The proposed Downtown LA Streetcar officially moved to its next phase this morning, when the Los Angeles City Council's Transportation Committee voted 5-0 to allow Los Angeles Streetcar, Inc. (LASI) to contract out the preliminary engineering work for the project.

Meeting attendees expressed overwhelming support with the project, including several positive public comments.

A recent estimate from planning and engineering firm AECOM raised eyebrows when it estimated the total cost of the proposed streetcar at $281.6 million - a far greater total than the $125 million figure presented to voters in 2012. Since this amount would exceed the Federal Transit Administration's $250 million limit for projects seeking funding under the Small Starts program, the streetcar would thus be ineligible for a $75 million FTA grant currently under review. In total, the project would face a funding shortfall of $144 million.

One factor contributing to this high preliminary estimate is an FTA rule that all applicant projects which have completed less than 5% of engineering work must budget a 30% contingency to absorb any possible cost overruns. This contingency rule will no longer apply to the proposed streetcar after preliminary engineering work is completed, potentially lowering cost estimates. Preliminary engineering work may also provide opportunities for further cost savings through modifications to the project's design.

Additionally, LASI intends to explore public-private partnerships as a means of generating additional funding for the project. This may include the construction of a mixed-use development in conjunction with the streetcar's maintenance facility.

Besides questions of cost, several Council Members also raised concerns over a staff report’s findings that the streetcar could travel as slow as four miles per hour during rush hour - a consequence of mixed-flow operations with cars and buses. The Transportation Committee discussed the possibility of devoting a transit-only lane to the streetcar to mitigate this problem, and the idea may be explored during the course of the preliminary engineering phase.

The proposed 3.8-mile route would run in mixed traffic between the Civic Center and South Park neighborhoods along Broadway, 1st, 11th, 7th, Figueroa and Hills Streets. Unlike the Metro Rail system, which connects Downtown Los Angeles with adjacent neighborhoods and cities, the streetcar would provide function as a local circulator for residents and visitors.

The design phase for the project is expected to begin next year. Operations are expected to commence by 2020.