C2C - Circulator Services Contract

Procurement Requests - C2 C

C2 C A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE, AT ITS OCTOBER 15, 2025 MEETING, AND APPROVING, IN SUBSTANTIAL FORM, AN AGREEMENT BETWEEN THE CITY AND LIMOUSINES OF SOUTH FLORIDA, INC. PURSUANT TO INVITATION TO NEGOTIATE (ITN) 2024-008-ND FOR MUNICIPAL CIRCULATOR SERVICES; FURTHER, AUTHORIZING THE CITY MANAGER TO FINALIZE THE AGREEMENT; AND FURTHER, AUTHORIZING THE CITY MANAGER AND CITY CLERK TO EXECUTE THE AGREEMENT. (TRANSPORTATION AND MOBILITY) Applicable Area:

COMMISSION MEMORANDUM

RECOMMENDATION

The City Administration (“Administration”) recommends that the Mayor and City Commission (“City Commission”) adopt the Resolution.

While the Administration recommends a 40-foot Gillig Trolley with dual doors and maintaining the Current Service Level (operating 15 hours daily from 8 a.m. to 11 p.m., 7 days per week), the Administration supports the following recommendations from the Finance and Economic Resiliency Committee (“FERC” or “Committee”) to reduce the annual operating cost of the Municipal Circulator Services from $14.7M to $12.6M given the current budget constraints in the Transportation Fund:

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Vehicle Type: Proceed with a Gillig Bus rather than a Gillig Trolley; Service Hours: Reduce service from 15 hours daily (8 a.m. to 11 p.m., 7 days per week) to 12 hours daily (8:00 a.m. to 8:00 p.m.), focusing on commuter demand; Spare Vehicles: Purchase only two (2) new spares while refurbishing three (3) vehicles from the City’s current trolley fleet; and Vehicle Size: Purchase 30-foot vehicles for the South Beach Loops A and B, Mid Beach Loop, and North Beach Loop, and 40-foot vehicles for the Collins Express (route with the highest ridership demand).

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Should additional funding be identified in the future, the Administration will prioritize increasing the service hours and acquiring additional vehicles to increase service frequency (i.e. reduce headways) and provide the highest level of reliable circulator service feasible within the available budget.

As such, the Administration recommends that the City Commission adopt the Resolution approving, in substantial form, the material terms of an agreement with Limousines of South Florida (“LSF”) pursuant to ITN 2024-008-ND for Municipal Circulator Services (“Agreement”), and furthermore, authorizing the City Manager to execute the Agreement (Attachment A).

This solicitation is currently under the Cone of Silence.

BACKGROUND/HISTORY

At the April 30, 2014 City Commission meeting, the City Commission approved the award of a contract, pursuant to Invitation to Bid (“ITB”) 2014-154-SR, to LSF for turnkey trolley operations and maintenance services. The original scope of work consisted of a fixed-route/fixed-schedule public transportation service to enhance mobility in the North Beach area of the City of Miami Beach (“City”). During the contract term, the scope of work was modified to include three (3) additional routes (Collins Express, Middle Beach Loop, and South Beach Loops). In addition, the scope of work was modified to include optional technology equipment, including, but not limited to, automated audio/visual stop announcement equipment and TV monitors with the capability of displaying public advertisements.

Since 2014, the City has had a turnkey contract with LSF for the operation, management, and maintenance of a fixed route/fixed schedule public transportation system consisting of Classic American trolley vehicles. Pursuant to the current contract, LSF provides the vehicles, drivers, fuel, maintenance, repairs, and insurances required for the provision of the services.

Since its inception, the Miami Beach Trolley service has been and continues to be one of the most, if not the most, successful municipal circulator services in Miami-Dade County, with an annual ridership of approximately five (5) million passengers prior to the COVID pandemic and currently approximately 3.5 million passengers annually. In 2018, the Miami Beach Trolley service was rated the only 4-star (highest ranking) circulator service in Miami-Dade County by the Transit Alliance, a non-profit organization advocating for walkable streets, bikeable neighborhoods, and better public transit.

The City’s current fleet consists of 33 Hometown Trolley vehicles (12 low-floor vehicles and 21 high-floor vehicles), including spare vehicles. Prior to COVID, the City operated 25 vehicles for 18 hours daily (6 a.m. – midnight), Monday-Sunday, year-round. The average frequency of service or headway (i.e. passenger wait times) was approximately 15 minutes on all four (4) loops. Since 2022, the City has operated a reduced level of service (“Current Service Level”) which consists of 21 trolley vehicles (8 low-floor trolleys and 13 high-floor trolleys) in service for 15 hours daily (from 8 a.m. to 11 p.m.), seven (7) days a week, year- round. The Current Service Level has resulted in an average service frequency (headways) of approximately 20 minutes.

In advance of the LSF contract expiring on August 19, 2023, the Administration brought an item to the March 27, 2023 City Commission meeting for the approval to issue Invitation to Negotiate (“ITN”) 2023-198-ND for Municipal Circulator Services. The City Commission did not approve the ITN and instead directed the Administration to issue a Request for Information (“RFI”) and to bring back an item to the April 28, 2023 City Commission meeting to extend the current contract with LSF until a future solicitation process is completed. On April 28, 2023, the City Commission authorized a month-to-month extension of the current contract with LSF until a new contract is executed and all services have transitioned.

