As we know, Forensic Auditor Tiffany Couch issued an analysis recently critical of C-Tran finances and their claims of needing more revenue they seek in Proposition 1. It goes without saying that the Columbian, our local mouthpiece for any pro-Democrat, pro-CRC, pro-Light Rail or pro-C-Tran measure would do what they could to discredit it, which they did in their hit piece, Analysis questions C-Tran’s financial claims; agency fires back
Included in the article is C-Tran’s critical response here, in essence labeling her a liar while the article itself seeks to taint her work due to her being separately hired by local businessman and the Columbian’s ‘boogieman’ David Madore to perform a Forensic Analysis of the Columbia River Crossing, a completely separate agency.
Ms Couch’s report is here
Tiffany Couch has now issued a rebuttal to the C-Tran claims of her not using complete numbers, numbers they provided to her and their effort to label her work incomplete that you can read here
Rebuttal of C-Tran claims:
• She used nine months of operating expense data for projecting 17 years of expense.
o Not true.
o If you look at my analysis on page 4, I do take C-Tran’s actual 9 month cash position and extrapolate that into what the full year of “cash burn” might look like.
o I then double that for 2012, which calculates to approximately 1.8 million dollars of cash burn next year
o If you look at page 4 of my analysis and then Table 3 on page 5, you will see that C-Tran’s actual cash burn for the last 5 years has approximated 1.9 Million dollars.
o C-Tran’s actual operating results for the last 5 years (6 years if you count 2011) support my analysis.
• Her analysis eliminates ALL capital improvements for 17 years.
o Not True
o Please look at page 6 of my report under “Proposed Capital Budget”
I simply eliminate High Capacity Transit related capital expenditures, not ALL expenditures
o Please look at Table 4 called “Revised Capital Budget”
I list a capital expenditure item there representing capital costs NOT related to High Capacity Transit
o Please look at Exhibit B
I leave a restriction for capital assets in the budget
o By using the ACTUAL CASH BURN RATE for C-Tran, I’m analyzing the impact on cash as it relates to BOTH operating and capital expenditures. This is clearly seen on their statement of cash flows (which is what I used for the burn rate in the first bullet above). A summary of C-Tran’s cash flow statement is on Page 5 of my report.
• Her analysis assumes no changes in revenue sources
o I’m using C-Tran’s own 2011-2012 budget that clearly shows significant ($10M per year) grant funding
o C-Tran’s 2030 plan also indicates the continuance of grant funding
• Her analysis assumes an average annual increase in expenses of less than one-half of one percent…..
o True
o I chose NOT to use C-Tran’s highly aggressive revenue growth rates as per their 2030 plan. (Which takes Sales Tax Revenue growth of 140.66% over the next 19 years). Had I done that, C-Tran would never run out of cash.
o Instead, I give them deficit cash burn rates of a compounding 5% per year (again, on current bus service levels only)
• She ignores the 90 days cash on hand policy
o Not True
o Please see Table 4 on page 7 of my report. It’s listed as “Working Capital Reserve”
o Please see Exhibit B. I leave their working capital intact. I clearly state that in 2021 (the year that I say they run out of unrestricted reserves) that they will have to dip into capital reserves.
• Used an incorrect “Total Retail Sales” number in the first year of the 2010-2030 revenue analysis
o Not True
o I use 2010 actual retail sales as per C-Tran’s CAFR in my analysis
• 2011-2013 Budget does have 11.3M in HCT Activities:
o I did find a slight error. I accidently double counted the CRC Consulting costs in my analysis. I will revise that to be $11.0M instead of $11.3M
Capital Budget (Page 23 of 2011-2012 Budget):
Tri-Met Ticketing 2,700,000
BRT Analysis 426,125
20 year Planning 6,239,386
Total Per C-Tran’s Capital Budget 9,365,511
C-Tran Operating Budget (Page 20 of 2011-2012 Budget)
CRC Consulting 200,000
Ballot Measures 960,000
HCT Study 500,000
Total Per C-Tran’s Operating Budget 1,660,000
Total $ 11,025,511
• Cash Reserve Policy ignored
o Again, I have addressed this above. I absolutely used C-Tran’s cash reserves policy
o Sales Tax Revenue Assumptions
I used actual Clark County sales tax revenues and then used C-Tran’s revenue growth assumptions in my analysis.
• Using ACTUAL sales tax revenue and their growth figures, you will not get to $99M in sales tax revenue in 2030.
They indicated they would send me their own analysis but I did not receive that.
• Debt Service Payments are in overall budget
o This was not sent to me.
o Page 73 of their 2030 plan looks like a budget to me….it spells out cash flows from revenue, cash expenditures for both capital and operating expenses. Why would it omit debt service payments?
• At no time did I state that I was preparing a public document
o This is true.
o I did not think I would. I feared that the public press would be so significant that I did not want to bring this onto myself.
o However, the findings were so significant that I felt it was important to inform the voters.
• Misrepresented the reserve and sales tax base and growth rate.
o Not true (see above)
o How did I do this if I used actual numbers and C-Tran’s own plan?
• I used too small a sample
o The last 6 years operating results are not enough?
o This represents the most accurate pictures of C-Tran’s most current level of bus service to the Citizens of Clark County. If you would like me to extend that sample, I can. I would be happy to revise my numbers. Please let me know whether or not you’d like to review that analysis.
In this bloggers view, C-Tran has proven themselves to be an untrustworthy agency, run inefficiently and overly costly. We do need a reliable community bus service, but we do not need the outrageously expensive dreams they plan on bringing to our community, whether we taxpayers want it or not.
I find no logical re4ason to continue funneling our dwindling tax dollars into the dark hole of C-Tran. They need top restructure, reorganize and do what is necessary to become an efficient and cost effective service, not just keep seeking more money from us so they can build some expensive dream.
I urge you, if you haven’t sent your ballot in yet, Mark NO on Proposition 1.
