Tuesday, June 21, 2011

Miami Herald: Miami-Dade Transit Agency’s financial woes drag on

Posted on Tue, Jun. 21, 2011

Miami-Dade Transit Agency’s financial woes drag on

By Martha Brannigan

mailto:mbrannigan@MiamiHerald.com



A long-running suspension of federal grant money to Miami-Dade County’s transit agency is threatening to trigger serious financial fallout at County Hall, with commissioners and administrators talking openly about cutting services to Metrorail, Metrobus and Metromover if the crisis isn’t resolved soon.

County administrators, who are weeks away from presenting a new county budget, said at a County Commission meeting Tuesday they need to know what the transit agency’s financial picture will look like in order to plan for the coming fiscal year that begins Oct. 1.



Jennifer Glazer-Moon, the county’s director of strategic business management, warned commissioners at the meeting that the county may not have enough money in its general fund to continue covering the deficit from the suspension of federal grant money if the crisis, now in its seventh month, drags on. Since the freeze, the county has tapped about $118 million from the general fund and entered the suspended federal funds as a “receivable” to keep its books balanced.



Meanwhile, commissioners failed Tuesday to approve a measure that would allow the county to take out an emergency $100-million bridge loan from Citibank. The loan would provide funds to continue construction of Metrorail’s elevated link between Miami International Airport and the Earlington Heights Station and provide some cash toward the purchase of new railcars. The interim loan would be used until the financial crisis is resolved and the county can issue bonds to pay for the capital projects.



The vote on the bridge loan was a 6-6 tie, with several commissioners saying county administrators hadn’t provided them with the information needed to make an informed decision about such hefty borrowing. The commission expects to bring back the measure for reconsideration in July and is likely to pass it then.



With the transit agency’s finances under a cloud amid the ongoing federal investigation, the county previously postponed a $550-million bond offering planned for this summer, because the interest rate would have been painfully high.Besides the concerns raised during several Federal Transit Administration audits of Miami-Dade Transit, the U.S. Department of Transportation’s Office of Inspector General is conducting a criminal investigation of the transit agency, although the details of that probe aren’t clear.



But amid all the gloom over the transit agency, there was a bright note Tuesday: Commission Chairman Joe Martinez told fellow commissioners that FTA Administrator Peter M. Rogoff told him at a meeting in Washington, D.C., last week that the agency will release $65 million of the $185 million in federal grant funds that FTA has withheld from the county since the cutoff began in November.



Martinez said he was expecting the funds to be turned over to the county as early as Tuesday. However, the FTA said the timing of the payout hasn’t been finalized. FTA approved the $65-million payment after the county documented its eligibility for reimbursement for preventive maintenance done in 2010.



Problems at Miami-Dade Transit exploded last November when the FTA, which doles out federal transportation funds, suspended reimbursement in federal grants to the transit agency over concerns about shoddy financial management and weak internal controls. Regulators criticized the county agency for, among other things, failing to document how federal grant money was being spent and improper accounting for its bus fare boxes.



In April, federal regulators abruptly suspended several audits, making the unusually blunt assertion that they couldn’t determine “the veracity of MDT’s information.’’ The FTA laid out eight key areas it wants the county to address before the review can go forward. Harpal Kapoor, the transit agency’s embattled director, retired the same month.



The county has since sent the FTA extensive information to respond to its demands and has been prodding the feds to say what more they want.



“Our greatest frustration has been our inability to get any response back,’’ County Manager Alina Hudak told commissioners at Tuesday’s meeting.



On Tuesday, the FTA said it is developing a schedule to restart a number of the audits and to set up a way for the county to begin getting funds on a restricted basis.



Commissioner Bruno Barreiro suggested taking such a drastic measure as cutting services might get the attention of the FTA “when people start screaming and hollering.’’



But Commissioner Barbara Jordan warned against taking “a hard line’’ with federal regulators because it would hurt residents who rely on public transportation for work and other key needs.











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Read more: http://www.miamiherald.com/2011/06/21/v-print/2277937/miami-dade-transit-agencys-financial.html#ixzz1Pxwvwv4L

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