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Frank Wilson

Can we share these lanes?

Metro is rethinking how the light rail lines run in parts of downtown.

Traffic woes and collisions along the newest light-rail lines in downtown have Metro leaders toying with the idea of backpedaling on their promise not to close parts of the lanes to cars.

The Metropolitan Transit Authority’s new Green and Purple lines in downtown that run eastbound along Capitol and westbound along Rusk for about a mile continue to confuse traffic signal timing and drivers. The trains and vehicles have had several collisions in these shared lanes as drivers make turns, as well as enter and exit parking garages for downtown buildings.

Now Metro is – albeit cautiously – considering ideas to close the lanes to vehicular traffic where practical.

“There is zero intent to change this without getting a lot of input with the stakeholders,” board member Christof Spieler said, while acknowledging some changes may be needed to improve timing and safety for trains, drivers and pedestrians.

City officials, downtown business leaders and drivers, however, remain skeptical that dedicating the lanes to trains is going to be a solution.

“(Former Metropolitan Transit Authority CEO) Frank Wilson promised the community and the City Council that these would ‘never’ be train-only lanes in order to get agreement to allow them to operate downtown,” said Jeff Weatherford, deputy director of Houston Public Works in charge of traffic operations and maintenance.

I guess I’m not surprised there are issues with the trains sharing a lane with car traffic, but I did not know there was such resistance to the idea of separating the two. I suppose the entrances to and exits from downtown parking garages, which by the way can snarl traffic pretty effectively themselves, are a major obstacle to any kind of change. I’m sure there are some minor tweaks that can be made to improve things a bit, but more than that seems unlikely.

Here comes the fully extended Green Line

Hallelujah.

Oh what a rocky ride it’s been.

Political opposition. A Buy America violation. Construction delays. Contaminated soil that sank an underpass. Overweight and badly-manufactured railcars. More construction delays.

When trains finally start rolling along the new Green Line into neighborhoods east of downtown on Wednesday, the last leg in Metro’s controversial multi-billion dollar project to establish light rail in Houston will be open for business.

But the occasion, coming just days before the Super Bowl, also marks the end, for now, of any light rail expansion in the city.

What the future now holds for Houston’s rail dreams, however, is hard to predict – and that may me the only opinion pro-rail advocates and longtime train critics share.

Officials, namely leaders at Metropolitan Transit Authority, acknowledge the completion of the agency’s $2.2 billion rail expansion is both exciting and a relief because of the detours, setbacks and struggles to complete the last line and the effect it had on East End businesses and residents.

[…]

The final piece of the line, a $30 million overpass at Harrisburg, was competed late last year, ending detours and roughly seven years of construction on the $587 million project, the bulk of which opened in May 2015. The last mile remained closed until the overpass could be completed and Metro could conduct testing required before ferrying passengers along the route.

Service for all riders starts Wednesday, and is free until Jan. 22 along the Green Line.

There’s a long litany in the story on the problems that occurred during the project. There were a lot, and some of them were bad, but let’s keep two things in mind: One, every major infrastructure project has problems, and two, many of the issues with this project originated with the David Wolff/Frank Wilson Metro administration, which were then left for subsequent boards and CEOs to clean up. It’s all water under the overpass now, and the final completion of this line will do a lot of good, so let’s focus on that.

The end of the line for the Green Line and the most recent rail expansion, however, will not bring an end to talk of rail in Houston. Though there is no funding identified, officials are already dusting off plans for commuter rail to Missouri City along U.S. 90A and looking at what possibilities appear practical to complete other train lines voters approved more than 13 years ago.

First, however, Patman said Metro and others need to develop a regional transportation plan to gauge needed projects and where there is political support for transit investments.

“We have to know where we are going for me to tell you how we’ll get there,” Patman said.

Once the plan is in place, officials could go back to the voters to seek funding, or explore alternatives such as public-private partnerships. Metro has already approved seeking proposals to determine what private partnerships are available.

Any step in the direction of rail, however, has always been politically charged in Houston. The 2003 referendum remains controversial, particularly in relation to a line planned along Richmond. That project remains bitterly opposed by some landowners and businesses, as well as Rep. John Culberson, R-Houston.

We’ve discussed the possibility of a Metro referendum this November. There will always be opposition to a referendum that includes financing for rail, but that opposition will be a lot greater if the Universities Line is a part of it than if it is not. Of course, a rail system that doesn’t include a connection between downtown and the Uptown Line doesn’t make any sense, so one way or the other this needs to be reckoned with. But first we need a plan and a plan to pay for it, then we can decide whether to vote on it this year or not. I’ll be keeping a close eye on that. Write On Metro and KUHF have more.

Treating all fares the same

Good idea.

A six-month test starting in February will gauge the effects of letting cash-paying rail riders switch to buses for free.

The vast majority of riders use a Q card, day pass or some other form of Metro payment. Transfers with those items are free, provided subsequent trips are along the system and not just a reverse of the current trip. That prevents a rider from making a round trip on one fare, officials said.

About 10 percent of riders use cash, and about 4 percent use cash and transfer, according to Metro. The cash trips don’t include a free transfer because Metro eliminated a way to track transfers when it moved to the Q card in 2008.

[…]

A lack of convenient transfers is especially cumbersome for rail users who don’t use Q cards. Riders who pay with cash or a credit card receive a paper ticket. During the pilot, those tickets will be good for bus trips within three hours after the ticket was purchased.

As part of the pilot program, bus drivers will have day pass cards to give to riders, which they can load with money on board the bus.

“Fundamentally, I think this solves our biggest problem,” said Metro board member Christof Spieler.

The details are a bit unclear in this story, but the basic idea is that if you transfer from a rail line to a bus on the same trip you don’t have to pay a second fare, regardless of how you paid for your initial trip. This is how it should be, and how it was before the David Wolff/Frank Wilson Metro team undid it. This is one of many things Metro is doing to boost ridership, with rail expansion and bus route reimagining being high on the list. Honestly, just the fact that Metro is doing a better job engaging with the community – you know, the people that actually ride the buses and trains – is a big step forward. I hope it translates into better numbers, but whatever it does, this needed to happen.

I got those “can’t get my rail cars built on time” blues

Actually, I don’t, but Metro does.

The company building 39 new Metro railcars has yet to deliver an acceptable vehicle almost six months after the original due date, potentially delaying full service for rail lines scheduled to open later this year.

The first car hasn’t passed a required water leak test and exceeds the maximum weight specified in the builder’s contract with the Metropolitan Transit Authority. In a Dec. 30 letter to CAF USA, the American subsidiary of the Spanish train-building giant, interim Metro CEO Tom Lambert demanded that the company explain how it will deliver all the cars by the Sept. 25 deadline.

“It is imperative that CAF demonstrate to Metro that it is seriously willing and able to meet its obligations,” Lambert wrote. Metro is withholding a $12.8 million payment until an acceptable rail car is delivered, he wrote.

In a reply, CAF’s worldwide CEO, Jose Maria Baztarrica, assured Lambert that U.S. representatives of the company would come to Houston to “fix all the various issues.”

Continued delay would leave Metro officials with options for opening the lines on time, but possibly not on a full schedule. Fewer railcars ready to hit the street could mean that trains operated less frequently or failed to cover the entire route.

