On Friday, December 7, 2018 Mayor Tim Keller held a press conference and announced the city is taking legal action against the California based BYD bus company, the manufacturer of the 60-foot, fully electric buses for the disastrous $135 million ART Bus project and making good on a threat of litigation.
The lawsuit has been filed in 2nd Judicial District Court in Albuquerque and claims breach of contract, breach of warranty, fraudulent and negligent misrepresentation and violations of New Mexico Unfair Practices Act.
The New Mexico Unfair Trade Practices Act is usually enforced by the New Mexico Attorney General’s office, but the act does provide for private remedies which do extend to municipalities.
The significance of an Unfair Trade Practices action is that an aggrieved party can be awarded “triple damages” proven and attorney fees under the act.
The 15 buses that were manufactured and delivered were picked up by BYD after the city made a demand of the company to take back the buses due to a significant number of safety and battery-life issues.
The city demanded the buses be taken back by November 30, 2018.
During his press conference announcing the city’s action Keller had this to say:
“The short story is we’re taking BYD to court. … We need to hold … [BYD] accountable for what they’ve done to our city and for their lack of adherence to a contract that they signed. … We think … this actually is going to all wash out at a minimum, if not us actually recouping more. … For a city of our size, the pain that we went through and the trauma that Route 66 has gone through to put this in, was that worth being the first city to have these fancy electric buses? … I don’t think so.”
On the same day as the filing of the lawsuit, the city released an independent report by the Center for Transportation and the Environment (CTE) which tested the buses’ batteries.
In a news release, the Keller Administration had this to say about the CTE report:
“CTE’s simulations found that the operational plan developed for ART – running the electric buses during the day, then recharging them overnight in preparation for the next day, could not be achieved by the buses BYD delivered to Albuquerque.”
In response to the filing of a lawsuit by the city, BYD issued a statement that it was “considering all legal options in response to the City’s actions”, which means a counterclaim, and proclaimed:
“BYD once again disputes the Mayor’s false and misleading statements regarding BYD and its products … It is unfortunate that the City has chosen to file a lawsuit. Prior to today’s press conference the City had refused to provide BYD with inspection reports documenting alleged problems with the buses. The City has never stated the amount of damages it claims to have suffered.”
The city has also ordered 10 diesel buses made New Flyer that have a price tag of $870,000 apiece to replace the BYD buses.
The new buses are expected to arrive in 2019, but Keller had previously stated it would take upwards of 18 months.
Among the reported problems found with the BYD buses are:
1. The center and rear brakes had zero air pressure, yet the 60-foot-long articulated buses were able to move, meaning that the center and rear axle brakes were not working and the buses were relying on their front brakes alone.
2. Rear doors would open during bus operation without any action by the driver.
3. The buses have air conditioning outages.
4. Bolts flying off doors.
5. The electric buses delivered are supposed to operate for 275 miles, but city officials found the buses cannot go more than 177 miles before they need recharging.
6. The lack of undercarriage protection.
7. Buses that wouldn’t stop when emergency doors were utilized.
8. Cracking on bus exteriors.
9. Mirrors not set up correctly.
10. Wiring problems and electrical system problems.
11. The handicap electric chair lock becoming unsecured when the driver turns on the air conditioner.
12. The bus batteries heat up so much that they can’t take a charge.
13. The batteries or not properly stored or cooled on the buses posing a fire hazard. 14.Wheelchair ramps that deploy when weight is on them
14. Doors that open while the bus is in motion.
15. Exposed high-voltage wires.
17. Failure to construct extra charging stations promised.
ANALYSIS AND COMMENTARY
In announcing that the city was filing the lawsuit for damages in State Court, Mayor Keller said in part:
“For a city of our size, the pain that we went through and the trauma that Route 66 has gone through to put this in, was that worth being the first city to have these fancy electric buses? I don’t think so.”
How pathetic that Mayor Tim Keller uses opportunistic references to Route 66 and only now admits the damage done to the historic road in an effort to distance himself from his own failure to act for well over a year.
Keller made no mention of the pain Federal litigation caused to the 250+ businesses along Central with many of those businesses having to close or going out business because of ART construction.
During his year and a half quest to become Mayor of Albuquerque, Tim Keller never called upon his predecessor to stop the ART Bus project, nor to cancel the bus contract nor did he ever condemn it as destroying historical Route 66.
Tim Keller did not attend a single public hearing or meeting held by the Berry Administration on the project, including the meetings hosted by city councilors where councilors were urged to place it on the ballot.
When the federal lawsuit was filed to enjoin and stop the construction of ART, Keller did not attend any of the federal court hearings to stop the project.
Keller is given some credit for his efforts to secure the grant from the Federal Transportation Administration, but he and his predecessor always said the money was inevitable.
Mayor Keller has said that too much has been spent on the entire ART Bus project and it would be too costly to restore Central and to remove the platforms.
Keller has repeatedly suggested in public it would cost as much as $200 million to return Central to the way it was, a figure that is highly questionable, especially given the fact that it will eventually have to happen anyway.
What Keller apparently does no know is that a traffic study of the project found that the project has a 20-year shelf life.
Because of projected population growth and traffic flows along Central, one lane each way, as opposed to the original two, the platforms will sooner rather than later have to be removed to accommodate the increased traffic.
Within 12 years the buses will have to be replaced.
In general, transit systems expect buses to have a useful life of 12 years or a little less depending on wear and tear and 250,000 miles.
The 12-year time frame is due to the fact that after buses have been used for 12 years, a city is eligible to receive replacement bus funding from the federal government.
Keller has now wasted the first year of his 4-year term by failing to be decisive and trying to save the project by giving BYD the benefit of the doubt in their ability to deliver the buses.
