**Silicon Valley Rapid Transit Corridor**

**Santa Clara County, California**

(November 2003)

# Description 

The Santa Clara Valley Transportation Authority (SCVTA) is proposing to
implement a 16.3-mile heavy rail extension from the proposed Bay Area
Rapid Transit (BART) Warm Springs station to downtown San Jose and the
Norman Y. Mineta International Airport. Because of rapid job growth in
Silicon Valley in the 1990's and residential growth in Alameda and
Contra Costa Counties, travel conditions on I-880 and I-680 have
worsened, while express bus service and the Altamonte Commuter Express
rail system operate at capacity. The proposed BART extension is intended
to help address the imbalance between jobs and affordable housing in
Silicon Valley by opening up the area to improved regional transit
connections and providing commuters alternatives to travel on I-680 and
I-880. The proposed project would serve the heart of Santa Clara County
and Silicon Valley, connecting SCVTA's light rail and bus system to
BART, and would thereby expand transit access to Santa Clara, Contra
Costa, and Alameda counties, as well as to the city of San Francisco.

+------------------------------------+---------------------------------+
| **Summary Description**            |                                 |
+------------------------------------+---------------------------------+
| **Proposed Project:**              | Heavy Rail                      |
+------------------------------------+---------------------------------+
| ** **                              | 16.3 Miles, 7 Stations          |
+------------------------------------+---------------------------------+
| **Total Capital Cost (\$YOE):**    | \$4,997.8 Million               |
+------------------------------------+---------------------------------+
| **Section 5309 New Starts Share    | \$ 973.0 Million (19%)          |
| (\$YOE):**                         |                                 |
+------------------------------------+---------------------------------+
| **Annual Operating Cost:**         | Not Available                   |
+------------------------------------+---------------------------------+
| **Ridership Forecast (2025):**     | Not Available                   |
+------------------------------------+---------------------------------+
| **Opening Year Ridership Forecast  | Not Available                   |
| :**                                |                                 |
+------------------------------------+---------------------------------+
| **FY 2005 Finance Rating:**        | # Low-Medium                    |
+------------------------------------+---------------------------------+
| **FY 2005 Project Justification    | **Not Rated**                   |
| Rating:**                          |                                 |
+------------------------------------+---------------------------------+
| **FY 2005 Overall Project          | **Not Recommended**             |
| Rating:**                          |                                 |
+------------------------------------+---------------------------------+

The project received an overall rating of ***Not Recommended*** due to
the limited demonstration of local financial commitment. In addition,
SCVTA did not submit complete information on the benefits of the Silicon
Valley Rapid Transit Corridor, and as a result FTA could not evaluate
the project's justification criteria. The overall project rating applies
to this *Annual Report on New Starts* and reflects conditions as of
November 2003. Project cost estimates and proposed New Starts share are
developed by local project sponsors and are not FTA assumptions. Project
evaluation is an ongoing process. As New Starts projects proceed through
project development, estimates of cost, benefits, schedules and impacts
are refined. FTA's ratings and recommendation will be updated annually
to reflect new information, changing conditions, and refined financing
plans.

Because of the project's high costs and the reduced local revenues
available to fund it, a minimum operable segment (MOS) in the corridor
is being contemplated by SCVTA. In the coming months, FTA intends to
work with SCVTA to help develop an MOS and a financial plan that
reflects SCVTA's ability to build and operate the system. FTA will also
continue to work with SCVTA to improve its ability to more accurately
portray the benefits of the proposed project.

##### Status

FTA approved SCVTA's request to initiate preliminary engineering on the
Silicon Valley Rapid Transit Corridor project in September 2002. Since
then, the financial condition of SCVTA has deteriorated, which has
impacted the agency's ability to implement and operate the proposed
project. SCVTA is currently contemplating MOS options and alternative
financing strategies.

The current project scope and financial plan propose a New Starts share
of \$973.0 million. FTA notes that, historically, more than \$500
million in New Starts funding has rarely been provided to any single
major capital transit investment project.

TEA-21 Section 3030 (b)(19) authorized the Fremont-South Bay Corridor
for Preliminary Engineering and Final Design. Through FY 2003, \$250,000
in Section 5309 New Starts funds have been appropriated for the proposed
project by Congress.

####### Evaluation 

The following criteria have been estimated in conformance with FTA\'s
*Reporting Instructions for the Section 5309 New Starts Criteria*,
updated in June 2003. The project will be re-evaluated when it is ready
to advance into final design and for next year's *Annual Report on New
Starts*.

