Meeting_Body
PLANNING AND PROGRAMMING COMMITTEE
FEBRUARY 17, 2016
Subject/Action
SUBJECT: CAP-AND-TRADE PROGRAM
ACTION: APPROVE CANDIDATE TRANSIT AND INTERCITY RAIL CAPITAL PROGRAM PROJECTS
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to approve the development of project applications for grant funds from California’s Cap-and-Trade Program’s Greenhouse Gas Reduction Fund (GGRF) through the Transit and Intercity Rail Capital Program (TIRCP).
Issue
ISSUE
The second cycle of GGRF programming for the Cap-and-Trade’s TIRCP is underway; the State’s call for projects occurred on February 5, 2016, and grant applications will be due to Caltrans by April 5, 2015. In order to meet this timeline, staff seeks Board approval to develop grant applications for identified candidate projects considered as the most competitive for this program. Staff will return to the Board in March for action on the submission of final project applications and prioritization.
The California State Transportation Agency (CalSTA), the administrator of TIRCP, intends to adopt a two-year program of projects, which in this Cycle 2 will be FY 2016-17 and 2017-18. Attachment A identifies the major capital project candidates nominated by various Metro departments to be evaluated in accordance with the rigorous evaluation criteria provided in the draft TIRCP Guidelines, illustrating graphically which projects evolved as the most viable for an award of grant funds. As with the last cycle, project readiness continues to be a major consideration, as allocations must be requested in the fiscal year of project programming. The projects that staff are considering as potentially competitive candidates for this cycle, in no order of priority, are the Airport Metro Connector; Division 20 Portal Expansion/Turnback Facility for the Red/Purple Line; Gold Line Foothill Extension Phase 2B; potential joint Metrolink projects; Orange Line Electric Bus Purchase; and the Westside Purple Line Extension Section 2.
Discussion
DISCUSSION
The TIRCP was created by California State Legislature to provide grants to fund capital improvements and operational investments specifically designed to reduce greenhouse gas emissions by reducing vehicle miles traveled throughout California. The grant funds are derived from California’s Cap-and-Trade Program and are the result of quarterly auctions of emission credits for greenhouse gas emitters regulated under Assembly Bill (AB) 32. Auction proceeds are then reinvested in various projects to further reduce emissions. No fund estimate has yet been determined for Cycle 2, however the Governor’s draft FY 2016-17 budget recommends that approximately $600 million be invested in the TIRCP program.
Unlike the first cycle, where applicants were limited to an award of approximately $40 million for any one major capital project per applicant agency, Cycle 2 draft Guidelines are silent on both award limits and the number of applications that can be submitted by any one agency. However, as could be expected, the selection process promises to be rigorous.
Cycles 1 and 2 have been two-year programs; starting in FY 2018 CalSTA will move to five-year program cycles with the first year being FY 2018-19. Additional five year programs will be approved by April 1st of each even-numbered year thereafter, adopting a program for the allocation and expenditure of moneys during those five fiscal years.
TIRCP Goals and Objectives
The goals of the TIRCP are to provide monies to fund transformative capital improvements that modernize California’s intercity rail, bus, ferry, and rail transit systems to achieve all of the following objectives:
• Reduce greenhouse gas emissions;
• Expand and improve rail service to increase ridership;
• Integrate the rail service of the State’s various rail operations, including integration with the high-speed rail system;
• Improve safety; and
• Provide a benefit to disadvantaged communities, and address a community need.
Project Eligibility Criteria
CalSTA intends to fund a small number of transformative projects that will significantly reduce vehicle miles traveled, congestion, and greenhouse gas emissions by creating a new transit system, increasing the capacity of an existing transit system, or otherwise significantly increasing the ridership of a transit system, linking key destinations and improving accessibility to economic opportunities.
Project application evaluations will focus on the above objectives, as well as secondary evaluation criteria that consider the co-benefits of support for sustainable communities strategies, collaboration between rail operators, geographic equity, consistency with an adopted Sustainable Communities Strategy, leveraged supplemental funding (including from other GGRF programs), integration across other transportation modes and, if applicable, a financial plan that evidences support for service expansion. Those projects that score highly on multiple secondary evaluation criteria, with clear documentation of claimed benefits, demonstration of a high degree of project readiness, with few risks related to completion and achievement of the proposed benefits, will be highly rated by CalSTA.