The RFI was released on May 8, 2023 and closed on June 20, 2023. The RFI aimed to gather information from vendors of smaller alternative electric vehicles, focusing on innovative technology in the transportation industry. The City received five (5) responses as follows:

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Motiv provided information on low-floor, electric Hometown Trolleys. LSF provided information on low-floor, electric/diesel Hometown Trolleys and micro-transit vehicles, including Tesla Model 3, Ford E-Transit (electric vans), and Polaris LSV (electric golf-carts), offering a mix of electric and conventional fuel vehicles to meet various transit needs. Via, Freebee, and Circuit provided information related exclusively to micro-transit vehicles for flexible/on-demand transit services within the City.

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On a parallel path, in June 2023, the City engaged HNTB (“Consultant”), one of the City’s pre- qualified transportation consultants, to perform a trolley service efficiency study (the “Study”) entitled “Trolley Optimization Plan.” The Study included a trolley passenger survey to help inform the replacement solicitation and made several key recommendations including, but not limited to:

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Affirming the alignments of the current trolley routes (North Beach Loop, Collins Express, Middle Beach Loop, and South Beach Loops A and B) are appropriate based on adjacent land uses/densities and passenger demand (i.e. high ridership). Acquiring low-floor, medium to heavy-duty transit vehicles engineered for high passenger demand service to reduce breakdowns and service interruptions and improve service reliability. It is worth noting that in the mass transit industry, trolleys are not considered heavy-duty vehicles and have a shorter service life span than most buses used by mass transit agencies. Acquiring higher capacity vehicles (i.e. buses) and/or increasing the number of vehicles in service to improve service reliability and relieve the overcrowding that often occurs on some routes, particularly the Collins Express. Acquiring double-door transit vehicles to improve the efficiency of passenger boarding/alighting, specifically on the highly used Collins Express and South Beach Loops. Increasing the frequency of service to reduce average headways and passenger wait times to no more than 15 minutes on all routes (i.e. restoring service to 2019 pre- pandemic levels); and simplifying some of the existing routes by eliminating circuitous diversions to improve service efficiency. Leveraging on-demand transit service via micro-transit vehicles to feed the fixed- route/fixed-schedule circulator services and serve as a first/last mile solution, particularly in low-demand residential neighborhoods.

Attachment B includes the Trolley Optimization Plan Executive Summary presentation.

To provide the highest quality of service in the most cost-effective and environmentally responsible manner for the City’s residents, visitors, and workforce employees, the Administration crafted a solicitation in the most unconstrained fashion to allow interested parties to propose various vehicle types (buses, trolleys, shuttles, and micro-transit) and fuel/propulsion types (electric, compressed natural gas (“CNG”), electric/diesel hybrid, and conventional fossil fuels (gasoline and diesel)). Accordingly, the City issued a competitive solicitation that would allow for various innovative proposals, as well as negotiations with more than one firm simultaneously.

On February 21, 2024, the City Commission authorized the issuance of ITN 2024-008-ND for municipal circulator services. ITN responses were due and received on May 17, 2024. The City received a total of seven (7) proposals from the following firms: Academy Bus LLC; Beefree, LLC d/b/a Freebee; Circuit Transit, Inc.; Limousines of South Florida, Inc.; MV Transportation, Inc.; River North Transit LLC; and WeDriveU, Inc. On May 24, 2024, an evaluation committee appointed by the City Manager convened to consider the proposals received. The evaluation process resulted in the ranking of proposers in the following order:

1 st - WeDriveU, Inc. 2 nd - Limousines of South Florida, Inc. (“LSF”) 2 nd - MV Transportation, Inc. 4 th - Academy Bus LLC 5 th - River North Transit LLC 6 th - Beefree, LLC d/b/a Freebee 6 th - Circuit Transit, Inc.

ANALYSIS

On June 26, 2024, via Item C2 E (Attachment C), the City Manager recommended that the City Commission authorize the Administration to enter into simultaneous negotiations with WeDriveU, Inc., the top-ranked proposer, and LSF and MV Transportation, Inc., the tied second-ranked proposers, pursuant to ITN 2024-008-ND for municipal circulator services. The Item was separated from the Consent Agenda by Commissioner Dominguez. Commissioner Fernandez made a motion to approve the Item with an amendment that the Item be presented to the FERC for review and recommendation of a negotiated agreement(s) prior to City Commission consideration. The motion was seconded by Commissioner Rosen Gonzalez and approved by the City Commission. Therefore, pursuant to Resolution No. 2024-33084 (Attachment D), the Administration proceeded with simultaneous negotiations with the three (3) top-ranked proposers.

It is worth noting that all three (3) vendors proposed heavy-duty transit vehicles manufactured by Gillig LLC (“Gillig”), one of the leading manufacturers of heavy-duty transit buses in the United States, with a legacy of over 130 years in the American transportation industry. Gillig has its headquarters in Livermore, CA, and specializes in producing high-quality, durable, and customizable buses that meet the evolving needs of transit agencies across the country. The Transportation and Mobility Department staff conducted an independent evaluation focused on the emissions, aesthetics, and costs related to various Gillig vehicles to inform the Administration’s recommendation on the propulsion/fuel type for the City’s next-generation transit vehicles. Attachment E includes Gillig’s Emissions Impact Report prepared for the City which evaluates the environmental impact of each vehicle engine type (based on current 2025 models) across three (3) key emissions categories (Carbon Dioxide Equivalent (CO₂e), Nitrogen Oxides (NOx) and Particulate Matter (PM)) as further described below:

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Carbon Dioxide Equivalent (CO₂e): This is a measure of total greenhouse gas emissions which contribute to climate change. It includes CO₂ as well as methane and nitrous oxide, expressed in a single unified metric. Lower CO₂e means a smaller carbon footprint. Nitrogen Oxides (NOx): These are gases produced during combustion. High levels of NOx contribute to smog formation, acid rain, and serious respiratory health issues. Reducing NOx improves overall air quality. Particulate Matter (PM): These are fine particles, often called soot, that can penetrate deep into the human lungs and bloodstream, posing a significant risk to public health.

