HRT ‘true-up’ costs Norfolk $2 million; council outraged

NORFOLK, Va. (WAVY) — Hampton Roads Transit went $5 million over budget in 2016 — the largest amount in years.

Now, six Hampton Roads cities have to fork over cash. Some council members are outraged.

HRT calls it a “true up” — a move to cover the gap between revenue and expenses. Nine out of 17 years, the true up meant giving back to the cities. This year, it means a multi-million dollar bill, the largest of which is going to Norfolk.

HRT has asked Virginia Beach $1.6 million, Newport News $1 million, Hampton $640,000, Chesapeake $125,000 and Portsmouth $39,000.

The amounts are based on how many service hours the cities operate.

HRT asks cities for over $5 million to make up for ‘budgetary challenges’

The bill for buses in Norfolk shocked Councilwoman Angelia Graves.

“I felt like this was dropped in our lap with no warning,” she said.

For Norfolk, it will cost $2 million to pay the shortfall. That prompted choice words by Graves for HRT’s CFO.

“In corporate America, William Harrell may not have a job this morning,” she said.

CFO Brandon Singleton explained the problem.

“I think council members are definitely entitled to their opinions,” he said. “But, I do not plan to resign.”

Gallery: HRT budgetary challenges

How did HRT end up with $5.3 million deficit? Singleton explains the first problem: “In terms of our ridership, we did not see the level of our ridership that we anticipated.”

The revenue from that fell more than $2 million lower than expected. Then came the spending problem. Singleton started by explaining the aging bus fleet.

“Once they get to a certain age, they are expensive to maintain,” he said.

Singleton said they added overtime to it and the expenses went more than $2 million above projections. It all adds up to a true up of $5.3 million for all the cities.

“Hampton Roads Transit does not build a cash reserve to handle ebbs and flows like this,” Singleton said.

Councilwoman Graves said they should have been warned that this deficit loomed.

“It seems like if we were getting to that number soon in the fiscal year, that they would have said something,” she said.

Singleton said they told all the cities.

“We provide — on a monthly basis — our financial report to our commission,” he said.

Norfolk’s councilman on the HRT Commission is Paul Riddick. 10 On Your Side called him to ask what he knew about this deficit earlier in the year. He has not returned our calls.

Either way, bus service from 2016 will cost Norfolk $2 million in 2017.