Austin mayor says he will not support funding urban rail in 2012

“… In my view, we do not yet have a sufficient level of certainty regarding a plan to fund and manage operations and maintenance of an urban rail system. We also do not yet have the degree of certainty that I would like to see as it relates to a prospective federal funding match for construction costs, which is a fundamental need,” he wrote.

The mayor and other city officials have been studying a 17.5-mile urban rail network that would connect to the Capital Metro Red Line at Fourth Street, circulate downtown and provide service to the Mueller development in Northeast Austin as well as the Austin-Bergstrom International Airport.

Financial burden

On May 22, Austin Transportation Department staff recommended to Austin City Council what part of the network should be built first and said to pay for it, the city should ask voters to approve up to $275 million in bonds, an amount the federal government would likely match. The $550 million sum would cover the cost to design, engineer and construct 5.5 miles of the track.

However, Leffingwell said he did not want to place too much of an economic burden on families that “are still struggling to make ends meet” since there are other “critically needed” projects that would be paid for through bonds—leading to a possible rise in the city’s property tax rate.

Tax increases

On June 26, a citizen bond advisory committee will present to council two bond packages—one with $400 million of citywide capital improvement projects, or enhancements to roads, buildings and other city infrastructure, and one with $575 million of projects. Voters will likely see one of the packages on the November ballot.

According to the city’s Capital Planning Office, Austin has the capacity to take on up to $725 million of debt; however, a bond issuance of that size would result in an additional $105 per year in property taxes by 2016 for the typical homeowner. A $625 million bond issuance would lead to an additional $83 per year over the same time period, and a $500 million issuance would mean a $60 increase. An issuance of up to $385 million would not change the current tax rate.

Also potentially affecting resident expenditures is an increase in Austin Energy rates. The electricity provider said in September it needs to raise rates by 12.5 percent or it would face a $131 million shortfall. Council could vote on a final rate plan at its regular meeting June 7.

Furthermore, the city would either have to cut spending or raise taxes in the 2013 budget, though Leffingwell said in the blog he supported the former.

Ongoing funding

While urban rail will not appear on the November ballot, Leffingwell did say that he would support continued funding of urban rail planning in a bond package though he did not specify an amount.

 “I know many people in our community who will be deeply disappointed by delaying, once again, consideration of urban rail. But I doubt there will be too many more disappointed than I,” Leffingwell wrote.

Reacting to the announcement, a spokesperson for Capital Metro, a partner in developing the urban rail proposal, said, "With only five months away from a November ballot and many other competing priorities, we agree with the Mayor’s decision to allow more time to thoroughly plan and build consensus for an urban rail system that will meet the needs of Austin."