Baltimore City is suing Transdev North America, Inc., the operator of the free Charm City Circulator bus service, for breach of contract, arguing they were overcharged tens of millions of dollars, Mayor Catherine Pugh announced Wednesday.
At the same time, the city is seeking a new vendor to run the buses. The agenda from this morning’s Board of Estimates meeting says the city received two proposals and is opting to go with one from the Rockville-based RMA Worldwide.
The city filed suit this morning in Baltimore City Circuit Court, seeking a jury trial instead of a bench trial, which is decided by a judge. A release says Transdev should be served with the lawsuit this week.
Tellingly, the agenda for the meeting of the city’s spending board urged members to reject and return Transdev’s proposal to operate the buses, “as they were not determined to be a responsible bidder.”
The filing, shared by the Law Department Wednesday afternoon, alleges “Transdev has overbilled the City over 20 million dollars,” and that “the City has overpaid Transdev at least 16 million dollars” that the company has not given back.
The agreement Transdev and the city signed in 2009 required the city to pay the company for every hour the buses were in service. But a consultant found in a comparison of the company’s operating logs and a national database for transit reporting that Transdev had billed Baltimore for more than 29,400 hours when buses weren’t actually available from July 2015 through June 2017, the lawsuit alleges.
Baltimore Transportation Director Michelle Pourciau sent the company a letter in March asking for it to reconcile all invoices during that two-year stint with the actual hours the buses had been operating, and to begin submitting “weekly service logs” so the department could verify the hours.
“Transdev failed to provide either the reconciled invoices, the operating logs, or any
accounting of refunds due,” the filing alleges. “Instead, Transdev admitted to the City Department of Transportation Director, in a letter dated April 11, 2018, that it had in fact invoiced the City for scheduled hours for the Charm City Circulator and not the Revenue Service Hours when vehicles were actually operated.”
The company said in that April letter that it had “an unwritten mutual agreement with unnamed City ‘representatives'” through which it “would simply bill and receive payment for scheduled hours” regardless of whether they’d actually been operating.
A communications manager with Transdev North America, Scott Hagen, called the lawsuit “meritless litigation” and said the invoicing structure was agreed upon after the initial provider of the buses, Design Line North America, delivered only 13 of 21 vehicles the city ordered and went bankrupt.
“Because the City was unable to meet the terms of the contract, Transdev agreed to the City’s request for a new contractual and invoicing structure,” he wrote in an email. “For months, Transdev has actively engaged city officials to address their concerns and provide them with the relevant facts and documents, which makes this baseless lawsuit a complete and utterly non-productive surprise.”
Negotiations for a new vendor will “begin immediately,” and if successful, the new contract should be signed by Oct. 10, according to the release announcing the lawsuit.
That means you could be looking at a new fleet of Circulator buses very shortly. The Department of Transportation will use “local companies to provide the bus bridge service” until a new vendor is picked. Stops, schedules and operational hours should go unchanged in the meantime, the city said.
This story has been updated.