TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager
SUBJECT: Public Hearing
ACTION ITEM
RECOMMENDED ACTION(S):
Title
Receive public comment and consider the adoption of Resolution 19-025 approving the finding of significant public benefit in the use of line of credit proceeds to finance construction of the East Bay Bus Rapid Transit (BRT) project.
Body
BUDGETARY/FISCAL IMPACT:
Approving a finding of significant public benefit does not have a fiscal impact. The fiscal impact of the enabled financing for the BRT project was initially described in Staff Report 17-132a and will be further detailed in a subsequent staff report.
BACKGROUND/RATIONALE:
With approval of Staff Report 17-132a, the Board authorized staff to pursue a plan for a short-term financing strategy to complete the BRT project. Staff has continued to work with PFM Financial Advisors LLC to refine the strategy first described in that staff report. The District issued a Request For Proposals on February 21, 2019, for a short-term line of credit (LOC), and has selected a firm based on the responses received. Part of the requirements for the LOC is that it stays open over the three years required to complete the BRT project and then pursue longer-term financing to pay off the unfunded portion of the project cost. Due to limitations in the District’s enabling legislation, the LOC must be contracted through the California Statewide Communities Development Authority (CSCDA), a joint-powers agency that enables financing of public-benefit projects throughout California. CSCDA is functioning as a “conduit borrower” for the District.
To enable the LOC, the District must join CSCDA and must also, per California Government Code Section 6586.5a(2) of the Joint Powers Act, hold a public hearing to establish that it finds significant public benefit in approving the financing and implementing the BRT project (the capital improvement). Government Code Section 6586 defines significant public benefit in several ways. For the BRT project the District believes that it satisfies “(d) More efficient delivery of local agency services to residential and commercial development.” The BRT project will bring more frequent, more reliable, and more accessible service to the 9.5-mile corridor.
If the finding of significant public benefit is approved, staff will return to the Board in July for approval of the LOC and all the relevant agreements.
ADVANTAGES/DISADVANTAGES:
The main advantage of finding significant public benefit is that it will enable the District to proceed with the previously identified financing strategy for the BRT project. There are no identified disadvantages.
ALTERNATIVES ANALYSIS:
Working with the District’s financial advisor, staff reviewed a few different financing strategies. The two most likely scenarios - a LOC and commercial paper - were described in Staff Report 17-132a. In pursuing the LOC there is no alternative to the District setting a public hearing as it is required by the Government Code.
PRIOR RELEVANT BOARD ACTION/POLICIES:
SR 19-221 - Consider setting a public hearing regarding the finding of significant public benefit
SR 17-132a - BRT Financing Plan
ATTACHMENTS:
1. Resolution 19-025
2. Public Hearing Notice
Approved by:
Claudia L. Allen, Chief Financial Officer
Reviewed by:
Denise C. Standridge, General Counsel
Prepared by:
Chris Andrichak, Director of Management and Budget