HomeMy WebLinkAboutAGENDA REPORT 2003 0820 CC REG ITEM 10NITEM 10-- N .
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Moorpark City Coundi: lizio"° �
AGENDA REPORT
TO: Honorable City Council
FROM: John Brand, Senior Management Analyst 1613
DATE: August 12, 2003 (CC meeting of August 20, 2003)
SUBJECT: Consider Transfer of Ownership of Coach USA.
BACKGROUND
If approved, the City's Agreement with Antelope Valley Bus /Coach
USA would be transferred to a new company, CUSA, when it acquires
Antelope Valley Bus and other Coach USA properties.
The Coach USA Company, the parent of the City's contractor for
Moorpark City Transit, has reached an agreement in principle to
sell certain assets including Antelope Valley Bus /Coach USA. Coach
USA prepared the attached letter requesting City approval of the
transfer of ownership to CUSA, LLC, the proposed buyer. Staff is
assured that there will not be any material impact on the Agreement
with the City of Moorpark or on the services provided for the
maintenance and operation of Moorpark City Transit. All of the key
personnel identified in the proposal submitted to the City will
remain in place.
Antelope Valley Bus /Coach USA is a wholly -owned subsidiary of
Stagecoach Holdings, PLC, and a transportation firm based in
Scotland. The Coach USA Company is the largest provider of motor
coach and tour services in the United States. Coach USA is
comprised of what were once many local, privately held charter,
transit, motor coach, and limousine companies that were
consolidated through mergers and acquisitions beginning in the
1980's.
Antelope Valley Bus started in Lancaster, CA as a charter bus
service. It grew to become a regional firm, and the City of
Moorpark first contracted with Antelope in 1990 to operate the
Moorpark City Transit fixed route. It and the VISTA routes are
CC Meeting of August 20, 2003
Page 2
among the few transit operations that Antelope Valley Bus has.
Coach USA acquired Antelope Valley Bus in April 1997. Coach USA is
organized into several divisions and subsidiaries. The City is
contracted with Antelope Valley Bus /Coach USA, which along with
California Charter, is a subsidiary of The Coach USA Company's
western charter division.
Earlier this year, the Scottish ownership of Coach USA began to
market its holdings in the United States. Various regional
divisions of the company have been "spun off" in recent months.
There is a different Coach USA entity sometimes called "Coach USA
Transit" that was sold to First Transit earlier this year. Coach
USA Transit has contracts with MTA and other Los Angeles area
transit agencies. The Coach USA Transit division and the charter
division, with which the City has its Agreement, operate
independently of each other.
The South Central and Western divisions of Coach USA Charter are
being sold to CUSA LLC, a wholly -owned subsidiary of KBUS Holdings,
LLC. This proposed sale involves eighteen companies, including
Antelope Valley Bus, in several western states.
KBUS Holdings is said to be a New York - based, private investment
group formed specifically to buy and hold Coach USA properties. At
this time, the buyer is completing its due diligence and the seller
is obtaining the necessary approvals. The sale must be approved by
state and federal regulators and by customers such as the City of
Moorpark that have service agreements that require approval to
transfer the Agreement. The Coach USA Company and KBUS Holdings
hope to get the necessary approvals to complete the sale in early
September. The Ventura County Transportation Commission (VCTC)
considered and approved the transfer of its VISTA contracts at its
July meeting.
STAFF RECOMMENDATION
Approve the transfer of the Agreement for Maintenance and Operation
of Moorpark City Transit to CUSA, LLC.
Attachment
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Coach USA Transfer
&AIM
August 5, 2003
City of Moorpark
Attention: Mr. John Brand
799 N. Moorpark Avenue
Moorpark, CA 93021
RE: Agreement for Services
Dear Mr. Brand:
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As you are likely aware, Coach USA, Inc. has entered into an agreement to sell its Southwestern
and Western divisions including Antelope Valley Bus, Inc., to CUSA, LLC, a wholly -owned
subsidiary of KBUS Holdings, LLC. As part of this transaction, the buyer has agreed to assume
and requested an assignment of the agreement(s) referenced above between you and Antelope
Valley Bus, Inc.
We intend for there to be a seamless transfer of operations from Antelope Valley Bus, Inc. to
CUSA, LLC. Moorpark City Transit riders will experience the same friendly staff, who will
continue to operate the same facilities in the same manner and over the same routes as Antelope
Valley has provided the service in the past.
This transaction is scheduled to close in early September. In order to insure a smooth transition
of our operations to the new owner, we would very much appreciate if you would sign and return
the enclosed Consent to Assignment certificate. Please have the appropriate individual sign the
Consent to Assignment certificate and send one original copy to Kevin Rohnstock, a
representative of Buyer, in the enclosed prepaid, self - addressed envelope.
Thank you in advance for your assistance. If you have any questions, please do not hesitate to
contact me at 713- 860 -1717 or Mr. Rohnstock at 303 - 223 -1154.
Sincerely,
Robert Longo
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612803\795904.2
One Riverway, Suite 500 • Houston, Texas 77056 -1921 • (713) 888 -0104
Toll -free (888) COACH -USA • Fax (713) 888 -0257