Illinois company to run Long Island Bus

Some 100,000 Long Island Bus riders soon will have to rely on a private transportation company that has convinced Nassau County that it can run the system for virtually no county money -- and do so better than the MTA.

Veolia Transportation, of Lombard, Ill., was picked from three bidders to take over LI Bus in a public-private partnership, Nassau County Executive Edward Mangano said Friday.

The contract, which still must be negotiated, is expected to be finalized in the next 45 days. The county legislature and the Nassau Interim Finance Authority must approve it before Mangano gives his go-ahead.

"Creating a public-private partnership makes sense for taxpayers," Mangano said at an afternoon news conference. "It has an ability to stabilize fares and protect the taxpayers, and that's the ultimate goal."

Veolia has committed to keeping fares and service levels stable through the end of 2012, and any future service cuts "will only be considered as a last resort," county officials said.

Veolia's winning bid proposes a $106-million operating budget for LI Bus next year, a third less than the Metropolitan Transportation Authority's current $141-million budget.

Nassau does not plan to contribute any subsidy beyond the minimum $2.5 million to $4 million necessary to maintain state aid, officials said.

Long Island Bus is owned by Nassau but has been operated by the MTA for nearly 40 years. The county and the transit agency parted ways after a long funding dispute. The MTA said it needed $26 million more than the $9.1-million annual subsidy it was getting from the county to keep existing service levels.

MTA spokesman Kevin Ortiz, in a statement, said the transit officials "look forward to working with the county and Veolia to assist in the transition and transfer of service at the end of this year."

Veolia says it runs the "largest and most sophisticated bus networks in the U.S.," with more than 200 contracts in major cities ranging from New Orleans to Washington, D.C.

Mark Joseph, Veolia Transportation North America chief executive, said, "We have what we think is going to be a tremendous opportunity to improve the service for the riders and to find significant savings for the county."

Veolia vice president Michael Setzer will be the new chief executive of Long Island Bus.

Carl Schroeter, who chaired the committee that selected a new bus operator, said Veolia plans to find much of its savings by consolidating administrative functions into its main headquarters, leveraging its national profile for savings on purchases, investing in more efficient fuel technology and cutting maintenance costs.

The county plans to "re-brand" LI Bus with a new name and a new look for its fleet, said Schroeter, director of the county's Real Estate Department.

In its statement, Veolia acknowledged that operating the system with little subsidy "is a big challenge," but possible given the company's low cost structure and commitment to finding savings.

Rochester Genesee Regional Transportation Authority chief Mark Aesch, who was hired by the county to lead to the transition, said the takeover marks a new approach of providing "a public-sector service with a private-sector mindset."

"Stores open on time. Stores are clean. Stores have a greeter at the door with a smile on his face," Aesch said. "Rather than provide a service, we'll provide a product -- a product that's worth buying."

Several transportation advocates, bus riders, LI Bus employees and Democratic lawmakers Friday decried the deal. Nassau County Legis. Wayne Wink (D-Roslyn) said he believes Veolia is willing to take over LI Bus at a loss in the first year, with a longer-term plan to increase fares and demand a higher county subsidy.

"As is often the case with this administration, the devil is in the details, and the devil has absolutely yet to emerge," Wink said.

Veolia was represented during the bidding process by Park Strategies, former Sen. Alfonse D'Amato's Manhattan lobbying firm. Park vice president Robert McBride, who hosted a Mangano fundraiser in his house in January, worked on the deal.

Schroeter said he never had any dealing with Park Strategies representatives, and that Veolia was chosen because it scored highest on "scoring sheets" completed by selection committee members.

McBride did not return a call for comment.