Taken for a (Bus) Ride

A French transit firm wins a no-bid deal with Phoenix, and taxpayers are left without a transfer

For years, people have argued about who really runs Phoenix. The mayor? The city manager? City Council?

But when it comes to city buses, the answer is all too clear.

It's a bunch of French businessmen.

Seriously.

As it turns out, most of the municipal buses in Phoenix, as well as the shuttle service at Sky Harbor, are run by subsidiaries of a French-based conglomerate named Veolia. That company makes its living by handling the municipal details that typically bore politicians to tears: trash removal, transportation management, and shuttle service.

Naturally, the company does it all for a fee. And in Phoenix, that fee just got a whole lot bigger.

That's even though the satisfaction reported by local bus riders, according to the city's own survey, is on the decline. And that's despite the fact that city staffers didn't bother to get a quote from a single Veolia competitor.

After looking at a half-dozen boxes of records and talking to a number of people, it's clear to me that the system here failed completely.

That's because Veolia had every incentive to win bigger contracts for itself, but no one at City Hall put any energy into stopping it. City staff drafted the deals. The city manager signed off on them. The mayor and council rubber-stamped them.

The upshot is that, this summer, Phoenix agreed to increase Veolia's management fees by a collective $7 million on its two contracts — without shopping around.

By my calculation, Veolia is getting a 79 percent raise.

Kind of makes you want to get into the bus business, eh?


Here's the truly pathetic part of the city's renewal with Veolia for bus service.

Under the old contract, Veolia's entire $850,000 management fee was tied to its performance. Was it on time on certain routes? Did it properly serve customers with disabilities? If Veolia screwed up, the city docked it. In recent times, that meant the company lost out on more than $100,000 a year — pretty good incentive to kick it up a notch.

The new contract greatly decreases that accountability. No matter how badly the company performs, in fact, it stands to get $850,000 a year. Then, on top of that, the company is eligible for a $150,000 bonus, the only part of its fee now linked to performance.

That change comes even as bus riders in Phoenix are less and less happy.

According to the annual customer poll commissioned by the city, overall satisfaction with bus service dropped 5 percentage points in 2006. Satisfaction with the buses' cleanliness dropped 24 percent. Satisfaction with on-time performance was down 30 percent.

Now, we Phoenicians are all facing problems with "on-time performance" in this era of orange barrels and endless construction zones. But the company's scores are down overall — and you certainly can't blame dirty buses on the light-rail fiasco.

Really, nothing in the city's most recent survey justifies giving the company a no-bid renewal, particularly one with more money and less accountability.

Still, that's exactly what happened. City staffers recommended that the city re-up with Veolia in April. In June, the City Council approved the contract renewal, and the fat raise, without much of anything in the way of discussion.

Not a single person on the council even bothered to vote against the thing. And the council proved just as vigilant with the company's airport shuttle-service contract.

That contract wasn't due for renewal for another three years. But that didn't stop city staffers from altering the contract to give Veolia more money. They recommended a retroactive fee increase for Veolia — one that will earn the company roughly an extra $1.5 million a year. That's an increase of 136 percent.

Once again, the Council signed off on the deal last month without a single "no" vote.


One month before city staffers made their pitch to give Veolia these sweet perks this spring, a host of local Veolia executives — nine in all — donated a total of $3,200 to Mayor Phil Gordon's re-election campaign.

As Gordon stressed in an e-mail to me, that's not a lot of money in the scheme of things. After all, he's sitting on a war chest of nearly $1 million.

But it's nothing to sneeze at in this world of so-called clean elections and strict contribution limits. Seven of the nine Veolia execs, in fact, gave Gordon the maximum permitted by law, $390.

I can't say that there's anything nefarious going on. But I can say this: The timing stinks.

Gordon says he never discussed the contract renewal with his Veolia contributors, much less the staff that put the deals together.

"I did not talk to anyone about these contracts before [City Manager Frank Fairbanks] came to brief me on the staff recommendations for a number of agenda items," Gordon wrote. He added, "Our system isn't a system where mayors and council members lobby staff to do this or that. It is the exact opposite — staff comes to the mayor and council to tell us what they are recommending we do."

Fair enough. But that makes me wonder something else: Why even bother to elect a mayor and a council if all they're going to do is rubber-stamp the recommendations of the city bureaucracy?

