$5.1 billion that the Biden administration awarded to the project,<\/a>\u00a0Cortese worries that the bailout will put the funding, which makes up nearly half the budget of the $12.75 billion project, at risk.<\/p>\n\u201cI\u2019m pretty sure that even a very generous federal administration like the last one would call into question money being pledged for a project that has a state lien on it,\u201d the state senator told the Bay Area News Group. \u201cI think there\u2019s even more concern with the Trump administration given their track record at this point with putting these kinds of transactions under scrutiny.\u201d<\/p>\n
During the grant application process, the Federal Transit Administration examines whether all local sources of funding for a project are in place and whether any other initiatives would jeopardize the funding. A spokesperson for the FTA could not be reached for comment about the transit bailout\u2019s impact on the San Jose BART extension.<\/p>\n
John Goodwin, a spokesperson for the Metropolitan Transportation Commission, which will administer the loan, said in a statement that the \u201cloan is structured to uphold the state\u2019s commitments to awarded projects while minimizing risk to project schedules.\u201d<\/p>\n
The loan makes up nearly half of the $1.5 billion currently in the TIRCP fund set aside for Bay Area projects. Goodwin said that capital projects often have long construction timelines and that the bill that authorized the transit bailout lays out a process in case a project is ahead of schedule and needs to tap into those funds sooner.<\/p>\n
\u201cIf this occurs, it could affect the timing of when projects receive allocations, but it won\u2019t alter the state\u2019s commitment to ultimately provide the awarded funds,\u201d Goodwin said. \u201cThe requirement for coordination with MTC and project sponsors on any allocation plan means that it would be developed in a collaborative and transparent manner.\u201d<\/p>\n
State officials believe that the need for any such plan is unlikely as the TIRCP fund isn\u2019t tied to the state\u2019s budget and is constantly being replenished. MTC estimates that the Bay Area receives roughly $300 million in TIRCP funds every two years.<\/p>\n
The $590 million loan is expected to be repaid in quarterly installments over the next 12 years. If a transit operator misses a payment, MTC could redirect the agency\u2019s share of funds that stem from a tax on diesel fuel to help repay the loan.<\/p>\n
Cortese, who abstained from voting on the bill that authorized the bailout because of his concerns, called assurances that the BART project would be protected \u201cworthless,\u201d noting that the MTC doesn\u2019t have its own money as it\u2019s a \u201cpass through organization of existing state and federal money.\u201d<\/p>\n
But Greg Richardson, VTA\u2019s deputy general manager, said that the transit agency isn\u2019t concerned about any impact the bailout will have on the project.<\/p>\n
\u201cWe won\u2019t be drawing on those monies until a little bit down the road,\u201d he said. \u201cThat may speed up a bit with some of the things we\u2019re working on right now, but even then it will be a little bit until we start drawing on that.\u201d Richardson said the agency is likely to tap into the money in spring or summer of 2027, thought it could be moved up to late 2026 or early 2027.<\/p>\n
Campbell City Councilmember Sergio Lopez, who serves as the chair of VTA\u2019s Board of Directors, said that \u201cthere\u2019s few people who care more about this project and transit in Santa Clara County than Sen. Cortese.\u201d He said the agency has done its \u201cdue diligence\u201d looking into the senator\u2019s concerns, pressure testing cash flow scenarios and engaging in conversations with both MTC and the Federal Transit Administration about the situation. Lopez said those conversations are ongoing and have yet to yield any formal assurances.<\/p>\n
\u201cThis process and these decisions made it absolutely clear to me that all of our partners want and need BART to Silicon Valley and the connection that VTA is leading to succeed,\u201d he said.<\/p>\n
BART, which is projecting a $376 million operating deficit for the upcoming fiscal year, plans to take a \u201cconservative approach to using the state loan money,\u201d according to spokesperson Alicia Trost. The agency is expected to receive $285 million from the bailout.<\/p>\n
\u201cWe will only use what we know we can repay,\u201d she said in a statement. \u201cOur plan is to use the loan funds if the November funding measure passes. If the measure fails we will not use loan funds to continue operations because we would not have a revenue source to pay it back.\u201d<\/p>\n
But other transit operators included in the bailout might tap into the loan before any assurance that long-term funding might be available \u2014 a potential risk when it comes to the future of repaying the loan if the tax fails.<\/p>\n
Robert Lyles, the spokesperson for AC Transit, said in a statement that the loan gives them \u201ccritical breathing room at a pivotal moment.\u201d The agency is facing a projected $74 million deficit next fiscal year and \u201cmay draw up to $55 million from this emergency loan for operations by July 1, while we continue working on additional solutions to close the remaining gap,\u201d Lyles said.<\/p>\n
Muni spokesperson Erica Kato also said they plan to use the loan in the first year of the agency\u2019s two-year budget to \u201cavoid significant service cuts\u201d driven by the projected $307 million deficit for the upcoming fiscal year. Muni is expected to receive $200 million from the bailout.<\/p>\n
Caltrain spokesperson Dan Lieberman didn\u2019t say when they\u2019d draw on the loan, but said the agency is \u201crelying on those funds to sustain current service levels in its upcoming fiscal year budget.\u201d Caltrain has the smallest share of the bailout funds and is expected to receive $50 million.<\/p>\n
The proposed revenue measure would create a half-cent sales tax in Alameda, Contra Costa, San Mateo and Santa Clara counties and a one-cent sales tax in San Francisco for the next 14 years. It\u2019s expected to generate nearly $1 billion annually for struggling transit agencies that have seen ridership declines in recent years.<\/p>\n
While an early poll commissioned by MTC last year showed support for the measure, Cortese isn\u2019t convinced it will pass given growing concerns about affordability issues across the state.<\/p>\n
The only way he sees VTA being able to tap into the funds it was promised is if the loan is paid off or if new legislators or a new governor that\u2019s elected in November recognize that \u201cthe South Bay got screwed.\u201d<\/p>\n
\u201cThe transit operators in the Bay Area \u2014 especially the ones underwater \u2014 are rolling the dice,\u201d Cortese said. \u201cIt\u2019s riverboat gambling to hope and pray that they\u2019re going to pass the transit measure this year.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A $590 million bailout for the Bay Area\u2019s struggling transit agencies has raised concerns for one powerful Silicon…\n","protected":false},"author":2,"featured_media":195170,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[3767,184,7,2333,1533,181,100,182,88,90,89,198,200,3766,1967,35505],"class_list":{"0":"post-201345","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-san-jose","8":"tag-bart","9":"tag-bay-area","10":"tag-california","11":"tag-editors-picks","12":"tag-keywee","13":"tag-latest-headlines","14":"tag-news","15":"tag-pm-report","16":"tag-san-jose","17":"tag-san-jose-headlines","18":"tag-san-jose-news","19":"tag-santa-clara-county","20":"tag-south-bay","21":"tag-transit","22":"tag-transportation","23":"tag-valley-transportation-authority"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/201345","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=201345"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/201345\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/195170"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=201345"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=201345"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=201345"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}