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It’s always something

Good news for Metro.

The “forensic accounting review” by UHY Advisors examined all business expense reports submitted to Metro by its chief executive, Frank Wilson, and chief of staff, Joanne Wright. Both joined Metro in May 2004; Wilson previously was Wright’s supervisor for two years at the New Jersey Department of Transportation and for seven years at a private company, the report states.

The review found that Metro had paid business expenses totaling more than $111,000 for Wilson and more than $29,000 for Wright. While working for Metro, Wright and Wilson took 16 business trips together to cities including Dallas, Washington, San Diego, Chicago and Vancouver, the consultants found.

“There were no expenses submitted by either Mr. Wilson or Ms. Wright that appeared to be improper,” the report states.

Basically, this says that Wilson and Wright didn’t forget their receipts, and didn’t submit any expense claims that were not business-related. It made no opinion about whether or not they were necessary, but as the headline said, there were no red flags. Putting it in more relevant terms for Frank Wilson, nothing of the sort that would get a person fired.

Not so good news for Metro.

A potential new obstacle to federal funding for two of the Metropolitan Transit Authority’s planned light-rail lines emerged Tuesday as officials questioned whether Metro had complied with “Buy America” rules in procuring its rail cars.

The Federal Transit Administration’s chief counsel, Dorval R. Carter Jr., said it was his understanding that Metro and its Spanish rail car vendor planned to assemble two pilot rail cars in Spain. Federal rules require final assembly of “rolling stock” in the United States, Carter said in a letter to Frank Wilson, Metro’s president and chief executive officer.

Metro board chairman Gilbert Garcia said he would discuss this issue, among others, in meetings in Washington today with FTA officials. Garcia said he was confident any problems could be resolved.

Metro is awaiting $900 million in grants from the FTA for its North and Southeast rail lines, two of the five lines it plans to build in the next three to four years. Metro officials said this week that they expected to receive final approval of the grants by July.

FTA spokesman Paul Griffo said the agency wouldn’t speculate on the effect non-compliance with Buy America rules might have on Metro’s grant.

You just have to marvel sometimes at the agency’s ability to find bumps in the road. It’s truly uncanny. Note also that it was Wilson and Wright’s trips to Spain that were at the heart of the canoodling allegations that led to the review of their expense accounts. If this issue causes any problems, it would certainly be a firing offense.

And speaking of things that may or may not put that $900 million grant in jeopardy, you may have seen this breathless KHOU story from last week, which was a followup to this previous story in which it was claimed that Metro deliberately misled the FTA about sales tax revenue projections in order to preserve the viability of its bid for those grants. An awful lot was made in that story about what seemed like a fairly boilerplate response from the FTA and a couple of comments from UH economist Barton Smith, whose projections Metro had used. Well, Lisa Falkenberg spoke to Dr. Smith about what he said, and it turns out there’s more to it than what was aired:

Asked if KHOU characterized the situation accurately, Smith didn’t hesitate: “No,” he said, adding that the report leads viewers to the wrong conclusions.

“The problem is that they’re focusing on the one piece of information and not the whole thing,” he told me.

Greenblatt quoted Smith as saying: “The feds ought’ve been given the updated numbers.”

But Smith told me the comment was taken out of context: “He must have asked that question five different times trying to pull that answer out of me.”

[…]

If you want to argue that Metro should have submitted the newest sales tax revenue projections, Smith said, then they should have submitted all new projections, some of which would have benefitted Metro by reducing project costs.

The same recession that Smith forecasted would bring down sales tax revenue 16.6 percent by 2015 would also bring down construction costs by 16.7 percent, rail equipment by 14.9 percent, labor by 7 percent, fuel by 5.1 percent, and so on.

Yeah, somehow that never made it into the story. Funny how these things work. Metro Chair Gilbert Garcia is in DC this week talking to the FTA, so whatever obstacles there may be that we didn’t already know about, we ought to know about by the time he comes back. And in three months the grants that Metro awaits will be officially awarded, so we can stop speculating about what might happen with them and move on to speculating about what may come next.

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  1. […] ways. You can say “at least we’re better off than they are”, which assuming nothing goes wrong with the FTA is at least true for future construction projects. You can say “that may be us in the […]

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