HomeMy WebLinkAboutMINUTES - 12062005 - C127 TO: Board of Supervisors /9:;7.
Contra
FROM: Transportation, Water and Infrastructure Committee '� ••
Costa
(Supervisor Mary Nejedly Piepho, Chair)
County
DATE: November 14, 2005
SUBJECT: Plan for Accelerating Projects in the Measure J Transportation Sales Tax
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
ACCEPT report.
FISCAL IMPACT
None to the General Fund. The Bond Expenditure Plan will identify high priority
transportation projects that could benefit from bond proceeds issued by the Contra Costa
Transportation Authority (Authority) and backed by Measure J sales tax revenue. Some
County-sponsored projects could be included in the Plan,
BACKGROUND/REASONS FOR RECOMMENDATIONS
On November 2, 70.5% of Contra Costa voters approved Measure J which continues the
county's half-cent transportation sales tax for 25 more years. From 2009 to 2034,the sales
tax extension will generate $2 billion for various transportation projects and programs,
Approximately 40% of these revenues will be dedicated to major capital projects and
upgrades to local arterials. Since passage of Measure J, the Authority has been
upgrades
investigating opportunities to accelerate the major capital projects it funds. The Authority
used bonding in the Measure C-88 sales tax program to accelerate construction of projects
on State Route 4, the Richmond Parkway and Bay Area Rapid Transit (BART) to North
Concord and Pittsburg/Bay Point. Through bonding of its sales tax revenue at favorable
interest rates, the Authority can provide transportation benefits to taxpayers sooner, and
avoid inflationary pressures that could be experienced if projects are constructed later on a
pay-as-you-go basis.
CONTINUED ON ATTACHMEN X YES
RECOMMENDATION OF UN MINISTRATOR X RECOMMENDATION OF BOARD COMMITTEE
APPROVE THER
SIGNATURES : Ne'edl Pie ho u ervisor Federal D. Glover
ACTION OF BOARD ON � / ore �o�
APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
'� UNANIMOUS (ABSENT AND CORRECT COPY OF AN ACTION TAKEN
on
AYES: NOES: AND ENTERED ON THE MINUTES OF THE
ABSENT-:- ABSTAIN: BOARD OF SUPERVISORS ON THE DATE
SHOWN,
Contact: Steven Goetz (925/335=1240)
a
cc* Community Development Department (CDD) ATTESTED 1'7-) 0(o JV<00�
Public Works Department—Trans. Eng. JOHN, SW ETEN, CLERK OF
THE BOARD OF SUPERVISORS
AND COUNTY ADMINISTRATOR
BY
-3-DEPUTY
GATransportation\TWimpacket Information\2005\NovembeAftem 7 measureJ.doc �y
PLAN FOR ACCELERATING PROJECTS IN THE MEAJURE J TRANSPORTATION SALES TAX
November 14, 2005
Page 2
BACKGROUND/REASONS FOR RECOMMENDATIONS JContinued)
Since September the Authority has made a series of decisions that will lead to issuing a
bond in 2009 in order to accelerate Measure J projects and to lock-in the currently low
long-term bonding rates. The Authority's Administration and Projects Committee is
recommending that the Authority proceed with a bond that will generate $400 million for
Measure J projects and authorize approval of various agreements related to this bond
issuance (see Exhibit A). If future interest rates become unfavorable by 2009, these
agreements will allow the Authority to terminate the issuance, but not without making a
termination payment which could be over$25 million.
Under Measure J,the cost of financing is expected to be deducted from project allocations.
Under the current financing proposal, the financing costs would be about 7% of project
funds available in Measure J.The financing proposal requires that the Authority spend 85%
of the bond proceeds within three years of the issue date of the bond. Consequently, only
those projects that can be ready for construction by 2012 can benefit from the bond.
At its November meeting, the Authority will not only consider approval of the Measure J
financing, but also initiate preparation of a "Bond Expenditure Plan" that will identify the
projects that will use the bond proceeds. Authority staff has circulated a draft of a Bond
Expenditure Plan and of Expenditure Plan Principles for the 2009 Bond Proceeds (see
Exhibit B). It is expected that development of the Bond Expenditure Plan will occur over the
next six months,which should allow for a careful consideration of the policy options, project
deliverability, leveraging opportunities, local priorities, etc.
