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Wave Transit Seeks Additional Funding From County Commissioners

Managing Editor

NEW HANOVER CTY - The Cape Fear Public Transportation Authority met with the New Hanover County Board of Commissioners during their July 15th, meeting to ask the County to forgive a $133,000 loan to permit the authority to maintain several routes.
Wave Transit was created in July 2004 by a joint resolution of the City of Wilmington and New Hanover County to provide public transportation service buses throughout the County. That merged Wilmington Transit Authority and New Hanover County Transportation Services.
On April 22, the Board of Commissioners approved a short-term loan to the Authority to address cash flow issues arising from untimely reimbursements from federal and state funding partners. On May 15, the County provided the Authority with a short-term loan in the amount of $133,000. The Board of Commissioners subsequently adopted a budget for fiscal year 2013-2014 authorizing funding for WAVE in the amount of $140,000.
According to WAVE, the adopted county subsidy for Wave Transit does not provide sufficient local matching funds to continue routes 107/301 and route 207 serving the northern part of the county and the Authority has received considerable feedback from the community supporting continuation of that route currently scheduled for elimination.
According to a resolution adopted by Authority Board in June, "The Authority would be in a financial position to continue public transportation services at the current level for fiscal year 2013-2014 for an estimated additional $133,000" and the "Authority respectfully requests that the New Hanover County Board of Commissioners forgive repayment of the current short term loan in the amount of $133,000. The Authority requests the City and County convene a working committee to discuss future funding, stable financial support for the Cape Fear Public Transportation Authority."
County Commissioner Thomas Wolfe explained, "I think that the loan we are talking about is just a symptom of the things that are facing Wave. And the County needs to come forth with some type of program or agreement with them that they will know how much money they will have. What can we do to help them with this cash flow situation. The expenditures come first and they receive the funds later. They have no operating balance to work with or go forth. I'm of the opinion we need to work together."
Wolfe asked if County Staff could work with Wave and come back in 30 days with additional ideas on how to resolve the situation.
Commissioner Beth Dawson said she's in favor of a long-term solution and supports forgiving the loan. She referenced several alternate funding sources provided by the authority such as a vehicle registration tax and quarter cent sales tax.
Over the years Wave has proposed a vehicle registration tax, most recently at $7.00 per vehicle, and the County Commissioners did not approve.
Commissioner Jonathan Barfield said he mentioned the registration fee in his newsletter some time ago and got significant feedback from people opposed to the idea.
Barfield also sits on the Board of Wave Transit. He said there is a need for a long-term solution, but there is also a need to run Wave as a business. He said Wave's source of revenue is from federal and state agencies as well as local governments.
He said in other large cities such as Atlanta, professionals use public transportation to get back and forth to work and that's not the case in New Hanover County.
He said he looks forward to both entities meeting to discuss long term solutions.
Another financial impact on Wave is increasing insurance costs. Albert Eby of Wave said the North Carolina Association of County Commissioners has underwritten their insurance since the Authority was formed. Eby said the Association has changed policy to decrease their liability in coastal areas. He said, "If they weren't going to carry our property insurance they also would not carry our liability insurance" which forced them to buy a higher premium policy in the public market and some companies would not even bid on the policies because it's a high risk business.
Eby said its high risk for insurance because one bus in an accident with five passengers can end up being very costly.
The higher insurance cost has resulted in a $350,000 impact on Wave's budget.
Commission Chairman Woody White said he voted against the loan when it came before the Board a couple of months ago. He said issues raised by Barfield regarding pay raises, expansion projects and other issues caused concern.
He was unaware two route expansions cost around $500,000 a year to operate. One of those is a new route to serve Pleasure Island at a$348,000 a year.
White explained the County has participated in the agreement between the county and City of Wilmington for the Authority for ten years. He said the system will likely not alter people's travel habits towards increased public transit use in his lifetime, but it's a service the government should provide for those in need.
He said the route expansion was done without bringing it before the Board of Commissioners.
Eby said the expansion routes were based on a short-range plan and was supposed to be revenue neutral by adjusting other routes. He said, "At the end of the day it was based on our best estimate of funding not only at the state level but at the local level and a county contribution equal to what the county provided us in fiscal year 2013 which was $250,000" That figure was reduced in this years budget.
