Las Vegas Monorail officials Tuesday assured lawmakers that the monorail's finances were sufficient to carry into 2005 despite various setbacks and that the state would not be responsible if the company cannot repay any of the tax-exempts bonds.
The monorail currently has $33 million in bond proceeds that will act as a "cushion" in case of emergency, said Ross Johnson, chief financial officer for Transit Systems Management LLC, the for-profit arm of the Las Vegas Monorail Co.
Johnson spoke before the joint meeting of the Senate Transportation and Homeland Security Committees and the Assembly Transportation Committee.
The monorail also has $11.2 million in liquidated damages that it collected from the contractors, Bombardier Transportation and its partner Granite Construction, for problems related to the monorail, he said.
The Monorail company has also invoiced the companies another $3.5 million, but has yet to receive the funds, Johnson said.
Monorail officials project that the project will attract 36,000 riders a day who will bring in approximately $101,000 a day in 2005, he said.
"We feel we've experienced a successful reopening," he said.
Officials also reassured several lawmakers that the state would not be responsible for any public bailout if the monorail company could not repay the bonds that were issued by the state.
Assemblyman John Oceguera, D-Las Vegas, asked whether the state would be responsible for repaying the loans in light of major credit agencies placing the bonds on a "watch list."
The company, Fitch Ratings, a New York-based financial analyst company, placed the Las Vegas Monorail's bonds on its "Rating Watch Negative" in September, meaning that the bonds were in danger of being downgraded.
Johnson replied that the state has no responsibility over the bonds. Even though it issued the bonds, resorts and casinos committed to the bonds, effectively taking them over. The bonds are also insured, he said.
The monorail officials also blamed the contractors for the delays and problems that have haunted the monorail. They were responding to questions posed by Senate Assistant Minority Leader Dennis Nolan, R-LV., who asked how the problems occurred.
"It was a failure on their part," said Michael "Nick" Niarchos, general counsel for the monorail company.
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