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The table below compares the emissions reductions of each propulsion option (for the 2025 Gillig models) to the City’s existing Hometown Trolley Diesel fleet (2014-2017 models).

CO₂e NOx Reduction Reduction

Propulsion Type

PM Reduction

Based on City staff’s analysis, the Hybrid and Clean Diesel vehicles both deliver a 32% reduction in greenhouse gases (CO₂e); however, the Hybrid vehicle further outperforms in PM and NOx reduction. The CNG vehicle engine achieves the highest air quality benefit with a 100% reduction in PM and NOx, although the CO₂e reduction is lower in comparison to Clean Diesel and Hybrid vehicles.

It is worth noting that based on information provided by Gillig, the upcoming 2026 Clean Diesel models will utilize the next-generation clean diesel engine which is expected to further reduce overall emissions as compared to the 2025 Clean Diesel model. Additionally, the Clean Diesel Gillig Trolley is the only Gillig vehicle available with the full Classic American trolley-style design package, which includes the following features:

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Trolley-style cupola roof Maintenance-free wood-grain exterior trim Old-world styled graphics Solid American white oak interior seating and trim Solid brass trolley bell Decorative front “cow catcher” Roof and cupola accent LED rope lighting

The Hybrid and CNG Gillig trolleys share the same interior (including wood trim and seats). However, these vehicles have a standard transit bus exterior, with an optional vinyl wrap to resemble a trolley. As a result, the Hybrid and CNG Gillig trolley vehicles resemble more conventional buses, which may be less aligned with the City’s iconic trolley branding. Trolley exterior styling packages cost approximately $150,000 per vehicle. The total cost of each vehicle type, including the trolley package, is as follows:

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Clean Diesel: $720,000 CNG: $795,000 Hybrid: $1,030,000

Based on the Administration’s analysis of the emissions data, design considerations, and total cost analysis, the recommended vehicle type is a 40-foot Clean Diesel Gillig Low- Floor Trolley with dual doors. Attachment F depicts an image of the recommended vehicle. The capital costs of the vehicles will be built into the selected vendor’s hourly operating rate.

Attachment G includes a summary of key contractual terms based on each vendor’s proposal. The cost of the vehicles was a central focus throughout the negotiations, and thus pricing was requested on multiple occasions, initially in January 2025, followed by a second request in February 2025, and culminating in the request for a Best and Final Offer (“BAFO”) in June 2025. Following the BAFO submissions, a comparative analysis of the proposed hourly rates and key contractual elements from the three (3) top-ranked proposers showed LSF offers the lowest pricing across all vehicle types. For the City’s recommended Clean Diesel Gillig Low- Floor Trolley, LSF proposed the lowest hourly rate of $127.99 for the Current Service Level, significantly lower than WeDriveU at $141.07 and MV Transportation at $182.55.

Therefore, upon a comprehensive review of each vendor’s proposal, transition plan, facility readiness, vehicle pricing, and overall cost-efficiency, the Administration recommends that the final selection for Municipal Circulator Services Operator in the City be LSF. The Administration’s recommendation to award the contract to LSF is based on the following key findings. In addition to the lowest pricing, LSF’s proposal provides clear operational and logistical advantages, including:

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Seamless Transition Plan: As the City’s incumbent vendor with over a decade of operational experience in Miami Beach, an existing fleet, and staff familiar with City operations, LSF can offer a seamless and flexible transition, including the potential for a staggered and seamless implementation of new vehicles until all current trolley vehicles are replaced. Fully-Equipped, Self-Owned Facility: LSF currently owns and operates its own full- service facility, located at 3737 NW 43 Street in Miami, equipped with maintenance bays,

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fueling infrastructure, a bus wash facility, certified technicians/mechanics, a body repair shop, and administrative offices. This stands in contrast to WeDriveU, which proposed a potential leased facility without a confirmed Letter of Intent (LOI), and MV Transportation, which provided an LOI for a facility that would rely on third-party services for key day-to- day operations of the City’s transit service. Facility ownership and control is an essential component contributing to overall service efficiency and cost effectiveness. Refurbishment of Existing Vehicles: As an added benefit to the City, LSF is committed to refurbishing five (5) of the City’s existing low-floor trolleys at no cost to the City, to be used as additional spare vehicles or for special event services. Note the refurbishment of existing vehicles would supplement and not supplant the required 20% minimum spare ratio of new vehicles.

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The Administration has negotiated the Agreement with LSF (attached in substantial form) pursuant to the cost savings options recommended by the FERC at its October 25, 2025 meeting. The key terms of the Agreement are as follows:

