Last month, Mayor Ed Lee’s 2030 Transportation Task Force recommended a $10.1 billion investment into The City’s transit system over the next 15 years. The San Francisco Municipal Transportation Agency announced last week it had raised $75 million toward that goal through a bond issuance, a power voters granted in 2007.
The funds will be applied primarily for frontline transportation infrastructure. Specifically, $30.5 million will go to Muni operational and maintenance needs, $12.5 million to light-rail vehicle procurement, and $11 million to transit system safety and improvements.
In addition, $9 million will be used for street capital improvements, $7 million for transit agency facility improvements and $5 million for pedestrian safety and traffic signal improvements.
“This was one way that we can provide much-needed funding to help support our transportation network,” said SFMTA spokesman Paul Rose. “And when the voters approved Proposition A in 2007, it gave us the authority to do so.”
In its inaugural bond issuance in July 2012, the transit agency raised $63.8 million. Of that, about $25 million went to frontline Muni infrastructure needs, including Sunset Tunnel work, parking garages and station signage; $38 million was set aside to refinance existing debt.
The transit agency received bond ratings of A+ from Standard & Poor’s and Aa3 from Moody’s. The ratings, low interest rates and strong investor demand for the bonds resulted in 3.8 percent interest, which equals an average annual debt of $6 million over two decades, according to the SFMTA.
“The confidence shown by the market in the SFMTA provides an excellent opportunity for us to invest in the future of transportation in San Francisco,” said Transportation Director Ed Reiskin in a statement. “We will expeditiously and efficiently deliver this work to improve the overall transportation system.”
Repayment of the bonds will come from the transit agency’s operating budget. Before the first issuance last year, the transit agency had no outstanding bonds issued under Proposition A authorization.
“The SFMTA has been entrusted with the stewardship not only of The City’s physical transit infrastructure, but also the financial health of The City’s transportation network,” said SFMTA board Chairman Tom Nolan in a statement. “Issuing our own bonds helps to pay for maintaining both.”
Both bonds issued by the SFMTA in the two years are only one piece of a larger puzzle that must be solved to create a high-performing transportation system, officials say. The transportation task force report incorporated funds generated by bond sales.