DALLAS — Colorado’s Regional Transportation District has received confirmation of a $1.03 billion federal grant that is a key element in financing its $6.7 billion FasTracks program.
FasTracks, which Denver-area voters approved in 2004, is a plan to build 122 miles of commuter rail and light rail, 18 miles of bus rapid transit, 21,000 new parking spaces at light-rail and bus stations, and improve connections across the eight-county district.
Though the new grant had been expected, upheaval in the federal budgeting process amid political showdowns between Republicans and Democrats, deep federal budget cutting, and a loss of the United States’ AAA rating from Standard & Poor’s created a turbulent backdrop for formerly routine events.
FasTracks is one of the largest public-private partnerships in the country, with developers fronting capital for a commuter rail line from Denver International Airport to downtown Denver’s Union Station, along with RTD bonds and federal grants.
Despite the federal funds and relief from escalating construction costs during the recession, the district still expects to fall short of the necessary funding to complete FasTracks by 2020. To stay on schedule, the district expects to ask voters to increase the sales tax by 0.4 cents per dollar in 2012.
Amid the weak economy and the rise of the anti-tax, anti-federal government Tea Party, the district board ruled out an election this year. If voters refuse to double the current 0.4-cent tax, the district expects to finish FasTracks in 2042.
The full-funding grant agreement between the district and the Federal Transit Administration will be signed Aug. 31 in the Denver suburb of Arvada, the RTD said.
The federal grant for an airport commuter line known as the Eagle P3 project represents half of the $2 billion contract between the RTD and the private Denver Transit Partners.
In addition to the airport commuter line, the money will go toward a Northwest line to Denver suburbs and a commuter rail maintenance facility. The line is expected to open in 2016.
The RTD has received three full-funding grants in the past worth $983 million.
Standard & Poor’s last year downgraded the district’s lease-revenue debt to A-minus from A-plus as it prepared to issue $310 million of certificates of participation.
There has been no indication that the U.S. downgrade will affect the RTD.
Standard & Poor’s analyst David Hitchcock based the downgrade on “a significant increase in sales tax-secured debt that has a prior lien on RTD’s primary source of revenue and an increase in lease appropriation debt outstanding, as well as new RTD appropriation obligations for operations incurred as part of a concession agreement for RTD’s Eagle P3 FasTracks public-private partnership.”
Moody’s Investors Service rated the COPs Aa3. Fitch Ratings gave them a AA-minus. Both had stable outlooks.