Memorandum. Date: RE: Citizens Advisory Committee

Transcription

1 Memorandum Date: RE: Citizens Advisory Committee March 10, 2010 To: From: Subject: Summary Citizens Advisory Committee Maria Lombardo Chief Deputy Director for Policy and Programming Lee Saage Deputy Director for Capital Projects ACTION Adopt a Motion of Support for the Adoption of a Baseline Budget, Schedule, and Funding Plan for the Municipal Transportation Agency s Central Subway Project In 2009, the Municipal Transportation Agency s (MTA s) Central Subway Project completed an intensive risk analysis as part of the Federal Transit Administration s (FTA s) New Starts review and evaluation process. As a result of this review, FTA recommended that additional cost and schedule reserve contingency be added to ensure the project s success. Specifically, this review resulted in a revised project budget of $1.578 billion compared to the original $1.3 billion and a new completion date of December 2018 compared to the original of June Also as a result of the assessment, FTA indicated that it will support an increased federal share for the project and higher annual funding allocation levels, both of which helped to shrink the project s funding shortfall. In January 2010, FTA granted the MTA permission to enter the final design phase. In anticipation of beginning the final design phase, the MTA has undertaken an extensive review of the existing funding and expenditure plan for the project, which has included active participation by Authority staff and our project management oversight consultant. Having reached these critical project milestones, we are now recommending that the Authority adopt a baseline budget, schedule and funding plan for the project consistent with the requirements in the Prop K Expenditure Plan for major capital projects. This action will support our efforts to monitor project progress, including cost and schedule trends and the project s financial status. It will also serve as a useful check point for the Authority and the MTA as we work together to ensure that the MTA can satisfy all the requirements necessary to secure a Full Funding Grant Agreement (FFGA) from the FTA in December A FFGA is FTA s official commitment of federal New Starts funds to the project and it is a necessary milestone that signals the project s ability to move into the construction phase. In addition, the baseline budget, schedule and funding plan along with the recommended ground rules for financial management of the project (Attachment 1) also helps us to better forecast and manage financing needs for the Prop K program since the Central Subway Project is one of the primary drivers affecting the timing and size of debt issuance. The recommended action is conditioned upon approval of a proposed Strategic Plan amendment since it would trigger financing costs at levels higher than contemplated in the adopted Strategic Plan. We are seeking a motion of support for the adoption of a baseline budget, schedule, and funding plan for the MTA s Central Subway Project. BACKGROUND The Municipal Transportation Agency s (MTA s) Third Street Light Rail Project is being implemented in two phases: Phase 1 includes the Initial Operating Segment (IOS), which entails the construction of a light rail line from Fourth and King Streets to Bayshore Boulevard and Sunnydale Avenue in Visitation Valley along the Third Street Corridor, and construction of the Muni Metro East Light Rail Vehicle Maintenance and Operations Facility (MME). The IOS started revenue service in January 2007 and the MME started operations in September Prop B (predecessor to Prop K) and Prop K sales tax dollars funded the majority of the project, along with other state (i.e., Regional Improvement Program) and federal funds programmed by the Authority. A critical piece of the funding plan for the IOS was ensuring that sales tax, other local and non-federal funds spent on the IOS count toward the minimum 20% local match requirements for Federal New Starts funds for the Central Subway. M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\Central Subway Baseline Budget.doc Page 1 of 7

2 Phase 2 of the Third Street Light Rail Project, known as the Central Subway, will extend service north from King Street along Fourth Street, entering a tunnel north of Bryant Street, crossing beneath Market Street, and running under Stockton Street to Stockton and Washington Streets. A surface station will be provided near Brannan Street, and underground stations will be located at the Moscone Center, Union Square, and Chinatown. On November 26, 2008, the Federal Transit Administration (FTA) approved the final Supplemental Environmental Impact Statement/Supplemental Environmental Impact Report (SEIS/SEIR) for the Central Subway Project. In April 2009, as part of the intensive federal New Starts evaluation and review process, FTA, together with the Central Subway Project team and the Authority, completed a comprehensive Risk Assessment evaluation of the project. As a result of this review, FTA recommended that additional cost and schedule reserve contingency be added to ensure the project s success. Specifically, this review resulted in a revised project budget of $1.578 billion compared to the original $1.3 billion and a new completion date of December 2018 compared to the original of June Also as a result of the assessment, FTA indicated that it will support an increased federal share for the project and higher annual funding allocation levels, both of which helped to shrink the project s funding shortfall. The purpose of this memorandum is to seek a motion of support for the adoption of a baseline budget, schedule, and funding plan for the MTA s Central Subway Project. DISCUSSION On January 8, 2010, FTA gave the MTA permission to enter the final design phase for the Central Subway, marking a major milestone for the project. In anticipation of entering into the final design phase, the MTA undertook an extensive review of the existing funding and expenditure plan for the project, which has included active participation by Authority staff and our project management oversight consultant. This analysis includes detailed projections of total budget and cash flow needs by project phase (e.g. construction) and contract, and establishes a strategy for applying specific fund sources to specific project phases, contracts, and other major line item budget categories (e.g. public agency staff costs). As a result of this review, the MTA has requested the advancement of Prop K funds beyond what was previously requested by the MTA and approved in the 2009 Prop K Strategic Plan, provisionally adopted by the Authority Board in July This acceleration of Prop K funds is needed to enable the MTA to move forward with the final design phase, right-of-way acquisition, and advanced construction activities for the project consistent with the project schedule, which currently targets December 2018 as the date for commencement of revenue service. Having completed the FTA Risk Analysis in 2009 and with the project entering the final design phase, it is an appropriate time for the Authority to adopt a baseline budget, schedule and funding plan for the Central Subway Project consistent with the requirements in the Prop K Expenditure Plan for major capital projects which are not subject to the 5-Year Prioritization Program requirement that applies to the programmatic categories in the Expenditure Plan. Adopting a baseline budget, schedule and funding plan at this time will support our efforts to monitor project progress, including cost and schedule trends and the project s financial status. In addition, the baseline budget, schedule, and funding plan along with the recommended ground rules for financial management of the project (Attachment 1) also helps us to better forecast and manage financing needs for the Prop K program since the Central Subway Project is one of the primary drivers affecting the timing and size of debt issuance. Further, because the Central Subway is a grandfathered Prop B project, it is not assessed financing costs for M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\Central Subway Baseline Budget.doc Page 2 of 7

