Galveston TX - The Gavleston County Daily News reports on a problem occurring between the University of Texas Medical Branch (UTMB) and Island Transit. The problem is how much should the UTMB pay for the service.
Currently the UTMB pays $200,000 a year to subsidize the route for Island Transit and in exchange, Island Transit allows UTMB employees and patients to ride free on that route. It is a deal similar to what many universities across the country enter into with the transit system in their area.
Although there is no problem with the service that Island Transit provides, the UTMB has decided to base future payments on the systems performance. Under the new arrangement that Island Transit reluctantly agreed to, the base payment moved from $200,000 a year to $160,000 a year but the transit system can stand to make up to $240,000 a year if it performs well.
At first glance, that sounds like a reasonable deal. The problem I see is that as time goes by, it will force Island Transit to focus on that one particular route due to this one fact. Performance is based on the UTMB's assessment alone. Too often I see such arrangements go bad as more demands are made on the transit system by the paying agency.
Contracts such as this should be based on the cost of providing "X" amount of service, not strictly on performance. By entering a contract based strictly on performance, it can start the process ignoring the rest of the operation to focus on one particular route.
Given the fact that the UTMB had no problem with the current level of service, nor the quality of that service, the change demanded by the UTMB is not warranted. The excuse being used that the lowering of the base payment will ensure that Island Transit won't let it's service to the UTMB slip is a red herring in my opinion.
That red herring is that the UTMB wants more service without paying more for it. While the UTMB stated that if service remains the same the payment will remain at $200,000, I don't really believe that. When the time comes to pay for the contract, the UTMB will find fault in order to cut its own costs and save $40,000. This move will also force Island Transit to increase service just to try and keep the $200,000 payment.
As I see this, the UTMB agreement will ultimately end up hurting Island Transit by driving up costs. Already extra expenses are being spent to check for problems on the route, which by the way is not being done with the rest of the system.
Currently the UTMB pays $200,000 a year to subsidize the route for Island Transit and in exchange, Island Transit allows UTMB employees and patients to ride free on that route. It is a deal similar to what many universities across the country enter into with the transit system in their area.
Although there is no problem with the service that Island Transit provides, the UTMB has decided to base future payments on the systems performance. Under the new arrangement that Island Transit reluctantly agreed to, the base payment moved from $200,000 a year to $160,000 a year but the transit system can stand to make up to $240,000 a year if it performs well.
At first glance, that sounds like a reasonable deal. The problem I see is that as time goes by, it will force Island Transit to focus on that one particular route due to this one fact. Performance is based on the UTMB's assessment alone. Too often I see such arrangements go bad as more demands are made on the transit system by the paying agency.
Contracts such as this should be based on the cost of providing "X" amount of service, not strictly on performance. By entering a contract based strictly on performance, it can start the process ignoring the rest of the operation to focus on one particular route.
Given the fact that the UTMB had no problem with the current level of service, nor the quality of that service, the change demanded by the UTMB is not warranted. The excuse being used that the lowering of the base payment will ensure that Island Transit won't let it's service to the UTMB slip is a red herring in my opinion.
That red herring is that the UTMB wants more service without paying more for it. While the UTMB stated that if service remains the same the payment will remain at $200,000, I don't really believe that. When the time comes to pay for the contract, the UTMB will find fault in order to cut its own costs and save $40,000. This move will also force Island Transit to increase service just to try and keep the $200,000 payment.
As I see this, the UTMB agreement will ultimately end up hurting Island Transit by driving up costs. Already extra expenses are being spent to check for problems on the route, which by the way is not being done with the rest of the system.
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