The Texoma Area Paratransit System is under the spotlight as recent reports have surfaced that the 15-county rural and urban public transit provider and McKinney’s sole public transportation provider is currently $4 million in debt and could finish the year with a $600,000 to $1.4 million deficit.

When TAPS began its operating contract in McKinney in July 2013, the service offered riders multiple options with plans to expand fixed routes and upgrade services. However, with the news of financial concerns, those plans will now be reversed.

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“We are no longer financially capable of providing services without dramatic changes in how we operate,” said TAPS interim Executive Director Tim Patton, who replaced former Executive Director Brad Underwood when he resigned Sept. 16.  “The proposed changes you see today will impact many people. Many of the changes will affect school, work, medical and everyday life for people in all TAPS areas.”

For McKinney residents, the financial trouble means that some ride services have already been cut, and more are expected. TAPS cut weekend service in McKinney beginning Nov. 2 and voted Oct. 21 to cut airport shuttle services to Dallas-Fort Worth International Airport and Love Field.

TAPS also provides services for McKinney ISD, the Boys & Girls Clubs and senior centers, although it is unclear how, if it all, those services would be affected.

The TAPS board has indicated fixed- route and on-demand services will be changing this winter, although the exact changes have not yet been decided. The board is working with McKinney residents to determine how the organization can cut services and still meet riders’ needs. Those changes are expected to be announced in November, Patton said.

County transportation changes

Other coming changes will affect Collin County’s service contract with TAPS, which began in summer 2013. Those changes could include removal of the on-demand services in rural Collin County that have been ongoing without a daily trip limit, said Collin County Commissioner Chris Hill, the county’s TAPS board representative.

“TAPS didn’t have money to run unlimited service, nor was it limited, which was not a very smart operational decision,” Hill said. “So we will be looking at capping the service but we don’t know [in] what fashion we will do that or how we will prioritize that service but we will obviously have to be prudent and responsible with our funding. We simply cannot provide more service than we have funding for.”

As of Oct. 21, TAPS’ financial plan calls for weekly operating costs for its seven member counties—which include Clay, Collin, Cook, Fannin, Grayson, Montague and Wise counties—to drop to about one-third of the original cost. That means that weekly operations costs for Fiscal Year 15-16 will drop from $208,376 to $72,424.

TAPS staffers will work with each county to find the best service options, though they may not be the same across the board, Hill said.

Financial trouble

TAPS had an annual operating budget of $26 million in FY 2014-15. As of Oct. 23, the organization owes $2 million in vendor invoices, resulting in maintenance problems that have cut the TAPS fleet in half. TAPS also owes more than $1 million to its management service, First Transit, and $1 million in back payroll taxes to the IRS.

Hill, a certified public accountant, corporate auditor and former corporate accountant, said hints of trouble began surfacing in April as rider complaints escalated.

“The problem, as we have now learned, is that the previous director did not operate under the budget we had, but overran the budget significantly in a manner that threatened the entire organization,” Hill said.

In August the TAPS board of directors formed a finance committee to investigate the financial health of the organization. After months of sifting through what little financial records were given by staff, Hill said it became clear the organization was in a dire financial situation. Hill was made TAPS board president on Oct. 7.

During an Oct. 21 TAPS meeting, the board of directors voted to cut service levels drastically to match service levels with available funding. However, the situation continued to get worse.

By Oct. 23, TAPS announced it did not have funding to cover payroll for its 153 employees, Hill said. However, bus services continued as the majority of TAPS employees opted to clock in despite lack of pay. On Oct. 28 the North Central Texas Council of Governments expedited reimbursement funding, which TAPS used to cover the roughly $184,000 payroll shortage.

Backup plan

While the board of directors continues to work toward financial recovery, the city of McKinney voted to contract with a transportation consultant during its Oct. 20 City Council meeting. According to Randy Pogue, a City Council member and one of two McKinney representatives on the TAPS board, the consultant is building a backup plan should TAPS recovery efforts fail.

The consultant will perform various services, including obtaining a temporary service provider should TAPS cease operations as well as existing condition and cost-benefit analysis.

The consultant will also help the city directly receive federal transportation dollars, which would then be passed on to its service provider. TAPS currently receives those funds on the city’s behalf. Should the city directly receive those funds instead of TAPS, it would allow the city to ensure federal compliance and control of federal transit funding.

City officials said the consultant contract should not be perceived as a source of disruption to current efforts to rebuild a healthy TAPS. The consultant contract lasts 60 days, at the end of which a report will be given advising the city on how to move forward with public transit in McKinney. Should TAPS recovery efforts succeed, the consultant could assist in finding appropriate service routes; should they fail, the consultant would secure another transit provider immediately.

Moving forward

Despite TAPS’ overwhelming financial state, TAPS board members said they are hopeful the organization will remain intact.

“There is a lot to overcome, and it will take a number of items working [together] to see [financial recovery goals] as a reality,” Pogue said.

Pogue said patience on the part of riders, vendors owed, cooperation with the IRS and continued partnership from funding partners will be essential to TAPS’ success.

On Oct. 21 the board voted to request emergency funding from Texas Department of Transportation. The board requested each member to ask their respective city or county for financial assistance as well.

TxDOT denied sending emergency funding Oct. 30 stating they did not “have the discretionary funds available at this time. However, we will continue to process all reimbursements for which TAPS is entitled.”

NCTCOG said it would send a group of contracted accountants to find and submit receipts on behalf of TAPS for reimbursements from both the state and federal government.