Review of the Bay Area Rapid Transit District's Airport Extension Finance Plan
RCED-00-95R: Published: Mar 31, 2000. Publicly Released: Mar 31, 2000.
- Full Report:
Pursuant to a legislative requirement, GAO provided information on the Bay Area Rapid Transit District's (BART) finance plan for an airport extension, focusing on: (1) BART's proposed grant amendment and revised project completion schedule; and (2) the reasonableness of the assumptions contained in the finance plan.
GAO noted that: (1) BART has requested that the Federal Transit Administration (FTA) amend the grant agreement to reflect the project's increased costs and new funding arrangements, as contained in its finance plan; (2) the amendment would also change the estimated opening date to July 1, 2002; (3) current construction is about 8 weeks behind the latest estimate, but BART's contractor has identified ways to speed up construction, and the contractor FTA hired to oversee the project believes that the July 2002 opening date is still feasible; (4) the proposed amendment would change the project's scope by allowing BART to spend $70 million on maintenance improvements rather than buy 28 new railcars at a cost of $100 million, as anticipated in the original grant agreement; (5) BART's finance plan contains reasonable cost and financing assumptions and demonstrates that it has the financial capacity to pay for the current $1.483 billion estimated cost of the project; (6) BART's new project cost estimate is the result of a comprehensive cost review and includes revised higher construction contract costs; (7) BART has secured commitments from state and local sources to fund the entire $316 million cost increase--no additional federal funds are needed; (8) furthermore, BART has obtained a $300 million line of credit, secured by future federal funds, and an additional $60 million loan from the Metropolitan Transportation Commission to help alleviate expected cash-flow problems; (9) BART has proposed a capital reserve account backed by revenue from parking fees if it needs to pay costs above the current $1.483 billion estimate; and (10) the contractor hired by FTA to oversee the project proposed that BART provide an additional $27 million for contingencies.