Hydrogen fuel cell powered train
Part of the coastal rail line in Santa Cruz County.
(Kevin Painchaud / Lookout Santa Cruz)
Coast Life

Rail Trail update: Biz plan reveals funding gaps, potential private partnerships. Debate? Status quo

The draft business plan out Wednesday comes after the Regional Transportation Commission approved electric passenger rail as the “preferred transit option” alongside a recreation path in the coastal corridor. It outlines potential funding sources and implementation plans and will go before the RTC on April 1.

Transportation planners on Wednesday released a roadmap for Santa Cruz County’s much-debated Rail Trail proposal but acknowledged that significant funding gaps remain for a project estimated to cost hundreds of millions of dollars.

According to the draft business plan from the Regional Transportation Commission’s staff, sources for “Roughly half of the construction funds,” along with half of the operations and maintenance costs, are “currently unidentified,” leaving $189 million in capital costs unaccounted for, as well as $125 million in operation and maintenance expenses for the next 25 years.

Electric passenger transit is the “rail” portion of the much-discussed Rail Trail. Eventually, the RTC plans for some sort of passenger train to run alongside a bike and pedestrian path in the Santa Cruz Branch Line corridor, connecting Watsonville and Santa Cruz. According to the report released Wednesday, construction would begin around 2030, with passengers beginning to board rail cars in 2035, if the project moves forward.

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This draft business plan comes after the RTC approved electric passenger rail as the “locally preferred public transit option” for the corridor in February. It outlines potential funding sources and implementation plans that would make electric passenger rail a reality, and it will go before the full Regional Transportation Commission on April 1.

Where the money could come from


RTC staff identified several existing sources of funding for the project, though some are competitive (meaning county officials would have to apply for them) and suggested remaining gaps could be covered by sources that have yet to be created.

This would include new state or federal funding programs, or local measures such as a sales or fuel-tax. Any tax increase related to the project would require voter approval.

The report highlighted the fact that under the new Biden-Harris administration, legislation that “embraces a climate resiliency approach to improving transportation infrastructure including alternative modes of transportation” is in development, adding that Pete Buttigieg has been confirmed as the new Secretary of Transportation and his agenda includes “investing in robust transit and transportation infrastructure.”

In terms of how much funding could be obtained from local sources, Guy Preston, executive director of the RTC, said in an email that “the estimated need is roughly equivalent to a 0.5 cent sales tax for a 30-year period for initial implementation (capital) and O&M (operations and maintenance). Beyond the 30-year period, an on-going 0.25 cent sales tax (or equivalent) is estimated as needed for on-going maintenance and operations.”

This could change depending on project needs, and on rider revenue. Funds from Measure D, the only local source of tax revenue for the project so far, can be used for infrastructure preservation and analysis of transportation options, but not for construction.

Once the project is completed, the report stated that approximately $1.6 million per year from Measure D would be available for “future rail preservation needs.”

Another funding idea analyzed was that of a Public-Private Partnership (P3). The report cited the example of the San Mateo County Transit District, which has been meeting with Facebook and Plenary Americas for a potential partnership to connect the Caltrain corridor at Redwood City to the East Bay over the Dumbarton Bridge.

Preston said there is a vehicle manufacturer who is “interested in forming a P3 relationship,” for the Santa Cruz passenger rail, but added that “RTC staff believes it is too early for this sort of potential relationship.” He did not identify the name of that company.

The report suggested that if the commission is interested in this possibility, and it moves forward, RTC should be fairly far along in the planning and environmental review before entering a partnership, “in order to maintain the appropriate level of local control in defining the scope of the project.”

Anticipated revenues and expenses as prepared in the RTC draft business plan for electric rail.
Anticipated revenues and expenses as prepared in the RTC draft business plan for electric rail. Shown in annual increments over 25 years
(Santa Cruz County Regional Transportation Commission )

Debate continues

The proposal has long stirred passionate viewpoints on both sides of the debate. And much like the project itself, reactions to the release of the draft plan largely tracked with how proponents and opponents to a train along the coast have previously characterized the undertaking.

To those advocating for a train alongside a trail, the plan marked exciting news and a significant step forward. While those opposed to a train say the business plan — and the financial shortfalls outlined within — is further proof that the project is not feasible.

Bud Colligan, a board member of Greenway, a trail-only advocacy group, said the grants projected to help fund the train “are all highly speculative.”

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“They don’t know if they can get them or not, right?” he said. “So, you know, this whole idea of assumed available funds is just a non-starter. You know, it’s like this thing is so financially infeasible, any business person looking at this would say shut this down now.”

Even if all the projected grants were to come to fruition, funding would still fall short, Colligan said. “They are still missing 50% of the money.”

To Colligan the idea of public-private partnership, outlined in the draft plan, is just meant “to distract from the fact that the train will never happen.”

“This is just another idea that’s being floated like all the other infeasible ideas over the last 10 years,” he said. “The bottom line is, we have an empty corridor … not providing any transportation value. And this plan would guarantee that it does not provide transportation value for another 20 years.”

But to Faina Segal, board chair for Santa Cruz County Friends of the Rail & Trail, the plan is “a really big deal” and an important tool to be able to secure the needed funding. The projected gap in funding, she said, doesn’t worry her.

“I think that’s pretty normal for infrastructure plans,” Segal said. “You know, when we’re talking about any large public works plan that you do, you kind of have to have a plan and everything in place before you can go looking for grants and that kind of stuff.”

With Buttigieg and the Biden administration’s renewed focus on improving rail service across the country, Segal said the business plan comes at the right time. “We’re really excited to be able to use this to go and try and get some of that infrastructure money, federally, to fill in and build it.”