Return of Transit Plus to city hands will cost $2M more a year, report says

The City of Winnipeg says it would have to spend more than $2 million a year above what it pays now to provide people with disabilities transit service delivered by the public sector instead of private contractors.

But a city councillor says the figures city administrators have come up with vastly understate the amount the city can expect to pay those contractors in coming years. 

On Wednesday, a report outlining cost scenarios for returning 30 per cent of Winnipeg's Transit Plus service to public sector employees will be tabled at the public works committee.

The long-awaited report was first requested in 2019 by Coun. Brian Mayes (St. Vital) after complaints about the quality of the service were making headlines, backstopped by a Manitoba Ombudsman's report which made 19 recommendations for improvement.

Winnipeg Transit Plus provides door-to-door transportation for people who require a level of assistance not provided on a Winnipeg Transit bus. 

Winnipeg Transit began to contract out service delivery of what was then called Handi-Transit in 1988. The proportion of private contractors increased until 1997, when the entire service was outsourced to the private sector.

City administrators say if the city were to take back 30 per cent of rides from contractors, it would need to hire 64 new bus drivers along with other transit support employees, purchase 28 27-foot Crestline buses and secure extra garage space to store them. 

The net additional cost in year one of a four-year estimate, the report said, would be more than $2.5 million, exclusive of any financing costs. Based on 2019 statistics, 30 per cent of total Transit Plus trips amounted to 121,417, the report said.

Mayes said on Saturday the city's numbers in its four-year estimate downplay the cost inflation of contracting out the service over time. 

While the estimate shows savings from not paying contractor costs ranging from $5.4 million in year one to more than $5.7 million in year four from the private-to-public service clawback, they would be far higher, he believes. 

He said in their financial modelling, city staff used a conservative guideline of a two per cent annual increase to those costs. 

"It's a stretch for them to say that, I think," Mayes said.

"I just think it's an overly optimistic view by our staff to say, 'Well, geez, it's only going to go up two per cent a year if we keep it private.'"

He provided figures from city budgets showing the actual per-trip cost over time for Transit Plus has inflated well beyond the city's estimate. 

"From 2016 to 2019 it's a 19.6 per cent increase, not [a] six per cent increase over three years as [the] report projects," Mayes said. 

The city cautions the contractor savings amounts in the report are estimates, not current contract amounts. 

Buses could take up to 2 years to acquire

Another issue the plan faces is the time it will take for existing contracts to expire before the city can reclaim a 30 per cent share of the service. 

If it waits until existing bus contracts expire, turning the service public might not start until after Dec. 31, 2025. This would be the lowest-risk option, largely to protect contractors from financial losses, the report suggests. 

As well, it takes time to acquire the specialized buses — in the range of 16 to 24 months, the report said. 

Mayes said he takes the city's timeline estimate at face value. The report notes there are Transit Plus contracts for vans due to expire in August and September 2022. That might be the way to get started, he said.

He said he could see the shift to public sector services starting in 2024. 

"There are other contracts, cars and vans. To me those seem a lot cheaper to try and bring in-house," he said.

"That's one of the options I'm going to be coming in with this week.

"The blessing here is that it's not one big contract. You can say, 'OK, we'll take a few of them back in … and leave some of it in the private sector.'"