METRO budget battle all about the bucks

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 six years.

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 in Mississippi.

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 evening.

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.

.........

MONEY MATH

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.

METRO NUMBERS

• 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 NUMBERS

• 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