$49 million paratransit contract fails after Detroit council member retracts 'yes' vote

By Sarah Rahal | Detroit News

Detroit — Down to the wire, the City Council on Tuesday initially approved a controversial $49 million, five-year paratransit contract for a French company accused of providing subpar service to Detroit's disabled riders, but the deal ultimately failed after a council member later retracted her vote.

The defeat of the contract for Transdev means Americans with Disabilities Act paratransit services will be reduced 70% in the new year in a city that does 1,000 paratransit rides each day for an estimated 130,000 Detroiters with disabilities. The city also will have to put out another request for bids, which will take at least three months, potentially opening the city to litigation and investigation by the federal government.

"Effectively, it will go from 1,000 rides a day to 300 rides each day and will have to be prioritized by medical needs," said Detroit's Executive Director of Transit Mikel Oglesby before the vote. Oglesby was not available for comment on the reconsideration.

Starting Dec. 18, city officials said they won't accept reservations for the new year unless it's an urgent medical need. The current contract ends Dec. 30.

The nine-member council initially voted 5-3 to approve the contract, with council members Latisha Johnson, Mary Waters and Angela Whitfield Calloway rejecting the contract. The other five members said they were regrettably voting for it to keep rides operating in the new year and then recessed seven hours into the meeting. District 3 Councilman Scott Benson was absent Tuesday.

Once they returned from the recess, District 6 Councilwoman Gabriela Santiago-Romero motioned to reconsider the vote. She apologized, said she had to "vote with her conscience" and retracted her yes vote. The room became dead silent, with some council members covering their mouths in shock. The new 4-4 deadlock meant the contract was not approved.

In a statement to The Detroit News, Santiago-Romero said after her initial vote, she read communications from the disabled community and transit advocates and decided that the council was presented with a "false choice."

"It is the administration's job to do their due diligence to provide council with an amended Transdev contract or an expedited process to seek other vendors. It is our job as Council to consider all options — beyond this one false choice — and be given the time and required detailed information to make the right decision on behalf of the people this will most impact," Santiago-Romero said. "And I don't believe that to be Transdev, and I needed to vote my conscience."

The City Council postponed the vote on the contract for the last three weeks before Tuesday, its last session before recessing until Jan. 2. Council members have been reviewing this contract since October. Oglesby pleaded before the council and public that Transdev is the only contract bid on the city's request for proposals.

Detroit's new Chief of Staff Stephanie Washington said the next steps are "cleaning up City Council's mess."

"We believe we addressed the concerns the community expressed by adding accountability and bringing many of the administrative operations in-house. We also had the ability to cancel the contract at any time if there were performance issues. City Council has made its decision and this contract cannot be brought before them again. We now must start an entirely new procurement process and this past one took about six months," Washington said in a statement to The News.

"It is disappointing and disingenuous for council members to say we held this contract to the last minute to force a vote. Council had this contract before them for the past six weeks and could have voted it down a month ago. At least then we would have more had time to start a new procurement process," Washington said.

"The very people council members say they are trying to help are the ones that are being hurt because of this vote," she said.

Council members said they were given a lose-lose dilemma: Either pass the Transdev contract with no other alternative, against the wishes of some riders, or vote it down and sacrifice 70% of disabled transit services in the new year and expose the city to a legal challenge because of a restarted contract bidding process.

Earlier this month, the council unanimously approved a $16 million, five-year contract with People's Express Inc. based out of Whitmore Lake, which will conduct 30% of rides in the city.

The paratransit community has called for an end to Transdev, the main provider officials say has operated poorly in the city over the last six years. They have also asked for a reduced contract to hold the company accountable.

Transdev didn't immediately respond to a request for comment Tuesday evening.

The U.S. Department of Transportation's Federal Transit Administration sent a letter to Oglesby stating that DDOT has an obligation to ensure that ADA paratransit service continues uninterrupted as a public entity and recipient of federal funding. The federal agency threatened a loss of funding and investigating the failure to comply.

"In addition, the U.S. Department of Justice retains independent authority to investigate failure to comply with ADA requirements under any other federal agency's jurisdiction, without referral from such agencies," according to the letter sent by Kelley Brookins, regional administrator of the Transit Authority. The letter added that "aggrieved individuals" have the right to pursue legal action, "exposing DDOT to the possibility of private litigation."

One council leader supported the contract because it would provide more oversight of Transdev.

"I'm satisfied that riders' concerns are coming under the umbrella of DDOT," council President Pro Tem James Tate said to Oglesby. "The lion's share of what Transdev did will now fall under DDOT with a referendum on your leadership. What we've been talking about isn't different services, but a time clock. If this passes, I'm looking forward to holding you accountable."

