Board members voice concerns that outsourcing service might not save much money, after all
After about two-and-a-half hours of staff presentations, public comments and their own discussion about options, the Sarasota County commissioners voted unanimously on March 12 to hold an in-depth workshop on how best to proceed with the handling of Sarasota County Area Transit (SCAT).
That workshop would include a technical advisor and staff members who can facilitate the process, as well as members of the public and potentially representatives of companies interested in operating SCAT, based on comments the county’s procurement official, Jennifer Slusarz, provided the board.
The discussions also could lead to a new process — an advertisement of an Invitation to Negotiate — to solicit proposals for the private operation of SCAT, Slusarz added.
As part of a Request for Proposals (RFP) process that the commission requested in August 2018, staff had evaluated information from three companies interested in taking over the management of the county’s bus operations. However, the company deemed by a staff evaluation committee to be the most qualified to perform the necessary services — Transdev of Lombard, Ill. — would, at best, save the county $1.1 million in its first year of operations and as little as $100,000 in the third year of a proposed five-year initial contract before the amount went back up to about $1 million in the fifth year. Commissioners voiced dismay at those figures, especially since SCAT’s budget for the current fiscal year is $30 million.
“That’s not a huge savings to disrupt an entire system that we can control,” Chair Charles Hines said.
As part of their March 12 vote, the commission cancelled the RFP, which was advertised on Oct. 16, 2018; the proposals had to be submitted by Dec. 19, 2018.
SCAT exerts the second-highest demand on the county’s General Fund, commissioners pointed out. The General Fund is comprised mostly of property tax revenue. Only the annual budget for the Sarasota County Sheriff’s Office exceeds that of SCAT in General Fund appropriations.
A March 12 staff memo pointed out that $21 million of the SCAT budget this fiscal year comes from the General Fund. “Fare box receipts account for $1.3 million,” the memo adds, “and federal and state grants equal approximately $5.9 million.”
The March 12 vote came after the board members listened to 17 speakers, including members of Local 1701 of the Amalgamated Transit Union, which represents SCAT drivers.
A number of those who addressed the public came from other areas, including John Lyons of Maryland, who said he is originally from New York City. He drove a bus in the city for 25 years, he added.
Transdev cites its operation in Nassau County, N.Y., as one of its success stories, Lyons told the board. Yet, as a former resident of Nassau County, he continued, he saw that the company made significant cuts in involving one of the busiest routes in that area. “[Transdev] disenfranchised more impoverished neighborhoods, the people who really need the transportation most.”
Referencing SCAT drivers in the audience that day, Lyons said, “There are genuine concerns for their jobs, their livelihoods, their families and the service that they provide.”
He urged the commission “to avoid the perils of privatization.”
Don Turner, president of Local 1701, told the commissioners, “Transportation is a public service and should not be privatized.”
However, the very first speaker, W.C. Pihl, senior vice president of Transdev for business development, pointed out that SCAT’s “cost per passenger is increasing, and it’s not a sustainable direction.”
Because Transdev has about 200 company contracts across the United States for purchasing products such as tires and parts; because of consolidation of services, such as accounting and payroll; and thanks to its innovative practices, Pihl continued, Transdev “can bring you a lower cost structure, improve productivity, increase ridership and compensation to employees.”
Transdev initiated contact with the Sarasota and Manatee county commissions in 2013 about savings its leadership said it could achieve by operating the public bus systems for both jurisdictions. The Sarasota County Commission opted to wait, but Manatee forged ahead in the process.
About five years later, in a May 31, 2017 letter to then-County Administrator Tom Harmer and the commissioners, Transdev’s executive vice president asked for an opportunity to present a new proposal to Sarasota County. That prompted discussions that ultimately led to the decision to issue the Request for Proposals last year.
Other board concerns
Commissioners did question staff about an estimate that the county would have to continue to spend from $4.5 million to $4.7 million per year to oversee the work of a private company operating SCAT.
“That seems like a lot of costs for us to outsource something,” Chair Hines said.
Part of that expense would be related to maintenance of SCAT facilities, including bus shelters, and the need to keep on board six to eight SCAT employees — mostly managers who would work in a supervisory role, Rob Lewis, the interim SCAT director, explained. “A key component of [outsourcing the bus system management] would be the monitoring of the performance of the vendor.”
Another concern, raised by Commissioner Christian Ziegler, is the expectation that technological advances will continue on a fast track over the next several years. If the board eventually does decide to go with a private firm to manage SCAT, Ziegler said he does not want to see that “we lock ourselves out of being able to take advantage of some of those innovations that may be coming.”
Tina Lionhart of Transdev pointed out in remarks to the board, “Innovation is built into our proposal.”
For example, she said, the company uses an app, GoMobile, that enables riders to buy tickets, while another app allows people to check how long they will wait for their buses to arrive. Another company innovation, she said, enables drivers to trade routes among themselves. That has reduced the number of employees calling in sick, Lionhart pointed out, because they can find replacements on their own.
One other facet of the commissioners’ discussion among themselves focused on the fact that Rob Lewis, who also manages governmental relations for the county, has been serving as interim SCAT director since the fall of 2017. Commissioners have praised Lewis for his work in that role, and they did so again on March 12.
Yet, Commissioner Nancy Detert said at one point, “What’s odd here today is that you have all these people worried about losing their jobs, when the only one in this room that we actually want to fire is Mr. Lewis.”
Detert was the first to suggest that County Administrator Jonathan Lewis go ahead and hire a new person to lead SCAT. If a new director were on board, she said, then that person could serve as the expert the commission will need during the future workshop. (Detert earlier had noted her aversion to hiring consultants.)
“That certainly falls within my prerogative,” Jonathan Lewis responded to the hiring comment. However, he continued, “It does not seem to me to make sense … while [the future of SCAT] is up in the air.”
“I see the exact opposite,” Detert told him.
Chair Hines said he also had brought up the issue with Jonathan Lewis. Hines added that he would like for Jonathan Lewis, at some point, to talk with the commissioners about the potential hiring of a new SCAT director, perhaps a person from a larger community with experience in transit innovation. Given the fact that the county would have to have staff in place to oversee operations of a private company managing SCAT, Hines said, “That person we hire is not going away.”
A focus on the riders
Commissioner Detert often has voiced her reluctance to see the county privatize SCAT, saying she believes the only way a company can make a profit is to reduce services.
She voiced excitement on March 12 when a 25-year-old speaker talked about using the bus regularly.
Anna Smith of Venice said she takes the bus to work in Englewood. “I have a sinking feeling that that route won’t stick around if this [system] becomes privatized.”
Yet, Smith continued, transit is a service provided for the betterment of our community. … I stand by the opinion of the union that opposes this measure,” because it would lead to lower wages, fewer jobs and reduced services.
“We’re just wrestling with the best way to serve people like you,” Detert told Smith.
When Detert asked her how many people typically are on her bus, Smith replied that she generally sees no more than 10; often, fewer than that.
Smith told Detert she is fortunate that she does not have to walk far from her home to catch the bus.
Detert and other board members have talked on a number of occasions about how few people they see on SCAT buses.
Later during the March 12 discussion, Detert told her colleagues, “I was thrilled to hear from an actual customer and rider and what their experience is.”
Detert added, “It’s very difficult to make public transportation work in the state of Florida when it’s so hot, and we have an elderly population, so they’re almost risking their life, sitting at a bus stop for 45 minutes in the hot sun.”