A Democratic Nassau lawmaker is calling for an audit of the county’s contract with its deficit-ridden transit provider, raising questions about whether the taxpayers and riders are paying too much for too little.
Legis. Siela Bynoe (D-Westbury) on Wednesday sent a letter to Nassau County Comptroller George Maragos asking him to audit Nassau’s contract with Transdev — the parent company of the Nassau Inter-County Express, or NICE — “to determine whether the interests of County residents are being fully protected.”
Among the terms of the deal over which Bynoe raised concerns: a provision that requires Nassau to pay Transdev an “arbitrary” 5 percent of NICE’s total revenue for overhead expenses; that the contract’s allotment for certain “fixed fees” may actually result in Nassau paying twice for the costs, such as utilities; and that the size of Transdev’s profits — $4.6 million in 2015 — is too high, especially given that NICE has cut service on some routes in recent years.
“It seems clearly unreasonable for Transdev to be rewarded with a higher profit for rendering reduced services,” Bynoe wrote in the letter.
Maragos’ office will conduct the audit, said comptroller’s office spokeswoman Carla Hall D’Ambra.
The audit request comes as NICE faces a $12 million budget gap that transit officials have said will likely require deep service cuts to help fill.
NICE chief executive Michael Setzer said Friday that he would welcome an audit. He said the company’s overhead expenses are “legitimate and very fair,” that Bynoe is mistaken in her understanding about Transdev’s fixed fees, and that the company’s profit margin — averaging 2.6 percent since Transdev took over Nassau’s bus system in 2012 — is “modest.” Transdev’s contract runs through the end of 2021.
Although Bynoe said Friday she hoped efficiencies stemming from an audit could “mitigate” some of the potential service cuts, Setzer he believed the concerns she has raised are serving as a “distraction.”
“The gap is $12 million. Even if we gave up all profit and all overhead, that’s not $12 million,” Setzer said. “We want to answer all the questions and we want to answer all of them quickly, because it’s not the solution. New revenue is the only solution that I can think of.”
Although the county last month rejected a proposal from NICE to eliminate some routes, Setzer said he intends to make another push for “deep service cuts” next month.
County officials were holding out hope that some help could come in the form of increased transit aid from the state, but Gov. Andrew M. Cuomo’s proposed executive budget, released last week, including no additional funding for NICE over last year’s level.
In a statement, Brian Nevin, spokesman for County Executive Edward Mangano, defended the decision to hire Transdev to run the county’s bus system, which had been operated by the Metropolitan Transportation Authority for more than 30 years.
“The unanimously approved NICE contract saved taxpayers tens of millions of dollars, prevented a 50 percent cut in service, requires the company to report their financial information and provides the Comptroller the ability to audit,” Nevin said.