Regional Alliance For Transit
Founded 1992

1000 Union Street, Suite 206
San Francisco, California 94133
Email: raft@mtcwatch.com
Web: www.mtcwatch.com

June 4, 2010

Senator Christine Kehoe, Chair
Senate Appropriations Committee
State Capitol, Room 2206
Box 942849
Sacramento, California 94249

Re: AB 744 (Torrico) OPPOSE

Dear Senator Kehoe:

The Regional Alliance For Transit wrote to the Appropriations Committee on January 26, 2010 in opposition to AB 744. Our group continues to oppose the bill.

Since our January letter, the Metropolitan Transportation Commission has released its 2009 Comprehensive Annual Financial Report. The interest rate swap strategy’s effect has continued to worsen, with the termination cost increasing from $158 million to $399 million.

Additional swaps with a notional value of $556 million have been entered into in an attempt to net out several previously existing swaps. The estimated termination cost on these is $11 million, bringing the total termination value of all of the swaps to $411 million—not in MTC’s favor. The relevant page from the CAFR is enclosed with this letter.

As noted earlier, a review by the state of the stewardship of toll bridge revenues managed by MTC/BATA is worth consideration before granting any new powers to it. Drivers crossing the state–owned toll bridges are paying millions of dollars to cover swap charges resulting from BATA’s poor financial decisions. This is not a short–term problem, either, as several of the swaps are in effect until 2047.

A copy of our January letter also is enclosed with this letter.


M. Williams
for RAFT

cc: Assemblymember Torrico