Darensburg v. Metropolitan Transportation Commission

FINDINGS OF FACT AND CONCLUSIONS OF LAW FOLLOWING COURT TRIAL

ELIZABETH D. LAPORTE, United States Magistrate Judge.

Plaintiffs Sylvia Darensburg and Vivian Hain are individuals of color, and Plaintiffs Amalgamated Transit Union 192 and Communities for a Better Environment are organizations with minority members, who use the bus system of the Alameda-Contra Costa Transit District (“AC Transit”). Defendant Metropolitan Transportation Commission (“MTC”), is the Metropolitan Planning Organization (“MPO”) for all twenty-six independent transit operators in the nine-county Bay Area. In this class action, Plaintiffs contend that MTC makes funding decisions that adversely affect AC Transit’s largely minority riders, in comparison to the riderships of the other largest operators in the Bay Area. The seven largest operators, which collectively account for 95% of transit riders in the Bay Area, are: (1) AC Transit; (2) Bay Area Rapid Transit District (“BART”); (3) Peninsula Corridor Joint Powers Board (“Cal-train”); (4) Golden Gate Highway and Transportation District (“GGT”); (5) San Francisco Municipal Railway (“Muni”); (6) San Mateo County Transit District (“Sam-Trans”); and (7) Santa Clara Valley Transit Authority (‘VTA”).

More specifically, Plaintiffs contend that three of MTC’s apparently neutral transportation funding practices in fact divert funding from preserving and improving existing bus operations to costly expansion and capital rehabilitation of rail services, disproportionately harming AC Transit’s predominantly minority bus riders, in violation of California Government Code section 11135. Specifically, Plaintiffs chai

*998

lenge MTC’s: (1) selection and funding of rail expansion projects over bus projects through its Regional Transit Expansion Program embodied in Resolution 3434; (2) allocation of “committed” funds to capital rehabilitation instead of transit operations, and to capital expansion instead of capital rehabilitation of the existing transit system; and (3) assignment of “uncommitted” funds to offset projected capital rehabilitation shortfalls, but not operating shortfalls. Plaintiffs argue that they have made a prima facie showing of disparate impact as to each of these three practices, that MTC cannot meet its burden of proving necessity in response, and that even if MTC has, Plaintiffs have shown equally effective but less discriminatory alternatives.

MTC disputes that Plaintiffs have established a prima facie case of disparate impact, and argues that even if they have, MTC has met its burden of showing a legitimate justification. First, MTC denies that it prioritizes rail expansion over maintenance and operations of the existing system. MTC also argues that it does not have control over the allocation of most “committed” funds, and that when it does have control over those funds, it has allocated funds for operations in the form of preventive maintenance to AC Transit. Second, MTC argues that it has little control over the allocation of “uncommitted” funds, and that it allocates the funds that it does control to cover operating shortfalls. Third, MTC further argues that its practices are justified by its reliance on the advice of the Partnership Board, which consists of representatives of federal and regional transit agencies, including AC Transit, and environmental entities, by its scoring system for allocation of committed funds that reflects the consensus of the Partnership Board, and by its “Fix it First” policy focusing on maintenance of existing capital systems, among other reasons. Finally, MTC argues that in response to its justification, Plaintiffs have not met their burden of showing an equally effective alternative with a less racially disproportionate impact.

On August 21, 2008, 2008 WL 3915349 , the Court issued an order resolving the parties’ motions for summary adjudication and for summary judgment. The Court denied Plaintiffs’ Motion for Summary Adjudication on the issue of whether Plaintiffs had established as a matter of law a prima facie case for disparate impact discrimination arising out of MTC’s failure to fund the operating shortfalls it identifies in the quadrennial Regional Transportation Plans, while funding capital shortfalls. The Court granted in part and denied in part MTC’s Motions for Summary Judgment, holding that there were triable issues of fact as to standing and disparate impact discrimination, but that there was no triable issue of fact as to intentional discrimination.

This case was tried to the Court in October 2008. Because this case involved an array of funding source and other acronyms familiar to the transit cognoscenti but not necessarily to the rest of the public, the Court notes that a Joint Glossary of Terms prepared by the parties is available at docket number 340. The parties also submitted joint findings of fact (Nos. 1-369) on August 29, 2008 (docket no. 291), October 3, 2008 (docket no. 346), October 8, 2008 (docket no. 353) and October 21, 2008 (docket no. 364).

1

After considering and weighing all the evidence and the parties’ arguments, and having assessed the credibility of the witnesses, the Court enters the following findings of fact and con

*999

elusions of law as required by Federal Rule of Civil Procedure 52(a).

The Court begins with a few preliminary observations. First, throughout the litigation of this case, the Court has been impressed by the high level of advocacy on both sides of this dispute. Counsel have conducted themselves professionally and respectfully in their interactions with the Court and with each other during numerous court appearances and the three-week trial. The Court also appreciates the parties’ responsiveness to the Court’s suggestions to stipulate to facts not reasonably in dispute and to streamline presentation of this case at trial. The parties were well-served by their counsel in this case. Second, the Court was also impressed by the sincere dedication to meeting the needs of disproportionately minority riders of AC Transit on the part of Plaintiffs and their witnesses. The Court was left with no doubt that AC Transit’s bus riders would benefit from additional service and that many of them are burdened by fare hikes and service cuts, hampering their efforts to get to work, medical appointments, and grocery shopping and to meet other important needs. At the same time, the Court also came to appreciate the difficult challenge faced by MTC’s public servants of meeting a wide array of complex transportation needs and competing priorities of multiple operators throughout the Bay Area with limited and often highly restricted funds. The Court found the fact witnesses on both sides to be sincere and generally credible, although occasionally, as noted below, somewhat biased in their perceptions due to their particular roles.

Further, the Court found the expert witnesses to be highly qualified. The Court was impressed by the extensive knowledge of Plaintiffs’ expert, Thomas Rubin, of transportation planning and his concern with meeting the transit needs of under-served minority populations. As set forth in more detail below, however, the Court found that a few of his comparisons of relative funding and other matrices which he contended show unjustified disproportionate impact on AC Transit riders were not persuasive because they did not treat all transit operators alike or focused only on one type of comparison to the exclusion of other equally valid alternatives. Nor was the Court persuaded that the transportation statute and planning documents that he pointed to required the very strong, indeed paramount, priority on preserving existing urban bus operations that he advocated, at the cost of meeting other important transportation needs that MTC is also mandated by statute to consider. These other needs include, for example, a modern, integrated transit network that aids smart growth, and lures commuters out of their single occupancy vehicles to improve air quality. By the same token, the Court was not entirely persuaded by the testimony of MTC’s planning expert, Dr. Robert Cervero, to the extent that he downplayed the importance of preserving urban bus services. Similarly, although MTC’s statistician, Stefan Boedeker, provided a number of illuminating comparisons, two of his graphs used inconsistent scales that made AC Transit’s funding pattern look more similar to that of other operators than it really was.

Ultimately, as explained in detail below, the Court concludes that Plaintiffs have not proven disparate impact discrimination in violation of the California statute. It is worth pointing out that the Court’s conclusion is supported in part by MTC’s recent practice, commenced the same year that this lawsuit was filed, of allowing more operating funds in the form of preventive maintenance to flow to AC Transit than MTC allowed under its previous practice of reserving such funds for capital rehabilitation only. Indeed, this lawsuit may have

*1000

had some salutary impact on causing MTC to refine such policies.

FINDINGS OF FACT

Background

1. Created by the California Legislature in 1970, MTC is the transportation planning, coordinating and financing agency for the nine-county San Francisco Bay Area.

See

Cal. Gov’t Code §§ 66500

et seq.;

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 8.

2. MTC is not a transit operator.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 9.

3. MTC sets policy and makes funding decisions through its Board of Commissioners.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 11.

4. MTC’s work is guided by a nineteen-member policy board. Fourteen commissioners are appointed directly by local elected officials. In addition, two members represent regional agencies, the Association of Bay Area Governments and the Bay Conservation and Development Commission. Finally, three nonvoting members have been appointed to represent federal and state transportation agencies and the federal housing department.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 19.

5. MTC convenes three advisory committees: (1) the MTC Advisory Council; (2) the Elderly and Disabled Advisory Committee; and (3) the Minority Citizens Advisory Committee.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 27.

6. The Minority Citizens’ Advisory Committee (“MCAC”) advises MTC on issues of concern to African-American, Hispanic, and Asian-American constituencies. MTC recently added low-income interests to the MCAC’s portfolio.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 28.

7. MTC functions as both the regional transportation planning agency, a state designation, and as the region’s MPO for federal purposes. It is responsible for regularly updating the Regional Transportation Plan (“RTP”), a comprehensive blueprint for the development of mass transit, highway, airport, seaport, railroad, bicycle and pedestrian facilities.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 12.

8. MTC is the designated recipient of a variety of federal and state funding sources, and is responsible for setting policies and making decisions about the allocation and use of those funding sources that are within its control.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 30.

9. With the authority over the Bay Area’s transportation purse strings has come responsibility for overseeing the efficiency and effectiveness of the region’s transportation system. MTC monitors transit operators’ budgets, conducts performance audits and adopts a yearly productivity/transit coordination improvement program to ensure that the region’s numerous bus, rail and ferry systems are in sync in terms of their routes, fares, transfer policies, schedules, passenger information and facilities.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 16.

10. In January of 1992, MTC convened the Bay Area Partnership Board.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 26..

*1001

11. The Bay Area Partnership Board is a confederation of the top staff of various transportation agencies in the region (e.g., MTC, public transit operators, county congestion management agencies, city and county public works departments, ports, Caltrans, U.S. Department of Transportation) as well as environmental protection agencies.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 25.

Plaintiffs

12. The Class consists of Black, Hispanic, Asian or Pacific Islander, and American Indian or Alaskan native individuals who are patrons of Alameda Contra Costa Transit District (AC Transit).

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 1.

13. The named class representatives are Sylvia Darensburg and Vivian Hain.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶¶ 2, 4.

14. The Organizational Plaintiffs are Communities for a Better Environment (“CBE”) and Amalgamated Transit Union Local 192 (“ATU”). ATU represents transit employees, including bus, rail and ferry operators and advocates for its members primarily in the areas of wages, benefits and working conditions.

See

Aug. 21, 2008 Order Denying Plaintiffs’ Mot. for Summ. Adjudication; Granting in Part and Denying in Part Def.’s Mot. for Summ. J. (“Aug. 21, 2008 Order on Summ. Adjudication/Judgment”) at 15:23-25. ATU’s legislative agendas reveal that they are interested in,

inter alia,

increasing funding for public transit, including to “allow certain federal transit funds to be used for operating assistance.”

See id.

at 16:2-4. CBE is a “social justice organization with a focus on environmental health and justice,” focusing on “working class communities of col- or because those communities suffer the most from environmental pollution and toxics.”

