August 10, 2014

Analysis of Coast RTA travel receipts show ribeye, salmon and lobster for some executives during trips

An analysis of receipts for meals and trips taken by Coast RTA executives show a trend of high-priced meals and things like leisure rides on a sightseeing tour in the same period the public transit agency was pleading with Horry County and city officials for funding.

An analysis of receipts for meals and trips taken by Coast RTA executives show a trend of high-priced meals and things like leisure rides on a sightseeing tour in the same period the public transit agency was pleading with Horry County and city officials for funding.

According to results of a Freedom of Information Act request filed by The Sun News, Coast RTA, which is funded by federal, state and local tax dollars, spent more than $10,500 sending its interim CEO Julie Norton-Dew to crash courses in leadership in transit, training and conferences nationwide in the last 10 months to get her up to speed on mass transit issues.

Receipts for those trips include lodging and meals for Norton-Dew, who went from the unemployment line in 2009 without any transit experience to making more than $88,000 annually as Coast RTA’s chief financial officer and now interim general manager, as well as meals for colleagues. The analysis showed Norton-Dew used those state and locally funded trips to eat lobster macaroni and cheese and filet mignon room service at the Marriott in Washington, D.C., had a sometimes twice-daily fix of Starbucks coffee and a thrice-in-three-days affinity for Ruth’s Chris Steak House, an upscale restaurant.

Norton-Dew, along with Felicia Beaty, chief operating officer for Coast RTA, defended their expenses, saying they thought they were doing the right thing by staying under their federally allowed per diem, cutting costs by staying with relatives while on Coast RTA trips out of town and weighing the pros and cons of renting a car or taking a shuttle at conferences.

Gary Loftus, councilman on the Horry County Council who votes annually on whether to give the transit more than $1 million for its budget, isn’t buying their defense.

Norton-Dew said a per diem is set prior to every conference or training and she remains within the per diem, which is a monetary figure determined by the U.S. General Services Administration. She, along with Beaty, said they would typically eat a continental breakfast at the hotel they were staying at, a boxed or buffet lunch at the conference and then use the per diem for dinners.

As for ordering room service, Norton-Dew said it is more of safety measure for her since many of the out-of-state events end later and she does not want to leave her room in an unfamiliar city.

Asked what type of message it sends to be ordering high-priced food while asking the county and city officials for funds, Norton-Dew said: “I don’t really have an answer for you.” Norton-Dew was the company’s chief financial officer until April 30 when she accepted the interim CEO and general manager position. “I ate dinner. It fell within the rates. It was approved by my manager.”

Norton-Dew reported to then-CEO Myers Rollins.

She, along with Beaty, said the meals are a matter of what they normally eat.

“Maybe we need to look at things differently,” Norton-Dew said.

Fine dining on the road

Horry County Council has vowed to spend the next year examining where its $1.05 million annual contribution to Coast is going. County Council Chairman Mark Lazarus appointed a committee to look at a bus shelter program that never came to fruition. Shortly before the committee presented its findings to the full County Council, Rollins was fired. He has since sued Coast board members and staff members claiming, among other things, wrongful termination.

Norton-Dew is not the only one who dines fine on local- and state-funded trips at Coast RTA. According to analysis of travel, lodging and meal receipts from most recent training seminars examined by The Sun News, some board members and other top officials with Coast RTA have spent money on pricier meals.

Beaty, Norton-Dew and Barbara Blain-Olds, the $83,000-per-year former staff attorney, racked up a $155.09 bill while in Chicago for the American Public Transportation Association’s annual meeting at Chicago’s 720 South Grill in September 2013. The crew ordered items like steak frites, crab cakes, tall carrot cakes and appetizers. The $71-per-day per-person federally alloted per diem does not include hotel expenses.

During that same trip, Norton-Dew, Beaty, Blain-Olds and Joe Lazzara, vice chairman of the Coast RTA board of directors, went to dinner at Hugo’s Frog Bar and Fish House – touted as the city’s finest seafood restaurant. The four ordered salmon skuna bay, a 14-ounce filet mignon, a New York strip steak, and a $58 surf and turf, which cost, with a $39.36 tip, $301.80.

This meal came just about one month after the Horry County Council voted to give Coast a payment of $260,000, which had been withheld months earlier for the agency’s lack of effort to change the make up of its board. The Coast board had to pass an austerity budget and was on the verge of canceling routes.

Who is accountable?

Bernard Silverman, chairman of the board for Coast RTA, was surprised at the bill.

“Oh my God,” Silverman said when he heard about the dinner tab. “I’m amazed at $301.”

