Interpretation

1.1   In this Agreement, unless the context necessarily requires a different meaning, the word or words,

(a) "operating costs" means all of the costs necessarily incurred in the operation of the commuter rail service including, without limiting the generality of the foregoing, all amounts payable pursuant to a lease, licence or other agreement entitling BC Transit to use for the commuter rail service any lands, rights of way or interests therein for the operation of commuter rail trains, station sites including the access thereto, power substations, transit vehicle interchanges and parking facilities, but excluding any capital expenditure made or incurred by BC Transit for the acquisition or construction of locomotives, passenger cars and equipment, rails, signals, communication systems and devices and any lease fee or other amount payable to amortize such capital expenditure;

(b) "operational change" means any temporary change in service schedules, train consists and station access not requiring an amendment to the service specifications;

(c) "operations plan" means a plan incorporating work assignments, service allocations and budgetary implications identifying the personnel, equipment and services to be used in the implementation of the service specifications;

(d) "revenue vehicle" means a locomotive or passenger car used for the carriage of passengers in commuter rail service;

(e) "service change" means any permanent change in commuter rail service which requires the amendment of the Service Specifications such as service hours, addition or deletion of trips, frequency of trips, discontinuance of stations and termination of access to parking facilities;

(f) "service specifications" means a detailed description of the commuter rail system set out in Schedule A incorporating:

(i) the stations, ancillary parking and park-and-ride facilities and connections to transit services available to commuter rail passengers;

(ii) the days and hours of service, non-operating days including statutory holidays;

(iii) operational rules covering fare payment requirements, boarding, alighting and on-board conduct;

(iv) on-board passenger services;

(v) service and performance standards;

(g) "statutory holidays" means, for the purposes of service specifications, New Year's Day, Good Friday, Victoria Day, Canada Day, British Columbia Day, Labour Day, Thanksgiving Day, Remembrance Day, Christmas Day, Boxing Day and any other day gazetted as statutory holidays;

(h) "tariff" means the schedule of fares payable by the users of the commuter rail service including alternative fare payment methods and concession fare qualifications all as set out in Schedule B.

Planning and operation

2.1  

(a) review, settle and approve the operations plans prepared by the Operating Company;

(b) review, settle and approve the service specifications and any adjustments thereto prepared by the Operating Company.

Financial

2.2  

(a) in consultation with the Operating Company, establish, revise and settle the process to be followed in the preparation and presentation of annual capital and operating budgets, incorporating operating costs;

(b) incorporate the capital and operating budget of the commuter rail service and the Operating Company as part of the annual budget of BC Transit, submit such budget to the Vancouver Regional Transit Commission and the District of Mission for review and recommendation, and obtain approval thereof from the board of BC Transit and Treasury Board. In the event that amendment of the budget submission is required, to advise the Operating Company of the nature and extent of the budget adjustments and settle with it changes in the service specifications and the operations plan necessary to accommodate to the approved budget. In circumstances where the adjustment of service specifications and operations plan to accommodate budget requirements will materially affect the delivery of commuter rail services, to make representation to the board of BC Transit and to Treasury Board for the relaxation of budgetary restrictions and inform the Vancouver Regional Transit Commission and the District of Mission of any adjustment;

(c) pay on behalf of or reimburse the Operating Company for all expenditures made or incurred by it in the performance of this Agreement which are consistent with the approved budgets;

(d) in consultation with the Operating Company, determine the extent to which costs incurred by BC Transit shall be included in the operating costs;

(e) in consultation with the Operating Company, settle the form and process to be used in the submission of financial and operating performance information by the Operating Company;

(f) establish procedures to be followed by the Operating Company and BC Transit for the approval of variances to approved annual budgets and the necessary adjustment of commuter transit service as a consequence of such variance;

(g) to recover from the District of Mission and the Vancouver Regional Transit Commission their respective prescribed shares of the operating costs, and to recover from the Province of British Columbia BC Transit's ratable share of the operating and debt service costs all in accordance with the regulations made pursuant to the British Columbia Transit Act;

(h) to receive from West Coast Express and apply to the credit of the Province of British Columbia against BC Transit's share of operating and debt services costs all fares and all miscellaneous revenues produced by the commuter rail system.

Vehicles and physical assets

2.3   Acquire and make available to the Operating Company the locomotives, rail passenger cars and other physical assets required for the effective and efficient provision of commuter rail service under this Agreement;

Risk management

2.4   Make available to the Operating Company risk management, insurance, and accident investigation services, and the adjustment and settlement of damage claims against the Operating Company, BC Transit and their respective contractors and employees, including the provision of legal services required in the resolution of such claims.