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Contract Term: Seven (7) years with options to renew for three (3) additional one (1) year terms for a total of 10 years. Routes (same as Current Service Level): The service areas shall include: one (1) route in the North Beach area (North Beach Loop); one (1) route in the Middle Beach area (Middle Beach Loop); South Beach Route consisting of two (2) bi-directional loops: 1) “Loop A” operating in a clockwise direction and 2) “Loop B” operating in a counter- clockwise direction; and one (1) route connecting the North, Middle and South Beach Loops (Collins Express). Vehicle Type: 30-foot and 40-foot Clean Diesel Gillig Low-Floor Buses with dual doors (Attachment H). Number of Vehicles (total and per route): Total of 21 vehicles in operation plus a 20% spare vehicle ratio equivalent to five (5) spare vehicles (for a total fleet of 26 vehicles). The North Beach Loop will have three (3) vehicles in operation; the Middle Beach Loop will have four (4) vehicles in operation; the South Beach Loops will have eight (8) vehicles in operation, and the Collins Express will have six (6) vehicles in operation. Hours of Operation: Twelve (12) hours a day, from 8 a.m. to 8 p.m., seven (7) days a week, year-round. Average Frequency of Service (Headways) (same as Current Service Level): Approximately 20 minutes. Optional Vehicle Equipment and Technology: All service vehicles will be equipped with optional equipment, including but not limited to: Digital Destination Signs (interior and exterior); Automatic Passenger Counters (APC); Automated Voice Information Systems (AVIS); real-time GPS tracking services (with capabilities to provide mileage, service hours and ridership reports, and capabilities to provide data in a format that is compatible with Miami-Dade County’s mobile application (“Miami-Dade Bus Tracker”); CCTV security cameras; and on-board TV monitor for advertising and public service announcements (PSAs). Performance Penalties (including Mystery Rider scores to ensure ambassador- style customer service): Performance penalties will be assessed as appropriate for various incidents and deficiencies, including, but not limited to, reported malfunctioning or damaged equipment or device(s) that is not properly repaired within a specified timeframe; reported graffiti on the interior or exterior of the service vehicles that is not removed within a specified timeframe; and reported damage to the interior or exterior of a service vehicle that is not repaired within a specified timeframe. Furthermore, if LSF receives a quarterly average Mystery Rider score above 1.5 in any of the following five (5) categories assessed: Safety, Reliability, Customer Service, Appearance/Cleanliness, and Maintenance, the City reserves the right to impose financial penalties. The City will provide LSF with the Mystery Rider Quarterly Reports within five (5) business days of receipt. LSF will have ten (10) business days to submit a

Corrective Action Plan (CAP) addressing deficiencies. If no CAP is submitted or if corrective actions are not implemented within a specified timeframe, performance penalties will be assessed on the next monthly invoice. Real-Time Trolley Tracker App Integrated in the Miami Beach Gov App: LSF will develop a user-friendly real-time trolley tracker mobile application for integration in the Miami Beach Gov mobile application that accurately depicts the location of each vehicle in service (in real-time) and an estimated time of arrival (ETA) for each trolley stop along each of the four (4) routes. Special Event Service: At the sole discretion of the City, LSF will provide transportation services during special events (using the City’s service vehicles or other transit vehicles available to LSF and approved by the City) at the corresponding negotiated hourly rate for the corresponding vehicle used.

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July 16, 2025 FERC Meeting At the July 16, 2025 FERC meeting, the Administration presented this item to the FERC for advisory review and approval. Following a presentation on this item, the Committee requested that the Administration 1) conduct further research into the emissions analysis; 2) consider the potential of having a mixed fleet of diesel and electric vehicles; 3) explore ways of maximizing advertising revenues; 4) further analyze the branding and vehicle design options with a focus on reducing cost; and 5) return to the September FERC meeting with an update.

1. Emissions Analysis As directed by the FERC at its July 16, 2025 meeting, City staff conducted an independent review of the emissions data previously presented by the vehicle manufacturer (Gillig). The City’s Environment & Sustainability (E&S) Department reviewed the raw data provided by the City and modeling results provided by Gillig to evaluate accuracy and applicability to the City’s transit operations.

The review identified that the Gillig Emissions Impact Report relied on the assumption of 3.75 miles per gallon (mpg) for the City’s 2015 diesel trolleys. Staff requested the reasoning for the estimate used in the Gillig analysis as well as the actual fuel efficiency but did not receive this information. This baseline is significantly lower than the actual fuel efficiency range of the City’s existing trolley fleet provided by the Transportation and Mobility Department, which operates between 6.2 and 7.8 mpg. Using a lower efficiency baseline has the effect of overstating the emissions reductions attributed to newer vehicle technologies. The E&S Department review showed that fully electric buses provided the largest reduction in emissions and air pollutants, however, a complete transition to fully electric buses is not currently feasible.

The Gillig report applied the same methodology across all propulsion types but did not state the assumptions utilized for the analysis. The E&S Department compared the Gillig report results to an analysis performed based on commonly used averages from testing results from the Federal Transit Administration comparing the fuel efficiencies of buses by a different manufacturer and a freely available calculator, AFLEET, which was commissioned by the Department of Energy. The results of the two analyses show similar trends between diesel, hybrid, and CNG technologies. Both show that hybrid and CNG buses, which on average have better fuel efficiency than diesel buses, are estimated to have slightly lower greenhouse gas (GHG) emissions along with lower or comparable levels of particulate matter (PM) and nitrogen oxides (NOx) emissions. The key finding in the analysis is that the magnitude of the reductions reported to the FERC in July, as presented in the Gillig report, would most likely be lower when more realistic fuel efficiency data is applied.

The table below compares emissions reductions estimated in the Gillig report and the analysis conducted by the E&S Department, utilizing the AFLEET calculator.

Emissions Reduction by Fuel Types Compared to Diesel Buses

CO₂e Reduction

NOx Reduction AFLEET Gillig Report Calculator

AFLEET Calculator

Gillig Report

Fuel Type

Clean Diesel Electric Vehicle (EV) Hybrid Compressed Natural Gas (CNG) -13% -32% -50%

-91%

N/A

-17%

-26%

-32%

-13%

2. Vehicle Technology/Mixed Fleet As requested by the FERC at its July 16, 2025 meeting, City staff explored scenarios for incorporating a limited number of electric vehicles (“EVs”) into the City’s transit fleet while maintaining the majority of the fleet as clean diesel. This approach would allow the City to begin transitioning toward lower-emission propulsion technologies while recognizing current limitations in EV range, charging infrastructure, and costs.

