The Metro transit authority authorized yesterday the temporary diversion of $12.2 million from subway construction to meet a bond interest payment Metro owes July 1.
The diversion, made at the recommendation of Metro general manager Theodore Lutz, will keep Metro from technically defaulting on its obligations while it waits for federal money to become available to pay the debt. The bonds are federally guaranteed.
The Senate yesterday approved an appropriation bill for the U.S. Transportation Department that includes the $12 million payment. The House bill does not.
"We are hopeful of getting the $12 million in conference," Lutz told board members yesterday. "But in any case, the appropriation would not be signed into law until after" the July 1 deadline.
The money, if approved, would then be returned to the Metro construction fund to make up the deficit created by the diversion.
If for some reason the appropriation does not survive conference, Lutz outlined a second-line position involving the transfer of federal interstate highway money to pay the bond deficit. Such a proposal has been approved in concept by the Transportation Department, Lutz said.
Payment by the July 1 deadline is necessary to keep Metro in the bond holders' good graces. A long-term solution to the bonding debt must be found, and federal help has been promised for the fiscal year beginning July 1.
When the bonds were sold by Metro to raise money for subway construction, it was anticipated that fares collected from subway riders would pay the bill. That is no longer the case.
Metro's staff then proposed that the transit authority seek an agreement with the government for federal aid on the bond interest at the same rate aid is given to mass transit programs: 80 per cent federal, 20 per cent local.
To buy time, Metro made the first bond interest payment last December from money it had generated through investing construction funds. The payment of $3 million is 20 per cent of the total due in fiscal 1977. Then, Lutz set out to do the work necessary on Capitol Hill and in the Department of Transportation to find the July 1 payment: $12 million or 80 per cent of the total.
The proposal he outlined and won approval for yesterday "would involve the use of some form of federal funds" and would not require tampering with the delicate monetary agreements to complete 60 miles of Metro's planned 100-mile system, he said.
However, neither course of action - congressional apropriation or highway fund transfer - is a lead pipe cinch for final federal aproval Metro oard member Cleatus Barnett said, "there are some risks in this course of action, but I believe it's the way we should go."
Lutz also told the board yesterday that he was having some difficulty in getting agreements from Virginia Metro members that commit them to pay for us band subway services.
Lutz said he needs those agreements, or specific directives from the Metro board to operate without them, before he would be willing to run buses and trains in the next fiscal year, beginning next July 1, the date the new subway line is scheduled to open.
The problem is the minuscule contributions of Fairfax City and Falls Church to the total Metro picture. But the other Virginia jurisdictions - fairfax County, Arlington and Alexandria - don't want to get stuck for the deficit of their fellow Virginians.
Negotiations are under way to solve the problem, Arlington County Board Chairman Joseph Wholey told the Metro board. "There is every likelihood we will work this out . . . The possibility of not opening (the subway) July 1 is less than one-millionth of 1 per cent."