PART Is Coming Apart

High Point Mayor and Chairman of the Piedmont Authority for Regional Transportation (PART) Board of Trustees Becky Smothers summed up PART's situation concisely at a special (read: emergency) Thursday, August 30, meeting of that board.

"In some respects, we have encountered the perfect storm," Smothers told the board in her attempt to describe what PART is now facing.

Smothers was referring to Sebastian Junger's book about the crew of the fishing boat Andrea Gail, and it should be noted that the Andrea Gail went down and all of its crew members perished, and, in a nutshell, the special meeting was called because Smothers and the rest of the PART board wanted to make sure the same thing doesn't happen to a public agency that provides regional transportation for a 10-county area in central North Carolina.

Smothers told the board that PART was facing revenue shortfalls, rate increases from a key provider and even confusion as to who PART should be negotiating with.

To continue with the marine analogy, PART's captain, Executive Director Brent McKinney, is abandoning ship.

McKinney, who has been the head of PART since 1997, announced at a board meeting on Wednesday, August 8, that he would be stepping down at the end of January 2013. However, at the special meeting, after a lengthy closed session, it was announced that McKinney would be leaving Nov. 30, 2012.

At the August 30 meeting, after the board came back from the closed session that lasted about an hour and a half, Paul Johnson, the vice chairman of the PART board and the member who represents Surry County, read a motion calling for the board to accept McKinney's 90-day notice. The board voted unanimously to accept the resignation.

While McKinney will no longer have to worry about PART's problems after November, members of the PART board aren't so lucky: It was evident at the meeting that there were a host of issues PART needs to address successfully if the agency is to continue to provide public transportation across the 10-county service area.

PART has already made changes in an attempt to reduce costs. Starting on July 1, PART cut 25 percent of its express routes, which run between cities in the PART service area. However, at the same August 8 meeting at which McKinney announced his retirement, the board discovered that, despite those cuts, PART's cost to provide the express service might be going up due to a rate increase by the company that acquired Coach America, a major service provider for PART.

Much of the closed session discussion at the August 30 meeting was apparently about what PART should do with regard to the Coach America situation.

That transportation service provider declared bankruptcy in January, and Transportation Management Services (TMS), the company that acquired Coach America, has indicated that the cost to PART for the bus service that Coach America had been providing will go up from $77.50 per hour to $95.25 per hour.

PART board members said they were unhappy with McKinney at the August 8 meeting because they were blindsided by the news that Coach America was bankrupt and its new owner, TMS, would be raising rates by almost 25 percent. The PART board was apparently not even aware that PART had no signed contract with Coach America, even though the board approved a contract with Coach American last year and board members thought that contract was in effect.

A very significant part of PART's operations could be affected by the looming rate increase. According to Lisa Chislett, the public relations coordinator for PART, PART's general fund budget is $5.1 million and, of that, the Coach America expense constitutes $2.1 million. If the board finds no other options, continuing the service could mean hundreds of thousands of dollars in additional costs at a time when PART is already experiencing recurring budget shortfalls.

It was obvious at the August 30 meeting that the board wanted everyone to know it felt blindsided by the cost increase from the bankrupt company's new owner.

At the August 30 meeting, Smothers handed out a summary of issues facing PART, and the first bullet point in the document was underlined for emphasis. It stated, "It should be noted that, until the bankruptcy issue surfaced and the question of hour costs due to the 25% reduction in routes, the PART board had no knowledge that Coach America had NOT signed the contract that the Board had approved in 2011."

At PART's regular August 8 meeting, several PART board members asked McKinney why the board didn't know about the Coach America problems and related issues sooner.

According to Smothers' memo summarizing the situation, McKinney was verbally notified on Tuesday, June 26 that TMS wanted to hike the rate.

At the August 30 meeting, the PART board voted to hire a consulting firm to help PART deal with its current troubles. The board voted unanimously to enter into negotiations with Parsons Brinckerhoff, an international transportation consulting firm that has worked with PART in the past and has also helped other transportation systems in the Southeast recover from troubles.

After the meeting, representatives of both PART and Parsons Brinckerhoff were careful to state that the scope, fees and other aspects of the agreement were yet to be determined. However, the resolution adopted by the PART board did offer some basic parameters.

The resolution states that the intention is for PART to enter into "a short-term consulting agreement" for Parsons Brinckerhoff to advise PART "on all matters pertaining to the contract to operate PART's express and shuttle bus services; how PART should be organized to best provide these and other services; to analyze PART's finances; and to assist in the transition to a new executive leadership team."

The motion authorized Smothers to negotiate the terms of the agreement or to establish a committee to do so.

According to Smothers' memo, there are a number of possibilities as to how the board can proceed from here.

One possible outcome is that PART Express ceases operation. Another is that PART approves a contract with another transportation provider, while another possibility is to bring the operations in house. Since the cost of that option is unknown, Smothers' memo states that move could mean a temporary cessation of the service.

Yet another possibility, according to the memo, is to form a patchwork model that uses local municipal transit providers.

Right now, there are a lot of unknowns, and the PART board members are hoping that the outside consultants can come up with some solutions.

Lynn Purnell, a senior supervising planner for Parsons Brinckerhoff, told the board at the meeting, "We've done similar work for the Columbia, South Carolina, Department of Transportation."

Another Parsons Brinckerhoff representative said, "We've got a pretty rich history working with North Carolina from the mountains to the coast. We're extremely excited to be a part of this process."

After the meeting, Smothers said one confounding aspect of the mess is that PART hasn't even been sure who to talk to at TMS or Coach America in order to strike a deal.

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"There has not been an identified negotiator from either company," she said.

Smothers also said that, in addition to all of those issues to address, PART will also be transitioning to new leadership with McKinney's departure. She added that McKinney will still be available for consultation after November.

The board's attorney, Tom Terrell of Smith Moore Leatherwood, said he is attempting to talk to the correct party, but he added that TMS had not confirmed a designated negotiator yet.

According to Smothers' memo, TMS is requesting a five-year contract with PART, but that memo goes on to state that such a long-term contract would require approval from the Federal Transit Administration and the NC Department of Transportation – and, in addition, PART has no desire to enter into an agreement that long.

Right now the board is waiting on an expected two-week or 30-day notice from Coach America/TMS announcing the end of bus service.

Smothers' memo also lists "Possible Pending Actions," and states that one upcoming possible action may be "notification to participating county governments of the continued revenue and operations problems and possible cessation of services by PART Express."

In other words, PART might request bailout money from its 10 member counties. PART has asked for additional money before but only Guilford County has stepped up in a major way.

At the Thursday, Oct. 20, 2011 Guilford County Board of Commissioners meeting, McKinney asked Guilford County for $394,000 to help PART make it through the fiscal year that began only three months earlier in July 2011. The commissioners voted to give PART the money – something the other counties didn't do. One reason Guilford County was probably so accommodating is that, at the time, the county was entering into an agreement with PART for PART to take over the contract for Guilford County's own troubled transportation services after a private provider, MV Transportation, pulled out.

At a June 21 Board of Commissioners meeting, McKinney asked the Guilford County Commissioners for another $120,000 to cover a projected PART budget shortfall that he said PART had experienced due to taking over Guilford County's transportation services eight months earlier. At that time, McKinney told the commissioners PART had underestimated the cost of providing Guilford County with the transportation service.

Despite that infusion of over half a million in additional dollars from Guilford County in the past 10 months, PART is still having trouble making ends meet.

Smothers said after the August 30 meeting that, while Guilford County had been good about providing financial support to PART, other counties in the group hadn't been so supportive with their dollars.