Peace Train?

Bob and Bill talk up a Metro rail deal, but Butch isn't buying it

Based on new Metro financial projections, Houston mayoral candidate Bill Whiteand former mayor Bob Lanier contend that the agency can finance its 20-year mobility plan, Metro Solutions, without tapping into the general mobility funds that go to local governments for transit-related maintenance and roads.

White and Lanier say they'd welcome a compromise that would preserve a shaky coalition behind Metro's referendum, which is expected to go to voters in November. White is walking a political tightrope, hoping Metro produces a plan that he can support without alienating Lanier and other community leaders who have opposed rail in the past but have committed to an extension of the 7.5-mile Main Street line. The disposition of the road money is a land mine that could blow it all apart.

When Metro chair Arthur "Butch" Schechter unveiled the draft proposal last month, its most controversial feature was the phase-out of the general mobility payments with the end of the current contract in 2009. Between now and then, nearly $1 billion will be transferred from Metro to local governments. After the contract expires, that money would go to pay for Metro Solutions, which includes a proposed 41-mile light rail network.

White and Lanier had pressed Metro officials for financial projections that would detail how Metro proposed to pay for the plan. After chewing over the new numbers, White believes the issue of the fund transfer can be defused.

The candidate says that figures show Metro can launch the long-term plan by issuing bonds to raise its share of the budget for the rail extension, which would be matched by federal dollars. From what he's seen, there's no reason to fight over the issue of the general mobility fund right now.

"The projections, to me, show it is not needed for phase one of the plan," says White. "It looks to me like we can leave that decision to later Metro boards and mayors and city councils."

Metro projects that nearly $8 billion will be available for the Metro Solutions plan from now to 2025. According to White, that's enough to support financing of rail and other improvements envisioned by Metro, without tapping into the money transfers to local governments.

According to Lanier, if the rail extension initially costs in the range of $1 billion and Metro borrows half the money, the annual servicing of the debt would be easily manageable, on the order of $20 million.

"There's room for lots of errors and still have $20 million," says the former Metro chairman. "So why the hell does Metro need to go take Humble's money or West University's money? And when they do, they're going to have to go up to Congress with a straight face and say, 'What we've done is take their money, and so we want you to make them feel good about it by lending us an equal amount on it.' "

According to Lanier, the financial projections suggest a logical compromise.

"If they back off [the general mobility funds], I think we can have a consensus to build the first phase," he says.

Otherwise, Lanier predicts the referendum will fail. "If they undertake to do away with the 25 percent, I think the citizens will be looking at either increased taxes or reduced [road] maintenance, or possibly both. I think there will be a strong contest, and I do not believe it will pass the voters."

Lanier agrees with White that future politicians and elections can decide the disposition of the general mobility funds. "We don't have to resolve that issue now," he insists. "I think the idea that they have to have this money to build this is a misleading position."

When The Insider ran this rationale past Schechter, the chairman rejected the idea of dodging the general mobility issue until later.

"No, it can't be taken off the table," replied Schechter, who said he doesn't believe Metro Solutions can be implemented without the road dollars. "We have worked for a year and a half on this program, and there's been literally tens of thousands of man-hours and millions of public dollars spent on these studies. Right now, at this point, I believe that the public wants to move forward with the transit plan."

But why not shelve the issue for now and avoid a political firefight in the interest of passing the referendum?

Schechter contends that putting off the matter will solve nothing. "The reality is these are issues that need to be addressed… The bottom line is that we need this money for transit."

No significant compromises seem to be in the cards between now and July, when the Metro board is scheduled to approve the plan, says Schechter.

"Our board would make the decision about anything we did, and my board right now is pretty adamantly determined to go forward with the Metro plan as drafted and reasonably modified in public discussions."

The prospect of a November confrontation doesn't seem to faze the chairman.

"I think Mayor Lanier is a person who cares deeply about our city and wants to do the best thing for the city," allows Schechter, "but his view may not be the view of the majority of the people in the city now."

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