Highway 1 traffic creeps past a rail bridge in Aptos. (Stephen Baxter — Santa Cruz Local file)

The loans would avoid delays for building parts of the Coastal Rail Trail from Santa Cruz to Rio Del Mar and new lanes on parts of Highway 1 —- but paying back those loans would take a bite out of future money for trails and highways for 20 years, staff of the Santa Cruz County Regional Transportation Commission said Thursday. 

“There’s obviously trade-offs,” said Sarah Christensen, executive director of the regional transportation commission. 

Loan payments wouldn’t reduce money for road repair, transportation commission staff said.

Measure D raises money for transportation projects across Santa Cruz County. Approved by county voters in 2016, the half-cent sales tax dictates how the money is split between highways, transit, active transportation and other spending. Sales tax money is often used as a local match required for state and federal grants. 

Although the transportation commission has won grants for several major transportation projects, Measure D isn’t expected to bring in enough money for the local match in time to keep the projects on schedule. 

The transportation commission has pledged to pay:

• $124 million for Highway 1 widening from State Park Drive in Aptos to Freedom Boulevard, and the rail trail from State Park Drive to Rio Del Mar.
• $20 million for rail trail segments from Beach Street in Santa Cruz to State Park Drive. Construction is scheduled to start in 2027.

The Measure D budget is also strained by cost overruns on Segment 5 of the rail trail from Davenport to Wilder Ranch, and part of the Highway 1 widening between Soquel Drive and 41st Avenue.

A map shows rail-trail segments’ status as of February. (Santa Cruz County Regional Transportation Commission)

Covering cost overruns, local match

At Thursday’s meeting, the commission voted to spend $1 million towards construction overruns for the Highway 1 project, and $1.475 million on required habitat restoration for Segment 5. 

A bond could allow the commission to cover the local match for new projects and cost overruns for existing ones, potentially staving off years of delays. But it would also draw from Measure D money intended for highway, walking and biking projects until it expires in 2046.

“There’s just not a lot of alternatives,” said Manu Koenig, a transportation commissioner and county supervisor, at the meeting.

If “we want to deliver these large projects, we’re going to have to bond in order to bring the money into the present so we can put a shovel in the ground,” Koenig said. “The drawback is, well, it costs money to borrow money.”

Information about the potential cost of repayment will come in fall once there is more certainty about the cost of future projects and staff have researched loan options, transportation commission staff said. 

It’s unclear whether there would be enough remaining sales tax money to complete the rail trail from Rio Del Mar to Watsonville. Plans for that portion of the trail are expected with a conceptual report for passenger rail due this summer. 

The bond would be repaid from Measure D funds set aside for highways and active transportation. 

“We’re not bonding money from the trail and putting it into the train,” said Santa Cruz County Regional Transportation Commissioner Mike Rotkin. “Or from the transit district, or from local roads,” he added. 

Optics of borrowing money

Trail Now leader Brian Peoples said a bond would deplete money for a trail in South County. Residents there “are getting screwed, and that’s wrong,” Peoples said. The need to borrow money also casts doubt on proposals for passenger rail, he said. 

“Your plan is for a multibillion dollar train, and now you’re telling the public you’re going to go out and bond just to meet” existing trail and highway projects, he said. 

Former Watsonville City Councilmember Lowell Hurst said the bond would help avoid costly delays. 

“The longer you’re held up, the more it takes to do the project,” Hurst said. “And of course, opponents of this know that too, and so they drag out the process and make it even more difficult, and funding becomes more problematic. And so that’s why I say, get moving, stay moving, and let’s get these projects done.”

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