The Leander City Council is scheduled to vote tonight on whether to hold an election on severing ties with Capital Metro — a move that could end commuter rail service to the suburban community and allow Leander to keep millions of dollars each year in sales tax revenue.
The looming decision has prompted CapMetro to make some last-minute overtures to the suburban community, including the creation last week of a $10 million fund to help smaller cities pay for infrastructure that supports public transit, like sidewalks, bus stops and lighting.
The CapMetro board also directed CEO Randy Clarke to come back to the board by Monday with initial options for a deal with Leander.
But that may be too late to avert an election on CapMetro membership. The Leander City Council is set to meet at 6 tonight and vote on whether to hold the referendum May 7.
At the heart of the issue is the almost $10 million in annual sales tax revenue Leander sends to Capital Metro each year — an amount Leander expects will grow to more than $18 million in the next decade as the city's population swells.
Austin, Manor, Lago Vista, Jonestown, Point Venture and San Leanna also collect a 1% sales tax to pay for Capital Metro services. But only Austin and Leander have rail service.
For its annual payment to CapMetro, Leander gets to be the last stop on the MetroRail commuter line. CapMetro also operates the on-demand service PickUp in Leander along with the MetroExpress 985 commuter bus, which offers five daily southbound trips from Leander into Central Austin.
But Leander's MetroRail service remains by far the most expensive. It costs $7.2 million annually, which is 92% of the cost of CapMetro services in Leander, according to a city-commissioned transit study by Goodman Corporation, a planning and engineering firm.
As transit ridership plummeted during the pandemic and Leander's sales tax revenues surged with more people shopping online, the subsidized cost for each trip on a bus or train by a Leander resident rose from about $45 dollars to $214, the Goodman Corporation told Leander City Council members.
"There's nothing wrong with the service itself," Leander City Council Member Kathryn Pantalion-Parker told KUT. "We've got more [transit service] than we need. It's just not being used. If the ridership doubled, it still does not justify the money."
Capital Metro has raised doubts about the Goodman Corporation study, arguing that pre-pandemic ridership should have been used to forecast future transit demand, especially given that Austin voters agreed to help fund a $7 billion transit expansion.
Project Connect includes light-rail lines that one day will make it possible to ride the rails from Leander to Austin-Bergstrom International Airport.
"We're going to be a region of four million people. This place is exploding in growth and we all know it," Clarke said. "We can't have a multi-million-person region and everyone alone by themselves in a car."
If Leander holds the election and voters approve leaving CapMetro's service area, the city would have to pay the transit agency more than $33 million based on a legal formula. That would amount to about three years in sales tax revenue.
If voters rejected leaving CapMetro, a withdrawal election could not be held again for at least five years.
Correction: This story has been corrected to clarify that Capital Metro argued pre-pandemic ridership should have been used by the Goodman Corporation to forecast future transit demand. The original story said the opposite.