3 advancing sales tax funds. Instead, the financing cost from the advancement of funds for the Central Subway Project must be borne by the entire Prop K program, resulting in less revenue available for other projects and programs. Thus, in reviewing the project s schedule and funding plan, we have worked to minimize the impacts of accelerating Prop K funds for the Central Subway on the rest of the Prop K program while ensuring that the project has sufficient funds to continue moving forward. The baseline budget, schedule, and funding plan will also serve as a useful check point for the Authority and the MTA as we work together to ensure that the MTA can satisfy all the requirements necessary to secure a Full Funding Grant Agreement (FFGA) from the FTA in December A FFGA is FTA s official commitment of federal New Starts funds to the project and it is a necessary milestone that signals the project s ability to move into the construction phase. The FFGA does not guarantee a given amount of New Starts funding every year. Instead, it is a commitment that the FTA will recommend funding consistent with the FFGA in each year s federal budget. The actual amount available will be subject to the annual congressional appropriation process. Receipt of the FFGA requires the fulfillment of several deliverables, such as securing all of the capital funding for the project, completing final design, and budgeting for the increase in operating funds from the project. The MTA is currently working with the FTA to develop a roadmap (i.e. a list of deliverables and corresponding deadlines) for receiving the FFGA and it expects the roadmap to be completed in the next few weeks. Baseline Budget and Schedule: The following subsections describe the different project phases that are included in the baseline budget for the Central Subway Project. Attachment 2a contains the baseline budget broken down by project phase, including start and end date and budgeted amounts for specific contracts by phase. Attachment 2b contains similar information, but shows a breakdown of the baseline budget that compares work performed by contractors and work performed by City agency staff. Attachment 2c provides a summary description of the scope of work covered by each phase. Attachment 3 shows the overall project schedule through system start-up in December Overall, $1,476,276,488, or 94% of the overall project budget, is currently for work to be performed by contractors, direct procurement (e.g. purchasing vehicles and right-of-way), or hard costs during construction. The remaining $102,023,512, or 6% of the overall budget, is earmarked for work performed by City agency staff. City agency staff work generally includes, but is not limited to, overall project management, design and construction management, engineering cost estimates, approvals and permits and design engineering for specific items such as the Overhead Contact System). Preliminary Engineering and Environmental ($52.3 million): Preliminary engineering and environmental work for the Central Subway is now complete. The work performed by the contractors for the preliminary engineering and environmental phase was $28,736,071 or 55% of the phase budget. Correspondingly, $23,522,371, or 45% of the phase budget was for work performed by City agency staff. The project has received both state (i.e., CEQA) and federal (i.e., NEPA) environmental clearance through the issuance of a Record of Decision, on November 26, 2008, by the FTA. The Authority programmed or allocated just over $15 million to the MTA for this phase, including $6 million in Federal Congestion Mitigation and Air Quality Improvement Program (CMAQ) funds, $5 million in TCRP funds and $4.1 million in Prop K funds. Final Design ($119.4 million): This phase includes four separate contracts: Tunnels; Stations, Systems, and Project Controls, as well as MTA and other City agency staff design and project management work. The work to be performed by the contractors for all four contracts is $101,102,357 or 85% of the phase budget. Correspondingly, there is $18,268,769, or 15% of the phase budget for work to be performed by City agency staff. Further, up to $43.1 million of the amount budgeted for the three design engineering contracts are optional tasks for the contractor that may ultimately be performed by the M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\Central Subway Baseline Budget.doc Page 3 of 7