For ART under Keller see postscript below.
It is almost a sure bet that BYD will now file a counterclaim against the city for damages.
It is likely that BYD will attempt to have the case moved to federal court because they are a California based company, the buses were manufactured in California and the buses were funded by a federal grant from the Federal Transportation Administration mandating certain specifications.
You can also anticipate that former Mayor Richard Berry, former Chief Operations Officer Michael Riordan and former Transit Director Bruce Rizzeri will probably have to be named “necessary and proper parties” in a BYD counterclaim in that all 3 were involved with the selection of BYD and there will be a need to determine what was represented to them, what they agreed to and what was expected of BYD.
Mayor Keller proclaims “We need to hold … [BYD] accountable for what they’ve done to our city … .”
When Tim Keller was New Mexico State Auditor before becoming Mayor, he was a champion for accountability to stop “waste, fraud and abuse of taxpayer money”.
As State Auditor, Keller seemed never be reluctant to turn cases over to prosecuting agencies which garnered him much publicity
Keller’s reluctance now that he is Mayor to turn the City Audit and the ART Bus project to prosecuting agencies such as the Attorney General or the District Attorney is very puzzling.
Those truly responsible for ART are the ones that need to be held accountable for “what they have done to our city”, namely former Mayor Richard Berry, former Chief Operations Officer Michael Riordan and former Transit Director Bruce Rizzeri.
A breach of contract action by the city against the bus manufacture will not approach the real financial losses involved with the project to the city, let alone bring back those businesses along central that had to close all because of the construction, that is why an Unfair Trade Practices action is so critical.
What many taxpayers feel is that crimes occurred with the ART Bus project, but we will never know because no law enforcement agency has investigated it.
The city will now waite 30 days after BYD is served with complaint to find out about a counterclaim will be filed.
Taxpayers can expect lengthy litigation, but there is always the prospect that the City Attorney’s Office and Mayor Keller will just roll over and settle the case for a nominal amount on a $25 million dollar breach on contract case and not seek all the damages to which the city is entitled to under the law.
Keller supporters are always quick to go to his defense over ART saying it was a project he inherited.
No matter what Mayor Keller says or does now, no matter what eventually happens with the ART Bus Project and the litigation, it is now Mayor Keller’s lemon to own and be held responsible and accountable for his failure to act given his reluctance to scrap the project from the get-go.
In politics of ART, better late than never to try and sound good by finally making a right decision even though all the damage has already been done.
POSTSCRIPT OF ART UNDER KELLER
The $135 million ART Bus project was considered a legacy project of former Mayor Richard Berry and spans 9 miles of Central Avenue from the West side to Louisiana with dedicated bus lanes and specially built platforms to transform the Central corridor into a Rapid Transit area.
CHRONOLOGY OF ART UNDER KELLER
Berry dedicated the ART Bus project in November of 2017 as fully operational with only one bus that had been delivered to this city.
The only purpose for the delivery of the one bus was so that Berry could have his photo op before he left office.
Keller was sworn into office December 1, 2017.
For over a full year, Mayor Keller and the Keller Administration have been working on resolving major issues with the ART Bus project and bus performance.
Within 6 weeks after taking office, Keller proclaimed the project “as bit of lemon” but pushed forward to try and salvage the project anyway.
In January of this year it was recommended to Mayor Tim Keller and the City Attorney to file a civil complaint city for breach of contract, breach of warranties, misrepresentation and unfair trade practices and Keller declined the suggestion.
Two months after taking office, Mayor Keller was urged by many within the community to scrap the project and find alternatives, but he refused saying it would be too costly.
In June of this year, Mayor Keller said the buses were like kids in a divorce where parents are fighting for who gets custody.
On June 6, 2018, the city of Albuquerque’s Inspector General (IG) issued a report on the ART Bus Project.
According to the Inspector General’s report the first bus delivered in August 2017, was assembled by the manufacturer using a “frame intended for buses being built for [another city’s transit authority].”
Frames intended for the Albuquerque’s buses had not yet been shipped nor received by the manufacturer.
The Inspector General found that the bus manufacturer used “parts and pieces” intended for another city’s buses for the first ART bus delivered.
The last 4 sentences of the 72-page Inspector General’s findings and report is worth quoting relating fraudulent activity:
“The inspection was proactive in nature and not due to any allegations that were made. While this inspection didn’t identify instances of fraud, it is important to note that it doesn’t mean fraud did not occur. The inspection did identify several problems that offer opportunities to improve and could be vulnerabilities for fraudulent behavior. City leaders should consider the problems identified and recommendations made to develop a more efficient and stronger procurement process that will help prevent and deter fraud, while also ensuring more quality and confidence in the products and services that the taxpayer funds. This is essential to protecting the public’s trust.”
One question Mayor Keller was asked during one of his many the status conference after the Inspector General’s Report is if any attempt will be made to hold former Mayor Richard Berry accountable for the ART Bus Project given that he rushed to have buses delivered to dedicate the project before he left office.
Keller laughed off the question and declined to answer.
After the Inspector General’s report was released, Mayor Keller was urged turn the ART Bus project over to the City Attorney, the New Mexico Attorney General and the District Attorney, to investigate for criminal activity but Mayor Keller declined to make the referral.
On November 1, 2018, Keller proclaimed that the buses delivered were “unsafe at any speed”, demanded the manufacture pick up the buses and he threatened litigation by the city.
On Tuesday, November 13, 2018, Mayor Tim Keller held a press conference to announce the city’s plans to cancel the manufacturing contract with Build Your Dreams (BYD).
On November 28, 2018, it was reported that all 15 of the BYD buses were picked up by the manufacturer.
For more articles on ART, see the below link:
Dinelli Blog Articles On ART Bus Project Listed