Operational Limitations of EVs Based on information provided by LSF, each EV can operate only a limited number of hours before requiring full recharge. Because the City’s transit service would operate 12-15 hours daily, the EV vehicle(s) would not be able to operate for the full service day and would need to be replaced by a second vehicle, which could be EV or diesel. As such, introducing EVs in the City’s transit fleet would significantly increase both the upfront capital investment, including vehicle and infrastructure costs, and, thus, the hourly operating cost as detailed below.

Scenario Analysis (based on 15 hours of daily service) • Scenario 1 (Baseline): 21 Clean Diesel Gillig Trolleys in operation o Hourly rate: $127.99 o Total annual cost: $14.7M • Scenario 2: 20 Clean Diesel Trolleys in operation + 1 EV Trolley in operation o Diesel hourly rate: $127.99 o EV hourly rate: $248.04 (includes the purchase of 2 EVs + 2 EV chargers) o Total annual cost: $15.4M • Scenario 3: 19 Clean Diesel Trolleys in operation + 2 EV Trolleys in operation o Diesel hourly rate: $127.99 o EV hourly rate: $248.04 (includes the purchase of 4 EVs + 4 EV chargers) o Total annual cost: $16M

Key Takeaways • While EVs deliver the greatest emission benefits, the cost to operate is nearly double the Clean Diesel hourly rate and requires redundant vehicles to maintain Current Service Level, while maintaining a 20% spare ratio requirement. • Charging infrastructure represents an additional cost and space challenge, as each charging station supports only two (2) EVs. • A phased approach introducing a limited number of EVs in the fleet while maintaining a Clean Diesel majority is technically feasible but carries significant financial impact under current technology and cost assumptions.

3. Advertising On September 2, 2025, City staff held a meeting with LSF and Outfront Media (“Outfront”) to discuss the integration of advertising into the next-generation Municipal Circulator Services contract. It is important to note that the City currently has a contract with Outfront for advertising on the exterior of the existing trolley vehicles. The current revenue share in the City’s contract

PM Reduction

Gillig Report

AFLEET Calculator

provides for 52.5% of gross revenues to be allocated to the City and 47.5% to Outfront. City staff are currently in negotiations with Outfront to increase the City’s share to 60% of revenues and 40% to Outfront. LSF will not retain any portion of advertising revenue. However, the Agreement includes special provisions that place responsibility on Outfront for any exterior vehicle damage caused by the installation or removal of advertising materials.

Based on current levels of trolley exterior wrap advertising, the City receives approximately $180,000 annually in revenue. With the inclusion of interior advertising, total revenues are projected to modestly increase.

Vehicle Preparation and Advertising Methods Both LSF and Outfront recommend the use of painted vehicles rather than vinyl wraps. This approach reduces the risk of body damage during the advertising installation and removal process. To preserve paint quality, newly painted vehicles cannot host exterior advertising for the first six (6) months to allow the paint to cure properly.

Advertising Types • Exterior advertising remains the dominant revenue driver, estimated to contribute approximately 95% of total advertising income. • Interior advertising (via onboard monitors) will continue to be included at the City’s discretion. While revenues are limited, these displays provide value for promoting City- sponsored events and distributing public service announcements (PSAs).

4. Branding and Vehicle Design At the July 16, 2025 FERC meeting, the Committee requested additional analysis on the cost implications of maintaining the City’s iconic trolley branding versus utilizing a standard bus exterior with custom wraps/paint.

Comparative Cost Analysis (Vehicle Interior and Exterior) • Scenario 1 (Trolley): 21 Clean Diesel Gillig Trolleys (+5 spares) o Hourly Rate: $127.99 o Total Annual Cost: $14.7 million • Scenario 2 (Bus): 21 Clean Diesel Gillig Buses (no trolley styling package and no wooden seats) (+5 spares) o Hourly Rate: $123.14 o Total Annual Cost: $14.2 million

The difference between the two options above is approximately $500,000 annually, or approximately $4 million over the 7-year base contract term, attributable solely to the additional $150,000 per vehicle cost for the full Trolley Package ($120,000 for the trolley exterior package + $30,000 for the wooden seats).

Design Considerations • The Trolley Package includes a cupola roof, decorative trim, oak seating, and other design elements that reinforce the City’s current “vintage trolley” brand. This branding has historically contributed to strong ridership levels and differentiates the City’s service from standard Miami-Dade County buses. • The Bus Option would be finished with a custom exterior wrap/paint. This alternative achieves cost savings but results in a more conventional bus-like appearance, both inside and outside, with reduced alignment to the City’s established trolley identity.

September 26, 2025 FERC Meeting At the September 26, 2025 FERC meeting, the Committee requested that the Administration further explore ways to increase advertising revenues and reduce the annual operating cost of the proposed municipal circulator services, and provide an update at the October FERC meeting.

Advertising Update At the September 26, 2025 FERC meeting, the Committee raised concerns regarding the relatively modest revenue generated from exterior advertising on the City’s trolley fleet (currently averaging approximately $180,000 annually). City staff reached out to Outfront to review the primary factors influencing these revenues. Following is an update based on City staff’s discussions with Outfront.

Trolley advertising is generally driven by three (3) categories of advertisers: alcohol brands, high- end national brands, and local businesses. Following the City’s policy decision to ban alcohol advertising, annual revenues were reduced by approximately $80,000. High-end national brands, while approached by Outfront, typically do not view transit vehicles as a prime advertising means as compared to more permanent locations such as billboards or transit shelters, making trolley advertising more difficult to sell.