4 contractor or by city forces. Final design commenced in January 2010 and is scheduled to be complete by June The design contracts and corresponding City agency labor are discussed in detail as part of a subsequent agenda item calendared for the March 10 Citizens Advisory Committee (CAC) meeting. The Authority would contribute a total of $36.4 million to this phase, comprised of $9 million in TCRP funds and $27.4 million in Prop K funds. Advanced (pre-ffga) Construction ($97.8 million): As is customary for FTA-funded projects, the MTA will be able to begin some construction work before it receives the FFGA from the FTA. As a matter of policy, the FTA allows utilities relocation and non-construction procurement (e.g. procurement of tunnel boring machines, insurance) to proceed before the FFGA. The MTA has currently scheduled two utility relocation contracts and, under a limited Notice-to-Proceed (NTP) to the tunnel contractor, will procure the tunnel boring machine(s) prior to the FFGA. The first utilities contract, for work in the vicinity of the Moscone Center at the tunnel portal, budgeted at $11.2 million, broke ground on February 9, 2010, and is scheduled to be complete by December In addition, the MTA has requested a Letter of no Prejudice (LONP) from the FTA for the construction of the tunnel boring machine launch box at the portal site under highway 80, and the rerouting of the overhead contact system for affected trolley bus lines. A LONP is granted by the FTA to project sponsors when the sponsor provides a justification for advancing the project based on an accurate assessment of the consequences to the project s scope, schedule, and budget should the LONP not be approved. The LONP is not a guarantee that the project will receive federal funds through the FFGA, but it does allow the local funds used for the advanced construction projects to count towards the overall local match for the project. The projects covered by the LONP can begin construction immediately after receipt of the FTA approval, in advance of the FFGA. Consistent with the recommended funding plan, Prop K would contribute $34.4 million toward advanced construction. This action would require an exception to Strategic Plan policies that disallow allocation of Prop K funds to construction unless the construction (or a useful segment/construction phase) is fully funded. We are recommending this exception based on our review of the overall project budget, schedule and funding plan and contingent upon adoption of the baseline budget, schedule and funding plan, including the ground rules. Right-of-Way Acquisition ($34.8 million): The MTA must acquire two full properties; the site for the headhouse (the portion of the station that does not contain the tracks or platforms themselves) for the Moscone Station and the site for the headhouse of the Chinatown Station. The acquisition will cause the relocation of businesses from both sites as well as of residents at the Chinatown site. In addition, the project will require the acquisition of some underground easements to complete the full right-of-way for the project. The right-of-way (ROW) phase is underway, and is expected to be completed in December 2014, including the relocations. There is a total of $6.7 million in Prop K funds included in the ROW phase. To help safeguard the interests of the Prop K program, programming of Prop K funds for ROW will be conditioned upon limiting their use to purchase of real property and not for easements or relocations. Further, as was done for ROW acquisitions for the Transbay Transit Center Project, allocation of funds for ROW will include as a special condition that the MTA will execute a quitclaim deed for the percentage of the property that the $6.7 million covers in favor of the Authority. Should the Central Subway program be cancelled, ownership of that percentage of the property will be conveyed to the Authority. Construction ($1.2 billion): Assuming receipt of the FFGA in December 2011, the MTA will M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\Central Subway Baseline Budget.doc Page 4 of 7

5 commence with the full construction phase of the project in January This phase consists of five construction packages: one for tunnels; one for each of the three stations at Moscone, Union Square, and Chinatown, and a final package for trackwork and systems. Work performed by contractors, procurement costs and other hard construction costs are $1,187,323,079 or 95% of the phase budget. Correspondingly, $60,232,371, or 5% of the phase budget is for work performed by City agency staff, which includes construction management and permit work for the advanced construction phase detailed above. The first construction contract, tunnel construction, will receive two limited NTPs: one for the tunnel boring machines and another for construction of the launch box, as part of the early construction phase prior to the general NTP for the contract. The general NTP for tunnels contract is scheduled for March The last construction contract to be completed, trackway and systems, is scheduled to be finished by November Pre-revenue service is scheduled to begin in January The construction phase also includes a $14.5 million art program. Under the direction of the San Francisco Arts Commission, the program seeks to commission vibrant, high-quality works of art to reflect San Francisco s enduring commitment to the exceptional design of civic spaces; enhance the quality of transit riders experience; and to create a unique visual identity for each station reflecting the diverse history and vitality of surrounding neighborhoods. The Arts Master Plan for the project was completed in October 2008, with participation of city art leaders, MTA staff, and Authority staff. Following a national call for artists after extensive outreach, the Arts Commission convened an Artist Selection Panel which selected a Central Subway Artist Pool. In December 2009, a selection panel which included arts professionals and representatives from the Arts Commission, the MTA, and the Authority, was convened for each station to determine which artists will be invited to submit proposals from which the final selection will be made. Based on the recommended funding plan, the Authority would allocate $51.3 million in Prop K funds for the construction phase. Further, the Authority s remaining $88 million in committed state Regional Improvement Program (RIP) are slated for the construction phase (See Funding Plan section for further information on RIP funds). Vehicle Procurement ($26.6 million): The MTA plans to procure four new light rail vehicles to supplement the current fleet in order to serve the project corridor based on demand projections modeled for These vehicles will not be needed at the start of revenue service and the MTA is currently working with the FTA to determine when they would be needed so that the MTA can develop an appropriate procurement strategy. Funding Plan: The MTA s funding plan for the Central Subway is included as Attachment 4. The table shows funding by project phase, source (e.g. Prop K) and status (allocated, programmed, or planned). Attachment 5 builds off the funding plan and shows the proposed new Prop K programming and cash flow assumptions for the Central Subway compared to the assumptions in the adopted plan. The result is a net acceleration of expenditures. Prop K funds are fully expended by Fiscal Year 2012/13, two years earlier than assumed in the Strategic Plan. This increases financing costs for the project by about $8 million, with a corresponding reduction in funds available for other Prop K projects which absorb any financing costs associated with the Central Subway Project (a total of about $66 million) and a near-term reduction in interest earnings (revenues) due to accelerated spending. Subsequent to the aforementioned FTA Risk Assessment, FTA agreed to a funding plan that includes $942.2 million in federal New Starts funding, an increase of $180 million over previous funding plans. FTA also agreed to an increase in the annual federal cash flow allocations to $150 million per year, from M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\Central Subway Baseline Budget.doc Page 5 of 7

