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Committee moves interim $150M financing authority for Caltrain electrification

San Francisco Board of Supervisors Budget and Finance Committee · October 26, 2016
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Summary

Caltrain staff won committee approval to seek interim financing of up to $150 million to bridge cash‑flow timing gaps for the Peninsula Corridor Electrification Project; Caltrain named JP Morgan preferred lender and said a roughly $647 million FTA grant is expected.

The Budget & Finance Committee recommended that the Board approve interim financing capacity for the Peninsula Corridor Joint Powers Board of up to $150,000,000 outstanding at any one time to support the Caltrain Peninsula electrification project.

Michael Burns, chief officer for Caltrain’s modernization program, said the interim financing is intended to cover short-term cash‑flow needs between payments to contractors and reimbursement from seven project funding partners. Burns said the work includes infrastructure improvements and procurement of 96 electric multiple-unit trains. The financing would be a negotiated transaction; Caltrain invited multiple banks and selected JP Morgan as the preferred lender after receiving bids.

Burns told supervisors that project funding is secured from multiple sources and that the Federal Transit Administration full funding grant agreement (FFGA) is expected at roughly $647,000,000, representing about 30 percent of project cost. Caltrain said limited notices to proceed have been issued for design and that construction and manufacturing advance work will accelerate following final funding and contract notices to proceed.

Supervisor Katie Tang asked about the FFGA timeline and contingencies; Caltrain staff said they are confident the grant will be awarded and noted contingency measures including contract termination if FFGA funding does not materialize and sufficient one‑year funds to cover FY17 needs.

The committee forwarded the financing authority to the full Board with a positive recommendation.

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