What to do if Metro fraud costs us $900 million Fed$Adding to the Metro mess, KHOU 11News Defenders have an expose this morning on how Metro deceived the FTA in its rail funding application (hat tip to Barry). It intentionally used out-of-date pre-recession sales tax revenue estimates to "prove" it could afford to build all five lines (which was required). UH Dr. Barton Smith gave them updated numbers in June 2009, but they chose to submit the old June 2008 numbers with the November 2009 application.
"In fact, for the next 15 years combined, Smith downgraded his tax revenue projection by $2.4 billion, but KHOU discovered Metro never shared that information with the federal government."The FTA is unhappy and has asked for and received the updated data. Two local congressmen are calling for a fraud investigation and a Metro house-cleaning. It's unclear if the $900 million in federal funding for the North and SE rail lines is in jeopardy.
While I'd hate to see Houston lose out on federal funding, the loss might force us to do a much-needed rethinking of the Metro Solutions plan. A whole lot has changed since the 2003 referendum. Not only have revenue estimates plummeted, but cost and debt estimates have skyrocketed. Traffic congestion has increased noticeably. And gasoline prices went from $1.50 to $4 - and now temporarily down to $3, but the expectation is they will rise again as global growth gets back on track. That has, and will, dramatically increase the demand for long-distance commuter solutions, especially frequent express buses from all neighborhoods to all job centers with an improved and expanded HOV/HOT lane network. If we don't do it, I think we're going to see more employers considering places like The Woodlands, Katy, and Sugar Land (see bottom) to cut their employees' commutes while still giving them nice, new, affordable homes in good school districts - to the detriment of the core City of Houston tax base and vitality (like Exxon's potential move to The Woodlands).
Where is the money for those new commuter solutions going to come from? My proposal would be to scale back the core LRT network to connecting just the major job centers and destinations. That network would free up money by temporarily switching the North, East, Southeast, and (probably) Uptown lines to fast, frequent signature bus service. They have relatively low ridership projections and are through neighborhoods with uncongested streets (except Uptown, of course, but it can ill-afford rail disruption on Post Oak) where buses work just fine for the demand. We can no longer afford speculative rail lines through uncongested low-density neighborhoods without major destinations, while hoping for long-term densification.
Ultimately this short-term setback could be a long-term blessing in disguise.
Update: The Chronicle Politics blog is reporting that there was no deception, the FTA knew what it was getting all along, and the N and SE federal funds are not at risk.
Update 2: KHOU followup story: Feds scold Metro and take action to protect taxpayers on rail lines