RTA expects a funding shortfall to affect Tucson transportation projects

RTA expects a funding shortfall to affect Tucson transportation projects

To address the RTA's funding needs, Tucson would have to come up with up to $150 million of its own funding or establish that amount's worth of projects to move to the next 20-year-transportation plan.
September 10, 2022

By Nicole Ludden, Arizona Daily Star

The Regional Transportation Authority is grappling with a funding shortfall leaving the projects it promised it would deliver to voters in 2006 without a clear mechanism for completion, and only projects in the city of Tucson are left to be funded in the multibillion dollar transportation plan.

To address the RTA's funding needs, Tucson would have to come up with up to $150 million of its own funding or establish that amount's worth of projects to move to the next 20-year-transportation plan, called RTA Next, which could be on the ballot as early as 2024. The current RTA expires in June 2026.

Sixteen years ago, voters approved the RTA plan to fund $1.9 billion worth of transportation projects in Pima County through a half-cent sales tax, and the RTA hopes to continue the program with another $2 billion, 20-year plan.

But revenues have come in lower than anticipated, and the funding shortfall has caused frustration for the city — the home of nearly half of the county's voters — after it almost withdrew from the RTA at the beginning of the year.

Tucson vowed to leave the RTA by Feb. 1 unless changes were made to address a massive funding gap for the city's unfinished projects, causing the RTA board to approve a motion in January to come up with a precise plan to fill the gap.

Current considerations are to front-load some of Tucson's 11 pending RTA projects into RTA Next with the hope to gain voter approval a second time. If that doesn't work, the RTA would have to come up with up to $150 million worth of revenue from other sources to fulfill its promise to voters.

While no single solution has been identified, other regional RTA participants are waiting to see what the city of Tucson is willing to either fund itself or push back to the next plan.

The RTA's governing board — comprised of nine members representing Tucson, Pima County, tribal nations, the Arizona Department of Transportation and other local jurisdictions — discussed pushing back RTA projects at its latest Aug. 25 meeting, but Tucson Mayor Regina Romero said she couldn't provide feedback to which, if any, projects the city is willing to move back until she hears from city council members.

Farhad Moghimi, the RTA's executive director, is expected to speak with the city council before the RTA Board's Oct. 27 meeting, when members will make crucial decisions on funding the current RTA plan. It has yet to be decided which city council meeting he will attend.

The city is hoping to get further clarification on exactly what its role will be in addressing the funding shortfall and which of its projects would be affected.

"There are other projects that we need to find answers for. We're doing our part, we're trying to find the funds, we're trying to find the solutions to deliver the projects. And we, the city of Tucson, continue to get the door slapped in our face," said Romero, who represents the city on the RTA governing board, at the city council's Aug. 23 meeting.

Funding issues

The funding shortage and lack of flexibility to account for increasing construction costs has been at the center of Tucson's dispute with the RTA. The city has long advocated for the RTA to factor inflation into project costs instead of sticking to 2006 dollars.

"In 2006, the voters were shown certain projected budget amounts. Twenty years later, nobody expects those budget amounts to be valid," said Councilman Steve Kozachik. "And yet the RTA is taking our projects, and saying we are not going to recognize inflationary adjustments on what those 2006 budget estimates were going to be in the city of Tucson, you have to come up with the delta (difference) on your own."

Tucson front-loaded some of its share of RTA projects at the beginning of the 20-year plan, such as the Sun Link Streetcar, to allow more time for more urbanized, planning-intensive projects at the backend of the plan, Moghimi said, which is why so many of its projects fall into the later periods of the current RTA timeline.

The RTA has only authorized three roadway projects above the costs budgeted in 2006 — Tangerine Road, Sunset Road and Downtown Links — spending a total of $42 million in sales tax revenues and above ballot amounts, according to Moghimi.

Instead of "trying to worry about projections and estimates," Moghimi said, the RTA's policy is to fund projects at the actual cost they bid for.

But at the city council's last meeting, City Manager Michael Ortega, who chairs the RTA'S technical management committee, told the council that getting the RTA to factor inflation into Tucson's project costs is "still an area of concern" and that "ultimately, those costs both from an inflation standpoint, as well as what's going on today in terms of the radical cost increases have to be factored in."

