Newspaper article THE JOURNAL RECORD

Cotpa Alternatives Require Subsidies

Newspaper article THE JOURNAL RECORD

Cotpa Alternatives Require Subsidies

Article excerpt

Controversy over the Central Oklahoma Transportation and Parking Authority parking garages continues, with the proposed purchase of the garages by the Oklahoma City Public Property Authority.

A Government Finance Associates Inc. report concluded that both the Public Property Authority bid on the parking garages compared to the existing COTPA bonds would incur substantial negative cash flows over the forecast period, making city subsidies a necessity.

The report submitted by Kenneth L. Rust, vice president of Government Finance Associates of Portland, states that "while the total subsidy required under Alternative 2 (existing COTPA bonds) is significantly less than that required under Alternative 1 (purchase by Public Property Authority), the timing of the required subsidy is such that it results in a less efficient financial solution than that shown for Alternative 1."

Negative net revenues in the event of purchase of the garages by the Public Property Authority are projected at $38.9 million, but would only be $20.09 million if COTPA keeps the garages, according to the report.

"The best thing to do is just keep paddling under the present structure," said Harold Stansberry, chairman of the COTPA board of trustees. "It is going to cost money, but no place near what they are proposing."

"The figures I have seen show that the cost is going to be so much greater to the city of Oklahoma City if they go through the Oklahoma City Public Property Authority.

"To me, they are trying to work a square peg into a round hole," Stansberry said.

"We didn't see anything GFA (Government Finance Associates) was proposing until two or three weeks ago," Stansberry said. "We had paid them for some of the work they had done, but the city manager and finance director had received reports."

When Government Finance Associates presented the proposal, three trustees voted against the proposal.

In the comparative figures that are now available, some are different that those that they proposed originally, Stansberry said.

The debt service schedule used to compute Government Finance Associates proposed debt service has been reduced more than $2.5 million in the Nov. 3 report from the Oct. 14 report. In the report, Government Finance Associates also indicated payments of $3.7 million more for debt service than the Peat Marwick audit.

"We didn't think they were giving us the proper figures," Stansberry said, "and the latest report apparently proves us right. They've been playing with figures."

The original proposal of Oct. 14 stated that the debt service if the garages are purchased would be $15.56 million more than the existing COTPA debt service, but would result in savings of $2.2 million on a present value basis.

"I suspect that someone is saying to them, this is what we want to come up with," Stansberry said. …

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