See id.

at 16:5-7. The vision of CBE is to “protect the earth and human life for future generations.”

See id.

at 16:10-11.

15. On February 1, 2005, MTC received a letter from Public Advocates, Inc., Communities for a Better Environment (CBE) and Amalgamated Transit Union (ATU) 192, alleging that MTC has historically engaged, and continues to engage in policies and practices “that benefit the disproportionately white riders of BART and Caltrain ... at the expense of disproportionately minority riders of AC Transit.”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 7.

16. AC Transit’s change in transfer policy in 2001 limiting transfers to use within 90 minutes increased Plaintiff Sylvia Darensburg’s transit expenses by causing her to have to pay full fare more often. She also has been injured by increases in fares that stretch her limited budget. She has been unable to accept or keep certain attractive jobs as a result of inadequate AC Transit service. She has been docked pay at jobs due to being late because of unreliable AC Transit service. Increases in transit fares have also stretched her budget such that she has been unable to pay other bills on time.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 262(a).

17. Ms. Darensburg would benefit from improvements to the International Boulevard/East Oakland and Hesperian routes. She would also benefit

*1002

from improvements to routes such as San Pablo Avenue, Foothill/MacArthur, MacArthur/Oakland Airport, College Avenue/University, and Mission/Outer 14th Avenue routes. Signal improvements along these lines would also benefit her if they led to shorter travel times.

See

Supplemental Joint Findings of Fact (docket #364) at ¶ 263(a).

18. Newer, low-floor vehicles would also benefit Ms. Darensburg because it would make it easier for her to grocery shop, as the buses would more easily accommodate a grocery cart, allowing her to reduce the number of trips she takes to the grocery store. This improvement would save her time, energy, and transportation costs. It would also make it easier for her to travel with her granddaughter because low-floor vehicles would more easily accommodate a stroller.

See

Supplemental Joint Findings of Fact (docket #346) at ¶ 263(b).

19. Ms. Darensburg would also benefit from increased night and weekend service, in particular on Line 98, which would allow her to go to WalMart to shop.

See

Supplemental Joint Findings of Fact (docket # 346) ¶ 263(c).

20. Increases in AC Transit fares and recent limitations in use of transfers makes transit more expensive and more difficult for Plaintiff Vivian Hain to afford. Unreliable transit has also forced her to rely on unreliable cars that break down frequently and require frequent expensive repairs. Increases in AC Transit fares negatively impact her ability to buy food for herself and her family. Inadequate service has caused Ms. Hain to be subject to discipline at work for tardiness and put her at risk for failing to meet Welfare-to-Work requirements. Ms. Hain cannot afford to use BART regularly.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 262(b).

21. Ms. Hain would benefit from enhanced AC Transit bus service and increased frequency of service in certain high traffic areas. In particular, she and her family would directly benefit from improvements to the Telegraph/International Boulevard/and College Avenue/University routes. Signal improvements along these lines would also benefit her and her children if they led to shorter travel times.

See

Supplemental Joint Findings of Fact (docket #346) at ¶ 263(d).

22. In addition, newer low-floor vehicles would make it easier for Ms. Hain to grocery shop since the buses would more easily accommodate a grocery cart. This would allow her to make fewer trips to the grocery store overall which would reduce her transportation expenses, as well as saving her time and physical energy.

See

Supplemental Joint Findings of Fact (docket # 34) at ¶ 263(e).

23. Class member Jose Casias has been forced to own a car, on which he must spend money for gas, maintenance, and insurance, due to inadequate bus service for getting to and from work. He has lost money due to having to leave work early to catch a bus before AC Transit service stops running at night. He and his mother find the fares difficult to afford, especially as they have increased over the last ten years. Further increases would force his family to spend less on food.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 262(c).

*1003

24. Mr. Casias would benefit from enhanced routes/increased frequency of buses along the following routes: San Pablo Avenue, Telegraph/International Boulevard, Foothill/MacArthur, MacArthur/Oakland Airport, Shat-tuck/Alameda, College Avenue/University, Hesperian, 6th Street/Hollis, Sacramento/Market, and Mission/Outer E. 14th Avenue. Mr. Casias would also benefit from additional night and weekend service, because he would be able to take AC Transit to work instead of driving his car, and would be able to save considerably on gas money and mileage. Expanded night and weekend service would also make AC Transit a safer choice for his family and him, because it would mean less time waiting at bus stops.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 263(k).

25. Class member Concepcion Chavez sometimes has to take a taxi to medical appointments because AC Transit buses are unreliable. The taxi costs much more than the bus. AC Transit’s fare increases since 1996 are not affordable for Ms. Chavez on her Social Security income. Because she can not afford the fares she needs, she has to ask her kids for money.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 262(d).

26. Ms. Chavez would benefit from additional benches and shelters at AC Transit stops because it is difficult for her to walk and stand for long periods of time, and because it would provide shelter from rain and cold. Ms. Chavez would also benefit from low-floor buses because she believes it would be easier for her to get in and out of the bus with her arthritic knee. Ms. Chavez would also benefit from increased frequency of service so she could avoid planning her day around transit and could get to church on time.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 263(h).

27. Class member Octavio Hernandez has little flexibility in his budget. Mr. Hernandez has missed work because he could not afford AC Transit’s fares.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 262(e).

28. Mr. Hernandez would benefit from greater frequency of service, especially on the 82/1, 40, and 43 lines. He believes increased priority for buses at traffic signals might reduce delays and make his travels more efficient.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 263(i).

29. Class member Virginia Martinez has to pay two AC Transit fares to get to and from the grocery store since AC Transit limited transfer use to ninety minutes. She has received warnings at work due to tardiness because of too-infrequent bus service. She has pursued fewer job opportunities, including jobs that would provide more hours than her existing job, because it was too difficult and expensive to reach certain jobs on AC Transit. Ms. Martinez’s husband could not take a better-paying job further from home because it required AC Transit and BART to reach it, and the extra fares would have exceeded the increased wages. AC Transit fare increases cut into her family’s food budget, and her family’s wages do not keep up with AC Transit’s fare increases. She must spend money on gas and other vehicle expenses because AC Transit’s buses are too infrequent to be reliable transportation for her children to get to school.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 262(f).

*1004

30. Ms. Martinez would benefit from covered bus stops and benches because they would provide shelter from the rain. She would also benefit from exclusive bus lanes and more frequent service because they would speed up her travel.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 263(j).

31. Class member Rebecca Jones-White has had to pay for taxi trips to get home from work due to lack of AC Transit service late at night. She had to buy a car because AC Transit had insufficient service for her to get to and from work and to get where she needed to go on weekends. Ms. Jones-White has to incur significant expenses for gas, repairs, and insurance for her car because she can not get where she needs to on AC Transit.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 262(g).

32. Ms. Jones-White would benefit from AC Transit buses running more often near her Union Hall at night, so she could use AC Transit to get to and from work without waiting outside in unsafe areas for long periods of time. Being more able to use AC Transit to get to and from work would also save her money on gas.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 263(f).

33. Class member Margo Robinson has been written up at work for tardiness due to reduced frequency of the AC Transit bus she takes to get to work. She purchased a car because she could not get to work early enough on the only AC Transit line near her home and because the line does not go to the other places she needs to reach. Ms. Robinson’s car is expensive; she spends money on maintenance, insurance, gas, and repairs that she would not have to spend if she could reach the destinations she needs to reach on AC Transit’s bus.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 262(h).

34. Ms. Robinson would benefit from earlier service on the AC Transit lines that she could use to get to work, including the 45 and the 82. She would also benefit from reinstatement of the 58 line, because it would allow her to connect more conveniently to many locations. Ms. Robinson would also benefit from increased AC Transit service because it would allow her to save money on gas and other expenses of owning and driving a car.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 263(g).

Regional Transportation Plan (“RTP”)

35. The RTP is the region’s long-range transportation plan over a twenty-five year time horizon. The RTP is a prerequisite for the Bay Area’s transportation projects to qualify for federal funds.

See

23 U.S.C. § 134 (g); Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 34.

36. MTC uses the terms “Regional Transportation Plan” and “long-range transportation plan” interchangeably.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 35.

37. MTC adopted its 1994 RTP in or about June, 1994, by Resolution 2687.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 36.

38. MTC adopted its 1998 RTP in or about October, 1998, by Resolution 3116.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 37.

*1005

39. MTC adopted its 2001 RTP in or about December, 2001, by Resolution 3427.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 38.

40. MTC adopted its current RTP, known as the “Transportation 2030 Plan,” in or about February, 2005, by Resolution 3681.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 39.

41. Among other mandates for the planning process, MTC is required to “emphasize the preservation of the existing transportation system.” 23 U.S.C. § 134 (h)(1)(H).

42. Other mandates for the planning process set forth in the same statute require MTC to also: “support the economic vitality of the metropolitan area, especially by enabling global competitiveness, productivity, and efficiency,” “increase the safety of the transportation system for motorized and nonmotorized users,” “increase the security of the transportation system for motorized and nonmotorized users,” “increase the accessibility and mobility of people and for freight,” “protect and enhance the environment, promote energy conservation, improve the quality of life, and promote consistency between transportation improvements and State and local planned growth and economic development patterns,” “enhance the integration and connectivity of the transportation system, across and between modes, for people and freight,” and “promote efficient system management and operation.” 23 U.S.C. § 134 (h)(l)(A)-(G).

43. Since 1991, Congress has required long-range transportation plans to be fiscally constrained.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 42.

44. In MTC’s 2005 RTP, Financially Constrained Element refers to programmed local, regional, state, and federal funds, as well as discretionary state and federal funds anticipated to be available over the long term of the Transportation 2030 Plan.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 46.

45. The financially-constrained element of MTC’s 2005 RTP included approximately $118 billion. Of that sum, approximately $76 billion in funding is designated for transit, with the remainder for highways and local streets and roads. Of the transit portion, approximately $61 billion is designated for maintaining and operating the existing system, approximately $2 billion for system efficiency, and approximately $13 billion for transit expansion.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 48.

46. MTC’s 2001 RTP included six goals, one of which was “equity,” which the RTP described as the goal of “achiev[ing] fairness in the planning, funding and operation of the region’s transportation system.”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 50.

47. MTC broadly follows a four-step process in preparing the financial plan of its RTP.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 86.

48. In step one of the RTP process, for the revenue side, MTC staff prepares financial estimates for all transportation-related funding sources, including fund sources for transit, and assigns these dollars to transit projects based on current laws, policy, or his

*1006

toric funding levels, as applicable.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 87.

49. In step two of the RTP process, for the expense side, MTC generally relies on data from the Short Range Transit Plans (“SRTP”) for the first ten years and uses standard escalating assumptions for operating or life cycles for capital for the remaining years of the long-range plan.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 88.

