Need to Resolve Metro Funding
PSAD-77-123: Published: Jun 29, 1977. Publicly Released: Jun 29, 1977.
- Full Report:
The problem of obtaining funds to complete construction and finance operating deficits of the Washington area metrorail system has not yet been resolved.
The funding of metrorail system construction costs remains a major problem. An interim agreement to raise about $1 billion by matching local contributions with interstate highway transfer funds has been developed. The Washington Metropolitan Area Transit Authority can no longer finance the interest costs on over $997 million of revenue bonds from internally generated funds. If no alternative payment method is found, the Department of Transportation, guarantor of the bonds, will have to make the interest payment. The fiscal year 1977 bus operating deficit appears to be understated by about $5.5 million and the original metrorail operating deficit to be understated by $6.7 million. A study is now being conducted to evaluate the feasibility of a system of less than the planned 100 miles. If the rail system is to exceed 60 miles, a more comprehensive financial plan will be required.
Matter for Congressional Consideration
Comments: Please call 202/512-6100 for additional information.
Matter: The Director of the Office of Management and Budget, the Secretary of Transportation, the Authority's Board of Director's, and the State and local jurisdictions should expeditiously devise a mutually acceptable arrangement to finance bond interest payments and bond retirement since the Authority will be unable to finance metrorail bond debt-service costs. Because the primary sources of future funding will be the Government, the Congress should become involved in the arrangements and in the solutions developed.