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BlueGo tackles budget

Annie Flanzraich
aflanz@tahoedailytribune.com

SOUTH LAKE TAHOE, Calif. – The South Tahoe Area Transit Authority Board of Directors’ consideration of a revised 2010-’11 operating budget and an audit of the 2008-’09 fiscal year comes in the midst of three lawsuits and El Dorado County pulling away from the board.

The proposed budget projects the authority will bring in about $4.2 million from local revenue, private partners, local government agencies and federal and state grants.

The authority anticipates spending $4.2 million on operating expenses including paying new transit operator Transit Resources Center Nevada and STATA’s own operating and administrative expenses.



The board approved a budget at their June meeting, however staff recommends that the authority continue to revisit the budget.

“Given the changes in circumstance with management and funding … it seems that reliance on an annual budget at this time does not make sense,” according to the report. “However, there is value in working with a budget at this time, because a very refined and detailed budget is needed for the current quarter.”



Staff is also concerned that the loss of revenue from El Dorado County and Big George Ventures will leave the reserves significantly lower than projected in June.

“This means that STATA is left with little funds for debt retirement without either increasing revenues, or decreasing costs through service reductions, or other means,” according to the report.

El Dorado County withdrew from STATA in July due to the many lawsuits that have been filed against the agency by MV Transportation. The County provided between $150,000 and $250,000 in revenue each year, said STATA spokeswoman Stacy Dingman.

Big George Ventures agreed in the 2009-10 fiscal year to provide $372,500 to support the Kingsbury Express over the next three years. After a making a $75,000 contribution during the first quarter of STATA’s fiscal year, that commitment will be complete.

The board will also review its 2008-09 audited financial statements. The completion of the audit was “significantly delayed” because “additional time was required to insure a thorough inspection of STATA’s records,” according to staff reports.

The statements report a net loss of $1.4 million, mostly due to the costs of changing contracted operators from Area Transit Management to former operator MV Transportation in October 2008. The staff report also attributes the loss to a reduction of funding received from California.

A copy of the audit will not be released to the public until it is approved by the board.

After STATA decided to terminate its contract with MV Transportation in June, the transit operator filed four lawsuits against the agency.

One in El Dorado county has since been dismissed, while two in Douglas County and one in Solano County, Calif, where MV originates from, are still being pursued.

In one of the Douglas County complaints, MV Transportation claims that STATA owes more than $2 million for back payments for service and for when MV reconditioned STATA’s equipment and facilities in October 2008.

The lawsuit also alleges that STATA “had no intention of actually paying MV in accord with its promises.”

In addition, the lawsuit claims that each of STATA’s members at the time – including Harrah’s Lake Tahoe, the City of South Lake Tahoe, El Dorado County, Lakeside Inn and Casino, the Tahoe Transportation District, the Horizon Casino Resort, the Harrah’s Lake Tahoe, Douglas County, Heavenly Mountain Resort, MontBleu Resort Casino & Spa, The Ridge Resorts and the Tahoe Regional Planning Agency – are individually responsible for the money owed and promises made to MV Transportation.

The lawsuit claims there was a “deliberate and concerted effort” by the STATA members to “fraudulently obtain transit services for their personal benefit and profit without paying fair value.”

It goes on to allege that all the members have “participated in a conspiracy against MV pursuant to a preconceived and mutually agreed-upon plan, comprising explicit and implicit agreement among the (members) to fail and refuse to timely and fully pay invoices.”

STATA has until Aug. 23 to file a response to the lawsuit, said Mike McLaughlin, who is representing the authority.

“Everybody has a right to make allegations in a complaint filed in court,” McLaughlin said. “Often times we see in complaints a variety of allegations that sound compelling on their face, but it comes a time when those allegations have to be proved by a preponderance of the evidence.”

McLaughlin said he could not comment further on the case at the time.

As a result of the numerous lawsuits, El Dorado County decided to withdraw from the STATA board in July.

“With the number of lawsuits that came into play we had to do an assessment of the risk to the county,” said County Supervisor Norma Santiago. Santiago also added that many of the dealings with the lawsuits are being handled in closed session and under attorney client privilege.

“Our focus is on getting through this litigation process and working on a parallel track with regards to keeping the service going,” Santiago said. “El Dorado has a strong commitment to provide transit for our constituents and to work with the other local jurisdictions to support a transit system that works for our community.”

El Dorado’s withdrawal from STATA was unfortunate because of the funding the county brings to the table, Dingman said.

“It’s disappointing because it’s a loss of revenue and to not have that money does not help our community riders,” she said.


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