DALLAS — Austin taxpayers would be asked to back $275 million of general obligation bonds to get an urban rail system started under a proposal before the City Council.

Including the rail plan on the November ballot would mean scaling back other bond-financed proposals to about $400 million from a previously discussed $575 million.

The City Council is expected to decide which proposals to include on the ballot in June.

The initial cost of the first phase of the rail system is estimated at $550 million to build about 5.5 miles of double track running on Austin streets from the northeast through the University of Texas and the capitol complex to the Austin Convention Center downtown.

In addition to the GO bonds, the city would use federal funds to finance the first phase of a line that is expected to reach 16.5 miles.

The system would feature electric-powered light rail that would share lanes with cars along part of the route. Although Austin is one of the most environmentally active cities in the nation, its voters have at times balked at mass transit solutions to the city’s worsening congestion.

The Federal Transportation Agency’s criteria for $1.8 billion of combined grants favor systems that service downtown areas, transit consultants told the City Council. However, competition for the grants remains fierce as several major cities are developing light rail, they said.

While an agency known as Capital Metro operates a bus system around Austin, it is not a large issuer of debt and cannot match the city’s resources. Capital Metro does operate a commuter rail line from the Williamson County suburb of Leander to downtown Austin. That line was approved by voters in 2004.

With a triple-A rating from all three rating agencies, Austin is in a strong position to finance an urban rail line in the congested city, officials say. Federal funds would contribute the lion’s share of the financing, according to planners.

In his first bid for re-election, Mayor Lee Leffingwell, the chief backer of the rail plan, won more than 52% of the vote against two opponents earlier this month, thus avoiding a runoff.

Three other City Council incumbents — Mike Martinez, Bill Spelman and Sheryl Cole — also won their re-election bids.

The November bond election would be the first since 2006, when city voters approved $567 million in park, library, housing, drainage, road and cultural arts projects.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.