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PSTA and HART could be required to study transit merger

For years, talk has circulated about combining Hillsborough and Pinellas counties' cash-strapped transit agencies. Last week, a bill landed on the governor's desk that nudges the agencies closer to that possibility.

The bill, if signed by Gov. Rick Scott, will force the Pinellas Suncoast Transit Authority and Hills­borough Area Regional Transit to study the pros and cons of merging.

Both sides have come out against such a move, saying it probably wouldn't achieve much savings and could take years to pull off.

"To take two underfunded systems and staple them together into one huge, poorly funded system doesn't make sense," said Brad Miller, chief executive officer of the PSTA.

Supporters of a possible merger say a combined regional agency could operate at lower costs and attract more federal funding and bigger loans than two agencies working separately.

Sen. Jack Latvala, R-Clearwater, and Rep. Jeff Brandes, R-St. Petersburg, sponsored an amendment to a transportation bill to study the merger idea. It comes as PSTA and HART are enjoying ridership gains but diminished revenue because of declining property taxes.

"Any time we can look at how we can save money in these difficult times, it's important," Brandes said. "This could save hundreds of thousands or millions of dollars. People are always talking about having a regional perspective. Whether it works or not, that's what the study will tell us."

The agencies say they back the idea of working together to save money, but question whether the gains of combining into one large, regional agency outweigh the costs.

Steven Polzin, a HART board member and researcher at the Center for Urban Transportation Research at USF, said that large transit agencies generate higher operational expenses than smaller ones and that, based on his experience with a merger in Dallas 10 years ago, salaries and benefits tend to increase when agencies join forces.

Then there are the millions in up-front costs needed to rebrand the agencies' buses and shelters, combine their financial and communications systems, develop new interagency agreements with local governments and work through the maze of legal and financial rules affecting property taxes and bondholders.

"You're talking a pretty serious investment of time and money to combine and standardize these systems," Polzin said.

The bill awaiting the governor's signature requires HART and PSTA to pay up to $50,000 each to the Tampa Bay Area Regional Transportation Authority to assist in the study.

The study's final price tag could go higher depending on whether the agencies bring in outside consultants and attorneys to pore over the merger's full economic, financial and ridership impacts.

Polzin said HART would need to dip into its reserves or pull money from other programs to pay its share of the study.

HART's board has issued a resolution opposing the merger study.

Philip Hale, HART's chief executive officer, said there's no evidence to show that combining the agencies will save money. It might even backfire.

Administrative overhead might drop, but those savings might be swallowed up if salaries for bus drivers are increased to match those of Pinellas drivers, which could happen under collective bargaining.

"Merging won't bring in any more revenue," he said.

Laying groundwork for the merger could take years, and even then it might come down to voters in a referendum deciding whether to move forward with it, he said.

The governor's office hasn't said when Scott will take up the bill. Hale said that could happen in two or three weeks.

If signed, the agencies would be required to meet after July 1 to start work on the study. A report based on their findings would be due to the Legislature on Feb. 1, 2013.

Rich Shopes can be reached at hillsnews@tampabay.com.

PSTA and HART could be required to study transit merger 03/15/12 [Last modified: Friday, March 16, 2012 7:34am]

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