Transactions Newsletter

March 1999
Airport Extension Gets Funding Reprieve

The BART extension to San Francisco International Airport is back on track thanks to a creative funding deal brokered by MTC.

At a special meeting in early March, the MTC commissioners pledged to loan the project $76.5 million in bridge tolls by Sept. 1, 1999. The pledge is the keystone of a three-way funding agreement among MTC, BART and SamTrans.

Under the agreement, SamTrans will loan an additional $72 million to the extension, while BART will provide another $50 million. It all adds up to $198.5 million in loans to offset unanticipated cost increases and to make up for delays in expected federal funding for what has become a $1.5 billion project.

The hefty infusion of local funding will allow work to continue on excavating and building the subway portion that will go from Colma to just opposite the airport. "Construction is proceeding at a tremendous pace -- approaching 50 feet a day," BART General Manager Tom Margro told the MTC commissioners. "Delays cost money."

Crews also are preparing the underground shells for the stations at South San Francisco and San Bruno. In addition, work is well under way on the aerial station at the airport, and is starting on the street-level station at Millbrae, the end of the 8.7-mile line.

In 1997, the Federal Transit Administration (FTA) signed a full-funding grant agreement that promised to provide BART with $750 million for the extension. But annual allocations by Congress have fallen short of what the full-funding agreement called for, contributing to a project deficit. Escalating construction costs and rising real estate prices have exacerbated the problem.

According to MTC Executive Director Lawrence D. Dahms, the agreement sets the stage for securing $84 million in the fiscal year 2000 federal budget process that begins this spring. "Failing to act would have risked the possibility of a domino effect that could have halted a project that is under construction in a half-dozen places at once," he said.

Under the agreement, BART will repay the loans as promised federal grants materialize, and as the airport line opens for business and generates an operating surplus. As part of the agreement, the three involved agencies will establish a management-level task force in partnership with the FTA to monitor construction progress and to continue to explore opportunities for cost-savings.

"In 1988, MTC adopted a regional rail plan that made the BART extension to the airport our first priority," said MTC's Dahms. "With this recent action, we're standing by our commitment to deliver this critical extension that will link BART to the airport and to the Caltrain commuter rail system in Millbrae."

-- Brenda Kahn

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