AUSTIN, Texas — An Austin suburb said it is not getting its money's worth from Capital Metro.
Leaders in Leander are considering cutting ties with the transit agency.
Leander uses half of its sales tax to fund the agency. That's more than $5 million a year. But the mayor wants to at least reduce that amount, if not end its partnership altogether.
Hundreds of people a day use the rail line from Leander to get into Austin. It's the northernmost stop for CapMetro's rail service.
“Leander is an important part of Capital Metro,” said Todd Hemingson, executive vice president of planning and operations at CapMetro. “We hope that remains the case in the future."
The problem, the mayor of Leander said, is the sales tax revenue.
“Which Texas allows you to use that for economic development,” Mayor Troy Hill said.
He added that “it is one of the most powerful tools that cities, especially small cities like us have … so not having it puts us at a distinct disadvantage."
One alternative he considers is reducing the sales tax amount.
“They shouldn't take the whole one cent,” Mayor Hill said. “It should be a quarter of a cent."
CapMetro told KVUE, "There is no legal ability for the authority [CapMetro] to reduce just one member’s sales tax contribution to the authority."
CapMetro also said it thinks Leander is already getting a good deal.
"If they were to contract for service, they would actually have less service than if they were to pay the same amount,” Hemingson said. “Or to get what they have today they would have to pay more. So, in that regard, we think it's a good deal, but we're always ready and willing to work with them to modify, improve, upgrade, do what we can do to meet the needs of that community."
Ever since the rail stop opened in Leander almost 10 years ago, Austin Community College has built a campus close by the station, and more than 20,000 more people have moved to the city.
If Leander goes through with this, it would ultimately need to be approved by voters. That would likely not happen until next year.
On Thursday, Capital Metro released this additional statement:
"It is difficult to accurately estimate the cost of withdrawal as it is based on FUTURE obligations as at the effective date of withdrawal. As at December 2018, we estimated the cost of withdrawal as $9.8M. The cost of withdrawal in November 2019 will be a different number and future contractual obligations cannot accurately be estimated. The calculation is determined by Texas Transportation Code Section 451.611. Under Texas law, it would be illegal to reduce one member city’s sales tax from, for example, one cent to a quarter.
Operating cost for current service provided within Leander City boundaries is estimated at $9.3M per year. If Leander was to withdraw and contract for service, Leander would also need to pay for the capital costs related to the rail line, trains, buses and other infrastructure, the rent of the Leander station, as well as a proportional share of accessing the transit network. We currently do not have an estimate for the total cost of service, but it would be higher than $10M a year."
On Thursday evening, CapMetro sent KVUE the following statement:
"Under current Texas state law, it is unconstitutional for us to reduce the sales tax for just one, or a few, but not all member cities.
Capital Metro believes in regional mobility solutions and we are happy to discuss with Leander and other regional stakeholders how we can better facilitate partnerships that meet joint goals."
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