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HERALD WATCHDOG METRORAIL
Transit taxes can't meet pledge
The 2002 sales-tax-for
transit campaign promised an expansion of Metrorail, but recent financial
analyses show there isn't enough money for most of the project. Miami-Dade
leaders are trying to come up with fixes.
Jan. 2, 2005 - Sunday
BY LARRY LEBOWITZ
llebowitz@herald.com
Miami-Dade
Transit cannot afford to build, operate and maintain two-thirds of the
Metrorail corridors promised to voters when they approved a half-cent sales
tax in 2002, according to internal financial analyses obtained by The
Herald.
The
revised projections still call for three extensions to the original
Metrorail line. But the latest forecasts contain no money for the six other
corridors, costing an estimated $3.5 billion. Among them: a connection
between downtown and the airport, the Bay Link streetcar between Miami and
South Beach and trains to Aventura and Florida City.
''They
definitely overpromised, and now all of us are going to have to come
together and tell the citizens exactly what we can and can't do with the
tax,'' said Marc Buoniconti, chairman of the Citizens Independent
Transportation Trust, the watchdog group overseeing the program.
The
main reasons: fewer prospects for federal money than forecast; an existing
deficit not discussed during the campaign; declining fare revenue; and
several expensive programs that county commissioners added to the plan.
The
latest estimates set the stage for a series of tough policy decisions --
and potentially embarrassing revelations for former Miami-Dade County Mayor
Alex Penelas and others who sold the sales tax to voters.
County
Manager George Burgess, who inherited the problems, is moving to fix the
historic funding woes at Transit and buttress support for the remaining
projects. He was not involved in the 2002 tax campaign.
''We
probably would have designed it differently and presented it differently,''
Burgess said of the 2002 campaign. ``Absolutely. But we can make this
work.''
The
emerging transit picture is different from the promised ``New Money, New
Projects.''
A
NEW PLAN
Controversial
proposal would settle old debts
Earlier
this week, the Citizens Independent Transportation Trust ratified a
controversial Burgess plan that will allow Transit to spend more than $180
million in sales-tax proceeds over six years to settle old deficits, pay
debt service on buses purchased before the election and cover other
operations.
''This
isn't what I voted for,'' Martin Nash, an 83-year-old Kendale Lakes ad
executive said after the trust's vote. ``When people start to hear about
this, . . . I think this could start a major uprising.''
The
new projections estimate that the county can afford three Metrorail
projects with a cumulative price tag of $2.3 billion: a two-mile spur from
the Earlington Heights station to the airport; a 10-mile east-west segment
from the airport to Florida International University; and a nine-mile north
corridor along Northwest 27th Avenue.
The
six corridors now on hold are the Bay Link streetcar connecting downtown
Miami with South Beach; an east-west segment between downtown and the
airport; a Kendall express-bus route; and trains from downtown to Aventura,
along the expanding Busway to Florida City, and from Coral Gables to the
airport.
WHAT
WENT WRONG
Faulty forecasts, added
amenities derail project
According
to dozens of interviews and a review of county records and projections,
here is what happened:
• County officials, including former Transit Director Danny Alvarez and former County
Manager Steve Shiver, presented unrealistic forecasts in July 2002 that
persuaded commissioners to put the tax on the ballot.
Current
officials say Alvarez and Shiver overstated the amount of matching federal
dollars that Transit could qualify for and failed to point out operating
deficits that would have exploded once the lines were built.
Alvarez,
who resigned in 2003, said he and Shiver are convenient scapegoats after
leaving County Hall. He said that administrators and elected officials knew
that they couldn't deliver on all of the corridors promised in the
campaign, but that nobody chose to lead.
''They
knew the situation,'' Alvarez said. ``They knew that we couldn't build more
than two lines at a time with the federal funding situation. I told them .
. . in July of 2003 that they were going to have to prioritize which lines
went first and which would come later. To say now that we didn't tell them
the situation with the federal funding just isn't true.''
Shiver
and Penelas could not be reached.
• After the election, county staff
members and commissioners folded several big-ticket items into the 30-year
spending plan that were never approved by the voters -- including $55
million toward a contract to provide special rides for the disabled and
$211 million to rehabilitate trains. This left less money for rail
projects.
