Officials with TAPS announced Thursday that the transit agency have settled $57,552 in debts related to the demolition of its former office building in the 6100 block of Texoma Parkway. In September 2015, a mechanic’s lien was placed against TAPS property by Lloyd Plyler Construction for the demolition and other work at the site.
The demolition of the former office building was in preparation for the construction and development of a new multi-million dollar regional transit hub. However, those plans stalled amid a financial crisis that included more than $4 million in debt to creditors, the IRS and former employees, among others.
“We were able to pay this through a capital grant that was properly processed and properly received,” Grayson County Judge Bill Magers, who serves as the TAPS Board of Directors vice chairman, said Thursday.
Magers said the lien was unique with regard to its ongoing debt in that it represented one-time capital improvement costs and grants instead of direct operating grants and expenses. This expense came from another funding source unrelated to operations, Magers reiterated.
Rather than putting a lien against TAPS operations, Magers said this was instead related to a capital project grant through the Texas Department of Transportation. Through this grant, Magers said TAPS will be reimbursed for the one-time expense.
Magers said this debt also is unique in that it represents secured debt, where the remaining TAPS liabilities are unsecured.
The transit agency went through a financial crisis in the fall of 2015 that involved more than $4 million in outstanding debt, the resignation of former CEO Brad Underwood and the withdrawal of Collin County from the TAPS service network. In early 2016, TAPS temporarily suspended its service in order to restructure the organization and seek a new management provider. In March 2016, Transdev assumed daily operational oversight of TAPS.
Leading up to the financial crisis, TAPS operational expenses were in many cases not documented properly and in some cases funds were misspent for other projects. Magers thanked Transdev for helping sort out paperwork, and making this agreement possible. Magers also commended the board itself for its efforts on this agreement.
When asked about the plans for a new office facility, Magers said there is nothing foreseen in the near future. Looking back at when the regional transit hub was proposed, Magers described it as “not a very good vision to go after.”
“I can’t speak for the entire board, but TAPS has a long way to go before we look at new facilities,” Magers said. “TAPS is not in the business of building.”
As for TAPS’ other ongoing liabilities, Magers said there were no updates and that the transit agency is continuing to negotiate settlements with its creditors. Magers added that the agency simply does not have the operational funds to pay off all of its debts, necessitating the negotiations.
Previously, TAPS officials said there may be some difficulty paying off this debt using operational funds as its grants are for current expenses and cannot be used for past expenses.
The subject of the lien was discussed during the July meeting of the TAPS board during the public comments. In a letter from Richard Hose, who serves as a self-appointed advocate for former TAPS employees, he spoke about a lien placed by Lloyd Plyler Construction. Hose was not in attendance during the meeting, and the letter was presented to the board on his behalf by former TAPS driver Mark Ewig.
In the letter, Hose said the lien was not included in a recent audit report conducted by Louisiana-based accounting firm Kushner LaGraize. Hose wrote he was uncertain whether the lien was simply not discovered during the audit process or if the information was withheld by the board.
“The board of directors should, therefore ask that the audited financial statements be corrected for this significant item,” Hose wrote, emphasizing a need for accuracy. “… the general public or others of interest reading the certified audit report will be made aware of its existence.”
In an email to Magers, Transdev General Manager Josh Walker said the lien was as a part of the transit agency’s $4.18 million accrued liability. Additionally, the mechanics lien was not a “significant contingency” and did not need to be disclosed in the footnotes of the TAPS 2016 Fiscal Year Audited Financial Statements, he said.
“Transdev management and the board of directors conclude that the financial statements are properly stated and no revision is necessary,” Walker said.