METRO budget battle all about the
By LUCAS WALL
Houston Chronicle - 10/07/03
The battle of the Metro budget numbers turned uglier Monday,
with the transit authority accusing a federal agency of issuing
false figures while rail opponents called a news conference
to warn Metro will go bankrupt in 2005.
The dispute over how much federal money the Metropolitan
Transit Authority has on hand and how much it expects to get
in the next six years is the latest round in a fracas pitting
Metro against its opponents and the Federal Transit Administration.
Who wins the dollar debate could determine the outcome of
the Nov. 4 transit-expansion referendum.
Meanwhile Monday, as the opposition group Texans for True
Mobility began its TV advertising campaign, the committee
pushing for passage of the Metro referendum accused the group
of failing to file a required campaign-finance disclosure.
Citizens for Public Transportation said the mobility group
might be violating federal tax and state ethics laws.
Metro began the day's wranglings at noon, responding in detail
to allegations made last week that it overestimated its federal
revenue through 2009 by more than $100 million. Transit officials
said the FTA, on which opponents relied for their data, failed
to include $66 million already awarded to Metro in the calculations
it sent to Rep. John Culberson, R-Houston, on Sept. 26.
"This is a lot simpler than it has been portrayed to
be," said Francis Britton, Metro 's chief financial officer.
A simple day it was not, however. Texans for True Mobility,
the group led by developer Michael Stevens, responded to Metro
's calculations with a 4 p.m. news conference to announce
Metro will run out of money in two years based on what he
sees as the agency's reliance on false accounting.
Also during the day, Metro 's president and CEO fired off
an irate letter to the FTA's administrator - the official
who helps determine how much transit money is sent this way
- saying she is "appalled" at the "erroneous"
numbers the agency released that are "divisive"
and "will no doubt be publicly embarrassing to both the
FTA and the administration."
And Metro Chairman Arthur Schechter sent another note to
rail foe Harris County Judge Robert Eckels chastising him
for trying "to distract the public from the real issues."
U.S. Attorney Michael Shelby, meanwhile, issued a statement
saying he has received Culberson's request to begin a criminal
investigation of Metro 's finances but the Justice Department
prohibits him from commenting on such a probe.
According to Metro 's latest projections - drawn up by staff
over the weekend - it will spend $681 million in federal money
through 2009. The FTA, in projections released last week through
the U.S. House Appropriations Committee and in a letter to
Culberson, states Metro will receive $573 million - a discrepancy
of $108 million.
The transit authority said the difference is explained by
two factors: The FTA has miscalculated the amount of federal
grants Metro has received in prior years but plans to spend
in the future. Also, Metro used a different annual growth
projection than included in the Bush administration's draft
of the transportation spending authorization for the next
Britton said the numbers released by Culberson and Eckels
did not take into account another $58 million in existing
federal grants not yet spent, as well as a $7 million state
clean-air grant to pay for special diesel bus fuel.
Rail opponents said the release of Metro 's figures Monday
did not sway them. Stevens said Metro is asking voters to
authorize a $4.6 billion expansion plan, including 22 more
miles of light rail, "that effectively handles 1 percent
of the traffic in the region and will begin that with no money
in the bank and a negative cash flow by 2005."
If the FTA numbers prove correct and Metro continues to see
a drop in sales tax revenue, the authority will be $75 million
in the hole in two years, Stevens contends.
Britton acknowledged there is a difference between Metro
's projections and those by the FTA of $43 million because
of the different rates used to calculate annual increases
in the federal formula funds.
Metro used an 8 percent annual growth factor based on historic
trends, Britton said, while the FTA used a 2 percent rate
proposed by President Bush.
"We've got a rate of growth projected that is a reasonable
expectation," Britton said.
But even if the president's proposal prevails, Britton said,
Metro has included an $81 million contingency to cover shortfalls.
Shirley DeLibero, Metro president and CEO, expressed irritation
that neither Culberson nor Eckels asked Metro to explain its
federal formula estimates but instead released their criticism
to the press last week when she and other Metro executives
were at a transit conference in Utah and Britton was on vacation
DeLibero's letter to FTA Administrator Jennifer Dorn is an
unusually harsh critique of how the FTA handled Culberson's
request for information.
"Had you or your staff afforded Metro the simple courtesy
of a phone call, we could have clarified that FTA's chart
is fundamentally wrong," DeLibero wrote.
Metro spokesman Ken Connaughton said DeLibero and Dorn discussed
the matter at last week's American Public Transportation Association
conference in Salt Lake City. Dorn has told some people she
did not see or sign the Sept. 26 letter that bears a signature
in her name, Connaughton said.
FTA spokeswoman Kristi Clemens could not be reached Monday
Culberson said Monday he had not received the new numbers
and could not comment until his office and the FTA has a chance
to review the figures. Eckels' spokesman said the judge was
out of town Monday but is reviewing Metro 's response.
Metro released details of how it calculated future federal
funding to counter rail critics' claims that its projections
were more than $100 million too high.
- State clean air grant: $7 million
- Federal grants already awarded: $71 million
- Projected future federal grants: $603 million
- Total grant spending through 2009: $681 million
- Federal grants already awarded to Metro : $13 million
- Projected future grants to Metro : $560 million
- Total grant awards through 2009: $573 million
DISCREPANCY: $108 million