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State Auditor Says METRO's Financial Systems Fine
Tuesday, December 02, 2008 5:37 PM  

METRO train in front of downtown buildingA state audit report that examined METRO's finances for 10 months found that the transit agency is engaging in sound financial policies and has adequate processes in place to manage METRO's planned, long-term expansion for rail.

The audit, which began January 2008 and concluded October 2008, included METRO's General Mobility Program, financial reporting, ridership reports and performance audit reports. Under the General Mobility Program, METRO provides about $100 million every year to the region for new roads and infrastructure. The report was released yesterday.

Other major findings include:

 

  • Financial and performance reports for FY2007 were internally consistent and supported by the agency's information systems.

 

  • METRO complied with policies and procedures for travel expenses, General Mobility Program expenditures and long-term expansion.  

 

  • METRO consistently implemented recommendations from internal and external audits and reviews.

METRO worked closely with auditors and provided them with all available materials, said Frank J. Wilson, METRO president and CEO.

"We believe the preponderance of the findings were fair and accurate," said Wilson in a news release. "But there were some items that needed clarification, which are noted in our responses contained in the audit."

For example, the report states that "The Federal Transit Administration (FTA) noted that the plans for two federally funded light-rail corridors call for total borrowing that exceeds the Transit Authority's current debt capacity. The FTA determined that the Transit Authority had demonstrated its technical ability and capacity to develop and manage a third federally-funded light-rail corridor, but it noted that the schedule for that corridor project was optimistic when compared to the other two corridor projects."

Management at METRO vigorously disputes that.

In METRO's formal response, the agency pointed out the "FTA's statement incorrectly assumes that METRO borrows $4.6 billion. We and our financial advisors met with FTA on Sept. 11, 2008, to correct this error. The $4.6 billion figure is, in fact, the total debt service (principal and interest) over the 30-year life of the bonds - not the principal amount borrowed."Commuters standing in train

METRO pointed out that "the net annual cash flow available for debt service on the METRO Solutions Phase 2 projects...is more than sufficient to cover the debt service obligations in every year through the payoff of the bonds." The debt service is not just for the North and Southeast Corridors.

"Including all METRO obligations through 2030 (operating costs, debt service and METRO Solutions  capital), METRO will end up with over $2.3 billion in cash reserves in 2030," wrote METRO in its formal response.

METRO said it is unaware of any issues that the FTA has with the agency's ability to build the lines with existing debt capacity.

In fact, the FTA recently praised METRO's light-rail program, calling it "innovative" in its use of public-private partnerships. The FTA also complimented METRO on its streamlined procedures.

Comments

DominicMazoch said:

Mary: Why do you have the LRT train passing in front of the Rice Hotel instead of one passing in front of HQ. due to the nature of the thread, it would be a better picture.
# December 2, 2008 7:30 PM

DominicMazoch said:

The audit people should now look at TXDOT!
# December 2, 2008 7:31 PM

Royko said:

I saw a Fox story which focused on the portion of the report which noted METREAUX does not have the resources to build, operate, and properly maintain the planned five extensions to the existing boondoggle tram without significant FTA funding.

Too bad the Austin Liberals trumped up the indictment of Tom DeLay, and where the local PRAVDA championed "CHANGE," so that there now are no Texas Congress Members with the ability to bring home the urban rail "pork" for Houston.

Queen Sheila, instead of securing more funding for transportation projects, is barking at METREAUX for not doling out more minority contracts to her constituants.

When the dust settles, I hope reason prevails with our elected officials, and they direct our precious tax resources to rubber-tired mobility improvements.

# December 2, 2008 9:11 PM

PWang said:

Hey Royko, I thought conservatives didn't believe in "pork", but in fiscal responsibility.
# December 3, 2008 3:46 PM

don said:

Royko, which mental institution are you in?
# December 3, 2008 5:27 PM

Mary Sit said:

DominicMazoch,

I used that train picture because I hadn't used it for a while and liked the angle and the shot. Thought it was a different view of the train. But thanks for your comment - you are certainly observant!

# December 3, 2008 6:50 PM

Cedric Collins said:

don,

   I 2nd your question to Mr. Royko.  In other words, I also want to ask---well---what you said.

All the while, I still want to know why he keeps saying stuff similar to this, "When the dust settles, I hope reason prevails with our elected officials, and they direct our precious tax resources to rubber-tired mobility improvements."

The key words are "rubber-tired mobility improvements."  I assume he means buses since that's the only type of "rubber-tired" vehicle capable of carrying riders such as myself.

Even though METRO may be wanting to deal with the hybrid DD buses, I still say they should worry about the "A" bus for local routes since the DDs will be only used for P&R service.

# December 4, 2008 8:28 AM

JamesL said:

There are probably routes where articulated buses make sense anyway, but given the choice I would prefer higher frequency over bigger buses. Some concept of schedule adherence would be nice, too.

On a slightly related note, why is it that European design is so far ahead of ours? The heaps of rattling metal we call New Flyers don't even compare to the MAN and Mercedes-Benz buses I rode in Spain this summer. At least METRO went with Siemens for the LRVs and got some *** sexy (German-engineered) trains. They're holding up incredibly well, too.

# December 4, 2008 5:17 PM

Royko said:

PWang,

I said nothing about "Pork."  There are many dedicated funding requests for despeately needed projects, most notable, roads and bridges which are vital for commerce.

