The Capital Metro board approved two contracts with two different Texas-based companies to run bus service for part of its fixed-route and paratransit services in a deal that transit agency leaders say would save an estimated $35.5 million over the next seven years.
The first contract is a three-year, $408.7 million deal with Fort Worth–based McDonald Transit Associates and includes an option for four one-year extensions to run bus service.
The second contract goes to MV Transportation, which relocated its headquarters from California to Dallas, for MetroAccess services currently provided by StarTran. It is a $111.5 million deal for three years with an option for three one-year extensions.
The contractors will replace StarTran, a subsidiary of Capital Metro. They will start providing service Aug. 19 and are meeting with StarTran employees this week to introduce themselves and answer questions.
“I’m pleased with the outcome. We’ve done right by employees, we’re complying with the law, and over the long haul, we’re improving our financial bottom line,” said Linda Watson, Capital Metro president and CEO, in a news release. “Further, I’m confident in the expertise and abilities of the two contractors to provide a great service to our customers. It will be seamless to the community.”
Dottie Watkins, who oversees operations, said McDonald Transit’s local management team made the company stand out above the others.
“Through our interviews with McDonald and through their written proposals, they regularly stress the importance of good communication with employees as a foundation for good services,” she said during the April 20 board work session to discuss the recommended contractors. “Given what we are up against, we were impressed with their presentation.”
Hiring the new contractors will satisfy Senate Bill 650, signed into law in June 2011, which requires Capital Metro to either bring all of its employees in-house or outsource employment to a third-party contractor. About 70 percent of Capital Metro’s bus service employees work under StarTran, created by Capital Metro 1991 to manage its union workers. The other 30 percent are managed by third-party contractors First Transit and Veolia.
The bill was a result of the organization’s review by the Texas Sunset Advisory Committee, which studies government agencies and identifies waste and inefficiencies.
Both McDonald Transit and MV Transportation will be required to offer existing StarTran employees a job with the same wages and benefits they earn now. The contractors will also have to offer a comparable pension plan and negotiation of wages, benefits and the pension with the union.
Jay Wyatt, president of the Amalgamated Transit Union Local 1091, said StarTran employees will fight to earn the same pension coverage as they have now and have had since the 1950s.
According to board documents, McDonald Transit has other contracts with union workers in Indiana, Massachusetts, Alabama and Colorado. MV Transportation employs several ex-union officials on its labor team.
The contracts also include various penalties and incentives based on performance measures, such as the number of complaints per 1,000 passengers and number of accidents per 100,000 miles.
The board’s vote to select new contractors is another step forward in a nearly three-year process to make Capital Metro more efficient and financially stable as well as restructuring the organization of its labor force. The transit agency has a timeline of events posted on its website.