West Sacramento has suspended additional work and spending on the long-planned Downtown Riverfront Streetcar project while city officials assess whether rising construction costs and uncertainty surrounding federal funding have threatened the project’s viability.

The pause was disclosed in a staff report prepared for the City Council’s Aug. 19 meeting. It comes as the Sacramento Regional Transit District, which is leading the project, continues to say on its website that it is advancing the project, with construction expected to begin in early 2027 and completion anticipated in 2030.

“At this time, additional work and new expenses on the Streetcar project are suspended,” the West Sacramento staff report said, while the city evaluates anticipated cost increases and their effect on the project.

The report does not specify when the suspension began, which activities have stopped or how much additional money the project may need. It also does not say SacRT has suspended its own work, leaving unclear whether the action is limited to West Sacramento’s participation or signals a wider delay.

Asked about the project’s status, West Sacramento Public Information Officer Lanaya Lewis said the city remains interested in advancing the streetcar project.

“We are working with partners to identify the best way to move the streetcar project forward amid rising construction costs,” Lewis said.

She said streetcar access between downtown Sacramento and West Sacramento would provide another transportation option, reduce travel barriers for employees, residents and visitors, and support businesses on both sides of the river.

The city did not answer when the suspension began, what work or expenses were affected, how large the potential funding shortfall could be or how much West Sacramento has spent or committed to the project. Lewis referred questions about construction and the project schedule to SacRT.

The proposed 1.8-mile light-rail extension would cross the Sacramento River on the Tower Bridge and connect West Sacramento with downtown Sacramento. The revised route would link Sutter Health Park with SacRT’s existing light-rail network and provide access to destinations including Capitol Mall, Golden 1 Center, Old Sacramento and Sacramento Valley Station.

A SacRT presentation delivered during a June 10 community meeting placed the project’s cost at $164.3 million. About $131 million, or 80%, was expected to come from federal and state sources, with the remaining $33.3 million funded locally.

SacRT estimated the line would carry about 728,000 riders during its first year of operation and cost approximately $4.8 million annually to operate, based on 2025 dollars.

West Sacramento officials now say there is a “high likelihood” that construction bids will significantly exceed the money assembled for the project. The staff report attributed the expected increase to tariffs and volatility in steel and other construction-material prices, along with rising labor, fuel and freight costs, inflation and supply-chain disruptions.

Federal funding is also listed as cause of uncertainty. The project’s financial plan relies partly on a Federal Transit Administration Capital Investment Grant, but the final construction grant agreement has not been completed. The project faces a September 2027 deadline to obligate the federal money.

The staff report also attributed the uncertainty to the Trump administration, saying it has been withholding funding from public transit projects that have not received final federal construction commitments.

City staff report stated the city is working with SacRT to better understand the potential cost increases, including not only the expense of building the line but also West Sacramento’s potential responsibility for operating and maintaining light-rail service within the city.

The City Council was not asked to vote on the streetcar suspension Aug. 19. The disclosure about work suspension appeared in a report seeking approval of a separate contract to prepare a long-term transit plan for West Sacramento.

Council members voted unanimously to award WSP USA an $847,578 contract to prepare the West Sac Forward Transit Priority Plan. The city manager may also approve up to $85,000 in contract amendments, bringing the potential expenditure to $932,578.

The consultant will examine which transit services West Sacramento should support over the next 10 to 20 years, how those services should be funded and operated, and whether the city should prioritize buses, on-demand rideshare, bus rapid transit, light rail or a combination of those options.

The study is supported by a $431,490 Caltrans grant requiring an equal local match. West Sacramento previously allocated $600,000 for transit, light-rail and bus rapid-transit planning, leaving part of the local allocation available for staff time and contingencies. The study must be completed by June 30, 2028.

As of Tuesday, SacRT’s website continued to say the agency is advancing the project and listed early 2027 as the expected start of construction. SacRT did not respond to requests for comment before publication.