Major projects that could benefit from the Measure J bond include State Route 4 East,
eBART commuter rail service, and the 4 th Bore of the Caldecott Tunnel. Measure J projects
sponsored by cities and the County could also be considered if, among various factors,
they can spend the bond proceeds in the required time frame(by 2012). County-sponsored
projects eligible for Measure J funds include:
• Vasco Road improvements (East County Corridor category);
• Byron Highway improvements (East County Corridor category);
• State Route 4 improvements - east of Brentwood to the County line (East County
Corridor category); and
• Traffic flow, safety and capacity improvements on local arterials.
County staff will be advising the Transportation Water and Infrastructure Committee on the
status of the Bond Expenditure Plan and the potential opportunities it might provide us to
address high priority transportation projects.
List of Exhibits
Exhibit A: CCTA Administration and Projects Committee Report, Financing Plan for Measure J Projects,
November 2005. (Does not include its attachment.)
Exhibit B: Memorandum to RTPC's from Bob McCleary regarding Status of 2009 Measure J Bond Issue,
November 1,2005
EXHIBIT A
CCTA —Administration and Projects Committee November 3, 2005
Subject Financing Plan for Measure J Projects: Selection of Swap
Counterparties and Bond Insurers, Revision to Debt Policy
(Resolution#OS-08-A), Initial Draft of Authorizing Resolution.
Summary of Issues In order to accelerate Measure J projects, and to lock-in the currently low
long-term bonding rates, in September the Authority approved various
actions related to a variable to fixed(synthetic)rate financing. Last month,
elements of the financing option were reviewed in detail, including risks,
risk management,and estimates of the costs and benefits (under different
interest rate scenarios)of pursuing the selected option as compared to other
alternatives.
This month,the Authority is scheduled to make the final decisions regarding
the Swap,including a commitment to issue bonds on September 1, 2009.
At the APC meeting, a recommendation will be presented regarding:
A) Selection of the Swap Counterparties(financial partners).
B) Selection of the Bond Insurer.
C) Amendment of the Authority's Debt Policy.
D) Size of the Swap.
E) Draft Authorizing Resolution.
For the Authority Meeting on November 16`x,the final documents will be
presented for review and approval. Official pricing is scheduled for
November 22,2005,with final closing and settlement on December 6,2005.
Recommendations A) Final staff recommendation regarding the selection of the Swap
Counterparties will be sent separately prior to the APC meeting.
B) Selection of AMBAC as Bond and Swap Insurer is recommended.
C) Amendment of the Debt Policy(Resolution#05-08-A,Rev.) is
recommended to reflect the nature of the potential agreements and to
increase Authority Board discretion.
D) The size of the Swap is recommended to be$400 million as per
prior Authority comments.
E) The draft Authorizing Resolution is presented for review.
Financial Implications As described below.
Options As described below.
Attachments A. Authort Policy, Resolution#OS-08-A, Revised
B. Draft A orizing Resolution,#05-09-A (to be mailed separately)
C. Initi xp diture Plan "Or INGL.VDEp
Changes from
Committee
\4SharrMmy documents\4-APC Packets\2005\1 1-3-05\09-SWAP status BL.doc
CCTA —Administration and Projects Committee November 3, 2005
an option explicitly tailored to the perceived goals of the Authority by offering an option for additional
funding with delayed debt service.
Authority staff has met with our Financial Advisor, our Swap Advisor,and our Bond Counsel,and has
consulted with Authority Counsel, in reviewing the Swap Counterparty bids. With respect to the terms
and conditions at variance, a position has been developed that staff and our advisors believe would be in
the Authority's best interest. The response to the Authority's position on those terms and conditions at
variance is due back from the prospective Swap Counterparties on Friday, October 28h. Concurrently, an
evaluation is being prepared of impacts of proceeding with the Citibank proposal.
A final staff recommendation on the selection of the Swap Counterparties will be developed on Monday
October 31st, and distributed in an e-mail and mailing as an addendum to this APC packet. The
Authority's Financial Advisor will also be present at the November APC meeting to review the Swap
Counterparty recommendation.
