Transit districts seek economies of scale through proposed merger
Estuary Transit District, better known by the "9 Town Transit" logo emblazoned on its buses and vans, is poised to absorb Middletown Transit District in what officials say will be a larger and more cost-effective operation.
The move was put in motion by a 2020 report from the Lower Connecticut River Valley Council of Governments, the regional planning organization that recommended merging the two quasi-public agencies into "one integrated district to achieve a more efficient and sustainable approach to delivering transit services" in the region.
Estuary Transit District currently serves Chester, Clinton, Deep River, Essex, Killingworth, Lyme, Old Lyme, Old Saybrook and Westbrook. The consolidation would add Middletown, Middlefield and Durham, the district said, with the possible addition of six other Connecticut River Valley towns in the future.
The consolidation would combine the staff, budgets, governing boards and all operating and capital assets of both districts under the Estuary Transit District name, according to a summary from a joint committee of both governing boards. A new name and logo will be selected for the rebranded organization.
The summary specifies that no existing positions will be cut due to the consolidation.
Joseph Comerford, who already serves as executive director of both transit districts, said this week that consolidating into one entity would save about 8% in operating expenses and about 12% in facility costs compared to operating independently. He said that consideration is important to the state Department of Transportation, which funds about 60% of each district's operations.
Comerford is employed by First Transit Inc., a national transportation provider brought in by the state to salvage operations at Estuary in 2008 and Middletown in 2017, at the request of each group's board of directors.
The council of governments described Estuary as being in "a strong financial position" by the time the report was produced. It said the Middletown district had made "significant progress" toward financial sustainability and maintaining a positive cash flow, but still owed the state $900,000.
The debt will be forgiven by the state once the expansion occurs, according to Estuary.
The recommendations from the regional council of governments also include the construction of a new operations and maintenance facility in Middletown and a satellite operations facility proposed for Westbrook, at an estimated cost of $29 million. The report estimated another $1.6 million would be required to support consolidation through one-time projects and studies.
According to Comerford, the federal government covers 80% of all capital expenses and the state covers 20%.
Comerford said the state DOT and district have come to a verbal agreement about state funding but there has been no formal, written confirmation. Based on the verbal agreement, he said there would be no anticipated increase in matching funds from participating towns or change to the formulas for local contributions.
The state DOT provided a statement about the agency's commitment to improving regional transportation options and increasing efficiencies. "The new combined transit district will be managed by one general manager and administrative staff, which allow more resources to be directed to transit services," it said. "While the merger does not require DOT approval, the Department will provide technical support and funding for service and capital investment in the transit district's vehicles and facilities."
Estuary Transit District currently has 25 employees and a fleet of 18 vehicles as part of its annual $2.5 million budget, the transit district said. It would expand to 50 employees and 38 vehicles, with a $6 million budget, when it takes on Middletown's operations.
Middletown Transit District carries an average of 854 passengers per weekday, with an average of 95 people per route. Estuary's 9 Town buses carry an average of 292 passengers per weekday, with an average of 58 people per route.
Both districts provide bus routes, on-demand Dial-A-Ride services and accommodations for those with disabilities. Estuary currently offers a free shuttle in limited locations that can be scheduled using a smartphone app.
Stops along Route 156 on a line that runs from New London to Old Saybrook include Old Lyme Marketplace, Florence Griswold Museum, Lyme Art Academy, Old Lyme Shores, Flanders Four Corners, downtown New London and the New London Transportation Center.
Officials in Lyme and Old Lyme on Monday approved resolutions supporting the consolidation at their respective selectmen's meetings.
Old Lyme First Selectman Tim Griswold said "bigger is better" in terms of providing economies of scale that would result in reduced costs. The resolution endorsed by all three selectmen also referenced expanded service areas, frequencies and hours and new capital projects that will help make the organization more efficient.
"So it seems with these two relatively small transit districts, that would be a very sensible thing to do," he said.
There is currently $16,045 in the Old Lyme budget for the Estuary Transit District.
Lyme First Selectman Steve Mattson told The Day on Tuesday that "there's not a whole lot of option" when it comes to moving forward as one entity.
He said he hopes that an "infusion of cash" from the state DOT will allow both groups to improve their operations and staffing — "and hopefully that will translate to improved routes and ridership." A separate document from the council of governments focuses on service improvements that could be implemented once the consolidation occurs.
Mattson said the current budget in Lyme includes $3,350 for the transit district.
He noted residents in Lyme use the district's Dial-A-Ride services, but there are no dedicated bus routes in town. Dial-A-Ride offers door-to-door public transit service for residents who live outside the bus route and for those who require assistance beyond the curb, according to the district.
Comerford said officials in Lyme and Old Lyme are among the first to officially pass resolutions in favor of the consolidation. Killingworth officials chose to make a motion in support, and other towns were planning to discuss the topics at their municipal meetings.
He said Estuary's board of directors has "the full authority" to vote in favor of consolidation without local approval, but board members "want to know they're voting the will of the town, not just their own."
Griswold is Old Lyme's representative on the board and Susan Tyler represents Lyme.
Comerford pointed to the need for adequate staffing as a key factor in the consolidation plan.
"There was a reason the study was conducted in the beginning, and it's because we've had problems in the past," he said. "And the study indicated there's a lot more strength in the larger size." He said both transit districts at times have relied "heavily" on one or two people due to low staffing, which can make for a difficult transition when employees leave if "you don't get someone in who has all that knowledge."
The consolidation plan budgets an extra $1.3 million per year to fund new management positions and to compensate for benefits that are currently more generous in Estuary Transit District than Middletown's district.
Comerford said they are on track to have Middletown Transit District join the Estuary Transit District by the end of the year, though the process of absorbing the organization will be gradual over at least the next year.