Tuesday, November 14, 2006

Open Letter to the SMART Board: Funding Options

For some of us, it was not all good news following the November 7th, 2006 election.

Case in point: The sales tax measure to fund construction and operation of the Sonoma Marin Area Rail Transit (SMART) commuter rail service failed, attaining only 65% of the vote, not the 66.6% necessary to achieve passage. This measure would have funded the construction and operation of a new commuter rail service from Cloverdale, at the northern edge of Sonoma County (just over the hill from Mendocino County) all the way to the edge of the Larkspur Ferry Terminal in Marin County, which would put passengers within a quick high-speed ferry ride of downtown San Francisco.

The measure also would have funded the construction of a (mostly) Class 1 (off-street) bicycle facility, parallel to the entire alignment.

Immediately following news of the measure's close defeat, SMART officials vowed to place a new tax measure on the November 2008 ballot, and spend the next two years making a better case for it.

Since I definitely feel that SMART is something that really would be to the benefit of the entire Bay Area (and not only because I'd want to ride my bike on the adjacent trail, but because I used to work in Petaluma and do understand that an alternative is needed to the Hwy 101 corridor.), I've offered the following brainstorm as to ways that SMART might be able to fund the construction and operation of its service without having to resort to another vote on a sales tax measure.

Comment that hopefully will be relayed to tomorrow's (Wed., Nov. 14, 2006) board meeting:

Has SMART really considered all funding options thoroughly? Is the sales tax the only way to raise the necessary local match funds for this project? Or, are there other alternatives that should be reviewed at this time?

Other possible funding alternatives:

* Two county bond measure, levied by the SMART district. Bond measure might only need to receive a 50% +1 vote to pass.
- Could bond against general funds of Marin & Sonoma Counties
- Could bond against a combination of future passenger fares, future freight service charges and future TIF (Tax Increment Financing) assessments around the individual stations along the line.

* Use Tax Increment Financing in other creative ways to leverage the potential increase in real estate value due to the startup of transit service and the ensuing transit-oriented development around the stations.

* Aggressively pursue transit-oriented developments around each station. Levy transit surcharges on all such developments, front-load the development timeline such that most developments come online around the same time as the inauguration of train service, and thus have the most capital available to purchase rolling stock, rehabilitate tracks & construct station platforms.

* Create an Employer Payroll Tax district for the two-county area, and bond off of the proceeds to raise construction capital. Ongoing payroll tax receipts could cover operating deficit.

* Pursue other private financing options that involve borrowing money from banks/Wall Street and paying it back with a combination of TIF and transit development fees on new construction.

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