HomeMy WebLinkAboutMichelle Schumacher From: Michelle Schumacher
To: Michelle Schumacher
Subject: Public Comments for the Next Meeting-please read into the record&share the chart-thank you
Date: Monday, May 18,2020 11:32:26 PM
Attachments: fiscal comparison 2014-2019.xlsx
The TCA — the Toll Roads - the Transportation Corridor Agency a
Government Agency with Broken Agreements, Broken Trust and over
all a Financial Boondoggle. Tax Payers Deserve Better
The 73 toll road was supposed to be free in 30 years, instead billions of
dollars are still owed and the TCA is now automatically increasing tolls 2% a
year, continuing to drive up housing costs and the cost to do business in
Orange County. The TCA is a Joint Powers Agreement a government
agency that was trusted to build the toll roads, pay down the bonds then go
away. Instead the least amount of the bond debt is being paid due to the
continuous TCA refinances, not only is the bond DEBT growing in the wrong
direction but also pushing out the years the toll roads will have to be tolled
before being made free as was thier initial promise. We will have paid for
the roads 5 times by the time they are ever free to the public.
The TCA wastes millions of dollars on consultants and an army of lobbyist,
many TCA employees make over $300,000 a year, with benefits and
pensions that barely anyone in the public sector receive. They sponsor
many events from golf to galas, enjoy international travel. They even spent
$35,000 dollars on ONE dinner. They are not good stewards of our hard
earned money.
The Joint Power Agreement for the TCA clearly states that Development
Fees are to be reviewed annually by the Board of Directors, this is not being
done, instead they are automatically increased without required Board
review or approval. The Board of Directors has abdicated its power to
lobbyists. The Foothill TCA has been collecting Development Fees and has
not built anything in over 20 years, with no routes approved on the
legislative maps, why are development fees still being collected?
Development Fees are a silent tax and are driving up the costs of housing
and business in the County. This needs to stop, we have OCTA and
Caltrans, we do not need a duplicative redundant agency fleecing residents
in Orange County.
In March 2020 the TCA's Board of Directors UNANIMOUSLY voted to stop
the South Orange County Traffic Relief Effort which they threw hundreds of
millions of dollars at to try and extend the Southern most portion of the 241
which does not get many cars per day, a complete waste of money
and boondoggle. While taxpayers were so thankful of this vote to STOP the
process, only 2 months later they are back to thier old tricks and trying
to oppose legislation that would legitimize thier unanimous vote 2 months
ago. The TCA is speaking out of both sides of thier mouth as usual and
sadly tax payers are the ones getting the short end of the stick while
consultants and lobbyists bask in the money.
In 2014 the OC Grand Jury issued a solvency warning to the TCA and the
County for thier debt level, the Pacific Research Institute found that the
TCA's business model was probably not sustainable from the start and the
TCA in 2008 asked for a 1 .1 Billion dollar bailout, with times getting tough
potentially in the future it is time Orange County cuts the fat. The TCA
needs to go, it is a good time for you to see if it is still prudent to be a
member City of the TCA - it takes 8 cities to pull out.
Attached is a current TCA debt snap shot - please note the time period is of
the last TCA CEO's reign - he was making more than the President of the
USA to manage less than 90 people. Please stand up for Orange County
tax payers and stop the development fees and the untenable future of the
TCA, it is time to get smart.
FISCAL COMPARISON 2014-2019
Michael Kraman,CEO of the TCA started with the TCA in 2014 and ended in 2020
FE-TCA FE-CTA SJH-TCA SJH-TCA Both Agencies Both Agencies
2014 2019 2014 2019 2014 2019
Total longterm debt* $2,423,519,000.00 $2,467,823,000.00 $2,148,605,000.00 $2,423,690,000.00 $4,572,124,000.00 $4,891,513,000.00
Total debt service to maturity $7,073,012,000.00 $6,297,017,000.00 $4,608,933,000.00 $4,873,896,000.00 $11,681,945,000.00 $11,170,913,000.00
Year of maturity 2053 2053 2042 2050
Total toll revenue $138,923,000.00 $193,791,000.00 $129,013,000.00 $191,476,000.00 $267,936,000.00 $385,267,000.00
Development Impact Fees(DIFs) $19,813,000.00 $14,860,000.00 $3,807,000.00 $7,464,000.00 $23,620,000.00 $22,324,000.00
Other 1 $410.000.00 $731.000.00 $7,000.00 0.00 $417,000.00 $731,000.00
Total Revenue $159,146,000.00 $209,382,000.00 $132,917,000.00 $198,940,000.00 $292,063,000.00 $408,322,000.00
Operating Expenses -$24,066,000.00 -$31,832,000.00 -$13,859,000.00 -$24,802,000.00 -$37,925,000.00 -$56,634,000.00
Interest expense -$140,623,000.00 -$144,009,000.00 -$115,446,000.00 -$122,010,000.00 -$256,069,000.00 -$266,019,000.00
Other income/(expense) -$15,070,000.00 $8,456,000.00 $3,275,000.00 $2,391,000.00 -$11,795,000.00 $10,847,000.00
Net income/(loss) -$20,613,000.00 $41,997,000.00 $6,887,000.00 $54,519,000.00 -$13,726,000.00 $96,516,000.00
Cash&equivalents $647,337,000.00 $777,565,000.00 $394,480,000.00 $694,954,000.00 $1,041,817,000.00 $1,472,519,000.00
Unrestricted portion $149,631,000.00 $415,773,000.00 $23,651,000.00 $224,037,000.00 $173,282,000.00 $639,810,000.00
Net position -$1,453,701,000.00-$1,537,799,000.00 -$1,773,548,000.00-$1,694,533,000.00 -$3,227,249,000.00 -$3,232,332,000.00
*includes short term portion of long term debt
Observations:
1.In the 5 year period,long term debt actually increased by$319 million or 7%,despite principal repayments-due to interest accretion.
2.Total debt service to maturity on first glance improved by $511 million,until we realize that the maturity date for
SJHTCA moved out to 2050-another 8 years of paying tolls,penalties and Development Impact Fees.
3.Toll revenue increased 44%and total revenue by 40%but the total net position of the two agencies is almost the same(down$5M)
4.Operating expenses increased 49%during the period.Professional fees increased 8-fold($933K to$7.3 million)
5.Salaries increased 49%as well,from$5.9 million to$8.9 million.
6.Bottom line-revenue is up but they're spending most of it and making little impact on net position.
7.One bright spot-cash and equivlents are up$431 million,but a greater portion is restricted by bondholders.
The$640 million in unrestricted cash will buy some time,but many investments may have to be sold at a loss to meet debt obligations.
8.With revenue down significantly-60-70%in March,the revenue impact will likely push TCA out of compliance with debt covenants.
Source:All data derived from audited financial statements of FETCA and SJHTCA as published in Comprehensive Annual Financial Reports