Project Funding Update
With the February utility relocation for the future Moscone Station and Portal Tunnel groundbreaking for the Central Subway Project and the significant economic challenges across the U.S., there has been new interest and questions regarding the funding and progress of this project. Along with many other major cities, the Central Subway is for the improvement of light rail service and overall quality of life. We have heard questions that ask, “How can San Francisco do this project?” It is often assumed that the design and construction costs are competing or using the scarce funds from SF Municipal Transportation Agency (SFMTA) daily transit service. We want to respond to this misunderstanding and to provide background information on the funding basis of the Central Subway Project.
Utility Relocation
The Federal Transit Administration (FTA) granted the Central Subway approval to enter into Final Design (FD) on January 7, 2010. This approval was a major accomplishment for the Project and gives SFMTA pre-award authority to incur costs for upcoming FD activities, demolition and other non construction activities. The next step for the Central Subway Project is to secure Full Funding Grant Agreement (FFGA). The FFGA is a multi-year, contractual agreement that is made between FTA and SFMTA. The FFGA provides the funds that are utilized for construction of the Project. When this agreement is made, the SFMTA formally establishes the maximum level of federal financial assistance and the terms and conditions of federal participation. This commitment to the FFGA requires the SFMTA to deliver the contracted project on schedule, within budget, and in compliance with all applicable federal requirements.
Please be assured that the Central Subway project is and will continue to be under significant financial scrutiny each year and we must submit a report to be evaluated under the Federal New Starts Review program. Under this program all aspects of the project are analyzed by the FTA including the benefit-to-cost ratios, ridership, technical approach and financial capacity. As you can imagine, the process of acquiring federal funding for a transportation project of this scale is rigorous.
All New Starts funds allocated for this project cannot be redirected to other transportation projects or operations. The New Starts financial assistance only applies to the Central Subway Project due to the submittal of the New Starts report and the project is subject to the availability of appropriated funds and our continued performance under the terms and conditions of the FFGA. If funding is redirected to other operations within SFMTA, all the secured federal funding will be gone.
The SFMTA continues to work with local, state and regional partners to secure non-federal funding to work toward a Full Funding Grant Agreement with the Federal Transit Administration.
The Central Subway will extend light rail service with a surface stop on 4th Street near Brannan Street and subway service with stations at the Moscone Center, Union Square and Chinatown neighborhoods. It will operate as an extension of the T Third light rail line which opened for full revenue service in April 2007. The two-phase Third Street Light Rail Project will unite the City’s established civic, business, retail and cultural centers with the diverse communities along the light rail line and encourage economic revitalization along the entire corridor.