Maximizing benefits to disadvantaged communities (DAC) continues to be a legislatively-mandated goal of Cap-and-Trade Program. Attachment B uses California Environmental Protection Agency’s (CalEPA) environmental health screening tool information as a background to Metro’s existing and planned transportation projects and illustrates that the DACs, as defined, are disproportionately located in Los Angeles County and served by Metro’s transit system.
CalSTA continues to give priority to applications which fund construction or implementation and expresses a preference for projects with clear phases or scalability. Multiple applications from the same agency must be prioritized. Consideration will be given to proposals to fund only preconstruction components for a project, but a full funding plan must be provided to assure construction of a useable segment. In all scenarios, a project or project elements will be considered only if fully funded. While a local funding match is not required, a highly rated project will clearly indicate the acceleration of project delivery made possible due to the inclusion of TIRCP funds to complete the funding package.
Potential Metro Projects
Because the TIRCP application deadline is April 5 and applicants have only 60 days to prepare and submit funding applications, it is necessary to consider potential candidates for Cycle 2 funding in advance of completion of a draft expenditure plan for the potential ballot measure and an updated Long Range Transportation Plan (LRTP). Based on the draft Guidelines criteria and Metro’s current project development schedules, staff has preliminarily identified the six above-referenced projects as having the potential to meet the Guidelines criteria. Staff developed the matrix shown in Attachment A and recommends further analysis be undertaken with the goal of submitting one or several applications to CalSTA.
To ensure competitiveness of Metro’s applications, initial additional analysis to focus our field of candidates will include a preliminary screening of potential greenhouse gas emissions reductions that a project could provide, as well as a refining of project schedules to ensure award of construction contracts could be accomplished within the time frame provided by CalSTA, which is within six months of a request for allocation of the awarded funds from the California Transportation Commission, but no later than the Commission’s June 2018 meeting.
The Board will be requested to approve final application submittals and project prioritization at the March Board meeting, prior to the April 5 application deadline.
Multi-Year Cap-and-Trade Strategy
Pursuant to Director Butts’ Amendment to Item No. 28 on October 22, 2015 (Attachment C) that requested a comprehensive Cap-and-Trade strategy and action plan (Plan), staff has been developing an overall approach for identifying potentially competitive candidate capital transit expansion projects that are in the adopted 2009 Long Range Transportation Plan and that realize a nexus with the Cap-and-Trade Program priorities. The Cycle 2 nominated projects have been identified as a result of our efforts to develop the requested Plan. Inasmuch as the Plan should also consider the draft expenditure plan for the potential ballot measure currently in development, we will respond to Director Butts’ Motion at the April 2016 Board meeting to ensure that all priorities are considered and measured against the Program criteria.
As the GGRF grows and the Cap-and-Trade Program matures to a five-year cycle in FY 2018, we will likely see significant possibilities to strategically apply for funds using a multi-year strategy to compliment the funding profiles of our larger transit projects.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
The requested actions will have no impact on the safety of our customers or employees.
Financial_Impact
FINANCIAL IMPACT
Funding required for preparation of project applications has been included in cost center 4420 budget for FY 2016.
Impact to Budget
Preparation of project applications will have no impact on the FY2016 budget.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Board could choose not to approve the candidate projects contained in Attachment A and instead select one or more other projects considered for application. Staff does not recommended this alternative as the listed projects have the potential to meet the criteria set forth in the Guidelines and should represent at least one competitive application on behalf of Metro.
Next_Steps
NEXT STEPS
Upon approval, staff will prepare the project applications, due to Caltrans by April 5, 2016. The Board will be requested to approve final application submittals and project prioritization at the March Board meeting. CalSTA will publish the list of approved projects by August 1, 2016 and the list will be presented to the California Transportation Commission on August 17, 2016. We anticipate funds will be available for allocation between September 1, 2016 and June 30, 2018.
Staff will present the projects for which TIRCP applications are being submitted, and recommended priorities, at the March 2016 Board meeting and will provide the requested Plan at the April 2016 meeting.
Attachments
ATTACHMENTS
Attachment A - Proposed Metro TIRCP Projects Decision Matrix
Attachment B - Disadvantaged Communities Map
Attachment C - Amendment to Item No. 28 by Director Butts, dated October 22, 2015
Prepared_by
Prepared by: Kathleen Sanchez, Regional Programming Manager, (213) 922-2421
Wil Ridder, Executive Officer, (213) 922-2887
Reviewed_By
Reviewed by: Calvin E. Hollis, Interim Chief Planning Officer, (213) 922-7319
