DALLAS - The Harris County Metropolitan Transit Authority, better known as Metro, will have to seek other funding sources for its expanding Houston-area rail system after learning that federal stimulus funds will not be available.

Two light-rail lines in development are not sufficiently advanced to meet requirements that half of the $92 million in stimulus funds dedicated to the project be committed by Sept. 1, Metro officials said. Federal officials indicated that the funds should be allocated for high-occupancy vehicle lanes instead.

Under American Recovery and Reinvestment Act, funds must be spent in a year and the projects completed in three years.

Development of the Grand Parkway, a 185-mile outer loop tollway around Houston, is accelerating under the deadline to use the $181 million allocated for that project. The Commissioners Court will consider 17 design and engineering contracts this week.

In addition to letting contracts, the county must buy about 30 properties covering about 650 acres for the toll project, which would connect the Katy Freeway and U.S. 290. A lawsuit by the Sierra Club claiming that the loop would damage environmentally sensitive prairie could delay financing the project.

Earlier this month, the Texas Transportation Commission approved projects in the area using the federal stimulus funds.

The Metro board has already approved a contract with Parsons Transportation Group to build four light-rail lines that will join the current seven-mile line on Houston's Main Street.

The first phase of construction will cost $632 million and is designed to create 25,000 jobs. The board has not considered a bond issuance schedule yet.

The first phase includes a combined $90 million in utility work on the north and southeast corridors and $390 million in total costs for the east end corridor, including an overpass at Harrisburg for light rail, construction of a service and inspection facility, and rail cars.

The authority provides regional transportation services to 14 cities within Harris County. The service area spans more than 600 square miles and a population of more than four million. Metro operates a fixed-route bus service, paratransit service, commuter bus service, high-occupancy vehicle lanes, light-rail service, and a commuter vanpool service.

Standard & Poor's rates Metro's lease revenue debt AA-minus with a stable outlook, while Moody's Investors Service rates the bonds Aa2.

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