B) Selection of the Bond Insurer
The recommendation for the selection of the bond insurer is more straightforward. Insurance bids were
received from AMBAC Assurance Corporation,Financial Security Assurance (FSA),MBIA Insurance
Corporation,XL Capital Assurance,and(after the bid due date)from Financial Guaranty Insurance
Company(FGIC). As can be seen from the following table,AMBAC has the lowest costs, lowest upfront
fees,and includes the appropriate coverage.
Summary of Bids from Qualified Insurance Providers
AMBAC FSA MBIA XL FGIC
Total Insurance Premium(Dollars)
Bond and Swap Insurance $1,572,053 $19816,856 $21168,349 $490369686 $1,946,094
Termination Insurance included 175,000 100,000 3299000 included
Reserve Surety Bond 452.306 339.230 not provided 316.614 452,306
Total Premium(Dollars) $29024,359 $2,3310086 $2,268,349 $4,682,300 $2,3981400
Total Amount due Upfront $1,012,180 $1,059,287 $2,268,349 $2,0709320 $2,398,400
Termination Insurance Coverage
Forward Period Yes Yes Yes Yes Yes
Effective Date to Final Maturity Yes Yes Yes Yes Yes
Event of Non-Issuance Yes No Yes Yes No
Data Source: PFM,Authority's Financial Advisors
In addition,AMBAC would provide the most favorable terms and conditions, an uncapped forward
period swap termination insurance,has agreed that the Authority may secure the second required rating
subsequent to the swap agreement(but prior to the 2009 bond issue), and would accept favorable reserve
requirement provisions(each of which are necessary for some candidate Swap Counterparties). Staff
recommends approval to enter into final negotiations with AMBAC, and to authorize staff to enter into
the necessary agreements with AMBAC at the November 16`h meeting.
\1Sharri2\my documents\4-APC Packets12005V 1-3-05\09-SWAP status BL.doc
CCTA —Administration and Projects Committee _ November 3, 2005
C) Amendment of the Debt Policy (Resolution#05-08-A)
Our Bond Counsel and Swap Advisor have recommended a number of technical corrections to the
Authority's Debt Policy adopted at the September 29,2005 meeting. The changes are marked in red-line
strikeout in Attachment A. In general, the changes are technical clarifications, or give the Authority more
flexibility,or make the language conform more precisely to certain legal requirements.
Our Swap Advisor and Bond Counsel have also suggested some changes that are called out given APC
and Authority member comments. For example, on page 9,under Qualified Counterparties, the credit
standards for our prospective banking partners are specified. A clause is added that more restrictive
ratings standards may be approved by the Authority Board. This was in fact the case for the Swap
Counterparty RFQ,where the ratings threshold is higher than stated in the policy at the request of some
Board members. Also added is proposed language that"If the ratings were to be downgraded after the
execution of the swap,the Authority may choose to terminate the swap,or may continue with the
agreement based on business and economic considerations." In other words,while the Authority may
always terminate the swap if creditworthiness of the swap counterparty becomes a concern(or for any
other reason for that matter),the new clause would allow the Authority to continue with the agreement,
and not automatically terminate the agreement if it was not in the best interest of the Authority under the
circumstances at that time. Also,our Swap Advisor has suggested that the Maximum Collateralized
Exposure Column on page I I is redundant, and could be misinterpreted. This first column has been
deleted on his recommendation.
The glossary of the Debt Policy has been expanded to include additional terms related to swap agreements
- (using definitions from publications by Orrick,Herrington& Sutcliffe,LLP).
Staff recommends approval of the amended Authority Debt Policy,Resolution #05-08-A, Revised.
D) Size of the Bond Issue and the Swap
At the October Authority meeting,staff was directed to distribute the draft expenditure plan for the 2009
Bonds,, reviewed at the meeting,to the RTPCs for their review and comment. This has been done, and
was attached to a draft proposal for an overall strategic financing plan for all Measure J projects that can
be refined over the next four to six months.
