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Bus Management Contract Still in Question

If it’s not broken, don’t try to fix it

Dec. 18, 2013
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The Dallas-based bus company MV Transportation wants to win the contract to operate the Milwaukee County Transit System (MCTS) so that it can gain a toehold in the Midwest, a spokeswoman for MV told a city committee last Friday.

Nikki Frenney-Wiggins told the city’s Public Transportation Review Board that MV would earn no profits on the three-year transit and paratransit contract it hopes to sign with the county. Instead of generating revenue for the company during the life of the contract, MV would focus on adding services and improving operations within the $164 million that the county would allocate annually.

Adding Milwaukee to its portfolio would also help MV bring down the cost of purchasing fuel and supplies for all of its bus systems, Frenney-Wiggins said.

“A large amount of our cost savings will come through efficiencies of scale,” Frenney-Wiggins told the review board. “Adding 500 buses to our fleet, and tires and engines, will ultimately bring down the cost of every tire and engine or steering wheel that we have to buy across the country.”

She said that winning the Milwaukee contract was so vital to the company’s desire to gain a toehold in the Midwest that it’s using Milwaukee as a loss leader to generate more business. 

“We bid this at no profit because this will go on our resume and allow us to be able to win contracts in other places,” Frenney-Wiggins said. “There is no smoke and mirrors behind that. People keep saying, ‘You’re a for-profit company and you’ve got to make a dollar and cents somewhere.’ Well we may, but it’s probably not going to be here in Milwaukee. It will be in other places.”

Unmentioned in the hearing was the fact that the current operator, Milwaukee Transport Services (MTS), is a nonprofit corporation—and has run MCTS with generally high marks on a very tight budget.

Jacqueline Janz, MTS’s spokeswoman, told the Shepherd, “Milwaukee Transport Services is a local nonprofit company which has come in under budget 95% of the 38 years we have operated MCTS. In fact, just last year we saved Milwaukee County nearly $5 million through efficiencies. Milwaukee County then decides how best to use these funds moving forward.”


MV Contract On Hold

Frenney-Wiggins’ testimony was a rare bit of candor in the saga over the contract to run MCTS in the future.

This is the first public testimony by MV about its plans for Milwaukee.

Although the county operates MCTS, a city committee—chaired by Ald. Robert Bauman—offered this opportunity for a public hearing. Members of the committee were allowed to ask questions, but the public was not.

The Abele administration had announced in July that it intended to award the contract to MV. One of the losing bidders was the nonprofit MTS, which the county set up in the 1970s to run MCTS with county oversight.

But that wasn’t the only unique aspect of Abele’s contract.

Both the county and the state allow losing bidders to appeal the request for proposal (RFP) process to ensure that it is fair. But when MTS requested documents from the county to allow it to appeal, the Abele administration refused, then only released a few documents that were heavily redacted. Finally, in November, Judge Daniel Noonan ordered the Abele administration to release the documents.

A county panel met last week to begin hearing the appeals brought by MTS and another losing bidder, Veolia Transportation. Those hearings are estimated to last until spring.

Veolia also made its case to the Public Transportation Review Panel last Friday, but had little to say about its plans for Milwaukee. MTS declined the invitation to testify.


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