By Roland Murphy for Arizona Builder’s Exchange
The Tempe City Council has directed the removal of the city’s streetcar project from its Infrastructure Improvement Plan following a June 4 work study session on the plan. Despite the change in plans for how to fund it, the project is moving forward.
The city had considered funding a portion of the project’s $170M-$200M costs through a development impact fee program it is implementing. Creation and adoption of an IIP is the first component in creating such a program under state law.
Under the revised plan to be adopted July 30, development impact fees will go toward police buildings, fire stations and equipment, planned intersection improvements, transportation systems management, and park and recreation improvements.
City Public Works Director Don Bessler said the council decided to drop the streetcar project from the IIP and impact fee funding plan after receiving opposition from some residents and business groups. He said impact fees had not been used in the state in the manner planned for the streetcar project and there was concern it might set a precedent.
“There are often competing views about project development and funding,” he said, “and the council tries to listen to those views and incorporate the best course of action for all the parties involved and for the city.”
In a letter to Mayor Mark Mitchell and the city council, Valley Partnership President and CEO Cheryl Lombard expressed the organization’s support for removing the streetcar project from the IIP and pledged its ongoing willingness to help the city secure funding from other sources.
Costs and Funding Sources
According to Bessler, the city and Valley Metro have identified $154M in federal and regional funds, $79M of which is committed. $75M will be pursued via a small starts grant through the Federal Transit Administration.
“We have received a positive initial ranking from the FTA regarding the project and we believe we have a good chance of getting the grant,” Bessler said
Tempe is taking a two-pronged approach to securing the $23M still outstanding. First, Arizona State University and a group of local business interests have agreed to self-assess up to $13M. Second, the city will partner with cities through the Maricopa Association of Governments and Valley Metro to assign its portion of regional transit funds for up to $10M, if necessary.
Valley Metro Spokeswoman Susan Tierney confirmed that the action by the City of Tempe doesn’t impact the project planning or contracting schedule. Valley Metro will be the contracting authority, selecting the Engineer of Record and General Contractor when funding is secured.
City Confident About Cost Estimates
Some reports have projected costs for the streetcar could reach as high as $200M. Bessler voiced confidence in the city’s lower estimate.
“The FTA has very rigorous cost estimating requirements to ensure projects come in under budget,” Bessler said. “Since we have completed the preliminary environmental review, know the alignment, the length, the number of stops and a general understanding of the market, we do not anticipate costs being higher than $177M.”