If San Francisco could magically get the “Subway to Nowhere” Central Subway installed today for free it would still be a bad deal for San Francisco, mostly owing the very small amount benefits it would provide to a very small number of people and the very large hole it would put into MUNI”s annual budget.
But unless the Feds help out San Francisco by cancelling funding, politically connected players such as AECOM are all set to make a mint off of this project. Oh well.
Anyway, San Francisco officials are still trying to reassure the Feds about how great this horrible project is going, so, as of tomorrow, we’ll be on the hook for another $100,000,000, or so, to make up for the fact that California doesn’t want to chip in the money.
Check it out, from SaveMuni.com:
“On May 1, 2012, the San Francisco Municipal Transportation Agency (MTA) Board will be asked to approve Central Subway revenue bonds, of undetermined amount, to plug a large hole that has developed in the Central Subway budget. This is a very risky course of action.
A shortfall of between $61.3 million and $140 million has now appeared in the project budget. In order to make up for this substantial loss of previously anticipated State of California funding, the MTA staff is asking its Board and the San Francisco Board of Supervisors to approve a revenue bond sale of undetermined amount. On the agenda of the May 1, 2012 MTA Board meeting, the bond authorization is scheduled as Item 10.4 which is unaccountably included under the Board’s consent calendar rather than its regular calendar. In the Agenda packet, the staff attributes the need for the revenue bond sale to “uncertainty regarding HSR in California.” This statement is false and misleading, for the reasons set forth below.”
Here are the deets:
“SaveMuni.com
April 30, 2012
MTA’s Stealth Maneuver to Commit Additional City Funds to the Central Subway
On May 1, 2012, the San Francisco Municipal Transportation Agency (MTA) Board will be asked to approve Central Subway revenue bonds, of undetermined amount, to plug a large hole that has developed in the Central Subway budget. This is a very risky course of action.
MTA Board Agenda, Tuesday, May 1, 2012: See Item 10.4.
Particulars
The cost of the MTA’s Central Subway project has ballooned from $647 million to the current estimate of $1.58 billion.i The original plan was for $983 million of this total to come from the federal government, $471 from the State of California and $124 million from San Francisco’s Prop K sales tax fund.
In attempting to sell the subway to the public, MTA has repeatedly called the public’s attention to its “success” in leveraging a mere $124 million City & County contribution into a $1.58 billion subway.ii However, a shortfall of between $61.3 million and $140 million has now appeared in the project budget.
In order to make up for this substantial loss of previously anticipated State of California funding, the MTA staff is asking its Board and the San Francisco Board of Supervisors to approve a revenue bond sale of undetermined amount. On the agenda of the May 1, 2012 MTA Board meeting, the bond authorization is scheduled as Item 10.4 which is unaccountably included under the Board’s consent calendar rather than its regular calendar. In the Agenda packet, the staff attributes the need for the revenue bond sale to “uncertainty regarding HSR in California”. This statement is false and misleading, for the reasons set forth below.
The MTA is caught between a skittish Federal Transportation Administration (FTA) appropriately worried about the MTA’s financial ability to handle the Central Subway project and a huge shortfall in the non-federal share of the project budget. The MTA apparently believes the solution to this problem is to skim millions of dollars a year from already overburdened Muni revenues, in order to sell revenue bonds as necessary to make up for the loss in State capital—all in hopes that the action will reassure the feds and therefore put the hoped-for federal grant back on track.
The best that could be said of the MTA’s plan is that it is extremely risky. By far, the most important element of that risk is that the costs of servicing the revenue bonds, coupled with an indeterminate amount of project overrun (estimated by CGR Management Consultants to be as high as $422 million), could result in unacceptably high Muni fare increases and/or unacceptably damaging Muni service cuts.”
Ever more deets after the jump