“We can work through it, and we will,” Metro board chairman Gilbert Garcia said, stressing the important factor is that CAF deliver high-quality vehicles. “We have to be prepared that the cars are delayed and now we need to have a plan going forward of what we’re going to do.”

The railcar manufacturer is now promising swift action to get this resolved.

“If they are having a problem, then to me it is a big problem, even if it is a minor fix,” said Andres Arizkorreta, CEO of Construcciones y Auxiliar de Ferrocarriles, commonly known as CAF. “These are things we must do.”

[…]

Arizkorreta flew to Houston on Wednesday. On Thursday morning, he assured Metro officials the water leak would be fixed within 10 days by installing a gasket

Remedying the leak, which was minor, is necessary before the car can enter service by undergoing weeks of on-track testing, interim Metro CEO Tom Lambert said.

“The best thing we can do now is get this one at the test track,” Lambert said. “The sooner we do that, the sooner we can build the others.”

Additional cars might come at a brisker pace. Manufacture of the cars will accelerate as CAF U.S.A. expands its Elmira, N.Y., plant, Arizkorreta assured Metro.

Officials said they were pleased with the quick corrections.

“I am convinced this is moving in the right direction,” Metro chairman Gilbert Garcia said.

About 100 workers will be hired specifically to handle Houston railcar building, roughly doubling the staff now handling the order. CAF agreed in writing Thursday to give Metro a revised delivery schedule by Feb. 15.

That all sounds good, but the weight issue remains a problem. It’s not clear how that will be fixed. I’m going to be optimistic and say that this will mostly get worked out before the Southeast and Harrisburg lines open, but we’ll know more in a month. I hope it doesn’t cause any operational problems, or force reduced frequencies when the new lines open. Metro had already set its schedule back by a year after nearly blowing its Full Funding Grant Agreement due to the shenanigans of previous CEO Frank Wilson, who was trying to circumvent the FTA’s Buy American requirements. It’s possible that in the absence of those requirements, or at least in the absence of Metro trying to get around them and getting caught at it, that we’d be farther along now. Nothing can be done about any of that now, so let’s keep CAF’s feet to the fire and hope they have good news in February.

Greanias to step down from Metro

Bummer.

George Greanias

George Greanias, appointed to lead the Metropolitan Transit Authority in September 2010 after political squabbling and inefficiencies led to widespread criticism of the bus and train system, is resigning, a Metro spokeswoman confirmed Friday.

Greanias has stated his intent to resign from his position as president and chief executive officer, but a formal letter isn’t expected until Monday, said spokeswoman Margaret O’Brien-Molina.

Metro’s board of directors will discuss Greanias’ departure Thursday. A closed session scheduled at the end of the board’s monthly meeting includes “consideration of the resignation of the president and CEO,” as well as consideration of a transition and consulting agreement with Greanias and appointment of an interim chief executive.

[…]

Greanias took over an agency mired in problems related to the expansion of light rail. Greanias, who had no transit agency experience, was tasked with turning the agency around. His first step, he said in a recent speech to the Greater Houston Partnership, was to change Metro’s internal culture.

“When I got there, the employees were afraid to raise their hands and make decisions,” he said.

Frank Wilson, Greanias’ predecessor, agreed to leave after months of rancor over the validity of the agency’s rail efforts, and after scandals about money mismanagement and alleged document shredding worsened Metro’s image.

[Mayor Annise] Parker campaigned in 2009 on a platform to clean up Metro. She appointed five new members to the nine-member board, and the new board hired Greanias, who had deep ties to the city and once ran for mayor.

Greanias did a great job at Metro, and accomplished pretty much everything he set out to do. He was an excellent hire by the Board, which has also done some fine work in the time they’ve been there. No question that Metro is in a much better position now than it was when Greanias took over as CEO, and whoever is hired to replace him will have some large shoes to fill. Best of luck with whatever comes next, George Greanias.

Metro officially back on track with the FTA

The “Buy America” nightmare is now history for Metro.

In September 2010, the FTA announced that the process Metro had used to award a rail car contract to CAF USA, the U.S. subsidiary of a Spanish company, violated federal law and “Buy America” requirements that were designed to protect U.S. jobs.

To requalify for federal funds on the two lines, the FTA said Metro had to cancel its contract with CAF USA and solicit new proposals for rail cars. Metro complied.

Last week the FTA notified four congressional committees – House Transportation and Infrastructure; Senate Banking, Housing and Urban Affairs; and House and Senate Appropriations – of its plan to execute two grant agreements that could bring Metro a total of $900 million over five years.

[…]

FTA spokesman Paul Griffo confirmed that the agency sent notice to Congress on Sept. 7. The next day, President Barack Obama mentioned Houston public transit construction in his nationally televised jobs speech.

Hallelujah. Even before this delay, the process of getting the full funding grant agreement had been excruciatingly slow, but at least there has been some progress lately, and actual track has been laid for the Southeast line. Going back through the archives, the first wind of trouble came in May of 2010, about a week before then-CEO Frank Wilson took a powder. The “New Metro” and new CEO George Greanias received a second chance from the FTA in September of 2010; the prediction that this would tack on a year to the production schedule has proven eerily accurate. Metro settled with CAF in December, and had funds appropriated to them in the President’s budget in January. It’s true that the rest of the funding will depend on the whims of Congress, and that there’s still the opportunity for the transportation bill in Congress to get screwed up by the radicals in the Republican Party, but that’s no reason to be a party pooper:

Bill King, a Houston attorney and light-rail critic, said the rail funding was not guaranteed even if the FTA signs the agreement.

“The real issue is always whether Congress will fund it or not,” King said.

Yes, as noted, Congressional Republicans could always screw things up. But why fixate on that? An asteroid could collide with the earth and wipe us all out like the dinosaurs at the end of the Cretaceous Era. Global warming could accelerate and put the entire city under eight feet of water by the end of the decade. Terrorists could start blowing up light rail lines. Rick Perry could be elected President and prove that the Mayans were right all along. There’s no end to the doomsday scenarios, so what’s the point in worrying about them? There’s plenty of things you can control to worry about.

Metro settles with Higgins

And the last bit of “old Metro” business gets put to rest.

The Metropolitan Transit Authority’s board [Thursday] agreed to settle a lawsuit by the agency’s former chief counsel in which she accused Metro of firing her for trying to prevent the allegedly unlawful destruction of documents.

Metro has agreed to pay Pauline Higgins up to $100,000 to cover her legal fees. The agency will pay no damages.

See here for the background and Hair Balls for more. Statements from Ms. Higgins and Metro are beneath the fold. Far as I know this is the last bit if Wolff/Wilson business to deal with, so it should be all “new Metro” from here on out. I know I’m glad to get to this point, and I’m sure everyone at Metro is, too.

(more…)

Bye-bye, intermodal center

In the process of writing off some bad assets in what one hopes is the last ritual cleansing of the Frank Wilson era, Metro says good-bye to something we hadn’t heard of in awhile.

Metro has given up on what it calls an intermodal terminal just north of downtown at Main and Burnett streets on the planned North rail line despite having spent $41 million on it.

