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Pinellas, Hillsborough transit merger study finds few savings

A new study of the Tampa Bay area's two transit agencies found that merging them would result in significantly less savings than initially predicted.

Forging a single entity out of the Pinellas Suncoast Transit Authority and Hillsborough Area Regional Transit would save taxpayers about $339,000, according to a study by the accounting firm KPMG, which was brought in by the Tampa Bay Area Regional Transportation Authority to do a more detailed analysis after a 2012 report estimated a merger would save $2.4 million.

Members of both transit agencies' boards met separately on Friday to discuss the study's findings, which could bring an end to years of debate over a merger's feasibility.

Much of that discussion has been prompted by state Sen. Jack Latvala, R-Clearwater, who pushed the state Legislature to pay for both studies — the latest cost $200,000 — over the loud objections of HART board members. After initially voting to ask the state to go ahead with the study, they pulled their support last year, wary of giving lawmakers the impression that they would get behind a merger.

Heartened by the first study's findings, which suggested that some 44 senior staff positions were duplicative between the two agencies, Latvala predicted the second, more detailed analysis would find even more savings.

Instead, KPMG's report concluded that many of the jobs the first study proposed to eliminate couldn't be done away with so easily, or cheaply. "The positions are generally not redundant," the report stated.

Cutting those positions could lead to service reductions and the end of on-going projects, the report found. Between severance pay for the laid-off workers and increased pay for the remaining employees who would have more to do, the agency would see much of its savings disappear.

The report also found that while the two agencies could save by consolidating some administrative and support services, the overall cost of combining those functions would far outweigh any savings.

Reached by phone on Friday, Latvala said he hadn't read the report yet and couldn't comment on its findings.

To HART board chairman Mike Suarez, the KPMG study left little doubt that a merger was unwise.

"There's some savings, but there's also huge costs," he said. "I think it's about time that we just go about our business and keep cooperating the way we've been cooperating."

PSTA board chairman Ken Welch called the findings unsurprising given that the agency's largest expenses are its buses and drivers, neither of which would be significantly reduced in a consolidation.

"We kind of intuitively knew that you weren't going to have large savings," he said.

Anna M. Phillips can be reached at aphillips@tampabay.com or (727) 893-8779.

Pinellas, Hillsborough transit merger study finds few savings 01/17/14 [Last modified: Friday, January 17, 2014 11:52pm]
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