I've got it. Run with it. How about July? Are you going to be? Where are we going to hit the golf course? Oh, I'd love to go by it. Commissioner Kaufman-Govas, Commissioner Johnson, Commissioner Brown, Commissioner Bertrand, Commissioner Oleitnick. Okay, good. We'll begin. We'll start with oral communications. This is any money from public and talk on items that are not on our agenda. Please come on up and tell us your name and we have three minutes to talk. My name is Rebecca Downing and I'm president of the Seacliffe Improvement Association. We are inviting pedestrians, bicyclists, friends, neighbors, and the RTC commissioners to stroll with us to the Aptos Village Green on the morning of August 3, 2019. Our invitation is for you to join us by walking to Aptos Village from Seacliffe to get a street view of the safety challenges pedestrians face when we walk to Aptos Village. We will also invite neighbors from the other parts of Aptos to join us along the way to help create pedestrian safety awareness along their route. Upon arriving in the village, participants will take a quick pedestrian survey, enjoy a snack from one of our event sponsors, New Leaf Community Market, and enter to win prizes from local Aptos Village merchants. The first 100 arrivals will also receive a reusable shopping bag from New Leaf Market. In 2017, we surveyed our members and other Aptos residents and almost 90 percent of them said they would walk to Aptos Village if it was safe. So we will share what we learned from our survey with you to improve pedestrian safety measures for those walking and cycling to and from Aptos Village. Saturday mornings, well, every morning, can be difficult as traffic backs up through Aptos Choke Point on the northbound side of Highway 1. Those who opt to use Soquel Drive through Aptos Village add to the congestion of the locals trying to visit village businesses. Our hope is that this event creates pedestrian safety awareness for all those who drive through Aptos Village. Each of us who walk will take a car off the road. We want drivers to appreciate this by respecting pedestrians and cyclists who take up much less road space than a car. I've brought invitations for each of you and look forward to your RSVP or the full experience. I suggest you start your way, he knows the way. Thank you for your time. Thank you. The invitations too. Party at Zach's. That's what I heard. Welcome. Michael St. with Campaign for Sustainable Transportation and what I'd like to do this morning is to share some other transportation people's things that they do in their cities. I've been doing a lot of travel lately is why I haven't been to too many of these meetings. This is the Tahoeandepth.org remaking of Highway 50, which part of it goes into South Shore. And I'll have to read just some blurbs from one of the articles. There's three in here on their transportation goals. What this will do is turn the old highway alignment through South Shore and the casinos into a two lane main street. The plans today call for better pedestrian and bike infrastructure throughout the area, better transit services, landscaping, treescape amenities, and a pedestrian bridge. The project is planning safety improvements and community amenities such as parks, sidewalks and lighting for the adjacent Rocky Point neighborhood, mainly because that was used instead of the Highway 50, which is four lanes. They would go around and try to go through the residential areas, which we're all having issues with that. Carol Chaplin states that she wants the project not only to improve traffic and transit and pedestrian infrastructure and housing on the South Shore, but also make it easier for people to get out of their cars and enjoy Lake Tahoe. The project can do this, she said, by creating a core area where people can walk out of their hotel room, go to the lake, go to the mountains, go shopping, die and take a walk, or a bike ride, find entertainment, or hop on a bus, never having to use their car. The other two articles are very similar in nature. I'm not going to just read those, but the main theme here is they're trying to get people out of their cars. One of the things that they're not doing in this article is putting in anything that considers any highway widening. So I have three questions for this commission. At what point in time do we stop building infrastructure for single occupancy vehicles? Number two, how bad does it have to get before we initiate and start funding a robust mass transit system? And when will this commission start to help reduce the cause of climate change instead of contributing by widening highways? I want to thank you for your time, and it's nice to be back. Thank you. Thank you. Anyone else like to speak? It's okay to go ahead and line up so we know who wants to talk. Good morning. My name is Justin Acton. I'm a lifelong SLV resident, and I'm also the president of the BCBA, the Boulder Creek Business Association. I want to start by applauding Supervisor McPherson, Caltrans, and the RTC on their successful installation of the first RRFB in downtown Boulder Creek. I read through the corridor plan, and I'm very appreciative of all the work that went into that. Thank you, Rachel and Brianna at the RTC for all the outreach that they've done to create such a complete and thorough document. The ball seems like it's starting to move right now, which is very exciting after so many years. Everyone in town is eager to see the improvements that the corridor plan calls for. The reason I'm here today is to... I'm going to interrupt you for a second. This is oral communications about things that are not on the agenda, and it appears you're talking about the Highway 9 corridor. Is there other people that are going to talk on Highway 9 corridor? They're not going to be here, really. How many people are going to talk about Highway 9? Do you want me to finish, then? If there's anyone that's going to speak, I'm going to let you finish, okay? I just want to make clear that this is oral communications. If you have somewhere to go, I can appreciate that. I got to go to work, so I apologize. I'm sorry about that. Finish your conversation, and if everyone else can wait for the Highway 9 section, we'd appreciate that. Sorry, guys. All right, so I am out of role, but anyway, let me finish. Thank you. So I just want to say that there are a lot of projects cited as high priority, including reducing speed and other safety measures. These echo the concerns at all of our town meetings, at all of our mixers, at all of the online community forums. Projects enhancing corridor pedestrian safety via lighting, laddering, RRFBs, and other visibility augmenting devices, they're easy and they're relatively inexpensive. These are particularly needed in Brookdale as well as the 236 and 9 intersections. As everybody knows, Boulder Creek has been constructed along Highway 9. It's all controlled under the authority of Caltrans. For years, the residents, the visitors, and the business community have echoed the same request for improvements to a town that has not had very many meaningful enhancements pretty much in my entire lifetime. Now that we've had the community discussion, the RTC has formed this plan, I'm here really just to encourage Caltrans to find a way to release the brake pedal on the holdups that we've been experiencing on these plans and to figure out a way to work with all these agencies to make our downtown a little bit safer. A great place to start in our opinion is crosswalk ball bouts as well as back-and-parking spaces. These are graded as an A rating project with high performance for ease of implementation. The changes would slow traffic via road dieting, enhance the local economy by allowing additional and much-needed parking spots as well as provide shade tree planters for pedestrian and bike use. We'd like to see a study for a three-way stop at the 9 and Bear Creek intersection to slow cars down as they come into town. The community has done its work in contributing to the corridor plan. The county has facilitated many community discussions. The RTC has put a ton of effort into creating this plan. I feel like now is the time for the governing agency for Caltrans to kind of step up to the plate and figure out a way to break ground and make the corridor safer while helping the downtown businesses and the residents. So anyway, thank you for your time and I'm sorry to go out of order. Thank you, I appreciate your comments. I was one of the women that has to go to work, I heard, that didn't need to speak now and why don't you come up and we're going to let you speak. All right, you're welcome. Thank you. My name is Christine Prailey. I'm a small business owner in Felton, California. I live in Ben Lohman. My business is horse sense education and advocacy and I'm the Santa Cruz County Outreach Coordinator for 4-H. So on behalf of myself, my business and those children that I teach, along with the school children that I teach through charter schools and the Valley's school system, I just want to thank you very much for taking time, energy and due diligence to make sure that our roads are safer for pedestrian bicyclists. They're even mentioning horses here. I'm really grateful for that. So everything that you're doing for everybody so that we can all share the roadway and enjoy the beautiful mountains is really worth the effort. I thank you, again, also Caltrans. They do a lot of hard work and I realize there's reasons for the brake pedals, but when you get through them that it becomes a better product. So again, I just want to thank you all. And I think did you want to show others who are in support of that because you're speaking on behalf of them? Yeah. Is there some supporters that you have for this Highway 9 plan? Oh, absolutely. I want to thank Joni Martin for sending out the email this morning to ask people that can make it to come down. And I believe those people wanted to take a stand. Just if you could just stand up to show that you're supporting it. That would be great. Thank you for your attendance and thank you. Appreciate that. Appreciate it. Thank you. Welcome. Hello. So my name is Tim Onsted and I'm a concerned resident of the La Selva Beach area. I recently moved there from Capitola and when I lived in Capitola, I was really dependent on the bus service since I'm a writer and a college student. I don't have a car and I don't really have the money to have my own car. So I would take the bus everywhere and I would use my student ID for the bus pass, basically. But when I went to La Selva, I was surprised to see that maybe not so much surprise knowing what's on the signs in here, but they had discontinued bus service to La Selva. I don't know if that was a proposition or what it was, but the 54 and the 56 are no longer operating and I know that because the bus stop like markers are still up there, even though there are no buses coming here and it's been three years. So it's like either remove them or reinstate busing and it's become a bit of a grievance. And I know that there's a lot of pleasant walks, but the thing is that I'd rather only walk 10 minutes to the bus stop rather than 20 minutes to the nearest bus stop, which is over in Seascape. Thank you. I'm going to go ahead and respond to that just to try to help you out a little bit. There are a few members that are on this panel that also serve on the Metro Board of Directors and a couple of issues. One is Metro went through some serious budget cuts and that route was one of the routes that needed to be cut in order to continue service to other areas. It's our hope that when funding reappears, we'll be able to restore those routes. Your second item as far as removing the bus stops, it is- It's not so much moving the bus stops, but rather why they're still there if there's no service. That's what I wanted to explain to you is the act of getting a bus stop established someplace, the process to put in that stop and that sign is a long process. And our intention is to try to restore service. So if we were to take those out, we would have to go through that entire process again to get city approval to restore that stop and those poles. So I apologize that it's inconvenient and it does represent the fact that it appears that there might be bus service, but our intent, Metro's intent is to someday restore those routes when funding appears. Thank you very much. I would just add to that. Is that true year round or is it different in the summer and during the school year? I haven't lived for long enough to know. I've only moved just this week. Like literally only last week I moved into the new place from Capitola. So I haven't lived long enough to know. We cut those year round. Okay, it could be that they only have it during the school season. Those are year round cuts, Greg. Okay. Does that help? I know it doesn't solve your bus, but I just want to explain to you what the nature of how that happened. Yeah, yeah, I understand. Thank you. You're welcome. Good morning. Good morning. Keith Otto, 20 year county resident. Back in January, I and others from my community, many others across the county, spoke out against rail north of Watsonville, too costly to implement, too costly to maintain that maintenance being a forever liability, too little benefit. Decisions were made. Even so, as I'm able, I've been trying to follow the happenings here at the RTC. There were some items at the meeting earlier this month, which surprised me. Others gave me hope that there may be some adjustment in the direction of the commission. One commissioner was concerned that millions of dollars of federal funds expected for county road repair could be at risk. Yes, let's fix the local roads. Another commissioner spoke of the time needed to make big decisions, such as the alternatives for transit in the rail corridor. Decisions that were stated to involve scores or $100 million. We don't want to invest in projects that are not going to work, that was stated. Makes sense, although the figure is totally off. Per the corridor study, the cost for transit in the corridor is going to be greater than $300 million. And just a quick comparison, 300 million versus millions, I believe, single digit for local road repair. The priorities there seem obvious to me. There was another commissioner that spoke of the disquiet of residents, just trying to go about their daily lives with difficulties in commutes. Perhaps trying to get to the commission meeting here. Priorities should focus on those individuals. There were concerns about local budgets that were expressed, and that there's not going to be funding for aspirational projects. There was a gentleman from county public works, I believe, that stated, if we're not taking care of what we already have, but rather creating more stuff that we're not sure how we're going to take care of in the future, we think that's the wrong way to go. I completely agree. The bottom line, my ask is that we listen to each other. You folks have been studying this for a long time. There's a lot of good ideas and practicalities here within this group. Let's focus on fixing what we have. Let's avoid liabilities for the future. Let's focus on more of what's practical versus aspirational. Thank you. Thank you for those comments. I was going to say something else about dynamism, but I've run out of time. Come back next meeting. Thank you. Anyone else like to speak in oral communications? We'll go ahead and close oral communications. We'll move on. Is there any additions or deletions to our regular agenda? There's no additions or deletions, but a quick clarification or correction on item 16. The page numbering was often the printed version. It printed 17 instead of 16. The online addition is correct. When you're going through your agenda, if you're flipping pages and you see 17, and we're talking about item 16, that's why. 17-1 is actually 16-1. Yes, but there's another 17-1 for item 17 behind it. Thank you. Then there's just two handouts, one for item 17 and one for item 18. Thank you. It brings us to the consent agenda. These are items we normally deal with in one motion. Is there anybody who would like to pull anything from the consent agenda? Anyone from the public like to comment on anything on the consent agenda? A motion for approval for the consent? There's somebody. Excuse me, I did a second for that. I have a second. Second.  