prop k strategic plan ppc 06 2009 · j:\2009\memos\06 - june 2009\prop k strategic plan ppc 06...

$: Prop K Strategic Plan PPC 06 2009 · J:\2009\Memos\06 - June 2009\Prop K Strategic Plan PPC 06 2009.doc Page 1 of 6 Memorandum Date: 06.12.09 RE: Plans and Programs Committee June,$
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Memorandum

Date: 06.12.09 RE: Plans and Programs Committee June, 16 2009

To: Plans and Programs Committee: Commissioners Chu (Chair), Campos (Vice Chair), Chiu, Elsbernd, Maxwell and Dufty (Ex Officio)

From: Maria Lombardo – Chief Deputy Director for Policy and Programming

Through: José Luis Moscovich – Executive Director

Subject: INFORMATION – Status Report on the 2009 Prop K Strategic Plan and 5-Year Prioritization Program (5YPP) Updates

Summary

At the June 16 Plans and Programs Committee meeting, we will provide a status report on the 2009 Prop K Strategic Plan and 5-Year Prioritization Program (5YPP) updates, including an overview of key Strategic Plan model assumptions, such as Prop K revenue projections and measures we are taking to maximize funds available for projects, minimize financing costs and offset lower revenue projections. Development of the 5YPPs and Strategic Plan is an iterative process requiring extensive communication between the Authority and project sponsors to identify a set of proposed projects, schedules, and funding plans that support timely and effective implementation of the Expenditure Plan. It is also intended to be an open process where the Board, the public and agencies can meaningfully weigh in on the proposed programs of projects for the next five years (i.e., through Fiscal Year 2009/10 – 2013/14). In addition to Authority Board and committee meetings and making materials available on our website, in July we will host three to four public workshops focusing on the 5YPP updates. Our schedule calls for provisional approval of the 2009 Strategic Plan in July so that major capital projects such as Central Subway, Doyle Drive and Transbay Transit Center have a clear road map for Fiscal Year 2009/10 allocations and beyond. Understanding the cash flow needs of these projects is a key input, but not the only one, to forecasting our need to issue debt to finance the sales tax program. In September, we will bring final draft 5YPPs to the Committee and Board for approval, along with our recommended annual allocations. Approval of the 5YPPs is a voter-mandated requirement and a pre-requisite for consideration and approval of annual allocations. Our review of schedules and cash flows proposed by sponsoring agencies indicates that they may be more ambitious then warranted by those agencies’ project delivery track record, funding plans, project readiness, and resources. We are seeking input and guidance from the Plans and Programs Committee. This is an information item.

BACKGROUND

In March 2005, the Authority Board adopted the first Strategic Plan for the Prop K Expenditure Plan. We are currently in the final phases of preparing the first update to the Strategic Plan and its companion documents, the 5-Year Prioritization Programs. As will be discussed later in this memorandum, our schedule calls for adoption of the Strategic Plan in June 2009, and adoption of the 5YPPs in September 2009.

The Prop K Expenditure Plan approved by the voters in November 2003 describes the types of projects that are eligible for funds, including both specific projects and programmatic (i.e., non-project-specific) categories, establishes limits on sales tax funding by Expenditure Plan line item, and sets expectations for leveraging of sales tax funds to fully fund the Expenditure Plan programs and projects. The Expenditure Plan, however, does not specify in which years of the 30-year program projects will receive funds, nor does it detail specific projects for funding in 21 programmatic categories.

The Strategic Plan is the financial tool that guides the timing and allocation of Prop K revenues over the 30-year Expenditure Plan period. The Strategic Plan also sets policy and provides guidance for the

administration of the program ensuring prudent stewardship of the funds. Finding a balance between the availability of funds and project delivery is an iterative process that requires examining policy, analyzing agency capabilities to delivery projects consistent with the schedule and costs they have proposed, and maximizing fund leveraging opportunities without which the Expenditure Plan program of projects cannot be delivered.

The Expenditure Plan includes a number of requirements, including the development of the 5YPPs as a condition for receiving allocations in each programmatic (i.e., not project-specific) category in the Expenditure Plan. This requirement applies to 21 programs such as street resurfacing, new signals and signs, traffic calming, and transit enhancements. Over the course of the Expenditure Plan period (30 years), these programs represent over 66% of the total Priority 1, 2 and 3 funding of $2.82 billion (2003 $’s).

The 5YPPs are intended to provide a stronger link between project selection and expected project performance, to support on-time, on-budget project delivery, and optimize use of federal, state and regional matching funds. The latter is critical since delivery of the Expenditure Plan depends upon leveraging the projected $2.35 billion (2003 $’s) in sales tax funds generated over the 30 years of the program with about $9.6 billion (2003 $’s) in federal, state, regional and other local funds.

The desired outcome of the 5YPPs is the establishment of a strong pipeline of grant-ready projects that can be advanced as soon as funds (Prop K, federal, state and other) are available. This 5-year planning is essential to help achieving necessary leveraging to fully fund the Expenditure Plan projects and programs, to support faster delivery of projects so the public can enjoy the benefits sooner, and to maximize the City’s ability to make tangible contributions to strategies to combat global warming.

As established in the Expenditure Plan, the 5YPPs are developed by the eligible project sponsors for each category. In cases where there are multiple potential project sponsors, the Authority Board previously designated a lead agency. This lead agency role is one of facilitator and coordinator, not a veto role.