Systems operations

3.1  

(a) Develop the objectives, policies, performance standards and service specifications for the commuter rail service;

(b) Develop the operations plan for the efficient delivery of commuter rail service with particular attention to:

(i) operating and capital budgets;

(ii) capital asset additions and replacements;

(iii) commuter rail system financial audit.

(c) Manage, operate and maintain the commuter rail system in accordance with the operations plan and service specifications adopted hereunder in a manner which will:

(i) ensure the safe carriage, protection and security of passengers, employees and other persons using the commuter rail system;

(ii) maintain and secure all revenue vehicles and physical assets;

(iii) deliver the services set out in the service specifications in accordance with the approved budget;

(iv) inform BC Transit at the earliest opportunity of any circumstance giving rise to or likely to give rise to an operational change;

(d) Provide from its own resources or by contract such trained and competent personnel as are required to operate and maintain the revenue vehicles in a manner which will ensure the delivery of commuter rail service with due care and diligence and the use of every reasonable precaution to prevent loss or damage to persons using the commuter rail system and to any revenue vehicle;

(e) Monitor the performance of all employees, agents and contractors and others engaged by the Operating Company in the delivery of commuter rail service, and ensure that their performance complies with the objectives, policies and performance standards adopted for the delivery of commuter rail service;

(f) Design and implement a marketing and communications plan with associated promotional activities required to achieve the objectives of the commuter rail service, and establish facilities for public relations and communication services with respect to all of the activities of the commuter rail system;

(g) Design and implement the services and amenities required to achieve the objectives of the commuter rail service;

(h) Negotiate and enter into all contracts and grant licenses for the supply of goods and services required by the Operating Company to fulfill the terms of this Agreement.

Maintenance

3.2  

(a) Ensure that the revenue vehicles and physical assets made available by BC Transit for the commuter rail system are maintained in a clean, safe and dependable condition;

(b) Establish a planned maintenance program to be implemented by its own personnel, or by qualified persons engaged under contract, which will ensure the safe operation, structural integrity, and operating service schedule requirements of the revenue vehicles and physical assets, and eliminate undue wear and tear and deterioration affecting the performance of the commuter rail system;

(c) Report to BC Transit, annually, on the performance of the maintenance program, the effectiveness of the design and construction of revenue vehicles including a forecast of the need to remove revenue vehicles from service for the purpose of major overhaul or replacement.

Revenue vehicles performance

3.3  

(a) Maintain statistical records and information relating to:

(i) adequacy of specifications for physical assets;

(ii) operating performance of revenue vehicles and physical assets;

(iii) in the event of performance failures of any physical assets, the application of warranties;

(iv) contract performance by the suppliers of revenue vehicles and physical assets.

(b) Provide to BC Transit the specifications and indicate the contractual terms to be used when calling for proposals or tenders for additional or replacement revenue vehicles.

System performance

3.4  

(a) Monitor and review the operation of the commuter rail system with emphasis on the effectiveness and efficiency with which the service specifications are implemented;

(b) In consultation with BC Transit, prepare revisions to the operations plan and the service specifications to ensure that the commuter rail service is delivered in accordance with the service demand;

(c) Prepare annual and other requested reports for BC Transit to present to the Vancouver Regional Transit Commission and the District of Mission informing them of the performance of the commuter rail system and the achievement of the objectives, policies and performance standards incorporated in the operations plan and service specifications.

Revenue collection and finance

3.5  

(a) Collect from the users of the commuter rail service the fares set out in the tariff and enforce the rules and regulations established for the conduct of persons using the commuter rail system;

(b) Collect, safeguard and transfer to BC Transit all fares and all miscellaneous revenues produced by the commuter rail system;

(c) Keep records of and provide reports to BC Transit pertaining to the revenue performance of the commuter rail system;

(d) Establish with BC Transit a system for the maintenance of books of account and records incorporating all operating and capital expenditures incurred for the commuter rail system, all the financial transactions of the Operating Company and all revenues produced by the commuter rail system;

(e) Provide to BC Transit an annual financial statement of the operations of the commuter rail system to March 31 in each year;

(f) Provide a monthly financial statement to BC Transit within fifteen (15) business days of the end of each month reporting on the revenues generated and expenditures incurred during the month and containing the information required by BC Transit;

(g) Prepare and present to BC Transit the annual operating and capital budget required in accordance with the provisions of section 2.2 (a) of this agreement;

(h) Prepare and present to BC Transit, monthly, a report on the compliance with the operating and capital budget showing variances from the approved budget and forecast of budget compliance;

(i) Submit, monthly, reports to BC Transit on revenues received, the forecast of revenues under the tariff, and recommendations to be submitted to the Lieutenant Governor in Council for the modification of the tariff.

