The time has come to ask if only an independent audit from the North Carolina state auditor can deliver a full accounting of both CATS’ past spending on the South Blvd. line and its future plans for the North line commuter project.
The holes in the South Blvd. ledger are fairly obvious. We have not had an updated account of the cost of the project since last September’s jump to a $463 million total. This is despite a dispute involving a subcontractor which kicked off a Federal Transit Administration audit for foreign steel content in the project, foreign steel being prohibited under FTA funding regulations. How has this development impacted the bottom-line cost?
In addition, the official CATS method of accounting for the project cost omits at least $70 million in other infrastructure cost paid by the city along the South Blvd. corridor. How much of that total — objectively — should be attached to the light rail project?
Then there are the well-worn areas of the $40 million trolley and millions in convention center retrofits, costs paid by the city which benefited, often directly according to city officials, the light rail project. A back of the envelope figure would be at least $500 million, perhaps $550 million as the actual final cost of the project.
But we do not know the final cost. Will not know that, according to what CATS chief Ron Tober told city council, until six to 12 months after the project is complete. By then, not coincidentally, CATS will be well on its way to building two more light rail lines.
That is unacceptable. Unacceptable to local taxpayers, unacceptable to state taxpayers who helped foot the bill on the South line and are expected to do so by CATS on future lines.
Ah, future lines. The $261 million North line in particular. This is the plan in most urgent need of some sort of independent review and analysis.
Because the North line has such low ridership projections — only 4600 persons per day by 2030, which assumes another $112 million in project upgrades before then — it will not receive federal funding. More importantly, it will not receive federal oversight. There will be no FTA for CATS to answer to on project spending or timelines.
Instead, CATS will be rushing to issue debt backed by future property tax revenues in order to complete the project. The potential for projected rosy development scenarios to fail to deliver projected tax revenues is very real. Certainly tax increment financing plans around the country have, on occasion, come up short forcing local jurisdictions to hike the base property tax rate in order to avoid a default on the debt they have incurred.
In short, if the final cost for the South Blvd. line is going to be $550, $600, or $700 million, we need to know that now. If the North line financing plan is a house of cards — as the projection of 83,000 jobs within a half-mile of the line by 2030 alone indicates — we need to know that now.
Sounds like a job for the state auditor. Les Merritt, are you up to the task?
