NEW PORT RICHEY — The first year of Black Jack Media Group's contract to handle the advertising on Pasco County buses was a fruitful one, with thousands of dollars in ad revenue rolling in monthly.
The Hudson-based company even decorated a Pasco bus for New Port Richey's annual Christmas parade in 2012.
But within a year and a half of the two sides signing the deal, any goodwill they felt had seemingly evaporated. Black Jack wasn't keeping up its monthly payments and owed tens of thousands of dollars to the county. The company countered that the county wasn't holding up its end by keeping buses operational.
Months of emails between the sides did little to chip away at the debt. By January the county was looking for a way out, accusing Black Jack of breach of contract. County Attorney Jeffrey Steinsnyder's office issued a Notice of Default — a formal step to demand payment or face legal action.
The total outstanding as of the Jan. 8 notice: $93,380.47.
Now, the sides are in settlement talks.
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They never imagined it would come to this. Approved by county commissioners in August 2011, the five-year joint venture was intended to boost Pasco's transit operations without turning to taxpayers or raising fares. It also offered the county the easier of the two roles — supplying the buses and approving the ad designs.
Black Jack assumed the tougher job of lining up advertisers, collecting the revenue and designing and installing the ads, including full-length vinyl "wraps" adapted to the backs and sides of the buses.
The company could charge advertisers what it wanted, as long as it provided a monthly remittance to the county according to the contract. Most of the wraps ran $700 to $800 a month.
While simple on paper, what emerged as revealed in emails over the past year was an increasingly frustrating arrangement for both sides.
The county's share of the revenue started small — hundreds of dollars per month — but escalated as Black Jack signed more clients, so that by the start of the contract's second year the company was on the hook for nearly $15,000 a month.
It was during that second year when Black Jack started missing payments, struggling with some collections, and by mid 2013 fell tens of thousands in arrears, according to emails between the county and Black Jack.
Pasco officials pressed the company to catch up, sending reminders about its delinquency to CEO Amanda Hart. Black Jack, in turn, responded that some advertisers were late or refusing to pay. Last summer it requested the county trim its debt by $62,000, which the county rejected.
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While Black Jack was sinking farther into the hole, some of the buses it wrapped in ads were sitting in garages. Records show at least eight buses being pulled from the road last year for weeks, even months at a time, for numerous problems with airbags, engines, transmissions and brakes.
Failing to keep buses on the road forced Black Jack to give refunds to its advertisers or forgive what they owed. The company received credits from the county for each time a bus was off-line but says the credits weren't sufficient to cover its losses.
In a July 2012 email to Commissioner Jack Mariano, Hart wrote that the company was having problems with buses being taken out of service for extended periods.
"Regan (Weiss), our director of sales and marketing, went to the maintenance yard to inspect the buses. . . . They proceeded to laugh at him and say, 'These buses are pieces of sh--. We never know when we are going to get the parts in. Sometimes it takes two months.' "
At least one advertiser, Pampering Plumber, stopped paying altogether, expressing doubts that the two buses it advertised on were up and running on the days the county and Black Jack had claimed, according to emails from Hart.
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In the months preceding the January notice, Internal emails indicated county staffers had little confidence the company would ever catch up.
In March 2013, with Black Jack falling behind, administrative services manager Benny Scala wrote: "We need to give them a deadline and they need to live up to it. I don't want to go to the Board (of County Commissioners) to ask that we write off $45K in bad debt . . . or more."
He sounded even less hopeful by October: "They are past the point of no return."
At other times, officials complained Black Jack had agreed to make payments by certain dates but missed those deadlines.
In response, Hart emailed and phoned Pasco commissioners and staff, looking for flexibility to trim the amount owed and renegotiate the contract.
"My company has the county contract for the PCPT advertising and we are experiencing some issues. I would like to request 20 minutes of your time," she wrote in February to county Administrator Michele Baker.
The company entered into settlement talks shortly after that. Black Jack continues to run ads on buses and neither side will say much about the negotiations or the dispute.
Hart referred comment to her attorney, Stephen Booth, who said, "Both parties are cooperating to resolve the issue."
The county's spokesman, Doug Tobin, said of the predicament: "Obviously, looking at the emails, the county is concerned about the arrearage in the Black Jack account."
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Mariano said he sympathizes with Black Jack's plight, but said the county faces a bigger headache involving the ongoing servicing problems — particularly involving buses made by Fort Valley, Ga.,-based Blue Bird Inc.
They've broken down repeatedly and in some cases have sat for weeks as mechanics awaited parts from as far as Italy.
"At least 10 of those buses are deficient," Mariano said.
In a letter in January about the issues, transportation operations manager Joe DeGeorge listed 15 problems — including the airbags, suspension system, brakes, engines and transmissions, broken wiper arms, the coolant system, condenser fan motors and headlights.
"Of course this is a partial list and continues to multiply daily," he wrote to a Maine transit agency that was compiling complaints about the buses. "We utilize 18 buses in our fixed-route service, of which 12 are Blue Birds."
A Blue Bird spokeswoman did not respond to a request for comment.
The county said it's trying to rotate the Blue Bird buses with those of another manufacturer, but under terms of a federal grant that paid for the buses the county must keep them for 12 years or 500,000 miles.
According to a transit inventory report, the county isn't due to swap out the buses for five to six years. It purchased them in 2006, 2007 and 2008.
"The biggest part of all this is we're stuck with these buses and it's costing us all kinds of time and money," Mariano said. "This was thought to be a small issue, but now it's a much bigger issue."
Rich Shopes can be reached at [email protected] or (727) 869-6236.