Commuter rail system advisory committee

3.6   In recognition of direct interest of the residents of the communities served by the commuter rail service, the role which the commuter rail system will play in the development of those communities and the need to establish a means of communication between BC Transit, the Operating Company and the residents of those communities, the Operating Company will establish an Advisory Committee comprising representatives of the Vancouver Regional Transit Commission and the District of Mission. The Operating Company shall set the terms of reference of the Advisory Committee, a schedule for its meetings and provide such resources as are required by the committee for the discharge of its responsibilities.

4.1   Cause this operating agreement and all amendments thereto to be submitted to, for approval and confirmation by a regulation of the Lieutenant Governor in Council;

4.2   Construct, maintain and operate the commuter rail system in strict compliance with the provisions of the British Columbia Transit Act and the regulations made from time to time by the Lieutenant Governor in Council;

4.3   Collect from persons using the commuter rail service the fares set out in the tariff.

5.1   BC Transit shall indemnify and save harmless the Operating Company, its directors, officers, and employees against and shall defend any and all claims, actions, suits and proceedings brought or made against them arising from the operation of the commuter rail system in accordance with the provisions of this agreement including the cost of all legal proceedings and any fines and penalties.

5.2   BC Transit shall provide and maintain insurance coverage of the nature and with adequate limits covering all physical assets used by the Operating Company and public liability for all passengers carried on the commuter rail service.

5.3   The Operating Company shall report to BC Transit, without delay, all claims of which it has notice whether arising from an accident or otherwise in any way connected with or arising from an accident or otherwise in any way connected with or arising from the operation of the commuter rail system. The Operating Company and its officers and employees shall provide to BC Transit and to its insurer such information as may be available with respect to any such claim. No officer or employee of the Operating Company shall admit to any liability or offer any settlement in respect of any such claim without the prior written authorization of BC Transit and its insurer.

5.4   BC Transit shall, quarterly, report to the Operating Company with respect to all reported incidents of which it has received notice and all claims settled and paid during the preceding month.

6.1   The term of this agreement shall commence on the date hereof and shall continue until March 31, 1997, and thereafter shall be automatically renewed for successive terms of one (1) years each unless cancelled by not less than twelve (12) months written notice given by either party to the other on a date of renewal.

7.1   BC Transit may terminate this agreement upon breach by the Operating Company of any term or condition hereof, including non-performance by the Operating Company of any of its responsibilities under section 3, provided the Operating Company has been given written notice within seven (7) days of the alleged breach or non-performance and has not, within sixty (60) days of the receipt of such notice rectified the breach or non-performance. In the event that the breach or non-performance is not rectified, the agreement shall terminate at the end of the sixty (60) day period without further notice. Non-performance by the Operating Company of any term or condition of this agreement as the result of a strike, lockout, governmental action or other circumstance beyond the control of the Operating Company, or by any reason of any similar action or circumstance affecting the performance of any person with whom the Operating Company has contracted for the performance of any obligation under this agreement, shall not constitute a breach by the Operating Company entitling BC Transit to terminate this agreement.

8.1   This agreement may only be amended by memorandum in writing signed by both parties.

9.1   No part of this agreement may be assignable without the written consent of the other party.

10.1   All notices required or permitted to be given hereunder shall be in writing and shall be sufficiently given if personally served to a responsible officer of the party to whom the notice is directed, sent by electronic means or mailed by prepaid registered mail to:

(a) President, BC Transit, 520 Gorge Road East, Victoria, British Columbia, V8W 2P3;

(b) President, West Coast Express Limited, 295 - 601 West Cordova, Vancouver, BC V6B 1G1

or such other address as either of the parties may specify by written notice to the other party.

Any such notice shall be effective on the day of such personal delivery or the day following the transmission by electronic means, on the day five (5) days following the date of posting in an office of Canada Post, provided that notice by registered letter shall not be effective if, at the time of posting, any interruption of mail service at the place of posting is then in effect or, to the knowledge of the parties, is contemplated to occur within seven (7) days of the date of posting.