• Nobody accurately predicted a drop
in farebox collections despite hundreds of new and expanded routes.
Systemwide,
Transit boardings are up by eight million a year since the tax passed.
Transit Director Roosevelt Bradley estimates that 5.5 million to six
million of those new boardings are by seniors riding for free on the Golden
Passport, previously limited to the low-income elderly.
Analysts
are estimating that the free-ride program will cost $6.8 million in 2005.
OLD
PROBLEMS
Year
after year, one-time fixes were used
Many
of the current problems have been percolating for decades.
Prior
to the 2002 election, Miami-Dade Transit had no dedicated funding source,
and its revenue from property taxes did not come close to keeping pace with
countywide budget growth. Year after year, Transit directors were forced to
find one-time fixes to solve persistent shortfalls.
In
the late 1990s, Alvarez tried a tactic that had generated big one-time
revenues for other transit agencies: selling the rail guideways to private
investors and then leasing them back. But no investors emerged.
Just
five weeks before the election, Transit ended fiscal 2002 with an $18
million deficit.
Like
several Transit directors before him, Alvarez used federal
capital-improvement grants from the upcoming year to close the books.
Alvarez
said the 2001-02 deficit was settled routinely and in accordance with
federal guidelines. Nothing was done to hide the deficit, he said.
But
now, county officials are repaying that preelection deficit with sales
taxes -- to the surprise of some people who campaigned for the tax.
`SICKENING
SHOCK'
Presentation
to public differed from reality
''Each
of the revelations is a new, sickening shock to each of us who presented
this to the public, but did not know the truth,'' said political advisor
Ric Katz, who helped develop the campaign for Penelas.
``If
I had known, we wouldn't have pushed forward with these things this way.''
Surface
Transportation Manager Carlos Bonzon says Transit should have cut service
rather than run deficits. With the new tax in place, the agency can no
longer turn to quick fixes, he said.
In
August, Bonzon told the transportation trust that Transit not only must
settle the old deficits with sales taxes but needs to use more tax proceeds
to cover debt payments on buses purchased before the election.
Bonzon,
who became the chief transportation administrator in September 2003,
quickly discovered two serious flaws with the 2002 campaign.
The
ordinance that created the tax was worded in a way that required only a
$111.8 million annual contribution from general-fund revenues to maintain
preexisting services. Nobody factored in rising personnel costs or fleet
replacement.
REMEDIES
SOUGHT
Sales-tax
proceeds
will
pay old bills
Burgess
and Bonzon say they have stepped up on this part of the issue.
In
December 2003, Burgess told commissioners that he was committing the county
to 3.5 percent annual increases in the general-fund contribution to
Transit, plus a 1.5 percent annual increase in gasoline taxes, over the
next 30 years.
But
during 2004, they realized that the numbers still didn't work because of
the old deficits, the new projects that commissioners added, declining fare
revenues and a $10 million cut in Transit general-fund revenue just days
after the tax passed.
So
last week, after months of debate, Burgess and Bonzon persuaded the
transportation trust to let the county use $183 million in sales-tax
proceeds over the next six years for the old deficits and potential
operating shortfalls.
For
18 months, trust members had resisted using any sales-tax money for ''old''
services. But Bonzon and Burgess say the trust needs to view the sales tax
as one of several revenue sources supporting a unified transit system.
After
several tense talks between county staff members and trust leaders, Burgess
offered to bump the general-fund contribution to Transit by $2 million over
the already approved 2005 budget.
PROMISE
BROKEN
Burgess
deal `isn't what
we
sold to the voters'
But
critics say the deal still breaks the fundamental promise of the ''New
Money, New Projects'' campaign.
''It
may be an economic necessity today, but it isn't what we sold to the
voters,'' Katz said.
Burgess
defends the moves as a responsible way to use the tax to build a fiscally
sound transit system that one day could feature trains reaching all corners
of the community.
''We
have three corridors in this [plan], and a fourth [still to be prioritized]
will be under construction in 2034,'' Burgess said.
``If
we're building during every year of this program, wouldn't we consider that
a success? I think that would be a monumental success, not a failure.''
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