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12 comments
Joe Elie
Joe Elie

I loved your article. I use to work for Veolia in Mesa AZ. I was let go after I had started finding allot of wrong doing. They was allot of money on parts. Due to the fact they are replacing parts that do not need replacing. Getting kickbacks from Vendors. Anti Union. They never have the right parts in stock and the Buses sit there for weeks and months. Plus there parts inventory is so out of wack the techs can never finish their jobs. I worked for great companies. But Veloia in Mesa AZ is the worse. The management their has no clue on how to their jobs. They let the common worker take the blame for their mistakes. If the City did an investigation they would get rid of this company and get a company that cares for its workers.

Gregory Kueneman
Gregory Kueneman

I've began a boycott of the Metro, it's group online is located on myspace via this url: http://groups.myspace.com/vall... . Also you can view an ad on craigslist in reference to it by using this url: http://phoenix.craigslist.org/....

All information is available on these two URLs. Discussion and topics are available in the myspace group for those who would like to join in this struggle.

Thank you for the article, it helps!

I'll be borrowing it for the group if you don't mind (don't worry I'll give proper respects)

We, the people of Phoenix, will not take this sitting down.

Brad McNeal
Brad McNeal

Any news from the 8-21-07 public hearing ? Didnot see any coverage in the local outlets .

Stephen Cerda - Account Execut
Stephen Cerda - Account Execut

"A response to Robby Katz"

Let me tell you about buses... to put in a blunt, easy-for-anyone-to-understand format: riding the bus sucks!! It�s hot, stuffy, seldom on time, and customer service is horrible. From drivers who don't know their routes to agitated call center reps that have an "I don't give a fuck" attitude. It�s atrocious! How do I know this you might ask? Two words: PERSONAL EXPERIENCE! I ride the bus every single day to get around town. Including to work here at NT. Imagine spending as much time going from 7th Ave & Roosevelt to 12th St & Jefferson as it takes someone who commutes from Mesa to Downtown Phoenix in the morning. Trust me, if I had the choice, I'd drive. Unfortunately, I can't drive. Not because I lack the knowledge or skills to drive, but because my license is suspended because of a DUI. Now before anyone get a case of the "high and mighty" on the dangers of drunk driving let me say that I know I did it to myself. I was impaired and shouldn't have been behind the wheel. My lap in judgement isn�t at issue here, though. The issue is that a company who is failing to come through on their end of an agreement is getting a renewal of said contract and a raise! I pose the question to anyone who reads this that if you pay for a product or service and it doesn't perform the way its supposed to, do you pay for it again at four, five, six, or even seven times the cost? The answer is not "no" but "HELL NO!" A person would have to be a complete moron to do that, right? But that's exactly what's happened here in PHX. Viola�s contract shouldn't have been renewed at all! There are other transit companies out that that could have contacted for a proposal. City officials responsible for approving these proposals (the mayor, city council, et al) could have easily performed their duty to the citizens of Phoenix and had other options researched. The fact of the matter is that they didn't. Now, because of that lack of oversight the taxpayers will suffer. I challenge any of those gas-guzzling, SUV-driving Phoenicians out there to get up and ride the bus just one week. You'll agree that the state of public transit is absolutely ridiculous. We are one of the largest metropolitan areas in the US, and we can't even get a bus to show up when it�s supposed to. San Francisco's BART is amazing. In New York or Chicago you don't wait longer than the time it takes to smoke a cigarette (yes, I smoke, spare me that lecture too). Hell, even in my little home town of St. Petersburg, FL the PSTA was great! Never in my 25 years of existence have I ever experienced such horrible service. To detractors of NT's story about the shady bus dealings at city hall I say look at the facts... FACT: The city did no research into find alternative providers for bus services. FACT: Our Mayor has received campaign contributions from Viola or members of that company. FACT: This new bus contract is going to cost the city a lot more money that could be put to better uses. For instance crime prevention, city maintenance, or even, God forbid, paying a different transit provider to actually do the job they're contracted for. Let me give all of you out there who've never ridden a bus before an example a typical day of bus riding. The morning of August 16, 2007. The day I read the letter from Robby Katz regarding Sarah Fenske's article from the previous issue ("Taken for a Bus Ride", August 9, 2007). Robby, by the time I read your letter, I was already thirty-five minutes into my morning trip, but lets start at the beginning: The alarm went off at 6:00am. I woke up and go through the typical morning routine. Shower, shave, breakfast, a bit of morning news. At 6:40, I make the ten minute walk from my apartment to the bus stop at 7th Ave & Roosevelt. Where I catch the #8 southbound bus to central station Monday through Friday. It's not even 7am yet and its almost 100 degrees out and I'm already feeling sweaty and sticky. As usual, the bus is late. Its always late. Anywhere form 5-15 minutes. As I step onto the bus, I'm greeted by a scowling, elderly woman who can barely see over the steering wheel of the bus she's driving. She looks pissed that she had to stop and pick me up. I swipe my bus pass and squeeze through the mass of humanity to grab a spot standing between a drunken native and a woman wearing a city employee laminate who looks like she's still asleep. A few twists and turns later the bus makes it to Central Station, finally, and that mass of crowded humanity spills out of the bus. Personally I'm overjoyed to be off of the bus for a moment. I light a cigarette to get the bus scent out of my nose. God, I hate that smell. Why does every bus smell like a mixture of vomit and baby shit? I look up in time to see my connecting bus pull away from the stop on the Van Buren side of the Chase Bank building. This is nothing new. I only catch it about two times a week because my first is usually late. I cross to the stop, grab a copy of NT from the rack and wait for the next bus, as usual. Sitting at the stop I feel the sweat dripping down my face and onto the paper that I'm reading. The bums pass by begging for change from every person they pass. I manage to ignore the black guy who sits down next to me ranting, seemingly, to everyone as much as to himself about the coming revolution of the African people, the beauty of blackness, and the oppression of the white man. After about 25 minutes of sitting in the morning heat, ignoring the Malcolm X wannabe's rants to my right, and six bums asking me for change. The Washington Eastbound bus arrives. Another pissy driver, another uncomfortable seat, and more of that damn smell. To add to the fun, the bus is just as hot inside as the weather outside. Finally, I get to work. I'm early. I'm have to be. If I try to take a later bus odds are I'll be late for work. I work all day with the knowledge that i get to repeat the process after I finish work. I'm not looking forward to it. That's just the morning trip. Imagine doing that everyday. Twice a day. Through heat, rain, dust storms, construction, and whatever else the city tries to throw at your from gang bangers staring you down because he thinks you "disrespected" him, to lost bus drivers. Don't you think you'd be a little perturbed at the city for allowing a no-bid contract to go through then not owning up to their own laziness, self-interest, and corruption? I'm disgusted and angered that anyone could possibly think the public at large wouldn't want to know about this. My disillusion doesn't end there. This bus fiasco is just another in a long line of foul ups, payoffs, kickbacks, and other assorted shenanigans perpetrated by our city's elected officials and their underlings. My hope is that citizens of the PHX will finally step up and vote these parasitic leaders out of office and get some real leaders who have the best interest of the people in mind in control.

