BART Passed Over on Federal Loan for Airport Connector This Fiscal Year

Image: BART
Image: BART

As part of the complicated funding swaps BART staff arranged with regional and state transportation planners to proceed with the Oakland Airport Connector following the loss of $70 million in federal stimulus dollars due to civil rights deficiencies, the transit operator was hoping to get a federal loan with a low interest rate and a favorable interest payment schedule.

Unfortunately for OAC proponents, as reported recently in Project Finance Magazine (subscription needed), the US DOT announced its Transportation Infrastructure Finance and Innovation Act (TIFIA) loans for FY 2010-11 and the OAC was not among the projects selected. BART had applied for $105 million from the feds for the $484 million project.

Because BART has enough cash on hand to proceed with preparations for construction and actual groundbreaking in early 2011 (versus the ceremonial event held last month) and because TIFIA loans can be applied for continuously, the agency was not particularly concerned with the news.

“Quite frankly we don’t need the money right now,” said BART spokesperson Linton Johnson, who explained that in BART’s experience TIFIA loans are prioritized for projects that urgently need them. He also pointed to Federal Transit Administrator (FTA) Peter Rogoff’s assurances that BART would get a $25 million New Starts grant when the feds accept its revised civil rights compliance . “This shouldn’t be an indication that we’re not eligible for it or that something is wrong.”

Image: BART
Image: BART

OAC opponents offered a different analysis of the federal action and said this narrowed BART’s options for financing and ultimately would raise the debt obligation for the project by millions of dollars. Referring to BART’s own analysis, TransForm’s John Knox White indicated that if BART cannot secure a TIFIA loan, in the best case scenario with Build America Bonds they would have to subsidize the OAC with $46.3 million from the core system (versus $24 million) and would have to pay $115 million in debt financing (versus $106 million).

“The TIFIA decision is yet one more example of how BART’s likely financial scenario in its presentation was overly rosy,” said Knox White, who also noted the possibility that Build America Bonds will not be re-authorized and BART could have to go out and find loans with even worse interest and debt scenarios. “That’s tens of millions of dollars in debt the core system will have to cover.”

Because the BART board removed any preconditions that would have compelled staff to bring a revised funding plan before them should they not secure TIFIA, BABs or other funding (such as the Port of Oakland’s passenger surcharge approval from the Federal Aviation Administration), there will not likely be further debate about the financial scenario.

Johnson expressed optimism, saying he believed BART would be well-positioned for TIFIA loans in FY 2011. “There is a pool of money and it gets replenished. We’d love to have it in hand to make us feel good,” he said, but noted, “we’re not at the urgent stage yet.”

  • Michael Smith

    So far this project is working out exactly as planned! BART pretends to have enough money but them uses all of its reserves to get the project going. And then they will simply say that they have to get the money since they have already spent so much and the construction has already started. And of course they will then try to suck away money from other much better projects such BRT in San Francisco and Oakland.

    But due to the economy and the Republicans taking over the House they of course will not get the federal money and the project will collapse after many millions of dollars are spent.

    Now that is clever!

  • Winston

    Can we kill this project and divert $100 million to extending eBART to Oakley. It isn’t the most pressing transit need in the Bay Area but it would produce significantly more ridership than the OAC AND extend BART’s empire. Actually, given that you’re building eBART, adding an extra 2 miles to the system to gain an extra 5000 daily riders makes the project much better deal.

  • “Federal Transit Administrator (FTA) Peter Rogoff’s assurances that BART would get a $25 million New Starts grant when the feds accept its revised civil rights compliance.”

    How can BART be in Civil Rights compliance and still build the OAC monorail?

    Yes, that is a serious question.

  • Mad Park

    As an outsider (Seattleite) looking in, for the life of me I cannot understand why this propsal merits construction.

  • Winston

    The OAC project is especially mysterious as it replaces an existing, profitable bus service that handles just as many people, is cheaper to operate and is just as fast most days. All the Oakland Airport needs is better signage for the bus and a couple of queue jumping lanes to speed up the buses.

  • Stephen Kaus

    This connector seems virtually useless and ridiculously priced. They should extend the service to Eastern Contra Costa or Alameda rather than spending a fortune to substitute one annoying way to get to Oakland Airport for another.

    I have not seen a reasonable explanation for this expenditure. It does not appear to be faster or more convenient that the present busses, which, of course, could be improved for a relative pittance.

    Someone’s cousin must have the contract.

  • livegreen

    Not somebody’s cousin. Just contractors (Bechtel?) & their campaign donations to BART Directors. Or their cousins…

    As for building continuous extensions, that requires more capital projects & more expense in order to get more riders. Instead BART should be building more density by making it easier to get more riders to existing stations.

    Building more = raising ticket price more. & BART is already so expensive & makes so few stops in it’s existing coverage area that many people ignore it and drive.

  • There have been times when I find it faster to drive to San Francisco for medical appointments or family business than to take BART. Not cheaper but faster.

    And I don’t have to listen to some atrocious guy trying to play very bad music or selling me the Street Sheet or trying to sell me candy or solicit money from me while I’m doing it.

    That’s one reason why people still drive and why people don’t ride public transit.

    In my neck of the woods, the bus service is terrible too. ( County Connection ).

    Makes the Muni look like chauffeured limousine service by comparison.

    And if you work late nights, forget it.

    There’s no bus service after 8 or 9 pm and almost none on Sundays.

    Buses start here on 9 am on the weekends.

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