By Daniel Brock
dbrock@scbiznews.com
Published May 20, 2010

On the same day that the Charleston Area Regional Transportation Authority announced another month of record ridership, its board was taken to task by an official from the company that services the transit agency’s vehicles and staffs its drivers.

Michael Ake, a regional vice president with Veolia Transportation, told board members during their monthly meeting Wednesday that with an outstanding balance of more than $7 million, CARTA was the France-based company’s single largest account receivable out of almost 130 corporate contracts in North America.

“We don’t have the luxury of waiting for federal funds,” Ake said, referencing the fact that CARTA works in the red while waiting for federal aid.

CARTA often finds itself strapped for cash during the middle of its fiscal year, which runs from October to September. That situation was exacerbated this year after the federal fund notice that CARTA relies on was released on May 13, almost two months later than in 2009.

CARTA was allotted nearly $4.7 million but still has to fill out a grant request. All told, the authority has to wait at least 45 days from the notice date to receive its money.

To help with the cash flow situation, the board approved a $5 million line of credit last month that should mitigate outstanding balances owed to venders such as Veolia. It will also allow the authority to be current when it starts accepting bids for a new service vendor. CARTA’s five-year contract with Veolia runs out next year.

Ake expressed concern that even $5 million won’t be enough. He noted that the last payment received covered services from 2009 and that Veolia’s monthly invoice to CARTA is about $1.2 million. Ake did concede, however, that CARTA has always paid its bills in the past.

“It’s just never gotten this large before,” Ake said.

Howard Chapman, CARTA’s executive director, said the authority has been making monthly payments and that another installment of $625,000 will be forthcoming by the end of May. Chapman also questioned Ake’s $7.2 million total, noting that more than $1 million won’t come due until early next month.

“This is no different than any other year, except it’s a little later with the federal funds,” Chapman said. “Every year, we’ve paid our bills, and we will pay our bills this year.”

Ake did make clear after the meeting that Veolia still intends to keep CARTA as a client.

“We’re very much committed to a long-term partnership and we will aggressively pursue” a new contract with the transit authority, Ake said. “We’re very interested in continuing to do business.”

CARTA is also dealing with a $1.4 million reduction in county sales tax revenues, a cutback that will carry into 2011.

“Making that up one year is difficult,” Chapman said. “Trying two years in a row may be impossible.”

The authority is now looking at the possibility of reducing services, something it has been loath to do in the past.

“It seems to me that we have no choice but to make a moderate reduction in some of our services out there,” said Patterson Smith, the board’s chairman.

It wasn’t all bad news for CARTA, however, as the authority again posted its highest April passenger numbers ever. Ridership was up nearly 14% year over year and 9.5% for all of 2010. Revenue increased 4.7% during the month and remains up 6.88% for the year.

The board approved a $366,000 bid from L&L Construction to build 24 bus shelters throughout CARTA’s jurisdiction. An additional $212,000 will go toward design and construction management costs, bringing the project’s total to almost $580,000. The shelters will likely include boards that scroll real-time information about bus arrivals.

CARTA was allotted $625,000 in stimulus money last year to build the shelters, which provide protection for riders as they wait for buses. The agency will use the difference between the allocated funds and the project’s projected tally, about $45,000, for incidentals incurred during construction.

Reach Daniel Brock at 843-849-3144.