bob mcknight
bob mcknight

Just what does Veolia do for the citizens of the City of Phoenix?

Does it own any buses? Use ITS money to provide capital for the transit operations?

Does it own the Land that the bus maintenance facilities are located on? Lease/Rent the land? Does it pay taxes on the Land and/or buildings that the maintenance/storage facilities are located at? Does it own/lease the buildings and equipment at the bus maintenance facilities?

What physical assets does Veolia own/lease/rent in the City of Phoenix? Do those assets pay taxes (i.e. property, sales tax)

How many people are on the Veolia payroll in Phoenix?

What consultants/contractors are employed/paid by Veolia?

Does Veolia spend ANY money from the Phoenix General Fund? Does Veolia issue purchase orders or sign contracts that are paid for from the City of Phoenix.

Does Veolia pay Sales Tax on purchases for the Phoenix Transit System?

I am sure there are lots of good questions that need answers, but these are the only ones I can ask now.

bob mcknight General Fund?

Does Veolia have any employees that work out of City of Phoenix buildings?

Does the City of Phoenix have any employees that work out of Veolia controlled buildings?

J Stevens
J Stevens

There's more to the story about "Taken for a (Bus) Ride." Phoenix staff told me that the City of Phoenix had committed to funding Veolia's (formerly ATC Vancom) pension fund until 2010, before the City awarded the transit contract.

writingonthewall
writingonthewall

So the mark of the Globalist Beast is upon US? Well blame the two party system, and special interest...let the minions of the faux social-globies eat cake!

It is time to end the foreign interest & equal opportunity racket... in our City. The two party political system has transformed Phoenix a great American city to an Idiocracy, led by Smartballs Gordon!

Vote for Mark Yannone, an Independent, certified write-in candidate for Phoenix City Mayor on September 11, 2007. Yannone prefers to keep donations and special interest out of his campaign and politicks. Besides Yannone is very smart, where it counts...

Kenneth Weene
Kenneth Weene

The only thing that makes me more unhappy than the truth of this article is the absence of public notice before these events and others like them. When will government make citizens active participants in what goes on? When will citizens expect themselves to take a responsible active role? The bus riding public should have had a chance to be part of the decision process, and they should also undrstand the reasonable needs of companies to make profits. Without that kind of public involvement, competitive bidding on contracts probably would make things worse since it would make bribery a more active part of the competition.

