SAN RAFAEL -- Sonoma Marin Area Rail Transit today announced the sale of $191 million in multimodal rate bonds to fund construction of a train linking Marin and Sonoma counties.
The bond sale will result in $171 million in revenue for SMART, which the agency said will go towards construction of the rail line, bridges, crossings and stations, as well as the purchase of trains.
"The financing will be used to create 900 jobs in the new year," said SMART Vice Chair Judy Arnold.
SMART General Manager Farhad Mansourian said there were $1.6 billion in offers for the bonds when they were made available last Wednesday. The large number of offers allowed brokers to negotiate an interest rate of less than 1 percent, so less taxpayer money will go to repaying investors, he said. The bonds sold in one hour, and the sale closed today.
The proceeds will be put in an escrow account while the group RepealSMART collects signatures to repeal Measure Q, a quarter-cent sales tax measure voters in Sonoma and Marin counties approved to help fund SMART in 2008.
RepealSMART supporters contend that voters should have a second chance to vote on the measure after economic pressure forced SMART to make significant changes to its plan to construct a commuter rail line between Cloverdale in Sonoma County and Larkspur in Marin County. With reduced sales tax income, SMART plans to build an initial segment between Santa Rosa and San Rafael in 2015--16, with the remaining portions completed when funding becomes available.
If RepealSMART can't collect enough signatures by the end of January, proceeds of those bonds will go to fund construction. If the group does succeed, the funds will remain in escrow until a vote to repeal Measure Q, according to Mr. Mansourian.
Depending on financial conditions, the bonds could either remain at a shorter-term multimodal bond rate or be converted to a longer-term fixed rate, he said.
Final negotiations for construction contractors were completed yesterday, and Mr. Mansourian said he was pleased with the outcome. He plans to ask the SMART board on Wednesday to hold a special meeting on the contract. If approved, construction is expected to begin in January.
An updated picture of the project cost, as well as details concerning the contractor and the agreement, will be available during the special meeting. The total project cost is estimated to have increased from the $541 million estimated in SMART's expenditure plan, but the precise amount will be subject to changes in the economy in coming years, according to Mr. Mansourian and board meeting materials.
This story was updated to include details from SMART General Manager Farhad Mansourian on the bond sale, proceeds and the escrow account as well as the estimated project cost.