TAPS unable to pay payroll

TAPS bus stops, like this one seen here in McKinney, have remained unserviced since November 2015r.

TAPS bus stops, like this one seen here in McKinney, have remained unserviced since November 2015r.

The Texoma Area Paratransit System is unable to make payroll. Collin County Commissioner Chris Hill, TAPS board president said Oct. 23 that the organization is out of funding and will no longer be able to continue service.

"The board of directors was told today that we are unable to pay payroll," he said. "Although we have taken significant and critical steps on two parts of our recovery plan—reducing service levels and putting in place a more permanent reimbursement strategy—ultimately we have been stymied by our limited cash flow. That was my worst fear."

Hill said the staff was informed at 3 p.m today that paychecks that were due today will not be made.

"I don't know what happens next; I don't know who will come in tomorrow," he said. "We will have to wait and see. Whether we see TAPS busses on the road depends on who comes to work tomorrow. They would be coming in without having received their most recent paycheck and without a promise of when the next one will come."

Hill said it is too early to tell what busses would be running in the morning, adding that he hopes to know more in the morning.

"It might be possible to have folks that are running because they know the first money we get will  go toward paying payroll," he said.

When it comes to making the final call to cease operations, Hill said it was too early to know when that might occur.

Landmark Bank had given TAPS a line of credit to cover payroll funding with the anticipation that TAPS would have funding in soon.

"Yesterday the bank informed us that they were no longer be willing to do that," he said. "They pulled back their line of credit and that left us without a means to be making payroll."

During the Oct. 21 meeting, TAPS board members had requested emergency funding from the Texas Department of Transportation and asked that members request funding from their respective cities and counties.

"I have not received any official word on TxDOT funding but I expect that we will be discussing potential funding from Collin County at the Collin County Commissioners Court meeting on Monday," Hill said.

Any board action must happen in a board meeting, which require 72 hours notice.

"We have been frantically trying to find a new source of payroll," he said. "Now that we have gotten an answer on that, our next issue will be trying to get together as a board."

TAPS has been under scrutiny as recent reports have surfaced that the 15-county rural and urban public transit provider and McKinney’s sole public transportation option is currently $4 million in debt and could finish the year with a $600,000 to $1.4 million deficit.

TAPS had an annual operating budget of $26 million in FY 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 Internal Revenue Service.

Hill has represented the county on the TAPS board of directors since 2013 when Collin County made TAPS its rural public transportation provider. Hill, a certified public accountant, corporate auditor and former corporate accountant, said hints of trouble began surfacing six months ago as rider complaints escalated.

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 paperwork was given, Hill said it became clear the organization was in a dire financial situation.

TAPS Executive Director Brad Underwood resigned Sept. 16 and was replaced by interim Executive Director Tim Patton.

During TAPS' Oct. 21 meeting, the board of directors voted to cut service levels drastically to match service levels with available funding. The board also requested emergency funding from TxDOT and requested that each board member ask their respective cities or counties to pitch in as well.