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Gaining or losing $61M from state may impact release of federal funds for central subway

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The state and local funding programs will essentially be wrapped up if the allocation is approved

A funding decision this week for the Central Subway could play a crucial role in a massive federal grant that is still pending for the Muni project.

On Wednesday, the California Transportation Commission will decide whether to release $61 million in state bond funds for the subway, a nearly $1.6 billion undertaking to extend Muni’s Metro service from South of Market to Chinatown.

The state and local funding programs will essentially be wrapped up if the allocation is approved, leaving a $942 million grant application from the Federal Transit Administration as the last piece of the puzzle.

That grant was expected to be released in December, but it has been repeatedly delayed. A decision is now expected in September, and internal emails recently obtained through records requests show that local officials are concerned about release of the funds.

If the state bond money is not approved, the funding picture could become even murkier. The San Francisco Municipal Transportation Agency, which operates Muni, has approved a contingency plan to issue $61 million in revenue bonds if the state money doesn’t arrive. Yet that alternative might not sit well with federal officials, said Jerry Cauthen of Save Muni, a group opposed to the Central Subway project.

“Those bond proceeds will come from Muni’s operating revenues, which would have been otherwise used to shore up its system,” Cauthen said. “The FTA has said to Congress that they will not use federal funds for a project that would end up degrading existing systems.”

However, SFMTA spokesman Paul Rose said the state recommendation will not play a role in the pending federal grant process.

“There is no connection between the money being allocated and receiving the grant,” Rose said.

The funds up for approval Wednesday are from the $9.95 billion state bond measure passed in 2008 to support California’s high-speed rail project. Money for local agencies has been set aside for “connectivity” projects that link public transportation networks to high-speed rail.

The state agency’s staff has recommended releasing the $61 million because the Central Subway’s Fourth and King streets station will connect with the proposed high-speed rail route, increasing ridership for both systems.

Cauthen disagreed with that assessment of connectivity, pointing out that the high-speed rail plan calls for a station at the future Transbay Transit Center and not at Fourth and King streets.

“That stretches the limit of credulity,” Cauthen said. “There is no connectivity there.”

The federal transit agency would not comment on the pending $61 million allocation.


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