Members of the Southern Rail Commission (SRC) have asked the city to fund the local match for a federal grant that would pay the majority of costs associated with bringing Amtrak service back to Mobile.
Amtrak and the SRC have said they can bring passenger rail service back to the Port City in two years in the form of twice-daily service from Mobile to New Orleans, if the City Council approves a maximum $3 million commitment in local funds over three years.
Dan Dealy, a consultant hired by SRC, said the local match would bolster a federal grant program designed to provide supplemental funding for the first three years of rail service. Dealy said the funds would pay for 80 percent of the operating costs the first year, 60 percent the second year and 40 percent the third year. The remainder of the operating costs would be covered by passenger-generated revenue, he said, like food and beverage sales. The commitment from the city would cover any outstanding costs.
The “conservative” plan Amtrak is using to calculate the needed funding, estimates that three coaches per train would be at least 40 percent full and those passengers would spend $18.33 each, Dealy said. With four trains per day, that equals out to 38,400 passengers per year.
The SRC is calculating that the city’s commitment would break down to about $725,000 in the first year, $929,000 in the second year and $1.3 million in the last year of the grant. Dealy said the city would be required to participate in those first three years.
The SRC is calculating ticket prices for one-way fares to New Orleans would average between $28 and $35, he said, which means the $3 million estimated for the local contribution could be less.
“I don’t think it’ll be that much,” SRC Chairman Wiley Blankenship said of the $3 million commitment.
SRC officials had previously reached out to Gov. Kay Ivey’s office for the local match, but through this resolution are now seeking funding from the city.
“We’re coming straight to the city,” Blankenship said. “If the city really want this … they can fund this. If they want this to happen, the ball’s in the court of the city and the mayor to do this.”
Blankenship said the SRC would still possibly ask the state for help with infrastructure upgrades.
The council heard the resolution on first read on Tuesday, Dec. 17 and doesn’t have another meeting scheduled until Dec. 31. Meanwhile the SRC is facing a Tuesday, Jan. 6 deadline to have a grant written in order to receive federal funds. Both Blankenship and Dealy said they anticipated a Dec. 31 up or down vote.
“I believe there were really good questions asked by councilors …,” Blankenship said of the council’s reaction to the resolution as presented. “I’m hoping they all are looking at this as a benefit for all Mobilians.”
Blankenship said the trains will bring visitors and their money to Mobile.
“This will provide a transportation option for those who do not wish to take I-10 to New Orleans on the Mississippi coast,” he said. “This checks the box in many areas of quality of life.”
City acting Chief of Staff and Finance Executive Director Paul Wesch said the money for the commitment could be budgeted in 2023 and a previous station design plan could be altered slightly to move passenger loading and offloading to the Brookley Aeroplex.
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