Staff notes that the draft expenditure plan was developed to provide assurances to potential Swap
Counterparties and Bond Insurers that the Measure J projects are sufficiently developed at this point in
time for the issuance of bonds in September 2009. To minimize any reservations that might arise from
debating the plan at this time and reassure our business partners that the Authority has a sound approach
to use the bond proceeds, that Plan needs to be considered the Initial Expenditure Plan (it is attached for
reference).However, the Authority is not committing now to only those particular projects and their
funding levels shown in the Initial Expenditure Plan. Based on input from RTPCs and project sponsors,
for example,until 2009 projects may move between the tiers in the expenditure plan as a result of
accelerated readiness or other criteria, or other changes may be made, in order to maximize timely
application of the bond proceeds to Measure projects. Prior to the issuance of bonds in 2009, the
expenditure plan will need to be finalized. At that time, the Authority will be required to certify that 85%
of the bonds proceeds will be spent(not just obligated)within 3 years of the issue date of the bonds.
( At the October Authority meeting,a bond size and swap agreement size of$350 million was discussed.
�'- This is the level contained in the RFQs for the Swap Counterparties and Bond Insurers. The RFQs also
retained the flexibility that the size of the bond and the swap could be increased to $400 million.
\\Sharri2\my documents\4-APC Packets12005\I 1-3-05\09-SWAP status BL.doc
OCTA —Adminisb ation and Projects Committee November 3, 2005
Given that the Swap Counterparties and Bond Insurers have reviewed the draft expenditure plan, if the
Authority were to increase the size of the 2009 Bond and the Swap to$400 million, the next projects in
tier 2 and tier 3 that meet the regional equity constraint would be moved up to the anticipated projects in
tier 1. Again,the Initial Expenditure Plan can be adjusted until the bonds are issued in 2009.
The main advantage of a$400 million bond and swap amount is that a larger set of projects can be
included in the arrangement. If the Authority expects rates to increase dramatically by 2009, the potential
savings are proportionately greater. Ata 3.5% swap rate and a 5.5%historic fixed interest bond rate in
2009, the anticipated savings could be approximately$10 to $15 million higher with an additional $50
million locked in at the lower rate. More projects could be done sooner. In tier 3 alone, an additional
$214 million of potentially ready projects are described.
Conversely, if the bond rate were to be 3.5%in 2009,the Authority would have lost an additional $2 to
$5 million by increasing the scale of the present agreement by$50 million. Other risks(termination
payments for example)would also be proportionately greater. In addition, if the Authority were not able
to issue bonds in 2009,depending on market conditions,the amount of the termination payment due
could be larger. Also, all of the Authority debt that is affordable would be locked up in the swap. Other
potential disadvantages relate to the expenditure plan. For example, there may be less ability for project
delays, and there may be less ability to meet strict subregional equity at a higher bond amount if delays
occur.
Staff believes that the downside risks are limited, and$400 million in bond proceeds can be expended
between September 1, 2009 and August 31,2012; and therefore recommends proceeding at the$400
million level.
E)' Authorizine Resolution
In the Authorizing Resolution (Attachment B)are a number of standard provisions. These include the
authorization to enter into an International Swap and Derivatives Association (ISDA)agreement ,the
statements of the termination provisions, compliance with law and tax code, continuing disclosure, and
certain administrative statements.
In the Authorizing Resolution, authority is delegated to Authority Officers and the Executive Director and
the Chief Financial Officer to execute the various agreements required in connection with the Swap. The
resolution will include a section specifically stating that the"Chair,Vice Chair, Executive Director and
Chief Financial Officer,and other appropriate officers of the Authority are hereby authorized and
directed,jointly and severally...to execute and deliver any and all documents, certificates, and
representations, and to do any and all things and to take any and all actions which may be necessary or
advisable, in their discretion,to effectuate the actions which the Authority has approved in this Resolution
and to carry out, consummate, and perform the duties of the Authority set forth in this agreement ... and
all other documents executed in connection with the actions herein authorized."
This delegated authority would extend to the acceptance of the synthetic fixed rate. The pricing is
scheduled for November 22,2005, several days after the November Authority meeting. At the October
Authority meeting it was noted that the rates had increased from 3.54%when the process began to 3.64%
and that inflationary pressures were expected to increase rates further. At the November 16`h Authority
meeting, staff will report on the rate at that time, and the projections for the coming week. Any issues to
be resolved as of the November Authority meeting will also be reported at that time.
