July 2010

Contractors Provide Expertise, Flexibility

by Claire Atkinson, Senior Editor

McDonald's contracts in Bryce Canyon and Zion National Parks in Utah have helped reduce traffic congestion and noise levels.

Transit agencies generally contract services with outside vendors to cut costs, benefit from the provider's management or operational expertise, or improve efficiency.

Although contractors are not seeing a trend in transit agencies converting to privately-operated services, some hope the economic climate may push publicly run transit operators to consider contracts as a way to meet the demands of ­constricted budgets.

First Transit

Cincinnati-based First Transit, a division of FirstGroup America, provides fixed-route, paratransit and shuttle services, including university and airport shuttles. In addition, the company's First Services division offers fleet maintenance for municipalities and private companies.

First Transit President Brad Thomas has been with the company since 2003. He previously served as president of Coach USA Transit Services and joined First Transit when the Coach USA division was acquired by FirstGroup, serving as senior vice president of the east region. He became president in 2009.

In July, First Transit will begin operations in a contract for North County Transit District (NCTD) in Oceanside, Calif.

"That is what we could call a conversion, which means previously the county ran it themselves and they made the decision to contract the services out," Thomas says. "It's something that I'm hoping we see more of because I think there are some real opportunities for efficiencies when services are ­contracted out."

Will contracted services become a trend for agencies hard-pressed to make ends meet during tough economic times? "There are certainly more agencies that are experiencing economic difficulties," Thomas says. "I wouldn't say that there's a trend in that direction, but I'm hoping that as there are successes, we start to see more. If authorities and municipalities see that this type of conversion can be successful, they may ­decide to do the same."

The NCTD contract, estimated to save the agency approximately $70 million over the seven-year life of the contract, includes about 140 vehicles and 300 employees.

"We bring a lot to the table in the sense that we have a lot of different experiences and resources to draw from," Thomas explains. He says First Transit's maintenance, safety and employee programs provide efficiency while still maintaining a high quality of service for clients.

In addition, technology plays a role in helping customers attain efficient service. First Transit will be deploying two technologies in the NCTD contract: GreenRoad, a real-time driver modification training tool, and Zonar Systems' electronic inspection and maintenance tracking. "The driver is required to stop at different stations around the vehicle and identify certain things, and that's all tied into the maintenance work orders," Thomas says.

About 9,000 of FirstGroup's vehicles in the U.K. are outfitted with the GreenRoad system and the Zonar system is in place with most of FirstGroup's contracts maintained by the company's school transportation division, First Student. "These are just two examples of things where, because of our size, we're able to use what we find works and what we know is going to bring value or performance to a contract at other locations we operate," Thomas says.

Another First Transit contract set to start operations in July is in Reno, Nev., with the Regional Transportation Commission (RTC). In addition to the fixed-route services First Transit already operates for the agency, the company will now also run RTC's paratransit operations.

Thomas says he is most proud of First Transit's commitment to safety. "We have a very robust safety program in place, including everything from our high-visibility vests that all of our employees wear, down to our injury prevention program, which is intended to encourage safe behavior amongst our drivers and technicians," he says.

In that vein, First Transit uses DriveCam, a driver safety training tool that records incidents such as sharp turns, hard braking and collisions. "That's been a great tool for us in training our employees because nothing quite does the same thing as having the video of an incident so they can learn from their experience," Thomas says.

McDonald Transit Associates

McDonald Transit Associates, based in Fort Worth, Texas, currently serves 32 locations, providing consulting and management and operating contracts to cities, transit authorities and national parks.

President Robert Babbitt first joined the company in 1977 as an intern and has worked at four different McDonald Transit Associates locations during the course of his career. He has previously held the positions of vice president and chief financial officer.

The company's two largest contracts are managed in Fort Worth and Charlotte, N.C. "In Charlotte, we serve a booming city of about a million people," Babbitt says. "They have opened their first rail line and have three other corridors in development right now."

McDonald has served the Fort Worth Transportation Authority (The T) and its commuter rail line, the Trinity Railway Express (TRE) for 37 years.

The company is currently pursuing six additional opportunities for contracted services, and has been selected competitively three times in the past two months, Babbitt says, with contracts awarded with Lowell (Mass.) Regional Transportation Authority and Zion and Bryce Canyon National Parks in Utah.

"There are several national parks that have begun transit systems," Babbitt says. "It was an interesting decision in each park — how much transit to offer or how much to require people to park their cars."

He notes that the addition of transit options in the national parks have had several positive impacts. "In each case where the transit systems have been implemented, they've noticed a change in the congestion and fighting for limited parking spots, and a reduction in the noise. Between those two factors, there was an improvement in the amount of wildlife that comes back down near the roadways. It was really striking that literally, a week after the shuttle was in place, here come deer and even a ­bobcat or two," Babbitt says.

One of McDonald's greatest strengths is its personnel, Babbitt says. "There are certainly very talented people in the government-run transit ­agencies, but in general, because we're able to offer our employees a long-term horizon for this as a career, we believe that we have some of the brightest people in the industry. Being able to offer a long-term career in a business that has a four-and-a-half-years average tenure is quite attractive," he says.

Two of the company's managers were named in a recent list of the Top 40 Under 40 in the transit industry, and the company has won the American Public Transportation Association award for best transit system in their size category six times, Babbitt says.

In October 2009, McDonald Transit Associates became the U.S. affiliate of Regional Authority for Transport Paris Development (Ratp Dev) USA. "Fifty-one percent of our shares are now owned by Ratp Dev," Babbitt says. "The group is now in five continents. It's the fastest growing transit service group in the world."


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