute rate at 9 percent, followed by Mountain View with 6 percent,
whereas Redwood City’s bicycle commute rate is 2 percent.2 For the peninsula cities, transit ridership is
highest in Palo Alto and Mountain View at 6 percent with Redwood City recording 4 percent.
1 U.S. Census Bureau, American Community Survey 2006‐2010. Five‐year estimates. Special Tabulation: Census
Transportation Planning. Measures: workers 16 and over, weighted by 2010 working populations per city.
2 2010‐2014 American Community Survey 5‐Year Estimates. Commuting Characteristics by Sex, Accessed Dec. 3,
2015.
Bay Area Bike Share Page | 4
Peninsula Cities Analysis
Table 3 Commute Trips by Mode by City3
San
Francisco
South San
Francisco
San
Mateo
Redwood
City
Palo
Alto
East Palo
Alto
Mountain
View
Workers 16 years and over
(total) 456,670 32,566 52,404 40,375 31,113 12,978 42,147
Car, truck, or van 44% 82% 82% 84% 72% 85% 81%
Public transportation 33% 11% 8% 4% 6% 4% 6%
Walk 10% 3% 3% 3% 5% 3% 3%
Bicycle 4% 1% 2% 2% 9% 3% 6%
Taxicab, motorcycle, or other
means 4% 1% 2% 2% 9% 3% 6%
Work at home 7% 3% 4% 6% 8% 2% 4%
Transit Access
According to the Caltrain 2014 On‐Board Transit Survey Final Report, 17 percent of passengers access
Caltrain by bike and the same percentage reach their final destination by bike as well.4 According to the
San Francisco Bicycle Coalition, since 2004, the number of passengers bringing their bikes on board
Caltrain has almost quadrupled.5 To meet demand, bike capacity was increased to include two bike cars
for every train in 2009, though passengers are still denied boarding due to limited bike capacity as per
Caltrain’s “first –come, first‐served” policy.6,7 Caltrain explains:
With limited onboard bike space, customers with bikes are encouraged to park them at Caltrain
stations, when feasible. This will eliminate potential delays for cyclists who have to wait for
trains with available onboard bike capacity. Bike racks, lockers and shared‐access parking
facilities are available at most Caltrain stations for customers who bike to and/or from the
station.8
However, Table 4 shows that secure bike parking is not available at every Caltrain station included in
this analysis. Given the high bicycle access rates, limited secure bicycle parking, and limited space
onboard Caltrain vehicles, there may be an argument to expand bike share access in the peninsula cities.
However, it is noted that in the ‘BABS Membership Survey’ section below, that one of the conclusions of
3 U.S. Census Bureau. 2010 Demographic Profile. Accessed Dec. 3, 2015.
4 Caltrain 2014 On‐Board Transit Survey Final Report.
http://www.caltrain.com/Assets/_MarketDevelopment/pdf/Caltrain+Origin+$!26+Destination+Survey+2014.pdf
5 San Francisco Bicycle Coalition. Caltrain. Accessed Dec. 15, 2015. https://www.sfbike.org/our‐work/regional‐
advocacy/caltrain/
6 Ibid.
7 Caltrain. Bicycle Parking. Updated 2015. Accessed Dec. 15, 2015.
http://www.caltrain.com/riderinfo/Bicycles/BicycleParking.html
8 Caltrain. Bicycle Parking. Updated 2015. Accessed Dec. 15, 2015.
http://www.caltrain.com/riderinfo/Bicycles/BicycleParking.html
Bay Area Bike Share Page | 5
Peninsula Cities Analysis
the survey team was that Bay Area Bike Share, at least as a pilot program “has not had a sizeable effect
in reducing the number of bikes on Caltrain or BART trains.”9
Table 4 Caltrain Bicycle Parking Availability
Station Bike Rack
Spaces
Bicycle Locker
Spaces
Bicycle
Lockers
Available
Bike Share
Available Other Bike Parking Amenities
San Francisco 6 180 Yes Yes Free Attended Bike Parking Facility
(Monday – Friday, 6:30 a.m. to 8:30 p.m.)
San Mateo 11 12 Yes No City run, on‐demand electronic lockers
www.bikelink.org
Redwood City 18 50 No – full Yes
Palo Alto 178 94 No – full Yes
Mountain View 23 116 No – full Yes City run, shared access bike storage shed
3. System Performance in the Peninsula Cities
Bay Area Bike Share in the peninsula cities are each designed as small “mini‐systems” that are
connected to one another and to the rest of the system by Caltrain. Each city includes five to seven bike
share stations centered on the Caltrain station. In this way, bike share is intended to deliver people to
and from transit and act as a first‐ and last‐mile transit connection.
Quantitative Performance Review
A breakdown of the number of stations, docks, bikes, and ridership for each of the pilot cities is included
in Table 5 for the one‐year period between September 1, 2014 and August 31, 2015. Month‐by‐month
ridership levels are included in Appendix A. As well, membership information for each of the pilot cities
is included in Table 6 for the period between September 1, 2014 and November 11, 2015.
Table 5: Ridership Statistics for Bay Area Bike Share (September 1, 2014 to August 31, 2015)
City
System Statistics Ridership Trips /
Bike / Day
Annual
Member Trip
Percentage
Casual
Member Trip
Percentage Stations Docks Bikes Trips Percent
San Francisco 35 665 350 321,108 90.7% 2.51 85% 15%
Redwood City 7 115 70 2,007 0.6% 0.08 79% 21%
Palo Alto 5 75 50 3,093 0.9% 0.17 57% 43%
Mountain View 7 117 70 9,989 2.8% 0.39 85% 15%
San Jose 16 264 160 17,956 5.1% 0.31 84% 16%
Total 70 1,236 700 326,915 100% 1.39 85% 15%
9 OneBayArea Innovation Starts Here. MTC’s Climate Initiatives Program Evaluation, Pilot Bike‐sharing Program,
Bay Area Air Quality Management District.
Bay Area Bike Share Page | 6
Peninsula Cities Analysis
Table 6: Membership Statistics for Bay Area Bike Share (September 1, 2014 to November 11, 2015)
City
Annual Members Casual Members
Number of Annual
Members
Annual Member Zip
Code (%)1
Number of Casual
Members
Casual Member
Percentage2
San Francisco 2,015 52% 44,488 85%
Redwood City 70 2% 392 1%
Palo Alto 72 2% 1,852 4%
Mountain View 112 3% 1,842 4%
San Jose 238 6% 3,539 7%
Other 1,334 35% ‐ ‐
Total 3,814 100% 3,927 100%
1 Based on billing zip code provided at time of membership purchase.
2 Based on location of membership purchase. Users may have used the system in multiple locations.
The peninsula cities have approximately 27 percent of the stations and 25 percent of the docks in the
system. However, ridership was approximately 15,000 trips in the reported one‐year period,
representing just under five percent of system ridership. The highest performing of the peninsula cities
is Mountain View recording 0.39 trips per bike per day (higher than San Jose and second only to San
Francisco). Palo Alto and Redwood City recorded lower ridership at 0.17 and 0.08 trips per bike per day,
respectively.
Approximately seven percent of annual members have billing zip codes in the peninsula cities and nine
percent of casual members signed up in one of the peninsula cities.
Ridership between Stations
Toole Design Group prepared an online map that shows the number of trips per year between all origin‐
destination (O‐D) pairs for stations in the pilot program. The map shows that Caltrain stations are by far
the highest ridership stations on the peninsula. There are 14 O‐D pairs with ridership above 150 trips per
year, and all but one have a Caltrain station at one end (the exception is the O‐D pair between Franklin
at Maple and the Redwood City Public Library which had a ridership of about 300 trips per year). The
other ends of these high‐ridership O‐D pairs tend to be at employment (e.g., Redwood City Medical
Center), transit (e.g., Castro Street & El Camino Real), retail (e.g., Mountain View City Hall), and
educational (e.g., Stanford in Redwood City) destinations.
Mountain View had four O‐D pairs with ridership higher than 1,000 trips per year, the largest being
between the Mountain View Caltrain Station and Mountain View City Hall, which is located on
Downtown Mountain View’s retail and commercial Main Street. Redwood City’s highest ridership pairs
are between the Caltrain station and two different medical centers. Palo Alto’s highest ridership pairs
are between the Caltrain stations and mixed‐use neighborhoods with retail, employment, and higher
density residential uses. Interestingly there is somewhat high ridership between Palo Alto’s two Caltrain
stations (Palo Alto and California Ave), both of which are located in active, mixed‐use neighborhoods.
Bay Area Bike Share Page | 7
Peninsula Cities Analysis
Individual station ridership is shown in Appendix B along with a table summarizing the characteristics of
the area surrounding each station.
Ridership between Cities
Toole Design Group also analyzed ridership between the peninsula cities, shown in Table 7. Intercity
ridership can also be viewed on the station‐to‐station online map. The three cities were designed as
three independent mini‐systems and are generally operating that way with only a small amount of
intercity travel – 496 trips out of 15,089 trips or 3 percent. The highest intercity ridership is 190 trips
between Palo Alto and Mountain View and 50 trips between Palo Alto and Redwood City. Approximately
two‐thirds of all intercity trips are between two and three miles long, with the remaining one‐third
between three and seven miles long.
Table 7: Intercity ridership between pairs of peninsula cities (September 1, 2014 to August 31, 2015)
Mountain View Palo Alto Redwood City
(% of all Mountain View trips) (% of all Palo Alto trips) (% of all Redwood City trips)
Mountain View 9,788 190 2
98% 6% 0%
Palo Alto 190 2,851 50
2% 92% 2%
Redwood City 2 50 1,954
0% 2% 97%
San Francisco 3 2 1
0% 0% 0%
San Jose 6 0 0
0% 0% 0%
Total 9,989 3,093 2,007
100% 100% 100%
BABS Member and Intercept Survey
In 2014, Bay Area Bike Share conducted an online member survey and an intercept survey. The online
survey was administered in four rounds—at the end of January, March, June, and August, 2014 and was
sent to all annual members. It received a total of 1,004 responses. The intercept surveys were
conducted at stations only in San Francisco and received a total of 118 responses.10
From the online member survey, a large majority of respondents rated their BABS experience as
excellent or good (93 percent) and recommended the system to friends or family (also 93 percent).11
Sixty annual members with zip codes from the peninsula cities responded to the survey. When asked
10 Surveys were conducted Market at 4th, Embarcadero at Sansome, San Francisco Caltrain (Townsend at 4th), and
Harry Bridges Plaza (Ferry Building).
11 Ibid.
Bay Area Bike Share Page | 8
Peninsula Cities Analysis
what one thing they would improve about the system, the most commonly suggested changes were for
more stations, improved rebalancing at existing stations, and equipment changes.12 A breakdown of the
most requested changes is included below:
More stations: 24 respondents (40% of peninsula respondents).
Rebalancing, primarily the availability of bikes or spare docks at the Caltrain stations: 11
respondents (18%).
Equipment changes, such as improved consistency with locking and unlocking bicycles, weight of
bicycles, gearing, etc.: 9 respondents (15%).
Service changes, such as a longer free‐ride period: 5 respondents (8%).
Maintenance such as brake upgrades, more regular cleaning: 3 respondents (5%).
Improved customer service: 3 respondents (5%).
No suggested improvement: 5 respondents (8%).
Note that the annual member survey does not include potential members. There may be people in the
peninsula cities that would use the bike share system if there were more stations or if some other
potential barrier were removed.
Related to bikes on board, the last two of four rounds of the online member survey included a question
about bikes on transit to gauge the potential for BABS to reduce bike crowding on trains by encouraging
people to use bike share to access the train or their destination. Respondents who said that they were
going to or coming from Caltrain or BART when they used BABS were asked: “If bike share were not
available, would you have brought your own bike on the train, to use at either end of your [Caltrain or
BART] trip?”
This question applied to only 15‐percent of respondents, of whom only a small percentage said that they
would have brought their bike on the train if BABS was not available. Of people who referred to a
Caltrain trip, eight (18‐percent) said that, yes, they would have brought their bike on the train while nine
(20‐percent) said they were not sure or did not know.13 These responses indicate that BABS has not had
a sizeable effect in reducing the number of bikes on Caltrain trains.
Qualitative Performance Review
The TDG team conducted interviews with key staff that were involved with the initial pilot program to
assess how the system has worked in the peninsula cities. Staff from Redwood City, VTA, SamTrans, Palo
Alto, Motivate, and the Metropolitan Transportation Commission (MTC) were interviewed.
The Bay Area Bike Share program was started with the idea of the peninsula cities working together to
provide a coordinated bike share system. Prior to that, San Francisco had direction from then Mayor
Newsom in 2007 to implement a bike share system in the city. However, changes in the bike share
12 BABS Ridership Survey Data. 2014.
13 Ibid.
Bay Area Bike Share Page | 9
Peninsula Cities Analysis
industry had resulted in delays for the system in San Francisco and with the cities of Redwood City, Palo
Alto, Mountain View, San Jose and the Air District expressing interest, San Francisco delayed to work
towards a coordinated system. MTC, a potential choice to manage a regional system, was not interested
in the operations of bike share and so the Air District volunteered to coordinate regional operations. The
system was intended to be a pilot for the rest of the Bay Area but no strategic planning was conducted
to determine a regional strategy for how bike share could work in different communities or where it
should be expanded to (note that MTC started a strategic planning effort in 2014 but that effort was
discontinued once the Motivate offer was made available). As a result, staff felt there needs to be more
time to demonstrate the performance of a larger system. On the Peninsula, the system was intended to
function as a first and last mile solution focused on the Caltrain corridor. There needs to be additional
work to determine if there is additional demand within the individual cities and in particular untapped
demand to Caltrain. Many employers are asking for connections to Caltrain and while they have not
been specific on the mode, bike share could provide this service.
Demand
The staff at Redwood City has seen an increase in intra‐city trips when one of their stations was
relocated to be near a high‐density residential development. The proximity to higher‐density residential
areas within the more suburban cities of the Bay Area may be necessary to increase ridership. Stations
in Redwood City were moved to be non‐competitive with walk trips. Bike share may need to cover
longer distance trips than in urban areas. To increase bike share ridership, low‐stress bicycle
infrastructure is needed on the Peninsula. While San Mateo is proceeding with their own bike share
system, the City of Sunnyvale might be another city that bike share could expand into with significant
demand.
Interoperability
While the city staff and Motivate staff felt that it was important to ensure that bike share memberships
are compatible with different systems, it was undetermined if there was a need for the three peninsula
cities to have interoperability (i.e., where the equipment is compatible for use in different cities). Staff
felt there would be operational advantages and cost savings to having one vendor work in the Peninsula
cities. Motivate staff stated that they would be willing to look into solutions to ensure compatibility with
their equipment even if there was a different system on the Peninsula.
Equipment and Operations
It was recognized that the occurrence of full or empty stations (i.e., either where there is no room to
dock a bike or no bike available for pick‐up) may provide a bad user experience, turning off current and
future customers. The small system size with only a few stations offers no redundancies for people
looking for available bikes or docks. Nevertheless, City staff felt that overall they were pleased with the
service that Motivate provided, but that there were some issues with bikes not docking in stations and a
general lack of marketing. Staff felt that while the Motivate staff were overall responsive, they were not
given the resources necessary to provide a larger outreach effort to attract additional members.
Motivate staff stated that there was individual marketing plans for the three Peninsula cities at the
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Peninsula Cities Analysis
beginning of the project. Motivate staff also indicated that should a larger system be put in place, their
level of effort with operations and marketing would be commensurate to size of the system.
4. System Planning and Demand
Ridership observed in the peninsula cities was compared to that of other suburban cities participating in
larger regional bike share programs. These include Alexandria, VA and Bethesda, Rockville, and Silver
Spring, MD in the Washington D.C. area’s Capital Bikeshare and Brookline and Somerville, MA in the
Boston area’s Hubway system.
Table 8 and Figure 1 show the number of stations, system coverage area, and density of stations in each
city as well as ridership information reported in terms of the number of trips per bike per day recorded
for the most recent year where station‐to‐station data was available14. It shows that total ridership is
generally higher in other suburban cities than in the peninsula cities. However, a deeper analysis of this
data shows that many trips from these cities are external trips. When trips to and from external
destinations are stripped out of the data leaving only internal trips, ridership levels are, in some cases,
very similar to those of the peninsula cities.
Table 8: Comparison of Suburban Bike Share Systems
City
Bike Share
System
Name
Number of
Stations
System
Coverage
Station
Density
Total
Ridership
Internal
Ridership1
(Percentage of
System)
(sq.mi.) (stations /
sq.mi.)
(trips per bike
per day)
(trips per bike
per day)
Mountain
View Bay Area Bike
Share
7 (10%) 1.28 5.5 0.42 0.42
Palo Alto 5 (7%) 0.76 6.6 0.19 0.18
Redwood City 7 (10%) 1.06 6.6 0.09 0.08
Alexandria, VA
Capital
Bikeshare
16 (5%) 2.24 7.1 1.34 1.13
Bethesda, MD 14 (4%) 1.86 7.5 0.85 0.61
Rockville, MD 21 (6%) 5.54 3.8 0.15 0.14
Silver Spring,
MD 17 (5%) 3.12 5.4 0.63 0.54
Brookline, MA
Hubway
4 (3%) 0.94 4.3 1.98 0.32
Somerville, MA 12 (9%) 2.23 5.4 1.30 0.43
1 Includes only bike share trips made within each city.
14 Ridership statistics represent the same 243 day period between April 2nd and November 30th 2013. This
represents the time the Hubway system was open in 2013, the most recent year in which station‐to‐station data is
available on the Hubway website. The Hubway system closed the remainder of 2013 due to winter weather
conditions. Ridership statistics for Bay Area Bike Share and Capital Bikeshare represent the same 243 day period in
2014/2015.
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Peninsula Cities Analysis
Figure 1: Comparison of System Statistics for Suburban Bike Share Cities.
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Peninsula Cities Analysis
A comparison of internal ridership levels is shown on Figure 2. Alexandria is a clear outlier. The city is
removed from Washington D.C. and the other bike share jurisdictions and the majority of trips in
Alexandria start or end at one of their Metro stations. Similarly, a lot of trips in Bethesda and Silver
Spring start or end near the Metro stations (though not as many as in Alexandria).15 The results indicate
that the presence of high‐capacity and frequent mass transit is likely to have an impact on bike share
ridership. Land use may also have an impact with cities such as Rockville and Redwood City being more
suburban in nature with more spread‐out land use and easy access to parking.
Figure 2: Comparison of Intra‐City Bike Share Trip Rates for Suburban Bike Share Cities.
The project team explored trends between internal ridership rates and several variables including the
number of stations, service area, station density, population and employment density, land use diversity
(i.e., jobs per household), and network design (i.e., weighted multimodal intersection density) within the
service area.16 Plots of ridership rates against each of these variables are included in Appendix C. There
15 http://eliglazier.com/urban/map.html
16 Population and employment estimates and the land use diversity (jobs per household) and network design
(weighted multimodal intersection density) variables are calculating by using the EPA Smart Location Database,
which contains data from the 2010 Census: http://www.epa.gov/smartgrowth/smart‐location‐mapping#SLD
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Peninsula Cities Analysis
appears to be clear trends between the level of ridership and the number of stations, the service area,
and to some degree station density and land use diversity. Population density, employment density, city
coverage, and network density were less obvious as to their impact on ridership. This is consistent with
other research that has shown that population and employment density is less of a predictor of transit
and walking rates than factors such as proximity, land use diversity, and network design.17
The number of stations and the service area are closely related, but the service area accounts for where
stations may be closer together and overlap in service area. The well‐fitting relationship between
ridership and service area suggests that as more stations are added and increase the reach of the
system, that overall system ridership also increases.
There appears to be a lesser relationship between ridership and station density, at least in smaller
systems. Analysis conducted by the National Association of City Transportation Officials (NACTO) of the
five largest bike share programs in the United States showed that ridership at individual stations
increases as a function of station density.18 It may be that in smaller systems, balancing coverage area
and density is more important and that systems need to first consider covering a useful area where trips
begin to become too far to walk. At some point in a system’s growth, station density may take over as
the more important function in increasing ridership.
Density is also important to ensure that stations are close enough together to be convenient to potential
users and reachable with a short walk trip. Also, if a station is full or empty, people wishing to return or
check out a bike need to be able to access another station nearby.
To try to incorporate the importance of both service area and station density, the project team
conducted a regression analysis to develop a simple relationship between the two variables that could
help inform the impact of changing one or more of these variables. The analysis removed the results
from Rockville and Alexandria as outliers to the service area and station density analyses (see Appendix
C). The resulting equation is:
R internal = 0.17 * SA + 0.017 * SD
Where:
Rinternal = Internal ridership rate, measured in trips per bike per day,
SA = Service Area, measured in square miles, and
SD = Station Density, measured in stations per square mile.
A plot of the actual and predicted internal ridership rates using this equation is shown on Figure 3. The
analysis resulted in an R‐squared value of 0.91 and an F‐test showed that the regression equation is
useful in predicting ridership. A t‐test was conducted on the coefficients and found that there is some
redundancy in using both service area and station density to estimate ridership, which is logical given
17 Ewing, R. and Cervero, R. Travel and the Built Environment – A Meta‐Analysis. Published in the Journal of the
American Planning Association, Vol. 76, No. 3, Summer 2010.
18 NACTO Bike Share Equity Practitioners’ Paper #1, April 2015.
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Peninsula Cities Analysis
they are somewhat related. Comparing predicted ridership to actual ridership (see Figure 3) showed that
the equation is reasonably effective at predicting mid‐level ridership but was less accurate at predicting
really low (e.g., Redwood City) and really high (e.g., Alexandria) ridership.
Figure 3: Comparison of Actual Versus Predicted Internal Ridership Rates
The equation can be used to surmise what might happen to system ridership if these variables are
increased. It shows that every square mile added to the system area can expect a return in the order of
0.17 trips per bike per day. As well, if density is increased by 1 station per square mile, the resulting
impact on ridership is smaller, 0.017 trips per bike per day. Again, at some point in a system’s growth,
this may reverse and the impact of station density may take over as a larger driver of ridership, as
suggested by the NACTO analysis.
If the system ridership level of 1.0 rides per bike per day is a goal for a small city (which would also
result in an operating cost reduction of $25 per dock per month – see below), then a system of at
least 5 square miles and a density of at least 8 stations per square mile would be required. This is a
system of approximately 40 stations assuming the current smart dock system configuration.
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Peninsula Cities Analysis
The next steps will be to create maps of the potential system in each of the peninsula cities based on
proposed system size identified above. One of the traits of a successful bike share system is the ability
for people to walk to a station that is close to transit, retail, employment centers and other key origins
and destinations. MTC’s GIS suitability map and a “walk shed” analysis will be used to determine more
specific station locations.
5. Summary of Option 1 – Buying into the Motivate System
As part of the Motivate expansion plan, the peninsula cities were given a cost proposal to “buy into” the
system and continue operations of the existing equipment and to purchase and operate new equipment
in the future. The Motivate proposal to purchase the current and new equipment depends on the size of
the station but ranges from approximately $47,000 to $97,000 per station plus a $4,000 per station cost
to permit and install new stations. These costs are compared in Table 9 with other U.S. cities that
recently signed contracts or received proposals for bike share equipment based on an average station
size of 19 docks and 10 bicycles.
Table 9: Capital Cost Comparison (based on 10 bike and 19 dock station or equivalent)
City Cost Type Technology
Type
Equipment
Provider
Number of
10‐Bike
Stations
Cost per
Station
Cost per Station
(installation)
San Mateo, CA Proposed Smart bike Social
Bicycles
10 $17,0001 $4,600
West
Hollywood, CA
Proposed Smart bike Social
Bicycles
15 $25,1072 $8,760
Portland, OR Proposed Smart bike Social
Bicycles
60 $25,7203 $8,5503
Nextbike Pricing
Request
Smart bike Nextbike n/a $26,500 ‐
Nextbike Pricing
Request
Smart dock Nextbike n/a $29,000 ‐
Long Beach,
CA
Proposed Smart bike Social
Bicycles
50 $35,075 $4,500
Santa Monica,
CA
Proposed Smart bike Social
Bicycles
50 $43,0004 Included
Los Angeles
Metro, CA
Proposed Smart dock B‐cycle 80 $47,5005 Included
Motivate
Proposal
Proposed Smart dock Motivate ‐ $55,503.565 $4,000
1 The City of San Mateo is considering 10 to 12 “hubs” using existing bike racks. Therefore cost estimates do not include capital or installation of
racks, docks, or kiosks. City of San Mateo staff report, November 16, 2015.
2 The City of West Hollywood is considering purchase of 255 custom bike racks for 20 locations to consist of 1 electronic kiosk, 10 large displays,
and 9 small displays. City of West Hollywood Staff report, August 17, 2015.
3 The City of Portland will place bikes at 60 “locations” that include 30 city bike corrals, 19 “hubs” with display panels, and 11 kiosks. Installation
costs include $4,814 per station to be paid by City for system start‐up and $3,736 per station to be paid by vendor for launch expenses.
4 The City of Santa Monica purchased 1,000 custom bike racks for 50 locations to consist of 20 electronic kiosks and 30 large and small displays.
5 All stations include electronic kiosks and map panels.
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Peninsula Cities Analysis
Table 9 shows that prices vary depending on the size and specifications of the order. Smart bike systems
are generally less expensive to purchase than smart dock systems, although it is noted that as more
electronic kiosks were ordered (e.g., in Santa Monica), the price per station started to approach the
price of a smart dock system. The Motivate equipment is the highest cost of any of the proposals
compared. However, their per station installation costs are in line or lower than the other proposals.
Other costs that are difficult to measure are the “start‐up” and “launch” costs associated with creating a
new bike share program. As well, there are costs associated with delaying the system while a new
program is selected and set up that also need to be accounted for. These are not insignificant costs and
should be explored further if a different equipment vendor or operator is to be considered.
The Motivate cost proposal includes a $112.50 per dock per month operating fee. This is broken into a
$12.50 per dock per month fee to upgrade to the 8D Technologies equipment and $100 per dock per
month to operate and maintain the system. The 8D Technologies equipment upgrade cost is a recurring
cost that will last indefinitely. The latter O&M cost is reduced if the system hits ridership metrics above
1.0 trips per bike per day. Table 10 compares the base operating cost to those observed in several cities
already operating bike share programs and in several cities that have recently received operating cost
proposals.
Table 10: Operating Cost Comparison
City Operating
Cost Type
Equipment and
Operator Type
Operator Name System Size Price (per dock
per month)
Minneapolis, MN Actual (2013) Smart dock
Non‐profit
Nice Ride
Minnesota
1,550 bikes,
3,100 docks
$70.55
San Mateo, CA Proposed Smart bike
Non‐profit
Bikes Make Life
Better
50 bikes, no
specialty docks
$78.951
Boston, MA Actual (2012) Smart dock
Private
Motivate 700 bikes,
1,400 docks
$86.52
Santa Monica, CA Proposed Smart bike
Private
CycleHop 500 bikes,
1,000 racks
$91.26
Denver, CO Actual (2014) Smart dock
Non‐profit
Denver
Bikesharing
700 bikes,
1,250 docks
$99.12
Aspen, CO Actual (2014) Smart dock
Non‐profit
WE‐Cycle 100 bikes, 180
docks
$102.56
Motivate Proposal Proposed Smart dock
Private
Motivate ‐ $112.50
West Hollywood,
CA
Proposed Smart bike
Private
CycleHop 150 bikes, 255
racks
$112.75
Arlington, VA Actual (2014) Smart dock
Private
Motivate 460 bikes, 920
docks
$112.99
Los Angeles Metro,
CA
Proposed Smart dock
Private
Bicycle Transit
Systems
1,000 bikes,
1,900 docks
$115.34
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Peninsula Cities Analysis
City Operating
Cost Type
Equipment and
Operator Type
Operator Name System Size Price (per dock
per month)
Montgomery
County, MD
Actual (2015) Smart dock
Private
Motivate 500 bikes, 818
docks
$117.43
Alexandria, VA Actual (2015) Smart dock,
Private
Motivate 180 bikes, 250
docks
$124.59
Austin, TX Actual (2014) Smart dock
Non‐profit
Austin B‐cycle 380 bikes, 600
docks
$127.45
Washington D.C. Actual (2015) Smart dock,
Private
Motivate 2,000 bikes,
3,674 docks
$145.00
1 The City of San Mateo is planning to use existing bike racks for this system. For comparison, the per dock per month cost assumes 19 docks for
every 10 bikes.
Table 10 shows that actual operating costs range quite significantly anywhere from approximately $70
to $145 per dock per month. At the lower end, some non‐profits receive in‐kind donations and services
to off‐set some operating expenses (such as free or low‐rent warehouse space, pro‐bono legal costs,
marketing services, etc.). As well, there are often less stringent operating performance standards in
some non‐profit run systems. There is very little information available about the cost to operate smart
bike systems and in any case, most major city smart bike systems have been operating for less than a
year. Operating costs are typically negotiated at the time of contract and will vary greatly depending on
the service levels specified by the program owner. It is difficult to compare across cities without knowing
the service levels that these systems operate at and in many cases, this is not available. It is also unclear
what service levels Motivate is proposing at this cost. This will need further investigation.
Nevertheless, the Motivate proposal is towards the upper end of the range of actual and proposed
operating costs, and within a few dollars of the top of the range of operating costs for private bike share
operators. The Motivate cost proposal will be more competitive if ridership levels reach 1.0 trips per
bike per day in which case it will drop to $87.50 per dock per month compared to $112.50 per dock per
month.
The demand equation and the proposed Motivate costs were used to conduct some scenario planning
to show the link between system costs, system ridership, and productivity. A 40 station / 400 bike / 760
dock system (Scenario 1) and a 60 station / 600 bike / 1,140 dock system (Scenario 2) were modeled and
the results shown in Table 11 in terms of the capital cost per trip (over the five‐year useful life of the
equipment) and the operating cost per trip. Table 11 shows that increasing the average ridership rate
Over the long run, operating costs far outstrip equipment costs and so it is prudent to consider cost
impacts over a longer term. For example, for a 40 station / 760 dock bike share system operating
over a 5 year period, the Motivate system would cost approximately $2.4 million for equipment and
installation and approximately $5.1 million for operations and maintenance (approximately $1
million per year). This would reduce to $4.0 million if ridership can be maintained above 1.0 trips per
bike per day (approximately $800,000 per year).
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Peninsula Cities Analysis
reduces the per trip capital and operating costs. This impact is enlarged with the reduced operating cost
rates proposed by Motivate when ridership levels of 1.0 and 1.5 trips per bike per day are reached.
Table 11: Comparison of Capital and Operating Cost Scenarios
System Size Lower than Projected
Ridership
Projected Ridership Higher than projected
Ridership
Scenario 1 – 40 stations / 400 bikes / 760 docks (service area = 5.0 sq.mi.; station density = 8 stations / sq.mi.)
Trips per bike per day 0.5 1.0 1.5
Annual trips 73,000 146,000 219,000
Five‐year capital cost $2,400,000 $2,400,000 $2,400,000
Capital cost per trip (over
five‐year useful life of
equipment)
$6.58 $3.29 $2.19
Operating cost rate (per
dock per month)
$112.50 $87.50 $62.50
Operating cost per year $1,026,000 $798,000 $570,000
Operating cost per trip $14.05 $5.47 $2.60
Scenario 2 – 60 stations / 600 bikes / 1,140 docks (service area of 7.5 sq.mi.; station density = 8 stations / sq.mi.)
Trips per bike per day 0.9 1.4 1.9
Annual trips 197,000 307,000 416,000
Five‐year capital cost $3,600,000 $3,600,000 $3,600,000
Capital cost per trip $3.65 $2.35 $1.73
Operating cost rate (per
dock per month)
$112.50 $87.50 $62.50
Operating cost per year $1,540,000 $1,197,000 $855,000
Operating cost per trip $7.81 $3.90 $2.06
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Peninsula Cities Analysis
Appendix A: Monthly Ridership Rates by City
Trips per Bike per Day
Redwood City Palo Alto Mountain View
September, 2014 0.05 0.20 0.43
October, 2014 0.05 0.19 0.44
November, 2014 0.04 0.15 0.32
December, 2014 0.03 0.07 0.22
January, 2015 0.07 0.15 0.33
February, 2015 0.07 0.12 0.35
March, 2015 0.08 0.14 0.40
April, 2015 0.09 0.15 0.38
May, 2015 0.07 0.16 0.39
June, 2015 0.12 0.22 0.46
July, 2015 0.14 0.27 0.47
August, 2015 0.11 0.21 0.49
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Peninsula Cities Analysis
Appendix B: Station Characteristics Analysis
Station Jurisdiction Annual Ridership
(trips)1
Station Photo Station Characteristics
Caltrain Station Other Transit High Density
Residential
Commercial / Retail /
Restaurant Activity
Other Attractions Bicycle Facility
Type
Other Notes
Kaiser Hospital
(Old Location)
Redwood City 380
No No No Medical offices Kaiser Permanente
Medical Center
Low‐volume street Station was initially not very visible
located at the back of the medical
center due to construction.
Kaiser Hospital
(New Location)
Redwood City N/A N/A No No No Big box retail Kaiser Permanente
Medical Center
Buffered bike lane Station in a much more visible
location on Veterans Way
Mezes Redwood City 357 N/A No No Yes No No Bike lane Station recently moved to be located
near the new Radius development
Redwood City
Caltrain Station
Redwood City 1,694
Yes Yes No Restaurants / retail
nearby
No None Station has terrific visibility and is
right on the Caltrain platform
Redwood City
Public Library
Redwood City 216
No No No Restaurants neaby Public Library None Very visible station, on library plaza
San Mateo County
Center
Redwood City 314 No No No Restaurants, theater
nearby
Courts, municipal
offices, history museum
Bike Lane Offset 1 block from “main drag”, near
lots of parking lots
Sequoia Hospital Redwood City No Yes No No Hospital Low‐volume street
Stanford in
Redwood City
Redwood City 872
No Yes No No Hospital None
California Avenue
Caltrain Station
Palo Alto 896
Yes Yes Yes Retail/Restaurant,
“main street”
No Bike lane On side street right by station‐
visibility could be better
Cowper at
University
Palo Alto 1,152
No Yes No Retail/Restaurant,
“main street”
Office buildings None
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Peninsula Cities Analysis
Palo Alto Caltrain
Station
Palo Alto 2,016
Yes Yes Yes Restuarants Bike lane Right across from station entrance
Park at Olive Palo Alto 793
No No No Offices Bike lane
University and
Emerson
Palo Alto 1,329
2.5 blocks Yes No Retail/Restaurant,
“main street”
None Super visible, right on main
commercial street, right outside large
bike shop,
Castro Street at El
Camino Real
Mountain View 2,346
No Yes Yes Some strip mall retail,
some main‐street style
retail
Offices None
Charleston Park /
North Bayshore
Area
Mountain View No Yes No Commercial Office park Google Bike lane
Middlefield Light
Rail Station
Mountain View No Yes No No Suburban office park,
light rail station
Mountain View
Caltrain Station
Mountain View 7,408
Yes Yes No Retail/Restaurant,
“main street”
Mountain View
City Hall
Mountain View 3,307
No Yes Yes Retail/restaurant City Hall, offices None
San Antonio
Caltrain Station
Mountain View 2,104
Yes Yes Yes A few small strip mall
developments
Strip mall offices None
San Antonio
Shopping Center
Mountain View 2,168
No Yes No Big box retail, suburban
office buildings
Low‐volume street
Notes:
1 Trip data is for the period from September 1, 2014 to August 31, 2015 and represents total trips to and from the station.
Bay Area Bike Share Page | 22
Peninsula Cities Analysis
Appendix C: Comparison of Internal Bike Share Ridership with Service Area Characteristics
Bay Area Bike Share Page | 23
Peninsula Cities Analysis
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Peninsula Cities Analysis
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Peninsula Cities Analysis
MEMORANDUM
Project: Bay Area Bike Share – Peninsula Communities Strategic Plan
Subject: Deliverable 2 – Business Case Analysis and Summary of San Mateo Pilot Program
Date: January 29, 2016
To: Melissa Reggiardo, SamTrans
From: Sean Co and Adrian Witte, Toole Design Group
CC: Peninsula Bike Share Working Group
This memorandum is the second of a series of memoranda to help Redwood City, Palo Alto, and
Mountain View (referred to as “the peninsula cities”) make their decision on how to move forward with
bike share. It includes:
1.A review of the “business case” for bike share in the peninsula cities – summarizing what
function bike share can play, who are the most likely users of the system, and how bike share
could address different city goals.
2.System planning for expanded programs in each of the peninsula cities and an exploration of
population densities, diversity, and income levels in the proposed service areas.
3.A summary of the proposed San Mateo pilot bike share program to explore whether this
program may be expandable to the peninsula cities as an alternative to the Motivate program.
4.Possible funding mechanisms that might be available to the peninsula cities including MTC
capital funds and a review of funding mechanisms used in San Mateo and other places.
1.Business Case for Bike Share
This section builds on the existing conditions review and analysis conducted as part of the first
memorandum to summarize the business case for bike share on the peninsula. It looks at what functions
bike share could play, who would be the expected users of the program, and how bike share might be
able to address different city goals.
Attachment C
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Peninsula Cities Analysis
Bike Share Functions and Users
Bike share in the peninsula cities currently, and will continue to serve primarily a commuting function.
The greatest opportunities are to connect people to mass transit such as Caltrain as part of larger
commute trips or to connect local residents to employment centers within the same city or in nearby
cities. There are particular benefits to Caltrain including increasing the catchment area of stations,
reducing the need for private bicycles to be brought on board, and the opportunity to provide an
integrated transit solution that offers an alternative to private vehicle travel.
The program could also provide some ancillary functions for local residents, e.g., connecting
neighborhood commercial districts, providing recreational riding opportunities, connecting student
housing to city services, etc.
Bike share programs in the peninsula cities are not expected to serve a large tourist or visitor market,
primarily because the number of tourists and visitors to the peninsula is much lower than in other parts
of the Bay Area. This does take away a potential revenue stream from casual users that in other cities
makes up over 50‐percent of user revenues. This means that a greater emphasis on finding alternative
funding sources or better monetizing local users will be important.
Primary Functions of a Peninsula Bike Share Program
A first and last mile connection to transit, particularly to mass transit. Existing ridership
patterns show that the most frequent trips in the pilot program are to and from the Caltrain
stations. Bike share can increase the catchment area of a station (i.e., the bikeable distance
around a station is much larger than the walkable distance). If bike share could be integrated
into the transit fare structure, this would further reduce barriers to using the system and could
provide a full transit solution to compete with private automobile travel.
Reduce demand for long‐term secure bicycle parking and the need to bring private bicycles on
board Caltrain. The 2014 On‐Board Transit Survey Final Report showed that 17‐percent of
passengers access Caltrain by bike.1 Providing a network of public bicycles that users can dock
and “walk away” removes the personal risk of bike theft and could reduce the amount of secure,
long‐term bicycle parking that Caltrain would need to provide at stations. According to the San
Francisco Bicycle Coalition, since 2004, the number of passengers bringing their bikes on board
Caltrain has almost quadrupled.2 Expanding bike share may alleviate some of the demand to
bring bikes on board.3
1 Caltrain 2014 On‐Board Transit Survey Final Report.
http://www.caltrain.com/Assets/_MarketDevelopment/pdf/Caltrain+Origin+$!26+Destination+Survey+2014.pdf
2 San Francisco Bicycle Coalition. Caltrain. Accessed Dec. 15, 2015. https://www.sfbike.org/our‐work/regional‐
advocacy/caltrain/
3 One conclusion of the ‘BABS Membership Survey’ was that the Bay Area Bike Share, at least as a pilot program,
“has not had a sizeable effect in reducing the number of bikes on Caltrain or BART trains.”
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Peninsula Cities Analysis
Provide a connection to major employment centers, particularly for those commuting from
the same or the next city. There are already some “super‐users” of the pilot program that make
regular commute trips within the same city or to stations on the edge of the next city. As the
system is expanded to cover more employment centers and moves towards the edges of
adjacent cities, there is the potential for more commuting trips, and for associated trip‐making
throughout the day (e.g., running errands, going for lunch, recreational rides, etc.). Bike share
could become a Travel Demand Management (TDM) offering for employment centers in the
peninsula cities, which could also provide a funding opportunity for the system.
Ancillary Functions of a Peninsula Bike Share Program
Introduce new users to bicycling. Bike share provides an easily accessible network of bicycles
useful for those that do not have access to a private bicycle or that are looking to try bicycling.
Bike share systems and bicycling have social elements and social media associated with them
and many people are introduced to bike share through friends and visibility of the program. A
more complete and comfortable infrastructure network may be needed to attract or retain this
group of potential users.
Economic development and increased spending in retail and commercial areas. Bike share can
be a way to connect neighborhood centers and in particular provide access to downtowns and
retail / commercial districts where parking is constrained. Other cities have found bike share to
create additional local spending at businesses located near stations.
Student mobility. Although stations will not be provided on the main Stanford campus, there
will be stations on nearby properties. As well, bike share could be provided at off‐campus
student housing and be a means to connect students to city services, activity centers, and
recreational destinations.
Recreational trip making. This is not expected to be a large group of users, but for certain
station locations, there may be a potential trip type. For example, there is anecdotal evidence
from hospital campuses that have bike share stations that they are used by visitors spending
long hours at the campus and as a stress relief tool. Bike share in general can have a public
health benefit by increasing physical activity.
Minor Functions of a Peninsula Bike Share Program
Tourist and visitor transportation. Bike share is unlikely to serve a large tourist and visitor
function, primarily because there are fewer tourists and visitors than in other parts of the Bay
Area. This is a significant user group and revenue source in many other cities and will need to be
considered in the financial model.
Needs to Support the Bike Share Program
Improved and expanded bikeway network. There are certain users that will use the bike share
system regardless of the amount and type of infrastructure. But there is a large potential user
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Peninsula Cities Analysis
group that will be more likely to use the program as the peninsula cities continue to provide a
broader and more comprehensive network of comfortable bikeways.
A greatly expanded system. Providing a greater network of stations will improve convenience
and accessibility to the program, increase the number of destinations that can be served, and
bring inter‐city destinations closer together.
Innovative funding models. To overcome the expected revenue shortfall, a broad range of
funding options should be explored including MTC funding opportunities, other grant programs,
TDM program funding, corporate sponsorship and memberships, revenues from transit fare
integration, crowd‐source funding, and other funding opportunities. Minimizing operating costs
and better monetizing annual members and local users may also help fill this shortfall.
Bike Share’s Impact on City Goals
At the January 8, 2016 Peninsula Bike Share Working Group meeting, there was discussion on some
common goals for a Peninsula bike share system. While there was much agreement about some
common goals and objectives for the system, this discussion may be premature in the overall
progression of the direction of bike share on the Peninsula. When and if the cities decide they will be
part of the same bike share system, the group goals discussion can be revisited.
To provide background information for city officials on how bike share can best serve city goals, Table 1
illustrates how a bike share system can be used as a tool to help cities achieve their transportation,
climate, health, livability, and economic development goals. The goals are shown with potential
measures and methods to quantify the goals along with how bike share would achieve these goals. The
potential impact that bike share can have on these goals is shown based on qualitative and quantitative
evaluations from other systems in the United States and MTC’s Climate Initiatives Program Evaluation
on Bay Area Bike Share. Although it is premature to set bike share system goals and further discussion
will be required once a clear direction is selected, a draft set of goals is presented in Table 2. This table
will be a starting point for future goals discussions.
Table 1: City Goals Achieved Through Bike Share
City Goals Measures How Achieved Through Bike
Share
Potential Impact
Emissions and
Climate Reduction
GHG emissions Mode shift to bicycle trips Low
Particulate Emissions
(Particulate Matter 2.5 and 10)
Mode shift to bicycle trips Low
Number of single occupant
vehicle (SOV) trips
Mode shift to bicycle trips Low
Vehicle Miles Traveled (VMT) Mode shift to bicycle trips Low
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Peninsula Cities Analysis
City Goals Measures How Achieved Through Bike
Share
Potential Impact
Increase Mobility
Mode of access to transit Reduces the need for auto
parking
Medium
First and last mile connections Provides additional
transportation option
High
Bicycles on board transit Reduces need for private bicycle
trips to transit
High
Reduced vehicle parking at
Caltrain stations
Reduces the need for auto
parking
Medium
Improvement in
Public Health
Outcomes
Minutes of physical activity Increase in active transportation High
Bicycle mode share Overall increase in all bicycling Medium
Increase in
Economic
Development
Increased spending in retail and
commercial areas
Improves access to retail and
commercial areas
Medium
Trips to commercial areas Improves access to areas where
parking may be constrained
Medium
Connect to major employment
centers
Inclusion of bike share in
employer TDM programs
High
Increase Tourism Increase in visitors and tourists Provides a low‐cost
transportation option
Low
Table 2: Multi‐City Bike Share Goals
Example Goals Example Objectives
Develop a seamless, easy‐to‐use bike share system that
is accessible
Increase participation among a diverse spectrum of
members, regardless of income level, cultural
background, or other demographic factor.
Reduce barriers to membership and usage.
Effectively define bike share and its pricing structure.
Increase personal mobility and establish bike share as
an integral transportation mode in the region
Improve access to jobs, transit, key destinations and
the existing public transport and bike network.
Support a safe, healthy and environmentally sustainable Prioritize safety for all customers
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Peninsula Cities Analysis
Example Goals Example Objectives
Bay Area Reduce transportation‐related greenhouse gas
emissions and criteria pollutants.
Improve public health.
Create a financially sustainable bike share program
Sustain the system by attracting investment and
minimizing operating costs.
Strengthen the local and regional economy
2. Additional Pilot Program Analysis
Toole Design Group analyzed ridership of the Bay Area Bike Share pilot program as part of the first
memorandum. A series of online maps were created to show trends in existing ridership using data from
September 2, 2014 to August 31, 2015. The map below shows a “spider map” of bike share trip demands
between stations and can be accessed online at:
https://erinlise.cartodb.com/viz/41e179a8‐a90c‐11e5‐8b98‐0e787de82d45/embed_map
Since that analysis, Toole Design Group prepared a separate series of online maps that analyze: (1) the
distribution of trips over the course of a typical weekday originating at each station; (2) the most
popular destination stations for trips originating at each station; and (3) the zip code distribution of bike
share trips originating from the San Francisco Caltrain Station (to show how many Peninsula residents
may use bike share at the San Francisco end of their trip). These maps are online at:
https://ennslisa.github.io/BayAreaBikeshare.html
Map (1) Distribution of Weekday Rides by Time of Day
This map shows the average number of weekday bike check‐outs from each station by time of day. The
map shows that most stations observe commuter peaks. Trips from the Caltrain stations have a large
AM peak between 8am and 10am (likely people travelling from the station to work) and a smaller
evening peak between 5pm and 7pm (likely people coming home from work using Caltrain). Most other
stations have a small AM peak (perhaps people travelling to the Caltrain station or to local employment)
and a larger, and earlier PM peak (likely people travelling to the Caltrain station to return home).
Map (2) Station Destination by Start Station
The sidebar in this map shows a list of all stations in the pilot program. When a start station is clicked,
the dots on the map represent the total number of trips taken from the selected start station to the
various end stations (note: the start station is shown in orange and the destination stations are shown in
blue. If there were no trips taken from the selected start station to an end station, it will not appear on
the map). This map is useful in understanding the variety of destinations accessed from each station. For
example, approximately 1,400 trips that originated from the Mountain View Caltrain station were taken
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Peninsula Cities Analysis
to the Mountain View City Hall station, over 900 to the Castro Street & El Camino Real station, 600 to
the Evelyn Park & Ride station, and even 100 were taken to the San Antonio Shopping Center.
Map (3) Trips starting from San Francisco Caltrain station by member zip code
This map shows the zip code (for Peninsula cities only) of annual members that made a trip originating
from one of the two bike share stations at the San Francisco Caltrain station. What this map proximates
is how many people that use Caltrain to travel from the Peninsula to San Francisco then use bike share
to get to their final destination. There is no way to tell if these users also used bike share to access the
Caltrain station at the Peninsula end of their trip.
It shows that there were a total of 16,658 bike share trips made from the San Francisco Caltrain bike
share stations by annual members residing in the Peninsula cities. This represents approximately 45 trips
per day (and only includes annual members that chose to enter their zip codes). The map provides a
breakdown of that number by zip code, e.g., there were 872 bike share trips taken from the San
Francisco Caltrain bike share stations by annual members that live in zip code 94041 (part of Mountain
View). One of the interesting findings of this map is the number of members that live in San Mateo and
other Peninsula cities that do not currently have bike share.
One of the uses for this map is to understand how many people would be impacted by changes to the
current system, e.g., removing bike share altogether or going with a different system that could not be
integrated with the Motivate system that would require these users to potentially have two bike share
memberships to two different programs.
3. System Planning and Demographic Analysis
The analysis documented in the first memorandum recommended a system size of 35 to 40 stations to
increase ridership towards the target of 1.0 trip per bike per day. Based on that recommendation the
project team placed stations at potential locations in Redwood City, Palo Alto, and Mountain View to
reach the target coverage and station density. TDG considered the heat map prepared previously by
MTC, large employment centers, commercial, retail, and entertainment destinations, civic destinations,
and access to transit in placing stations. Note that these locations are intended to be general (e.g., to
the intersection level). Additional work will be required to identify precise locations for each station
considering available right‐of‐way, adjacent property interest, and public feedback. Potential station
locations are shown on the online map accessed at:
https://ennslisa.github.io/BayAreaBikeshareDemographics.html
Based on these stations placements, the service area of the system was calculated by drawing a 1/4 mile
radius circle around each potential bike share station (to approximate the distance that a potential bike
share user would walk to access a station) and joining these circles where there was overlap. A series of
maps were created to explore the following demographics of the proposed service area including: (1)
population density; (2) diversity; and (3) income.
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Peninsula Cities Analysis
Map (1) Population Density
This map shows population density in the potential service area and was created using ESRI population
estimates for 2015 based on the 2010 census. The map shows that there is potential for an expanded
program to serve higher population density areas of the peninsula cities, which will increase the primary
functions of the program as a connection to transit and a potential commuting option to employment
centers.
Map (2) Diversity
This map shows diversity in the potential service area as calculated by ESRI’s Diversity Index, a measure
of the percentage likelihood that two random people chosen from the same area would be of different
races. The average Diversity Index for Mountain View is 76‐percent, for Palo Alto is 59‐percent, and for
Redwood City is 85‐percent.
Map (3) Income
This map shows median household income in the potential service area. The average household income
in the entire area is approximately $91,000 for Mountain View, $114,000 for Palo Alto, and $64,000 for
Redwood City. Figures are ESRI estimates for 2015 based on the 2010 census.
4. Review of San Mateo Pilot Program
The City of San Mateo completed a bike share feasibility study in 2013. The City was originally left out of
the Bay Area Bike Share pilot program and the subsequent Motivate expansion of the program. More
recently, the City was approached by Social Bicycles (SoBi) to implement a pilot program of their own
featuring smart bike technology. Because SoBi had already been vetted through an extensive RFP
process and awarded the contract to establish the City of Santa Monica’s Breeze bike share program,
staff at the City of San Mateo reviewed this information and recommended to Council in November
2015 that they be granted a sole source contract to establish a 50 bicycle smart bike system.
Smart bike systems, as opposed to smart dock systems such as the Motivate program, provide the
locking mechanism on the bicycle itself, which offers greater flexibility in where the bicycle can be
parked. SoBi also offers an a‐la‐carte menu of station options. San Mateo is purchasing only the bicycles
and will use regular bike racks to serve as pseudo‐stations. There are also options to purchase custom
built bike racks to give the station a unique look to other street furniture and an option to purchase
kiosks. Because bikes are reserved via mobile phone or online, there is little need for kiosks except at
stations that are likely to receive high casual usage. Because of these choices, the cost of providing
stations is relatively low meaning that creating more stations is possible for the same or lower price.
About the System
Based on discussions with Kathy Kleinbaum at the City of San Mateo and information contained in the
City’s Administrative Report dated November 16, 2015, the following describes some of the key features
of the proposed bike share system:
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Peninsula Cities Analysis
The pilot will include 50 smart bikes distributed at 10 to 12 hubs.
The program will be named “Bay Bikes” and the system will be branded using a light blue color
that will be distinguishable from the Motivate program.
The City used TDM funding allocated from developers to purchase the bicycles. The City did not
take up the option to purchase custom bike racks or kiosks. They will use regular U‐racks with a
vinyl wrap to distinguish them from other city bike racks.
The City will own the program and its assets. A local non‐profit called Bikes Make Life Better will
operate and maintain the system performing day‐to‐day operations such cleaning the stations,
repairing the bikes, and rebalancing the bikes between stations. SoBi will be responsible for
creating and maintaining the website and mobile phone‐based membership and reservation
system as well as performing revenue collection and disbursement.
The San Mateo program will have a different pricing structure to the Motivate system. Users can
sign up for a membership for $15/month with which they receive one hour of free riding time
per day. For casual users, and annual members exceeding their one hour of riding time, the cost
is $5/hour, prorated to the nearest minute. There is a $3 fee for locking the bike outside a hub
and a $1 credit for returning a bike that is parked outside to a hub. There is also a $100 fee for
parking the bicycle outside of the service area (likely to be the City boundaries).
The City is seeking sponsorship. They are offering the bike basket and online assets to a
potential sponsors. Other bike elements will likely be retained for system branding.
Currently, a user travelling between San Mateo and one of the BABS pilot cities would need to
maintain two separate bike share memberships to be able to use bike share in both cities.
The City is intending to pilot the program for three years and evaluate the program based on
overall usage and customer experience. At the end of the pilot term, the City can decide to
continue the program, expand it, or to terminate it.
The City is hoping to launch the system in May 2016.
Potential for Expansion of the San Mateo Bike Share Program
The introduction of a second bike share system to the Peninsula offers some opportunities and some
challenges. There may be an opportunity to expand this system to the other peninsula cities to create a
peninsula region bike share system.
Opportunities
Regional Expansion – San Mateo has kept open the option for regional expansion to other cities.
They have named the program “Bay Bikes” to leave open this possibility and to create a regional
brand. They are also open to different regional governance models including the Cities working
together under an MOU or turning the system over to a non‐profit or some other model.
Cost – the a‐la‐carte nature of SoBi’s pricing structure means that per station capital costs are
lower. The cost per station is reduced by purchasing fewer kiosks and having the flexibility to
use regular bike racks in place of customized docking points.
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Peninsula Cities Analysis
Flexibility – smart bike systems allow users to park bicycles at or near hubs or at any location
outside of a hub for an additional fee. This provides more flexibility in suburban settings where
destinations are more spread out and would require a large number of stations.
Challenges
The following aspects of the San Mateo system may hinder expansion capabilities.
Inter‐operability – Smart dock bikes cannot be locked at smart bike hubs (as they need a custom
docking point to lock to). However, smart bike systems can be locked at any bike rack in a smart
dock area. Because of the distances between San Mateo and the other systems, it is unlikely to
be an issue that a smart dock bike would be ridden between systems. However, as program
areas expand over time, this may become more of an issue.
System Integration and Different Pricing Structures – Users of the San Mateo system will need
to maintain two memberships if they also use the Bay Area Bike Share program in another city.
SoBi and Motivate may over time offer reciprocal membership where a membership card for
one system may provide access to the other system. However, it will still be necessary for users
to maintain two accounts or be aware of the two different pricing structures. It would also
require some form of revenue sharing agreement between the two companies.
5. Future Funding Opportunities
MTC has continued to express interest in funding bike share equipment. It is expected that in the next
few months MTC will release a regional call to fund bike share programs. MTC has $4.5 million in
Congestion Mitigation and Air Quality (CMAQ) funds that can be used to purchase capital equipment for
bike share. As is the case with any bike share program funded under CMAQ, operations and
maintenance funds are not eligible. It is expected that these funds will be released in two phases with
approximately $2.25 available in the first phase. While MTC is currently developing the program, it will
most likely be a competitive program with priority given to communities that have done planning or
feasibility studies. It is expected that a draft of this call will be released in March of 2016.
There is also activity at a national level to clarify funding for bike share programs. The Bike Share Transit
Act, introduced to Congress at the beginning of 2016, would make federal funds for bike share available
through the Federal Transit Administration (FTA) and make it clear that bike share projects and
associated equipment are eligible for federal transit funds and CMAQ. This may change some of the
eligibility of projects and may allow operations and maintenance as an eligible expense.
While the Bay Area Air Quality Management District (BAAQMD) funded the initial Bay Area Pilot
Program, they have not made a clear determination if future Transportation For Clean Air (TFCA) funds
will be available to fund bike share programs. MTC and BAAQMD conducted an evaluation of bike share
under the Climate Initiative Program and bike share had a high cost per ton of CO2 reduced and minimal
reductions of other criteria pollutants. The program evaluates projects based on the cost effectiveness
of improving air quality and while bike share may have other benefits, the Climate Initiatives evaluation
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Peninsula Cities Analysis
showed high capital costs mostly due to a lack of any other subsidy such as sponsorship and the upfront
capital costs associated with the program.
There are many other funding opportunities that could be explored further. Some of those that have
been successfully implemented elsewhere include:
Travel Demand Management (TDM) and developer traffic impact fees going towards purchase
of bike share equipment, as is being used to fund San Mateo’s pilot program.
Seeking a system sponsor to help fund capital or operations and maintenance. Corporate
memberships could be offered as part of a sponsorship deal or independently.
Integrating bike share stations into other infrastructure improvements as part of other capital
projects such as roadway reconstructions, trail construction, parking improvements, Caltrain
station improvement plans, etc.
Revenue sharing agreement with transit providers that integrate bike share into the transit fare
structure (this has not yet been implemented in the United States).
Crowdsource funding has been used in Kansas City to fund bike share stations in communities
that want to expedite bike share in their neighborhoods.
There may be other grants available to fund different elements or specific programs related to
bike share, e.g., public health and equity partnerships and grants may be available.
MEMORANDUM
Project: Bay Area Bike Share – Peninsula Communities Strategic Plan
Subject: Deliverable 3 – Program Options
Date: March 15, 2016
To: Melissa Reggiardo, SamTrans
From: Sean Co and Adrian Witte, Toole Design Group
CC: Peninsula Bike Share Working Group
This memorandum is the third of a series of memoranda to help Redwood City, Palo Alto, and Mountain
View (referred to as “the peninsula cities”) make their decision on how to move forward with bike share.
It includes:
1.A summary of four potential system options that the peninsula cities could pursue including a
streamlined, no‐gap‐in‐service scenario; a streamlined, new vendor scenario; and expanded
system options with either the current vendor or a new vendor.
2.A review of procurement options to understand potential gaps in service and how to work
regionally if a new vendor or operator is to be procured.
3.A review of potential regional governance options for the peninsula communities to move
forward with a coordinated program.
4.Funding options including a review of how cities might be able to fund capital for their systems
and short‐ and long‐term operations.
1.Service Scenarios
The Peninsula Bike Share Technical Committee discussed possible service options for bike share service
in their communities. Firstly, in the interim, that the current pilot program be “streamlined” in each city.
In Redwood City, staff felt that streamlined service would remove the two lowest performing stations to
operate with fewer, well‐performing stations. In Palo Alto and Mountain View, staff felt that
streamlining the system could occur by relocating under‐performing stations to better performing
locations and/or adding a few new stations at key attractions and destinations.
Attachment D
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Peninsula Cities Analysis
Longer term, the peninsula cities might look to greatly increase the size of the program to between 30 to
40 stations to add significant utility to the program. This size increase comes with much greater capital
and operating costs. Under any service scenario, any new equipment and operations would need to be
funded by the cities and sources for this funding would need to be identified. The larger scale program
increases this commitment.
The general consensus of the Technical Committee is that there are already two bike share equipment
vendors operating on the peninsula and it seems confusing and challenging to introduce a third (or
more) vendors. That means that the peninsula cities will chose between the Motivate and the Social
Bikes equipment assuming this fits with their procurement protocols. However, the cities can decide
between one of the existing vendors (Motivate or Bikes Make Life Better) or select a new vendor or
vendors to operate their systems.
Distilling all of this information, four service options were considered for cost analysis:
1. Streamlined service, current vendor: streamline the number of stations in each city, purchase
any additional equipment needed, and pay Motivate to continue operations. This option results
in no gap in service. Cost estimates are based on quoted rates from Motivate (assuming less
than 1.0 trip per bike per day).
2. Streamlined service, new vendor: streamline the number of stations in each city, procure a new
equipment vendor (Social Bikes) and operator to take over operations. Cities could add on to the
Bikes Make Life Better operating contract with San Mateo or procure a different operator. Cost
estimates are based on capital costs quoted by Social Bikes and operating costs procured by the
City of San Mateo.
3. Expanded service, current vendor: applying a target size of 35 stations to each city, this scenario
would continue with the current vendor and operator. This option results in no gap in service.
Cost estimates are based on quoted rates from Motivate (assuming less than 1.0 trips per bike
per day).
4. Expanded service, new vendor: applying a target size of 35 stations to each city, this scenario
would procure a new vendor (Social Bikes) and operator. Cities could add on to the Bikes Make
Life Better operating contract with San Mateo or procure a different operator. Cost estimates
are based on capital costs quoted by Social Bikes and operating costs procured by the City of San
Mateo.
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Peninsula Cities Analysis
System Plans
Service areas were developed for each city for the full build‐out scenario by applying stations to meet
target coverage and station densities and then adjusted for key attractions and destinations. City staff
were asked to identify what a streamlined service would look like in each of their cities.
Mountain View, as part of planning for initial Bay Area pilot program had identified 11 station locations
that they took through their internal approval process and proposed to the pilot program. The pilot
launched with only 7 station locations including 2 that were the recommendation of the operator. The
City has since relocated these 2 stations to their preferred locations. A streamlined service in Mountain
View would include the existing 7 locations and add 4 stations as shown on Figure 1.
In Palo Alto, streamlined service would include 13 stations ‐ the 5 existing stations, 5 stations identified
for private funding, and 3 new stations (for which the City of Palo Alto submitted a TFCA grant
application in March 2016). These are shown on Figure 2. The new stations will add density in
Downtown Palo Alto and at the California Avenue Caltrain station and provide stations directly serving
the Stanford Medical Center and the Stanford Research Park.
Staff suggested that the most effective way to streamline service in Redwood City may be to actually
reduce the system to the best performing stations. This would help boost ridership metrics and reduce
operating costs. The streamlined system would reduce to 5 stations as shown on Figure 3. Staff
indicated that they would be willing to talk to Motivate to allow their 2 unused stations to be
transferred to Mountain View and/or Palo Alto.
System Costs
Capital and net operating costs were calculated for each of the scenarios describe above. Table 1 shows
a breakdown of capital (including installation) costs, operating costs, estimates of potential user
revenues (from membership and overage fees), and net operating costs for each city and for the
collective program.
Capital and O&M costs are generally well known and are outlined in the table footnotes. User revenues
are more difficult to calculate are a combination of annual and casual membership sales and usage fees.
Annual and casual membership sales are calculated as the number of annual or casual members
(assumed to grow from existing membership levels in proportion to the number of stations in the
system) multiplied by the cost of an annual or casual membership ($88 or $9 respectively). Usage fees
are calculated first by estimating the number of annual trips from the equations developed as part of
Deliverable 1 (and assuming a station density of 8 stations per square mile). Trips are then broken down
into annual and casual member trips based on existing ratios in each city. Annual member trips are
multiplied by the average overage fee recouped per annual member trip for the pilot program of $0.12
per trip. Casual user trips are multiplied by the average overage fee recouped per casual user trip for the
pilot program of $8.79 per trip.
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Peninsula Cities Analysis
Figure 1: Streamlined (Phase 1) and Full Build‐Out Scenarios for Mountain View Bike Share.
Bay Area Bike Share Page | 5
Peninsula Cities Analysis
Figure 2: Streamlined (Phase 1) and Full Build‐Out Scenarios for Palo Alto Bike Share.
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Peninsula Cities Analysis
Figure 3: Streamlined (Phase 1) and Full Build‐Out Scenarios for Redwood City Bike Share.
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Peninsula Cities Analysis
Table 1: Cost Scenarios (assumes one year of operations)
OPTION 1 OPTION 2 OPTION 3 OPTION 4
Streamlined service,
current vendor
(no‐gap‐in‐service)
Streamlined service,
new vendors
Expanded service,
current vendor
Expanded service,
new vendors
CAPITAL Motivate Social Bikes Motivate Social Bikes
Mountain View
$180,000 $335,000 $1,665,000 $1,075,000
Receive 1 station from
RWC, purchase 3 new
stations
Purchase 11 stations from
new vendor Purchase 28 new stations Purchase 35 new stations
Palo Alto
$415,000 $400,000 $1,785,000 $1,075,000
Receive 1 stations from
RWC, purchase 7 new
stations
Purchase 10 stations from
new vendor Purchase 29 new stations Purchase 35 new stations
Redwood City
‐ $150,000 $1,665,000 $1,075,000
Give 1 station to MV and 1
station to PA
Purchase 5 stations from
new vendor Purchase 29 new stations Purchase 35 new stations
Total Capital
Cost $595,000 $885,000 $5,115,000 $3,225,000
OPERATIONS
(REVENUE)
NET COST
Motivate New Operator Motivate New Operator
Mountain View
$280,000 $250,000 $900,000 $735,000
($65,000) ($65,000) ($290,000) ($290,000)
$215,000 $185,000 $610,000 $445,000
Palo Alto
$335,000 $290,000 $900,000 $735,000
($115,000) ($115,000) ($565,000) ($565,000)
$220,000 $175,000 $335,000 $170,000
Redwood City
$130,000 $130,000 $900,000 $735,000
($20,000) ($20,000) ($285,000) ($285,000)
$110,000 $110,000 $615,000 $450,000
Net Operating
Cost (per year) $545,000 $470,000 $1,560,000 $1,065,000
Notes:
1. Motivate retains ownership of existing stations in the pilot cities, but there is no capital cost to the peninsula cities to retain these stations.
2. New stations cost $55,503.56 per station plus a $4,000 per station installation cost based on Motivate quoted prices for a 19 dock station and
10 bikes per station.
3. All new equipment would be required if Social Bikes was selected. New stations cost $33,550 per station plus $4,000 per station for
installation based on prices quoted by Social Bikes for an equivalent 10 bike hub with 19 customized bike racks and a kiosk. Kiosks provided at
one‐third of stations. A $10,000 start‐up cost for website design is also included in this price.
4. Operating cost of $112.50 per dock per month based on quoted rates from Motivate, assuming less than 1.0 trips per bike per day.
5. Operating costs based on rates procured by the City of San Mateo. This includes a $150 per bike operating cost, plus a $100 per bike per year
allowance for replacement parts, a $2,500 per month software license fee, an $8 per bike per month platform connectivity fee, and a $50 per
kiosk per month kiosk connectivity fee.
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Peninsula Cities Analysis
2. Procurement Options
Staying with Motivate requires no procurement (Options 1 and 3). For this reason there is no gap in
service under these options. For the other service options where a new vendor (either for equipment,
operations, or both) needs to be procured, there is likely to be some downtime between the end of one
service and the start of another.
Cities could procure individually or in some collective format. Equipment and operators could be
procured separately in each city. Procuring separately for equipment could create the scenario of
different, incompatible vendors between cities. However, procuring separate operators could be of
benefit to each city to allow them to prioritize different price points, service levels, and other features.
For example, Mountain View may want to select a private operator with high service levels, but at a
higher price point than Redwood City, who may be prepared to accept lower service levels and a non‐
profit operator for a lower cost.
Based on discussion with staff at the City of San Mateo, the City was able to procure Social Bikes
equipment without having to issue an RFP because of a number of factors. Firstly, another charter city
(Santa Monica) went through a similar evaluation process to select Social Bikes as their vendor;
secondly, the amount of the procurement was relatively low (less than $100,000); and lastly, they had a
cost proposal from Motivate to compare to so the project was not sole source per se. These factors
allowed staff to recommend to Council that the City purchase equipment from Social Bikes. These same
opportunities may exist in the other Peninsula cities too.
Another way to coordinate procurement would be for an agency to lead the procurement with others
joining in. The City of Palo Alto has expressed interest that they would take the lead on procurement if
necessary.
3. Regional Governance Options
There are any number of ways for a bike share system to be organized and each city or region evaluates
their specific needs to determine which model works best for the funding, geographical, and political
environments of that area. A series of questions were designed to narrow down the potential
governance options. This flow chart is shown on Figure 4.
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Peninsula Cities Analysis
Figure 4: Peninsula Bike Share Governance Structure Options Flowchart.
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Peninsula Cities Analysis
The flow chart shows that there are several viable options to create a regional bike share program in the
Peninsula cities. These include:
Cities work together under a Memorandum of Understanding (MOU) framework. This is the
model used by the Boston area’s Hubway system and for the Capital Bikeshare program in the
Washington, D.C. area. Under this structure, an MOU would be developed between the
participating cities that outlines collective program decisions such as system branding, pricing
structure, revenue collection and distribution, marketing and fundraising responsibilities, etc.
Creating capacity outside of the city structures through the creation of a new non‐profit
organization to take on responsibility for the bike share program. The non‐profit may also take
on operations or contract out these services. This is the model used for Nice Ride Minnesota and
Cincinnati Red Bike (the former operating in multiple cities and the latter operating in multiple
cities across state lines).
Caltrain owned and operated program. This model is similar to the structure being used by LA
Metro in Los Angeles where an agency that spans the entire region takes on the responsibility of
the bike share program. Caltrain, although present in each community, does not have as much
influence over the whole system area as would a regional planning or transit agency. Also, this
model depends on interest and capacity within Caltrain that may not exist. Further discussions
would be needed to pursue this model.
Of the two most likely options, a collective MOU structure is the most expedient, maximizes control and
involvement for each of the cities, and is the most cost‐effective option. However, it relies on all of the
participating cities to be on‐board with this model and commit the necessary staff and financial
resources to operate the program. The peninsula cities have a good history of working together
cooperatively.
The non‐profit model would take the financial and public image risks of the program away from the city
agencies. Non‐profit operators also tend to be able to manage costs and can attract the greatest variety
of funding sources. However, a new non‐profit would take considerable time to establish and would
turn over control of the program. Staff capacity for the non‐profit would need to be built and a funding
source established to build this capacity.
As we have seen in the previous deliverables, the data suggests that the three (or more) systems
working together offers benefits to bike share members on the Peninsula and in the rest of the region.
The decision to work together to provide a unified bike share system ultimately rests with the individual
cities. The Motivate bike share system offers substantial benefits to the Bay Area region with the
possibility of rapid expansion into the East Bay and with large numbers of bikes not previously available
with pubic funds. However the Motivate expansion may have inadvertently caused a fracture in bike
share transportation for the region by causing cities not included in the expansion to examine their own
options for bike share ‐ which may include independent systems. The Bay Area is already burdened with
27 transit operators and regional coordination among them remains challenging. Should the Peninsula
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Peninsula Cities Analysis
cities decide that a coordinated bike share model does not work, there are options for bike share which
include independent programs and discontinuation of the service.
Independent Programs
Should the timing and coordination of a single regional system not fit into bike share plans for the cities,
individual cities may want to move forward with the implementation of bike share on their own. The
City of San Mateo has already moved forward with a small Social Bike system. The San Mateo system is
independent of the Motivate system requiring members to sign up for the system even if they have a
membership with Motivate. This is less than ideal from a customer service perspective requiring people
that may live in San Mateo but work in San Francisco to carry two membership fobs with different
pricing and different back‐end customer service and membership systems.
Moving independently allowed San Mateo to use available funds to quickly implement a system without
waiting for other cities to come online. This option may become necessary if one or two of the Peninsula
cities decide to discontinue bike share or move with a technology option that is different from each
other.
Discontinuing Bike Share
Should the cities decide that there is not political support or funding available for bike share, the
Motivate program can be discontinued thereby ending the pilot program. Supporters of bike share
including the Silicon Valley Bicycle Coalition and other advocacy groups may continue to lobby for bike
share making that decision a political challenge. If bike share were to be removed, the interest and
momentum would have subsided, making it difficult to bring bike share back at a future date. Funds that
are available for bike share would be spent on other projects and the current regional bike share
expansion funds may not be available in future years.
4. Funding Options
Capital
Metropolitan Transportation Commission (MTC) Congestion Mitigation and Air Quality (CMAQ)
MTC is in the process of developing guidelines for a standalone CMAQ funded grant program to
specifically fund bike share. It is expected the program will total $4.5 million and will be released in two
calls with the first call expected in the spring of 2016. Since the program is funded with CMAQ it is
expected that it will cover equipment only and not operations and maintenance.
Bay Area Air Quality Management District (BAAQMD) Transportation Fund for Clean Air (TFCA)
The TFCA fund has two parts, the Regional Fund and the County Program Manager Fund. The Air District
is no longer accepting applications for bike share under the Regional Fund as an eligible expense.
However bike share is still eligible under the County Program Manager Fund. To apply to the County
Program Manager Fund, projects are submitted directly to the County Congestion Management
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Peninsula Cities Analysis
Agencies. Projects must include a cost/effective measure that shows that bike share is able to achieve a
$500,000 per ton reduction for emissions. TFCA funds can be used to fund operations and maintenance
for bike share for up to 5 years. It is worth noting that even though operations and maintenance for bike
share are eligible, it is unlikely these expenses would make the application competitive. The cost
effectiveness calculations are based on the number of bikes for a system. Any additional funds
requested in the application that does not increase the number of bikes reduces the cost effectiveness
number.
Caltrans Active Transportation Program (ATP)
The Active Transportation Program (ATP) is a new funding source in California that can be used to fund
bicycle and pedestrian capital projects and plans. The program is a combination of different federal and
state funding sources including the federal Transportation Alternative Program and Highway Safety
Improvement Program. The state funds are part of the State Highway Account funds. Cycle 2 of the
program was over programmed by $360 million over 3 fiscal years. The call for Cycle 3, which will cover
fiscal years 2019/20 and 2020/21, will have applications due to Caltrans on June 15, 2016. Any grant
requests will cover equipment but will be unlikely to cover ongoing operations and maintenance.
Operations
There may be some initial seed money available to either sustain interim operations or start new
service. Given that MTC will no longer be funding the Bay Area Bike Share program, Samtrans and VTA
will receive back their share of user revenues collected from the pilot program. This can be distributed
to the peninsula cities for expenses related to bike share, operations, and capital incurred during the
pilot program. It is expected that there is $281,000 in total and these funds can be used for continuation
of the program. Based on the net operating cost shown in Table 1, this would allow a streamlined
system to continue to operate under the current vendor for approximately 6 months.
Longer‐term, the program would need to find one or more sponsors to fill the expected gap between
operating costs and system revenues. Any shortfall would need to be funded by the program owner
(e.g., the city, a non‐profit, etc.).
5. Next Steps
Different equipment and operator scenarios will be discussed at the March committee meeting.
Following that, the cities need to make some decisions about their internal goals and interests for bike
share and decide if they’d like to move forward: (1) with bike share; and (2) as a region or as individual
entities. The decision to move forward with bike share or not will likely come down to each city’s
funding capacity – particularly to meet any operating shortfall. This needs to be tested and
opportunities sought to secure capital and operating funds.
Assuming the cities decide to move forward collectively with bike share, they will need to decide how
they would like to move forward – under what governance structure. The most expedient model would
be to operate under a collective agreement that outlines regional versus local decisions, identifies roles
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Peninsula Cities Analysis
and responsibilities for each partner, outlines how decisions will be made, and specifies cost and
revenue sharing agreements between the partners. This does not preclude transitioning to a different
model over time. For example, a non‐profit could be formed to take over long‐term operations of the
program if internal capacity or risk become issues.
Once a governance structure is decided, the cities much chose between the existing equipment provider
and operator or whether to go out to bid for a new vendor. A common procurement process will be
necessary – with the ability for one city to lead the process and others to be able to add‐on to the
contract with the selected vendor. The feasibility of this process should be determined with the cities’
procurement departments.
CITY OF SAN MATEO
Administrative Report
City Hall
330 W. 20th Avenue
San Mateo, CA 94403
www.cityofsanmateo.org
Agenda Number: 15., Status: New Business
TO:City Council
FROM:Larry A. Patterson, City Manager
PREPARED BY: City Manager’s Office
MEETING DATE: Monday, November 16, 2015
SUBJECT:
Pilot Bike Share Program Implementation
RECOMMENDATION
Approve a purchase contract with Social Bicycles and a services agreement with Bikes Make Life Better to
develop a pilot bike share program in San Mateo and adopt a Resolution to approve a revision to the
Comprehensive Fee Schedule for 2015-2016 to add bike sharing program user fees and authorize the City
Manager to execute both documents.
.BACKGROUND
A bike share system consists of a network of bikes placed at hubs throughout a region that can be used on an
hourly basis by system members. Bike sharing is a cost-effective mobility option that assists with last mile
connectivity within a transportation system. Bike share programs have been adopted by more than 300 other
cities worldwide, including San Francisco, San Jose, and Redwood City in the Bay Area.
The City of San Mateo Bicycle Master Plan directs the City to explore the feasibility of implementing a bike
share program within the City. In March 2013, the City completed a Bike Share Feasibility Study that
determined that a successful program could be established within San Mateo. The City had originally hoped to
participate in the regional Bay Area Bike Share program that was organized by the Metropolitan
Transportation Commission (MTC). However, the bike share provider for that program, Motivate, has decided
to limit their program in the future to just a few larger cities in the region.
The City has been approached by an alternative bike share provider, Social Bicycles (SoBi), to implement a 50
-bike pilot bike share program within San Mateo. SoBi operates successful bike share programs within several
North American cities, including Long Beach, Tampa, Phoenix, and Hamilton, Canada, and is in the process of
launching new systems in Portland and Santa Monica. If successful, the bike share program in San Mateo will
be expanded to a regional system, including other Peninsula and Silicon Valley communities. SoBi bicycles
has partnered with Bikes Make Life Better, a local bicycle program operator, to operate the bike share
program in San Mateo.
The City of Santa Monica went through an extensive RFP process to select SoBi. Staff has reviewed their
RFP materials and selection criteria and believes that SoBi offers the best fit system for San Mateo. As a
result, staff recommends the sole-source award of the bike share system to SoBi. The City has the authority to
sole source this contract under Municipal Code Section 3.60.050 which states that a contract can be sole
sourced if calling for bids would be unavailing. Given how recently Santa Monica’s RFP was issued and the
recent decision of Motivate not to operate on the Peninsula, staff does not believe that an RFP would result in
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Agenda Number: 15., Status: New Business
a different outcome and would significantly delay the launch of a bike share system in San Mateo.
Smart Bike System
The SoBi bike share system is a “smart bike” system as opposed to the smart hub system used by the Bay
Area Bike Share program. A smart bike system is one where the technology for locating, renting, releasing
and locking is on the bikes themselves, as opposed to on the bike racks. This system has significant
advantages in that the bikes can be parked at standard bike racks allowing for more flexibility at siting bike
hubs, locking bikes mid-reservation, and allowing bikes to be left at non-hub locations at the end of a
reservation.
Smart bike systems can be implemented at a significantly lower capital cost than smart hub systems since
they do not require that a pay kiosk be incorporated into each station. Instead, each bike is capable of
accepting payments and releasing the bike-locking mechanism independently via mobile and web-based
software that interacts with the smart bike hardware. Smart bike systems are easier to scale and can be
successful with a small system such as the one proposed in San Mateo.
San Mateo System
The proposed San Mateo pilot bike share system will consist of 50 bikes spread out over a total of 10 to 12
hubs. The locations of the hubs have yet to be determined but will follow the guidance provided by the 2013
Bike Share Feasibility Study and will target transit nodes, large employers, retail districts, and high density
housing sites. The City intends to use existing bike racks located throughout San Mateo for the program but
may supplement some locations with additional bike racks to ensure adequate capacity. A typical hub would
have roughly 4 bikes though some hubs will be larger, such as those located at the Caltrain stations.
In order to develop and operate this system, the City first needs to purchase the bikes from SoBi and then
enter into a services agreement with Bikes Make Life Better and SoBi to operate and maintain the system.
Bikes Make Life Better would serve as the prime contractor to the City and SoBi would be a subcontractor
under the proposed agreement. Bikes Make Life Better will be responsible for the day-to-day on-the-ground
operations of the program, which includes repositioning the bikes between hubs, repairs and maintenance of
the bikes. SoBi will be in charge of the web and mobile application-based membership and reservation system
and the revenue collection and remittance. The City is intending to pilot the program for a 3-year trial basis
and evaluate the program based on overall usage and customer experience. At the end of this term, the City
can decide to continue the program, expand it, or to terminate it.
The draft purchase contract with SoBi is included as Attachment 2 to this report. The contract is for an amount
not to exceed $85,000. Staff is still finalizing negotiations on the language in Section 7, Indemnity and
Limitation of Liability with SoBi. If any further modifications are made to this section following the publication of
this report, staff will provide an updated contract to City Council at the meeting. Following the execution of the
contract, SoBi bikes will place the order for the system bikes. The bikes take roughly 6 months to manufacture.
The City hopes to launch the program in May 2016. A rendering of the proposed design for the bike share
bikes is included as Attachment 4 to this report.
The draft services agreement with Bikes Make Life Better is included as Attachment 3 to this report. The
contract amount of $293,000 is based on per bike service fee of $1,800 per year for a three year period plus
an additional start-up fee of $23,000 for system implementation.
Test Phase
Bikes Make Life Better and SoBi will be running a 10-bike test phase in San Mateo that is expected to launch
a few months in advance of the implementation of the full system. This program will feature 3 bike hubs at the
Downtown Caltrain station, the Hillsdale Caltrain station, and within Bay Meadows at the Nueva School
property. This phase will allow the City to test the functionality of the program with a small group of users and
to make adjustments to the operating model, as necessary. In addition, having bike share bikes at prominent
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Agenda Number: 15., Status: New Business
locations will build interest and awareness in the bike share program. SoBi bikes will be providing the City with
the 10 test bikes at no cost and will roll them into the larger 50 bike system. As a result, the City will only have
to pay for the purchase of 40 bikes. The City will pay Bikes Make Life Better a nominal fee of $110 per month
per bike for operating test phase program which will include repositioning the bikes between the 3 hubs a
couple of times a day and maintaining the bikes during this period.
User Fees
The City worked closely with SoBi to develop program user fees that are consistent with their other bike share
programs. The proposed fees are as follows:
·$3 per half hour pay-as-you go use
·$5 per hour for pay-as-you go use
·$15 per month for a monthly membership (which includes 1 hour of use per day)
·$3 fee for locking bikes outside of a bicycle hub
·$100 for locking bikes outside of the bike share system boundaries (likely contiguous with City
boundaries).
These fees would apply during the 10-bike test phase and throughout the initial roll-out of the program and will
be evaluated on an annual basis. The revenues from the user fees will help offset the annual operating costs
of the program. In order to implement these bike share use fees, it is necessary to amend the Comprehensive
Fee Schedule for 2015-2016. Attachment 1 includes the proposed resolution amending the Comprehensive
Fee Schedule and the detailed fee structure.
Sponsorships
The City intends to seek out sponsors for the bike share system to further offset the annual operating costs.
The City plans to approach major employers and property owners within the City. The sponsorships would be
available on an annual basis and sponsors would be able to display their logo on the baskets of the bicycles.
The City will retain the right to review and approve the sponsors and their logos to ensure appropriateness.
BUDGET IMPACT
The capital purchase costs and on-going annual operations will be paid from Project 465004 (Citywide Bike
and Pedestrian Path Improvements Project). The initial capital costs to set up the bike share program are
$85,000. This cost includes the provision of 40 bicycles. The bicycle provider, Social Bicycles, will provide the
City with the 10 bikes used for the test phase at no cost. The services agreement with Bikes Make Life Better
is for a fee not to exceed $293,000, which includes the start-up implementation expenses and operations for a
three-year period. This cost will be offset by revenues from user fees and any sponsorships that the City
attains which will be deposited back to Project 465004 to offset the expenses. Staff estimates that system
revenues and sponsorships will cover approximately 50% of the operating costs in the first year and will
eventually cover the full operating costs once the system reaches a stabilization level.
ENVIRONMENTAL DETERMINATION
The adoption of a pilot bike share program is categorically exempt pursuant to CEQA Guideline 15061(b)(3) in
that it can be seen with certainty that there is no possibility that the activity in question may have a significant
effect on the environment.
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 - Proposed Resolution
Att 2 - Purchase Contract with Social Bicycles
Att 3 - Agreement for Services with Bikes Make Life Better
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Att 4 - Rendering of San Mateo Bike Share bicycle
STAFF CONTACT Kathy Kleinbaum, Senior Management Analyst
kkleinbaum@cityofsanmateo.org
(650)522-7153
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1
PURCHASE CONTRACT
FOR BIKE SHARE EQUIPMENT
FROM SOCIAL BICYCLES INC.
This Purchase Contract (the “Contract”), made and entered into this 17th day of November, 2015, by
and between the CITY OF SAN MATEO, a municipal corporation existing under the laws of the State
of California (the "CITY"), and SOCIAL CYCLES INC, a Delaware Corporation ("VENDOR").
R E C I T A L S:
A. The CITY desires to purchase certain smart bicycles hereinafter described for a bicycle
sharing program (the “Bicycle Sharing Program”) in the City of San Mateo, California.
B. The CITY desires to engage VENDOR to provide these smart bicycles by reason of its
qualifications and experience and VENDOR has offered to provide the required goods on the terms and
in the manner set forth herein.
NOW, THEREFORE, IT IS AGREED as follows:
SECTION 1 - PURCHASE
The goods to be purchased from VENDOR under this Contract are described in Exhibit A to this
Contract, which is attached and incorporated by reference.
SECTION 2 – PRICE AND TAXES
All prices shall be as stated in this Contract and are firm and not subject to escalation except as stated in
Exhibit A. This purchase is subject to all California sales tax. Municipalities are exempt from federal
excise and transportation taxes. Prices shall exclude these taxes.
SECTION 3 – PAYMENT
Payment terms shall be as stated in Exhibit A. Invoices must cite the purchase order number to prevent
delay in payment. All invoices must be mailed to City of San Mateo, Attn: Accounts Payable, 330
West 20th Avenue, San Mateo, CA 94403.
SECTION 4 – DELIVERY AND PERFORMANCE
If delivery of goods cannot be made at the specified time, VENDOR shall promptly notify the CITY of
the earliest possible date for delivery. The CITY’S receipt or acceptance of all or part of a non-
conforming delivery shall not constitute a waiver of any claim, right, or remedy the CITY has under this
Contract or applicable law.
Attachment F
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SECTION 5 – SHIPMENT AND INSPECTION
VENDOR assumes full responsibility for all transportation, transportation scheduling, packing,
handling, insurance, and other services associated with delivery of all products. No charges for
transportation containers, packing, etc., will be allowed unless so specified in this Contract or Exhibit A.
All shipments shall be F.O.B. City of San Mateo. Transportation charges shall be shown as a separate
item on the invoice.
The CITY may revise shipping instructions as to any goods not as yet shipped. The CITY shall have the
right to inspect any or all of the goods at VENDOR’s place of business or upon receipt by the CITY. By
reason of its failure to inspect the goods, the CITY shall not be deemed to have accepted any defective
goods or goods which do not conform to the specifications provided or to have waived any of the
CITY’S rights or remedies arising by virtue of such defects or non-conformance. VENDOR shall be
responsible for payment of shipping for the return of any defective goods. Shipping documents and
invoices must cite the Purchase Order number.
SECTION 6 – WARRANTIES
VENDOR warrants that the new products delivered hereunder shall be free from defects in
workmanship and materials and in conformity with all samples, drawings, descriptions and
specifications furnished by VENDOR for (i) thirty-six (36) months from the delivery date in the case of
the frames of each bicycle and (ii) twelve (12) months from the delivery date in the case of the locks and
all other components and accessories of the products. The warranty excludes damage caused by
accidents, misuse, weather events, vandalism, neglect, and improper maintenance.
In addition, VENDOR is providing ten (10) used bicycles to the CITY. The CITY expressly
acknowledges and agrees that it is acquiring the used bicycles from VENDOR on an “AS IS, WHERE
IS” and “WITH ALL FAULTS” basis, without representations, warranties, or covenants of any kind or
nature.
VENDOR HEREBY EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES
RELATING TO THE PRODUCTS PROVIDED HEREUNDER OR COMPONENTS THEREOF,
WHETHER ORAL OR WRITTEN, EXPRESS, IMPLIED, OR STATUTORY.
SECTION 7 – INDEMNITY AND LIMITATION OF LIABILITY
VENDOR agrees to hold harmless and indemnify the CITY, its elected and appointed officials,
employees, and agents from and against any and all claims, loss, liability, damage, and expense to the
extent resulting from or arising out of VENDOR’s delivery of the bicycles under this Contract, except to
the extent: (a) caused by the CITY or its employees, officers, agents, contractors, subcontractors,
licensees or invitees; or (b) caused by the negligence or willful misconduct of the CITY or its
employees, officers, agents, contractors, subcontractors, licensees or invitees. VENDOR agrees to
defend the CITY, its elected and appointed officials, employees, and agents against any such claims.
3
SECTION 8 – TERMINATION
This Contract may be terminated by mutual consent of both parties or by the CITY at its discretion. The
CITY may cancel an order for goods at any time with written notice to VENDOR, stating the extent and
effective date of termination. Upon receipt of this written notice, VENDOR shall stop performance
under this Contract as directed by the CITY. If the Contract is terminated, VENDOR shall be paid in
accordance with the Contract for all work commenced or performed by VENDOR prior to the date of
termination that cannot be cancelled, meaning that VENDOR has already incurred costs for such work
and such costs cannot be refunded. For any such work, when practicable, VENDOR agrees to use best
efforts to assist the CITY in finding a suitable buyer for the goods.
SECTION 9 – REMEDIES
In the event of VENDOR’s breach of this Contract, the CITY may take any or all of the following
actions, without prejudice to any other rights or remedies available to the CITY by law: (a) require
Vendor to repair or replace such goods, and upon VENDOR’S failure or refusal to do so, repair or
replace the same at VENDOR’S expense; and (b) reject any shipment or delivery containing defective or
nonconforming goods and return for credit or replacement at VENDOR’S option, said return to be made
at VENDOR’S cost and risk. In the event of the CITY’s breach hereunder, VENDOR’S exclusive
remedy shall be VENDOR’S recovery of the goods or the purchase price payable for goods shipped or
work commenced or performed prior to such breach.
SECTION 10 – COMPLIANCE WITH LAW
VENDOR warrants that it will comply with all federal, state, and local laws, ordinances, rules, and
regulations applicable to its performance under this Contract. VENDOR shall obtain and maintain
throughout the life of the Contract all permits or licenses required in connection with the manufacture,
sale, and shipment of the products ordered under this Contract.
SECTION 11 – ASSIGNMENT
VENDOR shall not delegate or subcontract any duties and services or assign any rights or claims under
this Contract without the CITY’S prior written consent.
SECTION 12 – ARTWORK, DESIGNS, PATENTS, COPYRIGHTS AND TRADEMARKS
VENDOR hereby agrees that the sale, use, or incorporation into manufactured products of all machines,
software, hardware, materials and other devices furnished under this Contract are free and clear of
infringement of any valid patent, copyright, or trademark. VENDOR shall hold the CITY harmless from
any and all costs and expenses, including attorney fees, liability, and loss of any kind growing out of
claims, suits, or actions alleging such infringement, and VENDOR agrees to defend such claims, suits,
or actions.
SECTION 13 – GOVERNING LAW
This Contract shall be deemed to be made in the State of California and shall in all respects be construed
and governed by the laws of that state.
4
SECTION 14 – VENUE
In the event of litigation, venue will be in the County of San Mateo.
SECTION 15 – WAIVER
The waiver of any term, condition, or provision hereof shall not be construed to be a waiver of any other
such term, condition, or provision, nor shall such waiver be deemed a waiver of a subsequent breach of
the same term, condition or provision.
SECTION 16 - COSTS AND ATTORNEY FEES
Attorney fees in an amount not exceeding $85 per hour per attorney, and in total amount not exceeding
$5000, shall be recoverable as costs (by the filing of a cost bill) by the prevailing party in any action or
actions to enforce the provisions of this Contract. The above $5000 limit is the total of attorney fees
recoverable whether in the trial court, appellate court, or otherwise, and regardless of the number of
attorneys, trials, appeals, or actions. It is the intent of this provision that neither party shall have to pay
the other more than $5000 for attorney fees arising out of an action, or actions to enforce the provisions
of this Contract.
SECTION 17 - MEDIATION
Should any dispute arise out of this Contract, any party may request that it be submitted to mediation.
The parties shall meet in mediation within 30 days of a request. The mediator shall be agreed to by the
mediating parties; in the absence of an agreement, the parties shall each submit one name from
mediators listed by either the American Arbitration Association, the California State Board of Mediation
and Conciliation, or other agreed-upon service. The mediator shall be selected by a "blindfolded"
process.
The cost of mediation shall be borne equally by the parties. Neither party shall be deemed the prevailing
party. No party shall be permitted to file a legal action without first meeting in mediation and making a
good faith attempt to reach a mediated settlement. The mediation process, once commenced by a
meeting with the mediator, shall last until agreement is reached by the parties but not more than 60 days,
unless the maximum time is extended by the parties.
SECTION 18 - NOTICES
All notices hereunder shall be given in writing and mailed, postage prepaid, addressed as follows:
To CITY: City of San Mateo
Attn.: City Manager
330 West 20th Avenue
San Mateo, CA 94403
To VENDOR: Social Bicycles
Attn: Ryan Rzepecki, CEO
47 Hall Street, Suite 414
Brooklyn, NY 11205
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SECTION 19 – MISCELLANEOUS PROVISIONS
RELATED TO THE BICYCLE SHARING PROGRAM
The CITY acknowledges that a third party will be responsible for the management and operation of the
Bicycle Sharing Program contemplated by this Contract, including but not limited to the rental and
maintenance of the products; the procurement of all parts, tools, labor, and other requirements associated
with maintaining the products; the solicitation and enrollment of subscribed users; the marketing of the
Bicycle Sharing Program; the provision of customer service to subscribed users; and the overall delivery
of a safe and reliable program.
