BRIDGE AUTHORITY DOESN'T HAVE HUGE SURPLUS

[CITY Edition]

Buffalo News

--------------------------------------------------------------------------------

Print Media Edition: Financial edition

Buffalo, N.Y.

Sep 15, 1999

--------------------------------------------------------------------------------

Pagination: B3

Abstract:

For several months now, we have heard reports that the Peace Bridge

Authority

has a $65 million cash reserve as well as an $11 million

revenue-over-expenses

surplus and that the authority is able to stockpile cash reserves.

While

this makes for interesting news coverage, it is not only inaccurate, it

is ludicrous.

I am the manager of Finance and Administration for the Peace Bridge

Authority.

The authority currently has debt in excess of $50 million and in the

very

near future will incur additional debt of at least that amount to help

finance its current capital plans.

Have people forgotten that construction of the new bridge and redecking

of the existing bridge will be done without the use of taxpayer funds

while

at the same time maintaining one of the lowest toll structures of any

international

crossing?

Full Text:

For several months now, we have heard reports that the Peace Bridge

Authority

has a $65 million cash reserve as well as an $11 million

revenue-over-expenses

surplus and that the authority is able to stockpile cash reserves.

While

this makes for interesting news coverage, it is not only inaccurate, it

is ludicrous.

I am the manager of Finance and Administration for the Peace Bridge

Authority.

The authority currently has debt in excess of $50 million and in the

very

near future will incur additional debt of at least that amount to help

finance its current capital plans.

Have people forgotten that construction of the new bridge and redecking

of the existing bridge will be done without the use of taxpayer funds

while

at the same time maintaining one of the lowest toll structures of any

international

crossing?

Based on audited financial statements by Ernst & Young, the following

should

be clarified:

The authority has total assets of $120 million -- $100 million of which

is the cost of the bridge and other property and equipment -- and

incurred

debt and other liabilities of $55 million.

The difference between its assets and liabilities represents its fund

balance

of $65 million, or the authority's net investment in the bridge. Simply

put, a fund balance can be equated to the difference between what you

owe

on your mortgage and what your house is worth. It does not represent

available

cash.

The only available cash reserve is $15.5 million, which is restricted

the bonding agencies for capital construction and payment of principal

and interest related to the authority's bonds. It is not available for

any other use.

The authority did earn a surplus of revenues over expenses in 1998 of

$9.1

million. However, it also incurred expenditures in excess of $19

million

for the acquisition and construction of capital assets and made

payments

on its long-term debt of almost $1 million. Neither of these

expenditures

are included in the $9 million surplus mentioned above.

The authority's current capital plan calls for expenditures in excess

$180 million through the year 2010, which will require incurring

additional

debt as it issues new bonds. Any current and future surpluses will be

necessary

to pay down these bonds, as well as existing debt.

For the past 72 years, the Bridge Authority has been financially

prudent

and responsible. We are willing to answer any questions about our

financial

status so information can be verified before it is printed.

LYNNE BOGDAN

Cheektowaga