Jeramey Jannene
Eyes on Milwaukee

City Chooses Streetcar Operator

French company Transdev will operate streetcar for $3.6 million a year.

By - Sep 6th, 2017 03:42 pm
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Milwaukee Streetcar Track. Photo by Jeramey Jannene.

Milwaukee Streetcar Track. Photo by Jeramey Jannene.

The Milwaukee Streetcar has an operator. As widely expected, the Milwaukee Streetcar selected a for-profit firm to operate the the 2.1 mile long starter system. After a lengthy process, Department of Public Works commissioner Ghassan Korban has informed members of the committee overseeing the streetcar that the city has entered into a contract with Transdev to operate the streetcar.

Transdev operates the newly constructed Detroit and Cincinnati streetcar systems in addition to New Orleans’ long operating streetcar network. A statement from the city notes that they operate 22 fixed rail systems in the United States.

The company, formerly known as Veolia Transdev, has operations in 19 countries and employs approximately 83,000 people worldwide. The company’s world headquarters are located in Paris, France, with the North American office based in Lombard, IL. (The company formerly included Veolia Water, which manages and operates the collection and wastewater treatment for the Milwaukee Metropolitan Sewerage District.)

In a letter from Korban to the streetcar committee, the commissioner notes: “The RFP attracted five highly qualified firms and agencies from the U.S. and Europe. An ad-hoc evaluation committee objectively reviewed their detailed proposals against the established evaluation criteria identified in the RFP, and conducted in-depth interviews with each firm that included presentations by the proposed general managers. The committee evaluated the companies on the criteria of experience and qualifications, past performance, understanding of our project, and approach and contract costs. The evaluation committee ranked TransDev the highest and recommended its selection. I accepted the committee’s recommendation.”

Korban went on to note: “Under the agreement signed with Transdev, the company will be responsible, with policy direction from the City, for all day-to-day operations and vehicle and facilities maintenance. Operations functions include hiring and training staff; managing and conducting vehicle operations and maintenance; maintenance of track, station platforms and support systems; and implementing safety programs. Through an innovative arrangement, Transdev will subcontract for vehicle maintenance with Brookville Equipment Corp., which is building our vehicles.”

The contract runs through December 2023. Annual operation costs, to be paid to Transdev for the first phase and the additional lakefront line to The Couture, are approximately $3.6 million annually.

Korban’s letter notes that “DPW maintains the right to terminate the contract at any time for convenience, funding, or default of contract requirements or performance standards.”

The initial phase of the streetcar, which will connect the Lower East Side, East Town, the Historic Third Ward and Westown, is scheduled to begin operation in late 2018. An extension along E. Michigan and E. Clybourn streets to the lakefront is scheduled to begin operation in late 2019.

The Milwaukee County Transit System had submitted a last-minute bid to operate the system after the Milwaukee County Board of Supervisors passed a resolution shortly before the deadline requesting them to do as much. Prior to that resolution, MCTS director Dan Boehm told the Milwaukee County board’s Transportation, Public Works and Transit Committee that “the deck’s pretty stacked against us.”

As I mentioned in an April 2017 article on the matter, MCTS and TransDev had discussions around a partnership, but these ultimately did not advance.

Construction on the streetcar is being led by Nebraska-based Kiewet. The firm has built a number of rail-based transportation systems across the country. A late July press release from the city indicates that Kiewet is on track to meet their required 40 percent Resident Preference Program hiring goals (designed to employ under- or unemployed city residents) and 21 percent disadvantaged business enterprises goal.

The project has a cost of nearly $128 million, a large portion of which is being funded with federal grants.

State Attacking Streetcar

As part of the transportation funding agreement designed to break the Wisconsin state budget stalemate, the Republican-led Joint Finance Committee has created a provision designed to further restrict the ability of the state or county to fund the operations of the system. The operations funding plan passed by the Common Council in 2015 does not include the use of state or county funds to operate the system.

Mayor Tom Barrett‘s office released a statement in response. “Despite the fact that the State is not funding The Milwaukee Streetcar, there are members of the legislature who don’t like the project. We’ve asked the City Attorney to review the motion that the Joint Committee on Finance passed last night and once we have that information we will be in a better position to plan and move forward.”

Urban Milwaukee will have more on the issue in a future article.

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More about the Milwaukee Streetcar

For more information on project details, how the operator will be selected, what the vehicles will be like, and possible extensions, see our extensive past coverage.

5 thoughts on “Eyes on Milwaukee: City Chooses Streetcar Operator”

  1. Tom D says:

    Does the $3.6 million/year INCLUDE the streetcar’s revenues or are revenues IN ADDITION to the $3.6 million? For example, if the streetcar takes in $1 million some year (fares, ad sales, naming rights, other sponsorships), will the Transdev payment for that year be reduced to $2.6 million?

  2. @Tom – I sent a message to the project team. I assume the payment would be reduced or the city would use those funds as part of their payment.

  3. “,,,Transdev will subcontract for vehicle maintenance with Brookville Equipment Corp., which is building our vehicles.”

    Is maintenance being done at a facility in MKE? If so is that part of the project?

  4. Tom D says:

    Ed, the maintenance will be done in a facility being built at the SW corner of 4th and Clybourn. Its cost is included in the startup budget.

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