The purpose of this memorandum is to provide a status report on the 2009 Prop K Strategic Plan and 5YPP updates, and to seek input and guidance from the Plans and Programs Committee.

DISCUSSION

Development of the Strategic Plan and 5YPP updates is an iterative process requiring extensive communication between the Authority and project sponsors to identify a set of proposed projects, schedules, and funding plans that support timely and effective implementation of the Expenditure Plan. It is also intended to be an open process where the Board, public and agencies can meaningfully weigh in, particularly on the proposed programs of projects for the next five years (i.e., Fiscal Year 2009/10 through Fiscal Year 2013/14).

The sections below provide a status report on the 2009 Strategic Plan and 5YPP updates. At the June 16 Plans and Programs Committee meeting, we will provide a presentation with additional details on the 5YPPs and Strategic Plan.

Schedule and Outreach: We are entering the last few months of the 2009 Strategic Plan and 5YPP update. The table below provides a general schedule of major milestones from July through September. Within the next two weeks, we will provide a more detailed schedule including dates for relevant Authority Board and Committee meetings and public workshops as we firm up the dates, times and locations for the latter.


2009 Prop K Strategic Plan and 5YPP Updates – Remaining Major Milestones

July • Circulate all 21 Draft 5YPPS for public review (complete release by July 1)

• Public workshops (3 to 4) (mid/late July)

• Provisionally approve the 2009 Strategic Plan (allows approval of allocations for major capital project categories with no 5YPP requirement)

August • Revise/finalize 5YPPs

• Evaluate Fiscal Year 2009/10 Annual Allocation Requests

September • Adopt 5YPPs

• Approve annual allocations (if relevant 5YPPs have been adopted)

• Amend Strategic Plan as needed (may occur 1-2 months later depending on status of 5YPPs)

Our schedule calls for provisional approval of the 2009 Strategic Plan in July so that major capital projects such as Caltrain electrification, Central Subway, Doyle Drive and Transbay Transit Center, which are not subject to the 5YPP requirement, have a clear road map for Fiscal Year 2009/10 allocations and beyond. Understanding the cash flow needs of these projects is a key input, but not the only one, to forecasting our need to issue debt to finance the sales tax program. Over the past five years, these four projects have achieved major milestones associated with environmental approvals, engineering design, shoring up funding plans, etc. Attachment 1 provides a summary update of each of these projects, briefly describing the scope and purpose, current status, schedule, cost and funding plans.

In September, we will bring final draft 5YPPs to the Committee and Board for approval, along with annual allocations. Action on the latter will be contingent upon Board approval of the corresponding 5YPP, which is an Expenditure Plan prerequisite for allocation from programmatic categories. We expect that adoption of the 5YPPs will trigger a Strategic Plan amendment to push out programming and cash flows for certain key categories compared to the current proposals from sponsors, which based on our review to date of project delivery track record, funding plans, project readiness and agency resources, seem more aggressive than what can reasonably be delivered.

In response to comments received from Authority commissioners, we are moving forward with scheduling 3 to 4 public workshops in various locations citywide – each one trying to target a subset of supervisorial districts. These will be scheduled in mid to late July. Agency staff will be present at the public workshops to assist in responding to any inquiries that the public may have about their proposed projects and programs. We have also asked Prop K project sponsors to describe the outreach activities that they haven undertaken for specific projects, as well as any ongoing opportunities for input (e.g. hotline to call in for requests) as part of their 5YPP texts.

With 21 5YPPs encompassing a vast amount of detailed information, we are working on some complementary materials to help make the 5YPPs process more accessible and hopefully, more appealing to encourage input from the public. One of the main issues that Board members have mentioned is that the desire to better understand how Prop K funds are being used or could be used to improve major multi-modal corridor projects (e.g. Market Street), complete networks (e.g. Muni’s rapid network), as well as major city policy initiatives (e.g. Livable Streets). Categorizing Prop K projects and programs this way cuts across multiple 5YPP categories and provides another perspective on the strategic impact of Prop K and the 5YPPs, in particular.


We are calling the topics listed below 5YPP themes and we intend to use this construct to help evaluate the impact of Prop K programs and as an outreach tool. This approach fits in very nicely with the Countywide Transportation Plan and the Prop K Expenditure Plan’s emphasis on networks, since a well thought out system is more then just a collection of individual projects.

• 19th Avenue/Park Presidio Safety/Streetscape Improvements • Balboa Park Station Area Improvements • Caltrain Corridor Improvements • Market Street Improvements • Better Streets/Livable Streets Projects • Traffic Management • Transit Effectiveness Project – Rapid Network Implementation

Based on the latest input from project sponsors, we are finalizing preparation of district and citywide maps and lists of both previously funded projects and proposed projects for Prop K funding in Fiscal Years 2009/10 through 2013/14.

Strategic Plan Model: The Strategic Plan is supported by a complex financial model that balances financial projections against anticipated Prop K programming over the 30-year life of the program. The Strategic Plan model considers factors such as revenues, capital project reimbursement rates, debt issuance costs, borrowing capacity and all other relevant considerations related to financing. The model allows the Authority to lay out a responsible, fiscally constrained road map that ensures existing debt is retired during the 30-year duration of the Expenditure Plan, annual operating reserves are maintained, the overall program reserve is met, administration and oversight is funded, preexisting commitments are kept (grandfathered projects from Prop B), and sales tax funds are distributed in keeping with the proportions established by the Expenditure Plan.

