Nassau's new private bus operator can eliminate up to six routes in the first half of 2012 and make deeper service cuts if it faces unexpected costs or shortfalls in revenue, according to the contract creating the county's new system, NICE Bus.

County Executive Edward Mangano Thursday released the 300-plus-page contract -- for the first time making public details of the county's proposed pact with Veolia Transportation. On Jan. 1, the Illinois-based company is due to take over Long Island Bus, which will be renamed Nassau Inter-County Express Bus.

While the contract guarantees that existing fares and service levels will remain on Jan. 1, it sets forth circumstances under which the county and Veolia can slash service for the system's 100,000 current daily riders. Some potential fare increases and service cuts would be subject to approval by a five-member Transit Committee of Nassau residents, with Mangano appointing the majority.

 

Contract awaits approvals

The contract, which has a five-year term with an optional five-year renewal, must be approved by the county legislature and the Nassau Interim Finance Authority. The legislature's Rules Committee is expected to consider it at a Monday meeting. The county plans to hold a public hearing in about two weeks.

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For running the system, Nassau will pay Veolia a fixed annual fee and a variable fee calculated by the number of hours buses are running, with the total payment going from as much as $106 million next year to up to $127 million in 2021. The contract has incentives if Veolia meets certain performance markers and penalties if it does not.

The contract allows Veolia to eliminate up to six of the system's 48 existing routes in the first six months of 2012 if the routes are largely duplicative of other lines that most customers could access within a mile.

Veolia also can "adjust headways and time points" -- meaning it can run fewer buses -- on specific, scheduled trips that are at 20 percent or less capacity, or those that don't recover more than 20 percent of costs from fare revenue.

 

Company's quarterly review

On a quarterly basis, Veolia can propose further service cuts, fare hikes or increases in fees paid by the county if revenues fall short of Veolia's projections or if costs exceed them, the contract says. The Transit Committee would have to approve such measures. If it chooses to do nothing, Veolia could walk away from the contract.

If a "major event" occurs that suddenly increases the cost of running the system, Veolia can propose fare hikes as high as 25 percent and/or 25 percent service reductions on some lines. It also can enact smaller fare hikes and service cuts in such situations, including axing "unproductive" lines that recover 20 percent or less of their costs in fares.

A "major event," under the contract's terms, could include a legal claim by LI Bus workers, who have said federal law entitles them to their full state pensions for the first six years after the county's bus system is privatized.

Veolia must notify the Transit Committee of any changes because of "major events."

At a news conference, Mangano called the deal "an open, transparent process that is guided by public participation on a quarterly basis here in Nassau County." He has maintained the privatization will save taxpayers more than $33 million. The Metropolitan Transportation Authority, which has operated the system for 38 years, has said it would have needed about $35 million each year to run LI Bus at current levels. The county, in its 2012 budget, will contribute $2.6 million to the bus system.

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But Ryan Lynch, spokesman for the nonprofit Tri-State Transportation Campaign, a riders' advocacy group, said the potential for fare hikes and service cuts means it could cost riders considerably more.

"It sounds like they already have major changes in mind," Lynch said. "The county executive needs to find a viable solution that does not overburden . . . residents and businesses."

Pat Bowden, president of Transport Workers Union Local 252, representing more than 800 LI Bus employees, said she was troubled by what she heard Thursday. "The fact is fewer buses mean longer wait times for commuters," Bowden said. "Less is not more."