N/A indicates that information is not available for this measure.

+--------------------------------------+---------------+---------------+
| **Project Justification Quantitative |               |               |
| Criteria**                           |               |               |
+--------------------------------------+---------------+---------------+
| **Mobility Improvements Rating: Not  |               |               |
| Rated**                              |               |               |
+--------------------------------------+---------------+---------------+
| **Average Employment Per Station**   | **[New Start  |               |
|                                      | vs.           |               |
| **Average Low Income Households Per  | Baseline]{    |               |
| Station**                            | .underline}** |               |
|                                      |               |               |
| **Transportation System User Benefit | N/A           |               |
| Per Project Passenger Mile           |               |               |
| (Minutes)**                          | N/A           |               |
|                                      |               |               |
|                                      | N/A           |               |
+--------------------------------------+---------------+---------------+
| **Environmental Benefits Rating:     |               |               |
| Medium-High**                        |               |               |
+--------------------------------------+---------------+---------------+
| **[Criteria Pollutant                | **[New Start  |               |
| Reduced]{.underline} (Tons)**        | vs.           |               |
|                                      | Baseline]{    |               |
| **Carbon Monoxide (CO)**             | .underline}** |               |
|                                      |               |               |
| **Nitrogen Oxide (NO~x~)**           | N/A           |               |
|                                      |               |               |
| **Volatile Organic Compounds**       | N/A           |               |
|                                      |               |               |
| **Particulate Matter (PM~10~)**      | N/A           |               |
|                                      |               |               |
| **Carbon Dioxide (CO~2~)**           | N/A           |               |
|                                      |               |               |
| **[Annual Energy                     | N/A           |               |
| Savings]{.underline} (millions of    |               |               |
| BTU)**                               | N/A           |               |
+--------------------------------------+---------------+---------------+
| **Cost Effectiveness Rating: Not     |               |               |
| Rated**                              |               |               |
+--------------------------------------+---------------+---------------+
| **Cost per Transportation System     | **[New Start  |               |
| User Benefit (current year           | vs.           |               |
| dollars/hour)**                      | Baseline]{    |               |
|                                      | .underline}** |               |
|                                      |               |               |
|                                      | N/A           |               |
+--------------------------------------+---------------+---------------+
| **Operating Efficiencies Rating: Not |               |               |
| Rated**                              |               |               |
+--------------------------------------+---------------+---------------+
| **System Operating Cost per**        | >             | **[New        |
|                                      | **[Baseline]{ | Start]{       |
| **Passenger Mile (current year       | .underline}** | .underline}** |
| dollars)**                           | >             |               |
|                                      | > N/A         | N/A           |
+--------------------------------------+---------------+---------------+

# Project Justification 

## Rating: Not Rated

The project justification rating is *Not Rated* because the
transportation system user benefit measure used for cost effectiveness
and mobility improvements was not submitted. FTA will continue to work
with SCVTA to improve its travel demand projections. FTA further notes
that unless the project generates an acceptable cost effectiveness
estimate, its ability to advance into final design could be jeopardized.

####### Transit-Supportive Existing Land Use and Future Patterns

**[Rating: Medium-High]{.underline}**

The *Medium-High* rating reflects the region's commitment to growth
management and the continued success of land-use policies that focus
development near transit nodes, as well as the tremendous potential for
improving densities around proposed station sites. However, while
several station areas currently maintain relatively dense population and
employment, only moderate population and employment densities exist
throughout the corridor as a whole.

**Existing Conditions:** The proposed extension would connect Santa
Clara County to the rest of the San Francisco Bay area. The Silicon
Valley Rapid Transit Corridor contains some high residential and
employment concentrations, as well as other trip generators such as
universities, hospitals, cultural attractions, and entertainment.
Station area employment and population densities are 9,365 and 7,094 per
square mile, respectively. Downtown San Jose maintains a good mix of
office/commercial use and residential development, often with ground
floor retail. The rest of the corridor consists of predominately
low-density industrial parks with a moderate amount of commercial and
residential uses. Pedestrian accessibility in the corridor varies by
proposed station site but is generally good.