At the June 16 Plans and Programs Committee meeting, our presentation will focus on the model including key assumptions related to revenue projections and financing, and will provide a flavor of some of the results we are getting after incorporating project sponsors’ proposed programs of projects. The following sub-section describes the 30-year revenue projections for the Strategic Plan update.

Revenue Projections: Attachment 2 shows our current revenue projections in year of expenditure dollars (YOE – current dollars) net of Board of Equalization fees over the 30-year life of the Expenditure Plan. The estimated $3.49 billion (YOE$) in sales tax revenues represents a 13% decrease from projections done in 2005 Strategic Plan ($4.01 billion). Due to positive returns on investments, cost savings from unexpected project delays, and the de-obligation of Prop B funds, the net revenues projected to be available to projects, after accounting for operating costs, is estimated to be $3.57 billion, which is approximately a 7% decrease from 2005 projection of $3.82 billion, noticeably less than the 13% dip in revenues.

The Expenditure Plan established three levels of funding priority, with Priority 1 revenues based on the most conservative revenue projection. The Expenditure Plan estimated Priority 1 revenues at $2.35 billion (2003$). In 2003 dollars, the net revenues available to projects are estimated to be about 84% of Priority 1 revenues. This is a decrease from the 90% of Priority 1 revenues that were forecast to be available in the 2005 Strategic Plan.

Attachment 3 shows the actual and assumed sales tax growth rates used in our projections. In Fiscal Year 2005/06 and 2006/07 actual sales tax revenues grew at a significantly higher rate than projected. The near-term growth rate estimates are from the Controller’s Office, which is currently projecting negative annual growth for Fiscal Year 2008/09 and 2009/10, with a marginal increase for Fiscal Year 2010/11 and 2011/12. By Fiscal Year 2012/13, sales tax is expected to grow by 4.5% annually, which is equal to the historic growth rate seen from 1998 to 2008.


Meeting Capital Project Needs: As we prepare the 2009 Strategic Plan Update, the combination of higher financing costs stemming from the global economic situation and the resultant lower sales tax revenue projections represent a double hit on the amount of Prop K funds that are available to deliver the Prop K program. In the Strategic Plan model, we have taken a number of steps, which are summarized below, to help offset these factors and maximize funds available for projects. Hand in hand with these efforts are our ongoing conversations with project sponsors to make sure that new project and programs proposed in the 5YPPs have, among other things, reasonable schedules and costs estimates that are supported by realistic funding plans and agency resources necessary to delivery the projects as proposed. We want to plan for sufficient financing to keep projects moving forward, but it is to no one’s advantage to incur financing costs for projects that are not progressing in a timely fashion.

Since the inception of Prop K, the Authority has used a commercial paper program as its financing mechanism. Our commercial paper program has functioned somewhat like a line of credit, which has been exceedingly beneficial to the Prop K program since the cost of borrowing has been low and project delivery rates and corresponding sponsor cash flow needs have been below what was anticipated in the 2005 Strategic Plan. We are now moving into an era where the cost of issuing commercial paper is expected to approach that of long-term bonds. While we plan to retain the option to issue commercial paper because of the flexibility it provides to meet short-term cash flow needs, we are anticipating the need to retire the current $150 million in outstanding commercial paper by buying it out with a long-term bond to lock in lower rates. There are many considerations when issuing bonds, but one important consideration is that once they are issued, the Prop K program will be paying interest whether or not the projects that are triggering the need for financing are making progress or not.

Some of the steps we have taken to minimizing finance costs and maximizing funds available for projects that have been incorporated into the Strategic Plan model include:

• Working with sponsors to de-obligate completed or inactive grants. For Prop K grants this means that funds return to the category from which they were allocated and can then be reprogrammed to other projects in that category. This is on-going effort.

• Entered actual expenditures (i.e. cash flow) for allocations from Expenditure Plan categories with the most financing costs assumed in the 2005 Strategic Plan. For many allocations, project delivery and related reimbursement requests have trailed significantly behind the Board-approved cash flow distribution schedule. Adjusting the cash flow assumptions in the model to reflect actual expenditures reduces the need for financing.

• Working with sponsors to amend the Board approved cash flow distribution schedules for prior year allocations with the largest remaining balances (e.g. greater than $500,000). We also included this information in the proposed Fiscal Year 2009/10 Authority Budget to help better forecast our capital budget expenditures for the coming year.

• Entered actual financing costs to date. These have been lower than projected in the 2005 Strategic Plan because sponsors have requested fewer allocations than were anticipated in the 2005 Strategic Plan, reducing the need for financing for the program as a whole and for specific Expenditure Plan line items. We also benefited from low commercial paper rates, until very recently.

We are seeking input and guidance from the Committee. This is an information item.

ALTERNATIVES

Not applicable – This is an information item.

CAC POSITION


Not applicable – This is an information item. The Citizens Advisory Committee has been briefed on the Strategic Plan and 5YPP updates on several occasions, and will be receive another update at its June 24 meeting.

