As new board looks to tackle financial issues at WAVE, additional cuts may be on the horizon

Updated: Feb. 10, 2020 at 6:29 PM EST
Email This Link
Share on Pinterest
Share on LinkedIn

NEW HANOVER COUNTY, N.C. (WECT) - New leadership may be at the helm of the Cape Fear region’s transportation system, but the issues with WAVE Transit’s bottom line haven’t changed.

At its first meeting since city and county leadership voted to replace the Cape Fear Public Transportation Authority, the new board got a closer look of the system’s exact financial position and set a course for the body going forward.

The change in leadership stemmed from a request from WAVE staff to the city and county for a $700,000 loan as it faced significant cash flow issues — a request that came as the embattled public transportation system has faced continued financial strain.

New board members agreed their approach should be twofold: address the need to restructure the system by July 2021 as the city and county originally agreed, but first address the short-term financial issues.

“The trick is, we not only have to provide a service that is there ... but we have to do so in a fiscally responsible manner,” said City Attorney John Joye.

Addressing the fiscal future of WAVE began with a look at the remainder of fiscal year 2019-2020, which comes to a close on June 30.

County staff who reviewed the operating budget determined WAVE is on track to end the year $146,032 short — after depleting the remainder of its fund balance reserves.

State law requires public entities have a balanced budget, so adjustments will have to be made to stay in compliance.

The coming fiscal year brings an even higher projected shortfall, based on the existing budget documents WAVE was preparing for the previous board.

If nothing changed, the authority would be looking at spending $726,663 more than its expected revenue.

That figure includes $500,000 in grant funding from the federal government — a funding source that while secure, is often delayed. This year it may not arrive until as late as May.

Board members are directing staff to no longer consider that as guaranteed income, meaning the projected deficit is closer to $1.3 million.

As far as cash flow goes, the news was slightly better. Where the initial loan request estimated the authority would have to cease operations by Feb. 15 without an infusion of cash, it would now be April before that happened thanks to some of the state funding finally coming through.

However, the local loan is still necessary to keep WAVE in the black, and it won’t be enough to avoid additional changes in how the system operates.

Executive Director Albert Eby said when cuts were proposed to the previous board, that body decided to go with a plan that would be the least disruptive to riders, so there are additional areas WAVE could cut back.

He said he would bring those options before the board on Feb. 27.

County Manager Chris Coudriet, who will serve as chair of the new board for 2020, said while the numbers were disheartening, he believes the board can still “Save WAVE.”

“It was difficult to hear some of the financial challenges that are coming, but I think we will do more than nibble around the edges," he said. “We will really get to work and right the ship.”

Despite the financial realities WAVE is facing, members expressed their support for public transportation.

“The members that are seated today are as equally committed to public transportation as any board prior and any member individually has been,” Coudriet said, “and that means the City Council and the County Commission are committed to public transportation, but the directive, reasonably and right, has been to think about a system for the future.”

What that future system looks like, while a conversation for another day, was on the minds of other board members too.

Former City Council member Paul Lawler said the board needs to “look beyond the ‘Boomer’ mindset,” when it comes to public transportation, referring to what he said may be a Baby Boomer generational aversion to transit, where those in younger generations find using it preferable.

Copyright 2020 WECT. All rights reserved.