50. MTC’s 2003 SRTP Guidelines provide in part that: “The [ten year] operations budget must be sustainable and generally balanced each year over the period of the SRTP, using currently available or reasonably projected revenues .... Where reductions in service levels are required in order to achieve a balanced operating budget, [the operator must] describe the reductions and assess their impact on the affected service areas and communities.”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 85.

51. At step three, MTC determines what funding sources are eligible for meeting the operation and maintenance needs, “taking into account eligibility restrictions on those funds.... ”

See

Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 21:27.

52. At step four, after applying all eligible funds to operations and maintenance of the existing system, MTC applies any excess Track 1, or uncommitted, funding to prior committed projects or new projects in the long-range plan.

See

Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 21:28-22:2.

53. For the 1998 RTP, the 2001 RTP, and the Transportation 2030 plan, assignment of regional transportation plan revenues was consistent with MTC policies current at the respective time those plans were prepared, and provided the basis for projecting those revenue assignments forward into the future. MTC policies were assumed to be consistent throughout the respective twenty-five-year period encompassing each plan.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 89.

54. As part of its process of preparing the financial plan of its RTP, MTC issues “calls for data” to the transit operators, requesting year-by-year projections over twenty-five years of operating costs and local operating revenues (in year of expenditure dollars), and an explanation of the assumptions on which these projections were based. MTC requests data on an existing “baseline” of service. The “baseline” includes only those services in operation, under construction, or that have full funding commitments, but not potential Regional Transit Expansion Program projects under MTC Resolution No. 3434. MTC instructs operators to use their most recent SRTP operating costs as a “baseline,” and to “trend off’ of that baseline for the outer fifteen years.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 99.

55. A “transit operating shortfall” in the RTP is the difference between an operator’s projected operating revenues and its projected operating costs.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 107.

*1007

56. In or about 2004, MTC stated to the California Legislature that its draft 2005 RTP “projects a transit operating shortfall totaling $1.6 billion over 25 years that will need to be addressed with similar fare and service changes absent a new source of operating funds.”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 108.

57. MTC identified a projected operating shortfall for AC Transit of $860.5 million in the 1994 RTP.

See

Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 306.

58. MTC identified a projected operating shortfall for AC Transit of $136.2 million in the 1998 RTP.

See

Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 307.

59. MTC identified a projected operating shortfall for AC Transit of $36.7 million in the 2001 RTP.

See

Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 308.

60. MTC identified a projected operating shortfall for AC Transit of $64.4 million in the 2005 RTP.

See

Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 309.

Transit Operators

61. Alameda Contra Costa Transit District (“AC Transit”), Bay Area Rapid Transit District (“BART”), Peninsula Corridor Joint Powers Board (“Cal-train”), Golden Gate Bridge Highway and Transportation District (“GGT”), San Francisco Municipal Railway (“Muni”), San Mateo County Transit District (“SamTrans”) and Santa Clara Valley Transit Authority (“VTA”) are the seven largest operators in the region.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 53.

62. In the aggregate, these seven operators account for more than 95% of the Bay Area’s total annual transit trips.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 54.

63. The annual ridership of these seven largest transit operators for Fiscal Year 2005-2006 was approximately as follows: AC Transit (65.383 million); BART (101.578 million); Caltrain (10.149 million); GGT (9.403 million); Muni (220.880 million); SamTrans (14.506 million); VTA (40.187 million).

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 55.

64. Minorities account for approximately 61% of the Bay Area’s aggregate transit ridership. The proportion of minority riders on the seven largest transit operators is as follows: 78% of AC Transit riders; 53% of BART riders; 50% of Caltrain riders; 38% of GGT riders; 58% of Muni riders; 70% of SamTrans riders; and 70% of VTA riders.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 56.

65. AC Transit connects with nine other bus systems, twenty-one BART stations, six Amtrak stations, and three ferry terminals.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 63.

66. AC Transit was created by statute.

See

Cal. Public Utilities Code §§ 24561

et

seq.; Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 64.

67. AC Transit’s patrons in Contra Costa County include a higher percentage of white riders than AC Transit’s patrons in Alameda County.

See

Joint Proposed Findings of Fact and Con

*1008

elusions of Law (docket # 291) at ¶ 65.

68. In or about 2001, the AC Transit Board of Directors adopted a policy-document entitled, “Strategic Vision: A World Class System for the East Bay” (“Strategic Vision”).

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 66.

69. AC Transit has published an SRTP that contains the Strategic Vision.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 67, 69.

70. AC Transit’s Strategic Vision describes a tiered approach to “accomplish the goal of increasing ridership to about 85 million by 2005-06, then rising to 100 million by 2010.”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 72.

71. The first tier is known as the Financially Constrained Operating Plan (“FCOP”), “which is based on anticipated revenue from existing sources.”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 73.

72. Bay Area Rapid Transit (“BART”) operates rail service consisting of five routes to forty-three stations in four counties.

See

Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 312.

73. According to BART’s STRP for FY 2003-2012, “[t]he Bay Area economy began to slow in late 2000, mid-way through FY01, and BART ridership declined as a result.”

See

Trial Exhibit (“Tr. Ex.”) 1172, Chap. 3, p. 3; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 315.

74. According to BART’s SRTP for FY 2005-2014, BART ridership, after growing at record rates for several years, decreased with the Bay Area economic downturn from FY02 through FY03. BART reported that much of the ridership decrease was attributable to the Bay Area economy, hard hit by the loss of technology jobs and by the terrorist attacks of September 11, 2001.

See

Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 325.

75. According to BART’s SRTP for FY 2005-2014, “BART’s ridership is often directly impacted by the health of the economy.”

See

Tr. Ex. 1898, p. 3-6; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 328.

76. Caltrain is a train system operating in San Francisco, San Mateo and Santa Clara counties.

See

Tr. Ex. 667 at 32-34. The Joint Powers Board, consisting of Muni, SamTrans and VTA, took over ownership of Cal-train in July 1992.

See id.

77. Caltrain lost 4.25% of its ridership in FY 2001-2002 and 11.85% in FY 2002-2003.

See

Tr. Ex. 1166 at 4-1.

78. Caltrain cut service after the 2002-2003 recession.

See

Reporter’s Transcript (“RT”) 549:12-18.

79. In or about June 2004, Caltrain began to run eighty-six trains each weekday, including ten express trains known as “Baby Bullet” trains between San Francisco and San Jose.

See

Tr. Ex. 219. Weekend service was also restored at that time, with thirty-two Saturday trains and thirty Sunday trains.

See id.

Service increased in July 2005, when Caltrain began running ninety-six trains each weekday, including twenty-two Baby Bullet trains.

See id.

80. Since the Baby Bullet opened, ridership has increased on Caltrain by more than 50%.

See

RT 884:25-885:4.

*1009

81. GGT is the smallest of the seven largest operators in terms of number of passengers carried per year.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 57.

82. GGT owns the Golden Gate Bridge, which provides GGT with toll revenues as a source of operating funding. Demand for GGT bus services has fallen by 25% since 2000-2001.

See

RT 510:16-22.

83. In late 2001 and early 2002, the economy contributed to GGT’s projection of a revenue shortfall of one billion dollars over ten years.

See

RT 972:18-973:19. GGT developed a strategic plan to address the projected shortfall, which was updated in 2002, and included service cuts.

See

RT 973:20-974:15.

84. GGT had service cuts after the 2002-2003 recession.

See

RT 549:4-5.

85. Since fiscal year 2004, GGT has increased service because ridership increased.

See

RT 979:17-20.

86. The San Francisco Municipal Transportation Agency is composed of San Francisco Municipal Railway (“Muni”) and the Department of Parking and Traffic.

See

http://www. sfinta.com/cms/ahome/indxabmu.html.

87. Muni served approximately 217 million riders in FY 2006-2007.

See

Stipulation Regarding Ridership, Revenue Vehicle Miles, and Revenue Vehicle Hours of Seven Largest Operators (docket # 371) at Ex. C.

88. Muni had service cuts after the 2002-2003 recession.

See

RT 549:8-9.

89. Muni receives parking-related revenues.

See

RT 927:9-11.

90. In 2004, Muni had a $13 million shortfall that was covered with a fare increase, parking fee and fine increases, as well as staff reductions.

See

Tr. Ex. 1178 at 66.

91. SamTrans provided bus service to approximately 14.5 million riders in San Mateo County in FY 2006-2007.

See

Stipulation Regarding Ridership, Revenue Vehicle Miles, and Revenue Vehicle Hours of Seven Largest Operators (docket # 371) at Ex. C.

92. SamTrans cut service after the 2002-2003 recession.

See

RT 549:6-7.

93. In 2003, SamTrans restructured their local service to provide feeder service to the new BART extension.

See

RT 417:4-22.

94. SamTrans’s ridership stabilized in FY 2007 due to some rebound in the economy.

See

Tr. Ex. 1902 at 1.

95. On June 12, 2002, the Board of Directors for SamTrans adopted certain bus service changes comprising the elimination of some routes, the combination of other routes and adjusted frequencies. The Board of Directors adopted the changes with the understanding that staff would be authorized to implement the changes as of August 25, 2002.

See

Tr. Ex. 1920; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 369.

96. VTA operates bus and light rail service.

See

Tr. Ex. 1913; Third Supplemental Joint Findings of Fact (docket #364) at ¶ 342.

97. VTA is the Congestion Management Authority (“CMA”) for Santa Clara County.

See

Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 343.

98. VTA has statutory authority to enact sales and use taxes if so authorized by the voters.

See

Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 345.

*1010

99. The VTA Board of Directors on August 9, 2000 voted to place a half-cent transit sales tax, Santa Clara County 2000 Measure A, on the November 7, 2000 General Election ballot. The voters passed the tax, which is dedicated to specified public transit capital improvement projects and operations in Santa Clara County, including the BART extension to Silicon Valley.

See

Tr. Ex. 1914; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 346.

100. On June 15, 2006, the VTA Board approved the 2000 Measure A Revenue and Expenditure Plan, a $21.6 billion capital and operations program.

See

Tr. Ex. 1180 at 4; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 348.

101. Approximately 18.5% of 2000 Santa Clara County Measure A sales-tax revenues are designated annually for operating purposes, which VTA projected to be $6,869 million in FY 2006 and $28,815 million in FY 2007.

See

Tr. Ex. 1180 at 6-7; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 349.

102. VTA reported to MTC in its MiniSRTP for FY 2007-2016 that “the addition of Measure A Operating Assistance” allows VTA “to project a reduction of Federal Preventive Maintenance in FY 2008 to levels consistent with pre-recession numbers, so that it may reinstate its local capital program.”

See

Tr. Ex. 1180 at 6, § 1.3; Tr. Ex. 1181 at 54; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 350.

103. On May 2, 2002, the VTA Board of Directors made a finding that a fare increase was necessary to meet operating expenses and to fund capital projects necessary to maintain service within the existing service area,

while maintaining minimum required financial reserves, and adopted Resolution No. 02.05.15 establishing new rates and fares for VTA bus, light rail, and paratransit services effective July 1, 2002.

