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Panel Recommends Veolia Transportation As New Operator to Run Long Island Bus

Contract to Be Negotiated Then Sent to Legislature and NIFA for Approval

Nassau County Executive Edward P. Mangano announced on June 10 that the RFP Panel formed in 2010 to evaluate public-private bids to manage and operate Long Island (LI) Bus operations beginning in 2012 has made an official selection. A contract, to be negotiated, will need the approval of the County Legislature and the Nassau Interim Finance Authority.

After reviewing proposals submitted by three private transportation operators, the panel, chaired by Nassau County Director of Real Estate Carl Schroeter, selected Veolia Transportation, Inc. Upon receiving the panel’s selection, the County Executive forwarded it to the outgoing Chief Executive Officer (CEO) of the Rochester Genesee Regional Transportation Authority Mark Aesch, who was retained to review the panel’s selection. Aesch independently confirmed the panel’s selection and, Mangano said, will further assist the County in transitioning to a privately managed and operated bus system.

Mr. Aesch, Mangano said, is nationally recognized for turning the Rochester Genesee Regional Transportation Authority from a money-losing, under-performing organization into a public sector leader – that has actually reduced reliance on taxpayer dollars. In the coming days, the County Attorney’s Office will negotiate a contract for review by the County Executive. The County Executive will determine whether it will go forward to the Presiding Officer of the County Legislature for appropriate legislative action.

 “Because an agreement to continue with the MTA as the operator could not be reached, I will move forward with a public-private partnership in 2012 that maintains bus service without ceding to MTA demands for an additional $26 million from homeowners and employers through the form of higher property taxes,” said Mangano. “A public-private partnership to operate Long Island Bus makes sense for taxpayers. The steps we take today will protect riders and ensure bus service continues into the future. Residents will enjoy accountability for their tax dollars as the private sector will run bus service more efficiently and effectively and protect residents from real property tax increases.”

The creation of a public-private partnership to operate LI Bus is necessary, Mangano said, as the Metropolitan Transportation Authority (MTA) voted on April 27 to cease all bus service in Nassau County after the end of 2011. In its proposal to provide the County’s fixed route transit and paratransit services, Veolia Transportation, Inc. proposed a first year budget of $106 million. Mangano called this a massive reduction from the current Long Island Bus budget of $141 million.

While the MTA has proposed to eliminate 27 fixed routes, Veolia Transportation, Inc. will maintain all routes for 2012. The county executive said it was made clear to Veolia that route eliminations will only be considered as a last resort and only after consultation with the County and required public hearings. It was stated that Veolia will study and analyze the current system to determine where efficiencies may be found to reduce the cost of the system, while maintaining and eventually expanding services and in the long term, anticipated revenues will be reinvested in the system to improve services and technology. Veolia also has stated their willingness to expand the County’s paratransit system and find efficiencies to improve service and reduce costs. The company has proposed a management team that consists of Michael H. Setzer serving as CEO of LI Bus. With over 30 years of experience in the transit industry, Mr. Setzer has served as CEO of transit systems in Minneapolis, Cincinnati and St. Louis.

In selecting Veolia Transportation, Inc. to provide the County’s fixed route transit and paratransit services, the Panel noted the following regarding Veolia Transportation, Inc:

“Clear understanding of the requirements of the Request For Proposal and successful demonstration to the panel of their ability to operate the County’s system;

“Extensive and well-funded organization to support the system, both operationally and financially, even through periods of fiscal uncertainty. Veolia is a large organization and has the ability to absorb revenue shortfalls in the event they occur. In addition, Veolia has the ability to obtain funds to make capital purchases with the expectation that reimbursement will come from state and federal sources;

“Experience in every aspect of operation, including grant management and capital program management;

“Strong proposed management team, which has a great deal of experience in successfully managing systems as large as or larger than the County’s system;

“Price proposal, which falls within the range established in the independent cost estimate;

“Detailed response to the panel’s request for additional information regarding fixed route service adjustments.”

Mangano stated that over the coming weeks, Nassau County will negotiate a contract with Veolia Transportation, Inc. to operate Nassau’s bus system. Upon reaching an agreement, the contract will then be forwarded to the Nassau County Legislature for approval.