**Future Plans, Policies and Performance:** The corridor is in the heart
of the Silicon Valley and is projected to grow 19.4 percent in
population and 34.7 percent in employment by 2025. There is a concerted
effort by all jurisdictions, through the establishment of goals and
policies, to concentrate development, conserve open space, and contain
sprawl. The jurisdictions have created several specific planning areas
with high-density development requirements and enhanced design
characteristics in order to foster increases in development and
improvements in the character of proposed station areas. A considerable
amount of light industrial/warehouse use is present in station areas
that are zoned for higher density uses, offering significant
possibilities for redevelopment. The station areas are not constrained
by well-established, low-density residential development. Local
jurisdictions have already shown great success in establishing higher-
density, mixed-use development around transit centers.

#### 

#### Local Financial Commitment

## Rating: Low-Medium

The *Low-Medium* local financial commitment rating acknowledges the low
proposed New Starts share of project costs but also reflects the
questionable feasibility of the capital and operating financing plan and
the lack of supporting documentation submitted by the project sponsor.

####### 

**Proposed Non-Section 5309 New Starts Share of Total Project Costs:
80%**

# [Rating: High]{.underline}

SCVTA plans to use Section 5309 New Starts funds to fund 20 percent of
project costs. State Transportation Congestion Relief Program funding
sources and Measure A dedicated sales tax revenues are proposed to fund
the balance of project capital requirements.

+---------------------------+-------------------+----------------------+
| **Locally Proposed        |                   |                      |
| Financial Plan**          |                   |                      |
+---------------------------+-------------------+----------------------+
| **[Proposed Source of     | **[Total Funding  | **[Percent of        |
| Funds]{.underline}**      | (\$millio         | Total]{.underline}** |
|                           | n)]{.underline}** |                      |
+---------------------------+-------------------+----------------------+
| **Federal:**              | \$973.0           | 19.5 %               |
|                           |                   |                      |
| Section 5309 New Starts   |                   |                      |
+---------------------------+-------------------+----------------------+
| **State:**                | \$649.0           | 12.9 %               |
|                           |                   |                      |
| Traffic Congestion Relief | \$3,375.7         | 67.5%                |
| Program                   |                   |                      |
|                           |                   |                      |
| **Local:**                |                   |                      |
|                           |                   |                      |
| Measure A                 |                   |                      |
+---------------------------+-------------------+----------------------+
| **Total:**                | **\$4997.8**      | 100.0 %              |
+---------------------------+-------------------+----------------------+

**NOTE:** Funding statements reflected in this table have been made by
project sponsors and are not DOT or FTA assumptions. Sum of figures may
differ from total as listed due to rounding.

####### Stability and Reliability of Capital Financing Plan

**[Rating: Low-Medium]{.underline}**

The *Low-Medium* rating reflects the questionable feasibility of the
capital financing plan and the lack of supporting documentation
submitted by the project sponsor.

### Agency Capital Financial Condition: SCVTA has limited capacity for additional capital funding. The primary sources of capital funding for the project include State Transportation Congestion relief program funds, which may no longer be available, and local sales tax revenues, which are not growing at the level anticipated. The average age of the bus fleet is presumed to be 7.5 years based on information submitted by the agency last year; this age is above the national average. Information on the agency's bond ratings was not provided.

### Capital Cost Estimate and Contingencies: SCVTA is evaluating options for a minimum operating segment; however, updated capital cost estimates have not been provided to FTA. Contingency allowances are currently 26 percent of the total capital cost, which is considered low for a project at this early stage of project development with complex underground elements. 

Existing and Committed Funding: The level of funds committed to the
project has been reduced due to economic conditions impacting sales tax
revenues and State funding.

New and Proposed Sources: SCVTA will need to identify a new source of
funding to make up the shortfall in State and local sources of funds.

#  

# Stability and Reliability of Operating Finance Plan 

**[Rating: Low-Medium]{.underline}**

The *Low-Medium* rating was assigned because sources of operating funds
for the proposed project and the existing system have not been
identified and supporting documentation for the operating plan was not
provided.

**Agency Operating Financial Condition:** SCVTA did not provide
sufficient documentation to determine the current operating financial
condition of the agency. FTA is aware that the agency has been forced to
reduce service in the last two fiscal years due to declining sales tax
revenues.

### Operating Cost Estimates and Contingencies: The operating plan did not include a 20-year cash flow. Consequently, the annual operating cost of the project was not provided.

Existing and Committed Funding: Unless new sources of operating funds
are found, there is not sufficient funding under existing and available
sources to operate the existing system and the proposed extension.

New and Proposed Funding Sources: SCVTA is seeking a new operating
funding source to sustain existing operations. A source of funding for
the proposed extension has not been identified.

MAP