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DOCUNII RESURZ
0.3u1 - [B2487513]
[Federal Share of biATA's Bond Interest Costs Is ToQ Large].
CED-78-161; B-141529. September 1. 1978. 5 pp. + 2 enclosures (5
Pp.).
Report to Secretary, Department of Transportation; by Henry
3schvege, lirector, Comiunity and Economic Development Div.
Kssue Area: Transportation Systems and Policies: Urban Public
Transit Systems (2411).
Contact: Community and Economic Developuent Div.
Budget Function: Ccamerce and Transportation: Ground
Transportatiu (404).
Congressional Relevance: House Committee on District of
Columbia; Senate Committee on Governmental Affairs.
Authority: Mationl Capital Transportation Act of 1972 (P..
92-349); S. Dept. 92-931; H. lept. 92-1145; S. 22S7 (92nd
Conq.); H.R. 11877 (92nd Cong.). latitonsl Capital
Transportation Act of 1969.
The National Lapital Transportation Act of 1972
provided that the Federal Government, through the Secretary of
Transportation, would guarantee the payment of the principal on
Vashington Retropolitan Area Transit Authorityss (gEA-l's) bonds
and reivburne MHATA for part of the bond's Interest and reletcd
costs. Between 1972 and 1975, Va1TA sold $997 million of 40-year
revenue bonds and had earned $134 millicn on the invested
ptoceeds as -f June 30. 1978. For fisi tl years 1977 through
1979t the total Federal contribution for VHATA's bond interest
will be about $140 million. Starting in fiscal year 1980, the
interest-set-aside funds will be used up, and the Pederal share
of matching payments will be 85%. URATA projects tiat the
Federal contribution to the bond interest payments will increase
to $65 million annually and then gradually reduce until the
bonds are Faid off in the year 2015. Starting with the first
interest payment due, the income earned from bond proceeds
should have been applied to the inteest due to derive the
amount of net interest which the Federal Government vould
contribute. Although VHATa has already spent about $38 million
of the inccee earne?, frow bond proceeds, the $96.1 millioL of
unspent income earned from the bond proceeds should bi used to
pay the interest vhen due. This would save the Federal
Government about $61.7 million. The 3ecr-tary of Transportation
should make sure that the amount of unspent incoee earned on the
b d proceeds ias been appropriately applied in determining the
federal Government's contribution to the inte.ets payable on
VHATA's bonds. (ERS)](ViewImageLocal?handle=hein.gao/gaobaaybj0001&div=1&collection=&method=preview&ext=.png&size=3)