Title
Amendment to South Central Extension/Downtown Hub Project Funding Agreement (Ordinance S-46945)
Description
Request to authorize the City Manager, or his designee, to approve an amendment to the current funding agreement with Valley Metro Rail (VMR) for the South Central Extension/Downtown Hub Project to add an amount not-to-exceed $350 million to fund the remainder of the project costs. Federal Capital Investment Grant (CIG) funded costs will be reimbursed by the Federal Transit Administration (FTA) over several years, potentially beyond the construction schedule.
Report
Summary
The South Central Extension/Downtown Hub Project is a 5.5-mile light rail project extending south along Central Avenue from Jefferson Street to Baseline Road. This Project also includes the creation of a transfer hub in downtown Phoenix. The Project includes nine new stations and two park-and-rides (one located at the existing Ed Pastor Transit Center on the northwest corner of Central Avenue and Broadway Road, and the other located at the end-of-line on the northwest corner of Central Avenue and Baseline Road).
Attachments A and B provide a graphical representation of the South Central Extension/Downtown Hub Project and the end-of-line park-and-ride, which can be expanded into a transit center in the future if necessary.
On Oct. 16, 2019, City Council approved an amendment to the funding agreement in the amount of $159 million for design and construction services for the Project. The Council Report explained: “Because the schedule for the disbursement of federal funding is based on a reimbursement process and is expected to exceed the project construction schedule, a future amendment to the agreement will be required to advance the necessary additional funding to VMR for project completion. The future amendment will be requested after the City receives authorization for the financing needed to cover costs that will be later reimbursed through federal CIG funding.”
Although the FTA approves the total CIG funding when executing the Full Funding Grant Agreement, CIG New Starts grant funds are typically allocated over multiple years due to the federal budget process. This may result in the receipt of some grant funds past project completion. Due to this timing of annual CIG allocations, it is expected that Phoenix will need to advance funds.
Financial Impact
The amount of this amendment is $350 million and funds are available in the Public Transit Department Capital Improvement Program current year budget using FTA funds and bond funds.
Concurrence/Previous Council Action
- The Citizens Transportation Commission voted 9-1 to recommend Transportation, Infrastructure and Innovation Subcommittee and City Council approval at the meeting on Aug. 27, 2020.
- The Transportation, Infrastructure and Innovation Subcommittee voted 4-0 to recommend Council approval at the meeting on Sept. 2, 2020.
Location
The extension will run south along Central Avenue from Jefferson Street to Baseline Road.
Council Districts: 7 and 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Public Transit Department.