DRAFT LETTER OF INTENT BETWEEN THE
Whereas, KU and the City have been working to identify opportunities to achieve increased coordination between their systems, including honoring of each others passes and coordination of routes; and
Whereas, in recognition of the findings of the joint study conducted by KU and the City to explore the feasibility of coordination and/or consolidation of transit services, both KU and the City desire to further explore a merger of their transit systems into one operating entity dependent upon certain conditions occurring in the future; and
Whereas, both KU and the City desire to express their intent regarding such a merger with a letter of intent indicating a commitment to prepare and execute the necessary documents to successfully complete the merger by July 1, 2009, if certain funding conditions occur in the future and other conditions are met;
NOW, THEREFORE, THE
The City and KU agree, to further explore the feasibility of consolidating their transit systems, with a goal of achieving merger effective July 1, 2009, if the following conditions are met:
A. KU and the City both agree to commit funding resources equal to the amount necessary to continue to fund the level of existing transit services currently provided by both KU and the City, as conditioned further hereinKU and the City acknowledge that for the City this will require an increased taxation and/or resource effort, and that if the City chooses to seek a sales tax election to provide funding support for transit, that the results of the election will not be known until the November 2008 election. KU and the City further agree that if the sales tax election funding source is chosen by the City, and the sales tax election fails, then the City will be under no further obligation to merge transit systems with KU. KU and the City further acknowledge that for KU any merger will require approval by the University’s Transit Commission, appropriate student representatives, and other required approval authorities. KU and City agree that, if such approvals are not obtained, KU will be under no further obligation to merge its transit systems with the City.
B. KU and the City agree that any merged system will be subject to a joint form of governance, to be further set forth and agreed to with a separate document which shall set forth the responsibilities and obligations of KU and the City. The joint form of governance shall be determined by KU and the City. The joint form of governance shall include representation by KU students and shall ensure that the legal obligations of both KU and the City are met. The joint form of governance shall determine the operation of the merged transit system, including but not limited to: personnel matters, selection of vendors for the operation and/or maintenance of vehicles, routes, passenger rates, pass and transfer policies, and hours of operation. With respect to KU, the primary goal of any merger shall be the benefit to its students. It is the intent and the desire of both KU and the City to meet both the unique and combined needs of KU and the City in the most efficient and effective manner possible within the resources provided to the merged transit system.
C. The parties acknowledge that the majority of funding for KU transportation services derives from student fees and that applicable restrictions on the use of such fees must be followed. KU and the City agree that any allocation of costs shall recognize applicable restrictions on sources of funding. KU and City agree that any merger agreement shall permit the subsequent separation of KU and City transit services if such separation is deemed necessary by KU or City to meet the needs of its constituents.
D. KU and City further agree that the physical assets for the operation of any merged transit system, such as fixed-route buses, paratransit vehicles, computer systems, shelters, etc. shall be inventoried and as may be necessary, title to the physical assets may be transferred to the merged transit system, if the merger agreement requires such transfer. The merger agreement shall account for all intangible assets and liabilities, such as budgeted funds, claims, and encumbrances, devoted to the transit systems to be placed in the merged transit system.
F. KU and the City will work to together to develop a general timeline for the steps required to successfully complete a merger by July 1, 2009 as outlined in this Letter of Intent.
G. KU and the City agree and acknowledge that this document is a letter of intent. The parties agree to enter into this letter of intent in good faith to explore a merger of their respective transit systems subject to the conditions outlined above; however, if unforeseen or changing legal or financial conditions preclude the ability of either KU or the City to agree to a merger as contemplated herein, or if the necessary approvals are not obtained, then this document shall be of no further force and effect upon the notification of one party to the other.
This letter of intent is entered into this _______ day of June, 2008.
Executive Vice Chancellor
FOR THE CITY OF