State auditors to look at failed Coast RTA bus shelter program

External auditors will take a look at the failed Coast RTA bus shelter program before the S.C. Department of Transportation decides whether it will allow the transit to take 10 years to pay the more than $324,000 debt it owes the state.

In a mid-April letter, then-Coast RTA CEO Myers Rollins asked the S.C. DOT if it will allow Coast to use advertising revenue for the next 10 years to pay off the debt or if it could use a combination of ad revenue and state mass transit funds.

Christy Hall, acting secretary of transportation for the state, sent a letter this week to Coast stating she is ordering an audit from S.C. DOT’s contract assurance office.

“I have requested that our external auditors conduct a review of this particular project, in order to assist the South Carolina Department of Transportation (SCDOT) in determining an appropriate path forward,” Hall wrote in the letter. “Until the review is completed, I am not in a position to accommodate your request nor able to finalize the payback amount and parameters.”

The letter came the same week as the Coast RTA board of directors fired Rollins, citing failures with the bus shelter program and the debt to the DOT related to it. Rollins could not be reached for comment Thursday.

In 2005, Coast RTA was awarded a $1 million grant from the Federal Highway Administration to install more than 60 bus shelters on routes throughout Horry and Georgetown counties, as well as route signs. The grant, which was administered by the S.C. DOT, was to cover the entire cost of the project. Hurdles Coast RTA had to deal with included working with municipalities to install the shelters, with such challenges as zoning and underground cable issues. The delay prompted Coast RTA to request an extension in 2009, which is when the whole project was scheduled to be done. The extension was granted to mid-2013.

More than 500 projects nationwide were being funded by the highway administration similar to the shelters and signs program, and it took until the last few years for federal officials to figure out Coast was not abiding in a timely manner. By the time that was discovered, federal officials realized that only a handful of shelters were erected and 10 were sold to the city of Myrtle Beach – some for use in the school system, which the grant did not allow.

Rollins has said that in 2011, S.C. DOT passed a requirement that all projects, including the shelter and signs project, required a local match, which is something Coast learned about in 2013.

In April 2013, the highway administration instructed Coast RTA to stop the project. In the summer, S.C. DOT said it was pulling the funding for the program and Coast could be liable for reimbursing part of the project.

Julie Norton-Dew, interim CEO with Coast RTA, said the transit is prepared to oblige with state transportation officials.

“Coast RTA will fully comply with this review,” Norton-Dew said Thursday. “Furthermore, Coast RTA will adhere to SCDOT requirements on all future transportation projects which support the mission of the organization.”

Doug Frate, deputy secretary for Intermodal Planning at S.C. DOT, said it is too early to determine how long the audit process will take.

“They run the gamut, to be quite honest,” Frate said. “You really don’t have a good idea until you get into it.”

Frate said the auditors will go back to the mid-2000s to determine what issues there have been and the nature of those issues.

“That will allow us to look at the final accounting to determine what were allowable expenses and what may not have been,” he said.

Frate said Wednesday’s firing of Rollins adds to the “significant turnover” Coast’s administration has had since the grant was given in 2005.

“It may impact the process to an extent,” Frate said, adding much of the audit is “contract related” and has an opportunity to go smoothly.

A committee was formed by Horry County Council Chairman Mark Lazarus to achieve a similar goal. Lazarus ordered the group to examine the failed bus shelter and signage program as well as an intermodal terminal project that Coast is accused of bidding the project before it was supposed to.

Councilman Marion Foxworth, who chairs the select committee, said Rollins’ firing will not impact his committee’s examination.

“That really doesn’t affect what we’re doing at all,” Foxworth said. “We’re still on schedule.”

That schedule includes having a report ready for the full council to review before it approves next year’s budget, which proposes to fund Coast RTA by more than $1 million.

“Right now, unless something really goes way off the rail, we plan to have some conclusions, findings and recommendations to present at the county’s budget workshop,” Foxworth said.

The county uses its two June meetings to hash out and finalize the 2015 budget.