Monorail audit OK’d

Kirsten Searer

Friday, April 15, 2005 | 10:56 a.m.

CARSON CITY -- An Assembly committee approved a bill Thursday that would require a legislative audit of the Las Vegas Monorail.

Assemblyman John Oceguera, D-Las Vegas, said the low ridership and financial problems surrounding the troubled monorail prompted him to support the idea.

"There has been so much controversy over the monorail," said Oceguera, chairman of the Assembly Transportation Committee. "I think the public is concerned about it."

But a monorail official objected to Assembly Bill 406 because it would require the monorail to pay for the audit with $50,000 of the company's own money.

Ross Johnson, chief financial officer of Transit Systems Management, the company that operates the monorail, said his company pays between $75,000 and $100,000 each year for an independent audit.

The Legislative Commission receives that yearly audit, along with extra information required by Senate Bill 362, which was passed in the 2003 legislative session, Johnson said.

Anything the Legislature needs is probably in that information, unless members want to request something more specific, Johnson said.

Oceguera pointed out that the monorail's bond ratings have been lowered by Moody's Investor Service to a higher-risk junk category. The bonds were issued by the state.

He said he's concerned the state will have to make up some of the bond money if the monorail can't pay them.

"Somebody's got to pay those bonds," he said.

But Sydney Wickliffe, director of the state department of business and industry, said that while the state has limited oversight over the monorail, it cannot be held liable for the bonds. The first $600 million of the bonds are insured, she said.

"The state has zero liability for these bonds," she said. "... The state under no set of circumstances ever has any liability for the repayment of these bonds."

State Treasurer Brian Krolicki has also said the private insurance policy, required by the state and the company's substantial bankroll will likely prevent the state from being at risk.

The audit will now go before a vote in the Assembly.

The monorail reopened Dec. 24 after a 107-day closure that started when a two-pound washer fell from a moving train in September. The system had consistently fallen short of ridership estimates in January and February, but saw an increase last month when more than a million people boarded the trains.

Those numbers -- roughly 32,000 riders a day -- were the highest for a full month since the system opened to the public but still lower than the 36,000 daily riders that company managers had predicted would ride the system.