Yeah, Keith Otto, a 20-year county resident. So with regards to item five, as far as public participation plan, I was very happy to see that there's a number of folks in my community that have been asking about what the particulars are with regards to projects related to the rail corridor in our community, what the process is for that, and how the community might be able to realistically engage and participate to direct projects in a manner which I guess is the most desirable or the least undesirable is the way some would put it. So my ask is in conjunction with this plan that perhaps there's, let's say, a two-page summary of items related to the rail corridor and the process and items where the public may be able to participate within the county. So that could be the items around the RTC and your contractors and consultants, as well as for the county, the public works and the planning commission and whatnot, basically to participate or to speak up at public comment at the end of the process when things are sort of designed and the cement's about to get poured. Obviously, that's way too late. But folks are trying to understand what the different agencies are and what those different points would be for them to participate. And if there could be some sort of summary document, I'm in the county, so that's my personal priority. Obviously, the process would be a little bit different for the city of Santa Cruz or Capitola. But I think that would be beneficial for all, for people to come forward and put forth their perspective. You know, it can get a little bit ugly to put up with a number of us, but at the same time, it's those opinions and perspectives that ultimately lead to better projects and better outcomes and solutions that work better for the wider community. So thank you if you can, you know, do that. Director Rock, can you have a comment? You should look at item 18 on this agenda. You can get the packet for it, which gives you the information online at our website, or you could probably ask our staff person for maybe we have an extra copy of that packet. That lays out a plan, because we're going to spend the next year planning what the public transit aspect of that project will be. And we're working on it today on our agenda is a scope of work which includes public participation. So that's, we're definitely answering your request here. Right. So that is related to the transit piece, but as far as the other aspects of the project, whether that's the freight and whatnot, the trail components. So I mean, I see that and I also saw the items associated with this item, agenda five, I believe. And that's all a good step in the right direction. I think to distill that down a little further would be helpful, at least for the folks that I'm talking to in my community. Let me, Director Preston, do you have anything you want to add to that, anything the RTC has available that might assist this gentleman? I would highly recommend that you get in contact with Shannon Munn's of my office. She's our communication specialist and she can work with you on that. Okay, great. Yeah, and I'll say I've reached out to the county and the details coming back thus far have, in less than robust, I'll just say that. I think you should try this avenue that was just suggested to you, okay. We have a dedicated staff person for public participation and outreach. Thank you. Anyone else like to comment on anything in the consent agenda? Seeing none, I'll bring it back. Sure, yes, do you have a comment? I'm not sure if I'm in the right order here, but I'm hoping. Which item are you wishing to speak on? I'm wishing to speak on 3.36 of the plan. I'm a homeowner on Lazy Woods and this is on the highway nine. This is for a bus stop. Okay, we're not there yet, okay. We're still doing the consent agenda. We get to item, that's item 17. We get to that, you can come up and speak. Thank you for your time. Okay, great. All right, with that, we have a motion and a second on the consent agenda, all in favor? Aye. Opposed? That carries unanimously. Brings us to a regular agenda, which starts with item 13, commissioner's report. Commissioner's report, any oral reports from commissioners? Coffin Gomez. Thank you. Sorry for our tardiness in commuting that highway one. I just wanted to share with you that the emphasis that we've put on when it came to our city council for the budgets for some of these projects, and that was for us to explore further. The funding differences that are needed that that shortfall for the Lee Road project for Watsonville. So we're really pushing that forward to try and move that project along a little further than the timeline that was provided. And the goal is that the staff is gonna look for more funding options that may be available to fix that set the offset so we can get that project moving along. Great, thanks. Any other comments from commissioners? Okay, seeing none. We'll go to item 14, which is our director's report. Hi, I have an oral report today just touching on two quick items. The first one is the regional bike signage project. The county wide bike route signage project is currently in the construction phase. This week, crews are completing the installation of over a hundred signs in the city of Santa Cruz and beginning the installation of signs in the unincorporated county. That'll be followed by work in the various cities. Discretionary funding. At the June 6th RTC meeting, I was directed to meet with stakeholders for input into a proposed process and timeline for the programming of RTC's discretionary funds with the intention to support the distribution of the RSTPX STPG funds by formula basis to the local jurisdictions for the current round of funding. On Monday, I met with the public work directors for the four cities in the county, Santa Cruz Metro representatives were also in attendance. There was a clear understanding that the RTC is still mandated to apportion the STPG RSTPX funds for projects implemented by the cities in the county and other transportation agencies on a fair and equitable basis based upon an annual and updated five year average of allocations. Projects shall be nominated by cities, counties, transit operators and other public transportation agencies through a process that directly involves local government representatives. Projects will still be required to be programmed in the app tip. Distributing the next round of RSTPX STPG funds by formula to the counties and cities will provide a reliable fund source to those jurisdictions for the next three years. There was discussion about the types of projects that recipients jurisdictions may nominate, including major maintenance of the local street network, highway projects, active transportation projects and other non-infrastructure education programs that have traditionally been nominated by the RTC. Local jurisdictions understood that the RTC would no longer be able to fund some of these projects and they may be asked to fund them in the future. Although there was discussion of providing a percentage of the funds to Metro, the public works directors expressed a desire that Metro be funded from other funding sources if possible. There was discussion about using the remaining discretionary fund sources, those other than RSTPX and STPG funds for Metro and other regional projects, including the Harkinsloo project if they are eligible and cannot be funded by other means such as grants or measure D. Since the state transportation improvement program or STIP estimate and guidelines were not yet released, discussion about programming the other discretionary funding was somewhat limited. It was agreed that Metro would assess its needs so that an analysis could be done as to how RTCs should program its remaining discretionary funds. Assuming no RSTPX funds are programmed to Metro, there was consensus among the public works directors that the formula distribution should be done on population with a 5% floor. The floor would benefit Capitola and Scots Valley whose annual share of the funding would not be enough to fund a typical project need. I requested that the public works directors discuss and get concurrence from their CAO and city managers respectively. The group is expected to meet again in a month. I expect to make a recommendation at December 5th RTC meeting. That concludes my report. Thank you. Any questions for the director? Okay, none. Well, I'm just kind of curious about the Metro portion and the funds there. I mean, how much has Metro gotten from these funds? That question was asked at the meeting and it's been asked by various commissioners. It varies year to year. And it's why it's really hard to look at one's funding source in a silo. Often the Metro is funded from the stiff. There have been years where 100% of the stiff needed to go to public transit. And there's years where the stiff had zero money available for public transit. So Metro several years ago received 100% of the funding and so they held off it in future years and deciding how much of the funding that you would get. It's important to also understand that there's been significant changes in the stiff as a result of Senate Bill one. They moved a lot of the transit funding from the stiff to the STA funds. So they now receive a higher percentage or a higher pot from STA funds and the stiff funds estimated lower than it used to be in prior years. So it's really important to understand that it kind of jumps all over the place. So we looked at it at this is a one year round of funding and we really wanted to see what Metro's needs were over the next three years. Three to five years because the stiff estimate is the last two years. Whereas we were looking at the next three years of the RSTPX funds. Thank you. In 25 words, can you explain the difference the acronyms STA and the stiff? I think I don't know that everybody understands them about the availability or just very briefly. Okay, well the stiff is the state transportation improvement program and that was generally set up for the highway system originally but it's available for a lot of different projects including transit. But the CTTC comes out with guidelines on that. The California Transportation Commission. I know there's a lot of acronyms and then there's other funds. The other funding sources are more specific to transit. Just for clarification, I've been meeting with the CEO of Metro and with Mr. Preston trying to work this triangle of funding and the course that we're on, the next meeting which is going to involve the CAOs and city managers, the integral part of this process and I'm actually awaiting the stiff allocations to come out and then with them we'll have all the information that we can I think make a good decision in either August or September to move forward on this. So thank you for all the hard work you've done putting those meetings together. And right after that meeting, the STIP estimate did come out. It was less than expected and it did restrict funding on PTA funds but if Metro's projects are federalized and generally they are, they would be eligible. So but it is less than expected. It's only guaranteed to be 2.6 million and it's in the last three years whereas the RSTP exchange funds which is about 3 million a year would be for this year and the next two. So 100% of the money would be going of the new money programming capacity would be going to the local jurisdictions and those STIP funds that we haven't decided on would be the latter two years and it's important to differentiate between that. Great, good information. Dr. Racken. So is my understanding correct that you're not although you're leaning towards in the end having this be a formula for the cities and the county local road projects, the final decision is not going to be made until we actually know what money is available from the STIP and so we can actually see the full picture. So I understand correctly what you just said. Well I'm not advocating for anything per se. The direction I received was to go that route. So I'm following the direction that I received and working on a formula distribution which will bring back to you in September for you guys to decide. I appreciate that because I think there were two things going on in that motion from our group. Others can correct me if I know properly characterize it but partly it was if the transit district is not completely savaged by this decision then if the money that goes to the local jurisdiction should be by formula and apparently they like it to be by population with a 5% and so forth which is fine but until we know that the transit district has some money left out of all of this I don't think this body wants to sort of make. I don't want to get too far into the weeds because it's not an agenda item but it's on our agenda to come back and discuss that and all the information will be at that September meeting for us to make a decision. And it does include the regional projects too that the local jurisdictions would likely not be willing to fund. Thank you for that report. That concludes your report. Yes. Thank you. It takes us to item 15 which is the Caltrans report. Welcome. Good morning, thank you very much. My name is John Olanek. I'm a planning manager at Caltrans District 5 and glad to be here today and deliver a little bit of an introduction and a report. One thing I'd like to talk about is work zone safety. The construction season has definitely kicked off with a bang as we've all probably noticed this driving on the highways and that's as a result of many things, SB1 funding, plans that have now being implemented for projects but the fact of the matter is there's a lot going on. So, but with that, we last week along with our partner CHP and the Office of Traffic Safety, we kicked off a B work zone alert public awareness campaign imaging shown on the screens here this morning to remind drivers to slow down when going through construction zones and also when passing highway workers. Again, the season is off to a large start. So there's a lot of activity going on. The campaign aims to protect workers from traffic that are literally inches away from the traveled roadway. As Caltrans and our partners also continue to work towards zero deaths, we wanna reduce that in our work zones especially and that's important because in 2018, more than 7,000 work zone collisions happened and of those 7,000, there were 2300 injuries and 46 fatalities of highway workers, both contractors and public workers. So part of this campaign is to help address that and so a question might be what can we all do individually as a communities? Well, certainly when we see work zones, we wanna slow down. When we see maintenance activities or any emergency services on the side of the road, there's the moveover law that's already in place. We wanna do our best to abide by that to move over or slow down and those are just things individually we can do but Caltrans, we're also on our side for our projects working to take it to even the next level. We're kicking off this year some pretty significant enhancements to our work zone protocols and some of our closures. Some of the things we're looking at is to expand some of the time even during our construction work periods. So a lot of times we've craft our work periods to deal with what we feel is probably the best