As a result, trolley advertising relies heavily on local businesses, such as real estate agents, health insurance providers, and other neighborhood-focused services. Outfront currently charges national companies and high-end brands approximately $10,000–$11,000 per four (4)-week period per trolley vehicle, whereas the local business rate is typically $4,000–$5,000 per vehicle for the same time period. On average, Outfront sells advertising space on five (5) to six (6) trolleys each month. This activity results in the current annual revenue level of approximately $180,000.

A preliminary review of national benchmarks indicates that the current trolley exterior advertising rates are consistent with, and in some cases above, prevailing market values for full transit vehicle wraps. Typical full-wrap rates range from $2,500–$5,000 per vehicle per four (4) weeks in most national markets, with premium cities commanding higher prices. By comparison, our local advertising rate ($4,000–$5,000) aligns with the national average, and our national/high-end brand rate ($10,000–$11,000) is positioned at the upper end of the spectrum, relative to major U.S. markets. This confirms that Outfront is charging fair market value for the City’s trolley exterior advertising, and that current revenue levels are driven primarily by category restrictions (alcohol ban), advertiser mix, and limited appeal to luxury brands, rather than underpricing.

Budget Considerations As directed by the FERC at its September 26, 2025 meeting, the Administration analyzed various options to reduce the projected annual operating budget deficit of $5.4 million associated with the recommended vehicle and service level scenario. The following options were evaluated:

Option 1: Vehicle Type – Trolley vs. Bus At the September 26, 2025 FERC meeting, the Administration presented a comparative cost analysis between a Gillig trolley and a Gillig bus, as detailed below.

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Scenario 1 (Gillig Trolley): 21 Clean Diesel Gillig Trolleys (+5 spares) – Hourly Rate: $127.99; Annual Operating Cost: $14.7 million Scenario 2 (Gillig Bus): 21 Clean Diesel Gillig Buses (+5 spares) – Hourly Rate: $123.14; Annual Operating Cost: $14.2 million

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Note the two scenarios under this option are based on 15 hours of daily service. The difference between the two (2) scenarios is approximately $500,000 per year, or about $4 million over the 7-year base contract term, due solely to the additional $150,000 per vehicle cost for the Trolley Package. The potential operating cost savings if the Gillig Bus is selected would be approximately $500,000 annually.

Option 2: Reduction in Service Hours The Current Service Level consists of operating 15 hours daily (8 a.m. to 11 p.m., 7 days per week). If the service is reduced to 12 hours daily (8 a.m. to 8 p.m.), focusing primarily on commuter demand, the cost impact would be as follows:

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Scenario 1 (Gillig Trolley): 21 Clean Diesel Gillig Trolleys (+5 spares) – Hourly Rate: $148.51; Annual Operating Cost: $13.7 million Scenario 2 (Gillig Bus): 21 Clean Diesel Gillig Buses (+5 spares) – Hourly Rate: $143.66; Annual Operating Cost: $13.2 million

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This reduction in daily service hours would result in an annual operating cost savings of approximately:  Scenario 1 (Trolley): $1 million  Scenario 2 (Bus): $1.5 million

The potential savings if the service hours are reduced to 12 hours per day would be $1 million – $1.5 million, depending on the scenario (i.e. vehicle type) selected. It is important to note that due to the operator’s fixed costs (capital cost of vehicles, insurance, maintenance, etc.) remaining the same regardless of the number of service hours, the reduction in service hours increases the hourly rate and does not proportionately reduce the overall cost.

Option 3: Reduction in Spare Vehicle Purchase The required spare ratio of 20% for a fleet of 21 vehicles in operation is five (5) spare vehicles. To reduce costs, under this option, LSF would purchase two (2) new spare vehicles and refurbish, at no cost to the City, three (3) trolleys from the City’s current fleet.

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Scenario 1 (Trolley): 21 Clean Diesel Gillig Trolleys (+2 spares) – Hourly Rate: $122.34; Annual Operating Cost: $14.1 million Scenario 2 (Bus): 21 Clean Diesel Gillig Buses (+2 spares) – Hourly Rate: $117.49; Annual Operating Cost: $13.5 million

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Note the two scenarios under this option are based on 15 hours of daily service and would reduce annual operating costs by $600,000 to $1.2 million, depending on the vehicle type selected. However, if Option 2 (12 hours of daily service) is selected in conjunction with Option 3, it is anticipated that the annual operating cost savings would be greater.

Option 4: Smaller Vehicle Size – 30’ vs. 40’ The Gillig Trolley and Gillig Bus are available in various lengths, including 30-foot and 40-foot vehicles. The recommended 40-foot Gillig Trolley has a seating capacity of approximately 40 passengers. Selecting a 30-foot vehicle (trolley or bus) would reduce seating capacity to 24 passengers per vehicle but would lower vehicle procurement cost.

The potential annual operating cost savings under this option would be approximately $200,000 based on 15 hours of daily service. However, if Option 2 (12 hours of daily service) is selected in conjunction with Option 4, it is anticipated that the annual operating cost savings would be greater.

Summary of Options and Potential Annual Operating Savings

Option Description Gillig Trolley Gillig Bus Notes

Vehicle Type: Gillig Trolley vs. Baseline ($0) Gillig Bus

Savings due to removal of Trolley Package.