Christopher Samp, director of the Office of Disability Affairs, said plans were transparent between DDOT and their office. He said transit services are essential and must keep running.

"Moving forward, I'll be working with DDOT to make sure the quality is improved and we will include the disability community," he advised the council ahead of their vote.

Now, the city will be prioritizing medical runs first and if there are available runs beyond those, DDOT will try to work them in, Washington said, "although we have a two-week lead time for booking paratransit rides."

"It is our hope that we will be able to conduct a thorough procurement process as quickly as possible and come back with a contract that City Council will approve to minimize the inconvenience members of our disabled community will be experiencing for the foreseeable future," she said.

Whitfield Calloway said she opposed the contract with Transdev and wished leaders would have brought an alternative to the table.

"The past problems with Transdev's services are well documented and deserves a vote against the contract," she said. "There's no reason to believe Transdev will be held accountable. Although the new RFP will take months, it's far better than suffering for another five years. I am aware of the possible legal liability that may arise during the re-bid process; however, this is far less than another five years of subpar service."

City Council President Mary Sheffield, who voted to approve the contract, said it's unfortunate that the council was put into a "bad situation." She also said the council should have had more time to review responses to the RFP, which were submitted over the summer.

"I cannot stress enough that the council be presented well in advance, especially with $49 million at stake. If we vote this down, our offices will be flooded with riders trying to get service," Sheffield said.

Then, the council president unconventionally stopped the vote to ask leaders of two disability advocacy groups in the audience, Lisa Franklin with Warrior on Wheels and Richard Clay with the Federation of the Blind, if they would be OK with a 70% reduction in service should the council vote against the contract.

"I know your back is against the wall; ours is, too. By no means would we be OK with that, but we should not allow Transdev to mistreat us for another five years," Franklin said. "They promised us Transdev would not be part of the equation, and (DDOT) knew that (Transdev) would be in May when the RFP was released and didn't bring it to you until October."

District 7 Councilman Fred Durhal II said he was torn, as the restructured deal had a substantial impact to service either way.

"I'm not happy that I have to vote on this today in its current form. You're almost leaving us with no choice," Durhal said. "To echo Tate, I will be keeping a very close eye on the performance. Some of the horror stories I've heard from the Disability Task Force of providers dropping someone off in the middle of the night, at the wrong location, or at the casino ... and if not for a good Samaritan, we would not know. ...

"The training piece is the biggest in these contracts. Who will be training these drivers and how. I, in good conscience, cannot sacrifice 70% of service."

But Waters said, "Transdev service was so horrible, they shouldn't have been allowed to bid on this contract. Riders are willing to sacrifice future service to not have them for another five years."

Under the previous agreement, Transdev was paid per trip at an increase from $15.60 to $40 going to the service. Riders will continue to pay a normal fare rate. DDOT is requiring 80 to 100 drivers for paratransit.

Detroit officials said they would be doing more oversight from Transdev, which riders have been advocating for.

Oglesby promised that in the new year, service "will not be business as usual" as DDOT has taken a majority of its operations in-house. He also said reducing the contract would not be possible "because it would destroy the integrity of the bidding process and open the city to potential legal challenges by companies who may bid on a shorter contract."

He said service would be "better either way because we're taking over several services."

DDOT proposed taking on the scheduling of rides and reservations, responsibility for customer service questions and complaints, the eligibility certification process, oversight of the providers, vehicle maintenance and service delivery.

"We've already hired 22 of 32 individuals that will be taking on that work, including an executive manager with 30 years of paratransit experience, Michael Stanley. These are DDOT employees who will be handling this in our new structure," Oglesby said. "We've taken the portions that Transdev didn't do well and we will have better service moving forward, there's no doubt about it."

Transdev would have had an operational role, while the city would have taken on the administrative role of reserving rides, scheduling, dispatching and transmitting through its in-house contract manager not only for People Express but also for the three subcontractors within its transit services bundle.

The department said it intended to implement a scorecard measuring accident frequency rates, tracking on-time pickups and drop-offs and looking at the number of trips per hour provided on the sources. Data for the key performance indicators would be collected daily by DDOT, compiled and provided to service providers at weekly meetings and on a quarterly basis to the local advisory council and the City Council.

Johnson called for the Office of Auditor General to review the quality performance of the new system, but to no avail.

ADA paratransit services were prioritized when the City Council approved the fiscal year budget in April. About $72.3 million in the city's general fund will support improvements to DDOT transit service and the People Mover. It included a $5.8 million increase to improve paratransit services and vehicle operations.

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