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DISTRICT 1 NEWS

ISLAND TRANSIT UPDATE   


Hindsight is 20/20, and as I look back I see a rural transit agency that was created by a grass roots effort. It built its way up over the years on a shoestring budget, creating a vital public service. For over 25 years it was run by one person, a culture was established and habits entrenched. A cash balance was saved in hopes of building a much needed facility to accommodate the growing needs. Once the facility funds came, it was known that the project would take most all of those savings. Unfortunately, the facility construction took the Director's focus away from monitoring the daily finances. Expenses exceeded revenues, creating a shortfall. Services had to be cut to reduce expenses and align them with available revenue. Should cuts have been made sooner? Yes. We know that now.  

 

If the proper internal financial controls had been in place, less dramatic adjustments could have been made over time. But as we see regionally with other transit agencies, necessary cuts to service are not unique to our islands.  

 

Other corrective steps were taken this year to strengthen Island Transit's checks and balances. A new professional is overseeing the Transit finance office and is updating the internal controls of the agency. The Board increased its oversight of finances. Two board members now meet monthly with staff to review bank statements, expenses and revenues.  Monthly reports were improved so the Board (and a new Director) can better monitor the cash position. State Auditors reported that the Board is taking "all necessary steps to resolve this issue."

 

The State Auditors have just finished their review of the Island Transit books for 2013 and confirmed the fact that the previous financial officer was not following standard practices in a number of important areas. Most significant were the cash shortfall and those controls associated with the federal grant funds for the new building project. Now time has passed to realize the savings from the cuts made this summer, it is clear that the reductions in service were sufficient to "right the ship" and Island Transit is operating in the black again and beginning to rebuild the reserve. It will be a slow but steady process.   

 

I am glad the Auditors confirmed that no one stole any money. However, they found that the agency did not follow the standards for federal grant record-keeping in their documentation of payroll and the tracking of equipment inventory. That practice is now been corrected and I think a full review of internal controls should be done to be sure best practices are being followed in all areas going forward.  

 

The Auditors confirmed that the Board must improve oversight of the Director. This is an opportunity to start a new chapter for the agency and break 20 year old habits, implementing clear guidance for Board members to follow and prevent this situation from reoccurring. 

 

Each of these changes are positive and will build a better, stronger transit agency for our community.

 

In the coming months there will be public outreach, seeking input about right-sizing the transit system for the future. We need a reconfiguration of routes to better meet the needs of our community and adjust for the recent impacts to weekend service and the outlying regions of our islands. Where emergency action was necessary earlier in the year, now a more deliberate approach can be taken.

 

Moving ahead it is important to hire a qualified Interim Executive Director so the restructuring of routes can be completed and the transit agency is stabilized for the future. The Board has decided to do a limited recruitment for this position to allow more transparency in the process and cast a broader net. Tentative plans are to hire someone by Thanksgiving. An interim position is wise at this time to provide transitional leadership for the organization and allow ample time for significant community outreach in the process of selecting a long-term Director. That outreach should focus on what we want our transit system to provide in the future. How can we best support expanded service? Should it stay fare-free?  

 

The audit results show that internal financial controls and Board policies did not keep up as the transit agency grew over time. Significant corrective steps have been taken already and I am committed to continuing to improve Island Transit for the future for our community.  

 

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It is an honor to serve you,

 
Helen Price Johnson
Island County Commissioner, Dist. 1

[email protected] 

(360)679-7354

PO Box 5000

Coupeville, WA 98239