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BRIDGE AUTHORITY DOESN'T HAVE HUGE SURPLUS

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 by 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 of $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

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