May 23--The cost of urban rail's first piece, mostly a matter of speculation for more than a year, would be $550 million, city of Austin officials said Tuesday.
They recommended to the City Council that voters be asked, perhaps as early as November, to shoulder half of that load in the form of general obligation bonds, borrowing backed by property taxes.
The net effect of that $275 million of debt, if combined with about $400 million in bonds for nontransit spending that the city is considering bringing to the ballot, would be that the owner of a $200,000 home by 2016 would pay more than $100 in extra property taxes, said Greg Canally, the city's deputy chief financial officer.
That $550 million is a somewhat higher figure than in previous estimates because of expected inflation before construction would begin in 2017 (with operations starting by 2021). The money would buy about 5.5 miles of dual track running on Austin streets from the Mueller development through the University of Texas and the Capitol complex to the Austin Convention Center downtown. The trains would be electric-powered light rail or "modern streetcars" that would run about half of the route in shared lanes with cars and about half in lanes isolated from traffic, city officials said.
In some cases, providing those so-called dedicated lanes would mean removing a lane used for parking. It is unclear whether any lanes now used by cars would be solely for trains and buses.
The trains generally would run 10 minutes apart, city officials said, about three times as often as Capital Metro's MetroRail commuter line. The city has not settled on ridership estimates, Transportation Director Robert Spillar said.
But urban rail's future depends first on the City Council deciding to include it in a bond election, either this year or later, and on voters saying yes to the debt. The council, after at least two other study sessions this summer on rail and other potential bond projects, will decide in mid-August about calling a November bond election.
Beyond that, the project hinges on Federal Transit Administration officials deciding — after what is likely to be a three- or four-year application and design process costing $30 million or more — that urban rail would be worthy of federal funding for half of the engineering and construction cost.
Transit experts hired by the city told the council Tuesday that the federal agency's criteria for such grants have begun to favor such downtown-centric systems over more commuter-oriented projects. But multiple cities are chasing what has recently been about $1.8 billion each year of federal New Starts grants.
"This project is in the sweet spot of those rules," said Jeffrey Parker, a financial consultant. "I remain very optimistic about the project. But it is a very competitive program."
City officials said construction could be less expensive for the city if it occurs earlier and if other funding sources come through, including land donations from the university. But, they edged away Tuesday from the prospect of using so-called tax-increment financing — added property taxes from development judged to have been spurred by the project, often referred to as TIF districts — as a way to pay for design and construction.
"Current TIF estimates would only provide minimal relief to (general obligation) debt needs," according to a presentation to the council.
City officials said operating the system initially would cost about $16 million a year and estimated that figure would increase about 3 percent a year (at least until a second phase of rail opens sometime in the future). But fares, along with some parking meter revenue the city is considering using for rail, would cover less than 20 percent of the ongoing cost, according to charts presented Tuesday to the council.