FINANCIAL IMPACTS


RECOMMENDATION


Attachments:

1. Prop K Major Capital Projects – Summary Update 2. 2009 Strategic Plan – Projection of Sales Tax Revenues ($YOE) 3. 2009 Strategic Plan – Anticipated Sales Tax Growth Rates


Attachment 1 Prop K Major Capital Projects – Summary Update – 06.12.09

Caltrain Electrification

Scope

Caltrain’s electrification project will replace Caltrain’s existing diesel service with a fully electrified service from the 4th and King station in San Francisco to the Tamian station in San Jose. This is one of the main components in phase 1 of the Caltrain 2025 program, dubbed Caltrain 2015. The Caltrain 2025 program provides commuter rail system the strategic vision to improve system performance while minimizing equipment and operating costs. The electrification project comprises the following components: the replacement of existing diesel vehicles with vehicles that run on electric power; the construction of the electrification infrastructure, which includes traction power substations that distribute power, an overhead contact system to supply power to the trains, signal and grade crossing circuitry changes, and other related infrastructure improvements.

The vehicle replacement portion of this project is part of a separate coordinated effort that needs to take place concurrently because the majority of Caltrain’s current rolling stock, 29 locomotives and 73 gallery cars, is nearing the end of its useful life in 2015. The vehicle replacement project is anticipated to cost $440 million in year-of-expenditures dollars. The construction of the electrification infrastructure, the focus of this major Prop K capital project, is projected to cost $785 million in year-of-expenditures dollars.

Status

The Caltrain Electrification Project currently has completed 35% design. The updated and completed Environmental Assessment/Environmental Impact Report (EA/EIR) was submitted to the Federal Transit Administration (FTA) in March 2009 and FTA approval of the Draft EA/EIR is expected in July/August 2009. Once the FTA has approved the Final EIR/EIS, Caltrain can move into the final design phase of the project.

Caltrain is continuing to work with the California Public Utilities Commission to secure approval of a new General Order that would establish rules of general applicability (e.g. safety guidelines) to commuter railroad systems proposing to undertake 25kV electrification projects. The Caltrain Electrification project also requires the approval of Federal Railroad Administration Ruling of Particular Applicability to allow the use of non-compliant electric multiple unit (EMU) trains on railroads that also serve diesel trains.

One of the biggest obstacles and opportunities facing the project right now is funding. While the project has a $301 million funding shortfall of a total cost of $785 million, the American Recovery and Reinvestment Act of 2009 (ARRA) provides several funding opportunities for Caltrain Electrification. For instance, Caltrain recently applied for a $25 million ARRA Transit Investments for Greenhouse Gas and Energy Reduction Discretionary Grant from the FTA, accompanied by a letter of support from the Authority. Caltrain has also been participating in regional discussions with the Metropolitan Transportation Commission, the three Peninsula Joint Powers Board (Caltrain’s governing body) member jurisdictions, the Authority and Transbay Joint Powers Authority to draft the High-Speed Rail Peninsula Corridor Investment Program, which seeks to identify and prioritize competitive high speed rail projects in the Peninsula Corridor for the $8 billion ARRA High-Speed and Intercity Rail (HSR) discretionary grant program. The group has initially identified the following projects, along with several others, for inclusion: Transbay

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Train Box, Downtown Extension, and Caltrain Electrification. The final federal guidance for the HSR discretionary grant program will be issued on June 17, 2009. The call for projects is expected to begin immediately upon issuance of the guidance, with application due in August 2009 and project selections made by October 2009.

Another major obstacle for the Caltrain electrification project is ensuring that it integrates with the California High Speed Rail Project. On November 4 2008, California voters passed Prop 1A, the $9.95 billion Safe, Reliable, High-Speed Passenger Train Bond Act for the 21st Century. A portion of that act declared the corridor from San Francisco to Los Angeles as the primary corridor for High Speed Rail. Further, the California High Speed Rail Authority (CHSRA) has designated the San Jose to San Francisco corridor along the existing Caltrain Rail Corridor as part of the route for the California High Speed Rail. Caltrain has implemented and initiated various improvements and efforts which are consistent with the accommodation of high speed rail in the Caltrain Rail Corridor, including implementation of its Baby Bullet program, environmental study and preliminary design of electrification program, formulation of Caltrain 2015, and pursuit of Federal Railroad Administration approval of mixed rail operations that will fully integrate Caltrain and high speed rail systems. Further, PCJPB and CHRSA have entered into a joint agreement whereby both agencies will engage as partners in the planning, design and construction of improvements in the Caltrain Rail Corridor that will accommodate and serve both the near-term and long-term needs of high speed rail and Caltrain’s enhanced commuter rail service. One of the main priorities of the partnership is to ensure that ultimate configuration of the Caltrain corridor will consist of a multiple track, grade-separated high speed rail system, with mixed traffic from Caltrain commuter rail and the high speed train service capable of operation on all tracks to enable Caltrain to achieve service levels of no less than eight trains per hour in each direction. Track configuration analyses will consider both horizontal and vertical alignments in the Caltrain corridor.




