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Chambersburg Transit Authority sued for back funds

More than a $175,000 sought

More than a $175,000 sought

October 22, 2006|by DON AINES

CHAMBERSBURG, PA. - The Chambersburg Transit Authority ceased operations more than two years ago, but a Lebanon, Pa., company has filed a lawsuit to try and recover more than $100,000 it is owed for buses sold to the dormant bus line.

M.A. Brightbill Body Works Inc., which sells municipal and commercial buses, filed the suit in Franklin County Court recently, seeking the balance of $177,106 it was to be paid for selling the authority two 26-passenger buses in 2001.

The bus line, which served Chambersburg and Waynesboro, Pa., stopped running in July 2004, and the board of directors resigned after the authority piled up hundreds of thousands of dollars in debt over the previous five years.

According to a 2003 audit, when the authority's debts began to mount, state and federal subsidies meant for capital purchases - such as buses - instead went to pay for day-to-day operations.

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"They are owed the money. No one is disputing that," said Thomas Finucane, the solicitor for the Borough of Chambersburg, which also is named in the suit, along with the Borough Council.

"The question is, what does the transit authority have in terms of resources or the power to raise resources?" Finucane said. "The short answer is none."

The suit states that after the buses were delivered, the authority failed to make payments, and Brightbill added a 1 percent per month finance charge onto the unpaid principal. The authority was able to pay the added finance charge for a time, but failed to make payments after January 2003, according to the suit.

Brightbill in January 2004 received a court judgment against the authority, which was ordered to pay the $177,106 plus interest, according to court documents.

The authority later ceased operations, and Brightbill repossessed the buses, selling them for a total of $78,000, according to court records.

The suit states that the borough "has a duty to appoint a governing board for the authority so that the authority can conduct business ... until such time as the authority satisfied all its debts and may cease operations."

An authority cannot declare bankruptcy, but also cannot go out of business without satisfying its outstanding obligations, according to the suit. The court judgment against the authority, however, cannot be satisfied because of its "lack of a governing body," according to the suit.

"They're not asking the borough for any money," Finucane said. "We have no obligation to pay the authority's debts."

"We could appoint people, but the question is, is anybody going to agree to serve?" Finucane said.

The litigation will be discussed in executive session during Monday's borough council meeting, Finucane said.

Borough Council President William McLaughlin said he could not comment on the matter because it is the subject of litigation. The attorney representing Brightbill could not be reached Friday.

The Chambersburg Transit Authority was created in 1991 to provide public transportation in the borough, and expanded service to include Waynesboro in 1997.

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