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October 2, 2003

Critics question rail's projected federal funding
$116 million shortfall claimed

By DAN FELDSTEIN
Copyright 2003 Houston Chronicle

Critics of Metro's rail plans released budget numbers Wednesday that seemed to show Metro is overestimating how much federal funding it will get in the next six years.

The chairman of the Metropolitan Transit Authority called the attack "garbage" as the debate over Metro's November bond referendum got hotter.

Harris County Judge Robert Eckels, an opponent of the rail plan, called a news conference to highlight a packet of information from the Federal Transit Administration and a congressional committee. It included figures asserting Metro was overestimating its expected federal funds for the next six years by $116 million.

If that were the case, Eckels said, spending on the proposed rail system would leave nothing left for buses, carpool lanes and Metro's contribution to local road work.

"The financing is more questionable at every turn," Eckels said.

One hour later, Metro board chairman Arthur Schechter held his own news conference and said opponents were trying to create doubts about the rail plan regardless of accuracy. "Politics. Pure politics. ... It's just an effort to be disingenuous and play political football," he said.

Critics already have questioned Metro's projections for its sales tax income -- its largest source of money -- saying the figures were far rosier than historical precedent would suggest. This time, opponents focused on federal "formula" funding, a pot of money handed out by the FTA to all transit agencies.

U.S. Rep. John Culberson, R-Houston, a rail opponent, asked the FTA to determine what share Metro could expect from formula funds. It responded that while the bill laying out the formula for the next six years hadn't been passed yet, it currently calls for a 2 percent increase each year.

Staff on an appropriations subcommittee on which Culberson serves did the math and compared the results to Metro's own estimate, finding the transit authority's to be 20 percent higher. Metro projects it will receive $681 million in formula funding from 2003 through 2009.

"As you can see, FTA estimates show Metro overstated its projections by over $116 million. I believe this overestimate, along with Metro's lowered sales tax estimates as well as its aggressive fare box recovery estimates, raises serious concerns about Metro's credibility and its ability to build the light rail system," Eckels wrote to Schechter in a letter he released.

Metro objected immediately and loudly, but couldn't respond in detail because its senior financial officers who might explain the discrepancy were out of town at a transit conference.

Schechter said that no transit formula bill had ever called for an annual increase as low as 2 percent, and he didn't expect the current number to stick. He also called the comparison numbers "apples and oranges."

The Culberson numbers were what Metro could expect to be appropriated in each of the next six years, said Metro vice president John Sedlak. But the numbers Metro provided were expenditure numbers, he said, which can include money that is appropriated in one year but spent in a later year.

Transit agencies have three years to spend their annual formula appropriation. And Metro plans to spend money from previous years in the first three years of its projections criticized by Culberson, Sedlak said.

He said he was not sure if that issue accounted for the entire discrepancy between the sets of numbers.

It was possible that both parties were correct -- or at least had some justification for their numbers. But there seemed little chance that they would congratulate each other and apologize.

Metro will hold its referendum Nov. 4, asking voters to approve a $640 million bond issue for 22 miles of light rail by 2012. Also on the ballot, the authority pledges $774 million for road projects from 2009 to 2014 and a 50 percent increase in bus routes by 2025.

Eckels sounded the theme of opponents of every rail concept since Houston began regularly fighting over them in the 1970s -- he supported rail, but just not this particular plan.

"I just think this is not the right rail plan for Houston. The financing is more questionable at every turn," he said.

"The opposition has no plan," Schechter responded. "All they want to do is keep the status quo, which hasn't worked for our community."

The packet of information released by Eckels included a letter he wrote dated Sept. 24 asking Culberson to check on whether Metro had overestimated its formula funding. Culberson apparently forwarded the request, and the chairman of a Congressional subcommittee responded on Sept. 25 with the full set of data, saying it has been fact-checked by the FTA.

Culberson's office could not be reached late Wednesday to explain how the FTA and the committee were able to respond in detail to Eckels within 24 hours.