1 $500,000

Reduce Daily Service Hours $1 M (from 15 hours to 12 hours)

2 $1.5 M

Reduce Spare Vehicle Purchase (from 5 new spare $470,000 vehicles to 2 new spare vehicles) Reduce Vehicle Size (from 40’ to $200,000 30’)

3 $400,000

4 $200,000

Service hours reduced to 8 a.m. to 8 p.m. (rather than 11 p.m.) to focus on commuter demand. Refurbish 3 trolleys from the City’s existing fleet to reduce purchase of new spare vehicles. Seating capacity reduced from 40 seats to 24 seats.

Tangentially, the Transportation and Mobility Department is conducting a comprehensive review of all its programs and services to identify potential cost-saving measures and optimize the use of available funding sources.

Discussions with Miami-Dade County The Miami-Dade County Department of Transportation and Public Works (“County”) is currently evaluating all municipal circulator services operating in Miami-Dade County, including the City of Miami Beach Trolley System, with the goal of eliminating duplication between the municipal circulator routes and County bus routes. It is important to note that the execution of an Intergovernmental Agency Agreement (IAA) between the City and County, subject to approval by both the Miami-Dade County Board of County Commissioners and the City Commission, is a pre- requisite for the operation of the City’s new municipal circulator services, as the County retains jurisdictional authority over all transit services in Miami-Dade County, including within incorporated municipalities. As such, the County is currently reviewing the City’s current trolley service with the goal of eliminating service duplication between the City’s and County’s bus routes. While the Administration does not recommend eliminating any of the current trolley routes as part of the new Municipal Circulator Services contract at this time, it is important to note that the County has discretion to approve or deny any of the City’s municipal circulator routes (current and proposed) based on their findings and recommendations.

Should the County not approve one (1) or more of the City’s municipal circulator routes after LSF has placed the purchase order for the new transit vehicles, the Agreement with LSF includes a provision allowing the City to terminate the purchase order of any new vehicle(s) without any penalty or liability, prior to the vehicle(s) being delivered, provided that the City provides LSF with the notice of vehicle termination during the six (6)-month period following the date LSF placed the purchase order for the vehicle(s) to be terminated. In the event the City chooses to terminate a new vehicle(s) after the six (6)-month period has expired, but prior to delivery of the new vehicle(s), the City will be obligated to reimburse LSF for the portion, if any, of the 20% deposit for the vehicle(s) terminated which is not refunded to LSF or which is not applied as a credit to a pending purchase order for new vehicle(s) or any other vehicle purchase order which LSF has placed with the vehicle manufacturer (Gillig), even if unrelated to this Agreement, plus seven percent (7%) per annum simple interest until paid.

October 15, 2025 FERC Meeting At the October 15, 2025 FERC meeting, the Committee reviewed and discussed the Administration’s cost-savings options for the City’s new municipal circulator services. Following the discussion, the Committee passed a motion recommending that the Administration proceed with the following cost-saving measures:

• •

Vehicle Type (Option 1): Proceed with a Gillig Bus rather than a Gillig Trolley; Service Hours (Option 2): Reduce service from 15 hours daily (8 a.m. to 11 p.m., 7 days per week) to 12 hours daily (8:00 a.m. to 8:00 p.m.), focusing on commuter demand; Spare Vehicles (Option 3): Purchase only two (2) new spares while refurbishing three (3) vehicles from the City’s current trolley fleet; and Vehicle Size (Option 4): Purchase 30-foot vehicles for the South Beach Loops A and B, Mid Beach Loop, and North Beach Loop, and 40-foot vehicles for the Collins Express (route with the highest ridership demand).

• •

• •

While the Administration recommends a 40-foot Gillig Trolley with dual doors, and maintaining the Current Service Level (i.e. operating 15 hours daily from 8 a.m. to 11 p.m., 7 days per week), the Administration supports the cost saving measures recommended by the FERC given the current budget constraints in the Transportation Fund. However, should additional funding be identified in the future, the Administration will prioritize increasing the service hours and acquiring additional vehicles to increase service frequency (i.e. reduce headways and passenger wait times) and provide the highest level of reliable circulator service feasible within the available budget.

Clarification of Total Annual Operating Cost Savings Following Final Negotiations with LSF Following the October 15, 2025 FERC meeting, the Administration conducted final negotiations with LSF to establish a consolidated hourly rate that reflects the combined effect of all FERC- recommended cost-saving options. During the FERC discussion on this item, the estimated total annual operating cost savings was estimated to be approximately $3.3 million based on the table that presented each cost-saving option individually. However, during final negotiations, LSF advised that some cost savings options could not be aggregated as discussed during the October 15, 2025 FERC meeting. For example, the cost reduction associated with Option 1 (selecting a Gillig Bus instead of a Gillig Trolley) is already embedded within the reduced hourly rate presented under Option 2, and therefore cannot be added to Option 2. Additionally, LSF revised the projected cost savings originally presented under Option 3 (reducing the number of new spare vehicles purchased), resulting in a lower but more accurate annual operating cost savings value.

As a result of the City staff’s final negotiations with LSF, taking into account all feasible cost- saving measures as a unified package, LSF proposed a revised hourly rate of $137.17, which equates to an annual operating cost of approximately $12.6 million. This results in a total annual operating cost savings of approximately $2.1 million, rather than $3.3 million as referenced during the October 15, 2025 FERC discussion on this item. The updated cost reflects the consolidated annual operating cost of the options recommended by FERC rather than the cumulative sum of the individual cost-saving scenarios previously presented to FERC for comparative purposes.