thing we can do for traffic, for seasons but that also takes a lot of time and a lot of exposures for closure set up, for take down. So one of the things we're looking at is if we can expand the work zone period then that puts less days on the road overall less time for set up and closure. That's one thing. Another element that maybe you've noticed already is our work zones are now going to include speed radar speed feedback signs to be complimented with a 10 mile an hour reduction in the speed limit through work zones. So we're really, for a variety of reasons, the most important being the life and safety of our workers and that of the modern public. We're taking whatever steps we can and whatever positive approaches that are available to us to help improve work zone safety. The campaign includes the public awareness billboards. These are not paid children. These are actually family members of high work cow trans employees. And a part of the messaging in our public awareness campaigns is they wanna have their parents come home every night. So that's what I wanted to report on. We wanna encourage all of us as public works agencies and those in the public, maybe some of the public or even contractors working themselves on the road. So a big shout to works on safety kicking off this year. Thank you. That's all I have to report on. Thank you. I think for all of us, we've noticed the repaving of Highway 17, it looks like it's about 95% done. We all greatly appreciate that. But I do notice that you mentioned that they're inches away and at night when I drive through there, it is inches away. So the speed zone, we should all take caution if we're on those roads at night, the work they're trying to do. They're doing a fabulous job, they're almost done. And I'm sure they're all gonna celebrate when they finish it, because it looks very hazardous to me. So thank you for that comment. Any questions? Sure. Yeah, I wanna thank you for Caltrans, the work you've done in the past for District 4. I don't expect you to give an instant analysis on my question. But in the city of Watsonville, Highway 152 does go through there. And then it goes by the high school and this whole thing. And Highway 1 really feeds into Highway 52. How much control does the city actually have when a freeway actually goes through the city? And if they were gonna take four lanes and reduce it down to two lanes, and whether or not they were gonna add roundabouts, Caltrans, what has the ultimate veto power? I suppose the short answer would be yes as the owner operator. But the reality is it starts well before that. Implementation of right sizing of roads, roundabouts, other improvements, that always comes first with a good planning study. And follow that in implementation strategy. And in there is operational analysis. So I know we've been working with the city on those things. Actually we've funded some planning grants to the city to allow them to look at those type of elements. So there are definitely opportunities when those plans are completed to then start discussing implementation. And there's definitely a lot of things at play. The operational thing is important because as I recall, there's a fairly heavy freight movement that uses those highways as well. So those are all the things that are kind of taking into consideration as part of the balance. The next level, what does happen sometimes is an agency, a community will decide that despite maybe what might be negative operational impacts, they still are really interested in these improvements. So there have been occasions, and I believe we have been in conversation with the city of Watsonville for opportunities if the city would like to take ownership under a relinquishment scenario. And so that has occurred in some areas of our district all over the state really. So that's just another one of the alternatives scenarios that could occur. Okay, and then one little more specific, I keep reminding Caltrans that I've talked to your office, they've been very kind. And that would be the enhanced crosswalk at East Beach and Marchion Street right in front of the Watsonville High School. And that's actually on the one way extension of Highway 152, which is Eastlake Avenue. So I think that's still on, it's moving forward. And I think I was told it would be early fall that they're gonna actually start working on it. Do you know that? I hate to put you on the spot because it's a specific one. I have to apologize, I don't know the exact detail of when that would be implemented, but I do recall the conversation and topic. It seems like I recall some correspondence between Caltrans and your office. So we can take that as a follow up to see where that stands. And that has a lot to do with the safety because during school hours, they do have probably close to 1700 students that are crossing that street, not only in the morning going to school, but also at lunch, they have open campus. And then also after school and sports programs in the afternoon. So anyway, that would be part of your safety program. So hopefully we can get that done. Thank you. Any other questions? All right, thank you, Mr. Atlantic for that report. Okay, moves on to item 16, which is a Measure D strategic implementation plan. Mr. Preston. Yes. So in accordance with the Measure D ordinance, the RTC allocates, administers and oversees the expenditure of all measure revenue, which is not directly allocated by formula annually to other agencies consistent with an implementation plan. As stated in the ordinance, the purposes of an implementation plan are to define the scope, cost, and delivery schedule of each expenditure plan project or program, detailed revenue projections and possible financing tools needed to deliver the expenditure plan within the 30 years promised to the voters and describe the risks, critical issues, and opportunities that the RTC as the local transportation authority should address to expeditiously deliver the expenditure plan. The RTC is beginning the process of developing an inaugural strategic implementation plan for measure D revenues by identifying program objectives and goals supported by sound financial objectives. The process is expected to be completed during the upcoming fiscal year of 2019 to 2020. On June 6th, 2019, the RTC authorized the executive director to enter into an agreement with K&N Public Finance, a municipal advisory firm to provide financial advisory services and the planning and analysis related to the development of the measure D SIP. K&N is here today to give you a presentation and included in attendance here today is David Leifer and I had the pleasure of working with David Leifer when I was director of projects and program for the Sonoma County Transportation Authority and he assisted me in the delivery of multiple strategic plans in the past. David serves as manager of K&N and has approximately 30 years of municipal finance experience including five years as an attorney and 24 years as a financial advisor. Also in attendance is Melissa Schick and Melissa has over 15 years of combined public sector and public finance, investment, banking and municipal advisor experience. David, the mic is yours. We have a presentation just so others can see it, we'll put it up on the screen. Okay, good morning. As Guy mentioned, my name is David Leifer. I'm joined today by my colleague, Melissa Schick who's gonna share the presentation with me. We work for K&N Public Finance. We are a municipal advisory firm. We've been retained by the commission to help, as Guy said, with the planning and analysis needs related to the development of a Measure D strategic implementation plan and to advise related to bonding and other sort of borrowing tools. Let's see, just to by way of background about what a municipal advisory firm is, there's a regulatory framework. Congress has regulated our little niche of the world in public finance. They have assigned to firms like ours, a fiduciary duty, which means we are obliged to put our clients' interests ahead of our own. The idea is we are here to provide analysis, objective analysis and advice to support informed and we hope prudent decision making by policy makers. So that's our role and we look forward to, I think this will probably be the first of several occasions when we'll be in front of you to help answer questions and provide briefings over the next several years. By way of background, we've put some logos up of some of the other agencies. Guy mentioned Sonoma. We work with your peers in Monterey and San Benito. I see Santa Barbara's not up there. They're a client. We do strategic planning and bonding assistance with all of these agencies. So we have a lot of experience working with self-help county transportation programs and particularly programs that have inaugural taxes that might be doing bonding for the very first time. The purpose of the presentation today is to do a couple of things. One, we wanna introduce the process by which a strategic implementation plan is developed and what some of its purposes are. We wanna introduce you a little bit to some bonding concepts because bonding is one of the important tools that can be used to deliver projects on an accelerated basis. And then we know there's some interest by the county and others in potentially looking at bonding against the direct allocation shares, not just bonding for regional projects but bonding for potentially local projects. And so at the end of the presentation, I'm gonna introduce that topic and talk to some of the different tools that are available and some potential policies that you as a commission board may wanna consider to guide that process. Okay, so as Guy mentioned, the voters approved an expenditure plan. The expenditure plan we're gonna talk about but it guides the allocation percentages for the expenditure of money. What a strategic implementation plan does is provide a roadmap in a sense to the feasibility of actually delivering projects. Over what period of time can projects be reasonably expected to be delivered? What additional funds, if any, might be needed? What sort of borrowing tools, if any, might be needed to deliver the projects on the schedule that is desired? So there are a number of sort of levers and trade-offs in developing the strategic plan. It's a, but as I say, it's a roadmap and it's gonna get updated regularly. We're gonna talk about that and that process is sort of an iterative process. So here I've outlined what I'd say is sort of the four elements of the plan. We're gonna talk a little bit more about each of these as we go through the presentation but first is the overall framework where we look at what are the projects? What are the construction schedules expected? What's the timing that's desired? Then we're gonna look at the revenue side. How much money do you have? How much growth is there expected to be? That's gonna impact the timing and delivery of projects, of course, which is why it's important to update these plans regularly because we can make forecasts but we need to update that for reality. And then we wanna integrate other information, other outside funding sources that may be available to you to deliver the plan. We're gonna take all that information. We're gonna dump it into a cash flow model. We'll show you a sample in a few pages, just a glorified Excel spreadsheet. Revenues, expenditures, and then we'll see after we drop in all those capital expenditures, where are their shortfalls? We say, okay, we got all these capital expenditures but we're bringing in revenues every year and so we may have some shortfalls. And then we're gonna look at what are the tools to plug those shortfall holes and bonding is one of those tools. Of course, bonding comes at a cost. So what's the trade off with that in terms of the overall delivery of dollars for projects over the 30 year life? So we're gonna do a bonding capacity analysis as part of the process. And then as part of this process, we wanna help you develop some policies related to sort of financial tools, borrowing, inner program borrowing, use of reserves, loans, et cetera. And then finally as part of that is what we're doing today which is providing some workshops or training for the board and for staff and for any other stakeholders that you think are important to be included in the process. Just one last short page on the plan itself. We've sort of talked about the planning process. Now we're gonna talk about the actual strategic implementation plan which will be developed and ultimately approved by your board. Really these six bullets here, sub-bullets are all the things we just talked about but this is what you'll find in the plan. There'll be revenue allocations along the lines of the expenditure plan and we'll look at sales tax revenue forecasts and we have a slide on that to talk about some of the different methodologies that we might wanna use to forecast revenues. Of course there'll be some discussion of the projects themselves and what the timelines are and there could be discussions amongst yourself about the priorities which should be delivered first and why, what sources of leveraged or matching funds are there and then what is the bonding availability to plug any shortfalls and then finally there'll be a discussion in the plan about policies that impact the financial implementation of the plan. Many sales tax agencies provide updates to their plan typically on a biannual basis. It could be more frequently but we wanna accommodate changes in project costs, matching funds, revenue growth, all of these assumptions which will go into the plan become more certain as more time passes and so we would expect that this plan would be updated at least every two years and the plan itself and any updates would be approved and discussed by your board. So what I wanna do now is turn it over to Melissa. She's gonna talk a little bit more about the details that are gonna go into the plan on particularly for regional projects and then I'll pick it up towards the end. Thanks. Good morning, I'm Melissa Schick and pleasure to be here on the screen today is the Measure D expenditure plan. So this is what was put forth before the voters in 2016 and it drives the allocation of Measure D revenues. In this case, there's direct allocations to cities and counties and then there's also regional funding where dollars will be directed to various regional projects. The expenditure plan serves as the primary basis for your strategic plan and so your strategic plan will program projects and revenues within the context of the expenditure plan. So what we'll do in our process is making sure dollars all stay in their appropriate lanes, if you will. In addition, the expenditure plan projected that Measure D will generate approximately 500 million over the life of the tax. That was assuming 17 annual revenues of 17 million in 2016 dollars. So also the strategic plan will look at a realistic forecast of future growth for Measure D. So along those lines, the first thing we'll do with the staff and in the context of preparing for the strategic planning process is look at Measure D revenues and start thinking about realistic assumptions for growth. And that will really be the primary driver for us to estimate future resources available for project delivery. There's various data points we utilize to forecast revenues and this is just one example. We've charted historical taxable sales in Santa Cruz County. You'll see that there's a good amount of volatility of growth in any given year. Just taking a five year look back at growth, it's approximately 4.3%. And then looking at a 20 year horizon, the average annual growth rate is lower at 2.76%. So it's just looking at a lot of various data and indices, also maybe working with local economic development departments and using this information to help us guide the future