Dianne Barker
Dianne Barker

Thanks for doing a terrific good job a, Ms. Fenske, informing the public on important matters as local municipal bus operations.

Sarah, although public opinion on an obvious emotional issue as transit service is interesting to know and can even be helpful, persons should realize there are local administrative regulations and even perinent federal laws against such "no-bid sole source" bids. The general rule is for the federal govenment to oversee the locals to provide healthy competition for best service and quality operations.

Finally, these two (2) City of Phoenix bus contract extensions lack necessary Federal Transit "FTA" rountine approval most definately past these ten (10) year durations. FTA 's guidance is mandatory for City of Phoenix who is our local FTA grant receipient receiving all bus federal monies for this region.

Kevin Cullen
Kevin Cullen

Viva la France, viva la difference!

Anyone who has been to France is greeted with highly efficient public transport in a myriad of forms, all on time, all gleaming clean and then some. I see no problem with French business people running the show, they do a better job there then we do here for many things and hopefully some of that savvy will rub off on the local methods...

I ride the bus to work every day. When I moved to Arizona three years ago from Ireland, local people would tell me that public transport was utter rubbish (trash) and that the drivers were a mean unhelpful bunch. Those inaccurate fools couldn't have been more wrong, a frequent symptom of modern times is reeling off borrowed opinions with no basis in fact. I wonder how many of those nay sayers have ever used public transport in the Phoenix area. As I had expected, the staff are wonderful under the circumstances. They are mannerly and helpful above and beyond their call of duty, its a pleasure to give them my money. I always feel safe with their driving skills as they negotiate amongst the muppets who don't know how to drive in the valley. Each day on every single bus ride I take, without fail I observe a driver helping passengers when they could have simply taken their money and driven onwards. The staff are wonderful. Kudos

My only complaint? More than half the buses operating within Tempe are completely out dated and prone to breaking down on the hotter days of the summer. After waiting for anything up to forty minutes in 115 degree heat (the wait in part due to the poorly designed transit infrastructure), the last thing anyone wants to experience be they passengers or drivers alike is to be stuck on the side of a busy road in a dead bus without ac... Who cares what company operates the system so long as they continue to staff it correctly as they have been doing. Yes its true, more money needs to be invested in new vehicles while more time and replacement parts seem to be currently missing from budgets and that certainly needs to be addressed. Invest, invest, invest. They definately have more capitol at their disposal, lets see if time will show them to utilize some of it in improving an already more than acceptable service.

Now if they could address the rude and utterly ignorant passengers...

syl
syl

Quote: "No wonder the French were able to triumph!" Be careful not to get into trouble with racist suggestions ... These are new times when a French President is mending fences with our leader. And spending his euros in our nation. Try to think.

margie
margie

as a former Bus Driver, and patron to Phoenix transit service, working for The City of Phoenix is a challenging job within itself. I worked at the Airport. Working as a Bus Operator is a challenging, and hazardous job within itself. every year, our Union fought for raises, and showed an effort to at least try to keep up with inflation! However, I think this article is grossly unfair to this company. These workers need better equipment, and much needed raises that they haven't seen in a long time!It is all about supply and demand, and you get what you pay for. Obviously, the better the pay, the better driver you will have on the road, which is a win-win situation! As a bus patron for many years, probably my biggest complaint was the heat. Yet, I don't see to much finger pointing there. Probably because everyone has to deal with it. Obviously, if the industry is lacking the funds, they cannot give proper raises to their drivers, thus they leave for less hazardous jobs, such as myself. And, without proper funds they cannot afford to clean the busses properly, do the proper check maintenance required by law, or keep their Admin or Supervisors (who are very much underpaid, btw!) If anything, this article is garbage. people still have to commute to their jobs, and workers for this company need an affordable wage in Phoenix, without having to live in the slums of Phoenix just to survive. As for busses being late? I know that the transit does everything humanly possible to make sure that busses are on time! there ARE things that are unavoidable, such as parades, construction, personal accidents, and the President coming to town, all of which I have witnessed first hand. This company is actually a pretty decent company, and one I'd work again, UNLIKE some of the businesses in the Phoenix Valley. so, if you REALLY want to do some serious researching, I'd suggest becoming a bus driver, and seeing how that half lives. Oh yes, and don't forget to get ON the bus to goto work, and save your SUV for some real driving!

 
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