City of Schertz Presentation Joe Black – Lone Star Rail District Joe Lessard – Knudson, LP December 9, 2014

 Local Funding Approach  Next Steps 1 Lone Star Regional Rail – Strategic Considerations

 Local Funding Approach 2 Lone Star Regional Rail – Strategic Considerations

Blue Line miles of LSTAR Service; 105 miles on existing Union Pacific rail Green Line - 40 miles of existing UPRR trackage to be improved from South San Antonio to the Seguin area as part of new freight bypass route Red Line - 80 miles of freight bypass route is new rail to be constructed between the Seguin area and Taylor 3 Lone Star Regional Rail Project

44 Georgetown Round Rock (1-3) Austin (7) Buda Kyle San Marcos (2) New Braunfels Schertz San Antonio (5-8) Proposed LSTAR Stations (north to south)

55 Local Funding / Project Status o City of Austin ILA - Dec. of 2013 (currently 0% / requesting 50% participation) o City of San Marcos ILA - Dec. of 2013 (50% participation) o Austin Community College Dist. ILA – Dec (50% participation) o Cities of Buda, Georgetown, Kyle, New Braunfels, San Antonio and Schertz in discussions for 2015 agreements o Freight rail bypass and passenger rail EIS initiated; agency & public scoping begins in Jan LSRR Project

6  Schertz – San Antonio Station Locations: Schertz(1) San Antonio (5-8) LSTAR Service Schertz Station

7  Station Locations area in Schertz LSTAR Service

Location Selection Criteria: o Multi-modal Access o Site Configuration o Economic Development o Transit Supportive Land Use o Environmental Issues LSTAR Station Location Technical Advisory Committee 8

LSTAR Planning Targets Initial Base Full Psgr. Improvements$ 700 mil$ 840 mil $ 1.40 bil Freight By Pass/Relo. $ 1.16 bil $ 1.16 bil $ 1.16 bil Totals $ 1.86 bil $ 2.00 bil $ 2.56 bil 9 Local jurisdictions not asked to fund major capital costs Capital Expenses covered over time with a combination of: o Federal Grants & Loans o State Rail Relocation Funds o UP Cost Sharing o Public-Private Partnerships Lone Star Regional Rail Project – Capital Costs

O&M is one key to securing capital funding The Draft LSRD Business Plan O&M costs split* by thirds (after fare box & misc. revenue): LSRD Planning Targets *Initial (2018)Base (2023)Full (2028) Small Cities value capture funding$ mil$ mil$ mil Central Texas value capture funding$ mil $ mil$ mil So. Central Texas value capture$ mil $ mil$ mil Total$ mil $ mil$ mil * Escalated over time at 2.5% annually; 15 year avg. of 1/3 cost is $15.16 million ( ) 10 LSTAR Operations and Maintenance Costs (O&M) Local Funding Targets

11 LSTAR Operations and Maintenance Costs (O&M) Local Funding Targets

12 Local funding established through interlocal agreement o Transportation Infrastructure Zone (TIZ) around each LSTAR station o Funding approach is focused on supporting rail service O&M Funding is from new growth o Portion of growth revenues from within TIZ o No impact on current City revenues o Funding primarily from rail induced station area growth No guarantee of funding levels No City or County debt No added tax or fee on station area properties No tax increase on station area properties or City residents Funding Approach: Lone Star Regional Rail Project Local Funding Support – Operations and Maintenance Focus

Delayed/Late Funding Community Impacts: Local private development decisions impacted o Interim developments may lock-in non-transit dev. o Interim developments may limit life style choices o May limit revenue growth & lower affordability Economic development may go to other locations LSRD capital resources allocated first to participating communities o Rail system extensions or additions compete against other system investments Community may have capital investment and/or catch-up funding impacts 13 Economic Development/Community Planning Issues

Generic Example Economic Impact Est. & Proposed TIZ Participation Base Est. Normal Growth 14

Generic Example Economic Impact Est. & Proposed TIZ Participation Est. Rail Influenced Growth Base Est. Normal Growth 15 Funding Participation: All rail induced/related growth Plus, normal growth up to a total participation of 50% of all new growth Plus, addition based on same % of sales tax growth

16 Generic Example Est. Rail Influenced Growth Base Est. Normal Growth 50% Growth Only 50% Est. Rail Influenced Growth General Fund TIZ Participation Economic Impact Est. & Proposed TIZ Participation

17 Generic Example Est. Rail Influenced Growth Base Est. Normal Growth Growth Only Rail Induced % Est. Rail Influenced Growth General Fund TIZ Participation Economic Impact Est. & Proposed TIZ Participation

18 Generic Example Est. Rail Influenced Growth Base Normal Growth Growth Only Rail Induced % Est. Rail Influenced Growth General Fund TIZ Participation Economic Impact Est. & Proposed TIZ Participation

19 LSTAR Split Service Station Concept Split service divides operations of one station between two stations based primarily on ridership demand

20 1. Transportation Infrastructure Zones (TIZ): a. New growth property tax from within station TIZ Requesting growth participation % (greater of rail related % or 50%) Add equivalent of new growth sales tax at same % b. In-kind contributions to reduce project costs: Station ready site (public access, drainage & utilities) Station maintenance and security Development fee waiver City sponsored zoning No cost for approved use/contribution of city right of way or real estate c. Other Provisions: Exclude existing single family and duplex residential Tax exempt parcels added when privately developed Honor preexisting economic development agreements 2. City retains funds in special account until LSRD meets performance measures If measures not met, City may dissolve TIZ and use funds LSTAR Local Funding Concepts

21 3. Performance measures Later of two years or May 1, 2017 LSRD must secure funding agreements with key Central Texas local governments Later of six years or January 1, 2020 LSRD must secure capital funding 4. When in operation, LSRD will annually identify excess TIZ funding for return to contributing jurisdictions 5. Equitable funding relationship between Central Texas local governments (i.e.: Pay for Service, Fair share, etc.) 6. Private Landowners Options to influence station location PID or MMD for station capital or O&M Station site contribution May require City assistance LSTAR Local Funding Concepts

 Next Steps 22 Lone Star Regional Rail – Strategic Considerations

Capital Funding Design Construction Commissioning Operations Local funding is the gateway to capital funding from public and private sources. 23 Local Funding Timing New development influenced by rail opportunity Initiates value capture from land speculation, zoning and other entitlements Project Timeline – Lone Star Regional Rail Project Rail Service Anticipated to Start in 6-10 years (2020 – 2024)

Scheduled Meetings San Antonio/Bexar CountyJan 20, 2015 Austin/Travis CountyJan 21, 2015 Buda/Kyle/San Marcos/Hays CountyJan 26, 2015 Elgin/Bastrop CountyJan 27, 2015 Georgetown/Hutto/Taylor/ Jan 28, 2015 Williamson County New Braunfels/Schertz/Comal & Jan 29, 2015 Guadalupe Counties (Seguin Coliseum, 950 S. Austin St., Seguin, TX) Schertz Open House &TBD City Committees 24 LSRD – EIS Public Scoping & Open House Mtgs.

Commuter / Regional Rail Service Convenient, predictable & easy to use Considered a higher level of transit Makes drive time available for other activities Congestion proof option, competitive with auto commute experience UP right-of-way becomes regional mobility asset Helps reduce growth in traffic demand Equals between 2-5 lanes of highway capacity in each direction 25 LSTAR – Mobility/Connectivity

26 1. Economic Impact Study complete in Jan. 2. EIS & Public Meetings Participation - public scoping meeting. in Jan. 3. Station Location preference confirmed 4. Local funding Agreement adopted by end of March Next Steps