Conner 2.0 AteROHRETIONS wasivorox Orr: uicosoutris on 1514 LemowonT BLING WascTON, DC 20515-490 Gonna snes a Sctesct AND NASA 25.2571 Fay 202235:4381 FIN SEES A Disimicr Ossi: 1990 MORAL Di, SUITE 620 Houston, Texas 70243490, LAND SFCCRIY JOHN CULBERSON Fo 7s Risersicas Wine ‘7rH Distaicr, TEXAS stent: oe ww.cuuatison oUsF.ov Mr. Peter Rogoff Administrator Federal Transit Administration 1200 New Jersey Avenue, SE East Building Washington, DC 20590 Dear Mr. Rogoff: ‘The western portion of Houston Metro's University Line (from Wheeler Station to the Hilleroft Transit Center) lies entirely within the boundaries of my congressional district, and | am formally objecting to its approval for the preliminary engineering phase of the Federal Transit Administration's New Starts Program because I am convinced Metro cannot afford to build this $1.5 billion line, in addition to the already approved $911 million Southeast line and the $897 million North line. Thave attached the Cash Flow Analysis from Metro's Supplemental Final Environmental Impact Statement for the Southeast Corridor (Attachment 1), which shows that Metro is assuming revenues that will almost certainly not materialize. First, Metro is counting on the elimination of a 2003 requirement that it commit 25% of its sales tax revenue for street improvements and road projects for the cities in Metro’s service area through 2014. The Mayor of Houston appoints a majority of metro board members as well as its chairman. The City of Houston will elect a new mayor on Saturday, November 12. The two candidates in the runoff election, Annise Parker and Gene Locke, have both expressed their clear intent to preserve the 25% of Metro’s sales tax for general mobility funding. Below and attached (Attachment 2) are excerpts of their remarks to Houston’s CBS affiliate: “Both Locke and Parker (ell 11 News that they would oppose any move to divert road repair money to METRO. ‘The City of Houston must get its full share of the METRO. road money without any reduction, delay or impairment,’ Locke said. “To divert money away from roads would imperil the resurfacing of streets, filling potholes and other vital road work.” “Parker said she would not consider changing the terms of the mobility fund agreement unless other cities that receive the funds also agreed to a change, ‘I do not believe in unilateral disarmament,’ she said. ‘If METRO wants the City of Houston to return general mobility dollars, in fairness, all cities must agree to return the dollars, However, |suspect that no one city is willing to release their funds until we are confident and have a true understanding of the financial situation at METRO. Returning the general mobility dollars would place a burden on the city.” Metro also appears to be counting on an additional $620 million in bond proceeds from 2013- 2015, on top of the $640 million total that was approved by voters in 2003, Metro would need voter approval for a new bond issue as well as eliminating the 25% general mobility payment, and neither is certain. In addition to these questionable revenue sources, Metro currently owes the City of Houston approximately $110 million (Attachment 3) in unbilled general mobility funds, which is not reflected in the Cash Flow Analysis and further weakens Metro’s financial position Thave also attached the Financial Proforma Balance Sheet from Metro’s FY2010 Business Plan & Budgets (Attachment 4), The “Estimated September 2009” total of cash, receivables, and investments is $469,754,000, while total liabilities are $592,124,000, for a quick ratio of .79. FTA’s own “Guidelines and Standards for Assessing Local Financial Commitment” (Attachment 5) states that a current operating ratio of less than 1.0 is rated as “Low.” As a dedicated fiscal conservative, I cannot in good conscience fail to register my strongest objection to any attempt to build this rail line in my congressional district when | am convinced that Metro's precarious financial condition will endanger the construction of the North and Southeast lines, which I have supported and helped secure funding for every year since 2004, Thank you for your attention to this important matter. Please do not hesitate to contact me if you have any questions. John Culberson Member of Congress‘Supplemental Final Environmental Impact Statement (Chaptar 8 Financial Analysis Table 8-13. Cash Flow Analysis (Year of Expenditure $) ‘2007 [2008 [2008 [2010201] 2012 [BEGINNING BALANCE 793.762] 127,712) 95,230] 85,705] 116,564] _ 60,376] [SOURCES Sales Tax Receipts aer72i] 616243] $62,908] 602,496] 610,862] 675.851 Farebox Revenue 53,627| 64,200] 69,386, 73.923] 62.57@| 90,002] Miscalaneous & Operating Grants ‘o|1.480| 1,490) 1.490[ _2.058| 1.674) Exemal Interest income S521] 4244] 3.418) 3.447] 47} 4,025 Internal interest income (Expens@) | a 9 9 Q of ‘State & County Grants | Ql 3 9 Q of Federal Grants, Formula/CMAG/Misc. 58,146| _97.132| 102,842| 91,640) 95.505|_ 121,486] Federal Grants, Discretionary 43.17 41.740] 6,719 | Ql of METRO Solutions - Feceral Grants ~ Bus & Rall ° 941,068] 112,748| 198.628) 264,402] Bond Proceeds-Net o 0] 633,400] o | 9 ‘Commercial Paper Proceeds o 0] 33.400] 623,000] 34000] 68,000] Interfund infiow (Outflow) o | 2 Ql al 9 Balance Sheet Adjustment Ql | 0 o 9) Ol Total Sources: 41,852) 724040) 1,448,314] 1,708,748] 1,949,371] 1,242,000] [TOTAL FUNDS AVAILABLE 835,624] 051,760] 1,581,544] 1,864,453] 1,465,178) 1,992,180] USES. ‘Operating Expenses - Transit 328.087] 918,004] 326761] 380,776] 354001] 343.326] ‘Operating Expenses Traffic Mat | 10,585] 10,864] 11.166] 11,496] _ 11,823 12.160) Capital Costs Gen. Mobilty 25% Fund Projects | 108,673] 12aa11| 738008] 140,124] 168,50] 168,885] Regional Bus Plan =1.913] | | Ql 0) Ol “Transitways & Releted Faciiles ol 683] 3 | 0, 9 Buses, Support Fac. & Equip, Land’ s26e75| 149,592] 143.075| _184,740|_142,720| 168,064) ‘Advanced Transit Plan 5362| 942| 3.621 0) o 9 METRO Solutions Bus & Ral Capital o| 432,142] _912,021| 1.037.474] _622,080| 418.623) ‘METRO Solutions Contingency 9] of 9] Ql 9 a ‘Commercial Paper interest Cost of S678) 14407) 96,422] 60.008] _ 66.139 Excess Balanos Used To Pay Down OP d ° d 6} o| d ‘Short Term Noves Principal Paid a 2 A @ a a Interest Fees Paid 0 o q 0 | q Bond Debt Service 9 | 17,600| 44,035) 44,035] 44,035) Total Uses. 707,972 7,045,530] 1,586,838| 1,770,648) 1,373,800] 1.218.426] [ENDING BALANCE, Ja77i2} $5,290] 85705| 113,808) 69.378] 112.745] Source METRO Cash Flow Model, Sourees and Uses of Funds, Ofice of Management & Budget Case #800-1, Scenario | — FTA Submittal (Pnase 24 3), Janvary 14, 2008, = Southeast Corridor prt 2008 a7‘Supplemental Final Environmental impact Statement Chapter 8~ Financial Analysis Table 8-13. Cash Flow Analysis (Year of Expenditure §) (continued) ‘Source: METRO Cash Flow Model, Sources and FTA Seema Pras 2 & 3), January 14, 2008, METRO Southeast Corridor 828 2018 207 728,809) 134,203] 761,631] 804707] 648,567] 699,682] 090,406) Farebox Revenue 123.636] 128,105] 192.576] _ 187,046] 141,516] 157,656] Miscellaneous & Operating Grants | 1,617| 1,862] 1,709) 1.75] 1,800 1,862 External Interest Income 4500|4e00| 5.144] 5.55¢| 5622] 6420] Intemal Interest Income (Expense) | 9 Ql @ 9] ‘State & County Grants 2 Ql Ql of 9] Federal Grans, Formula/CMAQMiso. e3.546| 95,643] 09.238] 90,744] 99,360] Federal Grants, Discretionary D) Ql ol of | METRO Solutions - Federal Grants = Bus & Rall = 173513] 113,992] 123.614] 102.302] 166,588) _ 200,000] ‘Bond Procesds-Net 131,000] 348,000] 141,000] 0 | ‘Commercial Paper Proceeds Q Ql 9 9 | Interfund inflow Outflow) 0 a ol @ | Balance Sheet Adjustment Q Ql a o | Total Sources: 1236.174| 7,449,882] 1,267,078] 1,166 061] 1,302,726] 1,407,507] [TOTAL FUNDS AVAILABLE: 1,348,850] 1,561,606] 1,425,887] 1,329,539] 1,436,067] 1,550,363} uses ‘Operating Expenses - Transit 434,907] 455,997] 477,704] 600087] 522,906] 6131 Operating Expenses -Traffe Mat | 12.484] 12.893) _ 18,167] 13.577] ta.971] 14.3 Capital Costs ~> | Gen. Movitty 25% Fund Projecs| 179.851] 190,383 al a | Regional Bus Plan 9] 0 G) 0 | “Transitways & Relaied Facies 9] o | o | Buses, Suppor Fac. & Equip, Land’ 176.897| 176,132| 178,203 190.548 _208.990| 225,50] ‘Advanced Transit Pian Q o 9) a 0] METRO Solutions Sus & Rai Capital 312,164] _467.192| 484,516] 225,126 144,620] 273 METRO Solutions Contingenoy 9j 0 | 0 4) Commercial Paper interest Cost | 67.456| 67,486] 67.486] 65,142] 67,7ea| s0.17 Excess Balance Used To Pay Down OP. | d o| _113,742| 247,610] 129.200) ‘Short Term Notes Principal Pala al D Ql a o InteresvFees Paid 9] ol 0 ol o Bond Debt Service 47.674] 62,007] 61.243) 67,126] 87,126] 67,126] 1,231,483| 7,482,800] %,262,400|_1,196,297] 7,260,710] 7.369.837} 117,726] 128,200[ 143.477) 194,242] 166,867] 164,226] ‘Uses of Funds, Ofice of Managomert& Budget Case #6001, Soenaro | — “Apri 2008