# December 4, 2008 10:16 PM

Royko said:

PWang,

I did use the term pork, although I was clearly making the point that none of the present Congressmembers have the ABILITY to bring home the rail pork.

I was in no way advocating either party waste taxpayer resources on boondoggle urban rail.

# December 4, 2008 10:24 PM

Cedric Collins said:

JamesL,

      Do you think we should have a Van Hool transit bus?  YES, Van Hool does make transit buses---mind you.  Just look at AC Transit---even though the relationship between those buses and the people who operate/ride them are less than perfect.

When you say higher frequency, do you mean in terms of less time to wait in between buses?  If so, that's what I would like to see as well more buses on the streets.

# December 5, 2008 9:33 AM

JamesL said:

Good tip, Cedric. It looks like Van Hool is the only major European coach builder (among MAN, M-B, Scania, Volvo) with a US-spec bus on the market. To compete in the European market they must be quality products. It could be one of their models shows up here in response to the RPF for bilevel buses. My point was originally that the New Flyers are not well designed, functionally (they shake themselves and their occupants to pieces), or aesthetically (they look like cheap, boxy junk). And yes, by frequency I mean buses running more often - relieves crowding, increases convenience.
# December 5, 2008 7:02 PM

Cedric Collins said:

Ah!  I see by your comment on the frequency thing.  That should be something METRO would need to look at ASAP---although that can't happen unless METRO gets as many buses/coaches as they possibly can.

Even though Van Hool does have a bi-level bus (just look at Megabus has running around in the Midwest and Northeast US), the Van Hool TD925 bus is not what METRO wants---yet (unless Van Hool can make a hybrid version of it).

Contrary to what critics say, I kind of like the Van Hool bus because of the style of it.  One benefit that I can say on here is that the Van Hool transit buses are TRUE LOW FLOOR---meaning---no steps like on the New Flyers (except if there's a seat no top of the wheel well.  Go here (http://www.abc-companies.com/transit_motorcoach_sales.asp) to view the buses I think should navigate Houston's streets.

It would be a wonderful thing if Van Hool can make these buses other than just plain disel---meaning---hybrid, CNG, etc.

They want the Alexander-Dennis Enviro 500H hybrid double decker bus.  Go here (http://www.alexander-dennis.com/news/product_stories/news_story15.htm).  That's similar to what METRO may want for their P&R service only.  What's also good about this situation is that soon, those hybrid DD buses could be built right here in the good ol' US of A---meaning---nobody won't have to wait longer for the buses to be built and delivered from overseas.

# December 8, 2008 7:26 AM

DominicMazoch said:

If the bus coulod be made here in the US, that would prevent a lot of problems with the "51% US content" laws for federal funding. EMD has contracts with other companies worldwide to produce their line of diesel engines. Several "offshore" auto companies have plants here in the US. So I can't see why a company could get a contract with an offshore company to make a bus which would work on the streets and meet current Federal rules.
# December 10, 2008 9:19 PM

DominicMazoch said:

I don't care who makes the bus, except that it has: 1. Working A/C! 2. Can go foreward! 3. Has brakes! 4. Does not have those horrible seats! 5. Perfer one that bends, so we can have extra seats on Westheimer! Too bad we can't get those 80' bi-A Curitiba type BRT buses. I can see this (use Westheimer as an example): 1. Use 40' buses for every stop on Westheimer. 2. Local A-bus for limited service as an overlay. (Galleria to Downtown run "express" or the route of the 53.) 3. Use 29.99999...' and 40' buses to be local circulators to connect to mini-terminals along Westheimer. 4. As a system, some may have to transfer, but frequency and coverage would make up for it. 5. Get some people from Curitiba, Brazil to help us set this up.
# December 10, 2008 9:34 PM

Cedric Collins said:

DominicMazoch said:  "I don't care who makes the bus, except that it has: 1. Working A/C! 2. Can go foreward! 3. Has brakes! 4. Does not have those horrible seats! 5. Perfer one that bends, so we can have extra seats on Westheimer!"

(puts on Nomex suit)

As far as having a more variety bus fleet, I do!  METRO needs to explore other bus builders and see if their models can survive the mean streets of Houston.

1.  You're half right on the A/C thing.  The buses should also have great heating on cold days.

2.  Huh?  Which buses don't go forward?  The ones tht may all of a sudden---break down?

3.  They all should have brakes---unless there are those that have bad brakes and are not propery looked at.

4.  I personally don't care what seats are on the buses!  Just as long as there's a seat with my name on it and I won't have to stand during the duration of my ride (which is somewhat long---mind you), I'm fine.

5.  There are other areas that need the bus that bends in the middle---not just Westheimer.

"Too bad we can't get those 80' bi-A Curitiba type BRT buses."

I 2nd that!  As far as the model that those folks have in Curitiba, YUCK!  I rather go for the Van Hool AGG300 bi-A bus.  Those models can be used for the rail shuttle when the trains are not running (for example).

# December 11, 2008 8:53 PM

DominicMazoch said:

Cedric: We need more A's than Westheimer. But that is one corridor which METRO can add more buses, and they would be filled. I think it could be the system poster child of lacking service. Good grief, Harwin has 1XX service, and Westheimer does not?
# December 12, 2008 10:56 PM
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