VENDOR will, pursuant to a separate agreement, grant the third party provider a non-transferable, non-
sublicensable, non-exclusive, limited right to access and use VENDOR’s software operating platform
for the purpose of enabling the rental of bicycles to subscribed users in the Bicycle Sharing Program.
SECTION 20 – OWNERSHIP OF
INTELLECTUAL PROPERTY RIGHTS
The CITY acknowledges that the goods offered hereunder contain and/or incorporate certain intellectual
property rights, including but not limited to trademarks, patent, patent application, moral right, trade
secret, copyright and any applications or right to apply for registration, computer software programs or
applications, tangible or intangible proprietary information, or any other intellectual property rights (the
“Intellectual Property Rights”), that the Intellectual Property Rights used in conjunction with the
products are proprietary to VENDOR and/or VENDOR’s suppliers, and that VENDOR and/or its
suppliers retain exclusive ownership of the Intellectual Property Rights and all copies thereof provided
under this Contract. The CITY acknowledges that title to the Intellectual Property Rights will remain
with VENDOR and its licensors, notwithstanding anything to the contrary herein, and that the CITY has
no rights in the Intellectual Property Rights except those expressly granted by this Contract. When used
in reference to the Intellectual Property Rights or in reference to Intellectual Property Rights embedded
in the products, the word “purchase” and similar or derivative words are deemed to mean “non-
transferable, non-sublicensable, non-exclusive, limited license” to use the Intellectual Property Rights
solely to the extent required for the CITY to use the products provided hereunder in accordance with this
Contract. The CITY acknowledges that it is not entitled to receive the source code of any software. This
limited license shall continue until this Contract is terminated, until the license is terminated in
accordance with this Contract, for the useful life of the goods in which the Intellectual Property Rights
are embedded, or for the useful life of the Intellectual Property Rights, whichever is shorter.
Notwithstanding the above and anything contrary in this Contract, in the event the CITY, in accordance
with this Contract and with VENDOR’s prior written approval, transfers title to goods containing or
incorporating Intellectual Property Rights, this limited license shall transfer to the CITY’s transferee.
Use of Intellectual Property Rights in violation of this Section shall automatically terminate the limited
license. All data created and/or processed by the products and VENDOR’s software platforms, including
subscribed user data, is and will remain the sole property of VENDOR. The Parties acknowledge that
the data in the CITY’s possession may be subject to disclosure under the California Public Records Act.
The CITY shall not directly or indirectly:
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1.1. Sell, lease, license, pledge, sublicense, loan, encumber, or otherwise transfer the Intellectual
Property Rights, in whole or in part, to any third party or otherwise make the Intellectual
Property Rights available to any third party, and shall keep the same free from any lien or
encumbrance, or any other claim by a third party;
1.2. Copy, reproduce, or otherwise infringe the Intellectual Property Rights, in whole or in part,
with respect to the goods or other materials developed or provided hereunder by VENDOR;
1.3. Decompile, disassemble, reverse engineer, or otherwise attempt to derive the source code of
any portion of the Intellectual Property Rights;
1.4. Write or develop any derivative software or any other software program based on the
Intellectual Property Rights;
1.5. Make modifications, corrections, alterations, enhancements, or other additions to the
Intellectual Property Rights;
1.6. Use the Intellectual Property Rights or allow someone to use the Intellectual Property Rights
otherwise than for the Bicycle Sharing Program; or
1.7. Remove or destroy any Marks, proprietary markings, or proprietary legends placed upon or
contained with or on any Goods or any related materials or documentation by VENDOR.
Trademarks associated with the CITY and VENDOR are and shall remain the property of the CITY and
Vendor, respectively. Notwithstanding the above and subject to the limitations, terms, and conditions set
forth in this Contract, neither party shall use the other party’s trademarks without the prior written
consent of the other party.
SECTION 21 - FORCE MAJEURE
Neither party shall be liable to the other party for failure or delay in the performance of a required
obligation if such failure or delay is caused by strike, riot, fire, natural disaster, utilities and
communications failures, governmental acts or orders or restrictions, failure of suppliers, or any other
reason where failure to perform is beyond the reasonable control of and is not caused by the negligence
of the non-performing party, provided that such party gives prompt written notice of such condition and
resumes its performance as soon as possible.
SECTION 22 - CONTRACT CONTAINS ALL
UNDERSTANDINGS; AMENDMENT
This document represents the entire and integrated agreement between the CITY and VENDOR and
supersedes all prior negotiations, representations, and agreements, either written or oral.
This document may be amended only by written instrument, signed by both the CITY and VENDOR.
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IN WITNESS WHEREOF, CITY and VENDOR have executed this Contract the day and year first
above written.
CITY OF SAN MATEO SOCIAL BICYCLES, INC.
_______________________________ _________________________________
Larry A. Patterson, City Manager Ryan Rzepecki, CEO
ATTEST: APPROVED AS TO FORM:
________________________________ __________________________________
Patrice Olds, City Clerk Gabrielle Whelan, Assistant City Attorney
SMART BICYCLE Quantity Price Total
B.1 V3.5 Smart Bicycle 40 1,500 $ 60,000 $
custom paint and decals (Pantone color palette) included
onboard real-time GPS and accelerometer tracking included
onboard GSM cellular connection included
integrated keypad, LCD screen, and RFID technology included
solar and dynamo power generators included
three-speed hub with shaft drive transmission included
B.2 Replacement Parts and Custom Tools 50 100 $ 5,000 $
B.3 Exterior Basket Printed Assets and Design Template 50 50 $ 2,500 $
B.4 Interior Basket Printed Assets and Design Template 50 50 $ 2,500 $
B.5 Additional Sponsorship Printed Assets and Design Template 50 50 $ 2,500 $
B.6 Upgrade to Skirt Guard - 85 $ - $
B.7 Skirt Guard Printed Assets and Design Template - 20 $ - $
B.8 Upgrade to Eight-Speed Hub with Shaft Drive Transmission - 135 $ - $
TOTAL SMART BICYCLE COSTS 72,500 $
TRANSPORT AND CUSTOMS SERVICES Quantity Price Total
T.1 Smart Bicycle Delivery Services (Item #B.1)12,500 $
T.2 Docking Point Delivery Services (Item #D.1)- $
T.3 Payment Kiosk Delivery Services (Item #S.1)- $
T.4 Panel Delivery Services (Item #S.2 and #S.3)- $
TOTAL TRANSPORT AND CUSTOMS SERVICES COSTS 12,500 $
Initial Goods Purchase and Setup Cost 72,500 $
Transport and Customs Services 12,500 $
TOTAL UP-FRONT ONE-TIME COSTS 85,000 $
BICYCLES
(in United States dollars)
EXHIBIT A
SUMMARY
TERMS
TERMS
• Fifty percent (50%) of the Total Up-Front One-Time Costs shall be paid by the CITY to VENDOR upon placing a Purchase Order. The
remaining fifty percent (50%) of the Total Up-Front One-Time Costs is due on the delivery date of the applicable Goods.
• The delivery date of the Goods will be six (6) months after submission of a Purchase Order. Purchase Orders shall be deemed submitted when
the CITY’s initial payment and final branding designs are received by VENDOR.
• The prices quoted above are valid for ninety (90) days from the effective date of the Contract.
Social Bicycles Inc. • Brooklyn, NY
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AGREEMENT WITH BIKES MAKE LIFE BETTER, INC.
FOR BICYCLE MANAGEMENT SERVICES
FOR THE SAN MATEO BIKE SHARE PROGRAM
This Agreement, made and entered into this 17th day of November, 2015, by and between the
CITY OF SAN MATEO, a municipal corporation existing under the laws of the State of
California ("CITY"), and Bikes Make Life Better, Inc., a California corporation
("CONTRACTOR"), whose address is 879 Hampshire, San Francisco, California 94110.
R E C I T A L S :
A. CITY desires certain bike share program establishment and management services
hereinafter described.
B. CITY desires to engage CONTRACTOR to provide these bike share program
services by reason of its qualifications and experience for performing such services and
CONTRACTOR has offered to provide the required services on the terms and in the manner set
forth herein.
NOW, THEREFORE, IT IS AGREED as follows:
SECTION 1 - SCOPE OF SERVICES
The scope of services to be performed by CONTRACTOR under this Agreement is as described
in Exhibit A to this Agreement, which is attached and incorporated by reference.
SECTION 2 - DUTIES OF CONTRACTOR
CONTRACTOR shall be responsible for the professional quality, technical accuracy and
coordination of all work furnished by CONTRACTOR under this Agreement. CONTRACTOR
shall, without additional compensation, correct or revise any errors or deficiencies in its work.
CONTRACTOR represents that it is qualified to furnish the services described under this
Agreement.
CONTRACTOR shall be responsible for employing or engaging all persons necessary to
perform the services of CONTRACTOR.
SECTION 3 - DUTIES OF CITY
CITY shall provide pertinent information regarding its requirements for the project.
CITY shall examine documents submitted by CONTRACTOR and shall render decisions
pertaining thereto promptly, to avoid unreasonable delay in the progress of CONTRACTOR'S
work.
Attachment G
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SECTION 4 - TERM
The services to be performed under this Agreement shall commence on November 17, 2015, and
be completed on or about June 30, 2019.
SECTION 5 - PAYMENT
Payment shall be made by CITY only for services rendered and upon submission of a payment
request upon completion and CITY approval of the work performed. In consideration for the full
performance of the services set forth in Exhibit A, CITY agrees to pay CONTRACTOR a fee
pursuant to rates stated in Exhibit B.
Any amounts due Contractor under this Agreement upon which payment is not received within
30 days of City receiving an invoice shall accrue late fees equal to the lesser of: (i) 3% per
month; or (ii) the highest rate allowable by law, in each case compounded monthly to the extent
allowable by law. Without limiting Contractor’s other rights or remedies, in the event City is
more than 30 days delinquent in their scheduled payments, City agrees that Contractor may, at its
choosing, terminate the relationship. In the event City’s account becomes seriously delinquent,
Contractor will have no choice but to resort to collection proceedings and City agrees to be
responsible for Contractor’s attorney's fees and costs incurred in those proceedings.
SECTION 6 – TERMINATION
Without limitation to such rights or remedies as CITY or CONTRACTOR shall otherwise have
by law, CITY or CONTRACTOR shall have the right to terminate this Agreement or suspend
work on the Project for any reason, upon thirty (30) days' written notice to the other party.
CONTRACTOR agrees to cease all work under this Agreement upon receipt of said written
notice.
SECTION 7 - OWNERSHIP OF DOCUMENTS
All documents prepared by CONTRACTOR in the performance of this Agreement are and shall
be the property of CITY, whether the project for which they are made is executed or not.
SECTION 8 - CONFIDENTIALITY
All reports and documents prepared by CONTRACTOR in connection with the performance of
this Agreement are confidential until released by CITY to the public. CONTRACTOR shall not
make any such documents or information available to any individual or organization not
employed by CONTRACTOR or CITY without the written consent of CITY before any such
release.
SECTION 9 - INTEREST OF CONTRACTOR
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CONTRACTOR covenants that it presently has no interest, and shall not acquire any interest,
direct or indirect, financial or otherwise, which would conflict in any manner or degree with the
performance of the services under this Agreement.
SECTION 10 - CONTRACTOR'S STATUS
It is expressly agreed that in the performance of the services required under this Agreement,
CONTRACTOR shall at all times be considered an independent contractor as defined in Labor
Code Section 3353, under control of the CITY as to the result of the work but not the means by
which the result is accomplished. Nothing herein shall be construed to make CONTRACTOR an
agent or employee of CITY while providing services under this Agreement.
SECTION 11 - INDEMNITY
CONTRACTOR agrees to hold harmless and indemnify CITY, its elected and appointed
officials, employees, and agents from and against any and all claims, loss, liability, damage, and
expense arising out of CONTRACTOR’s performance of this Agreement, except for those
claims arising out of CITY’s sole negligence or willful misconduct. CONTRACTOR agrees to
defend City, its elected and appointed officials, employees, and agents against any such claims.
SECTION 12 - INSURANCE
Contractor shall procure and maintain for the duration of the contract the insurance specified in
Exhibit C to this Agreement
SECTION 13 - NONASSIGNABILITY
Both parties hereto recognize that this Agreement is for the personal services of CONTRACTOR
and cannot be transferred, assigned, or subcontracted by CONTRACTOR without the prior
written consent of CITY.
SECTION 14 - RELIANCE UPON_SKILL OF CONTRACTOR
It is mutually understood and agreed by and between the parties hereto that CONTRACTOR is
skilled in the performance of the work agreed to be done under this Agreement and that CITY
relies upon the skill of CONTRACTOR to do and perform the work in the most skillful manner,
and CONTRACTOR agrees to thus perform the work. The acceptance of CONTRACTOR's
work by CITY does not operate as a release of CONTRACTOR from said obligation.
SECTION 15 - WAIVERS
The waiver by either party of any breach or violation of any term, covenant, or condition of this
Agreement or of any provisions of any ordinance or law shall not be deemed to be a waiver of
such term, covenant, condition, ordinance or law or of any subsequent breach or violation of the
same or of any other term, covenant, condition, ordinance or law or of any subsequent breach or
violation of the same or of any other term, condition, ordinance, or law. The subsequent
acceptance by either party of any fee or other money which may become due hereunder shall not
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be deemed to be a waiver of any preceding breach or violation by the other party of any term,
covenant, or condition of this Agreement or of any applicable law or ordinance.
SECTION 16 - COSTS AND ATTORNEY FEES
Attorney fees in total amount not exceeding $5000, shall be recoverable as costs (by the filing of
a cost bill) by the prevailing party in any action or actions to enforce the provisions of this
Agreement. The above $5000 limit is the total of attorney fees recoverable whether in the trial
court, appellate court, or otherwise, and regardless of the number of attorneys, trials, appeals, or
actions. It is the intent of this provision that neither party shall have to pay the other more than
$5000 for attorney fees arising out of an action, or actions to enforce the provisions of this
Agreement.
SECTION 17 - NON-DISCRIMINATION
CONTRACTOR warrants that it is an Equal Opportunity Employer and shall comply with
applicable regulations governing equal employment opportunity. Neither CONTRACTOR nor
any of its subcontractors shall discriminate in the employment of any person because of race,
color, national origin, ancestry, physical handicap, medical condition, marital status, sex, or age,
unless based upon a bona fide occupational qualification pursuant to the California Fair
Employment and Housing Act.
SECTION 18 - MEDIATION
Should any dispute arise out of this Agreement, any party may request that it be submitted to
mediation. The parties shall meet in mediation within 30 days of a request. The mediator shall
be agreed to by the mediating parties; in the absence of an agreement, the parties shall each
submit one name from mediators listed by either the American Arbitration Association, the State
Mediation and Conciliation Service, or other agreed-upon service. The mediator shall be
selected by a blind draw.
The cost of mediation shall be borne equally by the parties. Neither party shall be deemed the
prevailing party. No party shall be permitted to file a legal action without first meeting in
mediation and making a good faith attempt to reach a mediated settlement. The mediation
process, once commenced by a meeting with the mediator, shall last until agreement is reached
by the parties but not more than 60 days, unless the maximum time is extended by the parties.
SECTION 19 - LITIGATION
CONTRACTOR shall testify at CITY'S request if litigation is brought against CITY in
connection with CONTRACTOR'S services under this Agreement. Unless the action is brought
by CONTRACTOR, or is based upon CONTRACTOR'S wrongdoing, CITY shall compensate
CONTRACTOR for preparation for testimony, testimony, and travel at CONTRACTOR'S
standard hourly rates at the time of actual testimony.
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SECTION 20 - NOTICES
All notices hereunder shall be given in writing and mailed, postage prepaid, addressed as
follows:
To CITY: City of San Mateo
Attn: Public Works Director
330 West 20th Avenue
San Mateo, CA 94403
To CONTRACTOR: Bikes Make Life Better, Inc.
Attn: Amy Harcourt
879 Hampshire
San Francisco, CA 94110
SECTION 21 - AGREEMENT CONTAINS ALL
UNDERSTANDINGS; AMENDMENT
This document represents the entire and integrated agreement between CITY and
CONTRACTOR and supersedes all prior negotiations, representations, and agreements, either
written or oral.
This document may be amended only by written instrument, signed by both CITY and
CONTRACTOR.
SECTION 22 - GOVERNING LAW AND VENUE
This Agreement shall be governed by the laws of the State of California and, in the event of
litigation, venue will be in the County of San Mateo.
IN WITNESS WHEREOF, CITY and CONTRACTOR have executed this Agreement the day
and year first above written.
CITY OF SAN MATEO
CONTRACTOR
Larry A. Patterson, City Manager Amy Harcourt, CEO
APPROVED AS TO FORM
Gabrielle Whelan, Assistant City Attorney
EXHIBIT A
SCOPE OF WORK
The City of San Mateo continues to support and invest in the role of bicycle transportation. The
City is exploring a pilot bicycle share system that could introduce bicycles to new users and
further complement the City’s existing multi-modal transportation network. The pilot bicycle
share project will include 50 bicycles at ten to twelve locations within the City of San Mateo.
Bikes Make Life Better will serve as the prime contractor for this project and will be
responsible for the operations and maintenance of the system, including the redistribution of the
bicycles. Social Bicycles (Sobi) will be a subcontractor to Bikes Make Life Better and will be
responsible for the provision of the bicycles, the bike sharing website portal, and revenue
collection and remittance.
The Contract team, which includes Bikes Make Life Better and Sobi shall be responsible for
all of the following:
A. SYSTEM DEVELOPMENT AND INSTALLATION
The budget for the installation and launch of the Bike Share system shall be consistent with
Exhibit B of this contract. The scope of Work shall include all of the following:
1. System installation. Provide installation of all bicycles, electronics, and system software.
2. Create website. Work with Social Bicycles, and the City to create branding, marketing
and public relations.
3. Station Locations. Work with the City of San Mateo to identify and establish station
locations. The City will provide an initial list of locations that may be appropriate. The
Contract team will assist the City with evaluating the locations and determining the final
list. Locations may be adjusted during the term of the contract, based on usage rates and
other factors.
4. Launch. Plan and execute a timely and effective system launch within 30 days of delivery
of the bikes or within the time from when the bike racks locations are finalized and in
place.
B. SYSTEM MAINTENANCE AND OPERATION
The Bike Share system shall be operated consistent with the budget included in Exhibit B of
this contract. The scope of work shall include all of the following:
1. Reporting. Contractor shall submit monthly reports of gross revenues, ridership, and
expenses, in a format approved by the City, with revenue broken down into categories of
income. At the end of each operating year, the Contractor will be required to submit a
detailed income, utilization/ridership, and expense statement for the past year's operation.
2. Open Data. Contractor shall provide open content data that will allow third party
developers to provide applications to assist users in finding bicycles, and stations, and
comparing travel and usage information consistent with reports from other US systems..
3. Response to Complaints. All System structures shall contain a conspicuously posted
telephone number, to the contractor's customer service operations to which the public
may direct complaints and comments, and instructions for filing a complaint. All
complaints received by Contractor shall be logged, Contractor shall cooperate with the
City in providing a timely response to any such complaints. The Contractor shall provide
a shared database in which the City can communicate complaints from the public and
from the City, and in which the Contractor can report the resolution of such complaints.
4. Maintenance, Redistribution, and Repair. System maintenance shall include, but is
not limited to, inspecting, maintaining, redistributing bikes between station hubs,
cleaning, and removing graffiti from System structures on a timely basis, inspection
and prompt repair or replacement of the system elements. Contractor shall comply
with specified service standards as shown in Exhibit E of this contract.
5. Real-time Communication. Provide system to track bicycle and dock status and populate
interactive map with status of bicycles at stations, station locations with optional address
and directions, and transit information.
6. Safety information. Safety information shall be provided to all customers.
7. Adaptive Website Design. Provide and correctly display web pages on all major web
browsers and mobile devices/formats.
8. Branding, Marketing, Sponsor Fulfillment and Public Relations. Contractor shall work
with City to oversee the implementation of all branding, marketing and public relations,
and work with City to fulfill all obligations of any grants, sponsorships, advertisers
and/or donors including placement of corporate messaging as appropriate on bicycles
stations or other locations.
9. Performance Outcomes and Service Level Agreements. Contractor shall meet Service
Level Agreements (“SLA") consistent with Exhibit E of this contract.
10. Customer Service. Contractor shall provide responsive and customer-friendly services
that encourage repeat use, including timely response to complaints.
C. FINANCIAL OPERATIONS
1. Registration. Provide and maintain in full operation a web page to register, submit credit
card data, and execute a user agreement. After registration, members should be able to
immediately access a bike at any station. Membership of various durations (such as 30
minutes, hourly, daily, Weekly, and/or monthly) shall be available. Rates and durations
shall be determined by the City and Contractor.
2. Secure Financial Transactions. Complete secure financial transactions with data input at
the web page or mobile device applications. Provide the capability to track whether
bicycles are returned during a specified period and accurately assess overtime fees.
Financial data must be held securely in a manner that complies with all laws, and only
accessed by authorized personnel. The Contractor shall develop a robust security policy.
The Contractor must ensure that its security policy is enforced, report any breaches to the
City and develop corrective plan to prevent future breaches. The method for protecting
financial data, user names, and addresses, must be Payment Card Industry (PCI)
compliant and satisfy minimum specifications of the City.
3. Fee Collection. Accurately assess and collect fees for failure to return any bicycle within
24 hours or an established time period and clearly communicate rules to user.
4. Revenue. All revenues, including membership fees, use fees, and revenue from other
sources, shall be collected by the Contractor on behalf of the City and returned to the
City. The Contractor, as the City's fiduciary with respect to collection and treatment of
such revenue, shall be responsible for all revenue from the time it is collected until the
time it is deposited to City accounts.
5. Records. Contractor shall maintain records and make them available to the City on
appropriate notice for inspection and auditing.
6. Billing and Compensation. The Contractor shall submit invoices for service, operation,
maintenance and repairs based on a monthly, per-bike fee. The monthly fee will cover a
reasonable number of station relocations per year (up to 5). The Contractor shall submit
invoices for compensation for the installation of new stations in additional locations at
the price specified in the agreement.
7. Regular Operations Review. Contractor shall perform ongoing review of ridership, fees
structure and development of recommendations that promote use of the system and
reduce or eliminate any operating deficit.
D. SAFETY AND LIABILITY
Waiver of Liability
Contractor’s registration for all new system users will require agreement to a statement
waiving liability and accepting responsibility for use of the City's bikeshare bicycles. The
waiver language is subject to City approval prior to implementation.
E. SYSTEM EXPANSION, INTEROPERABILITY AND REGIONAL COORDINATION
1. Contractor will work with the City to coordinate with Clipper and provide access to all
bike share systems in the San Francisco Bay Area.
2. Contractor shall work with the City to expand the system within the City of San Mateo as
directed, subject to an amendment of this contract.
3. Contractor must develop cooperative agreements with other regional bikeshare operators
so that users can check out bicycles from bikeshare systems in San Mateo County and
Santa Clara County, as feasible.
4. Contractor shall facilitate regional cooperation, interoperability with any other regional
bikeshare system and regional fare media, and ongoing partnerships with transit and local
businesses.
Exhibit B: Budget and Fee Schedule
Exhibit C: Insurance Requirements
Exhibit D: San Mateo Bike Share Schedule
Exhibit E: Service Level Agreements
IMPLEMENTATION SERVICES
(in United States dollars)
SOBI IMPLEMENTATION SERVICES Quantity Price Total
A.1 Implementation Services (including expenses) 15,000
A.2 Website Landing Page Design 8,000 $
TOTAL ADDITIONAL PRODUCTS AND SERVICES COSTS 23,000 $
OPERATIONS
(in United States dollars)
BMLB MONTHLY TURN-KEY OPERATIONS COSTS Quantity Price Total
O.1 Per Bicycle Fee (per month) 50 150 $ 7,500 $
TOTAL MONTHLY TURN-KEY OPERATIONS COSTS 7,500 $
TOTAL ANNUAL TURN-KEY OPERATIONS COSTS 90,000$
All prices are for the 50-bike pilot and will be revisited for future expansion
Exhibit B
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EXHIBIT C
INSURANCE REQUIREMENTS
MINIMUM SCOPE OF INSURANCE
Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office (ISO) Form CG 00
01 12 07 covering CGL on an “occurrence” basis, including products-completed
operations, personal & advertising injury, with limits no less than $2,000,000 per
occurrence. If a general aggregate limit applies, either the general aggregate limit shall
apply separately to this project/location or the general aggregate limit shall be twice the
required occurrence limit.
2. Automobile Liability: ISO Form Number CA 00 01 covering any auto (Code 1), or if
Contractor has no owned autos, hired, (Code 8) and non-owned autos (Code 9), with limit
no less than $1,000,000 per accident for bodily injury and property damage.
3. Workers’ Compensation: as required by the State of California, with Statutory Limits,
and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for
bodily injury or disease.
If the contractor maintains higher limits than the minimums shown above, the City requires and
shall be entitled to coverage for the higher limits maintained by the contractor.
Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:
Additional Insured Status
The City, its elected and appointed officials, employees, and agents are to be covered as
insureds on the auto policy for liability arising out of automobiles owned, leased, hired or
borrowed by or on behalf of the Contractor; and on the CGL policy with respect to liability
arising out of work or operations performed by or on behalf of the Contractor including
materials, parts or equipment furnished in connection with such work or operations. General
liability coverage can be provided in the form of an endorsement to the Contractor’s insurance
(at least as broad as ISO Form CG 20 10, 11 85 or both CG 20 10 and CG 20 37 forms if later
revisions used).
Primary Coverage
For any claims related to this contract, the Contractor’s insurance coverage shall be primary
insurance as respects the City, its elected and appointed officials, employees, and agents. Any
insurance or self-insurance maintained by the City, its elected and appointed officials,
employees, or agents shall be excess of the Contractor’s insurance and shall not contribute with
it.
Notice of Cancellation
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Each insurance policy required above shall provide that coverage shall not be canceled, except
after thirty (30) days’ prior written notice (10 days for non-payment) has been given to the
City.
Waiver of Subrogation
Contractor hereby grants to City a waiver of any right to subrogation which any insurer of said
Contractor may acquire against the City by virtue of the payment of any loss under such
insurance. Contractor agrees to obtain any endorsement that may be necessary to effect this
waiver of subrogation, but this provision applies regardless of whether or not the City has
received a waiver of subrogation endorsement from the insurer.
Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the City. The
City may require the Contractor to purchase coverage with a lower deductible or retention or
provide proof of ability to pay losses and related investigations, claim administration, and
defense expenses within the retention.
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII,
unless otherwise acceptable to the City.
Verification of Coverage
Contractor shall furnish the City with original certificates and amendatory endorsements or
copies of the applicable policy language effecting coverage required by this clause. All
certificates and endorsements are to be received and approved by the City before work
commences. However, failure to obtain the required documents prior to the work beginning
shall not waive the Contractor’s obligation to provide them. The City reserves the right to
require complete, certified copies of all required insurance policies, including endorsements
required by these specifications, at any time.
Social Bicycles:
Implementation Schedule
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A
M
Design & Branding Finalized
Shipping
Testing & Installation
Planning & Setup
Siting Hubs
Permitting Approval Process
Network & Website Configurations
Branding Assets
Design
Printing
Installation
Software
Website Production
Website Launch
Marketing
Establishment of Social Media
Production of Marketing Materials
Membership Drive
Operations
Hiring
Operational Processes Set-up
SoBi In-person Training and Exercise
EXHIBIT D
MAINTENANCE + OPERATIONS Schedule Location Staff
Repairs and Adjustments Daily / Weekly On-site BMLB
Station and Bicycle Inspection Daily / Weekly On-site BMLB
Prevention Maintenance and Tune-ups Quarterly Facility BMLB
Cleaning and Litter Removal Daily On-site BMLB
Cleaning upon notification Within 48 hours On-site BMLB
Address repair upon notification Within 48 hours On-site BMLB
Maintenance: 88% of bikes operational Weekly On-site BMLB
Replacement parts and bicycles As needed Facility BMLB
Web and mobile updates On-going Wireless SoBi
Customer Service dispatching to crew Immediately Facility to Site BMLB
Redistribution of Bicycles at Priority
Hubs (‘Priority’ stations will not be empty
more than 8 hours daily)
Daily On-Site BMLB
Redistribution of Bicycles at 'Auxillary'
Hubs (‘Auxillary’ stations will not be
empty for more than 24 hours)
Daily On-Site BMLB
• Adjust fenders and kickstand for damage, and replace if needed
• Adjust brake function and gears for alignment, and replace if needed
• Brief test ride to ensure overall correct function
• Grease shaft drive; check for correct function, and replace if needed
• Adjust bottom bracket, pedals, cranks, and replace if needed
• Adjust hub or axle tightness, and replace if needed
• Adjust for wheels trueness, and replace wheels if needed
• Check lock functionality, keypad, enclosure
• Check all communications systems
• Inspect all stations and bikes for defects
• Check fenders and kickstand for damage
• Check LED lights (front and rear) for function
• Check brake function and gears for alignment
• Check seat tightness and seat quick-release
• Check handlebar tightness and range of motion
Quarterly Prevention Maintenance and Tune-ups
• Adjust seat tightness and seat quick-release, and replace if needed
• Adjust headset and replace tires if needed
• Check tire pressure, basket, bell, headset
• Check frame for damage, cracks, dents
• Brief test ride to ensure overall correct function
• Grease shaft drive; check for correct function
• Check bottom bracket, pedals, cranks
• Check hub or axle tightness
• Check for wheels trueness, and broken spokes
• Adjust tire pressure and replace tires if needed
Daily / Weekly Repairs, Adjustments, and On-site Inspections
Exhibit E - Service Standards
• Remove all trash from surrounding area
• Clean all visible dirt, ink, paint, litter, graffiti
Attachment H
Attachment I
STANFORD REAL ESTATE
3160 Porter Drive, Suite 200 • Palo Alto, CA 94304
March 7, 2016
Mr. Bill Hough
Congestion Management Agency Program Manager
Santa Clara Valley Transportation Authority
3331 North First Street
San Jose, CA 95134
Dear Mr. Hough,
Stanford Real Estate and the undersigned Stanford Research Park companies support the City of Palo Alto's
application for Transportation Fund for Clean Air (TFCA) grant funding to expand Bay Area BikeShare in Palo
Alto. We are especially enthusiastic about the opportunity to locate BikeShare stations in publicly accessible
locations within Stanford Research Park.
Stanford Research Park is home to over 150 companies, many of whom offer generous and effective transit
subsidies to their employees. BikeShare stations within Stanford Research Park will provide a convenient, low
cost and flexible "last mile" connection between Caltrain and major work sites. Machine Zone, Hewlett Packard
Enterprise, HP Inc. and Varian Medical Systems are just a few of the companies located within walking distance
of Palo Alto’s proposed BikeShare stations. Employees of these companies will welcome BikeShare as an
option for both commute and midday trips.
The proposed expansion of the BikeShare system will provide the scale and locations necessary to form an
effective BikeShare network in Palo Alto. We believe the synergy between Caltrain, BikeShare and Stanford
Research Park's Transportation Demand Management Program will attract new transit riders and convert
occasional riders to frequent users, thus achieving important trip reduction and air quality benefits. We look
forward to working with the City of Palo Alto to realize the full potential of BikeShare in our community.
Sincerely,
Tiffany Griego Jamie Jarvis
Director, Stanford Research Park TDM Manager, Stanford Research Park
Bill Roberts Alan Palter
VP Real Estate Strategy and Transformation Director Environmental Affairs
Hewlett Packard Enterprise Varian Medical Systems
Tory Valenzuela Cynthia Rock
General Counsel, Machine Zone Head of Global Real Estate, HP Inc.
Attachment J
S:\PLAN\TRAN\_NEW_PTC & City Council\CMRs\2016\6324 Mid-Peninsula Bike Share Study\Memo- MTC
Draft Bike Share Capital Program.docx
TO: Active Transportation Working Group DATE: March 13, 2016
FR: Kevin Mulder
RE: DRAFT Bike Share Capital Program
This memo outlines the plan for the Draft Bike Share Capital Program in advance of the March 2016
Active Transportation Working Group, where staff will solicit feedback on questions listed below.
Background/Goals & Objectives
Bike sharing has been a mixed success in the Bay Area, as demonstrated by the Bay Area Air Quality
Management District’s pilot bike share program, Bay Area Bike Share (BABS). In May 2015, MTC’s
Commission approved a privately-funded BABS expansion in Berkeley, Emeryville, Oakland, San
Francisco, and San Jose by Motivate Inc. that will add over 6,000 bikes to the system at no public cost.
MTC’s Commission also set aside up to $4.5 million for the Bike Share Capital Program in the remaining
Bay Area communities at the same May 2015 meeting. The Bike Share Capital Program will award grants
over two phases, with the timing of the second phase to be determined following Phase 1. The funding is
a one-time funding source to help project sponsors with capital purchase and initial implementation costs
and will not be an on-going grant program. It will also not fund operations due to constraints on the
federal Congestion Mitigation and Air Quality (CMAQ) funds committed to the program.
Program Summary
Eligible projects Bike share capital projects in Bay Area communities other than the
privately-funded BABS expansion. Typical capital items include:
Bicycles, stations, and station components
Support/rebalancing vehicles for bicycles
Testing equipment & membership cards/readers
Planning, engineering, design, & permitting
Site prep, installation, & project management
Total amount available Up to $2 million in Phase 1
Type of funds Congestion Mitigation and Air Quality Funds (CMAQ) – Federal
Funds administered by Caltrans Local Assistance
Application Process
The Bike Share Capital Program will follow a two-step application and evaluation process. First, MTC
will invite interested applicants to submit Letters of Interest (3-page maximum, excluding attachments) to
describe proposed projects, anticipated impacts, project readiness, and funding plans. The evaluation
Attachment K
S:\PLAN\TRAN\_NEW_PTC & City Council\CMRs\2016\6324 Mid-Peninsula Bike Share Study\Memo- MTC
Draft Bike Share Capital Program.docx
committee will review all LOIs and identify a small number of promising projects. These applicants will
be invited to submit a more formal proposal for further evaluation.
The evaluation committee will quantitatively evaluate proposals against the following criteria categories:
Potential for impact (including bicycle mode shift, reduced VMT, first/last mile solutions, etc.)
Full funding plan for ongoing operations
Readiness and local support (including feasibility studies, bike facilities, complete streets
policies, other engagement, etc.)
Local match share of total project cost
Capability of the project partners to implement the project
Location within a Priority Development Area (PDA), Community of Concern (COC), or
Community Air Risk Evaluation (CARE) Program area
Schedule & Timeline – all dates are tentative
LOI Development & Pre-Application Workshops April – May 2016
LOI Review & MTC Committee Presentation June or July 2016
Full Proposals Development August – September or October 2016
Full Proposals Review October – November 2016
Recommended Program of Projects &
Commission Approval
December 2016
TIP Revision Approval January 2017
Request for Obligation / E-76 and E-76 Approval
from Caltrans
June or July 2017
Project Implementation Within 24 months of MTC Commission approval
Questions for ATWG
What do you recommend for the minimum and maximum size of the grants?
What share of the total project amount do you anticipate for planning, engineering, and design?
Will you be able to provide a 100% operating funding commitment/plan by September or October
of this year?
Do you have other concerns about implementation readiness?
Should a portion of the $4.5 million be redirected to install bicycle facilities instead of bike
share?
Would you agree to a condition that poor system usage could result in equipment redistribution
after a given period of time?
Kevin Mulder
Active Transportation Planner
Metropolitan Transportation Commission
kmulder@mtc.ca.gov
101 8th Street
Oakland, CA 94607
510-817-5764
CITY OF PALO ALTO CITY COUNCIL
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Page 1 of 67
Special Meeting
April 25, 2016
The City Council of the City of Palo Alto met on this date in the Council
Chambers at 5:01 P.M.
Present: Berman, Burt, DuBois, Holman arrived at 5:07 P.M., Scharff,
Schmid, Wolbach
Absent: Filseth, Kniss
Closed Session
A. CONFERENCE WITH CITY ATTORNEY—POTENTIAL LITIGATION
Significant Exposure to Litigation Under Section 54956.9(d)(2)
(One Potential Case, as Defendant) – Palo Alto-Stanford Fire Protection
Agreement.
Mayor Burt: Our first item is a Conference with the City Attorney regarding
potential litigation, significant exposure to litigation, under Section
54956.9(d)(2) with the Palo Alto-Stanford Fire Protection Agreement. I have
no speaker cards, and so we'll entertain a motion to go into Closed Session.
Vice Mayor Scharff: So moved.
Council Member Wolbach: Second.
MOTION: Vice Mayor Scharff moved, seconded by Council Member Wolbach
to go into Closed Session.
Mayor Burt: Motion by Vice Mayor Scharff, seconded by Council Member
Wolbach. Please vote on the board. Why don't you raise hands. That
passes 6-0 with Council Members Kniss, Holman and Filseth absent. Thank
you. We'll now go into Closed Session.
MOTION PASSED: 6-0 Filseth, Holman, Kniss absent
Council went into Closed Session at 5:03 P.M.
Council returned from Closed Session at 6:09 P.M.
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Mayor Burt: ... session item. We have no reportable action.
Study Session
1. Receive and Review the Report on the Mid-Peninsula Bicycle Sharing
System Study.
Mayor Burt: We will now move on to a Study Session which is to receive
and review the report on the Mid-Peninsula Bicycle Sharing System Study.
James Keene, City Manager: I'll turn it over to Josh Mello. I think you'll find
this—I think it's a timely, obviously timely and necessary conversation but
pretty interesting.
Mayor Burt: Welcome, Mr. Mello.
Joshuah Mello, Chief Transportation Official: Thank you. Back when I
started in September, we had already received notice that the current bike
share pilot was coming to an end. I've been in kind of data-gathering mode
for the last eight months. There's a lot of moving parts to our existing bike
share network as well as what's happening regionally. I'm going to give you
a brief overview of kind of where we are today, things that have happened
over the last couple of months, and then present a couple of options moving
forward for your just consideration. Many of you are probably familiar with
what's called a fourth generation bike sharing system. This is different from older bike share systems where bikes were just left leaning against trees.
There was no formal membership, and bikes would typically disappear
because there was no account set up or any kind of deposit put down. This
type of system, the fourth generation bike share system, really took off in
Paris, the Velib system, about a decade ago. This is a fleet of kind of
automated public bikes that the typical version, the stations themselves
have locking mechanisms, and the bikes are locked into the docks. Folks set
up memberships where they can check out the bike for a defined period of
time. The bikes are highly durable, and they're made to be used and abused
by members of the public. They're not typical, off-the shelf bikes that you
would own for personal use. These systems have been fairly successful.
They have a low rate of loss and damage due to their design. Typically folks
have to put a credit card down in order to ensure the bike is returned in
time. There's generally two types of fourth generation bike sharing systems
that are prevalent in the world today. The first is what's called a smart dock
system, and this is what we have in Palo Alto. The two companies that
manufacture and operate these systems are Motivate and BCycle. Motivate
is the technology that we have with Bay Area Bike Share. The equipment
that's used by Motivate is called PBSC, and it was actually invented by the
Montreal Parking Authority. The technology is a little bit outdated today.
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I'm going to talk a little bit more about that on the next slide. With this
system, the majority of the technology is built into the stations themselves,
and the bikes are essentially dumb. They're just bikes that interlock into the
docking station. This type of system is used in New York, Boston, Downtown
Los Angeles (LA), Chicago, many other American cities. Paris and a lot of
the European cities also use this type of system. There's also one third
brand called Decobike which is used in San Diego and Miami Beach. All of these generally share the same characteristics that there's a computer
interface on the station itself. That's how folks sign up for memberships and
check out the bikes. A new type of system that's becoming a lot more
common in the United States, especially with cities that are just rolling out
bike sharing, is what's called a smart bike system. This is where the
stations themselves are just typical bike racks, and there's actually no
technology built into the stations themselves. All of the technology is on the
bikes. In this photograph, the black box that's above the rear wheel on the
bikes is a computer processor that's linked via mobile networks to a central
computer. When somebody signs up for a membership, they use a smart
phone app that they can download very quickly. They select the network
they want to use, and then they are given an account number and a pin number after they enter their credit card information. They can actually
reserve a bike using the smart phone app. If you're walking very quickly,
you need to get to a meeting, and you see there's a bike available a block
away, you can reserve that bike using your smart phone app. When you get
to the bike, you walk up to the keypad that's on the back, and you type in
your account number and your pin number, and the bike is immediately
unlocked. You take the yellow, U-shaped lock out there, and you put it onto
a little holder on the bike. One of the other benefits of this system is that
you can keep a bike checked out. I actually got to use this system in
Phoenix, that's where I got this photo about a month ago. I was able to
check out a bike at a hub across from my hotel, and then ride to a coffee
shop, temporarily lock that bike up in front of the coffee shop outside of a
typical bike share station. It charged me an extra dollar for being outside of
a hub, but I didn't mind because, when I came out of the coffee shop, the
bike was there, and I could jump back on it and ride it to a designated hub.
One of the other neat things about this system—Topeka, Kansas, does this—
you can create virtual hubs. In the case of Topeka, Kansas, their entire
downtown is designated as a bike share hub. Somebody can jump on one of
these bikes anywhere outside of downtown, ride to any normal bike rack
downtown, lock their bike up, and it's considered returned to a hub. Other
folks can use their smart phone apps and navigate to bikes that could be
placed anywhere around downtown. They don't necessarily have to be at a
fixed station. You can also create these kind of pseudo hubs like you see in
the photograph, that are very identifiable. If you're walking down the
street, if you're a visitor, you can easily tell that this is a bike share hub
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even though it's just typical metal racks with a map kiosk at the end. This
system is in use in Santa Monica, Portland, Phoenix, Tampa, Florida, as well
as Long Beach, California. There's a couple of other manufacturers that
emulate this, but Social Bicycles is the largest manufacturer of this type of
technology. The other two are Zagster and nextbike. Nextbike rolled out in
Pittsburgh last year. Zagster is mainly on college campuses and office parks
and business campuses. Just wanted to touch on—sometimes safety comes up when we talk about bike sharing. A study by the Mineta Institute that
actually just came out a couple of months ago looked at the history of
collisions on bike shares throughout the United States and determined that
they're actually safer than personal bicycles. People tend to take extra care
when riding a bike-share bike. That's despite a pretty low helmet usage,
because people don't typically carry helmets around with them when they're
at work and they're visiting, when people would otherwise use a bike share
system. As you know, we're part of the Bay Area Bike Share regional pilot.
This was a five-city program that was rolled out in 2013 with 700 bicycles
and 70 stations. Palo Alto has five of those 70 stations. It was launched
with Transportation Fund for Clean Air monies that were distributed by the
Bay Area Air Quality Management District. It was always intended to be a pilot. It was generally envisioned to get something on the ground, get bike
share out there, see where it works. It was really about getting something
on the ground quickly. The main goal of that program was to serve as last-
mile connectivity from Caltrain stations. That's why there are a whole host
of stations located along the Caltrain corridor in the Peninsula. Our five
stations are mostly concentrated in the areas around the Palo Alto Caltrain
station and the California Avenue Caltrain station. Our system was originally
envisioned to also include stations on the Stanford campus. That did not
occur. There were some issues with the technology as well as the aesthetics
that led to the Stanford stations being removed from the original pilot. We
were left with three stations kind of along the University Avenue Corridor,
and then two stations along the Park Boulevard Corridor. By any measure,
this is a pretty poorly designed bike share system. You don't have a density
of coverage. You're really limited to traveling just a couple of blocks from
the Caltrain stations. As you would expect, our usage has been fairly low.
These numbers reflect our trip data from September 1st, 2014 to
August 31st, 2015, roughly a one year period. As you can see San Francisco
has about two and a half trips per bike per day, while Palo Alto only has 0.17
trips per bike per day. The kind of threshold that a lot of systems look to
get to is at least one trip per bike per day. We're not even close to that
when we look at this data. However, Redwood City has performed a little bit
less successfully than we have. Mountain View is a little bit better; Mountain
View has a couple of stations over in the Baylands east of 101. I think that's
where a lot of their ridership comes from, folks going from Caltrain to the
job centers along the Baylands. It is getting a little better. I pulled data
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from February of this year; we're up to about 0.5 trips per day per bike
which is pretty good. I think one of the things about bike share is that it
takes a little bit of time to attract members and attract the type of usage
that we want to see. There also has not been a lot of marketing done of our
system. I think whatever we decide to do in the future, we should look at
increasing our marketing efforts. One of the interesting things that did come
from the data—you'll see this in the attachment to your Staff Report—is there's quite a few folks who have bike share memberships in San Francisco,
and they come to Palo Alto and use our system because it's interoperable
currently today. That goes to the fact that people are using it as a Caltrain
last-mile solution. This is our station data. We have five stations. As you
would expect, the Palo Alto Caltrain station has the highest number of trips
beginning at that location. That's 99 per month. There's not a lot of trips
happening on the weekends. Again, this looks like it's being used by
commuters during the week. When you look at the spider map—there's
actually a spider map that's released monthly by Metropolitan Transportation
Commission (MTC) that shows where the trips are originating and
terminating. Our largest trip segment is from the Palo Alto Caltrain station
to the bike share station at University and Cowper. That's actually the farthest point you can actually ride from a Caltrain station. I think that's
why you see that trip pair. It’s a little bit too far to walk quickly. The other
stations are generally clustered around the stations. If we were to move
forward, I think if we were able to increase the distance folks can travel from
Caltrain, I think we'd see higher performance. As you'd expect when you
look down at it, it's really about land use and number of stations within the
service area. San Francisco has a huge number of stations in a rather small
service area. When folks use bike share, they want to know that they're
going to have a station relatively close to where they're going. You're
probably just going to walk if you have to park your bike share four blocks
away from your destination, and then walk four blocks anyway. Back in
2015 as the pilot was about to start tapering off, MTC and Motivate—that's
the current operator of the Bay Area Bike Share—entered into an agreement
to dramatically expand the Bay Area Bike Share Program to 7,000 bikes
which will make it one of the largest systems in the entire United States.
That will be entirely privately funded; however, they're only expanding in
San Francisco, Berkeley, Oakland and San Jose. The Peninsula cities were
kind of left to fend for ourselves. We were given a term sheet, which is
included in your packet, basically outlining the costs that we would need to
cover in order for the Bay Area Bike Share system, the current five-station
system, to continue operating in Palo Alto. Back in October 2015, MTC
allocated some funding to SamTrans to do a Peninsula Bike Share Study.
They partnered with Palo Alto, Redwood City and Mountain View to look at
what the options are for those three Peninsula cities post-June 30th when
the Bay Area Bike Share pilot ends. This study is still underway. A lot of
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what's in your Packet is our draft documents from that study. We didn't
have time to wait for the study to be finalized, because we have some
decisions that we need to make in the coming two months. This Study
provided us with a lot of really useful data. They looked at other suburban
communities that have bike share, because one of the big questions is can
bike share work in suburbia, outside of the urban core. The answer is yes.
They looked at Alexandria, Bethesda, Brookline, Rockville, Silver Spring, Maryland, as well as Summerville, Massachusetts. Summerville and
Brookline are a little bit denser than Palo Alto, but some of the Maryland and
Virginia suburbs are, I think, good peers for us. They basically found that
service area is the most important thing. In urban areas, it's really about
station density. They found in suburban areas it's actually better to have a
larger service area, because destinations are so far out. It's actually better
to have a large coverage area, so folks can access a larger number of
destinations. Based on the data that they collected in these other suburban
communities, they looked at what the characteristics were for the successful
stations in those communities. They modeled the densities and the land
uses in Palo Alto, Redwood City and Mountain View to determine what the
ideal system would look like for each of those cities. I'm going to show you a map of our ideal system, which is a 35-station system generally
concentrated west of the U.S. 101 corridor, but covering the majority of the
City from north to south and also serving the Stanford Medical Center and
the Stanford Research Park. One of the developments in late 2015 was the
City of San Mateo approved a 50-bike pilot bike share system. This was
back in November. They did an interesting thing. Instead of doing their
own procurement process, they just piggy-backed off of an existing contract
between the City of Santa Monica and Social Bicycles. They were able to get
the price that Social Bicycles offered to the City of Santa Monica for those 50
bikes. Then they found a local nonprofit called Bikes Make Life Better to
actually operate the system. Every bike share system requires three
ongoing maintenance and operations tasks. The first is repairing the bikes.
The bikes will break from time to time; they'll need tires repaired. The
second is rebalancing the bikes. A lot of the bikes tend to get clustered in
one location. In the morning, everybody would ride to Caltrain, and then
there's no bikes left in the outer neighborhoods. The bike share systems
typically rebalance the bikes during the day to make sure that there's an
equal distribution. Then there's customer service. If somebody calls
because their account's not working, somebody has to answer the phone or
respond to emails. Those are the three kind of ongoing operations and
maintenance costs. City of San Mateo, their 50-bike system is going to cost
85,000 for capital, and then they're going to have about $90,000 a year in
operating costs for their 50-bike system. Back in March of 2016, there was
a deadline to apply for Transportation Fund for Clean Air funding. They
purposely reduced the threshold needed to apply for bike share funding. I
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think that was done to get Palo Alto and Mountain View and Redwood City to
apply for these funds. We indeed did submit an application in March. We
were still unsure as to what the future held, so we left it a little bit open. We
projected out costs over five years and came up with a cost benefit that
worked out for the funding source. We ended up requesting $171,000 with
an assumption that the City would identify $911,000 in local operating funds
over five years. By submitting the application, we did not commit ourselves to doing this project or accepting the funds, but we didn't want to leave that
funding on the table because it was purposely structured to enable us to
apply to continue the operation of our bike share program. There's also
another source of funding that's on the horizon, and that's the MTC Bike
Share Capital Program. Early last year, the MTC Board set aside $4.5 million
in capital funding. They're going to make that available over the next two
years in probably two phases to communities that are left out of the Bay
Area Bike Share expansion. Everybody but San Francisco, Berkeley,
Oakland and San Jose will be able to apply for these funds. We don't know
how much will be available per community. We don't know how many
communities they're going to fund. The total is 4.5 million. To wrap this
discussion up, this presentation up, the BABS, Bay Area Bike Share, pilot program is scheduled to end on June 30th. There is an opportunity for us to
go to a month-to-month contract where we would just need to give them 30
days notice when we want to end the program. We could also extend it for
another year. Either of those options would require us to bring an
agreement back to you in a relatively short time for your approval. The City
must provide notification to Motivate on what our decision is by May 31st.
We need to let them know whether we want to end the program, extend it
on a month-to-month basis or extend it for a longer period of time. There's
several decisions that we're going to need to make over the next several
months to a year, depending on what we do with the Bay Area Bike Share
system. We need to decide if we want to continue with a smart dock system
that's more expensive on a per-bike basis or do we want to transition over
to the smart bike system that's a little more flexible, seems to be the newer
technology and is a lot less costly than the smart dock system. We also
need to think about how large we want our system to be. Do we want to
continue with a very small or small system like we have today or do we want
to move towards that ideal system size where we're going to get the kind of
ridership that we'd really like to see? Thirdly, we need to think about an
operator. Our current operator is Motivate which is a for-profit company
that's very wedded to one technology. We could go to a nonprofit model
similar to what the City of San Mateo is doing. There's also several other
options out there as far as operations. This is a map showing our ideal
system. For the application that we submitted in March, we broke it into two
phases. The dark gray areas which are generally Downtown and the
California Avenue (Cal. Ave.) Business District as well as the Research Park
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and the Medical Center, that's what we called Phase One. Ideally we'd like
to get 13 stations in there. For the Transportation Fund for Clean Air (TFCA)
grant, we assumed three new publicly funded stations and then five privately
funded stations, which would get us up to that 13 number, which we think
would work in that dark gray area. The remainder of the area, which is
shown in light gray, that would get us to our 35 stations, which is based on
the modeling that the consultant did for the Mid-Peninsula study. That's what our ideal system looks like. That's where we're going to get the most
benefit for our cost. This is a table that shows the preliminary alternatives
and the cost. I want you to take this with a grain salt. This is a little bit
"back of the envelope." Until we actually start negotiations, we're not going
to have firm numbers. These are based on the term sheet that was
provided by Motivate as well as the rate that the City of San Mateo got for
Social Bicycles, which is an executed contract. For our very small system,
which is five stations, there would be no capital costs for us to continue that,
because the stations are already in place. They're owned by Motivate.
However, the Motivate term sheet shows that we would need to provide
$101,000 a year to keep operating that system. It would work out to a cost
per trip of about $33 if we had our current ridership, if we did not move the stations and just left it operating the way it is today. If we went to a small
system, which would be a little bit larger than ours, that 13-station system
that I mentioned, we would have a capital cost of $415,000, and then an
annual operating cost of $220,000, and a five-year total cost to the City of
about $1.5 million. That's about $15 per trip if we saw the ridership gains
that were modeled by the consultant. The Social Bicycles, same size
system, 13 stations, our capital costs would be a little bit lower at 400,000.
Keep in mind that would be buying an entirely new fleet of bikes. Even to
buy an entirely new fleet of bikes, the Social Bicycles system is still cheaper
from a capital perspective than just expanding our existing system. That
has an annual operating cost of 175,000 with a total five-year cost to the
City of about 1.3 million. The cost per rider goes down a little bit with that
one to $13 per rider. The last two would be the large 35-station system.
The capital cost for that using the smart dock Motivate system would be
about $1.8 million; whereas, it would only be about $1 million if we were to
use the Social Bike smart bike system. Our operating costs would be
$335,000 with the Motivate system, 170,000 with Social Bicycles. You can
see that the Social Bicycles 35-station system, the total five-year cost to the
City is only $1.9 million; whereas, the Motivate system would be about $3.5
million. With the Social Bicycles 35-station system, we get the cost per trip
down to about three dollars which kind of puts it in line with a typical transit
trip. One last point I want to touch on which I don't want it to get lost in the
numbers. This is very important, regional integration. One of the benefits
of our current system, being part of the Bay Area Bike Share system, is that
someone who has a bike share membership in San Jose or San Francisco
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can come to Palo Alto, and they can use our system with their membership.
They don't have to sign up for yet another layer of transportation
memberships or fares. Regardless of the technology that we select, we need
to move towards better integration with transit. There is an initiative on the
horizon by MTC to create what's called Clipper 2.0, and that could be a
couple of years out. Clipper 2.0 could feasibly integrate bike share into the
regional fare payment system. Someone who has a Clipper card that's stocked up with $20 could just walk up to the bike share system and not
have to go through the whole process of signing up for a membership and
just easily check out a bike and jump on and use it like they would any other
transit system. As currently structured, the Social Bicycles (SoBi) bicycle
technology actually offers a little bit better integration with the Clipper
system. You can tie your Clipper card to your membership. When you sign
up for a SoBi membership, you can take any Radio Frequency Identification
(RFID) card and you can enter the number on the back of the RFID card,
and your bike share membership will be tied to that card. If you remember
I showed you the SoBi bikes. They have the black box on the back of the
bike. There's actually an RFID chip reader in that box too. In lieu of
entering your account number and a pin, you can just walk up and scan the RFID card that you had already connected to your account previously.
However, you cannot use your Clipper card fare balance to pay for bike
shares. It won't actually use the backend payment processing that's
attached to Clipper. You would still have to have a separate account with
SoBi, but you could use the same card. That option doesn't exist at all with
the Motivate system. You have to have an entirely different membership.
That concludes my presentation. Thank you.
Mayor Burt: Thank you. Colleagues, questions and comments? As a Study
Session, we'll be taking no initiatives. Vice Mayor Scharff.
Vice Mayor Scharff: Thanks. Thanks for the presentation; it was really
great. A couple of things. Do we know at all what Mountain View or
Redwood City are going to do?
Mr. Mello: Yes. I actually talked to them this week, my counterparts there.
They're kind of in a similar stage we are. They're thinking about their
options. I know Redwood City, the City Manager is looking at it. Mountain
View, they're going to their Council shortly. They're in a similar place to we
are. They haven't seen the performance that they expected out of the Bay
Area Bike Share pilot. Redwood City has talked about whether they even
want to continue any type of bike share program given their low usage. I
think they're both open to pursuing an alternative solution. They're kind of
waiting to see what we do as well. What's come out of the planning effort
with SamTrans is kind of a mutual agreement that we need something that's
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a little more tailored to the Peninsula cities and that the Motivate system
may not be the best fit.
Vice Mayor Scharff: I think what struck me most is how much better than
San Jose we do. If you look at our numbers now ...
Mr. Mello: (inaudible)
Vice Mayor Scharff: Yeah, the current ones. We're at 0.52, and we have a
terrible system, as you said. I think that really shows that there's huge demand for this, given how much better we frankly do with horrible station
placement. When I look at this, I actually am very optimistic that if we did
the ideal system, that it would be widely used throughout Palo Alto. When
you look at these, it almost seems to me that there'd be very little reason to
stay with Motivate. They're much more expensive to operate, hard to grow
the system. When you look at that three dollars a bike ride, that seems to
make some sense when you start looking at that. I mean, $33 a bike ride
doesn't really seem to feel very economical to us. My thoughts are that I
would definitely push for the large system frankly with SoBi. I think that
makes the most sense. I mean, I'm not wedded to that obviously, but the
Motivate doesn't seem to make a lot of sense given their capital costs and
also that frankly they don't really want to do Palo Alto, they don't want to do Redwood City. They've sort of politically been forced to—now they're
charging us for it. I understand they don't even really want to do San Jose.
They really just wanted to do San Francisco, Berkeley, that area. I definitely
think that we should focus on that. How long would it take to—you said we
could go month to month. We could go month to month for as long as we
want. Is it prorated? Is there any down side? Is it more expensive to go
month to month? How quickly can we transition, if we wanted to, to SoBi
and then start maybe slightly smaller and then move to a large Phase One
and Phase Two as you talked about?
Mr. Mello: If we went month to month, it would be a prorated cost based on
the $101,000 per year.
Vice Mayor Scharff: (inaudible) what is that? 12,000?
Mayor Burt: No, 8,000.
Mr. Mello: $8,000 a month roughly. That's all inclusive, so we wouldn't
have to contribute anything additional. They do all the maintenance and
operations. There is an additional cost if we wanted to move the stations to
try to get a little better performance out of our existing system. There's an
added cost to moving the stations. If we were going to end the Motivate
contract eventually, I don't think we'd want to invest in moving the stations.
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Your second question about how long it would take, I think we could move—
I think each individual city could move relatively quickly. If we wanted to
develop a Peninsula solution with Redwood City and Mountain View, I think
there'd be an added time that would be required to negotiate something that
...
Vice Mayor Scharff: What's the advantage to that? Why not just put our
own in and then they'll probably follow suit. If they don't, they don't.
Mr. Mello: One of the other strengths of the Social Bicycles, SoBi, system is
it's one smart phone app for all of their systems. When I signed up in
Phoenix for their system, I could have also signed up for the Tampa system
or the Santa Monica system. San Mateo is rolling out a SoBi system, so
they'll have the same app in that case. I think if we were to move in that
direction, I think we could kind of see some cross-pollination and some
integration even if we didn't sit around and wait for a unified system that
was all one brand.
Vice Mayor Scharff: I'd be concerned with waiting. I'd like to see us move
as quickly as possible and get this done, given the traffic situation in Palo
Alto. This seems a relatively inexpensive way, especially with the large
system, to get this done. I'd be concerned with getting—I mean, I have doubts that Redwood City is going to really spend the money and move on
this frankly. I think if we get out there first and start doing this, I think
other people then, if they do come online, will follow that. When you look at
these numbers, it seems hard to imagine you'd choose Motivate over SoBi
just given the numbers. It seems to me that that's where we should go on
this. Thanks.
Mayor Burt: Council Member DuBois.
Council Member DuBois: I guess my understanding is we've basically been
on probation for about a year since they basically told us they weren't going
to fund it anymore. It doesn't sound like we did much in that last year to
really see what we could do. We could have moved the stations, but we
didn't do that. I guess my big question is what's it going to take to be
successful. I guess the numbers did go up a little bit since that time. You
mentioned marketing. Are there other things you think we need to do?
Mr. Mello: I think there's two things that we could do, that we haven't done
to date. The first is to increase our marketing and make this a recognizable
brand that is promoted by the Transportation Management Association
(TMA), by the Research Park Transportation Demand Management (TDM)
folks, the Medical Center, all of our larger employers. One of the most
successful ways to increase bike share usage is to offer corporate
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memberships at a discount, so that they're just included for every employee.
It gives people an incentive to try it out. They may not buy it own their
own, but if they get a corporate membership ...
Council Member DuBois: That starts to make a lot of sense to me. I'd
definitely want to see that be part of the plan.
Mr. Mello: We could also move to a place where bike share becomes a part
of the development discussion. When applicants are looking at different TDM measures, perhaps providing bike-share bikes or bike-share hubs
becomes one of the tools in their toolbox for trip reduction.
Council Member DuBois: It looks like we need to get about three times the
usage to get to self-funding, which is a pretty significant increase. Would we
actually go and have advertising on the bikes to help defer the cost?
Mr. Mello: The operating costs that I showed in the table do not include
costs being offset by advertising or sponsorship. If we did secure a sponsor
or advertising, that would reduce our operating cost.
Council Member DuBois: Do they change or are they permanent for the life
of the bike?
Mr. Mello: The advertising?
Council Member DuBois: The sponsorship, yeah.
Mr. Mello: On the SoBi bikes, they have panels on the racks on the front
that are changeable. If you go to the first picture I showed where they have
a map panel, you can have the map on one side, and then you could actually
have an advertisement on the other. They would be changeable as well.
Sponsorship would entail kind of wrapping all the bikes in some kind of
brand, the corporate colors. That's a little more difficult to change, but
those are usually multiyear contracts.
Council Member DuBois: I'll just echo Council Member Scharff. I mean,
Motivate seems very expensive, and they don't seem very interested really
in working with us. Have you talked to San Mateo? Are they interested in
collaborating, create a different kind of network with SoBi?
Mr. Mello: They are. I can't remember off the top of my head, but they
named their system something that's very easily transferrable to ...
Council Member DuBois: It's Bay something.
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Mr. Mello: Yeah. It's a play off Bay Area Bike Share. I think their intention
is to—if other cities want to buy into it and become a part, they'd be open to
it.
Council Member DuBois: it's pretty, I think, encouraging that—I think there
are other forms of integration. We're talking about paying with your phone
and Clipper card. I think if we pushed that way, that's very positive as well.
Can we get the TFCA funds if we go with SoBi or are those tied with staying with Motivate?
Mr. Mello: The grant was written in an interesting way. It said it must be
compatible with Bay Area Bike Share. It didn't say it had to be Bay Area
Bike Share. Our intent is if we are successful in our grant request and
Council elects to go with a different technology, we would just submit a
request to use that funding for a different technology.
Council Member DuBois: I think we need to—the question about smart bikes
versus smart docks, I think, is a really important one. Just reading the
report—you're more of an expert than I am—it seems like smaller cities,
smart bikes make more sense. This idea of kind of virtual docks or having
the entire Downtown be a dock just seems to make more sense in a
suburban environment. I really think we've got to factor that in as not just a cost issue, but really what technology is best for our City. I wanted to look
at the ideal 35-station slide for a second, if you could pull that back up. I
went back and looked, and there were some articles from a couple of years
ago where even then, I think, the ARB didn't like the station placement.
Even bike advocates were saying they didn't think it was going to work. I
think getting the placement right is really critical. I know this came out of
some recommendations, but just looking at this, if you think about Mountain
View, and you said they're getting a lot of bike usage to Bayshore, we've got
a lot of offices along Bayshore and also Embarcadero. They're outside of the
proposed region. We actually have empty office space out there. I think
thinking about bike share from University station out to Bayshore would be
useful. I'm also starting to hear a lot with the RPP about businesses along
Middlefield Road and University. They're a little bit far to walk from Caltrain.
Instead of kind of this dispersion model, we should actually think more about
where the employment centers are. There's kind of two issues: where are
the employment areas and where are the residential areas. I think the other
thing we need to consider here is the RPP program. If we start to put bike
share racks just outside where there's still free parking, we're going to have
people driving and parking in the neighborhood and picking up a bike.
That's probably not the intended behavior we want. I think if you look at
this, the ideal map might actually be more of a doughnut with racks along
101 and on the north side of Bayshore and maybe more stuff in the
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Research Park and less stations in the middle of the neighborhoods. If there
was a way that those racks in the middle of residential neighborhoods could
only be used by residents, I think that would be an interesting use of
technology. I would worry about stations in the middle of Old Palo Alto, and
you just park there and then ride the bike into Downtown. That's it.
Thanks.
Mayor Burt: Council Member Berman.
Council Member Berman: Council Member DuBois brings up an interesting
issue that kind of—before I get to that, has anybody—forgive me if this was
in here and I missed it—done an analysis of—what is the benefit to the
community if we somehow achieve 112,000 annual bike share trips in a
year? Has anybody quantified what that means either in terms of fewer
parking spaces or reduced congestion or reduced greenhouse gas emissions
or anything like that? Is there a way to even do that, to quantify it?
Mr. Mello: Yes. The City of Austin did a survey on its bike share users.
They have a pretty popular system. They found that 41 percent of the bike
share trips were displacing a single occupant vehicle trip. That's really the
only number that I've been able to find as far as trip displacement.
Council Member Berman: The question that I had that I thought I'd answered, but then Council Member DuBois' suggestion might blow a
doughnut hole in it, was is there that much demand just from commuting
employees or to reach that goal of 112,000, do you need to get significant
numbers of inner-city trips from residents taking it to go to the grocery store
or go Downtown for dinner or that kind of thing as opposed to just people
coming in for work. I don't know how this 112,388 was derived. Can you
achieve that high usage just with employees or do you need the benefit of
residents using it for trips across town?
Mr. Mello: That number was extrapolated from all of the peer cities that the
consultant looked at, which were mostly suburban in nature with a similar
land use pattern as Palo Alto. The assumption was that you would have the
coverage of the entire service area...
Council Member Berman: For both options essentially.
Mr. Mello: ...to generate that 112,000. If we were to just locate them in a
doughnut fashion at employment centers in Downtown, the numbers may
look different. We would have to re-model that to see how that would
perform.
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Council Member Berman: Based on the success or lack of success we've
had, I was fairly skeptical coming in. Seeing the distributed nature of the
stations and the fact that you could get residents to use it for inner-city
trips, which make up a lot of our congestion and parking usage at certain
times, that appeals to me. I definitely see Council Member DuBois' concerns
about how people might manipulate the system, though. These are good
questions that we have to think through. I like the fact that it's spread out, and that people can use it in the neighborhoods. I think that could be a
great way to get people using their cars less. In terms of the inter-city
connectivity and possibly partnering with Mountain View and Redwood City,
what's Menlo Park doing? They're kind of a big hole in between us and
Redwood City.
Mr. Mello: They have not shown an interest in participating in the study to
date.
Council Member Berman: Jim.
Mr. Keene: Can I just jump in as an aside? Interestingly enough, I think I
mentioned this to the Council before. The Cities and the City Managers of
Redwood City, Menlo Park, Palo Alto, Mountain View and senior leadership at
Stanford have been working together and actually working towards at least a sort of City Manager agreement to maximize inter-jurisdictional planning on
different transportation issues as much as possible. Even this past week, we
had a briefing to the City Managers on this topic that included Menlo Park.
To date, they haven't been part of this. As you know, they're in the process
of adding bike lanes, for example, along El Camino Real where we don't
have them. That's been a topic we've said, "Wait a minute. The
interconnect between your town and ours are things we've got to be talking
about more explicitly." I would imagine that this would extend to Menlo
Park also.
Mr. Mello: I think they would be interested to see what we do and maybe
want to participate once we get something in the works.
Council Member Berman: I guess just lastly I'd agree with my colleagues
that I think the SoBi go big option, if we're going to do this, is the right
option. I think there are still questions that need to be answered. The small
options aren't generating any sort of benefit, so that doesn't make a lot of
sense.
Mayor Burt: Council Member Schmid.
Council Member Schmid: It was good to see the February update. It's
important to see that this works in the community over time and builds up a
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cadre. I'm a little surprised that this is being pushed in conjunction with
Caltrain. I mean, using it for that last mile certainly would save Caltrain
loading up bikes on the train. It sort of condemns the system to be used
once a day. When you arrive at Caltrain, you go to your workplace, and you
put it there. You reserve the bike at 5:00 PM to catch the commute train
coming back. These one-way trips or one bike a day trips don't seem to
work. Where it really works is where you have dense neighborhood developments like San Francisco, where you can move from neighborhood to
neighborhood to house to visit and so on or in a business park where you
have three or four meetings over the course of a day and you can pick up a
bike in front of each office, drop it off. The bikes move around; they get
used five, ten times a day. Palo Alto is designed sort of to be a more
walkable community where you get to your workplace and you can walk to
your coffee, your lunch, to your comrades who are working across the
street. On your map, when you reach out to the neighborhoods, everybody
owns a bike. We're putting our efforts into making it easy with bike
boulevards for you to use your bike from home to go to various places. I
don't quite see how this would fit in. I guess there's a second issue on the
cost and the cost tradeoffs. I'm surprised you don't come tonight saying, "Here's what you get for spending hundreds of thousands of dollars on bike.
Here's what you might get by investing that in shuttles, in a Marguerite
program that moves from Caltrain to a number of businesses during rush
hours, that can deal with the suburban densities." We have talked about not
just shuttles but ridesharing components where for $100,000, $200,000 a
year you can make a big impact on a much wider audience and those who
are not just taking that one-mile trip from Caltrain to their job. I would
certainly encourage you to look at this in terms of a cost tradeoff with other
options. There are places where it makes a lot of sense maybe; the
Stanford Research Park jumps out. If you can get a good program running
in the Research Park, it might be just the commute and also lunch time and
shopping and things like that. You could have a program working back and
forth (inaudible). That raises another question of who pays. Why should the
General Fund pay if this is primarily work-oriented, how to get people to
their workplaces? I notice there are letters in here from Stanford Research
Park, from Stanford, from big employers saying, "This is great. Do it." Why
aren't they paying the $100,000 and guaranteeing that they would cover
whatever cost the program involves? They benefit; they should contribute.
One last comment on the placement, on the map you have. The point was
made that you've left off some of the big business districts already. I think
immediately of something like the Baylands. A station out there on a
weekend would entice people who are not regular bicyclists to be able to
enjoy the Bay trail. Maybe there's a way of just moving bikes from a
Caltrain station which aren't used on the weekend out to the Baylands on
the weekends and developing a whole new cadre of users and riders. I think
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this is a good program, but we're at a decision point. It would be good to be
able to compare this to what other ways can we spend money to solve the
problems that have been identified here.
Mayor Burt: Council Member Holman.
Council Member Holman: Thank you for coming forward with this. Just one
quick point. It was good to see the numbers for February. I thought it was
interesting that those numbers were up in February; it was pretty rainy. Kind of interesting those numbers were up.
Mr. Mello: There was one day, February 8th, that was higher than the
others.
Council Member Holman: A few things here. I particularly appreciate the
comments from Council Members Schmid and DuBois. I share the concerns
about some of these stations being in neighborhoods, and people driving to
those locations and then riding a bike into the employment centers. It does
seem like these ought to be more focused on employment centers. Pun
intended here; has there been any interest or any activity to try to peddle
this to the hotels? I guess my question—whether it's businesses, whether
it's the Research Park, whether it's hotels or whatever, has there been kind
of outreach to see if they'd be interested in promoting it, helping sponsor? Has there been any of that kind of outreach that I'm not aware of?
Mr. Mello: For the pilot program, the City of Palo Alto is relatively hands off.
It was overseen by MTC and then operated by Motivate. I think if we were
to advance a different type of system and take more of an ownership role in
that system, I think we would definitely need to build those kind of
relationships and do some more focused marketing at our target audiences.
I think hotel guests and hotels themselves would be a good place to start.
Council Member Holman: I agree with the comment about—I'd already had
in my notes about hotels. I think the Baylands is quite an attraction. It's
been written up nationally. I think it'd be a great place to try to get people
to take bikes, pickup bikes out there to ride. I also agree with Council
Member Schmid's comment about tradeoffs. What do we get for this many
compared to what we'd get for money spent on something else like shuttles?
That sort of thing. Going back to the polling here just for a moment. What
would come first? An investment and then do some polling and outreach or
doing the outreach and then coming forward with the program? That's a
question.
Mr. Mello: Polling about the system?
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Council Member Holman: Polling or outreach or a combination thereof to
see what kind of support we would get from the various entities.
Mr. Mello: I think when we come back to you, we could look a little more
closely at setting some goals on advertising, sponsorship, other things that
could offset the direct operating cost to the City. To date, we haven't
worked on any of that yet, because we don't really have a direction. We
don't have a cost. We don't know what the system's going to look like. I think it's totally appropriate for Council to give us some feedback on what
the appetite for sponsorship and advertising and other things that could
potentially offset the operating cost would be.
Council Member Holman: You touched on what my last comment or
question is. It seems like you're looking for direction tonight, but this is a
Study Session. I'm hearing comments and questions that sort of lead me to
think and your comments also and your presentation seem like you're
looking for direction. That's not what we can do in a Study Session. I'm
just a little concerned about what you're going to take away from this.
Mr. Keene: I think we wanted to surface the issue. We are interested in
comments. Josh kind of gave actually a pretty expansive presentation even
though in a lot of ways it's—no pun intended—motivated once again by a short-term decision point that we have about do we want to start expending
$100,000 to keep the Motivate program in. That's a pretty narrow decision
point. Partly for us to just tease out from the Council is there value in
keeping the Motivate system the way we have it now. That helps us inform
the near-term decision. He presented an alternative with SoBi and
everything. When Council Member Schmid talks about shuttles versus SoBi,
those are helpful but those would be the kind of things we would have to
come back to the Council for actual direction. Even the idea of the maps is
just one way to have drawn a map. Obviously in Palo Alto, we would never
be able to identify where stations ought to be based on the first go on
anybody's map. Clearly we would have to come back. In a lot of ways
we're trying to get a sense of do we even hang with the existing program or
not, just to get your sense, versus is it worthwhile diving deeper into what
we might do with an alternative program or is there no interest in that at all.
I haven't heard that, for example. For the most part, I would take away,
unless somebody says something differently, there doesn't seem much
interest to keep hanging on with the program that we have right now, given
the cost and what it is. There could be an interest in this other program
which you'd want to see more alternatives, comparisons, etc., before a
decision would be made. We'd have to come back. We'd be prepared to do
that based on tonight.
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Council Member Holman: That's where I am. It's a little misleading when,
from my perspective at least, a map is put up there and it says ideal system.
It sort of seems like it's almost at proposal stage. I understand that's not
what your intention is, but you understand why it leads, at least this Council
Member, down that path. I don't think there's much interest, like I said, in
keeping the Motivate. It doesn't seem like that's very productive or
profitable. I'd need a whole lot more information that you've heard other Council Members mention as well before saying do this, not that.
Mayor Burt: Let me just wade in on a few things. First, I like the concept of
having some down in the Baylands for two purposes. One, Council Member
DuBois' reason of having a route from the train stations down to those work
centers. The second is as a beginning and end station for people who might
drive to the Baylands but use them recreationally as a result of the bikes.
As far as the stations in the neighborhoods, I am concerned about using it
for satellite parking for Downtown. On the other hand, people who live in
the neighborhoods, who want to take Caltrain, would take it more if they
had a convenient way to get to the station. They typically are not going to
want to leave their own bikes there. This does go hand in hand with
whether we can provide better bike racks and better security at the Caltrain stations. That may give us a better alternative there. Josh, you mentioned
that this could be another TDM measure. I actually think that that's one of
the strongest reasons for this, to give us a whole other tool in the TDM
toolbox. We could begin to—whether this is a requirement of all those tools
that we would place on developments as a default or some toolkit remains to
be determined. Also, are all these one-speed bikes? In the SoBi in
particular.
Mr. Mello: They range from three to seven speeds depending on the City's
preference.
Mayor Burt: Good. In our flats, three are probably fine. If we're talking
about serving the Research Park, people are going to maybe want more
speeds. As far as the cost effectiveness, I also would like to see that. As I
recall, when we've looked at the subsidy per shuttle rider, it's actually
considerably higher than this. That's one point of reference; it's not the only
one. Higher than, I should say, what we would with the large-scale SoBi.
How soon would a SoBi system be able to come online here?
Mr. Mello: I would hazard—optimistically, I would say a year, but
realistically a year and a half to two years, I would say. I think we could get
a small system in place relatively quickly, but the entire 35-station system
would take a little while.
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Mayor Burt: A first phase might—when you say relatively quickly, say the
first phase?
Mr. Mello: I think if we were going to continue with our existing system, I'd
probably want to do a six-month month to month and then see how quickly
we can get a SoBi system in place and see if the other Peninsula cities are
interested in coming along.
Mayor Burt: A six-month month to month of our existing, you're saying extend that or a new SoBi on a month to month?
Mr. Mello: I think we'd want to keep something in place while we got the
new system set up.
Mayor Burt: That's what I was trying to figure out.
Mr. Mello: I don't think we'd want to have a gap in service. There probably
are some folks who depend on this to get to work every day, even though
it's not a large number of people.
Mayor Burt: Following on to these TDM measures, we could have individual
developments having these requirements. I can certainly see that we could
at the outset put as a condition on any new major development including
hotels. That's pretty easy. I'd also be interested in looking at our TMAs,
such as the Stanford Research Park. Have we had discussions with them about this specifically?
Mr. Mello: Yeah, we've been talking with Jaime and her colleagues over
there. They actually submitted a letter of support for the TFCA application
that we submitted. They're very open to participating.
Mayor Burt: I don't know whether participating means significant financial
participation. When we look at our costs, are they open to being significant
financial partners in this?
Mr. Mello: I think that conversation would come as we started to firm up the
plans for the system. The letter they submitted was just kind of a general
letter of support.
Mayor Burt: I would actually like to see that conversation occur sooner
rather than later and just be pretty direct. They're looking for a variety of
tools. I would think this would work well. It depends on the location. They
have to shuttle folks from the Downtown station to the Research Park,
because of the infrequency of our current California Avenue (Cal. Ave.)
service on Caltrain. From the lower end of the Research Park to the
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University Avenue station with our bike path and essentially Park Boulevard,
that's not a bad ride at all. When we look at that, we may want to think
about in a Stage One the lower level of the Research Park, Stage Two an
upper level which might be served more from Cal. Ave. Caltrain especially
when we have expansion there. Also, I had a discussion with Castilleja
recently and asked them whether they had used our current system,
because they were saying they now have a lot of students who take Caltrain, but then they have a shuttle that they have on their own from the Caltrain
station to Castilleja. A pretty short distance, but they don't have their own
bikes there. They weren't even very familiar with our existing system. You
don't want to probably sign folks up. One, they said that they were
interested in sponsoring a Motivate station at or near Castilleja, because
they are a commuter school. The final thing is aside from the comparison to
alternatives like expanded shuttle, what's our cost avoidance in terms of the
value of a parking space, setting aside for the moment the value of reducing
traffic congestion? Just on a parking standpoint, what portion of these—if
we have 112,000 annual trips under the large-scale SoBi system, that's
about 300 trips per day. What portion of those would we assume or project
would avoid demand for a $60,000 parking spot plus the maintenance of that parking spot? That's a calculus that, I think, is very important, and I'd
be real interested in seeing. I think I concur with my colleagues that we're
interested in the SoBi system. I think I heard generally on the larger scale.
I would be interested in really pursuing financial partners. If we mandate
locations for development, then we avoid both capital and a certain amount
of the operating cost expenses. If we have large-scale partners through the
TMAs, that also is a significant cost sharing. We might see our proportion of
this cost drop significantly. If we are to go forward with a local
transportation tax this fall—we're going to have a meeting next week to hear
our poll results—then we could have funding of our own to be able to expand
support of programs like this. Council Member Wolbach.
Mr. Mello: If I could just address one of those points. Most of the bike
sharing systems in operation today limit memberships to folks 18 years and
older. It could be a challenge for students at Castilleja. That's not saying
that there's not an opportunity to have a different age threshold, but most
systems in operation today you have to be 18 and older to use the system.
Mayor Burt: Interesting, although I wouldn't be surprised if agreements can
be struck between an institution where the institution would provide certain
guarantees or whatever. Council Member Wolbach.
Council Member Wolbach: Thank you very much for the presentation. I
concur very much with the comments I've heard from my colleagues. I just
want to add my voice to a couple of things. One, we've started to give some
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direction to Staff around at least starting to explore some potential pilot
programs around housing where you'd have maybe higher density housing
near our transit cores decoupled from parking. I think we mentioned it
before, but I think now is a good time to mention it again, the idea of
perhaps having bike share onsite at residential developments like that or
very proximate. As Mayor Burt was just saying, they might even be a
funding partner for this. I would lend my voice to that concept as well at least for exploration. I think that this is—as was said before, it's important
to recognize all of the potential benefits that come from this and the cost
comparisons.
Mayor Burt: We have one public speaker, Colin Roche. You have three
minutes to speak. Welcome.
Colin Roche, Swiftmile: Hello, Council Members. My name's Colin Roche.
I'm President and Chief Executive Officer (CEO) of a local company called
Swiftmile. We're actually developing something that addresses everything
you've stated here today, which is an electric bike share system that's solar-
powered, can be deployed anywhere, that's quick to set up. One of the
elephants in this room that nobody discussed is you're making it seem by
placing more bike stations out there, more people are going to bike. You're actually going to attract the bikers that already bike. What about the 99
percent of the different people out there that actually don't get on a bike?
There's new options. There's been an explosion in electric bikes within the
last two years that give you the ability for pedal-assist or you can bike just
pure biking. You get the best of both worlds. These systems are set up to
be completely tracked; they're smart; you can locate them with your smart
phone. The system, because they're solar, you can place them in many
different locations. We're already deployed at Google; we're down at the
Santa Clara Valley Transit Authority as a pilot station right outside their front
door. We're also engaged with a lot of companies at Stanford Research
Park. Council Member Holman, you mentioned the hotels and resorts.
That's actually one of our focuses as well. A lot of them, we've talked to
every general manager there. They say people Uber in, and in order to get
around locally they either have to walk, which might be too far, or they're
going to get in another car, maybe another Uber, and get back on the roads
to congest the roads. What about having a system where they could just
simply walk out their front door and get on one of these bikes? The other
part about bike share, which we love by the way. I'm not saying anything
bad about it. To attract non-bikers for the work hours, all studies suggest
this: people don't want to sweat to get to work. You talk about Stanford
Research Park. Half of those companies up there are up on a hill. That's
just another factor that a lot of people decide not to bike. That's just the
pure truth. I'm just here today to let you know as a local company, I was
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born and raised here. I went to Ohlone, Jordan, Palo Alto High School
(Paly). My folks still live here. I know the area well. I would love an
opportunity for my company to be considered. I say this with a little tongue
in cheek; as compared to two companies that are located on the East Coast.
I'm here today to let you know that. Thank you very much.
Mayor Burt: Thank you. I'll just ask Josh. Are you also considering electric
bike share programs?
Mr. Mello: Yes. I've been working with Mr. Roche to try to implement kind
of a pilot between the Cal. Ave. Caltrain station and the Research Park. It
sounds like he's having a great deal of success. There are a couple of bike
share systems in the U.S. that are using electric bikes. I think that's kind of
the next phase of bike sharing.
Mayor Burt: Thank you. That concludes this item. Thank you, Mr. Mello.
That's been an interesting discussion.
Special Orders of the Day
2. Building Safety Month Proclamation.
Mayor Burt: Our next item is a Special Order of the Day, which is the
Building Safety Month Proclamation. Council Member Berman is going to
read the Proclamation.
Council Member Berman: Thank you, Mayor Burt. This is a Proclamation on
Building Safety Month. Council Member Berman read the Proclamation into
the record.
Mayor Burt: Mr. Pirnejad, you have some comments.
Peter Pirnejad, Development Services Director: Thank you very much. That
was a mouth full. Thank you, Council Member. Mayor Burt, it's a pleasure
and delight to be here today. I'm representing the Development Services
Department and the many individuals doing their long days in the office and
in the field trying to ensure that the buildings we live, work, worship, shop
and play in are safe for everybody that inhabits them. We are bringing
before you a Proclamation for Building Safety Month in May. I wanted to
just focus on a few highlights, if I may. This flyer, which I'll pass out to you,
has a few dates that I just wanted to highlight. The first was May 11th,
which I'll get into briefly. It's a demo of a new app that we just launched.
This was a press release. Hopefully you picked up on it as Palo Alto
inspection request app. Contractors have the ease and convenience of
scheduling their inspections with their smart phones, Google or iPhone.
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They can also do inspection requests as well as a history of all their permits,
get immediate reminders of when those inspections are as well as do
multiple inspections at the same time for both fire and building inspections.
That's a great innovation that we're offering our applicants. Also, May 16th,
we continue our fine work on the Seismic Risk Management Advisory Group.
We welcome all those that are interested in looking at our seismic exposure
and how we might mitigate that. We welcome them to participate. That's going to be May 16th at Rinconada Park. I'll send this around, if you'd like
to take a look. I just wanted to highlight four quick points. The first, as we
continue to do the fine work of the Blueprint that was initiated by the Council
some years back, we're focused on four real key main areas. The first, not
in any particular order, is sustainability. We've brought many initiatives to
the Council, our Photovoltaic (PV) Readiness Program, our electric vehicle
readiness program. Our green building now exceeds minimum Code. We
are a Tier Two city. We exceed the minimum Code requirements identified
by the International Code Council (ICC). Energy efficiency is an area that
we strive and continue to show leadership in, since 2007. Next week, I'll be
bringing before you a Reach Code, which is another way of describing our
Energy Reach Code that's going to again exceed both California as well as the nation in energy efficiency. Water efficiency is a focal point as well as
indoor air quality and other areas. Lean, predictable, transparent process is
a second area of focus for us. The mobile inspection request app is one.
We've had improved efficiency using a dashboard that we created some
years back. In that dashboard, we've been able to improve transparency
within the department to identify how we might improve service to our
customers. Keep in mind that the majority of these customers are residents
like you and I that are trying to remodel their home, add on to their
bathrooms, their kitchens, and make the dream homes that they want to
live in and sometimes work in. Our on-time plan checks have improved
since 2013. We were on-time 77 percent of the time. I'm pleased to say
that as of 2015, we're up to 84 percent of the time. That's a collective
average of all the different departments that need to do the reviews. We
went from an average of 41 percent of the building permits that came in, the
applications, over the counter were being approved. Now over 50 percent of
the applications that come to the Development Center as a one-stop shop
can be approved the same day. That's a huge benefit for residents that are
in a hurry and on a tight time crunch. Transparency and predictability is a
big part of what we do. The third item is building safety and resilience.
Obviously this is a huge area of focus for us. The International Organization
for Standardization (ISO) Class One rating, to give you a sense of
perspective, of the 14,000 departments that are rated throughout the
nation, there's only nine that have an ISO Class One rating. We are one of
them. Of the 297 in California, we're of three others that are rated as a
Class One. It's a huge honor plus it provides a benefit of security to our
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residents as well as an insurance benefit for home and commercial business.
Finally, the last area is accountable and cost-recoverable department. We
pride ourselves in being a fee-based department, to not be a drain on the
General Fund. We ensure that development pays its own way by setting
fees to be in par with the level of service that we set. With that, I'd also
send this. If you have an iPhone that you want to download our app on, feel
free. It gives you instructions on how to do that. I look forward to continuing to serve the City and to represent the hardworking individuals
behind me and behind the scenes, like our new Assistant Chief Building
Official, Evon Ballash, sitting in the stands. Again, it's a pleasure to be here
and to serve the City of Palo Alto and its fine residents. I hope to continue
to do so.
Mayor Burt: If you'll hold, I'll bring this down to you.
Mr. Pirnejad: Thank you very much.
Agenda Changes, Additions and Deletions
None.
City Manager Comments
Mayor Burt: Next item is City Manager Comments. Mr. Keene.
James Keene, City Manager: Thank you, Mr. Mayor, Council Members. Silicon Valley at Home is hosting Affordable Housing Week 2016 in Santa
Clara County from May 13th to May 20th with a policy breakfast kickoff on
Friday, May 13th. There is a full schedule of events including affordable
housing tours, workshops and panels on various housing topics. Scheduled
events include a Palo Alto affordable housing tour on May 15th and a film
screening and discussion featuring a documentary about the Buena Vista
Mobile Home Park on May 17th at the Aquarius Theatre in Downtown Palo
Alto. A full schedule of events is available at the website
siliconvalleyathome.org, and you can look it up under events in Affordable
Housing Week on that website. Did want to share that permit applications
and parking occupancies in Downtown garages have increased due to the
Downtown Residential Preferential Parking (RPP) Phase Two implementation.
In particular, the number of commuters using parking at the Cowper-
Webster garage, finally, have dramatically increased. Staff has had recent
reports from the Police Department and permit holders that indicates all
permit spaces are now filled on a daily basis. Given this, we are working
with the Valet Assist Program Coordinator, SV Plus, to develop an
implementation plan for a valet program at the Cowper-Webster garage
similar to programs operating at the High Street and the Bryant Street
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garages. The new Council, you may recall, approved expansion of the Valet
Assist Program to Cowper-Webster in June 2015. We're going to meet with
the contractor this week, and Planning will coordinate with City departments
with a goal to initiate the program in the next four to six weeks. Prior to its
beginning , we will contact all permit holders at Cowper-Webster to notify
them of the program and how to use the service and will post notices at the
garage. We did want to, one last time, invite the Council and members of the public to join Mayor Burt and City Staff at the Great Race for Saving
Water this Saturday, April 30th. The City is teaming up with Tuolumne River
Trust, the Palo Alto Weekly, Project Anybody, KEEN and other partners to
host this Earth Day Festival and fun run and 5K run/walk. Community
Services, Utilities, Office of Emergency Services, Police, Fire, Public Works
and local youth and community organizations at the scenic Baylands for
some outdoor recreation, please join them. Again, as I mentioned before,
the chance to actually catch the running toilet, free bike repairs and tune-
ups will be offered by Repair Café for those who cycle the event. Hope to
see some of you there. We'll start at the Baylands Activity Center at 9:00
A.M., and you can register at the cityofpaloalto.org/great race. I do recall, I
think, that there is race day registration. I also just wanted to call attention to—I think we have an at-places memo from me to the Council about next
week's meeting, May 2nd, that Agenda Item Number Two, which is the
receipt of the first poll results on a possible local transportation funding tax
measure and direction to Staff. We're just getting the results from the
pollster. We're going to talk to them tomorrow. I would expect we will have
a Late Packet distribution on this item in your Thursday, April 28th, packet in
advance of that meeting. While we are on the meeting for May 2nd, Item
Number 12 on the Agenda is the last item scheduled on the Agenda; that's a
Colleagues Memo on Evergreen Parking Permit Program. We received some
comments. Since there's just a very short time that that is scheduled for
discussion, given the fact that you also have the actual petition related to
Evergreen Park and Southgate on the following week's Agenda, I discussed
with the Mayor this morning the idea of moving that to the first item on the
Council Agenda on the 2nd. That should be placed at around the 6:20 P.M.
timeframe, before you take up the public hearing again on the Royal Manor
single story occupancy. Given that that will be a very short item in
comparison to the other, we would put that first on the action schedule.
Lastly, we want to acknowledge, as you all heard, on Friday afternoon a
young woman in Palo Alto was killed when she was struck by the train at the
Palo Alto crossing near Menlo Park. She was a 2014 graduate of Gunn High
School. We've been in close touch with the School District and the Project
Safety Net collaborative in support of our community. It's a sad time for our
community, and our thoughts go out to the young woman's family and
friends. Thank you.
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Mayor Burt: Thank you.
Oral Communications
Mayor Burt: Our next item is Oral Communications. We have one individual
speaker, and then five speakers who have elected to speak with one
representative for up to 10 minutes. Our first speaker is Stephanie Munoz.
There we are. Our next speaker will be Christian Pease.
Stephanie Muñoz: Good evening, Mayor and Council Members. I've been
out of town for a little while. I noticed in the paper that you are going to
permit Stanford to raze, that is, tear down, demolish, the living units for
about 400 people for a very good purpose, so that they can put in denser
housing. Unfortunately—not unfortunately. Stanford has more land in
Santa Clara County and San Mateo Counties than all the cities put together
have public lands. There's no reason that they cannot build their 2,400
acres, 400 units—housing for that number of people—someplace else on the
Stanford lands. We've been telling you for some time, years, not just me
but other people have been telling you that if you have jobs and you invite
people to move to your community, you have to have a place for them to
live. It's gotten worse and worse and worse. A few weeks ago, a month or
so ago, there was a case in which a woman didn't want to have any more children; she wanted a tubal ligation. The law said that this hospital where
her doctor was performing the operation, which is the beginning of a
Caesarean section, didn't have to allow her to have this operation because of
one reason or another. I submit that if we are going to live in a society in
which people have to have babies, that you have to have a place for them to
live. I think you could by eminent domain, if Stanford was unwilling, claim
those apartments. It's been done before, not by Palo Alto and not with
Stanford, but it is quite common for cities to take what is absolutely
necessary for the welfare of the City. I recommend you give it very serious
consideration. When we moved the electrical substation so that the single
room occupancy housing could be put in, it went over to Stanford. It wasn't
done by eminent domain because Stanford didn't want it that way, and
that's fine. Stanford can also make an arrangement where it retains control
of those apartments. I love Stanford, but—thank you.
Mayor Burt: Thank you. Our next speaker is Christian Pease. You have up
to 10 minutes to speak. To be followed by our final speaker, Neilson
Buchanan.
