Island Transit will hire an outside consultant to conduct a study on whether it makes sense to charge fares on the island’s buses.

When that study will happen and how it will be funded are unanswered questions, but members of IT’s board of directors made it clear during a special meeting Friday that the study will happen.

“I think the community deserves to have this study,” said Island County Commissioner Helen Price Johnson, a member of the transit board.

Price Johnson requested the special meeting in order to discuss the ongoing financial problems that forced the agency to take out loans, cut routes and lay off employees. She is going to be absent from the regular meeting next Friday.

Board members and Rose briefly discussed the state audit.

Rose explained that she and staff members are scrambling to find all the necessary paperwork for state auditors, who are doing an accountability audit.

Chairman Bob Clay said he authorized auditors to spend an extra 100 hours on the accountability audit to get to the bottom of the unforeseen financial problems; it will cost IT an extra $8,400.

Thomas Shapley, spokesman for the state Auditor’s Office, said he expects the audit report to be completed in mid-October.

The board also decided to have monthly workshops, in addition to regular meetings, for the rest of the year. They created a new finance subcommittee and appointed Island County Commissioner Aubrey Vaughan and Langley Councilman Jim Sundberg to it.

Oak Harbor Mayor Scott Dudley said Councilman Jim Campbell, the council’s representative on the IT board, is on vacation for six weeks. He asked if an alternate can be appointed to ensure the city is represented on the board; the board said staff will research the issues and work with the mayor.

The board entered executive session at the end of the meeting to discuss potential litigation and the performance of a public employee.

Director Martha Rose has come under fire for her role in the financial mismanagement.

Rose earns $118,000 a year and has been with Island Transit for 26 years.

The meeting became tense when the board discussed new financial statements Rose presented. She said the budget numbers on one report aren’t accurate because of amendments, but she was presenting them just to show the board the format.

Board members were clearly upset, asking why the budget would show a $1.2-million deficit and why the numbers aren’t accurate. Price Johnson and Clay, a Coupeville councilman, maintained they didn’t approve a budget with a $1.2-million deficit.

Rose countered that they did. Price Johnson and Clay appeared confused by the response.

Rose said the budget called for the agency to spend its reserve account on the facility project. The problem, she said, was that the reserve account was depleted by operating expenses, “unbeknownst” to her and board members.

Rose said she relied on the former finance manager, who has been fired, to report any cash-flow problems.

“My mistake was trusting the finance manager,” she said.

Her comment drew groans from members of the audience.

Price Johnson said she appreciates that the financial statements now clearly separate capital and operation costs.

“It’s one of the issues that lead to the problem,” she said. “The differences weren’t clearly defined between the two.”

Price Johnson and Vaughan stressed the toll service cuts are having on families and paratransit riders, especially on South Whidbey.

Rose said staff members are restructuring routes to fill as many gaps as possible. She said the changes must go through the public, so she doesn’t expect changes for three months.

Price Johnson suggested smaller or temporary changes as quickly as possible to help those in need.

As for the study, Rose suggested that the agency hired an outside consultant to study whether it makes financial sense to charge fares on buses.

In the past, Rose insisted it doesn’t make financial sense to collect money because of the cost of training and infrastructure, as well as potential loss of ridership.

Rose said she plans to apply for a grant to fund the study, though it would require matching funds from the struggling agency. She estimates the cost at $75,000.

Price Johnson insisted that the study be done, even if it means waiting until Island Transit’s books are in order.

The agency will pay off its loan, which board members took out to cover operating costs, next June. At that point, Island Transit should be on stronger financial footing.

Rose is also applying for an operations grant that could solve the financial problems sooner.