The Metro Crash and Tax: Leaseback Infrequently Asked Questions

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6 Responses

  1. Jeff says:

    I thought you might be interested in some additional information. Metro presented the additional $25 million in payments out of their capital budget to the KBC as a major hardship to the judge and the public.

    http://www.wmata.com/about_metro/news/faqs/preview.cfm?faqID=49

    However, an interesting event happened in February 2009. WMATA paid off about $430 million in outstanding debt ahead of schedule. Does that sound like a financial hardship situation to you? Since WMATA claimed publicly to be fighting a $100 million operating deficit, the money must have come from the capital budget. Was that proper, legal, and valid? They suffered no delays in new starts or ongoing capital activities. In June, they replaced the short term debt with their largest bond offering ever. Does all of this add up to you?

    The following highlights were included in the FY2009 CAFR for WMATA:

    Fiscal Year 2009 Financial Highlights
    • Net assets increased by $93.5 million or 1.2 percent due primarily to increased capital
    contributions.
    • Capital assets before depreciation and amortization increased by $323.6 million, largely attributable
    to new rail car and bus purchases, facilities enhancements, and rail rehabilitation. Capital
    contributions were $578.3 million.
    • Current liabilities decreased by $432.5 million or 44.6 percent, decrease due to the repayment of
    the line of credit debt and replacement of commercial paper with long-term bonds.
    • Operating revenues increased by $54.7 million or 7.9 percent, due to a mid-year fare increase
    effective January 2008, and an increase in ridership. Special capital region events such as the
    Presidential Inauguration and sporting events contributed to the increase in revenue and ridership.
    • Operating expenses increased by $101.7 million or 5.6 percent, due primarily to an increase in
    wages, pension plan contributions and workers compensation claims reserves, and investments in
    risk and safety assessments. In addition, the continuous growth of the Authority’s paratransit
    service and propulsion power usage, also contributed to this increase in expenses. Operating
    expenses include the increase in estimated liability for injury and damage claims related to the June
    22, 2009 rail car accident.

    The link to this statement is:

    http://www.wmata.com/about_metro/docs/cafr_FY09.pdf