“We’re not going to put the public’s money into monuments. We’re going to put it into transit services,” Metro President and CEO George Greanias said.

The design for the terminal included bus bays, a kiss-and-ride area, light rail, commuter rail and possibly a Metro RideStore, restrooms, food service, newsstands and gift shops.

Greanias said there will be a light rail stop at Main and Burnett, but it has not been determined whether the station will serve other modes of transit. He added that the now-shelved design called for a facility that would have cost far too much to maintain and operate.

This announcement comes almost exactly two years after Christof, then still in his pre-Board days, noted that the intermodal center “has been shelved (for now, at least)”. The last bit of news about it since then came two months later, when Swamplot found a picture of the proposed design, which as I look at it today reminds me of a curvier and less-pointy version of the new Dynamo stadium. Or maybe it’s just my imagination. In any event, those of us who remember the intermodal center now bid it adieu.

Metro reaches settlement with CAF

Fresh from the inbox:

The Metropolitan Transit Authority announced today that it has reached a settlement with CAF USA, Inc. (a subsidiary of the Spanish Firm Construcciones y Auxiliar de Ferrocarriles, S.A.) over two disputed contracts for the construction of light rail cars for its North and Southeast Corridor lines. Under the agreement, the contracts are canceled and CAF will forego any additional payments for unpaid work and lost profits. In addition, CAF will refund $14 million to METRO. The agreement was ratified by the METRO board this morning.

“This is $14 million more for public transportation than we had yesterday,” said METRO Chairman Gilbert Garcia. “More importantly, it’s another step forward from old legacy issues to the safe, reliable and affordable public transit and mobility services that our customers and taxpayers deserve.”

The full press release is here. Given that I was afraid Metro would ultimately owe money to CAF, this is outstanding news. Cross off one more thing from their to-be-cleaned-up list. The rebidding process is set to open in January, so that will be the next step forward.

UPDATE: A copy of the settlement agreement is here.

UPDATE: The Chron story is here. Of interest:

The agreement is the latest of several steps Metro has taken in recent weeks that signal its intent to revive its stalled rail expansion plans in 2011.

In Friday’s meeting, the board also approved boosting rail project spending over the next nine months from $143 million to $345 million. The spending increase will accelerate construction on three lines and restart design work on a fourth.

Very good to hear.

Moving on at Metro

Frank Wilson is gone at Metro, and others are following him out the door.

“A number of the senior appointees that Frank Wilson brought in are no longer here,” said George Greanias, Wilson’s successor, but he did not describe it as a purge. The positions of the five people who have left were abolished, and they were not offered other positions within the agency, Greanias said, saving the agency $500,000.

Greanias said he hopes that restructuring the organization, which he described as “a six-cylinder engine that was operating on two cylinders,” will help it do a better job providing customer service and building a better transit system.

CFO Louise Richman left Dec. 3. Other participants in the management exodus include Tom Hickey, associate vice president; Dick White, acting vice president of infrastructure and service development; Joanne Wright, chief of staff; and Rich Lobron, director of strategic technologies. George Smalley, vice president of communications and marketing, leaves at the end of the month.

“I think it’s very significant. This is what he (Greanias) knows how to do,” said board Chairman Gilbert Garcia. Greanias had been a business consultant. “He has come in and looked at the organization and has been willing to reshuffle the deck.”

Metro needed changes, and they’ve gotten them. Most of what has been happening over there has been positive, and I expect that to continue.

In other Metro news, they got some dough from the FTA; basically, they got reimbursed for work done with money fronted by Metro on the North and Southeast lines that would have been covered by the $900 million New Starts grant and was done before the funds were rescinded thanks to Frank Wilson’s Buy America shenanigans. The board is also considering changes to the Q card program, specifically bringing back day passes, which a lot of people have been requesting. Finally, I’ll have some Metro-related news to bring you next week, and no it has nothing to do with this.

Feds reject CAF’s review request

I smell a lawsuit coming.

Federal officials on Friday rejected a Metro contractor’s bid to preserve its $330 million deal to supply rail cars, setting the stage for possible litigation over the soon-to-be-canceled contract.

Dorval R. Carter Jr., the chief counsel of the Federal Transit Administration, said the contractor, CAF USA, failed to provide any new facts or points of law in its Sept. 17 request.

The company, a subsidiary of a Spanish firm, had asked the FTA to reconsider its determination that the Metropolitan Transit Authority had conducted the rail car procurement improperly. Metro must cancel the contract with CAF USA and solicit new proposals to be eligible for federal funding to build two light rail lines, the FTA said.

Nell McGarity, a spokeswoman for CAF USA, said the company would have no immediate comment.

Actually, I’m sure that there’s a number Metro could whisper into CAF’s ear to make this all go away. Not too big a number, I hope – surely CAF sees that it’s unlikely to gain much by rolling the dice in the courts. But a little something for their trouble, to send them off happy. Then maybe Metro can try to collect some of that from Frank Wilson.

How Metro nearly cost itself $900 million

It’s an impressive feat, for some sense of the word.

In the first months of the procurement process, documents show, [former Metro CEO Frank] Wilson intended to use local rather than federal funds to buy the light-rail vehicles, possibly in the hope that this would avert the need to comply with federal requirements.

“FJW (Wilson) stated … since Metro is purchasing the vehicles there will be no FTA involvement,” Metro official John Coulter said in an e-mail to a colleague, Navin Sagar, on June 29, 2007.

The use of local funds to buy the cars, however, wouldn’t have exempted the purchase from Buy America rules because Metro intended to use the vehicles on the federally funded North and Southeast rail lines.

Nevertheless, Metro’s initial request for proposals didn’t include a Buy America provision, and Metro told bidders they wouldn’t have to follow federal rules other than those in the Americans with Disabilities Act.

On Dec. 4, 2007, in the first of at least four similar warnings or advisories, the FTA told Metro it must follow Buy America rules and federal procurement guidelines.

Yet Metro continued with the procurement based on the original request for proposals without Buy America language. Of the six firms that submitted initial technical proposals, Metro invited five to submit pricing offers.

It’s kind of amazing that no one on the inside ever blew the whistle on this. Must have been some seriously heavy discipline in there, which goes a long way towards explaining why morale was reportedly so low.

It’s hard to understand why Wilson thought he could do this when he was repeatedly told by the FTA that he couldn’t. He’s not talking, and I rather doubt he will. What is clear is that the board didn’t challenge him on this – David Wolff has been a staunch defender of Wilson’s, and he’s unlikely to change that tune. I’ll say again, it’s a measure of the respect the FTA must have for George Greanias and Gilbert Garcia, as well as a measure of their belief in the merits of the projects in question, that the agency wasn’t completely disqualified from getting the New Starts grants at all. It sure is hard to see how CAF changes the FTA’s mind about requiring Metro to cancel their contract. I hope that sometime after CAF sues Metro over the loss of their contract that Metro cancels any further buyout payments to Wilson. Let him sue to recover them, maybe being deposed will finally get him to explain his motives here.

FTA gives Metro a second chance

That sound you hear is a bullet whizzing past Metro’s ear

Metro violated federal laws in making a deal with a Spanish company to purchase 103 rail cars, and must re-bid the purchase in order to qualify for a $900 million grant, the nation’s top transit official said today.

