Scottsdale settles dispute with Dunn Transit for $85K

A view of a Downtown Scottsdale Trolley that is operated by Dunn Transit. (file photo)

Scottsdale City Council has approved the settlement of $85,000 in the case: Dunn Transit, Inc. v. City of Scottsdale, which is pending in Maricopa County Superior Court.

The settlement approval came during the local governing board’s April 4 consent agenda.

The litigation stems from Dunn Transit, which operates the city’s trolley service, submitting a demand letter to the city in October 2014 alleging the city did not accurately represent the warranty for existing Gillig trolleys in a request for proposals while looking for a new operator, resulting in damages to the company. Dunn also claimed the city did not timely purchase new Gillig Trolleys to replace the older supreme trolleys per the RFP, according to a city staff report.

The settlement is a one-time contract adjustment and should lead to the dismissal of the case and termination of the litigation.

While Dunn was operating under a previous contract, the city issued an RFP asking for proposals from interested operators to operate Scottsdale’s trolley service in 2014, a staff report states. The city-issued RFP said certain existing trolleys manufactured by Gillig were part of the city’s fleet and had a three-year warranty.

The RFP also said certain aging supreme trolleys in the city’s fleet would get replaced in 2015. The RFP also called for the operator to operate and maintain the city’s trolley fleet.

Ultimately, the city selected Dunn Transit and entered into a new contract with the company, which it operates under at this time.

Dunn originally requested a contract unit price adjustment but flipped to asserting a claim for in excess of $350,000 of damages, but negotiations brought the settlement to its current amount.

The payment is slated to come out of available funding in the transportation budget, city officials say.

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