Silverman said he didn’t know about the expense amounts.

“I don’t know about those things because I don’t see those things,” Silverman said. “I don’t really see the expense accounts.”

Company policy requires Silverman to sign off on a trip, usually via email, before the employee can go. Then the employee fills out an “Employee Travel Request” form, which outlines the purpose and location of the trip, as well as estimated cost of attendance. The trip is taken and a Travel Expense Report is filled out, which details food, lodging and travel expenses. That report was either signed off by Norton-Dew or Rollins.

County Councilman Loftus, who is the county’s liaison on the Coast RTA board, said he has filed many expense reports and said he used common sense when charging anything to a company he worked for or to the taxpayers as a councilman.

“I can’t imagine, with what’s been going on, it would even be thought of to go to Ruth’s Chris for dinner, let alone even have Ruth’s Chris delivered to my room,” Loftus said. “It just sort of boggles my mind the fact that it’s under anybody’s per diem. That’s not what I would have done in the same place, that’s for sure. I don’t care what the federal per diem is. I don’t care. It’s what is right. What you should be doing is what makes sense. What they were doing might be under per diem, but it’s not under Gary’s per diem … Where’s the common sense factor?”

Transportation costs

It wasn’t just meals that were steep. A flight to the Chicago conference on Delta Airlines cost Coast RTA $323, about $170 more than what an average direct flight from Myrtle Beach to Chicago cost during the third quarter of 2013, according to statistics provided by the U.S. Department of Transportation.

Lynette Nobles, board liaison for Coast RTA who handles travel arrangements and sets the budget level for trips, said Coast officials have had trouble with lost baggage and other concerns on low-cost airlines, which is why she opts for the most affordable flights outside of those carriers.

She said although conferences and training dates are set well in advance, approval from department heads sometimes comes in a week or two before the actual event, which can sometimes lead to higher prices. Nobles said Coast officials are always looking to save the company money.

“I don’t think any of us abuse the per diem,” Nobles said. “I think when we order something, that’s what I was going to order anyway. It’s not, ‘Oh good, Coast is paying for this, so I’ll just splurge. That’s not the way we are. We’re used to having to be careful with the money.”

In March, while Horry County Councilmen were considering making their contribution on a reimbursement basis, Norton-Dew was sipping Starbucks drinks daily – each with an added blast of caffeine – as she attended a conference in Washington, D.C.

Then-CEO Rollins’ back was against the wall in Conway for not making enough progress in the bus shelter program while Norton-Dew was dining on bisque de homard and sea scallops provencale.

In their October 2013 Chicago trip, Beaty and Norton-Dew rode, and charged to Coast RTA, the Shoreline Sightseeing boat tour, lauded on its website as “the #1 place for Chicago tours!” The two took the $14-per-person trip from Chicago’s Shedd Aquarium to Navy Pier. The company is not associated with the Chicago Transit Authority, the public transportation arm of the city.

Beaty said she initially wasn’t going to charge Coast RTA for the tour, but was told she could by Rollins because of Coast’s exploration at the time of installing a ferry near Sandy Island.

“When we’re out, we try to explore all modes of public transportation, because ferry transportation is transportation as well,” Beaty said. “As you know, with Sandy Island, we’re looking at that.”

Seeking other savings

Beaty said she always remains under the allotted per diem, which, for Chicago, is usually around $70 daily.

“If it’s pointed out that we’re eating lobsters and all this kind of stuff all day long and it’s made to look as if we’re overspending what the per diem is for that trip, then of course they’re not going to take that positively,” Beatty said of the public’s perception of Coast’s spending. “But if you show, yes, Felicia went to Atlanta and we didn’t pay for room and board and we didn’t pay for airfare... If you look at what we do to try and save money, I think that’s more positive to know that we are conscious of our spending. When we can save, we do save.”

High-priced meals weren’t the practice of the most previous CEO. An analysis of receipts submitted by Rollins showed the majority of his meal expenses were from places like McDonald’s, Burger King, Subway, McAlister’s Deli and Applebee’s.

There were some meals, like an October 2011 trip to a New Orleans Hilton where Rollins dined with board member Katharine D’Angelo, on stuffed lobster and a shrimp platter charged to Coast RTA for a total of $115, which included a $15 tip. But those higher-priced receipts for Rollins were not as frequent as Norton-Dew’s receipts.

Coast RTA has long struggled with the top spot at its agency. Before Rollins served at that capacity, former chief Benedict Shogaolu ran the company. He eventually pleaded guilty to three felony public-corruptions charges in 2006. He was fired from Coast in 2004 after an investigation by the agency’s board showed he misspent public money, mistreated employees and possibly violated state and federal laws.

