Valley Metro will reduce its light rail service to save $1.6 million in operating expenses.  Metro has $33 million to spend lose for its fiscal year beginning July 1, 2010.

The Phoenix City Councel voted to pay $27 million that it does not have to Veolia Transportation so Veolia will cancel its current bus service contract with Phoenix and enter into a new five year contract that will cost Phoenix $388 million.  Veolia is one of three contractors that provide bus related services to Phoenix such as drivers and bus maintenance.  Phoenix has eliminated bus routes and cut bus services because of its massive $244 million budget deficit.

The Phoenix City Council is struggling with new math and bus service.  While saving some money and cutting bus services, the Phoenix City Council has concluded that paying $27 million now plus an additional $388 million over five years equals $5 million per year savings.  A a regional vice president for Veolia said:

“What the new contract will do is save the city $25 million over five years.”

Under the old math $25 million saved – a $27 million termination fee = a $2 million loss, but who’s paying attention?