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Board approves up to $200 million MTC loan to fund SFMTA operations
Summary
The San Francisco Board of Supervisors unanimously adopted a resolution authorizing the director of transportation to enter a loan agreement with the Metropolitan Transportation Commission for up to $200 million to support SFMTA operations under Assembly Bill 117; repayment is secured by state transit assistance funds and is estimated to cost about $30 million a year when principal begins.
The San Francisco Board of Supervisors on June 16 unanimously approved a resolution allowing the director of transportation to enter a loan agreement with the Metropolitan Transportation Commission that would make up to $200 million available to the San Francisco Municipal Transportation Agency for operating purposes.
The board adopted the loan authorization after an SFMTA presentation that said the loan is part of a $590 million regional package required by Assembly Bill 117. Judson True, SFMTA chief of staff, told the board the loan for SFMTA would have a 12‑year term with two years of interest‑only payments and 10 years of principal and interest. “We estimate right now that the interest payments are $8,000,000, and the annual payments, with both interest and principal, are about $30,000,000,” True said.
A Budget and Legislative Analyst report summarized the fiscal effect and recommended approval. Nick Bilet told supervisors the agency is budgeting roughly $8 million in each of the next two years for debt service and plans for about $30 million a year thereafter. The report noted SFMTA receives roughly $65 million annually in state transit assistance (STA) and that STA is the committed source securing loan repayment.
Supervisor Connie Chan asked what would happen if SFMTA could not make a payment. True responded that MTC would withhold STA funds if required payments were missed; the board was told the withholding would mean another state funding stream would be reduced rather than the city facing a separate, unsecured liability. On whether loan forgiveness or an appeal process is written into the loan documents, staff said any forgiveness would require future state legislative action and is not part of the contract.
No members of the public addressed the board on the loan item. The clerk called the roll and recorded 10 ayes; President Mandelmann declared the resolution adopted.
Why it matters: The loan provides near‑term operating revenue for Muni as the agency waits for longer‑term revenue measures, including a regional sales tax and a parcel tax. Officials stressed the loan is an interim funding tool and that repayment is secured by a state funding stream, but it increases SFMTA's debt service needs and assumes future revenue measures or other revenue stabilizers.
What’s next: The director of transportation is authorized to execute the loan agreement with MTC; the city's payments will be scheduled under the loan's terms and the board will continue to monitor the agency’s budget and the progress of planned regional revenue measures.