Transition Period and Existing Fleet Hourly Rates Following City Commission approval of the new Municipal Circulator Services Agreement, the Administration anticipates a two (2) to three (3) -year transition period during which the current trolley service will continue to operate using the existing fleet until the new vehicles are delivered and fully deployed. During this transition period, the City will continue to rely on the existing trolley vehicles that are eight (8) to eleven (11) years old, approaching or exceeding typical industry lifespan for medium-duty transit vehicles. As vehicles age, the cost of maintaining safe and reliable service increases due to higher frequency of parts replacement, increased labor hours for

repairs, supply chain delays for discontinued components, and rising insurance and liability costs associated with older equipment.

To ensure service continuity and maintain operational safety standards through the transition period, the Administration intends to present to the City Commission at a future date a proposed adjustment to the current hourly rate for the existing trolley service. Preliminary modeling indicates that an approximate fifteen percent (15%) increase in the current hourly rates would reasonably account for inflationary escalation in maintenance, repair, insurance, and other operational requirements accumulated over the last several years, during which time hourly rates have remained flat despite increased costs borne by LSF. This hourly rate adjustment would only be in effect during the transition period and will sunset upon full conversion to the new Gillig fleet; however, it would require an amendment to the new Municipal Circulator Services Agreement, if approved by the City Commission.

If the City Commission accepts the FERC’s recommendation to reduce the service hours from 15 hours to 12 hours daily for the new transit circulator services, this reduced operating schedule could also be applied to the current trolley service during the transition period. Under this scenario, the 15% increase in hourly rate for the existing service is expected to be substantially offset by the reduction in total annual service hours (for the existing service), allowing current trolley operations to remain approximately budget neutral at the current funding level of $9.3 million annually while sustaining safe and reliable trolley service until new vehicles are phased-in.

FISCAL IMPACT STATEMENT

Funding for the new municipal circulator services resulting from this ITN is subject to City Commission approval through the annual budget process. The cost to the City will ultimately depend on the type of vehicle selected, number of vehicles in service (i.e. total service hours), and the negotiated hourly operating rate(s) based on the type of vehicle selected.

In response to the ITN, LSF has submitted the lowest overall hourly rates across all vehicle types, including the City’s recommended vehicle (40-foot Clean Diesel Gillig Low-Floor Trolley with dual doors). LSF’s proposed hourly rate for this vehicle is $127.99 based on 15 hours of daily service. The Administration believes that LSF’s proposed hourly rate is aligned with current economic conditions and represents a cost-effective solution. Based on LSF’s proposed hourly rate, the proposed municipal circulator services would represent a total annual cost to the City of approximately $14.7 million, based on 15 hours of daily service, seven (7) days a week. The City currently budgets approximately $9.3 million annually for the Current Service Level of citywide trolley service, therefore resulting in a $5.4 million annual funding gap.

Should the City Commission accept the cost saving measures recommended by the FERC, annual cost savings of approximately $2.1 million could be achieved, thereby reducing the annual funding gap to approximately $3.3 million. To close this annual funding gap, the Transportation and Mobility Department will present potential additional savings in its operating budget for consideration as part of the Fiscal Year 2027 budget process.

Based on Gillig’s schedule for the ordering, manufacturing and delivery of the new vehicles, funding for the new municipal circulator services is anticipated to be needed in Fiscal Year 2027 at the earliest. The funding needed for FY 2027 will be subject to the annual budget process and City Commission approval.

Does this Ordinance require a Business Impact Estimate? (FOR ORDINANCES ONLY)

If applicable, the Business Impact Estimate (BIE) was published on:

See BIE at: https://www.miamibeachfl.gov/city-hall/city-clerk/meeting-notices/

FINANCIAL INFORMATION

The annual cost associated with the current level of citywide trolley service is approximately $9.3 million and funded through the following three (3) funding sources:

106 Transportation Fund/106-9615-000349-30-403-529-00-00-00- = $2,500,800 187 People's Transportation Plan ("PTP") Fund /187-6300-000349-30-403-529-00-00-00- = $5,528,000 FDOT Grant (75%/25%)/303-9615-000305-30-403-523-00-00-00-52424 = $1,323,311 TOTAL FUNDING: $9,352,111

Based on Gillig’s schedule for the ordering, manufacturing and delivery of the new vehicles, funding for the new Municipal Circulator Services is anticipated to be needed in Fiscal Year 2027 at the earliest. The funding needed for FY 2027 will be subject to the annual budget process and City Commission approval.

While the PTP and Transportation funds are anticipated to be recurring funding sources for future circulator services, the FDOT grant funds are awarded on a discretionary basis and, thus, should not be considered as an annually recurring allocation.

CONCLUSION

While the Administration recommends a 40-foot Gillig Trolley with dual doors, and maintaining the Current Service Level (operating 15 hours daily from 8 a.m. to 11 p.m., 7 days per week), the Administration supports the recommendations from the FERC to reduce the annual operating cost of the municipal circulator services given the current budget constraints in the Transportation Fund. However, should additional funding be identified in the future, the Administration will prioritize increasing the service hours and acquiring additional vehicles to increase service frequency (i.e. reduce headways and passenger wait times) and provide the highest level of reliable circulator service feasible within the available budget.

As such, the Administration recommends that the City Commission adopt the Resolution approving, in substantial form, an agreement with LSF pursuant to ITN 2024-008-ND for Municipal Circulator Services, and furthermore, authorizing the City Manager to finalize the Agreement; and further, authorizing the City Manager and City Clerk to execute the Agreement.

Applicable Area

Citywide

Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481, includes a principal engaged in lobbying? No

If so, specify the name of lobbyist(s) and principal(s): N/A

Department

Procurement

Sponsor(s)

Co-sponsor(s)

Condensed Title

*Approve ITN 2024-008-ND, Municipal Circulator Services. TR/PR