Christian Pease, speaking for five people: Good evening. I'm here tonight
representing the Evergreen Parking Permit Committee regarding Planning
and Transportation Commission's Staff Report Number 6787. As you know,
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this report makes recommendations concerning four requests for Residential
Preferential Parking Programs or RPPs. Those are from Crescent Park,
Edgewood Plaza and Southgate as well as Evergreen Park. Beginning with
our own request, as you know, Evergreen Park is now overwhelmed by
private car commuting parking. It's also bounded to the east by the Caltrain
rail line, to the west by College Terrace and Stanford, both of which have
restricted parking, and to the south by California Avenue, where parking is also restricted, and to the north is Southgate. It's similarly bounded to the
east and west, and then hard-stopped by the Palo Alto High School campus,
which has now reduced its own limited, restricted parking. Now Southgate is
al inundated with commuter parking. Both of our little communities remain
fully open and cost free to any commuter parker who can find a space. Last
month, Evergreen requested annexation into the existing College Terrace
Parking Program, as it was originally intended to be. At first we did the hard
work, the parking counts, the mapping, and so on. Our submission was
designed to finally align us with what is already in place for California
Avenue, College Terrace, Stanford University as well as the nearby Caltrain
station and to do so in the least expensive and least complex manner
possible. But not so, according to the view of Staff Report 6787. According to its unsubstantiated estimates, our request is the most expensive and
complex of the four, with Southgate being second in that regard. We asked
how can this be. One line item, Staff costs, at $100,000 for the Evergreen
proposal by itself seems to explain it. That's 13-plus times the cost of
Crescent Park, ten times more than Edgewood, and four times more than
the runner up, Southgate, our immediate neighbor. Again, we asked how
could this be. A quick look at the item, called potential implications, seems
to answer this question: "While annexation into an existing program would
be a simplified approach from a Planning perspective, a shareholder process
and community outreach process is recommended to develop a program that
provides for residents and employees and could include permits for on-street
parking as well as parking management strategies for California Avenue lots
and garages to increase supply or evaluation of public/private parking
partnerships." Think about what this implies. It's as if little Evergreen is a
driving force behind the congestion now entangling the commercial core of
the California business district. To us, this seems to be putting the donkey
before the cart, to put it mildly. On the contrary, we are just so much
collateral damage from the decisions made by you and your predecessors
with respect to the development of that business district. That said, we
heartily endorse the notion of a comprehensive and competently
implemented transportation plan and programs for California Avenue. That
seems to be a no-brainer to us, but no such initiative exists or is even
contemplated at least as far as we know, which itself seems somewhat
astonishing. Nonetheless, it makes no sense to imply that Evergreen's
request is an inappropriate vehicle to address that purpose. The sad fact is
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each and every commuter who parks on an Evergreen street in route to
Stanford or the Caltrain station is now counted in the traffic mitigation win
column and duly and erroneously reported as a non-car commuter. If this is
not ironic enough, how about this? In the framework of Report 6787, every
new commuter who makes a habit of parking on an Evergreen street
becomes yet another stakeholder in the adjudication of our request. They
get free, unrestricted parking for the duration and a place at the table and a say in the outcome of our request, assuming of course that our request is
actually chosen to proceed. Which brings us to the question of scarcity and,
by that, we mean not just with respect to parking but to the very processes
suggested in this report for each of the requests encompassed by it. Our
City Manager Keene and his senior Staff have now blandly informed us that
there is only enough money and Staff resources available to deal with one of
our requests, and the other three will just have to wait. If what is outlined
in Report 6787 comes to stand, two clear and critical messages will be sent
to the residents of the City of Palo Alto. The first goes to Palo Alto
neighborhoods contemplating an RPP request. You must compete first with
your own neighbors. For your trouble and the inevitable acrimony that will
ensue, you will still have to wait two years or more for a result. The second is that, the City Council, the City Manager Keene and the senior Staff,
despite all the utterances to the contrary, don't actually seem to take this
problem very seriously, that all this talk is just so much empty rhetoric. The
process is nothing more than window dressing. We asked you when we
came here in February to do the right thing for Evergreen Park. Now we're
asking you to do the right thing for all of the requesters, for Crescent Park,
for Edgewood Plaza, for Southgate, and for Evergreen Park, to make sure all
of our submissions are promptly acted upon and judged on their merits.
Tonight we ask you to do something else. For you to actually walk your own
talk and to prove that our concerns as I have expressed tonight are
misplaced. I hope they are. Thank you.
Mayor Burt: Thank you. Our final speaker is Neilson Buchanan.
Neilson Buchanan: Neilson Buchanan, Bryant Street, Palo Alto. I'm here
tonight also to preempt the Planning Commission meeting later on
Wednesday for a couple of reasons. One, I physically can't be there.
Second, I've come to the conclusion that it's a waste of my time to make
these comments to the Planning Commission when the comments really
belong to the stewardship of the City Council. April 1st was the opening bell
on a new horse race. Four different neighborhoods submitted applications
for parking permits. I predict next year open season more neighborhoods
will submit applications. I'm here to make an appeal for a better process on
how we're going to address the neighborhood quality issues that are
inevitably going to arise. Wednesday night, the Planning Commission has a
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very imperfect process to handicap four horses. Which horses are they
going to pick first, second, win, place, show? I talked to a few
Commissioners today, and I don't think anybody has a concept of what
criteria is the Planning Commission going to have due diligence on
handicapping the horses. It's just one more testimony that the process to
take care of neighborhood quality is not perfect. In fact, it's very imperfect.
Council stewardship is needed now. The Planning Commission will submit its findings to you. I think you need to direct that the Finance Committee also
take a look at how they're going to fund these projects, the permit
programs. The Staff Report is silent about where money would be coming
from, if it exists at all. I'm going to close and remind you that one of the
enormous values of permit parking programs in neighborhood is the catalyst
to fund all the mitigation issues. This is an endless circle loop that we've
been in on how you're going to solve parking and traffic. One way to stop it
is to eliminate the free parking in the neighborhoods. That'll bring
everybody to the table for Transportation Management Association funding
for free parking studies and all the other litany of things that the Planning
Department has presented as a multipronged approach. The truth of the
matter is none of the multipronged approaches are even funded. They're pipedreams. How are you going to stop that cycle of (inaudible)? I brought
my can, the kicking can award. I didn't bring it up to the podium this time,
but next time I'll probably have to bring four cans to know which of the four
applications have been kicked down the road or not. In all seriousness, this
is a time to grab the issue. City Staff is floundering on how to solve this
problem. They don't have the resources. It's really follow the money time.
Thank you.
Mayor Burt: Thank you. That concludes our Oral Communications.
Minutes Approval
3. Approval of Action Minutes for the April 11, 2016 Council Meeting.
Mayor Burt: Our next item is Approval of Minutes from the April 11th, 2016
meeting. Do we have a motion to approve?
Council Member Schmid: So moved.
Council Member Berman: Second.
MOTION: Council Member Schmid moved, seconded by Council Member
Berman to approve the Action Minutes for the April 11, 2016 Council
Meeting.
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Mayor Burt: Motion to approve by Council Member Schmid, seconded by
Council Member Berman. Please vote on the board. That passes
unanimously with Council Members Kniss and Filseth absent.
MOTION PASSED: 7-0 Filseth, Kniss absent
Consent Calendar
Mayor Burt: Our next item is the Consent Calendar.
Vice Mayor Scharff: Move approval.
Council Member Berman: Second.
MOTION: Vice Mayor Scharff moved, seconded by Council Member Berman
to approve Agenda Item Numbers 4-6.
4. Approval of an Amendment to Contract Number C1415788 With Finite
Matters to Increase the Contract Term by Three Years and $142,225
for a Total Amount Not-to-Exceed of $363,555 for Budget Publishing
Software Services and Support.
5. Approval of Amendment Number 4 to Contract Number C13148075 in
the Amount of $117,000 With West Coast Arborists Inc., for Tree
Pruning and Removal Services for a Total Contract Compensation Not-
to-Exceed $1,349,410.
6. Request for Authorization to Amend two Legal Services Agreements With the Law Firm of Rankin Stock & Heaberlin: (1) for Litigation
Defense in the Matter of Harney v. City of Palo Alto Police Department,
Increase Compensation by $60,000 for a Total Contract Not-To-Exceed
Amount of $90,000; and (2) for Litigation Defense in Multiple General
Litigation Matters, Increase Compensation by $60,000 for a Total Not-
To-Exceed Amount of $190,000.
Mayor Burt: Motion to approve by Vice Mayor Scharff, seconded by Council
Member Berman. We have no comments. Please vote on the board. That
passes unanimously with Council Members Filseth and Kniss absent. We are
back on schedule.
MOTION PASSED: 7-0 Filseth, Kniss absent
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Action Items
7. Fiscal Year 2017 Proposed Budget Overview.
Mayor Burt: Our next item is the Fiscal Year 2017 Proposed Budget
Overview. Welcome, Director Perez.
James Keene, City Manager: While we're waiting and before I kind of kick
this off, I thought that I'd let Lalo introduce his Staff here.
Mayor Burt: I see we have two Scouts here, who I'm guessing are here for
citizenship merit badges. Is that correct?
Male: Yeah.
Mayor Burt: Welcome.
Lalo Perez, Administrative Services Director/Chief Financial Officer: Thank
you, Mr. Mayor. Lalo Perez, Chief Financial Officer. Tonight I have with me
Kiely Nose, Budget Manager, and Tarun Narayan, Senior Management
Analyst. We are going to have the City Manager give you an overview of
what's in the proposed budget, have some slides, and then open up the
floor. Thank you.
Mr. Keene: Again, just for the newer Council Members, I think you're pretty
much grounded in how we do this. One of my obligations as the City
Manager is to put forward a proposed budget to the Council each year, which we're doing. At this meeting, you might wonder why you didn't get the
budget in advance of the meeting. You didn't get it because it wasn't done
from the printer until 1:00 P.M. this afternoon. We're getting here about
just as soon as you can. I will give an intro and some overview. Then
there's the opportunity, whether Lalo and the Staff will orient you to the
document at all or just take questions and comments. I know that in talking
with the Mayor and Vice Mayor at times there's an interest in some
opportunity for Council Members who are not on the Finance Committee,
who next week will be diving deep into the budget, to be able to offer
comments and that sort of thing. We recognize that you're a little bit
handicapped in that you haven't seen the budget document itself. I know
my Council really pretty well. You guys actually really prefer to dive deep
into the information and the data rather than just winging it and telling us
off the top of your head what your thoughts are. We apologize for that.
Hopefully we'll give you enough of a sense of the budget here and can talk
with the Mayor and Vice Mayor about the upcoming Agendas, if there's any
desire to have any ways for other Council Members to give us some
feedback. The process we're going to use tonight with the Council is a
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reflection of the state of our City. I am going to sort of freelance in the
presentation here today. Hopefully we have the slides matched up with the
things that I was going to say. We have not had the opportunity to review
and prepare for this. I think we were—of course, Kiely as the Budget
Manager lives here full time. I was here with her four or five hours on Friday
afternoon going just over the transmittal letter. There is a 15-or-so page
transmittal letter in the budget. I'll just identify some excerpts from that and hit the highpoints with some slides, and then I'll make a few concluding
remarks. Kiely, if you want to put up the first slide. I'll leave that for a
second, but give you a little bit of introduction. As you know, in advance of
preparing the budget, the Staff presented the Long Range Financial Forecast
to the Council and certainly to the Finance Committee. That Forecast does
help inform the preparation of the base budget in the upcoming budget
cycle. It determines potential fiscal challenges the City may face in the
future and project the impact of salary and benefit increases, new programs
and changing economic conditions. The Forecast showed emerging
challenges for Fiscal Years 2017 and 2018 as well as borderline outcomes in
the following three years, when increasing salary and pension contributions
are taken into account. The City will have to be prudent as we consider responding to an ambitious community policy agenda and maintenance of
our high quality services and the need to attract and retain a well-qualified
workforce to provide these services. Understandably, our community has
been reluctant to support any significant reductions in scope of what we do
as a local government. In fact, the demands and conflicts emerging from
our vibrant economy have heightened the intensity of the Palo Alto process
with new analyses and data generation demands and deep dives into
complex problem-solving with an engaged public process across a wide
range of issues. Let's just kind of look at the numbers here. First of all, you
see the City-wide expenditure budget up there. The proposed budget is
$626 million. That's the all fund budget. That represents an 11 percent
increase from the Fiscal Year 2016 Budget of 563 million or roughly $62, $63
million. There are three main areas that were driving that. The Capital
Improvement Program (CIP), first of all, increased $43 million or 38 percent
for a total 2017 CIP Capital Budget for the upcoming year of $170 million. A
lot of that has carryover money from 2016 and that sort of thing. Again, it's
a reflection of something we'll talk about as we move through this whole
budget about this very active and vibrant infrastructure and capital
investment program. Secondly, utility commodity costs increased $7.3
million to a total of almost $144 million over the Operating Budget. Salary
and benefits costs increased at $7 million, about a 4.3-percent increase,
beginning to adjust salaries for our employees. If we look at the General
Fund, go to that chart. The overall General Fund revenues are $193 million
plus $4.9 million from the BSR, the Budget Stabilization Reserve. We'll talk
about that more. There is an increase of $9.2 million. The largest increase
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is in the Transient Occupancy Tax (TOT). I'm sorry, I got the numbers
wrong earlier today when I was talking about them. This number is right. A
23 percent increase in the TOT over Fiscal Year '16, a $4.3 million increase.
The property tax has a 7.9 percent increase. The sales tax revenues at a
3.8 percent increase, and operating transfers in from other funds a 7.8
percent increase. I think it's worth pointing out—as you can see from this
chart which you've seen many times, property taxes still remain the largest funding source in our General Fund. Really, unlike so many other local
governments in California, we really have pretty diversified revenue sources.
Unlike a lot of places, we're not depending on just one or two or even three
revenue sources. The General Fund expenditure budget itself is $198
million. Most of that, of course, 60 percent almost, is in the form of salaries
and benefits. The next largest number is 12 percent in the transfer to
infrastructure and in a variety of other items. Again, we look at these kind
of cost drivers that we have in our budget in general. These large utility and
commodity costs, the costs for the employees, obviously, we have—they're
providing the services that help the City run—and then these investments in
capital and in infrastructure as key issues. Some of the recommendations
included on the—I'll come back to that later—capital side. The next item really points to again a concern of the Council and ours. That is the size of
the workforce that we have. This budget, even though I'm sure the Council
would like to see no new positions added, does recommend an addition of
ten positions over last year. That's over all of the various funds. That's just
under one percent increase in our staffing. In my view, that's a very
conservative recommendation, given the number of requests that I received
during the budget process. There are really a net increase in the General
Fund, the tax-supported portion, of 3.23 positions. The other positions are
two and a half positions in the Enterprise Funds, and 4.25 positions in other
funds which include the Internal Service Funds and the Capital Fund. The
position changes are two and a half positions in Planning. One Building
Technician to cover the front counter at the Development Center. One
Program Assistant II to support transportation systems and programs.
About a third of that position is funded out of the General Fund, and the rest
in other funds. The addition of a half-time Coordinator, transportation
system management, to assist with the bicycle capital improvements
programs. We combined that with the current half-time Coordinator position
to make that a full-time position, so two and a half positions there. There
are four positions proposed in Public Works. Three of them are related to
the Water Quality Control Plant, funded with the Enterprise Fund there. One
is a Senior Engineer for the $200 million renovation at the Regional Water
Quality Control Plant, which our partners will pay their fair share. A Senior
Engineer for the recycled water program to meet City and State goals for the
use of potable water. A Management Analyst in the Environmental Services
Division for analytical support related to refuse and wastewater treatment.
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Lastly, one Full Time Equivalent (FTE) Street Maintenance Assistant for post-
closure maintenance of the landfill. That will be offset by a reduction of
almost the same amount in hourly positions, 0.86. Lastly, there is one
Program Assistant, one for the Bryant Street Garage Teen Program. That
will be offset by a reduction of 0.71 FTE hourly positions. That will be in
Community Services. In Libraries, there's the addition of a half-time Senior
Librarian, and an increase basically generating on top of another position, a full-time Senior Librarian. We'll be offsetting that with the elimination of an
equivalent of the same number, one FTE, of hourly position reductions in
Library. There is a proposal for a Senior Human Resources Administrator to
manage City-wide workers' compensation activities. When we get into the
budget in detail with Finance, we'll talk about why we expect that to be a
cost-recovery item. One Desktop Technician to support Help Desk requests
Citywide, also offset by a reduction of one FTE hourly position. A net in that
area of 10 positions overall. Again, a little over three of them in the General
Fund. On the utility rate side, I think we've shared some of these numbers
with the Council already before. This is one of the first years that we've
actually had an increase of all of our utility rates. I think since I've been
here, this is the first time that we have had that. The combinations you can see up there. The yield is a proposed increase in the average residential bill
in total of $22.42 a month. My recollection is the Electric Fund, which is the
largest here, of 11 percent, of course, very much connected with the
drought and the hydro situation and other factors. We have not had an
increase in the Electric Fund since 2009, as I recall. If we look at Citywide
budget proposals, just trying to pull out some highlights within this budget
beyond just these numbers about the revenue and expenditure level
changes and the staffing positions we have. One is at this moment the
budget includes $1 million in General Fund dollars to continue expenditures
for Project Safety Net into Fiscal Year 2017. That will include both the
operational costs for the Project Safety Net Executive Director and that
support and the potential ongoing costs for maintaining means restriction
through 2017. We expect to have some conversations with the Council
about alternatives in that area going forward. As of right now, that $1
million is funded in the General Fund. Secondly, there is a $2.3 million hit
for the first time on the General Fund. That is a result of the transferring
the cost for our street light and traffic signal program from the Electric Fund
to the General Fund. Not something that I would say is from the good news
department. It's driven by requirements associated with Proposition 26,
which was passed—what? Three, four years ago, that actually would direct
the reallocation of these charges when there is a change in the rates in the
utility. We have not been in this situation up until now. With the increases
we have in the Electric Fund, it's driving this $2.3 million which would be an
ongoing cost we're going to have to deal with. I mentioned earlier that we
have a large Capital Improvement Program. I think as the Committee gets
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into it, you'll see that there's a lot to it. There are a lot of projects in the
Capital Budget in '17 and '18. I could make the case that it would be
unlikely that we could expend the amount of money we have planned or
budgeted in any particular year. We will ultimately spend it, but whether we
will do so in that year. It was pretty difficult for us given the policy
directives and the pressure from the community for advancing on a lot of
different fronts, whether it's related to transportation, parking, road improvement, and your own Capital Improvement Program. It was pretty
unavoidable for me to not propose a large Capital Improvement Budget.
You can see the next line really speaks specifically to the Infrastructure
Management Plan. That's the term we're using for the program that the
Council specifically adopted to redress a range of issues that the City's been
facing for years and coming out of the Infrastructure Blue Ribbon Committee
(IBRC). Those include a new Public Safety Building, the Bike/Pedestrian
Plan, a new Downtown parking garage, a new California Avenue parking
garage, replacement of Fire Station Four, Fire Station Three, the Charleston-
Arastradero corridor improvements, the Byxbee Park completion, the
Highway 101 Bike and Pedestrian Bridge, and in addition a plan to establish
a $30 million reserve in this fund, taking it from $128 to $158 million for anticipated cost increases. Again, those would be matters we'd have to
discuss through Finance and with the Council. $6.9 million in all funds for
the salary and benefit increased costs in Fiscal Year 2017. Those will
continue, and they will grow. A reserve—at least a one-time reserve for
now—we're calling a Budget Uncertainty Reserve. This is due to the fact
that there are a number of Capital and Operating Budgets still in flux at this
time that could require additional funding during the fiscal year. I'm
proposing it for 2017 to provide the flexibility to respond during the year to
those items. Next slide please. In order to get this year's budget to
balance, we had to, for reasons such as the items that I mentioned including
things like the street lighting transfer and other things—a series of one-time
budget balancing strategies to bridge the gap. I'm not happy with doing
this, but we are tapping $4.9 million out of the Budget Stabilization Reserve,
which would reduce it to 18 percent level. You've got a target of 18.5
percent but a range of 15-20 percent in your existing policies. We also
propose the use of savings from Internal Services Funds such as general
benefits, workers' comp, etc., through a one-time reduction in allocated
charges; $3.1 million in the General Fund and some other matters. The next
slide. This is just a grab-bag of costs or revenues in 2017 and some of them
beyond, some of which could carry on in an ongoing way. Others which are
not active in the proposed budget, but they are issues that are out there and
that we're facing. One obviously, transportation costs to mitigate traffic
issues. As we work through the budget, you'll see that there are a number
of funding proposals, whether it's on the staffing side or support for capital
implementation in traffic and parking issues, to be able to work on the wide
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range of issues that you're facing. Of course, you just heard an example of
some comments from the public about are we doing enough, fast enough,
etc. We have the need to establish a new fire services contract with
Stanford University that we're in the process of working through. Longer
term, of course, there could be future changes to the pension plan
assumptions by the Public Employee Retirement System (PERS). We have
not included obviously yet, because hotels are not approved or in existence, but there is a potential for two new hotels. The TOT associated with that is
not included in this budget. We have the potential acquisition of the
Downtown Post Office that is not included in the CIP itself. We have some
issues to work out in the next few years related to the expansion of the
Junior Museum and Zoo and, in particular, as it relates to what the operating
agreement and the long-term operating costs of the Junior Museum and Zoo
are. We've got the Cubberley Center Master Plan, so we both have some
near-term issues related to potential loss of rental revenue when Foothills
moves out and who we backfill to move back in. We have the question of
using some of the existing funding we now have from the change in the
Covenant Not to Develop being taken out of the lease and put into a sinking
fund for capital investments. We'll be discussing with Finance a few small investments in that area. We have the much larger question as we work
through over the next few years with the School District, what is the Master
Plan itself for Cubberley and what are the implications for expanded
community center facilities and services at that location. The unfunded
actuarial liability at this time of $439 million for pension for retiree
healthcare trust, $293 million of which is in the General Fund. We have a
number of projects in the Capital Improvement Program (CIP) related to
parks improvements. Some are in the, like the Byxbee Park improvement,
Infrastructure Management Plan. Others are improvements that Community
Services Department (CSD) has provided to us. A number of those I've
moved out to the outer years of the five year capital plan itself. That's all in
advance of even having the completed Parks and Recreation Master Plan.
Sometime, once that's completed, Council's going to be having discussions
about what to do in that area. We have a number of requests related to
City-owned assets operated by not-for-profit organizations, whether that's
Avenidas or whoever. I think we've postponed now until 2020 the unknown
but potential impacts related to the Cadillac healthcare Federal excise tax.
Looking forward, some general comments. One, we've got to manage the
expectations of the City Council. I don't mean the Staff doing that, but we
do have a role in that too, but the community and the Staff. We have a
challenge of ensuring we're a competitive employer of choice. That's just
not a cute idea. What we're able to do is dependent upon the workforce that
we have, whether it's the routine day-to-day services or doing the analytical
work or the community engagement work with neighborhoods and
everything on the kind of change efforts that the community and the Council
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want to see. The proposed budget does leave us, if it were to be adopted as
proposed, with a structural imbalance for Fiscal Year 2018 that we've got to
acknowledge that we're going to have to double down on some way and
solve and address. Then these other longer-term issues. Just sort of before
that, I just wanted to try to put this in perspective, the cost issues, the
demand for services, this incredible rebuilding of the City that we've been
undertaking with infrastructure, and the Staff environment that we have. This is a can-do budget; it's also a little bit of a "can do everything" budget.
In many ways, we are burning the candle at both ends to deliver on this.
The question is there. Any budget, we have to make ends meet. Is it
sustainable? Is the proposed budget we have sustainable? I can tell you
right now it's not even sustainable to 2018. We've got to come back and
make some adjustments. An hour and a half ago, I wrote down just a bunch
of scribbles here of the kind of things our small City is doing. Kiely said to
me when she plopped these budgets down—how many pages are they?
1,300 pages. She came from San Jose. She said, "I've never seen a City
this small with this much documentation." This is the truth. Everything we
do is like, in many ways, the largest, most sophisticated city with more
engagement per capita, I'd argue, than anybody. I've been everywhere, and we're the most hands-on, invested community that I've ever been,
which is a great thing. If you just think of big issues we're working on in the
area of the environment, directly or indirectly, how we try to finalize the
Creek Joint Powers Authority (JPA); all of the work at the Regional Water
Quality Control Plant in looking at reclaimed and recycled and purified water;
the rising of the dewatering issue as a crisis; the whole Sustainability and
Climate Action Plan (S/CAP) itself; Building Codes and electrification; the
Urban Forest Master Plan; in mobility, Transportation Demand Management
(TDM), Transportation Management Association (TMA), RPP; capital projects;
Caltrain; High Speed Rail; grade separations; the Santa Clara County Valley
Transportation Authority (VTA) tax; a local business transportation tax; new
garages; wayfinding; automatic parking control; paid parking; mobility as a
service; shuttles; bike/pedestrian plan; 101 pedestrian bridge; in Planning,
the Comp Plan, single story overlay, the development cap, Edgewater Plaza,
housing policies, accessory dwelling units, what to do with Airbnb, office
density, deep dive on—I can't even read my writing here—development
application Code cleanup, Single-Family Individual Review (IR); the Parks
and Recreation (Rec) Master Plan; Cubberley Master Plan; fiber; and all the
things I mentioned on infrastructure and healthy city; Project Safety Net;
airplane noise. On the staffing side, in many ways we have an emerging
crisis in staffing. The challenges of our community naturally are playing
itself out in our ability to recruit and retain people, housing costs, traffic and
commute, and the demands of our environment. The people who work on
all of these things have to work harder on more complex issues with more
public scrutiny than most of their peers. Right now, we're trying to find a
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Utility Director. We just lost our Economic Development Manager. Planning
has a number of positions. A Transportation Official left; a Comp Plan
Planner left; a young assistant in our office left; OMB, Office of Management
and Budget, lost the OMB Director. It's lost the original Budget Manager.
It's losing two out of the four OMB Staff. May 6th, as we're going into the
budget discussions, we're going to have a couple of Staff people to work on
the budget. There's not one single factor that you can point to. There's a combination and different ones for different people. I think we need to
realize this is a big budget with big demands. We're going to have holes
during the course of the year in our ability to respond to them. I proposed
the budget that is designed to be responsive to, as best as we can see, all of
the demands from the community and our highly responsive Council to that
community to do the very best that we can. This budget gives me no
pleasure in presenting to the Council. I'm concerned about what we're going
to have to do through this process or next year, in particular. This is in an
environment where we're saying revenues are growing. I just think about
what happens a few years from now. It's not satisfying to me professionally
to not be able to resolve and tie up in a nice package this budget. It's got a
lot of choices and some contradictions in it. For that I apologize, but I think it's representative of where we are right now. I do want to thank our folks
here so much. Kiely, I have to say this here publicly, you have so risen to
the occasion. I can't tell you where we would be without you. When did you
come here?
Kiely Nose, Budget Manager: November.
Mr. Keene: November. Sort of feel like the military or something. Anyway,
you've done a tremendous job, and you cannot leave. Thank you.
Mr. Perez: I think a couple of quick reference points that we want to give
you. As Jim mentioned, the documents came in pretty late. Staff had been
working pretty long hours. There's six and a half people in OMB. From a
year ago, there's only one left of that group. Outside of Planning, it's
probably one of the most challenging areas in the organization to produce
the documents that we have. We'll apologize in advance if we have errors;
we will fix them. Hopefully there's nothing big. We tried to go over it as
best as we could. A couple of points of reference that, I think, are important
for our Council and our community to understand. As you know, I've been
here quite some time. I think we're doing progressively a lot of wonderful
things and a lot of new things from, let's say, 2003. In 2003, we had 1,122
employees Citywide to comparison now of 1,052. That's 70 positions less.
We're doing a lot more now than what we were doing then—I'm pretty sure
of that—in terms of a lot of the innovation and things. Because we have
more diversified revenues, we have opportunities to do more things,
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obviously. There's a lot of things to do. Comparing it a little bit closer to
2009. We had 1,075.60 or 23 1/2 positions more in 2009 than we do now.
It's addressing the point that Mr. Keene said. Obviously we're very
concerned about the pension and healthcare obligations associated with any
increase. In order to address the workload issues, we felt it was necessary.
One of the things that you'll read in Mr. Keene's message to you and the
community is our goal is to try to have these one-time items just be for this year, because we want to have the time to structure a plan that fixes this
structurally, with the target being to come back to 18 1/2 in our reserves
and to have informed decisions so we don't jeopardize the services to the
community abruptly. We've been through that. As you may recall, in 2009
and '10 we started freezing positions. Some of those positions were not
necessarily positions we would have frozen under normal conditions.
Because of the severity of the downturn, we had to make those difficult
choices. With this proposal, it gives us a bit of flexibility to make informed
decisions, buy us a little bit of time. With that, we'll turn it back to you.
Mayor Burt: Thank you, and thank you for all the hard work that's gone into
this. We will now be receiving our books, I take it. We can open it up to
Council Members for questions and brief comments. The bulk of the work in the review of the budget is obviously done by the Finance Committee. This
evening, we want to give particular opportunity for members of the Council
who aren't on the Finance Committee to ask questions and to give any input
to the Finance Committee or Staff going forward. If members of the Finance
Committee have certain considerations that they want to bring before the
Council, this is the opportunity at the preliminary stage to do that. As the
City Manager stated, because we are only just now getting the draft budgets
before us, we may very well have some follow-up questions or input to the
Finance Committee that is subsequent to this meeting. If, at the end of this
discussion, we find that Council Members want to have some additional time
to provide comments, we can try to schedule that in the next week or two.
We do have tight Council meetings, but that's something that we can bring
up at the very end of this conversation and see where we need to go. Who
would like to go first? I'll kick it off. First a question. This percentage of
our budget in absolute dollars that are in the Capital Improvement Program
for 2017 strikes me as all-time records on both a percentage basis and
absolute dollars. Now this pie graph on page two of the PowerPoint is for
the Citywide programs. That's Utilities, Enterprise Funds and regular
General Fund. Can you give us some framework? Lalo, I think you sort of
alluded to some of this. Compared to, say, 2009 or '10, how much more are
we spending on capital improvements versus that timeframe? I'll toss this
out knowing that you might need to thumb through things to be able to give
an answer to that later in the conversation. If you need time, I can just toss
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that out. If you've got a ballpark now, that's fine too. I'm not looking for
exact numbers.
Mr. Perez: While Kiely looks it up, let me give you some high level areas
that we know about. As you are all well aware, you have your $128 million
Infrastructure Plan that did not exist in 2009. That's a significant change.
What you'll read in the documentation that you'll see, as you start reading
through it, is that we're going to transfer $8 million in dedicated money from the hotel tax. This is generated from the two percent from '12 to '14 and
the new hotels alone that are going to feed our infrastructure and allow us to
finance our infrastructure projects and be able to move much quicker than
we have ever been able to do in the past. I can tell you that back in the late
'90s to early 2000, we came up with a $100 million Infrastructure Plan for
the General Fund. It gives a magnitude of what we were looking at 15, 16
years ago in comparison to now. One of the things that is influencing the
numbers a little bit is a change that we made, that I think was requested by
the Council and the community, to now include all the projects in our
numbers. In other words, we reappropriate everything every year. It
carries over the number, and it shows the projects. That's why you see so
many pages. That's another factor in there. The Enterprise Funds, we've gone back to our plan; we took a little bit of a hiatus there in a couple of the
funds due to some staffing and some other work that needed to be done. I
think those are the major influences. We'll try to get the actual dollars.
Mayor Burt: Kiely, did you have a number or a ballpark?
Ms. Nose: Yeah. Comparatively to your 2008-2009 adopted budget, your
Capital Improvement Program was about $80 million. Your actual adopted
was $85 million. Eight-five versus ...
Mr. Keene: That's the budget for the year. That's the Capital Budget for
2009, right?
Ms. Nose: It would be the equivalent in terms of the dollars by category
that you're looking at. The one thing to keep in mind in this dollars by
category sheet for the Capital Improvement Program are those are the hard
costs for the Capital Program. There are also salaries and benefits. When
you compare that 158 to your capital CIP, which is about $170 million, that
variance is because you have salaries and benefits as part of delivering your
capital projects, which are in the table that you're looking at, part of the
salary and benefits line item.
Mayor Burt: Apples to apples, say, compared to 2009 or '10 to today, what
are the ...
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Ms. Nose: It's 85 versus 158.
Mr. Keene: Twice as much.
Mayor Burt: Eight-five versus 158.
Ms. Nose: Correct.
Mayor Burt: That’s a massive investment. I think the City should be proud
and the community proud that we're doing investments in our capital
program and our infrastructure that really were discussed for decades as a under-investment for many decades. In recent years, we have increased
and increased that investment to this point. That's a great achievement. I
would also just note that if you look on the income side on the hotel tax, the
Transient Occupancy Tax, we went down to a low point after Hyatt Rickey's
closed of somewhere around five million in total. We're now pushing $24
million and rising. Without that additional funding, we really wouldn't be
able to do a good portion of this increase in the infrastructure investment. I
just wanted to also ask on the Utilities side. We've gone a number of years
with very low or in some of the utilities no increases. Now we have all of
them going up in one year. Two of them are very impacted by the drought.
It was really a three year drought. We, I think, last year kind of deferred an
increase on some of these. There's somewhat of a lag, I understand, between the impact of the drought and it catching up on us having to
increase these rates on water and electricity. We now have a year in which
we are pretty much a normal snow pack. I should say these utility rate
increases were computed before we had any confidence that we had a
normal year. It doesn't mean we'll have a normal year of snow pack next
year. Is there any consideration as to whether, now that we have visibility
on our water supply, do we still need the same increases? I appreciate that
at least in the case of electricity we basically need to catch up to having
drawn down our reserve, as I recall.
Mr. Perez: Thank you. Good question. As I understand it in the discussions
we've had at Finance, it is necessary at these levels, because we drew down
the reserves over the years. For example in electric, as you heard City
Manager Keene mention, we hadn't had an increase since 2009. Believe it
or not, water also influenced the gas. I hadn't thought about it until Staff
told me. Because we were conserving water, you weren't using gas to heat
up your—your showers were shorter, you were finding ways to conserve. It
also impacted the Gas Fund. Obviously, it's something that they monitor
very closely. We talked about, with the Finance Committee, whether the
State was going to loosen up the restrictions. That's not definitive yet. The
northern part of the state is doing better than the southern part, as you
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might have heard. To the best of my knowledge and I'm sure we'll get into
the deep details with the Finance Committee, it has been taken into
consideration.
Mayor Burt: I'll just say I hope we have one more opportunity to do a
relook at the rates based upon latest information. I appreciate when these
rates started percolating through the Utilities Advisory Commission, we
really didn't have the visibility that we have right now on this. As far as positions, I guess I do have one comment. I understand you mentioned that
a couple of the positions had to do with our wastewater treatment plant. I
support the necessity of moving forward with the engineering positions in
that we've really heard for a decade that we had a long series of steps that
would result in pretty much a full rebuild of our wastewater treatment plant
and modernization of it that will occur over this coming decade
approximately. If anything, I think we've been slow to really up that
investment. This is the first step in doing that. It's badly needed; that's
such a vital function for not only ourselves but our five member partners
who will share the cost of that.
Mr. Perez: Mr. Mayor?
Mayor Burt: Yes.
Mr. Perez: If I may add, that share cost is 64 percent.
Mayor Burt: We pay 36 percent of whatever the cost is.
Mr. Perez: We're looking at financing the project at rates below two percent
from State revolving loans.
Mayor Burt: The one position that caught my eye was on the Development
Center. This is another accomplishment that we've had over the last half
dozen years or so which is to greatly improve the performance of our
Development Center as we heard last night. It's sort of akin to what we've
done in an investment in our streets. We went from what we'll call mediocre
streets and a mediocre Development Center to really a high-performing
Development Center and the best scoring streets in Santa Clara County. My
question is what's driving the need to add more Staff and is it to try to
perform even higher? On the commercial side, we see on the horizon not
really an increase and maybe a decrease in projects. On the residential side,
is that what's driving it? Is there some other performance-based initiative
that's driving that one increase that was mentioned there?
Mr. Keene: Are you able to answer to that?
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Ms. Nose: I think you're talking about when Jim was mentioning the
Building Planning Technician.
Mayor Burt: Yes.
Ms. Nose: What that position is actually doing is trying to make the
Planners more efficient. It's actually front desk support. Right now what
actually happens is all of the Planners will physically move their desks from
their Planning office down to the front desk to staff the front desk. It's about—I don't know—10 percent of their time throughout a given year.
What this position is going to do is allow the Planners to actually be Planners
and do planning and put that clerical position at that front desk and alleviate
that movement of them, so that they can actually focus on true planning
activities.
Mayor Burt: I hear that, and I'll look for the Finance Committee to scrutinize
that one in particular. Finally, we have the issue of the unfunded pension
liability which, for all of the great things that we have done over the last
years in reforming not only what was an unsustainable financial horizon for
the City, but we did that and we have now addressed this incredible backlog
in unfunded and reduced our backlog in infrastructure in a really major way.
The remaining real great challenge for us is this unfunded pension liability. In this year's budget, refresh me where we stand. The Council gave
direction. Refresh for me where we stand and we are in the coming budget.
Mr. Perez: We have action from the Finance Committee that needs to come
forward to the Council. From the 2015 Fiscal Year close excess funds, we
set aside $1.3 million. The Finance Committee is making a recommendation
to you, the Council, to start what we call a Section 115 Trust. It's similar to
what we did with the retiree medical, as you may recall. We set up a trust,
and we put the funds aside. They're irrevocable. The direction is that 1.3 of
the General Fund side is for us to look for options or recommendations on
how the other funds can also contribute towards their unfunded portion. We
have that broken down. We can issue a Request for Proposal (RFP) and
have a provider manage the trust and invest the funds for us. Then, the
other to do is to look for ways to continue funding that. Obviously we're
challenged in '17, so there's not a specific recommendation. There is a
desire by the Finance Committee as part of their recommendation that we
explore options in '17 as well and to look for a recommendation and funding
policy. A quick example I can give you, just so it gives you a flavor of what
we're looking at. Anything over the 18 and a half threshold right now in the
Budget Stabilization Reserve, the City Manager can send a recommendation
to you that it be sent to fund the infrastructure projects. There could be a
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split of that, that some of it goes to the unfunded liabilities and some other
proportion goes to the infrastructure.
Mayor Burt: I would support that direction that the Finance Committee has
been discussing. I think it's crucially important that we continue to allocate
funds toward this unfunded liability as we're setting up the new program. I
would want to see it not less than one million for this fiscal year budget. If it
has to come even from one million less toward the infrastructure or one million less in our Budget Stabilization Reserve, whatever it takes, I think we
have to have that commitment and continue with it. It's the remaining
element in having our finances long term to be sustainable. We've got a
debt that we've got to be paying down. Council Member DuBois.
Council Member DuBois: Thank you for all the hard work. My bedtime
reading for a month now. I had a question about drawing down the BSR.
Have we done that in an up economy before?
Mr. Perez: We have. Back in the great recession, temporarily we drew
down on the reserve ...
Mr. Keene: He said in an up time.
Mr. Perez: I'm sorry.
Council Member DuBois: Specifically when times are good or do we usually do it in a recession?
Mr. Perez: In good times, not below the target that I can recall.
Council Member DuBois: Hearing the City Manager's comments about a
sustainable budget, it's a little bit worrisome. If this isn't it, I think it'd be
good to maybe see some scenarios with some hard choices just to see what
that means to get to something that feels more comfortable, maybe just to
kind of understand the risk involved. I appreciate that it's ambitious, and
we're trying to do everything. If you don't believe it, I think maybe some
alternate scenarios would be good. In terms of the new FTEs, that's above
all kind of open and unfilled positions that exist today? The Public Works
FTEs, are those all long-term positions or are they tied to this capital
infrastructure plan?
Mr. Perez: Not all of them are tied to the—one is specifically tied to the
project. I'd imagine that this is going to take us quite some time to
complete. We can reassess at the end of that process where we're at.
Council Member DuBois: It's like four or five years at least.
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Mr. Perez: I would be guessing, but intuitively I would think so.
Council Member DuBois: Last year, I think I asked to get an idea of kind of
consultant usage and how that's been changing. When you talk about kind
of our head count versus 2009, the piece that's really missing is how much
of our work has shifted to consultants. I'll make the request again this year.
It'd be great to start to track it, so maybe next year we could see how much
are we really kind of outsourcing or shifting or doing with kind of non-Staff workers.
Mr. Perez: I think one of the challenges we had was the way we capture our
data. It's like most companies; capturing the data is not a problem. It's
how you pull it out and make it useful. We're working on a project right now
to have those analytics come out of our system to be able to tell. What I
can tell you is that we have moved some of our services from in-house to
contracting, which may be part of what you were mentioning maybe. We've
done that for the golf course, parks, custodial, street sweeping, to name a
few. There's been a shift, and that impacts those numbers as you're
mentioning.
Mr. Keene: We've got an upcoming issue with the fleet.
Mr. Perez: We have a couple of items coming through the Finance Committee in May on how we administer our supplies for the fleet
management. We're looking at a different model that has ...
Mr. Keene: Contracting with a private vendor for jus- in-time delivery rather
than us managing inventory, that sort of thing.
Mr. Perez: We're looking at our swim program as well.
Council Member DuBois: Again, I totally believe that we are doing a lot with
and stretching people thin. I think it'd be good to recognize we've also
shifted and we're leveraging some outsourced work as well. In terms of
those unfilled positions, are there positions that have been open for a year
or more?
Mr. Perez: We purposely have held some positions in the Fire Department
as a result of the ongoing discussions with Stanford. Those come to mind.
In terms of difficult recruitment, I think we've been having some challenges
in some of the utilities, but I can't think of anything that's taken a year, off
the top of my head.
Council Member DuBois: Shifting away from people, I guess. It'd be great
to have ideas for new revenue sources. I think we're talking about parking
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revenue potential. I don't know how big it could be. I was talking to Jim the
other day of some cities are offering lit fiber services instead of dark fiber;
those have been highly profitable. We have this question about business
revenue and potential business tax. I think it'd be good to see some of the
trends of business revenue versus residential revenue over time to see if
we're keeping up. Just to echo the comments about the unfunded liability. I
would support trying to find a way to pay into a fund for that. The other part of that that would be really useful is if we just start to report it and
track it in a more transparent way. If we had the ability when we're making
decisions to know what the long-term cost impacts would be, I think it would
keep it more present in the minds of Council. We would be really
considering the full cost of decisions we're making. Again, that's not really
saying we would necessarily pay it differently. I think just making it more
visible would be useful. Just let me check my notes real quick. Just a real
quick clarification. The Capital Improvement Budget and the Capital
Infrastructure Plan, is one a subset of the other? They're not additive, right?
Mr. Perez: That's correct. I think that's a good point to just remind the
Council and the community that we segregated the projects and the funding
for the infrastructure master plan, which started at $126 million when it was adopted by the Council. As part of a way to report the progress, we call it
out.
Council Member DuBois: The last point is really back to getting comfortable
with the budget. If there are places for cost savings or efficiency projects,
using technology to get more efficient, projects that pay for themselves in
terms of cost savings, we're a complicated City trying to do a lot. I really
think we need to kind of focus on—we're looking at a new ERP system, for
instance. Are there ways that we can create efficiencies that actually save
us money? Thanks.
Mr. Perez: Thank you for the support. We agree.
Mayor Burt: Thank you. Council Member Holman.
Council Member Holman: I'll be brief since I'm on Finance. I just wanted to
give you a heads up. When you come to Finance—I've mentioned this
before, but it seems to not happen. I think it'd be really helpful when we get
the budget—it's a static document basically. When you come to Finance and
following up with the Council, come with information and be able to
demonstrate with open data or open gov—I've forgotten what it's called—
how we're comparing to prior years. It's just a quick, easy shift from one
screen to another. I think that can really help us. The other thing—help us
know where we are and help us benchmark ourselves. The other thing is
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with some indication of where we've made improvements, where we've
gotten efficiencies. I don't know why the one that comes to mind is what
we're going to be gaining by charging a percentage for our subcontracting
services, which we haven't done before, some improvements along the lines
of cost recovery plus. Thanks.
Mr. Keene: Before Lalo jumps in, we will do our best. I would respectfully
just say also that we're hardly going to have any OMB Staff at the Finance Committee meetings. If the Council would just keep that in mind, that we're
down whatever it is, 50 percent of the Staff. We're going to have to triage
in the Finance Committee too to be sure we're working on what's most
important. If we can do these other things, we will.
Mayor Burt: Vice Mayor Scharff.
Vice Mayor Scharff: Thanks. Thanks for the excellent presentation. First of
all, in general I think I agree with the City Manager's approach to this
budget. I agree that next year it has to be a sustainable budget. I think
Council Member DuBois was correct, but the big part he left out was the
possibility of the new hotel revenue, which is the most likely realistic source
as opposed to finding efficiencies somewhere. I'm thinking maybe you could
look at that and get a sense of what that would look like in different, reasonable and how that would basically give us confidence that there
should be enough revenue plus what we'd normally expect to see if we have
sales tax increase. Also, our property taxes usually go up. This year they
went up—what? Eight percent. What did they go up the year before, do you
know?
Mr. Perez: Let us look it up. Tarun has it.
Vice Mayor Scharff: What I'm saying is that it doesn't really matter that
much. It's more maybe you could give a sense so people get comfortable
that this approach is a stop-gap measure for this year. Next year, given
where that's going to be, this should play itself out and work out barring
having a sudden recession or something like that. My gut sense tells me
that it would actually work out, and it will make this work for a sustainable
budget for next year, which then gives me comfort for your approach for this
year. How many Public Works people are you hiring? Was it ...
Mr. Perez: Four.
Mr. Keene: I think there's some shedding of some part-time people in the
mix. Obviously (crosstalk) cost ...
Vice Mayor Scharff: What are they going to do—what are the positions?
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Ms. Nose: Two of them are Senior Engineers, and those are the ones for the
Regional Water Control Plant and the recycled water program.
Vice Mayor Scharff: That will deal with the improvements we're doing. Will
that also help with the improvements and manage the improvements to the
Water Quality Plant or not?
Ms. Nose: Correct.
Mr. Keene: We both have the overall planning for the investment design and the retiring ultimately of the incinerator and all that stuff. Then we have
the very specific acceleration on the reclaimed/recycled water, even
ultimately purified water, discussion to be sure we've got enough staffing to
help support that.
Vice Mayor Scharff: That's two of the people?
Mr. Keene: That's two of them. There's one in refuse and ...
Ms. Nose: One of them is a Management Analyst. With Public Works, the
multiple divisions, each division has a Management Analyst that helps them
with all their analytics and what not.
Vice Mayor Scharff: That person goes to refuse or not?
Ms. Nose: This person is—yes, for refuse and wastewater treatment. They'll
help with both of them, with the oversight of the administrative side of things, hiring, budget, contracts, all of that. The last position is street
maintenance assistance to help with the post-closure maintenance of the
landfill.
Vice Mayor Scharff: I look at this Capital Improvement Fund, and we are
doing so much capital improvements next year. $10 million for the Golf
Course. We're starting the Public Safety Building. If you just go through it,
you see it. There's multiple line items where we're over one million dollars,
1.4 million, 1.5 million and some really big items including some for
Rinconada Park improvements and stuff, three million dollars My concern is
that we don't actually have the Staff to do that. I actually think if that's
true, you should look at putting more Staff there. I don't want us to get to
the end of the year, and you've done a third or a half of what you said you
were going to do. I guess I want assurance that—I don't know where Jim
went. I want assurance from Jim. Jim. Now we can talk about cutting the
City Manager's salary to pay for that. Is that the right time?
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Mr. Perez: Those are excellent points. We've actually had those
discussions. We pushed back when Public Works—is the timing ready for
these positions to be added? Are you at the point where you're actually
going to need these positions full-time? The answer was yes. To your
second point, the way that Mike Sartor, the Public Works Director, has
recommended to the City Manager—you'll see something coming up soon
here in your Agenda—is to hire project managers and not to add Staff.
Vice Mayor Scharff: You think he might outsource this and do it that way?
Mr. Perez: Yes. There's going to be a request to do it multiyear. You're
absolutely right we have a lot of dollars and a lot of projects. My concern is
that we've got to get this Public Safety Building going so we can finance it at
the low rates that we have right now. We are pushing for many reasons.
You'll see something coming up soon with a proposal for that.
Vice Mayor Scharff: I think there's a lot of that. With the low rates, we
actually should try and get as much of this stuff going as possible.
Mr. Perez: Just to remind the Council, once you borrow, you have three
years to build. That's why we can't start until we know that we have a time
window.
Vice Mayor Scharff: That makes sense. We've obviously got to get the planning and stuff done so we can get it done. The other thing I wanted to
highlight that's important to me is the golf course. We're losing money. I
don't remember—how much are we losing a year on the golf course right
now?
Mr. Perez: They're going to come and update you, and it's in the 800,000
range a year that we're probably going to be losing. It looks like we're
making progress towards the permit.
Vice Mayor Scharff: We don't actually have all the permits yet. I thought
we did.
Mr. Perez: We have the Fish and Wildlife permit. I haven't had a chance to
talk to Staff last week, so I don't know exactly where we're at with the
other. My understanding was that we were given some verbal assurances
that once we have the Fish and Wildlife, then our chances were going to be
better to actually get the next permit. We're updating right now, as we
speak, the business model. I've been speaking to the consultant with those
discussions with Community Services. The Staff has asked the golf architect
to update the projected cost for the project. We're going to come in June—
Community Services is—to give you an update and full details on all of that.
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Vice Mayor Scharff: Spending the whole $10,291,000 in 2017 sounds
optimistic.
Mr. Perez: What we would do for this one is we would finance it. You're
right; we would not spend all of that. My understanding right now is that it
would be a 16-month project. They'll give you an update on specific starts
and all of that.
Vice Mayor Scharff: When we finance something, we put the whole $10 million in one fiscal year? Is that how that works?
Mr. Perez: That number's got a couple of components in it. There's three
million that is coming from the JPA for San Francisquito JPA. We have about
one million that we collected for accepting dirt at the golf course. That gets
knocked down from that 10 million, but the costs have obviously gone up.
We're going to update you on all of that. We would issue the ...
Vice Mayor Scharff: My question actually was more on timing. The way I
read the budget and I read the Capital Improvement Fund, if the money's in
2017, I expect we'll spend it. There's nothing in 2018, which implied to me
that we finished the project in 2017.
Mr. Perez: No. What we need to do ...
Vice Mayor Scharff: Did I read this wrong?
Mr. Perez: What we need to do is award the contract. In order to award the
contract, we have to have the budget.
Vice Mayor Scharff: When I see these numbers, it's awarding the contracts
(crosstalk).
Mr. Perez: That's correct.
Vice Mayor Scharff: That was my major points. I had one minor thing that
just caught my eye. I apologize for going down so deep into the weeds.
Why is there a number of 88,000 for the temporary Main Library? We have
like a very little amount of money in 2016. I thought we had the libraries
built; now we have 88,000 for a temporary Main Library. I was just
confused what that could possibly be.
Mr. Perez: Where are you looking now?
Vice Mayor Scharff: If you look on Page 88 of the Capital Improvement
Fund, that says temporary Main Library. It shows that in 2016 we spent
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$60,000 roughly, 2016 $8,900. For 2017, we have $88,000 budgeted. I
couldn't resist asking.
Mr. Perez: It was probably to close it down. We'll have to look.
Vice Mayor Scharff: You can get back to me on it. I was just curious as to
what that was for. Thanks.
Mayor Burt: I don't see any other lights. We'll thank the Staff and the
Finance Committee in advance for a month of hard work ahead. I know the Staff's been—their hard work on this doesn't start tonight. Maybe the next
month is actually easier than the last few months. You have a lot of
meetings coming up. Thank you all for this hard work in this coming month.
On that note, we will conclude this item.
NO ACTION TAKEN
8. Colleagues Memo: Developing City Policy on Acquisition, Use, and
Safeguards for Surveillance and Information-Gathering Technologies.
Mayor Burt: We'll move on to our final item tonight, which is a Colleagues
Memo regarding developing City policies on acquisition, use and safeguards
for surveillance and information gathering technologies. Since this is a
Colleagues Memo, Council Member Wolbach, are you wanting to take the
lead on introducing this? Go right ahead.
Council Member Wolbach: I just had a few comments to make about this,
just as a matter of process. Should I make those now or should we go to
the public, if there's any public comment, first?
Mayor Burt: We normally have authors of the Colleagues Memo offer
introductory comments on the Memo, and then we can hear from members
of the public and then return to the Council for discussion. We currently
have five speaker cards.
Council Member Wolbach: Also when there's an opportunity to make a
Motion, I'd appreciate it if I could do that. This Colleagues Memo is really
about beginning the process of establishing a proactive policy to ensure
transparency in City government when it comes to technology with
surveillance or privacy concerns and about protecting Personally Identifiable
Information, PII. This is in the context of rapidly evolving technology, which
enables unprecedented opportunities but also potential risks. This is in the
context of controversies at the national, state and local level, which Palo Alto
should aim to avoid. This is not about regulating private uses of technology,
only uses by the City or our contractors or partners. I'd say this is also not
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just about our Public Safety Departments but the City as a whole. For
example, our Planning Department might have even more cameras than our
Police and Emergency Services Department. This is not about a false
dichotomy of safety versus privacy. This is about protecting both safety and
privacy. As a quick example, if a city were to collect lots of information
about residents and not carefully safeguard it against either internal abuse
or leaking, then the privacy and the safety of a resident might be jeopardized. Automatic license plate reader, as one example, can provide
detailed information about a person's movement and habits, which could be
embarrassing if made public. It could be used for blackmail, if obtained by a
hacker. Also dangerous physically if a stalker or other nefarious actor
obtained it. As highlighted in Attachment C, other communities have seen
what happens when surveillance technology is adopted without a good
process. It sows distrust in government. Law enforcement, of course,
depends on a healthy relationship and the trust of the community, as does
every City department. In particular with Public Safety, I think we're
blessed to have outstanding professionals in our Public Safety Departments,
both rank and file and management, who understand this. Attachment B,
the suggestions from the International Association of the Chiefs of Police was actually provided to us by Police Chief Dennis Burns for consideration and
offers excellent examples of how to think about this complex question. I
want to thank all of the Staff and community members who offered their
thoughts prior to us drafting this Memo, and Staff for providing
improvements which increased the quality of the language of the Memo.
The community really deserves to know that we value their privacy,
especially here in the heart of Silicon Valley, that we recognize the complex
questions raised by recent and rapidly evolving technology. City Staff
deserves to know that the City Council supports their efforts, rather than
trying to guess how Council or the community will feel about something they
do. The buck stops with the Council, and we should be responsible for
authorizing any potentially controversial technology applications by the City.
We could try to respond ad hoc to each new technology as it arises. As the
coauthors of this Memo, we are of the opinion that we should be proactive.
We envision a high-level policy, a standard operating procedure, a checklist
for Staff to follow when considering adopting a new technology. Such a
checklist would call for standard components, which could be flexibly applied
depending on the technology and the need. As a high-level policy, it would
not dictate the outcome of the details of future technology adoption or
deployment in Palo Alto. It would merely establish a clear, consistent and
transparent process by which we would make decisions about technology
deployment. Particularly important are collection of data, retention of data
and dissemination of data. Along with that, analysis of data and Council
authorization. I expect Staff and the Policy and Services Committee will
closely study at least three sources of suggestions. First, the American Civil
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Liberties Union (ACLU) recommendations in Attachment A. Second, the
International Association of Chiefs of Police recommendations that I
mentioned before in Attachment B. Also worth noting is—we didn't include
as an attachment—the draft ordinance currently being considered by the
Santa Clara County Board of Supervisors which is working in parallel to this.
I'll watch with interest when it unfolds at the Policy and Services Committee
and look forward to recommendations coming back to full Council once there's been considered and thoughtful input from Staff and the community.
Mayor Burt: Thank you. Unless anybody has a burning question, we'll go
ahead and let members of the public speak. Our first speaker is Adam
Schwartz, to be followed by Brian Hofer. Each speaker has up to three
minutes to speak. Thank you.
Adam Schwartz: Good evening. I'm Adam Schwartz. I'm a resident of Palo
Alto; I've got two kids going to Jordan Middle School. I'm also a lawyer at
the Electronic Frontier Foundation (EFF). The EFF is a nonprofit group that
tries to ensure civil liberties in the new digital frontier. The technologies that
are changing our lives, obviously they can do a lot of good. They can make
our government more accountable; they can make it more efficient.
Sometimes these technologies can diminish our privacy and our civil liberties and even chill our free speech. Every time one of these technologies comes
up, these new, powerful surveillance technologies, there is a thicket of
complicated questions, including what are their costs and benefits and
should they even be adopted and, if so, who will the targets be, and what
are the privacy rules going to be. It's the view of the EFF that these are
decisions that ought to be made at the top. These are decisions that should
be made in consultation or with an opportunity for input from the general
public. We think we get better decisions when all of the stakeholders have
an opportunity to be heard. The idea here really builds upon two statutes
that were enacted this past year in Sacramento, that apply to all police
agencies in the entire state, which say that if police want to adopt automatic
license plate readers or stingrays, when doing so they need to first get
approval from elected officials. They need to at the front end adopt a set of
privacy and usage rules that all members of the community will have an
opportunity to observe and comment on before they're adopted. What the
idea, I think, here says in this bill is that it shouldn't just be these two
particular technologies, the stingrays and the license plate readers. There
ought to be an across-the-board approach that says all of these new
emerging technologies should go through the same kind of process. Without
trust between community and police, there can't be public safety. We think
that this kind of policy will do a great deal to advance trust. Finally, EFF,
ACLU, other groups that are here tonight would be very happy to meet with
City officials to assist in this process of crafting appropriate legislation in the
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coming months. I really appreciate the opportunity to be heard this
evening. Thank you very much.
Mayor Burt: Thank you. Our next speaker is Brian Hofer to be followed by
Paul George. Welcome.
Brian Hofer: Mayor, Honorable Council Members, my name is Brian Hofer.
I'm a member of the Oakland Privacy Working Group, and I chaired a
Citizens Privacy Advisory Committee at Oakland City Hall, which has now crafted two privacy policies for surveillance equipment. I've also worked
with the Alameda County Board and a District Attorney on what I believe is
the nation's strongest stingray use policy in the country. I've worked with
Supervisor Simitian and the Santa Clara Staff on their current ordinance. I
encourage you to go down this path. Everything that I've read in this
Colleagues Memo is directly on point. Santa Clara has actually leapfrogged
us a little bit. If you're going to look at a model, I do encourage you to look
at Supervisor Simitian's draft. They spent over ten months receiving
feedback from the Public Defender, District Attorney, Sheriff and others; it's
been vetted very well. I want to talk—as we heard from the budget Staff
just earlier, one of the obstacles you might face or concerns that you're
going to face is Staff time. As someone that's been through the process, I just want to share a little bit of what we went through. For one, if you use
Supervisor Simitian's ordinance, the ordinance is drafted. Secondly, while
Oakland's annual compliance reports are premature, I can't share those with
you. Menlo Park has been doing it on a quarterly basis with their license
plate readers. Those reports are two pages long. It's not too much of a
burden to produce those. Secondly, what about the underlying use policies
themselves if you do get the overarching global ordinance? You're going to
be writing individual use policies for equipment that you've approved the use
of. Oakland created a very robust policy and procedures. We took a long
time with that. Once we created our second policy, it took one hour. We sat
down with the helicopter team; it was a thermal imaging camera that the
helicopter used. We quizzed them, how to do you intend to use this, what
do you need it for, what sort of data sharing might you be doing, how long
do you need to retain the data. Then, we modified the template that we
already have. You're going to face some of these concerns. I assure you
that once you clear that initial burden, that burden is lessened quite a bit. I
don't want to make it sound so casual that you're just approving surveillance
equipment and policies. The burden really will disappear. It's good
government; it leads to transparency. It's not to exclude the Palo Alto Police
Department from having a voice, but it allows others to also have input into
the self-determination of what is appropriate in Palo Alto. I encourage you
to keep doing this. Thanks.
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Mayor Burt: Thank you. Our next speaker is Paul George, to be followed by
Winter Dellenbach. Welcome.
Paul George: Good evening, Council. My name is Paul George. I'm Director
of Peninsula Peace and Justice Center, which has been based here in Palo
Alto for 34 years. I strongly urge you to support the Colleagues Memo that's
before you. Surveillance is on the rise in our society. Unfortunately,
transparency with the public is not. We need to find the proper balance between the use of technology—the technology is to keep us safe—and
levels of transparency that will assure the public that those same
technologies are not being abused, and that our personal data is kept
secure. Holding full public hearings and setting the operating and security
policies before any such technology is acquired is an absolutely must, I
think, in a democratic society. Without those elements, there will be no
balance between security and public transparency. As the previous speaker
noted, the Colleagues Memo does cite the possibility of significant Staff time
required to administer the various reporting programs, etc. I would respond
that's the price, a small price actually, an open, free and democratic society
must pay to remain free and open. I also applaud Supervisor Joe Simitian
for the very strong ordinance he proposed for the County. It has rightfully garnered national and international attention. I came across an article about
Joe Simitian in the London Guardian. It was great. Palo Alto should use it
as a model to its own ordinance and set the gold standard for cities. Please
support the Memo. Thank you very much.
Mayor Burt: Thank you. Winter Dellenbach to be followed by our final
speaker, Jerry Schwartz.
Winter Dellenbach: I hope you refer this to Policy and Services. It's really
badly needed. If you're hesitant I suspect it's more a matter of your
needing more information rather than it being an unworthy or mistakenly
timed, consuming subject, given all the good work that you have to rely on
that's come before us. I really hope that this is not an encouragement of
"let's just get some policies in place," and then we have all of these toys.
I'm hoping that any policies would reflect we only have this technology when
there is no other alternative, when we can absolutely justify it, whether we
can show that there is an absolute need for it in the town of Palo Alto. It
grieves me that we have data, big data mining businesses in Downtown Palo
Alto. It grieves me, but we can't do anything about that. We can do, as a
town, something about this. We can once again be a leader in trying to put
in place something sensible. I want to take the rest of my time to just get
personal for a minute. I was the victim of surveillance for five or six years,
from 1967 to 1972. It became 24/7, constant surveillance using all
technology possible back then. Almost all of it was illegal. It included
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burglaries, wire-tapping, video filming, cameras, provocateurs, confidential
informants, a whole range of things. I was the founder of the Los Angeles
Resistance; I worked with David Harris, former student body president of
Stanford University and Joan Baez who founded the Institute for the Study
of Nonviolence. We were totally non-violent in urging young men to refuse
induction into the army and our opposition to an immoral, illegal war. For
that, I was nearly imprisoned twice with planted evidence. I'm about to get 8,000 pages of Federal Bureau of Investigation (FBI) records and Los
Angeles Police Department records from a Freedom of Information Act
(FOIA) request that has taken years and years. This surveillance business is
no messing around. It ruins people. I hope each and every one of you take
this really seriously, and let's get on with this and be our best civic self.
Thank you.
Mayor Burt: Thank you. Our final speaker is Jerry Schwartz. Welcome.
Jerry Schwarz: Thank you. I am a Palo Alto resident and the Chair of the
Mid-Peninsula Chapter of the ACLU. The proposal before you is a practical,
pragmatic way to deal with the matter of great and increasing concern in
today's society. The current surveillance technologies are—you know what
they are sort of. You know how concerned people are about them. What's coming in the future with artificial intelligence and all kinds of stuff nobody
has even thought of yet is even more concerning. The ACLU is not opposed
to any particular technology. Our position is that any technology must be
adopted with public review, the decision makers must have full information
about it, and they must make informed decisions. There needs to be
something like what is proposed here so that there are general procedures in
place to reach those informed decisions wisely. Finally, two more or less
personal notes. One is as a resident of Palo Alto, I am very glad that Palo
Alto is again leading the way on something that is of great public interest, at
least on the Peninsula. The other is I've heard in the previous remark and
from my friends in Oakland that Oakland—I'm sorry, not Oakland. Alameda
has the best policy with regard to stingrays. Ain't so. Santa Clara County
has the best policy which they will not acquire a stingray. We can thank Joe
Simitian for that. He fought very hard for it. Thank you.
Mayor Burt: Thank you. We can now return to the Council for discussion
and prospective motions. When we go to a motion point, I know that
Council Member Wolbach asked if he could have the floor. Council Member
Berman.
Council Member Berman: Thank you very much to the members of the
public for coming to speak today. I spent far too much time reviewing
Electronic Frontier Foundation (EFF) white papers when I was writing my law
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review note 10 years ago and know the quality of the work that you guys
do. Needless to say, that note was not published. More recently, I've been
doing some research on kind of best practices for adoption of technology and
local public safety. One of the things that I read by a sheriff's association
actually was the best process is to have a policy in place before you have a
problem. Drafting these processes after there has been some public incident
often leads to rushed policies and bad results. I think we have an opportunity now to do our best to put the process in place as we adopt—for
technology that we currently have, but also as we adopt new technology as
it becomes available. I think that it's important to have that community
dialog and community conversation and bring together community
stakeholders ahead of time to get everybody's input in a kind of logical,
thoughtful process before something goes wrong. I want to commend
Council Member Wolbach for all the work he did. I've been a part of a lot of
Colleagues Memos, and I think this was one that probably took the longest
to actually bring to Council. Council Member Wolbach did a diligent job of
getting input and reaching out to Staff ahead of time and providing a lot of
data that, I think, was helpful for tonight's conversation and will be helpful
when this goes to Policy and Services. Good job. I don't know if this was your first Colleagues Memo that you took point on. No. Then you're a pro
at this. It's just important. I'll support kicking this to Policy and Services, so
we can have a longer conversation about it there. Thanks.
Mayor Burt: Council Member DuBois.
Council Member DuBois: I just wanted to say thank you to the members of
the public for clarifying the issue. When I originally read this Memo, my
initial reaction was the City's already doing a lot of these things. I was
thinking about it more generally. Like our Chief Executive Officer (CEO) has
come before us and talked about our PII security procedures. The City deals
with credit cards, Social Security numbers, a lot of personally identifiable
information. We already have a lot of policies in place around that. We can
discuss those policies more broadly. In a lot of ways, I think the security
around the data is similar. I think we also recently passed a data retention
policy, and it was reviewed, I think, by the Legal Staff and the City Staff. I
guess you guys really just underlined this is really about surveillance
technologies and dissemination policies. If that's the intent, I'm supportive.
I think we have some existing policies we can build on. I'd like to keep the
focus just narrow on surveillance. When I initially read this, I was thinking it
was much more broad. Thanks.
Mayor Burt: Now I do see other lights. Council Member Holman.
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Council Member Holman: I have one question. I support this going to Policy
and Services, but I have one question. There are things that might be
deployed as safety or even fire prevention here, there and in the Foothills,
that sort of thing, but might be construed to some as surveillance as well.
I'm hoping that that will be a part of the conversation when this goes to
Policy and Services. When it's appropriate, appropriate use, not appropriate
use, and what can be used and what can't be used, I'm hoping that will be a part of the discussion there.
James Keene, City Manager: I would just say that I think the report even
acknowledges a little bit the existing directive at the Staff level to identify
any camera technology or anything that we have in the City and to report on
that. It's something that I asked for last year, for us to make sure that we
know the base that we have. I think the nice thing about this policy is this
idea of having a more detailed framework in advance. As you know, any
time we've had an issue, we've actually been publicly discussing it with the
Council. If we've got a bike count at a particular location, we've gone in to
talk about the actual technology, the fact that it doesn't show photos, all of
those kinds of things. I would say this. Our culture right now is on the
upfront part of any decision point to discuss this publicly with where we are. I would say for the most part what we have done has forestalled any
deployments from anybody coming in and basically saying, "This is Palo Alto.
We wouldn't deploy something like this." You may recall some of the Council
Members a number of years ago with license plate readers, we were talking
about how we might do enforcement. We pretty much had a big discussion
about some of the problems with that. We haven't deployed some of those
things. Particularly now in a lot of the emergent smart city sensor
information, I think pretty much everyone knows. While there could be a lot
of interest in how we could collect useful information, not so much
surveillance but capturing just data, we really need to have policies in place
before we can jump into that. I do want to let you know that on the way to
this policy, the Staff mindset is, I think, very attuned to the intentions of the
Council and the community in this discussion.
Council Member Holman: If there needs to be clarification, my one
reference, just as an example, was for instance about drones. We basically
don't allow drones to be flown anywhere in Palo Alto. They could be useful
perhaps in fire prevention and detection.
Mr. Keene: Clearly, I would hope we wouldn't say that there would be no
good deployments of technologies that we may not even know exists right
now. Again, this process for assessing and vetting and sharing. That is
what we hear this is about.
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Mayor Burt: Vice Mayor Scharff.
Vice Mayor Scharff: I wanted to basically follow up on what the City
Manager just said. My view of this is there's lots of great technology that
will make Palo Alto a Smart City, that will provide convenience, will give us
great data of how to plan. We want all that data. I thought your point
about bike counts was really good, but it's not just bike counts. It's car
counts. I think we're going to see a lot more of that, and we should see a lot more of that. I actually do want to see a lot more of that. I want people
to have confidence that their personally identifiable—when we count bikes,
we count cars, we're not counting their license plates. We're not seeing
where they move. There's nowhere you can follow them around, but we get
the patterns of the big data. That's really what we want. Then, we can do
our planning as a City Council and as a community based on good data. I
think the more of that we have—I'm actually hoping that what we do is we
put policies in place that allow us as a City and a City Staff to feel more
comfortable. Every time you put a bike counter up somewhere, the citizens
don't have to be concerned because they know we have a strong policy that
says it's not personally identifiable. You can with confidence say, "Yes, let's
put a bike counter. Let's put car counters." There's all the utilities stuff. As we become a Smart City, all that utility information we're going to have to
safeguard. I don't think it would be appropriate for people to know how
much water a particular citizen used without having a discussion about
things like that or how much electricity they used. I think those raise huge
issues of privacy. I think you want to have personally identifiable
information to be very safeguarded. The best way to do this is to have a
policy beforehand. I think it's not just surveillance. A lot of the smart city
stuff—I think it's all about personally identifiable information. I think we
should limit Policy and Services to some extent to be looking at personally
identifiable information. For drones, there's a lot of uses of drones in
utilities. They fly along the lines to make sure there's not a problem with
them. They may want to fly along our lines as part of coming in from
Northern California Power Agency (NCPA) or something like that. There may
be small drones or something that actually go through the sewer pipes or
something like that. I think we just want to—there's tons of this kind of
technology. We just want to make sure that we're not invading someone's
privacy and collecting personally identifiable information. That's my view of
it.
Mayor Burt: A couple of questions that I have. At a higher level, given that
this is potentially a lot of policy elements to look through, without
attempting to answer this question tonight, a question I would have is
whether we would want to consider breaking this up into categories of either
those aspects that are least complicated or least contentious or most
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important. Is there a group of them that should be considered and brought
back to the Council first, and a second group maybe be in a Phase Two? I
don't know the answer to that, but I think it may be a way that we want to
look at this, so that we can move forward sooner on the things that are
either more important or less contentious. Maybe there aren't things in
either of those categories. I was encouraged by hearing more information
on what we have going from Santa Clara County and their draft proposal and the consideration that's gone into it and also the reference to the
International Association of Chiefs of Police and their policy framework. I
wondered, Chief Burns, if you might be able to shed any light on whether
you've had a chance to look at this Memo in the context of the International
Association of Chiefs of Police (IACP) technology policy framework. Are they
roughly aligned? Do you see areas that are different or are they moving in
the same direction generally?
Dennis Burns, Police Chief: Good evening, Mayor, members of the Council.
It's been a while since I read that. Generally, I believe that what you're
proposing, Council Member Wolbach's Memo, is consistent. I think the idea
of having the conversation in advance, establishing the values of the
community and setting standards is very prudent. I encourage you all in considering this, and I hope this moves forward to Policy and Services.
Mayor Burt: Thank you. Just had a couple of smaller questions. This may
be just verbiage precision. It says the recommendation is to refer this to the
Policy and Services Committee to discuss. Ordinarily, it would be to consider
and make recommendations. When this comes in the form of a motion, I'd
want to see the clarification on what is the intended role of the Policy and
Services Committee. Under Item Four, listed under the areas for Policy and
Services Committee (P&S) to discuss, there's a reference that the
Committee should survey the existing field of regulations. I didn't know
whether the intention was the Committee would do that research or the
Committee would rely on the Staff research and review it. Of course,
Council Members will often do their own supplemental research. What's the
primary thrust of that is and the intent? Item Number Five under that, I
wasn't really clear about the relationship between what was intended here
between the community interest in smart city initiatives, which we've kind of
had some discussion about, and security of persons and property. It was a
pretty convoluted sentence that didn't link two halves of that. I inferred that
there was an intention to reconcile those two directions, but I couldn't
gather that from the sentence. I don't need to wordsmith it. I just want to
know what's the intent there. When this comes back for a motion, maybe
that clarification could come as well. I think that covers the bulk of my
questions. I will be interested in understanding how much of this focus is
around personally identifiable information and whether that needs to be the
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principal focus and to clarify that more. Council Member Wolbach, did you
want to bring forward a motion?
Council Member Wolbach: Would you like me to respond to some of the
questions you just raised before I do that?
Mayor Burt: Sure, you're welcome to do that before the motion.
Council Member Wolbach: Actually I think a couple of your quibbles—I hate
to put you on the spot, Jim. I think they actually came from some of the recommendations that came from Staff to change the Memo somewhat
(crosstalk).
Mayor Burt: Here's the—just a moment. The Staff makes suggestions to
the authors of Colleagues Memos, and then the authors own the Memo.
Council Member Wolbach: That is correct. I just wanted to open an
opportunity for Staff to weigh in, if they'd like to. Otherwise, I'll (crosstalk).
Mr. Keene: We might be missing a couple of words in here for clarity. I
think it's handled well enough by a request when we're at the Committee to
kind of clarify that in words.
Council Member Wolbach: That was my sense as well. On the question of—
actually I'll just go forward with the motion. In speaking to the motion, I'll
provide it. I'd move that we refer this Colleagues Memo to the Policy and Services Committee to discuss and potentially craft such an ordinance as
described in the Memo.
Vice Mayor Scharff: I'll second that. Could I suggest a revision?
Council Member Wolbach: Sure.
Vice Mayor Scharff: I'd suggest that "to discuss and potentially make
recommendations to Council regarding this subject."
Council Member Wolbach: That's amenable to me.
MOTION: Council Member Wolbach moved, seconded by Vice Mayor Scharff
to refer this Colleagues Memo to the Policy and Services Committee to
discuss and potentially make recommendations to Council.
Council Member Wolbach: First, I wanted to address—besides the
comments I've already made, I just wanted to provide a couple of
clarifications based on questions and things I heard raised. A few members
of the public referred to stingrays, but I'm not sure if we had clarification of
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what those are. They're essentially cell phone tower emulators. They allow
you to gather a substantial amount of information from somebody's cell
phone usage. On the question of whether this can be broken up into things
that are less controversial and simpler at first versus more controversial and
more complex later, I'd like to leave that question open to Policy and
Services as they dig into it. I don't have an easy answer, but I'm certainly
comfortable with Policy and Services Committee having the discretion to bring forth some recommendations at one point and others at another point,
as they see appropriate. If there are minor errors or items that lack clarity,
I'd be happy to provide that if it's necessary at this point. Otherwise, I ...
Mr. Keene: The Mayor's comment about Committee review, just clarifying.
I think that would be something that the Staff would do. I think ...
Mayor Burt: The research (crosstalk).
Mr. Keene: Research, survey.
Council Member Wolbach: Yeah. I think that is correct. Any research
beyond what's all provided in the attachments to the Memo, Staff could
provide to the Committee Members.
Mayor Burt: Vice Mayor Scharff, speaking to your second.
Vice Mayor Scharff: Thanks to Cory for putting this together. He did all the heavy lifting on this. I think he deserves a lot of the credit for that. I'm
pleased we're doing this for the comments I made earlier. I think it's
important to set these policies. I do think, as we start with Policy and
Services though, we should make it clear that the charge of Policy and
Services and focus is on those technologies that create personally
identifiable information. I actually do think in hindsight the Colleagues
Memo was a little broader than that. I think that's, at least, what the focus
should be to start with. I think that would make the charge for Staff a lot
easier when they come up with stuff to us and help us out on this. I don't
know if you feel comfortable doing that.
Council Wolbach: I think that's kind of assumed. I don't know if it's
necessary to incorporate it into the motion. Again, giving the discretion to
the Policy and Services Committee to bring forward recommendations in the
order and manner that they see fit, I think that would be allowable within
that scope.
Vice Mayor Scharff: I often think in these things oftentimes it takes them a
while to get it to Policy and Services. These things go on. You could have
several new Council Members next year, who haven't had this discussion.
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When you look at the Colleagues Memo—actually Council Member Burt was
the one who really pointed this out to me. I do think it's broader than that.
I think it would be good to start there. At least if we have new Council
Members, it's clear on that.
Council Member Wolbach: If we wanted to add something saying starting
with technologies which collect potentially personally identifiable information,
I'd be fine with (crosstalk) that.
Vice Mayor Scharff: I think we should say that Policy and Services
Committee should focus on technology that creates personally identifiable
information.
Council Member Wolbach: That's fine with me.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to add to the Motion, “with a focus on technology
that collects personally identifiable information.”
Mayor Burt: Council Member Schmid.
Council Member Schmid: I support the Motion in general. I think the issue
has been clearly stated that technologies are proliferating. The concern
about security is showing up at every level of government, starting with
constitutional issues, but at the Federal level, the State level, the County level, the City level. It's showing up in business, how they conduct
themselves. One of the things that I've heard from the Public Safety over
the years is whenever there is an issue and a meeting, the first statement of
Public Safety is we need trust and support from the residents, from the
people. The first step in building that trust and confidence, the sharing of
information is the fact that people are confident in the way information is
gathered and used appropriately. I think of all those levels of government
that are dealing with this issue, the cities are the most critical because there
is the place where enforcement takes place, there is the place where the
concern of citizens is best met. I guess I like the City policy on video that's
on Packet Page 250. It's a good example of the City looking at the details of
how to gather information, what information is gathered, what controls on it,
what the process is and procedures are investigating. What we're adding
here is an element that review by people in a public setting about the
security and safety of that information. I'm happy to support the motion.
Mayor Burt: Council Member Holman. Council Member Wolbach, did you
have some—go ahead?
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Council Member Wolbach: I just wanted to add something. I was remiss in
not being very clear about this earlier. As the City Manager pointed out, the
City of Palo Alto has already taken great steps, and I think does have a very
strong culture in this regard. The idea here is really just to institutionalize
what's already been a strong culture. Again, my thanks to the City Manager,
the City Attorney, and also our Public Safety Staff for their support for this.
MOTION RESTATED: Council Member Wolbach moved, seconded by Vice Mayor Scharff to refer this Colleagues Memo to the Policy and Services
Committee to discuss and potentially make recommendations to Council,
with a focus on technology that collects personally identifiable information.
Mayor Burt: Please vote on the board. That passes unanimously with
Council Members Filseth and Kniss absent. Thank you to members of the
public and to our Staff for participating.
MOTION AS AMENDED PASSED: 7-0 Filseth, Kniss absent
Inter-Governmental Legislative Affairs
Mayor Burt: We have our wrap-up items. Intergovernmental Legislative
Affairs, nothing to report.
Council Member Questions, Comments and Announcements
Mayor Burt: Council Member Questions, Comments and Announcements. Council Member Wolbach.
Council Member Wolbach: A couple of things to report on. First, last
Thursday I attended the Association of Bay Area Governments (ABAG)
General Assembly in Oakland on behalf of the City. This was on April 21st.
It was interesting to note that during the breakout session with Council
Members representing mid to large cities from the Bay, there was essentially
one topic for discussion, which was housing, housing costs, housing supply,
housing displacement. Lots of people from other parts of the larger Bay
Area region, even as far as away as Marin County or eastward, talked about
how people who work in Silicon Valley cities like Palo Alto but can't afford to
live here find housing in their neighborhoods, causing displacement there,
causing further growth pressures and consternation there. Just further
evidence that if we don't pull our own weight addressing the regional
housing crisis, the problem doesn't just go away. By refusing to address the
challenge here, it means that other communities really have to deal with it.
I heard that from a number of other cities. On April 20th, last Wednesday,
Joe Simitian—a separate issue—sponsored a County Town Hall in the City of
Los Altos Hills on short-term bike and pedestrian improvements to Page Mill
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Road and Highway 280 that I wanted to let you all know about. The options
they were considering were very limited. Signalization in the nearer term at
Page Mill and 280 was not proposed by County Staff. They said that the
budget they were working with for the short term wouldn't accommodate it.
Most of the attendees seemed very supportive of adding some kind of
signalization, especially if it would only stop car traffic when a pedestrian or
biker pressed a button. Also, of course, slowing Page Mill Road speeds would help with safety there. County Roads and Airport Staff—I think the
same Staff member who presented to us last year—told me when I asked
about the long-term plans, separately from the nearer-term discussion, that
they wouldn't make any major improvements in the long term to the
interchange at Page Mill and 280 unless Page Mill got widened. I pressed
her on it, and she said a 20 percent reduction of traffic on Page Mill would
suffice. She didn't seem to recognize that that was actually possible through
Transportation Demand Management. When I asked if she had any sense of
what Stanford was working on regarding Transportation Demand
Management at the Research Park, she really hadn't. She clarified for me
County Roads and Airports Department can add lanes, bike lanes, High-
Occupancy Vehicle (HOV) lanes but not TDM. When I asked her if basically they can do infrastructure but not programs, she confirmed. Essentially
County Roads and Airports does hardware; they don't do software. It's a
classic example of if every problem you have is—sorry. If all you have in
your toolbox is a hammer, every problem looks like a nail. This is important
when looking at the expressway proposals, whether locally or regionally,
that have been driven by County Roads and Airports.
Mayor Burt: Vice Mayor Scharff.
Vice Mayor Scharff: A couple of things. I visited our Sister City, Tsuchiura,
in Japan. Their Mayor sends his greetings to our Mayor and wishes us well.
They were incredibly hospitable. I ran their marathon, and there's lots of
pictures and that kind of stuff if anyone wants to see it. The second thing is
I was at the ABAG/Metropolitan Transportation Commission (MTC)
Administrative Joint Committee, talking about the merger. The committee
voted overwhelmingly to consolidate all staff functions of ABAG over at MTC,
but have two Boards. The MTC Board would be the primary Board, and
ABAG would retain its functions and autonomy and oversight under current
statutory policies and would work with the MTC Executive Director. There
would be no more ABAG Executive Director. That seems to be the direction
that that is moving.
Mayor Burt: Council Member Holman.
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Council Member Holman: A question. Is there a published list yet of when
the Federal Aviation Administration (FAA) meetings are, the air noise
meetings and where they are?
Vice Mayor Scharff: There is.
Council Member Holman: Are those on the City's website and I haven't
noticed them yet?
James Keene, City Manager: They're on the website. We'll look at how we get the information out. We just got the information last week.
Council Member Holman: Thank you.
Mayor Burt: I'll just mention that on Saturday I went to the Matadero Creek
Bikeway pop-up event, which was pretty interesting. It was basically a one-
block length of the Water District right-of-way that was opened up for
members of the public to go through and pass through. There were maybe
over the course of the time as many as a couple hundred people who
showed up. People seemed to be very interested. I guess we'll be hearing
feedback on that in coming months. It was actually a well-attended event.
Mayor Burt: On that note, the meeting's adjourned.
Adjournment: The meeting was adjourned at 9:51 P.M.
PROGRAM AGREEMENT TO OPERATE
BIKE SHARE IN PALO ALTO
This Program Agreement to Operate Bike Share in Palo Alto (this “Agreement”) is entered into
as of July 1, 2016 (the “Effective Date”), by and between Bay Area Motivate, LLC, a Delaware
limited liability company (the “Operator”), and the City of Palo Alto, a California chartered
municipal corporation (the “City”), having an office at 250 Hamilton Avenue, Palo Alto,
California 94301. Capitalized terms used herein and not otherwise defined shall have the same
meanings as set forth in the MTC Agreement (as defined below). Operator and the City are
referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, the original operator of the Bay Area Bike Share Pilot Program, Alta
Bicycle Share, Inc. was acquired in December 2014 by the owner of Bay Area Motivate, LLC;
WHEREAS, the Operator and the Metropolitan Transportation Commission (“MTC”)
have entered into that Bay Area Bike Share Program Agreement (“MTC Agreement”) as of
December 31, 2015, attached hereto as Exhibit A, for the design, build, operation, maintenance
and marketing of a network of publicly available bicycles in a pilot bike share program in the
Bay Area;
WHEREAS, Bay Area Bike Share includes 70 stations and 700 bicycles throughout the
San Francisco Bay Area with five stations located in the City of Palo Alto;
WHEREAS, simultaneously with the MTC Agreement, Operator and the MTC entered
into that Agreement to Continue Pilot Bike Share Program (as amended from time to time, the
“Continuation Agreement”) for the continuation of a pilot program of existing bike share
operations in certain cities;
WHEREAS, the Term of the Continuation Agreement as to the City of Palo Alto will be
extended on or before the Effective Date to November 30, 2016;
WHEREAS, the City Council of the City of Palo Alto provided direction to approve a
Program Agreement with Bay Area Motivate, LLC to maintain and operate the City’s five
existing bike share stations that were part of the original Bay Area Bike Share Pilot Program; and
WHEREAS, the Operator and the City desire to extend the Pilot Program with respect to
bike share operations in Palo Alto.
NOW THEREFORE, in consideration of the premises and the mutual covenants herein
contained, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Program Agreement to Operate Bike Share in Palo Alto
2
AGREEMENT
1. Services. Operator shall operate the portion of the System currently in existence
in Palo Alto (“Palo Alto System”) according to the terms and conditions of the Continuation
Agreement except as otherwise stated herein, during the Term. The size of the Palo Alto System
may not be increased during the Term, whether by an increase in the number of Bicycles, Docks,
Kiosks, Stations or otherwise.
2. Operating Fee. From the Effective Date to the end of the Term, the City shall pay
to Operator, monthly, (i) the “Cost to operate and maintain the Equipment” in the Pilot Cities,
and (ii) if Operator upgrades the AD Equipment, the “Cost to upgrade AD Equipment,” each as
set forth in Appendix B of the MTC Agreement, to cover Operating Expenses in Palo Alto.
Amounts owed by City under this Section 2(ii) will be prorated for the month in which upgrade
of the AD Equipment occurs.
3. Payments. Motivate may invoice the City on the first day of each month in
advance for the Operating Fee described in Section 2 and any other fees owing and due to
Motivate. City shall remit payment by check to Bay Area Motivate, LLC, 5202 Third Avenue,
Brooklyn, NY 11220, Attn: Accounts Receivable or by electronic transfer, within thirty (30)
days of the date of the invoice for such payment.
4. Term. This Agreement will commence on the Effective Date and remain in effect
until November 30, 2016, unless earlier terminated in accordance with the terms hereof (the
“Term”). Either Party may terminate the Agreement for convenience upon sixty (60) days’
written notice to the other Party.
5. Expansion Planning. The City shall be solely responsible for any plans, and their
associated costs, to expand the Palo Alto System after the expiration of the Term, including the
ordering and purchasing of new Equipment. For the avoidance of doubt, Operator’s obligations
under this Agreement do not include placement of purchase orders for new Equipment unless
otherwise agreed to by the Parties.
6. Sponsorship. The City may secure Sponsorships and place recognition thereof on
one side of one Map Frame (as defined in the Continuation Agreement) at each Station in the
Palo Alto System, provided that such Sponsorships may not be in the same category as the Title
Sponsor. The City will have no rights to determine System naming or branding of Bicycles or
any other physical assets besides one side of each Map Frame, or to share in any revenue
therefrom. Such naming and branding will be determined by Operator and Title Sponsor in
compliance with local advertising regulations, and are subject to change at any time.
7. Notices. Except as otherwise provided herein, all notices, requests, demands and
other communications which are required or may be given under this Agreement shall be
provided in the manner set forth in this section. Notice to a Party shall be delivered to the
attention of the person listed below, or to such other person or persons as may hereafter be
designated by that Party in writing. Notice shall be in writing sent by e-mail or regular first class
mail. In the case of e-mail communications, valid notice shall be deemed to have been delivered
Program Agreement to Operate Bike Share in Palo Alto
3
upon sending, provided the sender obtained an electronic confirmation of delivery. E-mail
communications shall be deemed to have been received on the date of such transmission,
provided such date was a business day and delivered prior to 4:00 p.m. PST. Otherwise, receipt
of e-mail communications shall be deemed to have occurred on the following business day. In
the case of regular mail notice, notice shall be deemed to have been delivered on the mailing date
and received five business days after the date of mailing.
If to City:
City of Palo Alto
250 Hamilton Ave
Attention: Joshuah Mello, Chief Transportation Official
Email: Joshuah.Mello@CityofPaloAlto.org
If to Operator:
Bay Area Motivate, LLC
5202 Third Avenue
Brooklyn, New York 11220
Attention: Justine Lee, Vice President and General Counsel
Email: justinelee@motivateco.com
Bay Area Motivate, LLC
2200 Jerrold Avenue, Unit J
San Francisco, California 94124
Attention: Emily Stapleton, General Manager
Email: emilystapleton@motivateco.com
8. Entire Agreement; Amendments and Waivers. This Agreement constitutes the
entire agreement between the Parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or written, of the
Parties. No supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the Party to be bound thereby. No waiver of the provisions of this
Agreement, or any breach thereof, shall constitute a waiver of any prior, concurrent or
subsequent breach of the same or any other provisions hereof, or shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
9. Assignment. Operator shall not assign, transfer, convey, sublet, or otherwise
dispose of any award, or any or all of its rights, obligations, or interests under this Agreement,
without the prior written consent of the City, except the preceding clause shall not limit
Operator’s rights to enter into subcontracts for the provision of services hereunder.
10. Governing Law. This Agreement shall be governed in all respects, including
validity, interpretation and effect, and construed in accordance with, the laws of the State of
Program Agreement to Operate Bike Share in Palo Alto
4
California, irrespective of conflict of laws principles, as applicable to contracts entered into and
to be performed entirely within the State of California.
11. Severability. The clauses and provisions of this Agreement are intended to be
severable. If any clause or provision is declared invalid, in whole or in part, by any court,
agency, commission, legislative body, or other authority of competent jurisdiction, such
provision shall be deemed a separate, distinct, and independent portion, and such declaration
shall not affect the validity of the remaining portions hereof, which other portions shall continue
in full force and effect, but only so long as the essential terms underlying this Agreement are not
undermined.
12. Counterparts. This Agreement may be executed in one or more counterparts
which, when taken together, shall constitute one and the same.
[Signature page follows]
Exhibit A to Program Agreement to Operate Bike Share in Palo Alto
6
Exhibit A
MTC Agreement
See attached.
203193300.19
BAY AREA BIKE SHARE PROGRAM AGREEMENT
between
METROPOLITAN TRANSPORTATION COMMISSION
and
BAY AREA MOTIVATE, LLC
December 31, 2015
203193300.19 -ii-
Table of Contents
DEFINED TERMS ................................................................................................... 2
SCOPE OF SERVICES .......................................................................................... 13
PROGRAM AREA AND EXPANSION; PROGRAM SIZE;
PROGRAM TIMING .................................................................................... 18
SITING .................................................................................................................... 21
RESERVED ............................................................................................................ 22
IMPROVEMENTS, MAINTENANCE, REPAIR AND OPERATION ................ 22
ADVERTISING AND SPONSORSHIP ................................................................. 23
REVENUE SHARING ........................................................................................... 24
PRICE SCHEDULES. ............................................................................................ 26
MERCHANDISING, LICENSING AND INTELLECTUAL PROPERTY ........ 29
RESERVED .......................................................................................................... 30
RESERVED .......................................................................................................... 30
MARKETING ....................................................................................................... 30
WEBSITE ............................................................................................................. 31
SECURITY FUND ............................................................................................... 32
INDEMNITY ........................................................................................................ 34
INSURANCE ........................................................................................................ 34
TERMINATION AND DEFAULT ...................................................................... 37
RIGHTS OF RECOGNIZED LENDER ............................................................... 41
EMPLOYMENT ................................................................................................... 43
INSPECTION AND AUDIT RIGHTS ................................................................. 44
RESTRICTION AGAINST ASSIGNMENT ....................................................... 44
DISPUTE RESOLUTION PROCESS .................................................................. 45
REPRESENTATIONS AND WARRANTIES OF OPERATOR ......................... 46
MISCELLANEOUS ............................................................................................. 47
203193300.19 iii
APPENDICES
APPENDIX A KEY PERFORMANCE INDICATORS AND LIQUIDATED DAMAGES
APPENDIX B COST OF EQUIPMENT
APPENDIX C REPORTING REQUIREMENTS
APPENDIX D FUNCTIONAL SPECIFICATIONS
ATTACHMENT
ATTACHMENT A AGREEMENT TO CONTINUE PILOT BIKE SHARE PROGRAM
203193300.19 -1-
BAY AREA BIKE SHARE PROGRAM AGREEMENT
THIS BAY AREA BIKE SHARE PROGRAM AGREEMENT (this “Agreement”), has been executed
and delivered as of December 31, 2015 (the “Effective Date”) by and between the METROPOLITAN
TRANSPORTATION COMMISSION, an agency of the State of California established pursuant
California Government Code § 66500 et seq., having an office at 101 Eighth Street, Oakland, California
(“MTC”), and BAY AREA MOTIVATE, LLC, a Delaware limited liability company, having any office
at 5202 Third Avenue, Brooklyn, New York 11220 (“Operator”).
