Consultants recommend in‑house transit operation; council directs staff to build a business model and probe county interest

A Minnesota Department of Transportation-funded consultant presented options for Brainerd’s transit operations on Oct. 6 and recommended that the city consider bringing more transit functions in-house.

Jill Cahoon of AECOM summarized four scenarios — continue contracting out services, the city operate directly, the county operate the service, or a hybrid model — and combined financial and qualitative analysis to recommend the city-run option for improved control of customer service and vehicle maintenance. "Scenario 2 is the recommendation," she said.

The financial analysis assumed a 10% local match (a temporary reduction from a higher statutory rate) and estimated modest operating savings under in-house operation but substantially higher personnel costs to staff dispatch, maintenance and driving functions. Gabe Johnson pressed for clarity on personnel costs and pay rates: the consultant's model counted about 15 additional positions and a personnel budget in the $1.2M–$1.5M range depending on assumptions; Johnson cautioned that city pay scales, union rates and pay-equity rules could materially change the arithmetic.

Council discussion ranged from liability and customer-service tradeoffs to ridership and service scope. Several members said they wanted options that scale to Brainerd’s actual ridership rather than an immediately large in-house operation. The council voted to direct staff (leadership and transit staff working with HR and the city administrator) to prepare a business model showing how in-house operation would work, to ask Crow Wing County in writing whether it would partner or take on operations, and to ask Baxter about aligning fares. The motions carried.

Why it matters: The choice of operating model affects service quality, liability, staffing, and long-term costs. If the city brings operations in-house it would assume direct responsibility for employees, maintenance and service decisions; if contracting continues the city keeps less direct control but avoids staffing obligations.

Next steps: Staff will return with a business model and financial details, will solicit formal written input from the county about interest in partnering, and will seek information from Baxter about fare structure and potential alignment. Council noted the current contract extends into 2027 and that staff have time to develop a robust plan before any contract decision.