DALLAS — Houston’s Metropolitan Transit Authority said it plans to issue $2.6 billion of bonds to finance five new light-rail lines, even though voters only authorized a quarter of that amount.
The bond plan reported this week comes amid a lawsuit over alleged document shredding, the firing of two Metro attorneys, and questions about the authority’s ability to finance all of its planned projects.
Expansion of Metro’s light-rail system from a single line using $640 million of sales tax bonds won approval from Harris County voters in 2003. But Metro chief executive Frank Wilson has said voter approval is not needed for the additional bonds because some of the debt is authorized by Texas state law. Metro also plans to issue revenue bonds backed by fares, which officials also contend do not require voter approval.
However, Houston attorney Bill King, a critic of Metro’s transit policies, maintains the authority is limited to bonds approved by voters. By borrowing against fare revenue, the system will have to rely increasingly on sales tax revenue for operations, he says.
Newly elected Houston Mayor Annise Parker, who will appoint five members to Metro’s nine-member board, said Wednesday she doubts the authority can afford to finance more than three of the five proposed lines.
Metro is preparing to issue $1.2 billion of bonds in June to finance the three lines. The deal will include $174 million of sales tax revenue bonds from the $640 million authorization. Another $202 million of sales tax backed bonds do not count against the $640 million because state law authorizes their use for equipment such as buses or rail cars, according to Metro. About $866 million of revenue bonds would be backed by system revenues and federal funds, not requiring voter approval, agency officials say.
As it defends its financing plan, the authority is also defending itself in court against a lawsuit by former Houston Comptroller Lloyd Kelley. He claims Metro illegally shredded documents that he had sought in an open records request. The alleged shredding is also under investigation by the Harris County district attorney’s office.
Metro has acknowledged firing two attorneys, but said they were not dismissed for shredding documents. The authority has denied shredding documents sought by Kelley but said it will comply with an order from state District Judge Al Bennett to preserve documents sought in the case.
Meanwhile, Kelley alleged in court that Wilson may have had an improper relationship with his female chief of staff who traveled with him to Spain on official business.
Wilson has denied the allegations, and the authority issued a statement that said: “No facts to support these allegations have been brought forward by Kelley or have surfaced in the ongoing investigations.”