W I T N E S S E T H:
WHEREAS, self-service bicycle sharing programs are revolutionizing the way residents commute and
tourists travel within cities in Europe and North America, and a regional self-service bicycle sharing
program with public access has been determined by MTC and the Participating Cities (as defined below)
to be a desirable and valuable mode of alternative public transportation for the San Francisco Bay Area;
and
WHEREAS, a bike sharing program will provide a 24-hour transportation network that complements
existing transit and transportation options, increases multi-modal travel options in the region and
encourages bicycle use as a healthy, environmentally friendly and congestion-reducing transportation
option; and
WHEREAS, MTC authorized its Executive Director to negotiate an agreement with Operator to design,
build, operate, maintain and market a network of publicly available bicycles in a bike share system within
the cities of Berkeley, Emeryville, Oakland, San Francisco and San Jose (subject to Section 2.16, each a
“Participating City”, and collectively, the “Participating Cities”);
WHEREAS, accordingly, MTC and Operator have negotiated this Agreement for the design, build,
operation, maintenance and marketing of a network of publicly available bicycles in a bike share program
in the Participating Cities;
WHEREAS, this Agreement also addresses the continuation of the pilot bike share program established in
2013 in San Francisco, Redwood City, Palo Alto, Mountain View and San Jose (the “Pilot Program”; the
foregoing cities being the “Pilot Cities”) pursuant to Bike Share Program Agreement dated February 6,
2013 (as amended, the “AD Agreement”) between Alta Bicycle Share, Inc. and The Bay Area Air Quality
Management District (the “Air District”);
WHEREAS, concurrently with the execution and delivery of this Agreement, Operator, the cities of
Emeryville, San Francisco and San Jose, and MTC are executing a Coordination Agreement
(“Coordination Agreement”) that sets forth certain rights, liabilities, and responsibilities of each party
thereto with respect to the Program, and defines the organizational, management, and operational
structure for the successful development of the Program.
NOW, THEREFORE, in consideration of the foregoing clauses, which clauses are hereby made a part of
this Agreement, and the mutual covenants and agreements herein contained, and for other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties do hereby
covenant and agree as follows:
203193300.19 -2-
DEFINED TERMS
For purposes of this Agreement and the Appendices and Exhibits, the following terms, phrases, words,
and their derivatives shall have the meanings set forth in this Section.
1.1 “AAA” has the meaning given such term in Section 23.1.2.
1.2 “AD Agreement” has the meaning given such term in the Recitals.
1.3 “AD Equipment” shall mean bike share equipment paid for by the Air District or Pilot
Cities under the AD Agreement.
1.4 “Adjustment” shall mean permanent or temporary changes to a Station’s size or
configuration, and changes to Street Treatments and Street Markings as necessitated by such, without
changes to the Station location.
1.5 “Advertising” shall mean any printed matter, including, but not limited to, words, pictures,
photographs, symbols, graphics or visual images of any kind, or any combination thereof, promoting or
soliciting the sale or the use of a product or service or providing other forms of textual or visual messages
or information for the sale or the use of a product or service, but in no event shall it include any textual
information that is required to be posted on any Equipment by any federal, state or local law, rule or
regulation, or by this Agreement.
1.6 “Advertising Restrictions” has the meaning given such term in Section 7.2.
1.7 “Agents” has the meaning given such term in Section 17.1.
1.8 “Agreed Completion Dates” shall mean, collectively, the Agreed Phase I Completion Date,
the Agreed Phase II Completion Date, the Agreed Phase III Completion Date, the Agreed Phase IV
Completion Date and the Agreed Phase V Completion Date.
1.9 “Agreed Phase I Completion Date” has the meaning given such term in Section 3.4.1.
1.10 “Agreed Phase II Completion Date” has the meaning given such term in Section 3.4.2.
1.11 “Agreed Phase III Completion Date” has the meaning given such term in Section 3.4.3.
1.12 “Agreed Phase IV Completion Date” has the meaning given such term in Section 3.4.4.
1.13 “Agreed Phase V Completion Date” has the meaning given such term in Section 3.4.5.
1.14 “Agreed Phase I Site Permit Submission Date” has the meaning given such term in Section
3.4.1.
1.15 “Agreed Phase II Site Permit Submission Date” has the meaning given such term in
Section 3.4.2.
203193300.19 -3-
1.16 “Agreed Phase III Site Permit Submission Date” has the meaning given such term in
Section 3.4.3.
1.17 “Agreed Phase IV Site Permit Submission Date” has the meaning given such term in
Section 3.4.4.
1.18 “Agreed Phase V Site Permit Submission Date” has the meaning given such term in
Section 3.4.5.
1.19 “Agreed Site Permit Submission Dates” shall mean, collectively, the Agreed Phase I Site
Permit Submission Date, the Agreed Phase II Site Permit Submission Date, the Agreed Phase III Site
Permit Submission Date, the Agreed Phase IV Site Permit Submission Date and the Agreed Phase V Site
Permit Submission Date.
1.20 “Agreement” has the meaning given such term in the Preamble, together with all
Appendices and Exhibits, and all amendments or modifications hereof or thereof.
1.21 “Air District” has the meaning given such term in the Recitals.
1.22 “Alcohol Advertising” shall mean Advertising or Sponsorship, the purpose or effect of
which is (i) to identify a brand of an alcohol product, a trademark of an alcohol product or a trade name
associated exclusively with an alcohol product, or (ii) to promote the use or sale of an alcohol product.
1.23 “Annual Member” shall mean a user having an Annual Membership.
1.24 “Annual Membership” has the meaning given such term in Section 9.2.1.
1.25 “Annual Membership Fee” has the meaning given such term in Section 9.2.1.
1.26 “Annual Membership Fee Cap” has the meaning given such term in Section 9.2.1.
1.27 “Applicable Interest Rate” in effect at any date shall mean the prime rate as most recently
published in the Eastern edition of the Wall Street Journal on or prior to such date plus 3%.
1.28 “Assessment Period” has the meaning given such term in Section 2.6.2(b).
1.29 “Back-end Software” designates all Software components of the central application
provided by Operator’s Software vendor and stored on the servers of such vendor, used for operation of
such vendor’s equipment, and accessible online from a remote location using the Hosted Infrastructure.
1.30 “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended (Title 11
(U.S.C.).
1.31 “Berkeley Effective Date” has the meaning given such term in Section 2.16.
1.32 “Bicycle” shall mean a vehicle with pedals and with 2 wheels held in a frame and aligned
one behind the other and steered with a steering wheel as further described in Appendix D. “Bicycle”
shall not include motorized vehicles, including scooters or mopeds. For the avoidance of doubt, electric
assisted bicycles constitute Bicycles and do not constitute motorized vehicles.
203193300.19 -4-
1.33 “Bicycle Availability” shall mean conformance with the required Bicycle Fleet Level.
1.34 “Bicycle Fleet Level” shall mean the number of Bicycles that are operational, on-the-street
and available for public use.
1.35 “Bicycle Maintenance” shall mean, at a minimum, that the following checks are performed
on a Bicycle, with deficient elements repaired or replaced as necessary:
1.35.1 Check tire pressure, and add air as may be needed, to recommended Pounds per
Square Inch measurement;
1.35.2 Check tightness of handlebars, headset bearings, and full handlebar range of
motion (left to right);
1.35.3 Check tightness of seat, seat post quick-release, and see that seat post moves
freely in full range of motion (up and down);
1.35.4 Check brake function (front and rear);
1.35.5 Check grips for wear and brake levers for tightness and damage;
1.35.6 Check bell for tightness and correct function;
1.35.7 Check handlebar covers for damage and instruction stickers;
1.35.8 Check front basket for tightness and damage, and check bungee cord for wear;
1.35.9 Check for correct gears and shifter function through all 5 gears;
1.35.10 Check fenders (front and rear) for damage, and clean outside of fenders;
1.35.11 Check tires (front and rear) for damage or wear;
1.35.12 Check wheels (front and rear) for trueness, broken or bent spokes and hub or axle
tightness;
1.35.13 Check LED lights (front and rear) for function;
1.35.14 Check reflectors on wheels, seat and basket, to ensure they are present, clean, and
undamaged;
1.35.15 Check pedals and cranks for tightness;
1.35.16 Lubricate and clean chain and check chain tensioner for correct function;
1.35.17 Check kickstand for correct function; and
1.35.18 Take brief test ride to ensure overall correct function of Bicycle.
203193300.19 -5-
1.36 “Bikeshare Holdings” shall mean Bikeshare Holdings LLC, a Delaware limited liability
company, the sole member of Operator, and its successors.
1.37 “Claims” has the meaning given such term in Section 16.1.
1.38 “Cluster” shall mean, with respect to any Station, the Stations located within one-third of a
mile from such Station, unless fewer than 3 other Stations are located within one-third of a mile from such
Station, in which case such Station’s Cluster shall mean the 3 other Stations located closest to such
Station.
1.39 “Cluster Outage” shall mean an instance when either:
1.39.1 There are no empty, Operable Docks available at any of the Stations in a Cluster;
1.39.2 There are no Bicycles available for use at any of the Stations in a Cluster.
(Bicycles Wrenched in Docks are not considered as available for use.)
1.40 “Computer Hardware” electronic component that provides information or controls a
mechanical device and that is controlled by local or remote software.
1.41 “Contract Year” has the meaning given such term in Section 8.1.1.
1.42 “Coordination Agreement” has the meaning given such term in the Recitals.
1.43 “CPI” shall mean the Consumer Price Index for the Consolidated Metropolitan Statistical
Area covering San Francisco-Oakland-San Jose, as measured by the Consumer Price Index for All Urban
Consumers, as published from time to time by the Bureau of Labor Statistics, U.S. Department of Labor.
1.44 “CPI Adjustment” shall mean, with respect to a specific cost, that such cost is subject to
annual adjustment each January 1 based on changes in the CPI from the Effective Date to the date of
adjustment.
1.45 “Deactivation” shall mean, at a minimum, shut-down of Kiosk (or display of messaging on
Kiosk screen indicating that Station is out of service) removal of all Bicycles present, installation of
physical barriers on all Docks that prevent docking of Bicycles, and designation of the Station as “Out of
Service” on the Program website, app, and all other real-time data sources. A Deactivation event is not
over until the Station has been reactivated.
1.46 “Default” has the meaning given such term in Section 18.1.
1.47 “De-Installation” shall mean, at a minimum, (i) the temporary or permanent full removal of
the Station and its associated Street Treatments, and, (ii) the designation of the Station as “Out of Service”
on, or removal of the Station from, the Program website, app, and all other real-time data sources.
1.48 “Designated Representative” has the meaning given such term in Section 25.1.
1.49 “Discovery” shall mean any Operator employee gaining actual knowledge by personal
observation of such employee or by Notification of any defect in the Equipment or Program.
203193300.19 -6-
1.50 “Dispute Resolution Process” has the meaning given such term in Section 23.1.
1.51 “Docks” shall mean the locking mechanisms contained on a Station that are designed to
receive a Bicycle for locked storage.
1.52 “Electing City” shall mean a Peninsula Pilot City or other Eligible City that elects, in
accordance with Section 3.2, to participate in the Program.
1.53 “Effective Date” has the meaning given such term in the Preamble.
1.54 “Eligible City” shall mean any city located in the MTC Area.
1.55 “Equipment” shall include Stations, Kiosks, Docks and Bicycles, either individually or in
any combination thereof.
1.56 “Escrow Agreement” means an escrow agreement to be executed among the vendor of the
Software, Operator, and a nationally reputable company that provides escrow deposit services with
respect to software and technology, as escrow agent, for the deposit, storage and release of the
proprietary source code of Vendor for all of Vendor’s software made available to Operator to operate the
Equipment, which agreement shall be in form acceptable to the parties thereto and in form reasonably
acceptable to MTC.
1.57 “Event of Force Majeure” shall mean a delay, suspension or interruption due to strike; war
or act of war (whether an actual declaration of war is made or not); terrorism; insurrection; riot;
injunction; fire, flood or similar act of providence; or other similar causes or events to the extent that such
causes or events are beyond the control of the Party claiming an Event of Force Majeure, provided in each
case that such Party has taken and continues to take all reasonable actions to avoid or mitigate such delay,
suspension or interruption and provided that such Party notifies the other Party to this Agreement in
writing of the occurrence of such delay, suspension or interruption within 5 business days, or if not
reasonably practicable, as soon thereafter as reasonably practicable, of the date upon which the Party
claiming an Event of Force Majeure learns or should have learned of its occurrence. A delay in a decision
by a government entity, the approval of which is a condition to an occurrence, shall not constitute an
“Event of Force Majeure” unless such delay is beyond the normal period in which such entity generally
acts with respect to the type of decision being sought and only if the Party claiming Event of Force
Majeure has taken and continues to take all reasonable steps to pursue such decision. The financial
incapacity of Operator shall not constitute an Event of Force Majeure.
1.58 “Executive Director” shall mean the Executive Director of MTC, or any successor in
function to the Executive Director.
1.59 “Firearms Advertising” shall mean Advertising or Sponsorship, the purpose or effect of
which is (i) to identify a brand of firearms or ammunition, a trademark of a firearm or ammunition or a
manufacturer of firearms or ammunition, or a trade name associated exclusively with a firearms or
ammunition, or (ii) to promote the use or sale of firearms or ammunition.
1.60 “Functional Specifications” shall mean the specifications set forth in Appendix D, subject
to Section 6.7.
203193300.19 -7-
1.61 “Hacking” shall mean unauthorized and intentional access to the Computer Hardware for
the Program and/or Software.
1.62 “Hosted Infrastructure” means the hosting of the Back-end Software and associated
network access designed and controlled by Operator’s Software vendor, which renders the Back-end
Software accessible to Operator and its end users;
1.63 “Indemnified Party” and “Indemnified Parties” have the meaning given such terms in
Section 16.1.
1.64 “Infill” shall mean the placement of additional Stations within the Program Area in order
to address unmet demand or community request.
1.65 “Initial Meeting Date” has the meaning given such term in Section 23.1.1.
1.66 “Initial Ride Period” has the meaning given such term in Section 9.2.3.
1.67 “Initial Term” has the meaning given such term in Section 2.2.
1.68 “Installation Scheduling Permits” shall mean permits required for the scheduling of the
installation of Station-related Equipment at Sites proposed for Stations for which a Site Permit has been
issued as a check for conflicts with other activities at the same location. The “temporary occupancy
permit” issued by the San Francisco Department of Public Works is an example of an Installation
Scheduling Permit.
1.69 “Institutional Lender” shall mean any savings bank, a savings and loan association, a
commercial bank or trust company (whether acting individually or in a fiduciary capacity), an insurance
company organized and existing under the laws of the United States or any state thereof, a religious,
educational or eleemosynary institution, a federal, state or municipal employee’s welfare, benefit, pension
or retirement fund, any governmental agency or entity insured by a governmental agency, a credit union,
trust or endowment fund, or any combination or syndicate of Institutional Lenders or other lenders that is
led by an agent that qualifies as an Institutional Lender (in which case such combination or syndicate
shall, for purposes of this Agreement, constitute a single Institutional Lender); provided, that each of the
above entities (or, in the case of any such combination or syndicate, the agent) shall qualify as an
Institutional Lender only if it (a) is subject to service of process within the State of California and (b) has
a net worth of not less than $50,000,000 and net assets of not less than $250,000,000. A wholly-owned
subsidiary of any of Person that qualifies as an Institutional Lender is also an Institutional Lender.
1.70 “Key Performance Indicators” (or “KPIs”) has the meaning given such term in Appendix
A.
1.71 “Kiosk” shall mean the payment terminal that provides Bicycle rental instructions,
contains payment equipment (e.g., a credit card device), and includes all other physical means necessary
for the rental of Bicycles.
1.72 “KPI Contest Notice” has the meaning given such term in Section 2.6.3(b).
1.73 “KPI Change Request” has the meaning given such term in 2.6.2(a).
203193300.19 -8-
1.74 “KPI Failure Notice” has the meaning given such term in 2.6.3 (a).
1.75 “KPI LD Payment Date” has the meaning given such term in Section 2.6.3(b).
1.76 “Liabilities” has the meaning given such term in Section 16.1.
1.77 “Membership Fee” has the meaning given such term in Section 9.1.
1.78 “MTC” has the meaning given such term in the Preamble, together with any successor
thereto.
1.79 “MTC Area” means the 9 counties in the San Francisco Bay Area within MTC’s
jurisdiction.
1.80 “MTC/Participating City Property” shall mean the trademarks, logos, servicemarks, and
other intellectual property rights of MTC and/or the Participating Cities.
1.81 “Notification” shall mean all information provided by MTC, a Participating City or the
general public to Operator about a specific defect or problem concerning the Program, Equipment or
operations of the Program by written document, email to Operator’s public information email address for
the Program, or telephone call to Operator’s call-in center for the Program.
1.82 “Oakland Effective Date” has the meaning given such term in Section 2.16.
1.83 “Operable Dock” shall mean a Dock that can both rent and receive bicycles from all
Program users and is not physically obstructed in a manner that would prevent such use.
1.84 “Operable Station” shall mean a Station at which at least 90 percent of all installed Docks
are Operable Docks from which an Annual Member can check out and return a Bicycle.
1.85 “Operator” has the meaning given such term in the Preamble.
1.86 “Operator Property” has the meaning given such term in Section 10.3.
1.87 “Operator Basic Function Software” shall mean software and other intellectual property
developed by Operator that is integral to the basic function of the Program (such as mobile apps that allow
for the unlocking of Bicycles). As of the Effective Date, no Operator Basic Function Software has been
developed.
1.88 “Operator Non-Basic Function Software” shall mean software and other intellectual
property developed by Operator that enhances the functionality of the Program but is not necessary for the
basic function of the Program (such as the Program website or mobile apps that allow users to identify
nearby Stations with available Bicycles or available Docks).
1.89 “Participating City” and “Participating Cities” have the meaning given such terms in the
Preamble.
1.90 “Participating City Delay” has the meaning given such term in Section 4.2.
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1.91 “Parties” shall mean MTC and Operator, and “Party” shall mean one of them, as the
context requires. The term “parties” shall mean, collectively, Operator, MTC and the Participating Cities.
1.92 “Payment Breach” has the meaning given such term in Section 15.3.1.
1.93 “Peak Hours” has the meaning given such term in Section 2.6.2(b).
1.94 “Peninsula Pilot Cites” shall mean the cities of Mountain View, Palo Alto and Redwood
City.
1.95 “PII” has the meaning given such term in Section 2.15.
1.96 “Person” shall mean any human being or any association, firm, partnership, joint venture,
corporation, limited liability company, governmental entity or other legally recognized entity, whether for
profit or not for profit.
1.97 “Pilot Cities” has the meaning given such term in the Recitals.
1.98 “Phase” shall mean any one of Phase I, Phase II, Phase III, Phase IV and Phase V, as the
context requires, and Phases shall mean, collectively, Phase I, Phase II, Phase III, Phase IV and Phase V.
1.99 “Phase I” has the meaning given such term in Section 3.4.1.
1.100 “Phase II” has the meaning given such term in Section 3.4.2.
1.101 “Phase III” has the meaning given such term in Section 3.4.3.
1.102 “Phase IV” has the meaning given such term in Section 3.4.4.
1.103 “Phase V” has the meaning given such term in Section 3.4.5.
1.104 “Phase I Stations” has the meaning given such term in Section 3.4.1.
1.105 “Phase II Stations” has the meaning given such term in Section 3.4.2.
1.106 “Phase III Stations” has the meaning given such term in Section 3.4.3.
1.107 “Phase IV Stations” has the meaning given such term in Section 3.4.4.
1.108 “Phase V Stations” has the meaning given such term in Section 3.4.5.
1.109 “PPI” shall mean the Producer Price Index for the United States, as measured by the
Producer Price Index for final demand, as published from time to time by the Bureau of Labor Statistics,
U.S. Department of Labor.
1.110 “PPI Adjustment” shall mean, with respect to a specific cost, that such cost is subject to
annual adjustment each January 1 based on changes in the PPI from the Effective Date to the date of
adjustment.
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1.111 “Program” shall mean Equipment, Sites, website, Backend Software and Computer
Hardware and the Services.
1.112 “Program Area” shall mean the entire area of all Participating Cities.
1.113 “Program Fleet” shall mean the total number of Bicycles required to serve the Program
Area as specified in Section 3.
1.114 “Program Name” has the meaning given such term in Section 10.2.
1.115 “Program Property” shall mean (a) the Equipment, and (b) all relevant licenses and rights
to the Equipment and the Software (excluding Operator Non-Basic Function Software).
1.116 “Program Property Assignment Conditions” shall mean the following: (a) Operator and
the purchaser of the Program Property have agreed on the purchase price for the Program Property, which
shall be based on the fair market value of the Program Property as an installed system at the time of the
purchase, (b) such purchaser has paid Operator the agreed upon purchase price for the Program Property,
and (c) such purchaser and Operator have entered into a license agreement with respect to the Operator
Basic Function Software, which license agreement shall (i) strictly prohibit use of the Operator Basic
Function Software for any other purpose other than the operation of the Program during such purchaser’s
tenure as operator of the Program, (ii) strictly prohibit the sale, lease, license, sublicense or other transfer
of such software, (iii) strictly prohibit any attempt to derive the source code of such software, (iv) strictly
prohibit the development of any derivative software based on such software, and (v) contain such other
customary terms and provisions intended to govern the licensing and use of proprietary software by a
competitor of the licensor to prevent, or limit the risk of, unauthorized use or infringement of such
software by such licensee or any third party, and such other customary terms and provisions intended to
protect the licensor from the licensee or any third party obtaining proprietary information for use by such
licensee or any third party other than the use specifically authorized in such license agreement.
1.117 “Prohibited Advertising” shall mean outdoor advertising that is prohibited by local laws,
regulations or ordinances of the Participating City.
1.118 “Property Damage Breach” has the meaning given such term in Section 15.3.2.
1.119 “Rebalancing” shall mean actions taken by Operator to prevent or rectify Cluster Outages,
subject, however, to Section 2.6.2(b).
1.120 “Recognized Lender” shall mean the holder of a Recognized Loan.
1.121 “Recognized Loan” shall mean any loan that is held by an Institutional Lender.
1.122 “Regular Annual Member” has the meaning given such term in Section 9.2.1.
1.123 “Regular Annual Membership” has the meaning given such term in Section 9.2.1.
1.124 “Renewal Term” has the meaning given such term in Section 2.4.
1.125 “Renewal Condition” has the meaning given such term in Section 2.4.
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1.126 “Replacement Agreement” has the meaning given such term in Section 19.4.
1.127 “Revenue Sharing Credit Period” has the meaning given such term in Section 8.2.4.
1.128 “Ridership Revenue” has the meaning given such term in Section 8.1.2.
1.129 “Ridership Revenue Hurdle” has the meaning given such term in Section 8.1.3.
1.130 “Scheduled Phase I Completion Date” has the meaning given such term in Section 3.4.1.
1.131 “Scheduled Phase II Completion Date” has the meaning given such term in Section 3.4.2.
1.132 “Scheduled Phase III Completion Date” has the meaning given such term in Section 3.4.3.
1.133 “Scheduled Phase IV Completion Date” has the meaning given such term in Section 3.4.4.
1.134 “Scheduled Phase V Completion Date” has the meaning given such term in Section 3.4.5.
1.135 “Scheduled Phase V Plus 90 Days Date” has the meaning given such term in Section 8.2.4.
1.136 “Scheduled Phase Completion Date” shall mean any of the Scheduled Phase I Completion
Date, the Scheduled Phase II Completion Date, the Scheduled Phase III Completion Date, the Scheduled
Phase IV Completion Date or the Scheduled Phase V Completion Date, as the context requires.
1.137 “Security Fund” has the meaning given such term in Section 15.1.
1.138 “Self-Help Situation” has the meaning given such term in Section 15.3.3.
1.139 “Services” shall mean the installation, operation and maintenance of the Stations and the
acquisition, placement, maintenance and rental to users of the Bicycles.
1.140 “Site” shall mean a designated area on publicly or privately owned real property, which
area contains a Station that conforms to the Siting Criteria.
1.141 “Site Permits” shall mean permits for installation of Station-related Equipment at Sites
proposed for Stations (other than Installation Scheduling Permits or Special Traffic Permits).
1.142 “Siting Criteria” has the meaning given such term in the Coordination Agreement.
1.143 “Software” shall means the software and the Equipment it runs on required to operate the
Equipment.
1.144 “Special Traffic Permit” shall mean a permit required if installation of Station-related
Equipment will interfere with pedestrian, bicycle, transit or vehicular traffic in a material respect. The
Special Traffic Permit issued by the San Francisco Municipal Transportation Authority (SFMTA) in
accordance with SFMTA’s Regulations for Working in San Francisco Streets is an example of a Special
Traffic Permit.
1.145 “Sponsor” means a Person contributing payments for the Program in exchange for
acknowledgment of its contribution.
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1.146 “Sponsor Property” has the meaning given such term in Section 10.2.
1.147 “Sponsorship” shall mean an arrangement pursuant to which, in connection with a payment
or payments that will be used to help defray the costs of installing or operating the Program, the Person
contributing such payment or payments is acknowledged by the Parties for such contribution.
1.148 “Sponsorship Revenue” has the meaning given such term in Section 8.1.4.
1.149 “Sponsorship Revenue Hurdle” has the meaning given such term in Section 8.1.5.
1.150 “State” shall mean the State of California.
1.151 “Station” shall mean a Kiosk (subject to Section 6.5), map module, a variable number of
Docks and, when applicable, Street Treatment(s) and Street Markings, designed in accordance with the
Functional Specifications set forth in Appendix D.
1.152 “Station Cleaning” shall mean, at a minimum that the following tasks are performed by
Operator at a Station:
1.152.1 Removal of litter at the Station; and
1.152.2 As needed power washing of the Docks and Street Treatments comprising a
Station and the pavement area on which a Station is situated.
1.153 “Street Marking(s)” shall mean thermoplastic paint markings and/or striping on the
pavement for the express purpose of demarcating a Station.
1.154 “Street Treatments” shall mean the three-dimensional objects used to demarcate the
Station, and protect it from adjacent parking and moving traffic. Such objects may include, but are not
limited to, delineators and wheel stops.
1.155 “Street Treatment Requirements” shall mean a Participating City’s requirements with
respect to Street Treatments as set forth in the Siting Criteria for such Participating City.
1.156 “Term” has the meaning given such term in Section 2.2.
1.157 “Title Sponsor” shall mean Operator’s system-wide Sponsor for the entire Program.
1.158 “Tobacco Advertising” shall mean Advertising or Sponsorship that bears a health warning
required by federal statute, the purpose or effect of which is to identify a brand of a tobacco product (any
substance that contains tobacco, including, but not limited to, cigarettes, cigars, pipe tobacco and chewing
tobacco), a trademark of a tobacco product or a trade name associated exclusively with a tobacco product,
or to promote the use or sale of a tobacco product.
1.159 “Trips” shall mean the use of a Bicycle from one Station to another Station or back to the
initial Station.
1.160 “Vendor” shall mean the company selected by Operator to provide the Software (other
than the Operator Software).
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1.161 “Wayfinding Elements” shall mean the maps posted on every Station, showing the location
of each Station.
1.162 “Wrench” shall mean the action of locking a Bicycle in a Dock such that it cannot be
released by Program users pending action by Operator.
SCOPE OF SERVICES
2.1 General Requirements. Operator shall (a) provide the Services in conformance with the
terms of this Agreement, (b) provide all of the Equipment and Software required to operate the Program,
(c) procure all of the relevant licenses and rights to use the Equipment and Software to operate the
Program, (d) procure all licenses and permits from applicable governmental agencies that are required to
provide the Services from all applicable governmental agencies, and (e) comply with all applicable laws,
rules and regulations of the United States, the State and the Participating Cities.
2.2 Initial Term. The term (the “Term”) of this Agreement shall commence on the Effective
Date and shall end on the last day of the calendar month in which the 10th anniversary of the earlier of (a)
the date that Phase I is completed, and (b) the Agreed Phase I Completion Date occurs (the “Initial
Term”), subject to Section 2.3.
2.3 Reduction of Initial Term. If Operator does not complete 75% of Phase I, Phase II, Phase
III, or Phase IV by the Agreed Phase I Completion Date, the Agreed Phase II Completion Date, the
Agreed Phase III Completion Date, the Agreed Phase IV Completion Date, respectively, or 100% of
Phase V by the Agreed Phase V Completion Date, then MTC shall have the right, by notice to Operator
given with 60 days of the respective missed Completion Date, to reduce the Initial Term by 5 years,
subject to the rights of the Recognized Lender set forth in Section 19.5. In addition, if on the 4th
anniversary of the earlier of (a) the date that Phase I is completed, and (b) the Agreed Phase I Completion
Date, a Default exists under Section 18.1.5, then MTC shall have the right, by notice to Operator given
with 60 days of such 4th anniversary, to reduce the Initial Term by 5 years, subject to the rights of the
Recognized Lender set forth in Section 19.5. Any amounts due pursuant to Section 8.2 shall be due
within 120 days after expiration of the Term as reduced pursuant to this Section 2.3.
2.4 Renewal Term. If the Initial Term has not been reduced pursuant to Section 2.3 and
Operator is in substantial compliance with the terms of this Agreement one year prior to the expiration of
the then current Term (the “Renewal Condition”), then, upon mutual agreement of the Parties, the Term
may be extended for 2 5-year renewals terms (each a “Renewal Term”) on substantially equivalent terms
applicable to the Initial Term. Subject to Operator’s satisfaction of the Renewal Condition and the mutual
agreement of the Parties to extend the Term, MTC and Operator shall engage in good faith negotiations
on a mutually acceptable agreement for each Renewal Term commencing one year prior to the expiration
of the then current Term with the goal of the Parties entering into an agreement for the respective
Renewal Terms prior to the commencement of each Renewal Term. Until such agreement is entered into
for the initial Renewal Term, this Agreement shall govern the relationship between the Parties, and until
such agreement is entered into for the second Renewal Term, the agreement for the initial Renewal Term
shall govern the relationship between the Parties.
203193300.19 -14-
2.5 Non-Renewal. Notwithstanding anything to the contrary contained in Section 2.4,
Operator has the right not to renew the Term for either Renewal Term by notice given to MTC not later
than 6 months prior to the expiration of the then current Term. If Operator gives MTC a non-renewal
notice in accordance with the preceding sentence, then this Agreement shall end upon the expiration of
the then current Term.
2.6 Services.
2.6.1 Subject to Events of Force Majeure, following completion of Phase I, Operator shall
operate the Program so that it is fully operational at all Stations, consistent with the
Key Performance Indicators as set forth in Appendix A, 24 hours per day, seven days
per week, every day of each year, during the Term.
2.6.2 Adjustments to KPIs.
(a) KPIs in General. Notwithstanding anything to the contrary, if at any time
and from time to time either Party in good faith believes that the KPIs should be updated, including by
amending, supplementing or replacing them, (a) on account of technological developments incorporated
into the Program by Operator, or (b) because the Party seeking changes believes the KPIs are ineffective,
or not as effective as the KPIs could be, in strengthening the Program, the customer experience, and
Operator’s performance, then the Party seeking changes to the KPIs shall submit proposed changes to the
KPIs together with an explanation of how the proposed changes would address the deficiencies in the then
existing KPIs (“KPI Change Request”). Within 10 business days thereafter, the other Party shall either
accept the KPI Change Request in writing, or reject the KPI Change Request along with the reasons for
the rejection. In the case of such rejection, at the request of the Party submitting the KPI Change Request,
the matter will be referred to discussion in accordance with Section 23.1.1, except the matter will not be
subject to mediation in accordance with Section 23.1.2. If the matter is not resolved within 30 business
days of the KPI Change Request, the KPIs shall not be changed pursuant to the KPI Change Request. In
lieu of rejecting or accepting a proposed KPI change, the Parties may agree to test trials to test proposed
changes and then defer any decision until the conclusion of the trial period.
(b) Rebalancing. It is the objective of Operator to maximize the utility of the
Program and the customer experience at all times, but particularly during the hours between 6:00 AM and
10:00 PM (“Peak Hours”), in a cost effective manner. Maximizing utility requires that Operator take
affirmative steps to address severe imbalances in the demand for and supply of available Bicycles and
empty Operable Docks during Peak Hours, which imbalances typically arise from patterns in demand and
usage in which Bicycles typically travel in one direction. Operator’s objective is to minimize instances,
and minimize the duration of those instances, in a cost effective manner, when the demand for an empty
Operable Dock or an available Bicycle at a Station is not met by the available supply at that Station.
Achieving this objective is a multistep and collaborative process requiring the involvement, cooperation
and flexibility on the part of Operator, MTC and the Participating Cities. To achieve this objective,
during the period commencing upon the completion of Phase I and ending 6 months after the completion
of Phase V (the “Assessment Period”), the parties will (i) observe demand and use patterns as the Program
is being implemented to identify the times and locations that a shortage of empty Operable Docks and/or a
shortage of available Bicycles arises and the extent of the shortages at those time and locations; and (ii)
assess alternative approaches to alleviating outages, including, by way of example, by (A) enlarging
existing Stations or adding new Stations in areas in which there is a shortage, (B) finding and utilizing
storage areas located near Stations that experience Bicycle shortages so that additional Bicycles can be
203193300.19 -15-
deployed quickly, (C) prioritizing Stations by demand and time of demand so that Operator may, at any
particular time, focus more attention on those Stations with the highest demand at that time and less
attention on those Stations with weaker demand at that time and have greater flexibility to address those
Stations with weaker demand, and (D) identifying the optimal time of day for Operator to transport
Bicycles from areas in which there is a shortage of empty Operable Docks to areas in which there is a
shortage of Bicycles, which optimality will take into account when it is most efficient for Operator to
transport the Bicycles in order to meet the anticipated demand at the transferee Stations. As the parties
are developing approaches to alleviating outages during the Assessment Period, the parties shall also
reformulate a commercially reasonable KPI for Rebalancing. While Operator will strive to reduce and
eliminate Cluster Outages at all times commencing on the completion of a Phase, liquidated damages for
the Rebalancing KPI will not be assessed for any Phase until 6 months after the completion of such Phase.
The Rebalancing KPI will be refined and reformulated during the Assessment Period, and the KPI, as
refined and reformulated, will be fully implemented and effective immediately after the end of the
Assessment Period. The parties recognize that as patterns of use and demand, as well as levels of use and
demand, change from and after the Assessment Period, different outages may arise, which will also need
to be addressed in the manner set forth above.
2.6.3 Subject to Events of Force Majeure, if Operator fails to comply with the KPIs,
Operator shall be required to pay MTC liquidated damages as calculated in Appendix
A, provided that the maximum aggregate liquidated damages payable by Operator in
any calendar year for failure to comply with the KPIs is 4% of Ridership Revenue for
such calendar year.
(a) MTC is entitled to liquidated damages for failure of Operator to comply with
the KPIs by notice (a “KPI Failure Notice”) given to Operator (i) not more
frequently than once per quarter, and (ii) not later than 120 days after the
occurrence of the related failure, except with respect to the failure to comply
with a KPI that is measured on an annual basis, for which the KPI Failure
Notice shall be given by March 31 of the following calendar year. Each KPI
Failure Notice shall provide specific and detailed information about the failure
to comply and the amount of the liquidated damages due in connection
therewith.
(b) Prior to the later of (a) 30 days after Operator’s receipt of a KPI Failure Notice
and (b) the end of the calendar quarter in which such KPI Failure Notice is
given (the later of (a) and (b) being the “KPI LD Payment Date”), Operator
shall either pay the full amount of liquidated damages set forth in the KPI
Failure Notice or 50% of such amount along with a notification to MTC that
Operator seeks to contest, in good faith, the assessment of the liquidated
damages (a “KPI Contest Notice”). The KPI Contest Notice shall provide
specific and detailed information that rebuts or challenges the information
contained in the corresponding KPI Failure Notice. After a KPI Contest Notice
is given, any disputes relating to the subject matter of the KPI Failure Notice
and the KPI Contest Notice shall be resolved in accordance with the Dispute
Resolution Process.
(c) If Operator does not timely give a KPI Contest Notice in response to a KPI
Failure Notice, then interest on the liquidated damages set forth in the KPI
203193300.19 -16-
Failure Notice shall accrue at the Applicable Interest Rate in effect from time to
time commencing on the KPI LD Payment Date. If Operator does timely give a
KPI Contest Notice in response to a KPI Failure Notice and the Dispute
Resolution Process results in Operator being required to pay liquidated
damages, then Operator shall make such payment within 30 days following the
date that the liquidated damages dispute is resolved in accordance with the
Dispute Resolution Process, and interest on the liquidated damages shall accrue
at the Applicable Interest Rate in effect from time to time commencing on such
30th date.
2.7 [INTENTIONALLY OMITTED]
2.8 Ownership of Equipment. Except as provided in Sections 3.2 and 3.3, all Equipment shall
at all times be the property of Operator, subject to the lien thereon by any Recognized Lender.
2.9 Costs of Program.
2.9.1 Except as otherwise provided, each party shall bear its own costs in connection with
the Program, if such costs are applicable, including, but not limited to, costs incurred in
connection with: negotiating this Agreement and the Coordination Agreement and
preparing the Siting Criteria; Site selection; the review required for issuance of Site
Permits, Installation Scheduling Permits, Special Traffic Permits and other permits;
Equipment installation; exercising enforcement, inspection and audit rights;
prosecuting or defending claims arising from the Program, and marketing, to the extent
that MTC and/or the Participating Cities choose to undertake marketing.
2.9.2 Except as otherwise provided in Section 2.9.3, MTC and the Participating Cities shall
not be obligated to pay or bear any of the costs associated with or expenses incurred for
the Equipment, Software, or Services.
2.9.3 Each Participating City may elect, if additional incremental dedicated capital and
operating funds becomes available for the Program, to expand the Program within its
borders by adding Stations, Docks and Bicycles, provided that such Participating City
shall be responsible for securing funds to pay for the cost of purchasing, installing,
maintaining and operating the Equipment required for such expansion as set forth in
Appendix A of the Coordination Agreement.
2.9.4 Operator shall reimburse a Participating City for any other work performed by such
Participating City under this Agreement in furtherance of the Program, provided that
prior to performing such work such Participating City shall notify Operator that such
work will be performed at the expense of Operator, such Participating City provides an
itemized invoice for any such work, and Operator is billed for the actual cost incurred
by such Participating City without a markup or premium. Operator shall pay for such
work within 30 days following receipt of the itemized invoice therefor. In connection
with the installation of a Station, such other work may include, but is not limited to, (i)
any necessary changes to signs, parking meters and curb paint, and (ii) installation of
any striping, delineators or parking blocks outside the perimeter of a Station if the
foregoing items are not installed by Operator.
203193300.19 -17-
2.10 Use of Data. All data generated by the Program will be owned by Operator. Operator will
grant MTC and the Participating Cities a non-exclusive, royalty-free, irrevocable, perpetual license to use
all data generated by the Program, other than personally-identifiable information that can identify
individual users, their addresses, their credit card information and other personal information about users,
for non-commercial purposes and on a real-time basis; and MTC and each of the Participating Cities shall
have the right to grant to others a sublicense to use all such data for non-commercial purposes.
2.11 [INTENTIONALLY OMITTED]
2.12 [INTENTIONALLY OMITTED]
2.13 No Discrimination. Operator shall not discriminate in the implementation of the Program
or in the provision of Services on the basis of race, creed, color, national origin, sex, age, marital status, or
real or perceived sexual orientation.
2.14 Accessibility. In implementing and operating the Program, Operator shall comply with all
applicable requirements of the Americans with Disabilities Act, Section 508 of the Rehabilitation Act of
1973 and all other applicable federal, state and local requirements relating to persons with disabilities,
including any rules or regulations promulgated thereunder. Such compliance shall extend to the location
and design of Equipment as well as the Program’s website and any mobile application for the Program.
2.15 Personally Identifiable Information (“PII”). All PII obtained or maintained by Operator in
connection with this Agreement shall be protected by Operator from unauthorized use and disclosure.
This includes, but is not limited to, the secure transport, transmission and storage of PII used or acquired
in the performance of this Agreement. Operator agrees to properly secure and maintain any computer
systems (hardware and software applications) or electronic media that it will use in the performance of
this Agreement. This includes ensuring all security patches, upgrades, and anti-virus updates are applied
as appropriate to secure PII that may be used, transmitted, or stored on such systems in the performance of
this Agreement. Operator agrees to comply with the information handling and confidentiality
requirements outlined in the California Information Practices Act (Civil Code sections 1798 et.seq.). In
addition, Operator warrants and certifies that in the performance of this Agreement, it will comply with all
applicable statutes, rules, regulations and orders of the United States and the State of California relating to
the handling and confidentiality of PII and, as provided in Section 16, agrees to indemnify MTC against
any loss, cost, damage or liability by reason of Operator’s violation of this provision.
2.16 Notwithstanding anything to the contrary contained herein or in the Coordination
Agreement, as of the Effective Date, (a) the City of Berkeley and the City of Oakland have not completed
the approval processes necessary for such cities to execute the Coordination Agreement and for the
Coordination Agreement to be effective as to such cities, (b) neither such city is a Participating City, and
(c) the Coordination Agreement and this Agreement do not apply to such cities. Upon completion by
each such city of its approval processes, including the adoption by each such city of a franchise ordinance
as referenced in Sections 29.1 and 32.4 of the Coordination Agreement, and the execution by each such
city of the Coordination Agreement, the Coordination Agreement shall thereupon be effective as to such
city, each such city shall thereupon be a Participating City under this Agreement and Coordination
Agreement, which agreements shall thereupon apply to such city, and the Program Area shall thereupon
be expanded to encompass the entirety of such city (the date thereof, as to Berkeley, being the “Berkeley
Effective Date,” and, as to Oakland, being the “Oakland Effective Date”). If either or both of such cities
does not approve the execution of the Coordination Agreement, then the Parties shall make appropriate
203193300.19 -18-
amendments to this Agreement and the Coordination Agreement to reflect the removal of such city or
cities, as applicable, from the Program. In addition, the Parties are anticipating that the Berkeley
Effective Date will occur in February, 2016 and the Oakland Effective Date will occur in March, 2016. If
either such date does not occur until after March 31, 2016, then the Parties shall amend Sections 3.4 and
4.2 to make appropriate adjustments to the timing of the Program.
PROGRAM AREA AND EXPANSION; PROGRAM SIZE; PROGRAM TIMING
3.1 Program Area. As of the Effective Date, the Program Area encompasses the entirety of the
cities of Emeryville, San Francisco and San Jose. The Program Area shall also encompass the entirety of
the City of Berkeley as of the Berkeley Effective Date and the entirety of the City of Oakland as of the
Oakland Effective Date.
3.2 Program Area Expansion. Following expiration of the Pilot Program, each of the
Peninsula Pilot Cities may elect, by notice to Operator, to continue the bike share program in such
Peninsula Pilot City, provided that the Peninsula Pilot Cities shall be responsible for paying the cost of
upgrading, purchasing, installing, maintaining and operating the Equipment in accordance with the
schedule applicable to the Peninsula Pilot Cities set forth in Appendix B. Following the completion of
Phase V, the other Eligible Cities may elect, by notice to Operator, to develop a bike share program in the
Eligible Cities, provided that the other Eligible Cities shall be responsible for paying the cost of
purchasing, installing, maintaining and operating the Equipment in accordance with the schedule
applicable to the other Eligible Cities set forth in Appendix B. Operator shall be required to maintain the
Equipment purchased by an Electing City in a state of good repair throughout the Term, and at the end of
the Term, Operator shall return such Equipment to the Electing City in good working order but subject to
reasonable wear and tear from use and subject to loss and damage caused directly by users. Each Electing
City shall enter into with Operator a separate service agreement to establish the number of Stations,
Docks and Bicycles for such city, and the schedule for installation of the Equipment for such city, which
agreement will also address, among other matters, (i) Siting Criteria, the Site selection process, Street
Treatment Requirements, the protocols and procedures for the submission and review of applications and
the issuance of permits and approvals, and the Electing City’s requirements with respect to each of the
foregoing, (ii) De-installations, Adjustments and Deactivations, and (iii) advertising and sponsorship.
3.3 Program Size. The Program Fleet for Phases I through V is 7,000 to 7,055, allocated
among the Participating Cities as follows:
3.3.1 4,500 in San Francisco;
3.3.2 1,000 in San Jose;
3.3.3 1,400 in East Bay, as follows:
(a) 850 in Oakland
(b) 100 in Emeryville
(c) 400 in Berkeley
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(d) 50 to be determined based on additional system planning analysis;
3.3.4 If Palo Alto elects to participate in the Program, 37 Bicycles will be distributed to Palo
Alto; if Mountain View elects to participate in the Program, 59 Bicycles will be
distributed to Mountain View; and if Redwood City elects to participate in the
Program, 59 Bicycles will be distributed to Redwood City; if the sum of the Bicycles
to be distributed to the Peninsula Pilot Cities that elect to participate in the Program is
less than 100, then Operator will distribute in San Francisco, San Jose and East Bay an
additional number of Bicycles equal to the difference between 100 and such sum; and
if none of the Peninsula Pilot Cities elect to participate in the Program, then Operator
will distribute an additional 100 Bicycles in San Francisco, San Jose and East Bay.
3.3.5 The minimum number of Stations in the Participating Cities is 500.
3.4 Program Timing. The schedule for Operator to obtain Site Permits and to install the
Equipment is as follows:
3.4.1 Phase I. Operator shall submit to the Participating Cities complete applications for
Site Permits for Stations containing 25% of the total Bicycles for San Jose, East Bay
and San Francisco (the “Phase I Stations”) by the date that is 5 months after the
Effective Date, such date being subject to extension by Events of Force Majeure or by
Participating City Delay (such date, as it may be so extended, being the “Agreed Phase
I Site Permit Submission Date”). Operator shall not be obligated to commence
installation of fully functional and operational Bicycles and related Equipment at such
Sites until the date that is 5 months after the issuance by the Participating Cities of Site
Permits for 75% of the Phase I Stations and shall complete such installation for all such
Sites by the date that is 5 months after the issuance by the Participating Cities of Site
Permits for the remainder of such Stations, such date being subject to extension by
Events of Force Majeure or by Participating City Delay (such date, as it may be so
extended, being the “Agreed Phase I Completion Date”; the installation of the
percentage of total Bicycles and related Equipment as required by this paragraph being
“Phase I”). Any AD Equipment that is acquired by Operator will count toward the
Bicycles and related Equipment required for Phase I. Based on the schedule set forth
in this paragraph, the objective of the Parties is for Operator to complete Phase I by the
date that is 10 months after the Effective Date (such date being the “Scheduled Phase I
Completion Date”). Notwithstanding anything to the contrary contained in this
Agreement, if Operator fails to submit to the Participating Cities complete applications
for Site Permits for 75% of the Phase I Stations by the date that is 30 days after the
Agreed Phase I Site Permit Submission Date, or if Operator fails to place a purchase
order, taking into account AD Equipment to be used by Operator, for 75% of the Phase
I Bicycles and 75% of the Phase I Stations, by the date that is 30 days after the issuance
by the Participating Cities of Site Permits for 75% of the Phase I Stations, then as the
sole remedy of MTC and the Participating Cities under this Agreement for such
failures, MTC shall have the right to terminate this Agreement upon 10 days’ notice to
Operator without any further right of Operator or any Recognized Lender to remedy
such failure. Operator shall provide evidence of such purchase order reasonably
promptly following a request by MTC.
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3.4.2 Phase II. Operator shall submit to the Participating Cities complete applications for
Site Permits for Stations containing an additional 15% of the total Bicycles for San
Jose, East Bay and San Francisco (the “Phase II Stations”) by the date that is 9 months
after the Effective Date, such date being subject to extension by Events of Force
Majeure or by Participating City Delay (such date, as it may be so extended, being the
“Agreed Phase II Site Permit Submission Date”). Operator shall not be obligated to
commence installation of fully functional and operational Bicycles and related
Equipment at such Sites until the date that is 5 months after the issuance by the
Participating Cities of Site Permits for 75% of the Phase II Stations and shall complete
such installation for all such Sites by the date that is 5 months after the issuance by the
Participating Cities of Site Permits for the remainder of such Stations, such date being
subject to extension by Events of Force Majeure or by Participating City Delay (such
date, as it may be so extended, being the “Agreed Phase II Completion Date”; the
installation of the percentage of total Bicycles and related Equipment as required by
this paragraph being “Phase II”). Based on the schedule set forth in this paragraph, the
objective of the Parties is for Operator to complete Phase II by the date that is 14
months after the Effective Date (such date being the “Scheduled Phase II Completion
Date”).
3.4.3 Phase III. Operator shall submit to the Participating Cities complete applications for
Site Permits for Stations containing the remaining 60% of the total Bicycles for East
Bay (the “Phase III Stations”) by the date that is 12 months after the Effective Date,
such date being subject to extension by Events of Force Majeure or by Participating
City Delay (such date, as it may be so extended, being the “Agreed Phase III Site
Permit Submission Date”). Operator shall not be obligated to commence installation of
fully functional and operational Bicycles and related Equipment at such Sites until the
date that is 5 months after the issuance by the Participating Cities of Site Permits for
75% of the Phase III Stations and shall complete such installation for all such Sites by
the date that is 5 months after the issuance by the Participating Cities of Site Permits
for the remainder of such Stations, such date being subject to extension by Events of
Force Majeure or by Participating City Delay (such date, as it may be so extended,
being the “Agreed Phase III Completion Date”; the installation of the percentage of
total Bicycles and related Equipment as required by this paragraph being “Phase III”).
Based on the schedule set forth in this paragraph, the objective of the Parties is for
Operator to complete Phase III by the date that is 17 months after the Effective (such
date being the “Scheduled Phase III Completion Date”).
3.4.4 Phase IV. Operator shall submit to the Participating Cities complete applications for
Site Permits for Stations containing an additional 30% of the total Bicycles for San
Jose and San Francisco (the “Phase IV Stations”) by the date that is 16 months after the
Effective Date, such date being subject to extension by Events of Force Majeure or by
Participating City Delay (such date, as it may be so extended, being the “Agreed Phase
IV Site Permit Submission Date”). Operator shall not be obligated to commence
installation of fully functional and operational Bicycles and related Equipment at such
Sites until the date that is 5 months after the issuance by the Participating Cities of Site
Permits for 75% of the Phase IV Stations and shall complete such installation for all
such Sites by the date that is 5 months after the issuance by the Participating Cities of
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Site Permits for the remainder of such Stations, such date being subject to extension by
Events of Force Majeure or by Participating City Delay (such date, as it may be so
extended, being the “Agreed Phase IV Completion Date”; the installation of the
percentage of total Bicycles and related Equipment as required by this paragraph being
“Phase IV”). Based on the schedule set forth in this paragraph, the objective of the
Parties is for Operator to complete Phase IV by the date that is 20 months after the
Effective Date (such date being the “Scheduled Phase IV Completion Date”).
3.4.5 Phase V. Operator shall submit to the Participating Cities complete applications for
Site Permits for Stations containing 30% of the total Bicycles for San Jose and San
Francisco (the “Phase V Stations”) by the date that is 22 months after the Effective
Date, such date being subject to extension by Events of Force Majeure or by
Participating City Delay (such date, as it may be so extended, being the “Agreed Phase
V Site Permit Submission Date”). Operator shall not be obligated to commence
installation of fully functional and operational Bicycles and related Equipment at such
Sites until the date that is 5 months after the issuance by the Participating Cities of Site
Permits for 75% of the Phase V Stations and shall complete such installation for all
such Sites by the date that is 5 months after the issuance by the Participating Cities of
Site Permits for the remainder of such Stations, such date being subject to extension by
Events of Force Majeure or by Participating City Delay (such date, as it may be so
extended, being the “Agreed Phase V Completion Date”; the installation of the
percentage of total Bicycles and related Equipment as required by this paragraph being
“Phase V”). Based on the schedule set forth in this paragraph, the objective of the
Parties is for Operator to complete Phase V by the date that is 26 months after the
Effective Date (such date being the “Scheduled Phase V Completion Date”).
3.5 Failure to Achieve Completion of any Phase. Notwithstanding anything to the contrary in
this Agreement, for the avoidance of doubt, the sole remedy of MTC and the Participating Cities against
Operator under this Agreement for Operator’s failure to complete Phases I, II, III, IV or V by the Agreed
Phase I Completion Date, the Agreed Phase II Completion Date, the Agreed Phase III Completion Date,
the Agreed Phase IV Completion Date, and the Agreed Phase V Completion Date, respectively, is to
reduce the Initial Term pursuant to Section 2.3, subject to the rights of the Recognized Lender.
3.6 Pilot Program. Attachment A sets forth the terms and conditions pursuant to which MTC
and Operator have agreed that Operator will continue operation of the Pilot Program.
SITING
4.1 General. The Coordination Agreement, together with the Siting Criteria, sets forth, among
other matters, (a) the Siting Criteria and the Site selection process for determination and approval of
locations of the Stations in each Participating City, and (b) the protocols and procedures for the
submission materials by Operator to each Participating City for, and the issuance by the Participating City
of, Site Plan approvals and permits to install the Equipment at each Station.
203193300.19 -22-
4.2 Delays in Approval: The following constitute delay (“Participating City Delay”) for which
Operator is entitled to an extension in the Agreed Site Permit Submission Dates and the Agreed
Completion Dates:
4.2.1 Identification of Sites. If, notwithstanding fulfillment of Operator’s obligations under
the Coordination Agreement regarding community engagement, field work and
outreach, Operator fails to identify, by a date that is not less than 2 months prior to the
Agreed Site Permit Submission Date for a Phase, 75% of the Sites required for such
Phase, such Sites being both viable and acceptable to the Participating Cities and the
applicable communities, or Operator fails to identify, by a date that is not less than 1
month prior to such Agreed Site Permit Submission Date, the remaining 25% of the
Sites required for such Phase, such Sites being both viable and acceptable to the
Participating Cities and the applicable communities, then such Agreed Site Permit
Submission Date shall be extended by any reasonably necessary additional period
required by Operator to identify a sufficient number of viable and acceptable Sites for
such Phase.
4.2.2 Issuance of Site Permits. If Operator timely submits complete applications for the Site
Permits for any Phase by the applicable Agreed Site Permit Submission Date but the
Participating Cities fail to issue Site Permits for 75% of the Stations by the date that is
3 months prior to the Scheduled Phase Completion Date for such Phase other than on
account of errors or omissions by Operator or valid reasons for denial, then such failure
shall constitute Participating City Delay and Operator shall have the right to delay
submission of applications for Site Permits for the next following Phase until a
reasonable period after the Participating Cities issue Site Permits for 75% of the
Stations for such Phase.
4.2.3 Installation Scheduling Permits. If the period of time for the Participating Cities to
issue Installation Scheduling Permits exceeds, on average, 7 days after final submission
of the required materials by Operator, or if more than 25% of the Installation
Scheduling Permits are issued 14 days or longer after final submission of the required
materials, other than on account of errors or omissions by Operator or valid reasons for
denial, then the Agreed Completion Dates shall be extended to reflect any reasonably
necessary additional period required by Operator to complete the Phases.
RESERVED
IMPROVEMENTS, MAINTENANCE, REPAIR AND OPERATION
6.1 Operator shall establish and maintain during the Term prompt and efficient procedures for
handling complaints from the public for which Operator receives a Notification. Such procedures shall be
consistent with all applicable laws, rules and regulations and the provisions of this Section. Such
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procedures shall be set forth in writing and copies thereof shall be maintained at Operator’s office and
shall be available to the public and the Participating Cities upon request.
6.2 Operator will operate a primary call center that will answer calls in person 24 hours per
day, 7 days per week. Operator shall conspicuously post a notice on each Station and each bicycle
advising the general public that they may direct their complaints and comments to Operator’s call center.
Such call center shall have a full-time availability to handle calls in English, Spanish and Cantonese,
whether by in-house staff or by utilization of a translation service.
6.3 Operator shall maintain written, accurate and complete records of all complaints, and those
records shall be available to MTC through appropriate Software or, at MTC’s reasonable advance request,
in written form. Such records shall indicate: (i) the specific Equipment, including its identifying number
and location at a specific point in time, for which the complaint was made; (ii) the type of complaint;
(iii) the date and time of complaint; (iv) if the complaint is in written form (non-electronic) and the
information is available, the name, address, and telephone number of the Person filing the complaint;
(v) Operator’s action to address the complaint; and (vi) to the extent applicable, the date of resolution of
the complaint. All such records shall be retained by Operator throughout the Term. Within 7 business
days following a request by MTC, Operator shall provide MTC with records of complaints by location or
time period, and statistical reports by type of complaint, location of complaint, Station or Bicycle, and
time of complaint.
6.4 Following the Effective Date, MTC may, at its option, request that Operator provide it with
a full inventory of Bicycles, including numbers and dates of lease or purchase.
6.5 Operator may, without incurring any liquidated damages or causing a default hereunder,
(a) shut down the Program or reduce the number of Bicycles and Stations deployed and/or operating in
the Program Area for weather-related or other emergencies for the duration of the emergency in its
reasonable discretion, (b) reduce the number of Bicycles and Stations deployed and/or operative in the
Program Areas as needed to implement upgrades to the Functional Specifications, and (c) phase-out
Kiosks when they have become obsolete on account of the availability and usage of mobile phone apps.
6.6 Operator shall incorporate Wayfinding Elements on each Station as directed and approved
by MTC with input from the Participating Cites.
6.7 Nothing in this Agreement shall limit Operator’s right to upgrade the Functional
Specifications.
ADVERTISING AND SPONSORSHIP
7.1 Operator is responsible for identifying Sponsors and developing branding for the Program
tied to the Sponsors. In no event shall any Sponsor of Operator produce or sell alcohol products, tobacco
products, firearms, other products banned by the Participating Cities or products otherwise deemed
offensive to the general public. MTC, in consultation with the Participating Cities, shall provide written
approval to Operator prior to Operator entering into a Sponsorship agreement with the Title Sponsor,
which approval shall not to be unreasonably withheld or delayed. If MTC declines to give consent or
203193300.19 -24-
approval referred to hereunder, it will so advise Operator and provide Operator an opportunity to discuss
with MTC and an opportunity to attempt to meet MTC’s objections.
7.2 Operator shall not install, or permit to be installed, on any Equipment, any Tobacco
Advertising, Alcohol Advertising, Firearms Advertising or other Prohibited Advertising. Advertising on
any Equipment, including electronic media, shall be consistent with guidelines adopted by each
Participating City for outdoor advertising as set forth in this Agreement. Operator shall not place any
Advertising or Sponsorship acknowledgment matter that is indecent, in obvious bad taste, or demonstrates
a lack of respect for public morals or conduct. (The prohibitions and restrictions in this Section 7 and in
Section 29 of the Coordination Agreement are referred to collectively as the “Advertising Restrictions”.)
7.3 Operator shall comply with all applicable laws, rules and regulations in force as of the
Effective Date and which may hereafter be adopted, to the extent not grandfathered under the law, with
respect to Advertising and Sponsorship.
7.4 Neither MTC nor any Participating City shall have any liability or obligation with regard
to any Advertising or Sponsorship that survives the termination or expiration of this Agreement, except
MTC and the Participating Cities, at no cost to MTC or the Participating Cities, shall cooperate with the
Recognized Lender to keep the Sponsorship agreement in effect while a replacement operator is being
pursued and will continue to cooperate if a replacement operator is selected.
REVENUE SHARING
8.1 Definitions.
8.1.1 “Contract Year” shall mean (a) the period commencing on the Agreed Phase I
Completion Date and ending on December 31 of the calendar year in which the Agreed
Phase I Completion Date falls, which period shall constitute Contract Year 1, and (b)
each subsequent calendar year during the Term, the first of which is Contract Year 2
8.1.2 “Ridership Revenue” shall mean all revenues to the extent actually collected by
Operator as determined on a GAAP basis as Program membership or user payments
(including but not limited to annual, weekly and daily membership payments), and any
other Program revenue generated through Bicycle ridership, net of sales taxes or other
taxes imposed by law that Operator is obligated to collect and net of credit card fees
netted out of amounts due to Operator by the credit company prior to payment to
Operator and other billing related charges treated by the party imposing such charges in
a similar manner.
8.1.3 “Ridership Revenue Hurdle” shall mean $18,000,000 per calendar year, subject to CPI
Adjustment. The Ridership Revenue Hurdle shall be prorated for any Contract Year
that is not 365 days.
8.1.4 “Sponsorship Revenue” shall mean all revenues to the extent actually collected by
Operator as determined on a GAAP basis as a result of Program advertising and
sponsorships, including without limitation revenue generated in connection with (a)
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naming rights related to the Program and (b) Sponsorship or Advertising placements on
Bicycles, Stations, Equipment, website, mobile applications or other physical or web-
based materials, net of sales taxes or other taxes imposed by law that Operator is
obligated to collect and net of credit card fees and other billing related charges.
8.1.5 “Sponsorship Revenue Hurdle” shall mean $7,000,000 per calendar year, subject to
CPI Adjustment. The Sponsorship Revenue Hurdle shall be prorated for any Contract
Year that is not 365 days.
8.2 Within 120 days following the end of each Contract Year during the Term, Operator shall:
8.2.1 Deliver to the MTC a schedule, certified by a senior officer of Operator, setting forth
the Ridership Revenue and the Sponsorship Revenue for such Contract Year; and
8.2.2 Pay to MTC an amount equal to 5% of the excess of Ridership Revenue for such
Contract Year over the Ridership Revenue Hurdle for such Contract Year, subject to
Section 8.2.4.
8.2.3 Pay to MTC an amount equal to 5% of the excess of Sponsorship Revenue for such
Contract Year over the Sponsorship Revenue Hurdle for such Contract Year, including
all Sponsorship Revenue for the period between the Effective Date and Contract Year
1, provided that Operator may defer payment of any amount owed for Sponsorship
Revenue for Contract Years 1 through 5 during the Term until Contract Years 6
through 10 during the Term, subject to Section 8.2.4. Operator shall pay any amounts
so deferred in equal monthly instalments during Contract Years 6 through 10 during
the Term. If the Term is reduced pursuant to Section 2.3, then Operator shall pay the
amounts so deferred within 120 days following the expiration of this Agreement.
8.2.4 Notwithstanding anything to the contrary herein, if Participating City Delay results in
an insufficient number of Site approvals for Operator to accommodate 500 Stations
(being the minimum number of Stations identified in Section 3.4) by the Scheduled
Phase V Completion Date plus 90 days (the “Scheduled Phase V Plus 90 Days Date”),
then in lieu of MTC’s share of Ridership Revenue and Sponsorship Revenue being
determined in accordance with the 5% amount set forth in Sections 8.2.2 and 8.2.3,
such percentage shall be reduced to the product of 5% and a fraction whose numerator
is the number of Stations for which a Site approval has been issued by such date and
whose denominator is 500, and such reduced amount shall apply retroactively and
prospectively until Site approvals for an aggregate of 500 Stations have been issued.
Any amounts theretofore paid by Operator to MTC under this Section 8.2 in excess of
such amount due to MTC shall be credited against amounts thereafter payable to MTC
under this Section 8.2. Notwithstanding the foregoing, if at any time during the period
commencing on the Scheduled Phase V Plus 90 Days Date and ending on the date on
which Site approvals for an aggregate of 500 Stations have been issued (such period
being the “Revenue Sharing Credit Period”) the Ridership Revenue or the Sponsorship
Revenue is less than the Ridership Revenue Hurdle or the Sponsorship Revenue
Hurdle, respectively, then Operator shall be entitled to a credit against amounts
thereafter payable to MTC under this Section 8.2 equal to the sum of (a) the product of
(i) the amount by which the Ridership Revenue Hurdle for such period exceeds the
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Ridership Revenues during such period, and (ii) the amount by which the percentage
above has been reduced from 5% in accordance with the reduction set forth on the first
sentence of this paragraph, and (b) the product of (i) the amount by which the
Sponsorship Revenue Hurdle for such period exceeds the Sponsorship Revenues
during such period, and (ii) the amount by which the percentage above has been
reduced from 5% in accordance with the reduction set forth on the first sentence of this
paragraph. If the Revenue Sharing Credit Period is less than one year, then the
calculations in the preceding sentence shall be pro-rated based on the duration of the
Revenue Sharing Credit Period. If the Revenue Sharing Credit Period is longer than
one year, then the calculations for any fractional period shall be similarly pro-
rated.Any amount not paid to MTC when due under Section 8.2 shall accrue interest on
the overdue amount at the Applicable Interest Rate in effect from time to time.
8.3 No acceptance of any payment due pursuant to Sections 8.2 shall be construed as an accord
that the payment is the correct amount, nor shall such acceptance of payment be construed as a release of
any claim that MTC may have for further or additional sums payable under this Agreement.
PRICE SCHEDULES.
9.1 Operator agrees that the amount and terms of the fees it charges users of the Program shall
be consistent with the provisions of this Section. Membership Fees and Initial Ride Periods shall be
consistent with Section 9.2, the Annual Membership Fee for users eligible for the affordability
subscription specified in Section 9.3.1 shall be as described in said Section 9.3.1, the maximum Bicycle
usage charge shall be consistent with Section 9.5 and the fees for damaged, lost, stolen or otherwise
unreturned Bicycles shall be consistent with Section 9.6 initially charged by Operator shall be consistent
with this Section. A “Membership Fee” is an amount that entitles the purchaser of the membership (a
“member”, for the period of such purchased membership) to check out (as defined below) one or more
Bicycle(s) at a time, for the length of time described below, provided that the member shall be charged a
usage fee associated with the time period the Bicycle is checked out beyond the Initial Ride Period. A
Bicycle is “checked out” for the period from the time it is removed from a Dock to the time it is returned
to a Dock. A member may check out and return a Bicycle from or to any Dock at any Station in the
Program, for an unlimited number of times, at any time during the period of the member’s membership,
with the usage fee applicable to each such checkout and return sequence being calculated separately (so,
for example, a Regular Annual Member may, within the member’s membership period, check out a
Bicycle and return it within the first 30 minutes after checkout, and then subsequently check out a Bicycle
and return that Bicycle within the first 30 minutes after that checkout, without incurring any usage fee for
either checkout period).
9.2 Membership Fees, New Ridership Programs/Arrangements, and Initial Ride Periods:
9.2.1 Operator shall offer an annual membership (“Annual Membership”) for a fee (the
“Annual Membership Fee”) in an amount not to exceed the Annual Membership Fee
Cap in effect from time to time. The Annual Membership Fee Cap shall be $149 for a
one-year period, subject to increase on the first anniversary of the Effective Date and
on each subsequent anniversary of the Effective Date by a percentage amount equal to
the CPI increase for the trailing 4 calendar quarters preceding each such anniversary
203193300.19 -27-
plus 2% (so, for example, if the CPI increase were 1% for the trailing four calendar
quarters preceding a particular anniversary of the date hereof, the applicable permitted
percentage increase in the Annual Membership Fee Cap as of that anniversary would
be 3%). An Annual Member whose Annual Membership Fee is subject to the Annual
Membership Fee Cap is sometimes referred to as a “Regular Annual Member” and the
corresponding Annual Membership is the “Regular Annual Membership.” The period
of an Annual Membership shall run from the day the annual membership is activated
until the first anniversary of the date on which the Annual Membership had been
activated (but a membership purchased on February 29 shall expire on March 1 of the
following year);
9.2.2 Annual Memberships may be paid in 12 equal monthly instalments at a price not
greater than 120% of the Annual Membership Fee;
9.2.3 All memberships will include a free period of usage (the “Initial Ride Period”), which
is the length of time at the beginning of each individual Trip to which additional usage
fees will not be applied. For Regular Annual Memberships and affordability
memberships, the Initial Ride Period is 30 Minutes. Usage fees will be applied to all
Trips that exceed the Initial Ride Period; and
9.2.4 For monthly, weekly and daily memberships, and for usage of the Program by non-
members, Operator will determine the applicable fees, usage fees, and periods of use
for members beyond the Initial Ride Period in its sole discretion.
9.2.5 Nothing in the foregoing shall limit the right of Operator to offer premium
memberships featuring an Initial Rider Period longer than 30 minutes for an Annual Membership Fee
greater than $149.
9.3 Affordability Option:
9.3.1 Notwithstanding the permitted rate for a Regular Annual Membership set forth in
Section 9.2.1 (as adjusted pursuant to Section 9.11), Operator shall charge those
eligible for an “affordability subscription” no more than $60 per annum (excluding
sales tax) as the Annual Membership Fee, or $5.00 per month for a 12-month
membership. Such rate is subject to annual CPI increase on the first anniversary of the
Effective Date and on each subsequent anniversary of the Effective Date for the trailing
4 calendar quarters preceding each such anniversary plus 2%.
9.3.2 Members of households enrolled in the Utility Lifeline Programs (also known as
California Alternative Rates for Energy (CARE)) available in the MTC Area are
eligible for affordability memberships. At least 30 days prior to the completion of
Phase I, Operator shall propose, for MTC’s review and approval, procedures for
verifying enrollment in CARE. In San Francisco, those who meet Muni Lifeline
income requirements as determined by the City of San Francisco’s Human Services
Agency are also eligible for the affordability membership. Upon mutual agreement of
the Parties, eligibility may expand to include other categories of persons so long as the
eligibility is determined by third parties.
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9.3.3 Members enrolling through the affordability program shall be entitled to the same
rights and privileges as Regular Annual Members.
9.3.4 The usage fees for affordability members shall not exceed the rate charged to Regular
Annual Members.
9.4 The checkout period for the purposes of calculating usage fees shall always commence
with the time a Bicycle is actually removed from a Dock, and it shall not be based on the time of insertion
of a payment or identification card.
9.5 The maximum Bicycle usage charge initially charged with respect to any member shall be
$100 per 24 hour period, not including charges for damaged, lost, stolen or otherwise unreturned
Bicycles.
9.6 Fees for damaged, lost, stolen or otherwise unreturned Bicycles initially charged shall be
(i) $1,200, if not returned, or (ii) if returned, the sum of all direct costs of the repair, including all labor
and parts, as determined by Operator in its reasonable discretion, plus a 10% administrative fee; provided,
however, that the fees charged to affordability members for unreturned or damaged Bicycles shall be not
more than 33% of the fees set forth in the preceding clauses (i) and (ii). Operator shall waive such fees for
an any member who is not at fault for the unreturned or damaged Bicycle.
9.7 Operator shall at all times post on all Stations and on Operator’s website a complete and
up-to-date fee description that sets forth each and every current membership and usage fee offered by
Operator, the methods of purchasing memberships and paying fees, available discounts on such fees, the
applicability and terms of such discounts and, to the extent applicable, how to apply for or qualify for
such discounts, and fees associated with damaged, lost, stolen or otherwise unreturned Bicycles. Operator
shall furnish written copies of such material to the public upon request.
9.8 Operator shall accept credit card and debit card payments online and at all Stations but in
the case of debit cards only those that have a Visa or Mastercard logo on them. Operator may employ
such other methods of payment as it may determine.
9.9 All required state sales and use taxes with respect to membership and usage fees shall be
collected and paid by Operator, as required by applicable law.
9.10 Operator shall be permitted to create Program pricing discount programs, which may be
targeted in connection with marketing and outreach efforts, and in connection with Sponsorship or
Advertising programs, to expand or enable Program use among different communities or for other lawful
purposes.
9.11 At any time and from time to time, Operator shall have the right:
9.11.1 To adjust the amount of the Annual Membership Fee specified in Section 9.2.1
downwards at any time and upwards on each anniversary of the Effective Date by an
amount not to exceed the Annual Membership Fee Cap then in effect;
9.11.2 To adjust the amount of the maximum Bicycle usage charge specified in Section 9.5
and the fees for damaged, lost, stolen or otherwise unreturned Bicycles specified in
Section 9.6 downwards at any time and upwards on each anniversary of the Effective
203193300.19 -29-
Date by a percentage amount equal to the CPI increase for the trailing 4 calendar
quarters preceding each such anniversary plus 2% (so, for example, if the CPI increase
were 1% for the trailing 4 calendar quarters preceding a particular anniversary of the
date hereof, the applicable permitted percentage increase in the Annual Membership
Fee Cap as of that anniversary would be 3%);
9.11.3 Any upwards adjustment permitted under this Section 9.11 and not made as of any
anniversary date may be made at any time after such anniversary date without
derogation of Operator’s right to make any other upwards adjustments permitted under
this Section 9.11;
9.11.4 To adjust in its sole discretion all other fees, time periods and charges specified
hereunder other than those fees, time periods and charges specified in Section 9.2.1 and
Section 9.3; and
9.11.5 To adjust upward the duration of the Initial Ride Period.
9.12 MTC shall have the right to review and approve the initial Program membership waiver
and any material changes thereto, which approval shall not be unreasonably withheld.
9.13 At any time and from time to time, Operator may, in its sole discretion, offer discounts and
promotions for the Program.
MERCHANDISING, LICENSING AND INTELLECTUAL PROPERTY
10.1 [INTENTIONALLY OMITTED]
10.2 Subject to the limitations, terms and conditions as may be imposed by the Sponsor in the
Sponsor’s discretion, upon request by MTC and the Participating Cities, Operator shall seek to obtain for
MTC and the Participating Cities, or shall assist MTC and the Participating Cities to obtain, for the
benefit of MTC, the Participating Cities and their respective business partners and sublicensees, non-
exclusive licenses to use during the term of any Sponsorship agreement the Sponsor trademarks, logos,
servicemarks, and other similar intellectual property identified for use in connection with the Sponsorship
agreement (individually and/or collectively the “Sponsor Property”) to market and promote the Program
under the name or title for the Program adopted by Operator for the Program (the “Program Name”),
which name shall be subject to the consent of MTC and the Participating Cities, as applicable, to the
extent the Program Name consists of MTC/Participating City Property; provided, however, the use of any
Sponsor Property by MTC or the Participating Cities shall comply with reasonable quality control
measures required by the Sponsorship agreement. To the extent that the Program Name incorporates
MTC/Participating City Property, MTC and/or one or more of the Participating Cities, as the case may be,
shall own the portion of any Program Name that consists of MTC/Participating City Property. For further
clarity, with respect to obtaining the aforementioned licenses, Operator is not the agent of MTC or the
Participating Cities and has no authority to enter into agreements on behalf of or otherwise bind MTC or
the Participating Cities.
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10.3 Subject to the limitations, terms and conditions as may be imposed by the Sponsor in the
Sponsor’s discretion to the extent the Operator Property incorporates any Sponsor Property, including,
without limitation, the Sponsor’s consent, Operator hereby grants to MTC and the Participating Cities and
their respective business partners and sublicensees a non-exclusive, royalty-free license to use any
trademarks, logos, servicemarks, and other similar intellectual property developed by Operator
(individually and/or collectively the “Operator Property”) required in connection with marketing and
promoting the Program during the Term.
10.4 MTC hereby grants to Operator the exclusive right to use during the Term the name “Bay
Area Bike Share” and variations thereof (individually and/or collectively “Bay Area Bike Share”). As
part of Operator’s exclusive right to use “Bay Area Bike Share”, Operator shall have the right to
sublicense the use of “Bay Area Bike Share” to the Sponsor or any other Person to market or promote the
Program. Such rights shall terminate upon expiration or termination of this Agreement, but subject to the
rights of the Recognized Lender.
10.5 Notwithstanding the foregoing Sections, the Recognized Lender shall not be precluded
from collateralizing any intellectual property of Operator.
RESERVED
11.1 [INTENTIONALLY OMITTED]
11.2 [INTENTIONALLY OMITTED]
11.3 [INTENTIONALLY OMITTED]
RESERVED
12.1 [INTENTIONALLY OMITTED]
12.2 [INTENTIONALLY OMITTED]
12.3 [INTENTIONALLY OMITTED]
MARKETING
13.1 Operator shall create a marketing plan for the Program, subject to approval by MTC, which
approval will not be withheld so long as the plan is not in bad taste, offensive, obscene or derogatory to
MTC or any Participating City. Following such approval, Operator shall market the Program in
accordance with such plan. The marketing budget and the allocation of such budget shall be determined
by Operator, in its sole discretion. The marketing plan shall include, at a minimum, demonstrations,
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events, social media outreach, programs, partnerships and other efforts to educate residents of the
Participating Cities about bike share, to launch the Program and to grow membership and ridership in a
financially sustainable manner.
13.2 A portion of Operator’s marketing plan will include marketing and outreach to low-income
communities, disadvantaged communities, and communities for which English is not the native language,
shall be subject to the approval of MTC and the Participating Cities, shall comply with local requirements
regarding language access for each Participating City, shall comply with local standards for decency and
not be offensive to the general public. MTC retains the non-exclusive right to conduct marketing and
outreach to low-income neighborhoods and limited English proficiency neighborhoods. Operator’s
marketing activities shall not violate the Advertising Restrictions.
13.3 [INTENTIONALLY OMITTED]
WEBSITE
14.1 Operator shall create and maintain a Program website, subject to the MTC’s prior review.
The Program’s website shall include, at a minimum, all of the following elements:
14.1.1 Eligibility requirements;
14.1.2 Subscription information and rate schedules;
14.1.3 Payment and subscription processing information;
14.1.4 Method for subscribers to update required information;
14.1.5 Subscriber agreement and acceptance of terms;
14.1.6 Map of network of Stations and real-time availability of Bicycles at each Station;
14.1.7 Frequently Asked Questions;
14.1.8 Safety requirements and information (including malfunctions and crashes);
14.1.9 News and operational updates;
14.1.10 Special events notices;
14.1.11 Links to other bike programs and events;
14.1.12 Call center contact information;
14.1.13 Real-time information on Bicycles and Docks for app developers (e.g. JSON Feed);
14.1.14 System-wide anonymized historical data;
14.1.15 For individual members, that member’s ridership history;
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14.1.16 For individual members, that member’s payment history; and
14.1.17 Operator’s privacy policy; and
14.1.18 Translation capability to Cantonese, Spanish, and Vietnamese at a minimum.
14.2 Operator shall keep all information on the Program’s website updated.
SECURITY FUND
15.1 Prior to installation by Operator of the first new Station, Operator shall deposit with MTC
a security deposit (“Security Fund”) in the amount of $250,000.00. Interest on the Security Fund shall
accrue in an interest bearing bank account for the benefit of Operator, and all such interest shall be paid
annually to Operator on each anniversary of the Effective Date.
15.2 Operator shall maintain $250,000.00 in the Security Fund at all times during the Term and
for 90 days after the end of the Term. Upon expiration of the foregoing period, the remaining balance of
the Security Fund shall be disbursed to Operator, unless prior to the expiration of such 90-day period
MTC commences litigation against Operator, the underlying claim is covered by the Security Fund, and
such litigation is not finally resolved prior to the expiration of such period, in which case an amount of
the Security Fund equal to the amount of the outstanding claim shall be retained and only until such claim
is resolved. Any amounts remaining in the Security Fund that are not being retained in accordance with
this paragraph shall be promptly returned to Operator, and MTC shall fully and timely cooperate with the
payment of the Security Fund to Operator.
15.3 The Security Fund shall serve as security for the faithful performance by Operator of all
terms, conditions and obligations of this Agreement and shall be available for withdrawal under the
following circumstances:
15.3.1 If Operator breaches a payment obligation under this Agreement and fails to
remedy such breach within 10 business days following notice by MTC to Operator (a “Payment Breach”),
other than the payment of liquidated damages under Section 2.6.3, which is addressed in Section 15.3.5.
In the event of a Payment Breach, MTC shall be entitled to withdraw from the Security Fund the amount
of the money that is due and payable as set forth in such notice, unless within such 10 business day period
Operator initiates the Dispute Resolution Process by giving MTC notice stating that it contests the
occurrence of such Payment Breach or the amount thereof. This Section 15.3.1 does not cover a Default
under Section 18.1.1 (which is covered in Section 15.3.4).
15.3.2 If Operator commits a non-monetary breach under this Agreement that results in
damage to any municipal structure or property of MTC or a Participating City, Operator fails to repair
such damage within 30 days following notice by MTC to Operator and in response thereto MTC or the
applicable Participating City undertakes such repair (a “Property Damage Breach”), in which event MTC
shall be entitled to withdraw from the Security Fund the costs incurred by MTC or the applicable
Participating City to undertake such repair, provided such costs are reasonable. Notwithstanding MTC’s
withdrawal from the Security Fund for a Property Damage Breach, Operator shall have the right to contest
203193300.19 -33-
such Property Damage Breach or the costs incurred by initiating the Dispute Resolution Contest, provided
that Operator gives MTC notice thereof not later than 30 days after such withdrawal.
15.3.3 If Operator fails to undertake any other non-monetary obligation under this
Agreement within the period required under this Agreement and in response thereto MTC or a
Participating City exercises self-help to perform such obligation pursuant to a provision of this Agreement
that expressly permits self-help or with respect to which self-help is a reasonable response (e.g., a failure
of Operator to timely complete a Station De-Installation; or failure of Operator to remove advertising that
violates Advertising Restrictions within 24 hours of notice to Operator) (a “Self-Help Situation”), in
which event MTC shall be entitled to withdraw from the Security Fund the costs incurred by MTC or the
applicable Participating City to undertake such self-help, provided such costs are reasonable.
Notwithstanding MTC’s withdrawal from the Security Fund for a Self-Help Situation, Operator shall have
the right to contest such Self-Help Situation or the costs incurred by initiating the Dispute Resolution
Contest, provided that Operator gives MTC notice thereof not later than 30 days after such withdrawal.
This Section 15.3.3 does not cover a breach of Section 16 or matters covered by Section 15.3.2 or 15.3.4.
15.3.4 Operator commits a Default, in which event MTC shall be entitled to withdraw
the actual, direct damages arising from such Default unless prior to the expiration of the applicable cure
period set forth in Section 18.1 Operator initiates the Dispute Resolution Process by giving MTC notice
stating that it contests the occurrence of such Defaults. This Section 15.3.4 does not cover matters
covered by Section 15.3.1, 15.3.2, 15.3.3 or 15.3.5.
15.3.5 Operator fails to pay any amount of liquidated damages, and interest, if any due to
MTC pursuant to Section 2.6.3 within the time periods provided therein.
15.4 Each notice by MTC to Operator under Section 15.3 of a failure, breach or Default, as
applicable, shall provide specific and detailed information about Operator’s non-compliance, together
with the amount MTC is intending to withdraw and detailed support for such amount, if then known.
Each notice from Operator to MTC under Section 15.3 to contest the occurrence of such non-compliance
or the amount to be withdrawn, which notice shall commence the Dispute Resolution Process, shall
provide specific and detailed information that rebuts or challenges the information contained in the
corresponding notice provided by MTC. Within 2 days following any withdrawal from the Security
Fund, MTC shall notify Operator of the date and amount of the withdrawal, together with detailed support
for the amount of the withdrawal.
15.5 MTC may not seek recourse against the Security Fund for any cost or damages for which
MTC has previously been compensated by Operator or from the Security Fund. The withdrawal of the
amounts from the Security Fund shall constitute a credit against the amount of the applicable liability of
Operator.
15.6 If a withdrawal from the Security Fund is made, Operator shall be required to replenish the
Security Fund by the amount withdrawn within 30 days after receipt of notice of such withdrawal.
Notwithstanding the foregoing, if Operator is contesting in good faith MTC’s right to withdraw in
accordance with the Dispute Resolution Process, then Operator shall not be obligated to replenish on
account of such withdrawal until 30 days after such dispute is finally resolved in accordance with the
Dispute Resolution Process. Interest on the amount required to be replenished shall accrue at the
Applicable Interest Rate in effect from time to time commencing on such 30th date.
203193300.19 -34-
15.7 The obligation to perform and the liability of Operator pursuant to this Agreement shall not
be limited in nature or amount by the acceptance of the Security Fund required by this Section 15.
INDEMNITY
16.1 Indemnification. Operator shall defend, indemnify and save harmless MTC, the
Participating Cities, and their respective commissioners, officers, agencies, departments, agents, and
employees (each, an “Indemnified Party”; and collectively, “Indemnified Parties”) from and against any
and all claims, demands, causes of action, proceedings or lawsuits brought by third-parties (“Claims”),
and all losses, damages, liabilities, penalties, fines, forfeitures, costs and expenses arising from or
incidental to any Claims (including attorneys’ fees and other costs of defense) (collectively, with Claims,
“Liabilities”), resulting from, or arising out of, the operation of the Program and the provision of Services,
whether such operation or Services is performed or provided by Operator or by Operator’s subcontractors
or any other person acting for or on behalf of Operator.
16.2 Notwithstanding the foregoing, the following shall be excluded from Operator’s
indemnification and defense obligations contained in the preceding sentence: any Liabilities to the extent
resulting from, or arising out of, (i) the gross negligence or willful misconduct of any Indemnified Party,
(ii) Operator complying with the written directives or written requirements of a Participating City, if the
Operator has previously objected to such written directives or requirements in writing, with respect to (A)
the location or configuration of any Station in relation to the street or sidewalk on which such Station is
located or to which it adjoins or (B) a Participating City’s Street Treatment Requirements, or (iii) the
condition of any public property outside of the perimeter of a Station and not otherwise controlled by
Operator (and expressly excluding from this clause (iii) the condition of the Bicycles or other Equipment).
If any Claim against Operator includes claims that are covered by clause (iii) of the preceding sentence or
claims contesting a Participating City’s authority to issue a permit for a Station, then each Party shall be
responsible for its own defense against such claims.
16.3 Upon receipt by any Indemnified Party of actual notice a Claim to which such Indemnified
Party is entitled to indemnification in accordance with Sections 16.1 and 16.2, such Indemnified Party
shall give prompt notice of such Claim to Operator. Operator shall assume and prosecute the defense of
such Claim at the sole cost and expense of Operator. Operator may settle any such Claim in its discretion
so long as such settlement includes an unconditional release of the Indemnified Party.
INSURANCE
17.1 Minimum Coverages. The insurance requirements specified in this section shall cover
Operator’s own liability and the liability arising out of work or services performed under this Agreement
by any subconsultants, subcontractors, suppliers, temporary workers, independent contractors, leased
employees, or any other persons, firms or corporations that Operator authorizes to work under this
Agreement (hereinafter referred to as “Agents”). Operator shall, at its own expense, obtain and maintain
in effect at all times during the life of this Agreement the following types of insurance against claims,
damages and losses due to injuries to persons or damage to property or other losses that may arise in
connection with the performance of work under this Agreement.
203193300.19 -35-
17.2 Operator shall include in every subcontract the requirement that the Agent maintain
adequate insurance coverage with appropriate limits and endorsements to cover the risks associated with
work to be performed by the Agent. To the extent that an Agent does not procure and maintain such
insurance coverage, Operator shall be responsible for any and all costs and expenses that may be incurred
in securing such coverage or in fulfilling Operator’s indemnity obligation under Section 16 as to itself or
any of its Agents in the absence of such coverage.
17.3 In the event Operator or its Agents procure excess or umbrella coverage to maintain certain
requirements outlined below, these policies shall also satisfy all specified endorsements and stipulations,
including provisions that Operator’s or its Agent’s insurance, as the case may be, be primary without right
of contribution from MTC.
17.3.1 Workers' Compensation Insurance with Statutory limits, and Employer’s Liability
Insurance with a limit of not less than $1,000,000 per employee for injury by disease
and $1,000,000 for injury for each accident, and any and all other coverage of
Operator’s employees as may be required by applicable law. Such policy shall contain
a Waiver of Subrogation in favor of MTC. Such Workers’ Compensation &
Employer’s Liability may be waived, if and only for as long as Operator is a sole
proprietor or a corporation with stock 100% owned by officers with no employees.
17.3.2 Commercial General Liability Insurance for Bodily Injury and Property Damage
liability, covering the operations of Operator and Operator’s officers, agents, and
employees and with limits of liability which shall not be less than $1,000,000
combined single limit per occurrence with a general aggregate liability of not less than
$2,000,000, and Personal & Advertising Injury liability with a limit of not less than
$1,000,000. Such policy shall contain a Waiver of Subrogation in favor of MTC.
MTC and its commissioners, directors, officers, representatives, agents and employees
are to be named as additional insureds. In addition, the entities listed in Section 17.12
and their respective commissioners, directors, officers, representatives, agents and
employees are also to be named as additional insureds. Such insurance shall be
primary and contain a Separation of Insureds Clause as respects any claims, losses or
liability arising directly or indirectly from Operator’s operations.
17.3.3 Business Automobile Insurance for all automobiles owned (if any), used or maintained
by Operator and Operator’s officers, agents and employees, including but not limited to
owned (if any), leased (if any), non-owned and hired automobiles, with limits of
liability which shall not be less than $1,000,000 combined single limit per accident.
17.3.4 Umbrella Insurance in the amount of $4,000,000 providing excess limits over
Employer’s Liability, Automobile Liability, and Commercial General Liability
Insurance. Such umbrella coverage shall be following form to underlying coverage
including all endorsements and additional insured requirements.
17.3.5 Errors and Omissions Professional Liability Insurance for errors and omissions and the
resulting damages, including, but not limited to, economic loss to MTC and having
minimum limits of $5,000,000 per claim. Such policy shall contain cyber risk
coverages including network and internet security liability coverage, privacy liability
coverage and media coverage. The policy shall provide coverage for all work
203193300.19 -36-
performed by Operator and any work performed or conducted by any
subcontractor/consultant working for or performing services on behalf of Operator.
Operator may delegate the obligation to maintain Errors and Omissions Professional
Liability Insurance to an Agent, but the failure of such Agent to maintain such
insurance shall not relieve Operator of its obligation to maintain such insurance.
17.3.6 Property Insurance. Property Insurance covering Operator’s own business personal
property and equipment to be used in performance of this Agreement, materials or
property to be purchased and/or installed on behalf of MTC (if any), and builders risk
for property in the course of construction (if applicable). Coverage shall be written on
a "Special Form" policy that includes theft, but excludes earthquake, with limits at least
equal to the replacement cost of the property. Such policy shall contain a Waiver of
Subrogation in favor of MTC.
17.4 Acceptable Insurers. All policies will be issued by insurers qualified to do business in
California and with a Best’s Rating of A-VIII or better.
17.5 Self-Insurance. Operator’s obligation hereunder may be satisfied in whole or in part by
adequately funded self-insurance, upon evidence of financial capacity satisfactory to MTC.
17.6 Deductibles and Retentions. Operator shall be responsible for payment of any deductible
or retention on Operator’s policies without right of contribution from MTC. Deductible and retention
provisions shall not contain any restrictions as to how or by whom the deductible or retention is paid.
Any deductible or retention provision limiting payment to the Named Insured is unacceptable.
17.7 In the event that MTC is entitled to coverage as an additional insured under any Operator
insurance policy that contains a deductible or self-insured retention, Operator shall satisfy such deductible
or self-insured retention to the extent of loss covered by such policy, for any lawsuit arising from or
connected with any alleged act of Operator, subconsultant, subcontractor, or any of their employees,
officers or directors, even if Operator or subconsultant is not a named defendant in the lawsuit.
17.8 Claims Made Coverage. If any insurance specified above is written on a “Claims-Made”
(rather than an “occurrence”) basis, then in addition to the coverage requirements above, Operator shall:
17.8.1 Ensure that the Retroactive Date is shown on the policy, and such date must be before
the date of this Agreement or the beginning of any work under this Agreement;
17.8.2 Maintain and provide evidence of similar insurance for at least three (3) years
following the expiration or termination of this Agreement, including the requirement of
adding all additional insureds; and
17.8.3 If insurance is cancelled or non-renewed, and not replaced with another claims-made
policy form with a retroactive date prior to the commencement of any work hereunder,
Operator shall purchase “extended reporting” coverage for a minimum of three (3)
years after the expiration or termination of this Agreement.
17.9 Failure to Maintain Insurance. All insurance specified above shall remain in force until the
expiration or termination of this Agreement. Operator must notify MTC if any of the above required
203193300.19 -37-
coverages are non-renewed or cancelled. The failure to procure or maintain required insurance and/or an
adequately funded self-insurance program will constitute a material breach of this Agreement.
17.10 Certificates of Insurance. Prior to commencement of any work hereunder, Operator shall
deliver to MTC Certificates of Insurance verifying the aforementioned coverages. Such certificates shall
make reference to all provisions and endorsements referred to above and shall be signed on behalf of the
insurer by an authorized representative thereof.
17.11 Disclaimer. The foregoing requirements as to the types and limits of insurance coverage to
be maintained by Operator are not intended to and shall not in any manner limit or qualify the liabilities
and obligations otherwise assumed by Operator pursuant hereto, including, but not limited to, liability
assumed pursuant to Section 16 .
17.12 Additional Insureds: The following entities are to be named as Additional Insureds under
applicable sections of this Section 17 and as Indemnified Parties pursuant to Section 16.
