More bad news, at least for people hoping for more light rail in Houston, came from Metro headquarters this morning when the agency's president, George Greanias, announced that the light rail expansion budget for this year has been cut by close to 70 percent, from $458 million to $143 million.
That means more than a hundred construction, engineering, small business and community outreach contracts are being reduced or suspended. You can view the list of contracts here.
The changes stem from Metro's financial woes and the Federal Transit Administration's announcement in September that Metro had violated Buy American rules, delaying its federal funding even further.
"These are difficult and regrettable decisions," Greanias said. "We've taken the agency down to the foundation to start from a totally financially sound base."
But, he added, "It's going to be a very difficult path as we move forward."
Utility work will continue on the North and Southeast lines until the end of this year, and utility and road work go on as planned in "select areas" on the East End line. The rest is going the way of the buffalo. At least for now.
Because Greanias and Metro's board chairman, Gilbert Garcia, stressed that the light rail plans aren't completely shutting down. That would be more expensive -- costing about $200 million, according to Greanias -- than suspending the operation until the federal funding picture becomes more clear.
The board also voted this morning to amend wording in its "General Mobility" contract -- until it expires in 2014 -- which uses a small portion of Metro's sales tax revenues to pay for road improvements for Houston, Harris County and other areas where Metro provides service.
The contract has been a big problem for the new Metro administration, because the old group was using the money to pay for Metro operations, and when someone called for a General Mobility payment, Metro would go out and borrow money to cover what it owed.
Greanias has repeatedly said that Metro is stopping that practice and will make cash payments only. Today's vote puts that promise in writing. Greanias said Metro will make a $30 million General Mobility payment this month.
"I don't think people realize how big a hit that was to Metro, but it was the right call," Greanias said after the meeting. "It marks a major break with a past way of thinking in the agency."
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