9/4/25 SCCRTC P7a - Measure D Active Transportation Expenditures and Financing

Options Summary

Overview

• Measure D active transportation projects are progressing faster than pay-as-you-go funding allows, necessitating new financing options.
• Over $150 million in state and federal funds have been leveraged for the coastal rail trail.
• Recent project completions include segment 7 to the Santa Cruz Wharf and new funding for segment 12.
• Cost estimates have increased due to material and escalation costs, creating a significant funding gap.
• Three financing scenarios were presented, with borrowing needs ranging from $12.5 million to $55 million.
• The commission will revisit recommendations and programming in November.

Project Delivery Pace and Funding Needs for Coastal Rail Trail

• Provided update on coastal rail trail project funding needs.
• Measure D active transportation funds enable earlier project delivery but require financing options.
• Local Measure D funds leveraged over $150 million in state and federal funds for the 32-mile trail.
• Current discussion is informational; further recommendations expected in November.

Project Updates, Segment Status, and Recent Funding Awards

• RTC refines project cost estimates with sponsors for next five-year plan update.
• Coastal Rail Trail aims for full public access; segment 7 completed to Santa Cruz Wharf.
• SB1 grant awarded for Highway 1 State Park, Freedom Auxiliary Lane, and segment 12; construction funded.
• Segments 8-9 led by City of Santa Cruz; segments 10-11 led by County of Santa Cruz; segment 5 under construction, completion expected summer 2026.
• Segments 17-19 received $4.8M pre-construction funding; construction funding not yet identified.

Cost Estimates, Funding Gaps, and Value Engineering

• Project cost estimates for segments 8 and 11 updated in August 2025.
• Funding gap increased due to higher material unit costs, escalation, and schedule shifts.
• Value engineering analysis achieved cost savings, but escalation offset most savings.
• Secured additional $19.5 million funding; funding gap remains.

Financing Scenarios, Borrowing Models, and Cash Flow Analysis

• Presented three funding scenarios for Measure D active transportation: current, near-term, long-term.
• Current scenario based on adopted five-year plan, updated annually and as needed.
• Near-term needs include environmental mitigation for North Coast Rail Trail Segment 5 and additional design/right-of-way funding for Santa Cruz projects.
• Long-term commitments may require construction funding for Segments 8–11; commission committed to fully fund Segments 10 and 11 in April 2024.

Summary, Next Steps, and Recommendations for Financing and Project Delivery

• Three expenditure scenarios evaluated: current (~$40M), near-term (+$10M), long-term (~$80M).
• Borrowing needs: $12.5M (current), $23M (near-term), $55M (long-term/constrained).
• All scenarios assume ongoing corridor maintenance; trail maintenance only funded through FY28-29.
• Maximum borrowing ($55M) insufficient to fully fund segments 8–11A; multi-pronged funding approach required.
• Next steps: establish legal framework for debt, refine cash flow models, prepare financing plan for commission approval.