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SMART Votes to Issue Bonds Despite Moderate Marketability

With signatures being gathered to halt sales tax funding, passenger rail system ventures forth with less-than-perfect bond sale.

Now that the sale of $191 million in bonds has been approved by the Sonoma-Marin Area Rail Transit board at its Wednesday board meeting in Santa Rosa, the focus of the passenger rail debate in the two North Bay counties turns to construction getting under way right when the RepealSMART campaign is getting more and more serious.

A financial consulting firm told the Santa Rosa Press Democrat that the marketability of the bonds will take a hit because of the effort to repeal a quarter-cent sales tax increase for 20 years that is the primary funding for the commuter rail system. The firm, Public Financial Management, also said the push by RepealSMART could lead to $10 million in added costs for SMART.

So, Novato, how do you feel about all this? You might have voted for Measure Q to raise funds for SMART in 2008. You might be just as much an advocate for the train system now as you were before, eying fewer vehicles on 101 burning fossil fuels and pumping greenhouse gas emissions into the air.

But you might point to of the rail authority and the — which includes just one train station rather than two — and be ticked off at what SMART is proposing now.

Share your comments below. What do you think will happen next?

Bob Ratto November 17, 2011 at 09:31 PM
From the release: "The Repeal SMART effort substantially increased the cost to taxpayers of borrowing for the project in accordance with the Board's initial plan, and prevented SMART from issuing bonds on its original schedule." Read that, twice. That statement is quite disingenuous. SMART initial plan is no more, the true cause of problems was wildly wrong cost estimates (sales taxes were temporary, and more than offset by decline in constructions costs)-this is a major reason the Repeal effort exists...this statement is pure fiction/spin. Another alternative would be: The lack of competence by the Board has resulted in a recall effort, and bonds are being issued in an attempt to restore public confidence in the project. The bonds cannot be spent, but we will have to pay interest on them.
Lloyd November 17, 2011 at 09:55 PM
I am at a loss of words to describe the issuance of these bonds. By the BOD own admission the cost of these bonds is greatly increased due to the current uncertainty of the repeal initiative. Please tell me that this Board is so not so blinded by it's own ineptitude that they couldn't wait 60 days to find out if the repeal effort had gathered enough signatures before acting. They say this could cost as much as $10 Million of our tax dollars. They are right about one thing, the added cost is born by only one party and that would be the self serving interests of this Smart BOD. There aren't any reasonable business plans or fiscal practices that this slap in the face to the voters of Marin and Sonoma Counties can be excused or explained. This issuance at this time, in this manner just cost us the cost of a couple of stations. I don't care what side of the fence you sit on this debate throwing away $10,000,000.00 is an unconscionable breach of the public trust.
Bob Ratto November 17, 2011 at 10:12 PM
I think they "only" allocated about $300k to the public "re-education" program, so yes, this is far and above this. There really is no fiscal responsibility to this. In also looking at the so called contracts the other night that were issued for some crossing signal improvements and I think the Petaluma river bridge...those were not complete legal contracts that would EVER be entered into by a contractor...why? No lien rights listed (which gives contractors an ability to get paid), no surety/bonding company, no terms of payment/discussion of progress billings....Proposals maybe, contracts, NO. The need to sell bonds now is simply unconscionable. If one tried to liken this to a person that drew down on an equity line prior to the bank shutting it down, that would be a poor analogy, because people don't have income secured by sales tax proceeds..it would be much more straight up to see if the Repeal effort succeeds in January and then go forward, your overall permanent costs are lower as uncertainty may be reduced. It is sad that public funds are spent so foolishly.
diane November 17, 2011 at 10:35 PM
I totally agree with you Floyd Fulmer, and that is why I didn't vote for it in the first place. And why I'm going to get signatures from my family and friends for the petition. Contact Repeal SMART if you're interested in signing it or if you have friends who will also sign it.
Scott Warner November 18, 2011 at 05:21 PM
A very interesting proposal; take the current right of way and turn it into a "public transportation" corridor to be used by clean powered buses (and still with bike-pedestrian lanes) instead of a train. Buses are more versatile, less expensive, the infrastructure cost of major stations is eliminated, Novato can have several stops, and those buses can be linked up to a better county wide bus transportation plan to get folks where they need to go. We can take the current buses off of 101 and put them to "the transport-idor". We need a better dose of pragmatic progressive thinking. We can make lots of sound environmentally soundl/alternative transportation progess if we have leadership-leadership that recognizes when plans must be changed to move forward rather than "staying the course" when that course will not get us where we need to go.

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