resources of the Measure D tax. So apologies for a very busy slide, but this is an illustrative example of what a cash flow model may look like for your program. And really the cash flow model establishes the implementation framework for Measure D within the context of your expenditure plan. So what does it do? It forecast annual sale tax available for projects based on a realistic assumption for growth of the revenues. And we put that into the model and you'll see in the blue shaded rows at the top of the illustrative model, we've shown just an example of revenues coming in at the top and then some assumption for growth over time. The other thing a cash flow model does is it starts putting revenues and allocating revenues to their appropriate buckets and funding allocations. So you'll see in the middle of the illustrative model, there's oftentimes a space to allocate revenues to direct allocation programs like you all have in addition to regional project programs. And then within each of those buckets, we look at the cash flow associated with money out to regional direct allocation programs in addition to the projects and the timing of cash flows necessarily to deliver the larger scale regional projects. So there's a couple ways that we look at delivering regional projects and actually a couple of ways just to deliver the larger scale projects. Some is just utilizing PAYGO measure D revenues allocated to that funding bucket. But the drawback with PAYGO is that doesn't necessarily always allow for the acceleration of large scale capital projects and the PAYGO approach may be more applicable to direct allocation funding programs where it's just dollars in and dollars out on an annual basis. The second approach is borrowing, whether in the form of a short-term loan or bonds to help accelerate shovel ready projects and it may help minimize rising infrastructure and construction costs. Really kind of the optimal financing plan will likely involve a mix of both PAYGO funding as well as some borrowing in the form of bonds or loans to deliver your regional projects. So turning back to the cash flow model, again just the same illustrative model but in this instance we've infused proceeds from an example bond issuance in fiscal 2021 to meet cash flow deficits over a three-year period. So you'll see that the ending balance line within this illustrative model shows positive ending balance through fiscal 2023, through some combination of cash flow revenues being able to support the annual projects and in addition to the issuance of bonds. You'll see in fiscal 2324 in this example we've highlighted that ending balance becomes negative again and it would be likely that there would need to be another borrowing at that time or some of the project expenditures would need to be pushed back just because there's not enough annual sales tax revenues to support those projects. So what are some borrowing tools and options to help accelerate projects? And in this context just really speaking of the regional programs, David will speak to local tools but really the primary tool utilized by your peers in the self-help county space is long-term, the issuance of long-term sales tax revenue bonds. There's other options within loan programs with the federal government or the state whether it be TIFIA or iBank loans probably the most efficient tool is a long-term sales tax revenue bond. We've also worked with transportation sales tax agencies that have utilized interim borrowing and that tends to be more with smaller scale projects where a big bond issuance isn't necessary and maybe it's a short-term loan with a bank or we've seen another entity use a county treasury pool or there's also facilities to just have an interim borrowing program where you draw on a line of credit as needed and then take out that interim loan or borrowing with a long-term issuance. So just a couple of things as we work with issuers in thinking about borrowing and how much to borrow and when to borrow. And first and foremost, your borrowing will be driven by your expenditure requirements and that really drives the amount and the timing. So as your regional projects start taking shape and this expenditure needs hit a peak that typically warrants a bond issuance. Those projects actually, in order to issue a bond, really need to have evidence of CEQA compliance as well as the related permitting in place. And then there's also tax law. So an entity like RTC would be issuing tax exempt bonds and in that case tax law requires that after issuing bonds that the expenditure of those bond proceeds take place over a three-year period. So we can't issue bonds and having those proceeds sitting around for a long while, we need to have the projects ready to spend the proceeds. The term of your borrowing will really be driven by two things. First is measure D. You can't issue bonds with a term beyond the term of your tax because those revenues serve as the security of your borrowing. And the second again is our friends at the IRS. They like to know that your borrowing will not exceed the useful life of your project. With larger scale transportation projects that tends not to be an issue. And then the timing of borrowing, as we saw in the previous example of the cash flow model, it tends to be that issuers like yourselves will sequence transactions that really meet the timing needs of certain projects. So it's likely that you wouldn't just do one bond. You could do a couple over a period of seven to 10 years. And then your ability to bond and the amount of your bonding is really, will be constrained by your tax. And your tax, at the time of issuing bonds, you'll need to, we'll need to show to the market that your tax will be sufficient to support the obligation to pay debt service. And we look at the tax within the year your bonds are issued. So your strategic plan will forecast growth over time, growth of revenues, and we'll use that for planning purposes. But when we issue a bond, we really look at your actual sales tax revenues in the year the bonds are issued. We'll also need to look at debt service coverage. So how much measure D revenues are available to support the ongoing debt service on the bonds. And typically we need to show that there'll be revenues over one times that of the debt service. So usually, if you had one and a half million of annual sales tax dollars, your debt service could not exceed that amount. And typically it would be lower, for example, closer to a million. And then interest rates at the time of issuing bonds will also drive your capacity. In a higher interest rate environment, you have lower bonding capacity. David will get into this a little bit more when we're talking about local agency tools and options, but just a brief snapshot of the security pledge and the RTC as the local transportation authority as the entity who is able to leverage the measure D tax. So it's the California department upon issuing the bonds, the California department of tax and administration will then direct the measure D revenues to the bond trustee. And the bond trustee will pay the debt service payments before allocating the revenues back to the RTC. So after issuing bonds, the after the authority would issue bonds, those revenues, the bondholders have first claim on revenues before the revenues coming back to the authority for use on PAYGO projects or direct allocation funding programs. And then this slide 13 just kind of puts numbers around bonding capacity, it's in sizing constraints and this coverage. And the first is coverage within the regional program. So again, the notion of staying in your own lane and making sure that if the regional program issued bonds for a specific project that the debt service would be supported by the regional program allocation. So for example, in fiscal 18, measure D revenues were just slightly above 20 million. And if we were to say allocate all of the regional program share to support annual debt service, that would be approximately 10 million. So the regional program could support a borrowing within its cash flow such that the annual debt service was approximately 10 million annually. The, this, oops, let's go, oops, this way. Oh, sorry, I was gonna go back a page, but thank you. Yeah, oops. That's all right, yeah, sorry about that. This one is what, this is the legal water flow. So this is where all of this is how bondholders and rating agencies look at a bond issuance. So all of the measure D revenues then would support that service to achieve a debt service coverage ratio. So if we go back here, the second box shows that assuming fiscal 18 revenues of just over 20 million. And if the regional program had the annual debt service of 10 million using the 20 million over the 10 million, your legal coverage is two times. So bonds are sized first and foremost to stay within the debt service can be supported by its specific program area, but then there's a legal coverage requirement such that all revenues, the coverage is based on all revenues of the authority. David.  So congratulations. Questions now, or are you gonna wait till the end? I'm saying just wait till the end of the presentation. Yeah, and you're gonna hear more about bond if we're happy to answer questions today and we're gonna review these concepts multiple times before you ever issue a bond. I'll just add one comment to what Melissa said and then I'm gonna move on to the local bonding. But the reason why debt service coverage is so important is that sales tax are volatile as you saw. So if you issue a bond today and next year we have the big recession and sales taxes decline, the investor can only look to the sales taxes for security and you are not in a position to increase sales taxes.  So obviously from an investor point of view, if you're lending money, you wanna make sure there's a cushion there. So if debt service is X, you want X plus Y in terms of revenue so that if there is volatility and there's a dip and there have been some significant dips at various points, 10, 20% over one or two years, that there's still adequate money there to pay the bond and that's the whole idea of coverage. And it's gonna become important when we talk about bonding at the local level because of the different amounts of coverage that might be needed for that as well. But that's the whole idea is that there's financial, there's cushion when you issue the bond to protect the investor because this is not a situation like a county or a city wastewater enterprise or water enterprise where you can raise rates and generate more revenue the next year if there's a dip in delivery of water supplies as an example. That's one point I wanted to make. Yeah, I know there's gonna be some questions about all that bonding and we'll get to it. The other thing I just wanna reiterate that Melissa mentioned is this idea that money needs to be expended within three years generally, there's gotta be, when you borrow it in order to use the tax exemption which is favorable, there's an expectation that you have projects that are ready and that the money will be spent in three years which is why often there's multiple bonds that need to be issued as she mentioned over the course of 10 years or a longer term program. Okay, so what I wanted to do now is sort of, we've talked about bonding at the regional level and we're gonna talk a little bit about bonding at the local level and before I get into these slides just to comment about why, why was this even a topic? For many, many years I would say there wasn't a lot of interest in this topic. Most programs where there was a pass through or a direct allocation, it's not uncommon. The local agencies did not use bonding because they really needed the money for road maintenance on an annual basis and so the money would come in annually so that if they bonded for a bigger project they wouldn't have the sales taxes available annually because they'd be going to pay off the bond. So that was sort of the traditional working model and it still probably is for a majority of agencies but recently we've definitely seen more interest in this. I think it's for a couple of reasons. One is the obvious backlog of road maintenance projects that have accumulated over a dearth of funding availability for many, many years. I think that's one. I think two, now with SB1 there is more money around coming to cities and the unincorporated area of the county to address maintenance issues and so maybe that frees up a little bit more flexibility to use other monies like the self-help sales tax to tackle some of your larger projects at the local level so there's probably interest there and then of course Melissa talked on page seven about some of the reasons for bonding. Minimizing construction cost growth. If you're seeing large escalations and inflation on the construction side you wanna get projects delivered now then that's a reasonable tool using a bond to accelerate the delivery before those costs go up. Keep in mind of course that there is a cost to borrowing as well. There's an interest cost and so if those two were awash, if your construction costs and your interest costs were awash you're not necessarily saving money by issuing the bond. You're still delivering the project sooner which might be an important policy objective but it may not be economic. On the other hand if inflation on construction is going up at seven, 10% a year and the cost of borrowing is at 3% then obviously there might be an economic benefit to bonding so those are all the trade offs but bonding isn't free. It's just something we all need to keep in mind and so every dollar that goes to pay off interest on a bond is $1 less for project costs out of your sales taxes and sales taxes will be a finite amount so we believe bonding is really an important tool but we try and minimize it as well. As Melissa mentioned earlier we want to optimize the amount of dollars that you can use just straight up pay as you go because there's no cost to those dollars and then the amount of bond proceeds and so every strategic plan at the regional level and I'm sure your own plans when you put your local hats on will do the same optimizing dollars for pay go versus dollars for debt service. Okay, with that said let's talk about local agency options to accelerate the delivery of these direct allocation projects and against your direct allocation shares. So Melissa made one really important point, well among many and that is that under the Measure D ordinance it's really only the RTC in their role as the local transportation authority that has the authorization, the legal authorization to issue sales tax revenue bonds secured by Measure D. So per the ordinance only this agency can issue bonds, sales tax revenue bonds secured by the sales taxes, okay? And that's typically for regional projects though the authority can issue for local projects as well we're gonna talk about that. But that does not mean that local agencies, cities and the county have no tools available to them to issue bonds and to accelerate their delivery of projects with the sales taxes. It just means they can't use that tool but there are other tools that can be used and we're gonna talk first about those and then I'm gonna talk about how you also can come together through the authority and have the authority be the issuer of bonds. But the tools, the first tool I wanna talk about briefly is interprogram loans. That's one tool that doesn't involve bonding and may be appropriate for a smaller shorter term need by an agency that's maybe too small to bond. It's not worth the cost, the overhead, the administrative hassle of issuing a bond. So we'll talk a little bit about that. Then we're gonna talk about these options I mentioned for the local agencies to issue some sort of bond. It's not the same bond that the authority can issue. And then finally the