Update: The FTA has responded to Cascade’s letter, and disagrees with Cascade’s contention that the MAX Green Line is out of compliance with the Full Funding Grant Agreement. The FTA’s response is here. Quoting from the response:

In recent years, TriMet, like many transit agencies across the country, has been impacted by the decline in economic conditions. FTA recognizes that light rail projects are long-term investments that may experience one or more economic downturns during their lifecycle. While the duration of almost any downturn is uncertain, transit agencies are often faced with service reductions as a way to temper immediate financial impacts until conditions improve. Such temporary actions are not typically viewed by FTA as a breach of contract. Section 19(a) of the FTA FFGA discusses “default” in terms of “…substantial failure [emphasis in original] of the Grantee to complete the Project in accordance with the Application and this Agreement will be a default of this Agreement.” TriMet is not in “substantial failure” of completing the project nor is it in default of the FFGA as a result of recent service reductions.

The original text of this article is after the jump.