St. Albert city council is set to debate bringing public transit operations in-house and ending the city's contract with a private service provider on Tuesday — a move one councillor says could result in substantial savings for the city.
Since St. Albert Transit was created in 1986 the city has outsourced transit services to private companies. Under these contracts, including the current contract the city has with PW Transit, the city is responsible for purchasing and maintaining busses, planning routes, and determining service levels or frequency of transit services, while the company is responsible for hiring, training, and scheduling drivers, shift supervisors, and all necessary administrative work like payroll and dispatching.
The city's current contract with PW Transit expires in 2028, and last year the city paid $8.6 million for transit services, city spokesperson Pamela Osborne said.
“I put forward this motion because upon review of the contract with [PW Transit], and after doing calculations on how much it would cost to come in-house, I'm confident that we can do it for the same price that we're currently paying or less,” Coun. Sheena Hughes said in an interview.
“And I think it could be substantially less.”
Gil McGowan, the president of the Alberta Federation of Labour (AFL), which represents 28 unions and more than 170,000 unionized Albertan workers, says his organization came to the same conclusion after reviewing the city's contract with PW Transit, and the AFL thinks the savings could be at least $1 million per year.
“Looking at this contract confirms our belief that privatization doesn't make sense — it clearly is not saving the citizens of St. Albert money — [because] when you contract out it just adds a profit margin for a corporation, as opposed to making sure that all the money pays for the frontline services for citizens,” he said.
The potential savings, McGowan explained, would come from reduced administrative costs the city currently pays to PW Transit.
“We think the contract clearly shows that it makes sense to bring the operation in-house,” McGowan said. “$1 million dollars per year of savings, and from our perspective based on our analysis of the contract, that's the minimum, it could actually be significantly more than that.”
“We went with a very conservative number because we acknowledge that there might be some additional transition costs, but certainly there's a big gap here.”
However, the city's director of public operations, Tim Saunders, wrote in a report to council that there are too many unanswered questions at the moment for administration to identify any potential savings.
“There are significant considerations and complexities with in-sourcing bus operations,” Saunders' report reads. “The known direct costs and unknown costs from the risks that require further evaluation, as well as the examination and consideration of analogous situations of various regional partners, do not provide a clear indicator of savings.”
“This, combined with the scope of the effort to address these issues lead administration to recommend against pursuit of internal bus operations at this time,” Saunders wrote.
Saunders' report also explains that if council does choose to start the process of bringing transit operations in-house, then administration would need to hire consultants to create an “organizational and operating plan” to help aid the city through the process.
“Administration is not able to provide estimated costs for such a transition without first completing thorough evaluations and analysis of the operational requirements and impacts specific to St. Albert.”
Despite administration's report, Hughes says she's still confident that savings are possible.
“Because I think it can be done for less I'd like to see [property taxes] reduced,” Hughes said. “This is a way to reduce them without reducing service levels.”
PW Transit has yet to respond to an interview request.
St. Albert city council's Feb. 6 meeting is scheduled to start at 1:00 p.m., and the Gazette will have more to come after council's debate.