6 the previous limit of $100 million per year. Both of these actions will contribute significantly to minimize borrowing costs and covering the increased funding needs triggered by the higher project cost. As noted above, in order to secure a FFGA by December 2011, the MTA will have to secure funding commitments to cover the project s remaining shortfall, as well as provide sufficient cushion to enable the project to keep moving despite possible delays in availability of funds. We are continuing to work with the MTA to identify and advocate for funding to cover the remaining shortfalls in the funding plan. This includes identifying and securing commitments for about $160.0 million in yet-to-be-identified fund sources (shown as TBD in Attachment 3), as well finding other fund source(s) to backfill the Authority s remaining $88 million in state RIP funds, which are not likely to be available when needed given the ongoing state budget crisis and the impact on availability it has had on RIP funds and other fund programs included in the State Transportation Improvement Program. Similarly, the MTA will need to have the ability to weather potential delays in the availability of Prop 1B funds, which is dependent upon the state s ability to issue additional general obligation bonds. Similarly, even with a FFGA, Federal New Starts funds are subject to congressional approval and are not guaranteed to be accessible when the project needs them. Potential sources under consideration include additional Prop 1B Public Transportation Modernization, Improvement, and Service Enhancement Account (PTMISEA) revenues, Prop 1A High-Speed Rail Connectivity Funds, and MTA parking and advertising revenues. We are seeking a motion of support for the adoption of a baseline budget, schedule, and funding plan for the MTA s Central Subway Project. ALTERNATIVES 1. Adopt a motion of support for the adoption of a baseline budget, schedule, and funding plan for the MTA s Central Subway Project, as requested. 2. Adopt a motion of support for the adoption of a baseline budget, schedule, and funding plan for the MTA s Central Subway Project, with modifications. 3. Defer action, pending additional information or further staff analysis. FINANCIAL IMPACTS Approval of the recommended action would have the net effect of reducing the expected capital project expenditures line item by $14,974,000 in the Authority s adopted Fiscal Year 2009/10 budget. The adopted budget assumed a maximum reimbursement of $19,474,000 in Prop K funds and $4.5 million in TCRP funds for Central Subway. Based on the above described funding plan, the recommend action would allow maximum reimbursement of $9 million in TCRP funds and no Prop K funds in the current fiscal year. Sufficient funds are included in the adopted Fiscal Year 2009/10 budget to accommodate the proposed recommendation in terms of expenditures; however, the budget will need to be amended to increase TCRP revenues from $4.5 million to $9 million. This will be incorporated in a mid-year budget revision that will be presented to the CAC at the March 24, 2010 meeting. The recommended changes would also result in an accelerated reimbursement rate of Prop K funds over the life of the project and related increased financing costs for the Prop K program as a whole. These increased costs are accounted for in the proposed Strategic Plan amendment, which is the subject of another agenda item at the March 10 CAC meeting, and would be incorporated into the capital expenditures line item in future fiscal years. M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\Central Subway Baseline Budget.doc Page 6 of 7

7 RECOMMENDATION Adopt a motion of support for the adoption of a baseline budget, schedule, and funding plan for the MTA s Central Subway Project. Attachments 1. Ground Rules for Financial Management of the Central Subway Project 2a. Central Subway Baseline Budget 2b. Central Subway Baseline Budget Contract Work versus Public Agency Work 2c. Central Subway Project Development Phase Descriptions 3. Central Subway Master Schedule (September 2009 Update) 4. Central Subway Funding Plan (March 1, 2010) 5. Central Subway Project Comparison of Prop K Programming Assumptions 2009 Prop K Strategic Plan vs. Proposed Amended Prop K Strategic Plan M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\Central Subway Baseline Budget.doc Page 7 of 7

8 Attachment 1 GROUND RULES FOR FINANCIAL MANAGEMENT of the Central Subway Project 1. The Municipal Transportation Agency (MTA) accepts responsibility to hold project scope and costs to the total amount proposed in the baseline budget, which was informed by the risk assessment evaluation of the project completed in April 2009 by the Federal Transit Administration (FTA), the Central Subway Project Team, and the Authority. 2. MTA will implement project control procedures and processes that will allow for the effective forecasting of costs at all levels and categories, and provide monthly forecast updates to the Authority. 3. MTA will implement a formal budget transfer (i.e., shifting costs/funds between tasks, contracts and/or contingency) procedure to be used to manage the project contingency. 4. MTA will obtain concurrence from the Authority for change orders over $100, MTA will inform the Authority about intended budget transfers and change orders prior to their execution. Budget transfers will occur before the money is spent in the category receiving funds. 6. Budget transfers for public agency staff costs must be justified by a directly related design or construction event (e.g. extension of the construction time, redesign caused by unexpected conditions). 7. MTA understands that some budget transfers may require approval by the Authority Board to amend previously approved Prop K and/or TCRP allocations, while others may be approved administratively by Authority staff. Determination of whether budget transfers require Board approval (e.g. policy level) or may be approved administratively will be consistent with the Authority s existing Prop K amendment procedures. 8. MTA agrees to update the Authority as additional funds are allocated and/or committed (e.g. programmed) to the Central Subway project, and will comply with Prop K policies to delay the expenditure of Prop K funds to the extent possible without putting the project at risk. M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\GROUND RULES FOR FINANCIAL MANAGEMENT ATT 1.doc