White questioned why they decided to eliminate the route that serves the northern part of the county, used by college students, high school students and many others with a higher demand for use, than eliminating the route to Pleasure Island which has much less use.
The northern route operates at $202,000 a year while the Pleasure Island route cost $348,000 a year.
Eby said there is an overwhelming need to provide transportation for people getting to work or seniors getting access to doctor appointments and other needs.
Carolina Beach and Kure Beach do not currently provide funding for public transportation. Eby said the Town's wanted to see a need for the service.
Barfield said Carolina Beach and Kure Beach should help fund Wave Transit if it's that important to the community. He said it's not a good business practice to provide a service that isn't funded.
White said, "Recognizing the fluctuation between funding sources between federal and state government and the uncertainty of those, I'm curious as to why your board chose to expand to Pleasure Island at $348,000 a year without certainty on those funding sources. That seems to be an odd decision."
Eby said there is no certainty, but the decision was made based on surveys of riders.
White said, "Just because the customers say we want a route to the beach, we have to know we can afford a route to the beach... and it doesn't seem like you can afford it."
White said he was unable to understand that decision while Wave is asking for forgiveness on the loan.
Wolfe said County Staff should do cost analysis on the routes and study a program recommendation as to the best way to fund the request within 30 days.
White recommended a special meeting on September 12th, to hear from the Wave Transit Board, City of Wilmington, County staff and others to address the questions raised during the meeting.
The Board voted unanimously to schedule the September 12th, meeting and table the request until after that meeting. White said he simply needs more information before making a decision.
Less than a year after Wave Transit began providing bus service to Pleasure Island, officials told the New Hanover County Board of Commissioners earlier this year on June 3, due to a lack of funding they will have to reduce service. Two routes would be eliminated including the Carolina Beach routes and one in Castle Hayne.
Capt. David R. Scheu, Chairman of the Cape Fear Public Transportation Authority Board of Directors, spoke to the Board of Commissioners at their June 3, meeting asking them to make a hard choice.
Scheu requested a reconsideration of funding for Wave in the proposed 2013-2014 budget which was reduced from $250,000 to $140,000.
Executive Director Albert Eby explained last month to the Board of Directors for Wave that, "The majority of the decrease is attributable to an anticipated 36% reduction in funding from New Hanover County. This $90,000.00 decrease in County support will lead to the elimination of two routes primarily serving the unincorporated areas of the County. Since the $90,000 is used as local match for state and federal funding, the overall impact from the proposed county budget will result in a total loss of operating funds available for FY 2014 of $360,000. Unfortunately this change will result in the loss of service to many areas which have a demonstrated need for public transportation service. The Executive Committee and staff are in the process of working with the County to restore funding to the FY 2013 level. If the effort is unsuccessful, elimination of two routes is eminent."
Additionally, the Authority is facing increased property and liability insurance costs.
Scheu said the interlocal agreement between the City of Wilmington and New Hanover County adopted in 2004 created a scenario implying both would pay fair shares towards the operations of Wave Transit.
He explained, "Local government funding is critical since it’s used to match state and federal funds" and, "For one dollar you spend, yields one dollar from the state and two dollars from the feds for operations. For capital acquisition, your one-dollar yields one dollar  from the state and eight dollars from the feds. That's a significant leveraging that is critical to the authority to operate their overall system and should be also the leveraging for the county."
Scheu said the reduction means, "We have to cut our budget $140,000" and will lead to a reduction in service eliminating two fixed routes including Carolina Beach and the Northern loop in the Castle Hayne area.
He explained the cost per resident per year for Wilmington is $11.44 and the County subsidy is $1.19. The City's subsidy will rise to $11.75 because of cost increases and the proposed county reduction will lead to a county subsidy of $0.67 per resident.
Scheu said, "It appears to me the interlocal agreement seems to be affectively set aside. The question for you all is whether you consider public transportation a core responsibility. If it is, we request that you fund us to the fair share, joining the city, and Brunswick County is already paying a fair share. If you don't consider it a core responsibility then you need to revisit the interlocal agreement and consider canceling it."