The Santa Cruz County Regional Transportation Commission during its Nov. 6 meeting approved the money for pre-construction work on Segments 8 to 11 of the rail trail, which has faced setbacks due skyrocketing construction costs. (Stephen Baxter — Santa Cruz Local file)

WATSONVILLE >> Santa Cruz County transportation officials on Thursday greenlit $8.33 million towards a seven mile stretch of the Coastal Rail Trail from Santa Cruz to Aptos.

But it remains unclear how much of the trail will be able to be built, or if the design will need to change, amid a multimillion dollar shortfall.

At its Thursday morning meeting, the Santa Cruz County Regional Transportation Commission approved the money for pre-construction work on Segments 8 to 11 of the rail trail, which has faced setbacks due skyrocketing construction costs. 

A large chunk of the project’s funding comes from a $96.6 million Active Transportation Program state grant. In 2024, commission staff looked for ways to save money, but the effort backfired, and the estimated cost soared. The most recent estimate to complete the project is $228 million, with a $77 million gap.

Commissioners discussed a phased approach at its October meeting to make ends meet. Commission Chair Eduardo Montesino and Commissioners Manu Koenig and Fred Keeley then met with state transportation officials to discuss the ramifications of decreasing the project scope on state funding.

After the California Transportation Commission signaled that it may ask for part of the grant back if the trail is shorter than originally promised, state officials said they were open to “creative approaches.” That includes an “interim” trail built atop of, rather than beside, the tracks, according to a letter to the commission by Montesino, Koenig and Keeley.

“The idea that we could maintain all of the money for the ATP grant and eliminate more than 50% of the trail we build is, I think, pretty much off the table,” Koenig said at the meeting.

The interim trail would require a legal process known as railbanking, which would remove the legal obligation to keep the existing freight tracks in place, and requires approval from federal regulators. It would also disrupt a proposal for passenger rail on the line.

Discussion swelled throughout Thursday’s meeting around these possibilities.

Railbanking supporters said it’ll make the rail trail more affordable. An analysis by transportation commission staff suggested that the interim trail would halve costs for Segments 8-11. Opponents worry that railbanking would kill the passenger rail project.

State officials requested a side-by-side comparison of the benefits for a shortened trail beside the tracks and a full-length interim trail. RTC spokesperson Shannon Munz said there’s no timeline currently of when that comparison may be presented to the commission.

Inching forward

Munz said the preconstruction work for Segments 8 to 11 that commissioners agreed to fund on Thursday includes finalizing the trail designs, preparing and filing environmental permits, consulting environmental health services and other potential environmental reviews.

During the meeting, the commission also doled out about $15 million funds through the Consolidated Grants Program, which provides the RTC with state and federal dollars to divide amongst local and regional transportation projects. About $2 million of that was set aside for Segments 8-11.

The commission also revisited its five-year Measure D funding plans, in which $2.73 million was set aside from its active transportation funds in this fiscal year 2025-26 for Segments 8 and 9. Another $3.6 million was pulled in advance from fiscal year 2027-28 to now, to fund preconstruction on Segments 10 and 11.

“With the funding programmed today, the County of Santa Cruz and City of Santa Cruz will be able to continue their design work for Segments 8-11 and meet grant funding deadlines,” Munz said in an email.

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