SMART's Bond Sale a Success; Funds to Sit in Escrow Pending Repeal Effort

Despite an effort to halt funding for a commuter train line in Marin and Sonoma counties, the upstart train system raised a net $171 million in bonds Wednesday and vows to move forward with hiring and construction.

“Our finance team did a superb job,” General Manager Farhad Mansourian of the Sonoma-Marin Area Rail Transit system said in a release. “We apprised them of the risk associated with a potential repeal effort, and they still managed to complete the deal. With historic lows for financing and tremendous construction bids, delaying the sale would have cost SMART and taxpayers many times that.”

SMART announced that it sold & closed $191 million in multi-modal rate bonds to fund construction of a passenger train between downtown Santa Rosa and downtown San Rafael. The sale of $191 million in bonds will net SMART $171 million will help build the line, buy the trains and construct bridges, crossings and train stations.

RepealSMART, an effort to halt most of SMART’s voter-approved funding, is attempting to obtain enough signatures to force a referendum on a 2012 ballot. Organizers would like to repeal a 20-year, quarter-cent sales tax increase in the two counties because the rail line slated to be built is not what voters approved in 2008.

John Parnell, a Novato resident active in RepealSMART, remains confident that enough signatures will be obtained by the end of January. At least 15,000 signatures are needed for the repeal of the tax initiative.

“I’m not worried about it. It definitely looks doable,” Parnell said.

Parnell said he’s confused as to why the registrars in the two counties said they would seek SMART board approval on certified signatures before putting the issue on a ballot if the minimum number of signatures is met.

“I’m concerned about the precedence that sets,” he said.

Novato resident Judy Arnold, who represents the Fifth District on the Marin County Board of supervisors and serves as SMART’s vice chair, deemed Wednesday’s bond sale a victory.

“Despite attempts to disrupt the market, SMART has successfully completed the sale of $191 million worth of bonds at favorable rates,” she said. “The financing will be used to create over 900 jobs beginning in the New Year.”

SMART is bonding off the sales tax revenue to fund the SMART train and bicycle & pedestrian path approved by almost 70 percent of the voters in 2008. Some of those voters have decided they do not like the changes forced by a lack of funding and are seeking thousands of signatures to force a ballot measure.

SMART said the bond proceeds will be put in an escrow account pending the results of RepealSMART’s efforts to overturn the 2008 Measure Q vote.

In its release, SMART seemed confident the effort would fail.

“When the unsuccessful repeal effort deadline is passed at the end of next month, the bonds will be converted to fixed interest rate and the money will be put to use to fund SMART construction,” the release read.

Arnold said the go-ahead with construction will generate 900 jobs and SMART Chair Valerie Brown said the rail line will ease traffic congestion, improve the business climate and “offer a greener way to move around the North Bay.”