Costs soar after Huntington Park picks politically connected firm to provide bus service
The Huntington Park City Council was faced with a crisis.
Its longtime provider of bus service abruptly announced it was getting out of the business two years ago, and the city had 30 days to find a new operator.
Without seeking competitive bids, the city contracted with Metro Transit Services. The company hired as its general manager Mario Beltran, a political consultant who worked for a campaign committee that promoted the three new council members, campaign finance records show.
The deal with Metro paid the company a 46% higher rate for the same service the old bus operator provided, according to city records.
And that was only the beginning of several upgrades. Eventually, Huntington Park paid Metro nearly triple what it spent on the former bus service.
The city also purchased a new fleet of buses for more than $250,000 and leased them to Metro Transit for $100 a month per bus, an arrangement the city’s then-finance director described as far below market value and “completely inappropriate” in an email to the city manager.
Metro registered with the state 11 days after the new council majority was sworn in. Beltran was hired to manage the operation even though he had no previous experience in the bus business.
Beltran, a former Bell Gardens councilman, was convicted in 2007 of filing a false police report after claiming he was robbed. Two years later, he pleaded guilty to three counts of failing to file campaign disclosure forms and one count of failing to deposit cash contributions. Under that plea, he was forced to step down from the City Council.
Council members say Beltran’s connection to their campaigns played no role in the contract selection process. They said that the city was desperate for a transit company and that they’ve been generally pleased by Metro’s performance.
“At the end of the day, we’re prioritizing service for the residents,” Councilwoman Karina Macias said.
Beltran declined to comment, saying he was not authorized to do so by the company. Metro’s vice president, Victor Caballero, and the company’s ownership did not return repeated calls seeking comment.
Huntington Park’s experience contrasts sharply with its neighbor, South Gate, which also had the same bus provider pull out in 2015.
But South Gate managed to secure new service for significantly less money than Huntington Park. Records show South Gate paid roughly $54 hourly per bus compared with $63 for Huntington Park.
Moreover, South Gate got a much better deal leasing out its buses. The city charges $1,250 a month per vehicle for use of its buses, more than 12 times the price Huntington Park is billing Metro Transit.
When Graciela Ortiz was elected to the Huntington Park City Council in 2015, she publicly thanked her campaign team, which included Beltran, her brother Henry Ortiz and her campaign manager, Efren Martinez.
Within a few months, Beltran and Henry Ortiz — an unpaid campaign volunteer for Councilwoman Ortiz — would become paid employees of Metro Transit Services.
Metro Transit was awarded its bus contract in May. Its ownership has transportation companies that service other parts of the country, and Metro Transit was the latest business venture.
In addition to Beltran, Henry Ortiz, the councilwoman’s brother, was hired to wash down vehicles, answer phones and perform other tasks.
Martinez ran a local PAC called Saving Local Jobs that promoted the three members of the council majority who assumed office just weeks before voting for Metro’s contract: Graciela Ortiz, Marilyn Sanabria and Jhonny Pineda. The PAC also used Beltran’s firm, Principia Group LLC, as a paid consultant, campaign filings show.
Martinez opened a committee to run for state Assembly in 2015 and paid Macias commissions for raising contributions from city contractors or people connected to them, including Beltran’s wife, The Times reported earlier this year. Macias voted for contracts with those companies but said she did not consider this a conflict of interest.
Council members said they didn’t see anything wrong with selecting Metro Transit. They said that Caballero, Metro’s vice president, was known in the community as having previously operated transit services around Los Angeles and that Metro Transit was affiliated with other companies that provide transportation services in other locales.
“I believe that Mr. Caballero was willing to take the chance because he knows the community really well,” Councilwoman Ortiz said .
Council members also said Metro Transit was the only company willing to take on the bus contract on short notice and with buses in disrepair because of neglect by the previous operator.
“Our biggest concern was the interruption of services,” Ortiz said. “That’s what we didn’t want to occur. And so, given the condition of our vehicles, given the fact that we were given literally a 30 days’ notice, we were put in a really tough position.”
Others who defended the deal pointed out that Metro pays more than $5,000 a month to the city for leasing office space and the city yard and for parking vehicles on city property.
Ortiz said the state’s Fair Political Practices Commission, which enforces the state’s conflict of interest law, advised her in an email that having a brother who worked for Metro Transit wouldn’t make it illegal to vote for a contract with the company.
She said she didn’t find out her brother was working for Metro Transit until after he got the job.
John Ornelas, who was Huntington Park’s interim city manager when Metro Transit was awarded the bus contract, said there was no political pressure to do business with Metro Transit over other companies, only the time constraints of having to find a new bus service operator within 30 days.
“We were desperate. We needed to service the community,” Ornelas said.
However, the CEO of the previous bus operator, the nonprofit Oldtimers Foundation, said there were other options.
Jose Solache said he initially wanted to find one company to take over the group’s transportation services in a few cities, including Huntington Park, South Gate and Artesia. His group sent the same 30-day notice to each city, he said.
The company Solache approached was Global Paratransit Inc., which was well established in the L.A. area. The company took over Old Timers’ transit services in South Gate and Artesia.
Solache and Global Paratransit CEO Reza Nasrollahy said Huntington Park wasn’t interested in joining that arrangement.
Ornelas, Ortiz and other city leaders denied knowing that Global Paratransit was interested in taking over the service.
Council members approved budget increases worth hundreds of thousands of dollars. Contract documents show that in 2013, the city’s program budget for the bus service was $355,680. Under Metro Transit, the projected budget for fiscal year 2016-17 would be over $1 million, records show.
The service level under Metro did grow significantly, invoices show. But the skyrocketing cost far outpaced service levels; monthly billing amounts nearly tripled.
Meanwhile, city officials were grumbling to each other about the company’s management.
The company failed its terminal inspection by the California Highway Patrol for not enrolling drivers in a state system that generates records on accidents and other incidents. The agency threatened to refer Metro Transit to the district attorney’s office for prosecution, inspection records show. Metro Transit later passed another inspection.
Complaints about the senior dial-a-ride service — awarded to Metro under a separate contract — rose sharply after the company took over that service, according to the city’s complaint logs.
City leaders argue that’s because the city wasn’t closely tracking complaints before Metro took over. Yet even the city manager expressed frustration when Caballero failed to respond about repeated complaints from an elderly woman being stranded in the middle of a rainy night with no Metro drivers available to pick her up.
“This is concerning and unacceptable,” City Manager Edgar Cisneros wrote in a Feb. 14 email to Caballero.
During the confusion over the CHP terminal inspection, Cisneros thanked an employee in an email for “being clear with the operator about their responsibilities.”
“It’s been an unorthodox process dealing with [Metro Transit] thus far and it’s gotten confusing at times,” Cisneros wrote to the employee. “I know it’s not easy.”
Start your day right
Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week.
You may occasionally receive promotional content from the Los Angeles Times.