Gary bus service could end in months

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BY PATRICK GUINANE
pguinane@nwitimes.com
317.637.9078 | Saturday, September 29, 2007 | (14 comment(s))

INDIANAPOLIS | The Federal Transit Administration cut off funding Friday for the financially troubled Gary Public Transportation Corp., a disciplinary move that could shut down city bus service by the end of the year.

The Gary transit agency "lacks the technical, legal or financial capacity" to continue receiving grants and must repay $3.7 million in mismanaged federal funds, FTA Chief Counsel Severn Miller wrote in a scathing letter delivered late Friday.

The Federal Transit Administration said the city agency "fraudulently inflated" an energy-efficiency contract, "illegally spent" nearly $900,000 in infrastructure funds on operating expenses and further flouted federal rules by decommissioning working buses without prior approval.

Calls to Gary Mayor Rudy Clay and Daryl Lampkins, the bus agency's general manager, seeking comment were not returned to The Times, which learned of the pending reprimand on Thursday.

"I'm not saying anything," Cherokee Stanton, chairwoman of the Gary Public Transportation Corp. board, said when contacted Friday.

Federal dollars account for nearly a third of the bus agency's annual budget, so the FTA's decision to sever ties means "the Gary community may lose transit service by the end of the year," Miller wrote in his letter to Clay. The FTA also forwarded the letter to the Gary Common Council, Gov. Mitch Daniels and members of the Indiana congressional delegation.

"This affects the people of Gary. They depend on the city's busing service," said Justin Kitsch, spokesman for U.S. Rep. Pete Visclosky, D-Ind. "It's terrible that their transit services may be interrupted because the GPTC did not fully comply with its financial responsibilities."

The fiscal troubles stretch back to 2001, when the bus agency inked a $3.3 million energy-efficiency contract with Milwaukee-based Johnson Controls.

The Gary Public Transportation Corp. apparently lacked the local cash to seek federal funds, so it took a $300,000 loan from Johnson Controls, using the money to obtain $1.2 million from the FTA. Johnson Controls in January agreed to pay $2.4 million to settle a civil complaint brought by the U.S. attorney's office.

The diversion of $888,782 in federal infrastructure funds to operating expenses occurred in fiscal years 2005 and 2006, according to the FTA. The Gary Public Transportation Corp. owes the federal agency another $1.6 million after prematurely retiring natural-gas fueled buses and an accompanying fueling station.

The FTA told the city agency it could erase that debt by persuading another transit agency to begin using the alternative-fuel fleet or by purchasing new buses. On it's Web site, the Gary Public Transportation Corp. recently announced the purchase of eight new buses. But the FTA says "GPTC does not intend to purchase enough buses to entirely extinguish the debt in this manner."

The FTA has hired a private contractor, Jacobs Engineering Group, to work with Gary Public Transportation Corp. to craft a remediation plan to repay the $3.7 million debt and restore it eligibility for federal funding.

"We're not saying we're leaving them by the wayside. We're still going to be there," FTA spokesman Wes Irvin said Friday. "We just can't start giving them money again until they get their financial house back in order."

Gov. Daniels' office had not received the FTA letter late Friday, though a spokeswoman said the state is well aware of the unfolding situation.

"There's certainly no secret that there have been financial and management problems over time," said Jane Jankowski, the governor's press secretary. "Obviously, we're interested in ensuring that there's continued bus service for those who count on it."

The Federal Transit Administration has stripped funding from the financially troubled Gary Public Transportation Corp., a disciplinary move that could shut down city bus service by the end of the year. The FTA say the city agency must return $3.7 million in misspent grant money and cannot receive federal funding until it implements a remediation plan.

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BILL WILSON wrote on Oct 4, 2007 9:20 AM:

" MAYBE MR.LAMPKINS DONT KNOW WHAT HE DOING. TWO DEPARTMENT HEADS WERE DIMISSED IN MARCH OF 2005. TWO MORE QUIT IN SEPTEMBER OF 2005. ANOTHER IN 2007.SOUNDS TO ME THE NEXT MOVE SHOULD BE GET RID OF THE BOARD OF DIRETORS,(WHO ARE RESPONSIBLE FOR THIS WHOLE MESS)THEN GET A GENERAL MANAGER THAT JUST MIGHT KNOW HOW TO RUN TRANSIT SYSTEM.MR.LAMPKINS DONT HAVE A CLUE AND THE PEOPLE OF GARY HAVE LOST CONFIDENCE IN THE BUS SYSTEM.THE BUS AINT COMING. FOR WHATEVER REASON! "

