Title
An Ordinance authorizing the approval of Amendment 3 to the Transportation Service Agreement with OATS, by and between the City of Lee's Summit, Missouri and OATS, and authorizing the City Manager to execute the same. (PWC 9/14/26)
Body
Issue/Request:
An Ordinance authorizing the approval of Amendment 3 to the Transportation Service Agreement with OATS, by and between the City of Lee's Summit, Missouri and OATS, and authorizing the City Manager to execute the same.
Key Issues:
• OATS, Incorporated (“OATS”) is a private, not-for-profit corporation that provides non-emergency demand response transportation within the City of Lee’s Summit.
• Pursuant to Ordinance No. 9310, the City entered into an agreement with OATS, Inc. (OATS) to provide on-demand door-to-door public transportation within the City Limits of Lee's Summit.
• Pursuant to Ordinance No. 9839 the City and OATS entered into Amendment No. 1 to the Transportation Service Agreement effective January 23, 2024, to address changes in service cost and change to rider fare.
• Pursuant to Ordinance No. 10057 the City and OATS entered into Amendment No. 2 to the Transportation Service Agreement effective February 7, 2025, to address changes in service cost and add a 3% increase in the hourly rate for service, with renewals.
• The cost of this service has increased, and terms of the original agreement have necessitated an amendment to the original agreement.
• The City and OATS desire to modify the existing agreement to continue providing said transportation services.
Proposed Committee Motion:
I move to recommend to City Council approval of an Ordinance authorizing the approval of Amendment 3 to the Transportation Service Agreement with OATS, by and between the City of Lee's Summit, Missouri and OATS, and authorizing the City Manager to execute the same.
Proposed City Council Motion:
FIRST MOTION: I move for a second reading of an Ordinance authorizing the approval of Amendment 3 to the Transportation Service Agreement with OATS, by and between the City of Lee's Summit, Missouri and OATS, and authorizing the City Manager to execute the same.
SECOND MOTION: I move for adoption of an Ordinance authorizing the approval of Amendment 3 to the Transportation Service Agreement with OATS, by and between the City of Lee's Summit, Missouri and OATS, and authorizing the City Manager to execute the same.
Background:
OATS, Inc. has provided on-demand door-to-door bus service with 24-hour advance notice within the City Limits of Lee's Summit for more than 20 years. OATS is no longer limited to serving the elderly, so OATS also provides service to all residents regardless of age to any location within the City of Lee’s Summit. The City must annually renew the service agreement, so this amendment will continue this local transit service for one year from October 1, 2026, through September 30, 2027. This amendment moves the agreement from a calendar year to the federal fiscal year.
OATS, Inc. initially started with one bus in operation on a 3 days per week service schedule. OATS was expanded in 2010 to a 5 days per week service on the basis of a 2008 Lee's Summit Transit Study. The service was expanded again in 2012 with two vehicles based on ridership demand. Hours of daily operation were 7:00 a.m. to 3:30 p.m. A third vehicle in circulation (or overlapping service hours in peak demand) was added to support the operation, especially for demand to/from Longview Community College in 2014. The fare per one-way trip at that time had been $2.00.
A Lee's summit Transit Study completed in 2016 recommended consolidating the two demand response transit services in Lee's summit, KCATA MetroFlex and OATS, into one service. The Kansas City Area Transit Authority (KCATA) historically provided a demand response transit service in Lee's Summit, as well as OATS. MetroFlex provided on-demand during more hours per day with a lower fare when compared to OATS. However, OATS provided service over a much larger area within the City. MetroFlex was discontinued and combined with OATS in April 2017.
As part of the change, the City agreed to transfer its OATS transit management to KCATA and re-branded the services as RideKC Lee's Summit in April 2017. This consolidation of demand response transit service expanded the service capacity, service hours, and reduced cost to the City and users. Transferring management to KCATA allowed the management and operations expenses to become eligible for federal grant funding to reduce the City's matching cost from local funds. The result of this change created a significant increase in ridership without increasing the cost of the City’s local match. The fare was adjusted to $1.50 to match comparable KCATA system fares at that time. Fares were increased in 2024 to $3.00 per trip.
This OATS, Inc. service agreement is for the period of October 1, 2026, through September 30, 2027, and may be terminated with advance notice. The 2026/2027 cost of service will increase by 3% to $72.00 per hour for the contract year, compared to $70.00 per hour in 2025. The cost increases were caused by increased costs of health insurance and vehicle insurance, which were typical of inflationary or cost of living indices experienced in 2025. The cost for these transit services operated by OATS are based on actual ridership, but shall not exceed the City’s $660,000 transit budget allocated in the FY27 Capital Improvement Plan. This agreement can be renewed for additional one-year periods with the addition of an annual not to exceed 3% increase to the hourly rate.
The $3.00 fare per trip established in 2024 is proposed to remain the same. This cost falls in line with other on-demand transit services offered in the metro KC area. Service boundaries and hours of operation are to remain the same. OATS operates Monday through Friday from 7:00 a.m. to 5:00 p.m., except on 13 recognized holidays. Those holidays are listed at <https://www.oatstransit.org/schedules>.
The cost for these transit services operated by OATS is an amount based on trip cost using actual ridership. KCATA, as the designated and contracted transit administrator and manager of the City's OATS contract, will invoice the City monthly for actual expenses. This agreement authorizes the City local funds to pay for the City's share of actual costs. Costs are partly offset by the use of Federal Funding provided to the City from the Federal Transit Administration. The KCATA manages these contracts and federal funding on behalf of the City to maximize the federal share of costs.
To continue transit services and maximize the use of available federal funds, the City must enter into agreements that includes: on-demand transit services with OATS and an agreement with KCATA for Commuter Express Service, transit management services, and administration of OATS contract and vehicle replacement. The KCATA agreement with the City is a separate agreement.
Impact/Analysis:
The transit program was budgeted $660,000 in the approved FY2027 Transportation Sales Tax Fund and includes transit costs for KCATA Commuter Express Service and RideKC Lee's Summit operated by OATS. These KCATA transit contracts are based on the calendar year, spanning parts of this fiscal year and next. Costs of transit service shall not exceed the approved budget.
Presenter
Susan Barry, P.E., PTOE
Recommendation
Staff recommends approval.
Committee Recommendation