BusTalk

[ripta42]

Gary bus service could end in months
by PATRICK GUINANE
Northwest Indiana Times, 9/29/2007

INDIANAPOLIS | The Federal Transit Administration cut off funding Friday for the financially troubled Gary Public Transportation Corp., a disciplinary move that could shut down city bus service by the end of the year.

The Gary transit agency "lacks the technical, legal or financial capacity" to continue receiving grants and must repay $3.7 million in mismanaged federal funds, FTA Chief Counsel Severn Miller wrote in a scathing letter delivered late Friday.

The Federal Transit Administration said the city agency "fraudulently inflated" an energy-efficiency contract, "illegally spent" nearly $900,000 in infrastructure funds on operating expenses and further flouted federal rules by decommissioning working buses without prior approval.

Calls to Gary Mayor Rudy Clay and Daryl Lampkins, the bus agency's general manager, seeking comment were not returned to The Times, which learned of the pending reprimand on Thursday.

"I'm not saying anything," Cherokee Stanton, chairwoman of the Gary Public Transportation Corp. board, said when contacted Friday.

Federal dollars account for nearly a third of the bus agency's annual budget, so the FTA's decision to sever ties means "the Gary community may lose transit service by the end of the year," Miller wrote in his letter to Clay. The FTA also forwarded the letter to the Gary Common Council, Gov. Mitch Daniels and members of the Indiana congressional delegation.

"This affects the people of Gary. They depend on the city's busing service," said Justin Kitsch, spokesman for U.S. Rep. Pete Visclosky, D-Ind. "It's terrible that their transit services may be interrupted because the GPTC did not fully comply with its financial responsibilities."

The fiscal troubles stretch back to 2001, when the bus agency inked a $3.3 million energy-efficiency contract with Milwaukee-based Johnson Controls.

The Gary Public Transportation Corp. apparently lacked the local cash to seek federal funds, so it took a $300,000 loan from Johnson Controls, using the money to obtain $1.2 million from the FTA. Johnson Controls in January agreed to pay $2.4 million to settle a civil complaint brought by the U.S. attorney's office.

The diversion of $888,782 in federal infrastructure funds to operating expenses occurred in fiscal years 2005 and 2006, according to the FTA. The Gary Public Transportation Corp. owes the federal agency another $1.6 million after prematurely retiring natural-gas fueled buses and an accompanying fueling station.

The FTA told the city agency it could erase that debt by persuading another transit agency to begin using the alternative-fuel fleet or by purchasing new buses. On it's Web site, the Gary Public Transportation Corp. recently announced the purchase of eight new buses. But the FTA says "GPTC does not intend to purchase enough buses to entirely extinguish the debt in this manner."

The FTA has hired a private contractor, Jacobs Engineering Group, to work with Gary Public Transportation Corp. to craft a remediation plan to repay the $3.7 million debt and restore it eligibility for federal funding.

"We're not saying we're leaving them by the wayside. We're still going to be there," FTA spokesman Wes Irvin said Friday. "We just can't start giving them money again until they get their financial house back in order."

Gov. Daniels' office had not received the FTA letter late Friday, though a spokeswoman said the state is well aware of the unfolding situation.

"There's certainly no secret that there have been financial and management problems over time," said Jane Jankowski, the governor's press secretary. "Obviously, we're interested in ensuring that there's continued bus service for those who count on it."

The Federal Transit Administration has stripped funding from the financially troubled Gary Public Transportation Corp., a disciplinary move that could shut down city bus service by the end of the year. The FTA say the city agency must return $3.7 million in misspent grant money and cannot receive federal funding until it implements a remediation plan.

[ripta42]

No bailout in hand for Gary buses
by KEITH BENMAN
Northwest Indiana Times, 10/2/2007

GARY | City of Gary officials say they want to keep public buses running in Gary, but no one is offering to put up the $3.7 million it would take to bail out the troubled Gary Public Transportation Corp.

"Just let me put this in no uncertain terms: The money just isn't there," said Gary Common Council President Jerome Prince, D-5th, when contacted Monday.

Mayor Rudy Clay is trying to arrange a meeting with Federal Transit Administration Regional Administrator Marisol Simon, the mayor's spokesman LaLosa Burns said.

"We need to sit down with them and determine what process or plan of action we can put in place," Burns said. "Certainly public transport is important to the community, so it's a priority."

On Friday, the Federal Transit Administration sent a letter to Gary Public Transportation Corp. announcing that all federal funding for the service would be cut off, a disciplinary move that could shut down city bus service by the end of the year. The FTA letter said the Gary agency "lacks the technical, legal or financial capacity" to continue receiving federal grants and must pay back $3.7 million in mismanaged federal funds.

The alleged mismanagement dates back four years or more, before Mayor Clay took office and before present Gary Public Transportation Corp. general manager Daryl Lampkins came on board.

It includes an alleged sham $300,000 loan from a vendor and the use of $1.65 million in federal funds for natural-gas fueled buses that could not be used.

Lampkins did not return calls from The Times seeking comment Monday.

Prince and Burns both emphasized they are open to ideas on how to help the agency get back on track.

Burns acknowledged the city of Gary will approach other organizations, such as the Regional Bus Authority, in its search for a solution.

The Gary Public Transportation Corp. provides 13 fixed bus routes, including buses to Crown Point and Merrillville as well as on-demand and para-transit services in Gary. It is supported by its own tax levy, fares, and state and federal aid.

The Gary agency is the region's largest provider of bus service, and its demise would leave a huge hole in public transit in Lake County.

At least one other provider of on-demand bus service, Northwest Indiana Community Action Corp., wanted people to know it will go on running buses no matter what happens at Gary agency.

"Northwest Indiana Community Action remains dedicated to providing service," said Thomas Phillips, transportation director of the Northwest Indiana Community Action Corp.