RTC to re-bid bus contract; First Transit to drop lawsuit

The Regional Transportation Commission disappeared behind closed doors Thursday and reappeared minutes later with a tentative agreement that is expected to end the months-long stalemate over a $600 million bus service contract.

The commission informally agreed to First Transit's request to rebid the bus contract and split the agreement into two regions, giving the company a chance to share the service with rival Veolia Transportation, which has run the service since 2008.

It is also possible, however, that neither company will win the contract. Veolia and First Transit are the largest transit providers in the world, but in reducing the size of the service area by half, the commission is inviting smaller firms that otherwise would not be qualified to enter the bidding.

"In our case, it will enhance the competition," said Zev Kaplan, the Regional Transportation Commission's attorney. "There is no guarantee of any particular contractor getting it. Splitting it opens it up to a greater number of contractors who could perform the service."

Board members could not vote on the settlement Thursday because the bus contract was not posted on the meeting's agenda. They are scheduled to formally discuss and vote on rebidding and splitting the contract during their Dec. 8 meeting.

In May the board awarded the seven-year operating agreement to First Transit, whose bid was $50 million less than Veolia's proposal, but that vote turned out to be controversial, and commissioners have since deadlocked on all issues related to the contract. After several meetings during which the commission tied 4-4, the issue was expected to be heard in District Court later this month.

As part of the deal reached Thursday, First Transit agreed to drop its lawsuit.

"While we are confident that we would prevail in court, given the prolonged nature of this litigation, the enormous time and resources required to sustain these efforts, and the cost and uncertainties of the legal process to both the RTC and First Transit, we have offered to resolve this matter out of court in a manner that is fair and equitable to both parties," Brad Thomas, president of First Transit, said in a prepared statement.

"While not easy, we believe that this decision is in the best interested of the community, the RTC and First Transit."

Veolia and First Transit agreed to pay their own legal fees. If the agreement is approved, First Transit will also be granted a two-year extension on its contract to operate the ParaTransit system.

The controversy over the new contract began in May, when the board voted 4-3 to give the deal to First Transit. Attorneys for Veolia Transportation filed a protest, claiming the vote was invalid because it did not constitute a majority decision because Commissioner Lois Tarkanian was absent.

Commission administrators opted to seek an opinion from the state attorney general's office, which sided with Veolia's legal team.

First Transit lawyers disagreed and filed a lawsuit in District Court, asking a judge to force Commission Chairman Larry Brown to sign the contract.

District Court Judge Rob Bare disagreed with the attorney general's opinion and strongly urged commissioners to settle the dispute, adding that any capricious and arbitrary decisions against First Transit would not be tolerated.

Last month, commissioners voted 4-4 to deny First Transit's bid and send out a new set of requests for proposals. A second vote to award First Transit the contract again ended with a 4-4 stalemate.

First Transit again asked Bare to intervene, and the judge scheduled a hearing for Nov. 18.

The Regional Transportation Commission has two maintenance facilities, one in the north and one in the south valley, which makes it likely that the service will be split up by regions.

Board members are also likely to change the weight given to scores on pricing and technical issues, a point of contention that had some commissioners claiming the scoring was unfair.

The request for proposals process is expected to last until the end of 2012; it would be early 2013 when the new operators actually begin running the services.

Veolia, which was granted a month-to-month contract extension through March while the dispute was being settled, will continue operating the fixed-route system until new contracts are awarded.

The commission recently approved its budget based on First Transit's figures, and Veolia agreed to provide the service for the same amount through March.

Kaplan said the board must re­negotiate with Veolia, but he does not believe the budget must be amended as a result.

Kaplan said that because the board has agreed to issue a new request for proposals, it is doubtful the Federal Transit Administration will pull funding. The agency had threatened to strip the agency of about $4 million if it hadn't decided on a new operator by March.

Las Vegas City Council members Steve Ross and Lois Tarkanian along with Clark County commissioners Brown and Chris Giunchigliani consistently voted for Veolia.

Mesquite City Councilman Kraig Hafen, Boulder City Mayor Roger Tobler, North Las Vegas City Councilman Robert Eliason and Henderson City Councilwoman Debra March pushed for First Transit.

Contact reporter Adrienne Packer at
apacker@reviewjournal.com or 702-387-2904.