Monday, May 23, 2005
Fitch Rates Santa Clara VTA Outlook Positive
Fitch Rates Santa Clara VTA, California's $232.3MM Sales Tax Bonds 'A+'; Outlook to Positive: "The system's low farebox recovery ratio is expected to remain below 15% through fiscal 2009 despite projected fare increases made in accordance with the board-approved fare policy."
That policy is to raise fares annually for the foreseeable future. Fitch also mentions that the bonds VTA has on offer are secured against its sales tax revenues, which, although recovering, remain sluggish. They rate VTA A+ (Positive). It all seems positive, but to secure that rating has required steep cuts in service and union personnel, even though they insisted on building new light rail and buying new buses with borrowed money, all of which are mentioned in the rating summary, but which Fitch manages to put a positive spin on. All one need do to see the reality of VTA's situation is to compare them to their nearest neighbor, SamTrans, which has laid off perhaps 3 or 4 administrators while maintaining service and front-line staff levels.
That policy is to raise fares annually for the foreseeable future. Fitch also mentions that the bonds VTA has on offer are secured against its sales tax revenues, which, although recovering, remain sluggish. They rate VTA A+ (Positive). It all seems positive, but to secure that rating has required steep cuts in service and union personnel, even though they insisted on building new light rail and buying new buses with borrowed money, all of which are mentioned in the rating summary, but which Fitch manages to put a positive spin on. All one need do to see the reality of VTA's situation is to compare them to their nearest neighbor, SamTrans, which has laid off perhaps 3 or 4 administrators while maintaining service and front-line staff levels.
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