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METRO Clears Federal Hurdle In Light Rail Grants

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Metro clears federal hurdle for $900M in rail grants


Updated 10:35 p.m., Thursday, September 15, 2011

A year after blocking $900 million in Metro light-rail grants over a botched rail-car procurement, the Federal Transit Administration has told Congress it intends to approve the grant agreements.

Most of the money is still subject to annual congressional appropriations, but the move by the FTA means the Metropolitan Transit Authority has overcome the problems cited by the federal agency when it called Metro's procurement process "alarming and disturbing" last year.

Metro plans to use the federal money to help build its North and Southeast lines, which are under construction.

In September 2010, the FTA announced that the process Metro had used to award a rail car contract to CAF USA, the U.S. subsidiary of a Spanish company, violated federal law and "Buy America" requirements that were designed to protect U.S. jobs.

To requalify for federal funds on the two lines, the FTA said Metro had to cancel its contract with CAF USA and solicit new proposals for rail cars. Metro complied.

Last week the FTA notified four congressional committees - House Transportation and Infrastructure; Senate Banking, Housing and Urban Affairs; and House and Senate Appropriations - of its plan to execute two grant agreements that could bring Metro a total of $900 million over five years.

Federal law requires a 60-day notification period, but Congress does not have to vote on the grants. Typically, grants that get as far as the 60-day notice go on to be signed.

'This is just one step'

Metro's response was low-key, although the FTA's notice to Congress represents a major milestone.

"Obviously, we are pleased with this news," George Greanias, Metro's president and chief executive officer, said Thursday in a statement through the transit agency's spokesman Jerome Gray. "This is just one step in the process, and we look forward to a signing ceremony" for the grants.

No date has been set for the signing ceremony with Washington officials, but Metro expects it will be in November in Houston, Gray said.

FTA spokesman Paul Griffo confirmed that the agency sent notice to Congress on Sept. 7. The next day, President Barack Obama mentioned Houston public transit construction in his nationally televised jobs speech.

"There's a bridge that needs repair between Ohio and Kentucky that's on one of the busiest trucking routes in North America," Obama said. "A public transit project in Houston that will help clear up one of the worst areas of traffic in the country …"

Mayor Annise Parker cited the president's remark as encouraging news about the federal grants.

"I was very pleased that the president did a shout-out to Houston and our Metro rail project," Parker said in a news conference. "That's clearly a signal that we are on the right track and moving forward. I know that the Full Funding Grant Agreement has gone to the Hill, and we expect a positive response there."

Gilbert Garcia, chairman of the Metro board, said the 60-day comment period is a good time for the community to unite behind public transit funding.

"I am hopeful that people in the community, whether they have been pro-rail or anti-rail, will now come together as community patriots to get this money here," Garcia said. "It's a mobility program but also, in this environment, a much-needed jobs program."

$334.5 million set aside

Bill King, a Houston attorney and light-rail critic, said the rail funding was not guaranteed even if the FTA signs the agreement.

"The real issue is always whether Congress will fund it or not," King said.

Of the $900 million, Congress has already set aside more than one-third - $334.5 million - and Metro has received checks for about $84.5 million, Greanias said last month. The agency agreed to provide some of the funds prior to the signing of the agreement because it believed Metro's projects were worthy.

Barry Goodman, Metro's first executive director and now a mobility consultant, described the 60-day notice as a good step forward for Metro.

"In my opinion, this funding agreement should have been approved quite some time ago, but obviously we're in an extremely difficult economic time at all levels of government," Goodman said.

Chronicle reporter Mike Morris contributed to this report.

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