See

Tr. Ex. 1915; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 354.

104. VTA implemented a 5% service reduction in July 2002.

See

Tr. Ex. 1183, p. 2-8; Third Supplemental Joint Findings of Fact (docket #364) at ¶ 355.

105. VTA implemented a 9% service reduction in April 2003.

See

Tr. Ex. 1183, p. 2-8; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 357.

106. VTA reported in its SRTP for FY 2004-2013 that the high rate of unemployment in Santa Clara County had a dramatic impact on transit ridership. VTA reported in its SRTP for FY 2004-2013 that ridership trends closely mirror unemployment trends — as unemployment increases, ridership declines.

See

Tr. Ex. 1183, p. 2-8; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 359.

107. VTA bus ridership declined 13% between FY 2001-02 and 2002-03. VTA reported in its SRTP for FY 2004-2013 that the decline was attributed to the “weak local economy.”

See

Tr. Ex. 1183, p. 2-5; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 360.

108. VTA light rail ridership declined 22% between FY 2001-02 and 2002-OS. VTA reported in its SRTP for FY 2004-2013 that the decline was attributed to the “weak local economy.”

See

Tr. Ex. 1183, p. 2-5, 2-7; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 361.

*1011

109. VTA reported in its SRTP for FY 2004-2013 that after 2001, declines in bus and light rail productivity were primarily due to the poor performance of the local economy.

See

Tr. Ex. 1183, p. 2-8; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 362.

110. VTA reported in its SRTP for FY 2004-2013 that “[i]n excess of 200,-000 jobs have been lost in our community.”

See

Tr. Ex. 1183, p. 2-8; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 363.

111. VTA reported in its SRTP for FY 2004-2013 that “[between FY 1997 and FY 2001, VTA bus and light rail passengers per scheduled revenue hour steadily declined for several reasons. These were years of system expansion, and it is very difficult for new services to be as productive as the core services that were already in place. Added to that, the most highly productive markets were already being served.”

See

Tr. Ex. 1183 at 2-7; Third Supplemental Joint Findings of Fact (docket #364) at ¶ 364.

112. On September 12, 2008, VTA reported a rise in both bus and rail ridership with average weekday ridership being at the highest levels since August 2002.

See

Tr. Ex. 1917; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 365.

113. In November 2001, the VTA and BART Boards of Directors approved “a cooperative agreement regarding institutional, project implementation and financial issues related to the BART extension.”

See

Tr. Ex. 1181, p. 78; Tr. Ex. 1182, p. 74; Tr. Ex. 1183, p. 4-23; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 366. VTA reported in its SRTP for FY 2004-2013 that it is “seeking to close the gap in the regional transportation network by providing an extension of the Bay Area Rapid Transit (BART) system to Silicon Valley.”

See

Tr. Ex. 1183, p. 4-23; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 366.

114. BART reported in its SRTP for FY 2008 through FY 2017 that: “VTA is providing the funding support for all BART costs related to support work for the Silicon Valley Rapid Transit project. BART and VTA will continue to work towards the completion of the proposed BART to Santa Clara County Extension, with VTA taking the lead in financing and completing the project planning, design and construction.”

See

Tr. Ex. 1898, p. 5-22; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 367.

115. The revenue from the one-eighth cent sales and use tax that was proposed by the VTA Board of Directors and approved by the voters on November 4, 2008 can be used only to fund the operation, maintenance and future capital reserve for the BART Extension to Santa Clara County.

See

VTA Board Resolution No. 08.08.23, http://www.vta.org/ bart/documents/other/adoptecL resolution_08_08_23.pdf;

see also

http://www.vta.org/bart; Third Supplemental Joint Findings of Fact (docket # 364) at ¶ 368.

MTC Demographic Survey

116. In 2006, MTC commissioned a region-wide demographic survey of Bay Area transit ridership (“Demographic Survey”).

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 58.

*1012

117. In or about June 2007, MTC issued a final report entitled “MTC Demographic Survey, Phase One” (“the 2007 Report”).

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 59.

118. The 2007 Report reports the findings of Phase One of a survey of the ridership of riders of fixed-route transit service provided by approximately twenty Bay Area transit operators.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 61.

119. The MTC Demographic Survey was the first demographic survey of the riderships of Bay Area transit operators that MTC had prepared, commissioned or conducted.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 62.

120. Since at least as early as September 2000, MTC has annually published a report entitled “Statistical Summary of Bay Area Transit Operators.”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 77.

121. MTC’s “Statistical Summary” publication provides, for each Bay Area transit operator, a variety of data on operating budgets and service levels. Among other things, it reports annual ridership, annual revenue vehicle miles and hours, and operating budget. See Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 78.

Lifeline Transportation Network

122. In or about December 2001, MTC adopted the Lifeline Transportation Network Report as a part of the “Blueprint element” of the 2001 RTP.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 235.

123. The “Blueprint” element of the 2001 Regional Transportation Plan was “MTC’s advocacy document for new transportation revenues” to fund key transportation projects.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 248.

124. The purpose of the Lifeline Transportation Network Report was to assess the current ability of the fixed route transit system to serve low-income communities in the region.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 236.

125. The Lifeline Transportation Network Report, which was included in the 2001 RTP, defined a network of lifeline transit routes identified by MTC as critical to meeting the transportation needs of low income people in the San Francisco Bay Area.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 237.

126. The Lifeline Transportation Network Report estimated that, assuming a fixed route solution, a total of 1.55 million service hours per year of additional service would be needed to fill the gaps identified in the Lifeline Transportation Network.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 241.

127. The Lifeline Transportation Network Report identified as a “first priority” supporting “the current network of transit routes that effectively serve low-income communities.”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 242.

*1013

Equity Analysis

128. In the Equity Analysis of its 2001 RTP and its 2005 RTP, MTC analyzed “Communities of Concern” that were defined on the basis of proportional geographic concentrations of minority populations and low-income populations in “Regional Travel Analysis Zones” (“RTAZs”).

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 257.

129. RTAZs are small area neighborhoods or communities that serve as the smallest geographic basis for travel demand modeling.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 253.

130. Communities of Concern, as defined in the 2001 and 2004-05 Equity Analyses, are found in each of the nine Bay Area Counties.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 257.

131. The 2005 RTP Equity Analysis included an RTAZ as part of a community of concern if 30% or more of the households within that zone are below 200% of the poverty level because using this threshold places an emphasis on evaluating areas with significant concentrations of low-income households. Also, as 50% of the Bay Area is non-white (according to the 2000 U.S. Census data used in the 2004-05 Equity Analysis), an RTAZ was also included as a community of concern if 70% or more of the persons in the households were of the following descent: African American, Asian American, Hispanic or Latino, American Indian or Alaska Native, Native Hawaiian or Other Pacific Islander, or MultiRacial (two or more races). These two thresholds of 30% and 70% were also used to define a community of concern in the 2001 equity analysis. The 30%/70% thresholds together represent 33% of the Bay Area population.

See

Supplemental Joint Findings of Fact (docket # 346) at ¶ 252.

Funding Types

Resolution 3434

132. Resolution 3434 is also known as the Regional Transit Expansion Program (“RTEP”). Resolution 3434 consists of a list of high-priority rail and express/rapid bus improvements to serve the Bay Area’s most congested corridors. MTC adopted Resolution 3434 in December 2001 to establish clear priorities for the investment of transit expansion funds.

See

Joint Glossary at 13.

133. MTC’s 2001 RTP states that: “The cornerstone of this RTP is the Regional Transit Expansion Program— adopted by the Commission as Resolution 3434 — which calls for a nearly $11 billion investment in new rail and bus projects ---- Resolution 3434 is the successor to MTC’s Resolution 1876, which was adopted in 1988 and delivered ... improvements [such] as the BART extensions to Pittsburg/Bay Point and Dublin/Pleasanton, the Tasman light-rail extension in Silicon Valley, and the ... BART extension to [SFO].”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 208.

134. Resolution No. 3434 is a strategic long-range master plan. The plan contemplates that MTC would find additional sources of funds to fully fund the projects in the plan. In order to be included in the RTP, however, the project would have to have full capital funding and its transit agency must demonstrate an

*1014

ability to operate the increase in service. If a project had a capital shortfall, it could not be included in the RTP.

See

RT 1028:3-19.

135. For Resolution No. 3434, the funding projections are long range projections which are expected to take twenty-five to thirty years to fulfill.

See

RT 961:1-12.

136. Resolution 3357 sets forth the criteria MTC adopted to govern the selection of projects for Resolution 3434.

See

RT 423:4-10; Tr. Ex. 104. In Resolution 3357, MTC formulated different selection criteria for bus projects than for rail projects.

See

RT 1255:8-10; Tr. Ex. 104, Attachment A. When Resolution No. 3434 was originally adopted in 2001, MTC issued a call for projects. Projects were to be judged by criteria adopted in Resolution No. 3357, which fell into two main categories. First, there were financial-based criteria which assessed whether a sponsor already had funds, whether federal, state and/or local, committed to the project. Second, there were performance-related criteria, which assessed the relationship of the project to land-use goals, connectivity with other systems, and ability to fill gaps in the transit network.

See

RT 1012:2-1013:25; Tr. Ex. 1456.

137. For a bus project to be included in Resolution 3434, Resolution 3357 required a demonstration that the bus project could effectively address congestion relief by providing a clearly attractive (i.e., faster and/or more convenient) alternative to single occupancy vehicles. The same criteria was not listed in the requirements for rail projects, although MTC assumed that rail projects would satisfy this requirement.

See

RT 1256:17-1258:3; Tr. Ex. 104, Attachment A.

138. MTC issued a call for project candidates specifically instructing operators to submit projects based on these criteria.

See

RT 423:14-17. One of the evaluation criteria in Resolution 3357 was cost-effectiveness, as rated on a scale of high, medium, or low.

See

RT 424:4-9, 1256:3-5; Tr. Ex. 104, Attachment A, Section A. MTC assigned a high cost-effectiveness score to projects with a capital cost of $0 to $15 per new rider.

See

RT 424:10-12. However, a high rating on the cost-effectiveness scale was not a prerequisite to a project’s inclusion in Resolution 3434 and several Resolution 3434 projects had low efficiency ratings.

See

RT 424:13-21.

139. When formulating Resolution 3434, MTC intended to include bus projects to “provide transitional express bus services more quickly in corridors where rail service is planned but not deliverable for many years.”

See

RT 1258:4-1259:7; Tr. Ex. 104 at MTCP151108.

140. MTC recognizes that express bus projects can be completed more quickly than new rail extensions, and generally require a much smaller capital investment.

See

RT 1259:8-1260:22.

