OCTA Awards Van Service to Laidlaw

Despite a warning from a former Los Angeles transportation commissioner and public misgivings about quality of service, the Orange County Transportation Authority on Monday broke with its standing policy and agreed to hire a single company to provide all of its small-bus and van service such as programs for the disabled and senior citizens.

Awarding the $93-million contract to Laidlaw Transit Services Inc. “was not an easy decision,” said Laurann Cook, a Fountain Valley councilwoman who is vice chairwoman of OCTA’s board of directors. “We’re talking about a lot of money. And money aside, we’re talking about a lot of people whose lives will be affected.”

The board voted 8 to 2 for a five-year deal exclusively with Laidlaw, a Canadian company that is the largest North American provider of ambulance, school and city bus transportation. OCTA’s practice in the past has been to provide some of the service itself and divide the rest among several private companies, including Laidlaw. By dividing the work, OCTA officials had aimed to ensure that backup transportation was available in emergencies and to encourage improved service through competition.

John Shallman, a former Los Angeles transportation commissioner, told the OCTA board before the vote Monday that service will suffer.

“If we had awarded one provider and that one provider was Laidlaw, we would have had a meltdown in Los Angeles paratransit services,” he said.

But OCTA board members pointed out that Laidlaw’s operations in Orange County are under different management than in Los Angeles.

County officials decided to contract out the so-called paratransit service, which serves 14,000 disabled people and a total of 1.7 million passengers a year, after consulting firm Crain & Associates found that such a move would save $6.3 million to $15.8 million over the life of the contract.

Hiring Laidlaw for disabled services and Western Transit/Yellow Cab of North Orange County for the rest of the program would have cost $8.8 million more than allowing Laidlaw to handle both services, an OCTA staff report showed.

The board approved a single contract, effective Nov. 1, for both services on condition that Laidlaw put up a performance bond of 25% of the annual contract amount. The money would go to the transit authority if Laidlaw’s performance is not acceptable.

“We are keepers of taxpayers’ money. As an elected official, if I can save $8.8 million, I must look at it very closely,” said board member Mike Ward, an Irvine councilman. “These people are the most vulnerable, but they’re also the most vocal. I know we will hear from them if the service is not adequate.”

Critics, however, argued that the performance bond guarantees nothing.

“As an advocate for the elderly and disabled, my greatest concern is going with one contractor,” said Marilyn Ditty, executive director of South County Senior Services. “You’ll find that this population, which is the most vulnerable and the most dependent, needs to have an emergency backup.”

Union leaders too spoke against contracting solely with one company and disputed the consultant’s estimate that using OCTA workers for paratransit service would cost $108.5 million for five years. Public employees were never given an opportunity to bid on the contract, said Mike Patton, a business agent for Teamsters Local 952, which represents OCTA’s drivers and mechanics.

“Our problem is, the Teamsters Union was never consulted as to costs development, especially labor costs,” Patton said, adding that the mechanic’s wage used in the estimates was inaccurate and that the union would be willing to trim wages for van drivers.

“We didn’t even get to participate in the process,” Patton said. “That’s inherently unfair.”

Western Transit officials also argued against a single contract, pointing out that their company had bid nearly $1.7 million less than Laidlaw for the same service.

But Monte Ward, the transit authority’s manager of special projects, said Laidlaw scored higher in the bidding process because of detailed operating plans, expertise, higher staffing levels and a larger proposed facility that could handle future growth.

Raising concerns about reliability, OCTA board member Todd Spitzer proposed awarding two contracts. Board members Cynthia P. Coad and Sarah L. Catz agreed, but the motion failed on a 7-3 vote.

Although the aim of the contract is to save money, Spitzer said, relying on a sole provider could end up costing tens of millions of dollars, for any attempts to collect on the performance bond would lead to lengthy litigation.

Besides, he said, “it’s the cost associated with the loss of goodwill with your ridership, who will be sitting in wheelchairs on the street corner because there was no service to pick them up.”

In other action, the board voted 9 to 1 to support a state constitutional amendment now under consideration by the Legislature that would give voters a one-time opportunity to extend existing transportation sales taxes by a simple majority. Orange County voters could extend Measure M--the half-cent sales tax--through 2031. Board members stipulated that voter control over major changes in spending plans was essential.

If passed by the Legislature, the amendment would be on the November 2000 ballot. Even if the measure is approved statewide, every county wishing to extend its local transportation tax would need approval from a majority of its voters.

Critics argue that the amendment is a sneaky way to ignore the wishes of voters, who overwhelmingly approved a 1996 proposition that required a two-thirds vote to increase local taxes.

“It’s tragic that this government in Sacramento and this august body here in collusion would attempt to circumvent the will of the people of California,” said Roland A. Boucher, a representative of United Californians for Tax Relief and the Orange County chapter of Citizens for a Sound Economy.

Spitzer, the lone dissenter, said the $16 billion the state receives in gas and automobile taxes ought to fund transportation improvements. Only half is used that way now, with the rest going into the general fund.

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Bus Bids

Opponents say the agreement for bus service to senior and disabled riders was flawed for two reasons: In-house county costs were overstated by $12.9 million; and the contract went to a single provider, leaving no back-up service. Laidlaw Transit was awarded the contract.

Provider: County

Total 5-year service cost in millions: $108.5

Provider: Adjusted county

Total 5-year service cost in millions: $95.6*

Provider: Laidlaw Transit

Total 5-year service cost in millions: $93.3

Provider: Western Transit

Total 5-year service cost in millions: $91.5

* Crain and Associates calculated the original in-house cost; adjusted county cost is based on figures from the Teamsters union.

Source: Orange County Transit Authority. Teamsters Local No. 952.