Local company loses out on Crow Wing transit bid

It’s about the service, not the money.

That’s the stance the majority of Brainerd City Council members took Monday, June 21, when choosing the pricier of two bus companies to run the city’s and county’s transit system for the next three years.

Blue Earth Blue Sky, owned by Minneapolis-based company Jefferson Lines, will run the Brainerd and Crow Wing Public Transit system beginning in August for the next three years. City Council members awarded the $3.59 million contract on a 4-2 vote, forgoing a partnership with local company Brainerd Bus Lines — also known as Reichert Bus Service — that would cost less by more than $1.2 million.

The Brainerd and Crow Wing Public Transit System serves Pine River and various Crow Wing County locations. In a typical year, state and federal funding covers 85% of the operational costs, with Brainerd, Baxter, Pine River and Crow Wing County picking up the other 15%. Brainerd pays the largest share of the rest of the cost at 46%, followed by Crow Wing County at 35%, Baxter at 12% and Pine River, 7%. The money each entity collects in fares goes toward their share of the contract.

Brainerd’s share of the Blue Earth Blue Sky contract is $82,623 per year, which is an increase of $29,162.48 from the current contract with Productive Alternatives, which did not submit a proposal this year. The only two bidders for the new contract were Blue Earth Blue Sky and Reichert.

In 2022, however, coronavirus relief funds will cover 100% of transit costs, so all the money from fares collected will go into the transit fund and be used to pay the contract cost for the following years.

Per an agreement with the other entities and because Brainerd has the transit operating license through the state, the Brainerd City Council has the authority to approve a transit contract.

The recommendation to go with Blue Earth Blue Sky’s proposal came from the city’s transportation advisory committee, which approved the measure on a 4-1 vote, with Mary Koep in opposition.
The five committee members scored each of the two proposals in four categories: technical/operations, personnel, performance/financial and management plan. Because the transit system is a service provided by a third-party contractor, it is not subject to bid law, meaning the city is not obligated to choose the lowest bidder.

Transportation Advisory Committee Chair Jeff Czeczok outlined his thought process on choosing Blue Earth Blue Sky over Reichert during the council’s safety and public works committee meeting Monday.

Reichert’s proposal included a line noting the company has the right to relocate the transit office to elsewhere in Brainerd or Baxter. The current office is at city hall, where Czeczok said it needs to stay, as it is near the rest of the city staff.

Czeczok said the committee also hopes to increase ridership in the future to cover the cost difference between the proposals.

Overall, Czeczok, who uses the transit service regularly, said he believes Blue Earth Blue Sky will provide the best service for the best value.

“It’s a service that you’re getting provided to you, not just the dollars and cents of it,” he said. “And the service is about the most important thing when it comes to bus transit.”

Another pro for Blue Earth Blue Sky, City Engineer Paul Sandy added, is the inclusion of commercial automobile liability insurance, which was missing from the Reichert proposal. In the event of a catastrophic event, the third-party contractor’s insurance would be on the hook after the city’s insurance is maxed out. The Blue Earth Blue Sky proposal includes $90,000 a year of liability insurance, while the Reichert proposal did not include any.

Committee member Mary Koep, however, took the opposing stance, arguing the council should choose the local contractor that has paid local taxes for years.

“I see a lot in the newspaper these days and hear a lot about ‘buy local, keep it local, Lakes Proud.’ You know, you should really change that and forget about that little model unless you mean it. Reichert is local,” Koep said.

She also took issue with the higher price tag. Even though a majority of the cost is absorbed by the state and federal governments, Koep said that still doesn’t mean it’s free money.

“When I hear about all this money that the state and feds are going to put in, it’s not really all that comforting,” she said. “They don’t have a magic printing press, although they act as if they do. But sooner or later that money has to be paid back. Somebody is going to pay it. At my age, that likely won’t be me, but it will be you or your children or your grandchildren. I think it’s irresponsible to not be concerned about the money.”

Koep also argued that ridership is down because of the COVID-19 pandemic and will take a while to build back up to where fares are covering operational costs.

During a phone interview Tuesday, June 22, Sandy shared a graph showing ridership from early 2020 through now. While the number of riders did dip significantly when the pandemic hit in March 2020, it has been steadily growing ever since. Before COVID-19, Sandy said the transit system logged about 80,000 riders per year, and he expects to get back up to that number in the near future and perhaps even exceed it with the new service provider.

Kevin Pursey, of Jefferson Lines, was present Monday and said all drivers will be local and assured the safety and public works committee of the company’s great track record over its 101 years of operation.

“We know how to run buses,” he said. “We’re a transportation company. We run in 14 states. We are in the top 5% of safety records of all motorcoach carriers in North America. So we do have a good track record of running buses. … Our plan is to bring that kind of expertise, that focus to this project.”

During the full council meeting later Monday night, Transit Coordinator Andy Stone said Blue Earth Blue Sky plans to pay drivers a higher wage than Reichert, which is the key difference in his mind. A higher wage, he said, will help ensure higher quality drivers.

Council member Gabe Johnson asked if awarding the higher contract will mean the city will have to ask for a transit levy in the future or increase fares?

Sandy said he does not foresee a transit levy — which the city has not had since 2002 — and said fares may be adjusted a reasonable amount, depending on ridership.

Johnson also asked what would happen when the contract ends in three years if Blue Earth Blue Sky decides it no longer wants to work with the city. Would Brainerd still maintain a good relationship with Reichert?

Stone said he couldn’t answer that question without a crystal ball.

“But I can tell you, we had high hopes for our current contractor, but then COVID hit, and they wanted to refocus on their principal business,” Stone said. “Yes, things change. … Day by day, we’ve got to make sure we get all of our riders picked up and dropped off safely and in good shape and collect enough fares and have few accidents so that we can meet our budget and make sure we get funding from the state. And so there’s all these other duties besides actually driving the bus that we rely on somebody else to do.”

Johnson and Tiffany Stenglein voted against the measure, and Dave Pritschet was absent, bringing the final tally to 4-2.

Representatives from Reichert did not return a request for comment.

The Blue Earth Blue Sky contract will begin Aug. 1 and run through June 30, 2024.

Prior to the vote, the council extended its current contract with Productive Alternatives another month — through July 31 — to allow for a transition period before the new contractor takes over.

THERESA BOURKE may be reached at theresa.bourke@brainerddispatch.com or 218-855-5860. Follow her on Twitter at www.twitter.com/DispatchTheresa .