Transit leaders approve vital agreement for BART extension

A vital agreement between the Santa Clara Valley Transportation Authority and Bay Area Rapid Transit has finally been authorized, just in time for the completion of Phase I of the Silicon Valley expansion project – the 10-mile BART extension to Milpitas and Berryessa.

The VTA Board of Directors voted unanimously Thursday to authorize VTA General Manager Nuria Fernandez to execute the BART Operations & Management agreement, defining each agency’s respective rights, responsibilities and costs.

To say it was a long time coming may be an understatement. The newly-approved plan took 3 1/2 years of negotiations, and it’s been 18 years since VTA and BART entered into the initial agreement for the expansion into Santa Clara County in Nov. 2001.

Santa Clara County Supervisor Cindy Chavez, the VTA Board’s vice chair, said the vote was a historic moment.

“It’s amazing,” Chavez told San José Spotlight. “It takes so long to make this happen, and this is going to be open with a brand new agreement in less than two months.”

Working as partners, VTA will own all Silicon Valley Rapid Transit (SVRT) facilities, while BART will acquire, operate and maintain all needed equipment for performance. The agreement states that VTA is responsible for funding 100 percent of the costs of the extension in the county, as well as fund a proportional percentage of operations and maintenance costs within the BART core system, such as new rail cars and track rehabilitation.

The main sources of revenue will come from VTA’s 2008 Measure B 1/8-cent sales tax and VTA fare revenues that will be collected by BART. VTA will also be credited for 100 percent of fares that begin or end in Santa Clara County.

According to Raj Srinath, VTA deputy general manager and CFO, VTA receives approximately $56 million each year from 2008 Measure B funds, and rider fare revenues are estimated to be around $25 million each year. Those revenues collectively total $81 million, while the extension’s operating expenditures are estimated at around $60 million annually.

Lien Amendment

With such a large project underway, BART wanted a built-in guarantee that VTA could pay. That’s where a lien came in.

In earlier drafts of the agreement, a lien – or guarantee of debt payment – was placed on state sales tax funds from the Transportation Development Act, which accounts for 21 percent of VTA’s biennial budgeted revenue.

However, the 2008 Measure B sales tax has been collecting taxpayer money since 2012 – now totaling around $376 million – and the measure was originally dedicated to solely help fund the Silicon Valley extension.

Negotiations finally led to the decision that since this saved revenue was so high, the lien on the TDA could essentially be removed. That last-minute suspension was an important aspect of the new agreement.

“Having the TDA money attached creates lack of flexibility for VTA, and this is all about making sure that we are creating a healthy environment,” Chavez said. “So the idea that we would be risking revenue that we need right now for other operations is why that was such a big deal.”

She said the VTA committee that was a part of the negotiations included herself, San Jose Councilmember Raul Peralez, San Jose Mayor Sam Liccardo and Santa Clara Councilmember Teresa O’Neill.

VTA board member and San Jose Councilmember Lan Diep said he was shocked to hear of the change.

“I thought there was no way out of (the lien), so I’m quite impressed that you were able to come to a mutual agreement,” Diep said. “Kudos, because you can’t underscore that enough.”

Community transit advocates were actively concerned, too, as they thought the lien could’ve potentially reallocated current VTA bus and light rail service funding, especially if BART underperformed.

“I’m happy that this agreement has finally been reached and that the lien will not happen,” said Eugene Bradley, Silicon Valley Transit Users founder. “It would’ve been even more devastating and likely put our bus and light rail services all the way back to levels roughly last seen in the 1970s. Thanks to the VTA board and staff for at least seeing to it that transit service is not affected by BART coming down here.”

Board Chair O’Neill also thanked the BART board and staff for being willing to move on the issue before the vote to authorize the agreement.

“I think we’re all thrilled this lien will not be impacting the existing transit services,” O’Neill said. “We’re taking our first steps here… but we can all be celebrating soon when we see the service actually beginning.”

Contact Katie Lauer at [email protected] or follow @_katielauer on Twitter.