Former deputy transportation director Jamie Kendrick approved an agreement with Transdev Services Inc., the operator of Baltimore’s Charm City Circulator, that allowed the company to overbill the city for years, according to a source with knowledge of the matter.

That alleged “unwritten mutual agreement” is at the center of a lawsuit filed yesterday by Baltimore City against Transdev charging that the company overbilled the city $20 million for the free bus service.

Reached by phone today, Kendrick, who left DOT in late 2012, did not deny his involvement in the approval of the charges. He asked to see a copy of the lawsuit and acknowledged that he has been questioned on multiple occasions about the matter.

“I got a call from the city almost a year ago and a couple [of calls] from Transdev, but I can’t talk more at this point,” said Kendrick, citing a tight work deadline.

“I also may be involved in litigation,” he added.

In a subsequent email, Kendrick said he was proud of his involvement in the Circulator and called the system “an unabashed success . . . once named The Best City Service by the City Paper.”

“Over the course of now nearly eight years and three administrations, many operational changes were vetted and addressed by the City,” said Kendrick. “Some of these changes have led to better service, others not so much.”

Fiscally Unsustainable

The city’s lawsuit against the company comes in the context of a program that, since its inception in 2010, has been politically popular but plagued by deficits, mechanical problems and poor supervision.

The Brew has covered this saga extensively, dating back to when the operator company was known as “Veolia.”

Here are a few of those stories:

Options for fixing the cash-strapped Circulator include reduced hours, axed route 12/2/14

Bureau of Management calls Circulator’s financials a distressing picture 12/2/14

Charm City Circulator’s future: Subject of a hearing tomorrow 1/14/15

A band-aid to stop the bleeding but no roadmap for Circulator’s future 5/6/15

Consultant Advice: Ditch dud Circulator buses before contract is rebid 6/3/15

City to pay $6 million to Veolia to continue the status quo of Circulator service 12/11/17

In 2015, the former head of the system, Barry S. Robinson, pleaded guilty to bribery and money laundering.

Prosecutors said Robinson took $20,000 in bribes from a Charm City Circulator advertiser and hid 13 city-owned bus shelters with the intention of selling them for a $70,000 profit.

Amid annual losses of $2 million a year, Mayor Catherine Pugh has signaled she is ready to find a new operator for the bus system.

“Fiscally unsustainable” is how the service was described in a report last year by Pugh’s transition team.

Unwritten Agreement

City Solicitor Andre M. Davis confirmed in an email today that Kendrick “was indeed responsible for managing the CCC contract” while he was at DOT.

But Davis demurred on the question of Kendrick’s role in establishing the overbilling practice.

According to the lawsuit, the discrepancy was reported to DOT by a consultant who determined that Transdev had charged the city for 29,419 hours when a bus “had not been available for passenger transport.”

Rather than reconciling invoices and providing refunds, according to the suit, Transdev told DOT last April that it had billed the city for scheduled rather than actual hours of services because it had been permitted to do so.

City: Company said it had been billing for scheduled, rather than actual service “for nearly eight years beginning in 2010, and the city had routinely paid Transdev’s invoices in full.”

“Transdev claimed that it had reached an unwritten mutual agreement with unnamed City representatives pursuant to which Transdev would simply bill and receive payment for scheduled hours, regardless of actual Revenue Service Hours,” the complaint says.

Transdev spokesman Scott Hagen today called the litigation “meritless” and said the problem originated in 2010 when the city was unable to provide a full fleet of buses because of “its selection of non-functioning vehicles with unproven technology from a company that ultimately went bankrupt.”

“Because the city was unable to meet the terms of the contract, Transdev agreed to the city’s request for a new contractual and invoicing structure,” Hagen said.

Overbilling since 2010

The lawsuit seeks $2 million for overbilling that it says its consultant documented between July 2015 and June 2018.

But the suit alleges the practice of billing for scheduled rather than actual services was allowed by DOT for years.

In an August 17, 2018 letter, the company acknowledged that it had invoiced the city for scheduled, not actual service hours, and “further stated that it had done so for nearly eight years beginning in 2010, and the city had routinely paid Transdev’s invoices in full.”

DOT has paid the company $16 million of the $20 million it was improperly charged by Transdev, according to the city’s complaint, which alleges breach of contract and seeks a jury trial.

Hagen said Transdev has “actively engaged city officials to address their concerns and provide them with the relevant facts and documents.”

The city said it was told by its purchasing agent that Transdev had not “provided the operating logs necessary for determination of whether Transdev had overbilled the city since the inception of the contract in 2010.”

New Contractor Sought

The Pugh administration has been trying to rebid the contract that expires next month.

Yesterday’s Board of Estimates agenda disclosed that the city has received bids from two companies to run the service and that RMA Worldwide Chauffeured Transportation, of Bethesda, is the recommended bidder.

In the agenda, the board was asked to reject Transdev’s proposal “as they were determined not to be a responsible bidder.”

A release from the mayor’s office said that if negotiations for a new three-year-contract are not successful in time, DOT “will be utilizing local companies to provide the bus bridge service until a permanent vendor is ready to begin full operation.”

“DOT is committed to providing seamless, uninterrupted service,” agency director Michelle Pourciau declared in the statement.