The village of Niles has suspended it’s free in-town Pace bus service, blaming a dispute with the suburban commuter bus company over paying insurance — though Pace says it offered to temporarily cover that cost.
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Vllage officials announced in a news release Sunday that the 410, 411 and 412 are not operating right now. Other suburban bus lines that run through or service the town are not part of the suspension, the release explains.“The Village of Niles has been engaged in ongoing contractual discussions with Pace regarding the Niles free bus service,” the release states. “This difficult decision has been made after Pace declined to continue responsibility for the insurance coverage for the Niles free bus service as well as refusing to indemnify the Village against potential liability as required by the contract.”
The three lines of free bus service run through the east, west and north sides of town, and help give riders access to major shopping strips and centers, area high schools, the library, apartment complexes and more. Buses had operated seven days a week, from morning to late-afternoon.
But in a statement to Pioneer Press, Pace spokeswoman Maggie Daly Skogsbakken said the bus company offered to cover the premiums for several more weeks to allow time for the village to come up with other plans.
According to the statement, Niles leaders have so far declined the offer.
“Since August 2025, Pace and Niles have been actively discussing a new agreement pertaining to Niles’ service. When Niles communicated to Pace on September 14, 2025, that it would be suspending its service that day because of having no insurance, Pace offered to insure Niles’ service until November 5, 2025, to allow time to finalize the new agreement while avoiding a service interruption. As of [late Tuesday afternoon], Niles has not accepted Pace’s offer,” Skogsbakken stated.
She further explained that in 2022, Pace changed its policy to no longer provide insurance for fixed-route buses where the bus company does not directly manage the service or employ the drivers.
“This approach ensures consistency across all our community partnerships and aligns with industry standards. The 2022 change allows Pace to better manage risk, ensure fairness across communities, and focus resources on providing reliable transit service,” according to the statement.
Village leaders did not immediately respond to requests for comment about the offer Pace says it extended.
Additionally, information on the Pace website states that the free bus routes – combined – at one point transported fewer than 750 riders per day. Ridership was considered “relatively low.”
Those assessments were made about a decade ago when Pace was launching a modernization project that included service-wide upgrades.
The village subsidizes the free bus service but has looked to Pace for some assistance.
“Despite our best efforts to negotiate a solution that would preserve this service, the Village cannot in good conscience continue operations without adequate insurance protections in place. The safety of our residents and employees and the legal integrity of our municipal operations must remain paramount,” the village release reads.
It has been anticipated that the interruption of service could disproportionately affect seniors and people with limited mobility.
The Niles release explains that the village would look to help impacted residents.
“Our elected officials and village staff continue discussions with Pace and state officials to resolve this matter as quickly as possible,” Nile officials stated in the release.
Riders are advised in the release to check the village website for updates on the situation, which would be provided “as soon as they become available.”