141. AC Transit requested funds from MTC for the 2001 RTEP for the Berkeley-Oakland-San Leandro Bus Rapid Transit, Phase 1 Project.

See

RT 425:23-426:6; Tr. Ex. 103 at MTCP000982;

see also

RT 116:18-117:9; 117:24-118:2. The total capital cost of that project was approximately $104 million in 2001 dollars.

See

RT 426:7-10; Tr. Ex. 103 at MTCP000982. That service area is

*1015

largely minority and predominantly loW-income.

See

Spencer Dep. of 09-10-07 at 65:21-66:4. AC Transit sought funding for that project to contribute to improved mobility for area residents and greater access to jobs.

See id.

at 66:12-21. AC Transit received some money for that project, but MTC did not allocate the full amount requested by AC Transit.

See id.

at 66:22-67:2. The project is currently not fully funded.

See id.

at 67:3-6. AC Transit has plans to go forward with the improvements if it receives full funding.

See id.

at 67:7-10.

142. AC Transit also requested funds from MTC in the 2001 RTEP for the AC Transit/ Oakland/San Leandro Bus Rapid Transit, Phase Two (International Boulevard — East 14th Street) Project.

See

RT 426:13-17; Tr. Ex. 103 at MTCP000985;

see also

RT 116:18-117:9; 118:5-8. The total capital cost of that project was approximately $270 million in 2001 dollars.

See

RT 426:18-20; Tr. Ex. 103 at MTCP000985.

143. AC Transit also requested funds from MTC in the 2001 RTEP for the AC Transit Enhanced Bus/Rapid Transit, Miscellaneous Corridors project.

See

RT 426:21-25; Tr. Ex. 103 at MTCP000988. AC Transit submitted a proposal for eight miscellaneous corridors set forth in the Strategic Vision Plan chart, including San Pablo Avenue, Telegraph/International Boulevard/East 14th, MacArthur Boulevard and Hesperian/Mission/East 14th.

See

RT 116:18-117:4, 118:14-17, 162:18-24; Tr. Ex. 582 at Table ES-1. The total capital cost of that project was approximately $906 million in 2001 dollars.

See

RT 427:1-6; Tr. Ex. 103 at MTCP000988.

144. AC Transit’s funding requests under Resolution 3434 were close to a billion dollars.

See

RT 119:8. In 2001, Resolution 3434 ultimately provided just above $200 million for AC Transit’s projects.

See

RT 119:5-12.

145. As adopted in 2001, Resolution No. 3434 included nineteen projects with a total projected capital cost of $10,519 billion in 2001 dollars.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 213.

146. As adopted in 2001, Resolution No. 3434 included five BART projects: BART to Warm Springs; Warms Springs to San Jose; Oakland Airport Connector; East Contra Costa Rail Extension; and Tri-Valley Rail Extension.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 214.

147. As adopted in 2001, Resolution No. 3434 included three Caltrain projects: Caltrain Rapid Rail/Electrification; Caltrain Express, Phase 1; and Caltrain Express, Phase 2.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 215.

148. As adopted in 2001, Resolution No. 3434 included two AC Transit projects: AC Transit Oakland/San Leandro Bus Rapid Transit, Phase 1 (Enhanced Bus); and AC Transit Enhanced Bus, Hesperian/Foothill/MacArthur corridors.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 216.

149. As adopted in 2001, Resolution No. 3434 projected the total project cost of the following projects, in 2001 dollars, as follows: (1) BART to Warm Springs: $634 million; (2) BART, Warms Springs to San Jose: $3,710

*1016

billion; (3) BART Oakland Airport Connector: $232 million; (4) BART East Contra Costa Rail Extension: $345 million; (5) BART Tri-Valley Rail Extension: $345 million; (6) Caltrain Rapid Rail/Electrification: $602 million; (7) Caltrain Express, Phase 1: $127 million; (8) Caltrain Express, Phase 2: $330 million; (9)AC Transit Oakland/San Leandro Bus Rapid Transit, Phase 1 (Enhanced Bus): $151 million; and (10) AC Transit Enhanced Bus, Hesperian/F oothill/M acA'thur corridors: $90 million.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 217.

150. As adopted in 2001, Resolution No. 3434 projected the capital shortfall for the following projects, in 2001 dollars, as follows: (1) BART to Warm Springs: none; (2) BART, Warms Springs to San Jose: none; (3) BART Oakland Airport Connector: none; (4) BART East Contra Costa Rail Extension: $99 million; (5) BART Tri-Valley Rail Extension: $145 million; (6) Caltrain Rapid Rail/Electrification: none; (7) Caltrain Express, Phase 1: none; (8) Caltrain Express, Phase 2: $190 million; (9) AC Transit Oakland/San Leandro Bus Rapid Transit, Phase 1 (Enhanced Bus): none; (10) AC Transit Enhanced Bus, Hesperian/Foothill/MacArthur corridors: $63 million.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 218.

151. As amended in 2006, Resolution No. 3434 included 20 projects (18 pending completion and two open for service), with a total projected capital cost of $13,503 billion in 2006 dollars.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 220.

152. As amended in 2006, Resolution No. 3434 included five BART improvement projects: BART to Warm Springs; BART, Warms Springs to San Jose/Santa Clara; BART/Oakland Airport Connector; East Contra Costa BART Extension (eBART); Tri-Valley Transit Access Improvements to/from BART.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 221.

153. As amended in 2006, Resolution No. 3434 included two projects that were open for service: Caltrain Express: Baby Bullet and Regional Express Bus. As amended in 2006, Resolution No. 3434 included two Caltrain projects that were not yet open for service: Caltrain Electrification; and Caltrain Express: Phase 2.

See

Tr. Ex. 98 at MTCP239004.

154. As amended in 2006, Resolution No. 3434 included two AC Transit projects: AC Transit Berkeley/Oakland/San Leandro Bus Rapid Transit; and AC Transit Enhanced Bus, Grand-MacArthur corridor.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 223.

155. As amended in 2006, Resolution No. 3434 projected the total capital cost of the following projects, in 2006 dollars, as follows: (1) BART to Warm Springs: $686 million; (2) BART, Warms Springs to San Jose/Santa Clara: $4,792 billion; (3) BART/Oakland Airport Connector: $350 million; (4) East Contra Costa BART Extension (eBART): $407 million; (5) Tri-Valley Transit Access Improvements to/from BART: $464 million; (6) Caltrain Electrification: $471 million; (7) Caltrain Express, Phase 2: $250

*1017

million; (8) AC Transit Berkeley/Oakland/San Leandro Bus Rapid Transit: $175 million; and (9) AC Transit Enhanced Bus, Grand-MacArthur corridor: $68 million.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 224.

156. As amended in 2006, Resolution No. 3434 projected the capital shortfall for the following projects, in 2006 dollars, as follows: (1) BART to Warm Springs: none; (2) BART, Warms Springs to San Jose/Santa Clara: none; (3) BART/Oakland Airport Connector: none; (4) East Contra Costa BART Extension (eBART): none; (5) Tri-Valley Transit Access Improvements to/from BART: none; (6) Caltrain Electrification: $94 million; (7) Caltrain Express, Phase 2: $66 million; (8) AC Transit Berkeley/Oakland/San Leandro Bus Rapid Transit: none; and (9) AC Transit Enhanced Bus, Grand-MacArthur corridor: $52 million.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶225.

157. The 2008 update to Resolution No. 3434 included the assignment of funds from Proposition IB, which authorizes the state to issue a $20 billion general obligation bond for a variety of transportation improvements, and the unanticipated additional Congestion Mitigation and Air Quality (“CMAQ”) funds.

See

23 U.S.C. § 149 . Proposition IB has a program called “SLPP” which refers to state and local partnerships. If a sponsor has local funds dedicated to the project, the state will do a one to one match with Proposition IB money. These funds are allocated to the region through a formula that is based on the relative amounts of local self-help revenues that the transit operators have available. The formulas are specified geographically.

See

RT 1059:8-16.

158. VTA is the project sponsor for the BART Warm Springs to San Jose extension, which means that it promised to deliver the project.

See

RT 1018:13-15.

159. VTA worked with MTC for years to address the growing congestion on the 1-880 corridor, which goes from Oakland to San Jose. Because San Jose is a major employment center and a many workers commute to San Jose from Alameda County via 1-880, congestion has increased. Because there is no transit service in that corridor, VTA wanted to fill that gap. VTA demonstrated that commitment by taking a half cent sales tax measure to the voters. That measure, which dedicates funds to the BART system, passed in 2000.

See

RT 1018:21-1020:2.

160. The BART Warm Springs to San Jose project had $649 million earmarked by the California Legislature to form the Traffic Congestion Relief Program (“TCRP”). The project also estimated over $3 billion in local sales tax money. MTC had no discretion to move these funds to another use. VTA, as Santa Clara’s Congestion Management Agency, also dedicated $49 million in Santa Clara County Regional Transportation Improvement Program (“RTIP”) funds to the project. VTA also targeted $636 million in federal New Starts funds that it hoped to receive.

See

RT 1020:2-1022:12; Tr. Ex. 1036 at 8.

161. The BART Warm Springs to San Jose project was included in the 2001 RTP but removed from the

*1018

2005 RTP because when the economic crisis hit, and the estimated revenue from sales tax revenue for operations failed to meet the test of sufficiency to operate the extension.

See

RT 1064:4-1065:11.

162. MTC has committed funds to AC Transit’s Bus Rapid Transit corridors under Resolution No. 3434.

See

RT 106:12-15.

163. AC Transit received the full amount of Regional Measure 2 (“RM2”) funds that it requested for the Telegraph Bus Rapid Transit service.

See

Martin DT 91:5-7. RM2 was a ballot measure instituting a $1 bridge toll increase passed by Bay Area voters in March 2004. The expenditure plan funds thirty-seven capital projects, with an emphasis on transit improvements in the bridge corridors, as well as a dozen transit operating projects to enhance service along the bridge corridors.

See

Joint Glossary at 13.

164. AC Transit’s Bus Rapid Transit project increased by $100 million dollars between 2001 and 2008. MTC fully filled this gap because this project was identified as a top project to target for receipt of Small Starts funding. Between 2001 and 2008, the scope of the MacArthur/Hesperian project was reduced.

See

RT 1054:4-1055:17.

165. MTC had some unanticipated CMAQ funds that came to the region. MTC made a strategic decision to allocate these funds to a number of programs including Resolution No. 3434. MTC provided $35 million of the funds to cover the shortfall in AC Transit’s Bus Rapid Transit program so that the project could be included in the 2009 RTP.

See

RT 1049:23-1050:14.

166. The Transbay Transit Center is part of Resolution No. 3434, with a projected cost of $2.6 billion as of 2006. Of that cost, $301 million is projected to come from county sales tax revenue; $25 million is projected from San Francisco RTIP funds, $67 million is projected from a federal earmark that the project sponsor obtained, and $444 million is projected to be obtained from a combination of land sales and planned tax increment from a planned new redevelopment area related to the terminal. MTC cannot transfer any of these funds to another use.

