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September 14, 2014

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Bus lawsuit settlement approved

First Transit will continue operating paratransit service for two years

The Regional Transportation Commission formally approved a settlement to end the nine-month stalemate and legal wrangling over its bus system and took the first steps to restart the bidding for operation of the buses.

The commission’s board approved the settlement in theory at its meeting last month, but the formal approval was required to end the lawsuit and authorize other actions required by the settlement.

The agreement with First Transit, the low bidder for the contract that was eventually blocked by a split board, says First Transit will drop its lawsuit against the commission and pay its own legal fees. In return, the company keeps control of the smaller paratransit bus service for another two years and gets a letter of explanation to clear its name from the RTC.

The agreement says the commission will redo the bidding process for the bus contract, but will split it in two, with no company allowed to have a monopoly on the system, as has previously existed. First Transit will be allowed to bid on the new contracts.

Until the new bidding process on two smaller contracts is complete, the current bus operator, Veolia Transportation, will keep running the buses, although at a lower cost than it proposed in its failed bid.

The RTC board initially approved the contract with First Transit, which was about $50 million less over seven years than Veolia’s proposal. But after legal questions were raised, the board rescinded the vote and it has since remained tied 4-4 on taking any other action.

First Transit then sued the RTC, asking a District Court judge to order the RTC to take action.

Even though First Transit was likely to win the first round in court, the appeals would likely not be settled until the contract was about to end, so First Transit decided it made more financial sense to drop the lawsuit and end the fight, sources said. First Transit offered the RTC a settlement plan Nov. 7.

The board today approved the formal settlement documents, approved a two-year extension to the paratransit contract and canceled the old bidding process. The paratransit extension is at a lower cost to the RTC, saving the commission about $1.7 million.

All of the board’s actions today were unanimously approved.

The board also discussed its options to rebid the bus contract. Members agreed with RTC staff to split the contract geographically, with one bus company to operate certain routes from the Sunset Maintenance facility in the southern valley and the other operator to provide other routes out of a maintenance facility near the North Las Vegas Airport.

Under the proposed guidelines presented today, one contract would be for five years with one optional five-year extension. The other contract would be for four years, with two four-year extensions.

The different timelines would keep the RTC from having to rebid both contracts at the same time in the future, General Manager Jacob Snow said.

The board discussed, but did not decide on the exact parameters or rules that will govern the bidding process, such as who will judge the bids. Board members said they would discuss it again in January.

Although there is some urgency to begin the bidding process quickly, board members expressed a desire to be prepared for the process up front and avoid confusion and controversy created by the last process.

“I just want to avoid the nine months of circus we had,” Mesquite City Councilman Kraig Hafen said.

Veolia has previously said it would support splitting the bus system into smaller contracts, as is done in most cities of similar size to Las Vegas, and First Transit required the separation as a part of the lawsuit settlement.

But the union that represents bus drivers has expressed concerns about the idea, worrying that it will split the union. Amalgamated Transit Union Local 1637 President Jose Mendoza told commissioners today that he has asked national union leaders for assistance in monitoring the process and protecting the drivers.

The union previously had sided with First Transit in the bus contract battle, but recently agreed to a new contract with Veolia.

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