The Carter administration has stopped processing millions of dollars of grants for Washington Metro to pressure area governments into formally pledging to pay one-third of a $1 billion debt.
The biggest single item awaiting government action is an application for $70 million in federal aid for about 90 new subway cars. Bid are scheduled to be opened on the cars May 23.
If there is no federal grant, the contract cannot be awarded. Metro officials said every day is critical because the cars will be needed early in 1981 when Metro extends the Red Line from Dupont Circle to Van Ness Center.
"Everything Metro has right now is contingent on working out those (pledges)," a key White House officials said. "The current guarantees are just not what the government has to have."
The central issue in the grant for new cars is the $1 billion debt. An interest payment of $28 million is due on that debt July 1. Metro has $5.8 million of that payment ready to go, but the rest must come from federal appropriations or Metro will be in default.
Special action is needed by Congress, but the administration has not yet moved to request that action. If the payment is missed, the federal government is liable, because it guaranteed the entire $1 billion debt.
In a letter April 24 to Metro Board chairman Jerry A. Moore Jr., deputy Transportation Secretary Alan Butchman wrote that, "In order to move ahead with . . . grant approvals . . . and federal assistance for the July 1 interest payment, we must know how the full faith and credit assurances on the one-third local bond service obligation are being obtained and when they will be in hand . . ."
Metro and the administration tentatively agreed last December that the debt would be shared, with two-thirds of the money coming from federal sources and one-third from local sources.
For the past two years, on a regular schedule of six-month crises, the federal government has been paying 80 percent of the interest and Metro has been paying 20 percent while a longterm agreement was being negotiated. As part of the tentative agreement, Transportation Secretary Brok Adams said a period of transition would be permitted so local governments participating in Metro could work the larger one-third payment into their budgets.
That has not been done yet, nor has any firm schedule been reached on when it will be don. Those facts have visibly irritated important administration officials. "I don't think the local people have really come to grips with it," a Department of Transportation official said.
The local people disagree and point as evidence of their efforts to vigorous but unsuccessful attempts in recent sessions of both the Maryland and Virginia legislature to nail down guaranteed funding sources for Metro. Mayor Marion Barry told Congress last week that "I will work for the dedication or earmarking of revenues for Metro purposes . . ."
In a response to Butchman that was delivered on Friday, Moore wrote that "A 'full faith and credit' guarantee is not easy to obtain, under the best of circumstances. This kind of guarantee is the most serious a local government can make . . . and for certain Virginia jurisdictions and Prince George's County, would require voter referendums to achieve . . .
"There is simply no possible way we can comply at this time."
In the letter and in a recent meeting, Metro board members offered to negotiate an interim agreement between Metro itself and the federal government that would stand until a formal agreement involving the local governments couuld bbe completed.
Some federal officials have problems with that concept because Metro lacks taxing authority and thus has no revenue to guarantee it can meet its obligations.
Metro's budget is financed by "voluntary" contributions from seven local governments-the District of Columbia, Montgomery, Prince George's, Arlington and Fairfax counties, and the cities of Alexandria and Falls Church.
Fairfax City, once a Metro partner, walked out in a huff one day and has not contributed a dime since. Federal officials point to that occurence as proof that Metro's commitments mean nothing.
The key White House Official interviewed yesterday said, however, that "we're not inflexible" in insisting on an agreement. "At a minumum we need a very specific plan on how and when the locals plan to reach their commitments" to pay off the bonds.
The $1 billion debt was incurred by Metro in the early years of subway construction when five issues of bonds totaling that amount were sold. The interest was to be paid from fares on Metro after all operating costs were met. Metro's operating costs - including those of the bus system - now total about $200 million annually with no more than half coming from fares. Thus, nothing is left to pay bond interest.
Moore's seven-page letter to Butchman also detailed for the first time a new agreement by Metro board members on a proposed construction schedule that would fit within the Carter budget. Metro has been scheduling construction in anticipation of a $400 million annual federal appropriation. The administration has said that $275 million is the top figure.
"We now reluctantly accept the $275 million annual level . . . despite the fact this will cause cost and scheduled overruns and thereby add both time and money to our ultimate program," Moore wrote. Under the $400 million schedule Metro would be completed in 1987. The lower funding rate could mean 1989, according to officials.
Moore proposed a three-year program in keeping with the Carter budget.
Sixty miles of Metro's planned 101-mile system are fully funded. The only segment of Metro beyond the funded 60 miles that would be brought to full operational status under the three-year plan is the second Potomac River crossing. It would open the Yellow Line connecting L'Enfant Plaza directly with the Pantagon.