The Sunset Empire Transportation District suspended bus service and other operations starting April 29 after the agency’s troubling financial condition came to light.

The transit district’s board voted unanimously on the afternoon of April 27 to discontinue operations indefinitely and furlough employees.

“The message is we will not be offering any public transportation services effective Saturday due to the financial situation that we’re in. We will get it restarted as soon as we have a financial package in place. And we’ll get the process to restart up and running as soon as possible,” Jeff Hazen, the transit district’s executive director, told The Astorian.

The transit district’s bus routes and paratransit services connect riders across Clatsop County. The Lower Columbia Connector also takes riders between Astoria and Portland. The agency has an annual budget of $6.6 million and 46 employees.

While Hazen has referred to a six-figure shortfall, the transit district has also reported that ridership was up 11% year to date.

In an extraordinary meeting on April 27 at the Astoria Transit Center, the board weighed financial options, heard from the Oregon Department of Transportation and met in an emotional executive session to evaluate Hazen’s job performance.

In the morning, Hazen said he was communicating with a consultant to pursue financing options and was waiting to hear back, so the board put off a decision until late afternoon in the hopes of securing a last-minute reprieve.

‘Yellow flags’

The transit district foreshadowed the decision at a special board meeting on April 18, when Hazen first made the startling recommendation to suspend operations and claimed the agency was out of money. A decision was postponed after Hazen and the board learned of a possible financial lifeline from the state.

Over the past several days, Hazen declined to provide updates when asked by The Astorian and pointed to the board meeting on April 27 for the next announcement.

Debbie Boothe-Schmidt, the board chairwoman, said she did not learn of the financial issues until two weeks ago. She asked Hazen when the transit district was aware that funds were low.

“We noticed earlier this month. We’ve been tracking it, watching it and we were hopeful that we’d be able to get through it, but it didn’t come to fruition,” Hazen replied.

Karyn Criswell, a state Department of Transportation public transportation district administrator, revealed Thursday that a contingency from the Statewide Transportation Improvement Fund — the potential lifeline — had already been dispersed to the transit district and was not an option.

Criswell noted that the transit district gave the state no indication, including in quarterly reports, that finances were dire until she received word last week.

She also said the state is coordinating with an auditor and an independent compliance reviewer to complete a financial audit on the transit district as soon as possible. The agency already had a compliance review with the state scheduled for May.

“What we found at a high level, given what we found to date, we are concerned about whether state and federal funds are being expended in a manner that is substantially compliant with our existing agreements and with regulations,” Criswell, who appeared at the meeting remotely, said of a preliminary review.

Criswell also cited discrepancies between several figures in reports that were provided to the board versus the state, as well as numbers on bank statements that differed from reports to the state.

“Those were a few of the things we’re seeing that raise yellow flags and that have caused us to want to engage an auditor to look more deeply into what’s going on and help get to the root of it and see how we can help the district to address those issues,” she said.

Concerns were raised during the meeting about the transit district’s accounting software, which has reportedly led to errors and discrepancies.

Some reimbursement funds, Criswell said, are being withheld from the transit district until the audit is complete. The transit district is also set to receive more funds from the state through the next two-year budget cycle.

The board inquired about different avenues to continue operations.

“This will destroy a lot of what has been done here. The riders suffer from this and the employees. It doesn’t seem like we have a backup,” Pamela Alegria, a board member, said.

But Hazen reiterated concerns about the lack of cash flow and being able to pay employees.

“The board is going to need to make a decision today,” Hazen said. “ … I don’t have a source of money right now to operate.”

‘Gut punch’

Several transit district employees were emotional as the decision became inevitable.

“This has been a gut-punch meeting. Last week was a gut punch,” Kathy Kleczek, a transportation options specialist, said. “All week, all we heard was everything is fine, everything’s been fixed, don’t worry, it’s all OK. And that was through the grapevine, no direct communication. So to hear this today is a gut punch. It’s important that you know that.”

Nicholle Searle, a paratransit supervisor, said she would have to contact 60 riders who rely on paratransit service to let them know that they will not have transportation.

“I have elderly and disabled riders who are expecting rides on Monday,” she said. “I have riders who are going through dialysis, lifesaving treatments that they need to prepare, ask family, ask neighbors and being — excuse me, but — willy-nilly about … a decision — these people don’t have that kind of time to sit and wait.”

Jason Jones, a mobility manager, recommended that the transit district write letters to private medical transportation providers to request lowering their rates to meet the needs of transit district riders, which Hazen said he would do.

The transit district has struggled over the past few years to attract bus drivers. Jennifer Geisler, a supervisor, warned that some drivers may not return if the transit district gets back up and running.

“Drivers are leery. We already have a handful that were planning on retiring. If we close they will not come back,” she said. “We might find seven to run service, but I don’t know if we could do a full service that we have on the road today.”

Outside the Astoria Transit Center on April 27, riders were disappointed.

Scott Staples, of Svensen, said he uses the bus to get to work.

“Everybody will tell you that it would be devastating to the town,” he said. “It’s ABC, with no public transportation, a lot of people can’t get to jobs.”

Tom Estes, of Warrenton, said he uses the bus to get to work, run errands and attend doctors’ appointments.

“Well, that sucks,” he said of the transit district’s decision.

Estes also worried about the impact on older people.

“I know a lot of older people that use it,” he said. “And that’s gonna hurt a lot of older, elderly people, because how are they going to get back and forth to their doctors’ appointments or the grocery stores?”