Cap Metro to Pay Up by 2019
Council to vote on new agreement regarding Quarter Cent program funds
The meat of the amendment is a "threshold amount" of sales tax collections that must be reached by Cap Metro before any payments begin (see chart below). Once that minimum is reached, Cap Metro will set aside 35% of any additional revenues in an account dedicated to paying off the $51 million (to be paid out as the city bills Cap Metro for completed transportation mobility projects – see "Gone and Quartered," April 16).
The beginning threshold is based on the Capital Metro fiscal year 2010 budget of $134.1 million. Each year thereafter, the threshold will rise about 3.3% annually – basically, an assumption of inflation and increases in Cap Metro's cost of doing business. That would put the threshold at $138.5 million in fiscal year 2011, eventually reaching $211.1 million in fiscal year 2024, assuming there is still an outstanding debt at that point. Cap Metro estimates that the full amount will be paid by 2019.
In January 2009, Cap Metro stopped making payment on the Quarter Cent program – which is supposed to send a quarter of the transit agency's penny sales tax to the city – when the economic crash sent tax revenues plummeting, a crisis that coincided with the agency spending down most of its cash reserves on various facility improvements and the launch of MetroRail.
Cap Metro was able to stop payment because the current agreement allows for payment to be made "as funds are available" – but of course, that raises the issue of why the funds weren't set aside in a separate account since 2001, instead of being spent away. Randy Hume, Cap Metro's chief financial officer, said he wasn't certain why such an account wasn't set up by his predecessors, but the account set up by this amendment addresses that concern going forward.
What kind of reception can the amendment expect at council? As of this writing, only Council Members Randi Shade and Chris Riley returned phone calls, and both expected it to pass. "I don't know of any outstanding concerns that would prevent approval," said Riley, who also sits on the Cap Metro board. (Riley and Mayor Pro Tem Mike Martinez, who is chair of the board, recused themselves from last Thursday's vote.) "I'm satisfied," said Riley, adding, "obviously I would have liked the city to get paid sooner."
Under the interlocal agreement between the city of Austin and Capital Metro, Cap Metro gets to keep 100% of its sales tax collections up to a threshold amount each year. Above that, the city gets 35%. The threshold starts at Cap Metro's fiscal year 2010 budget of $134.1 million, then rises about 3.3% a year to account for expected inflationary rises in operational costs.