For the third time in as many years, the Regional Transportation District will have to replace its major private contractor, as Oak Brook, Illinois-based ATC/Vancom has begged out of a five-year, $80.1 million deal.
The company, which is a division of British conglomerate National Express Corporation, didn't give a reason for its decision to abruptly leave Denver, but RTD spokesman Scott Reed says he believes ATC wants to consolidate its operations in light of the economic recession that has enveloped the United States in the last year.
"They want to pull out, and we're happy to see them do it," adds RTD boardmember Dick McLean. "I think they were having trouble meeting the terms of the contract, and if they can't do the job, they take a financial penalty. My guess is that they don't want to incur that, and that they'd rather get out now."
A woman who answered the phone at ATC's Denver office said acting manager Rick Murray would have no comment on why ATC was leaving the city. No one from the company's Illinois administrative offices, including CEO Jim Long, returned phone calls from Westword.
ATC was hired in August 2000 to run two-thirds of RTD's privatized routes. It replaced Knoxville, Tennessee's TCT Transit Service, which had been fired the previous fall after only three months on the job. TCT had left passengers stranded and failed to meet RTD's service requirements, forcing unionized drivers employed by the district to pick up the slack by working overtime. TCT said it hadn't been able to hire enough drivers because of the tight labor market. When ATC took over, company officials promised they wouldn't have the same problem.
But only a year later, the company asked to be relieved of half of its routes, Reed says, which were bid out to another transportation conglomerate, First Transit Inc. of Cincinnati. In December, ATC asked to be released from the rest of its contract, and RTD is currently negotiating with the company on how to accomplish that as soon as possible without disrupting bus service again. It has also asked First Transit to step in and take over the remainder of ATC's routes.
"We have had numerous service problems with ATC," Reed explains, "so this is probably the best solution and will hopefully provide better service to the riding public." He adds that the financial arrangements with both companies won't be revealed until the discussions are completed sometime in February.
In 1989, the Colorado Legislature passed a law requiring RTD to privatize 20 percent of its routes. Two years ago, lawmakers upped that number to 35 percent. The theory was that private companies would reduce the cost of providing bus service and provide a chance for locally owned transportation companies to find business.
But no Colorado companies have bid on any of RTD's routes, and finding companies that are both willing and able to carry the load has been a nightmare for the district. Laidlaw Inc., which is based in Canada, had the job before TCT; it now provides service to about one-third of RTD's privatized routes.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
"The whole thing has been a sham since the start," says Bill Jones, a lobbyist for the Amalgamated Transit Union, Local 1001, which represents bus drivers employed directly by RTD. "Privatization might sound good for the taxpayer except for the crappy service we've gotten. We've always said that the privatized buses should be painted bright yellow, because we want people to know the difference between them and us."
While union drivers were able to bail RTD out of the situation with TCT, Jones says the district will be out of luck next time. "The first part is that at the time, we were under 20 percent privatization. The problem now is that with 35 percent contracted, RTD drivers cannot possibly step in and take over -- we don't have the manpower. The second part is, we, the union, are not going to lift one finger to help. Last time, with TCT, they missed so many runs that they forced our members to cancel their vacations and they wouldn't allow anyone to take days off. We literally had people here who worked for six or seven weeks straight without a day off. It was just horrible."
Whether First Transit will be any better than the previous companies is anyone's guess, however. "It's to the point where boardmembers don't want to have the private contractors supply the routes in their districts because they get all the complaints," says RTD board chairwoman Mary Blue. Blue, who couldn't remember the name of the new company, doesn't know if RTD has looked into the finances of First Transit any more carefully than it did those of ATC or TCT. "I think our staff does research to the extent that it's possible."