Valley Metro considers merging bus contracts

Posted on June 25, 2012

In a move to help create a fully integrated regional transit system in the Valley, the City of Tempe and the Valley Metro Regional Public Transportation Authority (RPTA) are exploring a “scout program” for bus service unification. The scout program would aid in taking the first steps to unify Tempe’s bus operations with the RPTA. The intent is to operate regional bus service more efficiently, achieve cost savings and improve service to customers.

Tempe currently operates 19 bus routes (including Local, Express, Flash and Orbit) from a bus operations facility on Rio Salado Parkway in Tempe. The RPTA currently operates 22 Local and Express bus routes from an operations facility located on Greenfield Road in Mesa. Combined, Tempe and RPTA provide nearly 45% of the region’s bus service.

Much of the estimated savings potential stems from increasing the number of bus routes based out of the more centrally located East Valley Bus Operations Maintenance Facility in Tempe. Additionally, the Tempe facility has bus maintenance capacity for 250 buses whereas RPTA’s Mesa facility can accommodate up to 150 buses. Unifying will also create opportunities to reduce duplicative contractor staff by consolidating functions, auxiliary contracts (e.g., fuel supply, fuel station maintenance), and improve operational and security coordination. In addition to greater efficiency, higher service quality will be a measure of success in the unification effort.

The advantages to the community may include the preservation of existing bus service as the potential cost savings and long-term efficiencies achieved can partially replace budget gaps created by lagging sales tax revenues in local and regional transit budgets. The estimated savings is in the range of $800,000 to $1 million with Tempe’s local savings totaling about one-half of this amount.

Tempe and RPTA are conducting a joint procurement process to hire a new bus operations contractor to provide services from both sites beginning July 2013. The procurement will require contractors to provide pricing for both the unified operation and separated operations. This strategy will provide the Tempe City Council and RPTA board with concrete information on the actual cost savings related to unification and will aid both agencies in making the final decision to proceed with unification. It is anticipated that one or more contractors will be selected in December 2012 and will begin the contract term of six years on July 1, 2013.

Tempe will continue to administer its local Transit Tax (i.e., a permanent half-cent sales tax that funds transit in the city). Tempe will also continue to own its bus fleet and operations facility and exercise complete control of all non-rail elements of its transit program.

The RPTA’s major funding source for regional transit services is a portion of the half-cent transportation sales tax approved by voters in 2004 (i.e., Proposition 400).

Tempe and the RPTA currently partner on bus procurement and fleet maintenance inspections, which has resulted in improved coordination, streamlined project delivery and reduction of costs to both agencies.

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