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Votran confronts fiscal and billing challenges

January 30, 2020

Volusia County’s Votran transportation system is confronting fiscal challenges and a billing discrepancy recently discovered by the county’s outside auditors.

Established in 1975, Votran is primarily financed by state and federal grants and an annual contribution from the county’s general fund. But Votran is facing an approximately $1.2 million reduction in annual revenues because of changes in the way the state provides funds to transit systems. Alarmed by the news, Volusia County officials are hoping the state will reverse some of the changes. In the meantime, the county is planning to transfer about $1.2 million from Votran’s capital and maintenance budget to ensure that there’s enough operating funds to last for the rest of the fiscal year. However, the budget transfer isn’t a long-term fix because it will consume funds needed to buy replacement buses and maintain the existing fleet. Votran’s budget for the current fiscal year is $26.1 million.

“This is really quite concerning to us,” said Dona Butler, who oversees Votran in her role as the county’s community services director. “We’re involved in ongoing discussions with the state about these changes and are doing our best to plead our case. We simply can’t absorb this kind of a financial hit without it negatively impacting the system somewhere down the line.”

About $530,000 of the revenue reduction has come from a change in the Florida Department of Transportation’s methodology in how transit systems must calculate their costs for reimbursement purposes. Another approximately $660,000 in revenue reductions has been the result of the Florida Commission for the Transportation Disadvantaged (CTD) saying it will no longer reimburse transit systems for ADA paratransit service they provide to people who are unable to ride a regular bus due to a disability. Currently, the state commission is saying that the money for ADA paratransit service comes from federal grants and that they shouldn’t pay for it. Votran and the state association, the Florida Public Transportation Association, disagree and have been working diligently to bring this issue forward to the CTD. The senior leadership of Votran has been invited to participate in a discussion with the CTD at its next business meeting in Tallahassee on Feb. 10.

The CTD actually decided several years ago to stop paying for ADA paratransit trips, but didn’t inform Votran or the other transit systems in the state about the change at the time. Votran found out that the expenses were no longer going to be reimbursed by the CTD in a routine compliance report from the state in 2017. Once notified, Votran – which is operated by the management company RATP Dev under a contract with the county – put a plan in place that was supposed to ensure that it stopped billing the CTD for ADA paratransit trips. County management wasn’t alerted to the issue until it came to light during the current audit when the county’s outside auditor, James Moore CPA Consultants, discovered that in an apparent oversight, Votran had never stopped billing the CTD for the ADA paratransit trips. The oversight has since been corrected and the CTD has agreed not to ask Votran to return the money it has been receiving for the ADA paratransit service. County officials, though, are hoping that the CTD will reverse itself and start paying for the ADA paratransit service again.

“We’re happy the problem was discovered and we were able to resolve the issue without having to repay the CTD, and that the CTD has agreed to discuss the issue,” said County Manager George Recktenwald. “We will continue to work with other Florida transit agencies to review the state’s methodology change and optimize our future billing practices.”

The county has re-bid the Votran management contract, and a decision is scheduled to come before the County Council on Feb. 4 whether to re-sign with RATP Dev or turn over management of Votran to the other company competing for the contract, First Transit, Inc.