City officials on Wednesday extended the contract of Veolia Transportation to operate the popular Charm City Circulator for 18 more months.
The $12.4 million deal keeps Veolia as the bus service's contractor until July 2016. The new deal includes a 1.6 percent increase in the hourly rate paid to Veolia, because of an "increase in the vendor's labor costs," according to Board of Estimates documents. The board approved the contract extension Wednesday.
City officials are "working right now to evaluate the Circulator and to look for efficiencies," Mayor Stephanie Rawlings-Blake said. "I believe that work is important because the Circulator is one of the highest rated city services that we offer. ... If that means we have to have an extension to continue that work, I think that's important."
The contract extension gives the Department of Transportation time to seek competitive bids to operate the free bus service, which began as a way to shuttle passengers around the downtown area, and now connects Locust Point to Mount Vernon and Johns Hopkins Hospital, city officials said.
In 2009, former Mayor Sheila Dixon's administration introduced the Charm City Circulator, and approved a five-year agreement with Veolia Transportation, Inc. The bus service quickly became a hit. More than 4 million people use the Circulator each year.
Last year, Rawlings-Blake said the circulator was operating at an $11.6 million deficit — which is projected to expand to $73.2 million over the next 10 years unless city officials figure out how to pay for it.
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The mayor said her administration is evaluating whether to eliminate routes or increase wait times, charge a fare or raise the tax on parking in city garages. Rawlings-Blake said officials plan to first study ridership trends and that she wants to exhaust all options before considering a fare or parking-tax increase.
A consultant has been hired for $130,000 to explore options, and a report was due in January. Kathy Dominick, a spokeswoman for the city's Department of Transportation, said the consultant's report is "still not finalized at this time."
Rawlings-Blake said the city is still exploring what to do next.
"We're taking a look at those options now," she said.