See

RT 1023:21-1026:12, Tr. Ex. 1036 at 8.

167. The project sponsor of the Transbay Project is the Transbay Joint Powers Board, made up of representatives of AC Transit, Muni, GGT, and SamTrans.

See

RT 565:25-566:18.

168. The Caltrain Baby Bullet project had $127 million in TCRP funds before it was selected for inclusion in Resolution No. 3434, leaving $1 million to be funded from another source. The second phase of the Baby Bullet project was funded in part by county sales tax measures adopted by the three county Cal-train partners, Santa Clara, San Francisco and San Mateo. The sales tax measures were included in expenditure plans which were adopted outside of MTC’s jurisdiction.

See

RT 1026:13-1027:17, Tr. Ex. 1036 at 8.

169. The Baby Bullet project was included in MTC’s Resolution No. 3434 after Caltrain obtained money from the Traffic Congestion Relief Program initiative committed to the project.

See

RT 883:25-884:6.

*1019

Committed Funds versus Discretionary Funds

170. Committed funds are “revenues that are dedicated by law, ballot measure or prior MTC programming actions to specific transportation investments.”

See

Joint Glossary at 6.

171. MTC operates on a July 1 to June 30 fiscal year. “Fiscal year 2006” means the fiscal year beginning on July 1, 2005 and ending on June 30, 2006.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 115.

172. By statute, MTC can impose conditions on the use of funds from certain funding sources.

See

RT 227:2-6.

173. MTC prepares an annual report for MTC Discretionary Funding.

See, e.g.,

Tr. Ex. 454. The list of funds included in this report were agreed to in the context of a legal settlement agreement.

See

RT 821:12-822:2; 360:6-15.

174. MTC prepared a “master scan” of funds considered as part of the 2005 RTP.

See

RT 360:16-25; Tr. Ex. 455. This “master scan” of funds is a more complete survey of funding sources over which MTC has discretion than the Report of Discretionary Funding.

See

RT 360:22-25, 361:4-9.

Federal Committed Funds

175. The Federal Transit Administration (“FTA”) administers formula Sections 5307 and 5309 funds and distributes them based on urbanized areas defined by census data.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 124.

176. Section 5307 funds are granted by the United States Secretary of Transportation to finance mass transit capital projects as well as to finance the planning and improvement costs of equipment, facilities, and associated capital maintenance for use in mass transit (also known as “preventive maintenance”), including the renovation and improvement of historic transportation facilities with related private investment. Section 5307 funds are authorized on a formula basis and programmed by MTC under its Transit Capital Priorities process.

See

Joint Glossary at 1.

177. There are three categories of Section 5309 funds: Fixed Guideway Modernization; Discretionary Capital — Bus and Bus Facilities; and Discretionary Capital — New Starts.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 140.

178. Section 5309 Fixed Guideway Modernization formula funds may be utilized for both capital renewal, replacement and expansion projects, and for preventive maintenance operating expenses. A “fixed guide-way” includes heavy rail, commuter rail, light rail, monorail, trolleybus, aerial tramway, inclined plane, cable car, automated guideway transit, ferryboats, motor bus service on controlled rights-of-way, and HOV lanes. Section 5309 Fixed Guideway Modernization funds are authorized on a formula basis and programmed by MTC under its Transit Capital Priorities process.

See

Joint Glossary at 1. “Eligible purposes are capital projects to modernize or improve existing fixed guideway systems, including purchase and rehabilitation of rolling stock, track, line equipment, structures, signals and communications, power equipment and substations, passenger stations

*1020

and terminals, security equipment and systems, maintenance facilities and equipment, operational support equipment including computer hardware and software, system extensions, and preventive maintenance.”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 141.

179. Section 5309 Discretionary Capital— Bus and Bus Facilities funds may be utilized for system expansion, capital renewal and replacement, and bus preventive maintenance operating expenses: “Eligible capital projects include the purchasing of buses for fleet and service expansion, bus maintenance and administrative facilities, transfer facilities, bus malls, transportation centers, intermodal terminals, park-and-ride stations, acquisition of replacement vehicles, bus rebuilds, bus preventive maintenance, passenger amenities such as passenger shelters and bus stop signs, accessory and miscellaneous equipment such as mobile radio units, supervisory vehicles, fare boxes, computers and shop and garage equipment.”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 142. Funds are allocated on a discretionary basis. Congress earmarks these funds based on grant applications by the operators.

See

Joint Glossary at 1.

180. Section 5309 Discretionary Capital— New Starts funds are used for construction of new fixed guideway systems or extensions for light rail, rapid/ heavy rail, commuter rail, monorail, “people movers,” motor bus on exclusive or controlled right of way/HOV lanes, and the like. New Starts programs typically receive funds through a full funding grant agreement (FFGA) that defines the scope and specifies the total multi-year Federal commitment to the project. Congress earmarks these funds based on grant applications by the operators.

See

Joint Glossary at 2.

181. MTC determines whether a project is statutorily eligible for Section 5307 funds and Section 5309 formula funds.

See

RT 237:1-238:1; McMillan Dep. of 12-19-07 at 400:8-102:6.

182. MTC is the designated recipient for Section 5307 funds for large urbanized areas in the Bay Area whose populations exceed 200,000.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 125.

183. MTC uses the Transit Capital Priorities (“TCP”) process to allocate Section 5307 funds and some Section 5309 funds. This process is not required by statute.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 126.

184. The goal of MTC’s TCP process is to prioritize the highest-need capital replacement requirements.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 127.

185. In its TCP process, MTC uses a scoring system to determine which statutorily eligible projects will be prioritized for Section 5307 and Section 5309 formula funds.

See

RT 234:23-235:4. The highest scoring projects generally receive a score of 16, while the lowest scoring projects receive a score of 8.

See

RT 238:2-6. Occasionally, projects receive a priority score of 17.

See

RT 238:16-240:4; Tr. Ex. 112 at 54, n. 42. Replacement of revenue vehicles, which are vehicles that carry passengers and generate revenue through fare collection, receives a score of 16.

*1021

See

RT 288:7-15; Tr. Ex. 112. Preventive maintenance receives a score of 9.

See

RT 241:17-19, 242:1-4; Tr. Ex. 112. Transit expansion receives a score of 8 and is the only category that receives a score lower than preventive maintenance.

See

RT 241:20-22.

186. Section 5307 funds are allocated based on a formula. For the national amount available, one third of the amount is distributed to the rail operators, or fixed guideway related operators. The other two thirds of the amount go to bus operators. Because there are many more bus operators than rail operators, operators in urbanized areas that have a combination of rail and bus services receive more overall funding at the outset. MTC is the designated recipient of these funds. It does not allocate these funds to the operators in accordance with the national formula. Rather, MTC blends the funds and ranks them according to need. All the transit operators compete for the funds on a basic level based on their capital replacement needs cycle under the TCP scoring system.

See

RT 1297:20-1299:9.

187. Section 5307 funds are eligible for fund exchange or fund swap as long as the federal funds are used for a statutorily eligible purpose.

See

Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 299.

188. By statute, an eligible use of Section 5307 formula funds is preventive maintenance (also known as capitalized maintenance), an operating expense.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 131.

189. In 1999, MTC made an exception to its TCP policy to allow AC Transit to use Section 5307 funds for preventive maintenance purposes pursuant to MTC Resolution No. 3225. This was the first time within the San Francisco/Oakland urbanized area that a preventive maintenance project was funded over a higher-scoring capital project within the same urbanized area.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 132.

190. In 2002, MTC allowed preventive maintenance funds to be used by operators with an operating shortfall for fiscal year 2003-04.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 133.

191. In 2003, MTC allowed preventive maintenance funds to be used by AC Transit, GGT, and VTA to cover their operating shortfalls for fiscal year 2004-05 pursuant to MTC Resolution 3580.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 134.

192. MTC rescinded $7,222,088 in operating assistance from AC Transit in the fiscal year 1999-2000 pursuant to MTC Resolution No. 3186.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 136.

193. MTC used Section 5307 funds, which has been programmed for preventive maintenance, to replace the $7,222,088 in operating assistance it rescinded from AC Transit in the fiscal year 1999-2000.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 137.

194. MTC made an exception to its TCP policy when it used Section 5307 funds to backfill the $7,222,088 in operating assistance that it rescind

*1022

ed from AC Transit in the fiscal year 1999-2000.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 139.

195. A significant portion of the Section 5307 funds that MTC has programmed to AC Transit for preventive maintenance has been used to buy foreign buses that cannot be purchased with federal funds. RT 177:19-178:23.

196. MTC retains the final decision as to modifications of the TCP scoring system and has frequently made modifications or exceptions.

See

RT 246:9-15.

197. In Resolution No. 3515, MTC approved a temporary “flexible programming” of Section 5307 funds for the 2003-04 year that was established by agreement of all operators in the San Francisco/Oakland, Concord, and Antioch urbanized areas. According to Resolution No. 3515, operators had the discretion to use Section 5307 funds for preventive maintenance or capital projects with scores of twelve or above under the current Transit Capital Priorities Policies and Procedures.

See

Tr. Ex. 1041; RT 247:6-25; McMillan Dep. of 12-19-07 at 417:8-418:6.

198. To be eligible for Section 5307 preventive maintenance funds, an operator must show that: (1) an operating shortfall exists; (2) the operator has implemented reasonable cost control and revenue generation strategies; and (3) the shortfall, if not addressed, would result in a significant service reduction.

See

RT 255:12-256:15; Tr. Ex. 504 at PL023941; Tr. Ex. 112; McMillan Dep. of 12-19-07 at 423:19-25, 424:11-21, 425:9-17, 425:22-426:6, 427:7-10. Even if MTC determines that an operator has met the three requirements, an operator must meet four additional conditions before preventive maintenance will be programmed under Resolution 3688: (1) the operator must show a board-approved bridging strategy that will sustain financial recovery beyond the year for which preventive maintenance is requested; (2) the bridging strategy cannot depend on future preventive maintenance funding from MTC; (3) preventive maintenance cannot be considered as a mechanism to sustain or replenish operating reserves; and (4) an operator may only use Section 5307 funds for preventive maintenance in two of every twelve years.

See

RT 258:8-260:9; Tr. Ex. 504 at PL023942.

199. Section 5309 funds are eligible for fund exchange or fund swap as long as the federal funds are used for a statutorily eligible purpose.

See

Second Supplemental Joint Proposed Findings of Fact (docket #353) at ¶ 300.z

200. Under MTC’s TCP process, Fixed Guideway Modernization Program funds can be used only for rail improvement and ferry improvement.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 146.

201. Section 5309 Fixed Guideway Modernization funds are limited to rail, ferry, and exclusive guideways associated with bus service. The bus element associated with an HOV project could also qualify.

