Inflated ridership figures will cost the New Castle Area Transit Authority $1.9 million in state operating subsidies.
To collect the overpayment of state funds, the Pennsylvania Department of Transportation will reduce its payments to the authority by a total of $1,968,104 over a two-year period beginning with the current fiscal year, according to PennDOT deputy secretary Toby L. Fauver.
The subsidy will be cut by $984,052 in the current fiscal year and by the same amount in 2015-16. The authority’s fiscal year begins July 1.
The total owed to the state represents an overpayment of $1,574,483 in state funds plus a 25 percent penalty. Fauver said regulations under Act 44 impose a 25 percent penalty. Act 44 is the state law governing allocations to transit agencies.
In addition, the miscalculation in ridership resulted in an overpayment of $476,846 by the state for capital improvements, Fauver said. As a result, the authority’s funding for capital improvements will be reduced by that amount, leaving a balance of $13,175.
The Associated Press initially reported last week that the authority owed about $1 million.
Three other transit agencies are being required to return money to the state for inflating ridership numbers of people 65 and older, according to the Associated Press.
Leonard Lastoria, general manager of the New Castle authority, said of the cutback, “It shouldn’t affect us at all.”
He said the authority will make up the loss with reserve funds, which exceed more than $2 million.
As for the loss in capital improvements funding, he said that should have no immediate effect.
“We’re in pretty good shape,” he said.
The authority has ordered five more hybrid buses with the aid of federal money, Lastoria said. Plus, it previously approved the purchase of a heavy duty truck with state funds.
He added operations will not be affected, nor will there be fare increases or cutbacks as a result of the state’s action. However, he didn’t rule out any service changes if there are route adjustments.
According to PennDOT, the authority’s ridership calculations resulted in grant allocations totaling $24,360,980 from the 2007-08 fiscal year through the 2013-14 fiscal year.
PennDOT’s recalculation reduced the grant amount to $22,786,497, for a difference of $1,574,483.
The transit authority’s budget for the current year is $7.1 million. Local revenue, most of which is generated by fare paying passengers, is projected at $865,043, leaving a deficit of $6.2 million.
State and federal funds make up the bulk of the deficit, leaving $191,333, which is covered by contributions from the city of New Castle, Lawrence County and Neshannock, Shenango and Union townships.
City council initially approved $145,716 as the city’s share of the local match. It later approved an additional $4,032 to cover part of an anticipated shortfall of $19,782 in the current year.
The county commissioners also committed $15,750 in county money to cover the remainder of the shortfall.