AL: Mobile transit: Council approves pension plan ahead of system operator change

Mobile will begin a new era Wednesday with a new public transportation operator who vows to make the city’s service more modern, high-tech, and efficient.

Before Port City Transit can begin its work, the Mobile City Council needed to provide one final approval on Tuesday. The council, with a 6-1 vote, approved an agreement with the company to continue with a pension plan for transit workers established 23 years ago.

“The agreement was signed in 2002, and was created in perpetuity,” said Scott Collins, executive director of finance with the City of Mobile. “We don’t have the ability for the employees not to participate in the plan.”

Councilman Ben Reynolds was the only “No” vote. He questioned whether the city could explore changes to the pension plan for new employees, such as moving them into a 401(K) program.

He said the timing made sense to consider a change while Mobile was moving forward with a new transit operator. Port City Transit, a limited liability company established by New York-based Via Transit LLC, is replacing Transdev as part of a contract the council approved last month.

However, Collins said that the city is bound by the 2002 agreement to continue providing the pension.

“We are simply putting forth the match we do today, and new employees would be part of the plan,” Collins said.

Collins said the city’s costs to support the pension plan are around $300,000 a year. He said that unlike police and fire pensions, the city does not have fiduciary responsibility over the transit union’s pension plan. Approximately 100 employees are covered under the plan.

The city’s transit employees will be transitioning to Via Transit employment this month. However, nothing is changing with the city’s public transportation system for the first nine months of the contract the council approved on September 19.

The overall costs for Via Transit to operate in Mobile are $12.1 million per year, with $8 million coming from the city. An additional $4.1 million comes from federal grants.

The term of the contract is for three years with two, one-year renewal options.

Via Transit could consider phasing out the Wave Transit bus system next year, in favor of a more modern, on-demand and app-based transit system featuring a bus service with reorganized fixed routes.

The company has operated the MoGo Rideshare program through the Mobile Chamber for city residents in recent years. The program provides $1.25 rides throughout the southeastern part of the city that includes downtown Mobile and the Mobile Aeroplex at Brookley, home to the Airbus’ North American manufacturing headquarters.

For years, Mobile’s bus system has been criticized for utilizing large buses, many of which are largely empty.

Via Transit’s contract also comes as Mayor-elect Spiro Cheriogotis is set to take office on November 3. Cheriogotis, throughout the mayoral campaign, highlighted his interest in having trolleys providing transit service in downtown Mobile.

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