METRO Pledges Budget Cuts, Debt Payments
by: Laurie Johnson, September 15, 2010 11:09:00 pm
METRO Chairman Gilbert Garcia and the agency's acting CEO George Greanias laid out the altered plan for city council.
Greanias told the council that in recent years METRO has essentially been operating in deficit.
"In other words, when the money came in it all went out the door for METRO purposes and when the City of Houston or somebody else would say 'oh by the way here's a contract and we'd like to get reimbursed for it out of the mobility fund,' METRO would go out and borrow money through commercial paper to pay that bill. I don't need to make all the analogies for you, you can make them for yourselves, you can understand the problem with this."
That's left METRO about $167 million in the hole. So in response to this, plus the added burden of rebidding the
contract for light rail cars, METRO will cut the fiscal 2011 budget by 31 percent. That means slashing $430 million from the budget, leaving the agency operating on less than a billion dollars next year.
"In the next fiscal year, the one that starts October 1st, we are going to move to an all-cash basis for the mobility fund. It will be set aside in an account, literally. In addition, to the extent that money is due to you but you've not collected it yet because you haven't got the projects — we're going to start reserving cash for that as well. And in about 18 months we will be totally current on all the cash that needs to go out the door."
Perhaps even more remarkable than the shift in spending, is the shift in accountability. It's notable that the agency's top two officials made the lengthy presentation to city council and spent more than half an hour answering questions.
This is Councilmember Mike Sullivan.
"I've been here almost three years and this is the first time that METRO has, in my opinion, sat inside the horseshoe almost in partnership with us, which I think is important. It always galled me from the past administration that when Frank Wilson came to city council and spoke, he sat on the front row. And he would walk up here and he would answer one question and go sit back down."
Both Garcia and Greanias were appointed by Mayor Annise Parker, who made it one of her campaign pledges to clean
house at METRO.
"I think they did a good job of laying out a new vision for METRO and noone watching that presentation would mistake the new METRO for the old METRO. The candor, the openness, the willingness to admit problems and uncertainty is a breath of fresh air and I am very, very proud of the board members and new staff leadership."
During the presentation, Greanias also pledged to council and area residents the agency won't raise fares in the coming year, despite the drastic cutbacks.