SMART to seek early renewal of voter-approved sales tax in 2020

A year and a half into passenger rail service, SMART moved a step closer to going back to voters in 2020 to request renewal nearly 10 years early of the sales tax that funds the system, so it can maintain operations and hasten completion of the planned 70-mile line from Larkspur to Cloverdale.

The plan, recommended by agency staff earlier this month, advanced Wednesday with unanimous support from the Sonoma-Marin Area Rail Transit board. The 12-member appointed board directed general manager Farhad Mansourian to review pushing for extension of the quarter-cent tax on the March 2020 primary election ballot - nine years before it expires. It would be part of an updated long-term strategic plan to restructure debt and finish the full rail line.

“Let’s say today you say, ‘We’re just not going to do that,’?” Mansourian told the board at its regular meeting. “Then we will immediately start balancing the budget. You immediately start freezing the positions and cutting in anticipation of that. The sooner that we can have that answered, the sooner we can figure out the long-term finances.”

The proposed ballot measure, if authorized by the board later this year, would represent the first major test of support of the North Bay rail system since voters first backed SMART’s ?20-year sales tax in 2008 through Measure Q. In the years that? followed, SMART made the decision to build the track in phases because of what it says were lower tax revenues during the Great Recession - and critics pointed to minimal afternoon ridership and limited effects to traffic on the adjacent Highway 101.

With funding from Measure Q set to sunset in 2029, SMART staff asked the board to allow it to go back to voters to try to guarantee the rail system’s primary revenue stream through at least 2049. In fiscal year 2017-2018, the sales tax generated about $38 million - roughly the equivalent of that year’s capital projects budget.

“It is an opportunity for a referendum on the SMART train, if you put it up for a vote to the public,” said Chris Rogers, Santa Rosa’s vice mayor. “We need them to understand that from a financial perspective and from an environmental and community perspective, this is the value that’s being brought. Having a strategic plan for getting the public to understand (that) is going to be critical if the measure is going to be successful.”

Board members ran the gamut in their support Wednesday. Some questioned the need to move on the sales tax renewal so early and before the system meets past promises, while others suggested the future ballot measure - whichever year it comes before voters - should have no sunset. Ultimately, each saw the benefit of favoring the review process to consider the tax extension landing on the March 2020 ballot.

“The Marin and Sonoma county taxpayers have a half-billion-dollar investment in this railroad system and we need to make sure that we continue moving forward,” Sonoma County Supervisor David Rabbitt said. “There’s really no alternative but to go back to the voters for a sales tax extension. What are you going to do if it doesn’t pass, mothball the fleet? Unacceptable.”

SMART now provides rail service along 43 miles of track, from San Rafael to near Charles M. Schulz-?Sonoma County Airport in Santa Rosa. By the end of the year, the agency expects to extend the line another ?2 miles south to Larkspur and add a third station in Novato.

By the beginning of 2022, service is planned 3 miles north of the airport to Windsor. An expected second train station in Petaluma, and extending service further north to Healdsburg and Cloverdale remains unclear.

Doug Kerr, a Healdsburg resident, told board members that if they eventually give the final green light to pursuing the tax renewal, SMART must offer a more definite plan for delivering rail service to the north county if voters in the two cities are to support a ballot measure next year.

“You must come forward with a plan for when this rail line will get to Healdsburg and Cloverdale,” said Kerr, a mainstay at SMART board meetings. “If it’s going to remain out in the fog somewhere, ‘We’ll do it someday when we get the money,’ you’re going to lose the support. You cannot leave that as an open issue and still expect north county support.”

The early sales tax renewal request from SMART staff factors in a need to bolster finances to ensure the train’s future, they said, considering rising annual debt payments and higher-than-projected labor and capital project costs. A potential recession that could impact tax revenues also is a concern, which would force depleting the agency’s $17 million in reserve.

“We always knew that there were going to be unknowns, so we set aside a reserve,” said Erin McGrath, SMART’s chief financial officer. “Going forward … we see some struggles ahead in finances. We’ve looked for every way possible to save money, however, our train riders are demanding more service.”

Also on Wednesday, SMART approved testing a cheaper fare that would allow children 18 years and under to ride for free on weekends and holidays, when joined by an adult who buys a ticket. Children 5 to 18, seniors and those with disabilities now ride for half price all other times, and kids under 5 ride free.

The program will start May 25 as part of Memorial Day weekend and include free parking on weekends and holidays at all SMART pay parking lots. The cheaper fares will remain through the summer before ending Sept. 9. The fare incentives could end up becoming permanent, or possibly expanded once data is collected to see how they affect operations and service.

“It’s one of these things that we’re testing if it makes sense,” Mansourian said. “Why youth? They’re the future, and if they start using transit, then we gain. So we’re trying to capture those riders, because then they become the adults.”