Updated: West U City Council Looks To METRO For Answers In Procurement Controversy

September 24, 2010

West U City Council is seeking answers from METRO regarding its recent procurement controversy.

West U City Council is seeking answers from METRO following recent findings by the Federal Transit Administration that the Houston area’s transportation agency violated federal procurement law and “Buy American” requirements.

Council asked to be briefed by small city representatives on METRO’s board of directors Burt Ballafant and Jim Stewart about the recent controversies at METRO.

A report will be presented to council on Monday, Sept. 27 at 6:30 p.m. in the council chambers.

City Manager Michael Ross sent an email to Ballafant and Stewart on Sept. 16 requesting they appear at an upcoming city council meeting.

“Some on council have been reading the recent press clippings regarding METRO and are concerned,” Ross said in his email. “Additionally, during these economic times when approximately $1 million in sales tax is being diverted to METRO (from West University Place) the concern is understandably amplified.”

Ross also sent an email to METRO Associate Vice President Russ Frank with questions about the METRO board and how board appointments are made for small cities like West U.

One of the questions Ross said council wants answered by the METRO representatives is whether or not West U can withdraw from METRO and keep the one percent sales tax revenue.

In an emailed response to Ross, Stewart appeared to take offense to the city’s request.

“I am somewhat totally taken back by this, ‘behind our back’ method being taken by West U. No one at West U, i.e.; your Mayor Bob Kelly has ever said anything negative to myself or Burt about our positions on this Board representing the ‘14’ Multi-Cities to date,” the e-mail said. “How do you think this looks to Metro to have ‘1’ of our constituents come in like this and ask these type questions that would indicate that West U is apparently unhappy with our services to date.”

Ross responded saying that “these are simply questions regarding these appointments and the Multi-City arrangement with METRO so they (West U City Council) may more clearly understand the process.”

Stewart wrote back, saying that “the correct way to have handled this ‘inquiry by your City Council’ would have been to request this info from or thru your own Mayor. He could of (sic) then contacted Allen Owen who chairs this Multi-City group of Mayors with regard to its representatives and received the needed information to each of your questions without going directly to our Metro staff and giving them the appearance of apparent dissatisfaction within our ranks. This can and does convey some weakness on the part of the Multi-City ranks and a very critical time as we are re-organizing under this new leadership.”

Council’s request to be briefed by METRO representatives was initiated by Councilmember George Boehme, who asked Ross to provide the council information.

Boehme sent Stewart an email saying it was not his intent to anger him “or anyone else at the Metropolitan Transit Authority” and that he wanted to be “pro-METRO.”

“METRO’s recent performance makes support a challenge, so I seek information and assurances of transparency that have been absent from METRO for several years,” Boehme said in his email to Stewart. “Many residents seek information and assurances from METRO representatives that could help us again become METRO boosters.”

In 1973, the state legislature passed a law that authorized the creation of local transit authorities. Houston-area voters approved the creation of METRO and a source of funding for the transit authority in 1978.

West U, one of 14 cities that belong to METRO, contributes around $1 million in sales tax to METRO and receives $259,000 from METRO’s general mobility fund every year.

In August, FTA announced that METRO violated both federal procurement law and the Buy America requirements” during the procurement and subsequent award of two light rail vehicle (LRV) contracts to Spanish rail car manufacturer Construcciones y Auxiliar de Ferrocarriles (CAF).

FTA began its investigation into whether or not METRO complied with FTA’s Buy American and procurement rules on April 23. To read the report of the investigation, click here.

“The results of the investigation are both alarming and disturbing.  They reveal a series of systematic efforts through which METRO and CAF sought to bypass numerous federal rules,” FTA Peter Rogoff said in a letter to METRO Board Chairman Gilbert Garcias and President and CEO George Greanias. “These rules are designed to ensure the integrity of procurements involving taxpayer funds and the requirement to use taxpayer funds in a manner to maximize the creation and sustainment of well-paying jobs here at home.  The Administration will vigorously enforce these requirements, both now and in the future.”

The letter went on to say that while METRO’s violations are serious, the FTA “believes the North and Southeast Corridor projects have merit” and they stand behind its fiscal year 2011 budget request of $150 million for the two projects.

To view METRO’s proposed 2011 budget, click here.

In order for the FTA to participate in these projects, METRO will have to terminate its contracts with CAF and re-procure light rail vehicles to comply with FTA rules.

METRO will also be required to submit a written affirmation of its intention to rebid the contract and detail its plan to achieve full compliance with all federal requirements in order for the FTA to continue to direct federal funds to these projects, according to the FTA.

The estimated cost of the North and Southeast Corridor projects is more than $1.5 billion total, with a projected federal investment of $900 million combined.

InstantNewsWestu Staff

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