sales tax revenue bond which can be issued by the authority and it could be issued on behalf of local agencies using the direct allocation share as the security for the debt service. So those are the three buckets of local agency options. This first is the interprogram loan. We know that the expenditure, excuse me, the expenditure plan sets forth various program areas. Some of which may have projects that are ready to roll and some which don't. So there's, as you can imagine, hey, if I'm ready to go and you're not, let's cut a deal. Let me borrow a little bit of your share, deliver my project over the next three to five years and I'll pay you back from my share over time. That's doable, it has been done. It may be more likely that a local agency that has a shovel ready project is going to borrow from the regional project that allocation because the regional projects may have a longer term horizon through CEQA and planning and getting matching funds. And so some of that money just may be accumulating and that may make more sense than doing interprogram loans from each of you. But this is all possible. It's one of the areas where I believe we wanna work with staff and your board to develop some policies. When would interprogram loans be permissible? At what interest rate would the borrowing be repaid back? Would there be the ability if it's borrowing from a regional program for the RTC to directly intercept the funds of the local agency that borrowed the money to repay the loan? All of these things I think are important. Considerations we've listed, I just mentioned most of those, the interest rate, timing and flexibility constraints. Obviously we don't wanna impinge another program's ability to deliver their projects. And so what kinds of protections are we gonna apply to ensure the overall equity of the program allocation? So we can address interprogram loans in the policy section of the strategic implementation plan. And we can have a conversation around that. And we did that in Sonoma and we have some policies from Sonoma that we can use as a starting point but there's others as well, okay? All right, so now we move on to the idea of local agency bonds. So these would be bonds that are issued by a city or the county, not by the authority. And so what I've said here is that local agencies can basically, there's two types of bonds that you could issue. And I don't wanna go too far into the weeds here but I'll keep it at the high level. First, and many of you are probably familiar with this are general fund-backed obligations, a lease revenue bond or a certificate of participation. So every city and the county has the authority under the state constitution and under governing law to enter into leases and to enter into contingent obligations which is what a lease bond is, to fund projects. And so what one could do is issue a COP for X millions of dollars sized carefully so that your share of the direct allocation dollars would be adequate to pay that debt service. So you wouldn't have to impinge on other monies of your general fund to pay that debt service. Keep in mind, you would be taking the risk. However, if the sales tax is declined, the general fund is still on the hook to make that debt service. So you probably would want to size a little of your own coverage or your own cushion into that bond to make sure that if there was a decline, you're not dipping into other of your general fund sources of revenue. But this is totally something you can do. And it's not technically secured by the sales tax revenue bond.  We'll talk a little bit about the pros and cons. One of the cons, if you will, of a COP or a lease revenue bond is you need to have a piece of real property.  Water treatment plant, very good. So I think some of you are familiar with this tool already but that can be done. And I've worked, I've been in front of many city and county councils and boards talking about this tool. And we'd be happy to talk to yours councils and boards if necessary. Okay, so that's step one is a COP. You might say, well, I don't wanna do that. I don't wanna pledge the general fund. Is there anything I can do to not pledge the general fund? But I know, but issue it at the local level, not through the authority. Yes, there is a tool that we call an installment purchase revenue bond or installment purchase revenue COP which could be structured so it's secured solely by your direct allocation revenues. Let's just say your agency is getting a million dollars a year on direct allocation. You think, you obviously don't know because of growth and volatility, you don't know but you think you're getting this amount of money. You could structure a bond that pledges your share. Okay, that's not technically a sales tax revenue bond which again only the authority has the authority to issue or the commission but could be secured by your share. Of course, the market is going to require that same cushion if not more that they would require of an authority issued regional bond. So if you're getting a million dollars a year, you probably only wanna have debt service that's six, 700,000 a year so that there's a cushion in case your share drops. There's still money there because there's no general fund pledge behind it. That's one point. The second point is if you remember back on Melissa's slide with that waterfall when the authority, which is you obviously in your hat as the authority issues a bond for the regional program, all of the revenues are pledged to the investor. Okay, now we would size that bond carefully as Melissa said, just to the regional program's share of revenue. So if the regional program again gets 50% of the revenue, we wouldn't size the debt service to more than 50% but the investor knows that all of the revenues are there to repay the bond. So effectively any bond that is issued at the local level secured by your share through this installment purchase revenue cop is effectively a subordinate bond to any bonds that are issued by the authority. That's not prohibitive. It doesn't mean it can't be done. There might be a slightly higher cost of funds and it needs to be coordinated with the regional level. The disclosure to the market is super important. It needs to indicate to the market that this is not an authority bond, that it's effectively subordinate. And this is important. We saw this at TAMC where the advisor to TAMC in Monterey. I think the city of Salinas was issuing a local installment purchase revenue cop. They shared the documents with staff at TAMC. They shared it with us. The disclosure was not appropriate. We got on the phone with the underwriter with the bond council. They of course agreed once we pointed out why and they had to really change their rating presentation and their official statement. It affected their rating not terribly but it was important to be clear of the priority of revenue. So I believe at the end, we're gonna talk about policies. Any type of issuance at a local level that doesn't involve the authority should at least be coordinated with authority. Include the authority staff. Make sure that we and any lawyers that work for the authority are at least working cooperatively to make sure that we don't trip over each other and do something which would impinge or run counter to the ordinance. So I've sort of laid out the two ideas. Why a cop versus an installment purchase revenue bond? A general fund cop, we talked about the negatives. Pledge of the general fund, pledge of real property. The positive on it is that you could issue more. You could issue at one times coverage. If you're bringing in a million dollars a year, you think you could issue a bond secured size to a million dollars a year of debt service because the general fund's taking the risk that revenues might drop. So that's one reason why you might think about that tool versus a different tool, you have more bonding capacity. On the other hand, the installment purchase revenue cop, the positive there of course, is that it would be secured only by your share of revenues and therefore you're gonna have to build more cushion in. So that's the positive and the negative. So it's doable with some coordination and the appropriate approach to education and disclosure. Third and finally, what about bonds that the authority issues, but on behalf of direct allocation projects, Melissa talked a lot about authority issue bonds for the regional projects, which are very important and I presume that'll be the focus of the strategic plan. But each of your agencies working with your public works directors and your own governing boards will be talking about whether you want to bond or not. So let me just talk for a minute about that and then I'll wrap and you can ask your questions. If the commission were to issue sales tax bonds on behalf of the direct allocation programs, there are a couple of important considerations. One, we might run out of coverage for the authority wide project if every single agency were to come and say hey yeah, we want a bond against our share which is unlikely, I'll grant you that, but it's possible. If each of your government entities said yeah, we want a bond and so the authority said okay, well let's look at that. We know we want a bond for some regional projects and we want a bond for each of the local projects and we generally want to get a good rating and a good interest rate and so we need to have some cushion. There isn't enough cushion to go around possibly and still get to the level of cushion we think would get you the highest rating. Let's just say 1.5 times coverage. In this box, this is a variation on Melissa's boxes. Here you got the 20 million a year, we're just saying let's just say those are the revenues at the time you issue your bond. Your regional program allocation, let's just say you bonded against the full regional, that's 10 million of debt service. Let's just say you bonded against the full city county direct allocation share which is about 27% so that's another 5.5 million. So you're up above 15 million of annual debt service against 20 million of revenues so now your overall coverage is down to 1.3 times instead of say 1.5 times. It's just an illustrative model. There's still coverage there because there's some other programs like transit and bike ped and other things that aren't being bonded against in this example. So we just have to be more careful if that's the approach and adopt some policies about how the locals could issue bonds through the authority and I'm gonna talk about that in a second what those policies are. So it's doable and it may make sense to do that also at the same time that the authority is issuing bonds for the regional project to achieve some economies of scale not duplicate cost of issuance, save some money basically for everybody involved. So this slide's a little messy. We've really talked about it all but pros and cons you can take this with you. You can call us and ask us questions later if you have them with your various staffs but we've laid out some pros and cons for each of the three options. We've got the general fund lease which presumably gives you greater bonding capacity and maybe a lower interest cost depending on the rating of your general fund but it pledges the general fund and ties up an asset. It's a pro and con. The local agency installment purchase cop protects the general fund, no need for an asset but probably a new credit. So a little bit more work involved in establishing the credit. It's more complicated credit. It's gonna probably have a lower rating, a higher interest cost because it is effectively a subordinate obligation to authority bonds and you'll have lower bonding capacity because you need to build in that financial cushion. And then finally the authority issued bond that we talked about also protecting the general fund and not requiring an asset and could have economies of scale when you do it all together with the authority bond but those probably on a policy basis we'd probably say the best course of action is to say yeah, the authority can issue bonds for the direct allocation share but maybe those should be on a subordinate basis to any authority issued bonds for regional projects and so there's still maybe a little bonding capacity constraint there and possibly slightly higher cost of funds as a result of the subordinate lien. Though of course interest rates are super low right now so even out of subordinate lien that might still be super cost effective. So I'm gonna finish this last page. Sorry, I'm going so long. Page 20, these are some of the policies that we might consider working with staff and your board ultimately around local agency bonding. Clearly local agency bonding should be coordinated with staff at a minimum through the evaluation and implementation stages and inter program loans of course necessarily involve the authority. We need to develop some policies around inter program loans. When, how much, how does it get repaid? Bonds issued by the authority themselves. We would need to just discuss how to preserve the coverage for all players especially for the regional program. So we might require debt service coverage for the local programs or subordinate liens, et cetera. And then, yeah, we probably wanna talk about installment purchase revenue cops issued by the city or the county making clear that they're gonna have a subordinate claim on sales taxes generally and that needs to be disclosed appropriately in the various disclosure documents. So I'm gonna end there, I know it was a mouthful but I hope you found this helpful and Melissa and I are both available for questions. Thank you, David and Melissa and I'm sure you stimulated some questions. I'll begin with Commissioner McPherson here. Yeah, thank you for your detailed presentation. Very well understood as best it can be. And first of all, I wanna thank the voters of Santa Cruz County for approving measure D. We wouldn't be having this discussion if you wouldn't have approved that by more than a two-thirds margin. So thank each and every one of you. The first page there, well, in measure D, it said that 30% would go to local roads and you, I've seen that the neighborhood projects include the, there's 27% and then there's 3% for neighborhood projects, Highway 9 and Highway 17. So those are the two specified but that's where that 30% is made up. I wanna make that clear because I know that was an important, when we were on the campaign, the biggest percentage is gonna go to local roads and so those are inclusive in that. So that's just for me to clear my conscience, I guess. Yeah, but that's our understanding as well. And another thing that we really pushed is that Santa Cruz County would be one of a few in the state, I believe now, to be a self-help county. And that means that the state recognizes you're helping yourself with your transportation issues. So we will put a line item in here for self-help counties. And as I remember, it was 200 or $300 million total. And for this county, I think it was gonna be in the neighborhood of about $200,000 or $300,000 a year. Is that about right? So I think you're talking about a portion of Senate Bill 1 which is the local partnership program funding. And that was put into Senate Bill 1 to be an incentive for local entities to tax themselves. So there's been a lot of debate on that program recently. Right now, in the previous cycle of programming, 50% of it was done by formula and we were receiving about 300,000 a year. And then the other 50% was competitive. There's been some discussion about changing that to provide more by formula as opposed to by competitive basis. I've actually been trying to push more for competitive because smaller counties can't do a lot with $300,000 a year when you're talking about some very, very large projects. And we're working on a compromise that would provide a higher