Even with the passage of Prop. 1 all but confirmed, the debate between local forensic accountant Tiffany Couch and C-Tran remains unresolved over whether the agency truthfully needed the 0.2 percent sales tax hike to avoid service cuts.
Last week, Couch issued an independent financial report in which she argued that C-Tran had $47 million in unrestricted cash reserves and, based on current cash flows, could cover existing bus service for 20 more years without additional tax revenue if it backed away from more than $11 million in capital projects associated with high capacity transit.
“If C-Tran maintains current levels of bus service, and foregoes expenses related to High Capacity Transit (HCT) initiatives, reserve funds will remain intact through 2023,” she wrote.
In a follow-up email to Couch, C-Tran board chair Marc Boldt expressed skepticism with Couch’s conclusion, but also a willingness to get to the truth.
“You have, in my view, told the public that C-Tran employees have convinced the board to place a measure on the ballot when we have excess cash,” Boldt wrote. “I have spent a lot of time this year on our budget numbers as well as the state auditor. I do have more faith in our numbers than yours, however I will seek to find answers to the truth and hold either you or C-Tran accountable.”
Boldt subsequently asked Couch to meet with C-Tran staff and County Auditor Greg Kimsey to go through the numbers together, although the meeting has yet to occur.
Couch owns the Vancouver-based firm Acuity Group PLLC and specializes in fraud investigation. (COUV.com owner David Madore has been a client of Acuity Group, but was not involved in the C-Tran white paper). In her analysis, Couch concluded that C-Tran was on track to “burn” less than $3 million of its $46.9 million in cash and investment reserves during its 2011–2012 biennium budget. C-Tran had assumed net losses of $13.2 million, which Couch thinks is inflated.
“C-Tran’s actual September 2011 year to date financials indicate that the agency is performing significantly better than the projected net losses they feared,” Couch wrote.
C-Tran, however, says Couch erroneously assumed that millions of dollars in capital projects were connected to high capacity transit projects, throwing off her calculations.
For example, Couch thought a $2.7 million capital expenditure for “Tri-Met Collaboration” involved light rail. However, C-Tran says the expenditure will pay to replace aging bus fare boxes with electronic versions that will accept cash or debit cards, a move C-Tran’s sister transit agency TriMet is pursuing in Portland, according to C-Tran’s director of development and public affairs, Scott Patterson.
“The fare boxes are 20 years old and no longer supported by the manufacturer,” wrote Patterson in an email.
Another item Couch connected to high capacity transit was an unspecified $6.2 million for local grant matches. Patterson said the grants have yet to be identified, but the matching funds won’t be used for capital projects related to Bus Rapid Transit (BRT) on Fourth Plain Boulevard or light rail associated with the Columbia River Crossing project.
Patterson explained that C-Tran expects the Federal Transit Authority’s Small Starts Program to pay 80 percent ($62 million) of the $78 million cost of constructing a BRT line on Fourth Plain, due in 2014. C-Tran’s “local match” will come in the form of a $15.6 million loan, but that’s assuming passage of a 0.1 percent sales tax increase for high capacity transit the C-Tran Board expects to put on ballots in 2012.
As for light rail, the $6.2 million in question is dedicated to grants for capital projects, but the C-Tran Board has decided to only ask voters to fund the operation and maintenance of light rail, not construction.
“The FTA grants…are for capital only, so you can see why we can’t and won’t use the $6 million for CRC,” wrote Patterson.
Couch responded that even if the cost of those capital expenditures is added back into the 2011–2012 budget, the situation is still not as dire as C-Tran described.
“It only means they’ll run out of cash reserves two years earlier,” she said. “I’m content to watch and see what C-Tran does.”
County auditor Greg Kinsey studied Couch’s report this week and said that in addition to some ancillary issues, the primary point of contention appears to be how to categorize these $11 million in capital expenditures.
“Tiffany has done a very good financial analysis,” Kimsey said. “It appears to me that the point of dissension regards the category of planned capital expenditures and whether these capital expenditures are related to BRT or HCT or…to bus service.”
See our continuing coverage of the Columbia River Crossing Light Rail project.
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