BANGOR, Maine — The local agency that coordinates transportation funding and projects in the greater Bangor region is breaking away from Eastern Maine Development Corp., which has been its parent organization for the past quarter-century.

The Bangor Area Comprehensive Transportation System will be an independent nonprofit as of April 1, according to Art Morgan, Bangor’s city engineer and chairman of BACTS’ board.

BACTS manages federal and state transportation funding and coordinates projects in Bangor, Brewer, Veazie and major portions of Hampden, Orono, Old Town, Milford, Bradley, Eddington, Orrington and the Penobscot Indian Nation, according to its website. It currently has a three-person staff.

EMDC is a private, nonprofit economic development organization based in Bangor that provides various business support and workforce development services in Penobscot, Piscataquis and Hancock counties as well as a portion of Waldo County.

In addition to becoming a standalone entity, BACTS will also relocate from EMDC’s building, Norumbega Hall at 40 Harlow St., to new space it has leased in Brewer on Acme Road as of April 1, Morgan said Monday.

It was not a hasty decision, Morgan said. BACTS’ board has been considering for some time how to provide its transportation planning services to the greater Bangor area in the most cost-effective way, he said.

“It became more apparent the more we looked at it that we could reduce our cost of doing business if we were a standalone entity,” he said. “The cost of office space and services and those types of things all add up to allow us to be a more efficient, fiscally responsible organization.”

By breaking away from EMDC and moving into its own office space, BACTS will reduce its expenses from $445,493 to $372,783, for a total reduction of nearly $73,000.

That $73,000 in savings could be used on road paving projects, traffic signal improvement or road planning projects, Morgan said. He also said it’s possible BACTS could hire a fourth staff member, but still save money.

“Even creating a new job and making this move, we’d still be spending less money by almost $27,000,” he said.

Though EMDC has been struggling financially itself, Morgan said that’s not the reason BACTS’ board decided to become independent and move into its own space.

“The building itself is a very nice building, but with it comes high overhead costs,” he said. “From my point of view, Eastern Maine Development Corp. has always been a huge asset to the entire region. I look forward to working with them again in the future to enhance transportation needs, but have nothing but the greatest respect for that organization.”

However, minutes from BACTS meetings during the past year do reveal that the situation at EMDC did cause some concern among BACTS’ board.

In minutes from the June 19, 2012, meeting, it’s noted that BACTS’ governance committee had met recently “based out of the concern that EMDC may not be the best place to house BACTS.”

The minutes go on to report that, “All six members of the EMDC accounting department have resigned or taken other jobs in the last four or five months. … The junior accountant is currently the highest-skilled person left, and not sure if they can handle the workload. There are mistakes that are being made on invoices, and Rob [Kenerson, BACTS’ full-time director] has concerns.”

Kenerson was not available Monday for comment.

Minutes from BACTS’ Oct 12, 2012, board meeting report that, “Rob [Kenerson] is still concerned about the BACTS/EMDC partnership.” The reasons given for Kenerson’s concern include a misplaced contract and the fact that invoices totalling $1,500 owed to Rudman Winchell for April, May and June had not been paid by EMDC’s accounting department.

“Accounting staff assured Rob that all would be paid this week. EMDC has been reimbursed by MDOT for the April and May invoices but have not pay [sic] the consultant,” the minutes state.

Morgan admits EMDC has been going through a tough transitional period, which has caused some things to fall through the cracks.

“I wouldn’t say they aren’t making improvements, but in the past they have had a problem with paying bills, and that’s never a good thing,” Morgan said. “I think those things are probably fairly common, not unique at all to any organization that has personnel turnover. When you are used to the usual organizational structure and you lose a key player, things don’t happen as smoothly as they often have. That doesn’t mean EMDC is not a fine organization.”

Because BACTS has been working on becoming independent for at least a year, the impact of its departure on EMDC will be minimal, Michael Aube, CEO of EMDC, told the Bangor Daily News.

“You never like to lose anybody, but in this economy we certainly fully understand and appreciate institutions having to find places where there’s cheaper rent, cheaper services and I fully understand that,” Aube said. “I’ve had outstanding discussions [with BACTS’ board] and recognize that’s the choice they need to make in today’s economy.”

The loss of the three salaried positions, which will reduce the amount of money that goes toward EMDC’s overhead, has been taken into account in the current operating budget, Aube said.

The loss of rental income will have an impact, but Aube said the difference will be made up from the success EMDC has experienced from the Small Business Administration’s Community Advantage Program, which it has participated in since April 2012. Aube told the BDN in December that the loan program generates between $25,000 and $30,000 a month in service fees for EMDC.

Whit Richardson

Whit Richardson is Business Editor at the Bangor Daily News. He blogs about Maine business, entrepreneurs and the economy.