Peter Rogoff, the administrator of the Federal Transit Administration, delivered the news in a meeting with Mayor Annise Parker and top Metro officials.

The FTA’s letter to the Metropolitan Transit Authority called the procurement process “alarming and disturbing,” saying it violated both federal procurement laws and “Buy America” provisions intended to protect the national economy.

Metro began soliciting proposals for the rail cars several years ago, and starting the process from scratch would be time-consuming and costly.

The FTA’s letter said the federal agency wanted to work with Metro to continue construction during this process, but didn’t specify how.

You can find all of the documents related to this case here or here. Specifically, here’s the FTA press release, the report of the investigation, the letter from the FTA chief counsel, and the letter from FTA Administrator Peter Rogoff. For the most part, what you need to know is in that last letter. Basically, for all the bad things the FTA determined Metro did, they still believe that that the North and Southeast Corridor projects have merit, and that they are prepared to work with Metro to keep these projects moving forward if Metro cancels the contract with CAF and re-bids it according to Buy America rules. To say this could have been a hell of a lot worse for Metro is to understate. The FTA must have a lot of faith in George Greanias and his ability to not be Frank Wilson for them to have declined to cut Metro off at the knees. I think we can finally close that chapter and say that the New Metro is fully up and running.

UPDATE: Here’s Metro’s statement:

Today at a press conference hosted by Houston Mayor Annise Parker, METRO’s leaders commented on the findings of the Federal Transit Administration’s (FTA) “Buy America” investigation and review of plans to purchase 103 new light rail vehicles.

Mayor Parker first acknowledged Houston’s need for a first class transit system and expressed confidence that the FTA supports METRO’s rail-expansion program. “There is a path forward. It is steep and rocky, but we can do it,” Mayor Parker said.

METRO Chairman Gilbert Garcia echoed comments by Mayor Parker that the NEW METRO was committed to resolving issues left over from the previous administration, including the FTA investigation. “We knew there would be challenges and we are attacking them one at a time,” Garcia said. “We are changing the culture at METRO to rebuild trust.”

Acting President & CEO George Greanias said that today’s FTA findings provide several positive outcomes, while acknowledging the challenges ahead. “First, the FTA made clear that they support METRO’s rail expansion program. Also, they laid out a plan to make funds available to keep the program moving forward. And, they provided a roadmap for how to move forward, including a re-procurement of the rail car contract. It will be a steep climb but we can accomplish it,” Greanias said.

Congress Member Sheila Jackson Lee, who also attended today’s press conference, expressed strong support among Houston’s Congressional delegation to see that METRO ultimately receives the $150 million in the President’s FY 2011 proposed budget for rail expansion.

Greanias underscored that construction currently underway on three light-rail lines will continue – the North, Southeast and East End lines. He acknowledged previously that METRO has slowed some work activity on the North and Southeast lines while awaiting funding commitments from the FTA. He also said future construction slowdowns are possible in light of cash constraints. He said a new procurement to purchase rail cars was not directly linked to construction and that it could take up to 20 months to complete and have initial vehicles begin arriving for testing.

“We treat what the FTA says very seriously,” Greanias added. “The NEW METRO is committed to building a strong working relationship with the FTA and to build trust.”

Finally, Chairman Garcia thanked members of Houston’s Congressional delegation who attended a meeting this morning with the FTA, including Congress Members Sheila Jackson Lee, Al Green, Gene Green and John Culberson. Senator Kay Bailey Hutchison also sent a representative. “We are truly appreciative of all their hard work on our behalf,” Garcia said.

The Metro settlement agreement

I presume we’ll get some more details in the morning, but for now I wanted to highlight one aspect of the story of Metro’s settlement agreement with Lloyd Kelley.

The suit accused Metro and several of its top officials, including then-President Frank J. Wilson, of destroying documents Kelley requested under the Texas Public Information Act.

The final judgment approved by state District Judge Al Bennett states that the parties agree that all investigations revealed no evidence that the transit agency engaged in any improper destruction of documents.

It recognizes that the Metro Transit Authority Board adopted a new document retention policy on May 18.

Emphasis mine. Now, an agreement of no wrongdoing is common in settlements like this, and there is still that ongoing criminal investigation, which could turn up anything, not to mention to Pauline Higgins lawsuit. But admit it: You were expecting Kelley to find something, especially after the hanky panky allegations were made. From where I sit, this doesn’t look all that much different from a dismissal. Maybe Kelley will have something to say about it tomorrow, maybe his still-unnamed client will speak up about why the suit was filed and what they thought they might find, and maybe that will change my mind. But right now, as I type this, it looks like it was a whole lot of nothing.

Grand jury hears Metro document shredding evidence

Obviously, the District Attorney’s office is farther along in their investigation than I thought.

A courthouse appearance today by Frank J. Wilson, the former Metropolitan Transit Authority president accused of destroying public documents, provided the first indication that prosecutors are presenting evidence to a grand jury in the case.

Wilson, 61, walked into a room where a Harris County grand jury was meeting today. He left the grand jury room about 1:30 p.m. Both he and his lawyer declined to comment.

So maybe we’ll hear something pretty soon after all. Hair Balls has more.

One Metro lawsuit pulled from court docket

Looks promising.

Metro expects to reach a settlement soon in an open-records lawsuit that triggered a series of accusations and investigations that gripped the transit agency for months, board chairman Gilbert Garcia said.

The trial of the lawsuit by attorney and former City Controller Lloyd Kelley, scheduled to begin Monday in state district court, has been pulled from the docket because of the settlement talks, Garcia said. Any settlement would have to be approved by the Metropolitan Transit Authority board.

Garcia declined to discuss details of the proposed settlement except to say he was confident the case would be resolved soon. Neither Kelley nor his attorney, Michael West, could be reached for comment Sunday.

This was the document shredding lawsuit, whose initial hearings led to allegations of hanky panky between now-former Metro CEO Frank Wilson and his chief of staff for which a subsequent forensic accounting review found no incriminating evidence. The lawsuit by Pauline Higgins, Metro’s former chief counsel, is still ongoing. If this does get settled, that will be one more thing that the new Metro board can cross off its to-be-dealt-with list. It will also almost surely mean we’ll never know what Kelley was looking for, or on whose behalf he was looking. I’ll take that trade, and I’m sure the Metro board will as well.

Meet George Greanias

As we know, former City Controller and member of Mayor Parker’s transition team George Greanias has taken over, at least on an interim basis, as the CEO of Metro. Houston Tomorrow has a brief intro to Greanias, including a pointer to this 1997 Houston Press cover story about Greanias’ rocky relationship with then-Mayor Bob Lanier and his own ultimately unsuccessful Mayoral campaign. Of interest is this:

Over the course of [Greanias’ final two terms as Controller], his brief alliance with Lanier devolved into a running confrontation over the mayor’s short-term financial schemes, such as the annual transfer of roughly $55 million from Metro to the general fund and the restructuring of the city’s bond debt.

[…]

As controller, Greanias was vocal in his opposition to most of Lanier’s fiscal maneuvers, particularly the decimation of Metro’s $600 million reserve. If elected mayor, Greanias promises to “stop the bleeding” and allow the transit agency to once again start socking away cash for a commuter rail project.

