Searching for greater cost certainty could see B.C. Transit steer away from the competitive bid process and instead grant contract extensions for existing operators.
But that philosophical shift has left at least one local politician concerned that increased certainty might not produce increased value for taxpayers.
“I’m just wondering why we wouldn’t put (a request for proposals) out there and see if there are other people interested,” said Allan Patton, who represents rural Oliver on the board of the Regional District of Okanagan-Similkameen.
Patton questioned the plan at an RDOS board meeting last week, shortly before his colleagues agreed to go along with a three-year contract extension for Berry and Smith Trucking to continue running the transit service between Naramata and Penticton.
Naramata residents chipped in about $70,000 to operate the route last year, which covered half the cost. The balance was funded by system revenue and provincial taxpayers.
Historically, B.C. Transit every seven years has put out to tender the contracts to run some of its transit systems, but the Crown corporation now thinks it can keep costs lower and more certain by going the contract-extension route, regional manager Steve Harvard told the RDOS.
“What we’ve found when we’ve gone out to RFP is a huge spike in costs,” he said, because it’s “not as easy as it would appear” to break into the business of public transit.
Harvard said the specialized equipment required, plus legislated safety standards, are sometimes too onerous and costly for new operators to meet at a competitive price.
In a separate letter to the RDOS, Harvard noted that Berry and Smith, which also operates Penticton Transit, school buses and commercial trucks, enjoys economies of scale from its holdings that help lower costs for the transit system.
The proposed three-year contract extension for Naramata, which would take effect when the current deal expires at the end of March 2013, includes annual 1.5 per cent increases for fixed costs and hourly costs, respectively, plus two per cent bumps for mechanics’ wages.
While the RDOS was asked for its opinion of the extension, the final decision rests with B.C. Transit’s board of directors.