Oct. 4, 2003, 10:14AM

Rail foes demand inquiry
Dueling sides swap barbs over funding

Copyright 2003 Houston Chronicle

With exactly one month until the Metropolitan Transit Authority's rail referendum, total warfare has begun.

When U.S. Rep. John Culberson, R-Houston, found that Metro's predicted flow of certain federal funds was 20 percent higher than his own, his first move wasn't to ask Metro to explain, but to seek a criminal investigation by the U.S. attorney in Houston.

On Friday, three Houston Democratic congressmen stood together, calling Culberson's behavior "outrageous" and "silly."

Minutes later at a dueling news conference, rail opponent Paul Bettencourt, the Harris County tax assessor-collector, stood before the cameras and said, "Metro needs to show me the money!"

And for its part, Metro has yet to fully explain its projections, although transit authority President Shirley DeLibero promised details would be forthcoming, on Monday.

While the pro- and anti-rail forces will argue over many points of Metro's light rail plans, this one involves how much cash Metro will really have on hand for the next six years.

If Metro overestimates its income from such sources as sales tax and federal grants, and goes forward with an expensive rail system, it will have to shortchange its bus service and street work, critics like Harris County Judge Robert Eckels contend.

If Metro cuts back on street work, leaving local cities with the onerous task, property taxes might have to rise to cover the cost, they say.

In a telephone interview Friday, Culberson was asked why he wrote a letter to the U.S. attorney for the Southern District of Texas before asking Metro itself for an explanation of its higher funding estimates.

"That was a private inquiry that I was not going to publicize," he said, but a television reporter "asked me the right question" and thus he spoke publicly about it.

Culberson made his first remarks Thursday evening. By 12:30 a.m. Friday, the anti-rail campaign issued a news release with the headline, "Cong. Culberson calls for federal investigation into Metro's finances."

The source of federal money at issue is called "formula funds" and comes from the Federal Transit Administration. Each transit agency in the country gets a piece, based on population, density and other factors.

The total pot of money and annual inflation factors are calculated in a massive transportation bill passed every six years. The bill for the next six years has been controversial, as usual, and sits unapproved in Washington.

In the version put forward by President Bush, the inflation factor would be 2 percent per year. Using this number, based on what Metro got in 2003, staffers on an appropriations subcommittee told Culberson that Metro could expect $565 million from 2003-2009.

Culberson said FTA officials verified the math.

But figures from Metro indicate an expected $681 million.

Metro officials said several factors may explain the difference. Metro used an 8 percent inflation factor, which it said was the historical average increase under the last transportation bill.

Culberson insisted that 2 percent was iron-clad and the president wouldn't budge, while DeLibero said that had never happened before -- Congress always increases transportation funding from what the president wants to make constituents happy.

At present, said U.S. Rep. Nick Lampson, D-Beaumont, Bush's bill is worth $247 billion, the Senate version is $311 billion and the House version is $375 billion.

"We know it will be in excess of $300 billion," he said.

But the inflation factor may not explain the entire $116 million difference between Metro and Culberson. Metro officials said that their numbers were for expenditures, not appropriations. A transit authority does not have to spend the money in the year it is appropriated, and thus Metro's first few years of predictions may include money that is already promised to it.

However, Metro officials couldn't say for sure, saying their top financial officer was on vacation. While DeLibero promised a full accounting Monday, rail opponents charged that Metro simply didn't have a good explanation. As the days passed this week, Metro looked flat-footed.

Lampson joined U.S. Rep. Gene Green, D-Houston, and U.S. Rep. Chris Bell, D-Houston at a pro-rail news conference. U.S. Rep. Sheila Jackson Lee, D-Houston, in Washington, issued a statement in support of Metro.

U.S. Sen. Kay Bailey Hutchison, R-Texas, also issued a statement saying she would work to make sure that federal funds were available if Harris County voters choose rail.

Bell said that by demanding criminal inquiries to grab headlines, rail opponents were being "irresponsible, malicious and dishonest by design."

"Based on history," Lampson said, "Metro has made good projections ... Let's be serious."

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

Opponents believe the rail plans are too expensive and do too little to relieve congestion. Pro-rail forces say Houston cannot build enough freeway lanes to relieve congestion and other alternatives are necessary.

Culberson said that if exaggerating financial estimates before a public bond referendum were not illegal, it ought to be.

"It's quite obvious they are desperate," said Ed Wulfe, a real estate developer leading the pro-rail campaign. "They are behind in the polls, and they are grasping at anything they can."

Rail opponents, who previously said Metro's sales tax projections were also too rosy, said they were just trying to bring the financing facts to light.

"In my mind, they (Metro) have no credibility on this issue," Bettencourt said.