Directors of Austin’s Capital Metro transit system will take out a one-year $10 million line of credit from JPMorgan Chase Bank to bolster the agency’s rapidly depleting reserves.
Chief executive officer Fred Gilliam said officials expect Cap Metro’s reserves will fall to about $10 million by September due to declining sales tax revenue and high expenses involved in the soon-to-open commuter rail system.
The line of credit, which would be restricted to capital items, would be available at rates ranging from 2.75% and 3.5%. The agency would have to repay any borrowing by May 31.
The transit system’s 1% sales tax provides more than 70% of its revenue. Collections have fallen every month since October 2008. February revenue was down almost 15% from February 2008, while March revenue fell 10.3% from a year earlier.
Total sales tax collections in the first seven months of fiscal 2009 are down $20 million from budget projections.