With the approach of a new administration, rail is once again an acceptable topic of discussion, though Lanier still won’t abide the notion that some day it may not be feasible to run even more freeway lanes through Houston. Over time, each of the candidates — while careful not to make any commitments — has at least paid lip service to the notion of exploring rail as a transportation alternative.

But Greanias, for better or worse, has been unequivocal. “For 20 years we’ve been fooling around on this issue, and we’ve gotten no closer to a solution,” he says. “I’m not going to consider it, I’m not going to study it, I’m not going to explore it. I’m going to go about the business of getting it done.”

There were two proposals Greanias was touting at that time, a commuter rail line along the Katy Freeway, and what eventually became the Main Street line. I’m particularly interested in his advocacy of Metro retaining all of its funds, which was something that outgoing CEO Frank Wilson had been pushing and which may be needed to finish construction on all five planned light rail lines. The rest of the story, which mostly focuses on Greanias’s campaign, is a blast from the past and a reminder that some things (and some names) never change, and is worth reading for the history, but given Greanias’s new gig, I thought that was worth pointing out. KUHF had a conversation with Greanias on Wednesday morning as well. Check it out.

Wilson resigns

He’s out.

Frank J. Wilson relinquished the leadership of the Metropolitan Transit Authority on Friday, leaving Metro’s reconstituted board and an acting chief executive with the task of completing the light rail system Wilson was hired to build six years ago.

Wilson, 61, signed a deal to terminate his employment as president and chief executive officer in exchange for payments totaling $456,000, plus extensive pension and insurance benefits.

The board emerged from more than two hours of discussions in closed session to announce the deal. It authorized chairman Gilbert Garcia to negotiate a contract with George Greanias, a former city councilman and city controller, as acting chief executive.

Greanias, 62, who will start work Monday, said he hopes to be considered for the permanent position. He has been out of public life, working as a business consultant, since an unsuccessful mayoral campaign in 1997.

This was a long time in coming, and is probably for the best. I think Wilson deserves praise for all he did to get rail as far as it’s come in Houston. It’s easy to forget just how hostile the environment has been at times, especially in the days when Tom DeLay was still in Congress. Given that, it’s almost a miracle we’ve got the one line we have, and may have the others we’re on the verge of building. But if the $900 million in FTA grants really are endangered, well, Wilson’s legacy won’t be nearly as positive.

In recent weeks, however, new questions have emerged about the anticipated federal grant for the North and Southeast lines as the Federal Transit Administration announced an investigation of Metro’s compliance with “Buy America” rules.

Parker said this issue jeopardized the grant, a characterization disputed Friday by U.S. Rep. Sheila Jackson Lee, D-Houston, who attended the board meeting.

“The federal grant is not in jeopardy because we have a good team in Washington” working to secure it, Jackson Lee said.

Hair Balls had a similar report.

[Metro board Chair Gilbert] Garcia said there was no pressure from the FTA for Wilson to resign, that it wasn’t talked about during last week’s meetings in Washington, D.C., so the change in leadership shouldn’t help with any of the FTA’s hesitation.

But Congresswoman Sheila Jackson Lee, who spoke at today’s meeting, said Metro will receive the federal funding. Lee spoke with Ray LaHood, the federal transportation secretary, this morning, and, according to Lee, LaHood told her that the administration is committed to paying for Houston’s new light rail.

Still, Metro has been saying it was set to get its full funding agreement from the feds for more than a year, so we wouldn’t trust anything until that agreement is finalized.

We already knew about LaHood being “committed” to Houston rail. I hope this really does mean that the grants are on their way, but I’ll feel much better when it’s all in black and white. Here’s a statement from Mayor Annise Parker about Wilson’s resignation.

It is a new day for openness and transparency at METRO. Now that a new board and chief executive officer are in place, I am committed to working hand-in-hand with the new leadership and the FTA to achieve the next phase of light rail in Houston. I commend board chair Gilbert Garcia and the other board members for their leadership. I am confident they will continue to act in the best interests of the citizens in METRO’s service area.

The Mayor now has her Board in place, and will soon have a new Metro CEO. Let’s see what the new crew can do.

Was it worth it for two prototypes?

I’m really at a loss to understand how the previous Metro board could have put $900 million at risk to make it easier for their manufacturer to build two prototype light rail cars.

Eight days after federal officials rejected the Metropolitan Transit Authority’s request for a waiver from federal requirements that it assemble its light rail cars in the U.S., the transit agency signed a deal for two Spanish-assembled pilot vehicles.

The contract could violate a provision of the “Buy America” rule, which Mayor Annise Parker said earlier this week threatens a $900 million federal grant that the agency needs to continue building out its light rail system.

Parker accused Metro of either misleading the Federal Transit Administration, or of basing its decision on flawed assumptions.

A review of Metro records indicates that the transit agency’s officials proceeded with the contract — despite the waiver denial — because they believed they had a remedy: Purchasing the two cars produced in Spain with local funds through a separate contract.

A year later, a letter from the FTA to Metro announcing an investigation of its compliance with Buy America rules showed that strategy was flawed.

I suppose I can understand the thinking that “it’s only two prototypes, the 100+ others are all compliant, what’s the big deal?”, but when someone else makes the rules, it’s best not to fool around. The FTA hasn’t specifically ruled on the usage of local funds, and the new Metro board still has a week to make their official response, so nothing is certain yet. One possibility, I suppose, is to renegotiate the deal so that those two cars, or two replacements for them, are now built in the US. I don’t know how much that might cost, but I’ll bet it’s less than $900 million. I just hope that, or something else, is acceptable to the FTA. The Metro board is meeting now, so maybe we’ll know more about this, and about the fate of Frank Wilson, who will royally deserve his firing if the FTA pulls the rug out, soon enough.

More on Wilson’s departure

More evidence that Metro CEO Frank Wilson is about to be history: The Metro board has a replacement in mind.

The board is expected to name George Greanias, a former city councilman and controller who co-chaired Mayor Annise Parker’s Metro transition committee, as interim chief executive, the sources said. A national search would be undertaken for a permanent replacement, they said.

The sources cautioned that arrangements for Wilson’s separation from Metro were not final. “Decisions get made at board meetings,” one source said.

True enough, but stuff like this usually doesn’t get leaked by accident, either. I wouldn’t bet against this happening.

Assuming it does, Greanias will have a very short period of time in which to defuse the latest threat Metro faces, to the $900 million in FTA grant money.

Concerns also have emerged about whether Metro, under Wilson’s leadership, has taken actions that might jeopardize a $900 million federal grant the agency is awaiting for two of the three rail lines under construction now. The agency’s website outlines plans to complete these three lines, plus two others in earlier stages of development, by 2012.

In late April, the Federal Transit Administration launched an investigation of Metro’s compliance with “Buy America” rules in its purchase of rail cars from a Spanish company. Metro, which must demonstrate compliance with the rules to receive the federal funds, is preparing a reply due by May 14.

I sure hope they have a good reply to make. Lisa Falkenberg’s column today is making me nervous. Good luck with that, George.

