NewsLocal News

Actions

Norfolk’s buses stopped running after $1 million went missing. The main suspect is still on the run.

Norfolk Bus Photo 3.jpg
Posted at 4:02 PM, Feb 25, 2023

NORFOLK, Neb. (Flatwater Free Press) — One of the last bus drivers in Norfolk begins his day by taking Nancy Stehlik to work.

Wrapped in a purple coat and earmuffs, Stehlik inches her walker onto the small bus’s wheelchair lift.

Driver Neil Schlecht pushes a button and the lift whirs down, placing Stehlik outside of Walmart, where she works as a cashier.

Schlecht spends the rest of his shift on a recent Monday crisscrossing Norfolk – a pick up at Odd Fellow Rebekah Manor, an assisted living facility. A drop off at Walmart. The doctor’s office. And then back to Odd Fellows again.

He takes seven people to work, clinics, church, the grocery store, home. It’s just as he long did for North Fork Area Transit, the bus service which until recently used 35 buses and vans to give as many as 10,000 rides a month.

As Schlecht talks and jokes with his riders, it feels like any normal day on his route. But the bus in Norfolk has become undeniably abnormal.

“This is just a smidge of what we used to do,” Schlecht said.

On Jan. 6, the buses serving Madison County stopped operations for a reason that shocked riders, drivers and some area leaders: The transit system’s general manager, Jeff Stewart, had allegedly stolen as much as $1 million, much of it taxpayer money, from the transit nonprofit. A warrant had been issued for his arrest.

But he’s nowhere to be found – authorities believe he’s fled the country. His company cell phone and laptop are also missing, according to court records.

Now, Schlecht drives a lone bus around Norfolk, bought in January by a city council member to make sure people without transportation weren’t left entirely stranded.

North Fork Area Transit’s swift end left 60 employees without a job. And it left hundreds of residents without reliable transportation – residents including many Norfolk senior citizens, people with disabilities, students and single parents.

The organization has tried crowdfunding to cover its debts and bring regular bus service back. It’s racing to raise $500,000 in local funds by the end of February, the match needed to secure an equal donation from the Johnny Carson Foundation. Board members of the transit nonprofit say the full $1 million would allow buses to begin running again by mid March.

As of Thursday, it’s still $100,000 short of the money needed.

The investigation into Stewart and the transit system’s finances is ongoing.

But emails obtained by the Flatwater Free Press shed light on the days before Stewart’s disappearance, as board members of the Norfolk-area transit nonprofit began to belatedly notice financial red flags.

Norfolk Bus Photo 1.jpeg
Ramona Kaup (left) and Miles Jenkinson (right) visit while riding the bus in Norfolk along with passenger Shelly Ford (background) on Wednesday, Feb. 22. Bus service has been mostly interrupted in Norfolk, a city of nearly 25,000 residents, after the transit authority’s director allegedly stole as much as $1 million in taxpayer money and fled the country. Photo by Darin Epperly

Those emails show state employees growing increasingly frustrated – and concerned – with Stewart’s questionable financial management as the 2022 holiday season neared.

For example: The transit authority, with an annual budget of $3.4 million, didn’t have an accountant. Stewart was doing the books – and allegedly cooking them – himself.

“It’s unfortunate. It closes down and then you find out how many people were utilizing that service, so it’s a huge disappointment for the community,” said Shane Clausen, a Norfolk city council member.

Public transit in Norfolk has been run by a nonprofit separate from the city and county for more than 50 years. It’s a setup common for small-town transportation, said Bill Bivin, statewide mobility manager with the Nebraska Department of Transportation.

Norfolk started small, with a bus for the elderly and individuals with disabilities.

In 2021, it re-branded and expanded, after the state flagged northeast Nebraska as needing more public transportation. That September, it became North Fork Area Transit.

The public transit nonprofit’s board hired Stewart, who had previously run a school bus service in Idaho, in January 2022.

With the expansion came an influx of funding: A total of $427,074 from the City of Norfolk since October 2021, with more money promised annually; a $750,000 one-time payment from Madison County in July 2022, from COVID relief funds.

In the 2022 fiscal year, North Fork Area Transit took in $944,035 from the federal and state government, according to the Nebraska Department of Transportation. From 2020 to 2022, it received an additional $920,997 in federal COVID relief funds.

“We’re putting a lot of trust in you, so there’s a lot of weight,” Troy Uhlir, a Madison County commissioner, told Stewart when the board approved its contribution last July.

In two years, the bus service grew to include three routes in Norfolk and door-to-door by-appointment pickups. It added two regional routes to Madison, Lindsay and Wayne for employees at Tyson, Lindsay Corporation and Great Dane. And it transported students for both Norfolk and Pierce Public Schools.