Schedule Start Date End Date Quarter Fiscal Year Quarter Fiscal Year Planning/Conceptual Engineering 4 2006/07 1 2009/10 Updated Environmental Studies (PA&ED) 3 2008/09 1 2009/10 Design Engineering (PS&E) 1 2009/10 2 2010/11 R/W Activities/Acquisition Advertise Construction 3 2010/11 N/A N/A Start Construction (e.g., Award Contract) 2 2011/12 N/A N/A Start Procurement (e.g. rolling stock) 2 2011/12 4 2013/14 Project Completion (i.e., Open for Use) N/A N/A 3 2014/15

Cost Planning/Conceptual Engineering 28,880,000Design Engineering (PS&E) 103,170,000Construction 653,170,000

TOTAL 785,220,000




Funding Plan

Type Source1 Committed Proposed Total Federal STP/CMAQ $ 12,000,000 $ 12,000,000 Federal FTA Section 5309 $ 14,980,000 $ 14,980,000 State Prop 1B - PTMISEA $ 20,000,000 $ 20,000,000 State High Speed Rail Connectivity Funds $ 46,000,000 $ 46,000,000 State CARB/AB 434 $ 29,000,000 $ 29,000,000 State RTIP (San Francisco) $ 4,000,000 $ 24,000,000 $ 28,000,000 Local San Mateo Sales Tax $ 146,800,000 $ 146,800,000 Local Santa Clara Sales Tax $ 159,310,000 $ 159,310,000 Local Prop K -- sales tax $ 28,000,000 $ 28,000,000 Subtotal $ 365,090,000 $ 119,000,000 $ 484,090,000 Total Cost $ 785,220,000 Subtotal (Currently Identified Funding) $ 484,090,000 Current Funding Shortfall2 $ 301,130,000 Prop K % of Entire Project 3.57% San Francisco % of Entire Project (Prop K, RTIP) 7.13%1 Acronyms used in this column include: STP - Surface Transportation Program, CMAQ - Congestion Mitigation and Air Quality Program, FTA - Federal Transit Administration, PTMISEA - Public Transportation Modernization, Improvement and Service Enhancement Account, CARB - California Air Resources Board, RTIP - Regional Transportation Improvement Program, TBD - To Be Determined 2 Potential sources to cover this shortfall include FTA Transit Investments for Greenhouse Gas and Energy Reduction Discretionary Grant Funds, FRA High Speed Rail Discretionary Funds, and state Proposition 1A funds.



Central Subway

Scope

The Municipal Transportation Agency’s (MTA’s) Central Subway is the second phase of the Third Street Light Rail line, which opened in 2007. It is a 1.75-mile extension of the existing Third Street Light Rail line from its current terminus at 4th and King Streets to a surface station south of Bryant Street and underground at a portal under US 101. From there it will continue north to stations at Moscone Center, Union Square—where it will provide passenger connections to the Powell Street Station and BART—and at Chinatown, where the line will terminate. The Central Subway is expected to carry nearly 73,000 passengers a day, making it the second most utilized rail project in the Federal New Starts Program.

Status

The Central Subway project has both state and federal environmental clearance, and in November 2008, the Federal Transit Administration (FTA) issued the Record of Decision for the project. Work is proceeding on advanced preliminary engineering, which is concentrating on the early construction packages and preparation for FTA approval to enter into final design, which is anticipated in September 2009. Coordination with the Transbay Joint Powers Authority, Caltrans, and the California Public Utilities Commission is ongoing. The construction package for utilities relocation at the tunnel portal and the Moscone station is scheduled for completion in summer 2009. Construction of this early package will commence in January 2010, subject to receiving FTA’s approval for entrance into final design, expected sometime in the fall of 2009. The project team is also planning on starting the procurement of the tunnel boring machines and soliciting bids for construction of the tunnel portal in early 2010, subject to receiving a letter of no prejudice from the FTA

The arts program for the project is underway under the direction of the San Francisco Arts Commission. Discussions regarding the Memorandum of Agreement (MOA) between the MTA and the Arts Commission, which defines the parties’ roles and responsibilities, were concluded in March 2009. The budget for the arts program has been set at $14.5 million and the MOA is being readied for the respective board’s ratification.

The FTA, together with the project team and the Authority, completed a nine-month risk assessment evaluation of the project in April 2009, which analyzed and evaluated in detail technical, schedule, commercial, and external aspects of the project from a risk and probability perspective. As a result of this review, FTA recommended that additional cost and schedule reserve contingency be added to ensure the project's success. Specifically, this review resulted in a revised project budget of $1.578 billion compared to the original $1.3 billion, and a new completion date of December 2018 instead of the original 2016 date. Also as a result of the assessment, FTA indicated that it will support an increased federal (New Starts) share for the project and higher annual funding allocation levels, both of which will contribute significantly to minimize borrowing costs and covering the increased funding needs triggered by the higher project cost. Due to the state budget deficit and the global economic climate the timing and availability of funds, particularly of state funds sources, such as the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 (commonly known as Prop 1B) and the Regional Transportation Improvement Program, remains a concern.



