CAT fires back at Cumberland County claims

CAT Board Chairman Eric Bugaile and other officials said the transit system’s dual pension plan was established four decades ago to deal with issues created when the public authority took over bus operations from a private-sector operator.

“There has been no ‘cloud of mystery’ with this issue,” CAT Board Chairman Eric Bugaile said, referencing allegations by Cumberland County Commissioners.

CAT provides fixed-route bus services in Cumberland County, in addition to fixed-route and paratransit operations in Harrisburg and Dauphin County.

The commissioners on Tuesday called for state Auditor General Eugene DePasquale to examine Capital Area Transit’s finances over what they believe are “questionable practices,” including double pensions for top executives.

A CAT statement responding to the commissioners’ request called their “slamming” of the pension plan “old news.”

CAT’s board directed an audit of the plan in the summer of 2016, according to the statement. That audit was completed in January and approved by the board in February, the statement added, and the board has taken steps to freeze the pension plan. 

“If I could get rid of the plan today, I would,” CAT general manager Tony Johnson said.

CAT spokesman Robert Philbin said he was working on responses to Business Journal follow-up questions about the pension program this morning.

Background

CAT was established in 1973, after Harrisburg Railways Co. — a private firm originally created to run the city’s trolley system back in 1913 — petitioned the state for permission to abandon much of its bus network as the company struggled to make a profit.

In response, Cumberland County, Dauphin County and the City of Harrisburg formed a public authority to take over bus service, something that was happening across the state and across the U.S. in the 1960s and ’70s as the last remaining private transit systems sunk into insolvency amid rising competition from automobile ownership.

For CAT, Harrisburg Railways’ legacy may have sown the seeds of the ongoing pension issue.

According to the agency’s statement, “the so-called executive pension plan”  was established by the CAT board in 1977 to compensate key executive personnel, formerly with Harrisburg Railways, who were not covered by an earlier employee pension plan. The latter plan had been established when CAT was created four years earlier.

“The plan has been included in CAT financial audits and annual budgets for decades,” Bugaile said.

“Under my tenure as board chair, all of CAT financials have been audited without a single finding by the auditors,” he added. “The board, including the members from Cumberland County, has repeatedly voted to approve those audits and budgets.”

Susan Woods, press secretary for the Department of Auditor General, said Tuesday that the agency was reviewing Cumberland County’s letter and would reach out to the commissioners to discuss their request.

Consolidation battle

The commissioners’ move is the latest salvo in a simmering battle over CAT’s expenses and service.

Cumberland County contributes approximately $300,000 in yearly subsidies to the bus system, but has long argued that the county does not receive adequate service in response.

County officials have been pushing for greater “regionalization” of the midstate’s various transit agencies, a policy that has seen Cumberland develop a closer relationship with the Central Pennsylvania Transportation Authority (CPTA), formerly known as The York Adams Transportation Authority, which does business as rabbittransit.

In July 2015, Cumberland County appointed rabbittransit as its coordinator for shared-ride services, which provide transportation to the elderly and disabled.

But the county also supports creation of a single authority to provide fixed-route services for Cumberland, Dauphin, York, Adams, Franklin Counties, along with the city of Harrisburg — ideally, they argue, under CPTA.

In support of that argument, Cumberland officials cite a PennDOT study that estimated that Cumberland County alone would save about $2 million in transportation subsidies over 10 years through CPTA operation.

PennDOT spokesman Rich Kirkpatrick said the agency is a supporter of consolidation, but the impetus for such a move must come from the affected stakeholders.

“Regarding the issues raised by Cumberland County, while we advocate transit agency consolidation as a common sense approach, the decision to do so must be made locally,” Kirkpatrick said.

“We will work to advance this goal with any and all interested parties in the southcentral region,” he added. “We have continuing conversations with the counties, city and transit agencies in this region and we are encouraged that all have similar goals to improve transit services and efficiencies.”

CAT, meanwhile, defended its record of service to the West Shore and environs.

“We have gone out of our way to provide excellent service to the citizens of Cumberland County,” CAT’s Bugaile said.

“We conducted a pilot circulator project in the Borough of Carlisle, as well as provide current Shippensburg service and special warehouse employee service, connecting job seekers in Dauphin County with warehouse jobs in Cumberland County,” Bugaile added.

That pilot progrram is facing termination, however, as a result of low ridership in the borough, CAT officials have said.