Is this the end for Frank Wilson?

Could be.

The Metropolitan Transit Authority board is working toward president and chief executive officer Frank Wilson’s “amicable” departure from the agency as soon as Friday, sources said today.

A plan under discussion involves naming George Greanias, the former city controller who chaired Mayor Annise Parker’s Metro transition committees, as interim president and chief executive officer, the sources said.

Under the plans under discussion, Wilson might retain a temporary position as a consultant to Metro’s chairman, a source with knowledge of the discussions said.

As noted, there is an agenda posted for a Friday meeting, so it could happen. As Lisa Falkenberg notes, firing Wilson won’t be as expensive as originally thought, which one would assume might nudge the board in that direction now that they don’t have a for-cause reason to dump him. Whatever happens, I hope Metro can move on to the remaining issues with the FTA, and otherwise generally getting back down to the business of being a transit agency again.

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.

Pauline Higgins sues Metro

Pauline Higgins, the former chief counsel for Metro who was fired in the wake of the document shredding scandal, has now sued the agency for wrongful termination.

“This case involves cut-throat politics and cronyism at Metro,” Pauline Higgins said in the lawsuit filed in state district court. It seeks her reinstatement, unspecified damages and legal fees under the Texas Whistleblower Act.

[…]

Her lawsuit claims Higgins lost her job because Metro’s president and chief executive officer, Frank Wilson, resisted her efforts to bring the agency into compliance with state laws regarding document retention and to correct other problems, such as hiring third-party contractors without contracts or allowing them to work after their contracts had lapsed.

Prior to her arrival, the suit says, Metro’s legal department was “disorganized and dysfunctional,” and its employees “often came to work and left at their leisure.”

After she was fired, the suit states, Metro officials, including former Chairman David Wolff, sought to discredit Higgins in their public statements.

Wolff alleged that it was Higgins that was responsible for the shredding. In a Rick Casey column, Metro CEO Frank Wilson also attacked Higgins:

Far from firing Higgins because she pressed them to get their document and e-mail retention policies in order, [Wolff and Wilson] said, they had asked Higgins to develop a policy months ago. They claimed she only recently produced one, and that it was not in good enough shape to take to the board.

But that’s not why they fired her.

They fired her, they said, because she was a horrible manager of her department.

“A trickle, then a flood of people came to me,” Wilson said. “They were agitated, in tears.”

He said Higgins had bullied them to the point that “they had feelings of zero worth.”

You can hear more of what Wolff said in my interview with him. This case ought to be very interesting, that’s all I can say. I just hope that someday, Metro can go back to being a transit agency again.

UPDATE: Houston Politics has a copy of the suit.

Firing Frank

Mayor Annise Parker has said she wants the new Metro board to fire Frank Wilson, the agency’s CEO. So why hasn’t that happened yet? There are a couple of complicating factors.

Among them are uncertainty about the outcome of two investigations of allegations involving Wilson and the cost of buying out his contract — estimated at $1.6 million by Parker’s Metro transition team. The transit agency could avoid this expense if it fired Wilson for cause, defined in Wilson’s contract as “willful malfeasance, gross negligence or the conviction of a felony crime or any crime involving moral turpitude.”

If investigations by the Harris County District Attorney or a consultant find evidence that Wilson misused Metro funds or improperly ordered documents destroyed, the board will have no choice but to fire Wilson, board member Jackie Freeman said.

Board Chairman Gilbert Garcia said he expects to get a report in the next few days from UHY Advisors, the consultant Metro hired to investigate whether Wilson improperly used Metro funds in connection with a personal relationship with his chief of staff, Joanne Wright.

It’s worth it to see if you can fire him for free instead of having to pay $1.6 million to buy out his contract, right? Of course, nobody knows how long the DA will take to investigate the document shredding charges, but at least you’ll have a report about whether or not he was canoodling on the company’s dime soon enough.

The bigger question is what happens if both UHY and the DA clear Wilson of all allegations. You can make a case, as former Metro Chair David Wolff has, the Wilson has accomplished a great deal in his time as CEO. But it’s clear that the transition team holds Wilson responsible for Metro’s poor relationships with many stakeholders as it moves forward with light rail construction, and that these issues make building the lines more difficult and contentious than it needs to be. They also threaten any prospect Metro has of leading a broader regional transportation plan. Can those problems be worked out by the new board if Wilson stays in place? If not, is the $1.6 million buyout a bigger price to pay than waiting two years till his contract expires? Those are the questions they have to answer.

Metro and the FTA

I didn’t see this KHOU story, in which a regular Metro critic claims that the agency deliberately gave outdated sales tax revenue information to the Federal Transit Administration in order to get $900 million in federal money for the North and Southeast lines, until I saw this Houston Politics post in which the Mayor and Metro respond to the charges.

James Moncur, who headed a transition committee that examined Metro’s finances for Mayor Annise Parker, told me today he discussed the sales tax projections when he met with FTA officials in February. The officials knew very well that they had received 2008 numbers, Moncur said, and didn’t believe Metro was trying to mislead them.

The mayor agreed, saying in a statement that “the FTA assured transition team members that it conducts its own analysis.”

Metro chief executive Frank Wilson told me that in July 2009, Metro officials and the FTA’s consultant jointly developed updated sales tax projections that were provided to the agency the following month. These figures, Wilson said, were lower than those developed in 2008.

For the past few months, Wilson said, Metro has consulted regularly with the FTA by phone and repeatedly offered to provide updated information, an offer he said the agency declined.

“FTA is currently reviewing updated information provided by Houston Metro,” agency spokesman Paul Griffo said in response to my questions about the KHOU story. “Our review is limited to ensuring that there is a dedicated source of funding that will meet Houston’s local commitment to the North and Southeast light rail lines, while continuing to maintain and operate the existing system.”

I realize that one should never underestimate the capacity of large organizations to screw up (and if you think this is limited to government agencies, you’ve clearly never worked for a big company), but I find it a little hard to believe that at no point since the original numbers were submitted in 2008 did the change in economic climate and the effect it may have on those numbers ever come up. In fact, one could interpret FTA spokesman Paul Griffo’s response to KHOU, “FTA will not commit taxpayer dollars to a project based on outdated data”, as basically being “What kind of idiots do you take us for?” Anything’s possible I suppose, but if Metro is trying to hide lower sales tax revenues from the Feds, they’re doing a poor job of it since the cash flow numbers they posted from their December meeting clearly shows a dip in 2010 and 2011. Again, I just don’t see how they could even hope to get away with a deception like this. But I suppose we’ll find out soon enough. Anyway, Metro’s official response is in a video on their website, so go see that for yourself.

The question not asked

Lisa Falkenberg has a chat with Lloyd Kelley.

Kelley, the attorney whose lawsuit against the county unearthed embarrassing e-mails that brought down former District Attorney Chuck Rosenthal a couple of years ago, is at it again, with his latest public document fishing expedition at least appearing to have reeled in another big one in Metro’s chief executive Frank Wilson.

Metro has hired a consultant to investigate allegations raised by Kelley’s attorney that Wilson is carrying on an inappropriate relationship with his chief of staff and misused public funds in various ways, including a trip to Spain in which the alleged “girlfriend” accompanied him. Wilson is also key figure in shreddergate, involving a criminal investigation into whether Metro destroyed public documents Kelley requested. Wilson maintains no wrongdoing.

