Facing an $8 million budget deficit and a large drop in sales tax revenues, Tempe officials have agreed to move forward with a money-saving unification plan that would allow Valley Metro’s Regional Public Transportation Authority to operate Tempe’s buses under one service contract as early as July 1, 2013.
The unification would significantly reduce the city’s costs in operating bus services, said Greg Jordan, Tempe’s deputy director of public works, at a Nov. 15 City Council meeting.
Tempe currently runs 19 local, Express, Flash and Orbit routes, with the second largest public transportation system in the Valley, after the City of Phoenix. Valley Metro operates 16 percent of the city’s services.
A 2011 estimate predicted that unifying both agencies’ operations under a single contract would save from $800,000 to $1 million per year. After receiving contractor bids for both unified and separate scenarios, the agencies have determined that unification would save even more than they had predicted. However, the exact amount is being kept confidential until three-year contracts are awarded at Valley Metro’s board meeting on Dec. 13.
“Unification provided the best value for the agency, the community and the City of Tempe,” said Susan Tierney, a Valley Metro spokeswoman.
Tempe’s City Council and Valley Metro’s Board of Directors will vote in early 2013 on an intergovernmental agreement that specifies each of their roles in operating services.
“This is the first time this has been done,” Tierney said. “We are really pleased that we are going to be able to save enough money that will hopefully be able to save and preserve service.”
As long as it is stated in the agreement, unifying Tempe’s system with Valley Metro’s would not affect the amount of control Tempe has over its kind of services, but would simply allow Valley Metro to manage those services, Jordan said.
“Because unifying operations is a major change to how we deliver service, we can expect a few bumps in the road to occur during the first couple of months of service,” Jordan said. “But in general our passengers and our customers and our residents should notice no change in how things are going out during their rides around the community.”
After two years of unification, the city will be able to review Valley Metro’s performance and decide whether or not it would like to renew the contract, Jordan said.
“So we can be immediately aware of any kind of suffering of the service out in the street,” he said. “If things are not performing well, or performing below performance objectives, then we retain the right to return to the current model we have today and run operations directly.”
The new contract will allow Valley Metro to immediately start operating its bus routes out of Tempe’s bus facility, which can accommodate 250 buses and is more centrally located, instead of its current facility in east Mesa, which is equipped for 150 buses. Customer service will also be handled through Valley Metro rather than through Tempe’s customer service line, Tempe 311, Jordan said. Many Tempe residents already tend to call Valley Metro’s customer service center before calling Tempe 311, he said.
If Tempe chooses to continue unification beyond the three-year contract, Valley Metro will eventually take over the titles of the city’s bus fleet, but not for at least three years, Jordan said.
Buses are already purchased regionally with shared federal fund and tax revenues, so changing title ownership “really doesn’t change a whole lot,” Tierney said. “The difference would be that we take on responsibility with the fleet; we would be responsible for changing out the fleet.”
If things go well, the city will agree to a more permanent contract, “hopefully with a better product and service for our citizens at a lower cost,” Jordan said.
Valley Metro and Tempe have experienced a drop in the regional half-cent sales tax revenues that fund the majority of Valley transportation in the last few years. Tempe has an additional permanent half-cent sales tax to fund transportation, but that revenue has declined as well. To accommodate the lack of funds, both have had to make significant cuts to bus routes and hours.
Since 2010, Tempe has eliminated four bus routes, altered or removed portions of 26 routes, limited peak hour operations, changed service schedules to include more holidays and removed some free service traditionally offered on holidays and during events.
Unifying service with Valley Metro isn’t likely to bring back service in the near future, but it would prevent having to make drastic changes, Tierney said.
“We are trying to be creative in developing ways to utilize our budget so that it helps to add a transit service or provide a transit service that our riders really need and rely on,” Tierney said. “It is our hope that this effort will create better efficiency for the whole system.”