Madison’s finance committee approved a proposal Monday afternoon that would move up construction of a Metro Transit bus facility from 2018 to 2016 and cost the city $10 million more than anticipated.
The change is spurred by uncertainty about how much money the federal government is willing to contribute to the project coupled with an imminent need for more bus storage, but the increased borrowing will add stress to an already tight budget.
“Our buses cannot expand at all right now. They need that barn,” said Madison City Council President Chris Schmidt. “Ideally we would have started on this five years ago.”
The current bus facility on East Washington Avenue is designed for 160 buses but currently houses 214, along with some smaller paratransit vehicles. Ridership on Metro Transit has continued to climb over the past decade, hitting a record 15 million in 2014.
“The urgency for a bus garage is significant,” said Metro Transit general manager Chuck Kamp at the Board of Estimates meeting.
The plans entail construction of a satellite facility at the city’s new Nakoosa Trail property. The 2015 Capital Improvement Plan allocated funding for the facility in 2018 through 2020, totaling $35 million over those three years. The plan anticipated that federal grant funding would support 80 percent of those expenses but noted that “such funding is uncertain.”
Now, city officials say the federal government is unlikely to provide that level of support.
"Congress has not been funding the transportation bill the way they used to. There’s no guarantee we’re going to get that kind of money," Schmidt said.
Instead, the city plans to apply for a Department of Transportation TIGER grant, which has an application cycle this spring. According to the resolution, proposals have a greater chance of success with local contributions of at least 30 percent, even better with 50 percent.
“Basically it came back to, here’s the TIGER grant, right in front of us. It could fund this, half of this,” Schmidt said. “We’ll go for what we can get now.”
The resolution the Board of Estimates passed Monday would increase the city’s support from $7 million to $17.5 million in general obligation borrowing, totaling 50 percent of the project costs. It would likewise reduce expected grant contributions to $17.5 million. City Council will vote on the change next week.
Ald. Larry Palm questioned going with the full 50 percent funding Monday due to the strains on the city’s budget, but Kamp said the higher percentage puts the city in a more competitive position to get a garage up and going.
The concern is that the $10 million in borrowing next year will then strain the operating budget in coming years, requiring $1.4 million in debt service every year for 10 years.
“I think it’s going to have to be weighed against some of the other projects in those years and thought will have to be given to the impact of the debt service on the levy,” said finance director Dave Schmiedicke.
Schmidt, who sponsored the change along with Mayor Paul Soglin, said the finances will have to be hashed out alongside other projects, but the bus barn needs to happen no matter what.
“To me, that’s the number one infrastructure priority as far as city construction goes,” Schmidt said.
And with the TIGER grant funding available now, he said it’s worth applying.
“We don’t know that the transportation funding will be there in the future,” he said.