See

RT 961:13-24.

202. Under MTC’s TCP process, AC Transit is not eligible for Fixed Guideway Modernization Program funds.

See

Joint Proposed Findings

*1023

of Fact and Conclusions of Law (docket # 291) at ¶ 147.

203. Muni and Caltrain each received one-third of all Section 5309 Bus Discretionary funds in FY2003-2007.

See

RT 544:5-11; Tr. Ex. 771. BART received a little over one-seventh of all Section 5309 Bus Discretionary funds in FY2003-2007.

See

RT 544:5-11; Tr. Ex. 771. AC Transit received a little under one-twelfth of total Section 5309 Bus Discretionary funds in FY2003-2007.

See

RT 544:12-13; Tr. Ex. 771.

204. Section 5310 Elderly Individuals and Individuals with Disabilities Program funds may be utilized for operating, capital expansion, and capital renewal and replacement purposes.

See

Tr. Ex. 112, Ex. C at 10-11.

205. Under current law, Section 5316 Job Access and Reverse Commute (“JARC”) Apportionments funds can be utilized for transit operations, capital expansion, and capital renewal and replacement projects. The JARC grant program was established in 1998 as part of the Transportation Equity Act for the 21st Century (“TEA-21”), Pub.L. NO. 105-178, § 3037, 112 Stat. 107 (1998). “Grants may finance capital projects and operating costs of equipment, facilities, and associated capital maintenance items related to providing access to jobs; promoting use of transit by workers with nontraditional work schedules; promoting use by appropriate agencies of transit vouchers for welfare recipients and eligible low income individuals; and promoting use of employer-provided transportation including the transit pass benefit program.” Tr. Ex. 112, Ex. C at 11-12.

206. After JARC became a formulaized program, AC Transit received approximately $500,000 annually in JARC funds.

See

RT 128:4-10;

see also

Martin Dep. of 9-11-07 at 45:17-22; 48:5-10.

207. MTC allocates ten percent ADA Set-Aside funds based on the ADA needs of the transit operator.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 128.

208. MTC uses a different policy to allocate ten percent ADA Set-Aside funds than the policy MTC uses to allocate and program Section 5307 funds.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 129.

209. MTC does not use a scoring system in allocating and programming ten percent ADA Set-Aside funds.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 130.

210. Ten percent ADA set-aside funds are eligible for operating expenses.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 158.

211. In FY 2006-2007 and 2007-2008, there was an unexpected excess of $210 million in Section 5307 formula funds from the Federal Transit Administration (“FTA”) that were available for the region.

See

RT 263:6-264:12. FTA is the United States Department of Transportation agency that provides financial and planning assistance to help plan, build and operate rail, bus and para-transit systems. The agency also assists in the development of local and regional traffic reduction programs.

See

Joint Glossary at 8. MTC made the decision on how to program these funds for Fiscal Year 2006-2007 and Fiscal Year 2007-

*1024

2008.

See

RT 264:13-265:10; McMillan Dep. of 12-19-07 at 435:13-436:16.

212. AC Transit is eligible for Transportation Enhancement Activities (“TEA”) funds to the extent that AC Transit has an eligible project that falls within the statutory definition of “transit enhancement activities.”

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 157. TEA funds are a federal transportation funding category consisting of ten percent of Surface Transportation Program moneys that are set aside for projects that enhance the compatibility of transportation facilities with their surroundings. The primary purpose of STP is construction, reconstruction, rehabilitation, resurfacing, restoration and operational improvements for highways and bridges including construction or reconstruction necessary to accommodate other transportation modes. Other eligible transit activities are capital costs of transit projects. Examples of TEA projects include bicycle and pedestrian paths, restoration of rail depots or other historic transportation facilities, acquisition of scenic or open space lands next to travel corridors, and murals or other public art projects.

See

Joint Glossary at 17.

State Committed Funds

213. State law requires that, by March 1 of every year, MTC publish an estimate of available transportation revenues (“Fund Estimate”) that it allocates on a yearly basis and the expected distribution of those funds among eligible claimants. This Fund Estimate includes an estimate of expected revenue generations for the coming year, and a reconciliation of carryover funds from the prior fiscal year as well as an adjustment to the remaining revenue levels for this year. Fund sources included in the estimate are Transportation Development Act (“TDA”), State Transit Assistance (“STA”), AB 1107 ( Cal. Pub. Util. Code § 29142.2 ) and transit-related bridge toll funds. Transit operators and other claimants may request an allocation of these funds in the upcoming fiscal year up to the amount apportioned to them in the Fund Estimate; however, disbursement will be subject to actual cash availability.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 116.

214. Operators use the Fund Estimate to craft annual budgets.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 119.

215. MTC provides the financial information in the Fund Estimate to all operators to assist them in developing budgets in a timely manner.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 120.

216. MTC’s Fund Estimate is a first step in the distribution of TDA, STA and AB 1107 funds that an operator is eligible to receive in the next fiscal year.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 121.

217. Using financial projections of the aggregate funds expected to be available for the upcoming fiscal year, MTC’s Fund Estimate apportions the funds to eligible claimants based on statutory eligibility. MTC’s policies and existing agreements apply to this funding.

See

Joint Proposed

*1025

Findings of Fact and Conclusions of Law (docket # 291) at ¶ 123.

Transportation Development Act

218. The Transportation Development Act (“TDA”) is a state law enacted in 1971, which imposes a tax of one-quarter of one percent on all retail sales in each county, that is used for transit, special transit for disabled persons, and bicycle and pedestrian purposes. TDA funds are collected by the state and allocated by MTC to fund transit operations and programs. In nonurban areas, TDA funds may be used for streets and roads under certain conditions.

See

Joint Glossary at 17.

219. TDA funds are generally divided into three separate types: (1) Articles 4 and 8; (2) Article 4.5; and (3) Article 3.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 159.

220. TDA Articles 4 and 8 funds may be utilized for transit operations and for transit capital replacement.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 160.

221. TDA Article 4.5 funds may be utilized for paratransit operations.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 161.

222. TDA Article 3 funds may be used for bikes and pedestrian facilities.

See

RT 298:11-12.

223. TDA funds, by statute, must go back to the county in which the sales taxes were generated.

See

Tr. Ex. 112, Ex. C at 15-16. If there are multiple eligible transit operators in a county, MTC develops a fund estimate and apportions the TDA funds among the entities that are eligible to request the funds.

See

RT 296:22-297:1; McMillan Dep. of 11-21-07 at 42:18-43:9. MTC has discretion over how to allocate these funds to eligible claimants within a county.

See

RT 297:7-9.

224. The Bay Area region receives approximately $260-270 million in TDA funds annually.

See

RT 297:10-13. The annual MTC Fund Estimate is the cornerstone of MTC’s allocation of TDA funds.

See

RT 299:11-18. MTC makes the ultimate decision as to how to allocate TDA funds and need not follow recommendations by transit operators.

See

RT 302:7-17.

225. MTC made a policy decision that BART may not receive TDA funds for which it is eligible in San Francisco and Alameda counties. Instead, those TDA funds are claimed by Muni in San Francisco, and AC Transit in Alameda.

See

RT 303:18-304:4, 1278:17-1281:14. AC Transit receives approximately $56 million annually in TDA funds.

See

RT 305:17-306:8; Tr. Ex. 654, Attachment A at 2,14.

State Transit Assistance

226. State Transit Assistance (“STA”) provides funding for mass transit operations and capital costs.

See

Joint Glossary at 15-16.

227. STA funds are composed of: (1) revenue-based funds; and (2) population-based funds. These two types of STA funds are allocated differently.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 162.

228. STA revenue-based funds may be utilized for transit operations.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at 11163.

*1026

229. STA population-based funds may be utilized for transit operations and capital. See Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 164.

230. MTC distributes STA funds based on statutory eligibility and the allocation policies in MTC Resolution No. 2310.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 165.

231. By statute, 50% of STA funds are distributed to transit operators based on the transit operators’ revenue-generating capacity, while the other 50% is distributed to Regional Transportation Planning Agencies based on population.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 166.

232. Pursuant to MTC policy, AC Transit is eligible for STA funds allocated to paratransit purposes.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 167.

233. MTC allocated $11,597,580 in STA funds to AC Transit during the fiscal year 2001-02 for operating purposes pursuant to MTC Resolution No. 3371.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 168.

234. In FY 2005-2006, MTC received additional funds from Proposition 42, which increased the base STA funds available in the region.

See

RT 318:4-7.

235. MTC Resolution 3837 is MTC’s new policy for allocating STA population-based funds.

See

RT 321:2-4; Tr. Ex. 1744. Resolution 3837 was approved by MTC in January 2008 and superseded Resolution 2310.

See

RT 310:17-25. Resolution 3837 still allocates STA population-based funds to the same four categories found in Resolution 2310: northern counties, small operators, paratransit, and regional coordination programs.

See

RT 321:5-25; Tr. Ex. 1744 at Attachment A.

Proposition IB

236. Proposition IB (the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006) passed with 61 percent of the vote in November 2006. Proposition IB, also known as the Infrastructure Bond, authorized the state to issue a $20 billion general obligation bond for a variety of transportation improvements.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 169; Joint Glossary at 12.

237. Proposition IB included funding “to the Department of Transportation for intercity rail projects and to commuter or urban rail operators, bus operators, waterborne transit operators, and other transit operators in California for rehabilitation, safety or modernization improvements, capital service enhancements or expansion, new capital projects, bus rapid transit improvements, or for rolling stock procurement, rehabilitation, or replacement.”

See

Cal. Gov’t Code § 8879.23(f)(1);

see also

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 170.

AB 664

238. AB 664 is the Net Bridge Toll Revenues Program, originally passed by the California Legislature in 1975, is codified at Streets and Highways Code § 30880

et seq.

AB 664 imposed a toll increase on the SF-Oakland (Bay) Bridge, the San Ma

*1027

teo Bridge and the Dumbarton Bridge. The Legislature intended “that toll bridge revenues be used to further the development of public transportation systems in the vicinity of toll bridges in order to alleviate automobile-related congestion and pollution and to diminish the need for state expenditures on new bridge facilities.” Cal. Sts. & Hwy.Code § 30880;

see also

Joint Glossary at 2.

239. MTC Resolution 3215 is MTC’s policy with respect to bridge toll funds including AB 664.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 171.

240. Approximately $12 million to $15 million in AB 664 funds come into MTC’s Bay Area region on an annual basis.

See

RT 325:4-6.

241. By statute, AB 664 funds must be used for transit purposes within bridge corridors.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 172.

242. By statute, MTC can allocate AB 664 funds for capital purposes.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 173.

243. MTC’s policy is to make AB 664 funds available as matching funds for federal formula funds Section 5307, Section 5309, STP, CMAQ and STIP.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 175.

