The House Transportation Appropriations Subcommittee yesterday came up with the money Metro needs to make a $29 million interest payment on July 1, but cut Metro's construction funds to do it.
Assuming the subcommittee action is affirmed by the full committee, the House and the Senate, as is expected., Metro will have averted yet another crisis because it was $7 million short of the money needed to make the July 1 payment.
However, the subcommittee directed that the $7 million be sent to Metro "subject to the terms and conditions that the Secretary (of Transportation) may impose."
Furthermore, the subcommittee directed that the $7 million be diverted from Metro's construction funds, which come from credits for canceled interstate highway projects in the Washington area.
Metro General Manager Richard S. Page said that subcommittee action is "a bad precedent." "The money will be helpful," he said in a careful understatement, "but the goal is to use interstate transfer funds for construction, not for debt service."
The debt service issue has been a critical one for several years at Metro. The debt is $1 billion in bonds that were sold to raise money and that were supposed to be retired by fares. However, when it became clear that fares would never cover even operating costs, much less debt service, local and federal officials sought a permanent solution to the debt. The bonds are federally guaranteed.
Local and federal officials have tentatively agreed that the federal government will pay two-thirds of the debt and the local governments one-third. The federal government has asked for a formal, legally binding "full faith and credit guarantee" from local governments that they will meet that goal.
Local government have responded that they are willing to meet the goal as soon as they can work the heavier one-third payment into their budgets, but they cannot legally pledge "full faith and credit."
However, Metro Has offered the federal government a two-year interim agreement on sharing the debt service. Page said yesterday that a draft of that agreement will be delivered to the federal government early next week.