Lesson

Provide for appropriate legal support services to address the many significant legal issues faced in implementing a regional fare card project.

Experience of seven partner public transportation agencies in the Central Puget Sound region of Washington in setting up a regional fare card program.


4/14/2006
Washington,United States


Background (Show)

Lesson Learned

The RFC project has confronted a variety of legal challenges, starting from the initial preparation of the RFP and negotiations with the candidate vendors to aspects of contract language, change amendments, specification of terms and conditions, trade secrets, warrantee and maintenance, indemnification against lost revenue and claims, and contractor performance security. Legal documents have had to be drafted, and important decisions with legal ramifications made and agreed upon by each of the partners. In addition, each partner agency has faced legal considerations associated with its participation in the RFC project and its relationships with its own governing entities.

More detailed insights from the Puget Sound experience in dealing with legal issues include the following:
  • Understand in advance the range of legal issues that are likely to be faced, and plan how the project will address and resolve these.

    It may be helpful to consult with partnerships that have already undertaken a regional fare card program, such as the Puget Sound RFC project or the San Francisco Bay Area Translink project. The burden on limited legal staff or contracted legal support for partner agencies, particularly the smaller agencies, will be significant, time consuming and costly. Plan for this important need ahead of time as well, coordinating across all partners. If the legal staff of one agency is shared with others, recognize the potential for conflict of interest issues.

  • Establish a legal committee composed of representatives of each partner agency (similar to the Puget Sound's legal SAAT) to identify legal issues needing attention and to help schedule, prioritize and track their resolution.
  • Plan and budget to retain independent legal counsel for the project overall, allowing each agency's legal staff to work with that counsel as required. Consider establishing the governing body as a legal entity, empowered to make legally binding decisions for the partnership.
The legal issues that may arise are grounded in the choice of a governance model for the regional fare card program. In the case of the Central Puget Sound, the partner agencies chose to operate as individual agencies rather than entering into a joint powers association (a regional entity). Operating as individual agencies meant there was no provision for a legal entity or attorney designated to look out for the interests of the region.

The partners in the RFC project faced a number of prominent legal issues:
  • The Joint Board, the RFC’s governing body under the Interlocal Agreement, is not a legal entity. Moreover, the Regional Team, which manages the day-to-day project development process, is not authorized to hire a project attorney, and lacks the staff to provide even routine legal support. The Regional Team has no confidential privilege with an attorney to work on behalf of the region’s interests.
  • Some of the partner agencies have attorneys on their staff, while others must hire needed legal services at their own expense. Each partner agency wants legal oversight, for example in the design review phases, to look after its interests.
  • The project is driven by contractual issues that require frequent legal review. The legal work required by the project has exceeded the originally anticipated amount and budget.
  • A legal Subject Area Advisory Team (SAAT) was created to provide for deliberation on the legal issues faced by the RFC project, but the SAAT does not have the authority to make legal decisions on behalf of the project or any of the partner agencies.
Because RFC governance is based on consensus among partner agencies, it was decided when framing the Interlocal Agreement that there would not be a separate legal entity to process and sign contracts; rather, each of the partner agencies would have legal signing authority. This approach implies that each agency may require separate legal counsel.

In order to facilitate the development of the RFC project, King County Metro (KCM) has provided legal support through the King County Prosecuting Attorney's office under a legal services agreement among the partner agencies. Two KCM attorneys have been working on the project from the outset and have developed an in-depth understanding of the issues. This knowledge base represents a significant and helpful resource to the entire RFC project. It would be difficult for other partner agencies to provide their own independent legal capability at a level that would be necessary without KCM's support. Nevertheless, a number of the partner agencies are comfortable having KCM's attorneys providing legal resources to the project and would like the role of these attorneys to be expanded. Reliance on KCM’s legal staff has created some issues for KCM as well, including in particular the increasing time required to provide support to the project, and concerns with potential conflicts of interest.

Strictly speaking, the KCM attorneys can only provide legal advice to King County, their client. For example, although the KCM attorneys have been involved in drafting project documents and change amendments, each agency must individually review and process these.

The legal issues encountered in the RFC project are more numerous and challenging than were anticipated. Issues have included, among others, those associated with managing the vendor contract and with balancing the needs of seven partner agencies under a consensus-based governance structure. There is general consensus that these issues have been addressed in a very professional and successful manner under the existing agreement.


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Source

Evaluation of the Central Puget Sound Regional Fare Coordination Project

Author: Cluett, Chris et. al.

Published By: Prepared by Battelle for the USDOT FHWA

Source Date: 4/14/2006

EDL Number: 14300

URL: http://ntl.bts.gov/lib//jpodocs/repts_te//14300.htm

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Lesson Contacts

Lesson Contact(s):

Chris Cluett
Battelle
206-528-3333
cluett@battelle.org


Agency Contact(s):

Candace Carlson
King County Metro, Washington
206-684-1562
candace.carlson
@metrokc.gov

Lesson Analyst:

Firoz Kabir
Noblis
202-863-2987
firoz.kabir@noblis.org


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Notes

Lesson of the Month for April, 2006 !


Lesson ID: 2006-00222