9 Attachment 2a Central Subway Baseline Budget No. Phase Major Line Item Start Date End Date Duration (months) TOTAL 1 Planning & Environmental Planning/Conceptual Engineering $26,764,071 2 Planning/Conceptual Engineering - Public Agencies $23,522,371 3 Environmental Studies (PA&ED) $1,972,000 Subtotal Planning/Conceptual Engineering/Environmental $52,258,442 4 Design-PS&E Design - Package 1 - Contract (Tunnels and Utilities) 01/04/10 08/31/10 8 $4,983,728 5 Design - Package 1 - Public Agencies (Tunnels and Utilities) $1,018,476 6 Design - Package 2 - Contract (Stations) 02/01/10 06/30/11 17 $31,094,690 7 Design - Package 2 - Public Agencies (Stations) $6,323,395 8 Design - Package 3 - Contract (Trackwork and Systems) 03/05/10 06/30/12 28 $12,000,000 9 Design - Package 3 - Public Agencies (Trackwork and Systems) $3,192, Program Controls Contract 07/01/10 12/31/11 18 $5,000,000 Subtotal Design PS&E $63,612, Design-Project Management Program Management - Contract - Design Phase 04/06/09 12/31/11 33 $35,000, Program Management - Public Agencies 04/06/09 12/31/11 33 $7,734, Other Direct Costs 04/06/09 12/31/11 33 $2,037, Const. Admin - Legal; Permits & Fee 01/01/10 12/30/11 24 $4,986, Insurance - Excess Design Liability 07/01/10 06/30/11 12 $6,000,000 Subtotal Design Project Management $55,758, Advanced Construction Utilities Moscone Center - Contract 1 01/04/10 12/20/10 12 $11,249, Utilities - Contract 2 11/01/10 12/20/11 14 $22,228, Tunnel Boring Machine Equipment (TBM) 03/01/11 03/31/12 13 $26,000, Construction TBM Launch Box 03/01/11 02/28/12 12 $38,300,000 Subtotal Early Construction $97,777, Construction Design - Package 1 - Construction Support (Tunnels and Utilities) 01/04/10 12/31/13 48 $1,516, Design - Package 1 - Public Agencies (Tunnels and Utilities) $986, Design - Package 2 - Construction Support (Stations) 11/01/11 04/30/16 54 $8,855, Design - Package 2 - Public Agencies (Stations) $6,043, Design - Package 3 - Construction Support (Trackwork and Systems) 01/01/12 12/31/18 84 $8,000, Design - Package 3 - Public Agencies (Trackwork and Systems) $3,056, Program Management - Contract - Construction Phase 01/01/12 12/31/18 84 $104,000, PM - Public Agencies Construction Support 01/01/12 12/31/18 84 $22,592, Other Direct Costs 01/01/12 12/31/17 84 $5,952, Construction Administration-Project Controls Contract 01/01/12 12/31/17 72 $5,855, Const. Admin - Legal; Permits & Fee 01/01/12 12/31/18 84 $4,986, Construction Admin. - Survey, Testing, Investigation 02/01/10 06/30/17 89 $14,957, Construction Admin. - Public Agencies 01/04/10 12/31/ $27,552, Construction- Tunnel 03/05/12 12/31/13 22 $197,868, Union Square/Market Station - UMS 03/05/12 04/30/16 50 $228,839, Chinatown Station - CTS 04/02/12 06/30/16 51 $182,059, Moscone Station - MOS 07/02/12 02/28/16 44 $118,263, Surface, Trackwork & System 01/01/13 12/31/16 48 $134,291, Fare Collection Equipment 07/01/15 06/30/16 12 $2,400, Utility Connection Fees 07/01/15 06/30/16 12 $14,858, Start Up 01/01/18 12/31/18 12 $22,672, Public Art 07/01/15 06/30/16 12 $14,500, Unallocated contingency - Draw down -$96,299, Unallocated Contingency $213,744,194 Subtotal Construction $1,247,555, Procurement Vehicle Procurement 07/01/15 06/30/18 36 $26,559, Right of Way Real Estate 07/05/10 12/31/11 18 $30,000, Right of Way Real Estate Relocation 07/05/11 12/31/14 42 $4,777,416 TOTAL $1,578,300,000 Authority Note: MTA will adjust the Baseline Budget within two weeks of full execution of the design contracts per Deliverable #1 in this allocation request. This will include an adjustment to the Planning/Conceptual Engineering/Environmental phase (Resolution 04-51) that reflects the fnial amount of Prop K funds billed to that phase and the corresponding de-obligation of remaining funds. M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\Central Subway Baseline Budget and Funding Plan ATT 2a,2b,4 Page 1 of 1

