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CHAPTER X - FUNDING Overview The streetcar project will be a major undertaking for Eureka Springs. It may well be as significant to the Northwest Arkansas region - in terms of tourism, and the ability to absorb additional visitors - as the new Regional airport and the completion of US Highway 71 and US Highway 412 as limited access freeways. Because of this far-reaching influence, it is important to consider not only traditional sources of funding for transit capital projects, but also creative and innovative resources and partnerships. This chapter does not give a definitive funding program. Rather, it provides an overview of funding sources which have been used on other similar projects, and suggests some possible sources which may be available to Eureka Springs. The purpose is twofold;
Capital Funding Sources Federal The primary source of capital funding for the Eureka Springs streetcar system will be Federal dollars, most of which will come from the recently-enacted Transportation Equity Act for the 21st Century (TEA-21). There are two significant sections of this legislation which may be used. The "new starts" section of the previous legislation has provided funds for several projects. For example, the Congress appropriated $1,988,046 for fiscal 1997 to help the Little Rock River Rail project get underway. Additional appropriations were made for fiscal year 1998, and are expected to be approved for 1999 and subsequent years to help fund this project. A rough rule is that 80% of the capital cost may be provided through this source. Within the provisions of the TEA 21 legislation is a second Federal source of capital funding - the Congestion and Air Quality Improvement Program (CMAQ). Since 1992, this program has provided almost $2 billion nationally for public transit purposes, including assistance on vintage trolley projects. While TEA 21 is in large measure a continuance of the former transportation funding legislation, it does have several new features. Specific guidelines for the use of program funds are currently being finalized, and should be obtained by CETA as they become available. In the meantime, it is important to work with the Arkansas Congressional Delegation and with the Federal Transit Administration to assure that the Eureka Springs project is properly presented in accordance with these guidelines. A town somewhat similar to Eureka Springs is Harper's Ferry, West Virginia, where a Civil War vintage community's downtown is preserved, and is accessible to visitors only by a shuttle bus. This bus service and the remote parking lot is operated by the Parks Service. Although Eureka Springs is not a National Park venue, it is an Historic District. This suggests that the applicability of both Federal preservation and tourism funding should be explored. State and Local Public Funds Most Federal transportation funding flows through the Arkansas State Highway and Transportation Department. Thus, it is important that this agency be closely involved in funding discussions. Several elements of the Eureka Springs streetcar project may fall within the eligibility parameters of State funding for transportation. One obvious example is the rebuilding of State Highway 23 (Main Street) through Eureka Springs. The State is committed to perform this work over the next several years. Part of the alignment for the streetcar will use this road. If the State were to provide for the installation of the track as part of its rebuilding, this would not only help to fund the overall project, but could perhaps be considered as matching funds to generate Federal dollars. It is beyond the scope of this report to provide a detailed review of all of the State transportation funding assistance programs, but this review should be undertaken as the project moves forward. One such program that may have applicability is the Translease program. This is an innovative program which allows transit providers in the State to lease vehicles (usually lift-equipped vans) under favorable terms. The leases are;
Clearly, stretching this program to include vintage trolleys is a significant step. However, when combined with the concept of private sponsorship, it may provide an innovative means of funding vehicles; and could perhaps be considered as an eligible Federal match. The Eureka Springs streetcar project enhances tourism and assists historic preservation. Thus it is appropriate that State programs for assistance in these areas be explored also. Local capital funding assistance may take several forms. A fairly common one is to allow in-kind services or donations to be used for Federal match. For example, the use of the present trolley terminal on Main Street saves the cost of providing a separate off-street terminal for the streetcar. Similarly, if the City contributes the land for the maintenance facility and museum at Harmon Park, as well as the present log building, the value of this could be considered as a match for Federal funds. Yet another possible in-kind match is the provision of the street right-of-way for Spring Garden Street, which is part of the traffic and parking mitigation element of the streetcar project. CETA and the Eureka Springs Council should jointly explore these possibilities. Several systems have enlisted to participation of the private sector for funding assistance in vintage trolley projects. In both Memphis and San Jose, private contributions have provided funding for vehicles. There are also many examples around the country where the private sector has provided funding for passenger stop amenities. Finally, local funding can be provided through various fees and taxes. Some examples from other cities include:
The determination of the exact mix of capital funding sources for the project will require considerable cooperative discussions within the community. The most likely scenario will be a combination of several mechanisms. Operating Funding Sources As shown in Chapter IX, the operating cost of the system can be substantially recovered through the farebox. However, since the possibility of an operating deficit exists, a discussion of non-farebox operating funding sources is included in this section. Federal operating assistance is available in limited amounts. It is administered through the State of Arkansas for small urban and non-urban areas. To date, it is the consultant's understanding that Eureka Springs has not taken advantage of this program for its rubber tired trolley system. Thus, this funding may be available for offsetting any operating deficit of the streetcar. Other non-traditional local sources may be available, if needed. Interior advertising space is provided on the streetcars, and this could be sold. Similarly, provisions for advertisements could be made at certain passenger stops. On certain weekends, where special events are undertaken by the community, the cost of running special service can be partially offset by event sponsors. In Galveston, for example, a local department store agreed to underwrite the operating deficit for the initial period of operation. Some transit systems have had the cost of service reimbursed by a local retail establishment or consortium of businesses for a day, in return for recognition. One idea harking back to the days of the Citizens Electric Railway is the "party car", described in Chapter III. Such a vehicle could be chartered by individuals, or hoteliers for their guests. If an interpretive museum is developed as part of the maintenance facility, a gift shop can be included, where postcards and perhaps a small history book of the Eureka Springs streetcar can be made available. Other cost-sharing ideas are also feasible. These include volunteers for such tasks as staffing the gift shop, maintaining passenger stops, or cleaning the cars. Administrative functions such as payroll and accounting can be undertaken by the City, the present transit agency, or another body. Marketing and advertising expenses could be partially undertaken by others. Indeed, the promotion efforts currently in place to attract visitors to Eureka Springs will undoubtedly prominently feature the streetcar! The specific non-farebox contributions required will be determined after the actual operating plan has been further developed. This will be done as part of the next phase, and will be subject to refinement as actual service experience dictates. |
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