LCTA surplus seen as fueling serviceā??s future

December 26, 2012

While governments large and small face year-end deficits, how is it that the Luzerne County Transportation Authority is sitting pretty on a $7 million surplus?

We got there through solid fiscal management and … having employees being much more productive. It's from running the authority like a business, Executive Director Stanley Strelish said in a recent interview.

Authority member Sal Licata and Chairman Paul Maher touted the surplus, which amounts to nearly 60 percent of the authority's annual operating budget, at the November authority meeting.

The board even voted to provide the authority's 150 employees with a free catered holiday lunch last week at a cost not to exceed $2,000 in celebration of their hard work in the successful consolidation of the Luzerne County Transportation Department into the authority this year.

But the next day, Strelish said he nixed the offer, fearing it would lead to criticism from the public or politicos targeting the authority.

The LCTA has come under scrutiny in recent months after board member Patrick Conway alleged that bus drivers were padding ridership numbers at Strelish's direction to increase state funding – an allegation Strelish denies.

Since then, senior ridership numbers plummeted and the state launched an investigation.

Strelish said he has heard criticisms and complaints about having such a sizable surplus since it was reported in The Times Leader the day after the November meeting, so he eagerly agreed to a reporter's request to explain how it developed and why he wants to maintain it.

Shortfall in 2005

The year before Strelish was hired as assistant executive director in 2005, the authority raised fares and cut service, citing a $450,000 budget shortfall.

By the time he took the reins as executive director a little over a year later, the authority was making headway on increasing ridership and expanding routes. And then, Strelish got busy looking for ways to save money and make the authority more efficient.

I went over this entire facility from water coolers to first aid kits to fuel, Strelish said.

With the board's approval, the authority began purchasing diesel fuel through the futures market in 2006.

The first year, we saved approximately $350,000. Over the last seven years, conservatively, we saved over half a million dollars by purchasing diesel fuel the way we did, he said.

Over the last four years, the authority saved about 20 percent on fuel costs for each diesel-electric hybrid bus the authority had bought under Strelish's recommendation and put into operation.

The hybrid fleet now numbers 13, and Strelish pointed out that the authority used less than $20,000 of the local share money provided by Luzerne County to buy them, with each costing nearly $560,000.

The Federal Transit Administration picked up the brunt of the cost, with some funding from the Pennsylvania Department of Transportation.

Some other cost-saving measures Strelish implemented since 2007 were realized through moving health care administration in-house, increasing the auto insurance deductible, reducing the workforce through attrition and increasing the employee health care insurance contribution.

More savings expected

More recently, with the consolidation of the county's Shared Ride Program into the authority, Strelish said having all maintenance and repair work done in-house by authority mechanics is expected to save about $100,000 per year.

The county Transportation Department previously had its 60 vans serviced by privately owned auto service providers.

And, by recently buying and installing a 10,000-gallon fuel tank and pump at the authority garage, fueling the van fleet is saving the authority about $200 per day, Strelish said.

Also over the years, the authority has eliminated nine positions – two administrative and seven full-time drivers – through attrition while not hurting our service to the people who need it, Strelish said.

And beginning in March, when a contract runs out with a tire supply company, the authority will cease leasing bus tires and begin buying them and re-treading tires for use on the rear end of the buses to save even more money, Strelish said.

Strelish also noted that in performance reviews by both PennDOT and independent groups, the authority was informed that it was understaffed by two administrators. However, we're able to get the job done. Our staff is capable and willing, he said.

Keeping the money

So, that's partially how the surplus came about. But what is the purpose of keeping it?

Strelish said about $3.5 million will be used for the employee pension plan over a period of about 15 years. Strelish said it would be imprudent to put the entire amount into the pension fund now in case the stock market takes a dive.

It's safer to gradually add it to the pension fund using a ‘smoothing process,' he said.

Strelish also said he hopes that the authority can purchase land adjacent to the authority complex on East Northampton Street in Kingston that can be used to accommodate the vans for the Shared Ride Program. Currently, the program is based out of a county-owned property in Forty Fort.

And, of course, we have to have money available to purchase new buses in the future, Strelish said.

He said people have asked if the authority should have such a large surplus and wanted to know why it's needed.

My major concern is the fact that we have good employees who have good jobs and we have people who need the service we provide. But it's not only for today, it's for the future, Strelish said, adding that he loves his job and the challenges it presents, but he won't be in it forever.

When I leave here, I want to make sure (the authority is) fiscally sound, so when a new administration comes in, they can look at the past and the way we've done things and continue to do so in the future, he said.


After reviewing authority finances and spending practices in and around 2006 and 2007, LCTA Executive Director Stanley Strelish implemented measures to produce these savings.

• $20,000 per year – Moved administration of health insurance in-house from contractor with no additional hires. Saved more than $100,000 in the last five years.

• $120,000 over five years – Increasing deductible for collision and comprehensive insurance on authority vehicles. Saved $16,000 the first year; increased as insurance premiums increased 10 percent annually.

• $60,000 per year – A maintenance employee who retired was not replaced, saving about $60,000 a year.

• $25,000 – A one-time parts inventory reduction.

• $58,000 annually – The assistant executive director position was eliminated in 2007, saving about $43,000 in salary and $15,000 in benefits annually.

• $70,000 over five years – Withdrew membership from the American Public Transportation Association.

• $60,000 to $70,000 – Eliminated a one-week maximum vacation buyout for administration employees, saving $7,000 the first year and increasing each year afterward.

• $30,000 to $50,000 – The employee health care insurance contribution was increased from 5 percent to 15 percent, realizing these savings over five years.

• $340 per month – Making changes to first aid kit policy/contract. It used to cost $400 per month to have a company restock first aid kits; now, it costs $60 per month.

• $1,000 per year – Bidding out carpet rental/cleaning.

• $2,000 per year – Strelish declining the vehicle use privilege. He said the LCTA is the only transit agency in the state and possibly in the country that has an executive director that doesn't take a vehicle home.