Central Subway

Schedule Start Date End Date Quarter Fiscal Year Quarter Fiscal YearPlanning/Conceptual Engineering 3 2003/04 1 2009/10 Environmental Studies (PA&ED) Design Engineering (PS&E) 1 2009/10 2 2011/12 R/W Activities/Acquisition Advertise Construction 1 2009/10 N/A N/A Start Construction (e.g., Award Contract) 3 2009/10 N/A N/A Start Procurement (e.g. rolling stock) N/A N/A N/A N/A Project Completion (i.e., Open for Use) N/A N/A 4 2017/18

Cost Planning/Conceptual Engineering 48,698,000Design Engineering (PS&E) 47,154,000Right of Way 39,459,000Construction 1,442,989,000

TOTAL 1,578,300,000



Central Subway

Funding Plan

Type Source1 Committed Proposed Total Federal FTA - New Starts $ 29,837,000 $ 912,363,000 $ 942,200,000 Federal CMAQ2 $ 6,230,000 $ 6,230,000 State TCRP $ 14,000,000 $ 14,000,000

State Prop 1B - PTMISEA (MTA Share) $ 140,000,000 $ 140,000,000

State Prop 1B - PTMISEA (MTC Share) $ 100,000,000 $ 100,000,000

Local RTIP (San Francisco County)/Backfill2 $ 88,000,000 $ 88,000,000

Local3 Prop K -- sales tax $ 123,981,000 $ 123,981,000 Subtotal $ 167,818,000 $1,246,593,000 $ 1,414,411,000 Total Cost $ 1,578,300,000 Subtotal (Currently Identified Funding) $ 1,414,411,000 Current Funding Shortfall4 $ 163,889,000 Prop K % of Entire Project 7.86% San Francisco % of Entire Project (Prop K, RTIP) 13.43%1 Acronyms used in this column include: CMAQ - Congestion Mitigation and Air Quality Program, FTA - Federal Transit Administration, PTMISEA - Public Transportation Modernization, Improvement and Service Enhancement Account, RTIP - Regional Transportation Improvement Program, TCRP - Traffic Congestion Relief Program

2 In January 2008, the Authority brokered a fund swap of $4 million in FY 2008/09 RTIP funds programmed to Central Subway for an equivalent amount of CMAQ funds for the subject project. The swap gave MTA quicker access to the funds than would have been possible with the delay in available RTIP funds. The $4 million in CMAQ funds count toward the Authority’s RTIP commitment to the project. 3 The FY 2008/09 amount was subject to a swap that traded $2,025,000 in Prop K funds for an equivalent amount of CMAQ funds to help MTA meet timely use of funds deadlines for three separate Regional Bike and Pedestrian Program (RBPP) projects (Res. 09-25).

4 MTA is anticipating filling these gaps with a combination of possible Prop K Loan, Prop 1B PTMISEA Funds, State High Speed Rail Connectivity Funds, or MTA Parking and Advertising Revenues.



Downtown Extension to a Rebuilt Transbay Terminal

Scope

Headed by the Transbay Joint Powers Authority (TJPA), the Downtown Extension to a Rebuilt Transbay Terminal Program has three major components: the extension of commuter rail service from its current San Francisco terminus at Fourth and Townsend Streets to a new underground terminus underneath a new Transbay Transit Terminal; a new, multimodal Transbay Terminal on the site of the present Transbay Terminal; and the establishment of a Redevelopment Area Plan with related development projects, including transit-oriented development on publicly owned land in the vicinity of the new multimodal Transbay Terminal.

On November 4 2008, California voters passed Prop 1A, the $9.95 billion Safe, Reliable, High-Speed Passenger Train Bond Act for the 21st Century. A portion of that act declared the corridor from San Francisco to Los Angeles as the primary corridor for High Speed Rail. Further, the California High Speed Rail Authority (CHSRA) has designated the San Jose to San Francisco corridor along the existing Caltrain Rail Corridor as part of the route for the California High Speed Rail. The Transbay Terminal is expected to be the northern terminus of the primary corridor.

Status

The TJPA’s Transbay project has been divided in two phases: Phase 1 includes the Terminal Building and Ramps and Phase 2 consists of the underground rail extension from 4th and Townsend to the Transit Center. Having completed schematic design of Phase 1 in April 2009, design development is underway, with a scheduled completion of October 2009. Preliminary engineering of Phase 2 is underway and is expected to complete in early 2010. Construction of the Temporary Terminal started in November 2008. Demolition of the existing terminal and ramps is scheduled to start in September 2009 and construction of the new terminal and ramps is scheduled to start in January 2010.

The TJPA selected a team headed by Webcor Builders to provide construction management/general contractor services and Webcor Builders has started providing pre-construction services for the terminal building.

The TJPA has also been participating in regional discussions with the Metropolitan Transportation Commission, the three Peninsula Joint Powers Board (Caltrain’s governing body) member jurisdictions, and the Authority to draft the High-Speed Rail Peninsula Corridor Investment Program, which seeks to identify and prioritize competitive high speed rail projects in the Peninsula Corridor for the $8 billion ARRA High-Speed and Intercity Rail (HSR) discretionary grant program. The group has initially identified the following projects, along with several others, for inclusion: Transbay Train Box, Downtown Extension, and Caltrain Electrification. The final guidance for the HSR discretionary grant program will be issued on June 17, 2009. The call for projects is expected to begin immediately upon issuance of the guidance, with applications due in August 2009 and project selection made by October 2009. This probable infusion of federal discretionary funds will allow the TJPA to move forward with constructing the train box as part of Phase 1, resulting in considerable cost savings.




