AUTHORIZE the Executive Director to enter into a short-term Measure X loan agreement for $3,000,000 with Monterey-Salinas Transit, subject to approval by Counsel, to support the construction of the King City Maintenance and Operations Facility, to be repaid upon receipt of U.S. Department of Transportation Funds. 

Monterey-Salinas Transit has requested a short-term Measure X loan to support the construction of the King City Maintenance and Operations Facility due to the uncertainty of the final closing date of a federal loan. This short-term loan of $3,000,000 is intended to carry the cost of final design and construction while MST obtains a Rural Project Initiative loan with the U.S. Department of Transportation. The Measure X loan will be repaid with MST's long-term Rural Project Initiative loan funds. 

This loan agreement for $3,000,000 will allow the Transportation Agency to loan Monterey-Salinas Transit Measure X funds while they await the finalization of a U.S. Department of Transportation Rural Project Initiative long-term loan for the construction of the King City Maintenance and Operations Facility. The interest rate will be 2.5% unless the Monterey County Pool Quarterly rate rises above 2.0%, whereby the interest rate will be the pool rate plus 0.5%. This Measure X loan will be paid back to the Agency by December 2021, as MST receives their federal, long-term loan. MST has pledged future Measure X allocations, in the unlikely event that the federal loan does not close. The Agency has sufficient funds in the Measure X Commuter regional projects account to support the financing of this loan.

Monterey-Salinas Transit has requested a short-term loan for the South County Operations and Maintenance Facility Project, located in King City, to support the timely construction of the facility (see attached letter). The project is funded in part by Measure X (a component of the Commuter Bus, Salinas Valley Transit Centers and Vanpools category); Federal Transit Administration funds; and State funds. MST is expediently pursuing a very low interest loan (less than 1.5%) through the U.S. Department of Transportation's Build America Bureau under the Rural Project Initiative which would help pay for construction of the project. 

After conducting an appropriate environmental assessment, MST determined that the project was exempt pursuant to CEQA Guidelines Sections 15332 and 15061(B)(3), and filed a Notice of Exemption on October 17, 2017.  No new information or changes in circumstances relating to the project have been presented.

MST has awarded a design-build contract with Diede Construction and will begin incurring design and construction costs before the Rural Project Initiative loan closes. Construction on the Facility is anticipated to begin in August 2020 with completion in September 2021. Staff is recommending that the Board of Directors authorize the Executive Director to execute a short-term Measure X loan of $3,000,000 to MST allowing MST to carry the costs of final design and construction, which will be repaid to TAMC after their receipt of the federal loan. 

The table below portrays a summary of other confirmed funding sources.

*$3,000,000 of the TIFIA Rural Project Initiative Loan will be used to pay back the Measure X Bridge-Loan.

The recommended action is consistent with Ordinance 2016-01, Monterey County Transportation Safety & Investment Plan (Measure X), which states that TAMC may issue limited loans, from time to time, to finance any program or project in the Investment Plan. MST’s project falls under the Mobility for All category of the Investment Plan, and the King City Facility was explicitly identified in the 2019 Integrated Funding Plan, adopted in December, 2019 by Resolution 2019--17.