Urban Rail
2:38 pm
Tue May 22, 2012

Feds May Cover Half of $550 Million Urban Rail Line

What’s the estimated cost of Austin’s first urban rail investment? $550 million.

That was the price tag the Austin City Council heard in a work session this morning. Assistant City Manager Robert Goode said some $550 million was required to build the first proposed phase of urban rail, from the convention center through the UT-Austin campus and on the Mueller neighborhood.

And while the Federal Transit Administration’s New Starts funding program could cover roughly half of that, rail consultants said the city would need to cover the other $275 million, likely in large part through a bond election – should council place it on the ballot, and voters approve it.

If the project goes forward, the first rail segment could open by 2021. Jeff Parker, an consultant on the project, told the council that getting a bond could expedite federal investment.

“One of the ways to sort of jump the queue and get to the head of the class and shorten that time frame is to have the local match in hand,” Parker said. “So I think that’s a point we want to keep in mind.”

Another way to lessen the cost of rail – which may be competing with millions of dollars in other priorities in a bond election this November – is to procure buy-in from other agencies. The city envisions a rail funding package of federal, private and public funds, along with potential funding in the November bond election.

“The city needs to be careful that as it goes forward that future extensions, future operating and maintenance costs, future financial exposure that’s associated with the investment is shared with other partners,” said Parker. “And that those partnerships need to be formed before these commitments are really solidified, so that everyone knows the level of expectation and is comfortable with that, and the City is comfortable with the fact it’s not going to be going it alone.”

A second proposed phase would take the rail south of Lady Bird Lake. The city has also released an even broader map of potential future extensions.

Reaction from the council was cautious. Mayor Lee Leffingwell sought to emphasize that the estimates might outstrip the actual cost.

“My understanding is, and I want you to either confirm or refute it, that these numbers are very conservative and there’s a very good chance that the final costs will be much less,” he asked Assistant City Manager Goode. Goode replied that the transportation department “consciously set the bar so that we are comfortable that if we got the authorization – you choose to set an election, we got authorization from the voters – that we would reduce that number and we would never be coming back to you saying ‘we need more.’” 

City council member Bill Spelman was more cautious, reciting some of the common knocks against rail – likely hoping to inoculate the proposal from similar criticism in the future.

“Let me summarize your presentation as briefly as I can … If we are going to build a train, we should expect it to not be completed before 2021, and maybe we’ll get lucky,” he told staff. “That we can expect, if we put our proposal together, a 50 percent match from FTA. That if we can get TIFs [tax increment financing agreements] and partnerships and ancillary funds that would be great, but we shouldn’t count on that until we’ve actually nailed that down. In the meantime we ought to expect to spend GO bonds, and for this project it’s about $275 million dollars. Is that right? Okay. Let me back way up and ask the most basic question …  So why are we talking about a train and not a bus rapid transit line?”

Transportation Director Rob Spillar replied planned bus rapid transit lines along Guadalupe Street and Lamar Boulevard “do not compete against” the proposed rail line, but rather “they really are compatible and reinforcing each other.” Spillar also said that rail has a “greater moving capacity” than the bus, and that the rapid bus is focused on getting further out of the urban core than rail.

The conversation will certainly continue next week. The council is scheduled to further discuss rail finance during their next work session on May 29.