Funding vote Thursday for park decks over I-35, Austin city council split on road forward
AUSTIN (KXAN) — Thursday, Austin city council will decide whether it wants to commit funding to design and build roadway elements for park decks over the Texas Department of Transportation’s (TxDOT) I-35 expansion project near downtown.
For Austin to build out all of the highway covers it wants, called caps and stitches, city staff said it would cost more than $1.4 billion. Austin city council only has to commit funding for the early construction elements for now, but that alone will still cost hundreds of millions of dollars.
“Thursday, we are going to decide whether or not we have the opportunity to bridge our community’s east and west, to cover a highway for more than half of the area between Cesar Chavez and the Red Line or if that opportunity disappears altogether,” Austin City Council Member Ryan Alter said.
The search for new funding options
The city of Austin only has so much money it can borrow. City staff have said that, assuming there is no change in state law, the city should not exceed $750 million in additional bond debt between caps and stitches and anything the city opts to put into its 2026 comprehensive bond package.
That’s why, in a final scramble to fund the park decks without taking away from other city services, a group of council members are combing through possible funding options that would not take away from the city’s borrowing power for that bond package.
Austin City Council Members Alter, Zo Qadri, ‘Chito’ Vela, Natasha Harper-Madison and José Velásquez are the coalition of members pushing for the building of those highway spaces.
Some asked staff to look at alternate funding options, including looping a cap into the convention center project, using increased temporary right-of-way fees and pulling from eligible transportation bonds, among other alternate funding sources.
“Looking at a car rental tax, which is something that allows for us to spend on a project like the caps, but once again couldn’t be used to spend on homelessness or parks,” Alter previously added.
City staff responded to that request in a memo over the weekend. In some cases, staff said those funding sources could or should not be used for cap and stitch, other avenues would require further research or voter approval and others could face “legal risks.”
“The memo was mixed, some of the ideas we brought forward they said ‘yes, this makes a lot of sense, you could do this with very little risk.’ Others, they flagged potential issues that we need to address,” Alter said Monday.
But the memo flagged more issues than it did a path forward for the alternate funding proposal — and did little to quell the concerns of council members questioning the project’s price tag.
“Unfortunately for their proposal, the chief financial officer of the city has issued a memo basically saying none of those funding streams are viable for this project,” Siegel said.
Austin city council members will hash those details out with TxDOT, city staff and fellow council members at Tuesday’s work session. Alter also said he was learning more about the timeline funding would actually need to be sent to TxDOT to understand how long council would actually have to put this funding stack together.
A slimmer plan
Earlier this month, city staff released an updated cap and stitch recommendation which is significantly less expansive than the city’s original vision plan.
While the vision plan placed highway covers with parks and community spaces over the highway in a handful of locations, city staff are now recommending only funding the roadway elements for a cap spanning from Cesar Chavez to Fourth Street and another project from 11th to 12th.
Siegel said Monday, he’s much more likely to support that recommendation when council goes to vote this week.
“For me, this is an issue about prioritization, not whether it’s a good idea. Instead of building a roof for the freeway, I would like to build houses to put roofs over people’s heads,” Siegel said.
He’s among a subquorum of council members — the others being Mayor Pro Tem Vanessa Fuentes and council members Paige Ellis, Krista Laine and Marc Duchen — that is looking to fund just the initial construction of those staff-recommended caps for now.
According to those council members, TxDOT has extended the deadline to commit funding to the phase two roadway elements — which are the covers — until November.
“This morning, the TxDOT Austin District informed us that the deadline for the City to commit funding for the Phase 2 Caps has been pushed back from the end of this month until November 2026. As we are all feeling the pinch of our local financial forecast, there are opportunities for the voters to decide on their priorities. Pending additional staff and Bond Election Advisory Task Force research and evaluation, we may be able to allow Austinites to vote on potential funding mechanisms for the caps, including General Obligation Public Improvement Bonds and the Motor Vehicle Rental Tax.
We understand that the staff recommendation for Thursday’s decision will require a $49M commitment. Given our overall debt capacity of $750M, Council can commit this sum towards building the support structures for two important caps and still have $701M remaining for the 2026 Comprehensive Bond package to address our community’s wide range of needs – from parks to housing to mobility to libraries to climate resilience – or caps. This is a balance we can support.“