17.12.1 Metropolitan Transportation Commission (MTC)
17.12.2 City of Berkeley
17.12.3 City of Oakland
17.12.4 City of San Francisco
17.12.5 City of Emeryville
17.12.6 City of San Jose
TERMINATION AND DEFAULT
18.1 The following events shall be a Default under this Agreement:
18.1.1 A breach by Operator of a payment obligation under Section 8 [Revenue Sharing] and
the failure to remedy such breach within 10 business days after receipt by Operator
from the Executive Director of written notice of such breach;
18.1.2 A breach by Operator of a material obligation under Section 7 of this Agreement or
Section 29 of the Coordination Agreement [Advertising and Sponsorship]; Section 9
[Price Schedules], Section 10 of this Agreement or Section 30 of the Coordination
Agreement [Merchandising, Licensing and Intellectual Property]; any separate
licensing agreement between Operator (or its affiliate) and MTC and/or a Participating
City; Section 31 of the Coordination Agreement [Marketing, Promotions and
Reporting]; Section 14 [Website]; Section 15 [Security Fund]; Section 16 [Indemnity];
Section 20 [Employment and Purchasing]; and Section 21 [Inspection and Audit], and
the failure to remedy such breach within 10 business days after receipt by Operator
from the Executive Director of written notice of such breach;
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18.1.3 A breach by Operator of Section 22 [Assignment];
18.1.4 A breach by Operation of Section 17 [Insurance] and the failure to remedy such breach
within 5 business days after receipt by Operator from the Executive Director of written
notice of such breach;
18.1.5 (a) Operator’s chronic Program-wide failures to abide by its obligations under Sections
2, 3, 4 and 6 of this Agreement and Section 22 of the Coordination Agreement, which
failures materially and adversely affect the non-pecuniary benefits to be derived by
MTC and the Participating Cities under this Agreement, (b) the failure of Operator to
submit to MTC and the Participating Cities, within 15 business days following receipt
by Operator from the Executive Director of written notice of such failures, a credible
business plan for Operator to proactively and comprehensively address Operator’s
deficiencies, which plan shall be subject to approval by MTC in consultation with the
relevant Participating Cities, and (c) the failure of Operator to take concrete steps to
implement such response plan within 30 days of MTC’s approval of such plan;
18.1.6 If the Security Fund balance falls below $50,000 and Operator does not replenish the
full amount of the Security Fund within 10 days following notice thereof from the
Executive Director. However, if Operator is then contesting one or more prior
withdrawals from the Security Fund in accordance with the Dispute Resolution Process
and the aggregate amount in dispute exceeds $200,000, then such $50,000 may only be
used pursuant to Section 15.3.2 or Section 15.3.3 until such dispute has been finally
resolved;
18.1.7 The commencement of any proceeding by Operator under the Bankruptcy Code or
relating to the insolvency, receivership, liquidation, or composition of Operator for the
benefit of creditors;
18.1.8 The commencement of any involuntary proceeding against Operator under the
Bankruptcy Code that has not been stayed or dismissed within 120 days of its
commencement;
18.1.9 If Operator or any of its officers, directors or senior management has been convicted
after the Effective Date under any state or federal law of any of the matters listed in
clauses (a) through (e) of this Section 18.1.9: (x) in connection with a matter that is not
directly or indirectly connected with this Agreement or the Program and, in the case of
the conviction of an individual, such individual has not been terminated by Operator
within 30 days after Operator receives notice of such conviction, or (y) in connection
with a matter that is directly or indirectly connected with this Agreement or the
Program. The matters referred to above as being listed in clauses (a) through (e) are
the following:
(a) A criminal offense that is incident to obtaining or attempting to obtain or to
performing a public or private contract;
(b) Fraud, embezzlement, theft, bribery, forgery, falsification, destruction of
records, or receiving stolen property;
203193300.19 -39-
(c) A criminal violation of any state or federal antitrust law;
(d) Violation of the Racketeer Influence and Corrupt Organization Act, 18 U.S.C. §
1961 et seq., or the Mail Fraud Act, 18 U.S.C. § 1341 et seq., for acts in
connection with the submission of bids or proposals for a public or private
contract; or
(e) Conspiracy to commit any act or omission that would constitute grounds for
conviction or liability under any statute described in subparagraph (d) above.
18.1.10 If Operator or any of its officers, directors, partners, managers, 5 percent or greater
owners, principals, or other employees or persons substantially involved in its activities
(a) are subject to a judgment of civil liability under any state or federal antitrust law for
acts or omissions in connection with the submission of bids or proposals for a public or
private contract, or (b) intentionally makes or causes to be made any false, deceptive,
or fraudulent material statement in any bid, proposal, or application for government
work, and the individual responsible for such act, omission or material misstatement, if
an employee, has not been terminated by Operator, or if not an employee, the
relationship therewith has not been terminated, within 30 days after such judgment is
entered into in the case of clause (a) above or after a judgment is entered into that any
such material statement was intentionally false, deceptive or fraudulent in the case of
clause (b).
18.2 If a Default occurs, then, subject to Sections 3.5 and 18.3, MTC shall, at MTC’s option,
have any or all of the following remedies, all cumulative (so exercise of one remedy shall not preclude
exercise of another remedy), in addition to such other remedies as may be available at law or in equity or
under any other terms of this Agreement. MTC’s remedies include, but are not limited to:
18.2.1 Cause a withdrawal from the Security Fund, pursuant to Section 15, subject to any
right of Operator to contest such withdrawal pursuant to the Dispute Resolution
Process;
18.2.2 Seek actual, direct damages only from Operator for such Default (and notwithstanding
anything to the contrary herein, in no event shall MTC be entitled to special,
consequential or punitive damages under this Agreement);
18.2.3 Seek to restrain by injunction the continuation of such Default;
18.2.4 Purchase the Equipment at its then fair market value, subject to the rights of the
Recognized Lender not to permit the sale of the Equipment to MTC;
18.2.5 Pursue any other remedy permitted by law or in equity or in this Agreement; or
18.2.6 Terminate this Agreement, subject to the rights of the Recognized Lender.
18.3 Nothing in this Agreement precludes Operator from contesting the existence of such
Default or the breach, failure or other occurrence underlying a Default in accordance with this Section
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18.3 and the Dispute Resolution Process. If Operator seeks to contest any of the foregoing, Operator must
notify MTC prior to the expiration of the applicable cure period set forth in Section 18.1. Following such
notice, the dispute shall be addressed and resolved in accordance with the Dispute Resolution Process.
Pending final resolution of such dispute, Operator may continue operating the Program in accordance
with the terms of this Agreement, and any exercise by MTC of its remedies hereunder shall be stayed
until final resolution of such dispute in accordance with the Dispute Resolution Process. In addition, if
such final resolution is against Operator, then MTC shall have the right to terminate this Agreement only
if such Default is not cured within the period otherwise provided in the definition of Default to remedy
such default, provided that for this purpose the applicable remedy period shall commence upon the final
resolution of such dispute.
18.4 Subject to the rights of the Recognized Lender (if any and if applicable), upon termination
of this Agreement on account of a Default by Operator, reduction of Initial Term under Section 2.3, or
expiration of the Term, Operator shall comply with the following close-out procedures:
18.4.1 Turning over to MTC or its designees copies of all books, records, documents and
materials specifically relating to this Agreement and reasonably requested by MTC;
18.4.2 Submitting to MTC, within 120 days, a final statement and report relating to this
Agreement that has been reviewed by a certified public accountant or a licensed public
accountant;
18.4.3 Providing reasonable assistance to MTC during the transition; and
18.4.4 Continuing to operate the Program in accordance with the terms of this Agreement and
to effect an efficient and orderly transition of responsibility with respect to the
operation of the Program until the earlier of (i) 180 days after such termination and (ii)
the selection of a replacement operator for the Program and such replacement operator
commencing operation of the Program; provided, however, that Operator shall have the
right to cease operating prior thereto if Operator experiences an operating shortfall
during the transition period and MTC fails to compensate Operator for such shortfall.
18.5 Subject to the rights of the Recognized Lender (if any and if applicable), upon termination
of this Agreement on account of a Default by Operator, reduction of the Initial Term under Section 2.3, or
expiration of the Term, MTC shall have the option to:
18.5.1 require Operator to remove all Equipment at its sole cost and expense;
18.5.2 subject to satisfaction of the Program Property Assignment Conditions, require
Operator to assign to MTC (or a third-party operator designated by MTC) the
Equipment and Operator’s rights under the Escrow Agreement, in which event
Operator shall reasonably cooperate with MTC (or such designee) to obtain the legal
right to use the Software (excluding the Operator Basic Function Software and the
Operator Non-Basic Function Software) either through an assignment of Operator’s
license with the Vendor to MTC (or such designee) or by MTC (or such designee)
entering a license agreement for such Software with the Vendor; or
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18.5.3 subject to satisfaction of the Program Property Assignment Conditions, take over
operation of the Program, and in connection therewith assign to MTC the Equipment
and Operator’s rights under the Escrow Agreement, in which event Operator shall
reasonably cooperate with MTC to obtain the legal right to use the Software (excluding
the Operator Basic Function Software and the Operator Non-Basic Function Software)
either through an assignment of Operator’s license with the Vendor to MTC or by
MTC entering a license agreement for such Software with the Vendor.
18.6 Not less than 6 months prior to the expiration of the Term, MTC shall elect either (a) to
purchase (or have a designee purchase) the Program Property at the expiration of the Term or (b) to
require Operator to remove the Equipment upon expiration of the Term. If MTC elects clause (a), then
Operator and MTC shall negotiate a purchase price for the Program Property based on the fair market
value of the Program Property as an installed system, and at the expiration of the Term, Operator shall
reasonably assign to MTC (or its designee) the Equipment and Operator’s rights under the Escrow
Agreement and cooperate with MTC (or its designee) to obtain the legal right to use the Software
(excluding the Operator Basic Function Software and the Operator Non-Basic Function Software) either
through an assignment of Operator’s license with the Vendor or by MTC (or its designee) entering a
license agreement for such Software with the Vendor, subject to satisfaction of the Program Property
Assignment Conditions. If MTC elects clause (b), then within 90 days of the expiration of the Term,
Operator shall remove all Equipment.
18.7 In the event of a breach of this Agreement by any Party or by any Participating City, the
other Party or parties shall act in good faith and exercise commercially reasonable efforts to mitigate any
damages or losses that result from such breach. Notwithstanding the foregoing, nothing contained in this
Section shall limit in any respect the rights of MTC and the Participating Cities to indemnification
pursuant to Section 16.
18.8 No Party shall be liable (including, but not limited to, for payment of liquidated damages)
for failure to perform any of its obligations, covenants, or conditions contained in this Agreement, to the
extent such failure is caused by the occurrence of an Event of Force Majeure, and such Party’s obligation
to perform shall be extended for a reasonable period of time, commensurate with the nature of the event
causing the delay, and no breach or default shall exist or liquidated damages be payable with respect to
such extended period.
RIGHTS OF RECOGNIZED LENDER
19.1 Operator shall have the right to collaterally assign its rights under this Agreement to the
Recognized Lender as collateral for the Recognized Loan. Operator or the Recognized Lender shall
notify MTC of the existence of the Recognized Loan and the collateral assignment of this Agreement and
shall notify MTC of the name and address of the Recognized Lender. In no event shall there be more than
one Recognized Lender at any one time.
19.2 MTC shall give the Recognized Lender, at the address of such Recognized Lender and in
the manner set forth in Section 25.2 a copy of each notice of default at the same time as it gives notice of
203193300.19 -42-
default to Operator. A notice of default to Operator shall not be effective unless a copy thereof is
concurrently given to the Recognized Lender.
19.3 The Recognized Lender shall, in the case of any Default by Operator under Section 18.1.1,
have a period of 10 days more than is given Operator, to remedy such Default prior to MTC terminating
this Agreement on account of such Default, and in the case of a Default by Operator under Section 18.1.2
or 18.1.5, shall have a period of 10 days more than is given Operator to remedy such Default prior to
MTC terminating this Agreement on account of such Default, provided that if such Default is not one that
can be cured with the payment of money and if the Recognized Lender needs to exercise its remedies and
obtain access to its collateral prior to being able to effectuate the cure of any such default, such additional
10-day period shall, so long as the Recognized Lender is diligently and continuously pursuing such cure
and has provided written notice to MTC of its intent to cure such Default, be extended for such additional
time as is necessary for the Recognized Lender to obtain such access and commence and effectuate such
cure.
19.4 If this Agreement terminates on account of a Default, then Operator shall give any
Recognized Lender prompt notice thereof. Within 60 days following receipt of such notice, the
Recognized Lender may elect to require MTC to enter into a new agreement with a replacement operator
designated by the Recognized Lender for the remaining Term of this Agreement, considered as if the
Term had not ended on account of such Default and on substantially the same terms as contained in this
Agreement (the “Replacement Agreement”). Within 120 days of such notice, the Recognized Lender
shall identify a replacement operator and credible business plan for such replacement operator to
proactively and comprehensively address Operator’s deficiencies. Such replacement operator and
business plan shall be subject to the approval of MTC, which approval shall not be unreasonably withheld
or delayed. If MTC approves such replacement operator and business plan, then MTC and such
replacement operator shall enter into the Replacement Agreement. If MTC and the Recognized Lender
are unable to agree on the replacement operator or the business plan within 150 days following such
notice, or if the Recognized Lender does not elect to require MTC to enter into a Replacement Agreement
within 60 days following receipt of such notice, then MTC shall have the right to exercise its other
remedies under Section 18.5 without regard to the rights of the Recognized Lender.
19.5 If pursuant to Section 2.3, MTC exercises its right to reduce the Initial Term by 5 years,
then MTC shall give the Recognized Lender notice thereof. Within 60 days following receipt of such
notice, the Recognized Lender may elect to require MTC to enter into a new agreement with a
replacement operator designated by the Recognized Lender commencing on the expiration of the Term as
reduced pursuant to Section 2.3 for the remaining Term of this Agreement, considered as if the Term had
not been reduced pursuant to Section 2.3 and on substantially the same terms as contained in this
Agreement. Within 120 days of such notice, the Recognized Lender shall identify a replacement operator
and credible business plan for such replacement operator to proactively and comprehensively address
Operator’s deficiencies. Such replacement operator and business plan shall be subject to the approval of
MTC, which approval shall not be unreasonably withheld or delayed. If MTC approves such replacement
operator and business plan, then MTC and such replacement operator shall enter into such replacement
agreement. If MTC and the Recognized Lender are unable to agree on the replacement operator or the
business plan within 150 days following such notice, or if the Recognized Lender does not elect to require
MTC to enter into a replacement agreement within 60 days following receipt of such notice, then the
Recognized Lender shall have no further rights arising on account of the reduced Term.
203193300.19 -43-
19.6 MTC and Operator shall not amend or modify any provision of this Agreement if the effect
thereof is to reduce the Term, reduce Operator’s rights or increase Operator’s obligations in any material
respect, or weaken any of the Recognized Lender’s express rights under this Agreement, including the
Recognized Lender’s rights under this Section 19, in each case without the prior written consent of the
Recognized Lender. MTC shall not accept a surrender of this Agreement by Operator, nor shall MTC and
Operator agree to a termination of this Agreement, without the prior written consent of the Recognized
Lender.
19.7 If Operator defaults on the Recognized Loan and as a result thereof the Recognized Lender
has a right under the applicable loan documents to foreclose on its Program-related collateral, then
without the consent of MTC or any Participating City, the Recognized Lender (or a subsidiary thereof)
and/or a third party may succeed to the interest of Operator under this Agreement, so long as (a) the party
succeeding to the interest of Operator under this Agreement, or a third party manager designated by such
successor, has the experience and expertise to operate a large-scale bikeshare program, (b) such successor
succeeds to Operator’s interest in the Bicycles, other Equipment and other collateral, (c) such successor
has substantially the same legal right to obtain replacement Bicycles and other Equipment, to utilize the
Bicycle patents and other Equipment patents, and to utilize the required Software that Operator has as of
the Effective Date; and (d) agrees to comply with all terms of this Agreement.
19.8 The terms and provisions of this Section 19 and the rights of the Recognized Lender
hereunder shall survive a termination of this Agreement pursuant to a Default or the expiration of this
Agreement pursuant to Section 2.3.
EMPLOYMENT
20.1 Operator will pay wages to all of its employees that equal or exceed the living wage in
effect as of the date of this agreement under State law or applicable local law.
20.2 Operator shall use reasonable efforts, at its own cost and expense, to conduct outreach for
employment purposes to residents of the Participating Cities for the opportunities to be created by the
construction, installation, operation, management, administration, marketing and maintenance of the
Program. Such recruitment activities shall include provisions for the posting of employment and training
opportunities at appropriate Participating City agencies responsible for encouraging employment of
Participating City residents. Operator shall ensure the promotion of equal employment opportunity for all
qualified Persons employed by, or seeking employment with, Operator. For San Francisco-based entry
level job openings with Operator, Operator shall post such openings through San Francisco’s First Source
Hiring Program and offer the City of San Francisco the first opportunity to refer qualified candidates to
Operator for such openings.
20.3 Operator shall not refuse to hire, train, or employ, bar or discharge from employment or
discriminate against any individual in compensation, hours of employment, or any other term, condition,
or privilege of employment, including, but not limited to, any promotion, upgrading, demotion,
downgrading, transfer, layoff, or termination, on the basis of race, creed, color, national origin, sex, age,
handicap, marital status, affectional preference or sexual orientation, in accordance with applicable law.
Operator agrees to comply in all respects with all applicable federal, state and local employment
discrimination laws and requirements during the Term.
203193300.19 -44-
20.4 Operator shall select, train and employ such number of employees as is necessary or
appropriate for Operator to satisfy its responsibilities hereunder. Operator shall be the sole authority to
hire, terminate and discipline any and all personnel employed by Operator.
INSPECTION AND AUDIT RIGHTS
21.1 MTC shall have the right at reasonable times and upon reasonable notice to inspect the
installation, operation, and maintenance of the Program and its associated elements.
21.2 Operator shall open and maintain a facility in each of San Francisco, San Jose and East
Bay to support Program operations.
21.3 Operator shall comply with the reporting requirements set forth in Appendix C.
21.4 Throughout the Term, Operator shall maintain complete and accurate books of account and
records of the business, ownership and operations of Operator with respect to the Program.
21.5 MTC has the right upon written demand with reasonable notice to Operator under the
circumstances, to inspect, examine or audit during normal business hours all documents, records or other
information pertaining to Ridership Revenue and Sponsorship Revenue or any other data collected and
maintained by Operator to comply with the reporting requirements of Appendix C. All such documents
shall be made available at one of Operator’s local offices. All such documents shall be retained by
Operator for a minimum of 6 years following the expiration or termination of this Agreement.
RESTRICTION AGAINST ASSIGNMENT
22.1 Operator shall not sell, assign or otherwise transfer all or any portion of its interest in this
Agreement without the prior written consent of MTC, except as otherwise provided in Sections 19.1 and
19.7. Operator shall notify MTC of any proposed sale, assignment or transfer of this Agreement, in
writing, at least 60 days prior to the proposed effective date of such sale, assignment or transfer. In the
event that any such sale, assignment or transfer of this Agreement is approved by MTC, the purchaser,
assignee or transferee shall agree to be bound by all the covenants of this Agreement required of Operator
to the extent arising from and after the effective date of such sale, assignment or transfer. Any purported
sale, assignment or transfer without MTC’s approval as required above shall be void and of no force or
effect. Nothing in the foregoing shall limit (a) the right of Bikeshare Holdings to sell, assign or otherwise
transfer interests in Operator, (b) the right of direct or indirect owners of equity interests in Bikeshare
Holdings to sell, assign or otherwise transfer such interests, (c) the right of Bikeshare Holdings to sell,
assign or transfer all or substantially all of its assets, including its interest in this Agreement, so long as
Operator or, in the case of clause (c), its successor, has the experience and expertise to operate a large-
scale bikeshare program and has substantially the same legal right to obtain replacement Bicycles and
other Equipment, to utilize the Bicycle patents and other Equipment patents, and to utilize the required
Software that Operator has as of the Effective Date. In addition, nothing in the foregoing shall prohibit a
merger, reorganization, recapitalization, consolidation or similar transaction involving Bikeshare
Holdings or any direct or indirect holder of equity interests in Bikeshare Holdings, so long as the
conditions set forth in the preceding sentence are satisfied.
203193300.19 -45-
DISPUTE RESOLUTION PROCESS
23.1 In the event of a dispute between the Parties, including, without limitation, a dispute
regarding liquidation damages pursuant to Section 2.6.3, a dispute regarding the Security Fund, a dispute
regarding a breach of this Agreement or regarding the occurrence or continued existence of a Default,
such dispute shall be addressed and resolved in accordance with the following (the “Dispute Resolution
Process”):
23.1.1 MTC’s Program Manager assigned to the Program and Operator’s General
Manager of the Program, or their respective delegates, shall meet, within 10 days after receipt by one
Party of notification from the other Party of such dispute, to negotiate in good faith in order to try to
resolve such dispute (the date of the first such meeting, or the expiration of such 10-day period if the
meeting is not timely held, being the “Initial Meeting Date”). A KPI Contest Notice shall constitute
appropriate notification for a dispute regarding a right to liquidated damages under Section 2.6.3, and a
rejection of a KPI Change Request shall constitute appropriate notification for a dispute under Section
2.6.2(a). If such persons fail to resolve such dispute within 15 days after the Initial Meeting Date, then the
Executive Director of MTC and the President of Bikeshare Holdings shall meet promptly and negotiate in
good faith in order to resolve such dispute. If such persons fail to resolve such dispute within 30 business
days after the Initial Meeting Date, then such dispute shall be subject to mediation under Section 23.1.2.
As used in this Section 23.2.1, a meeting may be held in person, by conference call or by video
conference. By agreement of the Parties, any of the deadlines set forth in this Section 23.1.1 may be
extended or shortened. The process described in this Section 23.1.1 shall be confidential and treated as a
compromise negotiation for purposes of federal and state rules of evidence.
23.1.2 Unless the Parties otherwise agree, mediation shall be administered by the
American Arbitration Association (the “AAA”) in accordance with its Commercial Rules, or similar
service. A request for mediation shall be made in writing, delivered to the other Party and filed with the
applicable mediation service. Either Party may submit such request. The Parties shall share the
mediator’s fee and any filing fees equally. The mediation shall be held in San Francisco. The Parties
shall be represented by individuals of their choosing. Agreements reached in mediation shall be binding
on the Parties and enforceable in a State or Federal Court of competent jurisdiction sitting in San
Francisco County. The mediation process shall be confidential and treated as a compromise negotiation
for purposes of federal and state rules of evidence.
23.1.3 For the avoidance of doubt, the Parties shall comply with any settlement
agreement regarding any dispute that is the subject of a settlement agreement.
23.1.4 As used in this Agreement, “final resolution” of a dispute or a dispute being
“finally resolved” means that (a) the Parties have entered into a settlement agreement to resolve such
dispute, or (b) if either Party has initiated a judicial proceeding to contest such dispute, that a final-non-
appealable order of a court of competent jurisdiction has been issued for such dispute.
203193300.19 -46-
REPRESENTATIONS AND WARRANTIES OF OPERATOR
24.1 In addition to the representations, warranties, and covenants of Operator set forth
elsewhere herein, Operator represents and warrants to MTC and the Participating Cities as of the Effective
Date:
24.1.1 Operator is a limited liability company, validly existing and in good standing under the
laws of the State of Delaware, and it is duly authorized to do business in the State of
California;
24.1.2 The sole owner of Operator is Bikeshare Holdings; and
24.1.3 Operator has all requisite power and authority to own or lease its properties and assets,
to conduct its business as currently conducted and to execute, deliver and perform this
Agreement and all other agreements entered into or delivered in connection with or as
contemplated hereby.
24.1.4 The execution, delivery and performance of this Agreement and all other agreements, if
any, entered into in connection with the transactions contemplated hereby have been
duly, legally and validly authorized by all necessary action on the part of Operator.
24.1.5 This Agreement has been duly executed and delivered by Operator and constitute the
valid and binding obligations of Operator, and are enforceable in accordance with their
respective terms, subject to equitable legal principles and the laws governing creditors’
rights. Operator has obtained the requisite authority to authorize, execute and deliver
this Agreement and to consummate the transactions contemplated hereby and no other
proceedings or other actions are necessary on the part of Operator to authorize the
execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby.
24.1.6 Neither the execution and delivery of this Agreement by Operator nor the performance
of its obligations contemplated hereby will:
(a) Conflict with, result in a material breach of or constitute a material default
under (or with notice or lapse of time or both result in a material breach of or
constitute a material default under) (i) any governing document of Operator or
to Operator’s knowledge, any agreement among the owners of Operator, or (ii)
any statute, regulation, agreement, judgment, decree, court or administrative
order or process or any commitment to which Operator is a party or by which it
(or any of its properties or assets) is subject or bound;
(b) Result in the creation of, or give any party the right to create, any material lien,
charge, encumbrance, or security interest upon the property and assets of
Operator; or
203193300.19 -47-
(c) Terminate, breach or cause a default under any provision or term of any
contract, arrangement, agreement, license or commitment to which Operator is
a party.
24.1.7 Warranty of Services. In the performance of its services, Operator represents and
warrants that it has and will exercise the degree of professional care, skill, efficiency,
and judgment of those with special expertise in providing such services, and that it
carries and will maintain all applicable licenses, certificates, and registrations needed
for the work in current and good standing.
24.1.8 Neither Operator nor any of its officers, directors or senior management has committed
or been convicted (where such conviction is a final, non-appealable judgment or the
time to appeal such judgment has passed) of any criminal offense, including, but not
limited to, bribery or fraud, arising out of or in connection with (a) this Agreement, (b)
the award of this Agreement, or (c) any act to be taken pursuant to this Agreement by
MTC or its officers, employees or agents, or (d) the business activities and services to
be undertaken or provided pursuant to this Agreement. Operator shall promptly
terminate its relationship with any office, director or senior management of Operator
who is convicted (where such conviction is a final, non-appealable judgment or the
time to appeal such judgment has passed) of any criminal offense, including, but not
limited to, bribery or fraud, arising out of or in connection with: (i) this Agreement, (ii)
the award of this Agreement, (iii) any act to be taken pursuant to this Agreement by
MTC or its officers, employees or agents, or (iv) the business activities and services to
be undertaken or provided by Operator pursuant to this Agreement.
24.2 All representations and warranties contained in this Agreement shall survive the Term.
MISCELLANEOUS
25.1 Operator, MTC and the Participating Cites acknowledge and agree that the nature of the
Program requires extensive and ongoing long-term coordination among the Parties and the Participating
Cities. Accordingly, no later than 10 business days after the Effective Date, Operator, MTC and, in
accordance with the Coordination Agreement, each Participating City, shall designate an employee as its
designated representative (the “Designated Representative”) to be the principal contact of such party in its
dealings with the other parties in connection with the implementation of the Program. Any party may
change its Designated Representative in its sole discretion so long as notice of such change is given to the
other parties.
25.2 All notices, demands or requests under this Agreement shall be in writing and shall be
sufficiently given if sent by registered or certified mail, return receipt requested, by electronic mail
(email), by overnight mail, or by personal delivery, in each case to the address listed below, or to such
other location or person as any party may designate in writing from time to time. Any notice, demand or
203193300.19 -48-
request under this Agreement intended for the Participating Cities shall be sent to MTC. Any notice,
demand or request shall be deemed given on the date of receipt or rejection by the intended recipient.
If to MTC:
Metropolitan Transportation Commission
Joseph P. Bort MetroCenter,
Oakland, CA 94607-470
Attention: Executive Director
Email: SHeminger@mtc.ca.gov
Attention: General Counsel:
Email: AWeil@mtc.ca.gov
Attention: Designated Representative
Email: KMulder@mtc.ca.gov
If to Operator:
Bay Area Motivate, LLC
5202 Third Avenue
Brooklyn, New York 11220
Attention: Jay Walder, President and CEO
Email: jaywalder@motivateco.com
Attention: Justine Lee, Vice President and General Counsel
Email: justinelee@motivateco.com
Bay Area Motivate, LLC
2200 Jerrold Avenue, Unit J
San Francisco, California 94124
Attention: Emily Stapleton, General Manager and Designated Representative
Email: emilystapleton@motivateco.com
Notwithstanding the foregoing, any notice required to be given to Operator pursuant to Section 18 for
which a cure period is 10 business days or less or any other notice that requires action to be taken within
10 business days or less must be given by email, personal delivery or overnight mail service.
25.3 If Operator receives either a notice of default or a notice of noncompliance from a Sponsor,
a lender or a material supplier, it shall notify MTC and supply a copy of the notice of noncompliance
within 5 days of receipt.
25.4 Upon request by Operator, MTC shall execute, acknowledge and deliver to Operator (or
directly to a designated third party) an estoppel certificate in a form reasonably acceptable to the Parties.
MTC shall sign, acknowledge, and return such estoppel certificate within 15 days after request, even if
Operator is in default. Any estoppel certificate shall bind MTC to the extent set forth therein.
25.5 This Agreement shall be binding upon and inure to the benefit of the parties and their
respective permitted successors and assigns. The Recognized Lender shall be a third party beneficiary of
Section 19.
203193300.19 -49-
25.6 No failure on the part of MTC or Operator to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right
preclude any other right, except as provided herein, subject to the conditions and limitations established in
this Agreement. The rights and remedies provided herein are cumulative and not exclusive of any
remedies provided by law, and nothing contained in this Agreement shall impair any of the rights of any
party under applicable law, subject in each case to the terms and conditions of this Agreement. A waiver
of any right or remedy by a party at any one time shall not affect the exercise of such right or remedy or
any other right or other remedy by such party at any other time. In order for any waiver of any party to be
effective, it must be in a writing signed by such party. The failure of MTC to take any action regarding a
default by Operator shall not be deemed or construed to constitute a waiver of, or otherwise affect, the
right of MTC to take any action permitted by this Agreement at any other time regarding such default.
25.7 The clauses and provisions of this Agreement are intended to be severable. If any clause
or provision is declared invalid, in whole or in part, by any court, agency, commission, legislative body,
or other authority of competent jurisdiction, such provision shall be deemed a separate, distinct, and
independent portion, and such declaration shall not affect the validity of the remaining portions hereof,
which other portions shall continue in full force and effect, but only so long as the essential terms
underlying this Agreement are not undermined. If, however, the essential terms underlying this
Agreement are undermined as a result of any clause or provision being declared invalid, in whole or in
part, by any court, agency, commission, legislative body, or other authority of competent jurisdiction, and
such declaration is not stayed within 30 days by a court pending resolution of a legal challenge thereto or
an appeal thereof, the adversely affected party shall notify the other parties in writing of such declaration
of invalidity and the effect of such declaration of invalidity and the parties shall enter into good faith
negotiations to modify this Agreement to compensate for such declaration of invalidity. If the parties
cannot come to an agreement modifying this Agreement within 120 days (which 120 day period shall be
tolled during any stay contemplated above) of such notice, then this Agreement shall terminate with such
consequences as would ensue if it terminated pursuant to Section 18, except Operator shall not be liable
for any damages.
25.8 If any applicable federal, state, or local law or any regulation or order is passed or issued,
or any existing applicable federal, state, or local law or regulation or order is changed (or any judicial
interpretation thereof is developed or changed) in any way which undermines the essential terms
underlying this Agreement, the adversely affected party shall notify the other parties in writing of such
change and the effect of such change and the parties shall enter into good faith negotiations to modify this
Agreement to compensate for such change, subject to any necessary approvals of MTC and the
Participating Cities.
25.9 The headings contained in this Agreement are to facilitate reference only, do not form a
part of this Agreement, and shall not in any way affect the construction or interpretation hereof. Terms
such as “hereby,” “herein,” “hereof,” “hereinafter,” “hereunder” and “hereto” refer to this Agreement as a
whole and not to the particular sentence or paragraph where they appear, unless the context otherwise
requires. The term “may” is permissive; and, the terms “shall,” “must,” and “will” are mandatory, not
merely directive. The term “day” means a calendar day, unless otherwise stated herein to be a “business
day.” The term year means any period of 365 days, unless otherwise stated herein to be a “calendar year.”
All references to any gender shall be deemed to include both the male and the female, and any reference
by number shall be deemed to include both the singular and the plural, as the context may require. Terms
used in the plural include the singular, and vice versa, unless the context otherwise requires. References
203193300.19 -50-
in this Agreement to Sections, Appendices and Exhibits are to Sections, Appendices and Exhibits of this
Agreement.
25.10 Operator shall conduct the work to be performed pursuant to this Agreement as an
independent contractor and not as an agent of MTC or any Participating City.
25.11 This Agreement shall be governed in all respects, including validity, interpretation and
effect, and construed in accordance with, the laws of the State of California, irrespective of conflict of
laws principles, as applicable to contracts entered into and to be performed entirely within the State of
California.
25.12 Subject to the requirement that disputes be addressed in accordance with the Dispute
Resolution Process, each hereby irrevocably submits to the jurisdiction of any State or federal court
sitting in San Francisco County, California, over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent permitted by law, any
objection it may now or hereafter have to such venue as being an inconvenient forum.
25.13 Should any party employ an attorney for the purpose of enforcing or construing this
Agreement, or any judgment based on this Agreement, in any legal proceeding whatsoever, including
insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing party shall be
entitled to receive from the other party or parties thereto reimbursement for all reasonable attorneys’ fees
and all costs, including but not limited to service of process, filing fees, court and court reporter costs,
investigative costs, expert witness fees and the cost of any bonds, whether taxable or not, and such
reimbursement shall be included in any judgment, decree or final order issued in that proceeding. The
“prevailing party” means the party in whose favor a judgment, decree, or final order is rendered.
25.14 No provision of this Agreement nor any Appendix or Exhibit shall be amended or
otherwise modified, in whole or in part, except by a written instrument, duly executed by the Parties and
approved as required by applicable law.
25.15 This Agreement may be executed in one or more counterparts which, when taken together,
shall constitute one and the same.
25.16 Time is of the essence with respect to the obligations of the parties under this Agreement
and with respect to the deadlines for submitting notices, including, without limitation, a KPI Failure
Notice, a KPI Contest Notice or any notice under Section 15.3 or 18.1.
25.17 If Operator publishes a work dealing with any aspect of performance under this
Agreement, or of the results and accomplishments attained in such performance, then MTC shall have a
royalty-free, non-exclusive and irrevocable license to reproduce, publish, or otherwise use and to
authorize others to use the publication, or, in the event that only a portion of the publication deals with an
aspect of performance under this Agreement, such portion of the publication.
TN WITNESS WHEREOF,MTC and Operator have executed this Agreement as of the Effective Date.
METROPOLITAN TRANSPORTATION COMMISSION
By:
Name:eriiinger
Title:Executive Director
Signature Page to Program Agreement
BAY AREA MOTIVATE,LLC
By:______
Name:Jay a1dr
Title:Presid nt ahd Chief Executive Officer
V
Signature Page to Program Agreement 5-2
203193300.19 A-1
Appendix A
Key Performance Indicators and Liquidated Damages
This Appendix A sets forth the Key Performance Indicators and the liquidated damages assessed against Operator for failing to comply with the Key
Performance Indicators. Key Performance Indicators are subject to extension for Events of Force Majeure. Liquidated damages are subject to the annual
limitation of 4% of Ridership Revenues.
KPI
#
Title Definition Measurement
Tool(s)1
Liquidated Damages
1 Station Cleaning
and Inspection
Station Cleaning for each Station must occur 2 times per
month-- one time between the first and fifteenth days of
the month, and one time between the sixteenth and last
days of the month. Litter removal needs to occur for on
street Stations at least once per week.
Additional litter removal to occur on an as-needed basis.
Operator records/
databases
$75 for each Station that is not
cleaned according to schedule.
2 Graffiti Removal (a) Except as required by clause (b) below, Operator shall
remove conspicuous graffiti within 72 hours after
Notification.
(b) Operator shall remove racist and hate graffiti within 4
hours after Notification.
Operator
records/databases
(a) $50 for each 24-hour period (or
part thereof) beyond 72 hours.
(b) $50 for each 4-hour period (or
part thereof) beyond 4 hours.
3 Litter Removal Operator shall remove conspicuous accumulations of
litter from Stations within 24 hours after Notification.
Operator
records/databases
$50 for each 4-hour period (or part
thereof) beyond 24 hours.
4 Bicycle
Maintenance
Every Bicycle in the Bicycle Fleet shall receive a Bicycle
Maintenance check at least once every two calendar
months.
Operator records/
databases
$25 for each Bicycle that is not
subject to a Bicycle Maintenance in
any 2-calendar month period.
1 Sources of information used to assess compliance with these service levels may include, but are not limited to, those listed in the “Measurement Tool(s)” column.
203193300.19 A-2
KPI
#
Title Definition Measurement
Tool(s)1
Liquidated Damages
5 Station
Deactivation and
De-Installation
As directed by MTC or a Participating City, Operator must
perform:
(i) Station Deactivation(s);
(ii) Station De-Installation(s);
(iii) Station Re-Installation(s);
(iv) Station Adjustment(s).
(i) Operator will Deactivate a Station within 24 hours
after a request from a Participating City, except in
instances where the continued presence/activity of the
station has been determined to pose a threat to public
safety.
(ii) Operator will complete a De-Installation of a Station
within 72 hours after a request from a Participating City,
except in instances where the continued
presence/activity of the station has been determined to
pose a threat to public safety.
(iii, iv) Deactivated Stations must be reactivated within
24 hours of direction from a Participating City. De-
Installed or Adjusted Stations must be reinstalled or
Readjusted to their original configurations within 72
hours of direction from a Participating City.
Notwithstanding the foregoing, the KPIs for De-
Installation and reinstallations are limited to 20 in any
72-hour period. The time permitted for larger scale De-
Installation and reinstallation will be subject to
agreement between Operator and MTC.
Electronic
communications
(i) $75 for each hour of delay (or
part thereof) beyond 24 hours for
Deactivation.
(ii) $75 for each hour of delay (or
part thereof) beyond 72 hours for
De-Installation.
(iii, iv) $50 for each hour of delay
(or part thereof) beyond 24 hours
for reactivation; $50 for each hour
of delay (or part thereof) beyond
72 hours for reinstallation or
Readjustment.
203193300.19 A-3
KPI
#
Title Definition Measurement
Tool(s)1
Liquidated Damages
6 Program
Functionality
The Program must be operational 100% of the time every
month (i.e., every hour of every day, 24 hours per day, 7
days per week, measured monthly), so that, at a
minimum, all Program users can dock and undock
Bicycles at all times, excluding (i) scheduled downtime,
and (ii) any period when the Computer Hardware for the
Program and/or Software is, and remains, damaged
through Hacking.
Program Functionality does not apply to hardware
malfunctions at individual Stations or to individual
Stations that are not Operable Stations.
Software System If in any month the Program is
operational less than 100% of the
time, then $300 for every hour (or
part thereof) that the Program is
not operational.
7 Station
Operability
Stations, in the aggregate, must be Operable Stations
99% of the time every month (i.e., every hour of every
day, 24 hours per day, 7 days per week, measured
monthly), excluding (i) during scheduled downtime, and
(ii) any period when a Station is not an Operable Station
because the Kiosk or other Equipment located at the
Station has been damaged by third-parties.
Calculated by taking the sum of the number of hours that
each Station was an Operable Station during a month,
dividing that sum by the product of the total number of
hours in the month and the number of Stations that
month.
Station Operability does not apply during any period in
which the entire Program system is down.
Operator records/
databases
If in any month the Stations are not
Operable Stations 99% of the time,
then $100 for every hour that
Stations are not Operable Stations
below the 99% threshold.
203193300.19 A-4
KPI
#
Title Definition Measurement
Tool(s)1
Liquidated Damages
8 Website
Operations
The Program website must be operational 100% of the
time every year (i.e., every hour of every day, 24 hours
per day, 7 days per week, measured annually) excluding
(i) scheduled downtime, and (ii) any period when the
Computer Hardware for the Program and/or Software is,
and remains, damaged through Hacking.
Operator records/
databases
If in any year the website is not
operational 100% of the time, then
$50 for every hour each year that
the website is not operational.
9 Telephone
Answering Time
Not less than 80% of telephone calls to Operator’s call
center each month must be answered by a person within
90 seconds or less.
Operator records/
databases
$100 for every percentage point
below 80% that telephone calls are
not answered in 90 seconds or less
in any month.
10 Email Response
Time
Not less than 95% of emails to Operator’s public
information email address must be answered within 1
business day.
Operator records/
databases
$100 for every percentage point
below 95% that emails are not
answered within 1 business day or
less in any month.
11 Bicycle Availability
This Bicycle Availability requirement is met if the monthly
average Bicycle Fleet Level, recorded once each Day of
the month between the hours of 11:00 AM and 3:00 PM,
is not less than 90% of the Program Fleet.
Damages are calculated as the sum of Bicycles under the
threshold for each Day that the recorded Bicycle Fleet
Level is less than the required Bicycle Fleet Level.
Software System $15 for each Bicycle that is under
the 90% threshold each month.
203193300.19 A-5
KPI
#
Title Definition Measurement
Tool(s)1
Liquidated Damages
12 Rebalancing No station Cluster shall be completely empty of available
bikes for use or completely lacking of empty, operable
docks for more than 10 consecutive minutes during Peak
Hours (i.e., 6:00 am to 10:00 pm).
The Rebalancing KPI set forth above is an interim KPI.
During the Assessment Period (as defined in Section
2.6.2(b) of the Agreement), the Rebalancing KPI will be
assessed and reformulated, and a new Rebalancing KPI
will be fully implemented immediately following the
Assessment Period.
Software System/
Operator records/
databases
$1.00 for each minute that a
Cluster Outage occurs beyond 10
consecutive minutes during Peak
Hours.
Liquidated Damages do not apply
to the Stations installed as part of a
Phase for the first 6 months after
the completion of such Phase.
203193300.19 B-1
Appendix B
Cost of Equipment
PENINSULA PILOT CITIES:
• Cost to upgrade AD Equipment: $12.50 per Dock per month, subject to PPI Adjustment.
• Cost to purchase new Equipment: As set forth in the New Equipment Price Schedule below.
The prices set forth in such schedule are subject to PPI Adjustment.
• Cost to install new Equipment (including site planning and drawings): $4,000 per Station,
subject to CPI Adjustment
• Cost to operate and maintain the Equipment: $100 per Dock per month, subject to CPI
Adjustment, and subject to the following reductions:
(i) Cost to operate and maintain will be reduced to $75 per Dock per month, subject to
CPI Adjustment, during any 12-month period in which there is an average of 1 Trip
per Bicycle per day for the entire Bicycle Fleet in such Peninsula Pilot City (subject
to Bicycle Availability)
(ii) Cost to operate and maintain will be reduced to $50 per Dock per month, subject to
CPI Adjustment, during any 12-month period in which there is an average of 1.5
Trips per Bicycle per day for the entire Bicycle Fleet in such Peninsula Pilot City
(subject to Bicycle Availability)
(iii) Cost is reduced to $0 per dock, adjusted by CPI, if an average of 3 rides per bike
per day citywide occurs for a 12 month period
OTHER ELIGIBLE CITIES:
• Cost to purchase new Equipment: As set forth in the New Equipment Price Schedule below.
The prices set forth in such schedule are subject to PPI Adjustment.
• Cost to install new Equipment (including site planning and drawings): $4,000 per Station,
subject to CPI Adjustment
• Cost to operate and maintain the Equipment: $130 per Dock per month, subject to CPI
Adjustment, and subject to the following reductions:
(i) Cost to operate and maintain will be reduced to $97.50 per Dock per month, subject
to CPI Adjustment, during any 12-month period in which there is an average of 1
Trip per Bicycle per day for the entire Bicycle Fleet in such Eligible City (subject
to Bicycle Availability)
203193300.19 B-2
(ii) Cost to operate and maintain will be reduced to $65 per Dock per month, subject to
CPI Adjustment, during any 12-month period in which there is an average of 1.5
Trips per Bicycle per day for the entire Bicycle Fleet in such Eligible City (subject
to Bicycle Availability)
(iii) Cost to operate and maintain will be reduced to $0 per Dock per month, subject to
CPI Adjustment, during any 12-month period in which there is an average of 3.0
Trips per Bicycle per day for the entire Bicycle Fleet in such Eligible City (subject
to Bicycle Availability)
• If Operator contracts with a private property owner to locate a publicly-accessible Station on
private property in the Eligible City, then the cost to operate and maintain the Equipment will be a
matter for agreement between Operator and the private property owner.
New Equipment Price Schedule
Station Size (No. of Bicycles)No. of Docks Cost (Excluding Sales Tax)
8 15 47,166.98$
10 19 55,503.56$
12 23 63,840.15$
14 27 72,176.74$
16 31 80,513.33$
18 35 88,849.92$
20 39 97,186.51$
203193300.19 C-1
Appendix C
Reporting Requirements
MTC shall have real-time, read-only access to data as specified in the Functional Specifications.
Operator shall deliver a monthly report, by the 25th day of each month, to MTC, with all of the data
described below, and in a form that is acceptable to, and approved by, MTC for the Program. Except for
financial information, the data shall reflect all relevant facts as they existed with respect to the
immediately preceding calendar month (e.g., the June report would reflect the non-financial data for
May), and the reports shall provide cumulative calendar year-to-date totals for each category (as may be
applicable). For all financial information, the data shall reflect all relevant facts as they existed with
respect to the calendar month that immediately precedes the immediately preceding calendar month (e.g.,
the June report would reflect the financial data for April), and the reports shall provide cumulative
calendar year-to-date totals for each category (as may be applicable). No more frequently than once every
six months, Operator may request a meeting with MTC to assess the effectiveness of these Reporting
Requirements; upon mutual agreement, the Reporting Requirements below may be adjusted.
1) Membership:
• YTD membership counts at the end of the reporting month, by membership type and Participating
City;
• Number of new members by type and Participating City, who signed up during the reporting
month, by day and month; and
• Number of cancellations and expirations of registered members, by type and Participating City,
during the reporting month.
2) Ridership:
• “Trip” shall mean the use of a Bicycle from one Station to another Station or back to the initial
Station;
• Trips per Day, per Participating City and member type, for the entire Program; and
• Total Trips per month, and YTD per Station, Participating City, and member type, for the entire
Program.
3) Environmental Impact:
• Total and average calories burned per Day/month, by Participating City for the entire Program,
based on calculation using total and average Trip durations; and
• Carbon offset per month, by Participating City and for the entire Program, based on calculation
using total hours of usage.
4) Rebalancing Operations:
203193300.19 C-2
• Number of Bicycles rebalanced per Day;
• Bicycles on the street per Day per Participating City;
• List of full and empty instances (Station, start time, end time, and date) in excess of 10
consecutive minutes between 6:00 AM and 10:00 PM;
• Count of full and empty instances per Station and Participating City by Day and month in excess
of 10 consecutive minutes between 6:00 AM and 10:00 PM;
• Breakdown of full and empty instances by duration in excess of 10 consecutive minutes between
6:00 AM and 10:00 PM;
• List of full and empty instances (Station, start time, end time, and date) between 6:00 AM and
10:00 PM at “priority” Stations (to the extent “priority” Stations have been established);
• Count of full and empty instances per Station and Participating City by Day and month between
6:00 AM and 10:00 PM at “priority” Stations (to the extent “priority” Stations have been
established);
• Breakdown of full and empty instances by duration between 6:00 AM and 10:00 PM at “priority”
stations (to the extent “priority” stations have been established); and
• Percentage of time Stations are normal, full, or empty.
5) Station Maintenance Operations:
• List of Stations cleaned and dates of each cleaning;
• Number of active Stations;
• List of all Station malfunctions (Station, start and end date and time, and event); and
• Percentage of time Stations were available to provide rentals for monthly and annual members by
Station and for the entire Program.
6) Bicycle Maintenance Operations:
• Count of Bicycles checked per month;
• Count of Bicycles repaired per month;
• List of Bicycles by unique ID number not checked per month.
7) Incident Reporting:
• List of all incidents (crash, vandalism, theft, and police action) with dates and summary of
outcomes.
203193300.19 C-3
8) Customer Service Reporting:
• Number of calls and emails, with total and broken down by classification;
• Average time to answer call;
• Average time of call;
• Number of refunds and amount given per month; and
• Upon call center software availability, number of calls of different types of issues, and average
length of call.
9) Customer Outreach:
• Web site analytics.
10) Financial Summary:
• Fees assessed to bike share users due to lost or damaged bicycles;
• Revenue generated from subscriptions, by subscription type;
• Revenue generated from usage fees, by subscription type; and
• Revenue generated from other sources, including Advertising and Sponsorships.
11) Compliance with KPIs:
• Recorded Bicycle Fleet Level for each day as recorded between the hours of 11:00 AM and 3:00
PM.
203193300.19 D-1
Appendix D
Functional Specifications
Functional Specification
Software
Billing
Product requirements
Annual and casual billing
Usage charges billing
Discounts
Refunds
Administrative and stolen bike charges
Automatic renewal of accounts
Opt-in/Opt-out ability for automatic renewal
Allow Annual Members to use Clipper Card to access Bicycles in lieu of key fob2
Automatic emails to customers
Ability to edit text in emails to customers
Automatic emails in the following instances:
Upon successful renewal
Upon signup
Upon failed monthly payment
Upon successful monthly payment
Upon credit card change
Upon credit card expiration
Upon account renewal needed (manual billing)
Upon upcoming automatic account renewal (automatic billing)
Upon successfully account renewal
Upon failed account renewal
Upon successful bike return (user configurable)
Upon missing bike (user and system configurable)
Upon incurrence of overage fees
Upon system shut down
PCI Compliance
PCI Compliance of Bike Share Operator and System
Remote functionality
Ability to shut down system (prevent bikes from being rented)
Ability to lock down bikes (with visual indicator)
Ability to shut down stations
Ability to reboot remotely (when connected)
Operational Dashboards (The following dashboards should be available at a minimum)
2To be achieved by the later of 20 months after the Effective Date and completion of Phase IV.
203193300.19 D-2
Subscriptions
Number of casual users by subscription type
Number of members by subscription type
Customer rental activity
Number of open rentals and duration of rental
Number of trips and rentals completed by casual and registered members
Real-Time Dashboards
Station status (total, working, out of order, locked, disconnected)
Station occupancy (current and recent history of station bike/dock occupancy)
Docking point status (total, locked, error, empty, bike docked)
Bike status (docked, in rental, defective, other)
Private data feed
MTC to have access to analytical/reporting databases provided by bikeshare
system.
Public data feed
All public data feeds should cover the following at a minimum:
Station Name
Station ID
Station Status (locked/unlocked)
Latitude
Longitude
# of total docking points
# of available docking points
# of inoperable docks (w/ and w/o bikes)
# of available bikes
Last communication time with server
Excludes test/warehouse station
Product support and redundancy
Features for product support include
System redundancy
Real-time database backups
Development and QA will be done separate from the production
environment
Software escrow
A third-party software escrow with the latest major software release must be
maintained at all times
Hardware
Docking mechanism
Subscriber can unlock a bike (e.g., via a valid key or card)
Locking mechanism that opens within configurable number of seconds
Locking mechanism that closes immediately with moderate docking force
Defaults to unlocked/open when bike is not present
Functional user lock-down capability ("wrench button") with permanent visual
203193300.19 D-3
indicator
Visual and audible indication of successful, failed, or in-progress transaction
Bike
Step through design
Hold someone up to 240 pounds
Can lock and unlock securely
Bell
Front and rear flashing lights when bike is moving; stay illuminated for 60 seconds
after bike stops
Reflective sidewalls on tires
Within range, an infinitely adjustable seat height with ergonomic lever/tension
adjustment and high-contrast height markings
Carrier not susceptible to trash accumulation
Wheels greater than or equal to 26" in diameter
Fenders for front and rear wheels
Front and rear hand brakes
Multiple speed drivetrain
Scratch- and graffiti-resistant frame finish
Reflectors on pedals, spokes, and front and rear of bike
Rubber tread on pedals
Room for safety messaging on handlebar and front cockpit
Tamper-resistant hardware (including hidden cables and custom wrench fittings)
Chain guard
Kiosk station
Short-term user can unlock one or multiple bikes (e.g., via valid ride code or key).
Casual users can use single credit card to rent up to 4 bikes
Hibernation stage
Vandal resistant, replaceable screens
Nearby station functionality
Multiple languages
203193300.19
Attachment A
Agreement to Continue Pilot Bike Share Program
203215669.16
ATTACHMENT A
AGREEMENT TO CONTINUE PILOT BIKE SHARE PROGRAM
by and between
BAY AREA MOTIVATE, LLC
and
METROPOLITAN TRANSPORTATION COMMISSION
203215669.16 1
Table of Contents
RECITALS ..................................................................................................................................... 3
ARTICLE I SCOPE OF SERVICES; TERM ........................................................................... 3
ARTICLE II REVENUES; USER FEES; AND OPERATING EXPENSES ......................... 4
ARTICLE III EMPLOYEE AND EMPLOYMENT MATTERS ............................................ 5
ARTICLE IV OWNERSHIP AND PROPRIETARY RIGHTS .............................................. 7
ARTICLE V TERMINATION .................................................................................................... 7
ARTICLE VI DISPUTE RESOLUTION ................................................................................... 8
ARTICLE VII INSURANCE....................................................................................................... 8
ARTICLE VIII INDEMNIFICATION AND LIMITATION OF LIABILITY .................... 12
ARTICLE IX THIRD PARTY BENEFICIARIES ................................................................. 13
ARTICLE X MISCELLANEOUS ............................................................................................ 13
ARTICLE XI DEFINITIONS ................................................................................................... 17
Attachment A-1, Description of Services ..................................................................................... 21
Attachment A-2, Subscriber Related Fees .................................................................................... 28
Attachment A-3, New Subscriber-Related Fees ........................................................................... 30
203215669.16 2
ATTACHMENT A
AGREEMENT TO CONTINUE PILOT BIKE SHARE PROGRAM
THIS AGREEMENT TO CONTINUE THE PILOT BIKE SHARE PROGRAM (this
“Continuation Agreement”), has an effective date (the “Effective Date”) that is the same as the
effective date of the BAY AREA BIKE SHARE PROGRAM AGREEMENT, to which this
Continuation Agreement is attached (the “Program Agreement”), by and between the
METROPOLITAN TRANSPORTATION COMMISSION, a California public agency
established pursuant California Government Code § 66500 et seq., having an office at 101 Eighth
Street, Oakland, California (“MTC”), and BAY AREA MOTIVATE, LLC, a Delaware limited
liability company, having any office at 5202 Third Avenue, Brooklyn, New York 11220, as
Operator of the Bay Area Bike Share Program (“Operator”).
RECITALS
WHEREAS, Alta Bicycle Share, Inc., an Oregon corporation (“Alta”), and Bay Area Air
Quality Management District, a California special district (the “Air District”), entered into a Bike
Share Program Agreement having an effective date of February 6, 2013 (the “Pilot Program
Agreement”), pursuant to which Operator operated a pilot bike sharing program (the “Pilot
Program”) in the cities of San Jose, Palo Alto, Mountain View, Redwood City and San Francisco
(each, a “Pilot City” and collectively, the “Pilot Cities”);
WHEREAS, on the date hereof, (a) the Air District and Motivate International, Inc.,
formerly known as Alta (“Motivate”), terminated the Pilot Program Agreement, (b) the Air
District and MTC agreed to the conveyance of all of the Air District’s right, title and interest in
and to the tangible and intangible property acquired or developed in connection with the Pilot
Program from the Air District to MTC, and (c) MTC and Operator agreed to the conveyance of
all of MTC’s right, title and interest in and to the tangible property acquired or developed in
connection with the Pilot Program (the “Pilot Program Property”) from MTC to Operator ;
WHEREAS, the Parties have agreed that Operator will continue to operate the Pilot
Program in the Pilot Cities using the Pilot Program Property; and
WHEREAS, capitalized terms not otherwise defined when they first appear in this
Continuation Agreement are defined in Article XI.
NOW, THEREFORE, in consideration of the foregoing clauses, which clauses are hereby
made a part of this Continuation Agreement, and the mutual covenants and agreements herein
contained, and for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Parties do hereby covenant and agree as follows:
ARTICLE I
PURCHASE OF PILOT PROGRAM PROPERTY; SERVICES; TERM
1.1 Purchase of Pilot Program Property. On the Effective Date, Operator shall
purchase the Pilot Program Property for the purchase price agreed to among Operator, MTC and
203215669.16 3
the Air District, and Operator shall remit payment of the purchase price to MTC not later than
the 15th day after the Effective Date.
1.2 Services. Operator shall, during the Term (as defined in Section 1.3), operate and
maintain in the Pilot Cities a bike share system that was originally established under the Pilot
Program Agreement (the “System”). Operator shall (a) utilize the Sites being used as of the
Effective Date from the Pilot Program as well as the Bicycles, Docks, Technical Platforms, Map
Frames, Terminals and other Equipment existing as of the Effective Date from the Pilot Program,
and Operator shall not be obligated to purchase any Equipment, new or otherwise, that was not
Pilot Program Property; (b) subject to Events of Force Majeure, provide the specific services set
forth in this Continuation Agreement; (c) provide all technical expertise and qualified personnel
to operate the System safely and competently; and (d) correct defective or non-conforming
services. All services shall be performed in compliance with this Continuation Agreement and
shall be carried out in strict compliance with all applicable federal, state and local laws and
regulations.
1.3 Term. This Continuation Agreement shall commence on the Effective Date and
shall end (a) for Mountain View, Palo Alto and Redwood City, on June 30, 2016, and (b) for San
Francisco and San Jose, upon installation of 75% of the Phase I Stations located in San
Francisco and San Jose. Notwithstanding the foregoing, if MTC terminates the Program
Agreement pursuant to the second to last sentence of Section 3.4.1 of the Program Agreement,
then this Continuation Agreement shall terminate at the same time the Program Agreement
terminates, and Sections 5.1D, 5.5 and 5.6 shall apply. The bike share program to be
implemented under the Program Agreement is referred to as the “BABS Program.”
ARTICLE II
REVENUES; USER FEES; AND OPERATING EXPENSES
2.1 Revenues. Operator shall be entitled to collect and retain all System Operating
Revenues.
2.2 User Fees. From the Effective Date to June 30, 2016, user fees shall be consistent
with the fee schedule set forth in Attachment A-2. After June 30, 2016, Operator shall have the
right to institute the fee schedule set forth in Attachment A-3.
2.3 Operating Expenses.
2.3.1 San Francisco and San Jose. Subject to Section 2.3.3, Operator shall be
responsible for paying the expenses of operating and maintaining the System in San Francisco
and San Jose.
2.3.2 Mountain View, Palo Alto and Redwood City. Subject to Section 2.3.3,
from the Effective Date through December 31, 2015, Operator shall be responsible for paying the
expenses of operating and maintaining the System in Mountain View, Palo Alto and Redwood
City. From January 1, 2016 to the end of the Term, MTC shall pay to Operator $100 per Dock
per month for Mountain View, Palo Alto and Redwood City to cover Operating Expenses in
those cities.
203215669.16 4
2.3.3 MTC Payment. Subject to the last sentence of this paragraph, MTC shall
cover 50% of Operator’s (and Motivate’s) Operating Losses for the period commencing August
29, 2015 and ending on the earlier of the Effective Date and December 31, 2015 (the “Covered
Period”). Within 30 days after the end of the Covered Period, Operator shall send MTC a
statement setting forth Operator’s (or Motivate’s) Operating Losses, if any, for the Covered
Period accompanied by reasonable back-up. Notwithstanding the existence of Operator’s (or
Motivate’s) Operating Losses for any particular month, MTC’s obligation under this Section
2.3.3. shall apply only to Operator’s (and Motivate’s) cumulative Operating Losses over the
entire Covered Period. MTC shall pay Operator for any such cumulative Operating Losses
within 30 days following Operator’s submission of its statement for the Covered Period. MTC’s
payment obligation under this paragraph is capped at $100,000.
2.4 Taxes, Dues, and Fees. Operator shall pay all applicable federal, state, and local
taxes assessed against, arising out of, and collected from the service operation, including sales,
use, license, and/or privilege taxes. Operator shall at all times maintain records evidencing
revenue and the taxes collected as are required to substantiate the correctness of the tax returns
filed.
2.5 No Tax Exemption. No provision of this Continuation Agreement shall be
construed to provide Operator or any of its subcontractors with an exemption, exclusion,
deferral, offset or other relief from any assessment, tax, levy, or penalty which is now or which
may be hereafter authorized by law.
2.6 Covenant Against Contingent Fees. Operator warrants that it has not employed or
retained any company or person, other than a bona fide employee working for Operator, to solicit
or secure this Continuation Agreement and that it has not paid or agreed to pay any company or
person other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift, or
any other consideration, contingent upon or resulting from the award, or formation of this
Continuation Agreement. For breach or violation of this warranty, MTC shall have the right to
annul this Continuation Agreement without liability, or, at its discretion, to deduct from the
agreement price or consideration, or otherwise recover, the full amount of such fee, commission,
percentage, brokerage fee, gift, or contingent fee.
2.7 Liquidated Damages. Subject to Events of Force Majeure, the failure of Operator
to achieve the service levels described in Section 3 of Attachment A-1 will result in liquidated
damages but only if such failure relates to a service level described in such Section 3 for which
there is a corresponding “Key Performance Indicator” in Appendix A of the Program Agreement.
Operator will have no liability for a failure to achieve a service level described in such Section 3
for which there is no corresponding “Key Performance Indicator” in Appendix A of the Program
Agreement. Liquidated damages will be assessed at half of the rate set forth in Appendix A of
the Program Agreement. MTC shall notify Operator on a monthly basis of any such failures and
the corresponding liquidated damages, but payment of such liquidated damages shall not be due
until the completion of Phase I.
203215669.16 5
ARTICLE III
EMPLOYEE AND EMPLOYMENT MATTERS
3.1 Project Manager. Each Party shall appoint a project manager to act, except as
otherwise specified in this Continuation Agreement, as the primary contact person for purposes
of this Continuation Agreement. The provision by Operator of services to operate and maintain
the System is subject at all times to inspection and review by MTC Project Manager.
3.2 Fairness Policy. No employee of MTC shall be admitted to any share or part of
this Continuation Agreement or to any benefit that may arise therefrom that is not available to
the general public.
3.3 Employment Discrimination by Operator Prohibited. During the performance of
this Continuation Agreement, Operator agrees as follows:
A. Operator shall not discriminate against any employee or applicant for
employment because of race, religion, color, sex, national origin, age,
disability or any other basis prohibited by state law related to discrimination in
employment except where there is a bona fide occupational qualification
reasonably necessary to the normal operation of Operator. Operator agrees to
post in conspicuous places, available to employees and applicants for
employment, notices setting forth the provisions of this nondiscrimination
clause.
B. Operator, in all solicitations or advertisements for employees placed by or on
behalf of Operator, will state that Operator is an Equal Opportunity Employer.
C. Notices, advertisements, and solicitations placed in accordance with federal
law, rule, or regulation shall be deemed sufficient for the purpose of meeting
the requirements of this Section 3.3.
D. Operator will comply with the provisions of the Americans with Disabilities
Act of 1990 which prohibits discrimination against individuals with
disabilities in employment and mandates their full participation in both
publicly and privately provided services and activities.
E. Operator shall not discriminate against any customer, prospective customer,
employee or prospective employee because of race, color, sex, age, religion,
or country of origin.
3.4 General Compliance with Laws and Wage Rates. Operator will comply with all
federal, state, and local laws and ordinances applicable to the provision of services to operate and
maintain the System. This includes compliance with prevailing wage rates and their payment in
accordance with California Labor Code section 1775, to the extent applicable.
3.5 Supervision by Operator. Operator shall at all times require strict discipline and
good order among Operator’s employees and all subcontractors providing any of the services
required hereunder. Operator shall not permit, and shall require all subcontractors not to permit,
203215669.16 6
any employee or other person to provide any service required hereunder unless such employee or
other person has demonstrated proficiency in the type of work which such employee or other
person is assigned to perform.
3.6 Non-Discrimination. During the performance of this Continuation Agreement,
Operator and its subcontractors shall not unlawfully discriminate, harass, or allow harassment
against any employee or applicant for employment because of sex, race, color, ancestry, religious
creed, national origin, physical disability (including HIV and AIDS), mental disability, medical
condition (e.g., cancer), age (over 40), marital status, and denial of family care leave. Operator
and subcontractors shall insure that the evaluation and treatment of their employees and
applicants for employment are free from such discrimination and harassment. Operator and
subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Gov.
Code §12990 (a-f) et seq.) and the applicable regulations promulgated thereunder (California
Code of Regulations, Title 2, Section 7285 et seq.). The applicable regulations of the Fair
Employment and Housing Commission implementing Government Code Section 12990 (a-f), set
forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations, are incorporated
into this Continuation Agreement by reference and made a part hereof as if set forth in full.
Operator and its subcontractors shall give written notice of their obligations under this clause to
labor organizations with which they have a collective bargaining or other Agreement.
3.7 Subcontractors Restrictions. Operator shall only enter into subcontracts with
subcontractors that have clearly demonstrated proficiency in the tasks which are the subject of
such subcontracts. Operator is prohibited from hiring or subcontracting with any individuals that
participated in the selection of Operator or the development of this Continuation Agreement for a
period of 24 months from the date of execution of this Continuation Agreement.
ARTICLE IV
OWNERSHIP AND PROPRIETARY RIGHTS
4.1 Rights, Authorizations, Licenses, Permits, and Other Permissions. Except as
explicitly set forth in Attachment A-1, Operator shall, at its sole cost and expense, obtain all
rights, authorizations, licenses, permits, and other permissions, from all federal, state, and local
governments, and other entities or persons, necessary for Operator to provide the services
required under this Continuation Agreement. MTC’s execution of this Continuation Agreement
shall neither constitute nor be deemed to be governmental approval of, or consent to, any rights,
authorizations, licenses, permits, and permissions required or needed to be obtained by Operator.
4.2 Use of Seals, Logos, Servicemarks, Trademarks, and Copyrighted Material.
Operator shall not use, display, or reproduce the seal, logo, servicemark, trademark, or
copyrighted material of the Air District, MTC or any Pilot City without the prior express written
authorization of the Air District, MTC or any Pilot City, as applicable.
4.3 Third Party Intellectual Property. Operator covenants to save, defend, hold
harmless, and indemnify MTC and the Pilot Cities, and all of their officers, officials,
departments, agencies, agents, and employees from and against any and all claims, losses,
damages, injuries, fines, penalties, costs (including court costs and attorney's fees), charges,
liability, or exposure, however caused, for or on account of any trademark, copyright, patented or
203215669.16 7
unpatented invention, process, or article manufactured, supplied, or used in the performance of
this Continuation Agreement, including its use by MTC or any Pilot City.
ARTICLE V
TERMINATION
5.1 Termination.
A. Right of MTC to Terminate. MTC shall have the right to terminate this
Continuation Agreement if Operator fails to provide the services required
hereunder satisfactorily or if Operator breaches any term, condition, or
covenants of any of this Continuation Agreement.
B. Failure or Breach. If Operator fails to provide the services required hereunder
satisfactorily or if Operator breaches any term, condition, or covenants of any
of this Continuation Agreement, then MTC will give Operator written notice
of such failure or breach and 30 days to cure such failure or breach. If
Operator fails to cure such failure or breach by the expiration of such 30-day
period, then MTC shall have the right to give Operator a written notice of
termination, including the date when the termination shall be effective (the
“Termination Effective Date”).
C. Operator’s Contest. If Operator in good faith contests any such failure or
breach, then such termination shall be suspended pending the outcome of such
contest.
D. Termination of Program Agreement. If the Program Agreement terminates
for any reason prior to completion of Phase I under the Program Agreement,
then this Continuation Agreement shall terminate concurrently, and Sections
5.5 and 5.6 shall apply.
5.2 Stop Work. Unless otherwise directed in writing by MTC, Operator shall stop
providing services as of the Termination Effective Date, terminate all vendors and subcontractors
effective as of the Termination Effective Date, and settle all outstanding liabilities and claims.
5.3 Compensation. Operator will be entitled to receive compensation as provided in
Article II to the Termination Effective Date.
5.4 Sole Remedies. Notwithstanding anything to the contrary herein, other than
liquidated damages under Section 2.7, the sole remedy of MTC and the Pilot Cities against
Operator for breach of this Continuation Agreement, excluding a breach of Article VIII, or for
failure to provide the services satisfactorily, is to terminate this Continuation Agreement in
accordance with Article VII. Except for liquidated damages under Section 2.7, in no event shall
Operator be liable for damages of any kind for breach of this Continuation Agreement, other than
a breach Article VIII, or for failure to provide the services satisfactorily.
5.5 Transition. Upon termination of this Continuation Agreement pursuant to Section
5.1D, Operator shall comply with the following close-out procedures:
203215669.16 8
5.5.1 Turning over to MTC or its designees copies of all books, records,
documents and materials specifically relating to this Continuation Agreement and reasonably
requested by MTC;
5.5.2 Submitting to MTC, within 120 days, a final statement and report relating
to this Continuation Agreement that has been reviewed by a certified public accountant or a
licensed public accountant;
5.5.3 Providing reasonable assistance to MTC during the transition; and
5.5.4 Continuing to operate the System in accordance with the terms of this
Continuation Agreement and to effect an efficient and orderly transition of responsibility with
respect to the operation of the System until the earlier of (i) 180 days after such termination and
(ii) the selection of a replacement operator for the System and such replacement operator
commencing operation of the System (such earlier date being the “Transition Termination
Date”); provided, however, that MTC shall cover 100% of Operator’s Operating Losses for the
period commencing upon termination of this Continuation Agreement and ending on the
Transition Termination Date (such period being the “Transition Period”), subject to an
aggregate cap for the Transition Period equal to the product of (X) the number of months of the
Transition Period, (Y) $20 for each Dock, and (Z) the number of Docks. Within 30 days after
the end of each month during the Transition Period, Operator shall send MTC a statement setting
forth Operator’s Operating Losses, if any, for the preceding month accompanied by reasonable
back-up. MTC shall pay Operator for any such monthly Operating Losses within 30 days
following Operator’s submission of its statement for such month, subject to a cap calculated on
a monthly basis equal to $20 for each Dock. Within 60 days following the end of the Transition
Period, the Parties shall reconcile Operator’s cumulative Operating Losses for the entire
Transition Period with Operator’s monthly, non-cumulative Operating Losses for the entire
Transition Period, and shall also reconcile the aforementioned aggregate cap applied to the
cumulative Operating Losses for the entire Transition Period with the aforementioned monthly
cap applied to the monthly Operating Losses for the entire Transition Period. If the payment for
Operating Losses received by Operator from MTC on a monthly basis exceeds the payment for
Operating Losses to which Operator is entitled from MTC on an aggregate basis, then Operator
shall reimburse MTC for the difference between the two calculations within 30 days following
such calculation; and if the payment for Operating Losses received by Operator from MTC on a
monthly basis is less than the payment for Operating Losses to which Operator is entitled from
MTC on an aggregate basis, then MTC shall pay Operator the difference between the two
calculations within 30 days following such calculation.
5.6 Disposition of the Equipment. Upon termination of this Continuation Agreement
pursuant to Section 5.1D, MTC shall have the option to:
5.6.1 require Operator to remove all Equipment at its sole cost and expense;
5.6.2 subject to satisfaction of the Equipment Assignment Conditions, require
Operator to assign to MTC (or a third-party operator designated by MTC) the Equipment, in
which event Operator shall reasonably cooperate with MTC (or such designee) to obtain the legal
right to use the Backend Software and Computer Hardware either through an assignment of
203215669.16 9
Operator’s license with the vendor thereof to MTC (or such designee) or by MTC (or such
designee) entering a license agreement for Backend Software and Computer Hardware with such
vendor; or
5.6.3 subject to satisfaction of the Equipment Assignment Conditions, take over
operation of the System, and in connection therewith require Operator to assign to MTC the
Equipment, in which event Operator shall reasonably cooperate with MTC to obtain the legal
right to use the Backend Software and Computer Hardware either through an assignment of
Operator’s license with the vendor thereof to MTC or by MTC entering a license agreement for
Backend Software and Computer Hardware with such vendor.
ARTICLE VI
DISPUTE RESOLUTION
6.1 In the event of a dispute between the Parties, such dispute shall be addressed and
resolved in accordance with the following (the “Dispute Resolution Process”):
6.1.1 The MTC Project Manager assigned to the System and Operator’s General
Manager of the System, or their respective delegates, shall meet, within 10 days after receipt by
one Party of notification from the other Party of such dispute, to negotiate in good faith in order
to try to resolve such dispute (the date of the first such meeting, or the expiration of such 10-day
period if the meeting is not timely held, being the “Initial Meeting Date”). If such persons fail to
resolve such dispute within 15 days after the Initial Meeting Date, then the Executive Director of
MTC and the President of Bikeshare Holdings shall meet promptly and negotiate in good faith in
order to resolve such dispute. If such persons fail to resolve such dispute within 30 business days
after the Initial Meeting Date, then such dispute shall be subject to mediation. A meeting may be
held in person, by conference call or by video conference. By agreement of the Parties, any of
the deadlines set forth in this section may be extended or shortened. The process described in this
section shall be confidential and treated as a compromise negotiation for purposes of federal and
state rules of evidence.
6.1.2 Unless the Parties otherwise agree, mediation shall be administered by the
American Arbitration Association (the “AAA”) in accordance with its Commercial Rules, or
similar service. A request for mediation shall be made in writing, delivered to the other Party and
filed with the applicable mediation service. Either Party may submit such request. The Parties
shall share the mediator’s fee and any filing fees equally. The mediation shall be held in San
Francisco. The Parties shall be represented by individuals of their choosing. Agreements
reached in mediation shall be binding on the Parties and enforceable in a State or Federal Court
of competent jurisdiction sitting in San Francisco County. The mediation process shall be
confidential and treated as a compromise negotiation for purposes of federal and state rules of
evidence.
6.1.3 The Parties shall comply with any settlement agreement regarding any
dispute that is the subject of a settlement agreement.
203215669.16 10
6.1.4 If mediation fails to resolve a dispute, then the exclusive forum for
resolving such dispute shall be any State or federal court sitting in San Francisco County,
California.
6.1.5 As used in this Continuation Agreement, “final resolution” of a dispute or
a dispute being “finally resolved” means that (a) the Parties have entered into a settlement
agreement to resolve such dispute, or (b) if either Party has initiated a judicial proceeding to
contest such dispute, that a final-non-appealable order of a court of competent jurisdiction has
been issued for such dispute.
ARTICLE VII
INSURANCE
7.1 Minimum Coverages. The insurance requirements specified in this section shall
cover Operator’s own liability and the liability arising out of work or services performed under
this Continuation Agreement by any subconsultants, subcontractors, suppliers, temporary
workers, independent contractors, leased employees, or any other persons, firms or corporations
that Operator authorizes to work under this Continuation Agreement (hereinafter referred to as
“Agents”). Operator shall, at its own expense, obtain and maintain in effect at all times during
the life of this Continuation Agreement the following types of insurance against claims, damages
and losses due to injuries to persons or damage to property or other losses that may arise in
connection with the performance of work under this Continuation Agreement.
7.2 Operator shall include in every subcontract the requirement that the Agent
maintain adequate insurance coverage with appropriate limits and endorsements to cover the
risks associated with work to be performed by the Agent. To the extent that an Agent does not
procure and maintain such insurance coverage, Operator shall be responsible for any and all
costs and expenses that may be incurred in securing such coverage or in fulfilling Operator’s
indemnity obligation under Article VIII as to itself or any of its Agents in the absence of such
coverage.
7.3 In the event Operator or its Agents procure excess or umbrella coverage to
maintain certain requirements outlined below, these policies shall also satisfy all specified
endorsements and stipulations, including provisions that Operator’s or its Agent’s insurance, as
the case may be, be primary without right of contribution from MTC.
7.3.1 Workers' Compensation Insurance with Statutory limits, and Employer’s
Liability Insurance with a limit of not less than $1,000,000 per employee for injury by disease
and $1,000,000 for injury for each accident, and any and all other coverage of Operator’s
employees as may be required by applicable law. Such policy shall contain a Waiver of
Subrogation in favor of MTC. Such Workers’ Compensation & Employer’s Liability may be
waived, if and only for as long as Operator is a sole proprietor or a corporation with stock 100%
owned by officers with no employees.
7.3.2 Commercial General Liability Insurance for Bodily Injury and Property
Damage liability, covering the operations of Operator and Operator’s officers, agents, and
employees and with limits of liability which shall not be less than $1,000,000 combined single
203215669.16 11
limit per occurrence with a general aggregate liability of not less than $2,000,000, and Personal
& Advertising Injury liability with a limit of not less than $1,000,000. Such policy shall contain
a Waiver of Subrogation in favor of MTC. MTC and its commissioners, directors, officers,
representatives, agents and employees are to be named as additional insureds. In addition, the
entities listed in Section 7.13 and their respective commissioners, directors, officers,
representatives, agents and employees are also to be named as additional insureds. Such
insurance shall be primary and contain a Separation of Insureds Clause as respects any claims,
losses or liability arising directly or indirectly from Operator’s operations.
7.3.3 Business Automobile Insurance for all automobiles owned (if any), used
or maintained by Operator and Operator’s officers, agents and employees, including but not
limited to owned (if any), leased (if any), non-owned and hired automobiles, with limits of
liability which shall not be less than $1,000,000 combined single limit per accident.
7.3.4 Umbrella Insurance in the amount of $4,000,000 providing excess limits
over Employer’s Liability, Automobile Liability, and Commercial General Liability Insurance.
Such umbrella coverage shall be following form to underlying coverage including all
endorsements and additional insured requirements.
7.3.5 Errors and Omissions Professional Liability Insurance for errors and
omissions and the resulting damages, including, but not limited to, economic loss to MTC and
having minimum limits of $5,000,000 per claim. Such policy shall contain cyber risk coverages
including network and internet security liability coverage, privacy liability coverage and media
coverage. The policy shall provide coverage for all work performed by Operator and any work
performed or conducted by any subcontractor/consultant working for or performing services on
behalf of Operator. Operator may delegate the obligation to maintain Errors and Omissions
Professional Liability Insurance to an Agent, but the failure of such Agent to maintain such
insurance shall not relieve Operator of its obligation to maintain such insurance.
7.3.6 Property Insurance. Property Insurance covering Operator’s own
business personal property and equipment to be used in performance of this Continuation
Agreement, materials or property to be purchased and/or installed on behalf of MTC (if any), and
builders risk for property in the course of construction (if applicable). Coverage shall be written
on a "Special Form" policy that includes theft, but excludes earthquake, with limits at least equal
to the replacement cost of the property. Such policy shall contain a Waiver of Subrogation in
favor of MTC.
7.4 Acceptable Insurers. All policies will be issued by insurers qualified to do
business in California and with a Best’s Rating of A-VIII or better.
7.5 Self-Insurance. Operator’s obligation hereunder may be satisfied in whole or in
part by adequately funded self-insurance, upon evidence of financial capacity satisfactory to
MTC.
7.6 Deductibles and Retentions. Operator shall be responsible for payment of any
deductible or retention on Operator’s policies without right of contribution from MTC.
Deductible and retention provisions shall not contain any restrictions as to how or by whom the
203215669.16 12
deductible or retention is paid. Any deductible or retention provision limiting payment to the
Named Insured is unacceptable.
7.7 In the event that MTC is entitled to coverage as an additional insured under any
Operator insurance policy that contains a deductible or self-insured retention, Operator shall
satisfy such deductible or self-insured retention to the extent of loss covered by such policy, for
any lawsuit arising from or connected with any alleged act of Operator, subconsultant,
subcontractor, or any of their employees, officers or directors, even if Operator or subconsultant
is not a named defendant in the lawsuit.
7.8 Claims Made Coverage. If any insurance specified above is written on a “Claims-
Made” (rather than an “occurrence”) basis, then in addition to the coverage requirements above,
Operator shall:
7.8.1 Ensure that the Retroactive Date is shown on the policy, and such date
must be before the date of this Continuation Agreement or the beginning of any work under this
Continuation Agreement;
7.8.2 Maintain and provide evidence of similar insurance for at least three (3)
years following the expiration or termination of this Continuation Agreement, including the
requirement of adding all additional insureds; and
7.8.3 If insurance is cancelled or non-renewed, and not replaced with another
claims-made policy form with a retroactive date to Effective Date, Operator shall purchase
“extended reporting” coverage for a minimum of three (3) years after the expiration or
termination of this Continuation Agreement.
7.9 Failure to Maintain Insurance. All insurance specified above shall remain in force
until the expiration or termination of this Continuation Agreement. Operator must notify MTC if
any of the above required coverages are non-renewed or cancelled. The failure to procure or
maintain required insurance and/or an adequately funded self-insurance program will constitute a
material breach of this Continuation Agreement.
7.10 Certificates of Insurance. On the Effective Date, Operator shall deliver to MTC
Certificates of Insurance verifying the aforementioned coverages. Such certificates shall make
reference to all provisions and endorsements referred to above and shall be signed on behalf of
the insurer by an authorized representative thereof.
7.11 Disclaimer. The foregoing requirements as to the types and limits of insurance
coverage to be maintained by Operator are not intended to and shall not in any manner limit or
qualify the liabilities and obligations otherwise assumed by Operator pursuant hereto, including,
but not limited to, liability assumed pursuant to Article VIII.
7.12 Additional Insureds. The following entities are to be named as Additional
Insureds under applicable sections of this Article VII and as Indemnified Parties pursuant to
Article VIII of this Continuation Agreement.
7.12.1 Metropolitan Transportation Commission (MTC)
203215669.16 13
7.12.2 City of Mountain View
7.12.3 City of Palo Alto
7.12.4 City of Redwood City
7.12.5 City of San Francisco
7.12.6 City of San Jose
ARTICLE VIII
INDEMNIFICATION AND LIMITATION OF LIABILITY
8.1 Indemnification. Operator shall defend, indemnify and save harmless MTC, the
Pilot Cities, and their respective commissioners, officers, agencies, departments, agents, and
employees (collectively, “Indemnified Parties”) from and against any and all claims, demands,
causes of action, proceedings or lawsuits brought by third-parties (“Claims”), and all losses,
damages, liabilities, penalties, fines, forfeitures, costs and expenses arising from or incidental to
any Claims (including attorneys’ fees and other costs of defense) (collectively, with Claims,
“Liabilities”), resulting from, or arising out of, the operation of the System and the provision of
services, including the condition of the Bicycles or other Equipment, whether such operation or
services is performed or provided by Operator or by Operator’s subcontractors or any other
person acting for or on behalf of Operator.
8.2 Exclusions. Notwithstanding the foregoing, the following shall be excluded from
Operator’s indemnification and defense obligations contained in the preceding sentence: any
Liabilities to the extent resulting from, or arising out of, (i) the gross negligence or willful
misconduct of any Indemnified Party, (ii) Operator complying with the written directives or
written requirements of a Pilot City, if the Operator has previously objected to such written
directives or requirements in writing, with respect to (A) the location or configuration of any
Station in relation to the street or sidewalk on which such Station is located or to which it adjoins
or (B) a Pilot City’s Street Treatment Requirements, or (iii) the condition of any public property
outside of the perimeter of a Station and not otherwise controlled by Operator. The exclusion in
clause (iii) does not include the condition of the Bicycles or other Equipment. In addition, if any
Claim against Operator includes claims that are covered by clause (iii) of the preceding sentence
or claims contesting a Pilot City’s authority to issue a permit for a Station, then each Party shall
be responsible for its own defense against such claims.
8.3 Notice. Upon receipt by any Indemnified Party of actual notice a Claim to which
such Indemnified Party is entitled to indemnification in accordance with Section 8.1, such
Indemnified Party shall give prompt notice of such Claim to Operator. Operator shall assume
and prosecute the defense of such Claim at the sole cost and expense of Operator. Operator may
settle any such Claim in its discretion so long as such settlement includes an unconditional
release of the Indemnified Party.
203215669.16 14
ARTICLE IX
THIRD PARTY BENEFICIARIES
9.1 Third-Party Beneficiaries Under This Continuation Agreement. Except as
provided in Sections 7.13, 8.1, 8.2 and 8.3, this Continuation Agreement does not and is not
intended to confer any rights or remedies upon any person or entity other than the signatories to
this Continuation Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Governing Law. This Continuation Agreement shall be governed exclusively by
the internal laws of the United States and of the State of California applicable to contracts made,
accepted and performed wholly within said State, without regard to application of principles of
conflict of laws. Any claim, suit or action arising under or relating to this Continuation
Agreement must be brought only in courts located in San Francisco, California. The Parties
hereby agree that such courts shall have exclusive personal and subject matter jurisdiction over
any such claim, suit or action.
10.2 Survival. All provisions of this Continuation Agreement that by their terms
survive the expiration or any termination of this Continuation Agreement, together with all other
provisions of this Continuation Agreement that may be reasonably construed as surviving the
expiration or any termination of this Continuation Agreement, shall survive the expiration or any
termination of this Continuation Agreement.
10.3 Notices. Except as otherwise provided herein, all notices, requests, demands and
other communications which are required or may be given under this Continuation Agreement
shall be provided in the manner set forth in this section. Notice to a Party shall be delivered to
the attention of the person listed below, or to such other person or persons as may hereafter be
designated by that Party in writing. Notice shall be in writing sent by e-mail, facsimile, or
regular first class mail. In the case of e-mail and facsimile communications, valid notice shall be
deemed to have been delivered upon sending, provided the sender obtained an electronic
confirmation of delivery. E-mail and facsimile communications shall be deemed to have been
received on the date of such transmission, provided such date was a business day and delivered
prior to 4:00 p.m. PST. Otherwise, receipt of e-mail and facsimile communications shall be
deemed to have occurred on the following business day. In the case of regular mail notice,
notice shall be deemed to have been delivered on the mailing date and received five business
days after the date of mailing.
If to MTC:
Metropolitan Transportation Commission
Joseph P. Bort MetroCenter,
Oakland, CA 94607-470
Attention: Executive Director
Email: SHeminger@mtc.ca.gov
203215669.16 15
Attention: General Counsel:
Email: AWeil@mtc.ca.gov
Attention: Designated Representative
Email: KMulder@mtc.ca.gov
If to Operator:
Bay Area Motivate, LLC
5202 Third Avenue
Brooklyn, New York 11220
Attention: Jay Walder, President and CEO
Email: jaywalder@motivateco.com
Attention: Justine Lee, Vice President and General Counsel
Email: justinelee@motivateco.com
Bay Area Motivate, LLC
2200 Jerrold Avenue, Unit J
San Francisco, California 94124
Attention: Emily Stapleton, General Manager and Designated Representative
Email: emilystapleton@motivateco.com
10.4 Entire Agreement; Amendments and Waivers. This Continuation Agreement
constitutes the entire agreement between the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties. No supplement, modification or waiver of this Continuation Agreement
shall be binding unless executed in writing by the Party to be bound thereby. No waiver of the
provisions of this Continuation Agreement, or any breach thereof, shall constitute a waiver of
any prior, concurrent or subsequent breach of the same or any other provisions hereof, or shall be
deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly provided.
10.5 Counterparts; Severability. This Continuation Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. The Parties may rely upon a facsimile copy or scanned
copy of any Party’s signature as an original for all purposes. In the event that any one or more of
the provisions contained in this Continuation Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision of this Continuation
Agreement or any other such instrument and the remaining provisions shall remain in full force
and effect. To the extent permitted by applicable law, any such provision will be restricted in
applicability or reformed to the minimum extent required for such provision to be enforceable.
This provision will be interpreted and enforced to give effect to the original written intent of the
Parties prior to the determination of such invalidity or unenforceability.
10.6 Construction; Incorporation. The headings of the articles, sections, and
paragraphs of this Continuation Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Continuation Agreement or to affect the construction hereof.
203215669.16 16
All sections and article references are to this Continuation Agreement, unless otherwise
expressly provided. As used in this Continuation Agreement, (a) “hereof”, “hereunder”, “herein”
and words of like import shall be deemed to refer to this Continuation Agreement in its entirety
and not just a particular section of this Continuation Agreement, and (b) unless the context
otherwise requires, words in the singular number or in the plural number shall each include the
singular number or the plural number, words of the masculine gender shall include the feminine
and neuter, and, when the sense so indicates, words of the neuter gender shall refer to any
gender. The Parties acknowledge and agree that: (i) this Continuation Agreement is the result of
negotiations between the Parties and shall not be deemed or construed as having been drafted by
any one Party, (ii) each Party and its counsel have reviewed and negotiated the terms and
provisions of this Continuation Agreement (including, without limitation, any exhibits and
schedules attached hereto) and have contributed to its revision, (iii) the rule of construction to the
effect that any ambiguities are resolved against the drafting Party shall not be employed in the
interpretation of this Continuation Agreement, and (iv) the terms and provisions of this
Continuation Agreement shall be construed fairly as to both Parties and not in favor of or against
either Party, regardless of which Party was generally responsible for the preparation of this
Continuation Agreement.
10.7 Relationship of the Parties. Operator is an independent contractor and neither
Operator nor its employees shall, under any circumstances, be considered employees, servants,
or agents of MTC, nor shall MTC nor its agents or employees be considered employees,
servants, or agents of Operator. At no time during the Term or otherwise shall Operator, its
employees, or agents, represent to any person or entity that Operator and its employees are acting
on behalf of, or as an agent of, MTC or any of its employees. MTC shall not be legally
responsible or liable for any negligence, intentional act, or other wrongdoing by or of Operator,
its employees, servants, agents, subcontractors, suppliers, or manufacturers of goods or services
provided by Operator pursuant to this Continuation Agreement. MTC will not withhold
payments to Operator for any federal or state unemployment taxes, federal or state income taxes,
Social Security tax, or any other amounts for benefits to Operator. MTC will not provide to
Operator any insurance coverage or other benefits, including Workers' Compensation, normally
provided by MTC for its employees. This Continuation Agreement does not constitute and shall
not be construed as constituting a partnership or joint venture or grant of a franchise between the
Parties.
10.8 Cooperation. The Parties agree to execute such further instruments and to take
such further action as may reasonably be necessary or helpful to carry out the intent of this
Continuation Agreement.
10.9 Failure or Delay in Performance. Operator shall not be held responsible for
failure to perform the duties and responsibilities imposed by this Continuation Agreement if such
failure is due to Event of Force Majeure, beyond the control of Operator, that make performance
impossible or illegal, unless otherwise specified in this Continuation Agreement; provided that
the Operator (in order to not be held responsible for failure to perform) shall have given MTC
Project Manager written notification of such failure, event, or occurrence beyond the control of
Operator not later than 48 hours after the beginning of such failure, event, or occurrence.
203215669.16 17
10.10 Representations of Operator. Operator hereby represents and warrants to MTC
that:
10.10.1Operator is a limited liability company, validly existing and in good
standing under the laws of the State of Delaware, and it is duly authorized to do business in the
State of California; and
10.10.2Operator has all requisite power and authority to own or lease its
properties and assets, to conduct its business as currently conducted and to execute, deliver and
perform this Continuation Agreement and all other agreements entered into or delivered in
connection with or as contemplated hereby.
10.11 Ethics in Public Contracting. This Continuation Agreement incorporates all local,
state, and federal law, regulations and rules related to ethics, conflicts of interest, or bribery.
Operator certifies that its offer is made without collusion or fraud and that it has not offered or
received any kickbacks or inducements from any other officer, supplier, manufacturer, or
subcontractor and that it has not conferred on any public employee having official responsibility
for this purchase any payment, loan, subscription, advance, deposit of money, services, or
anything of more than nominal value, present or promised unless consideration of substantially
equal or greater value was exchanged.
10.12 Remedies. The remedies available to MTC in various sections of this
Continuation Agreement shall be deemed to be in addition to, and not in limitation of, any other
remedies MTC has or may have under applicable law or in equity arising out of or relating to this
Continuation Agreement.
10.13 Assignment. Operator shall not assign, transfer, convey, sublet, or otherwise
dispose of any award, or any or all of its rights, obligations, or interests under this Continuation
Agreement, without the prior written consent of MTC, except the preceding clause shall not limit
Operator’s rights to enter into subcontracts for the provision of services hereunder.
10.14 Prohibition of Expending Local, Agency, State or Federal Funds for Lobbying
A. Operator certifies to the best of its knowledge and belief that:
i. No state, federal or local agency appropriated funds have been paid, or
will be paid by-or-on behalf of Operator to any person for influencing or
attempting to influence an officer or employee of any state or federal
agency; a Member of the State Legislature or United States Congress; an
officer or employee of the Legislature or Congress; or any employee of a
Member of the Legislature or Congress, in connection with the awarding
of any state or federal contract; the making of any state or federal grant;
the making of any state or federal loan; the entering into of any
cooperative agreement, and the extension, continuation, renewal,
amendment, or modification of any state or federal contract, grant, loan, or
cooperative agreement.
203215669.16 18
ii. If any funds other than federal appropriated funds have been paid, or will
be paid to any person for influencing or attempting to influence an officer
or employee of any federal agency; a Member of Congress; an officer or
employee of Congress, or an employee of a Member of Congress; in
connection with this Continuation agreement; Operator shall complete and
submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in
accordance with its instructions.
B. This certification is a material representation of fact upon which reliance was
placed when this transaction was made or entered into. Submission of this
certification is a prerequisite for making or entering into this transaction
imposed by Section 1352, Title 31, US. Code. Any person who fails to file
the required certification shall be subject to a civil penalty of not less than
$10,000 and not more than $100,000 for each such failure.
C. Operator also agrees by signing this Continuation Agreement that it shall
require that the language of this certification be included in all lower-tier
subcontracts, which exceed $100,000, and that all such sub recipients shall
certify and disclose accordingly.
ARTICLE XI
DEFINITIONS
11.1 Defined Terms. As used herein, the terms below shall have the following
meanings. Any of such terms, unless the context otherwise requires, may be used in the singular
or plural, depending upon the reference.
“Backend Software and Computer Hardware” shall mean an electronic interface
enabling, among other things, Stations, Bicycles, subscriber customer service, cellular service,
Customer Keys, the website, and call center to function.
“Bicycle” shall mean a device propelled solely by human power, upon which a person
may ride either on or astride a regular seat attached thereto, having two or more wheels in
tandem.
“Crash” shall mean every reported incident or event involving a subscriber, Bicycle user,
Bicycle, and/or Station resulting in personal injury to the subscriber or others, or property
damage to the Equipment, or to the property of others.
“Customer Key” shall mean a fare card or fob for rental of Bicycles.
“Dock” or “Docking Point” shall mean a locking mechanism contained on a Station
designed to receive a Bicycle for locked storage.
“Equipment” shall mean all physical components provided by, or used by, Operator so
that the System is available for use by the public, including, without limitation Bicycles, Docks,
Technical Platforms, Map Frames, Terminals, cables, Station batteries, maintenance trailer,
truck, electric bicycle, Customer Keys, trailer, and Bicycle and Station spare parts.
203215669.16 19
“Equipment Assignment Conditions” shall mean the following: (a) Operator and the
purchaser of the Equipment have agreed on the purchase price for the Equipment, which shall be
based on the fair market value of the Equipment as an installed system at the time of the
purchase, and (b) such purchaser has paid Operator the agreed upon purchase price for the
Equipment.
“Event of Force Majeure” shall mean a delay, suspension or interruption due to strike;
war or act of war (whether an actual declaration of war is made or not); terrorism; insurrection;
riot; injunction; fire, flood or similar act of providence; or other similar causes or events to the
extent that such causes or events are beyond the control of the Party claiming an Event of Force
Majeure, provided in each case that such Party has taken and continues to take all reasonable
actions to avoid or mitigate such delay, suspension or interruption and provided that such Party
notifies the other Party to this Continuation Agreement in writing of the occurrence of such
delay, suspension or interruption within five (5) business days, or if not reasonably practicable,
as soon thereafter as reasonably practicable, of the date upon which the Party claiming an Event
of Force Majeure learns or should have learned of its occurrence. A delay in a decision by a
government entity, the approval of which is a condition to an occurrence, shall not constitute an
“Event of Force Majeure” unless such delay is beyond the normal period in which such entity
generally acts with respect to the type of decision being sought and only if the Party claiming
Event of Force Majeure has taken and continues to take all reasonable steps to pursue such
decision. In no event will a government entity’s final decision relating to Operator, this
Continuation Agreement or the System, whether positive or negative, once made constitute an
Event of Force Majeure (the term “final decision” in this sentence shall refer to a decision with
respect to which all available appeals have been exhausted or the time period for filing such
appeals has expired). The financial incapacity of Operator shall not constitute an Event of Force
Majeure.
