South County Operations and Maintenance Facility

1. DETERMINE that the proposed regional funding agreement with Monterey-Salinas Transit is exempt from the California Environmental Quality Act pursuant to CEQA Guidelines Sections 15332 and 15061(B)(3); and
2. APPROVE and AUTHORIZE the Executive Director to enter into a Measure X Funding Agreement with Monterey-Salinas Transit, subject to approval by Agency Counsel, for an amount not to exceed $10,359,695 to support construction of the South County Maintenance and Operations Facility.

The funding agreement will allow the Transportation Agency to reimburse MST for expenses MST will have paid towards the construction phase of the project, not to exceed $10,359,695 in Measure X Funds. MST is anticipating receipt of a low-interest federal Transportation Infrastructure Financing and Innovation Act (TIFIA) loan to help finance the project. A portion of Measure X Funds will be used to pay for construction costs directly and the remaining funds will be used to repay the federal loan.

The South County Operations and Maintenance Facility project will accommodate existing and future transit needs in the surrounding rural communities of Monterey’s South County. This project will allow buses currently housed in Salinas and Monterey to be relocated to South County, allowing for increased operating efficiency by reducing deadhead travel time, allowing MST to deploy more transit service throughout South County.

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. MST has already begun to incur design costs, and expects to incur construction costs before the TIFIA loan closes. Construction on the Facility is anticipated to begin in August 2020 with completion in September 2021. The project has a total estimated cost of $16,244,287.

Measure X reimbursable funds under agreement total $10,359,695, including: 

• $2,399,695 for construction costs (FY 2020/21)
• $7,960,000 for TIFIA loan repayment (FY 2020 through 2029/30)

The TIFIA loan repayment will include an estimated payment of $833,000 per year until the loan is repaid, not to exceed $7,960,000. The specific annual amounts are to be determined.

The table below portrays a summary of all available funds:

At the February 26th, 2020 meeting of the Agency's Board of Directors, the Board authorized the Executive Director to execute a short-term Measure X loan of $3,000,000 to MST allowing MST to carry the costs of its design-build contract, pending receipt of the federal loan. This short-term loan will be repaid after MST's receipt of the federal TIFIA loan.

The attached funding agreement sets forth the agreed-upon expected benefits, project scope, schedule and cost. The Measure X funds are designated to reimburse MST for direct construction costs that may not be covered by the federal loan, with any remaining amount used for payments on the federal loan. The funding agreement also identifies the parties responsible for meeting reporting requirements and implementing the project. In this case, the Transportation Agency is the administrator of the Measure X funds, and MST is the project sponsor responsible for implementation and reporting.