Schedule Phase 1 (Transbay Transit Center) Start Date End Date

Quarter Fiscal Year Quarter Fiscal Year

Planning/Conceptual Engineering 4 1994/95 3 2000/01 Environmental Studies (PA&ED) 1 2000/01 4 2008/09 Design Engineering (PS&E) 1 2007/08 2 2009/10 R/W Activities/Acquisition 1 2004/05 4 2007/08 Advertise Construction 1 2007/08 N/A N/A Start Construction (e.g., Award Contract) 2 2007/08 N/A N/A Start Procurement (e.g. rolling stock) N/A N/A N/A N/A Project Completion (i.e., Open for Use) N/A N/A 3 2013/14 Phase 2 (Downtown Extension) Start Date End Date

Quarter Fiscal Year Quarter Fiscal Year

Planning/Conceptual Engineering 3 2004/05 4 2009/10 Environmental Studies (PA&ED) 1 2000/01 4 2008/09 Design Engineering (PS&E) 4 2009/10 1 2012/13 R/W Activities/Acquisition 1 2004/05 4 2007/08 Advertise Construction 4 2010/11 N/A N/A Start Construction (e.g., Award Contract) 4 2010/11 N/A N/A Start Procurement (e.g. rolling stock) N/A N/A N/A N/A Project Completion (i.e., Open for Use) N/A N/A 2 2018/19

Cost

Phase 1 Cost Phase 2 Cost Total Cost Planning/Conceptual Engineering 110,000,000 156,000,000 266,000,000Design Engineering (PS&E) 217,000,000 368,000,000 585,000,000Right of Way 84,000,000 176,000,000 260,000,000Construction 778,000,000 2,296,000,000 3,074,000,000

TOTAL 1,189,000,000 2,996,000,000 4,185,000,000




Funding Plans

Phase 1 Funding Plan

Type Source1 Committed Proposed Total

Federal Federal 1601 & Earmarks $ 63,000,000 $ 63,000,000 Federal TIFIA Loan $ 172,000,000 $ 172,000,000 State RTIP (San Francisco) $ 28,000,000 $ 28,000,000 Local AB 1171 $ 150,000,000 $ 150,000,000 Local Regional Measure 1 $ 54,000,000 $ 54,000,000 Local Regional Measure 2 $ 142,000,000 $ 142,000,000 Local San Mateo County Sales Tax $ 7,000,000 $ 7,000,000 Local Prop K -- sales tax $ 98,000,000 $ 98,000,000 Local AC Transit Capital Contribution $ 39,000,000 $ 39,000,000 Local Land Sales $ 429,000,000 $ 429,000,000 Local Misc. Local $ 8,000,000 $ 8,000,000 Subtotal $ 581,000,000 $ 609,000,000 $ 1,190,000,000 Total Cost $ 1,190,000,000 Subtotal (Currently Identified Funding) $ 1,190,000,000 Current Funding Shortfall2 $ - Prop K % of Entire Project 8% San Francisco % of Entire Project (Prop K, RTIP) 11%1 Acronyms used in this column include: TIFIA - Transportation Infrastructure Finance and Innovation Act, RTIP - Regional Transpoprtation Improvement Program




Phase 2 Funding Plan

Type Source1 Committed Proposed Total Federal TIFIA Loan $ 377,000,000 $ 377,000,000 Local Regional Measure 2 $ 8,000,000 $ 8,000,000 Local San Mateo County Sales Tax $ 22,000,000 $ 22,000,000 Local Prop K -- sales tax $ 50,000,000 $ 50,000,000 Local Land Sales $ 185,000,000 $ 185,000,000 Subtotal $ 235,000,000 $ 407,000,000 $ 642,000,000 Total Cost $ 2,996,000,000

Subtotal (Currently Identified Funding) $ 642,000,000 Current Funding Shortfall2 $ 2,354,000,000

Prop K % of Entire Project 2% San Francisco % of Entire Project (Prop K) 2%1 Acronyms used in this column include: TIFIA - Transportation Infrastructure Finance and Innovation Act

2 Potential funding sources include Federal High Speed Rail Discretionary Funds.



Doyle Drive Replacement

Scope

Doyle Drive serves as the south access to the Golden Gate Bridge, winding one and a half miles through the Presidio of San Francisco. Built in 1936, the highway no longer meets acceptable standards in terms of its ability to withstand potential earthquakes, the structural integrity of its bridges and viaducts, and its capacity to handle safely the high volumes of traffic that use it daily. The Federal Highway Administration (FHWA) ranked Doyle Drive as the fifth worst bridge in the nation and the worst in California for structural sufficiency. Given its importance to regional transportation continuity and low structural sufficiency, the existing Doyle Drive facility poses a significant life-safety and economic risk should an earthquake occur. Both Caltrans and the Federal National Bridge Inventory recommend that the existing structures be replaced.

The Authority has been leading the effort since 1994, in close cooperation with Caltrans, to replace the existing Doyle Drive structure. The Authority has forged a partnership with a host of federal, state and local agencies involved with this complex undertaking. These agencies include the FHWA, Presidio Trust, Department of Veterans Affairs, National Park Service, California Department of Transportation (Caltrans), Golden Gate Bridge Highway and Transportation District (GGBHTD), State Historic Preservation Officer and others. In September 2006, after years of public input and involvement, the Authority and its partner agencies selected the Presidio Parkway alternative to replace Doyle Drive. This alternative features six travel lanes plus an eastbound auxiliary lane between the Park Presidio interchange and a new Presidio access at Girard Road. The parkway features wide landscaped medians and includes a high-viaduct, two short tunnels, and a low causeway over a depressed Girard Road.

