Link to Chronicle article regarding funding issues effecting Metro and light rail. Article is also printed below.
Stalled federal grant adds to budget concerns
By BRADLEY OLSON
Aug. 20, 2010, 12:17AM
Senior Metro officials emphasized that they did not anticipate any cuts to services due to the financial pressures and expressed confidence the FTA grant needed to pay for an estimated 30 miles of additional rail in Houston is forthcoming. But they nevertheless have begun to weigh the impact of continued delays on construction plans that anticipated completion in 2013.
“There’s going to be some tough choices that we’ll be making here, no doubt,” Metro Chairman Gilbert Garcia said.
So far, officials said, the work that has been put off has been minimal on the North line, which is expected to run from north Houston to the Texas Medical Center and Reliant Park. Metro has delayed road reconstruction work on Fulton Street and has put off awarding a contract for the expansion and construction of a rail facility on Fannin at the south end of the line near Reliant Park and the 610 Loop.
Those delays could just mark the beginning, Metro’s Acting President and CEO George Greanias said.
Holding the line
Metro’s budget had anticipated that the transit agency this fiscal year would receive some of the $800 million earmarked to expand Houston’s light rail in President Barack Obama’s 2010 budget. The grant money has been delayed amid an FTA investigation into Metro’s compliance with federal procurement rules. Metro also has struggled during the economic slowdown due to lower ridership and sales tax revenues.
“We’re holding the line on operating costs, and we’re going to be watching everything very diligently,” he said. “We have to be prudent in the management of our finances. That’s why all summer long we’ve been looking at scenarios, and that’s what we’re going to be talking about with the board in the coming weeks.”
Garcia and Greanias said the board will hold several meetings in the coming months to discuss contingency plans for next year’s budget. They said those plans will depend on the status of the FTA’s investigation and whether the grant is approved in the coming months.
This year, officials said, although Metro took in more than $260 million less than anticipated in sales tax revenues, grant funding, ridership fees and debt issuance, the agency expects to have a $49 million shortfall at the end of its fiscal year Sept. 30 due to lower spending. That shortfall will be closed using cash surpluses.
Wednesday’s board meeting also showcased the findings of a private law firm that faulted the manner in which Metro conducted board meetings in the past and made more than a dozen recommendations about how the agency can improve its compliance with state laws regarding transparency.
Neil Thomas, a partner at Fulbright and Jaworski, said the firm had been unable to assess how decisions were made at Metro board committee meetings due to insufficient records.
“That lack of transparency bothered us,” he said.
Improved minutes, files
Thomas praised Metro’s efforts to improve how it retains documents after an open records lawsuit and complaints from a terminated employee embroiled the agency in scandal earlier this year. Still, he said cultural transformation would be more important than implementing a new policy.
“Those cultural changes will ultimately make things work,” he said.
Board members pledged to keep better minutes and comply with the recommendations.
“We just want to make sure we’re following the rules,” Garcia said.
Daphne Scarbrough, a longtime Metro critic who owns a business on Richmond where the University Line would run, said the agency is being forced to comply with state law and deserves no credit for the changes it has implemented to bring it in line with what is expected of all government entities.
She praised Thomas’ report and said she and other Metro critics have experienced similar problems with previous committee meetings.
“They have the appearance of a public meeting, but in reality decisions are made behind closed doors,” she said. “It’s because of their policies that Houston does not have light rail.”