In its first year after expanding, the transit’s buses made more than 70,000 trips, a 72% increase from the year before.

“As the system grew and made itself more accessible within the community, [the need] was eye-opening in a lot of ways,” said Josh Moenning, mayor of Norfolk.

But by last December, when buses were averaging nearly 10,000 rides a month, board members and state transportation staff were emailing each other alarmed with the transit system’s finances, according to emails obtained by the Flatwater Free Press.

“Many red flags from our end and I am sure your end too,” Corinne Donahue, project manager for the state’s mobility management team, wrote to transit board members on Dec. 5. “One item to consider is reviewing or quietly requesting from the insurance company the policy to see if there is coverage for employee theft/embezzlement.”

Days later, Department of Transportation staff flagged missing signatures on paperwork submitted by Stewart for monthly federal and state reimbursements. Receipts and fuel invoices were missing. Revenue and deposits didn’t match up. Pay stubs were incorrect.

Then board leaders say they discovered transit funds going toward personal spending, including charges at casinos, airline tickets and hotels.

By Dec. 15, Stewart was suspended.

The next day, a warrant was issued for his arrest for the alleged theft of up to $1 million between April and December 2022.

The board has since hired an outside accountant to handle all finances. The mobility management team is working to secure federal reimbursements to help close the bus system’s debts. And the investigation and search for Stewart continues. Police believe he fled the country.

“This is still an ongoing investigation, and there’s some questions that can only be answered by speaking with him,” said Todd Volk, Madison County Sheriff.

In the meantime, bus riders have had to find another way around Madison County.

Norfolk Bus Photo 2.jpg
Neil Schlecht drives the bus in Norfolk on Wednesday afternoon, Feb. 22. Schlecht is one of the city’s last remaining bus drivers after bus service was largely halted in Norfolk. He now drives a bus paid for by a city councilman and his brother, who bought the used bus off of Facebook Marketplace. Photo by Darin Epperly

Cecilia Herada relied on public transit for four years. A single mom of two, she used it to get her children to daycare and doctors’ appointments. It’s how she got to work.

The transit provided security for those who can’t afford a car, she said. Now Herada has to rely on a patchwork of rides from bus driver Schlecht, who sometimes gives her a post-shift lift in his car, and from her relatives.

Herada is far from alone. Norfolk’s bus system served car-less college students trying to get to class. Senior citizens unable to drive used it to get to clinics and dialysis appointments. It served as a key part of independent living for individuals with disabilities, according to disability advocates in the city.

“This program was there to support families in Norfolk that were not able to otherwise afford their own car,” Major Jesus Trejo with the Salvation Army said. “They were kind of left stranded. That sudden stop of services, to them, was devastating.”

A few local Good Samaritans are trying to help.

Just two weeks after North Fork Area Transit suspended services, Norfolk city council member Shane Clausen and his brother Aaron began the Fellowship Transit – after buying a lone 14-passenger wheelchair-friendly bus they found on Facebook Marketplace 140 miles away in Sioux Falls.

“Lo and behold, we were in the transit business in just a few days,” Shane Clausen said.

The bus is free to riders, with operating costs coming out of the Clausens’ pockets and small local donations. But it’s only a short-term fix, Shane Clausen said.

“[The cost] adds up, but our goal is to only operate (until) NFAT gets up and going again,” he said.

Ponca Express, a bus service run by the Ponca Tribe, had already been offering an appointment-based bus service in Norfolk. They’ve continued running, but are spread thin now that North Fork Area Transit is in limbo, Donahue said.

This week, the Norfolk City Council pledged $150,000 if the bus service nonprofit is able to raise the remaining money to match the Carson Foundation’s $500,000 matching grant.

If bus service does resume, it’ll likely be a scaled back version of what it once was – something that was on the table even before the discovery of the missing funds, according to emails between board members. The transit system’s budget would be reduced from $3.4 million to $2.5 million.

If it resumes, another change will be made: All finances will be processed through an external accounting agency, Donahue said.

If the bus system can’t raise enough funds to get back to operating, the board will have to decide whether to shut down entirely, or declare bankruptcy, she said.

As the future of Norfolk’s bus service hangs in the balance, Schlect continues to drive the bus bought by the Clausens every weekday.

The bus driver listens to classic rock as he takes riders to their destinations.

In the middle of his route, an ad interrupts the music: “Our community needs North Fork Area Transit,” the voice says. “And now is the time to show your support.”

Schlecht turns the volume up on the commercial, points to the speakers, and steers the bus to his next stop.

The Flatwater Free Press is Nebraska’s first independent, nonprofit newsroom focused on investigations and feature stories that matter.

Download our apps today for all of our latest coverage.

Get the latest news and weather delivered straight to your inbox.