The RTA has largely been able to fund projects below 2006 ballot amounts, according to Moghimi. What's changed, he said, is a gradual climb in costs that began in 2017 and has been compounded by supply chain issues, labor force availability and local jurisdictions' decreasing capacity to contract out work on schedule.

"Nobody can really explain why this is happening. But everybody is hopeful that it's going to stop, that it's going to start trending back down," Moghimi told the RTA board at its Aug. 25 meeting.

Regardless of the reason for recent financial constraints, the RTA board is planning for about $150 million worth of Tucson's projects to move into the next RTA if Tucson doesn't come up with the funding itself. The RTA board has already moved two projects to the new 20-year initiative with hopes voters will reapprove them: North Silverbell Road from Grant to Ina roads and North First Avenue from Orange Grove to Ina roads.

Both projects are in Pima County's share of RTA roadway improvements, while the Silverbell project also includes Marana.

"That was something that we were allowed to do under the state statutes that govern the RTA because both of those projects, as they have evolved, their scope is changing," said Supervisor Rex Scott, Pima County's representative on the RTA board. "So it's appropriate for the voters when they vote on the new RTA plan to be OK with that change in scope."

While Scott discussed the status of the RTA at the Board of Supervisors meeting last Tuesday, Supervisor Matt Heinz made a motion to have Scott, as an RTA board member, seek to terminate Moghimi's contract as RTA executive director. Heinz mentioned concerns over a lack of a recent performance review for the executive director and poor management of the regional plan. His motion failed to pass.

First Avenue priority

But Tucson has been at odds with the RTA over one project it has said would need to move to RTA Next in order to complete a new version the city's proposing for the roadway.

The RTA's completed 17 of 35 road corridors promised in the 2006 plan, and the majority of the bike lanes, intersections, sidewalks and other transportation projects have been completed.

While it's unclear which of Tucson's 11 projects or portions of construction the city may find its own funding for or move into RTA Next, city council members have continuously advocated for completing upgrades on a 3-mile section of First Avenue between Grant and River roads in the current RTA.

While the 2006 version of the project called for expanding the road to six lanes, the city developed a detailed assessment that involves keeping First Avenue at four lanes while enhancing safety features like continuous sidewalks and upgraded traffic signals.

The project had a cost of $71.4 million on the 2006 ballot, but the city estimates the six-lane option would now cost $91.7 million, while the four-lane option would cost $73.4 million.

But the RTA maintains the First Avenue project would have to be sent to RTA Next to get authorization from voters due to the scope changes of the project.

"If you want to reduce the scope, and it still costs more ... there is a difference of opinion on if you're doing that, then should we seek approval from the voters," Moghimi said.

But several council members have advocated for completing First Avenue in the current RTA, and the project could become a tipping point in upcoming conversations.

"Requiring an individual project to go back to the voters is just their way of keeping us at the table. And frankly, one guy's opinion is going to blow up in their face," Kozachik said.

The RTA board's Oct. 27 meeting will be key to establishing how to fund the rest of the current RTA plan's projects and creating a budget for RTA Next. With the discussion between council members and Moghimi scheduled to be complete by then, Scott hopes for a clear path forward.

"What we vote on in October has to be something that the whole RTA board can get behind," he said. "At the last four meetings ... we've had a series of unanimous votes. And sometimes those unanimous votes have come after all of us walked into the room not sure of how we were going to get to unanimity. We need to work for that same outcome in October."

Tucson's RTA projects with funding needs

— Silverbell Road, Grant to Ina; Stage 2, Goret to Camino del Cerro

— First Avenue, River to Grant

— Grant, Oracle to Swan; Stages 3 and 4, from Palo Verde to Venice

— Grant, Oracle to Swan; Stages 5 and 6, from Park to Palo Verde

— 22nd, I-10 to Tucson; Stage 2, Kino to Tucson

— 22nd, I-10 to Tucson; Stage 3, I-10 to Kino

— Valencia, Kolb to Houghton

— 22nd, Camino Seco to Houghton

— Harrison, Golf Links to Irvington

— Houghton, I-10 to Tanque Verde; Stage 7, from Irvington to 22nd.

— Houghton, I-10 to Tanque Verde; Stage 8, from Broadway to Tanque Verde

Contact reporter Nicole Ludden at nludden@tucson.com

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