Two features of this Nonlinear solution were key to its success. The first was a significant and unprecedented “overmatch” of state and local funding sources to secure the federal funding. The second was designing the local funding to avoid drawing from the city’s budget while exempting residential taxpayers.
Capital finance for a new light rail system serving a mature city’s downtown business district.
Federal sources rated the city “low priority” compared with other cities seeking funding, and the city government could not provide the necessary local funding from its budget and would not allow a tax referendum.
$700 million in capital finance was committed to the project in equal parts from federal, state, and local sources. The federal source had sought a 20% combined state/local match, so the Nonlinear approach of 67% state/local funding caused the federal source to give the project first priority. The local share was provided by a carefully designed special service district evenly spreading the costs over downtown businesses but exempting residential taxpayers.