percentage by formula but a special bucket for smaller counties to compete for. And we think that overall that would actually provide opportunities to bring more money to the region. Thank you. Thank you for your effort. We continue pushing and pressing for that. And it's just another benefit of Measure D and I just want to assure the voters also that included in that as an oversight committee. So we have an updated annual report of how we're spending our money so people can be assured that we're doing what we said we do. Thank you. Thank you. Mr. Rodkin. First of all, thank you for your presentation. I've been in local government and regional groups like this for over 30 years. That's the clearest presentation really on how bonds work and what the considerations are I've heard all that time. Great, thank you. And I don't want my questions to sound like I'm against doing bonding. They may end up sounding like that's not the point because it weren't for bonding. City of Santa Cruz wouldn't have a water treatment plan a sewage treatment plan. Our roads wouldn't be paved. They all depended on bonding that we've done over the years. So my first question is, can you give, did I understand correctly that the cushion you need generally for the bond market is about 1.5, in other words, like an effect of 150%. You need to. Yeah, it's like a third extra. It's a third extra. I mean, that's a working assumption. One thing to note, sales tax revenue bonds are viewed favorably by the market. It's a good credit. The ratings that you get, the higher the rating, the lower the interest cost, right? The lower the borrowing cost. And so the higher the coverage factor, that will impact the higher rating. So 1.5 we think is consistent with a sort of double A category rating. It's a very positive rating. It could be done, a bond could be done at a lower coverage, maybe one and a quarter, but it wouldn't be as favorable. So what we see here is that since on a regional basis you're only gonna bond against 50% at most and probably not even that, but at most. So effectively there's two times coverage for the regional bond. So there's no reason to drop down to 1.25 and get a lower rating. At the local level, then we start to look at what are the trade-offs? Maybe a lower rating is better because you get more money, we could talk about it. But yes, that's our working assumption. And again, for the general public about this, when you think of a recession, most people are thinking there's nothing, the bottom drop down. But in fact, this is the 1.5 number, something is on the level of the worst recessions even like the five year one we just had recently, they don't take more than 50% of the tax money. Yeah, I mean, we've seen 10, 20% declines, but. And you give us a ballpark figure for what the borrowing costs are for a bond and was including the setup, establishing the bond as well as the interest rate you're paying. What percentage of the money that you're getting from measure D? Let's say, for the sake of argument, we bonded 50% of it. I'm not gonna do that. Yeah, it's a big number. What percentage of that would be going down? I can't answer that one. I didn't think. I might try to really answer that one. Your term of the tax is 30 years and remember the tax has been going now for a couple years. So let's for the moment assume you're gonna issue 25 year bonds. Just yesterday we were in the market with approximately a 25 year issuance and it was high A, low, double A rated and the interest rate all in cost of borrowing on that was 3.06%. So we're at an incredibly low interest rates right now for planning purposes. We often use a higher estimate for debt service costs. And then you wanna talk just briefly about the cost of issuance, the actual consultant costs, et cetera. Yeah, so your cost of issuance is one payments to consultants, advisors in the form of municipal advisors and legal advisors and then just ancillary cost bond trustees and rating agencies. And then there's also a payment to an underwriter whether they're purchasing your bond or negotiating the sale of the bond and that's in the form of what is called an underwriter's discount and that tends to be paid on a dollar per bond basis. So if you have a bigger offering, you have a larger payment to the underwriter whereas the consultant fees are just fixed fees. And on any given transaction they end anywhere. Yeah, on average 300,000 in terms of all of the consultant fees. One last question. If we were to issue a bond for city of Watsonville and we talked about this for that was gonna be based primarily on their share that they were guaranteed by the formula that we worked out. But in the end, we're gonna, it's not gonna be their general fund but we're gonna take the ultimate responsibility if things go badly and so forth. So who's we? The authority, the RTC. And so we're putting the entire 500 million bucks at risk. Even though again, I don't think it's all at risk but legally it is. How often are general authorities willing to do that for local governments? I'm trying to get some sense of whether that would be like extremely generous and never heard of before or something that's done every day. I don't have any idea about that. Yeah, I haven't seen it done very often. I saw it in Napa County when they had a flood tax and we were the advisor and we did allow bonding against some local shares but we had a policy adopted by the, it was a flood protection authority that the bonds be on a subordinate lean basis to any bonds by the regional issued at the regional level. So that, I guess the answer is it wouldn't be done without protections for the priority project at the regional level and the bonding ability at the regional level and protections for other local agencies because you're pledging everybody else's share as well. So there would have to be a sizable coverage factor to really protect against declines in revenues, I think is the way it would work. But as Melissa said, that's the only occasion I can think of it. And if the bond holders are, they're being put in the second or third position for getting the money if everything falls apart, they're gonna wanna hire interest rate on their bonds, obviously. Yeah, yeah. My question is, again, that was a really excellent question. You seem like you understand it well. Commissioner Cap. You bet. Actually, I won't repeat a lot of that. The interest rate and everything and how much we pay, is there an actual figure like 5%, 7%, kind of like a home loan or whatever like that is, is there a percentage? Is it 20%? For the interest rate, as Melissa said on this recent deal we did, it was 3% or 25 year money in the current market for a reasonably well rated entity. So again, by time you're ready to issue, it could be a year from now, it could be two years from now, we'll see where rates go. We're at a historically low level, but I've been saying we were at a historically low level for about five years and we're still there. And all of the events that are happening nationally and internationally seem to be keeping interest rates low given all of the volatility. Okay, and then I know you're the messengers and all that, as far as the Measure D money, we're spending how much on consulting with K&M? Right now, to assist in the strategic planning process, we charge on an hourly basis. Our rates are in the 300 to three and a quarter an hour for the two of us, I think if I remember correctly. And so it's a time and materials basis at the moment. If we were to assist you in a bond transaction, our typical approach is a fixed transaction fee, which gets paid from the bond proceeds, typically in the range of $100,000 or less, something in that level, yeah. And the reasoning I guess for the bonds is when Measure D was passed, that was before now the federal highway money that's being withheld for the freeways, that affects Caltrans and it affects us approximately about eight million probably or more in Santa Cruz County that we had spent on emergency repairs. So the public, I guess, that asked me, they expect that once Measure D passed that we were gonna be shovel ready and be able to go full bore because we were gonna use leverage and matching funds from the state or federal. Somehow we're not hearing that. And that's my concern. What I'm seeing here is the money that we're bringing in for Measure D should be for leverage and also matching funds from the state and fed. And then if we're not getting it, we're going down a path of borrowing and borrowing with this money. So, am I mistaken? It's kind of depressing in a way. Somebody have an answer? I think we're reasonable where we are. Yeah, remember we passed Measure D because we could not count on revenues from the state and federal government. And so we wanted to become a self-help county. So we would have access to funds. And what we are talking about in this presentation is to leverage these funds to potentially accelerate the use of the money to do the projects now rather than waiting to do them all over a 30 year period. And what is being presented here is options for how that could be done. We in the end will choose whether we wanna do that acceleration and at what level and for what kind of projects. But there will be policies. But Measure D without a doubt provides critical resources for us to do road repair on projects that we're doing now. In the county of Santa Cruz, we're gonna be having $2.9 million in this year's budget on road repair that we did not have prior to the passage of Measure D. And that represents probably a twofold increase on what we were spending on roads in 2016. So it's a big increase. And now we're just figuring out how to potentially borrow off of it in the future to get the projects done sooner. Okay, and I guess that's my point. Maybe I'm the only one mistaken here is if we have like 2.5 or 3 million coming in in a year, are we getting matching funds or is the leverage getting us another let's say 2.5 or 3 million from the state or federal government because that's what the public that I talked to was looking at. Are we actually getting that matching funds or leverage that we were talking about? We are eligible for additional funds from the state as our director just pointed out. There's a discussion about how much is gonna be by formula and how much will be in competition. Those of us who campaigned in favor of Measure D understood that when we were out talking to the public that we were gonna be able to use this money as leverage and that we would be able to access additional funds. Right, and have we received any leverage money? So we're in the first cycle of the SB1 program, which is really our best opportunity to leverage funds. We didn't have a lot of regional projects ready. Now I'm speaking mainly about regional projects because those are projects that I have control over and that I can actually submit applications for. Local jurisdictions can certainly submit their own applications for leveraging funds too. I don't think it's an either or situation where we're looking at bonding and paying for the project versus asking for grant money to pay for the project. I think it's a combination of both and there's a sweet spot that we have to kind of reach. It takes a while to get projects, big projects ready for construction. Sometimes it can take five to 10 years to get a big highway project ready for construction. There's a planning phase. There's an environmental phase. There's the need to acquire right away and to do final design before you get to construction and then you actually have to construct the project. One of the things that K&N clearly emphasized today is the need to have secret clearance before you can issue bonds. So I'm trying to get as many projects out with pay go capacity to get environmental clearance. So that would be now putting me in position to bond. I'm gonna be looking at the horizon saying can these projects expend these funds in three years? And then I'm gonna try to see what my need is. How much money do I need? Should it all come from grants or should it come from a combination of the measure funds and the grant funds? The grant funding application process and the guidelines are still being formulated. But what I've seen is a desire to have the teeth in the game for us to put some of our money on it so they'll put more of their money on it. So we're going to be doing an analysis as we put together the strategic plan to say where's our sweet spot? Should we put 10 million of bond money on this project for construction and asked for 30 from the solutions to congested corridor pod? And that would be a fully funded project. Do we think that that will compete well and give us the best opportunity to get the grant? I could say, well, I'm not gonna put any of my measure money on it. I'm gonna go for all the grant funds, but that could be risky. I may not get the grant funds. So it's going to be a combination of looking at all of our opportunities, but we're too early in the game to really measure what we've obtained thus far. Cycle two of solutions to congested corridors is coming towards the end of this year. That's why I'm working hardly. That's why K&N is here today. We're trying to get ourselves in the best position to leverage funds by using a combination of measure D and grant funds. And I appreciate that. It kind of makes it clear. It is risky. What we're doing here is we got to be very careful. I just, I want to see us spend the money wisely and actually be shovel ready and get projects moving actually. The only concern I have is I hope 10 or 15 or 20 years from now, we don't have to try to pass a tax to pay off the debt from our debt from measure D. I want us to spend the money wisely and not have this debt that we're going to have to pass another bond or pass another, you know. Thank you for those comments. Yeah, what we're trying to do today, Greg, is we're trying to get an understanding of how bonds work. I'm sorry, this is a lesson for all of us on how bonds work. We're not spending any money today. We're just taking the time to get educated on bonds. So Commissioner Dills. Yes, thank you for the great presentation also. I have a few questions. Sure. First, does the, do we already have a reserve policy and a debt policy that you'll be building upon? Does the RTC have such those documents? So we don't be on what's in the measure itself and that's one of the strategic implementation plan is to put that actually in policy and give you guys an opportunity to decide how you guys want to approach financing for these projects. I also want to emphasize too, because there's been a lot of discussion about, you know, the economy turning downward and how much risk we're taking. When I was at Sonoma, we issued our first revenue bonds in 2008, right about at the beginning of the recession. We did fine. We continued to deliver environmental documents. We didn't slow down. We watched interest rates go down. We watched the cost of labor go down and we were actually able to deliver more projects by bonding. We never had an issue with coverage. We had great coverage and safeguards put in. We had a debt reserve fund as one of our policies. We don't want that to be too high because that limits your ability to deliver projects and that's money just sitting in the bank and there's also additional insurance that you can take out to ensure that, you know, you don't get yourself in trouble. But we got through the great recession delivering most of our projects and being able to pay our debt service. And my next question, thanks for addressing the recession issue because obviously they come and go and when you're looking at long-term trends, I recognize you've seen that. But I'm wondering about maybe the more recent trend of brick and mortar and what that, I know you don't have a crystal ball, but you know, long-term, is that a real issue for