10 Attachment 2b Central Subway Baseline Budget Contract or Direct Work v. Public Agency Work CONTRACT OR DIRECT COST Phase Major Line Item Start Date End Date Duration (months) TOTAL Planning & Environmental Planning/Conceptual Engineering $26,764,071 Environmental Studies (PA&ED) Subtotal Planning/Conceptual Engineering/Environmental $1,972,000 $28,736,071 Design-PS&E Design - Package 1 - Contract (Tunnels and Utilities) 01/04/10 08/31/10 8 $4,983,728 Design - Package 2 - Contract (Stations) 02/01/10 06/30/11 17 $31,094,690 Design - Package 3 - Contract (Trackwork and Systems) 03/05/10 06/30/12 28 $12,000,000 Program Controls Contract Subtotal Design PS&E 07/01/10 12/31/11 18 $5,000,000 $53,078,418 Design-Project Management Program Management - Contract - Design Phase 04/06/09 12/31/11 33 $35,000,000 Other Direct Costs 04/06/09 12/31/11 33 $2,037,889 Const. Admin - Legal; Permits & Fee 01/01/10 12/30/11 24 $4,986,050 Insurance - Excess Design Liability Subtotal Design Project Management 07/01/10 06/30/11 12 $6,000,000 $48,023,939 Advanced Construction Utilities Moscone Center - Contract 1 01/04/10 12/20/10 12 $11,249,591 Utilities - Contract 2 11/01/10 12/20/11 14 $22,228,098 Tunnel Boring Machine Equipment (TBM) 03/01/11 03/31/12 13 $26,000,000 Construction TBM Launch Box Subtotal Early Construction 03/01/11 02/28/12 12 $38,300,000 $97,777,689 Construction Design - Package 1 - Construction Support (Tunnels and Utilities) 01/04/10 12/31/13 48 $1,516,272 Design - Package 2 - Construction Support (Stations) 11/01/11 04/30/16 54 $8,855,266 Design - Package 3 - Construction Support (Trackwork and Systems) 01/01/12 12/31/18 84 $8,000,000 Program Management - Contract - Construction Phase 01/01/12 12/31/18 84 $104,000,000 Other Direct Costs 01/01/12 12/31/17 84 $5,952,513 Construction Administration-Project Controls Contract 01/01/12 12/31/17 72 $5,855,281 Const. Admin - Legal; Permits & Fee 01/01/12 12/31/18 84 $4,986,050 Construction Admin. - Survey, Testing, Investigation 02/01/10 06/30/17 89 $14,957,556 Construction- Tunnel 03/05/12 12/31/13 22 $197,868,469 Union Square/Market Station - UMS 03/05/12 04/30/16 50 $228,839,932 Chinatown Station - CTS 04/02/12 06/30/16 51 $182,059,984 Moscone Station - MOS 07/02/12 02/28/16 44 $118,263,761 Surface, Trackwork & System 01/01/13 12/31/16 48 $134,291,769 Fare Collection Equipment 07/01/15 06/30/16 12 $2,400,000 Utility Connection Fees 07/01/15 06/30/16 12 $14,858,685 Start Up 01/01/18 12/31/18 12 $22,672,966 Public Art 07/01/15 06/30/16 12 $14,500,000 Unallocated contingency - Draw down -$96,299,620 Unallocated Contingency Subtotal Construction $213,744,194 $1,187,323,079 Procurement Vehicle Procurement 07/01/15 06/30/18 36 $26,559,876 Right of Way Real Estate 07/05/10 12/31/11 18 $30,000,000 Right of Way Real Estate Relocation 07/05/11 12/31/14 42 $4,777,416 TOTAL $1,476,276,488 PUBLIC AGENCY WORK Planning & Environmental Planning/Conceptual Engineering - Public Agencies Subtotal Planning/Conceptual Engineering/Environmental $23,522,371 $23,522,371 Design-PS&E Design - Package 1 - Public Agencies (Tunnels and Utilities) $1,018,476 Design - Package 2 - Public Agencies (Stations) $6,323,395 Design - Package 3 - Public Agencies (Trackwork and Systems) Subtotal Design PS&E $3,192,185 $10,534,056 Design-Project Management Program Management - Public Agencies Subtotal Design Project Management 04/06/09 12/31/11 33 $7,734,713 $7,734,713 Construction Design - Package 1 - Public Agencies (Tunnels and Utilities) $986,621 Design - Package 2 - Public Agencies (Stations) $6,043,919 Design - Package 3 - Public Agencies (Trackwork and Systems) $3,056,363 Project Management - Public Agencies Construction Support 01/01/12 12/31/18 84 $22,592,486 Construction Admin. - Public Agencies Subtotal Construction 01/04/10 12/31/ $27,552,982 $60,232,371 TOTAL $102,023,512 Central Subway Baseline Budget - CONTRACT WORK $1,476,276,488 94% Central Subway Baseline Budget - PUBLIC AGENCY WORK $102,023,512 6% TOTAL $1,578,300,000 M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\old\Central Subway Baseline Budget and Funding Plan ATT 2a,2b,4 Page 1 of 1

11 Attachment 2c Central Subway - Project Development Phase Descriptions A. Cross References of Agency Terminology for Project Phases The table below shows the three major Central Subway partnering agencies s use of terms and phases to describe the project s development from planning through start up. The same project information is used by all of the agencies at different stages of the project but in the case of the Central Subway, additional sub-phase categories are used that are unique to project design, construction and project management. The second page presents the Central Subway Design and Construction sub-phases. Stakeholder Agency Terminology for Project Phases SFCTA Funding Phases Environment ROW PS&E Construction Central Subway Project (CSP)Development Phases Preliminary Engineering or Conceptual Engineering Environmental Clearance Real Estate - Acquisition - Relocation of Existing households, businesses Final Design 1 - Three major final design contracts Design Package Tunnels Design Package 2 Stations Design Package 3 Tracks, Systems Project Controls Contract Final Design 2 - Project Management, Legal, Permits, Insurance, surveying, investigations for FD Procurement Specifications For the four light rail vehicle acquisition and parts Advanced Construction prior to the Full Funding Grant Agreement - FTA authorization for advanced procurement - FTA approval to carry out construction Construction with Full Funding Grant Agreement Tunnel, Stations, Track and Systems Testing Start up Project Close out FTA Phases and Approvals Environmental Impact Statement (EIS) Preliminary Engineering Right of Way Acquisition Relocation Final Design Procurement Pre award authority to perform utility relocation and procure TBMs. Letter of No Prejudice to construct Trolley reroute and TBM launch box. Construction Start up Project Close out M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\CS FEP Description of Phases for SFCTA 2-05 ATT 2c.doc Page 1 of 2

12 Attachment 2c Central Subway - Project Development Phase Descriptions B. Central Subway Project (CSP) Design and Construction Phase Descriptions CSP Final Design 1 Design Plans, Specifications & Estimates (PS&E) This is the work to produce the drawings and documents required for construction and to control the cost and schedule of design and the proposed construction. Design Contracts Program Controls Contract Public Agency Design Work CSP Final Design 2 This is work that to manage, support, coordinate and obtain approval of the designs/construction, and to provide a design office for the combined design staff.. Design Program Management (PM) Program Management/Construction Management Contract SFMTA Program Management Owner Controlled Excess Design Liability Insurance Legal, Permits, Fees, surveying, investigations, and Other Direct Costs require FTA Final Design Phase CSP Advanced Construction This consists of utility relocations, early procurement and specific construction approved by the FTA in a Letter of No Prejudice (LONP). The advance construction opportunity is provided by the FTA as part of the New Starts policy guidelines in order to preserve/reduce overall project costs and schedule. The purpose of this Phase is to carry out the FTA s guidance to preserve the project budget and schedule and reduce risks to the City and County of San Francisco by expediting procurement on long lead or special order equipment. The opportunity to reduce costs and risks is expanded by the current low bid environment. Examples of Advanced Construction opportunities, contracts and activity now underway or in development are: Utility Relocation contracts that prepare work sites for major construction at station areas, re-route the trolley bus service now on 4 th Street, and prepare the work area for the Tunnel Boring Machines and soil transfer area under Hwy 101. Acquisition of the two Tunnel Boring Machines (TBM), which are long lead procurements. Construction of the Launch Box required for the delivery and assembly of the TBMs. CSP Construction This phase includes all major construction activities and begins immediately following the execution of the Full Funding Grant Agreement (FFGA). These activities include: Construction Contracts Program Management/Construction Management Contract work after FFGA SFMTA Program Management for the work after FFGA Legal, Permits, Fees, surveying, investigations, and Other Direct Costs after the FFGA. Vehicles, arrival and commissioning Commissioning and start up \\Cs2sa001\Ncsm544.1\Financial Plan Grants And Budget Revisions\SFCTA Grants Application Folder 2009\CS FEP Description Of Phases And Segments For SFCTA 2-03.Doc M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\CS FEP Description of Phases for SFCTA 2-05 ATT 2c.doc Page 2 of 2

