Fly in the SFMTA Soup?

San Francisco’s voters are being asked to approval two transportation ballot measures in 2022, one on November 8th and the other……. on June 7th.

The November 8th Measure, sponsored by the San Francisco County Transportation Authority (CTA), would extend the existing ½ cent Prop K transportation sales tax for another 30 years and during that time raise a projected $2.6 billion. Pursuant to an extensive outreach program and much hard work on the part of the CTA’s Community Advisory Committee, the measure was thoroughly vetted and appears to be well thought out. It’s Expenditure Plan addresses SF’s outstanding transportation problems and furthers its transit-first policy in a well-balanced manner.

The June 7th measure (Measure A), sponsored by the San Francisco Municipal Transportation Agency (MTA), would reportedly raise an additional $400 million by selling General Obligation Bonds. Measure A, developed by the MTA staff, has received relatively little public exposure but it too cites long standing transportation problems in need of attention.

Read more here

At this point there is a need to mention the Central Subway. The Central Subway has turned out to be an unmitigated disaster for San Francisco. Originally sold on the basis of grossly overstated ridership projections and grossly understated future Muni operating costs, it is now 41 months behind schedule and saddled with a budget overrun that was recently put at $353 million, and rising. Pursuant to an Agreement signed in October, 2012 between the MTA and the Federal Transportation Administration, Central Subway budgetary overruns do not qualify for federal funding.

MTA spokespeople have given assurances that no Prop A money would be diverted to pay for the Central Subway project’s overrun, but have refused to discuss or even speculate on how this $353 + million debt might be paid for. The SF City Controller has recently stated that thanks to healthy property tax revenues last year, coupled with State and federal COVID allocations and reduced Muni service, the MTA currently enjoys a significant financial surplus. Could it be that if the $400 million bond measure (being promoted during a time of fast rising bond interest rates) gets past the voters, the proceeds will be used to free up other City and County resources to pay off the debt? In other words could there be a connection between the sudden interest in floating GO bonds and the huge outstanding Central Subway debt?

In any event the $353 million plus debt is real and not going away. It is past time for the MTA to clearly explain how and when this debt will be paid.

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