Saturday, July 09, 2005
Copyright © Las Vegas Review-Journal

'OPERATIONAL PHASE': Monorail oversight changing

Management firm's top executives leaving; parent company takes over

The top two executives of the company running the Las Vegas Monorail are on their way out, after a deal was struck Friday for the management firm's takeover by the monorail's parent company.

In a deal being termed as a "merger," Transit Systems Management LLC president Cam Walker and Jim Gibson, the firm's chairman and chief executive, will leave their posts as their firm is swallowed whole by the nonprofit Las Vegas Monorail Co.

Walker and Gibson will continue to advise the monorail company.

"We'll no longer contract for management services," Jim Haycock, monorail company board chairman, said in a prepared statement. "Instead, the board will hire a CEO, and that person will manage the staff that currently works for TSM."

Taking the title of CEO and president will be Curtis Myles, who is deputy general manager of the Regional Transportation Commission.

"With the design and construction complete and the monorail up and running, it's time to change the manner in which the monorail company manages the system and the organization," Walker said in a prepared statement.

Myles takes over July 18, one year and three days after the monorail's July 15, 2004, opening to the public.

Critics have directed their ire at Transit Systems as the monorail struggled through repeated pratfalls last year, including three instances of metal parts falling from moving trains. Those problems kept the rail line sidelined for much of 2004.

The system has been much more reliable this year, but its bond rating was dropped to junk status by a financial rating firm as ridership remained sluggish.

Monorail board members say the end of Transit Systems and Walker and Gibson's roles overseeing day-to-day operations have nothing to do with the monorail's operational foibles.

"Absolutely not," said Terry Murphy, a board member speaking on behalf of the board. "We are done with the construction phase. We're in the operational phase. Cam wanted to pursue some other opportunities. It just makes sense to have management in-house."

Said Myles: "It appears to be a very amicable agreement for both sides.

"When you have a management company, the board is pretty well separated from the day-to-day operations. The board wanted to have some greater oversight, I suspect."

The monorail company had no employees of its own. Rather, it paid Transit Systems roughly $6 million per year to provide all management services and front-office operations for the $650 million monorail. That 5-year agreement expires next month.

Murphy said the motivation for the changes, which has been under discussion for several months, was "kind of mutual."

"They felt they fulfilled their obligations under the contract. We felt they fulfilled their obligations as well," she said.

As part of the deal, the monorail company will take over leases, employees and contractual obligations of Transit Systems, which was co-owned by Walker and the widow of the late Bob Broadbent, who was Walker's father-in-law and a Clark County political heavyweight.

Walker and Broadbent's widow, Sue Broadbent, will not be additionally compensated for the merger, according to Murphy.

Walker's continued involvement, albeit in a lesser role, is necessary, according to Haycock.

"He'll stay on in a consulting capacity for at least a year because of the historical knowledge he holds," Haycock said in his statement. "We'll need him as we move forward."

Transit Systems was the offshoot of a Walker-Broadbent partnership that first developed the monorail concept, before the creation of the monorail company.

Gibson, who also is mayor of Henderson, has long been rumored to be planning an exit from Transit Systems, which he joined after Broadbent's death in 2003. Prior to that, he was a member of the monorail company's board.

Gibson is widely considered to be mulling a gubernatorial run.

Myles said he would expect full disclosure of the monorail's management costs after the merger. That has been a point of contention with critics who sought to mandate fuller disclosure.

The monorail company is required under law to open its books to the Legislature, though Transit Systems was not, other than to disclose how much the monorail company paid it for management services. Transit Systems did not have to disclose how it spent its money.

Myles said his main goal is ensuring the monorail runs reliably.

"The primary thing is going to be focused on getting the system up and running, and running consistently over the long term," he said. "Once you do that, a lot of things are going to take care of themselves.

"One of the things I looked into was whether the system can be successful. It's clear to me it can be. It's not running. It's walking. Before long, it'll be jogging. Then we'll get it up to a sprint."

Murphy agreed.

"I think we have lots of room to grow our ridership. You have to demonstrate reliability before you can really go after marketing opportunities," she said.

"Two or three years from now, everybody will wonder what the fuss was about."