Leander City Council will decide tonight whether to hold an election on leaving Capital Metro

The Leander City Council is scheduled to vote tonight on whether to hold an election on severing ties with Capital Metropolitan Transportation Authority – 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 Capital Metro 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 Capital Metro 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 Capital Metro membership. Leander City Council is set to meet at 6 p.m. 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 percent sales tax to pay for Capital Metro services. But only Austin and Leander have rail service.

For its annual payment to Capital Metro, Leander gets to be the last stop on the MetroRail commuter line. Capital Metro 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 percent of the cost of Capital Metro 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 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 not be 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 4 million people. This place is exploding in growth and we all know it,” Clarke said. “We can’t have a multimillion-person region and everyone alone by themselves in a car.”

If Leander holds the election and voters approve leaving Capital Metro’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 Capital Metro, a withdrawal election could not be held again for at least five years.

This story was produced as part of the Austin Monitor’s reporting partnership with KUT.

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