The draft Authorizing Resolution is presented to the APC for review and approval.
\\,Sharri2\my documents\4-APC Packets\2005\I 1-3-05\09-SWAP status BL.doc
CCTA —Administration and Projects Committee November 3, 2005
Summary
Staff requests that at the APC meeting,the APC forward a recommendation to the Authority regarding:
A) Selection of the Swap Counterparties
B) Selection of the Bond Insurer
C) Amendment of the Debt Policy
D) Size of the Swap and 2009 Bond
E) Draft Authorizing Resolution.
A final set of all Swap documents will be presented to the November Authority meeting for review and
approval.
i
r"
\1Sharri2lmy documents\4-APC Packcts\2005U 1-3-05\09-SWAP status BL.doc
EXHIBIT B
MEMORANDUM
TO: RTPCs,Dale Dennis (ECCRFFA), Kathleen Kelly (BART)
CC: Authority Members& Alternates
FROM: Bob McCleary,Executive Director
DATE: 1 November 2005
RE: Status of 2009 Measure J Bond Issue and Timing for Consideration of Draft Principles and
Draft Bond Expenditure Plan—No Action Needed at this Time.
Our Memorandum dated October..).1 4)?009 regarding the?009 Measure J Bond Issue contemplated
review and discussions of the"Initial"Bond Expenditure Plan. We assembled that Plan to demonstrate to
potential swap counterparties and swap insurers that the Authority would have the need for and
opportunity to expend bond proceeds on our sales tax projects. The"Final"Plan for the 2009 issue does
not need to be adopted until immediately prior to our actual sale of bonds in September,2009.
In the interests of stabilizing the information supporting the proposed Forward Interest Rate Swap
Agreement,our Bond Counsel and our Swap Advisor have advised us that no further action should be
taken at this time on the Initial Plan. Consequently,we wanted you to know that review and discussion of
prospective policies and priorities for the"Final"Plan can be deferred to start in early 2006,when we can
devote additional time and effort to their consideration.�ecifically, staff will propose to the Authority
that a Strategic Plan for Measure J projects,taking fullrivanta�a_ae and recognition of the final Agreement,
S'e Eve�loped over approximately the nem our to six months. That should allow a full vetting of policy
options,consideration of the financial parameters resulting from the swalp transaction if consummated,
and more extensive discussions regar ing project deliverability, local priorities, etc.
Background on the Initial Plan
As the process got underway, staff was advised by our Swap Advisor that we needed a list of projects as
an expenditure plan for bond proceeds in order to solicit swap counterparties and swap insurers.
Accordingly,a list of candidate capital projects in each sub-region that could expend bond proceeds in the
period between September 1, 2009—August 31,2012 was developed based on current project delivery
status,current under-funded commitments,and Authority priorities. To address a broad spectrum in this
Initial Plan,potential candidates fell into two lists:
1. Constrained List of Protects: A list of projects that matched the anticipated levels of funding
($350 and$400 million)was identified,constrained by sub-regional equity shares(the percent of
total Measure J major capital funds committed in each sub-area). In the Initial Plan,both East
County and West County project lists meet their estimated shares. Since the Caldecott Tunnel is
a project that cannot be staged, under both bond sizes Southwest County would receive higher
than its equitable share in order to fully fund the Measure J portion of the tunnel. If a project
were not ready for delivery by 2009,the assumption is that another project from the sub-region
could replace it if ready; if not,then one from another sub-area.
2. Unconstrained Project List: Since bond proceeds must be SS percent expended between
September 1,2009 and August 31,2.012,we proposed that the Plan include a list of additional
Measure J capital projects that the Authority could advance in place of projects on the constrained
list that encounter funding shortfalls or schedule delays.
If you have any questions, please call me at 925.256.4724.
Measure J Implementation
Draft Expenditure Plan Principles for 2009 Bond Proceeds
The following are proposed draft principles to guide the preparation of the"final"Expenditure Plan for
?009 Bond Proceeds,to be adopted prior to the sale of$350 to$400 million in sales tai revenue bonds on
July 1,2009.
❖ Sub-Area Equity. Bond proceeds are targeted to be assigned to projects in each sub-area of the
county proportionately to the percentage of major capital projects in the Measure J program
within each area: Central, 26.2%;East,53.4%; Southwest, 12.7%; and West,7.7%.
