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More on Metro’s finances

The Chron reports on Metro’s current financial situation. I think you can largely sum this up as follows:

“Clearly, Metro is burning through its cash,” said Steven Craig, a University of Houston economics professor specializing in public finance.

Craig said the declines in Metro’s reserves are “frightening” because its growing light rail network will require the agency to spend more on operations and to pay off debt.

Metro’s decision to begin construction on three light rail lines without assurance of the $900 million federal grant was aggressive and risky, Craig said. Metro had expected the grant to be finalized in April.

Greanias said FTA authorized it to proceed with certain projects, which he said historically means that an expected grant is forthcoming. Greanias said he has instructed his staff to review how Metro would respond if the grant is delayed much longer or even rejected.

When the FTA grants come through – I’m going to be optimistic here – these questions largely go away. If for whatever the reason that doesn’t happen, or if it takes a sufficiently long time for it to happen, then a day of reckoning arrives, and it won’t be pretty. Metro will surely join the ranks of transit agencies that have had to cut service and/or raise fares in that case. Far as I can tell, it’s as simple as that. There’s a special board meeting scheduled for today, so perhaps there will be some news related to that afterward.

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