Agenda Item # 25
||August 5, 2002
||Committee Meeting Date:
||August 15, 2002
||Board Meeting Date:
||September 5, 2002
||Administration and Finance Committee
| ||Santa Clara Valley Transportation Authority|
| ||Board of Directors|
| || |
|THROUGH:||Peter M. Cipolla|
| ||General Manager|
| || |
|FROM:||Scott D. Buhrer|
| ||Chief Financial Officer|
| || |
||Revenue Pledge & Assignment Agreement with the San Francisco Bay Area Rapid Transit District
Authorize the General Manager to execute a Transportation Development Act (TDA) Revenue Pledge and Assignment Agreement with the San Francisco Bay Area Rapid Transit District (BART) relating to the BART Extension from Warm Springs in Fremont to Downtown San Jose/Santa Clara (SVRT Project).
VTA and BART executed a Comprehensive Agreement effective as of November 19, 2001 that includes a requirement that ongoing operating, maintenance and capital costs, caused by operation of the SVRT Project, are the financial responsibility of VTA. The financial responsibility will be met through an annual subsidy amount of $48 million (FY02$), which is adjusted quarterly from December 31, 2001 at a rate equal to the growth rate of all taxable sales in Santa Clara County for the most recent quarter for which taxable sales data is available versus the same quarter of the prior year.
The Comprehensive Agreement also requires VTA to dedicate to BART a revenue stream sufficient to cover the subsidy; and that if VTA does not fulfill its obligations to provide a dedicated subsidy source before January 1, 2009, the automatic dedication of TDA Funds shall be implemented immediately and automatically without any further action by VTAs Board of Directors.
Pursuant to the Comprehensive Agreement, BART and VTA staff have jointly developed a TDA Revenue Pledge and Assignment Agreement (Pledge Agreement), which places a first lien on VTAs TDA Funds in an amount equal to the adjusted subsidy amount and describes the process by which the lien will be administered.
BART will notify VTA and MTC, in writing at least 30 days in advance of the commencement of operation of the SVRT Project, of the amount of subsidy that will then become due. Each quarter, BART will calculate the appropriate adjustment to the subsidy and provide notice to VTA and MTC indicating the appropriate amount for the payment of TDA Funds to BART for the succeeding quarterly period. In the event MTC changes its current practices of making quarterly distributions of TDA Funds to monthly distributions, the calculation of the subsidy amounts and disbursement of TDA Funds to BART will also change to monthly.
The Pledge Agreement also adds a provision that if BART service commences on a segment of the SVRT Project prior to completion of the entire SVRT Project, the subsidy amount will be a proportionate amount.
The Pledge Agreement is effective upon execution and will remain in effect until terminated by written agreement. If VTA provides to BART by the earlier of January 1, 2009 or the commencement of revenue service on the SVRT Project a revenue stream dedicated to BART in payment of the subsidy other than the TDA Funds pledged under the Pledge Agreement, BART will acknowledge in writing that this Pledge Agreement is terminated.
There are no practical alternatives as this Pledge Agreement is required under the provisions of the Comprehensive Agreement in connection with the SVRT Project between the VTA and BART that was executed in November 2001.
This agreement creates a first lien on VTA TDA Funds and reduces annual TDA Revenues by the annual amount of the subsidy, which is $48 million (FY02$).
|Prepared by: ||Kimberly Koenig
Click here to return to the Board Agenda Index