Consultants recommend bringing Brainerd Crow Wing Transit in-house; TAC directs staff to prepare business model

Consultants hired through the Minnesota Department of Transportation told the Brainerd City Transit Advisory Committee that bringing Brainerd Crow Wing Transit operations in-house ("scenario two") is the most frequent recommendation from their qualitative and financial analysis.

"So the recommendation ... is scenario two bringing the bringing the service in house," said Jill Cahoun, an AECOM consultant who led the presentation. Cahoun said the study combined a seven-criteria qualitative evaluation with a line-item financial analysis to compare four operating scenarios: continuing with a third-party contractor, city-run in-house service, county-run service (eliminated from further consideration), and a hybrid mix.

The consultants presented modeled cost estimates for 2026 operations: continuing to contract services was estimated at $1,672,127, while an in-house city-operated model was estimated at about $1,654,234; a hybrid approach was roughly $1.71 million. Consultants said the in-house option showed savings driven by reduced contractor oversight fees, lower insurance and better vehicle maintenance. "Those numbers are based on peer systems and historical trends," Cahoun said, adding the figures are model-based and include assumptions about staffing and administrative allocations.

MnDOT representative Tina (identified during the meeting) described available one-time transition grants and facility funding that could help upfront costs. "Yes, it's called a transition grant," she said, explaining such funds can cover hiring-related costs, marketing and other short-term expenses; she said typical transition grants are usually up to a few hundred thousand dollars.

Committee members probed the assumptions behind the consultants' figures, questioning whether the administrative and personnel cost estimates understated true city overhead. Members asked what "administration" covered, how much HR and finance time would be charged to the transit grant, and whether insurance and maintenance savings were realistic. Consultants replied that administration figures followed MnDOT budget categories, personnel estimates were derived from similar municipal systems, and some items were intentionally presented as guesstimates to be refined in a business model.

The meeting included extended debate over governance and cost risk. Supporters of in-house operations said direct oversight would likely improve vehicle care and service responsiveness; critics raised concerns about long-term costs and the risk that in-house operations would ultimately increase pressure on local taxes. One committee member warned that if the city took operations in-house, costs could rise substantially over time.

After discussion, Jan Lambert moved and Jeff Chisak seconded a motion directing staff to develop a detailed business model showing staffing, positions, full costs and implementation steps so the TAC could forward a recommendation to City Council. The motion carried on a voice vote with one recorded opposition. Staff said the consultants' presentation and recommendation would be presented to City Council on October 6 and that the business model would inform any final decisions about 2026 operations.

The committee did not take a final policy vote to change operations at the meeting; it directed staff to prepare the business model and present findings to the TAC and City Council for a later decision.