Thursday, Oceanside, Calif.-based the North County Transit District's (NCTD) board of directors voted to approve a contract for its bus operations and fleet and facility maintenance with First Transit, a private transportation management company. The move will save NCTD approximately $70 million over the life of the contract and cut its anticipated operating deficit in half.

The seven-year contract, estimated at $178 million, requires First Transit to give job priority to existing NCTD employees.

NCTD's decision to contract bus operations and maintenance services comes at a time when the district is facing up to $20 million in annual deficits in future operating years due primarily to the elimination of State Transit Assistance funding and dramatically lower sales taxes revenues. To highlight the significance of these budget deficit projections, in fiscal year 2011 the projected deficit of $16.1 million represents 18.5 percent of NCTD's total operating budget of $86.8 million.

Contract approval completes a nine-month review of strategic options, including additional alternatives that the board rejected. These alternatives would not have achieved comparable budget savings and would have required drastic service cuts, greater staff reductions and employee pay concessions as high as 30 percent.

NCTD Board Chair Bob Campbell says this difficult, but necessary, decision by the board is a major step in realigning NCTD's finances and operations for the long term. The shift to a private operator mirrors three current contracts successfully implemented for NCTD's COASTER and SPRINTER rail lines along with LIFT paratransit services.

Agency staff estimates the agreement will reduce deficits by an average of $10 million annually, nearly fifty percent of projected budget shortfalls.

A six-month transition period beginning in January 2010 will allow for the seamless transfer of operations to First Transit by July 1, 2010, ensuring continuity of bus operations. NCTD customers should see no disruptions in service.