ART - STUDY-PrivateOperationofTransit 2002

The document is a report that analyzes the policy options for contracting with private operators for the operation and maintenance of ST Express bus service. The report provides a summary of the history of privately-provided transit services nationally and describes the experience of Community Transit (CT) with its private contractors. It also estimates the potential cost savings from contracting with private operators and identifies constraints that may affect the cost or scale of private operations. The report highlights that Community Transit has been contracting with private operators for commuter express service since 1986. In a bid comparison in 1997, the selected private contractor offered savings of 23% compared to in-house operation of the service. This demonstrates that cost savings have been a significant factor in decisions to contract with private operators. Furthermore, the report suggests that if the current ST Express services were privately operated, ST could save about $4.5 million in 2002, or approximately 13% of the cost of current agreements with local operators. These savings could potentially be utilized to finance maintenance facilities and equipment. However, the report also acknowledges that there are constraints that could impact the magnitude of cost savings. One such constraint is the provision of termination benefits to public transit employees. The report suggests that further analysis is required to assess the potential risks and impacts of contracting with private providers. In conclusion, the report suggests that if ST decides to contract for a portion or all of ST Express services, there would still be a role for ST and local transit operators. It provides a description of the preferred allocation of responsibilities among these parties, offers several models for structuring a private operating contract, and identifies the tasks necessary to implement this concept. The report emphasizes the importance of balancing cost savings with acceptable levels of operating performance.