Walmart Tagged, Metro Gets Spotlight At City Council

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At least one city council member asked Metro if it's time to re-evaluate certain plans.
At a Houston City Council meeting that was supposed to clear up a few things about a planned Walmart development near the Heights, Metro, and its financial mess, ended up being the issue of the morning.

Council members were set to vote on a 380 agreement between the city and developer Michael Ainbinder -- he's building the Walmart -- but Councilman Ed Gonzalez tagged the vote. No real discussion, just delayed the vote until at least the next council meeting.

Metro, however, did get quite a bit of discussion, because Metro's president, George Greanias, and its chairman, Gilbert Garcia, appeared before the city council for the first time since the Federal Transit Administration announced that mass transit in Houston, at least as currently planned, is in trouble.

And Greanias and Garcia told the City Council a few things that are new to Hair Balls, and one of those things shed some light on how the old Metro operated its general mobility fund.

That fund was supposed to reserve a fraction of Metro's one-cent sales tax revenue to pay for road improvements in the Houston area. Unfortunately, the past Metro administration, according to Greanias, didn't use that cash flow for general mobility payments, instead opting to borrow money to make the payments.

Greanias said Metro now has a commercial paper liability of about $167 million that is going to be hell to pay back. But as big as that problem is, Metro is putting it on the back burner until it can figure out the mess with the FTA.

The feds, apparently, have assured Metro that at least $300 million is still coming, after the whole Buy America violatons and rail car procurement are fixed. In the meantime, Metro might be able to get its hands on $50 million of federal money, and there's another $64 million in stimulus funds that Metro might get. Considering how bad it could be, all that was good news to Greanias.

But things are far from over on the Buy America issue and with the rail car company CAF. Metro issued stop-work orders on all those expensive rail cars, and we're sure CAF isn't going to easily give up the contract.

In fact, Greanias said that litigation is likely.

City council members seemed concerned with how Metro intends to maintain current service levels, without raising fares, with a budget that is set to be $430 million smaller than last year.

Greanias assured everyone that it could be done, and we assume Metro's new budget will be discussed at some length during tomorrow's Metro board meeting.


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