13 Activity Name Preliminary Engineering Attachment 3: Central Subway Master Schedule 11-Feb-10 Page 1/ Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2Q3 Preliminary Engineering Design, procurement and approvals processes New Starts Report Utility Contract #1- MOS & Portal Utility Contract #2 - UMS Tunnels Advanced Preliminary Engineering Final Design Program Project Management Design, procurement and approvals processes Permit Applications Utility Contract #1- MOS & Portal Utility Contract #2 - UMS Tunnels Moscone Station Union Square / Market Street Station Chinatown Station and Crossover Cavern Systems, Track and Surface Real Estate Design, procurement and approvals processes Utility Contract #1- MOS & Portal Utility Contract #2 - UMS Tunnels Moscone Station Union Square / Market Street Station Chinatown Station and Crossover Cavern Design, procurement and approvals processes New Starts Report Utility Contract #1- MOS & Portal Utility Contract #2 - UMS Tunnels Advanced Preliminary Engineering Final Design Program Project Management Design, procurement and approvals processes Permit Applications Utility Contract #1- MOS & Portal Utility Contract #2 - UMS Tunnels Moscone Station Union Square / Market Street Station Chinatown Station and Crossover Cavern Systems, Track and Surface Real Estate Design, procurement and approvals processes Utility Contract #1- MOS & Portal Utility Contract #2 - UMS Tunnels Moscone Station Union Square / Market Street Station Chinatown Station and Crossover Cavern Procurement Construction Construction Procurement Start up Start up Remaining Level of Effort Actual Level of Effort Actual Work Remaining Work Critical Remaining Work Milestone Summary CSP-MPS SFMTA Central Subway Project Master Project Schedule Summary Schedule - January 2010 Update Start Date 01-Jan-08 Finish Date 30-Dec-20 Data Date 31-Jan-10

14 Attachment 4 Central Subway Funding Plan - Last Updated March 1, 2010 Project Phases 1 Source 2 Type Status PE/ENV PS&E ROW CON Total by Status TOTAL Allocated $37,394,745 $29,020,739 $0 $0 $66,415, New Starts 3 Federal Programmed $0 $0 $0 $0 $0 $942,200,000 Planned $0 $29,486,216 $0 $846,298,300 $875,784,516 Allocated $6,025,000 $0 $0 $0 $6,025,000 CMAQ 4,5 Federal Programmed $0 $0 $0 $0 $0 $6,025,000 Planned $0 $0 $0 $0 $0 Allocated $0 $4,417,153 $7,500,000 $3,082,847 $15,000,000 Prop 1B-MTA 6 State Programmed $0 $0 $0 $0 $0 $140,000,000 Planned $0 $7,805,599 $6,536,903 $110,657,498 $125,000,000 Allocated $0 $4,417,153 $7,500,000 $3,082,847 $15,000,000 Prop 1B- MTC 6 State Programmed $0 $0 $0 $0 $0 $100,000,000 Planned $0 $7,805,599 $6,536,903 $70,657,498 $85,000,000 Allocated $0 $0 $0 $0 $0 STIP - RIP 4,7 State Programmed $0 $0 $0 $0 $0 $88,000,000 Planned $0 $0 $0 $88,000,000 $88,000,000 Allocated $5,000,000 $0 $0 $0 $5,000,000 TCRP State Programmed $0 $9,000,000 $0 $0 $9,000,000 $14,000,000 Planned $0 $0 $0 $0 $0 Allocated $4,142,132 $0 $0 $0 $4,142,132 Prop K 5 Local Programmed $0 $27,418,669 $6,703,610 $85,710,589 $119,832,868 $123,975,000 Planned $0 $0 $0 $0 $0 Allocated $140,481 $0 $0 $0 $140,481 TBD 8 Local Programmed $0 $0 $0 $4,000,000 $4,000,000 $164,100,000 Planned $0 $0 $0 $159,959,519 $159,959,519 Allocated $52,702,358 $37,855,045 $15,000,000 $6,165,694 $111,723,097 Totals Programmed $0 $36,418,669 $6,703,610 $89,710,589 $132,832,868 $1,578,300,000 Planned $0 $45,097,414 $13,073,806 $1,275,572,815 $1,333,744,035 $52,702,358 $119,371,128 $34,777,416 $1,371,449,098 $1,578,300,000 1 Acronyms used for project phases include: PE/ENV - Preliminary Engineering/Environmental Documentation, PS&E - Plans, Specifications & Estimates or Final Design, ROW - Right of Way, CON - Construction. For the purposes of this table, construction includes procurement (e.g. vehicles). 2 Acronyms used in this column include: CMAQ - Congestion Mitigation and Air Quality Improvement Program, MTC - Metropolitan Transportation Commission, RIP - Regional Improvement Program, SFMTA - San Francisco Municipal Transportation Agency, STIP - State Transportation Improvement Program, TCRP - Traffic Congestion Relief Program. 3 The $20 million in planned funds for the PS&E phase of the project is subject to Congressional approval in federal Fiscal Year 2010/11. It was recommended as part of the FTA's New Starts report released in December M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\Central Subway Baseline Budget and Funding Plan ATT 2a,2b,4 Page 1 of 2