I sat down with Kelley to ask what motivates him on these crusades and whether he gets the obvious irony of his involvement: the idea that a disgraced former public official accused of any number of shady dealings is now reinventing himself as a soldier of the public trust.

I would have asked him why he had no witnesses to present to back up his allegations about document shredding and Wilson’s alleged canoodling. Maybe his sources are reluctant to speak on the record, perhaps because they fear reprisals. Maybe he’s bluffing. I don’t know, but that’s what I would have asked.

Parker reaffirms commitment to light rail

This is what I want to see.

[Mayor Annise] Parker’s letter regarding this week’s Metro board meeting was sent on the eve of her trip to Washington, where she said she would reassure U.S. Transportation Secretary Ray LaHood that her administration wants to see five new light-rail lines built in Houston.

“I just want them to know that in spite of what might seem to be some turmoil at Metro, and despite what’s clearly going to happen with a new management team and a new board at Metro, is that Houston remains firmly committed to light rail,” Parker said.

The mayor said she intends to announce her five new appointees, including a new chairman, after she returns from Washington on Thursday — the same day as Metro’s March board meeting. Parker has said Wilson also should be replaced.

Her letter asks the board to defer action on any items that would obligate Metro to substantial financial commitments or assign any of its operating authority to a third-party vendor. Parker said she expects her appointees to be confirmed by City Council prior to the board’s April meeting.

It’s a good start, and if one assumes that a large part of the concern over Metro’s finances is that they’ve counted too much on federal dollars that haven’t been appropriated yet, it goes a long way towards offering reassurance that the two U lines will get built. I have faith in Mayor Parker and I don’t doubt her desire to see these lines built, but it’s always nice to hear the words.

Metro asks consultant to investigate Wilson allegations

We’ll see if there’s anything to the hype.

A consultant with expertise in identifying business fraud will investigate allegations that Metro’s chief executive used public funds in an inappropriate relationship with his assistant, the agency announced today.

David Wolff, the Metropolitan Transit Authority’s board chairman, asked Jeff Harfenist, a managing director of UHY Advisors, to conduct the inquiry, Metro said in a statement.

The investigation stems from comments made during a March 10 civil court hearing by Michael West, who represents attorney and former City Controller Lloyd Kelley in an open-records lawsuit against Metro.

Well, at least Kelley will get something for his trouble, even if he couldn’t find a witness. I have no idea what this may turn up – again, despite the lack of evidence, it is entirely possible that Kelley is right, and it is entirely possible that he is full of it – but Harfenist seems to have solid credentials, so we’ll see. Hair Balls has more.

More on Metro’s finances

The Chron takes a closer look at Metro’s finances and the recently expressed doubts about their ability to pay for the University and Uptown lines.

Mayor Annise Parker said last week that she wasn’t convinced the Metropolitan Transit Authority would have the money to build its planned Uptown and University rail lines.

Parker said she hopes Metro can build the two lines, which together would constitute about 15 of the 30 miles of rail included in the second phase of the “Metro Solutions” mobility program.

But Parker, who was scheduled to be briefed this weekend by transition teams that she said have “drilled down” into Metro’s finances, said Metro officials have misled the public by talking as if funding for those two lines were assured. Three other lines are under construction.

“It’s tenuous,” Parker said Thursday after a speech to the Greater East End Chamber of Commerce that included an enthusiastic endorsement of rail transit in Houston.

Some of the doubts expressed by Parker and others who have studied the issue focus on how Metro would repay the $2.6 billion in bonds it intends to issue through 2014 to help finance the rail system. Metro chief executive Frank Wilson said the bonds would be backed by a combination of sales tax revenues, fare revenues and federal grants.

Parker noted that revenues from Metro’s 1 percent local sales tax are declining. Figures presented to the Metro board in February show sales tax receipts for the 10 months ending in January plummeted by $34 million from the same period a year earlier.

“We’re in a very different sales tax climate,” Parker said. “Some analysts say the sales taxes are going to continue to decline. There are a lot of moving parts.”

If sales tax revenues do continue to decline, we’re going to have much bigger problems than just Metro. Be that as it may, it’s still hard to judge the concerns without seeing the transition team’s report. If it mostly hangs on the question of whether Metro will get the federal funds it anticipates for the University line, then yes, not getting those funds, or not getting as much of them as requested, would be a big deal. Metro did very well in getting the funds it received for the North and Southeast lines, and the University line will have stronger ridership numbers than either of them, so you’d think they’d be in decent shape, but anything can happen with appropriations, so who knows? I don’t know what else there is to say about this.

At a higher level, what I want to know is what the commitment is to getting these lines built. I have faith in Mayor Parker, and I do believe she wants to see this happen. What I want to see is an affirmation that we’ll find a way to make it happen. The people voted in 2003 to build five light rail lines. We all remember how upset the strongest supporters of the 2003 referendum got when Metro announced that due to cost concerns they would be building bus rapid transit (BRT) instead of light rail for some of the routes. If the current funding model doesn’t work, then what we need is a promise to figure out a way to make it work. We’ve come too far to turn back now, and the transit system that we’re building is too important to Houston’s future mobility to leave incomplete.

Got evidence?

If you saw Wednesday night’s rather sensational coverage of the allegations that Metro CEO Frank Wilson had an “improper” relationship with an employee, you would have come away with the impression that things were about to go all Chuck Rosenthal at that agency. But if you read this Houston Politics post about that hearing, you might wonder what all the fuss is about.

During Wednesday’s hearing in the open records lawsuit against the Metropolitan Transit Authority, an attorney for lawyer and former City Controller Lloyd Kelley acknowledged that he had no witnesses ready to testify that the transit agency had destroyed specific documents his client had requested.

Instead, attorney Michael West told state District Judge Al Bennett that Metro couldn’t be trusted to comply with the court’s order not to destroy any documents. West also said he could produce witnesses who would testify that Metro officials — particularly its chief executive, Frank Wilson — had strong motives to hide or shred documents Kelley wanted to see.

When Bennett questioned West about this, West stated in open court that Wilson had a “personal relationship that is inappropriate” with his chief of staff, Joanne Wright.

When I asked West later if by “inappropriate” he meant a romantic or sexual relationship, he said he wasn’t certain.

So Kelley has no witnesses to testify that any documents or emails he’s requested have actually been destroyed as he’s loudly been alleging for weeks now, and the best he can do is produce someone to testify that Wilson had motive to destroy documents – the documents he can’t find anyone to say were destroyed – because these documents might have to do with an inappropriate relationship, the nature of which he’s not sure about. It sounds a lot less sensational when you put it that way, doesn’t it?

This doesn’t mean that documents weren’t shredded, or that Wilson didn’t have an inappropriate relationship with Wright. All the things Kelley is alleging may be true. But he’s not acting like a man who has evidence of the charges he’s made, he’s acting like a man who’s hoping to find evidence of them. Those are two different stories.

Metro CEO accused of inappropriate relationship with employee

Well, at least we now have some idea of what Lloyd Kelley has been looking for.

