Contract rules for running the city bus system

(a) In accordance with §§ 15B-8.1 , 15B-8.2 , 15B-6.2 , and 15B-4.1 , the department shall contract with the private, nonprofit corporation to manage, operate, and maintain the city bus system, and may contract with the private, nonprofit corporation to manage, operate, and maintain the special transit service on behalf of the city. Under the contract, the private, nonprofit corporation: (1) Shall be an independent contractor in relation to the city; (2) Shall be the employer of record of bus personnel, who are employees of the private, nonprofit corporation under 29 USC § 152(3), and who are not public employees under HRS Chapter 89. The private, nonprofit corporation is also the employer of record of special transit service personnel should the contractor be retained under contract to manage, operate, and maintain the special transit service on behalf of the city; (3) Is an instrumentality of the city for appropriate purposes other than for labor and employment purposes; (4) Shall manage, operate, and maintain the city bus system and special transit service, as applicable, in the most efficient and effective manner and in accordance with sound management practices; and (5) Shall have no purpose, except the management, operation, and maintenance of the city bus system and special transit service, as applicable, and the provision of transit-related services on behalf of and for the city. (b) The term of the contract will be set by the department, provided that such term cannot be less than five years. The term may encompass a fiscal period for which council appropriations are unavailable. If so, the contract must include conditions specifying that: (1) The term of the contract is subject to the availability of council appropriations; (2) The council is not obligated to appropriate funds for the contract; and (3) The failure of the council to appropriate funds for the contract does not constitute a breach by the department or city. (c) For the purposes of Charter § 9-305, inclusion in the contract of the conditions specified under subsection (b): (1) Will be sufficient for approval by the director of budget and fiscal services as to the availability of funds for the contract; and (2) Are a prohibition on extending the contract beyond the term of an appropriation to finance an obligation of the department. (d) Under the contract: (1) Reimbursements to the private, nonprofit corporation for the operation and maintenance expenses of the city bus system and special transit service are not income or profit of the corporation; (2) Reimbursements for expenses incurred by the corporation’s directors and officers in the performance of official duties: (A) Are operation expenses of the city bus system or special transit service, as applicable; and (B) Are not a distributed share of the income or profit of the corporation; and (3) The operating revenues derived from the city bus system and special transit service will be income of the city, not of the corporation.