15 Attachment 4 Central Subway Funding Plan - Last Updated March 1, In January 2008, the Authority working with MTC and MTA brokered a fund swap of $4 million in FY 2008/09 RTIP funds programmed to Central Subway for an equivalent amount of CMAQ funds for the subject project. The swap gave MTA quicker access to the funds than would have been possible with the delay in available RTIP funds. The $4 million in CMAQ funds count toward the Authority s RTIP commitment to the project. The RTIP funds helped MTC address eligibility issues for a regional project. 5 In November 2008, the Authority approved a swap that traded $2,025,000 in FY 2008/09 Prop K funds for an equivalent amount of CMAQ funds to help MTA meet timely use of funds deadlines for three separate Regional Bike and Pedestrian Program (RBPP) projects (Res ), without any negative impacts to the Central Subway Program. 6 Both MTA and MTC have committed to dedicating these Prop 1B funds to the project. However, availability of Prop 1B funds is subject to the state's ability to sell bonds and therefore MTA will need to build some flexibility into the project's funding plan to account for possible delays. 7 In November 2005, through Resolution 06-30, the Authority Board programmed a total of $88 million to the Central Subway project. $88 million is the remaining yet-to-be programmed commitment. Given the ongoing state budget crisis and its impact on the STIP, it is unlikely that these funds will be available when needed. Thus, the Authority is working with MTA to identify fund sources to help backfill the RTIP funds until they become available. 8 MTA is identifying revenues to fill the project shortfall. Sources under consideration include: Prop 1B Public Transportation Modernization, Improvement and Service Enhancement Account Funds (PTMISEA), Prop 1A High Speed Rail Connectivity Funds, and MTA parking and advertising revenues. M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\Central Subway Baseline Budget\Central Subway Baseline Budget and Funding Plan ATT 2a,2b,4 Page 2 of 2

16 Attachment 5 Central Subway Programming and Cash Flow Comparison Prop K Strategic Plan (adopted July 2009) v. Proposed Amended 2009 Prop K Strategic Plan 2009 Prop K Strategic Plan Cash Flow PHASE Allocation Amount Allocation Year FY 07/08 FY 08/09 FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13/14 FY 14/15 Actual Allocation CER $11,861,000 FY2005/06 $1,438,013 $2,194,787 $8,228,200 Programmed PS&E/ ROW $26,960,000 FY2009/10 $17,524,000 $9,436,000 Programmed PS&E/ ROW $25,000,000 FY2010/11 $5,000,000 $12,500,000 $7,500,000 Programmed PS&E/ ROW $20,000,000 FY2011/12 $4,000,000 $10,000,000 $6,000,000 Programmed CON $40,154,000 FY2013/14 $8,030,800 $20,077,000 $12,046,200 Allocation TOTAL $123,975,000 $1,438,013 $2,194,787 $25,752,200 $14,436,000 $16,500,000 $25,530,800 $26,077,000 $12,046,200 Proposed Amended 2009 Prop K Strategic Plan Cash Flow PHASE Allocation Amount Allocation Year FY 07/08 FY 08/09 FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13/14 FY 14/15 Actual Allocation 1 CER $4,142,132 FY 2005/06 $1,438,013 $2,194,787 $509,332 Programmed PS&E $27,418,669 FY 2009/10 $27,418,669 Programmed ROW $6,703,610 FY 2010/11 $6,703,610 Programmed ADV CON $34,387,729 FY 2010/11 $15,483,626 $18,904,103 Programmed CON $51,322,860 FY 2011/12 $10,000,000 $41,322,860 Allocation TOTAL $123,975,000 $1,438,013 $2,194,787 $509,332 $49,605,905 $28,904,103 $41,322,860 $0 $0 Cash Flow Comparison Prop K Strategic Plan v. Proposed Amended 2009 Prop K Strategic Plan FY 07/08 FY 08/09 FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13/14 FY 14/15 TOTAL Adopted Cash Flow $1,438,013 $2,194,787 $25,752,200 $14,436,000 $16,500,000 $25,530,800 $26,077,000 $12,046,200 $123,975,000 Proposed Amended Cash Flow $1,438,013 $2,194,787 $509,332 $49,605,905 $28,904,103 $41,322,860 $0 $0 $123,975,000 Difference by Fiscal Year - decrease/(increase) $0 $0 $25,242,868 ($35,169,905) ($12,404,103) ($15,792,060) $26,077,000 $12,046,200 Cumulative Difference $0 $0 $25,242,868 ($9,927,037) ($22,331,140) ($38,123,200) ($12,046,200) $0 1 In February 2010, at MTA's request the Authority de-obligated $7,718,868 from the Prop K allocation to the CER phase of the Central Subway project (R04-51). Those funds were the re-programmed to the PS&E phase of the Central Subway project. Central Subway Cash Flow Comparison 2009 Prop K Strategic Plan v. Proposed Amended 2009 Prop K Strategic Plan $60,000, Prop K Strategic Plan Proposed Amended 2009 Prop K Strategic Plan $50,000,000 $40,000,000 Prop K Cash Flow $30,000,000 $20,000,000 $10,000,000 $0 2007/ / / / / / / /15 Fiscal Years M:\Meetings\Memo to CAC\2010\03-Mar 2010 Special\SP Amendment\Central Subway SP Cashflow Comparison Graph; Comp to Prov SP Page 1 of 1