Lone Star Rail District Seeks $500K from San Antonio

Lone Star Rail District Seeks $500K from San Antonio

Officials with Lone Star Rail District (LSRD) have asked City Council to allocate up to $500,000 in the city’s 2016 fiscal year budget to help fund staffing and consulting services in anticipation of the $2-3 billion passenger rail project.

Lone Star Rail (LSTAR) project supporters see the project as a means for commuters to avoid congested roads between San Antonio and Austin and the potential for economic development and higher educational opportunities in one of the fastest growing regions in the nation.

LSRD officials made their case for initial funding during the Council’s B session on Wednesday. The plan includes improving the existing Union Pacific railroad that runs parallel to Interstate 35 between San Antonio and Austin for passengers at an estimated cost of $800 million. LSRD would first build a $1.6 billion freight line east of San Antonio that would take on the freight traffic of the exiting line. These one-time capital construction costs would be funded by state and federal grants as well as the private sector. But first, it needs assurances from municipalities along its route from San Antonio to Georgetown, just north of Austin, that they will pay for continued maintenance and operations of each stop.
The idea is to pull 18,000 vehicles, or 20,000 people, off I-35 daily. LSRD proposes 16 station locations, including six in the San Antonio area, one in New Braunfels and one in San Marcos. The inner city locations would be Loop 410 at the San Antonio International Airport, the University of Texas at San Antonio Downtown campus, Port San Antonio, and Texas A&M University-San Antonio.

“It’s a very big, complicated infrastructure project,” said Tullos Wells, vice chairman of the LSRD Board of Directors representing San Antonio. “You can’t solve all of the congestion and the risks it poses to the economic vitality in our region by pouring more concrete alone. Lone Star Rail alone won’t solve all the transportation problems in this region, but it’ll be a very important part of the solution. We’re going to have two million more warm bodies along this corridor in the next 25 years and we need a way to move them.”

At full capacity, there could be up to 32 trains running per day, including midday and evening service in each direction for commuters, students and other regional travelers – depending on demand. The system would support a 75-minute express service from downtown San Antonio to downtown Austin with stops in San Marcos and New Braunfels. LSRD promises modern, safe passenger cars with wireless Internet access, especially beneficial to business travelers and college students.

If all goes well, San Antonio’s $500,000 initial contribution in FY 2016 would consist of funds from the City’s general fund budget and property tax revenue derived from Transportation Infrastructure Zone (TIZ) around the LSR stations.

There would be continual financial commitments each year over the duration of a 36-year funding agreement, which would accompany a 36-year TIZ agreement. LSRD officials pledged not to seek any other funds from San Antonio’s proposed FY 2016 budget. Deputy City Manager Peter Zanoni explained that in 10-year increments, from 2021 to 2051, TIZ funds would cover most of the annual funding commitment with San Antonio.

Financing for the entire system is supposed to be split among San Antonio, Austin, and a coalition of seven “smaller” yet major cities along the LSR route, including Schertz and New Braunfels. LSRD estimates that annual funding for the system could reach $75 million by 2050, split among participating cities and taxing entities.

LSRD is also requesting funds from Bexar County and Alamo Colleges. Zanoni said the system’s current 36-year funding plan has a funding gap of $44 million in 2021, a gap that LSR presently cannot fill. Also, the plan has not identified funding for the maintenance of San Antonio’s stations, totaling $24 million over 30 years, Zanoni told the Council.

The Lone Star Rail District anticipates yearly total system funding, split among participating taxing entities, at more than $75 million by 2050 if all goes as planned. Graphic courtesy of Lone Star Rail District.

In addition to their recommendation of allocating $500,000 in FY16 as San Antonio’s initial contribution and signal of support, City staff recommended setting up a calendar for funding and TIZ agreements, including milestones and benchmark goals, as well as cancellation options if goals cannot be reached.

Wells called the $500,000 request a “placeholder” that allows the organization to work through business modeling for the entire operation. While many expressed support for the LSTAR project, Council members also were concerned with the project’s finances. Wells said it’s natural to build support for the level of public and private monies that could be used over decades to fund the system.

Wells said he and colleagues are presently looking at three finance models, with different formulas, and an independent third-party will verify the numbers in each model.
“There will be benefits from this alternative transit option, but we have to be good fiscal stewards,” Mayor Ivy Taylor said.

Wells addressed the project’s funding gap.

“We’re a bit early in the game to talk more about that. Right now, we need baseline support from the community.”

The Lone Star Rail District has outlined projected funding the system would need from local participating taxing entities. However, a funding gap presently exists as of 2031 as the system gets really rolling. Graphic courtesy of Lone Star Rail Dristrict.

Council members such as Ray Lopez (D6) and Rey Saldaña (D7) agreed with Wells that public and private investment could lead to a wider variety of opportunities for both businesses and residents. This, they added, would be true especially for lower-income individuals and cash-strapped college students by providing them more employment and higher education opportunities. Wells said ticket prices have not yet been determined.
“This could have a positive generational impact for many future generations, not just now,” Lopez said. “I do believe we’re a mass transit-focused community, we just haven’t figured out yet the level of commitment. We’re just doing our due diligence.”

Councilmember Joe Krier (D9) has been a vocal advocate of building a regional commuter rail system for 20 years. He said there’s still a lot to be worked out, and a lot of improvements that can be applied to existing forms of local mass transit. But he said the LSTAR represents an opportunity to further growth in San Antonio, and help transport future generations of riders.

“In the last century, if you didn’t have a railroad going through your town, you’d literally dry up and blow away,” Krier said. “In this century, railroads are seeing a renaissance of interest because they provide that alternative transportation option.”

Krier, along with Councilmember Shirley Gonzales (D5) said LSR officials should emphasize the system’s potential for improving rail crossings, particularly in older neighborhoods, and how it could improve overall public health and safety in the region.

“If it does nothing else than to reduce the rate of deaths on this stretch of highway, it would have provided much improvement and benefit to the region,” Krier said.
The Council will consider the $500,000 request as it continues discussing the proposed FY16 budget.

*Featured/top image: A map of the proposed Lone Star Rail line. Courtesy image.