“Fleet” shall mean 100% of the number of Bicycles obtained by Operator from MTC on
the Effective Date minus the number of stolen (or otherwise unreturned) and unrepairable
Bicycles.
“Functional Bicycle” shall mean the condition of a Bicycle, consistent with the technical
specifications of the Bicycles to be provided under this Continuation Agreement, to be ridden by
an ordinary subscriber using such Bicycle under normal conditions. A Functional Bicycle does
not refer to comfort, speed, quality of the riding experience, or minor issues with the Bicycle that
does not impede the ability to be ridden.
“Functional Station” shall mean a Docking Station, consistent with the technical
specifications of the Docking Stations under the Pilot Program, to be used by an ordinary
subscriber using such Docking Station under normal conditions. A Functioning Station does not
refer to inconvenience or inability of a subscriber to follow directions, provided such directions
are provided in a form understandable by an ordinary subscriber. A Functional Station shall
have at least one Docking Point containing a Functional Bicycle, at least one empty Docking
Point, and all other elements in working condition to be considered a Functional Station.
“Hacking” shall mean unauthorized and intentional access to the Computer Hardware for
the System and/or Software.
203215669.16 20
“Map Frame” shall mean a two-sided metal informational display unit, including
translucent covering and lock.
“MTC Project Manager” shall mean an individual appointed by MTC to act as the
project officer.
“Notification” shall mean all information provided by MTC, a Pilot City or the general
public to Operator about a specific defect or problem concerning the System, Equipment or
operations of the System by written document, email to Operator’s public information email
address for the System, or telephone call to Operator’s call center for the System.
“Operable Station” shall mean a Station at which at least 90 percent of all installed
Docks are Operable Docks from which an annual member can check out and return a Bicycle.
“Operating Expenses” shall mean, with respect to Operator (or Motivate) for any
period, the costs expended by Operator (or Motivate) to operate and maintain the System and to
provide the specific services set forth in this Continuation Agreement, including, without
limitation, personnel costs, software license fees, insurance costs, costs of maintaining service
vehicles, costs of leasing and maintaining facilities used for the System.
“Operating Losses” shall mean, with respect to Operator (or Motivate) for any period,
the amount, if any, by which Operating Expenses for such period exceed System Operating
Revenues for such period.
“Party” means either MTC or Operator, as the context requires; “Parties” means MTC
and Operator.
“Service” shall mean the use of the Equipment by the public at large after the Effective
Date.
“Site” shall mean a designated area on publicly or privately owned real property, which
area contains one or more of each of the following items made available by Operator for the
System: Bicycles, Docks, Terminal, Technical Platforms, and Map Frame.
“Station” shall a designated area of docking Bicycles at which Docks, Terminal,
Technical Platforms, and Map Frame are located.
“System Operating Revenues” shall mean all funds derived from ridership use of the
System, including subscription fees and usage fees.
“Technical Platform” shall mean a base component that rests on the ground and
supports the Docks, Terminal, and Map Frame.
“Terminal” shall mean a kiosk that provides Bicycle rental instructions, contains
payment equipment (i.e. credit card device), and includes all other means necessary for the rental
of Bicycles.
203215669.16 21
“Trip” shall mean the use of a Bicycle from one Station to another Station or back to the
initial Station.
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203215669.16 A-1-1
Attachment A-1, Description of Services
1. Description of Services
Operator shall operate the bike-sharing system in the Pilot Cities that was installed and in
place at the termination of the Pilot Program Agreement using the same Sites, Bicycles, Docking
Stations, Terminals, Docking Points, Technical Platforms, Customer Keys, Back-end Software
and Computer Hardware and other Equipment that was used for the Pilot Program. Operator
guarantees the following minimum equipment numbers in Mountain View, Palo Alto, and
Redwood City:
Mountain View: 7 Stations; 117 Docks; 59 Bicycles
Palo Alto: 5 Stations, 75 Docks, 37 Bicycles;
Redwood City: 7 Stations; 117 Docks; 59 Bicycles;
San Francisco: 35 Stations; 665 Docks; 300 Bicycles;
San Jose: 16 Stations; 264 Docks; 110 Bicycles
Operator’s responsibilities include:
(1) Handle ongoing Equipment maintenance and rebalancing;
(2) Manage intellectual property issues related to a program sponsor such as
brands and trademarks;
(3) Manage all ongoing customer service issues associated with the System
(unless otherwise instructed); and
(4) Conduct bicycle safety trainings and encourage the use of bicycle helmets.
2. Subscriber Information/Relations.
2.1 Subscriber and Usage Fees. User fees shall be consistent with Attachment A-2,
subject to application of Attachment A-3 as provided in Section 2.2 of this Continuation
Agreement.
2.2 Age Requirement for Program Subscribers. Subscriptions shall only be issued to
individuals 18 years of age and older.
2.3 Subscriber Privacy. Operator shall, at all times, protect the privacy rights of all
subscribers. Operator shall strictly comply with all applicable federal, state, and local laws,
203215669.16 A-1-2
ordinances, and regulations concerning the privacy of all subscriber information obtained by
Operator in the course of providing services under this Continuation Agreement.
2.4 Subscriber Agreement. Operator shall use the same form of Subscriber
Agreement that was used for the Pilot Program with such changes thereto as Operator considers
appropriate. Any material changes to the Pilot Program form shall be subject to the review and
approval of MTC. The Subscriber Agreement shall address, at a minimum, the following:
(1) The rates, fees, and deposits (if any).
(2) Confidentiality of personal and financial data and information.
(3) Subscriber’s agreement to return the Bicycle in the same condition as it was
when rented.
(4) Subscriber’s agreement to immediately report to the call center any Crash, as
defined in this Continuation Agreement to include any incident or event
resulting in personal injury to the subscriber or others or in property damage
to the Equipment or to the property of others and agreement to follow any
instructions from the call center regarding reporting a Crash to police.
(5) Subscriber’s agreement to immediately report to the call center a lost or
stolen Bicycle or a lost or stolen Customer Key.
(6) Subscriber’s responsibility and liability for any consequences of any kind or
nature whatsoever related to a stolen or lost Bicycle or Customer Key.
(7) Prohibited uses including, without limitation, no more than one person on a
Bicycle at one time.
(8) Subscriber’s acknowledgement of and acceptance of responsibility and risk.
(9) Prohibition against any person other than the subscriber operating any
Bicycle rented from Operator and prohibition against transfer of a Customer
Key to anyone in any manner whatsoever.
(10) A representation by each subscriber that s/he is physically able to ride a
Bicycle without risk to health, knowledgeable about the operation of a
Bicycle, and knowledgeable about the laws pertaining to Bicycles operated
within the jurisdictions where the Bicycles are to be used.
(11) Age limits.
(12) Subscriber’s indemnification of MTC and the Pilot Cities, its elected and
appointed officers, officials, employees, and agents.
(13) Prohibition against use of Bicycle while under the influence of alcohol,
drugs, any controlled substance, or any medication that would impair the
Bicycle operator’s ability to safely operate the Bicycle.
(14) Instructions regarding proper use of Bicycle luggage carrier as to type of
contents, weight, or visual obstruction.
(15) Prohibition against Bicycle use for any illegal purpose.
2.5 Loss Fees. Operator shall deem a Bicycle as “lost or stolen” if not returned to a
Site within 24 hours of being signed out, and charge the subscriber whose account is associated
with that sign-out the amount of the “Loss Fee” set forth in Attachment A-2, subject to
application of Attachment A-3 as provided in Section 2.2 of this Continuation Agreement, which
covers the replacement value of the Bicycle, along with shipping fees and expenses and service
charges for placing a new Bicycle into the operational Fleet. Credit accounts will be charged the
Loss Fee at the time a loss is determined. Operator shall include all such circumstances in its
203215669.16 A-1-3
monthly report to MTC. Notwithstanding the foregoing, Operator shall waive such fees for
stolen Bicycles or Bicycles that are damaged in connection with a crime against the rider or in a
collision with a motor vehicle, so long as an appropriate police report is filed for the incident.
2.6 Helmets. Operator shall provide information on the System website and in the
subscription agreement about the importance of wearing helmets for safety reasons. Operator
will make reasonable best efforts to provide users with information that directs them to nearby
bike shops and other locations where subscribers may purchase a helmet and shall display on the
System website where discounts are available and at Terminals.
2.7 Subscriber Communications. Upon request from MTC, Operator will send biking
related information announcements via electronic mail to all subscribers who do not “opt out’ of
receiving such emails.
3. Operations
3.1 Continuous Operation and Management. The System shall commence operating
on the Effective Date and shall remain in operation 24 hours per day, 365 days per year.
3.2 Inspection and Maintenance.
(1) Operator shall, at all times, follow and strictly comply with the
manufacturer’s requirements, warranties, and recommendations for assembly,
maintenance, storage and repair of all Equipment. Operator shall not be
obligated to purchase any replacement Equipment.
(2) Operator shall perform a maintenance check for each Bicycle once every two
calendar months consisting of the following checks, with deficient elements
repaired or replaced as necessary:
Check tire pressure, and add air as may be needed, to recommended Pounds
per Square Inch measurement;
Check tightness of handlebars, headset bearings, and full handlebar range of
motion (left to right);
Check tightness of seat, seat post quick-release, and see that seat post moves
freely in full range of motion (up and down);
Check brake function (front and rear);
Check grips for wear and brake levers for tightness and damage;
Check bell for tightness and correct function;
Check handlebar covers for damage and instruction stickers;
Check front basket for tightness and damage, and check bungee cord for
wear;
Check for correct gears and shifter function through all 5 gears;
Check fenders (front and rear) for damage, and clean outside of fenders;
Check tires (front and rear) for damage or wear;
Check wheels (front and rear) for trueness, broken or bent spokes and hub or
axle tightness;
Check LED lights (front and rear) for function;
203215669.16 A-1-4
Check reflectors on wheels, seat and basket, to ensure they are present, clean,
and undamaged;
Check pedals and cranks for tightness;
Lubricate and clean chain and check chain tensioner for correct function;
Check kickstand for correct function; and
Take brief test ride to ensure overall correct function of Bicycle.
(3) Operator shall clean each Station two times per month-- one time between the
first and fifteenth days of the month, and one time between the sixteenth and
last days of the month. Station cleaning shall consist of, at a minimum, litter
removal and, as needed, power washing of Docks, Terminal Platforms and
pavement.
(4) (a) Except as required by clause (b) below, Operator shall remove
conspicuous graffiti within 72 hours after Notification; and(b) Operator shall
remove racist and hate graffiti within 4 hours after Notification.
(5) Operator shall remove conspicuous accumulations of litter from Stations
within 24 hours after Notification.
(6) The System must be operational 100% of the time every month (i.e., every
hour of every day, 24 hours per day, 7 days per week, measured monthly), so
that, at a minimum, all System users can dock and undock Bicycles at all
times, excluding (i) scheduled downtime, and (ii) any period when the
Computer Hardware for the System and/or Software is, and remains,
damaged through Hacking. System functionality does not apply to hardware
malfunctions at individual Stations or to individual Stations that are not
Operable Stations.
(7) Stations, in the aggregate, must be Operable Stations 99% of the time every
month (i.e., every hour of every day, 24 hours per day, 7 days per week,
measured monthly), excluding (i) during scheduled downtime, and (ii) any
period when a Station is not an Operable Station because the Terminal or
other Equipment located at the Station has been damaged by third-parties.
Calculated by taking the sum of the number of hours that each Station was
Operable Station during a month, dividing that sum by the product of the
total number of hours in the month and the number of Stations that month.
Station Operability does not apply during any period in which the entire
System is down.
(8) The System website must be operational 100% of the time every year (i.e.,
every hour of every day, 24 hours per day, 7 days per week, measured
annually) excluding (i) scheduled downtime, and (ii) any period when the
Computer Hardware for the System and/or Software is, and remains,
damaged through Hacking.
In any circumstances where Operator is required to perform cleaning services under this
Continuation Agreement, Operator shall use the most environmentally friendly cleaning
solutions and chemicals available for these purposes.
3.3 Availability of Bicycles. Operator shall ensure that at least 90% of bicycles in the
Fleet are operational, on-the-street and available for public use. The number of available bicycles
will be recorded once each Day of the month between the hours of 11:00 AM and 3:00 PM.
203215669.16 A-1-5
3.4 Distribution of Bicycles. Operator shall re-distribute Bicycles among Sites and
place the Bicycles in operable Docks throughout the day from 6 am to 10 pm during each day of
operation. Such distribution shall be critically timed to increase the probability that each Site, at
all times, contains a sufficient number of empty Docks for Bicycles to be returned and occupied
Docks containing Bicycles available for subscribers. All Bicycles placed in operational Docks
shall be in acceptable operating condition. Operator shall ensure that, during any day, no Site has
all empty Docks or all full Docks for more than three hours between the hours of 6 am and 10
pm. If during any month the average usage of a Site is greater than 2.5 Trips per day per Dock
or less than 0.75 Trips per day per Dock, then this service level does not apply for such Site for
such month.
3.5 Operator’s Call Center. Operator shall provide to MTC, all subscribers, and the
public at large, a toll-free telephone number for Operator’s call center. The call center shall be in
continuous operation 24 hours per day, 7 days per week, and 365 days per year. Not less than
80% of telephone calls to Operator’s call center each month must be answered by a person
within 90 seconds or less. Operator shall conspicuously post a notice on each Station advising
the general public that they may direct their complaints and comments to Operator’s call center.
Operator shall ensure that the call center can handle calls in English, Spanish, Mandarin
and Cantonese, using operators fluent in those languages. The operators at the call center shall be
fully competent and knowledgeable to answer questions and provide information concerning,
among other things, subscription process, subscription prices, billing, Crashes, comments,
complaints, malfunction problems, location of Sites, directions to nearest Site that has Bicycles
available for use and/or available Docks for returns, directions to helmet sales location(s), and
instructions on how to fit a helmet. The call center manager shall be knowledgeable about all
service areas. The call center operators shall keep accurate and complete written records of each
such call in a Customer Service Log as hereinafter required, including the primary reason for
each call and the status of the call (e.g., “no further action”, “requires reimbursement”).
3.6 Email Response Time. Not less than 95% of emails to Operator’s public
information email address must be answered within 1 business day.
3.7 Comments and Complaints. Operator shall establish and maintain during the
Term prompt and efficient procedures for handling complaints from the public for which
Operator receives a Notification. Such procedures shall be consistent with all applicable laws,
rules and regulations and the provisions of this Section. Such procedures shall be set forth in
writing and copies thereof shall be maintained at Operator’s office and shall be available to the
public and the Pilot Cities upon request.
3.8 System Website. Operator shall create and maintain a System website the content
of which shall address, at a minimum, the following:
(1) Eligibility requirements;
(2) Subscription information and rate, schedules;
(3) Payment information and subscription processing;
(4) Method for subscribers to log in, update required information, and track
individual usage data compiled by the system;
203215669.16 A-1-6
(5) Subscriber Agreement and acceptance of terms;
(6) Map with the entire regional network of Sites and real-time availability of
Bicycles at each Site, both for a standard computer screen and mobile phone;
(7) Frequently Asked Questions;
(8) Safety requirements and information (including notification in the event of
malfunction or Crash);
(9) Encouragement of helmet use for subscribers and a listing of nearby locations
where users may purchase or lease helmets;
(10) Merchandise page;
(11) Permitted links to other Bay Area based bike programs and events;
(12) A listing of nearby bike rental shops, locations and contract information;
(13) Safety video (supplied by the Air District or others) addressing safe use of
bicycles, helmets, and California Vehicle Code and local laws pertaining to
bicycle riders; and
(14) A webpage that contains links to MTC- approved information (i.e. links to
partner websites and notices).
Operator, at all times, shall keep the website information updated, current, and accurate
on a regular basis.
3.9 Operator Staffing Levels. Operator, at all times, shall provide sufficient staff to
efficiently and promptly provide the services set forth in this Continuation Agreement.
3.10 Personnel and Staffing Requirements. Operator shall deliver to MTC copies of all
written personnel policies that, at a minimum, address employee conduct and qualifications.
3.11 Relocation, Resizing, and/or Reconfiguration of Stations.
(1) By Operator. In the event that Operator wishes to remove, relocate, resize,
and/or reconfigure any Station, other than those Stations whose locations are
fixed pursuant to the terms of a grant or sponsorship agreement, due to under-
utilization or lack of profitability, it must notify MTC in writing, providing
sufficient detail and description of the proposed relocation site and reasons
therefore, prior to removal. Assuming that MTC does not disapprove the
request within ten business days, Operator may remove, relocate, resize,
and/or reconfigure the Station consistent with Operator’s notice of same to
MTC and subject to local review and permitting requirements.
(2) By MTC. MTC shall provide Operator with 48 hours advance notice of any
relocation or reconfiguration of Stations to accommodate construction,
special events, or other reasons. The fee payable by MTC (or the applicable
Pilot City) to Operator for any such relocation or reconfiguration shall be
determined in accordance with Attachment A-4.
3.12 Interruption of Service.
(1) Intentional Interruption of Service. If, at any time, Operator intends, or is
required, to temporarily interrupt all or a portion of the service, for any
reason beyond Operator’s reasonable control, including, without limitation,
weather, safety, or other event or circumstance where continued service
203215669.16 A-1-7
would be unsafe, unavailable, impractical, or impossible , then Operator shall
contact MTC by telephone and by email at least 24 hours before the
interruption of service and specifically describe the reason, proposed
duration, Operator’s proposed actions to correct the cause of the interruption
(if possible), minimize the interruption, and Operator’s plans to resume
service.
Operator promptly shall notify the subscribers of the cause and expected duration of the
proposed interruption of service by posting notice on the website, via email, and Terminals
(electronic message).
(2) Unintentional Interruption of Service. If, at any time, a System malfunction
or an event or circumstance occurs where continuous service would be unsafe
or unavailable for reasons beyond Operator’s reasonable control, and this
causes or will cause a temporary interruption of service, then Operator shall
immediately contact MTC by telephone and by email and specifically
describe the reason, estimated duration, Operator’s proposed actions to
correct the cause of the interruption (if possible), efforts to minimize the
interruption, and Operator’s plans to resume service.
Operator promptly shall notify the subscribers of the cause and expected duration of the
interruption of service by posting notice on the website, via email, and Terminals (electronic
message).
In the case of both Intentional and Unintentional Interruptions of Service, Operator shall
be obligated to perform all necessary and appropriate acts to restart the service as soon as
possible.
3.13 Safety Training: On at least a quarterly basis, Operator shall provide safety
training on proper use of bicycles and applicable rules and regulations of the road to current
and/or potential users in each city.
203215669.16 A-2-1
Attachment A-2, Subscriber Related Fees
1. Annual and Monthly Subscription and Usage Fees
a) Annual Subscription Fee - One-time payment of $88
b) Annual and Monthly Subscription Usage Fees:
i. No charge for up to 30 minute use of a Bicycle per session,
ii. $4.00 for 31-60 minutes,
iii. $7.00 for each additional 30 minutes
A usage fee will be tracked and charged to credit accounts within one hour (or based on
normal credit card operating procedures) of any occurrence of continuous usage exceeding
thirty (30) minutes.
c) Annual Memberships may be purchased at a discounted rate for promotional purposes
and may be purchased in bulk at a discounted rate
2. Other Subscription and Usage Fees
a) Short-term Subscription Fees
i. Three day Subscription fee - $22,
ii. One day Subscription fee - $9
b) Other Subscription Usage Fee:
a. No charge for up to 30 minute use of a Bicycle per session,
b. $4.00 for 31-60 minutes,
c. $7.00 for each additional 30 minutes
A usage fee will be charged to credit accounts at the time any continuous usage exceeding
30 minutes is determined.
3. Bicycle Loss Fee - $1,200.
4. Operator reserves the right, in its sole discretion, to increase or decrease the fees
under 2(a) and 2(b) above.
203215669.16 A-3-1
Attachment A-3, New Subscriber-Related Fees
1. General. At Operator’s election, after June 30, 2016, Membership Fees and
Initial Ride Periods shall be consistent with Section 2, the Membership Fee for users eligible for
the affordability subscription specified in Section 3 shall be as described in said Section 3, the
maximum Bicycle usage charge shall be consistent with Section 4 and the fees for damaged, lost,
stolen or otherwise unreturned Bicycles shall be consistent with Section 5 initially charged by
Operator shall be consistent with this Section. A “Membership Fee” is an amount that entitles
the purchaser of the membership (a “member”, for the period of such purchased membership) to
check out (as defined below) one or more Bicycle(s) at a time, for the length of time described
below, provided that the member shall be charged a usage fee associated with the time period the
Bicycle is checked out beyond the Initial Ride Period. A Bicycle is “checked out” for the period
from the time it is removed from a Dock to the time it is returned to a Dock. A member may
check out and return a Bicycle from or to any Dock at any Station in the System, for an unlimited
number of times, at any time during the period of the member’s membership, with the usage fee
applicable to each such checkout and return sequence being calculated separately (so, for
example, an annual member may, within the member’s membership period, check out a Bicycle
and return it within the first 30 minutes after checkout, and then subsequently check out a
Bicycle and return that Bicycle with the first 30 minutes after that checkout, without incurring
any usage fee for either checkout period).
2. Membership Fees, New Ridership Programs/Arrangements, and Initial Ride
Periods:
2.1 Operator shall offer an annual membership (“Annual Membership”)
for a fee (the “Annual Membership Fee”) in an amount not to exceed the Annual Membership
Fee Cap in effect from time to time. The Annual Membership Fee Cap shall be $149 for a one-
year period. The period of an Annual Membership shall run from the day the annual
membership is activated until the first anniversary of the date on which the Annual Membership
had been activated (but a membership purchased on February 29 shall expire on March 1 of the
following year). At the end of the Term, each member can elect whether to roll his or her
Annual Membership into the BABS Program. Such election can be made by contacting the call
center. If a member elects not to roll into the BABS Program, then if the Annual Membership
Fee has been paid in advance for a full 12 months, the prorated amount for the portion of an
Annual Membership period that is beyond the Term shall be reimbursed to or credited to the
credit card account of the Annual Member;
2.2 Annual Memberships may be paid in 12 equal monthly instalments at
a price not greater than 120% of the Annual Membership Fee;
2.3 All memberships will include a free period of usage (the “Initial Ride
Period”), which is the length of time at the beginning of each individual Trip to which additional
usage fees will not be applied. For Annual Memberships and Affordability Memberships, the
Initial Ride Period is 30 Minutes. Usage fees will be applied to all Trips that exceed the Initial
Ride Period; and
203215669.16 A-3-2
2.4 For monthly, weekly and daily memberships, and for usage of the
System by non-members, Operator will determine the applicable fees, usage fees, and periods of
use for members beyond the Initial Ride Period in its sole discretion.
2.5 Nothing in the foregoing shall limit the right of Operator to offer
premium memberships featuring an Initial Rider Period longer than 30 minutes for an Annual
Membership Fee greater than $149.
3. Affordability Option:
3.1 Notwithstanding the permitted rate for an Annual Membership set
forth in set forth in Section 2.2.1, Operator shall charge those eligible for an “affordability
subscription” no more than $60 per annum (excluding sales tax) as the Annual Membership Fee,
or $5.00 per month for a 12-month membership.
3.2 Persons who were entitled to affordability memberships under the
Pilot Program shall be entitled to affordability memberships for the System. Members of
households enrolled in the Utility Lifeline Programs (also known as California Alternative Rates
for Energy (CARE)) available in the MTC Area are also eligible for affordability memberships.
Within 10 days following the Effective Date, Operator shall propose, for MTC’s review and
approval, procedures for verifying enrollment in CARE. In San Francisco, those who meet Muni
Lifeline income requirements as determined by the City of San Francisco’s Human Services
Agency are also eligible for the affordability membership. Upon mutual agreement of the
Parties, eligibility may expand to include other categories of persons so long as the eligibility is
determined by third parties.
3.3 Members enrolling through the affordability program shall be entitled
to the same rights and privileges as all other Annual Membership holders.
3.4 The usage fees for affordability members shall not exceed the rate
charged to general annual members.
4. The checkout period for the purposes of calculating usage fees shall always
commence with the time a Bicycle is actually removed from a Dock, and it shall not be based on
the time of insertion of a payment or identification card.
5. The maximum Bicycle usage charge initially charged with respect to any
member shall be $100 per 24 hour period, not including charges for damaged, lost, stolen or
otherwise unreturned Bicycles.
6. Fees for damaged, lost or otherwise unreturned Bicycles initially charged shall
be (i) $1,200, if not returned, or (ii) if returned, the sum of all direct costs of the repair, including
all labor and parts, as determined by Operator in its reasonable discretion, plus a 10%
administrative fee; provided, however, that the fees charged to affordability members for
unreturned or damaged Bicycles shall be not more than 33% of the fees set forth in the preceding
clauses (i) and (ii). Notwithstanding the foregoing, Operator shall waive such fees for stolen
Bicycles or Bicycles that are damaged in connection with a crime against the rider or in a
collision with a motor vehicle, so long as an appropriate police report is filed for the incident.
203215669.16 A-3-3
7. Operator shall at all times post on all Stations and on Operator’s website a
complete and up-to-date fee description that sets forth each and every current membership and
usage fee offered by Operator, the methods of purchasing memberships and paying fees,
available discounts on such fees, the applicability and terms of such discounts and, to the extent
applicable, how to apply for or qualify for such discounts, and fees associated with damaged,
lost, stolen or otherwise unreturned Bicycles. Operator shall furnish written copies of such
material to the public upon request.
8. Operator shall accept credit card and debit card payments online and at all
Stations but in the case of debit cards only those that have a Visa or Mastercard logo on them.
Operator may employ such other methods of payment as it may determine.
9. All required state sales and use taxes with respect to membership and usage
fees shall be collected and paid by Operator, as required by applicable law.
10. Operator shall be permitted to create System pricing discount programs,
which may be targeted in connection with marketing and outreach efforts, and in connection with
Sponsorship or Advertising programs, to expand or enable System use among different
communities or for other lawful purposes.
11. At any time and from time to time, Operator shall have the right:
11.1 To adjust the amount of the Annual Membership Fee specified in
Section 2 downwards at any time and upwards on each anniversary of the Effective Date by an
amount not to exceed the Annual Membership Fee Cap then in effect;
11. 2 To adjust in its sole discretion all other fees, time periods and
charges specified hereunder other than those fees, time periods and charges specified in Section
2 and Section 3; and
11.3 To adjust upward the duration of the Initial Ride Period.
203215669.16 A-4-1
ATTACHMENT A-4 FEE SCHEDULE FOR
STATION DEACTIVATION, DE-INSTALLATION AND ADJUSTMENT
As stated in Section 3.11(2) of Attachment A-1 of this Continuation Agreement, the following is the fee
schedule for Station Deactivation, De-Installation, and Adjustments (each as defined below). (Capitalized
terms used but not otherwise defined herein shall be defined as provided below.))
Section 1: For Public Works, Other Special Events and Public Safety Emergencies there is no charge to
the Pilot City. In addition, for each Pilot City, there is no charge for the first 2 Discretionary Requests
by the Pilot City.
Section 2: For (a) Private property owners or contractors doing private construction on public or
private property, (b) event producers or organizers of For Profit and Political Special Events, and (c)
Discretionary Requests by a Pilot City after the first 2 Discretionary Requests by the Pilot City, the
following fee schedule applies:
1. Deactivation: Station is deactivated but not removed; Bicycles are removed and cannot be
returned by customers:
$500/Station + $10/Dock/day of Deactivation. (Each of the foregoing amounts is subject to CPI
Adjustment.)
2. De-installation and Reinstallation: Station is completely removed from the location and returned
to same location:
$1,000/Station + $20/Dock + $10/Dock/day of Deactivation. (Each of the foregoing amounts is
subject to CPI Adjustment.)
3. Adjustment: Property owners and utilities may seek permanent or temporary changes to a
Station’s size or configuration, and changes to Street Treatments and Street Markings as
necessitated by such, without changes to the Station location:
$1,000/Station + $20/Dock that is adjusted. (Each of the foregoing amounts is subject to CPI
Adjustment.)
4. Temporary Relocation Followed by Reinstallation: Property owners and utilities who need to De-
install or Deactivate a Station for a period greater than 15 business days must pay for the
temporary relocation of the Station during the event or construction, which allows for
continuous operation of the Station, and must also pay for the reinstallation of the Station at
the original location after completion of the event or construction:
203215669.16 A-4-2
$5,000/Station + $40/Dock. (Each of the foregoing amounts is subject to CPI Adjustment.)
Defined Terms:
“Adjustment” shall mean permanent or temporary changes to a Station’s size or configuration,
and changes to Street Treatments and Street Markings as necessitated by such, without changes
to the Station location.
“CPI” shall mean the Consumer Price Index for the Consolidated Metropolitan Statistical Area
covering San Francisco-Oakland-San Jose, as measured by the Consumer Price Index for All
Urban Consumers, as published from time to time by the Bureau of Labor Statistics, U.S.
Department of Labor.
“CPI Adjustment” shall mean, with respect to a specific cost, that such cost is subject to annual
adjustment each January 1 based on changes in the CPI from the Effective Date to the date of
adjustment.
“Deactivation” shall mean, at a minimum, shut-down of Terminal (or display of messaging on a
Terminal screen indicating that Station is out of service) removal of all Bicycles present,
installation of physical barriers on all Docks that prevent docking of Bicycles, and designation of
the Station as “Out of Service” on the System website, app, and all other real-time data sources.
A Deactivation event is not over until the Station has been reactivated.
“De-Installation” shall mean, at a minimum, (i) the temporary or permanent full removal of the
Station and its associated Street Treatments, and, (ii) the designation of the Station as “Out of
Service” on, or removal of the Station from, the System website, app, and all other real-time
data sources.
“Discretionary Request” shall mean any De-Installation and/or Re-Installation or Station
Adjustment requested by the Pilot City that is not related to Public Works, Other Special Events,
or Public Safety Emergencies.
“For Profit and Political Special Events” shall mean temporary events permitted by the Pilot City
that (i) have entry fees for participation (e.g., road races, cycling tours); or (ii) have the purpose
of selling products (e.g., street fairs, food festivals, holiday fairs, film festivals, film shoots); or
(iii) have a title sponsor; or (iv) are political events.
“Other Special Events” shall mean temporary events permitted by the Pilot City other than For
Profit and Political Special Events (e.g., heritage or cultural parades).
“Public Safety Emergency” shall mean an instance when (i) Equipment is damaged or in an
unsafe state so as to cause an immediate danger to the public; or (ii) circumstances or situations
203215669.16 A-4-3
immediately surrounding Equipment create an imminent danger to the public; or (iii) the area
around a Station becomes unsafe or is required by police department or other emergency
responders of a Pilot City in order to respond to a natural disaster or avoid a calamity.
“Public Works” shall mean all instances where a Pilot City (including a utility owned by a Pilot
City) or its contractors (including any private contractors hired by a Pilot City) are undertaking
construction, maintenance, repairs or other public improvements.
“Street Marking(s)” shall mean thermoplastic paint markings and/or striping on the pavement
for the express purpose of demarcating a Station.
“Street Treatments” shall mean the three-dimensional objects used to demarcate the Station,
and protect it from adjacent parking and moving traffic. Such objects may include, but are not
limited to, delineators and wheel stops.
WRITTEN CONSENT OF THE
SOLE MEMBER OF
BAY AREA MOTIVATE, LLC
October 1, 2015
The undersigned, being the sole member (the “Member”) of Bay Area Motivate, LLC, a
Delaware limited liability company (the “LLC”), does hereby consent to the adoption of, and
does hereby adopt, the following resolutions without a meeting pursuant to the Delaware Limited
Liability Company Act, as amended:
Amendment of LLC Agreement
WHEREAS, the Member desires to amend the Limited Liability Company Agreement of
the LLC (the “LLC Agreement”);
NOW, THEREFORE, BE IT RESOLVED, that the LLC Agreement is hereby amended
and restated as set forth on Exhibit A attached hereto.
Resignation of Officer
FURTHER RESOLVED, that the resignation of the following person as an officer of
the Company in the capacity set forth below opposite his name is approved and ratified:
Edward Inlow - Vice President—Operations
Appointment of Officer
FURTHER RESOLVED, that the appointment of the following person to act as an
officer of the Company in the capacity set forth below opposite his name until his successor shall
be duly elected and qualified or until his earlier death, resignation or removal, be, and hereby, is
approved and ratified:
Mark Roberts - Vice President—Marketing
Omnibus
FURTHER RESOLVED, that the officers of the LLC be, and each of them hereby is,
acting singly or jointly, authorized, empowered and directed, in the name and on behalf of the
LLC, to execute and deliver the LLC Agreement and such other agreements, forms, certificates
and other documents as may be contemplated by the LLC Agreement, in such form and
containing such terms and conditions as the officer executing the same shall in his or her sole
discretion determine to be necessary, appropriate, convenient or proper to effectuate the intent of,
Member Consent of BAM, LLC (Officer Change and LLC Agreement Amendment)
2
and the transactions contemplated by, the foregoing resolutions, the execution and delivery
thereof by such officer to be conclusive evidence of such approval;
FURTHER RESOLVED, that the officers of the LLC be, and each of them hereby is,
acting singly or jointly, authorized, empowered and directed, in the name of and on behalf of the
LLC, to take or cause to be taken any and all actions, to make all payments, to make any filings
or other submissions with any governmental authority, and to negotiate, enter into, execute and
deliver any and all agreements, instruments and other documents as may be necessary,
appropriate, convenient or proper to effectuate the intent of, and the transactions contemplated
by, the foregoing resolutions, such agreements, instruments and other documents to be in such
form and to contain such terms and conditions as the officer executing the same shall in his or
her sole discretion determine to be necessary, appropriate, convenient or proper, the execution
and delivery thereof by such officer to be conclusive evidence of such approval;
FURTHER RESOLVED, that all actions previously taken by any officer, agent or
attorney of the LLC relating to the foregoing resolutions and the transactions contemplated
thereby are hereby adopted, ratified, confirmed and approved in all respects as the acts and deeds
of the LLC; and
FURTHER RESOLVED, that, for purposes of these resolutions, a facsimile copy or an
e-mail of a PDF file containing a copy of the signature page of the person executing these
resolutions shall be effective as an original signature and effective as an execution copy thereof.
[Signature Page follows]
[Exhibit A to BAM, LLC Sole Member Consent (Officer Change and LLC Agreement Amendment)]
Exhibit A
Amended LLC Agreement
See attached.
Amended Operating Agreement of BAM, LLC
AMENDED LIMITED LIABILITY COMPANY AGREEMENT
OF
BAY AREA MOTIVATE, LLC
This AMENDED LIMITED LIABILITY COMPANY AGREEMENT (this
“Agreement”) is made as of October 1, 2015, by and between BAY AREA MOTIVATE, LLC (the
“Company”), and BIKESHARE HOLDINGS LLC, as the sole and managing member of the
Company (the “Member”).
RECITALS
WHEREAS, the Certificate of Formation (the “Certificate”) of the Company was
filed with the Office of the Secretary of State of Delaware on May 29, 2015; and
WHEREAS, the Member desires to be admitted to the Company as a Member on
the terms and conditions set forth herein.
DEFINITIONS
Definitions
The following terms used in this Agreement shall have the following meanings.
“Act” means the Delaware Limited Liability Company Act, Chapter 434 of Title 6
of the Delaware Code, 6 Del. Code §18-101 et seq., as in effect on the date hereof and as it
may be amended hereafter from time to time.
“Company” means the limited liability company formed by the filing of the
Certificate and governed by this Agreement under the name “BAY AREA MOTIVATE, LLC.”
“Treasury Regulation” means the final, temporary and proposed income tax
regulations promulgated under the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law), as the same may be amended from
time to time (including corresponding provisions of succeeding regulations).
AGREEMENT
1. Formation.
The Company was formed as a limited liability company under the Act by the
filing of the Certificate with the Office of the Secretary of State of Delaware on the applicable
date referred to in the Recitals to this Agreement. The rights, obligations and liabilities of the
Member shall be determined pursuant to the Act and this Agreement and shall be subject to the
terms, provisions and conditions set forth therein and herein. To the extent that the rights,
obligations or liabilities of the Member are different by reason of any provision of this Agreement
than they would be in the absence of such provision, this Agreement shall, to the extent
permitted by the Act, control. The purpose of the Company shall be to engage in any lawful
activities for which a limited liability company may be organized under the Act.
Amended Operating Agreement of BAM, LLC 2
2. Filing.
The Member shall accomplish all filing, recording, publishing and other acts
necessary or appropriate for compliance with all requirements for operation of the Company as
a limited liability company under this Agreement and the Act and under all other laws of the
State of Delaware and such other jurisdictions in which the Company determines that it may
conduct business.
3. Name.
The name of the Company is “Bay Area Motivate, LLC,” as such name may be
modified from time to time by the Member as it may deem advisable.
4. Office and Agent.
The Company shall continuously maintain an office and registered agent in the
State of Delaware as required by the Act. The Delaware office and registered agent for the
Company shall be Corporation Service Company, 2711 Centerville Road, Wilmington, DE
19808 or such other Delaware office and/or registered agent as the Member may designate
from time to time. The Company also may have such other offices as the Member from time to
time may determine or as the business of the Company may require.
5. Addresses for Notices.
The address of the Member is set forth in the Company’s records as maintained
by the Member. The administrative address of the Company is 5202 Third Avenue, Brooklyn,
NY 11220. The Member may change its address by executing a written instrument. Any notice
issued in connection with this Agreement shall be in writing and shall be sent to the Company,
or the Member, as the case may be, at their respective addresses provided for in this Section 5.
6. Management.
The Company shall be managed by the Member. All decisions to be made on
behalf of the Company and all actions to be taken on behalf of the Company (including the
execution, delivery and performance of any documents) shall be made or taken solely by the
Member. Without limiting the foregoing, the Member and all officers shall have the authority to
execute and/or deliver, in furtherance of the Company’s business, any deed of trust, promissory
note, bill of sale, contract or other instrument purporting to convey, exchange or encumber any
Company asset.
7. Officers.
The Company may elect to have such officers as are from time to time
determined by the Member. Each officer of the Company shall have such authority and shall
exercise such powers and perform such duties as may be specified herein or by the Member or
as may be inherent in such office. Unless otherwise determined by the Member, the officers of
the Company need not be elected for a specified term but shall service at the pleasure of the
Member or for such terms as may be agreed in the individual case by each officer and the
Company. Each officer shall hold office until his or her successor has been elected or appointed
and has qualified, or until his or her earlier death, resignation or removal. Any officer of the
Company maybe be removed, either with or without cause, by the Member. Any officer may
Amended Operating Agreement of BAM, LLC 3
resign at any time by giving written notice to the Company, either in writing signed by such
officer or by electronic transmission. Unless otherwise specified in the notice of resignation,
such resignation shall take effect upon delivery, and the acceptance of the resignation shall not
be necessary to make it effective. The removal or resignation of an officer shall not affect the
rights of the Company under his or her contract of employment, if any. Any vacancy occurring
in any office of the Company by death, resignation, removal or otherwise, may be filled by the
Member.
8. Events Giving Rise to Dissolution.
The Company shall dissolve upon the first to occur of any of the following events
or occurrence, and upon no other event or occurrence:
(a) any event that makes it unlawful for the business of the Company
to be carried on by the Member; or
(b) at the election of the Member; or
(c) at any time there is no Member of the Company unless the
Company is continued in accordance with the Act; or
(d) the entry of a decree of judicial dissolution under Section 18-802
of the Act.
9. Liquidation.
Upon dissolution of the Company, the assets of the Company shall be liquidated
and the proceeds thereof shall be applied in the following order:
(a) to the satisfaction (whether by payment or the making of
reasonable provision for payment) of the Company’s liabilities to
creditors in the order of priority required by law, including the
creation of a reasonable reserve for reasonably foreseeable
contingent liabilities to be distributed when and as the Manager
determines; and
(b) thereafter to the Member.
10. Tax Treatment
For federal income tax purposes, at all times that the Member owns 100% of the
equity interests in the Company, the Company and the Member intend that the Company be
disregarded as an entity separate from the Member pursuant to Treasury Regulations Section
301.7701 and corresponding provisions of state law. Accordingly, no election will be made to
treat the Company as a corporation for income tax purposes.
11. Amendments.
This Agreement may be amended at any time by a written instrument executed
by the Member.
Amended Operating Agreement of BAM, LLC 4
12. Governing Law; Jurisdiction.
This Agreement and the rights of the Member hereunder shall be governed by
and interpreted in accordance with the laws of the State of Delaware. Bikeshare Holdings LLC
may assign all of its rights and obligations as Member hereunder at any time.
13. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the Member and
its legal representatives, successors and assigns.
14. Counterparts.
This Agreement may be executed in counterparts and all such counterparts shall
be construed together to form a single document.
[Remainder of Page Intentionally Left Blank]
203193300.19
BAY AREA BIKE SHARE PROGRAM AGREEMENT
between
METROPOLITAN TRANSPORTATION COMMISSION
and
BAY AREA MOTIVATE, LLC
December 31, 2015
203193300.19 -ii-
Table of Contents
DEFINED TERMS ................................................................................................... 2
SCOPE OF SERVICES .......................................................................................... 13
PROGRAM AREA AND EXPANSION; PROGRAM SIZE;
PROGRAM TIMING .................................................................................... 18
SITING .................................................................................................................... 21
RESERVED ............................................................................................................ 22
IMPROVEMENTS, MAINTENANCE, REPAIR AND OPERATION ................ 22
ADVERTISING AND SPONSORSHIP ................................................................. 23
REVENUE SHARING ........................................................................................... 24
PRICE SCHEDULES. ............................................................................................ 26
MERCHANDISING, LICENSING AND INTELLECTUAL PROPERTY ........ 29
RESERVED .......................................................................................................... 30
RESERVED .......................................................................................................... 30
MARKETING ....................................................................................................... 30
WEBSITE ............................................................................................................. 31
SECURITY FUND ............................................................................................... 32
INDEMNITY ........................................................................................................ 34
INSURANCE ........................................................................................................ 34
TERMINATION AND DEFAULT ...................................................................... 37
RIGHTS OF RECOGNIZED LENDER ............................................................... 41
EMPLOYMENT ................................................................................................... 43
INSPECTION AND AUDIT RIGHTS ................................................................. 44
RESTRICTION AGAINST ASSIGNMENT ....................................................... 44
DISPUTE RESOLUTION PROCESS .................................................................. 45
REPRESENTATIONS AND WARRANTIES OF OPERATOR ......................... 46
MISCELLANEOUS ............................................................................................. 47
203193300.19 iii
APPENDICES
APPENDIX A KEY PERFORMANCE INDICATORS AND LIQUIDATED DAMAGES
APPENDIX B COST OF EQUIPMENT
APPENDIX C REPORTING REQUIREMENTS
APPENDIX D FUNCTIONAL SPECIFICATIONS
ATTACHMENT
ATTACHMENT A AGREEMENT TO CONTINUE PILOT BIKE SHARE PROGRAM
203193300.19 -1-
BAY AREA BIKE SHARE PROGRAM AGREEMENT
THIS BAY AREA BIKE SHARE PROGRAM AGREEMENT (this “Agreement”), has been executed
and delivered as of December 31, 2015 (the “Effective Date”) by and between the METROPOLITAN
TRANSPORTATION COMMISSION, an agency of the State of California established pursuant
California Government Code § 66500 et seq., having an office at 101 Eighth Street, Oakland, California
(“MTC”), and BAY AREA MOTIVATE, LLC, a Delaware limited liability company, having any office
at 5202 Third Avenue, Brooklyn, New York 11220 (“Operator”).
W I T N E S S E T H:
WHEREAS, self-service bicycle sharing programs are revolutionizing the way residents commute and
tourists travel within cities in Europe and North America, and a regional self-service bicycle sharing
program with public access has been determined by MTC and the Participating Cities (as defined below)
to be a desirable and valuable mode of alternative public transportation for the San Francisco Bay Area;
and
WHEREAS, a bike sharing program will provide a 24-hour transportation network that complements
existing transit and transportation options, increases multi-modal travel options in the region and
encourages bicycle use as a healthy, environmentally friendly and congestion-reducing transportation
option; and
WHEREAS, MTC authorized its Executive Director to negotiate an agreement with Operator to design,
build, operate, maintain and market a network of publicly available bicycles in a bike share system within
the cities of Berkeley, Emeryville, Oakland, San Francisco and San Jose (subject to Section 2.16, each a
“Participating City”, and collectively, the “Participating Cities”);
WHEREAS, accordingly, MTC and Operator have negotiated this Agreement for the design, build,
operation, maintenance and marketing of a network of publicly available bicycles in a bike share program
in the Participating Cities;
WHEREAS, this Agreement also addresses the continuation of the pilot bike share program established in
2013 in San Francisco, Redwood City, Palo Alto, Mountain View and San Jose (the “Pilot Program”; the
foregoing cities being the “Pilot Cities”) pursuant to Bike Share Program Agreement dated February 6,
2013 (as amended, the “AD Agreement”) between Alta Bicycle Share, Inc. and The Bay Area Air Quality
Management District (the “Air District”);
WHEREAS, concurrently with the execution and delivery of this Agreement, Operator, the cities of
Emeryville, San Francisco and San Jose, and MTC are executing a Coordination Agreement
(“Coordination Agreement”) that sets forth certain rights, liabilities, and responsibilities of each party
thereto with respect to the Program, and defines the organizational, management, and operational
structure for the successful development of the Program.
NOW, THEREFORE, in consideration of the foregoing clauses, which clauses are hereby made a part of
this Agreement, and the mutual covenants and agreements herein contained, and for other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties do hereby
covenant and agree as follows:
203193300.19 -2-
DEFINED TERMS
For purposes of this Agreement and the Appendices and Exhibits, the following terms, phrases, words,
and their derivatives shall have the meanings set forth in this Section.
1.1 “AAA” has the meaning given such term in Section 23.1.2.
1.2 “AD Agreement” has the meaning given such term in the Recitals.
1.3 “AD Equipment” shall mean bike share equipment paid for by the Air District or Pilot
Cities under the AD Agreement.
1.4 “Adjustment” shall mean permanent or temporary changes to a Station’s size or
configuration, and changes to Street Treatments and Street Markings as necessitated by such, without
changes to the Station location.
1.5 “Advertising” shall mean any printed matter, including, but not limited to, words, pictures,
photographs, symbols, graphics or visual images of any kind, or any combination thereof, promoting or
soliciting the sale or the use of a product or service or providing other forms of textual or visual messages
or information for the sale or the use of a product or service, but in no event shall it include any textual
information that is required to be posted on any Equipment by any federal, state or local law, rule or
regulation, or by this Agreement.
1.6 “Advertising Restrictions” has the meaning given such term in Section 7.2.
1.7 “Agents” has the meaning given such term in Section 17.1.
1.8 “Agreed Completion Dates” shall mean, collectively, the Agreed Phase I Completion Date,
the Agreed Phase II Completion Date, the Agreed Phase III Completion Date, the Agreed Phase IV
Completion Date and the Agreed Phase V Completion Date.
1.9 “Agreed Phase I Completion Date” has the meaning given such term in Section 3.4.1.
1.10 “Agreed Phase II Completion Date” has the meaning given such term in Section 3.4.2.
1.11 “Agreed Phase III Completion Date” has the meaning given such term in Section 3.4.3.
1.12 “Agreed Phase IV Completion Date” has the meaning given such term in Section 3.4.4.
1.13 “Agreed Phase V Completion Date” has the meaning given such term in Section 3.4.5.
1.14 “Agreed Phase I Site Permit Submission Date” has the meaning given such term in Section
3.4.1.
1.15 “Agreed Phase II Site Permit Submission Date” has the meaning given such term in
Section 3.4.2.
203193300.19 -3-
1.16 “Agreed Phase III Site Permit Submission Date” has the meaning given such term in
Section 3.4.3.
1.17 “Agreed Phase IV Site Permit Submission Date” has the meaning given such term in
Section 3.4.4.
1.18 “Agreed Phase V Site Permit Submission Date” has the meaning given such term in
Section 3.4.5.
1.19 “Agreed Site Permit Submission Dates” shall mean, collectively, the Agreed Phase I Site
Permit Submission Date, the Agreed Phase II Site Permit Submission Date, the Agreed Phase III Site
Permit Submission Date, the Agreed Phase IV Site Permit Submission Date and the Agreed Phase V Site
Permit Submission Date.
1.20 “Agreement” has the meaning given such term in the Preamble, together with all
Appendices and Exhibits, and all amendments or modifications hereof or thereof.
1.21 “Air District” has the meaning given such term in the Recitals.
1.22 “Alcohol Advertising” shall mean Advertising or Sponsorship, the purpose or effect of
which is (i) to identify a brand of an alcohol product, a trademark of an alcohol product or a trade name
associated exclusively with an alcohol product, or (ii) to promote the use or sale of an alcohol product.
1.23 “Annual Member” shall mean a user having an Annual Membership.
1.24 “Annual Membership” has the meaning given such term in Section 9.2.1.
1.25 “Annual Membership Fee” has the meaning given such term in Section 9.2.1.
1.26 “Annual Membership Fee Cap” has the meaning given such term in Section 9.2.1.
1.27 “Applicable Interest Rate” in effect at any date shall mean the prime rate as most recently
published in the Eastern edition of the Wall Street Journal on or prior to such date plus 3%.
1.28 “Assessment Period” has the meaning given such term in Section 2.6.2(b).
1.29 “Back-end Software” designates all Software components of the central application
provided by Operator’s Software vendor and stored on the servers of such vendor, used for operation of
such vendor’s equipment, and accessible online from a remote location using the Hosted Infrastructure.
1.30 “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended (Title 11
(U.S.C.).
1.31 “Berkeley Effective Date” has the meaning given such term in Section 2.16.
1.32 “Bicycle” shall mean a vehicle with pedals and with 2 wheels held in a frame and aligned
one behind the other and steered with a steering wheel as further described in Appendix D. “Bicycle”
shall not include motorized vehicles, including scooters or mopeds. For the avoidance of doubt, electric
assisted bicycles constitute Bicycles and do not constitute motorized vehicles.
203193300.19 -4-
1.33 “Bicycle Availability” shall mean conformance with the required Bicycle Fleet Level.
1.34 “Bicycle Fleet Level” shall mean the number of Bicycles that are operational, on-the-street
and available for public use.
1.35 “Bicycle Maintenance” shall mean, at a minimum, that the following checks are performed
on a Bicycle, with deficient elements repaired or replaced as necessary:
1.35.1 Check tire pressure, and add air as may be needed, to recommended Pounds per
Square Inch measurement;
1.35.2 Check tightness of handlebars, headset bearings, and full handlebar range of
motion (left to right);
1.35.3 Check tightness of seat, seat post quick-release, and see that seat post moves
freely in full range of motion (up and down);
1.35.4 Check brake function (front and rear);
1.35.5 Check grips for wear and brake levers for tightness and damage;
1.35.6 Check bell for tightness and correct function;
1.35.7 Check handlebar covers for damage and instruction stickers;
1.35.8 Check front basket for tightness and damage, and check bungee cord for wear;
1.35.9 Check for correct gears and shifter function through all 5 gears;
1.35.10 Check fenders (front and rear) for damage, and clean outside of fenders;
1.35.11 Check tires (front and rear) for damage or wear;
1.35.12 Check wheels (front and rear) for trueness, broken or bent spokes and hub or axle
tightness;
1.35.13 Check LED lights (front and rear) for function;
1.35.14 Check reflectors on wheels, seat and basket, to ensure they are present, clean, and
undamaged;
1.35.15 Check pedals and cranks for tightness;
1.35.16 Lubricate and clean chain and check chain tensioner for correct function;
1.35.17 Check kickstand for correct function; and
1.35.18 Take brief test ride to ensure overall correct function of Bicycle.
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1.36 “Bikeshare Holdings” shall mean Bikeshare Holdings LLC, a Delaware limited liability
company, the sole member of Operator, and its successors.
1.37 “Claims” has the meaning given such term in Section 16.1.
1.38 “Cluster” shall mean, with respect to any Station, the Stations located within one-third of a
mile from such Station, unless fewer than 3 other Stations are located within one-third of a mile from such
Station, in which case such Station’s Cluster shall mean the 3 other Stations located closest to such
Station.
1.39 “Cluster Outage” shall mean an instance when either:
1.39.1 There are no empty, Operable Docks available at any of the Stations in a Cluster;
1.39.2 There are no Bicycles available for use at any of the Stations in a Cluster.
(Bicycles Wrenched in Docks are not considered as available for use.)
1.40 “Computer Hardware” electronic component that provides information or controls a
mechanical device and that is controlled by local or remote software.
1.41 “Contract Year” has the meaning given such term in Section 8.1.1.
1.42 “Coordination Agreement” has the meaning given such term in the Recitals.
1.43 “CPI” shall mean the Consumer Price Index for the Consolidated Metropolitan Statistical
Area covering San Francisco-Oakland-San Jose, as measured by the Consumer Price Index for All Urban
Consumers, as published from time to time by the Bureau of Labor Statistics, U.S. Department of Labor.
1.44 “CPI Adjustment” shall mean, with respect to a specific cost, that such cost is subject to
annual adjustment each January 1 based on changes in the CPI from the Effective Date to the date of
adjustment.
1.45 “Deactivation” shall mean, at a minimum, shut-down of Kiosk (or display of messaging on
Kiosk screen indicating that Station is out of service) removal of all Bicycles present, installation of
physical barriers on all Docks that prevent docking of Bicycles, and designation of the Station as “Out of
Service” on the Program website, app, and all other real-time data sources. A Deactivation event is not
over until the Station has been reactivated.
1.46 “Default” has the meaning given such term in Section 18.1.
1.47 “De-Installation” shall mean, at a minimum, (i) the temporary or permanent full removal of
the Station and its associated Street Treatments, and, (ii) the designation of the Station as “Out of Service”
on, or removal of the Station from, the Program website, app, and all other real-time data sources.
1.48 “Designated Representative” has the meaning given such term in Section 25.1.
1.49 “Discovery” shall mean any Operator employee gaining actual knowledge by personal
observation of such employee or by Notification of any defect in the Equipment or Program.
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1.50 “Dispute Resolution Process” has the meaning given such term in Section 23.1.
1.51 “Docks” shall mean the locking mechanisms contained on a Station that are designed to
receive a Bicycle for locked storage.
1.52 “Electing City” shall mean a Peninsula Pilot City or other Eligible City that elects, in
accordance with Section 3.2, to participate in the Program.
1.53 “Effective Date” has the meaning given such term in the Preamble.
1.54 “Eligible City” shall mean any city located in the MTC Area.
1.55 “Equipment” shall include Stations, Kiosks, Docks and Bicycles, either individually or in
any combination thereof.
1.56 “Escrow Agreement” means an escrow agreement to be executed among the vendor of the
Software, Operator, and a nationally reputable company that provides escrow deposit services with
respect to software and technology, as escrow agent, for the deposit, storage and release of the
proprietary source code of Vendor for all of Vendor’s software made available to Operator to operate the
Equipment, which agreement shall be in form acceptable to the parties thereto and in form reasonably
acceptable to MTC.
1.57 “Event of Force Majeure” shall mean a delay, suspension or interruption due to strike; war
or act of war (whether an actual declaration of war is made or not); terrorism; insurrection; riot;
injunction; fire, flood or similar act of providence; or other similar causes or events to the extent that such
causes or events are beyond the control of the Party claiming an Event of Force Majeure, provided in each
case that such Party has taken and continues to take all reasonable actions to avoid or mitigate such delay,
suspension or interruption and provided that such Party notifies the other Party to this Agreement in
writing of the occurrence of such delay, suspension or interruption within 5 business days, or if not
reasonably practicable, as soon thereafter as reasonably practicable, of the date upon which the Party
claiming an Event of Force Majeure learns or should have learned of its occurrence. A delay in a decision
by a government entity, the approval of which is a condition to an occurrence, shall not constitute an
“Event of Force Majeure” unless such delay is beyond the normal period in which such entity generally
acts with respect to the type of decision being sought and only if the Party claiming Event of Force
Majeure has taken and continues to take all reasonable steps to pursue such decision. The financial
incapacity of Operator shall not constitute an Event of Force Majeure.
1.58 “Executive Director” shall mean the Executive Director of MTC, or any successor in
function to the Executive Director.
1.59 “Firearms Advertising” shall mean Advertising or Sponsorship, the purpose or effect of
which is (i) to identify a brand of firearms or ammunition, a trademark of a firearm or ammunition or a
manufacturer of firearms or ammunition, or a trade name associated exclusively with a firearms or
ammunition, or (ii) to promote the use or sale of firearms or ammunition.
1.60 “Functional Specifications” shall mean the specifications set forth in Appendix D, subject
to Section 6.7.
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1.61 “Hacking” shall mean unauthorized and intentional access to the Computer Hardware for
the Program and/or Software.
1.62 “Hosted Infrastructure” means the hosting of the Back-end Software and associated
network access designed and controlled by Operator’s Software vendor, which renders the Back-end
Software accessible to Operator and its end users;
1.63 “Indemnified Party” and “Indemnified Parties” have the meaning given such terms in
Section 16.1.
1.64 “Infill” shall mean the placement of additional Stations within the Program Area in order
to address unmet demand or community request.
1.65 “Initial Meeting Date” has the meaning given such term in Section 23.1.1.
1.66 “Initial Ride Period” has the meaning given such term in Section 9.2.3.
1.67 “Initial Term” has the meaning given such term in Section 2.2.
1.68 “Installation Scheduling Permits” shall mean permits required for the scheduling of the
installation of Station-related Equipment at Sites proposed for Stations for which a Site Permit has been
issued as a check for conflicts with other activities at the same location. The “temporary occupancy
permit” issued by the San Francisco Department of Public Works is an example of an Installation
Scheduling Permit.
1.69 “Institutional Lender” shall mean any savings bank, a savings and loan association, a
commercial bank or trust company (whether acting individually or in a fiduciary capacity), an insurance
company organized and existing under the laws of the United States or any state thereof, a religious,
educational or eleemosynary institution, a federal, state or municipal employee’s welfare, benefit, pension
or retirement fund, any governmental agency or entity insured by a governmental agency, a credit union,
trust or endowment fund, or any combination or syndicate of Institutional Lenders or other lenders that is
led by an agent that qualifies as an Institutional Lender (in which case such combination or syndicate
shall, for purposes of this Agreement, constitute a single Institutional Lender); provided, that each of the
above entities (or, in the case of any such combination or syndicate, the agent) shall qualify as an
Institutional Lender only if it (a) is subject to service of process within the State of California and (b) has
a net worth of not less than $50,000,000 and net assets of not less than $250,000,000. A wholly-owned
subsidiary of any of Person that qualifies as an Institutional Lender is also an Institutional Lender.
1.70 “Key Performance Indicators” (or “KPIs”) has the meaning given such term in Appendix
A.
1.71 “Kiosk” shall mean the payment terminal that provides Bicycle rental instructions,
contains payment equipment (e.g., a credit card device), and includes all other physical means necessary
for the rental of Bicycles.
1.72 “KPI Contest Notice” has the meaning given such term in Section 2.6.3(b).
1.73 “KPI Change Request” has the meaning given such term in 2.6.2(a).
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1.74 “KPI Failure Notice” has the meaning given such term in 2.6.3 (a).
1.75 “KPI LD Payment Date” has the meaning given such term in Section 2.6.3(b).
1.76 “Liabilities” has the meaning given such term in Section 16.1.
1.77 “Membership Fee” has the meaning given such term in Section 9.1.
1.78 “MTC” has the meaning given such term in the Preamble, together with any successor
thereto.
1.79 “MTC Area” means the 9 counties in the San Francisco Bay Area within MTC’s
jurisdiction.
1.80 “MTC/Participating City Property” shall mean the trademarks, logos, servicemarks, and
other intellectual property rights of MTC and/or the Participating Cities.
1.81 “Notification” shall mean all information provided by MTC, a Participating City or the
general public to Operator about a specific defect or problem concerning the Program, Equipment or
operations of the Program by written document, email to Operator’s public information email address for
the Program, or telephone call to Operator’s call-in center for the Program.
1.82 “Oakland Effective Date” has the meaning given such term in Section 2.16.
1.83 “Operable Dock” shall mean a Dock that can both rent and receive bicycles from all
Program users and is not physically obstructed in a manner that would prevent such use.
1.84 “Operable Station” shall mean a Station at which at least 90 percent of all installed Docks
are Operable Docks from which an Annual Member can check out and return a Bicycle.
1.85 “Operator” has the meaning given such term in the Preamble.
1.86 “Operator Property” has the meaning given such term in Section 10.3.
1.87 “Operator Basic Function Software” shall mean software and other intellectual property
developed by Operator that is integral to the basic function of the Program (such as mobile apps that allow
for the unlocking of Bicycles). As of the Effective Date, no Operator Basic Function Software has been
developed.
1.88 “Operator Non-Basic Function Software” shall mean software and other intellectual
property developed by Operator that enhances the functionality of the Program but is not necessary for the
basic function of the Program (such as the Program website or mobile apps that allow users to identify
nearby Stations with available Bicycles or available Docks).
1.89 “Participating City” and “Participating Cities” have the meaning given such terms in the
Preamble.
1.90 “Participating City Delay” has the meaning given such term in Section 4.2.
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1.91 “Parties” shall mean MTC and Operator, and “Party” shall mean one of them, as the
context requires. The term “parties” shall mean, collectively, Operator, MTC and the Participating Cities.
1.92 “Payment Breach” has the meaning given such term in Section 15.3.1.
1.93 “Peak Hours” has the meaning given such term in Section 2.6.2(b).
1.94 “Peninsula Pilot Cites” shall mean the cities of Mountain View, Palo Alto and Redwood
City.
1.95 “PII” has the meaning given such term in Section 2.15.
1.96 “Person” shall mean any human being or any association, firm, partnership, joint venture,
corporation, limited liability company, governmental entity or other legally recognized entity, whether for
profit or not for profit.
1.97 “Pilot Cities” has the meaning given such term in the Recitals.
1.98 “Phase” shall mean any one of Phase I, Phase II, Phase III, Phase IV and Phase V, as the
context requires, and Phases shall mean, collectively, Phase I, Phase II, Phase III, Phase IV and Phase V.
1.99 “Phase I” has the meaning given such term in Section 3.4.1.
1.100 “Phase II” has the meaning given such term in Section 3.4.2.
1.101 “Phase III” has the meaning given such term in Section 3.4.3.
1.102 “Phase IV” has the meaning given such term in Section 3.4.4.
1.103 “Phase V” has the meaning given such term in Section 3.4.5.
1.104 “Phase I Stations” has the meaning given such term in Section 3.4.1.
1.105 “Phase II Stations” has the meaning given such term in Section 3.4.2.
1.106 “Phase III Stations” has the meaning given such term in Section 3.4.3.
1.107 “Phase IV Stations” has the meaning given such term in Section 3.4.4.
1.108 “Phase V Stations” has the meaning given such term in Section 3.4.5.
1.109 “PPI” shall mean the Producer Price Index for the United States, as measured by the
Producer Price Index for final demand, as published from time to time by the Bureau of Labor Statistics,
U.S. Department of Labor.
1.110 “PPI Adjustment” shall mean, with respect to a specific cost, that such cost is subject to
annual adjustment each January 1 based on changes in the PPI from the Effective Date to the date of
adjustment.
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1.111 “Program” shall mean Equipment, Sites, website, Backend Software and Computer
Hardware and the Services.
1.112 “Program Area” shall mean the entire area of all Participating Cities.
1.113 “Program Fleet” shall mean the total number of Bicycles required to serve the Program
Area as specified in Section 3.
1.114 “Program Name” has the meaning given such term in Section 10.2.
1.115 “Program Property” shall mean (a) the Equipment, and (b) all relevant licenses and rights
to the Equipment and the Software (excluding Operator Non-Basic Function Software).
1.116 “Program Property Assignment Conditions” shall mean the following: (a) Operator and
the purchaser of the Program Property have agreed on the purchase price for the Program Property, which
shall be based on the fair market value of the Program Property as an installed system at the time of the
purchase, (b) such purchaser has paid Operator the agreed upon purchase price for the Program Property,
and (c) such purchaser and Operator have entered into a license agreement with respect to the Operator
Basic Function Software, which license agreement shall (i) strictly prohibit use of the Operator Basic
Function Software for any other purpose other than the operation of the Program during such purchaser’s
tenure as operator of the Program, (ii) strictly prohibit the sale, lease, license, sublicense or other transfer
of such software, (iii) strictly prohibit any attempt to derive the source code of such software, (iv) strictly
prohibit the development of any derivative software based on such software, and (v) contain such other
customary terms and provisions intended to govern the licensing and use of proprietary software by a
competitor of the licensor to prevent, or limit the risk of, unauthorized use or infringement of such
software by such licensee or any third party, and such other customary terms and provisions intended to
protect the licensor from the licensee or any third party obtaining proprietary information for use by such
licensee or any third party other than the use specifically authorized in such license agreement.
1.117 “Prohibited Advertising” shall mean outdoor advertising that is prohibited by local laws,
regulations or ordinances of the Participating City.
1.118 “Property Damage Breach” has the meaning given such term in Section 15.3.2.
1.119 “Rebalancing” shall mean actions taken by Operator to prevent or rectify Cluster Outages,
subject, however, to Section 2.6.2(b).
1.120 “Recognized Lender” shall mean the holder of a Recognized Loan.
1.121 “Recognized Loan” shall mean any loan that is held by an Institutional Lender.
1.122 “Regular Annual Member” has the meaning given such term in Section 9.2.1.
1.123 “Regular Annual Membership” has the meaning given such term in Section 9.2.1.
1.124 “Renewal Term” has the meaning given such term in Section 2.4.
1.125 “Renewal Condition” has the meaning given such term in Section 2.4.
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1.126 “Replacement Agreement” has the meaning given such term in Section 19.4.
1.127 “Revenue Sharing Credit Period” has the meaning given such term in Section 8.2.4.
1.128 “Ridership Revenue” has the meaning given such term in Section 8.1.2.
1.129 “Ridership Revenue Hurdle” has the meaning given such term in Section 8.1.3.
1.130 “Scheduled Phase I Completion Date” has the meaning given such term in Section 3.4.1.
1.131 “Scheduled Phase II Completion Date” has the meaning given such term in Section 3.4.2.
1.132 “Scheduled Phase III Completion Date” has the meaning given such term in Section 3.4.3.
1.133 “Scheduled Phase IV Completion Date” has the meaning given such term in Section 3.4.4.
1.134 “Scheduled Phase V Completion Date” has the meaning given such term in Section 3.4.5.
1.135 “Scheduled Phase V Plus 90 Days Date” has the meaning given such term in Section 8.2.4.
1.136 “Scheduled Phase Completion Date” shall mean any of the Scheduled Phase I Completion
Date, the Scheduled Phase II Completion Date, the Scheduled Phase III Completion Date, the Scheduled
Phase IV Completion Date or the Scheduled Phase V Completion Date, as the context requires.
1.137 “Security Fund” has the meaning given such term in Section 15.1.
1.138 “Self-Help Situation” has the meaning given such term in Section 15.3.3.
1.139 “Services” shall mean the installation, operation and maintenance of the Stations and the
acquisition, placement, maintenance and rental to users of the Bicycles.
1.140 “Site” shall mean a designated area on publicly or privately owned real property, which
area contains a Station that conforms to the Siting Criteria.
1.141 “Site Permits” shall mean permits for installation of Station-related Equipment at Sites
proposed for Stations (other than Installation Scheduling Permits or Special Traffic Permits).
1.142 “Siting Criteria” has the meaning given such term in the Coordination Agreement.
1.143 “Software” shall means the software and the Equipment it runs on required to operate the
Equipment.
1.144 “Special Traffic Permit” shall mean a permit required if installation of Station-related
Equipment will interfere with pedestrian, bicycle, transit or vehicular traffic in a material respect. The
Special Traffic Permit issued by the San Francisco Municipal Transportation Authority (SFMTA) in
accordance with SFMTA’s Regulations for Working in San Francisco Streets is an example of a Special
Traffic Permit.
1.145 “Sponsor” means a Person contributing payments for the Program in exchange for
acknowledgment of its contribution.
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1.146 “Sponsor Property” has the meaning given such term in Section 10.2.
1.147 “Sponsorship” shall mean an arrangement pursuant to which, in connection with a payment
or payments that will be used to help defray the costs of installing or operating the Program, the Person
contributing such payment or payments is acknowledged by the Parties for such contribution.
1.148 “Sponsorship Revenue” has the meaning given such term in Section 8.1.4.
1.149 “Sponsorship Revenue Hurdle” has the meaning given such term in Section 8.1.5.
1.150 “State” shall mean the State of California.
1.151 “Station” shall mean a Kiosk (subject to Section 6.5), map module, a variable number of
Docks and, when applicable, Street Treatment(s) and Street Markings, designed in accordance with the
Functional Specifications set forth in Appendix D.
1.152 “Station Cleaning” shall mean, at a minimum that the following tasks are performed by
Operator at a Station:
1.152.1 Removal of litter at the Station; and
1.152.2 As needed power washing of the Docks and Street Treatments comprising a
Station and the pavement area on which a Station is situated.
1.153 “Street Marking(s)” shall mean thermoplastic paint markings and/or striping on the
pavement for the express purpose of demarcating a Station.
1.154 “Street Treatments” shall mean the three-dimensional objects used to demarcate the
Station, and protect it from adjacent parking and moving traffic. Such objects may include, but are not
limited to, delineators and wheel stops.
1.155 “Street Treatment Requirements” shall mean a Participating City’s requirements with
respect to Street Treatments as set forth in the Siting Criteria for such Participating City.
1.156 “Term” has the meaning given such term in Section 2.2.
1.157 “Title Sponsor” shall mean Operator’s system-wide Sponsor for the entire Program.
1.158 “Tobacco Advertising” shall mean Advertising or Sponsorship that bears a health warning
required by federal statute, the purpose or effect of which is to identify a brand of a tobacco product (any
substance that contains tobacco, including, but not limited to, cigarettes, cigars, pipe tobacco and chewing
tobacco), a trademark of a tobacco product or a trade name associated exclusively with a tobacco product,
or to promote the use or sale of a tobacco product.
1.159 “Trips” shall mean the use of a Bicycle from one Station to another Station or back to the
initial Station.
1.160 “Vendor” shall mean the company selected by Operator to provide the Software (other
than the Operator Software).
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1.161 “Wayfinding Elements” shall mean the maps posted on every Station, showing the location
of each Station.
1.162 “Wrench” shall mean the action of locking a Bicycle in a Dock such that it cannot be
released by Program users pending action by Operator.
SCOPE OF SERVICES
2.1 General Requirements. Operator shall (a) provide the Services in conformance with the
terms of this Agreement, (b) provide all of the Equipment and Software required to operate the Program,
(c) procure all of the relevant licenses and rights to use the Equipment and Software to operate the
Program, (d) procure all licenses and permits from applicable governmental agencies that are required to
provide the Services from all applicable governmental agencies, and (e) comply with all applicable laws,
rules and regulations of the United States, the State and the Participating Cities.
2.2 Initial Term. The term (the “Term”) of this Agreement shall commence on the Effective
Date and shall end on the last day of the calendar month in which the 10th anniversary of the earlier of (a)
the date that Phase I is completed, and (b) the Agreed Phase I Completion Date occurs (the “Initial
Term”), subject to Section 2.3.
2.3 Reduction of Initial Term. If Operator does not complete 75% of Phase I, Phase II, Phase
III, or Phase IV by the Agreed Phase I Completion Date, the Agreed Phase II Completion Date, the
Agreed Phase III Completion Date, the Agreed Phase IV Completion Date, respectively, or 100% of
Phase V by the Agreed Phase V Completion Date, then MTC shall have the right, by notice to Operator
given with 60 days of the respective missed Completion Date, to reduce the Initial Term by 5 years,
subject to the rights of the Recognized Lender set forth in Section 19.5. In addition, if on the 4th
anniversary of the earlier of (a) the date that Phase I is completed, and (b) the Agreed Phase I Completion
Date, a Default exists under Section 18.1.5, then MTC shall have the right, by notice to Operator given
with 60 days of such 4th anniversary, to reduce the Initial Term by 5 years, subject to the rights of the
Recognized Lender set forth in Section 19.5. Any amounts due pursuant to Section 8.2 shall be due
within 120 days after expiration of the Term as reduced pursuant to this Section 2.3.
2.4 Renewal Term. If the Initial Term has not been reduced pursuant to Section 2.3 and
Operator is in substantial compliance with the terms of this Agreement one year prior to the expiration of
the then current Term (the “Renewal Condition”), then, upon mutual agreement of the Parties, the Term
may be extended for 2 5-year renewals terms (each a “Renewal Term”) on substantially equivalent terms
applicable to the Initial Term. Subject to Operator’s satisfaction of the Renewal Condition and the mutual
agreement of the Parties to extend the Term, MTC and Operator shall engage in good faith negotiations
on a mutually acceptable agreement for each Renewal Term commencing one year prior to the expiration
of the then current Term with the goal of the Parties entering into an agreement for the respective
Renewal Terms prior to the commencement of each Renewal Term. Until such agreement is entered into
for the initial Renewal Term, this Agreement shall govern the relationship between the Parties, and until
such agreement is entered into for the second Renewal Term, the agreement for the initial Renewal Term
shall govern the relationship between the Parties.
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2.5 Non-Renewal. Notwithstanding anything to the contrary contained in Section 2.4,
Operator has the right not to renew the Term for either Renewal Term by notice given to MTC not later
than 6 months prior to the expiration of the then current Term. If Operator gives MTC a non-renewal
notice in accordance with the preceding sentence, then this Agreement shall end upon the expiration of
the then current Term.
2.6 Services.
2.6.1 Subject to Events of Force Majeure, following completion of Phase I, Operator shall
operate the Program so that it is fully operational at all Stations, consistent with the
Key Performance Indicators as set forth in Appendix A, 24 hours per day, seven days
per week, every day of each year, during the Term.
2.6.2 Adjustments to KPIs.
(a) KPIs in General. Notwithstanding anything to the contrary, if at any time
and from time to time either Party in good faith believes that the KPIs should be updated, including by
amending, supplementing or replacing them, (a) on account of technological developments incorporated
into the Program by Operator, or (b) because the Party seeking changes believes the KPIs are ineffective,
or not as effective as the KPIs could be, in strengthening the Program, the customer experience, and
Operator’s performance, then the Party seeking changes to the KPIs shall submit proposed changes to the
KPIs together with an explanation of how the proposed changes would address the deficiencies in the then
existing KPIs (“KPI Change Request”). Within 10 business days thereafter, the other Party shall either
accept the KPI Change Request in writing, or reject the KPI Change Request along with the reasons for
the rejection. In the case of such rejection, at the request of the Party submitting the KPI Change Request,
the matter will be referred to discussion in accordance with Section 23.1.1, except the matter will not be
subject to mediation in accordance with Section 23.1.2. If the matter is not resolved within 30 business
days of the KPI Change Request, the KPIs shall not be changed pursuant to the KPI Change Request. In
lieu of rejecting or accepting a proposed KPI change, the Parties may agree to test trials to test proposed
changes and then defer any decision until the conclusion of the trial period.
(b) Rebalancing. It is the objective of Operator to maximize the utility of the
Program and the customer experience at all times, but particularly during the hours between 6:00 AM and
10:00 PM (“Peak Hours”), in a cost effective manner. Maximizing utility requires that Operator take
affirmative steps to address severe imbalances in the demand for and supply of available Bicycles and
empty Operable Docks during Peak Hours, which imbalances typically arise from patterns in demand and
usage in which Bicycles typically travel in one direction. Operator’s objective is to minimize instances,
and minimize the duration of those instances, in a cost effective manner, when the demand for an empty
Operable Dock or an available Bicycle at a Station is not met by the available supply at that Station.
Achieving this objective is a multistep and collaborative process requiring the involvement, cooperation
and flexibility on the part of Operator, MTC and the Participating Cities. To achieve this objective,
during the period commencing upon the completion of Phase I and ending 6 months after the completion
of Phase V (the “Assessment Period”), the parties will (i) observe demand and use patterns as the Program
is being implemented to identify the times and locations that a shortage of empty Operable Docks and/or a
shortage of available Bicycles arises and the extent of the shortages at those time and locations; and (ii)
assess alternative approaches to alleviating outages, including, by way of example, by (A) enlarging
existing Stations or adding new Stations in areas in which there is a shortage, (B) finding and utilizing
storage areas located near Stations that experience Bicycle shortages so that additional Bicycles can be
203193300.19 -15-
deployed quickly, (C) prioritizing Stations by demand and time of demand so that Operator may, at any
particular time, focus more attention on those Stations with the highest demand at that time and less
attention on those Stations with weaker demand at that time and have greater flexibility to address those
Stations with weaker demand, and (D) identifying the optimal time of day for Operator to transport
Bicycles from areas in which there is a shortage of empty Operable Docks to areas in which there is a
shortage of Bicycles, which optimality will take into account when it is most efficient for Operator to
transport the Bicycles in order to meet the anticipated demand at the transferee Stations. As the parties
are developing approaches to alleviating outages during the Assessment Period, the parties shall also
reformulate a commercially reasonable KPI for Rebalancing. While Operator will strive to reduce and
eliminate Cluster Outages at all times commencing on the completion of a Phase, liquidated damages for
the Rebalancing KPI will not be assessed for any Phase until 6 months after the completion of such Phase.
The Rebalancing KPI will be refined and reformulated during the Assessment Period, and the KPI, as
refined and reformulated, will be fully implemented and effective immediately after the end of the
Assessment Period. The parties recognize that as patterns of use and demand, as well as levels of use and
demand, change from and after the Assessment Period, different outages may arise, which will also need
to be addressed in the manner set forth above.
2.6.3 Subject to Events of Force Majeure, if Operator fails to comply with the KPIs,
Operator shall be required to pay MTC liquidated damages as calculated in Appendix
A, provided that the maximum aggregate liquidated damages payable by Operator in
any calendar year for failure to comply with the KPIs is 4% of Ridership Revenue for
such calendar year.
(a) MTC is entitled to liquidated damages for failure of Operator to comply with
the KPIs by notice (a “KPI Failure Notice”) given to Operator (i) not more
frequently than once per quarter, and (ii) not later than 120 days after the
occurrence of the related failure, except with respect to the failure to comply
with a KPI that is measured on an annual basis, for which the KPI Failure
Notice shall be given by March 31 of the following calendar year. Each KPI
Failure Notice shall provide specific and detailed information about the failure
to comply and the amount of the liquidated damages due in connection
therewith.
(b) Prior to the later of (a) 30 days after Operator’s receipt of a KPI Failure Notice
and (b) the end of the calendar quarter in which such KPI Failure Notice is
given (the later of (a) and (b) being the “KPI LD Payment Date”), Operator
shall either pay the full amount of liquidated damages set forth in the KPI
Failure Notice or 50% of such amount along with a notification to MTC that
Operator seeks to contest, in good faith, the assessment of the liquidated
damages (a “KPI Contest Notice”). The KPI Contest Notice shall provide
specific and detailed information that rebuts or challenges the information
contained in the corresponding KPI Failure Notice. After a KPI Contest Notice
is given, any disputes relating to the subject matter of the KPI Failure Notice
and the KPI Contest Notice shall be resolved in accordance with the Dispute
Resolution Process.
(c) If Operator does not timely give a KPI Contest Notice in response to a KPI
Failure Notice, then interest on the liquidated damages set forth in the KPI
203193300.19 -16-
Failure Notice shall accrue at the Applicable Interest Rate in effect from time to
time commencing on the KPI LD Payment Date. If Operator does timely give a
KPI Contest Notice in response to a KPI Failure Notice and the Dispute
Resolution Process results in Operator being required to pay liquidated
damages, then Operator shall make such payment within 30 days following the
date that the liquidated damages dispute is resolved in accordance with the
Dispute Resolution Process, and interest on the liquidated damages shall accrue
at the Applicable Interest Rate in effect from time to time commencing on such
30th date.
2.7 [INTENTIONALLY OMITTED]
2.8 Ownership of Equipment. Except as provided in Sections 3.2 and 3.3, all Equipment shall
at all times be the property of Operator, subject to the lien thereon by any Recognized Lender.
2.9 Costs of Program.
2.9.1 Except as otherwise provided, each party shall bear its own costs in connection with
the Program, if such costs are applicable, including, but not limited to, costs incurred in
connection with: negotiating this Agreement and the Coordination Agreement and
preparing the Siting Criteria; Site selection; the review required for issuance of Site
Permits, Installation Scheduling Permits, Special Traffic Permits and other permits;
Equipment installation; exercising enforcement, inspection and audit rights;
prosecuting or defending claims arising from the Program, and marketing, to the extent
that MTC and/or the Participating Cities choose to undertake marketing.
2.9.2 Except as otherwise provided in Section 2.9.3, MTC and the Participating Cities shall
not be obligated to pay or bear any of the costs associated with or expenses incurred for
the Equipment, Software, or Services.
2.9.3 Each Participating City may elect, if additional incremental dedicated capital and
operating funds becomes available for the Program, to expand the Program within its
borders by adding Stations, Docks and Bicycles, provided that such Participating City
shall be responsible for securing funds to pay for the cost of purchasing, installing,
maintaining and operating the Equipment required for such expansion as set forth in
Appendix A of the Coordination Agreement.
2.9.4 Operator shall reimburse a Participating City for any other work performed by such
Participating City under this Agreement in furtherance of the Program, provided that
prior to performing such work such Participating City shall notify Operator that such
work will be performed at the expense of Operator, such Participating City provides an
itemized invoice for any such work, and Operator is billed for the actual cost incurred
by such Participating City without a markup or premium. Operator shall pay for such
work within 30 days following receipt of the itemized invoice therefor. In connection
with the installation of a Station, such other work may include, but is not limited to, (i)
any necessary changes to signs, parking meters and curb paint, and (ii) installation of
any striping, delineators or parking blocks outside the perimeter of a Station if the
foregoing items are not installed by Operator.
203193300.19 -17-
2.10 Use of Data. All data generated by the Program will be owned by Operator. Operator will
grant MTC and the Participating Cities a non-exclusive, royalty-free, irrevocable, perpetual license to use
all data generated by the Program, other than personally-identifiable information that can identify
individual users, their addresses, their credit card information and other personal information about users,
for non-commercial purposes and on a real-time basis; and MTC and each of the Participating Cities shall
have the right to grant to others a sublicense to use all such data for non-commercial purposes.
2.11 [INTENTIONALLY OMITTED]
2.12 [INTENTIONALLY OMITTED]
2.13 No Discrimination. Operator shall not discriminate in the implementation of the Program
or in the provision of Services on the basis of race, creed, color, national origin, sex, age, marital status, or
real or perceived sexual orientation.
2.14 Accessibility. In implementing and operating the Program, Operator shall comply with all
applicable requirements of the Americans with Disabilities Act, Section 508 of the Rehabilitation Act of
1973 and all other applicable federal, state and local requirements relating to persons with disabilities,
including any rules or regulations promulgated thereunder. Such compliance shall extend to the location
and design of Equipment as well as the Program’s website and any mobile application for the Program.
2.15 Personally Identifiable Information (“PII”). All PII obtained or maintained by Operator in
connection with this Agreement shall be protected by Operator from unauthorized use and disclosure.
This includes, but is not limited to, the secure transport, transmission and storage of PII used or acquired
in the performance of this Agreement. Operator agrees to properly secure and maintain any computer
systems (hardware and software applications) or electronic media that it will use in the performance of
this Agreement. This includes ensuring all security patches, upgrades, and anti-virus updates are applied
as appropriate to secure PII that may be used, transmitted, or stored on such systems in the performance of
this Agreement. Operator agrees to comply with the information handling and confidentiality
requirements outlined in the California Information Practices Act (Civil Code sections 1798 et.seq.). In
addition, Operator warrants and certifies that in the performance of this Agreement, it will comply with all
applicable statutes, rules, regulations and orders of the United States and the State of California relating to
the handling and confidentiality of PII and, as provided in Section 16, agrees to indemnify MTC against
any loss, cost, damage or liability by reason of Operator’s violation of this provision.
2.16 Notwithstanding anything to the contrary contained herein or in the Coordination
Agreement, as of the Effective Date, (a) the City of Berkeley and the City of Oakland have not completed
the approval processes necessary for such cities to execute the Coordination Agreement and for the
Coordination Agreement to be effective as to such cities, (b) neither such city is a Participating City, and
(c) the Coordination Agreement and this Agreement do not apply to such cities. Upon completion by
each such city of its approval processes, including the adoption by each such city of a franchise ordinance
as referenced in Sections 29.1 and 32.4 of the Coordination Agreement, and the execution by each such
city of the Coordination Agreement, the Coordination Agreement shall thereupon be effective as to such
city, each such city shall thereupon be a Participating City under this Agreement and Coordination
Agreement, which agreements shall thereupon apply to such city, and the Program Area shall thereupon
be expanded to encompass the entirety of such city (the date thereof, as to Berkeley, being the “Berkeley
Effective Date,” and, as to Oakland, being the “Oakland Effective Date”). If either or both of such cities
does not approve the execution of the Coordination Agreement, then the Parties shall make appropriate
203193300.19 -18-
amendments to this Agreement and the Coordination Agreement to reflect the removal of such city or
cities, as applicable, from the Program. In addition, the Parties are anticipating that the Berkeley
Effective Date will occur in February, 2016 and the Oakland Effective Date will occur in March, 2016. If
either such date does not occur until after March 31, 2016, then the Parties shall amend Sections 3.4 and
4.2 to make appropriate adjustments to the timing of the Program.
PROGRAM AREA AND EXPANSION; PROGRAM SIZE; PROGRAM TIMING
3.1 Program Area. As of the Effective Date, the Program Area encompasses the entirety of the
cities of Emeryville, San Francisco and San Jose. The Program Area shall also encompass the entirety of
the City of Berkeley as of the Berkeley Effective Date and the entirety of the City of Oakland as of the
Oakland Effective Date.
3.2 Program Area Expansion. Following expiration of the Pilot Program, each of the
Peninsula Pilot Cities may elect, by notice to Operator, to continue the bike share program in such
Peninsula Pilot City, provided that the Peninsula Pilot Cities shall be responsible for paying the cost of
upgrading, purchasing, installing, maintaining and operating the Equipment in accordance with the
schedule applicable to the Peninsula Pilot Cities set forth in Appendix B. Following the completion of
Phase V, the other Eligible Cities may elect, by notice to Operator, to develop a bike share program in the
Eligible Cities, provided that the other Eligible Cities shall be responsible for paying the cost of
purchasing, installing, maintaining and operating the Equipment in accordance with the schedule
applicable to the other Eligible Cities set forth in Appendix B. Operator shall be required to maintain the
Equipment purchased by an Electing City in a state of good repair throughout the Term, and at the end of
the Term, Operator shall return such Equipment to the Electing City in good working order but subject to
reasonable wear and tear from use and subject to loss and damage caused directly by users. Each Electing
City shall enter into with Operator a separate service agreement to establish the number of Stations,
Docks and Bicycles for such city, and the schedule for installation of the Equipment for such city, which
agreement will also address, among other matters, (i) Siting Criteria, the Site selection process, Street
Treatment Requirements, the protocols and procedures for the submission and review of applications and
the issuance of permits and approvals, and the Electing City’s requirements with respect to each of the
foregoing, (ii) De-installations, Adjustments and Deactivations, and (iii) advertising and sponsorship.
3.3 Program Size. The Program Fleet for Phases I through V is 7,000 to 7,055, allocated
among the Participating Cities as follows:
3.3.1 4,500 in San Francisco;
3.3.2 1,000 in San Jose;
3.3.3 1,400 in East Bay, as follows:
(a) 850 in Oakland
(b) 100 in Emeryville
(c) 400 in Berkeley
203193300.19 -19-
(d) 50 to be determined based on additional system planning analysis;
3.3.4 If Palo Alto elects to participate in the Program, 37 Bicycles will be distributed to Palo
Alto; if Mountain View elects to participate in the Program, 59 Bicycles will be
distributed to Mountain View; and if Redwood City elects to participate in the
Program, 59 Bicycles will be distributed to Redwood City; if the sum of the Bicycles
to be distributed to the Peninsula Pilot Cities that elect to participate in the Program is
less than 100, then Operator will distribute in San Francisco, San Jose and East Bay an
additional number of Bicycles equal to the difference between 100 and such sum; and
if none of the Peninsula Pilot Cities elect to participate in the Program, then Operator
will distribute an additional 100 Bicycles in San Francisco, San Jose and East Bay.
3.3.5 The minimum number of Stations in the Participating Cities is 500.
3.4 Program Timing. The schedule for Operator to obtain Site Permits and to install the
Equipment is as follows:
3.4.1 Phase I. Operator shall submit to the Participating Cities complete applications for
Site Permits for Stations containing 25% of the total Bicycles for San Jose, East Bay
and San Francisco (the “Phase I Stations”) by the date that is 5 months after the
Effective Date, such date being subject to extension by Events of Force Majeure or by
Participating City Delay (such date, as it may be so extended, being the “Agreed Phase
I Site Permit Submission Date”). Operator shall not be obligated to commence
installation of fully functional and operational Bicycles and related Equipment at such
Sites until the date that is 5 months after the issuance by the Participating Cities of Site
Permits for 75% of the Phase I Stations and shall complete such installation for all such
Sites by the date that is 5 months after the issuance by the Participating Cities of Site
Permits for the remainder of such Stations, such date being subject to extension by
Events of Force Majeure or by Participating City Delay (such date, as it may be so
extended, being the “Agreed Phase I Completion Date”; the installation of the
percentage of total Bicycles and related Equipment as required by this paragraph being
“Phase I”). Any AD Equipment that is acquired by Operator will count toward the
Bicycles and related Equipment required for Phase I. Based on the schedule set forth
in this paragraph, the objective of the Parties is for Operator to complete Phase I by the
date that is 10 months after the Effective Date (such date being the “Scheduled Phase I
Completion Date”). Notwithstanding anything to the contrary contained in this
Agreement, if Operator fails to submit to the Participating Cities complete applications
for Site Permits for 75% of the Phase I Stations by the date that is 30 days after the
Agreed Phase I Site Permit Submission Date, or if Operator fails to place a purchase
order, taking into account AD Equipment to be used by Operator, for 75% of the Phase
I Bicycles and 75% of the Phase I Stations, by the date that is 30 days after the issuance
by the Participating Cities of Site Permits for 75% of the Phase I Stations, then as the
sole remedy of MTC and the Participating Cities under this Agreement for such
failures, MTC shall have the right to terminate this Agreement upon 10 days’ notice to
Operator without any further right of Operator or any Recognized Lender to remedy
such failure. Operator shall provide evidence of such purchase order reasonably
promptly following a request by MTC.
203193300.19 -20-
3.4.2 Phase II. Operator shall submit to the Participating Cities complete applications for
Site Permits for Stations containing an additional 15% of the total Bicycles for San
Jose, East Bay and San Francisco (the “Phase II Stations”) by the date that is 9 months
after the Effective Date, such date being subject to extension by Events of Force
Majeure or by Participating City Delay (such date, as it may be so extended, being the
“Agreed Phase II Site Permit Submission Date”). Operator shall not be obligated to
commence installation of fully functional and operational Bicycles and related
Equipment at such Sites until the date that is 5 months after the issuance by the
Participating Cities of Site Permits for 75% of the Phase II Stations and shall complete
such installation for all such Sites by the date that is 5 months after the issuance by the
Participating Cities of Site Permits for the remainder of such Stations, such date being
subject to extension by Events of Force Majeure or by Participating City Delay (such
date, as it may be so extended, being the “Agreed Phase II Completion Date”; the
installation of the percentage of total Bicycles and related Equipment as required by
this paragraph being “Phase II”). Based on the schedule set forth in this paragraph, the
objective of the Parties is for Operator to complete Phase II by the date that is 14
months after the Effective Date (such date being the “Scheduled Phase II Completion
Date”).
3.4.3 Phase III. Operator shall submit to the Participating Cities complete applications for
Site Permits for Stations containing the remaining 60% of the total Bicycles for East
Bay (the “Phase III Stations”) by the date that is 12 months after the Effective Date,
such date being subject to extension by Events of Force Majeure or by Participating
City Delay (such date, as it may be so extended, being the “Agreed Phase III Site
Permit Submission Date”). Operator shall not be obligated to commence installation of
fully functional and operational Bicycles and related Equipment at such Sites until the
date that is 5 months after the issuance by the Participating Cities of Site Permits for
75% of the Phase III Stations and shall complete such installation for all such Sites by
the date that is 5 months after the issuance by the Participating Cities of Site Permits
for the remainder of such Stations, such date being subject to extension by Events of
Force Majeure or by Participating City Delay (such date, as it may be so extended,
being the “Agreed Phase III Completion Date”; the installation of the percentage of
total Bicycles and related Equipment as required by this paragraph being “Phase III”).
Based on the schedule set forth in this paragraph, the objective of the Parties is for
Operator to complete Phase III by the date that is 17 months after the Effective (such
date being the “Scheduled Phase III Completion Date”).
