Scottsdale’s free trolley service is under new management even as the previous long-term vendor battled the city in court to maintain its expired agreement.
On Monday, Sept. 14, the St. Louis-based MTM Transit began running the weekday trolley program, replacing Dunn Transit, which had operated the city’s buses for over 30 years.
Amid the transition, Margaret Dunn, president of Dunn Transit, challenged the nearly $16 million service contract with a lawsuit she recently filed in Maricopa County Superior Court.
In legal filings, she accused the city of violating its own purchasing policies by unfairly choosing her competitor despite it being more expensive and having less local experience than her company.
Calling her claims baseless and emotional,
the city argued, in part, that its decision was based on a “reasoned evaluation” of the various offers during the bidding process.
MTM echoed the sentiment. In a legal filing to join the lawsuit, the vendor called Dunn’s arguments “meritless.”
Dunn is asking the court to determine whether the contract with MTM should be rescinded and instead awarded to her.
Her complaint, though, hit an early speed bump this month. Days before her contract officially ended, Judge Frank Moskowitz denied her request for a temporary extension and to halt MTM’s new deal as the case proceeds in court.
While he agreed that the lawsuit raises “serious questions” about the contract, he didn’t believe there was a basis to pump the brakes.
Scottsdale invites vendors to compete for new trolley contract
Scottsdale residents and visitors can catch the free trolleys Monday through Friday, between 5:45 a.m. and 7:45 p.m., except for major holidays and weekends. The vehicles run on 20-minute intervals along three fixed routes between north and south Scottsdale.
The Scottsdale-based Dunn Transit was first tapped by the city to operate the trolleys in 1991. Except for a four-year stint from 2017 to 2021 — when another contractor was hired — Dunn has managed the program ever since.
As Dunn’s latest contract began to wind down, Scottsdale invited her and other transit operators to compete for a new multi-year agreement this past February.
Five vendors, including Dunn, submitted offers.
An evaluation committee comprising three Scottsdale employees reviewed and scored the proposals.
Based on four categories that the panel considered — price, local knowledge, staff qualifications and operation plans — MTM was ranked as the top bidder.
The San Francisco-based WeDriveU landed in second, while Dunn came in third.
In May, the city awarded the service contract to MTM Transit, which is locked in for a two-year agreement, starting this month. Afterward, MTM and the city can extend the deal annually for three consecutive years.
Dunn challenges city over MTM’s awarded deal
Since losing the contract, Dunn has scrutinized the competitors’ proposals and the committee’s evaluation to challenge the city’s decision.
She filed her lawsuit with the court in July, alleging that the city gave preferential treatment to some of her competitors who, she claimed, didn’t meet certain qualifications under the then-proposed contract.
Largely at issue is MTM’s price tag for services, its lack of local knowledge about Scottsdale’s trolley system and its inexperience with the public transit technology that the city uses.
Dunn pointed to the evaluation committee’s scorecard to note that MTM offered to operate the trolleys for about $15.7 million over a five-year period. That’s about $1.4 million more than her offer.
The scorecard also showed that while MTM had some regional experience working with Valley Metro, it didn’t have much city-specific knowledge of the local trolley program — a concern that some on the committee expressed.
Both MTM and the committee also acknowledged that the company hasn’t used Clever Devices, the communications system the city uses to manage trolleys out in the field. Dunn noted that prior use of Clever Devices was a requirement in the city’s request for proposals and a major point of emphasis throughout the committee’s evaluation of the bids.
Despite MTM’s shortcomings, the committee gave the vendor higher scores in the local knowledge and operations categories compared to Dunn, the lawsuit noted.
Scottsdale challenges Dunn’s criticism
Scottsdale has disputed Dunn’s claims that the evaluation committee acted arbitrarily and that MTM should have lost points for its lack of experience.
“The administrative record reflects a reasoned evaluation, not arbitrary decision-making,” the city said in court filings.
It added that Dunn mischaracterized much of the city’s preferences and expectations for the companies that submitted bids, arguing that experience with Clever Devices wasn’t a requirement or standalone criterion that the committee scored.
Companies that didn’t have direct experience with Clever Devices could outline their experience with comparable systems, the city said.
Scottsdale went on to also challenge Dunn’s assertion that she should get the contract if MTM’s award is rescinded. Because her proposal was ranked third, the city noted, she can’t reasonably believe that the contract would automatically come to her.
“If the top-ranked proposer holds no entitlement to the award, a third-ranked proposer like Dunn holds none either,” the city stated.
Scottsdale also objected to Dunn’s unsuccessful request for the court to extend her contract and pause MTM’s for 60 days.
If Moskowitz had ruled in Dunn’s favor, the city would have had to still reimburse MTM $177,148 in startup costs and pay an additional $450,000 to Dunn to continue operating the trolley for another two months, Scottsdale said.
Following Moskowitz’s decision, MTM will remain as the city’s new trolley operator while Dunn’s lawsuit moves through the court process. No hearing dates were scheduled as of Sept. 17.
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Shawn Raymundo covers Scottsdale and Maricopa County. Reach him at sraymundo@gannett.com or follow him on X @ShawnzyTsunami.
This article originally appeared on Arizona Republic: Scottsdale picked a new trolley operator. Now it's in court
