Part 4: Loop Trolley Q and A

A special University City  July 16 answered several questions about the plans for the trolley's path and how it would operate. It also brought up several more.

In order to help clear up confusion about the proposal and any changes that may have occurred since the Trolley was first proposed, Mayor Shelley Welsch asked City Manager Lehman Walker to compile a list of frequently asked questions about the trolley.

The information is from the Loop Trolley Company.

Operation

• Who will own and operate the trolley? — The trolley will be owned by the Loop Trolley Transportation Development District (TDD). The TDD will solicit interested parties and select an operator for the system well before the completion of construction. The TDD is comprised of five entities: Metro, City of St. Louis, , St. Louis County and the CB 5421/5979 Transportation Development District.
• Of the five entities that comprise the TDD, does each one have a vote and is each responsible for 20 percent of the cost? — Each entity has one vote but are not responsible for any of the cost. The TDD as a public entity itself is 100 percent responsible for the costs, with its revenue derived from a TDD tax on retail sales in its coverage area..
• The boundary of the Loop Trolley TDD does not go west of Kingsland, will the boundary and statue need to be revised since the project limits is passed that point? — The boundary and statue of the TDD will not have to be revised. There are no requirements that TDD funds must be spent in a defined area. TDD funding can be spent on anything that relates to the project and there are no limitations on where the TDD can construct the track.

Liability

• If the unexpected occurs, who will be responsible if the trolley doesn't work and goes bankrupt? — The Financial Management Oversight consultant provided by the Federal Transit Administration (FTA) has thoroughly reviewed the funding and found that the TDD has enough money to operate the system. The TDD had a thirteen and a half percent increase in sales tax revenue from 2010 to 2011. There is a conservative estimate of 5 percent growth for the TDD. This revenue will keep increasing with expected new development. The fare box revenues are estimated to cover at least 30 percent of the operating costs with advertising and sponsorship bringing in 6 percent. The TDD tax revenue will cover the balance.
• Will University City be held financially and legally liable for this project? — University City will not be held financially or legally liable for this project. Only the TDD will be so liable.
• Will University City taxpayers be responsible for any future maintenance cost such as trolley cars and related equipment like the tracks and overhead wires? — No, University City taxpayers will not be responsible for any future trolley maintenance cost. The TDD will be responsible for all maintenance cost and any additional capital expense.
• How would the City Council assess whether the TDD's annual insurance coverage would be adequate? Could University City taxpayers become potentially responsible for any insurance costs, such as for liability to cover an accident, or for any destruction to or caused by the trolley overhead wires? — The TDD will carry its own insurance.
• If the tracks needed to be removed because the project failed, how would removal of the tracks be funded? — If the tracks needed to be removed, the TDD would be responsible for cost associated with removal of the tracks.

Funding

• What will it cost to build and operate the Trolley system? — It will cost up to $43 million to build the system and approximately $1.1 million in the first year to operate. Operating costs are then estimated to increase modestly annually, and as projected continue to be covered with the revenue stream of fare, advertising and TDD tax receipts.
• Is all the funding in place for this project? — The construction funding plan for the project is currently being developed, with most of the funding already in place and the final funding approval before Sept. 30, 2012. The project’s implementation budget comes from several federal funding sources as well as private donations. The operations budget for the project will be met based on fares, advertising, sponsorships and TDD tax revenue.
• Is there a contingency amount in the cost estimate? — Yes, there is a contingency amount in the capital cost estimate. It is standard industry practice to have between a 10 to 20 percent contingency set up for the project at this later stage of its development. Currently, there is approximately 17 percent contingency for this project. In the event that something would happen during construction to cause an overrun, the TDD has the authority and could issue revenue bonds to cover the cost.
• What is the trolley project timeline? — The federal dollars will expire September 30th of this year. The grant application was turned in June 1st in order to get the remainder of the Urban Circulator Grant and we will be able to go to construction later this year. The second week of August, Final Design plans will be 90 percent completed and by the end of August, plans will be at 100 percent with bid documents available to go on the street. It is anticipated that in September the federal grant approval will be made.
• In 2007, University City provided funding for a $250,000 study, where are the results? — According to city officials, $200,000 for the study came from the Economic Development fund and $50,000 came from the Council. This study served to provide invaluable input to the Environmental Assessment required in order to apply for the grant and can be found on the trolley website, www.looptrolley.com.
• Is University City providing any funding for this project? — University City is not funding any portion of this project.
• What are the next steps for the project? — Next steps are final engineering scheduled to be completed by the end of this summer with construction slated to begin as early as late 2012/early 2013.

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