Concerned wrote on Sep 29, 2007 9:19 PM:

" Does it ever end? "

mts wrote on Sep 29, 2007 5:56 PM:

" Yet another reason Gary is never going to come back. And the people of the city vote them back in time and time again, so no one is to blame but the Garyites. At least Mitch is smart enough to leave the morass up here alone. Once local governments fix themselves up, they've earned the right to ask the state to help them along with the goodness they got going, not to bail them out. The residents have to get fed up to have a (peaceful, legal) revolution, and they've not been abused enough yet. I just wonder what their breaking point is. Listen to the song by a famous Gary singer and look at the man in the mirror and ask him to change his ways! "

Taxpayer wrote on Sep 29, 2007 4:18 PM:

" Just another example of more money being flushed down the toliet by giving it to Gary. "

Fred wrote on Sep 29, 2007 1:52 PM:

" Well, if the Gary bus system is close to shutdown, the Hammond Transit system wont be far behind. "

shocked wrote on Sep 29, 2007 11:57 AM:

" Funds misused by Gary? How shocking - NOT!!! When are all the politicians going to be indicted? It's just a metter of time! stay tuned! "

Good wrote on Sep 29, 2007 11:48 AM:

" Good, get a car and save our TAX dollars.... "

Oh Really ???? wrote on Sep 29, 2007 9:41 AM:

" "There's certainly no secret that there have been financial and management problems over time," I have a Great Idea... Lets Start A NEW TRANSPORTATION SCAM... RDA. And SUCK the LIFE and TAXES, OUT OF THE NEXT TWO GENERATIONS... "

Faith wrote on Sep 29, 2007 9:18 AM:

" Everytime I read the paper something has gone terribly wrong in Gary, from the city's housing to the police department, the department of welfare, the township, now the public transit? When trouble begins not one official in Gary will take the blame, they pass the buck and from what I have read in the past, they pass the buck right to their own pocket. They won't be happy until they scammed every dollar and Gary becomes a complete ghost town. Gary has already been called plywood city. "

flushometer wrote on Sep 29, 2007 9:10 AM:

" Just shameful. Gary is an unmitigated, absolute, disgusting fetid swamp of failure. Top to bottom. We are all working very hard to keep this county afloat and Gary is the gaping hole at the bottom of the hull. So much money, so much effort by so many people over the course of decades valiantly tried to save Gary from itself. All for nothing. The harsh reality is that reasonable people must consider that Gary cannot be saved. Perhaps it is time to buy out the city. Use what will become wasted tax money on projects to purchase every property, scrape the buildings off of the land, un-incorporate the city, then divide the property to the bordering cities and towns. Start from scratch. I realize the harshness of such an action. Relocating tens of thousands of people is nasty, rough business. A terrible hardship. But what is the alternative? Everything has been tried, more than once. I am afraid we are fresh out of alternatives. "

Get Transportation Right wrote on Sep 29, 2007 8:02 AM:

" Time for the Lake County Regional Bus Authority to step in, take over and make things right. We need one integrated and greatly improved bus system in NWI that greatly serves everybody to get people to jobs, schools, health care, shopping, social and cultural events and family. However, long term, NICTD should be the ultimate provider of both buses and trains by providing commuter rail, commuter bus, regional bus, on demand bus service for the aged and infirmed, and commuter van pool services. They should also explore developing seasonal Lake Michigan Ferry services much like ferry services in NY/NJ and the Pacific Northwest. Heck, if you want to get things done right, NICTD should be running the Gary-Chicago Airport! One regional provider for all transportation modes. "

Joker wrote on Sep 29, 2007 8:02 AM:

" Maybe they could get some money from GUEA....everybody else does... "

Northern Jasper Co wrote on Sep 29, 2007 6:27 AM:

" ..."lacks the technical, legal or financial capacity ... and must repay $3.7 million in mismanaged federal funds" ... Is anyone really surprised by this from Gary, or Lake Co? It's really a shame for the people that have come to rely on the GPTC and use the bus service. "

Region Rat wrote on Sep 29, 2007 4:56 AM:

" And the hits keep coming! I empathize with the (honest) people of Gary; however, if you punish all for the actions of a few, at least in this case, perhaps those in Gary with a conscience will wake up and demand accountability for the corruption and mismanagement that has plagued them for so many years. It doesn't take a rocket scientist (or an accountant or banker) to realize that, sometimes, your cronies aren't necessarily the best-suited for the job. "

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