Transit authority ends contract with operator
SOUTH LAKE TAHOE, Calif. – The South Tahoe Area Transit Authority will end its contract with operator MV Transportation at noon on June 20 after the two organizations were unable to agree about how much money STATA owes MV.
“By not making any progress resolving our issues we were in jeopardy of them terminating or suspending bus service period,” said STATA Spokeswoman Stacy Dingman.
Current transit consultant Transit Resources Center will operate the transit system, including BlueGO, beginning June 20. Buses will continue to run during the transition. TRC will have a contract of no longer than 12 months for a still to be negotiated amount, Dingman said. After 12 months STATA will put out a call for bids.
“This is an interim transition period,” Dingman said. “We are working with the Federal Transit Administration and Nevada Department of Transportation not to jeopardize any regulations or funding.”
On May 28, MV sent STATA a notice of termination of contract May 25 to find a resolution to the financial issues.
MV was “flabbergasted” when it received STATA’s recent termination of contract notice, spokeswoman Nikki Frenney said.
MV contends that STATA owes $2.38 million, without considering interest on a $800,000 loan MV extended when it took over operations in July 2009 to help STATA cover transitional costs, Frenney said.
“It was to help them continue service because they didn’t have the money to restart service when the other company left,” Frenney said.
The South Lake Tahoe City Council voted in December 2008 to terminate former operator Area Transit Management’s contract to operate and maintain the city’s public transportation fleet following an arbitration process between ATM and the city.
STATA is set to begin paying back in the loan in July, Dingman said.
Of the $2.38 million, $1.55 million is owed for services rendered, Frenney said.
“They have been sporadic in paying their bill,” Frenney said.
According to Frenney, STATA did not pay MV in the months of August 2009, September 2009 and March 2010.
“We’ve been working with them for a long time and we are at a point where we can’t foot the bill for service when we don’t know if or when we’re going to get paid,” Frenney said.
However, the $1.55 million may not be accurate, as MV and STATA are debating the terms of its contract, Dingman said.
“The definitions as we know it between ‘gate to gate’ and ‘first to last drop’ are mercurial and that’s what we are trying to define,” Dingman said.
STATA plans on resolving the issue and paying its bill with MV, Dingman said.
“STATA is going to be making to good on it,” Dingman said. “The timing of all this makes this seem aggressive but the intention is to move swiftly. We will absolutely be taking care of the monetary issues.”
The STATA Board’s next meeting is 10 a.m. Friday at 128 Market St. and the board is expected to discuss the issue in depth, Dingman said.
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