9/4/25 SCCRTC P7b - Measure D Expenditures and Financing Continued

Overview

• Significant funding gap for rail trail segments 8-11, with a shortfall of $17 million (projected cost: $137M + $88M = $225M; grants received: $120M).
• Measure D revenues are nearly fully committed, limiting future borrowing and project capacity.
• Urgency to secure additional funding by June 2027 to avoid losing $120M in outside grants.
• No contingency for litigation costs included in current budgets.
• Scaling back project scope may risk current grant funding and require state approval.

Measure D Borrowing and Revenue Constraints

• Borrowing for active transportation projects uses only Measure D active transportation revenues, not full Measure D revenue.
• Other Measure D program areas remain unaffected and retain borrowing capacity under proposed scenarios.

Project Cost Overruns and Funding Gaps for Segments 8-11

• Segments 10 and 11 over budget by $72 million; only $55 million projected funding, creating a shortfall.
• Measure D revenues cannot fully cover current project cost estimates; borrowing $55 million considered to partially fill gap.
• Future Measure D capacity to leverage state and federal funds will be significantly reduced after current funds are exhausted.
• Ongoing project cost estimates are subject to revision and updates are provided regularly.

Grant Funding Risks, Deadlines, and Local Responsibilities

• Received $120 million in outside funding for rail trail segments 8–11.
• Funding deadline for construction is June 2027; must achieve 100% design and full funding by then.
• California Active Transportation Program does not cover cost overruns; local sponsors responsible for extra costs.
• Failure to meet deadlines risks loss of $120 million in grants.
• Additional construction funding needed to complete segments 8–11 and future segments 13–20.

Efforts to Secure Additional Funding and Grant Competitiveness

• Applied for two additional federal grants in 2023; received BUILD/RAISE grants in 2024.
• City of Santa Cruz submitted $20.5M Safe Streets for All grant for segments 8 and 9; decision expected December.
• Grant construction allocation request required by June 27, 2027; construction start not required by that date.
• Current Active Transportation Program cycle has significantly less funding than previous cycle.
• Projects are over budget; limited options and time remain to secure additional funding.

Project Scope, Grant Compliance, and Feasibility Concerns

• California Transportation Commission approval required for scope changes.
• Total cost for segments 8–11: $225 million (8–9: $88M, 10–11: $137M).
• Total grants received for segments 8–11: $120 million.
• Measure D revenue capacity estimated at $174–175 million; about $40 million obligated.
• No contingency funding allocated for litigation costs.
• No requirement to repay state design funds if projects not constructed.