9/4/25 SCCRTC P7a - Measure D Active Transportation Expenditures and Financing Options

9/4/25 SCCRTC P7a - Measure D Active Transportation Expenditures and FinancingOptions SummaryOverviewMeasure D active transportation projects are progressing faster than pay-as-you-go funding allows, necessitating new financing options.Over $150 million in state and federal funds have been leveraged for the coastal rail trail.Recent project completions include segment 7 to the Santa Cruz Wharf and new funding for segment 12.Cost estimates have increased due to material and escalation costs, creating a significant funding gap.Three financing scenarios were presented, with borrowing needs ranging from $12.5 million to $55 million.The commission will revisit recommendations and programming in November.Project Delivery Pace and Funding Needs for Coastal Rail TrailProvided update on coastal rail trail project funding needs.Measure D active transportation funds enable earlier project delivery but require financing options.Local Measure D funds leveraged over $150 million in state and federal funds for the 32-mile trail.Current discussion is informational; further recommendations expected in November.Project Updates, Segment Status, and Recent Funding AwardsRTC refines project cost estimates with sponsors for next five-year plan update.Coastal Rail Trail aims for full public access; segment 7 completed to Santa Cruz Wharf.SB1 grant awarded for Highway 1 State Park, Freedom Auxiliary Lane, and segment 12; construction funded.Segments 8-9 led by City of Santa Cruz; segments 10-11 led by County of Santa Cruz; segment 5 under construction, completion expected summer 2026.Segments 17-19 received $4.8M pre-construction funding; construction funding not yet identified.Cost Estimates, Funding Gaps, and Value EngineeringProject cost estimates for segments 8 and 11 updated in August 2025.Funding gap increased due to higher material unit costs, escalation, and schedule shifts.Value engineering analysis achieved cost savings, but escalation offset most savings.Secured additional $19.5 million funding; funding gap remains.Financing Scenarios, Borrowing Models, and Cash Flow AnalysisPresented three funding scenarios for Measure D active transportation: current, near-term, long-term.Current scenario based on adopted five-year plan, updated annually and as needed.Near-term needs include environmental mitigation for North Coast Rail Trail Segment 5 and additional design/right-of-way funding for Santa Cruz projects.Long-term commitments may require construction funding for Segments 8–11; commission committed to fully fund Segments 10 and 11 in April 2024.Summary, Next Steps, and Recommendations for Financing and Project DeliveryThree expenditure scenarios evaluated: current (~$40M), near-term (+$10M), long-term (~$80M).Borrowing needs: $12.5M (current), $23M (near-term), $55M (long-term/constrained).All scenarios assume ongoing corridor maintenance; trail maintenance only funded through FY28-29.Maximum borrowing ($55M) insufficient to fully fund segments 8–11A; multi-pronged funding approach required.Next steps: establish legal framework for debt, refine cash flow models, prepare financing plan for commission approval.