North County Transit board picks outsourcing as best budget option

North County Transit Distrist, which last year cut FAST and LIFT bus service in Ramona and scaled back Ramona service to and from Escondido to twice a day, is looking toward the private sector to operate and maintain its buses.

District directors yesterday authorized Executive Director Matthew Tucker to issue a Request for Proposals (RFP) for a private contractor to handle bus operations and maintenance.

Staff recommended the action as a cost savings measure to help resolve the district’s financial situation, which projects annual deficits close to $19 million, states a district news release. According to Sarah Benson of the district’s Marketing and Communications Department, the state eliminated transit assistance for the next five years resulting in a loss of $10.5 million annually to district’s budget. This, combined with declining sales tax revenues, translates into a loss projected in the millions, Benson reported.

The transit board considered three options in reviewing the district’s bus operations: maintaining the existing business model by reducing compensation costs, maintaining the existing business model by reducing compensation costs combined with partial outsourcing of district’s services, or 100 percent outsourcing.

The board reviewed each of the alternatives and concluded that the full outsourcing option represented the best alternative for NCTD, as it allows the operation to provide the highest level of service at the lowest cost per service hour operated. Under the outsourcing scenario, the public would be provided with 15 to 23 percent more vehicle service hours.

Continuing the existing business model would require significant across-the-board compensation reductions, in excess of 30 percent, according to the district. These were deemed not feasible, given that the resulting wages would be well below what is acceptable in the public and private sectors for fully trained mechanics and professional staff.

The partial outsourcing option was determined not to be feasible because of the requirement to implement significant across-the-board reductions in compensation, and savings were limited.

“We appreciate the excellent work put forth by NCTD employees in providing service to our customers on a daily basis,” said Board Chairman Bob Campbell. “Back in February, the board directed the executive director to begin looking at all alternatives, given the decline in state and sales tax revenues. The decision today was not easy, but reflects the board’s desire to provide the highest level of service to our customers. As we move forward, we will continue to review all of our business activities with a focus of reducing costs and increasing ridership,”

The RFP will be finalized and issued at the end of July 2009, with the first half of 2010 identified as a transition period and the private contract startup to begin in July 2010.

The district moves more than 12 million passengers annually by providing public transportation for North San Diego County. Transit services include the BREEZE bus system, the COASTER commuter rail service, LIFT paratransit for physically disabled passengers whose wheelchairs require lifts, and the SPRINTER light rail. The FAST minibus that the district cut from was droppeRamona last year provided door-ro-door service within town.

The district’s fiscal year 2010 operating budget recently adopted by the board totals $87.9 million.