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New company gets $83 million contract to operate bus system

Updated Thursday, May 19, 2011 | 5:33 p.m.

The Regional Transportation Commission today approved a controversial contract to give control of its bus system to a new company.

The board voted 4-3 to approve a contract with First Transit to operate the RTC’s fixed-route bus system. The contract shifts control of the system from one of the largest transportation companies in the world.

The contract, which will go into effect in September, is for three years, but can be extended twice for two years each.

The exact value of the contract will fluctuate as bus routes and the RTC budget change from year to year. In the next fiscal year budget, which was also approved by the board, First Transit will get $86.4 million; however, $2.8 million is for start-up costs, so the contract will likely be worth about $83 million per year, or more than $500 million if First Transit maintains the contract for all seven years.

The RTC owns the Las Vegas Valley’s public bus system, but maintenance and operation of buses are contracted to a private company. The system is the largest in the country operated by one company.

Until now, the RTC’s contractor has been Veolia Transportation, a multinational company based in Paris.

Operation of the RTC’s paratransit system has been contracted to First Transit, part of a company based in the United Kingdom that also operates the McCarran International Airport shuttle buses and owns the Greyhound Lines bus company.

The new contract gives First Transit control of all RTC buses, at least until the paratransit contract comes up for renewal this year. Members of the RTC board, which includes elected officials from Clark County and each municipality, were divided in the decision.

County Commissioners Larry Brown and Chris Giunchigliani, and Las Vegas Councilman Steve Ross voted against the contract with First Transit. Henderson Councilwoman Debra March, Boulder City Mayor Roger Tobler, North Las Vegas Councilman Robert Eliason and Mesquite Councilman David Bennett voted for the contract. Las Vegas Councilwoman Lois Tarkanian, who recently joined the RTC board, wasn’t at the meeting.

The normally tame and short RTC meeting turned into a five-hour affair after dozens of Veolia employees joined, packing the County Commission chambers beyond capacity.

The contract was the subject of months of intense lobbying involving some of the county’s most high-powered politicians, attorneys and consultants. First Transit’s bid for the contract was significantly lower than Veolia’s, although the exact difference depended on who interpreted the numbers. First Transit claimed that Veolia’s bid was $50 million higher, with $10 million of that being straight profit that would go to the company.

But Jeremy Aguero, an analyst for Applied Analysis who was hired by the RTC to give an impartial interpretation of the two proposals, said the difference between the contracts in terms of overhead and profit was closer to $4.2 million.

Veolia officials said that because they operate the system, they know the correct cost of doing business here and that First Transit was lowballing its bid.

But First Transit said it plans to use innovative techniques to lower costs.

The disparity between the bids seemed to be what concerned board members most, suggesting that the lower one may be unreliable, they said.

Ross said he wasn’t comfortable with either proposal because of the difference. He advocated abandoning both proposals and starting over.

Tobler disagreed, saying the board has always trusted RTC staff recommendations, and the independent analysis verified that First Transit’s bid was lower and yet still reasonable, he said.

“We do have confidence in the staff and we have their recommendation,” Tobler said.

If for some reason First Transit is unable to provide service at the level the contract requires and funds, the company will have to absorb the loss, so there is no risk for the RTC, he said.

Brown, the board’s chairman, suggested that the board split up the current bus system into contracts with multiple operators, as is done in other cities.

But RTC General Manager Jacob Snow said it would take at least a year for the staff to figure that out. In the meantime, they would have to negotiate an extension to the current contract with Veolia, which would be more expensive than going with First Transit for three years, while the RTC prepares to split the system when the contract comes up.

The concept was still supported by Giunchigliani and Ross, but overruled by the other members who said it was their duty to protect taxpayer money and go with the lower bid.

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  1. The contract has been awarded to a company that claims it can run the bus system for many millions of dollars less. It will be interesting to see if they can live up to their claims.

  2. DJohnson,

    You need to get your facts straight. First Transit still runs the buses in Boston and their drivers belong to the Teamsters union. They are currently hiring if you need a job. ;-)

    Read the article. If they bid to low, they have to eat the losses.

  3. First Transit and it's affiliated companies run busing operations all over the U.S....

    It's a BID.
    If they were eligible to bid, and won the bid, to call the whole thing "an outrage" is, well, outrageous.

  4. I'm stunned! Politicos actually going with cost-savings to the taxpayers? What a novel idea. Maybe, just maybe, it will catch on. BTW, Mrs, Gray, you just lost my vote for LV Mayor with your puppet-on-a-string vote. You put a union's interests before CC taxpayers. You ought to be ashamed of yourself but, in this day & age, shame is lost on people like you!

  5. They might be legitimate - don't really have a clue about that. I think it should be automatic when someone wins a bid that they reveal all of their political contributions - that would even the playing field and would let everyone know just what the cost is of doing business. Just sayin'.

  6. Don't break up the bus system, "keep it simple, Stupid" says it all. The System could use improvement: more buses to the 'burbs & more frequent buses through the Strip & Maryland Parkway. But overall, it has been leaps & bounds better than the Las Vegas Transit System was in my childhood.

  7. Thank you to Jacob Snow, Roger Tobler, Debra March, Robert Eliason and David Bennett for taking the RTC transit contract away from Veolia. For those who don't know, Veolia was "managing" (or better said mis-managing) the LA area's Metrolink commuter train system. In 2008, when a Veolia employee who was a train engineer was so busy texting to little boys (icky) that he missed a red signal along the tracks, and slammed the commuter train head on into a freight train.

    Thanks to the Veolia employees' gross negligence, in that 2008 train crash 25 passengers died very gory deaths (squashed, decapitated, bleeding to death while trapped), 46 passengers were gravely injured (paralyzed, brain injured, internal organs permanently crushed) and another 39 passengers were hospitalized with broken bones and other injuries causing them to lose work days and pay.

    Though the NTSB found that Veolia's employees were at fault in that 2008 train crash, and the current and future medical bills and lost wages of the dead and injured approached $1 Billion, Veolia-the-billion-dollar-company nevertheless hid behind a $200 Million limit on train crash damages and stiffed the gravely injured and families of the dead.

    If you want to see the horror caused by Veolia's negligence type "2008 Chatsworth Train Collision" into Wikipedia.

    So karma has come around and bit Veolia on the behind. Veolia deserves it because of their reprehensible conduct towards the victims of the 2008 Chatsworth train crash, which Veolia's employees caused.

    And shame on Chris Giunchigliani for voting to help this slimy company Veolia. Her vote on this issue shows me she doesn't deserve to be Mayor. Perhaps someone should put together a commercial showing footage of the Chatsworth crash wreckage and its victims, and telling Las Vegas voters how Chris G tried to maneuver to help Veolia get a second chance at bidding this RTC contract. Chris G's vote to help Veolia is far, far worse than her swearing at some county employee.