us in terms of security for bonds that we might issue? Any thoughts on that? So you're talking about brick and mortar sales tax revenues versus on the movement to online. Right, and so yeah, that overall, you're right, a lot of it's just shifted to online. But because of that, it may not, we may not get the sales taxes here in our locality depending on I guess where it's coming from. But any thoughts on that general trend and how it may affect our long-term sales tax trend? Yeah, I was just gonna, there was a recent, was it late 2018, ruling it's the way fair decision with regard to the collection of sales tax revenues from online purchases. So the hope is that while some of the online sales tax maybe have escaped the county historically, that now that decision will help insulate the sales tax within the county. So if I were a county resident purchasing an item from a vendor online in Oregon, that entity would need to charge my local sales tax on that product, so in remit. And so the hope is that that decision will help protect the sales tax revenues on a local basis. It still needs to be administered state by state, I think. There's a lot more to come on that. But it's an important point, we've been talking about internet sales for a while. You know, I think ultimately in the strategic implementation plan, you wanna be more conservative about your growth assumption. You know, under promise and over-deliver is generally a better course than the inverse. Spoken like a true finance person. My next question is, and I know we're talking about bonds and debt, but we're talking about sales taxes and as being the primary source of how we pay back these bonds. And I'm wondering if we're contemplating a new sales tax. I know there are lots of questions out there still about how much we're gonna get in grants versus what we're gonna get in existing tax. But is that part of the discussion? I'm asking partly because I spoke with the previous executive director, but I'm gonna ask you this question about that possibility. And so I just wanted to see if we are contemplating that, if that's part of this strategic plan that we may need to do a new sales tax. We're contemplating a class on bonds right now is all we're doing. We're not contemplating any additional funds. There's no hidden agenda here. This is pretty much an education on bonding. Thanks. I just wanna see it coming. That's all. My next question. Okay, go ahead. Is on the COP, at least revenue bonds you mentioned, and the fact that security would be real estate for local jurisdiction if we were, from the city, city of Scott's Valley, if we were doing our own COP.  I know that's unusual. Is that a possibility? Or do we actually literally need a building? Well, we've talked about that. It's less than ideal. We don't see it very frequently. It's not considered an essential asset in a sense. And that's part of the security and at least an investor wants to make sure you're not gonna walk away from your admin building. You might, what does it mean to even walk away from a road? I wouldn't say it can't be done. It's something we could look at, but it's definitely irregular. Nasty, I say a nasty. Better with the parking lot. Yeah, right? Which might mean a higher interest rate on the bonds if there's some complexity. I'm sure of it, yeah. And my last question. You mentioned alternative ways that we could fund for cities that say our share of projects. If we had the money and we don't have surplus of money, but if we found ourselves with cash as a city to cover our share of local project costs, could we use our own internal borrowing and repay that with the tax dollars as they come in later? Whether they were, I guess that may, could come in I guess either as tax dollars or as bond proceeds, but any issue with paying ourselves back, we funded our own money and did a large project all at once. That's gonna hold as a security, the money you get from the RTC, is that the question? We're not even going that formally, but just saying that if we decided to do a project all at once and it fit the definition where we could spend the money on for our local shares that comes to us, could we use the money that comes in later? You saying to repay a bond? We're not going to pay ourselves back. If you use cash for a project, if we use cash, it's probably simpler if I don't bring the bonds into it. Yeah, I'll leave the bonds out of that. Because we just bring the money coming in, so that's probably not a bond issue, but any... I think it depends on, as long as it's consistent with the expenditure plan, the ordinance, right? I mean, that's the use of sales tax dollars that's dictated by that. So we just comply the ordinance. Okay, thank you. That's all my questions. And I just want to follow up just to be clear. When we didn't get into all the elements of bonding, but bonds can be repaid early after a period of time, and that's a consideration as well. If you have excess dollars, you want to pay off your bonds early, that's a possibility. Thanks for adding that, that may be a future question. Commissioner Kaufman-Gomens. Yeah, somewhat that question. Let's see, the bond rating. Let's talk a little bit about that because there's an application process in order for us to be able to get rated somehow. I don't know the cost, the timing, the variance of the rate. Can you discuss that a little bit about applying and getting yourself rated? Sure. And just for my edification, are we talking about for a local agency bond or for the regional bond or just generally? Well, the discussion is about the regional bond. So let's talk about this agency as a whole and what that process would look like. So one of the things that the rating agency's rate is an actual deal or a document. So you need documentation. So one wouldn't typically go and get a rating until they're in the process of issuing a bond. The bond issuance process from sort of start to finish typically for maybe six months for a first time issuer. So we're a ways away from that, but once the legal documents have been prepared, which set forth some of the terms we've talked about, the coverage and the term of the bond and the repayment structure, all of that is set forth in a legal document. Then there is a disclosure document which discloses to the market all of the economy that supports the sales tax and any other risks, any litigation that's happening that might impinge on the tax, the decisions like the way fair and other things. All of that goes into a prospectus. At that point, then we go to the rating agency and we say, here's our story. We want to borrow $25 million. It's gonna have coverage of at least X. We've got all these legal protections built in and covenants. Here's our economy. Here's our collections history since 2016. We tell a story, the best story we can. And at that point, we get a rating. But would there be, I don't know. Cost or? Well, the difference in going out and getting our own rating versus some of the other bond options that are in here. I mean, if we're dealing with a quarter, a half a percent, a quarter of a percent, is it really important to do or to go that approach versus another? I don't know cost effective wise. If it's wise for us to go and spend all that for whatever the savings may be. Well, I guess if I understand the question correctly, if the authority goes for a rating, we expect the rating to be high given this type of security structure and the likelihood of the coverage factor that we're talking about. So I think we think in the low double A, something like that, and it was reasonable to expect perhaps. If the city of Watsonville were to go and issue a local bond secured by just your share of the sales taxes, it very well could be less. You're in a much less economically diverse area. The economy there may be impacted by a recession differently. So that's one factor that the regional rating is like, could be higher than the local ratings, although you each have your own entities with your own characteristics. So I don't know if that answers the question. I might be missing it. Well, I think that I'm just looking at the regional basis versus some of the other terms of the other bond options that were available. It's, we obviously wanna go with the most competitive lowest rate possible so we can leverage that as far as we possibly can. And the duration of the bonds, is it necessary that we don't have to have the duration of the life of the tax either? No, of course not. A five-year bond or a 10-year bond as well. And again, no pre-payment penalties for payoff early for any reason other than upfront fees that we won't. Well, so that, I mean, you're getting into the details and your advisor, if you're doing a local bond, you could work with us as an advisor or another firm, certainly. Certain types of publicly sold bonds do have a pre-payment penalty. Other types of private placements, maybe with your local bank, might not. That really, you're getting into another level of detail. I think if you were to issue bonds through the regional authority, it probably makes sense to try and get a sense of who's interested in issuing and when and try and team up and create some efficiencies. You do one issuance, we don't wanna do five little issuances and pay all the same fees five times. Duplicate. Yeah, so there's efficiencies, I think that could be achieved. Thank you. Mr. Leopold. I'll try to keep my remarks short. I appreciate the presentation, it was very helpful. I think my questions are more directed to Mr. Preston. You know, the county faces some unique circumstances. When measure D passed in November of 16, it was before $130 million worth of damage to our infrastructure in February of 2017. And now we were faced with a federal administration who is making it very hard for us to access federal disaster dollars that we're entitled to. And so the idea of bonding off our share has gained a lot more traction at the county. In your experience in Sonoma County, was there bonding on local roads, did entities bond off of their portion different from everybody else? The locals were asked about their interest in bonding and they were not interested in bonding. They wanted a steady flow of revenue for maintenance and transit. They also, for their project funds, did not want to bond. The only exception was when SMART, the Sonoma Marine Area Rail Transit, did pass their sales tax measure and they did so concurrent with passing CEQA for that project. They did bond and we did a combination bond with the regional projects for the highway bucket with the SMART program so they could repair grade crossings, which was allowed under their bonding. It was a very similar situation with measure D and 8% rail preservation. We can do certain preservation projects but we can't implement rail. When they pass their own sales tax measure for that and I believe they bonded off of that too. But the regional projects, the direct allocation projects for maintenance and transit showed no interest in bonding. Well, I think that it might be different here given the different circumstances that we have here. And maybe, I don't know whether you could answer this or they can, I'm assuming that we're gonna want to bond for the regional projects because they may be the ones most likely the highway project or something like that, which requires a lot of money at one time. Could you bond for a regional project and one jurisdiction together or do you have to do that separately? Yes. You could. I think the biggest issue is the term of the payback and the life of the projects. So I know that the highway projects, for example, have 50 hundred year of lifespan, no problem bonding over that period of time. So I'd have to know what the projects really are. I mean, if they're five year maintenance projects and the longest term I can go with seven years, I would have to talk to David about how could I structure a bond that I want to issue for 30 years with a project that I can only bond for seven. Yeah, that's a really good point. Thank you. There's a relationship requirement under the tax law about the average life of your bonds and the average life of your project and the useful life and they do need to be in relationship. One can be 125% of the other, but not more. Well, just so that we're not too deep in the weeds, I feel confident with the leadership, Mr. Preston, has experience in putting together these strategic plans. One of the reasons we hired him is because of that experience and his presentation does that that would be useful for project like ours. And so I feel very confident in that. I think we were gonna, unlike the previous county, there's probably gonna be some bonding here and to be thinking about that as we build this strategic plan will be important and we will have to have a lot more conversation with our public work staff and our board and everything else to figure out exactly what we wanna do, but I think we should be prepared for that. That's why we're here today. Thank you for the presentation. We'll consider that on the table, okay. Commissioner Brown? Thank you for the presentation. I'll echo Commissioner Rock in statement about this, although my history of hearing these kinds of presentations is much more limited than his. It was really understandable and so I appreciate for novices like myself really being able to get into this. I don't think I have any other questions. I think most of them have been answered. I would say just to echo the desire to find a way and space to have this conversation about how it is that local jurisdictions who may express an interest in bonding. I know at least the county has and others may come to have that conversation as we proceed. So I'll just leave it at that. Thank you. Commissioner? Sure. Thank you for your presentation. I look forward to seeing the actual scenarios and then we can really look at the numbers and the trade-offs. But as conceptual, I thought it was helpful to go over this. I will say from my perspective, it's extremely important that local jurisdictions in this case, particularly the county, have the opportunity to bond. First, interest rates are extremely low and our credit rating is extremely high. We will not be able to borrow money at these rates anytime in the near future. And so this is an opportunity. And then the most important piece is that given the state of our roads, interim repairs can extend the lifespan. And so we can wait for these monies to come in. And in five years, every road will cost three times as much to repair. And so the more we can preventative work we can do or interim work we can do, the more money we save. And right now the money is accessible and inexpensive. And so we need to move quickly on this as quickly as we can in order to access these funds in my opinion. Can I make one follow up comment to that? Absolutely. Very brief. Just a reminder that all of the considerations we talked about early on on the regional program apply for the local program bonding. So having SQL ready, having an expectation that you'll expend the money within three years for tax exempt bonds, those are all the same requirements that'll help dictate when you're ready, I guess. Yeah. Thank you. Commissioner Mulherr. Commissioner Gonzalez. First of all, I want to thank you for the presentation. And again, thank you for bringing this. It's been very educational for me. I'm the novice person over here, everyone's a senior to me. So this has been really an educational process for me. So thank you. Commissioner Rock, can you have a follow up? Great. Comment. I just wanted to respond to a concern that Greg Capet had raised that you're spending some of the money on interest and setting up the bond and so forth. But it's not just that you accelerate the projects. They happen sooner and people see them now instead of having to wait 20 years for them to