TAMPA — When the board of Hillsborough County’s transit agency unanimously authorized an external investigation into the workplace practices of its chief executive, they were firm in their deadline: 60 days.
At the board meeting Monday morning, 69 days later, there was little mention of the investigation.
There was, however, a detailed discussion of the agency’s uncertain financial future and a nod from the CEO that she is exploring “outsourcing opportunities” in an effort to reduce operating costs.
The Hillsborough Area Regional Transit Authority is facing a fiscal cliff in 2024 — two years sooner than previous predictions. The shortfall is primarily due to operating costs both exceeding and growing at a faster rate than operating revenue, according to Amanda Vandegrift of InfraStrategies, a management consulting firm hired to conduct a deep dive into the transit agency’s financial strategy.
From 2017 to 2023, HART’s annual operating costs grew at an average rate of 8%. “Very high,” said Vandegrift, citing global supply chain complications, inflation increases and the COVID-19 pandemic as reasons why HART and transit agencies nationwide are contending with budgetary shortfalls.
“There is nothing we are seeing to suggest it is going to drop back down,” she told board members Monday. “This is your new normal.”
At the same time, passenger fare revenue decreased by 4.3%, she said.
In Hillsborough County and communities across the country, one-time federal cash injections during the pandemic are running out.
“Your COVID relief funds will be spent down sooner than we’d been assuming,” Vandegrift said. Those dollars are expected to be exhausted in the next annual budget and once they do, “we’re quickly in the negative,” she said.
In the next 30 years, the agency faces $9.5 billion in unfunded costs such as the TECO streetcar extension in Tampa, frequency improvements and new express bus routes. That’s equivalent to 53% of total costs.
Hillsborough County Commissioner Pat Kemp called the presentation “very sobering” but not surprising. “This is a reality I think we’ve been dealing with for a long time,” she said.
HART CEO Adelee Le Grand offered three potential cost-cutting avenues. Vacant positions that “do not need to be filled” will be removed for the next annual budget. Opportunities to “streamline and reduce redundancies within departments” will be assessed. And the agency will conduct “a better overall assessment of outsourcing opportunities.”
Le Grand joined HART in January 2020 from the private sector, becoming the highest-paid chief executive in the agency’s history, with $50,000 in relocation assistance and a starting salary higher than her predecessor.
The churn among staff, lingering vacancies and subpar route performance have left some fearful the agency is vulnerable to privatization, the Times previously reported. Meanwhile, community members reliant on public transit in Florida’s fourth-most populous county are clamoring for improved service reliability, frequency and safety.
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Approximately three-quarters of the agency’s budget is operational costs, the majority of which are personnel costs, Le Grand said Monday. The “first phase” of cost-cutting impacts will be “felt internally,” she said, adding that she wants to avoid cutting service.
“We do not want any impact to be felt by our customers,” she said.
As of late Monday morning, the agency had 17 openings listed on its website, including a director of budgets and grants, which Chief Financial Officer Loretta Kirk told auditors last May the agency was “aggressively recruiting to fill” after an audit found the agency’s “absence of finance staff put a strain on the current personnel to complete their responsibilities in an accurate and timely manner,” the Times previously reported.
Tampa City Council member and HART board chairperson Luis Viera pointed to the need for “innovative solutions” to provide transportation to county residents while steering the agency onto firmer financial footing. But he cautioned that unless the agency finds additional funding sources, the “issue of revenue will continue to haunt us.”
InfraStrategies and agency staff considered 88 potential funding sources on the federal, state and local level, ultimately identifying 49 that HART could try to tap to steady its economic situation. Most are federal grant opportunities from the Bipartisan Infrastructure Law, Vandegrift said.
But federal grants rely on a local match, so Vandegrift stressed the importance of HART partnering with other agencies and local government to cobble together the funds necessary to access federal dollars.
HART has not seen ridership return to pre-pandemic levels but has the highest ridership recovery of any transit agency in the state, Le Grand said Monday.
That climb is testament to the vital and already stretched-thin service the agency provides, Kemp said.
Earlier this year, Democratic U.S. Rep. Kathy Castor helped secured $5 million for 285 new bus stops to bring them into compliance with the Americans with Disabilities Act, news that was celebrated by board members in an otherwise somber meeting.
Director of Facilities Dale Smith also highlighted the agency has expanded its shelter trash cleanup efforts and is launching an adopt-a-shelter program in the hope of improving cleanliness and safety.
The meeting ended with a short statement from general counsel Julia Mandell, explaining that the lawyer hired to investigate allegations of a hostile work environment and the double-dipping of a top staffer who was simultaneously working for a public agency in another state will offer an update at next month’s meeting, 28 days away.