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July 15, 2019

6/20/2019 7:30:00 AM
Transit commission continues rocky ride in Oneida County
County board approves loan amid a chorus of questions, concerns

Richard Moore
Investigative Reporter


On a 16-3 vote, the Oneida County Board of Supervisors passed a resolution allowing the Oneida-Vilas Transit Commission to borrow up to $192,000 for four new buses, but it was anything but a resounding vote of confidence.

In fact, the resolution hit a number political speed bumps and potholes on its way to the vote, with a broader discussion about the commission's fate looming on the horizon. Supervisors Jack Sorensen, Alan VanRaalte, and Bill Liebert opposed the resolution Tuesday.

The county itself is not loaning the commission any money, nor will it liable for any default, according to the resolution. The transit commission's charter, however, requires the commission to get approvals from both Oneida County and Vilas County before it can borrow from a lending institution.

The matter will go before the Vilas County board in July.

The actual cost of the four buses is approximately $240,000, and the commission has been approved for state and federal grants that will pay for 80 percent of that cost, or about $192,000. The commission must provide a local match of 20 percent, or about $48,000.

However, though the grants have been approved, the commission has to pay for the buses upfront and then it is reimbursed. Because it does not have that much cash, it needs to short-term borrow for the $192,000 and then pay the loan back upon receiving the grant funds.

In a similar transaction in 2018, the commission received the funds and paid the loan back within 28 days.

Transit commission vice-chairman and county supervisor Bob Mott told supervisors he believes enough local match money has been raised to purchase all four buses.

"If we don't come up with the total amount that we need to cover our 20 percent share, then we would not get four buses, we'd get three buses or two buses," Mott said. "We believe at this time we have enough donations and so on to cover our 20 percent cost. Thats why we believe we'll get four buses."

Mott also said the commission needs to purchase the buses as soon as possible, given the age of the fleet.

"One of the largest expenses that transit has is the repair of old buses," he said. "We have a number of buses that are over 100,000 miles, and they need to be replaced. Some of the buses that are being replaced would be used for parts. Others will surface back up."



Persisting concerns

While the resolution was approved, garnering the support of even some of the transit commission's skeptics, it turned out to be a bumpy ride.

The commission's resistance to a required audit - not to mention the fact that one has not been completed - and a lack of ridership and route statistics again fueled multiple concerns, and prompted a promise that a broader discussion about the fate of the transit operation will take place once an audit is completed.

County board chairman Dave Hintz observed that the commission was in the process of finalizing a contract for an independent audit, a fact he praised, but he again called for hard numbers.

"As you are aware, we requested and required the transit commission to undergo an audit and contract for an audit," Hintz said. "I was told this morning by supervisor Mott that they have received a quotation from a reputable firm to do the audit, and they are in the process of contracting for that audit. That's a big step forward."

That said, numbers were necessary, Hintz said.

"I have also been pushing the transit commission to produce metrics, business performance indicators - the number of riders and bus utilization," he said. "I have been told they are working on that, but I have not seen any results yet."

But Hintz said the numbers were necessary for the commission to understand its business.

"I still think that's very important that they have appropriate business performance indicators, as I call them, or metrics, as others call them, showing bus utilization, route utilization, how many people ride the buses, which routes have one person on them, which routes have no people, which routes have five people," he said. "That can give them information to better run their business."



Audit and loan: Separate issues

Supervisor Bill Liebert wondered if it would be prudent to hold off on approving the loan until the required audit - which must be completed within 90 days of signing the contract - was in hand.

Mott explained that that discussion had been engaged at the committee level but the loan was not tied to the audit.

"The discussion was had at the time the audit question came up and the only restriction at that time was that we wouldn't make any changes to the charter because the audit really came up during a discussion about whether it needed to continue to be in the charter or be adjusted," he said.

While the transit charter requires an audit, Mott said the federal government only requires an audit once a transit budget exceeds around $700,000.

"BART (Bay Area Rural Transit), for example, has run for 30 years in northwestern Wisconsin and hasn't had an audit at all," he said. "But it is in our charter so that's where that discussion came up, and the only requirement at that time was that we would not continue the charter discussion until the audit was done."

There was nothing discussed about the loan for the buses, Mott said, and he reiterated that the purchase was important because of current maintenance costs.