The president and CEO of the Metropolitan Transit Authority was accused in open court Wednesday of having an improper relationship with a female employee who works for him. That alleged relationship may include taxpayer-funded trips to Spain, additional compensation and benefits, and other items the public paid for with tax dollars, according to the attorney for former Houston Controller Lloyd Kelley.

Attorney Michael West, who represents Kelley, told Judge Al Bennett he has information which leads him to believe Metro President Frank Wilson had substantial motivation to keep specific documents or e-mails from coming out.

Kelley had previously sued Metro, alleging it improperly destroyed public documents related to a public information request from Kelley.

Insert your own Chuck Rosenthal joke here. The difference at this point is that the allegations about Rosenthal’s abuses were concurrent with the discovery of the emails. We don’t have the emails here, maybe because they’ve been destroyed and maybe because they don’t actually exist. For what it’s worth, the KHOU broadcast I saw said that Metro continues to deny the allegations. I sure hope they’re right, but none of this looks good.

Criminal probe of Metro document shredding begins

I can’t wait to see how this turns out.

The Harris County District Attorney’s Office has begun a criminal investigation into allegations that the Metropolitan Transit Authority improperly destroyed public documents, a prosecutor confirmed Friday.

The statement by Terese Buess, the head of the district attorney’s public integrity division, came during a hearing that ended with a new civil court order against Metro not to destroy any further documents, and with the prospect of forensic examinations of the transit agency’s computers.

Mayor Annise Parker and David Wolff, Metro’s board chairman, had asked the district attorney last week to investigate allegations that the agency destroyed some of the documents sought by Houston attorney and former City Controller Lloyd Kelley in a January open records request.

State District Judge Al Bennett said the district attorney’s investigators would have the first opportunity to inspect Metro computer equipment to try to identify or recover any deleted data. Kelley’s lawyers may conduct a similar review afterward, Bennett said.

The criminal investigation, Bennett said, should take priority, and “I am not going to allow the civil litigation to get in the way of that.”

Houston Politics has a Metro employee training video on the subject of document retention. There’s a whole lot going on here. We still don’t know what exactly Lloyd Kelley is after. As the story says later, and as you’ll see in this space next week, Metro is putting the responsibility for the shredding on Pauline Higgins, their former general counsel; she in turn claims she was fired after blowing the whistle on Metro over the shredding. Mayor Parker’s transition team has not issued its report about Metro yet. Wolff is still the Chair until Parker names a replacement for him. We are in for some interesting times.

Please don’t shred the documents

This isn’t good.

At a crucial moment in the development of its light rail system, Metro confronted accusations Wednesday that it shredded documents sought in an open-records request, then fired two attorneys who objected to its handling of the request.

State District Judge Robert Shaffer signed a temporary restraining order forbidding the Metropolitan Transit Authority from destroying records requested by former City Controller Lloyd Kelley.

In January, the Houston lawyer had requested travel records, e-mail and other documents involving several top Metro officials, Board Chairman David Wolff and an executive of an agency rail contractor.

In a hastily called news conference, Metro President Frank Wilson said one of the agency’s lawyers shredded some documents on Monday. When he discovered this, Wilson said, he ordered an investigation of what was shredded and the circumstances.

Wilson said he didn’t know whether the shredded documents included any sought by Kelley, but said he was confident Metro will produce the records Kelley wants.

“I’m not sure there was anything sinister about it,” Wilson said. “It may be very innocent and very coincidental.”

That’s usually not the way it is, and even if it does turn out to be the case, the timing is still lousy. Does Metro have a document retention policy in place, and if so was it followed? If it doesn’t have such a policy, now would be a good time to put together a team to create one. Just please make sure the process to create it is done openly, and allows for plenty of input from the public.

To its credit, Metro’s response is appropriate.

Faced with a lawsuit, an increasingly critical mayor and lingering questions about document shredding and high-level firings, Metro board chairman David Wolff took steps Thursday to prop up public confidence in his embattled agency.

Wolff released documents that he said was fully responsive to a January open records request by former City Controller Lloyd Kelley.

He joined Mayor Annise Parker in asking Harris County District Attorney Pat Lykos to investigate the shredding of as-yet unidentified documents Monday by a Metro employee.

“It is very important to maintain public confidence in Metro, and that’s why I’ve urged the mayor to involve the DA’s office beginning today, if possible,” Wolff said.

Lykos, through a spokeswoman, declined to say whether she would comply with the request.

The best outcome is for the DA to investigate and determine that nothing sinister happened. Let’s hope that is the case. Martha and Hair Balls have more.

Bonding Metro

It wouldn’t be Metro if there weren’t drama.

Metro has not obtained performance or payment bonds to cover all the planned construction of four new light rail lines, and some officials say that could put taxpayer dollars at risk.

Metro President Frank Wilson said the transit agency has not made a final decision, but tentatively plans to use a different form of risk management, called parent guarantees, to make sure the four major companies fulfill their obligations and pay their subcontractors on the $1.46 billion contract.

The four companies are Parsons Transportation Group, Granite Construction Co., Kiewit Texas Construction L.P. and Stacy and Witbeck Inc. They have formed a joint venture known as “Houston Rapid Transit.”

Wilson’s announcement at a July board meeting aroused the concern of the national surety industry, which provides the bonds for construction projects by public agencies. Some local officials also questioned the decision.

Texas statute requires public agencies to obtain performance bonds on construction contracts larger than $100,000 and payment bonds on contracts larger than $25,000. Metro did use performance bonds during the construction of the Main Street rail line.

“By Metro not putting these bonds in place the taxpayer is potentially liable,” said Peter Brown, a Houston City Council member and mayoral candidate. “We do these for every major project at the city of Houston. Metro has been planning the light rail project for a long time, and if they needed to find protection for the taxpayers through another means they should have taken that up with the Legislature this past session.”

[…]

Wilson said that Metro was complying with the state law but had to explore a different method because performance bonds for a $1.46 billion contract would be too expensive and difficult to obtain. “We went out and got 100 percent performance bonds, just not in the traditional way,” he said. Bond underwriters object because they can’t get business from the contract, he said.

Wilson said that the contract ensures the four parent companies share “joint and several liability” for the proper building of the new light rail system. “They have pledged their corporate assets,” he added.

[…]

A parent guarantee is written into contract language, while a performance bond is issued by a regulated, third-party underwriter with deep pockets, said Peter Linzer, a University of Houston business law professor. Although a parent company involved in a joint venture may also have deep pockets, and may pledge to make good on any disputes or failures of subcontractors, there is still some risk it could go under.

“There is no doubt in my mind that a performance bond is not the same as a parent guarantee,” Linzer said.

I’m not a finance guy, so I’m not going to try to analyze this stuff. I get that the issue is the risk that the public could wind up on the hook in the event things go south. What I don’t see in this story, maybe because it’s not possible to accurately quantify at this point, is how big this risk is. Metro is claiming their way of doing this is less expensive, and that the tradeoff in increased risk is minimal. How valid are those claims? I don’t have a feel for that based on this story.

On a tangential note, Metro and the Medical Center have settled the lawsuit filed by the Med Center over stray current from the Main Street line. One less thing for Metro to have to deal with.