SFMTA hopes to greenlight funding after admitted lag in bond spending

After facing criticism earlier this year for their slow spending of a transportation bond that finances Muni service improvements, transit leaders on Monday presented a “more realistic” spending timeline while requesting a second round of funding.

“A lot of these projects that [will be funded] are already in construction, so there is obviously a lot more certainty in terms of expenditure rates,” said Ed Reiskin, director of the San Francisco Municipal Transportation Agency.

San Francisco voters in 2014 approved a $500 million bond to tackle The City’s growing transportation service and infrastructure needs.

At a Capital Planning Committee hearing Monday, Reiskin presented a timeline for projected expenditures in conjunction with a request for authorization of a second round of funding from the bond money, totaling $181 million.

The first round of funds was issued in July 2015 and totaled $69.7 million, although that money has yet to be entirely utilized by the agency.

After having spent just $12 million by February 2017, Board of Supervisors President London Breed and Supervisor Aaron Peskin questioned the agency for its lag in spending.

Following pressure from City Hall, the SFMTA requested and was granted a supplemental reapportion of the money it received under the first bond issuance, which shifted some $26.2 million away from Muni improvements and pedestrian safety projects to Muni facility upgrades.

The issue with funding several projects during the first issuance was the SFMTA’s failure to account for “much of the planning, design, community and public processes” necessary to secure approval of those projects, resulting in stretched out timelines, Reiskin said.

“We had money attached to projects that were moving slowly, and, meanwhile, we had other projects that were ready to go and needed money,” he said, adding that “spending has taken off” after the money was moved.

Reiskin said the SFMTA expects 80 percent of the first round of bond funds — roughly $52 million — to be spent by the end of the year, and the rest by December 2018. A third issuance will be requested some time in 2019, he said.

“They have definitely greatly stepped up their game,” said Peskin, who along with Breed called for a hearing earlier this year to assess how the SFMTA was spending the bond money.

“We were trying to ascertain why they were not spending the money as quickly as they had projected,” he explained. “I have noted that recently their spending has thankfully picked up.”

Breed said she is hopeful after Monday’s presentation that bond money will be spent more rapidly, and emphasized that every dollar should be utilized.

“We have shovel-ready projects,” Breed said. “Why aren’t we taking advantage of [every] opportunity to use that money for that purpose?”

The second issuance “has been informed by lessons learned from the first issuance, which had a overly optimistic spending projections,” said Reiskin, calling the proposed timeline for the second round of spending a “much more realistic expenditure rate.”

The second round of bond funding is expected to be issued early next year. A “large chunk,” or $50 million of that money, will go toward funding improvements that are already underway under Muni Forward, a series of projects that aim to improve Muni routes and service across The City.

These projects include the rollout of more Muni fleets, extension of service hours, the addition of new routes and improvements to existing ones. The SFMTA serves 100,000 customers daily.

Of the requested funding, another $20 million will be allocated to fund the electrification of the Caltrain corridor, starting at the Fourth and King streets station, under the ongoing Caltrain modernization program that the SFMTA is supporting.

Additionally, the agency is requesting that $41.5 million of the bond money be shaken loose to continue funding ongoing Muni facility upgrades, such as at Burke Warehouse and Muni Metro East, which will receive $32.4 million and $9.1 million, respectively.

Major corridor improvements, such as the Better Market Street and L-Taraval improvements, will receive a total of $21.6 million in funding, while the SFTMA plans to contribute another $3 million to BART accessibility improvements along Market Street. These improvements include the addition of canopies over BART escalators.

In line with The City’s Vision Zero capital improvement plan, ongoing and new pedestrian safety improvements will receive funding from the bond — a total of $26.3 million.

The 2014 bond was granted to the transportation agency to “serve a subset of the [growing] need” and “really focused on transit and street safety improvements,” said Reiskin, who also presented the SFMTA’s 20-year capital plan at Monday’s hearing.

The capital plan is a “need-based” assessments of the SFMTA’s anticipated capital needs for the next two decades and is based on unconstrained funds.

An emerging need is the increased demand for buying transit vehicles that comes hand in hand with expanding SFMTA facilities for storing them, Reiskin said.

Though ridership is currently “flat,” Reiskin said it’s estimated that at least another 1 million residents will live in San Francisco by 2040.

If current transit trends continue, the agency expects to own 77 more buses than it can store by 2025, 132 more buses than it can store by 2030, and 46 more light-rail vehicles than it can store by 2040. The 20-year capital plan calls for the reconstruction and optimization of new and current storage facilities.

“We have a lot of new jobs being created here. A lot of large new developments are being approved, and the only way we will be able to accommodate that growth in residents and jobs is by improving our transit capacity,” Reiskin said.

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