Capital Metro board OKs $1.4 billion contract to consolidate bus operations, maintenance

Capital Metro's board approved a $1.4 billion contract with MV Transportation for all bus operations and maintenance.

Capital Metro's board approved a $1.4 billion contract with MV Transportation for all bus operations and maintenance.

Two weeks after delaying a vote on the agency’s largest contract for bus services, Capital Metro’s board of directors approved a $1.4 billion contract Aug. 12 that will consolidate two existing ones.

The transit agency currently contracts out its bus service and maintenance operations to MV Transportation and RATP Dev, but the new contract awards the services to Dallas-based MV Transportation. MV’s contract to operate all of Capital Metro’s services starts Jan. 5.

“Major transitions are complex, but we’re confident that the combined contract will improve employment opportunities and give us the flexibility needed to always provide the best service to our customers," Capital Metro President and CEO Randy Clarke said in a news release.

Because of the differences in wages and benefits between the two existing contracts, MV Transportation CEO Tom Egan told the board at the July 29 meeting that they will be equitable under the new contract. Language in the new contract also sets a baseline for negotiations with the local union that would prohibit MV from starting negotiations by lowering wages or increasing health care premiums.

“We are ready to make a commitment toward getting premiums and costs to where the employees can afford them,” he said July 29.

In April 2012, Capital Metro’s board approved two contracts for bus operations, including one with MV Transportation. This change came after Capital Metro went through the Texas Sunset Advisory Commission to look for inefficiencies within the agency. The commission came back and stated Capital Metro would need to reorganize its labor structure by either outsourcing labor to a third party or bringing all workers in-house. The agency chose the former, and a June 2011 bill was signed into law.

Capital Metro has operated under two contracts since 2012 but will now merge them into one to have equal pay and benefits for employees, said Dottie Watkins, Capital Metro’s vice president of bus operations and maintenance.

But the Aug. 12 vote came with concerns from board members and members of the Amalgamated Transit Union Local 1091, which represents bus operators and maintenance workers.

Chief among the concerns from board members was the cost of premiums and co-pays for MV Transportation employees.

“My biggest fear is some of my employees will get left behind,” said Brent Payne, ATU’s president and business agent, at the board’s July 29 meeting.

Board members Ann Kitchen and Delia Garza, both of whom are also Austin City Council members, expressed concern at the July 29 board meeting over the lack of details presented to them. They also wanted to include stronger language in the contract as the baseline for negotiations.

Capital Metro's board is only able to approve a total cost for the labor contract. The next step is for MV to meet with ATU to begin negotiations for wages and benefits. Those negotiations could take several months.

“I am comfortable with awarding the contract and putting negotiations in the hands of the ATU,” board President Wade Cooper said July 29. “I understand [the contract is] not going to get worse. It will get better or stay the same. I’m not sure we need to put a hand on the scale between MV and the union.”
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