happen. But it's the fact that the construction costs go so consistently up every year, I mean they go up and down, but over a trend. If you're paying three to, let's say even 4% with the initial cost to issue the bond against the fact that if you wait another year for the project it's gonna be 7% to 10% more expensive to do it. It's a fiscally responsible thing to do as well as giving people something earlier. So you gotta look at both of those issues, I think. To trade off with inflation. Yeah, no, exactly, I think it's kind of critical to address that. If it were just money coming out and people were happier because they got the projects earlier it might not be fiscally responsible, but we're actually saving money when you spend the money earlier rather than wait and plus the maintenance issue that Ryan raised. Well that was why I asked the interest rate. If the interest rate was let's say 10% or something then we're losing money, but in this case we're keeping up with inflation. Okay, great. Okay, thank you. I'm gonna open up to the public to see if they have any questions. Anyone from the public like to come up and have a comment or question? Okay, great. This item was information only and it was a boatload of information. We appreciate your time for coming here and enlightening us and I'm sure we'll be having further conversations down the road. Thank you very much. Okay, we go on to item 17. This is the Highway 9 Santa Rosa Valley Complete Street Corridor Program. Either way, either way, you know, it's probably that's... Commissioner McPherson has a few comments before you start, so I'm just gonna allow him to make those. First of all, I just wanna frame the conversation on this Highway 9 Corridor plan. Before we, this is kind of, we usually listen to the presentation, but I just wanna get a framework of where we are and who we're working with and the partners that we have in this. And the long haul we have taken to get to this point. And I really wanna thank everybody for developing this plan. Each of the agencies that are involved really can't be thanked enough. It's been a tremendous cooperative effort, especially from Caltrans. I wanna thank you for your funding. They're funding of this study and buying all of us to your table to develop this first master plan for transportation for Highway 9. This is gonna take a couple minutes and I just don't wanna miss any points because this has been a long haul. The Regional Transportation Commission staff, Rachel on down or up or whatever, your passion and hard work were evident throughout this process. I can't thank you enough. And the County Public Works staff has been really very instrumental in getting us to where we are today. And specifically just some sentiments of Valley residents and community groups. In particular, the Boulder Creek Business Association who we heard from earlier, Santa Rosa Valley Chamber of Commerce, the Valley Women's Club and the Santa Rosa Valley School District. Personally, I've been talking with this community since 1913 after first being elected. And we... 2013. 2013. Well, I'm getting older. Yeah, I'm glad. You are one of the senior members. I'm one of the senior members. I know. Okay. Here we go. And early on, Caltrans came along when we had a metro bus that... And the metro has been very much involved in this as well. To just look at the needs of Highway 9, a special avenue that... And it's for serving the Santa Rosa Valley and all its surrounding residents there. Now after more than two years that Caltrans is and RTC has taken to develop this, I would just want to emphasize the one big theme is safety. Safety for pedestrians, cyclists, motorists, and yes, we've even heard horses this morning. But after the February accident that took Josh Howard from his family and friends, safety has become an even more profound theme. My thanks go to also Assemblyman Mark Stone who hosted a meeting with me on April 18th with Congress members Anna Eshoo and Jimmy Panetta, present to ask Caltrans, the RTC and County Public Works what we could do to address these safety concerns. The Santa Rosa Valley makes up the biggest part of my fifth district and is the only area in the county that has a state highway serving as a main street to four town centers. Sheldon, Ben Lohman, Brookdale, and Bola Creek. The regulations that historically apply to state highways may not be a great fit for this rural community served by this Highway 9. And that's one of the many reasons this plan is so important. It's a recognition of the iconic Santa Rosa Valley and the unique conditions of the main street for those communities Highway 9. Santa Rosa Valley residents are interested in slower vehicles, safer walkability, better cycling opportunities, well-conceived disaster preparedness and relieving congestion at choke points, at the SOV school entrances, Graham Hill Road and Bear Creek Road in particular. It's critically important that projects to improve Highway 9 increase the safety for all users becoming more reliable for first responders and bolster safe exiting in case of an emergency, which have really come to light, as we know in the recent fire disasters that we've experienced in California. The Valley has the highest rainfall and wildfire risk of any population center within Santa Cruz County year after year. And so there's no doubt that future holds more frequent and tense flooding, slides, road damage and loss due to fire. After the April 18th meeting we had, I requested Caltrans and the RTC to give an update during today's meeting regarding the status of their discussions on safety projects and improvement along Highway 9. I wanna thank again Caltrans for its response in their letter dated June 19th to the RTC Executive Director Guy Preston. After initially screening all 175 project suggestions identified in the draft Highway 9 plan, Caltrans indicated their next steps in collaboration with the RTC to take ownership in delivering feasible solutions sooner rather than later. They have given us a sense of their process to analyze other projects that need further review. The Caltrans response demonstrates a concrete action that I'm very appreciative of for the communication to the community of Santa Rosa Valley. The Highway 9 plan makes clear there will be numerous public agencies involved in implementation of many of these projects, including us, the RTC, County Public Works and the Santa Rosa Valley School District, among others. But the central agency is Caltrans. Nothing will happen along Highway 9 without Caltrans as the primary party. We all have a seat at the Caltrans table, but it is their process and regulatory framework that will dictate the progress that is made on any of these projects. I have heard from many Santa Rosa Valley residents who believe that Caltrans process is lacking in both innovation and sense of urgency to get projects built. I empathize with the frustration. I also understand that if we wanna get projects built, we must work with Caltrans in this process. As for myself, I will continue to press for progress and work collaboratively with Caltrans and other agencies involved for projects to get built. Projects need to be, progress needs to be visible and timely if we're to fulfill the responsibilities of public officials and make Highway 9 safer for the community it serves. Regarding the speed limits, speed limits came up time and again, during the public input process that are highlighted as an issue in this plan, the traditional guidelines set the speed limits of her state highways that act as main streets for rural communities need reconsideration. I know that the California legislature passed Assembly Bill 2363 to establish a zero traffic fatalities task force to reconsider the methodology for setting speed limits. The task force recommendation are coming in 2020. I will be advocating that the task force find ways to lower speed limits on highways that act as main streets for small town centers. The speed limits in the town centers are not posted the same as the plan indicates. Fulton and Boulder Creek are posted at 25, Ben Lohman and Brookdale are posted at 30. I hope we can get some consistency in that. And I thank you for the opportunity to establish the framework and how far we've come. It takes time and I know people can get frustrated with the timeline, but I wanted to assure you that Caltrans has been cooperative in this venture and I look to the fulfillment of really implementing really reasonable Highway 9 corridor plan. So thank you for your time. Thank you for that background, Commissioner McPherson. That's important that we all understand that.  Okay, good morning, Brianna Goodman, RTC planner and San Lorenzo Valley resident. The Highway 9 San Lorenzo Valley complete streets corridor plan team has worked with the community, supervisor McPherson's office, Caltrans, the County of Santa Cruz and Metro to develop the complete streets plan for Highway 9 and SLV. Plan area includes the corridor from Henry Cal State Park and Fulton to north of Boulder Creek. It is focused on Highway 9, but also on Highway 236 and connecting County roads. The plan identifies, evaluates and prioritizes complete streets concepts that improve safety, access to schools, businesses and bus stops, and traffic operations for users of all modes of transportation. Plan affects the community's vision and priorities for the corridor. They include corridor-wide recommendations and designs, 28 location-specific recommendations, including maintenance, walking, biking, traffic flow, transit and safety projects, as well as the short, middle and longer-term implementation options. This is a community-based plan and the plan process includes extensive outreach to the SLV community. In incorporates, input we've received since 1913, and 2013, most recently, after publication of the draft plan in January, the project team solicited public input through emails to stakeholders and interested community members, two well-attended open houses, an online survey, news releases and articles, neighborhood social media groups, community calendars, flyers, RTC committee meetings, and a public hearing at the February RTC meeting. This feedback resulted in modifications to the scope of some of the identified projects and concepts in chapters two and three, and this included addition of new components, as well as changes to the proposed implementation and chiming in chapter four for several of the projects. Summary of comments received is included in your attachment number three of your agenda. Comments received after the public comment deadline have been included as a handout. Summary of significant edits to the document has included in agenda attachment two. It should be mentioned that this is a corridor plan planning document to be used as a stepping stone to prioritize projects for more detailed feasibility analysis before being approved for implementation. This document is not itself a final implementation plan. Bringing complete streets improvements to the SLV Highway 9 corridor faces a variety of constraints. Some are physical, such as right-of-way widths between private property and town centers, and right-of-way widths between slopes, trees, retaining walls, and other terrain features between the towns. Some constraints are financial, such as the availability of state, federal, and local funding for construction and maintenance of these projects. These constraints create a need to prioritize improvement projects, which is the primary goal of this plan. Please see page four of the executive summary in your agenda packet that's attachment one, page 17-7, and chapter four of the document for the results of this project prioritization exercise. Implementation is already underway. Last summer, RTC staff secured an H-SIP grant to fund safety enhancements to five SLV crosswalks identified in the plan. Caltrans has already been investigating which project concepts could be integrated into near-term shop projects, as well as which suggestions and concepts they recommend county public works implement via encouragement permits. We also received strong collaboration on the plan from county public works who are planning to install signage, alerting pedestrians and cyclists to alternative routes on county-maintained roads between the SLV schools, campus, and Felton this summer, when they will also improve the existing crosswalk at Felton Empire Road and Cooper Street. RTC, Caltrans, and county public work staff will continue to pursue funding opportunities for priority projects in the plan. On June 6th, the commission-programmed Measure D funds as part of the five-year plan. In this one million for San Lorenzo Valley safe routes to schools, funding pre-construction and grant match to add pathways to the SLV schools campus, 250,000 for preliminary scope and engineering documents for near-term projects. RTC, Caltrans, and county public works will use funds to conduct more detailed analysis, including cost estimates, engineering, feasibility analysis, and to help prepare applications and secure funds for some of the projects we identified as short-term priorities. RTC staff will return to the commission for approval to use additional Measure D funds to leverage funding as needed, but given the large list of priorities, we estimate $100 to $200 million worth of projects total. Implementing agencies will be looking to maximize all funding options. The project team would like to thank Supervisor McPherson's office, Caltrans, the County of Santa Cruz, Metro, and especially the San Lorenzo Valley community for all their excellent assistance in the creation of this Complete Streets Corridor Plan. If the board has any final edits, we will incorporate them into the document before it goes to print. Let staff know if you would like a hard copy of the final bound document. Staff suggest that the project list remain a living document so that feedback from the public, Caltrans, and other stakeholders can be added to the identified project list that's Appendix B over time. Staff recommends that the commission accept the plan, request that Caltrans and the County of Santa Cruz accept the plan, and also work in partnership with the RTC to implement priority projects and concepts, and authorize staff to negotiate funding and co-op agreements with Caltrans and the County, as may be necessary to facilitate implementation. Thank you. Thank you for that presentation, Brianna. Any questions for Ms. Goodman? I just want to thank Brianna, especially too. I mentioned Rachel, but she's been on all of you. Teamwork. Teamwork. Any questions? OK, we'll go ahead and open up to the public. Any questions of the public? Comments? Come on up. Anything you want to say? Yeah, welcome, three minutes. I guess life all comes down to timing. Good morning. Just want to say that we support all the improvements that are going to take place on Highway 9. I voted yes on Measure D. Back in March, when I reviewed the plan, I'd realized that a bus stop was going to be relocated, which is about 400 feet from my property, directly onto my property, not just on my property, but into my property, which would destroy all my fencing, my gardening, my irrigation, all of my security systems and everything that I put in place. That's just for me as a personal homeowner. So I reached out to Rachel. She provided me some guidance on what to do. She suggested that I come up with two different alternate sites for a bus stop, which I did provide. And so I created a 30-page document to have everything to show that putting a bus stop on the corner of Lazy Woods and Highway 9 would be very, very destructive, not only to myself, but dangerous into the safety of not only the commuters in Highway 9, but especially to all the residents of Lazy Woods itself. So I went ahead and reached out to all my neighbors and gathered a petiti