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PSAD-77-123 1 (1977-06-29)

handle is hein.gao/gaobaackj0001 and id is 1 raw text is: DOCUMENT RESUME 02624 - [A1872903J Need to Resolve Metro Funding. PSAD-77-123; B-141529. June 29, 1977. 22 pp. + 5 appendices (14 pp.). Report to the Cong.ess; by Elmer B. Staats, CoLptroller Generel. Issue Area: Federal rrocurement of Goods and Services: Notifying the Congress of Status of Important Procurement Programs (1905) ; Transportation Systems and Policies (2400). Contact: Procurement and Systems Acquis'tion Div. Budget Function: Commerce and Transportation: Ground Transportation (404); Interest: Other InteLest (902). Organization Concerned: Department of Transportation; Washington Metropolitan Area Transit Authority. Congressional Relevance: House Committee on District of Columbia; Congress. Authority: P.L. 92-517. P.L. 89-774. The problem of obtaining funds to complete constructior and finance operating deficits of the Washington area metrorail system has not yet been resolved. Findings/Conclusions: The funding of metrorail system construction costs remains a major problem. An interim agreement to raise about $1 billion by mat-ching local contributions with interstate highway transfr funis 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 gener:te? 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 undr-stated by about $5.5 million and the original metrorail operati I deficit to be understated by $6.7 million. A study i. .ow being conduc~ed 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. Recommendations: 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 tc finance bond interest payments and bond retirement since the Authority will be unable to finance metrorail bond debt-servic costs. Because the primary sources of future funding will be the Government, the Congress should become involved in the arra'igementE and in tho solutions developed. (Author/SC)

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