❖ Debt Service Limitations. The percentage of annual revenues devoted to debt service in any
given year should not exceed the percentage of major capital projects in the overall program—
approximately 34.5%. (Unless sub-regional arterials and/or other capital or flexible programs are
added to the mix of projects eligible for bonding to generate more capacity.)
❖ Project Deliverab . The Authority must certify that it expects at least 85%of Bond Proceeds
to be expended within three years of the date of issuance of the bonds. Unspent proceeds must be
yield-restricted. Consequently,the degree to which a project is likely to be delivered—its
progress to date and upcoming activities slated between now and 2009—will be fundamental
factors in selecting projects for the final plan.
❖ Benefits and Visibility of Projects. Within the above considerations, emphasis should be given to
high visibility projects with significant benefits to the voters and users of the transportation
system. Examples of important benefits include reducing congestion,improving safety,
leveraging other funds,completing critical gaps,etc.
❖ Substitute Projects. Notwithstanding sub-area equity,the Authority reserves the option to include
a list of substitute projects and/or funding strategies as part of the Expenditure Plan that could
receive bond proceeds in the event that the primary identified projects experience delays or
financing shortfalls that make construction less feasible within the three-year window in which
bond proceeds must be spent—mid-2009 through mid-2012.
❖ Costs of Financing. Advancing projects through bond financing has an associated cost,which is
determined by the fixed costs of issuance and,to a greater degree,the difference between the
average bond interest rate and the rate of escalation assumed for project costs. To some degree,
each project that receives funding above its pay-as-you go share during the program benefits from
bond proceeds. Bond interest costs will vary from one issue to another,and spreading the costs
"equitably"across projects from individual issues is challenging. Consequently,all projects will
share equally in absorbing the net cost of financing.
❖
CoglWggRa Against Revenue Shortfall. The existing Measure C program is projected to
produce approximately 15 percent less revenues,in 1988 dollars,than originally projected. Three
mechanisms will be employed to address such a potential shortfall during the Measure J period:
o Cap on Project Allocations. Based on current approximate estimates of a seven(7)
percent cost of financing,and uncertainty of revenues,no project can expect to receive
more than a 90 percent allocation against its total Measure J Expenditure Plan level—
unless there are other offsetting adjustments;
o Future Cav Reductions. If revenues prove insufficient,the Measure J caps on future
project expenditures will be further reduced to address such shortfall. In each sub-area,a
total sub-area reduction would be calculated as a proportionate share of the aggregate
shortfall,and distributed against the remaining projects—and opening programs if
necessary—within that sub-area; and
o Outside Funding would be sought to achieve the vision approved by the voters—through
the State Transportation Improvement Program (STIP),current and future regional
sources, and State and Federal matching and discretionary funds.
❖
2008'93ridge"Financing. In order to advance major work and effectively provide four years for
application of bond proceeds,the Authority will strongly consider the use of Commercial Paper
in 2008 to"jump start"the Measure J program.
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e0002*
TO: Board of Supervisors
ia,
Contra
FROM: Transportation, Water and Infrastructure Committee . � f- '•
Costa
(Supervisor Mary Nejedly Piepho, Chair)
County
DATE: November 14, 2005
SUBJECT: Plan for Accelerating Projects in the Measure J Transportation Sales Tax
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
,RECOMMENDATIONS
ACCEPT report.
FISCAL IMPACT
None to the General Fund. The Bond Expenditure Plan will identify high priority
transportation projects that could benefit from bond proceeds issued by the Contra Costa
Transportation Authority (Authority) and backed by Measure J sales tax revenue. Some
County-sponsored projects could be included in the Plan.
BACKGROUND/REASONS FOR RECOMMENDATIONS
On November 2, 70.5% of Contra Costa voters approved Measure J which continues the
county's half-cent transportation sales tax for 25 more years. From 2009 to 2034,the sales
tax extension will generate $2 billion for various transportation projects and programs.