3.4.4 Phase IV. Operator shall submit to the Participating Cities complete applications for
Site Permits for Stations containing an additional 30% of the total Bicycles for San
Jose and San Francisco (the “Phase IV Stations”) by the date that is 16 months after the
Effective Date, such date being subject to extension by Events of Force Majeure or by
Participating City Delay (such date, as it may be so extended, being the “Agreed Phase
IV Site Permit Submission Date”). Operator shall not be obligated to commence
installation of fully functional and operational Bicycles and related Equipment at such
Sites until the date that is 5 months after the issuance by the Participating Cities of Site
Permits for 75% of the Phase IV Stations and shall complete such installation for all
such Sites by the date that is 5 months after the issuance by the Participating Cities of
203193300.19 -21-
Site Permits for the remainder of such Stations, such date being subject to extension by
Events of Force Majeure or by Participating City Delay (such date, as it may be so
extended, being the “Agreed Phase IV Completion Date”; the installation of the
percentage of total Bicycles and related Equipment as required by this paragraph being
“Phase IV”). Based on the schedule set forth in this paragraph, the objective of the
Parties is for Operator to complete Phase IV by the date that is 20 months after the
Effective Date (such date being the “Scheduled Phase IV Completion Date”).
3.4.5 Phase V. Operator shall submit to the Participating Cities complete applications for
Site Permits for Stations containing 30% of the total Bicycles for San Jose and San
Francisco (the “Phase V Stations”) by the date that is 22 months after the Effective
Date, such date being subject to extension by Events of Force Majeure or by
Participating City Delay (such date, as it may be so extended, being the “Agreed Phase
V Site Permit Submission Date”). Operator shall not be obligated to commence
installation of fully functional and operational Bicycles and related Equipment at such
Sites until the date that is 5 months after the issuance by the Participating Cities of Site
Permits for 75% of the Phase V Stations and shall complete such installation for all
such Sites by the date that is 5 months after the issuance by the Participating Cities of
Site Permits for the remainder of such Stations, such date being subject to extension by
Events of Force Majeure or by Participating City Delay (such date, as it may be so
extended, being the “Agreed Phase V Completion Date”; the installation of the
percentage of total Bicycles and related Equipment as required by this paragraph being
“Phase V”). Based on the schedule set forth in this paragraph, the objective of the
Parties is for Operator to complete Phase V by the date that is 26 months after the
Effective Date (such date being the “Scheduled Phase V Completion Date”).
3.5 Failure to Achieve Completion of any Phase. Notwithstanding anything to the contrary in
this Agreement, for the avoidance of doubt, the sole remedy of MTC and the Participating Cities against
Operator under this Agreement for Operator’s failure to complete Phases I, II, III, IV or V by the Agreed
Phase I Completion Date, the Agreed Phase II Completion Date, the Agreed Phase III Completion Date,
the Agreed Phase IV Completion Date, and the Agreed Phase V Completion Date, respectively, is to
reduce the Initial Term pursuant to Section 2.3, subject to the rights of the Recognized Lender.
3.6 Pilot Program. Attachment A sets forth the terms and conditions pursuant to which MTC
and Operator have agreed that Operator will continue operation of the Pilot Program.
SITING
4.1 General. The Coordination Agreement, together with the Siting Criteria, sets forth, among
other matters, (a) the Siting Criteria and the Site selection process for determination and approval of
locations of the Stations in each Participating City, and (b) the protocols and procedures for the
submission materials by Operator to each Participating City for, and the issuance by the Participating City
of, Site Plan approvals and permits to install the Equipment at each Station.
203193300.19 -22-
4.2 Delays in Approval: The following constitute delay (“Participating City Delay”) for which
Operator is entitled to an extension in the Agreed Site Permit Submission Dates and the Agreed
Completion Dates:
4.2.1 Identification of Sites. If, notwithstanding fulfillment of Operator’s obligations under
the Coordination Agreement regarding community engagement, field work and
outreach, Operator fails to identify, by a date that is not less than 2 months prior to the
Agreed Site Permit Submission Date for a Phase, 75% of the Sites required for such
Phase, such Sites being both viable and acceptable to the Participating Cities and the
applicable communities, or Operator fails to identify, by a date that is not less than 1
month prior to such Agreed Site Permit Submission Date, the remaining 25% of the
Sites required for such Phase, such Sites being both viable and acceptable to the
Participating Cities and the applicable communities, then such Agreed Site Permit
Submission Date shall be extended by any reasonably necessary additional period
required by Operator to identify a sufficient number of viable and acceptable Sites for
such Phase.
4.2.2 Issuance of Site Permits. If Operator timely submits complete applications for the Site
Permits for any Phase by the applicable Agreed Site Permit Submission Date but the
Participating Cities fail to issue Site Permits for 75% of the Stations by the date that is
3 months prior to the Scheduled Phase Completion Date for such Phase other than on
account of errors or omissions by Operator or valid reasons for denial, then such failure
shall constitute Participating City Delay and Operator shall have the right to delay
submission of applications for Site Permits for the next following Phase until a
reasonable period after the Participating Cities issue Site Permits for 75% of the
Stations for such Phase.
4.2.3 Installation Scheduling Permits. If the period of time for the Participating Cities to
issue Installation Scheduling Permits exceeds, on average, 7 days after final submission
of the required materials by Operator, or if more than 25% of the Installation
Scheduling Permits are issued 14 days or longer after final submission of the required
materials, other than on account of errors or omissions by Operator or valid reasons for
denial, then the Agreed Completion Dates shall be extended to reflect any reasonably
necessary additional period required by Operator to complete the Phases.
RESERVED
IMPROVEMENTS, MAINTENANCE, REPAIR AND OPERATION
6.1 Operator shall establish and maintain during the Term prompt and efficient procedures for
handling complaints from the public for which Operator receives a Notification. Such procedures shall be
consistent with all applicable laws, rules and regulations and the provisions of this Section. Such
203193300.19 -23-
procedures shall be set forth in writing and copies thereof shall be maintained at Operator’s office and
shall be available to the public and the Participating Cities upon request.
6.2 Operator will operate a primary call center that will answer calls in person 24 hours per
day, 7 days per week. Operator shall conspicuously post a notice on each Station and each bicycle
advising the general public that they may direct their complaints and comments to Operator’s call center.
Such call center shall have a full-time availability to handle calls in English, Spanish and Cantonese,
whether by in-house staff or by utilization of a translation service.
6.3 Operator shall maintain written, accurate and complete records of all complaints, and those
records shall be available to MTC through appropriate Software or, at MTC’s reasonable advance request,
in written form. Such records shall indicate: (i) the specific Equipment, including its identifying number
and location at a specific point in time, for which the complaint was made; (ii) the type of complaint;
(iii) the date and time of complaint; (iv) if the complaint is in written form (non-electronic) and the
information is available, the name, address, and telephone number of the Person filing the complaint;
(v) Operator’s action to address the complaint; and (vi) to the extent applicable, the date of resolution of
the complaint. All such records shall be retained by Operator throughout the Term. Within 7 business
days following a request by MTC, Operator shall provide MTC with records of complaints by location or
time period, and statistical reports by type of complaint, location of complaint, Station or Bicycle, and
time of complaint.
6.4 Following the Effective Date, MTC may, at its option, request that Operator provide it with
a full inventory of Bicycles, including numbers and dates of lease or purchase.
6.5 Operator may, without incurring any liquidated damages or causing a default hereunder,
(a) shut down the Program or reduce the number of Bicycles and Stations deployed and/or operating in
the Program Area for weather-related or other emergencies for the duration of the emergency in its
reasonable discretion, (b) reduce the number of Bicycles and Stations deployed and/or operative in the
Program Areas as needed to implement upgrades to the Functional Specifications, and (c) phase-out
Kiosks when they have become obsolete on account of the availability and usage of mobile phone apps.
6.6 Operator shall incorporate Wayfinding Elements on each Station as directed and approved
by MTC with input from the Participating Cites.
6.7 Nothing in this Agreement shall limit Operator’s right to upgrade the Functional
Specifications.
ADVERTISING AND SPONSORSHIP
7.1 Operator is responsible for identifying Sponsors and developing branding for the Program
tied to the Sponsors. In no event shall any Sponsor of Operator produce or sell alcohol products, tobacco
products, firearms, other products banned by the Participating Cities or products otherwise deemed
offensive to the general public. MTC, in consultation with the Participating Cities, shall provide written
approval to Operator prior to Operator entering into a Sponsorship agreement with the Title Sponsor,
which approval shall not to be unreasonably withheld or delayed. If MTC declines to give consent or
203193300.19 -24-
approval referred to hereunder, it will so advise Operator and provide Operator an opportunity to discuss
with MTC and an opportunity to attempt to meet MTC’s objections.
7.2 Operator shall not install, or permit to be installed, on any Equipment, any Tobacco
Advertising, Alcohol Advertising, Firearms Advertising or other Prohibited Advertising. Advertising on
any Equipment, including electronic media, shall be consistent with guidelines adopted by each
Participating City for outdoor advertising as set forth in this Agreement. Operator shall not place any
Advertising or Sponsorship acknowledgment matter that is indecent, in obvious bad taste, or demonstrates
a lack of respect for public morals or conduct. (The prohibitions and restrictions in this Section 7 and in
Section 29 of the Coordination Agreement are referred to collectively as the “Advertising Restrictions”.)
7.3 Operator shall comply with all applicable laws, rules and regulations in force as of the
Effective Date and which may hereafter be adopted, to the extent not grandfathered under the law, with
respect to Advertising and Sponsorship.
7.4 Neither MTC nor any Participating City shall have any liability or obligation with regard
to any Advertising or Sponsorship that survives the termination or expiration of this Agreement, except
MTC and the Participating Cities, at no cost to MTC or the Participating Cities, shall cooperate with the
Recognized Lender to keep the Sponsorship agreement in effect while a replacement operator is being
pursued and will continue to cooperate if a replacement operator is selected.
REVENUE SHARING
8.1 Definitions.
8.1.1 “Contract Year” shall mean (a) the period commencing on the Agreed Phase I
Completion Date and ending on December 31 of the calendar year in which the Agreed
Phase I Completion Date falls, which period shall constitute Contract Year 1, and (b)
each subsequent calendar year during the Term, the first of which is Contract Year 2
8.1.2 “Ridership Revenue” shall mean all revenues to the extent actually collected by
Operator as determined on a GAAP basis as Program membership or user payments
(including but not limited to annual, weekly and daily membership payments), and any
other Program revenue generated through Bicycle ridership, net of sales taxes or other
taxes imposed by law that Operator is obligated to collect and net of credit card fees
netted out of amounts due to Operator by the credit company prior to payment to
Operator and other billing related charges treated by the party imposing such charges in
a similar manner.
8.1.3 “Ridership Revenue Hurdle” shall mean $18,000,000 per calendar year, subject to CPI
Adjustment. The Ridership Revenue Hurdle shall be prorated for any Contract Year
that is not 365 days.
8.1.4 “Sponsorship Revenue” shall mean all revenues to the extent actually collected by
Operator as determined on a GAAP basis as a result of Program advertising and
sponsorships, including without limitation revenue generated in connection with (a)
203193300.19 -25-
naming rights related to the Program and (b) Sponsorship or Advertising placements on
Bicycles, Stations, Equipment, website, mobile applications or other physical or web-
based materials, net of sales taxes or other taxes imposed by law that Operator is
obligated to collect and net of credit card fees and other billing related charges.
8.1.5 “Sponsorship Revenue Hurdle” shall mean $7,000,000 per calendar year, subject to
CPI Adjustment. The Sponsorship Revenue Hurdle shall be prorated for any Contract
Year that is not 365 days.
8.2 Within 120 days following the end of each Contract Year during the Term, Operator shall:
8.2.1 Deliver to the MTC a schedule, certified by a senior officer of Operator, setting forth
the Ridership Revenue and the Sponsorship Revenue for such Contract Year; and
8.2.2 Pay to MTC an amount equal to 5% of the excess of Ridership Revenue for such
Contract Year over the Ridership Revenue Hurdle for such Contract Year, subject to
Section 8.2.4.
8.2.3 Pay to MTC an amount equal to 5% of the excess of Sponsorship Revenue for such
Contract Year over the Sponsorship Revenue Hurdle for such Contract Year, including
all Sponsorship Revenue for the period between the Effective Date and Contract Year
1, provided that Operator may defer payment of any amount owed for Sponsorship
Revenue for Contract Years 1 through 5 during the Term until Contract Years 6
through 10 during the Term, subject to Section 8.2.4. Operator shall pay any amounts
so deferred in equal monthly instalments during Contract Years 6 through 10 during
the Term. If the Term is reduced pursuant to Section 2.3, then Operator shall pay the
amounts so deferred within 120 days following the expiration of this Agreement.
8.2.4 Notwithstanding anything to the contrary herein, if Participating City Delay results in
an insufficient number of Site approvals for Operator to accommodate 500 Stations
(being the minimum number of Stations identified in Section 3.4) by the Scheduled
Phase V Completion Date plus 90 days (the “Scheduled Phase V Plus 90 Days Date”),
then in lieu of MTC’s share of Ridership Revenue and Sponsorship Revenue being
determined in accordance with the 5% amount set forth in Sections 8.2.2 and 8.2.3,
such percentage shall be reduced to the product of 5% and a fraction whose numerator
is the number of Stations for which a Site approval has been issued by such date and
whose denominator is 500, and such reduced amount shall apply retroactively and
prospectively until Site approvals for an aggregate of 500 Stations have been issued.
Any amounts theretofore paid by Operator to MTC under this Section 8.2 in excess of
such amount due to MTC shall be credited against amounts thereafter payable to MTC
under this Section 8.2. Notwithstanding the foregoing, if at any time during the period
commencing on the Scheduled Phase V Plus 90 Days Date and ending on the date on
which Site approvals for an aggregate of 500 Stations have been issued (such period
being the “Revenue Sharing Credit Period”) the Ridership Revenue or the Sponsorship
Revenue is less than the Ridership Revenue Hurdle or the Sponsorship Revenue
Hurdle, respectively, then Operator shall be entitled to a credit against amounts
thereafter payable to MTC under this Section 8.2 equal to the sum of (a) the product of
(i) the amount by which the Ridership Revenue Hurdle for such period exceeds the
203193300.19 -26-
Ridership Revenues during such period, and (ii) the amount by which the percentage
above has been reduced from 5% in accordance with the reduction set forth on the first
sentence of this paragraph, and (b) the product of (i) the amount by which the
Sponsorship Revenue Hurdle for such period exceeds the Sponsorship Revenues
during such period, and (ii) the amount by which the percentage above has been
reduced from 5% in accordance with the reduction set forth on the first sentence of this
paragraph. If the Revenue Sharing Credit Period is less than one year, then the
calculations in the preceding sentence shall be pro-rated based on the duration of the
Revenue Sharing Credit Period. If the Revenue Sharing Credit Period is longer than
one year, then the calculations for any fractional period shall be similarly pro-
rated.Any amount not paid to MTC when due under Section 8.2 shall accrue interest on
the overdue amount at the Applicable Interest Rate in effect from time to time.
8.3 No acceptance of any payment due pursuant to Sections 8.2 shall be construed as an accord
that the payment is the correct amount, nor shall such acceptance of payment be construed as a release of
any claim that MTC may have for further or additional sums payable under this Agreement.
PRICE SCHEDULES.
9.1 Operator agrees that the amount and terms of the fees it charges users of the Program shall
be consistent with the provisions of this Section. Membership Fees and Initial Ride Periods shall be
consistent with Section 9.2, the Annual Membership Fee for users eligible for the affordability
subscription specified in Section 9.3.1 shall be as described in said Section 9.3.1, the maximum Bicycle
usage charge shall be consistent with Section 9.5 and the fees for damaged, lost, stolen or otherwise
unreturned Bicycles shall be consistent with Section 9.6 initially charged by Operator shall be consistent
with this Section. A “Membership Fee” is an amount that entitles the purchaser of the membership (a
“member”, for the period of such purchased membership) to check out (as defined below) one or more
Bicycle(s) at a time, for the length of time described below, provided that the member shall be charged a
usage fee associated with the time period the Bicycle is checked out beyond the Initial Ride Period. A
Bicycle is “checked out” for the period from the time it is removed from a Dock to the time it is returned
to a Dock. A member may check out and return a Bicycle from or to any Dock at any Station in the
Program, for an unlimited number of times, at any time during the period of the member’s membership,
with the usage fee applicable to each such checkout and return sequence being calculated separately (so,
for example, a Regular Annual Member may, within the member’s membership period, check out a
Bicycle and return it within the first 30 minutes after checkout, and then subsequently check out a Bicycle
and return that Bicycle within the first 30 minutes after that checkout, without incurring any usage fee for
either checkout period).
9.2 Membership Fees, New Ridership Programs/Arrangements, and Initial Ride Periods:
9.2.1 Operator shall offer an annual membership (“Annual Membership”) for a fee (the
“Annual Membership Fee”) in an amount not to exceed the Annual Membership Fee
Cap in effect from time to time. The Annual Membership Fee Cap shall be $149 for a
one-year period, subject to increase on the first anniversary of the Effective Date and
on each subsequent anniversary of the Effective Date by a percentage amount equal to
the CPI increase for the trailing 4 calendar quarters preceding each such anniversary
203193300.19 -27-
plus 2% (so, for example, if the CPI increase were 1% for the trailing four calendar
quarters preceding a particular anniversary of the date hereof, the applicable permitted
percentage increase in the Annual Membership Fee Cap as of that anniversary would
be 3%). An Annual Member whose Annual Membership Fee is subject to the Annual
Membership Fee Cap is sometimes referred to as a “Regular Annual Member” and the
corresponding Annual Membership is the “Regular Annual Membership.” The period
of an Annual Membership shall run from the day the annual membership is activated
until the first anniversary of the date on which the Annual Membership had been
activated (but a membership purchased on February 29 shall expire on March 1 of the
following year);
9.2.2 Annual Memberships may be paid in 12 equal monthly instalments at a price not
greater than 120% of the Annual Membership Fee;
9.2.3 All memberships will include a free period of usage (the “Initial Ride Period”), which
is the length of time at the beginning of each individual Trip to which additional usage
fees will not be applied. For Regular Annual Memberships and affordability
memberships, the Initial Ride Period is 30 Minutes. Usage fees will be applied to all
Trips that exceed the Initial Ride Period; and
9.2.4 For monthly, weekly and daily memberships, and for usage of the Program by non-
members, Operator will determine the applicable fees, usage fees, and periods of use
for members beyond the Initial Ride Period in its sole discretion.
9.2.5 Nothing in the foregoing shall limit the right of Operator to offer premium
memberships featuring an Initial Rider Period longer than 30 minutes for an Annual Membership Fee
greater than $149.
9.3 Affordability Option:
9.3.1 Notwithstanding the permitted rate for a Regular Annual Membership set forth in
Section 9.2.1 (as adjusted pursuant to Section 9.11), Operator shall charge those
eligible for an “affordability subscription” no more than $60 per annum (excluding
sales tax) as the Annual Membership Fee, or $5.00 per month for a 12-month
membership. Such rate is subject to annual CPI increase on the first anniversary of the
Effective Date and on each subsequent anniversary of the Effective Date for the trailing
4 calendar quarters preceding each such anniversary plus 2%.
9.3.2 Members of households enrolled in the Utility Lifeline Programs (also known as
California Alternative Rates for Energy (CARE)) available in the MTC Area are
eligible for affordability memberships. At least 30 days prior to the completion of
Phase I, Operator shall propose, for MTC’s review and approval, procedures for
verifying enrollment in CARE. In San Francisco, those who meet Muni Lifeline
income requirements as determined by the City of San Francisco’s Human Services
Agency are also eligible for the affordability membership. Upon mutual agreement of
the Parties, eligibility may expand to include other categories of persons so long as the
eligibility is determined by third parties.
203193300.19 -28-
9.3.3 Members enrolling through the affordability program shall be entitled to the same
rights and privileges as Regular Annual Members.
9.3.4 The usage fees for affordability members shall not exceed the rate charged to Regular
Annual Members.
9.4 The checkout period for the purposes of calculating usage fees shall always commence
with the time a Bicycle is actually removed from a Dock, and it shall not be based on the time of insertion
of a payment or identification card.
9.5 The maximum Bicycle usage charge initially charged with respect to any member shall be
$100 per 24 hour period, not including charges for damaged, lost, stolen or otherwise unreturned
Bicycles.
9.6 Fees for damaged, lost, stolen or otherwise unreturned Bicycles initially charged shall be
(i) $1,200, if not returned, or (ii) if returned, the sum of all direct costs of the repair, including all labor
and parts, as determined by Operator in its reasonable discretion, plus a 10% administrative fee; provided,
however, that the fees charged to affordability members for unreturned or damaged Bicycles shall be not
more than 33% of the fees set forth in the preceding clauses (i) and (ii). Operator shall waive such fees for
an any member who is not at fault for the unreturned or damaged Bicycle.
9.7 Operator shall at all times post on all Stations and on Operator’s website a complete and
up-to-date fee description that sets forth each and every current membership and usage fee offered by
Operator, the methods of purchasing memberships and paying fees, available discounts on such fees, the
applicability and terms of such discounts and, to the extent applicable, how to apply for or qualify for
such discounts, and fees associated with damaged, lost, stolen or otherwise unreturned Bicycles. Operator
shall furnish written copies of such material to the public upon request.
9.8 Operator shall accept credit card and debit card payments online and at all Stations but in
the case of debit cards only those that have a Visa or Mastercard logo on them. Operator may employ
such other methods of payment as it may determine.
9.9 All required state sales and use taxes with respect to membership and usage fees shall be
collected and paid by Operator, as required by applicable law.
9.10 Operator shall be permitted to create Program pricing discount programs, which may be
targeted in connection with marketing and outreach efforts, and in connection with Sponsorship or
Advertising programs, to expand or enable Program use among different communities or for other lawful
purposes.
9.11 At any time and from time to time, Operator shall have the right:
9.11.1 To adjust the amount of the Annual Membership Fee specified in Section 9.2.1
downwards at any time and upwards on each anniversary of the Effective Date by an
amount not to exceed the Annual Membership Fee Cap then in effect;
9.11.2 To adjust the amount of the maximum Bicycle usage charge specified in Section 9.5
and the fees for damaged, lost, stolen or otherwise unreturned Bicycles specified in
Section 9.6 downwards at any time and upwards on each anniversary of the Effective
203193300.19 -29-
Date by a percentage amount equal to the CPI increase for the trailing 4 calendar
quarters preceding each such anniversary plus 2% (so, for example, if the CPI increase
were 1% for the trailing 4 calendar quarters preceding a particular anniversary of the
date hereof, the applicable permitted percentage increase in the Annual Membership
Fee Cap as of that anniversary would be 3%);
9.11.3 Any upwards adjustment permitted under this Section 9.11 and not made as of any
anniversary date may be made at any time after such anniversary date without
derogation of Operator’s right to make any other upwards adjustments permitted under
this Section 9.11;
9.11.4 To adjust in its sole discretion all other fees, time periods and charges specified
hereunder other than those fees, time periods and charges specified in Section 9.2.1 and
Section 9.3; and
9.11.5 To adjust upward the duration of the Initial Ride Period.
9.12 MTC shall have the right to review and approve the initial Program membership waiver
and any material changes thereto, which approval shall not be unreasonably withheld.
9.13 At any time and from time to time, Operator may, in its sole discretion, offer discounts and
promotions for the Program.
MERCHANDISING, LICENSING AND INTELLECTUAL PROPERTY
10.1 [INTENTIONALLY OMITTED]
10.2 Subject to the limitations, terms and conditions as may be imposed by the Sponsor in the
Sponsor’s discretion, upon request by MTC and the Participating Cities, Operator shall seek to obtain for
MTC and the Participating Cities, or shall assist MTC and the Participating Cities to obtain, for the
benefit of MTC, the Participating Cities and their respective business partners and sublicensees, non-
exclusive licenses to use during the term of any Sponsorship agreement the Sponsor trademarks, logos,
servicemarks, and other similar intellectual property identified for use in connection with the Sponsorship
agreement (individually and/or collectively the “Sponsor Property”) to market and promote the Program
under the name or title for the Program adopted by Operator for the Program (the “Program Name”),
which name shall be subject to the consent of MTC and the Participating Cities, as applicable, to the
extent the Program Name consists of MTC/Participating City Property; provided, however, the use of any
Sponsor Property by MTC or the Participating Cities shall comply with reasonable quality control
measures required by the Sponsorship agreement. To the extent that the Program Name incorporates
MTC/Participating City Property, MTC and/or one or more of the Participating Cities, as the case may be,
shall own the portion of any Program Name that consists of MTC/Participating City Property. For further
clarity, with respect to obtaining the aforementioned licenses, Operator is not the agent of MTC or the
Participating Cities and has no authority to enter into agreements on behalf of or otherwise bind MTC or
the Participating Cities.
203193300.19 -30-
10.3 Subject to the limitations, terms and conditions as may be imposed by the Sponsor in the
Sponsor’s discretion to the extent the Operator Property incorporates any Sponsor Property, including,
without limitation, the Sponsor’s consent, Operator hereby grants to MTC and the Participating Cities and
their respective business partners and sublicensees a non-exclusive, royalty-free license to use any
trademarks, logos, servicemarks, and other similar intellectual property developed by Operator
(individually and/or collectively the “Operator Property”) required in connection with marketing and
promoting the Program during the Term.
10.4 MTC hereby grants to Operator the exclusive right to use during the Term the name “Bay
Area Bike Share” and variations thereof (individually and/or collectively “Bay Area Bike Share”). As
part of Operator’s exclusive right to use “Bay Area Bike Share”, Operator shall have the right to
sublicense the use of “Bay Area Bike Share” to the Sponsor or any other Person to market or promote the
Program. Such rights shall terminate upon expiration or termination of this Agreement, but subject to the
rights of the Recognized Lender.
10.5 Notwithstanding the foregoing Sections, the Recognized Lender shall not be precluded
from collateralizing any intellectual property of Operator.
RESERVED
11.1 [INTENTIONALLY OMITTED]
11.2 [INTENTIONALLY OMITTED]
11.3 [INTENTIONALLY OMITTED]
RESERVED
12.1 [INTENTIONALLY OMITTED]
12.2 [INTENTIONALLY OMITTED]
12.3 [INTENTIONALLY OMITTED]
MARKETING
13.1 Operator shall create a marketing plan for the Program, subject to approval by MTC, which
approval will not be withheld so long as the plan is not in bad taste, offensive, obscene or derogatory to
MTC or any Participating City. Following such approval, Operator shall market the Program in
accordance with such plan. The marketing budget and the allocation of such budget shall be determined
by Operator, in its sole discretion. The marketing plan shall include, at a minimum, demonstrations,
203193300.19 -31-
events, social media outreach, programs, partnerships and other efforts to educate residents of the
Participating Cities about bike share, to launch the Program and to grow membership and ridership in a
financially sustainable manner.
13.2 A portion of Operator’s marketing plan will include marketing and outreach to low-income
communities, disadvantaged communities, and communities for which English is not the native language,
shall be subject to the approval of MTC and the Participating Cities, shall comply with local requirements
regarding language access for each Participating City, shall comply with local standards for decency and
not be offensive to the general public. MTC retains the non-exclusive right to conduct marketing and
outreach to low-income neighborhoods and limited English proficiency neighborhoods. Operator’s
marketing activities shall not violate the Advertising Restrictions.
13.3 [INTENTIONALLY OMITTED]
WEBSITE
14.1 Operator shall create and maintain a Program website, subject to the MTC’s prior review.
The Program’s website shall include, at a minimum, all of the following elements:
14.1.1 Eligibility requirements;
14.1.2 Subscription information and rate schedules;
14.1.3 Payment and subscription processing information;
14.1.4 Method for subscribers to update required information;
14.1.5 Subscriber agreement and acceptance of terms;
14.1.6 Map of network of Stations and real-time availability of Bicycles at each Station;
14.1.7 Frequently Asked Questions;
14.1.8 Safety requirements and information (including malfunctions and crashes);
14.1.9 News and operational updates;
14.1.10 Special events notices;
14.1.11 Links to other bike programs and events;
14.1.12 Call center contact information;
14.1.13 Real-time information on Bicycles and Docks for app developers (e.g. JSON Feed);
14.1.14 System-wide anonymized historical data;
14.1.15 For individual members, that member’s ridership history;
203193300.19 -32-
14.1.16 For individual members, that member’s payment history; and
14.1.17 Operator’s privacy policy; and
14.1.18 Translation capability to Cantonese, Spanish, and Vietnamese at a minimum.
14.2 Operator shall keep all information on the Program’s website updated.
SECURITY FUND
15.1 Prior to installation by Operator of the first new Station, Operator shall deposit with MTC
a security deposit (“Security Fund”) in the amount of $250,000.00. Interest on the Security Fund shall
accrue in an interest bearing bank account for the benefit of Operator, and all such interest shall be paid
annually to Operator on each anniversary of the Effective Date.
15.2 Operator shall maintain $250,000.00 in the Security Fund at all times during the Term and
for 90 days after the end of the Term. Upon expiration of the foregoing period, the remaining balance of
the Security Fund shall be disbursed to Operator, unless prior to the expiration of such 90-day period
MTC commences litigation against Operator, the underlying claim is covered by the Security Fund, and
such litigation is not finally resolved prior to the expiration of such period, in which case an amount of
the Security Fund equal to the amount of the outstanding claim shall be retained and only until such claim
is resolved. Any amounts remaining in the Security Fund that are not being retained in accordance with
this paragraph shall be promptly returned to Operator, and MTC shall fully and timely cooperate with the
payment of the Security Fund to Operator.
15.3 The Security Fund shall serve as security for the faithful performance by Operator of all
terms, conditions and obligations of this Agreement and shall be available for withdrawal under the
following circumstances:
15.3.1 If Operator breaches a payment obligation under this Agreement and fails to
remedy such breach within 10 business days following notice by MTC to Operator (a “Payment Breach”),
other than the payment of liquidated damages under Section 2.6.3, which is addressed in Section 15.3.5.
In the event of a Payment Breach, MTC shall be entitled to withdraw from the Security Fund the amount
of the money that is due and payable as set forth in such notice, unless within such 10 business day period
Operator initiates the Dispute Resolution Process by giving MTC notice stating that it contests the
occurrence of such Payment Breach or the amount thereof. This Section 15.3.1 does not cover a Default
under Section 18.1.1 (which is covered in Section 15.3.4).
15.3.2 If Operator commits a non-monetary breach under this Agreement that results in
damage to any municipal structure or property of MTC or a Participating City, Operator fails to repair
such damage within 30 days following notice by MTC to Operator and in response thereto MTC or the
applicable Participating City undertakes such repair (a “Property Damage Breach”), in which event MTC
shall be entitled to withdraw from the Security Fund the costs incurred by MTC or the applicable
Participating City to undertake such repair, provided such costs are reasonable. Notwithstanding MTC’s
withdrawal from the Security Fund for a Property Damage Breach, Operator shall have the right to contest
203193300.19 -33-
such Property Damage Breach or the costs incurred by initiating the Dispute Resolution Contest, provided
that Operator gives MTC notice thereof not later than 30 days after such withdrawal.
15.3.3 If Operator fails to undertake any other non-monetary obligation under this
Agreement within the period required under this Agreement and in response thereto MTC or a
Participating City exercises self-help to perform such obligation pursuant to a provision of this Agreement
that expressly permits self-help or with respect to which self-help is a reasonable response (e.g., a failure
of Operator to timely complete a Station De-Installation; or failure of Operator to remove advertising that
violates Advertising Restrictions within 24 hours of notice to Operator) (a “Self-Help Situation”), in
which event MTC shall be entitled to withdraw from the Security Fund the costs incurred by MTC or the
applicable Participating City to undertake such self-help, provided such costs are reasonable.
Notwithstanding MTC’s withdrawal from the Security Fund for a Self-Help Situation, Operator shall have
the right to contest such Self-Help Situation or the costs incurred by initiating the Dispute Resolution
Contest, provided that Operator gives MTC notice thereof not later than 30 days after such withdrawal.
This Section 15.3.3 does not cover a breach of Section 16 or matters covered by Section 15.3.2 or 15.3.4.
15.3.4 Operator commits a Default, in which event MTC shall be entitled to withdraw
the actual, direct damages arising from such Default unless prior to the expiration of the applicable cure
period set forth in Section 18.1 Operator initiates the Dispute Resolution Process by giving MTC notice
stating that it contests the occurrence of such Defaults. This Section 15.3.4 does not cover matters
covered by Section 15.3.1, 15.3.2, 15.3.3 or 15.3.5.
15.3.5 Operator fails to pay any amount of liquidated damages, and interest, if any due to
MTC pursuant to Section 2.6.3 within the time periods provided therein.
15.4 Each notice by MTC to Operator under Section 15.3 of a failure, breach or Default, as
applicable, shall provide specific and detailed information about Operator’s non-compliance, together
with the amount MTC is intending to withdraw and detailed support for such amount, if then known.
Each notice from Operator to MTC under Section 15.3 to contest the occurrence of such non-compliance
or the amount to be withdrawn, which notice shall commence the Dispute Resolution Process, shall
provide specific and detailed information that rebuts or challenges the information contained in the
corresponding notice provided by MTC. Within 2 days following any withdrawal from the Security
Fund, MTC shall notify Operator of the date and amount of the withdrawal, together with detailed support
for the amount of the withdrawal.
15.5 MTC may not seek recourse against the Security Fund for any cost or damages for which
MTC has previously been compensated by Operator or from the Security Fund. The withdrawal of the
amounts from the Security Fund shall constitute a credit against the amount of the applicable liability of
Operator.
15.6 If a withdrawal from the Security Fund is made, Operator shall be required to replenish the
Security Fund by the amount withdrawn within 30 days after receipt of notice of such withdrawal.
Notwithstanding the foregoing, if Operator is contesting in good faith MTC’s right to withdraw in
accordance with the Dispute Resolution Process, then Operator shall not be obligated to replenish on
account of such withdrawal until 30 days after such dispute is finally resolved in accordance with the
Dispute Resolution Process. Interest on the amount required to be replenished shall accrue at the
Applicable Interest Rate in effect from time to time commencing on such 30th date.
203193300.19 -34-
15.7 The obligation to perform and the liability of Operator pursuant to this Agreement shall not
be limited in nature or amount by the acceptance of the Security Fund required by this Section 15.
INDEMNITY
16.1 Indemnification. Operator shall defend, indemnify and save harmless MTC, the
Participating Cities, and their respective commissioners, officers, agencies, departments, agents, and
employees (each, an “Indemnified Party”; and collectively, “Indemnified Parties”) from and against any
and all claims, demands, causes of action, proceedings or lawsuits brought by third-parties (“Claims”),
and all losses, damages, liabilities, penalties, fines, forfeitures, costs and expenses arising from or
incidental to any Claims (including attorneys’ fees and other costs of defense) (collectively, with Claims,
“Liabilities”), resulting from, or arising out of, the operation of the Program and the provision of Services,
whether such operation or Services is performed or provided by Operator or by Operator’s subcontractors
or any other person acting for or on behalf of Operator.
16.2 Notwithstanding the foregoing, the following shall be excluded from Operator’s
indemnification and defense obligations contained in the preceding sentence: any Liabilities to the extent
resulting from, or arising out of, (i) the gross negligence or willful misconduct of any Indemnified Party,
(ii) Operator complying with the written directives or written requirements of a Participating City, if the
Operator has previously objected to such written directives or requirements in writing, with respect to (A)
the location or configuration of any Station in relation to the street or sidewalk on which such Station is
located or to which it adjoins or (B) a Participating City’s Street Treatment Requirements, or (iii) the
condition of any public property outside of the perimeter of a Station and not otherwise controlled by
Operator (and expressly excluding from this clause (iii) the condition of the Bicycles or other Equipment).
If any Claim against Operator includes claims that are covered by clause (iii) of the preceding sentence or
claims contesting a Participating City’s authority to issue a permit for a Station, then each Party shall be
responsible for its own defense against such claims.
16.3 Upon receipt by any Indemnified Party of actual notice a Claim to which such Indemnified
Party is entitled to indemnification in accordance with Sections 16.1 and 16.2, such Indemnified Party
shall give prompt notice of such Claim to Operator. Operator shall assume and prosecute the defense of
such Claim at the sole cost and expense of Operator. Operator may settle any such Claim in its discretion
so long as such settlement includes an unconditional release of the Indemnified Party.
INSURANCE
17.1 Minimum Coverages. The insurance requirements specified in this section shall cover
Operator’s own liability and the liability arising out of work or services performed under this Agreement
by any subconsultants, subcontractors, suppliers, temporary workers, independent contractors, leased
employees, or any other persons, firms or corporations that Operator authorizes to work under this
Agreement (hereinafter referred to as “Agents”). Operator shall, at its own expense, obtain and maintain
in effect at all times during the life of this Agreement the following types of insurance against claims,
damages and losses due to injuries to persons or damage to property or other losses that may arise in
connection with the performance of work under this Agreement.
203193300.19 -35-
17.2 Operator shall include in every subcontract the requirement that the Agent maintain
adequate insurance coverage with appropriate limits and endorsements to cover the risks associated with
work to be performed by the Agent. To the extent that an Agent does not procure and maintain such
insurance coverage, Operator shall be responsible for any and all costs and expenses that may be incurred
in securing such coverage or in fulfilling Operator’s indemnity obligation under Section 16 as to itself or
any of its Agents in the absence of such coverage.
17.3 In the event Operator or its Agents procure excess or umbrella coverage to maintain certain
requirements outlined below, these policies shall also satisfy all specified endorsements and stipulations,
including provisions that Operator’s or its Agent’s insurance, as the case may be, be primary without right
of contribution from MTC.
17.3.1 Workers' Compensation Insurance with Statutory limits, and Employer’s Liability
Insurance with a limit of not less than $1,000,000 per employee for injury by disease
and $1,000,000 for injury for each accident, and any and all other coverage of
Operator’s employees as may be required by applicable law. Such policy shall contain
a Waiver of Subrogation in favor of MTC. Such Workers’ Compensation &
Employer’s Liability may be waived, if and only for as long as Operator is a sole
proprietor or a corporation with stock 100% owned by officers with no employees.
17.3.2 Commercial General Liability Insurance for Bodily Injury and Property Damage
liability, covering the operations of Operator and Operator’s officers, agents, and
employees and with limits of liability which shall not be less than $1,000,000
combined single limit per occurrence with a general aggregate liability of not less than
$2,000,000, and Personal & Advertising Injury liability with a limit of not less than
$1,000,000. Such policy shall contain a Waiver of Subrogation in favor of MTC.
MTC and its commissioners, directors, officers, representatives, agents and employees
are to be named as additional insureds. In addition, the entities listed in Section 17.12
and their respective commissioners, directors, officers, representatives, agents and
employees are also to be named as additional insureds. Such insurance shall be
primary and contain a Separation of Insureds Clause as respects any claims, losses or
liability arising directly or indirectly from Operator’s operations.
17.3.3 Business Automobile Insurance for all automobiles owned (if any), used or maintained
by Operator and Operator’s officers, agents and employees, including but not limited to
owned (if any), leased (if any), non-owned and hired automobiles, with limits of
liability which shall not be less than $1,000,000 combined single limit per accident.
17.3.4 Umbrella Insurance in the amount of $4,000,000 providing excess limits over
Employer’s Liability, Automobile Liability, and Commercial General Liability
Insurance. Such umbrella coverage shall be following form to underlying coverage
including all endorsements and additional insured requirements.
17.3.5 Errors and Omissions Professional Liability Insurance for errors and omissions and the
resulting damages, including, but not limited to, economic loss to MTC and having
minimum limits of $5,000,000 per claim. Such policy shall contain cyber risk
coverages including network and internet security liability coverage, privacy liability
coverage and media coverage. The policy shall provide coverage for all work
203193300.19 -36-
performed by Operator and any work performed or conducted by any
subcontractor/consultant working for or performing services on behalf of Operator.
Operator may delegate the obligation to maintain Errors and Omissions Professional
Liability Insurance to an Agent, but the failure of such Agent to maintain such
insurance shall not relieve Operator of its obligation to maintain such insurance.
17.3.6 Property Insurance. Property Insurance covering Operator’s own business personal
property and equipment to be used in performance of this Agreement, materials or
property to be purchased and/or installed on behalf of MTC (if any), and builders risk
for property in the course of construction (if applicable). Coverage shall be written on
a "Special Form" policy that includes theft, but excludes earthquake, with limits at least
equal to the replacement cost of the property. Such policy shall contain a Waiver of
Subrogation in favor of MTC.
17.4 Acceptable Insurers. All policies will be issued by insurers qualified to do business in
California and with a Best’s Rating of A-VIII or better.
17.5 Self-Insurance. Operator’s obligation hereunder may be satisfied in whole or in part by
adequately funded self-insurance, upon evidence of financial capacity satisfactory to MTC.
17.6 Deductibles and Retentions. Operator shall be responsible for payment of any deductible
or retention on Operator’s policies without right of contribution from MTC. Deductible and retention
provisions shall not contain any restrictions as to how or by whom the deductible or retention is paid.
Any deductible or retention provision limiting payment to the Named Insured is unacceptable.
17.7 In the event that MTC is entitled to coverage as an additional insured under any Operator
insurance policy that contains a deductible or self-insured retention, Operator shall satisfy such deductible
or self-insured retention to the extent of loss covered by such policy, for any lawsuit arising from or
connected with any alleged act of Operator, subconsultant, subcontractor, or any of their employees,
officers or directors, even if Operator or subconsultant is not a named defendant in the lawsuit.
17.8 Claims Made Coverage. If any insurance specified above is written on a “Claims-Made”
(rather than an “occurrence”) basis, then in addition to the coverage requirements above, Operator shall:
17.8.1 Ensure that the Retroactive Date is shown on the policy, and such date must be before
the date of this Agreement or the beginning of any work under this Agreement;
17.8.2 Maintain and provide evidence of similar insurance for at least three (3) years
following the expiration or termination of this Agreement, including the requirement of
adding all additional insureds; and
17.8.3 If insurance is cancelled or non-renewed, and not replaced with another claims-made
policy form with a retroactive date prior to the commencement of any work hereunder,
Operator shall purchase “extended reporting” coverage for a minimum of three (3)
years after the expiration or termination of this Agreement.
17.9 Failure to Maintain Insurance. All insurance specified above shall remain in force until the
expiration or termination of this Agreement. Operator must notify MTC if any of the above required
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coverages are non-renewed or cancelled. The failure to procure or maintain required insurance and/or an
adequately funded self-insurance program will constitute a material breach of this Agreement.
17.10 Certificates of Insurance. Prior to commencement of any work hereunder, Operator shall
deliver to MTC Certificates of Insurance verifying the aforementioned coverages. Such certificates shall
make reference to all provisions and endorsements referred to above and shall be signed on behalf of the
insurer by an authorized representative thereof.
17.11 Disclaimer. The foregoing requirements as to the types and limits of insurance coverage to
be maintained by Operator are not intended to and shall not in any manner limit or qualify the liabilities
and obligations otherwise assumed by Operator pursuant hereto, including, but not limited to, liability
assumed pursuant to Section 16 .
17.12 Additional Insureds: The following entities are to be named as Additional Insureds under
applicable sections of this Section 17 and as Indemnified Parties pursuant to Section 16.
17.12.1 Metropolitan Transportation Commission (MTC)
17.12.2 City of Berkeley
17.12.3 City of Oakland
17.12.4 City of San Francisco
17.12.5 City of Emeryville
17.12.6 City of San Jose
TERMINATION AND DEFAULT
18.1 The following events shall be a Default under this Agreement:
18.1.1 A breach by Operator of a payment obligation under Section 8 [Revenue Sharing] and
the failure to remedy such breach within 10 business days after receipt by Operator
from the Executive Director of written notice of such breach;
18.1.2 A breach by Operator of a material obligation under Section 7 of this Agreement or
Section 29 of the Coordination Agreement [Advertising and Sponsorship]; Section 9
[Price Schedules], Section 10 of this Agreement or Section 30 of the Coordination
Agreement [Merchandising, Licensing and Intellectual Property]; any separate
licensing agreement between Operator (or its affiliate) and MTC and/or a Participating
City; Section 31 of the Coordination Agreement [Marketing, Promotions and
Reporting]; Section 14 [Website]; Section 15 [Security Fund]; Section 16 [Indemnity];
Section 20 [Employment and Purchasing]; and Section 21 [Inspection and Audit], and
the failure to remedy such breach within 10 business days after receipt by Operator
from the Executive Director of written notice of such breach;
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18.1.3 A breach by Operator of Section 22 [Assignment];
18.1.4 A breach by Operation of Section 17 [Insurance] and the failure to remedy such breach
within 5 business days after receipt by Operator from the Executive Director of written
notice of such breach;
18.1.5 (a) Operator’s chronic Program-wide failures to abide by its obligations under Sections
2, 3, 4 and 6 of this Agreement and Section 22 of the Coordination Agreement, which
failures materially and adversely affect the non-pecuniary benefits to be derived by
MTC and the Participating Cities under this Agreement, (b) the failure of Operator to
submit to MTC and the Participating Cities, within 15 business days following receipt
by Operator from the Executive Director of written notice of such failures, a credible
business plan for Operator to proactively and comprehensively address Operator’s
deficiencies, which plan shall be subject to approval by MTC in consultation with the
relevant Participating Cities, and (c) the failure of Operator to take concrete steps to
implement such response plan within 30 days of MTC’s approval of such plan;
18.1.6 If the Security Fund balance falls below $50,000 and Operator does not replenish the
full amount of the Security Fund within 10 days following notice thereof from the
Executive Director. However, if Operator is then contesting one or more prior
withdrawals from the Security Fund in accordance with the Dispute Resolution Process
and the aggregate amount in dispute exceeds $200,000, then such $50,000 may only be
used pursuant to Section 15.3.2 or Section 15.3.3 until such dispute has been finally
resolved;
18.1.7 The commencement of any proceeding by Operator under the Bankruptcy Code or
relating to the insolvency, receivership, liquidation, or composition of Operator for the
benefit of creditors;
18.1.8 The commencement of any involuntary proceeding against Operator under the
Bankruptcy Code that has not been stayed or dismissed within 120 days of its
commencement;
18.1.9 If Operator or any of its officers, directors or senior management has been convicted
after the Effective Date under any state or federal law of any of the matters listed in
clauses (a) through (e) of this Section 18.1.9: (x) in connection with a matter that is not
directly or indirectly connected with this Agreement or the Program and, in the case of
the conviction of an individual, such individual has not been terminated by Operator
within 30 days after Operator receives notice of such conviction, or (y) in connection
with a matter that is directly or indirectly connected with this Agreement or the
Program. The matters referred to above as being listed in clauses (a) through (e) are
the following:
(a) A criminal offense that is incident to obtaining or attempting to obtain or to
performing a public or private contract;
(b) Fraud, embezzlement, theft, bribery, forgery, falsification, destruction of
records, or receiving stolen property;
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(c) A criminal violation of any state or federal antitrust law;
(d) Violation of the Racketeer Influence and Corrupt Organization Act, 18 U.S.C. §
1961 et seq., or the Mail Fraud Act, 18 U.S.C. § 1341 et seq., for acts in
connection with the submission of bids or proposals for a public or private
contract; or
(e) Conspiracy to commit any act or omission that would constitute grounds for
conviction or liability under any statute described in subparagraph (d) above.
18.1.10 If Operator or any of its officers, directors, partners, managers, 5 percent or greater
owners, principals, or other employees or persons substantially involved in its activities
(a) are subject to a judgment of civil liability under any state or federal antitrust law for
acts or omissions in connection with the submission of bids or proposals for a public or
private contract, or (b) intentionally makes or causes to be made any false, deceptive,
or fraudulent material statement in any bid, proposal, or application for government
work, and the individual responsible for such act, omission or material misstatement, if
an employee, has not been terminated by Operator, or if not an employee, the
relationship therewith has not been terminated, within 30 days after such judgment is
entered into in the case of clause (a) above or after a judgment is entered into that any
such material statement was intentionally false, deceptive or fraudulent in the case of
clause (b).
18.2 If a Default occurs, then, subject to Sections 3.5 and 18.3, MTC shall, at MTC’s option,
have any or all of the following remedies, all cumulative (so exercise of one remedy shall not preclude
exercise of another remedy), in addition to such other remedies as may be available at law or in equity or
under any other terms of this Agreement. MTC’s remedies include, but are not limited to:
18.2.1 Cause a withdrawal from the Security Fund, pursuant to Section 15, subject to any
right of Operator to contest such withdrawal pursuant to the Dispute Resolution
Process;
18.2.2 Seek actual, direct damages only from Operator for such Default (and notwithstanding
anything to the contrary herein, in no event shall MTC be entitled to special,
consequential or punitive damages under this Agreement);
18.2.3 Seek to restrain by injunction the continuation of such Default;
18.2.4 Purchase the Equipment at its then fair market value, subject to the rights of the
Recognized Lender not to permit the sale of the Equipment to MTC;
18.2.5 Pursue any other remedy permitted by law or in equity or in this Agreement; or
18.2.6 Terminate this Agreement, subject to the rights of the Recognized Lender.
18.3 Nothing in this Agreement precludes Operator from contesting the existence of such
Default or the breach, failure or other occurrence underlying a Default in accordance with this Section
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18.3 and the Dispute Resolution Process. If Operator seeks to contest any of the foregoing, Operator must
notify MTC prior to the expiration of the applicable cure period set forth in Section 18.1. Following such
notice, the dispute shall be addressed and resolved in accordance with the Dispute Resolution Process.
Pending final resolution of such dispute, Operator may continue operating the Program in accordance
with the terms of this Agreement, and any exercise by MTC of its remedies hereunder shall be stayed
until final resolution of such dispute in accordance with the Dispute Resolution Process. In addition, if
such final resolution is against Operator, then MTC shall have the right to terminate this Agreement only
if such Default is not cured within the period otherwise provided in the definition of Default to remedy
such default, provided that for this purpose the applicable remedy period shall commence upon the final
resolution of such dispute.
18.4 Subject to the rights of the Recognized Lender (if any and if applicable), upon termination
of this Agreement on account of a Default by Operator, reduction of Initial Term under Section 2.3, or
expiration of the Term, Operator shall comply with the following close-out procedures:
18.4.1 Turning over to MTC or its designees copies of all books, records, documents and
materials specifically relating to this Agreement and reasonably requested by MTC;
18.4.2 Submitting to MTC, within 120 days, a final statement and report relating to this
Agreement that has been reviewed by a certified public accountant or a licensed public
accountant;
18.4.3 Providing reasonable assistance to MTC during the transition; and
18.4.4 Continuing to operate the Program in accordance with the terms of this Agreement and
to effect an efficient and orderly transition of responsibility with respect to the
operation of the Program until the earlier of (i) 180 days after such termination and (ii)
the selection of a replacement operator for the Program and such replacement operator
commencing operation of the Program; provided, however, that Operator shall have the
right to cease operating prior thereto if Operator experiences an operating shortfall
during the transition period and MTC fails to compensate Operator for such shortfall.
18.5 Subject to the rights of the Recognized Lender (if any and if applicable), upon termination
of this Agreement on account of a Default by Operator, reduction of the Initial Term under Section 2.3, or
expiration of the Term, MTC shall have the option to:
18.5.1 require Operator to remove all Equipment at its sole cost and expense;
18.5.2 subject to satisfaction of the Program Property Assignment Conditions, require
Operator to assign to MTC (or a third-party operator designated by MTC) the
Equipment and Operator’s rights under the Escrow Agreement, in which event
Operator shall reasonably cooperate with MTC (or such designee) to obtain the legal
right to use the Software (excluding the Operator Basic Function Software and the
Operator Non-Basic Function Software) either through an assignment of Operator’s
license with the Vendor to MTC (or such designee) or by MTC (or such designee)
entering a license agreement for such Software with the Vendor; or
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18.5.3 subject to satisfaction of the Program Property Assignment Conditions, take over
operation of the Program, and in connection therewith assign to MTC the Equipment
and Operator’s rights under the Escrow Agreement, in which event Operator shall
reasonably cooperate with MTC to obtain the legal right to use the Software (excluding
the Operator Basic Function Software and the Operator Non-Basic Function Software)
either through an assignment of Operator’s license with the Vendor to MTC or by
MTC entering a license agreement for such Software with the Vendor.
18.6 Not less than 6 months prior to the expiration of the Term, MTC shall elect either (a) to
purchase (or have a designee purchase) the Program Property at the expiration of the Term or (b) to
require Operator to remove the Equipment upon expiration of the Term. If MTC elects clause (a), then
Operator and MTC shall negotiate a purchase price for the Program Property based on the fair market
value of the Program Property as an installed system, and at the expiration of the Term, Operator shall
reasonably assign to MTC (or its designee) the Equipment and Operator’s rights under the Escrow
Agreement and cooperate with MTC (or its designee) to obtain the legal right to use the Software
(excluding the Operator Basic Function Software and the Operator Non-Basic Function Software) either
through an assignment of Operator’s license with the Vendor or by MTC (or its designee) entering a
license agreement for such Software with the Vendor, subject to satisfaction of the Program Property
Assignment Conditions. If MTC elects clause (b), then within 90 days of the expiration of the Term,
Operator shall remove all Equipment.
18.7 In the event of a breach of this Agreement by any Party or by any Participating City, the
other Party or parties shall act in good faith and exercise commercially reasonable efforts to mitigate any
damages or losses that result from such breach. Notwithstanding the foregoing, nothing contained in this
Section shall limit in any respect the rights of MTC and the Participating Cities to indemnification
pursuant to Section 16.
18.8 No Party shall be liable (including, but not limited to, for payment of liquidated damages)
for failure to perform any of its obligations, covenants, or conditions contained in this Agreement, to the
extent such failure is caused by the occurrence of an Event of Force Majeure, and such Party’s obligation
to perform shall be extended for a reasonable period of time, commensurate with the nature of the event
causing the delay, and no breach or default shall exist or liquidated damages be payable with respect to
such extended period.
RIGHTS OF RECOGNIZED LENDER
19.1 Operator shall have the right to collaterally assign its rights under this Agreement to the
Recognized Lender as collateral for the Recognized Loan. Operator or the Recognized Lender shall
notify MTC of the existence of the Recognized Loan and the collateral assignment of this Agreement and
shall notify MTC of the name and address of the Recognized Lender. In no event shall there be more than
one Recognized Lender at any one time.
19.2 MTC shall give the Recognized Lender, at the address of such Recognized Lender and in
the manner set forth in Section 25.2 a copy of each notice of default at the same time as it gives notice of
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default to Operator. A notice of default to Operator shall not be effective unless a copy thereof is
concurrently given to the Recognized Lender.
19.3 The Recognized Lender shall, in the case of any Default by Operator under Section 18.1.1,
have a period of 10 days more than is given Operator, to remedy such Default prior to MTC terminating
this Agreement on account of such Default, and in the case of a Default by Operator under Section 18.1.2
or 18.1.5, shall have a period of 10 days more than is given Operator to remedy such Default prior to
MTC terminating this Agreement on account of such Default, provided that if such Default is not one that
can be cured with the payment of money and if the Recognized Lender needs to exercise its remedies and
obtain access to its collateral prior to being able to effectuate the cure of any such default, such additional
10-day period shall, so long as the Recognized Lender is diligently and continuously pursuing such cure
and has provided written notice to MTC of its intent to cure such Default, be extended for such additional
time as is necessary for the Recognized Lender to obtain such access and commence and effectuate such
cure.
19.4 If this Agreement terminates on account of a Default, then Operator shall give any
Recognized Lender prompt notice thereof. Within 60 days following receipt of such notice, the
Recognized Lender may elect to require MTC to enter into a new agreement with a replacement operator
designated by the Recognized Lender for the remaining Term of this Agreement, considered as if the
Term had not ended on account of such Default and on substantially the same terms as contained in this
Agreement (the “Replacement Agreement”). Within 120 days of such notice, the Recognized Lender
shall identify a replacement operator and credible business plan for such replacement operator to
proactively and comprehensively address Operator’s deficiencies. Such replacement operator and
business plan shall be subject to the approval of MTC, which approval shall not be unreasonably withheld
or delayed. If MTC approves such replacement operator and business plan, then MTC and such
replacement operator shall enter into the Replacement Agreement. If MTC and the Recognized Lender
are unable to agree on the replacement operator or the business plan within 150 days following such
notice, or if the Recognized Lender does not elect to require MTC to enter into a Replacement Agreement
within 60 days following receipt of such notice, then MTC shall have the right to exercise its other
remedies under Section 18.5 without regard to the rights of the Recognized Lender.
19.5 If pursuant to Section 2.3, MTC exercises its right to reduce the Initial Term by 5 years,
then MTC shall give the Recognized Lender notice thereof. Within 60 days following receipt of such
notice, the Recognized Lender may elect to require MTC to enter into a new agreement with a
replacement operator designated by the Recognized Lender commencing on the expiration of the Term as
reduced pursuant to Section 2.3 for the remaining Term of this Agreement, considered as if the Term had
not been reduced pursuant to Section 2.3 and on substantially the same terms as contained in this
Agreement. Within 120 days of such notice, the Recognized Lender shall identify a replacement operator
and credible business plan for such replacement operator to proactively and comprehensively address
Operator’s deficiencies. Such replacement operator and business plan shall be subject to the approval of
MTC, which approval shall not be unreasonably withheld or delayed. If MTC approves such replacement
operator and business plan, then MTC and such replacement operator shall enter into such replacement
agreement. If MTC and the Recognized Lender are unable to agree on the replacement operator or the
business plan within 150 days following such notice, or if the Recognized Lender does not elect to require
MTC to enter into a replacement agreement within 60 days following receipt of such notice, then the
Recognized Lender shall have no further rights arising on account of the reduced Term.
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19.6 MTC and Operator shall not amend or modify any provision of this Agreement if the effect
thereof is to reduce the Term, reduce Operator’s rights or increase Operator’s obligations in any material
respect, or weaken any of the Recognized Lender’s express rights under this Agreement, including the
Recognized Lender’s rights under this Section 19, in each case without the prior written consent of the
Recognized Lender. MTC shall not accept a surrender of this Agreement by Operator, nor shall MTC and
Operator agree to a termination of this Agreement, without the prior written consent of the Recognized
Lender.
19.7 If Operator defaults on the Recognized Loan and as a result thereof the Recognized Lender
has a right under the applicable loan documents to foreclose on its Program-related collateral, then
without the consent of MTC or any Participating City, the Recognized Lender (or a subsidiary thereof)
and/or a third party may succeed to the interest of Operator under this Agreement, so long as (a) the party
succeeding to the interest of Operator under this Agreement, or a third party manager designated by such
successor, has the experience and expertise to operate a large-scale bikeshare program, (b) such successor
succeeds to Operator’s interest in the Bicycles, other Equipment and other collateral, (c) such successor
has substantially the same legal right to obtain replacement Bicycles and other Equipment, to utilize the
Bicycle patents and other Equipment patents, and to utilize the required Software that Operator has as of
the Effective Date; and (d) agrees to comply with all terms of this Agreement.
19.8 The terms and provisions of this Section 19 and the rights of the Recognized Lender
hereunder shall survive a termination of this Agreement pursuant to a Default or the expiration of this
Agreement pursuant to Section 2.3.
EMPLOYMENT
20.1 Operator will pay wages to all of its employees that equal or exceed the living wage in
effect as of the date of this agreement under State law or applicable local law.
20.2 Operator shall use reasonable efforts, at its own cost and expense, to conduct outreach for
employment purposes to residents of the Participating Cities for the opportunities to be created by the
construction, installation, operation, management, administration, marketing and maintenance of the
Program. Such recruitment activities shall include provisions for the posting of employment and training
opportunities at appropriate Participating City agencies responsible for encouraging employment of
Participating City residents. Operator shall ensure the promotion of equal employment opportunity for all
qualified Persons employed by, or seeking employment with, Operator. For San Francisco-based entry
level job openings with Operator, Operator shall post such openings through San Francisco’s First Source
Hiring Program and offer the City of San Francisco the first opportunity to refer qualified candidates to
Operator for such openings.
20.3 Operator shall not refuse to hire, train, or employ, bar or discharge from employment or
discriminate against any individual in compensation, hours of employment, or any other term, condition,
or privilege of employment, including, but not limited to, any promotion, upgrading, demotion,
downgrading, transfer, layoff, or termination, on the basis of race, creed, color, national origin, sex, age,
handicap, marital status, affectional preference or sexual orientation, in accordance with applicable law.
Operator agrees to comply in all respects with all applicable federal, state and local employment
discrimination laws and requirements during the Term.
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20.4 Operator shall select, train and employ such number of employees as is necessary or
appropriate for Operator to satisfy its responsibilities hereunder. Operator shall be the sole authority to
hire, terminate and discipline any and all personnel employed by Operator.
INSPECTION AND AUDIT RIGHTS
21.1 MTC shall have the right at reasonable times and upon reasonable notice to inspect the
installation, operation, and maintenance of the Program and its associated elements.
21.2 Operator shall open and maintain a facility in each of San Francisco, San Jose and East
Bay to support Program operations.
21.3 Operator shall comply with the reporting requirements set forth in Appendix C.
21.4 Throughout the Term, Operator shall maintain complete and accurate books of account and
records of the business, ownership and operations of Operator with respect to the Program.
21.5 MTC has the right upon written demand with reasonable notice to Operator under the
circumstances, to inspect, examine or audit during normal business hours all documents, records or other
information pertaining to Ridership Revenue and Sponsorship Revenue or any other data collected and
maintained by Operator to comply with the reporting requirements of Appendix C. All such documents
shall be made available at one of Operator’s local offices. All such documents shall be retained by
Operator for a minimum of 6 years following the expiration or termination of this Agreement.
RESTRICTION AGAINST ASSIGNMENT
22.1 Operator shall not sell, assign or otherwise transfer all or any portion of its interest in this
Agreement without the prior written consent of MTC, except as otherwise provided in Sections 19.1 and
19.7. Operator shall notify MTC of any proposed sale, assignment or transfer of this Agreement, in
writing, at least 60 days prior to the proposed effective date of such sale, assignment or transfer. In the
event that any such sale, assignment or transfer of this Agreement is approved by MTC, the purchaser,
assignee or transferee shall agree to be bound by all the covenants of this Agreement required of Operator
to the extent arising from and after the effective date of such sale, assignment or transfer. Any purported
sale, assignment or transfer without MTC’s approval as required above shall be void and of no force or
effect. Nothing in the foregoing shall limit (a) the right of Bikeshare Holdings to sell, assign or otherwise
transfer interests in Operator, (b) the right of direct or indirect owners of equity interests in Bikeshare
Holdings to sell, assign or otherwise transfer such interests, (c) the right of Bikeshare Holdings to sell,
assign or transfer all or substantially all of its assets, including its interest in this Agreement, so long as
Operator or, in the case of clause (c), its successor, has the experience and expertise to operate a large-
scale bikeshare program and has substantially the same legal right to obtain replacement Bicycles and
other Equipment, to utilize the Bicycle patents and other Equipment patents, and to utilize the required
Software that Operator has as of the Effective Date. In addition, nothing in the foregoing shall prohibit a
merger, reorganization, recapitalization, consolidation or similar transaction involving Bikeshare
Holdings or any direct or indirect holder of equity interests in Bikeshare Holdings, so long as the
conditions set forth in the preceding sentence are satisfied.
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DISPUTE RESOLUTION PROCESS
23.1 In the event of a dispute between the Parties, including, without limitation, a dispute
regarding liquidation damages pursuant to Section 2.6.3, a dispute regarding the Security Fund, a dispute
regarding a breach of this Agreement or regarding the occurrence or continued existence of a Default,
such dispute shall be addressed and resolved in accordance with the following (the “Dispute Resolution
Process”):
23.1.1 MTC’s Program Manager assigned to the Program and Operator’s General
Manager of the Program, or their respective delegates, shall meet, within 10 days after receipt by one
Party of notification from the other Party of such dispute, to negotiate in good faith in order to try to
resolve such dispute (the date of the first such meeting, or the expiration of such 10-day period if the
meeting is not timely held, being the “Initial Meeting Date”). A KPI Contest Notice shall constitute
appropriate notification for a dispute regarding a right to liquidated damages under Section 2.6.3, and a
rejection of a KPI Change Request shall constitute appropriate notification for a dispute under Section
2.6.2(a). If such persons fail to resolve such dispute within 15 days after the Initial Meeting Date, then the
Executive Director of MTC and the President of Bikeshare Holdings shall meet promptly and negotiate in
good faith in order to resolve such dispute. If such persons fail to resolve such dispute within 30 business
days after the Initial Meeting Date, then such dispute shall be subject to mediation under Section 23.1.2.
As used in this Section 23.2.1, a meeting may be held in person, by conference call or by video
conference. By agreement of the Parties, any of the deadlines set forth in this Section 23.1.1 may be
extended or shortened. The process described in this Section 23.1.1 shall be confidential and treated as a
compromise negotiation for purposes of federal and state rules of evidence.
23.1.2 Unless the Parties otherwise agree, mediation shall be administered by the
American Arbitration Association (the “AAA”) in accordance with its Commercial Rules, or similar
service. A request for mediation shall be made in writing, delivered to the other Party and filed with the
applicable mediation service. Either Party may submit such request. The Parties shall share the
mediator’s fee and any filing fees equally. The mediation shall be held in San Francisco. The Parties
shall be represented by individuals of their choosing. Agreements reached in mediation shall be binding
on the Parties and enforceable in a State or Federal Court of competent jurisdiction sitting in San
Francisco County. The mediation process shall be confidential and treated as a compromise negotiation
for purposes of federal and state rules of evidence.
23.1.3 For the avoidance of doubt, the Parties shall comply with any settlement
agreement regarding any dispute that is the subject of a settlement agreement.
23.1.4 As used in this Agreement, “final resolution” of a dispute or a dispute being
“finally resolved” means that (a) the Parties have entered into a settlement agreement to resolve such
dispute, or (b) if either Party has initiated a judicial proceeding to contest such dispute, that a final-non-
appealable order of a court of competent jurisdiction has been issued for such dispute.
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REPRESENTATIONS AND WARRANTIES OF OPERATOR
24.1 In addition to the representations, warranties, and covenants of Operator set forth
elsewhere herein, Operator represents and warrants to MTC and the Participating Cities as of the Effective
Date:
24.1.1 Operator is a limited liability company, validly existing and in good standing under the
laws of the State of Delaware, and it is duly authorized to do business in the State of
California;
24.1.2 The sole owner of Operator is Bikeshare Holdings; and
24.1.3 Operator has all requisite power and authority to own or lease its properties and assets,
to conduct its business as currently conducted and to execute, deliver and perform this
Agreement and all other agreements entered into or delivered in connection with or as
contemplated hereby.
24.1.4 The execution, delivery and performance of this Agreement and all other agreements, if
any, entered into in connection with the transactions contemplated hereby have been
duly, legally and validly authorized by all necessary action on the part of Operator.
24.1.5 This Agreement has been duly executed and delivered by Operator and constitute the
valid and binding obligations of Operator, and are enforceable in accordance with their
respective terms, subject to equitable legal principles and the laws governing creditors’
rights. Operator has obtained the requisite authority to authorize, execute and deliver
this Agreement and to consummate the transactions contemplated hereby and no other
proceedings or other actions are necessary on the part of Operator to authorize the
execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby.
24.1.6 Neither the execution and delivery of this Agreement by Operator nor the performance
of its obligations contemplated hereby will:
(a) Conflict with, result in a material breach of or constitute a material default
under (or with notice or lapse of time or both result in a material breach of or
constitute a material default under) (i) any governing document of Operator or
to Operator’s knowledge, any agreement among the owners of Operator, or (ii)
any statute, regulation, agreement, judgment, decree, court or administrative
order or process or any commitment to which Operator is a party or by which it
(or any of its properties or assets) is subject or bound;
(b) Result in the creation of, or give any party the right to create, any material lien,
charge, encumbrance, or security interest upon the property and assets of
Operator; or
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(c) Terminate, breach or cause a default under any provision or term of any
contract, arrangement, agreement, license or commitment to which Operator is
a party.
24.1.7 Warranty of Services. In the performance of its services, Operator represents and
warrants that it has and will exercise the degree of professional care, skill, efficiency,
and judgment of those with special expertise in providing such services, and that it
carries and will maintain all applicable licenses, certificates, and registrations needed
for the work in current and good standing.
24.1.8 Neither Operator nor any of its officers, directors or senior management has committed
or been convicted (where such conviction is a final, non-appealable judgment or the
time to appeal such judgment has passed) of any criminal offense, including, but not
limited to, bribery or fraud, arising out of or in connection with (a) this Agreement, (b)
the award of this Agreement, or (c) any act to be taken pursuant to this Agreement by
MTC or its officers, employees or agents, or (d) the business activities and services to
be undertaken or provided pursuant to this Agreement. Operator shall promptly
terminate its relationship with any office, director or senior management of Operator
who is convicted (where such conviction is a final, non-appealable judgment or the
time to appeal such judgment has passed) of any criminal offense, including, but not
limited to, bribery or fraud, arising out of or in connection with: (i) this Agreement, (ii)
the award of this Agreement, (iii) any act to be taken pursuant to this Agreement by
MTC or its officers, employees or agents, or (iv) the business activities and services to
be undertaken or provided by Operator pursuant to this Agreement.
24.2 All representations and warranties contained in this Agreement shall survive the Term.
MISCELLANEOUS
25.1 Operator, MTC and the Participating Cites acknowledge and agree that the nature of the
Program requires extensive and ongoing long-term coordination among the Parties and the Participating
Cities. Accordingly, no later than 10 business days after the Effective Date, Operator, MTC and, in
accordance with the Coordination Agreement, each Participating City, shall designate an employee as its
designated representative (the “Designated Representative”) to be the principal contact of such party in its
dealings with the other parties in connection with the implementation of the Program. Any party may
change its Designated Representative in its sole discretion so long as notice of such change is given to the
other parties.
25.2 All notices, demands or requests under this Agreement shall be in writing and shall be
sufficiently given if sent by registered or certified mail, return receipt requested, by electronic mail
(email), by overnight mail, or by personal delivery, in each case to the address listed below, or to such
other location or person as any party may designate in writing from time to time. Any notice, demand or
203193300.19 -48-
request under this Agreement intended for the Participating Cities shall be sent to MTC. Any notice,
demand or request shall be deemed given on the date of receipt or rejection by the intended recipient.
If to MTC:
Metropolitan Transportation Commission
Joseph P. Bort MetroCenter,
Oakland, CA 94607-470
Attention: Executive Director
Email: SHeminger@mtc.ca.gov
Attention: General Counsel:
Email: AWeil@mtc.ca.gov
Attention: Designated Representative
Email: KMulder@mtc.ca.gov
If to Operator:
Bay Area Motivate, LLC
5202 Third Avenue
Brooklyn, New York 11220
Attention: Jay Walder, President and CEO
Email: jaywalder@motivateco.com
Attention: Justine Lee, Vice President and General Counsel
Email: justinelee@motivateco.com
Bay Area Motivate, LLC
2200 Jerrold Avenue, Unit J
San Francisco, California 94124
Attention: Emily Stapleton, General Manager and Designated Representative
Email: emilystapleton@motivateco.com
Notwithstanding the foregoing, any notice required to be given to Operator pursuant to Section 18 for
which a cure period is 10 business days or less or any other notice that requires action to be taken within
10 business days or less must be given by email, personal delivery or overnight mail service.
25.3 If Operator receives either a notice of default or a notice of noncompliance from a Sponsor,
a lender or a material supplier, it shall notify MTC and supply a copy of the notice of noncompliance
within 5 days of receipt.
25.4 Upon request by Operator, MTC shall execute, acknowledge and deliver to Operator (or
directly to a designated third party) an estoppel certificate in a form reasonably acceptable to the Parties.
MTC shall sign, acknowledge, and return such estoppel certificate within 15 days after request, even if
Operator is in default. Any estoppel certificate shall bind MTC to the extent set forth therein.
25.5 This Agreement shall be binding upon and inure to the benefit of the parties and their
respective permitted successors and assigns. The Recognized Lender shall be a third party beneficiary of
Section 19.
203193300.19 -49-
25.6 No failure on the part of MTC or Operator to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right
preclude any other right, except as provided herein, subject to the conditions and limitations established in
this Agreement. The rights and remedies provided herein are cumulative and not exclusive of any
remedies provided by law, and nothing contained in this Agreement shall impair any of the rights of any
party under applicable law, subject in each case to the terms and conditions of this Agreement. A waiver
of any right or remedy by a party at any one time shall not affect the exercise of such right or remedy or
any other right or other remedy by such party at any other time. In order for any waiver of any party to be
effective, it must be in a writing signed by such party. The failure of MTC to take any action regarding a
default by Operator shall not be deemed or construed to constitute a waiver of, or otherwise affect, the
right of MTC to take any action permitted by this Agreement at any other time regarding such default.
25.7 The clauses and provisions of this Agreement are intended to be severable. If any clause
or provision is declared invalid, in whole or in part, by any court, agency, commission, legislative body,
or other authority of competent jurisdiction, such provision shall be deemed a separate, distinct, and
independent portion, and such declaration shall not affect the validity of the remaining portions hereof,
which other portions shall continue in full force and effect, but only so long as the essential terms
underlying this Agreement are not undermined. If, however, the essential terms underlying this
Agreement are undermined as a result of any clause or provision being declared invalid, in whole or in
part, by any court, agency, commission, legislative body, or other authority of competent jurisdiction, and
such declaration is not stayed within 30 days by a court pending resolution of a legal challenge thereto or
an appeal thereof, the adversely affected party shall notify the other parties in writing of such declaration
of invalidity and the effect of such declaration of invalidity and the parties shall enter into good faith
negotiations to modify this Agreement to compensate for such declaration of invalidity. If the parties
cannot come to an agreement modifying this Agreement within 120 days (which 120 day period shall be
tolled during any stay contemplated above) of such notice, then this Agreement shall terminate with such
consequences as would ensue if it terminated pursuant to Section 18, except Operator shall not be liable
for any damages.
25.8 If any applicable federal, state, or local law or any regulation or order is passed or issued,
or any existing applicable federal, state, or local law or regulation or order is changed (or any judicial
interpretation thereof is developed or changed) in any way which undermines the essential terms
underlying this Agreement, the adversely affected party shall notify the other parties in writing of such
change and the effect of such change and the parties shall enter into good faith negotiations to modify this
Agreement to compensate for such change, subject to any necessary approvals of MTC and the
Participating Cities.
25.9 The headings contained in this Agreement are to facilitate reference only, do not form a
part of this Agreement, and shall not in any way affect the construction or interpretation hereof. Terms
such as “hereby,” “herein,” “hereof,” “hereinafter,” “hereunder” and “hereto” refer to this Agreement as a
whole and not to the particular sentence or paragraph where they appear, unless the context otherwise
requires. The term “may” is permissive; and, the terms “shall,” “must,” and “will” are mandatory, not
merely directive. The term “day” means a calendar day, unless otherwise stated herein to be a “business
day.” The term year means any period of 365 days, unless otherwise stated herein to be a “calendar year.”
All references to any gender shall be deemed to include both the male and the female, and any reference
by number shall be deemed to include both the singular and the plural, as the context may require. Terms
used in the plural include the singular, and vice versa, unless the context otherwise requires. References
203193300.19 -50-
in this Agreement to Sections, Appendices and Exhibits are to Sections, Appendices and Exhibits of this
Agreement.
25.10 Operator shall conduct the work to be performed pursuant to this Agreement as an
independent contractor and not as an agent of MTC or any Participating City.
25.11 This Agreement shall be governed in all respects, including validity, interpretation and
effect, and construed in accordance with, the laws of the State of California, irrespective of conflict of
laws principles, as applicable to contracts entered into and to be performed entirely within the State of
California.
25.12 Subject to the requirement that disputes be addressed in accordance with the Dispute
Resolution Process, each hereby irrevocably submits to the jurisdiction of any State or federal court
sitting in San Francisco County, California, over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent permitted by law, any
objection it may now or hereafter have to such venue as being an inconvenient forum.
25.13 Should any party employ an attorney for the purpose of enforcing or construing this
Agreement, or any judgment based on this Agreement, in any legal proceeding whatsoever, including
insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing party shall be
entitled to receive from the other party or parties thereto reimbursement for all reasonable attorneys’ fees
and all costs, including but not limited to service of process, filing fees, court and court reporter costs,
investigative costs, expert witness fees and the cost of any bonds, whether taxable or not, and such
reimbursement shall be included in any judgment, decree or final order issued in that proceeding. The
“prevailing party” means the party in whose favor a judgment, decree, or final order is rendered.
25.14 No provision of this Agreement nor any Appendix or Exhibit shall be amended or
otherwise modified, in whole or in part, except by a written instrument, duly executed by the Parties and
approved as required by applicable law.
25.15 This Agreement may be executed in one or more counterparts which, when taken together,
shall constitute one and the same.
25.16 Time is of the essence with respect to the obligations of the parties under this Agreement
and with respect to the deadlines for submitting notices, including, without limitation, a KPI Failure
Notice, a KPI Contest Notice or any notice under Section 15.3 or 18.1.
25.17 If Operator publishes a work dealing with any aspect of performance under this
Agreement, or of the results and accomplishments attained in such performance, then MTC shall have a
royalty-free, non-exclusive and irrevocable license to reproduce, publish, or otherwise use and to
authorize others to use the publication, or, in the event that only a portion of the publication deals with an
aspect of performance under this Agreement, such portion of the publication.
TN WITNESS WHEREOF,MTC and Operator have executed this Agreement as of the Effective Date.
METROPOLITAN TRANSPORTATION COMMISSION
By:
Name:eriiinger
Title:Executive Director
Signature Page to Program Agreement
BAY AREA MOTIVATE,LLC
By:______
Name:Jay a1dr
Title:Presid nt ahd Chief Executive Officer
V
Signature Page to Program Agreement 5-2
203193300.19 A-1
Appendix A
Key Performance Indicators and Liquidated Damages
This Appendix A sets forth the Key Performance Indicators and the liquidated damages assessed against Operator for failing to comply with the Key
Performance Indicators. Key Performance Indicators are subject to extension for Events of Force Majeure. Liquidated damages are subject to the annual
limitation of 4% of Ridership Revenues.
KPI
#
Title Definition Measurement
Tool(s)1
Liquidated Damages
1 Station Cleaning
and Inspection
Station Cleaning for each Station must occur 2 times per
month-- one time between the first and fifteenth days of
the month, and one time between the sixteenth and last
days of the month. Litter removal needs to occur for on
street Stations at least once per week.
Additional litter removal to occur on an as-needed basis.
Operator records/
databases
$75 for each Station that is not
cleaned according to schedule.
2 Graffiti Removal (a) Except as required by clause (b) below, Operator shall
remove conspicuous graffiti within 72 hours after
Notification.
(b) Operator shall remove racist and hate graffiti within 4
hours after Notification.
Operator
records/databases
(a) $50 for each 24-hour period (or
part thereof) beyond 72 hours.
(b) $50 for each 4-hour period (or
part thereof) beyond 4 hours.
3 Litter Removal Operator shall remove conspicuous accumulations of
litter from Stations within 24 hours after Notification.
Operator
records/databases
$50 for each 4-hour period (or part
thereof) beyond 24 hours.
4 Bicycle
Maintenance
Every Bicycle in the Bicycle Fleet shall receive a Bicycle
Maintenance check at least once every two calendar
months.
Operator records/
databases
$25 for each Bicycle that is not
subject to a Bicycle Maintenance in
any 2-calendar month period.
1 Sources of information used to assess compliance with these service levels may include, but are not limited to, those listed in the “Measurement Tool(s)” column.
203193300.19 A-2
KPI
#
Title Definition Measurement
Tool(s)1
Liquidated Damages
5 Station
Deactivation and
De-Installation
As directed by MTC or a Participating City, Operator must
perform:
(i) Station Deactivation(s);
(ii) Station De-Installation(s);
(iii) Station Re-Installation(s);
(iv) Station Adjustment(s).
(i) Operator will Deactivate a Station within 24 hours
after a request from a Participating City, except in
instances where the continued presence/activity of the
station has been determined to pose a threat to public
safety.
(ii) Operator will complete a De-Installation of a Station
within 72 hours after a request from a Participating City,
except in instances where the continued
presence/activity of the station has been determined to
pose a threat to public safety.
(iii, iv) Deactivated Stations must be reactivated within
24 hours of direction from a Participating City. De-
Installed or Adjusted Stations must be reinstalled or
Readjusted to their original configurations within 72
hours of direction from a Participating City.
Notwithstanding the foregoing, the KPIs for De-
Installation and reinstallations are limited to 20 in any
72-hour period. The time permitted for larger scale De-
Installation and reinstallation will be subject to
agreement between Operator and MTC.
Electronic
communications
(i) $75 for each hour of delay (or
part thereof) beyond 24 hours for
Deactivation.
(ii) $75 for each hour of delay (or
part thereof) beyond 72 hours for
De-Installation.
(iii, iv) $50 for each hour of delay
(or part thereof) beyond 24 hours
for reactivation; $50 for each hour
of delay (or part thereof) beyond
72 hours for reinstallation or
Readjustment.
203193300.19 A-3
KPI
#
Title Definition Measurement
Tool(s)1
Liquidated Damages
6 Program
Functionality
The Program must be operational 100% of the time every
month (i.e., every hour of every day, 24 hours per day, 7
days per week, measured monthly), so that, at a
minimum, all Program users can dock and undock
Bicycles at all times, excluding (i) scheduled downtime,
and (ii) any period when the Computer Hardware for the
Program and/or Software is, and remains, damaged
through Hacking.
Program Functionality does not apply to hardware
malfunctions at individual Stations or to individual
Stations that are not Operable Stations.
Software System If in any month the Program is
operational less than 100% of the
time, then $300 for every hour (or
part thereof) that the Program is
not operational.
7 Station
Operability
Stations, in the aggregate, must be Operable Stations
99% of the time every month (i.e., every hour of every
day, 24 hours per day, 7 days per week, measured
monthly), excluding (i) during scheduled downtime, and
(ii) any period when a Station is not an Operable Station
because the Kiosk or other Equipment located at the
Station has been damaged by third-parties.
Calculated by taking the sum of the number of hours that
each Station was an Operable Station during a month,
dividing that sum by the product of the total number of
hours in the month and the number of Stations that
month.
Station Operability does not apply during any period in
which the entire Program system is down.
Operator records/
databases
If in any month the Stations are not
Operable Stations 99% of the time,
then $100 for every hour that
Stations are not Operable Stations
below the 99% threshold.
203193300.19 A-4
KPI
#
Title Definition Measurement
Tool(s)1
Liquidated Damages
8 Website
Operations
The Program website must be operational 100% of the
time every year (i.e., every hour of every day, 24 hours
per day, 7 days per week, measured annually) excluding
(i) scheduled downtime, and (ii) any period when the
Computer Hardware for the Program and/or Software is,
and remains, damaged through Hacking.
Operator records/
databases
If in any year the website is not
operational 100% of the time, then
$50 for every hour each year that
the website is not operational.
9 Telephone
Answering Time
Not less than 80% of telephone calls to Operator’s call
center each month must be answered by a person within
90 seconds or less.
Operator records/
databases
$100 for every percentage point
below 80% that telephone calls are
not answered in 90 seconds or less
in any month.
10 Email Response
Time
Not less than 95% of emails to Operator’s public
information email address must be answered within 1
business day.
Operator records/
databases
$100 for every percentage point
below 95% that emails are not
answered within 1 business day or
less in any month.
11 Bicycle Availability
This Bicycle Availability requirement is met if the monthly
average Bicycle Fleet Level, recorded once each Day of
the month between the hours of 11:00 AM and 3:00 PM,
is not less than 90% of the Program Fleet.
Damages are calculated as the sum of Bicycles under the
threshold for each Day that the recorded Bicycle Fleet
Level is less than the required Bicycle Fleet Level.
Software System $15 for each Bicycle that is under
the 90% threshold each month.
203193300.19 A-5
KPI
#
Title Definition Measurement
Tool(s)1
Liquidated Damages
12 Rebalancing No station Cluster shall be completely empty of available
bikes for use or completely lacking of empty, operable
docks for more than 10 consecutive minutes during Peak
Hours (i.e., 6:00 am to 10:00 pm).
The Rebalancing KPI set forth above is an interim KPI.
During the Assessment Period (as defined in Section
2.6.2(b) of the Agreement), the Rebalancing KPI will be
assessed and reformulated, and a new Rebalancing KPI
will be fully implemented immediately following the
Assessment Period.
Software System/
Operator records/
databases
$1.00 for each minute that a
Cluster Outage occurs beyond 10
consecutive minutes during Peak
Hours.
Liquidated Damages do not apply
to the Stations installed as part of a
Phase for the first 6 months after
the completion of such Phase.
203193300.19 B-1
Appendix B
Cost of Equipment
PENINSULA PILOT CITIES:
• Cost to upgrade AD Equipment: $12.50 per Dock per month, subject to PPI Adjustment.
• Cost to purchase new Equipment: As set forth in the New Equipment Price Schedule below.
The prices set forth in such schedule are subject to PPI Adjustment.
• Cost to install new Equipment (including site planning and drawings): $4,000 per Station,
subject to CPI Adjustment
• Cost to operate and maintain the Equipment: $100 per Dock per month, subject to CPI
Adjustment, and subject to the following reductions:
(i) Cost to operate and maintain will be reduced to $75 per Dock per month, subject to
CPI Adjustment, during any 12-month period in which there is an average of 1 Trip
per Bicycle per day for the entire Bicycle Fleet in such Peninsula Pilot City (subject
to Bicycle Availability)
(ii) Cost to operate and maintain will be reduced to $50 per Dock per month, subject to
CPI Adjustment, during any 12-month period in which there is an average of 1.5
Trips per Bicycle per day for the entire Bicycle Fleet in such Peninsula Pilot City
(subject to Bicycle Availability)
(iii) Cost is reduced to $0 per dock, adjusted by CPI, if an average of 3 rides per bike
per day citywide occurs for a 12 month period
OTHER ELIGIBLE CITIES:
• Cost to purchase new Equipment: As set forth in the New Equipment Price Schedule below.
The prices set forth in such schedule are subject to PPI Adjustment.
• Cost to install new Equipment (including site planning and drawings): $4,000 per Station,
subject to CPI Adjustment
• Cost to operate and maintain the Equipment: $130 per Dock per month, subject to CPI
Adjustment, and subject to the following reductions:
(i) Cost to operate and maintain will be reduced to $97.50 per Dock per month, subject
to CPI Adjustment, during any 12-month period in which there is an average of 1
Trip per Bicycle per day for the entire Bicycle Fleet in such Eligible City (subject
to Bicycle Availability)
203193300.19 B-2
(ii) Cost to operate and maintain will be reduced to $65 per Dock per month, subject to
CPI Adjustment, during any 12-month period in which there is an average of 1.5
Trips per Bicycle per day for the entire Bicycle Fleet in such Eligible City (subject
to Bicycle Availability)
(iii) Cost to operate and maintain will be reduced to $0 per Dock per month, subject to
CPI Adjustment, during any 12-month period in which there is an average of 3.0
Trips per Bicycle per day for the entire Bicycle Fleet in such Eligible City (subject
to Bicycle Availability)
• If Operator contracts with a private property owner to locate a publicly-accessible Station on
private property in the Eligible City, then the cost to operate and maintain the Equipment will be a
matter for agreement between Operator and the private property owner.
New Equipment Price Schedule
Station Size (No. of Bicycles)No. of Docks Cost (Excluding Sales Tax)
8 15 47,166.98$
10 19 55,503.56$
12 23 63,840.15$
14 27 72,176.74$
16 31 80,513.33$
18 35 88,849.92$
20 39 97,186.51$
203193300.19 C-1
Appendix C
Reporting Requirements
MTC shall have real-time, read-only access to data as specified in the Functional Specifications.
Operator shall deliver a monthly report, by the 25th day of each month, to MTC, with all of the data
described below, and in a form that is acceptable to, and approved by, MTC for the Program. Except for
financial information, the data shall reflect all relevant facts as they existed with respect to the
immediately preceding calendar month (e.g., the June report would reflect the non-financial data for
May), and the reports shall provide cumulative calendar year-to-date totals for each category (as may be
applicable). For all financial information, the data shall reflect all relevant facts as they existed with
respect to the calendar month that immediately precedes the immediately preceding calendar month (e.g.,
the June report would reflect the financial data for April), and the reports shall provide cumulative
calendar year-to-date totals for each category (as may be applicable). No more frequently than once every
six months, Operator may request a meeting with MTC to assess the effectiveness of these Reporting
Requirements; upon mutual agreement, the Reporting Requirements below may be adjusted.
1) Membership:
• YTD membership counts at the end of the reporting month, by membership type and Participating
City;
• Number of new members by type and Participating City, who signed up during the reporting
month, by day and month; and
• Number of cancellations and expirations of registered members, by type and Participating City,
during the reporting month.
2) Ridership:
• “Trip” shall mean the use of a Bicycle from one Station to another Station or back to the initial
Station;
• Trips per Day, per Participating City and member type, for the entire Program; and
• Total Trips per month, and YTD per Station, Participating City, and member type, for the entire
Program.
3) Environmental Impact:
• Total and average calories burned per Day/month, by Participating City for the entire Program,
based on calculation using total and average Trip durations; and
• Carbon offset per month, by Participating City and for the entire Program, based on calculation
using total hours of usage.
4) Rebalancing Operations:
203193300.19 C-2
• Number of Bicycles rebalanced per Day;
• Bicycles on the street per Day per Participating City;
• List of full and empty instances (Station, start time, end time, and date) in excess of 10
consecutive minutes between 6:00 AM and 10:00 PM;
• Count of full and empty instances per Station and Participating City by Day and month in excess
of 10 consecutive minutes between 6:00 AM and 10:00 PM;
• Breakdown of full and empty instances by duration in excess of 10 consecutive minutes between
6:00 AM and 10:00 PM;
• List of full and empty instances (Station, start time, end time, and date) between 6:00 AM and
10:00 PM at “priority” Stations (to the extent “priority” Stations have been established);
• Count of full and empty instances per Station and Participating City by Day and month between
6:00 AM and 10:00 PM at “priority” Stations (to the extent “priority” Stations have been
established);
• Breakdown of full and empty instances by duration between 6:00 AM and 10:00 PM at “priority”
stations (to the extent “priority” stations have been established); and
• Percentage of time Stations are normal, full, or empty.
5) Station Maintenance Operations:
• List of Stations cleaned and dates of each cleaning;
• Number of active Stations;
• List of all Station malfunctions (Station, start and end date and time, and event); and
• Percentage of time Stations were available to provide rentals for monthly and annual members by
Station and for the entire Program.
6) Bicycle Maintenance Operations:
• Count of Bicycles checked per month;
• Count of Bicycles repaired per month;
• List of Bicycles by unique ID number not checked per month.
7) Incident Reporting:
• List of all incidents (crash, vandalism, theft, and police action) with dates and summary of
outcomes.
203193300.19 C-3
8) Customer Service Reporting:
• Number of calls and emails, with total and broken down by classification;
• Average time to answer call;
• Average time of call;
• Number of refunds and amount given per month; and
• Upon call center software availability, number of calls of different types of issues, and average
length of call.
9) Customer Outreach:
• Web site analytics.
10) Financial Summary:
• Fees assessed to bike share users due to lost or damaged bicycles;
• Revenue generated from subscriptions, by subscription type;
• Revenue generated from usage fees, by subscription type; and
• Revenue generated from other sources, including Advertising and Sponsorships.
11) Compliance with KPIs:
• Recorded Bicycle Fleet Level for each day as recorded between the hours of 11:00 AM and 3:00
PM.
203193300.19 D-1
Appendix D
Functional Specifications
Functional Specification
Software
Billing
Product requirements
Annual and casual billing
Usage charges billing
Discounts
Refunds
Administrative and stolen bike charges
Automatic renewal of accounts
Opt-in/Opt-out ability for automatic renewal
Allow Annual Members to use Clipper Card to access Bicycles in lieu of key fob2
Automatic emails to customers
Ability to edit text in emails to customers
Automatic emails in the following instances:
Upon successful renewal
Upon signup
Upon failed monthly payment
Upon successful monthly payment
Upon credit card change
Upon credit card expiration
Upon account renewal needed (manual billing)
Upon upcoming automatic account renewal (automatic billing)
Upon successfully account renewal
Upon failed account renewal
Upon successful bike return (user configurable)
Upon missing bike (user and system configurable)
Upon incurrence of overage fees
Upon system shut down
PCI Compliance
PCI Compliance of Bike Share Operator and System
Remote functionality
Ability to shut down system (prevent bikes from being rented)
Ability to lock down bikes (with visual indicator)
Ability to shut down stations
Ability to reboot remotely (when connected)
Operational Dashboards (The following dashboards should be available at a minimum)
2To be achieved by the later of 20 months after the Effective Date and completion of Phase IV.
203193300.19 D-2
Subscriptions
Number of casual users by subscription type
Number of members by subscription type
Customer rental activity
Number of open rentals and duration of rental
Number of trips and rentals completed by casual and registered members
Real-Time Dashboards
Station status (total, working, out of order, locked, disconnected)
Station occupancy (current and recent history of station bike/dock occupancy)
Docking point status (total, locked, error, empty, bike docked)
Bike status (docked, in rental, defective, other)
Private data feed
MTC to have access to analytical/reporting databases provided by bikeshare
system.
Public data feed
All public data feeds should cover the following at a minimum:
Station Name
Station ID
Station Status (locked/unlocked)
Latitude
Longitude
# of total docking points
# of available docking points
# of inoperable docks (w/ and w/o bikes)
# of available bikes
Last communication time with server
Excludes test/warehouse station
Product support and redundancy
Features for product support include
System redundancy
Real-time database backups
Development and QA will be done separate from the production
environment
Software escrow
A third-party software escrow with the latest major software release must be
maintained at all times
Hardware
Docking mechanism
Subscriber can unlock a bike (e.g., via a valid key or card)
Locking mechanism that opens within configurable number of seconds
Locking mechanism that closes immediately with moderate docking force
Defaults to unlocked/open when bike is not present
Functional user lock-down capability ("wrench button") with permanent visual
203193300.19 D-3
indicator
Visual and audible indication of successful, failed, or in-progress transaction
Bike
Step through design
Hold someone up to 240 pounds
Can lock and unlock securely
Bell
Front and rear flashing lights when bike is moving; stay illuminated for 60 seconds
after bike stops
Reflective sidewalls on tires
Within range, an infinitely adjustable seat height with ergonomic lever/tension
adjustment and high-contrast height markings
Carrier not susceptible to trash accumulation
Wheels greater than or equal to 26" in diameter
Fenders for front and rear wheels
Front and rear hand brakes
Multiple speed drivetrain
Scratch- and graffiti-resistant frame finish
Reflectors on pedals, spokes, and front and rear of bike
Rubber tread on pedals
Room for safety messaging on handlebar and front cockpit
Tamper-resistant hardware (including hidden cables and custom wrench fittings)
Chain guard
Kiosk station
Short-term user can unlock one or multiple bikes (e.g., via valid ride code or key).
