Assistant City Manager Mike Rogers and Richard Mendoza, director of Transportation and Public Works, briefed council on the city’s I‑35 Cap and Stitch program and the financial and scheduling choices the council faces as TxDOT finalizes major freeway construction plans.

Lede: Staff told council that TxDOT requires a city funding commitment by May 31 for phase‑1 roadway elements at specific locations if the city wants those sections “future‑proofed” for overhead deck construction; staff said delaying a decision or relying on later change orders could substantially increase costs.

What staff presented

- Locations and phasing: staff described eight potential cap or stitch locations stretching from Holly Street in the south through downtown to a northern cap near the Red Line crossing. The city’s plan breaks construction into phases: phases 1 and 2 are roadway and structural elements required to later support decks; later phases add amenities on top of any deck built.

- Timeline and deadlines: TxDOT asked the city to identify which phase‑1 roadway locations it wants included in TxDOT’s 2026 letting by a May 31 commitment. Staff said the city can still pursue deck elements later by change order, but TxDOT cautioned change orders after the 2026 letting could be 35–45% higher; staff added that by Feb. 1933 (per the presentation) a 10‑year moratorium would start and restrict deck construction in the TxDOT contract window.

- Cost and funding scenarios: staff displayed multiple build scenarios and funding gaps. The presentation assumed a pending USDOT grant (staff called it the NAE grant) and a TxDOT State Infrastructure Bank (SIB) loan of about $41 million in some scenarios; staff also showed “no‑grant” scenarios. Staff said TxDOT cost estimates are based on 30% design and could rise if the city waits past the letting.

- Existing commitments: staff said the city previously paid TxDOT $15 million to advance Cap and Stitch design to 30% (the city paid that amount in late 2023). Staff also said the University of Texas is separately evaluating caps adjacent to its campus.

Council and public input

Members asked about the funding sources, debt‑service implications, the expected benefits (economic development and parkland created by caps), operational and maintenance costs, and protections for labor standards if TxDOT‑managed contracts are used. Kim Olivares (structured finance) told council the city will present a comprehensive debt‑capacity analysis in May before any binding decision so members can weigh bond program trade‑offs; she also said federal and state developments (possible changes to tax‑exempt muni debt and state bills on non‑voter‑approved debt) remain in flux.

Public testimony: Dozens of residents and advocacy groups spoke for and against proceeding. Supporters — including Reconnect Austin and the Downtown Austin Alliance — urged preserving the option now, pointing to caps’ potential long‑term economic and placemaking returns. Opponents warned that city fiscal constraints, the rising cost environment and uncertain federal/state funding argue for delaying or scaling back the program; several public speakers asked the city to prioritize housing, climate and flood projects instead.

Staff directions and next steps

- Staff will return to council in May with an updated recommendation and a full debt‑capacity analysis to show how a commitment would interact with potential 2026 bond priorities. The presentation listed May 22 as the last city council meeting before the TxDOT May 31 deadline.

- Staff said it will pursue partnerships, philanthropic support and operational‑and‑maintenance funding strategies but cautioned that TxDOT‑bundle bids typically produce lower construction prices than later change orders.

- Staff is advancing an air‑quality and microclimate modeling scope; a memo circulated to council summarized preliminary staff research and noted Denver and other cities’ cap projects have shown mixed microclimate results at edges and improvements in mid‑cap areas. Staff said the city has engaged a consultant to model noise, air flow and heat effects for Austin.

Caveats and risks

Staff repeatedly warned that the costs in the presentation are TxDOT estimates at 30% design and that costs could rise significantly if the city delays. They also noted federal and state policy changes under consideration could affect municipal borrowing costs or the city’s ability to use certain debt instruments.

No final commitment was taken April 8. Council members asked for more detail about: (1) debt capacity and the effect on the 2026 bond program; (2) detailed economic‑impact studies comparable to Dallas’s Clyde Warren Park; (3) air‑quality and noise modeling for cap tops; and (4) potential private‑sector and philanthropic partnerships to reduce the city share of upfront costs.