Status

The Doyle Drive Replacement Project Final Environmental Document was certified on December 16, 2008 by the Authority Board. This major project milestone closed the project’s environmental phase, approved the Presidio Parkway as the preferred alternative and initiated engineering of the final design.

Shortly after the passage of the federal American Recovery and Reinvestment Act (ARRA), Caltrans programmed $50 million in state share ARRA funds to the project, and we are working closely with the Mayor’s Office to secure an additional $50 million in federal discretionary ARRA funds from the Transportation Investment Generating Economic Recovery (TIGER) discretionary grant program.

Engineering design is currently underway, and on May 4, 2009, Caltrans and the Authority executed the Cooperative Agreement to kick off work on the right-of-way acquisition phase of the project. To take full advantage of the ARRA stimulus funds and in an effort to deliver this critical project sooner, we worked with Caltrans to accelerate the project delivery schedule by 22 months, which would result in a cost savings of $91 million, reducing the overall project cost from $1.045 billion to $954 million. Under this accelerated schedule, construction could begin as early as August 2009 and major construction would be completed as early as 2012, with the entire project completed by June 2013.




Schedule Start Date End Date Quarter Fiscal Year Quarter Fiscal YearPlanning/Conceptual Engineering Environmental Studies (PA&ED) 2 2000/01 2 2008/09 Design Engineering (PS&E) 3 2007/08 1 2010/11 R/W Activities/Acquisition 2 2008/09 1 2010/11 Advertise Construction 4 2008/09 N/A N/A Start Construction (e.g., Award Contract) 1 2009/10 N/A N/A Start Procurement (e.g. rolling stock) Project Completion (i.e., Open for Use) N/A N/A 4 2012/13

Cost Planning/Conceptual Engineering $25,400,000 Design Engineering (PS&E) $57,000,000 Right of Way $37,000,000 Construction $834,900,000

TOTAL 954,300,000




Funding Plan

Type Source1 Committed Proposed Total Federal PLH $ 13,600,000 $ 13,600,000 Federal Federal Earmark High Priority $ 14,000,000 $ 14,000,000 Federal UPA $ 47,300,000 $ 47,300,000 Federal ARRA - TIGER $ 50,000,000 $ 50,000,000 Federal Earmarks - Redirected $ 26,000,000 $ 26,000,000 State ARRA - SHOPP $ 50,000,000 $ 50,000,000 State TCRP $ 15,000,000 $ 15,000,000 State SHOPP $ 405,000,000 $ 405,000,000 Local RTIP (San Francisco County) $ 71,100,000 $ 13,000,000 $ 84,100,000 Local Prop K -- sales tax $ 67,900,000 $ 67,900,000 Local BATA Bridge Tolls $ 80,000,000 $ 80,000,000 Local GGBHTD $ 75,000,000 $ 75,000,000 Local Marin County $ 4,000,000 $ 4,000,000 Local Sonoma County $ 1,000,000 $ 1,000,000 Local SLPP $ 21,000,000 $ 21,000,000 Subtotal $ 843,900,000 $ 110,000,000 $ 953,900,000 Total Cost $ 954,300,000 Subtotal (Currently Identified Funding) $ 953,900,000 Current Funding Shortfall2 $ 400,000 Prop K % of Entire Project 7% San Francisco % of Entire Project (Prop K, RTIP, SLPP) 18%1 Acronyms used in this column include: PLH - Public Land Highway, UPA - Urban Partnership Agreement, ARRA - American Recovery and Reinvestment Act, TIGER - Transportation Investment Generating Economic Recovery, TCRP - Traffic Congestion Relief Program, SHOPP - State Highway Operation and Protection Program, RTIP - Regional Transportation Improvement Program, BATA - Bay Area Toll Authority, GGBHTD - Golden Gate Bridge, Highway, and Transit District, SLPP - State and Local Partnership 2 Potential funding sources include American Recovery and Reinvestment Act Discretionary Grant Funds, Cost Savings through Project Acceleration.


Attachment 2

J:\2009\Memos\06 - June 2009\Prop K Strategic Plan PPC 06 2009 v1 attach 2-3.doc Page 1 of 2

2009 Strategic PlanProjection of Sales Tax Revenues (YOE$)

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

FY20

03/04

FY20

06/07

FY20

09/10

FY20

12/13

FY20

15/16

FY20

18/19

FY20

21/22

FY20

24/25

FY20

27/28

FY20

30/31

FY20

33/34

2009 Strategic Plan Projections 2005 Strategic Plan Projections Actual Revenues

Total Revenues:2005 Projection: $4.01 B2009 Projection: $3.49 B

Attachment 3

J:\2009\Memos\06 - June 2009\Prop K Strategic Plan PPC 06 2009 v1 attach 2-3.doc Page 2 of 2

Anticipated Sales Tax Growth Rates

Assumptions in 2005 Strategic Plan

Current Assumptions

FY2005/06 4.45% 7.94% * FY2006/07 4.40% 6.72% * FY2007/08 4.35% 3.44% * FY2008/09 4.43% -4.60% FY2009/10 4.36% -4.00% FY2010/11 4.42% 2.70% FY2011/12 4.35% 3.00% FY2012/13 and on. 4.39% 4.50%

*Actual growth rates

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