Casual users can use single credit card to rent up to 4 bikes
Hibernation stage
Vandal resistant, replaceable screens
Nearby station functionality
Multiple languages
203193300.19
Attachment A
Agreement to Continue Pilot Bike Share Program
203215669.16
ATTACHMENT A
AGREEMENT TO CONTINUE PILOT BIKE SHARE PROGRAM
by and between
BAY AREA MOTIVATE, LLC
and
METROPOLITAN TRANSPORTATION COMMISSION
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Table of Contents
RECITALS ..................................................................................................................................... 3
ARTICLE I SCOPE OF SERVICES; TERM ........................................................................... 3
ARTICLE II REVENUES; USER FEES; AND OPERATING EXPENSES ......................... 4
ARTICLE III EMPLOYEE AND EMPLOYMENT MATTERS ............................................ 5
ARTICLE IV OWNERSHIP AND PROPRIETARY RIGHTS .............................................. 7
ARTICLE V TERMINATION .................................................................................................... 7
ARTICLE VI DISPUTE RESOLUTION ................................................................................... 8
ARTICLE VII INSURANCE....................................................................................................... 8
ARTICLE VIII INDEMNIFICATION AND LIMITATION OF LIABILITY .................... 12
ARTICLE IX THIRD PARTY BENEFICIARIES ................................................................. 13
ARTICLE X MISCELLANEOUS ............................................................................................ 13
ARTICLE XI DEFINITIONS ................................................................................................... 17
Attachment A-1, Description of Services ..................................................................................... 21
Attachment A-2, Subscriber Related Fees .................................................................................... 28
Attachment A-3, New Subscriber-Related Fees ........................................................................... 30
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ATTACHMENT A
AGREEMENT TO CONTINUE PILOT BIKE SHARE PROGRAM
THIS AGREEMENT TO CONTINUE THE PILOT BIKE SHARE PROGRAM (this
“Continuation Agreement”), has an effective date (the “Effective Date”) that is the same as the
effective date of the BAY AREA BIKE SHARE PROGRAM AGREEMENT, to which this
Continuation Agreement is attached (the “Program Agreement”), by and between the
METROPOLITAN TRANSPORTATION COMMISSION, a California public agency
established pursuant California Government Code § 66500 et seq., having an office at 101 Eighth
Street, Oakland, California (“MTC”), and BAY AREA MOTIVATE, LLC, a Delaware limited
liability company, having any office at 5202 Third Avenue, Brooklyn, New York 11220, as
Operator of the Bay Area Bike Share Program (“Operator”).
RECITALS
WHEREAS, Alta Bicycle Share, Inc., an Oregon corporation (“Alta”), and Bay Area Air
Quality Management District, a California special district (the “Air District”), entered into a Bike
Share Program Agreement having an effective date of February 6, 2013 (the “Pilot Program
Agreement”), pursuant to which Operator operated a pilot bike sharing program (the “Pilot
Program”) in the cities of San Jose, Palo Alto, Mountain View, Redwood City and San Francisco
(each, a “Pilot City” and collectively, the “Pilot Cities”);
WHEREAS, on the date hereof, (a) the Air District and Motivate International, Inc.,
formerly known as Alta (“Motivate”), terminated the Pilot Program Agreement, (b) the Air
District and MTC agreed to the conveyance of all of the Air District’s right, title and interest in
and to the tangible and intangible property acquired or developed in connection with the Pilot
Program from the Air District to MTC, and (c) MTC and Operator agreed to the conveyance of
all of MTC’s right, title and interest in and to the tangible property acquired or developed in
connection with the Pilot Program (the “Pilot Program Property”) from MTC to Operator ;
WHEREAS, the Parties have agreed that Operator will continue to operate the Pilot
Program in the Pilot Cities using the Pilot Program Property; and
WHEREAS, capitalized terms not otherwise defined when they first appear in this
Continuation Agreement are defined in Article XI.
NOW, THEREFORE, in consideration of the foregoing clauses, which clauses are hereby
made a part of this Continuation Agreement, and the mutual covenants and agreements herein
contained, and for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Parties do hereby covenant and agree as follows:
ARTICLE I
PURCHASE OF PILOT PROGRAM PROPERTY; SERVICES; TERM
1.1 Purchase of Pilot Program Property. On the Effective Date, Operator shall
purchase the Pilot Program Property for the purchase price agreed to among Operator, MTC and
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the Air District, and Operator shall remit payment of the purchase price to MTC not later than
the 15th day after the Effective Date.
1.2 Services. Operator shall, during the Term (as defined in Section 1.3), operate and
maintain in the Pilot Cities a bike share system that was originally established under the Pilot
Program Agreement (the “System”). Operator shall (a) utilize the Sites being used as of the
Effective Date from the Pilot Program as well as the Bicycles, Docks, Technical Platforms, Map
Frames, Terminals and other Equipment existing as of the Effective Date from the Pilot Program,
and Operator shall not be obligated to purchase any Equipment, new or otherwise, that was not
Pilot Program Property; (b) subject to Events of Force Majeure, provide the specific services set
forth in this Continuation Agreement; (c) provide all technical expertise and qualified personnel
to operate the System safely and competently; and (d) correct defective or non-conforming
services. All services shall be performed in compliance with this Continuation Agreement and
shall be carried out in strict compliance with all applicable federal, state and local laws and
regulations.
1.3 Term. This Continuation Agreement shall commence on the Effective Date and
shall end (a) for Mountain View, Palo Alto and Redwood City, on June 30, 2016, and (b) for San
Francisco and San Jose, upon installation of 75% of the Phase I Stations located in San
Francisco and San Jose. Notwithstanding the foregoing, if MTC terminates the Program
Agreement pursuant to the second to last sentence of Section 3.4.1 of the Program Agreement,
then this Continuation Agreement shall terminate at the same time the Program Agreement
terminates, and Sections 5.1D, 5.5 and 5.6 shall apply. The bike share program to be
implemented under the Program Agreement is referred to as the “BABS Program.”
ARTICLE II
REVENUES; USER FEES; AND OPERATING EXPENSES
2.1 Revenues. Operator shall be entitled to collect and retain all System Operating
Revenues.
2.2 User Fees. From the Effective Date to June 30, 2016, user fees shall be consistent
with the fee schedule set forth in Attachment A-2. After June 30, 2016, Operator shall have the
right to institute the fee schedule set forth in Attachment A-3.
2.3 Operating Expenses.
2.3.1 San Francisco and San Jose. Subject to Section 2.3.3, Operator shall be
responsible for paying the expenses of operating and maintaining the System in San Francisco
and San Jose.
2.3.2 Mountain View, Palo Alto and Redwood City. Subject to Section 2.3.3,
from the Effective Date through December 31, 2015, Operator shall be responsible for paying the
expenses of operating and maintaining the System in Mountain View, Palo Alto and Redwood
City. From January 1, 2016 to the end of the Term, MTC shall pay to Operator $100 per Dock
per month for Mountain View, Palo Alto and Redwood City to cover Operating Expenses in
those cities.
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2.3.3 MTC Payment. Subject to the last sentence of this paragraph, MTC shall
cover 50% of Operator’s (and Motivate’s) Operating Losses for the period commencing August
29, 2015 and ending on the earlier of the Effective Date and December 31, 2015 (the “Covered
Period”). Within 30 days after the end of the Covered Period, Operator shall send MTC a
statement setting forth Operator’s (or Motivate’s) Operating Losses, if any, for the Covered
Period accompanied by reasonable back-up. Notwithstanding the existence of Operator’s (or
Motivate’s) Operating Losses for any particular month, MTC’s obligation under this Section
2.3.3. shall apply only to Operator’s (and Motivate’s) cumulative Operating Losses over the
entire Covered Period. MTC shall pay Operator for any such cumulative Operating Losses
within 30 days following Operator’s submission of its statement for the Covered Period. MTC’s
payment obligation under this paragraph is capped at $100,000.
2.4 Taxes, Dues, and Fees. Operator shall pay all applicable federal, state, and local
taxes assessed against, arising out of, and collected from the service operation, including sales,
use, license, and/or privilege taxes. Operator shall at all times maintain records evidencing
revenue and the taxes collected as are required to substantiate the correctness of the tax returns
filed.
2.5 No Tax Exemption. No provision of this Continuation Agreement shall be
construed to provide Operator or any of its subcontractors with an exemption, exclusion,
deferral, offset or other relief from any assessment, tax, levy, or penalty which is now or which
may be hereafter authorized by law.
2.6 Covenant Against Contingent Fees. Operator warrants that it has not employed or
retained any company or person, other than a bona fide employee working for Operator, to solicit
or secure this Continuation Agreement and that it has not paid or agreed to pay any company or
person other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift, or
any other consideration, contingent upon or resulting from the award, or formation of this
Continuation Agreement. For breach or violation of this warranty, MTC shall have the right to
annul this Continuation Agreement without liability, or, at its discretion, to deduct from the
agreement price or consideration, or otherwise recover, the full amount of such fee, commission,
percentage, brokerage fee, gift, or contingent fee.
2.7 Liquidated Damages. Subject to Events of Force Majeure, the failure of Operator
to achieve the service levels described in Section 3 of Attachment A-1 will result in liquidated
damages but only if such failure relates to a service level described in such Section 3 for which
there is a corresponding “Key Performance Indicator” in Appendix A of the Program Agreement.
Operator will have no liability for a failure to achieve a service level described in such Section 3
for which there is no corresponding “Key Performance Indicator” in Appendix A of the Program
Agreement. Liquidated damages will be assessed at half of the rate set forth in Appendix A of
the Program Agreement. MTC shall notify Operator on a monthly basis of any such failures and
the corresponding liquidated damages, but payment of such liquidated damages shall not be due
until the completion of Phase I.
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ARTICLE III
EMPLOYEE AND EMPLOYMENT MATTERS
3.1 Project Manager. Each Party shall appoint a project manager to act, except as
otherwise specified in this Continuation Agreement, as the primary contact person for purposes
of this Continuation Agreement. The provision by Operator of services to operate and maintain
the System is subject at all times to inspection and review by MTC Project Manager.
3.2 Fairness Policy. No employee of MTC shall be admitted to any share or part of
this Continuation Agreement or to any benefit that may arise therefrom that is not available to
the general public.
3.3 Employment Discrimination by Operator Prohibited. During the performance of
this Continuation Agreement, Operator agrees as follows:
A. Operator shall not discriminate against any employee or applicant for
employment because of race, religion, color, sex, national origin, age,
disability or any other basis prohibited by state law related to discrimination in
employment except where there is a bona fide occupational qualification
reasonably necessary to the normal operation of Operator. Operator agrees to
post in conspicuous places, available to employees and applicants for
employment, notices setting forth the provisions of this nondiscrimination
clause.
B. Operator, in all solicitations or advertisements for employees placed by or on
behalf of Operator, will state that Operator is an Equal Opportunity Employer.
C. Notices, advertisements, and solicitations placed in accordance with federal
law, rule, or regulation shall be deemed sufficient for the purpose of meeting
the requirements of this Section 3.3.
D. Operator will comply with the provisions of the Americans with Disabilities
Act of 1990 which prohibits discrimination against individuals with
disabilities in employment and mandates their full participation in both
publicly and privately provided services and activities.
E. Operator shall not discriminate against any customer, prospective customer,
employee or prospective employee because of race, color, sex, age, religion,
or country of origin.
3.4 General Compliance with Laws and Wage Rates. Operator will comply with all
federal, state, and local laws and ordinances applicable to the provision of services to operate and
maintain the System. This includes compliance with prevailing wage rates and their payment in
accordance with California Labor Code section 1775, to the extent applicable.
3.5 Supervision by Operator. Operator shall at all times require strict discipline and
good order among Operator’s employees and all subcontractors providing any of the services
required hereunder. Operator shall not permit, and shall require all subcontractors not to permit,
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any employee or other person to provide any service required hereunder unless such employee or
other person has demonstrated proficiency in the type of work which such employee or other
person is assigned to perform.
3.6 Non-Discrimination. During the performance of this Continuation Agreement,
Operator and its subcontractors shall not unlawfully discriminate, harass, or allow harassment
against any employee or applicant for employment because of sex, race, color, ancestry, religious
creed, national origin, physical disability (including HIV and AIDS), mental disability, medical
condition (e.g., cancer), age (over 40), marital status, and denial of family care leave. Operator
and subcontractors shall insure that the evaluation and treatment of their employees and
applicants for employment are free from such discrimination and harassment. Operator and
subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Gov.
Code §12990 (a-f) et seq.) and the applicable regulations promulgated thereunder (California
Code of Regulations, Title 2, Section 7285 et seq.). The applicable regulations of the Fair
Employment and Housing Commission implementing Government Code Section 12990 (a-f), set
forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations, are incorporated
into this Continuation Agreement by reference and made a part hereof as if set forth in full.
Operator and its subcontractors shall give written notice of their obligations under this clause to
labor organizations with which they have a collective bargaining or other Agreement.
3.7 Subcontractors Restrictions. Operator shall only enter into subcontracts with
subcontractors that have clearly demonstrated proficiency in the tasks which are the subject of
such subcontracts. Operator is prohibited from hiring or subcontracting with any individuals that
participated in the selection of Operator or the development of this Continuation Agreement for a
period of 24 months from the date of execution of this Continuation Agreement.
ARTICLE IV
OWNERSHIP AND PROPRIETARY RIGHTS
4.1 Rights, Authorizations, Licenses, Permits, and Other Permissions. Except as
explicitly set forth in Attachment A-1, Operator shall, at its sole cost and expense, obtain all
rights, authorizations, licenses, permits, and other permissions, from all federal, state, and local
governments, and other entities or persons, necessary for Operator to provide the services
required under this Continuation Agreement. MTC’s execution of this Continuation Agreement
shall neither constitute nor be deemed to be governmental approval of, or consent to, any rights,
authorizations, licenses, permits, and permissions required or needed to be obtained by Operator.
4.2 Use of Seals, Logos, Servicemarks, Trademarks, and Copyrighted Material.
Operator shall not use, display, or reproduce the seal, logo, servicemark, trademark, or
copyrighted material of the Air District, MTC or any Pilot City without the prior express written
authorization of the Air District, MTC or any Pilot City, as applicable.
4.3 Third Party Intellectual Property. Operator covenants to save, defend, hold
harmless, and indemnify MTC and the Pilot Cities, and all of their officers, officials,
departments, agencies, agents, and employees from and against any and all claims, losses,
damages, injuries, fines, penalties, costs (including court costs and attorney's fees), charges,
liability, or exposure, however caused, for or on account of any trademark, copyright, patented or
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unpatented invention, process, or article manufactured, supplied, or used in the performance of
this Continuation Agreement, including its use by MTC or any Pilot City.
ARTICLE V
TERMINATION
5.1 Termination.
A. Right of MTC to Terminate. MTC shall have the right to terminate this
Continuation Agreement if Operator fails to provide the services required
hereunder satisfactorily or if Operator breaches any term, condition, or
covenants of any of this Continuation Agreement.
B. Failure or Breach. If Operator fails to provide the services required hereunder
satisfactorily or if Operator breaches any term, condition, or covenants of any
of this Continuation Agreement, then MTC will give Operator written notice
of such failure or breach and 30 days to cure such failure or breach. If
Operator fails to cure such failure or breach by the expiration of such 30-day
period, then MTC shall have the right to give Operator a written notice of
termination, including the date when the termination shall be effective (the
“Termination Effective Date”).
C. Operator’s Contest. If Operator in good faith contests any such failure or
breach, then such termination shall be suspended pending the outcome of such
contest.
D. Termination of Program Agreement. If the Program Agreement terminates
for any reason prior to completion of Phase I under the Program Agreement,
then this Continuation Agreement shall terminate concurrently, and Sections
5.5 and 5.6 shall apply.
5.2 Stop Work. Unless otherwise directed in writing by MTC, Operator shall stop
providing services as of the Termination Effective Date, terminate all vendors and subcontractors
effective as of the Termination Effective Date, and settle all outstanding liabilities and claims.
5.3 Compensation. Operator will be entitled to receive compensation as provided in
Article II to the Termination Effective Date.
5.4 Sole Remedies. Notwithstanding anything to the contrary herein, other than
liquidated damages under Section 2.7, the sole remedy of MTC and the Pilot Cities against
Operator for breach of this Continuation Agreement, excluding a breach of Article VIII, or for
failure to provide the services satisfactorily, is to terminate this Continuation Agreement in
accordance with Article VII. Except for liquidated damages under Section 2.7, in no event shall
Operator be liable for damages of any kind for breach of this Continuation Agreement, other than
a breach Article VIII, or for failure to provide the services satisfactorily.
5.5 Transition. Upon termination of this Continuation Agreement pursuant to Section
5.1D, Operator shall comply with the following close-out procedures:
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5.5.1 Turning over to MTC or its designees copies of all books, records,
documents and materials specifically relating to this Continuation Agreement and reasonably
requested by MTC;
5.5.2 Submitting to MTC, within 120 days, a final statement and report relating
to this Continuation Agreement that has been reviewed by a certified public accountant or a
licensed public accountant;
5.5.3 Providing reasonable assistance to MTC during the transition; and
5.5.4 Continuing to operate the System in accordance with the terms of this
Continuation Agreement and to effect an efficient and orderly transition of responsibility with
respect to the operation of the System until the earlier of (i) 180 days after such termination and
(ii) the selection of a replacement operator for the System and such replacement operator
commencing operation of the System (such earlier date being the “Transition Termination
Date”); provided, however, that MTC shall cover 100% of Operator’s Operating Losses for the
period commencing upon termination of this Continuation Agreement and ending on the
Transition Termination Date (such period being the “Transition Period”), subject to an
aggregate cap for the Transition Period equal to the product of (X) the number of months of the
Transition Period, (Y) $20 for each Dock, and (Z) the number of Docks. Within 30 days after
the end of each month during the Transition Period, Operator shall send MTC a statement setting
forth Operator’s Operating Losses, if any, for the preceding month accompanied by reasonable
back-up. MTC shall pay Operator for any such monthly Operating Losses within 30 days
following Operator’s submission of its statement for such month, subject to a cap calculated on
a monthly basis equal to $20 for each Dock. Within 60 days following the end of the Transition
Period, the Parties shall reconcile Operator’s cumulative Operating Losses for the entire
Transition Period with Operator’s monthly, non-cumulative Operating Losses for the entire
Transition Period, and shall also reconcile the aforementioned aggregate cap applied to the
cumulative Operating Losses for the entire Transition Period with the aforementioned monthly
cap applied to the monthly Operating Losses for the entire Transition Period. If the payment for
Operating Losses received by Operator from MTC on a monthly basis exceeds the payment for
Operating Losses to which Operator is entitled from MTC on an aggregate basis, then Operator
shall reimburse MTC for the difference between the two calculations within 30 days following
such calculation; and if the payment for Operating Losses received by Operator from MTC on a
monthly basis is less than the payment for Operating Losses to which Operator is entitled from
MTC on an aggregate basis, then MTC shall pay Operator the difference between the two
calculations within 30 days following such calculation.
5.6 Disposition of the Equipment. Upon termination of this Continuation Agreement
pursuant to Section 5.1D, MTC shall have the option to:
5.6.1 require Operator to remove all Equipment at its sole cost and expense;
5.6.2 subject to satisfaction of the Equipment Assignment Conditions, require
Operator to assign to MTC (or a third-party operator designated by MTC) the Equipment, in
which event Operator shall reasonably cooperate with MTC (or such designee) to obtain the legal
right to use the Backend Software and Computer Hardware either through an assignment of
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Operator’s license with the vendor thereof to MTC (or such designee) or by MTC (or such
designee) entering a license agreement for Backend Software and Computer Hardware with such
vendor; or
5.6.3 subject to satisfaction of the Equipment Assignment Conditions, take over
operation of the System, and in connection therewith require Operator to assign to MTC the
Equipment, in which event Operator shall reasonably cooperate with MTC to obtain the legal
right to use the Backend Software and Computer Hardware either through an assignment of
Operator’s license with the vendor thereof to MTC or by MTC entering a license agreement for
Backend Software and Computer Hardware with such vendor.
ARTICLE VI
DISPUTE RESOLUTION
6.1 In the event of a dispute between the Parties, such dispute shall be addressed and
resolved in accordance with the following (the “Dispute Resolution Process”):
6.1.1 The MTC Project Manager assigned to the System and Operator’s General
Manager of the System, or their respective delegates, shall meet, within 10 days after receipt by
one Party of notification from the other Party of such dispute, to negotiate in good faith in order
to try to resolve such dispute (the date of the first such meeting, or the expiration of such 10-day
period if the meeting is not timely held, being the “Initial Meeting Date”). If such persons fail to
resolve such dispute within 15 days after the Initial Meeting Date, then the Executive Director of
MTC and the President of Bikeshare Holdings shall meet promptly and negotiate in good faith in
order to resolve such dispute. If such persons fail to resolve such dispute within 30 business days
after the Initial Meeting Date, then such dispute shall be subject to mediation. A meeting may be
held in person, by conference call or by video conference. By agreement of the Parties, any of
the deadlines set forth in this section may be extended or shortened. The process described in this
section shall be confidential and treated as a compromise negotiation for purposes of federal and
state rules of evidence.
6.1.2 Unless the Parties otherwise agree, mediation shall be administered by the
American Arbitration Association (the “AAA”) in accordance with its Commercial Rules, or
similar service. A request for mediation shall be made in writing, delivered to the other Party and
filed with the applicable mediation service. Either Party may submit such request. The Parties
shall share the mediator’s fee and any filing fees equally. The mediation shall be held in San
Francisco. The Parties shall be represented by individuals of their choosing. Agreements
reached in mediation shall be binding on the Parties and enforceable in a State or Federal Court
of competent jurisdiction sitting in San Francisco County. The mediation process shall be
confidential and treated as a compromise negotiation for purposes of federal and state rules of
evidence.
6.1.3 The Parties shall comply with any settlement agreement regarding any
dispute that is the subject of a settlement agreement.
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6.1.4 If mediation fails to resolve a dispute, then the exclusive forum for
resolving such dispute shall be any State or federal court sitting in San Francisco County,
California.
6.1.5 As used in this Continuation Agreement, “final resolution” of a dispute or
a dispute being “finally resolved” means that (a) the Parties have entered into a settlement
agreement to resolve such dispute, or (b) if either Party has initiated a judicial proceeding to
contest such dispute, that a final-non-appealable order of a court of competent jurisdiction has
been issued for such dispute.
ARTICLE VII
INSURANCE
7.1 Minimum Coverages. The insurance requirements specified in this section shall
cover Operator’s own liability and the liability arising out of work or services performed under
this Continuation Agreement by any subconsultants, subcontractors, suppliers, temporary
workers, independent contractors, leased employees, or any other persons, firms or corporations
that Operator authorizes to work under this Continuation Agreement (hereinafter referred to as
“Agents”). Operator shall, at its own expense, obtain and maintain in effect at all times during
the life of this Continuation Agreement the following types of insurance against claims, damages
and losses due to injuries to persons or damage to property or other losses that may arise in
connection with the performance of work under this Continuation Agreement.
7.2 Operator shall include in every subcontract the requirement that the Agent
maintain adequate insurance coverage with appropriate limits and endorsements to cover the
risks associated with work to be performed by the Agent. To the extent that an Agent does not
procure and maintain such insurance coverage, Operator shall be responsible for any and all
costs and expenses that may be incurred in securing such coverage or in fulfilling Operator’s
indemnity obligation under Article VIII as to itself or any of its Agents in the absence of such
coverage.
7.3 In the event Operator or its Agents procure excess or umbrella coverage to
maintain certain requirements outlined below, these policies shall also satisfy all specified
endorsements and stipulations, including provisions that Operator’s or its Agent’s insurance, as
the case may be, be primary without right of contribution from MTC.
7.3.1 Workers' Compensation Insurance with Statutory limits, and Employer’s
Liability Insurance with a limit of not less than $1,000,000 per employee for injury by disease
and $1,000,000 for injury for each accident, and any and all other coverage of Operator’s
employees as may be required by applicable law. Such policy shall contain a Waiver of
Subrogation in favor of MTC. Such Workers’ Compensation & Employer’s Liability may be
waived, if and only for as long as Operator is a sole proprietor or a corporation with stock 100%
owned by officers with no employees.
7.3.2 Commercial General Liability Insurance for Bodily Injury and Property
Damage liability, covering the operations of Operator and Operator’s officers, agents, and
employees and with limits of liability which shall not be less than $1,000,000 combined single
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limit per occurrence with a general aggregate liability of not less than $2,000,000, and Personal
& Advertising Injury liability with a limit of not less than $1,000,000. Such policy shall contain
a Waiver of Subrogation in favor of MTC. MTC and its commissioners, directors, officers,
representatives, agents and employees are to be named as additional insureds. In addition, the
entities listed in Section 7.13 and their respective commissioners, directors, officers,
representatives, agents and employees are also to be named as additional insureds. Such
insurance shall be primary and contain a Separation of Insureds Clause as respects any claims,
losses or liability arising directly or indirectly from Operator’s operations.
7.3.3 Business Automobile Insurance for all automobiles owned (if any), used
or maintained by Operator and Operator’s officers, agents and employees, including but not
limited to owned (if any), leased (if any), non-owned and hired automobiles, with limits of
liability which shall not be less than $1,000,000 combined single limit per accident.
7.3.4 Umbrella Insurance in the amount of $4,000,000 providing excess limits
over Employer’s Liability, Automobile Liability, and Commercial General Liability Insurance.
Such umbrella coverage shall be following form to underlying coverage including all
endorsements and additional insured requirements.
7.3.5 Errors and Omissions Professional Liability Insurance for errors and
omissions and the resulting damages, including, but not limited to, economic loss to MTC and
having minimum limits of $5,000,000 per claim. Such policy shall contain cyber risk coverages
including network and internet security liability coverage, privacy liability coverage and media
coverage. The policy shall provide coverage for all work performed by Operator and any work
performed or conducted by any subcontractor/consultant working for or performing services on
behalf of Operator. Operator may delegate the obligation to maintain Errors and Omissions
Professional Liability Insurance to an Agent, but the failure of such Agent to maintain such
insurance shall not relieve Operator of its obligation to maintain such insurance.
7.3.6 Property Insurance. Property Insurance covering Operator’s own
business personal property and equipment to be used in performance of this Continuation
Agreement, materials or property to be purchased and/or installed on behalf of MTC (if any), and
builders risk for property in the course of construction (if applicable). Coverage shall be written
on a "Special Form" policy that includes theft, but excludes earthquake, with limits at least equal
to the replacement cost of the property. Such policy shall contain a Waiver of Subrogation in
favor of MTC.
7.4 Acceptable Insurers. All policies will be issued by insurers qualified to do
business in California and with a Best’s Rating of A-VIII or better.
7.5 Self-Insurance. Operator’s obligation hereunder may be satisfied in whole or in
part by adequately funded self-insurance, upon evidence of financial capacity satisfactory to
MTC.
7.6 Deductibles and Retentions. Operator shall be responsible for payment of any
deductible or retention on Operator’s policies without right of contribution from MTC.
Deductible and retention provisions shall not contain any restrictions as to how or by whom the
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deductible or retention is paid. Any deductible or retention provision limiting payment to the
Named Insured is unacceptable.
7.7 In the event that MTC is entitled to coverage as an additional insured under any
Operator insurance policy that contains a deductible or self-insured retention, Operator shall
satisfy such deductible or self-insured retention to the extent of loss covered by such policy, for
any lawsuit arising from or connected with any alleged act of Operator, subconsultant,
subcontractor, or any of their employees, officers or directors, even if Operator or subconsultant
is not a named defendant in the lawsuit.
7.8 Claims Made Coverage. If any insurance specified above is written on a “Claims-
Made” (rather than an “occurrence”) basis, then in addition to the coverage requirements above,
Operator shall:
7.8.1 Ensure that the Retroactive Date is shown on the policy, and such date
must be before the date of this Continuation Agreement or the beginning of any work under this
Continuation Agreement;
7.8.2 Maintain and provide evidence of similar insurance for at least three (3)
years following the expiration or termination of this Continuation Agreement, including the
requirement of adding all additional insureds; and
7.8.3 If insurance is cancelled or non-renewed, and not replaced with another
claims-made policy form with a retroactive date to Effective Date, Operator shall purchase
“extended reporting” coverage for a minimum of three (3) years after the expiration or
termination of this Continuation Agreement.
7.9 Failure to Maintain Insurance. All insurance specified above shall remain in force
until the expiration or termination of this Continuation Agreement. Operator must notify MTC if
any of the above required coverages are non-renewed or cancelled. The failure to procure or
maintain required insurance and/or an adequately funded self-insurance program will constitute a
material breach of this Continuation Agreement.
7.10 Certificates of Insurance. On the Effective Date, Operator shall deliver to MTC
Certificates of Insurance verifying the aforementioned coverages. Such certificates shall make
reference to all provisions and endorsements referred to above and shall be signed on behalf of
the insurer by an authorized representative thereof.
7.11 Disclaimer. The foregoing requirements as to the types and limits of insurance
coverage to be maintained by Operator are not intended to and shall not in any manner limit or
qualify the liabilities and obligations otherwise assumed by Operator pursuant hereto, including,
but not limited to, liability assumed pursuant to Article VIII.
7.12 Additional Insureds. The following entities are to be named as Additional
Insureds under applicable sections of this Article VII and as Indemnified Parties pursuant to
Article VIII of this Continuation Agreement.
7.12.1 Metropolitan Transportation Commission (MTC)
203215669.16 13
7.12.2 City of Mountain View
7.12.3 City of Palo Alto
7.12.4 City of Redwood City
7.12.5 City of San Francisco
7.12.6 City of San Jose
ARTICLE VIII
INDEMNIFICATION AND LIMITATION OF LIABILITY
8.1 Indemnification. Operator shall defend, indemnify and save harmless MTC, the
Pilot Cities, and their respective commissioners, officers, agencies, departments, agents, and
employees (collectively, “Indemnified Parties”) from and against any and all claims, demands,
causes of action, proceedings or lawsuits brought by third-parties (“Claims”), and all losses,
damages, liabilities, penalties, fines, forfeitures, costs and expenses arising from or incidental to
any Claims (including attorneys’ fees and other costs of defense) (collectively, with Claims,
“Liabilities”), resulting from, or arising out of, the operation of the System and the provision of
services, including the condition of the Bicycles or other Equipment, whether such operation or
services is performed or provided by Operator or by Operator’s subcontractors or any other
person acting for or on behalf of Operator.
8.2 Exclusions. Notwithstanding the foregoing, the following shall be excluded from
Operator’s indemnification and defense obligations contained in the preceding sentence: any
Liabilities to the extent resulting from, or arising out of, (i) the gross negligence or willful
misconduct of any Indemnified Party, (ii) Operator complying with the written directives or
written requirements of a Pilot City, if the Operator has previously objected to such written
directives or requirements in writing, with respect to (A) the location or configuration of any
Station in relation to the street or sidewalk on which such Station is located or to which it adjoins
or (B) a Pilot City’s Street Treatment Requirements, or (iii) the condition of any public property
outside of the perimeter of a Station and not otherwise controlled by Operator. The exclusion in
clause (iii) does not include the condition of the Bicycles or other Equipment. In addition, if any
Claim against Operator includes claims that are covered by clause (iii) of the preceding sentence
or claims contesting a Pilot City’s authority to issue a permit for a Station, then each Party shall
be responsible for its own defense against such claims.
8.3 Notice. Upon receipt by any Indemnified Party of actual notice a Claim to which
such Indemnified Party is entitled to indemnification in accordance with Section 8.1, such
Indemnified Party shall give prompt notice of such Claim to Operator. Operator shall assume
and prosecute the defense of such Claim at the sole cost and expense of Operator. Operator may
settle any such Claim in its discretion so long as such settlement includes an unconditional
release of the Indemnified Party.
203215669.16 14
ARTICLE IX
THIRD PARTY BENEFICIARIES
9.1 Third-Party Beneficiaries Under This Continuation Agreement. Except as
provided in Sections 7.13, 8.1, 8.2 and 8.3, this Continuation Agreement does not and is not
intended to confer any rights or remedies upon any person or entity other than the signatories to
this Continuation Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Governing Law. This Continuation Agreement shall be governed exclusively by
the internal laws of the United States and of the State of California applicable to contracts made,
accepted and performed wholly within said State, without regard to application of principles of
conflict of laws. Any claim, suit or action arising under or relating to this Continuation
Agreement must be brought only in courts located in San Francisco, California. The Parties
hereby agree that such courts shall have exclusive personal and subject matter jurisdiction over
any such claim, suit or action.
10.2 Survival. All provisions of this Continuation Agreement that by their terms
survive the expiration or any termination of this Continuation Agreement, together with all other
provisions of this Continuation Agreement that may be reasonably construed as surviving the
expiration or any termination of this Continuation Agreement, shall survive the expiration or any
termination of this Continuation Agreement.
10.3 Notices. Except as otherwise provided herein, all notices, requests, demands and
other communications which are required or may be given under this Continuation Agreement
shall be provided in the manner set forth in this section. Notice to a Party shall be delivered to
the attention of the person listed below, or to such other person or persons as may hereafter be
designated by that Party in writing. Notice shall be in writing sent by e-mail, facsimile, or
regular first class mail. In the case of e-mail and facsimile communications, valid notice shall be
deemed to have been delivered upon sending, provided the sender obtained an electronic
confirmation of delivery. E-mail and facsimile communications shall be deemed to have been
received on the date of such transmission, provided such date was a business day and delivered
prior to 4:00 p.m. PST. Otherwise, receipt of e-mail and facsimile communications shall be
deemed to have occurred on the following business day. In the case of regular mail notice,
notice shall be deemed to have been delivered on the mailing date and received five business
days after the date of mailing.
If to MTC:
Metropolitan Transportation Commission
Joseph P. Bort MetroCenter,
Oakland, CA 94607-470
Attention: Executive Director
Email: SHeminger@mtc.ca.gov
203215669.16 15
Attention: General Counsel:
Email: AWeil@mtc.ca.gov
Attention: Designated Representative
Email: KMulder@mtc.ca.gov
If to Operator:
Bay Area Motivate, LLC
5202 Third Avenue
Brooklyn, New York 11220
Attention: Jay Walder, President and CEO
Email: jaywalder@motivateco.com
Attention: Justine Lee, Vice President and General Counsel
Email: justinelee@motivateco.com
Bay Area Motivate, LLC
2200 Jerrold Avenue, Unit J
San Francisco, California 94124
Attention: Emily Stapleton, General Manager and Designated Representative
Email: emilystapleton@motivateco.com
10.4 Entire Agreement; Amendments and Waivers. This Continuation Agreement
constitutes the entire agreement between the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties. No supplement, modification or waiver of this Continuation Agreement
shall be binding unless executed in writing by the Party to be bound thereby. No waiver of the
provisions of this Continuation Agreement, or any breach thereof, shall constitute a waiver of
any prior, concurrent or subsequent breach of the same or any other provisions hereof, or shall be
deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly provided.
10.5 Counterparts; Severability. This Continuation Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. The Parties may rely upon a facsimile copy or scanned
copy of any Party’s signature as an original for all purposes. In the event that any one or more of
the provisions contained in this Continuation Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision of this Continuation
Agreement or any other such instrument and the remaining provisions shall remain in full force
and effect. To the extent permitted by applicable law, any such provision will be restricted in
applicability or reformed to the minimum extent required for such provision to be enforceable.
This provision will be interpreted and enforced to give effect to the original written intent of the
Parties prior to the determination of such invalidity or unenforceability.
10.6 Construction; Incorporation. The headings of the articles, sections, and
paragraphs of this Continuation Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Continuation Agreement or to affect the construction hereof.
203215669.16 16
All sections and article references are to this Continuation Agreement, unless otherwise
expressly provided. As used in this Continuation Agreement, (a) “hereof”, “hereunder”, “herein”
and words of like import shall be deemed to refer to this Continuation Agreement in its entirety
and not just a particular section of this Continuation Agreement, and (b) unless the context
otherwise requires, words in the singular number or in the plural number shall each include the
singular number or the plural number, words of the masculine gender shall include the feminine
and neuter, and, when the sense so indicates, words of the neuter gender shall refer to any
gender. The Parties acknowledge and agree that: (i) this Continuation Agreement is the result of
negotiations between the Parties and shall not be deemed or construed as having been drafted by
any one Party, (ii) each Party and its counsel have reviewed and negotiated the terms and
provisions of this Continuation Agreement (including, without limitation, any exhibits and
schedules attached hereto) and have contributed to its revision, (iii) the rule of construction to the
effect that any ambiguities are resolved against the drafting Party shall not be employed in the
interpretation of this Continuation Agreement, and (iv) the terms and provisions of this
Continuation Agreement shall be construed fairly as to both Parties and not in favor of or against
either Party, regardless of which Party was generally responsible for the preparation of this
Continuation Agreement.
10.7 Relationship of the Parties. Operator is an independent contractor and neither
Operator nor its employees shall, under any circumstances, be considered employees, servants,
or agents of MTC, nor shall MTC nor its agents or employees be considered employees,
servants, or agents of Operator. At no time during the Term or otherwise shall Operator, its
employees, or agents, represent to any person or entity that Operator and its employees are acting
on behalf of, or as an agent of, MTC or any of its employees. MTC shall not be legally
responsible or liable for any negligence, intentional act, or other wrongdoing by or of Operator,
its employees, servants, agents, subcontractors, suppliers, or manufacturers of goods or services
provided by Operator pursuant to this Continuation Agreement. MTC will not withhold
payments to Operator for any federal or state unemployment taxes, federal or state income taxes,
Social Security tax, or any other amounts for benefits to Operator. MTC will not provide to
Operator any insurance coverage or other benefits, including Workers' Compensation, normally
provided by MTC for its employees. This Continuation Agreement does not constitute and shall
not be construed as constituting a partnership or joint venture or grant of a franchise between the
Parties.
10.8 Cooperation. The Parties agree to execute such further instruments and to take
such further action as may reasonably be necessary or helpful to carry out the intent of this
Continuation Agreement.
10.9 Failure or Delay in Performance. Operator shall not be held responsible for
failure to perform the duties and responsibilities imposed by this Continuation Agreement if such
failure is due to Event of Force Majeure, beyond the control of Operator, that make performance
impossible or illegal, unless otherwise specified in this Continuation Agreement; provided that
the Operator (in order to not be held responsible for failure to perform) shall have given MTC
Project Manager written notification of such failure, event, or occurrence beyond the control of
Operator not later than 48 hours after the beginning of such failure, event, or occurrence.
203215669.16 17
10.10 Representations of Operator. Operator hereby represents and warrants to MTC
that:
10.10.1Operator is a limited liability company, validly existing and in good
standing under the laws of the State of Delaware, and it is duly authorized to do business in the
State of California; and
10.10.2Operator has all requisite power and authority to own or lease its
properties and assets, to conduct its business as currently conducted and to execute, deliver and
perform this Continuation Agreement and all other agreements entered into or delivered in
connection with or as contemplated hereby.
10.11 Ethics in Public Contracting. This Continuation Agreement incorporates all local,
state, and federal law, regulations and rules related to ethics, conflicts of interest, or bribery.
Operator certifies that its offer is made without collusion or fraud and that it has not offered or
received any kickbacks or inducements from any other officer, supplier, manufacturer, or
subcontractor and that it has not conferred on any public employee having official responsibility
for this purchase any payment, loan, subscription, advance, deposit of money, services, or
anything of more than nominal value, present or promised unless consideration of substantially
equal or greater value was exchanged.
10.12 Remedies. The remedies available to MTC in various sections of this
Continuation Agreement shall be deemed to be in addition to, and not in limitation of, any other
remedies MTC has or may have under applicable law or in equity arising out of or relating to this
Continuation Agreement.
10.13 Assignment. Operator shall not assign, transfer, convey, sublet, or otherwise
dispose of any award, or any or all of its rights, obligations, or interests under this Continuation
Agreement, without the prior written consent of MTC, except the preceding clause shall not limit
Operator’s rights to enter into subcontracts for the provision of services hereunder.
10.14 Prohibition of Expending Local, Agency, State or Federal Funds for Lobbying
A. Operator certifies to the best of its knowledge and belief that:
i. No state, federal or local agency appropriated funds have been paid, or
will be paid by-or-on behalf of Operator to any person for influencing or
attempting to influence an officer or employee of any state or federal
agency; a Member of the State Legislature or United States Congress; an
officer or employee of the Legislature or Congress; or any employee of a
Member of the Legislature or Congress, in connection with the awarding
of any state or federal contract; the making of any state or federal grant;
the making of any state or federal loan; the entering into of any
cooperative agreement, and the extension, continuation, renewal,
amendment, or modification of any state or federal contract, grant, loan, or
cooperative agreement.
203215669.16 18
ii. If any funds other than federal appropriated funds have been paid, or will
be paid to any person for influencing or attempting to influence an officer
or employee of any federal agency; a Member of Congress; an officer or
employee of Congress, or an employee of a Member of Congress; in
connection with this Continuation agreement; Operator shall complete and
submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in
accordance with its instructions.
B. This certification is a material representation of fact upon which reliance was
placed when this transaction was made or entered into. Submission of this
certification is a prerequisite for making or entering into this transaction
imposed by Section 1352, Title 31, US. Code. Any person who fails to file
the required certification shall be subject to a civil penalty of not less than
$10,000 and not more than $100,000 for each such failure.
C. Operator also agrees by signing this Continuation Agreement that it shall
require that the language of this certification be included in all lower-tier
subcontracts, which exceed $100,000, and that all such sub recipients shall
certify and disclose accordingly.
ARTICLE XI
DEFINITIONS
11.1 Defined Terms. As used herein, the terms below shall have the following
meanings. Any of such terms, unless the context otherwise requires, may be used in the singular
or plural, depending upon the reference.
“Backend Software and Computer Hardware” shall mean an electronic interface
enabling, among other things, Stations, Bicycles, subscriber customer service, cellular service,
Customer Keys, the website, and call center to function.
“Bicycle” shall mean a device propelled solely by human power, upon which a person
may ride either on or astride a regular seat attached thereto, having two or more wheels in
tandem.
“Crash” shall mean every reported incident or event involving a subscriber, Bicycle user,
Bicycle, and/or Station resulting in personal injury to the subscriber or others, or property
damage to the Equipment, or to the property of others.
“Customer Key” shall mean a fare card or fob for rental of Bicycles.
“Dock” or “Docking Point” shall mean a locking mechanism contained on a Station
designed to receive a Bicycle for locked storage.
“Equipment” shall mean all physical components provided by, or used by, Operator so
that the System is available for use by the public, including, without limitation Bicycles, Docks,
Technical Platforms, Map Frames, Terminals, cables, Station batteries, maintenance trailer,
truck, electric bicycle, Customer Keys, trailer, and Bicycle and Station spare parts.
203215669.16 19
“Equipment Assignment Conditions” shall mean the following: (a) Operator and the
purchaser of the Equipment have agreed on the purchase price for the Equipment, which shall be
based on the fair market value of the Equipment as an installed system at the time of the
purchase, and (b) such purchaser has paid Operator the agreed upon purchase price for the
Equipment.
“Event of Force Majeure” shall mean a delay, suspension or interruption due to strike;
war or act of war (whether an actual declaration of war is made or not); terrorism; insurrection;
riot; injunction; fire, flood or similar act of providence; or other similar causes or events to the
extent that such causes or events are beyond the control of the Party claiming an Event of Force
Majeure, provided in each case that such Party has taken and continues to take all reasonable
actions to avoid or mitigate such delay, suspension or interruption and provided that such Party
notifies the other Party to this Continuation Agreement in writing of the occurrence of such
delay, suspension or interruption within five (5) business days, or if not reasonably practicable,
as soon thereafter as reasonably practicable, of the date upon which the Party claiming an Event
of Force Majeure learns or should have learned of its occurrence. A delay in a decision by a
government entity, the approval of which is a condition to an occurrence, shall not constitute an
“Event of Force Majeure” unless such delay is beyond the normal period in which such entity
generally acts with respect to the type of decision being sought and only if the Party claiming
Event of Force Majeure has taken and continues to take all reasonable steps to pursue such
decision. In no event will a government entity’s final decision relating to Operator, this
Continuation Agreement or the System, whether positive or negative, once made constitute an
Event of Force Majeure (the term “final decision” in this sentence shall refer to a decision with
respect to which all available appeals have been exhausted or the time period for filing such
appeals has expired). The financial incapacity of Operator shall not constitute an Event of Force
Majeure.
“Fleet” shall mean 100% of the number of Bicycles obtained by Operator from MTC on
the Effective Date minus the number of stolen (or otherwise unreturned) and unrepairable
Bicycles.
“Functional Bicycle” shall mean the condition of a Bicycle, consistent with the technical
specifications of the Bicycles to be provided under this Continuation Agreement, to be ridden by
an ordinary subscriber using such Bicycle under normal conditions. A Functional Bicycle does
not refer to comfort, speed, quality of the riding experience, or minor issues with the Bicycle that
does not impede the ability to be ridden.
“Functional Station” shall mean a Docking Station, consistent with the technical
specifications of the Docking Stations under the Pilot Program, to be used by an ordinary
subscriber using such Docking Station under normal conditions. A Functioning Station does not
refer to inconvenience or inability of a subscriber to follow directions, provided such directions
are provided in a form understandable by an ordinary subscriber. A Functional Station shall
have at least one Docking Point containing a Functional Bicycle, at least one empty Docking
Point, and all other elements in working condition to be considered a Functional Station.
“Hacking” shall mean unauthorized and intentional access to the Computer Hardware for
the System and/or Software.
203215669.16 20
“Map Frame” shall mean a two-sided metal informational display unit, including
translucent covering and lock.
“MTC Project Manager” shall mean an individual appointed by MTC to act as the
project officer.
“Notification” shall mean all information provided by MTC, a Pilot City or the general
public to Operator about a specific defect or problem concerning the System, Equipment or
operations of the System by written document, email to Operator’s public information email
address for the System, or telephone call to Operator’s call center for the System.
“Operable Station” shall mean a Station at which at least 90 percent of all installed
Docks are Operable Docks from which an annual member can check out and return a Bicycle.
“Operating Expenses” shall mean, with respect to Operator (or Motivate) for any
period, the costs expended by Operator (or Motivate) to operate and maintain the System and to
provide the specific services set forth in this Continuation Agreement, including, without
limitation, personnel costs, software license fees, insurance costs, costs of maintaining service
vehicles, costs of leasing and maintaining facilities used for the System.
“Operating Losses” shall mean, with respect to Operator (or Motivate) for any period,
the amount, if any, by which Operating Expenses for such period exceed System Operating
Revenues for such period.
“Party” means either MTC or Operator, as the context requires; “Parties” means MTC
and Operator.
“Service” shall mean the use of the Equipment by the public at large after the Effective
Date.
“Site” shall mean a designated area on publicly or privately owned real property, which
area contains one or more of each of the following items made available by Operator for the
System: Bicycles, Docks, Terminal, Technical Platforms, and Map Frame.
“Station” shall a designated area of docking Bicycles at which Docks, Terminal,
Technical Platforms, and Map Frame are located.
“System Operating Revenues” shall mean all funds derived from ridership use of the
System, including subscription fees and usage fees.
“Technical Platform” shall mean a base component that rests on the ground and
supports the Docks, Terminal, and Map Frame.
“Terminal” shall mean a kiosk that provides Bicycle rental instructions, contains
payment equipment (i.e. credit card device), and includes all other means necessary for the rental
of Bicycles.
203215669.16 21
“Trip” shall mean the use of a Bicycle from one Station to another Station or back to the
initial Station.
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203215669.16 A-1-1
Attachment A-1, Description of Services
1. Description of Services
Operator shall operate the bike-sharing system in the Pilot Cities that was installed and in
place at the termination of the Pilot Program Agreement using the same Sites, Bicycles, Docking
Stations, Terminals, Docking Points, Technical Platforms, Customer Keys, Back-end Software
and Computer Hardware and other Equipment that was used for the Pilot Program. Operator
guarantees the following minimum equipment numbers in Mountain View, Palo Alto, and
Redwood City:
Mountain View: 7 Stations; 117 Docks; 59 Bicycles
Palo Alto: 5 Stations, 75 Docks, 37 Bicycles;
Redwood City: 7 Stations; 117 Docks; 59 Bicycles;
San Francisco: 35 Stations; 665 Docks; 300 Bicycles;
San Jose: 16 Stations; 264 Docks; 110 Bicycles
Operator’s responsibilities include:
(1) Handle ongoing Equipment maintenance and rebalancing;
(2) Manage intellectual property issues related to a program sponsor such as
brands and trademarks;
(3) Manage all ongoing customer service issues associated with the System
(unless otherwise instructed); and
(4) Conduct bicycle safety trainings and encourage the use of bicycle helmets.
2. Subscriber Information/Relations.
2.1 Subscriber and Usage Fees. User fees shall be consistent with Attachment A-2,
subject to application of Attachment A-3 as provided in Section 2.2 of this Continuation
Agreement.
2.2 Age Requirement for Program Subscribers. Subscriptions shall only be issued to
individuals 18 years of age and older.
2.3 Subscriber Privacy. Operator shall, at all times, protect the privacy rights of all
subscribers. Operator shall strictly comply with all applicable federal, state, and local laws,
203215669.16 A-1-2
ordinances, and regulations concerning the privacy of all subscriber information obtained by
Operator in the course of providing services under this Continuation Agreement.
2.4 Subscriber Agreement. Operator shall use the same form of Subscriber
Agreement that was used for the Pilot Program with such changes thereto as Operator considers
appropriate. Any material changes to the Pilot Program form shall be subject to the review and
approval of MTC. The Subscriber Agreement shall address, at a minimum, the following:
(1) The rates, fees, and deposits (if any).
(2) Confidentiality of personal and financial data and information.
(3) Subscriber’s agreement to return the Bicycle in the same condition as it was
when rented.
(4) Subscriber’s agreement to immediately report to the call center any Crash, as
defined in this Continuation Agreement to include any incident or event
resulting in personal injury to the subscriber or others or in property damage
to the Equipment or to the property of others and agreement to follow any
instructions from the call center regarding reporting a Crash to police.
(5) Subscriber’s agreement to immediately report to the call center a lost or
stolen Bicycle or a lost or stolen Customer Key.
(6) Subscriber’s responsibility and liability for any consequences of any kind or
nature whatsoever related to a stolen or lost Bicycle or Customer Key.
(7) Prohibited uses including, without limitation, no more than one person on a
Bicycle at one time.
(8) Subscriber’s acknowledgement of and acceptance of responsibility and risk.
(9) Prohibition against any person other than the subscriber operating any
Bicycle rented from Operator and prohibition against transfer of a Customer
Key to anyone in any manner whatsoever.
(10) A representation by each subscriber that s/he is physically able to ride a
Bicycle without risk to health, knowledgeable about the operation of a
Bicycle, and knowledgeable about the laws pertaining to Bicycles operated
within the jurisdictions where the Bicycles are to be used.
(11) Age limits.
(12) Subscriber’s indemnification of MTC and the Pilot Cities, its elected and
appointed officers, officials, employees, and agents.
(13) Prohibition against use of Bicycle while under the influence of alcohol,
drugs, any controlled substance, or any medication that would impair the
Bicycle operator’s ability to safely operate the Bicycle.
(14) Instructions regarding proper use of Bicycle luggage carrier as to type of
contents, weight, or visual obstruction.
(15) Prohibition against Bicycle use for any illegal purpose.
2.5 Loss Fees. Operator shall deem a Bicycle as “lost or stolen” if not returned to a
Site within 24 hours of being signed out, and charge the subscriber whose account is associated
with that sign-out the amount of the “Loss Fee” set forth in Attachment A-2, subject to
application of Attachment A-3 as provided in Section 2.2 of this Continuation Agreement, which
covers the replacement value of the Bicycle, along with shipping fees and expenses and service
charges for placing a new Bicycle into the operational Fleet. Credit accounts will be charged the
Loss Fee at the time a loss is determined. Operator shall include all such circumstances in its
203215669.16 A-1-3
monthly report to MTC. Notwithstanding the foregoing, Operator shall waive such fees for
stolen Bicycles or Bicycles that are damaged in connection with a crime against the rider or in a
collision with a motor vehicle, so long as an appropriate police report is filed for the incident.
2.6 Helmets. Operator shall provide information on the System website and in the
subscription agreement about the importance of wearing helmets for safety reasons. Operator
will make reasonable best efforts to provide users with information that directs them to nearby
bike shops and other locations where subscribers may purchase a helmet and shall display on the
System website where discounts are available and at Terminals.
2.7 Subscriber Communications. Upon request from MTC, Operator will send biking
related information announcements via electronic mail to all subscribers who do not “opt out’ of
receiving such emails.
3. Operations
3.1 Continuous Operation and Management. The System shall commence operating
on the Effective Date and shall remain in operation 24 hours per day, 365 days per year.
3.2 Inspection and Maintenance.
(1) Operator shall, at all times, follow and strictly comply with the
manufacturer’s requirements, warranties, and recommendations for assembly,
maintenance, storage and repair of all Equipment. Operator shall not be
obligated to purchase any replacement Equipment.
(2) Operator shall perform a maintenance check for each Bicycle once every two
calendar months consisting of the following checks, with deficient elements
repaired or replaced as necessary:
Check tire pressure, and add air as may be needed, to recommended Pounds
per Square Inch measurement;
Check tightness of handlebars, headset bearings, and full handlebar range of
motion (left to right);
Check tightness of seat, seat post quick-release, and see that seat post moves
freely in full range of motion (up and down);
Check brake function (front and rear);
Check grips for wear and brake levers for tightness and damage;
Check bell for tightness and correct function;
Check handlebar covers for damage and instruction stickers;
Check front basket for tightness and damage, and check bungee cord for
wear;
Check for correct gears and shifter function through all 5 gears;
Check fenders (front and rear) for damage, and clean outside of fenders;
Check tires (front and rear) for damage or wear;
Check wheels (front and rear) for trueness, broken or bent spokes and hub or
axle tightness;
Check LED lights (front and rear) for function;
203215669.16 A-1-4
Check reflectors on wheels, seat and basket, to ensure they are present, clean,
and undamaged;
Check pedals and cranks for tightness;
Lubricate and clean chain and check chain tensioner for correct function;
Check kickstand for correct function; and
Take brief test ride to ensure overall correct function of Bicycle.
(3) Operator shall clean each Station two times per month-- one time between the
first and fifteenth days of the month, and one time between the sixteenth and
last days of the month. Station cleaning shall consist of, at a minimum, litter
removal and, as needed, power washing of Docks, Terminal Platforms and
pavement.
(4) (a) Except as required by clause (b) below, Operator shall remove
conspicuous graffiti within 72 hours after Notification; and(b) Operator shall
remove racist and hate graffiti within 4 hours after Notification.
(5) Operator shall remove conspicuous accumulations of litter from Stations
within 24 hours after Notification.
(6) The System must be operational 100% of the time every month (i.e., every
hour of every day, 24 hours per day, 7 days per week, measured monthly), so
that, at a minimum, all System users can dock and undock Bicycles at all
times, excluding (i) scheduled downtime, and (ii) any period when the
Computer Hardware for the System and/or Software is, and remains,
damaged through Hacking. System functionality does not apply to hardware
malfunctions at individual Stations or to individual Stations that are not
Operable Stations.
(7) Stations, in the aggregate, must be Operable Stations 99% of the time every
month (i.e., every hour of every day, 24 hours per day, 7 days per week,
measured monthly), excluding (i) during scheduled downtime, and (ii) any
period when a Station is not an Operable Station because the Terminal or
other Equipment located at the Station has been damaged by third-parties.
Calculated by taking the sum of the number of hours that each Station was
Operable Station during a month, dividing that sum by the product of the
total number of hours in the month and the number of Stations that month.
Station Operability does not apply during any period in which the entire
System is down.
(8) The System website must be operational 100% of the time every year (i.e.,
every hour of every day, 24 hours per day, 7 days per week, measured
annually) excluding (i) scheduled downtime, and (ii) any period when the
Computer Hardware for the System and/or Software is, and remains,
damaged through Hacking.
In any circumstances where Operator is required to perform cleaning services under this
Continuation Agreement, Operator shall use the most environmentally friendly cleaning
solutions and chemicals available for these purposes.
3.3 Availability of Bicycles. Operator shall ensure that at least 90% of bicycles in the
Fleet are operational, on-the-street and available for public use. The number of available bicycles
will be recorded once each Day of the month between the hours of 11:00 AM and 3:00 PM.
203215669.16 A-1-5
3.4 Distribution of Bicycles. Operator shall re-distribute Bicycles among Sites and
place the Bicycles in operable Docks throughout the day from 6 am to 10 pm during each day of
operation. Such distribution shall be critically timed to increase the probability that each Site, at
all times, contains a sufficient number of empty Docks for Bicycles to be returned and occupied
Docks containing Bicycles available for subscribers. All Bicycles placed in operational Docks
shall be in acceptable operating condition. Operator shall ensure that, during any day, no Site has
all empty Docks or all full Docks for more than three hours between the hours of 6 am and 10
pm. If during any month the average usage of a Site is greater than 2.5 Trips per day per Dock
or less than 0.75 Trips per day per Dock, then this service level does not apply for such Site for
such month.
3.5 Operator’s Call Center. Operator shall provide to MTC, all subscribers, and the
public at large, a toll-free telephone number for Operator’s call center. The call center shall be in
continuous operation 24 hours per day, 7 days per week, and 365 days per year. Not less than
80% of telephone calls to Operator’s call center each month must be answered by a person
within 90 seconds or less. Operator shall conspicuously post a notice on each Station advising
the general public that they may direct their complaints and comments to Operator’s call center.
Operator shall ensure that the call center can handle calls in English, Spanish, Mandarin
and Cantonese, using operators fluent in those languages. The operators at the call center shall be
fully competent and knowledgeable to answer questions and provide information concerning,
among other things, subscription process, subscription prices, billing, Crashes, comments,
complaints, malfunction problems, location of Sites, directions to nearest Site that has Bicycles
available for use and/or available Docks for returns, directions to helmet sales location(s), and
instructions on how to fit a helmet. The call center manager shall be knowledgeable about all
service areas. The call center operators shall keep accurate and complete written records of each
such call in a Customer Service Log as hereinafter required, including the primary reason for
each call and the status of the call (e.g., “no further action”, “requires reimbursement”).
3.6 Email Response Time. Not less than 95% of emails to Operator’s public
information email address must be answered within 1 business day.
3.7 Comments and Complaints. Operator shall establish and maintain during the
Term prompt and efficient procedures for handling complaints from the public for which
Operator receives a Notification. Such procedures shall be consistent with all applicable laws,
rules and regulations and the provisions of this Section. Such procedures shall be set forth in
writing and copies thereof shall be maintained at Operator’s office and shall be available to the
public and the Pilot Cities upon request.
3.8 System Website. Operator shall create and maintain a System website the content
of which shall address, at a minimum, the following:
(1) Eligibility requirements;
(2) Subscription information and rate, schedules;
(3) Payment information and subscription processing;
(4) Method for subscribers to log in, update required information, and track
individual usage data compiled by the system;
203215669.16 A-1-6
(5) Subscriber Agreement and acceptance of terms;
(6) Map with the entire regional network of Sites and real-time availability of
Bicycles at each Site, both for a standard computer screen and mobile phone;
(7) Frequently Asked Questions;
(8) Safety requirements and information (including notification in the event of
malfunction or Crash);
(9) Encouragement of helmet use for subscribers and a listing of nearby locations
where users may purchase or lease helmets;
(10) Merchandise page;
(11) Permitted links to other Bay Area based bike programs and events;
(12) A listing of nearby bike rental shops, locations and contract information;
(13) Safety video (supplied by the Air District or others) addressing safe use of
bicycles, helmets, and California Vehicle Code and local laws pertaining to
bicycle riders; and
(14) A webpage that contains links to MTC- approved information (i.e. links to
partner websites and notices).
Operator, at all times, shall keep the website information updated, current, and accurate
on a regular basis.
3.9 Operator Staffing Levels. Operator, at all times, shall provide sufficient staff to
efficiently and promptly provide the services set forth in this Continuation Agreement.
3.10 Personnel and Staffing Requirements. Operator shall deliver to MTC copies of all
written personnel policies that, at a minimum, address employee conduct and qualifications.
3.11 Relocation, Resizing, and/or Reconfiguration of Stations.
(1) By Operator. In the event that Operator wishes to remove, relocate, resize,
and/or reconfigure any Station, other than those Stations whose locations are
fixed pursuant to the terms of a grant or sponsorship agreement, due to under-
utilization or lack of profitability, it must notify MTC in writing, providing
sufficient detail and description of the proposed relocation site and reasons
therefore, prior to removal. Assuming that MTC does not disapprove the
request within ten business days, Operator may remove, relocate, resize,
and/or reconfigure the Station consistent with Operator’s notice of same to
MTC and subject to local review and permitting requirements.
(2) By MTC. MTC shall provide Operator with 48 hours advance notice of any
relocation or reconfiguration of Stations to accommodate construction,
special events, or other reasons. The fee payable by MTC (or the applicable
Pilot City) to Operator for any such relocation or reconfiguration shall be
determined in accordance with Attachment A-4.
3.12 Interruption of Service.
(1) Intentional Interruption of Service. If, at any time, Operator intends, or is
required, to temporarily interrupt all or a portion of the service, for any
reason beyond Operator’s reasonable control, including, without limitation,
weather, safety, or other event or circumstance where continued service
203215669.16 A-1-7
would be unsafe, unavailable, impractical, or impossible , then Operator shall
contact MTC by telephone and by email at least 24 hours before the
interruption of service and specifically describe the reason, proposed
duration, Operator’s proposed actions to correct the cause of the interruption
(if possible), minimize the interruption, and Operator’s plans to resume
service.
Operator promptly shall notify the subscribers of the cause and expected duration of the
proposed interruption of service by posting notice on the website, via email, and Terminals
(electronic message).
(2) Unintentional Interruption of Service. If, at any time, a System malfunction
or an event or circumstance occurs where continuous service would be unsafe
or unavailable for reasons beyond Operator’s reasonable control, and this
causes or will cause a temporary interruption of service, then Operator shall
immediately contact MTC by telephone and by email and specifically
describe the reason, estimated duration, Operator’s proposed actions to
correct the cause of the interruption (if possible), efforts to minimize the
interruption, and Operator’s plans to resume service.
Operator promptly shall notify the subscribers of the cause and expected duration of the
interruption of service by posting notice on the website, via email, and Terminals (electronic
message).
In the case of both Intentional and Unintentional Interruptions of Service, Operator shall
be obligated to perform all necessary and appropriate acts to restart the service as soon as
possible.
3.13 Safety Training: On at least a quarterly basis, Operator shall provide safety
training on proper use of bicycles and applicable rules and regulations of the road to current
and/or potential users in each city.
203215669.16 A-2-1
Attachment A-2, Subscriber Related Fees
1. Annual and Monthly Subscription and Usage Fees
a) Annual Subscription Fee - One-time payment of $88
b) Annual and Monthly Subscription Usage Fees:
i. No charge for up to 30 minute use of a Bicycle per session,
ii. $4.00 for 31-60 minutes,
iii. $7.00 for each additional 30 minutes
A usage fee will be tracked and charged to credit accounts within one hour (or based on
normal credit card operating procedures) of any occurrence of continuous usage exceeding
thirty (30) minutes.
c) Annual Memberships may be purchased at a discounted rate for promotional purposes
and may be purchased in bulk at a discounted rate
2. Other Subscription and Usage Fees
a) Short-term Subscription Fees
i. Three day Subscription fee - $22,
ii. One day Subscription fee - $9
b) Other Subscription Usage Fee:
a. No charge for up to 30 minute use of a Bicycle per session,
b. $4.00 for 31-60 minutes,
c. $7.00 for each additional 30 minutes
A usage fee will be charged to credit accounts at the time any continuous usage exceeding
30 minutes is determined.
3. Bicycle Loss Fee - $1,200.
4. Operator reserves the right, in its sole discretion, to increase or decrease the fees
under 2(a) and 2(b) above.
203215669.16 A-3-1
Attachment A-3, New Subscriber-Related Fees
1. General. At Operator’s election, after June 30, 2016, Membership Fees and
Initial Ride Periods shall be consistent with Section 2, the Membership Fee for users eligible for
the affordability subscription specified in Section 3 shall be as described in said Section 3, the
maximum Bicycle usage charge shall be consistent with Section 4 and the fees for damaged, lost,
stolen or otherwise unreturned Bicycles shall be consistent with Section 5 initially charged by
Operator shall be consistent with this Section. A “Membership Fee” is an amount that entitles
the purchaser of the membership (a “member”, for the period of such purchased membership) to
check out (as defined below) one or more Bicycle(s) at a time, for the length of time described
below, provided that the member shall be charged a usage fee associated with the time period the
Bicycle is checked out beyond the Initial Ride Period. A Bicycle is “checked out” for the period
from the time it is removed from a Dock to the time it is returned to a Dock. A member may
check out and return a Bicycle from or to any Dock at any Station in the System, for an unlimited
number of times, at any time during the period of the member’s membership, with the usage fee
applicable to each such checkout and return sequence being calculated separately (so, for
example, an annual member may, within the member’s membership period, check out a Bicycle
and return it within the first 30 minutes after checkout, and then subsequently check out a
Bicycle and return that Bicycle with the first 30 minutes after that checkout, without incurring
any usage fee for either checkout period).
2. Membership Fees, New Ridership Programs/Arrangements, and Initial Ride
Periods:
2.1 Operator shall offer an annual membership (“Annual Membership”)
for a fee (the “Annual Membership Fee”) in an amount not to exceed the Annual Membership
Fee Cap in effect from time to time. The Annual Membership Fee Cap shall be $149 for a one-
year period. The period of an Annual Membership shall run from the day the annual
membership is activated until the first anniversary of the date on which the Annual Membership
had been activated (but a membership purchased on February 29 shall expire on March 1 of the
following year). At the end of the Term, each member can elect whether to roll his or her
Annual Membership into the BABS Program. Such election can be made by contacting the call
center. If a member elects not to roll into the BABS Program, then if the Annual Membership
Fee has been paid in advance for a full 12 months, the prorated amount for the portion of an
Annual Membership period that is beyond the Term shall be reimbursed to or credited to the
credit card account of the Annual Member;
2.2 Annual Memberships may be paid in 12 equal monthly instalments at
a price not greater than 120% of the Annual Membership Fee;
2.3 All memberships will include a free period of usage (the “Initial Ride
Period”), which is the length of time at the beginning of each individual Trip to which additional
usage fees will not be applied. For Annual Memberships and Affordability Memberships, the
Initial Ride Period is 30 Minutes. Usage fees will be applied to all Trips that exceed the Initial
Ride Period; and
203215669.16 A-3-2
2.4 For monthly, weekly and daily memberships, and for usage of the
System by non-members, Operator will determine the applicable fees, usage fees, and periods of
use for members beyond the Initial Ride Period in its sole discretion.
2.5 Nothing in the foregoing shall limit the right of Operator to offer
premium memberships featuring an Initial Rider Period longer than 30 minutes for an Annual
Membership Fee greater than $149.
3. Affordability Option:
3.1 Notwithstanding the permitted rate for an Annual Membership set
forth in set forth in Section 2.2.1, Operator shall charge those eligible for an “affordability
subscription” no more than $60 per annum (excluding sales tax) as the Annual Membership Fee,
or $5.00 per month for a 12-month membership.
3.2 Persons who were entitled to affordability memberships under the
Pilot Program shall be entitled to affordability memberships for the System. Members of
households enrolled in the Utility Lifeline Programs (also known as California Alternative Rates
for Energy (CARE)) available in the MTC Area are also eligible for affordability memberships.
Within 10 days following the Effective Date, Operator shall propose, for MTC’s review and
approval, procedures for verifying enrollment in CARE. In San Francisco, those who meet Muni
Lifeline income requirements as determined by the City of San Francisco’s Human Services
Agency are also eligible for the affordability membership. Upon mutual agreement of the
Parties, eligibility may expand to include other categories of persons so long as the eligibility is
determined by third parties.
3.3 Members enrolling through the affordability program shall be entitled
to the same rights and privileges as all other Annual Membership holders.
3.4 The usage fees for affordability members shall not exceed the rate
charged to general annual members.
4. The checkout period for the purposes of calculating usage fees shall always
commence with the time a Bicycle is actually removed from a Dock, and it shall not be based on
the time of insertion of a payment or identification card.
5. The maximum Bicycle usage charge initially charged with respect to any
member shall be $100 per 24 hour period, not including charges for damaged, lost, stolen or
otherwise unreturned Bicycles.
6. Fees for damaged, lost or otherwise unreturned Bicycles initially charged shall
be (i) $1,200, if not returned, or (ii) if returned, the sum of all direct costs of the repair, including
all labor and parts, as determined by Operator in its reasonable discretion, plus a 10%
administrative fee; provided, however, that the fees charged to affordability members for
unreturned or damaged Bicycles shall be not more than 33% of the fees set forth in the preceding
clauses (i) and (ii). Notwithstanding the foregoing, Operator shall waive such fees for stolen
Bicycles or Bicycles that are damaged in connection with a crime against the rider or in a
collision with a motor vehicle, so long as an appropriate police report is filed for the incident.
203215669.16 A-3-3
7. Operator shall at all times post on all Stations and on Operator’s website a
complete and up-to-date fee description that sets forth each and every current membership and
usage fee offered by Operator, the methods of purchasing memberships and paying fees,
available discounts on such fees, the applicability and terms of such discounts and, to the extent
applicable, how to apply for or qualify for such discounts, and fees associated with damaged,
lost, stolen or otherwise unreturned Bicycles. Operator shall furnish written copies of such
material to the public upon request.
8. Operator shall accept credit card and debit card payments online and at all
Stations but in the case of debit cards only those that have a Visa or Mastercard logo on them.
Operator may employ such other methods of payment as it may determine.
9. All required state sales and use taxes with respect to membership and usage
fees shall be collected and paid by Operator, as required by applicable law.
10. Operator shall be permitted to create System pricing discount programs,
which may be targeted in connection with marketing and outreach efforts, and in connection with
Sponsorship or Advertising programs, to expand or enable System use among different
communities or for other lawful purposes.
11. At any time and from time to time, Operator shall have the right:
11.1 To adjust the amount of the Annual Membership Fee specified in
Section 2 downwards at any time and upwards on each anniversary of the Effective Date by an
amount not to exceed the Annual Membership Fee Cap then in effect;
11. 2 To adjust in its sole discretion all other fees, time periods and
charges specified hereunder other than those fees, time periods and charges specified in Section
2 and Section 3; and
11.3 To adjust upward the duration of the Initial Ride Period.
203215669.16 A-4-1
ATTACHMENT A-4 FEE SCHEDULE FOR
STATION DEACTIVATION, DE-INSTALLATION AND ADJUSTMENT
As stated in Section 3.11(2) of Attachment A-1 of this Continuation Agreement, the following is the fee
schedule for Station Deactivation, De-Installation, and Adjustments (each as defined below). (Capitalized
terms used but not otherwise defined herein shall be defined as provided below.))
Section 1: For Public Works, Other Special Events and Public Safety Emergencies there is no charge to
the Pilot City. In addition, for each Pilot City, there is no charge for the first 2 Discretionary Requests
by the Pilot City.
Section 2: For (a) Private property owners or contractors doing private construction on public or
private property, (b) event producers or organizers of For Profit and Political Special Events, and (c)
Discretionary Requests by a Pilot City after the first 2 Discretionary Requests by the Pilot City, the
following fee schedule applies:
1. Deactivation: Station is deactivated but not removed; Bicycles are removed and cannot be
returned by customers:
$500/Station + $10/Dock/day of Deactivation. (Each of the foregoing amounts is subject to CPI
Adjustment.)
2. De-installation and Reinstallation: Station is completely removed from the location and returned
to same location:
$1,000/Station + $20/Dock + $10/Dock/day of Deactivation. (Each of the foregoing amounts is
subject to CPI Adjustment.)
3. Adjustment: Property owners and utilities may seek permanent or temporary changes to a
Station’s size or configuration, and changes to Street Treatments and Street Markings as
necessitated by such, without changes to the Station location:
$1,000/Station + $20/Dock that is adjusted. (Each of the foregoing amounts is subject to CPI
Adjustment.)
4. Temporary Relocation Followed by Reinstallation: Property owners and utilities who need to De-
install or Deactivate a Station for a period greater than 15 business days must pay for the
temporary relocation of the Station during the event or construction, which allows for
continuous operation of the Station, and must also pay for the reinstallation of the Station at
the original location after completion of the event or construction:
203215669.16 A-4-2
$5,000/Station + $40/Dock. (Each of the foregoing amounts is subject to CPI Adjustment.)
Defined Terms:
“Adjustment” shall mean permanent or temporary changes to a Station’s size or configuration,
and changes to Street Treatments and Street Markings as necessitated by such, without changes
to the Station location.
“CPI” shall mean the Consumer Price Index for the Consolidated Metropolitan Statistical Area
covering San Francisco-Oakland-San Jose, as measured by the Consumer Price Index for All
Urban Consumers, as published from time to time by the Bureau of Labor Statistics, U.S.
Department of Labor.
“CPI Adjustment” shall mean, with respect to a specific cost, that such cost is subject to annual
adjustment each January 1 based on changes in the CPI from the Effective Date to the date of
adjustment.
“Deactivation” shall mean, at a minimum, shut-down of Terminal (or display of messaging on a
Terminal screen indicating that Station is out of service) removal of all Bicycles present,
installation of physical barriers on all Docks that prevent docking of Bicycles, and designation of
the Station as “Out of Service” on the System website, app, and all other real-time data sources.
A Deactivation event is not over until the Station has been reactivated.
“De-Installation” shall mean, at a minimum, (i) the temporary or permanent full removal of the
Station and its associated Street Treatments, and, (ii) the designation of the Station as “Out of
Service” on, or removal of the Station from, the System website, app, and all other real-time
data sources.
“Discretionary Request” shall mean any De-Installation and/or Re-Installation or Station
Adjustment requested by the Pilot City that is not related to Public Works, Other Special Events,
or Public Safety Emergencies.
“For Profit and Political Special Events” shall mean temporary events permitted by the Pilot City
that (i) have entry fees for participation (e.g., road races, cycling tours); or (ii) have the purpose
of selling products (e.g., street fairs, food festivals, holiday fairs, film festivals, film shoots); or
(iii) have a title sponsor; or (iv) are political events.
“Other Special Events” shall mean temporary events permitted by the Pilot City other than For
Profit and Political Special Events (e.g., heritage or cultural parades).
“Public Safety Emergency” shall mean an instance when (i) Equipment is damaged or in an
unsafe state so as to cause an immediate danger to the public; or (ii) circumstances or situations
203215669.16 A-4-3
immediately surrounding Equipment create an imminent danger to the public; or (iii) the area
around a Station becomes unsafe or is required by police department or other emergency
responders of a Pilot City in order to respond to a natural disaster or avoid a calamity.
“Public Works” shall mean all instances where a Pilot City (including a utility owned by a Pilot
City) or its contractors (including any private contractors hired by a Pilot City) are undertaking
construction, maintenance, repairs or other public improvements.
“Street Marking(s)” shall mean thermoplastic paint markings and/or striping on the pavement
for the express purpose of demarcating a Station.
“Street Treatments” shall mean the three-dimensional objects used to demarcate the Station,
and protect it from adjacent parking and moving traffic. Such objects may include, but are not
limited to, delineators and wheel stops.
1
Motivate-Palo Alto Term Sheet
August 22, 2016
This term sheet is intended to be used to facilitate discussions between Palo Alto (“PA”)
and Motivate International Inc (“Motivate”) in order to develop a contract for the
operation of a bike share system that is interoperable with the Bay Area System.
Contract Topic Contract Terms
Responsibility for
Capital Costs
The City of Palo Alto will purchase the equipment and
provide Motivate with the right to use the equipment for
operations of the bike share system. Motivate will be
responsible for maintaining and returning the equipment in a
state of good repair at the end of the contract term.
System Size The City of Palo Alto will initially purchase up to 350 smart-
bikes for use in the system. Additional expansion phases to
be determined in Palo Alto’s discretion.
Launch Date Anticipated launch date Spring 2017, contingent on site
approvals, equipment funding and delivery of equipment
Supply Agreement In order to create a coordinated and accountable supplier
relationship, Motivate will hold a supply agreement with
Social Bicycles to govern terms such as software fees
(which are paid by Motivate), warranties, spare parts
purchasing, service level agreements, and customer
support.
Term 5-year term with two additional three year renewal terms
upon mutual agreement of Palo Alto and Motivate.
Operating Fees Motivate will cover the operating costs of the first 350 bikes.
Additional bikes will be charged to Palo Alto at the cost of
$100 per bike per month, subject to CPI Adjustment.
Sponsorship Motivate will have the exclusive right to sell title and
secondary sponsorship for the system and receive related
revenues.
Assets that may include sponsorship recognition include the
bikes, kiosks, racks, ad panels, mobile app and docks.
2
Local Station
Sponsorships
Palo Alto may fund the costs of capital or operations of
expansion bikes through selling local station sponsorships
Sponsors secured by Palo Alto may be recognized on each
station by receiving one sponsorship panel on each station
that is sponsored locally.
Palo Alto may not sell naming rights or the bike branding to
station sponsors. These assets will remain consistent with
the broader Bay Area system as part of the title sponsorship
package, which will help financially support the Palo Alto
system and reduce the need for subsidy.
Allocation of Revenue Motivate will keep all title sponsorship, secondary
sponsorship and user revenue generated by the system.
Palo Alto will keep all funds raised through local station
sponsorships.
Pricing Annual pricing for the program will match the pricing of the
broader program with the MTC and provide access to the
bike share program in San Jose, San Francisco, Oakland,
Emeryville, and Berkeley :
● $149 annual pass that can be increased no more
than CPI + 2% annually.
● Annual pass can be paid in 12-monthly installments
of no more than $15.00
● Pricing for other product types (e.g., day passes,
single rides) will be set at Motivate’s discretion
Siting and installation Motivate to develop site locations in conjunction and with
approval the city. Sites that maximize demand will be
prioritized.
Motivate will work together with Palo Alto on community
engagement and outreach as part of the station siting
process, including necessary business associations and city
meetings.
Motivate will hire planning and engineering firms to develop
drawings and submit permits.
Palo Alto to waive permit costs.
3
Palo Alto will reimburse Motivate $4,000 per station for the
cost to develop site plans, conduct community outreach,
and install the station and related street treatments.
Interoperability Bike share customers will be able to sign up for the Palo
Alto and the MTC system through a single registration
process. Bike share members will be able to use a single
key to access bikes. Motivate will work with the MTC to
allow for the Clipper Card to be used to access bikes
across the regional system.
Brand Development
and Sponsorship
Motivate will secure the title sponsor and develop
system name, color, and logo. MTC has approval
rights over title sponsorship and branding.
The sponsor is not in a category that is age-
restricted (alcohol, tobacco or firearms), products
banned by the local government, or deemed
offensive to the general public.
PCI Compliance System shall be compliant with the most recent version of
the Payment Card Industry Data Security Standard (“PCI-
DSS”). Supplier will maintain a full, current, up-to-date Level
2 PCI certification as demonstrated by an Attestation of
Compliance.
Exclusivity During the Term of this Agreement, Motivate shall have the
exclusive right to operate a public bike sharing program in
Palo Alto, as defined in the executed contract.
Regional Cities Opt-in Other cities can opt in to join the system on similar terms
to Palo Alto. Municipalities must fund the equipment costs.
Motivate will determine by October 31, 2016 whether it will
retain the right to sell physical sponsorship assets
including the bikes, racks, kiosks, and ad panels. If
Motivate retains these assets for sale, Motivate will be
responsible for operations costs for up to 350 bikes in each
municipality. For bikes above 350, the cost to the
municipality will be $100 per bike per month.
If Motivate waives its right to sell sponsorship on the
physical system, the local municipality can sell
sponsorship on the physical system including the bikes,
racks, kiosks, and ad panels. The cost for operations to the
4
municipality will be $100 per bike per month.
Since the bike share system is interoperable with the
broader regional system, naming rights and the mobile app
will be branded with the larger system name and are not
available for branding by the local municipality.
SUMMARY
(in United States dollars)
Description Cost
Bicycles (350 Smart Bicycles)596,750$
Infrastructure (665 Docking Points, 35 Stations, 0 Kiosks)333,025$
Program Setup 25,000$
Transport and Customs 66,028$
TOTAL UP-FRONT ONE-TIME COST 1,020,803$
Total
Total Turn Key Operations (per month)5,300$
TOTAL MONTHLY ONGOING SERVICES COST 5,300$
* Cost proposal assumes Social Bicycles is the system operator
MONTHLY ONGOING SERVICES
BICYCLES
(in United States dollars)
SMART BICYCLES Quantity Price Total
B.1 V3.5 Smart Bicycle 350 1,500$ 525,000$
B.2 replacement parts and custom tools 350 100$ 35,000$
B.3 exterior basket printed assets and design template 350 15$ 5,250$
B.4 interior basket printed assets and design template 350 15$ 5,250$
B.5 upgrade to skirt guard - 45$ -$
B.6 skirt guard printed assets and design template - 20$ -$
B.7 upgrade to eight-speed hub with shaft drive transmission 350 75$ 26,250$
custom paint and decals (Pantone color palette)included
onboard real-time GPS and accelerometer tracking included
onboard GSM cellular connection included
integrated keypad, LCD screen, and RFID technology included
solar and dynamo power generators included
TOTAL SMART BICYCLES COST 596,750$
STATIONS
(in United States dollars)
DOCKING POINTS Quantity Price Total
D.1 "Wave" Docking Point 665 400$ 266,000$
D.2 dock printed assets and design template 665 35$ 23,275$
base plate with high durability coating included
base plate connectors, end caps, and security bolts included
TOTAL DOCKING POINTS COST 289,275$
94250
PAYMENT STRUCTURES Quantity Price Total
P.1 Outdoor Payment Kiosk - 10,000$ -$
custom paint and decals (RAL color palette)included
payment terminal with credit card reader included
RFID access card dispenser and reader included
color LCD touch screen interface included
solar and battery power generators included
base plate with high durability coating included
base plate connectors, end caps, and security bolts included
P.2 Indoor Tablet Kiosk - 1,750$ -$
custom decals and design template included
payment terminal with credit card reader included
color LCD touch screen interface included
mounting stand and hardware included
TOTAL PAYMENT STRUCTURES COST -$
INFORMATION STRUCTURES Quantity Price Total
I.1 Large Advertisement and Info Panel - 2,750$ -$
two-sided panel (72" x 30" printable area per side)included
printed assets and design template included
base plate with high durability coating included
base plate connectors, end caps, and security bolts included
I.2 Compact Advertisement and Info Panel 35 1,250$ 43,750$
two-sided panel (43" x 11" printable area)included
printed assets and design template included
base plate with high durability coating included
base plate connectors, end caps, and security bolts included
TOTAL INFORMATION STRUCTURES COST 43,750$
SERVICES
(in United States dollars)
PROGRAM SETUP Quantity Price Total
S.1 Implementation Services (including expenses)25,000$
S.2 Website Landing Page Design - 10,000$ -$
S.3 Brand and Logo Design - 5,000$ -$
S.4 RFID Access Cards - 1$ -$
S.5 Printed Map and Ad Assets Design (per station)- 500$ -$
S.6 Site Design and Planning Services (per station)- 1,000$ -$
TOTAL PROGRAM SETUP COST 25,000$
TRANSPORT AND CUSTOMS Quantity Price Total
T.1 Bicycle Freight and Customs 51,228$
T.2 Infrastructure Freight and Customs 13,800$
T.3 Accessories Freight and Customs 1,000$
TOTAL TRANSPORT AND CUSTOMS COST 66,028$
OPERATIONS
(in United States dollars)
MONTHLY ONGOING SERVICES Quantity Price Total
M.1 Bicycle Connectivity 350 8$ 2,800$
M.2 Kiosk Connectivity (per kiosk fee) (per month)- 50$ -$
M.3 Software Services (flat fee) (per month)1 2,500$ 2,500$
M.4 Branded Mobile App (per app fee) (per month)- 500$ -$
TOTAL MONTHLY ONGOING SERVICES COST 5,300$
Social Bicycles
Hardware Overview
CONFIDENTIAL
Page 2 www.socialbicycles.com
SOCIAL BICYCLES SOCIAL BICYCLES
INTEGRATED LOCK
Each bicycle is equipped with
a robust integrated lock that
works with regular bicycle
parking racks. The bicycle can
be reserved and accessed by
web, mobile, an RFID card, or
simply by entering an account
number and PIN on the bike
keypad interface.
REAL-TIME GPS
Each Social Bicycle is
equipped with wireless
connectivity and real-time
GPS. Unlike other systems, our
real-time active GPS is a theft
deterrent, a data-gathering
technology, and a tool for
locating missing or stolen
bikes.
HOLD FUNCTION
Social Bicycles feature a
‘hold’ function that allows the
user to park a bike during
the trip while maintaining the
reservation on the bike. To
pause the rental, users simply
press the “hold” button and
lock the bike to a regular bike
parking rack. This innovation
improves security and user-
experience.
REPAIR FUNCTION
Social Bicycles feature a ‘repair’
function that allows the user
to report a maintenance issue
directly on the keypad interface
on the bike. If an issue occurs,
the user simply pushes the
‘repair’ button, selects the issue
type, and locks the bike.
The operator will receive an
instant alert about the issue.
Hardware: Bike
*All components secured
with custom screws
Front basket
with ad panel
Front lights
Full fenders
Puncture-resis-
tant Kevlar tires Chainless shaft-drive transmission Kickstand Three or eight-speed
internally geared hubs
Sponsorship and
branding space
Comfort seat
Rust and corrosion resistant
aluminium frame with
stainless steel components
Reliable and
intuitive braking
Grip bell
Step-through
frame
Hub brakes
Real-Time GPS/Accelerometer
LCD Screen and Keypad
Solar and Rider Powered
RFID/NFC Reader
Integrated Rear Lighting
SOCIAL BICYCLESSOCIAL BICYCLES
Page 3www.socialbicycles.com
CONFIDENTIAL
Specifications:
68 inches
Length
23 inches
Width
44 inches
Height
Dimensions:
Frame - Aluminum
Rear Hub - Shimano Nexus internal 3 or 8 speed
Drivetrain - Chainless shaft-drive
Pedals - Aluminum w/ rubber grip
Brakes - Front & rear hub/drum brakes
Wheels/Tires - 26” x 1.75” Kevlar puncture-resistant
Kenda w/ reflective sidewalls
Front Light - LED white
Rear Light - LED red w/ reflector
Seat / Post - Adjustable quick release w/ comfort seat,
indexed sizing guides, security fasteners
Bell - Grip bell
Power - Solar panel, dynamo generator,
battery pack, dual capacitors
Display - LCD screen and keypad
Basket - Aluminum basket w/ ad panel mounting
Fenders - Full coverage, optional skirt guard available
Features:
- Integrated lock and GPS tracking
- Wireless connectivity
- RFID/NFC Reader (optional BLE)
- Rear LCD display
- Step through frame
- Shaft drive
- Sponsorship and branding space
- Integrated automatic front and rear lights
- Integrated basket
The Social Bicycle ‘smart bike’ has wireless connectivity and an integrated
GPS-equipped locking mechanism embedded on a classic Dutch-frame bike.
Hardware: Bike
Bike is designed by Social Bicycles, manufactured in China
45 lbs
Weight
CONFIDENTIAL
Page 4 www.socialbicycles.com
SOCIAL BICYCLES SOCIAL BICYCLES
Select Health & St. Lukes (title sponsor - branding on bikes & stations)
Florida Hospital - Station BrandingWebpt sponsorship
American Express Bike Branding
Nike (title sponsor branding on bikes & stations)
Hulu (presenting sponsor branding on bikes)
Hardware: Branding
SOCIAL BICYCLESSOCIAL BICYCLES
Page 5www.socialbicycles.com
CONFIDENTIAL
Social Bicycles offers custom racks, manufactured with
durable powder-coated steel, which require no wiring
or electronics. This manufacturing process increases
robustness and reduces the cost of stations.
The docking points can be equipped with an optional
RF beacon to provide physical return detection. When
the bike is locked at the station, the bike ID and station
ID are matched and sent to the server to indicate a
successful return to the station.
Racks provide significant branding real-estate,
delivering a cohesive feel to the program. We offer a
Curved Rack and Square Rack to fit the needs of each
program.
Specifications:
Material -
Finish -
29.50 inch
Length
27.40 inch
Width
1.26 inch
Height
Base Plate Dimensions:
Steel
Corrosion resistant powder coat
Features:
- Large surface for advertising
- Mounting pattern allows for multiple rack
configurations
- Fast and easy installation (see assembly
specification)
- Optional RF Beacon
BIKE SIDE VIEW SIDE VIEW TOP VIEW
Bike Rack designed by Social Bicycles, manufactured in US
.38 STEEL
27.25
19.10
4.00
18.00
BIKE SIDE VIEW SIDE VIEW TOP VIEW
18.00 inch
Length
19.10 inch
Width
27.25 inch
Height
Rack Dimensions:
1.26 .25
29.50
27.40
1.26 .25
29.50
27.40
Hardware: Docks
CONFIDENTIAL
Page 6 www.socialbicycles.com
SOCIAL BICYCLES SOCIAL BICYCLES
Hardware: Large Signs
The large information panel provides a 58” by 30”
double-sided display for station information, maps,
way-finding and safety tips, and advertiser or sponsor
branding opportunities.
The poster is replaceable, and the panel can be
standalone or integrated into the kiosk.
This modularity increases installation options.
Material -
Finish -
Visual Asset -
29.79 inch
Length
4 .00 inch
Width
72.33 inch
Height
Dimensions:
Steel
Corrosion resistant powder coat
3mm Aluminum Composite Ma-
terial with Vinyl
58.00
13.98
29.79
.40
29.79
FRONT / BACK
72.33
4.00
SIDE
4.00
7.50
mounting holes for baseto be bolted into base plate
TOP VIEW
Specifications:
Features:
- Large surface for advertising
- Mounting pattern allows for multiple configurations
- Fast and easy installation (see assembly specification)
FRONT / BACK SIDE VIEW
Sign structure designed by Social Bicycles, manufactured in US
58.00
13.98
29.79
.40
29.79
FRONT / BACK
72.33
4.00
SIDE
4.00
7.50
mounting holes for baseto be bolted into base plate
TOP VIEWTOP VIEW
SOCIAL BICYCLESSOCIAL BICYCLES
Page 7www.socialbicycles.com
CONFIDENTIAL
Hardware: Compact Signs
29.00
43.00 40.00
11.50
4.00 2.50
FRONT(FACING OUTSIDE)
TOP VIEW
BACK(FACING INSIDE)
4.00
SIDE
Specifications:
Material -
Finish -
Visual Asset -
11.50 inch
Length
2.50/4.00 inch
Width
72 inch
Height
Dimensions:
Steel
Corrosion resistant powder coat
3mm Aluminum Composite
Material with Vinyl
Features:
- Banner-like surface for advertising
- Mounting pattern allows for multiple configurations
- Fast and easy installation (see assembly
specification)
The compact information panel provides a 43” by 11”
double-sided display on the metal sign surface.
The compact sign is ideal for smaller station locations
or for more cost-effective information display.
Bike Rack designed by Social Bicycles, manufactured in US
29.00
43.00 40.00
11.50
4.00 2.50
FRONT
(FACING OUTSIDE)
TOP VIEW
BACK
(FACING INSIDE)
4.00
SIDE
FRONT / BACK SIDE TOP VIEW
CONFIDENTIAL
Page 8 www.socialbicycles.com
SOCIAL BICYCLES SOCIAL BICYCLES
Hardware: Kiosks
Kiosks are optional with the Social Bicycles system
and can be installed on a case-by-case basis only at
high-traffic stations to reduce cost. The Social Bicycles
kiosk is a POS system for SoBi memberships. The
kiosk also features an RFID dispenser that dispenses
membership cards as well as an RFID reader that allows
members to sync transit cards to their SoBi account.
The kiosk features a touch-screen and accepts all
major international credit/debit cards. Kiosks are solar
powered with backup batteries and are modular to
provide multiple installation options. Kiosks can be
standalone or adjacent to information panels.
Specifications:
Material -
Finish -
Visual Asset -
16.50 inches
Length
19.00 inches
Width
78.00 inches
Height
Dimensions:
Steel
Powder Coat
Vinyl
Features:
- Helmet dispenser
- Credit card reader
- 12 inch screen
- RFID dispenser
- RFID reader
- PCI certified
- Solar powered
8
0
.
0
0
4
2
.
0
0
20.00 28.00
2
8
.
0
0
20.00
Sign structure designed by Social Bicycles, manufactured in US
8
0
.
0
0
4
2
.
0
0
20.00 28.00
2
8
.
0
0
20.00
8
0
.
0
0
4
2
.
0
0
20.00 28.00
2
8
.
0
0
20.00
FRONT / BACK SIDE TOP VIEW
SOCIAL BICYCLESSOCIAL BICYCLES
Page 9www.socialbicycles.com
CONFIDENTIAL
Hardware: Station Examples
STATION WITH KIOSK
STATION WITH LARGE SIGN PANEL
STATION WITH KIOSK + LARGE SIGN PANEL STATION WITH COMPACT SIGN PANEL