"We're overall below budget by quite a bit this year, but we're over-budget in maintenance," he said. "That's a killer for us, so that's why we need to replace buses as soon as we can."

But VanRaalte said the audit was critical.

"I know there's been some controversy with respect to an audit, whether it's in the charter or not in the charter, but from my perspective I don't care whether it's in the charter or not, not having an audit violates best management practices," VanRaalte said. "An independent audit is an essential cost of doing business to ensure that an organization follows generally accepted accounting principles, and that any financial issues or accounting errors can be identified and resolved in a timely manner."

VanRaalte also criticized the transit commission's business plan, saying it was lacking critical components.

"The other thing that I have been somewhat disappointed in, and I guess I am echoing chairman Hintz's concerns, is that the business plan I read lacks certain key elements," he said. "Missing from it are long-term budget and cash flow estimates, estimates of future growth in ridership and service miles, projected capital expenditures - these are the milestones against which performance can be measured so adjustments to the plan can be made."

While he would like to support the resolution, VanRaalte said he could not do so until he had seen the audit results.



Whither the meetings

Mott wondered why VanRaalte had not attended transit commission meetings to express his concerns.

"It's a continuing amazement to me that if you have those particular complaints about the business model, why you don't come to our commission meetings and talk to us about it," he said. "To bring it up here - I can't do much about it today, but we have a monthly meeting and it's open to the public so you're certainly more than welcome to come."

In fact, Mott said, the transit commission was doing its due diligence.

"Each year we send quarterly reports to the state that they look at," he said. "We send a budget at the end of the year that the state evaluates. The state has its own audit program about every three years. It's been a little negligent - I don't know if they don't have enough people or what - but our audit by the state will be done this fall."

Mott also said the commission has had help from the "aging department" in running efficient budgets and in accounting practices, and he said the director of BART, who was a 20-year manager of BART's finances before taking the leadership position, has advised the commission on the budget and on best practices.

The commission has also held conversations with Oneida County finance director Darcy Smith, Mott said, and sends her periodic reports.

"So we're not ignoring that type of thing," he said. "We're making every effort to do things as efficiently as possible. You're welcome to come and make those comments."

Supervisor Robb Jensen said he supported approving the loan because the county wasn't on the hook for paying it back.

"Audit or no audit, they are going to get $240,000 worth of buses," Jensen said. "The county is not accountable for any of that. If the audit comes back and the Oneida-Vilas Transit is going to be dissolved, the buses will have value and they will work with it. I'm glad we're getting the audit, but I don't see where the audit impacts this particular resolution."

Liebert, though, said the county board would be getting ahead of itself by approving the loan before seeing the audit.

"For me the point in this is, whether you believe it or not, our nation, our state , our county, our towns - we're all faced with budget restraints," he said. "And it's only going to get worse. We're $22 trillion in debt as a nation, and here we are looking at making an approval - and I don't know the ins and outs of it - but it's a cart before the horse sort of thing. If the audit comes back - and I don't think it's going to come back as a complete failure - but if it does, what's the next step then? Would you be able to pay that back then? Or should something happen down the road, its $192,000 that you're telling us we're not on the hook for, but why are we making this as a motion then because ultimately we sort of are, right?"

Mott replied that getting permission was part of the transit commission's charter, but that protections were built in so the county would not be liable for the loan.

Supervisor Jack Sorensen said he found it interesting that Mott referred to the charter requirement that the bus organization must come to the county board for approval.

"But historically speaking, another part of that charter required an audit, about which both Mr. Mott and Mr. [transit commission chairman Erv] Teichmiller have made some very negative comments. The requirement is an audit. We don't have one. We haven't had one. I will not vote for this until we do have an audit."

Supervisor Scott Holewinski said the county board had approved a similar loan in the past and should do so again, though he said a broader discussion about the transit commission needed to be held after the audit was complete.

"I have questions," Holewinski said. "I know when we started this it was supposed to be a route between the towns and finally we have some. There was also money borrowed and there's never been any discussion about that money being paid back. That should show up in a business plan. But I think we should support this today and wait for the audit report to come back and the numbers and then have a discussion on the county board floor."

Most supervisors agreed, and now Vilas County must give a similar stamp of approval for the loan to proceed.

Richard Moore is the author of the forthcoming "Storyfinding: From the Journey to the Story" and can be reached at richardmoorebooks.com.





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