Approximately 40% of these revenues will be dedicated to major capital projects and
upgrades to local arterials. Since passage of Measure J, the Authority has been
investigating opportunities to accelerate the major capital projects it funds. The Authority
used bonding in the Measure C-88 sales tax program to accelerate construction of projects
on State Route 4, the Richmond Parkway and Bay Area Rapid Transit (BART) to North
Concord and Pittsburg/Bay Point. Through bonding of its sales tax revenue at favorable
interest rates, the Authority can provide transportation benefits to taxpayers sooner, and
avoid inflationary pressures that could be experienced if projects are constructed later on a
pay-as-you-go basis.
CONTINUED ON ATTACHMEN X.YES
RECOMMENDATION OF UN MINISTRATOR X RECOMMENDATION OF BOARD COMMITTEE
APPROVE THER
SIGNATURESNe'ediry
4\s, I I rry yPie ho iupeisor Federal D. Glover
ACTION OF BOARD ON � APPROVED AS RECOMMENDED OTHER
1W W
COTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
. UNANIMOUS (ABSENT 1.1 Oh!foe AND CORRECT COPY OF AN ACTION TAKEN
AND ENTERED ON THE MINUTES OF THE
YES: NOES: BOARD OF SUPERVISORS ON THE DATE
BSENT: ABSTAIN: SHOWN.
:)ntact: Steven Goetz (925/335=1240) 17-�I'm
I's Community Development Department (CDD) ATTESTED
Public Works Department—Trans. Eng. JOHN SW ETEN, CLERK OF
THE BOARD OF SUPERVISORS
AND COUNTY ADMINISTRATOR
C
gy '--DEPUTY
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-ansportation\TWnpacket Information\2005\NovemberMtem 7 measureldoc
PLAN FOR ACCELERATING PROJECTS IN THE MEAJURE J TRANSPORTATION SALES TAX
November 14, 2005
Page 2
BACKGROUND/REASONS FOR RECOMMENDATIONS (Continued
Since September the Authority has made a series of decisions that will lead to issuing a
bond in 2009 in order to accelerate Measure J projects and to lock-in the currently low
long-term bonding rates. The Authority's Administration and Projects Committee is
recommending that the Authority proceed with a bond that will generate $400 million for
Measure J projects and authorize approval of various agreements related to this bond
issuance (see Exhibit A). If future interest rates become unfavorable by 2009, these
agreements will allow the Authority to terminate the issuance, but not without making a
termination payment which could be over$25 million.
expected Under Measure J,the cost of financing is to be deducted from project allocations.
Under the current financing proposal, the financing costs would be about 7% of project
funds available in Measure J.The financing proposal requires that the Authority spend 85%
of the bond proceeds within three years of the issue date of the bond. Consequently, only
those projects that can be ready for construction by 2012 can benefit from the bond.
At its November meeting, the Authority will not only consider approval of the Measure J
financing, but also initiate preparation of a "Bond Expenditure Plan" that will identify the
projects that will use the bond proceeds. Authority staff has circulated a draft of a Bond
Expenditure Plan and of Expenditure Plan Principles for the 2009 Bond Proceeds (see
Exhibit B). It is expected that development of the Bond Expenditure Plan will occur over the
next six months,which should allow for a careful consideration of the policy options, project
deliverability, leveraging opportunities, local priorities, etc.
Major projects that could benefit from the Measure J bond include State Route 4 East,
eBART commuter rail service, and the 4th Bore of the Caldecott Tunnel, Measure J projects
sponsored by cities and the County could also be considered if, among various factors,
they can spend the bond proceeds in the required time frame(by 2012). County-sponsored
projects eligible for Measure J funds include:
• Vasco Road improvements (East County Corridor category);
• Byron Highway improvements (East County Corridor category);
• State Route 4 improvements - east of Brentwood to the County line (East County
Corridor category); and
• Traffic flow, safety and capacity improvements on local arterials.
County staff will be advising the Transportation Water and Infrastructure Committee on the
status of the Bond Expenditure Plan and the potential opportunities it might provide us to
address high priority transportation projects.
List of Exhibits
Exhibit A: CCTA Administration and Projects Committee Report, Financing Plan for Measure J Projects,
November 2005. (Does not include its attachment.)
Exhibit B: Memorandum to RTPCs from Bob McCleary regarding Status of 2009 Measure J Bond Issue,
November 1, 2005