Rollins said he spoke with Norton-Dew in March about her spending habits on publicly funded trips.

“I did speak with Julie in mid-March because I saw expensive meals from Washington and tips were unusually high,” Rollins said. “She was tipping like 25 percent, between 25 and 28 percent. So I sat down and counseled her on the need to try and be more frugal when we travel.”

Norton-Dew acknowledges the conversation, but said it was more of a talk “in passing.”

In early April at the Triennial Review Workshop in Atlanta, Norton-Dew ordered a $41 ribeye steak from Ruth’s Chris room service and left a 20-percent tip.

“I instructed her to come up with a policy, and shortly after I was terminated, to put a cap on tips at 15 percent,” Rollins said. “I don’t know if they ever followed through and did it.”

As of Friday, there was not a policy that restricts gratuity to 15 percent.

Rollins said he would even refuse to go out to eat at places because of how expensive it was for the Coast budget.

“I just thought Chicago was an expensive place to eat, so I opted not to go with those guys and eat where they ate because I thought it was too expensive,” Rollins said. “I encouraged my staff to do so as well, as well as members of the board.”

Nobles rebutted Rollins’ statement, saying she booked at least five dinners in which transportation officials from across the country wanted to take Rollins out to dinner. When he or any other Coast official is invited to dinner, the tab is picked up by the one who invites the other.

Beaty said if being frugal was Rollins’s goal, he could have encouraged the staff to choose another place to eat.

“It really hurts to hear that because he signed off on those things and he knew we were going out to dinner that night and he was invited to go with us,” Beaty said. “He said, ‘No, I’m not going to go because I’m invited to this dinner here.’ He could have said then ‘You guys, that’s probably not a good place for you to go to have dinner tonight,’ but he didn’t.”

Board meeting meals

Spending on food is not limited to out-of-area trips. In January, at one of Rollins’ last board meetings, Coast spent $572.50 on lobster bisque, salads, bread, tea, cookies, muffins, danish and fruit for its board members to eat.

Food is ordered because the monthly meeting can last up to six hours, Nobles said. Norton-Dew has changed that practice and has ordered sandwiches for the board in the last few meetings she has been in charge.

Loftus said he can see the need to attend pricier dinners when an opportunity arises to network with officials who can benefit Coast RTA.

“You would go to benefit the company,” he said. “I submit to you that going with Felicia and Barbara does not benefit the company.”

Loftus said he looks forward to the Aug. 27 board meeting and will be interested in hearing a response from Norton-Dew, who has expressed interest in becoming the next full-time general manager of Coast RTA.

“I’ll be part of the discussion and I’ll put it in her application packet, no problem,” Loftus said.

Learning moment for Coast?

Beaty said the findings may turn things around for Coast officials and spending.

“Coast RTA has a unique opportunity right now to turn things around and to change the image that we have portrayed out there,” Beaty said. “So if this is an image that the public doesn’t want to see, they don’t want to see us eat lobster dinners and filet mignons, we’re willing to abide by that as leaders of Coast RTA, because we don’t want them thinking that. We have people out there not even making $20,000 a year using our bus every day. Let’s move forward and not make the same mistakes of the past.”

Beaty and Norton-Dew said The Sun News’ analysis made them more aware of what they charge because their mentality was more about staying under per diem and not the context of what they were charging to the company.

“We didn’t think of it that way, but you opened our eyes to that,” Beaty said. “So when I go to Chicago [later this week], you’re right, I am going to be conscious of that. I am going to be looking at every item and say, ‘OK, I could eat this, but what’s cheaper on this menu that I could eat for tonight.’ Or maybe I just don’t go to that restaurant that night. So we’ll be more conscious of that. This is our opportunity to change that and move forward in a different way.”

Norton-Dew released a statement after The Sun News’ interview: “All previous travel expenses presented were within Coast RTA policy guidelines and approved by management. However, Coast RTA is committed to reducing future travel expenses by implementing a revised policy which promotes prudent spending practices.”

Silverman said he will look at the materials in the The Sun News’ FOIA and plans to talk with those involved.

“I’ll look into it and I’ll talk to people about it,” Silverman said. “We can’t undo what we’ve done, but we can go forward doing a lot better … I’m going to ask for those FOIAs and I’m going to look at it. We’re spending public money, really.”

“I think people need to understand that not only is it public money, but that people are looking or have the ability to look. This is not a private affair.”

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