Wednesday, October 31, 2012

Real cost to city of the Central Subway: $123 million or $365 million?

October 22, 2012

Mr. Chan:

According to a recent SF Examiner editorial, the City of San Francisco has contributed $242 million so far to the Central Subway project. Is that correct? Do you have a current link that shows how much the city has contributed to the project?
Rob Anderson

October 25, 2012

Dear Mr. Anderson,

Thank you for your question about the recent SF Examiner editorial referenced in your October 22 email. The October 14 editorial states in the 2nd to last paragraph that the SFMTAhas already invested $242 million into the[Central Subway] Project.” Your inquiry then states, “According to a recent SF Examiner editorial, the City of San Francisco has contributed $242 million so far to the Central Subway project. Is that correct?

The answer to your question is that your conclusion from the editorial is not correct for several reasons. First, the term “invested,” as used in the editorial, means that the Central Subway Project to date has already “expended” $242 million. The total project expenditure level from 2003 to this August 2012 is $242 million. The expenditure program over this time period completed extensive preliminary engineering and environmental clearance at the state and federal level; also, completion of all final design, architecture and engineering; completion of all real estate acquisition; completion of relocation of small businesses, and started initial construction of the project. In addition, plans have advanced purchasing new LRVs for use on the Central Subway and Muni city wide in 2019.

Second, your inference from the editorial text that the City has “contributed” such funds is not quite accurate. The City and County of San Francisco (CCSF) has not “contributed” funds to the Central Subway Project that would otherwise be used by the City for on-going city-wide operating funds or capital funds.

Over nearly ten years, the Project has received more than twenty separate grants from discrete funding applications to the federal, state, regional and local governments. Approximately one third of the funds that have been received from the total approved grants to date come from the federal government, one third from the state and one third from regional-local sources.

The source of the local funds is the San Francisco County Transportation Authority (SFCTA) acting under the County Board of Supervisors. As of September 2012, the SFCTA has allocated 5 separate incremental grants averaging $25 million each. Each of these grants has been awarded after formal review, agonized public meetings and public input as part of the Board of Supervisors’ subcommittee structure. Each has been approved with conditions and oversight requirements.

To date the five separate grants from the SFCTA total $123 million. These funds are made possible from local sales tax revenues collected by the SFCTA. These sales tax revenues are dedicated to transportation improvements based on voter approval. The Central Subway allocation of $123 million was approved by SF voters in 2003 as part of approving the SFCTA’s Prop. K sales tax San Francisco long term transportation expenditure plan. The SFCTA expenditure plan with the Central Subway was approved by 75% of the voters.

Going forward, the majority of the future funds to be received will be federal and state sources with the total local share expected to remain at $123 million. You also asked, “Do you have a current link that shows how much the city has contributed to the project?” The Central Subway public web link that shows the information presented above including the current local share of $123 million is provided here.

Thank you for your interest in Central Subway Project. We appreciate your feedback. Please let me know if you have any additional questions.

Best regards

Charles Chan

Central Subway
821 Howard Street
San Francisco, CA 94103

October 25, 2012

Mr. Chan:
Thanks for the thoughtful, detailed response to my question.

What I still don't understand is the distinction between the "expended" $242 million between 2003 and 2012 and the "local share" of $123 million. Add the two numbers up and you get $365 million! Are these sums overlapping and inextricable from each other, or are they distinct expenditures and/or expected future expenditures?

Any additional light you can shed on this would be much appreciated.

I'm familiar with the link you provided showing the $123 million in the context of the state and federal money, which is why I was surprised to see the $242 million in the Examiner editorial.

Rob Anderson