244. MTC has made exceptions to its general policy of using AB 664 funds as local match funds for federal formula funds.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 176.

245. MTC made an exception to its general policy of allocating AB 664 funds in 2003, 2004 and 2005 by allocating AB 664 funds to eligible transit operators to implement the BART feeder bus program.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 177.

246. MTC has used AB 664 funds as a local match for preventive maintenance funds.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 179.

Regional Measure 1

247. Regional Measure 1 (“RM 1”), passed by Bay Area voters in 1988 and codified at Streets and Highways Code § 30910 et seq., increased tolls on the region’s seven state-owned bridges to a uniform $1 at the time. Revenues generated by the toll increase were dedicated by RM 1 to fund certain highway and bridge improvements, public transit rail extensions, and other projects that reduce congestion in the bridge corridors.

See

Joint Glossary at 13.

248. RM 1 is divided into two primary pots of money: 5% Reserves, and 90% Rail Extension Reserves. The 90% Rail Extension Reserves component is derived from the toll increase on the Bay Bridge. Cal. Sts. & Hwys.Code § 30912(b). Streets & Highways Code § 30919 requires RM 1 90% rail extension reserves to be used exclusively for rail transit capital extension and improvements.

See

Joint Glossary at 13.

249. By statute, the 60% share of funds over which MTC has discretion are to be used for reducing congestion and improving travel options on bridge corridors.

See

Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 273.

*1028

250. MTC’s allocation policy for Regional Measure 1 5% funds is set forth in Resolution 2004.

See

Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 180.

251. It is MTC’s policy to allocate a majority of 5% Reserves Regional Measure 1 Funds to the ferry program.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 180.

252. The 5% RM 1 funds go to ferries and to the Bay Trail under MTC policy because those entities do not receive most of the funds available to other operators.

See

RT 930:8-25.

253. Forty percent of the 5% funds are required by statute to be used for ferry capital and operating expenses.

See

Second Supplemental Joint Proposed Findings of Fact (docket #353) at ¶ 272.

254. AC Transit applied for 5% Reserves Regional Measure 1 Funds for fiscal year 1998-99.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 182.

255. AC Transit is statutorily eligible to receive a portion of Regional Measure 1 5% funds.

See

Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 274.

256. MTC has never allocated any of the 5% Reserves Regional Measure 1 funds to AC Transit.

See

RT 358:3-21.

257. MTC allocates 90% Rail Extension Reserves Regional Measure 1 Funds pursuant to MTC Resolution 2004. See Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 181.

258. AC Transit is not statutorily eligible for Regional Measure 1 90% rail extension reserves.

See

Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 270.

Regional Measure 2

259. Regional Measure 2 (“RM 2”) was a ballot measure instituting a $1 bridge toll increase passed by Bay Area voters in March 2004. The expenditure plan for the measure funds thirty-seven capital projects, with an emphasis on transit improvements in the bridge corridors, as well as a dozen transit operating projects to enhance service along the bridge corridors.

See

Joint Glossary at 13.

260. Specific projects are earmarked for funding in the legislation implementing RM 2.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 184.

261. RM 2 provided for a specific line item expenditure plan of projects eligible for this fund source. MTC can only change the projects in the legislation through two limited means. First, if a project is deemed undeliverable after a public hearing, the funds may be shifted to another project in the same bridge corridor. Second, if a project could be fully funded from a different source, then the RM 2 funds may be moved to another project in the same corridor, after a public hearing.

See

RT 931:15-932:9.

262. MTC allocated RM 2 Funds to operating and planning for fiscal year 2005-06 pursuant to MTC Resolution No. 3719.

See

Tr. Ex. 500.

RTIP/STIP

263. The Regional Transportation Improvement Program (“RTIP”), California Government Code § 14527(a), is a listing of highway and transit

*1029

projects that the region hopes to fund, compiled by MTC every two years from priority lists submitted by local jurisdictions. The California Transportation Commission (“CTC”) must either approve or reject the RTIP list in its entirety. Once the CTC approves an RTIP, it is combined with those from other regions to comprise seventy-five percent of the funds in the State Transportation Improvement Program (“STIP”). The RTIP must include all projects to be funded with regional improvement funds under Streets and Highways Code § 164(a).

See

Joint Glossary at 14.

264. The State Transportation Improvement Program is the output after CTC combines the various RTIPs in California as well as a list of specific projects proposed by Caltrans. Covering a five-year span and updated every two years, the STIP determines when and if transportation projects will be funded by the state. The STIP is the “Transportation Capital Program” referenced in Section 164 of the Streets and Highways Code. The RTIP is MTC’s submission into the STIP.

See

Joint Glossary at 16.

265. The RTIP was established by statute in 1997 to restructure the STIP into two parts. Twenty-five percent of the funds made available for transportation capital improvement projects to be programmed in the STIP is assigned to various state level programs focusing on inter-regional connections among the highways and rail. The remaining seventy-five percent is assigned by formula to regional agencies. The funds go to the region based on calculated county shares.

See

RT 957:2-24; Cal. Streets & Highways Code §§ 163 , 164.

266. RTIP funds come from the state and have many limitations because they are allocated by county.

See

RT 486:19-487:2.

267. Both transit and highway improvements are eligible for RTIP funds. The RTIP funds come out of the State Highway Account, which has huge demands for rehabilitating the state highway system.

See

RT 958:5-15.

268. MTC’s role in adopting the RTIP is largely ministerial. Projects in the RTIP must be consistent with the RTP.

See

RT 960:9-21.

269. RTIP funds that are programmed for transit average less than $50 million a year.

See

RT 960:22-25.

AB 1107

270. AB 1107 funds (Cal. Pub. Util.Code § 29142.2) are derived from 1977 legislation to make permanent a temporary one-half cent general sales tax originally imposed to build BART in Alameda, Contra Costa and San Francisco counties.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) / at ¶ 189.

271.f Under state law, 75% of AB 1107 funds are allocated to BART.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 190.

272. Under state law, MTC may allocate the remaining 25% among AC Transit, BART and Muni.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 191.

273. During the last five years, MTC has allocated half of the 25% share to AC Transit and the other half to Muni, with none to BART.

See

Joint Proposed Findings of Fact and Con

*1030

elusions of Law (docket # 291) at ¶ 192.

274. MTC does not allocate any AB 1107 funds to Caltrain as Caltrain is not eligible for these funds.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket #291) at ¶ 193.

275. MTC changed its allocation basis for allocating AB 1107 funds from a dollar amount to a percentage basis in 2004 pursuant to MTC Resolution 3590.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 194.

Uncommitted Funds

276. Federal “Flexible” Highway Programs uncommitted funds are generally divided into three separate types: 1) Surface Transportation Program (“STP”); 2) Congestion Mitigation and Air Quality (“CMAQ”); and 3) Transportation Enhancement Activity (“TEA”) Program.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 150.

277. MTC established a “Fix-it-First” policy under which MTC dedicates a significant amount of money in the RTP to capital rehabilitation of the existing transit system.

See

RT 372:9-15. MTC intends the policy to strike a balance between sustaining the existing system and expanding it, with an emphasis on the former in terms of the proportion of funding that is allocated to capital rehabilitation versus capital expansion.

See

RT 406:1-5; 900:21-901:6.

278. MTC’s practice under its “Fix-IbFirst” policy is that a portion of RTP “Uncommitted” or “Track 1” funds go to maintaining and sustaining the system in terms of meeting capital shortfalls in addition to the approximately eighty percent of the “Committed” funds already going to that purpose.

See

RT 405:6-14; McMillan Dep. of 11-15-07 at 766:23-769:7.

279. MTC passed Resolution 3331 in January 2001.

See

Tr. Ex. 509. Resolution 3331 is MTC’s regional policy for fund exchanges for projects programmed with regional discretionary funds.

See

RT 459:9-12; Tr. Ex. 509 at PL19710. Pursuant to Resolution 3331, sponsors who were receiving federal dollars for certain projects identified as regional priorities could use federal funds allocated to that project on another project that was already approved for the use of federal funds and, in exchange, redirect local dollars to the regional priority project.

See

RT 458:15-459:12; Tr. Ex. 509 at PL19710, 712. “Local dollars” are funds that the project lead or sponsor has direct responsibility and control over, such as sales tax funds or general funds.

See

Bockelman Dep. of 11-27-07 at 32:9-19. The “clean” local funds would be directed to the local project that had not yet met the requirements of federal funds.

See

RT 458:21-460:10; Bockelman Dep. of 11-27-07 at 28:4-18. Resolution 3331 is currently in effect.

See

RT 462:21-23; Bockelman Dep. of 11-27-07 at 50:11-14.

280. It is MTC policy under MTC Resolution 3331 that the project funded with “clean” local funds must be consistent with MTC’s programming policy in programming the regional discretionary fund.

See

Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 278.

281. It is MTC policy under MTC Resolution 3331 that the projects for

*1031

which the “clean” local funds are used should be completed in the same time frame as they would have been had federal funds had been used.

See

Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 279.

STP/CMAQ

282. Congestion Mitigation and Air Quality (“CMAQ”) Improvement Program funds consist of a sum of federal money for projects and activities that reduce congestion and improve air quality, both in regions not yet attaining federal air quality standards and those engaged in efforts to preserve their attainment status.

See

Joint Glossary at 6.

283. The purpose of the CMAQ program is to “fund transportation projects or programs that will contribute to the attainment or maintenance of the national ambient air quality standards (NAAQS) for ozone, carbon monoxide (CO), and particulate matter (PM).”

See

Joint Glossary at 6.

284. CMAQ funds are generally limited to capital expenses, but may also be used to help fund operating costs for the first three years of new operations.

See

Joint Glossary at 6.

285. Surface Transportation Program (“STP”), 23 U.S.C. § 133 , funds are one of the key federal funding programs. STP moneys are “flexible” in the sense that they can be spent on mass transit and pedestrian and bicycle facilities as well as on roads and highways.

See

Joint Glossary at 16.

286. The primary purpose of STP is construction, reconstruction, rehabilitation, resurfacing, restoration and operational improvements for highways and bridges including construction or reconstruction necessary to accommodate other transportation modes. Other eligible transit activities are capital costs of transit projects.

See

Joint Glossary at 16.

287. The California Department of Transportation (“Caltrans”) apportions the regional STP to the MPOs. Caltrans must apportion funds in accordance with the formula set forth in 23 U.S.C. § 133 (d) (3). Funds apportioned under this subdivision remain available for three federal fiscal years. Caltrans must notify each metropolitan planning organization receiving an apportionment under this section each year of the amount of obligation authority estimated to be available for program purposes.

See

Joint Glossary at 16.

288. STP and CMAQ are multi-modal funds that come to the region by formula. They are mostly limited to capital except for CMAQ in very limited circumstances. MTC works with the Bay Area Partnership Board to develop a programming process that balances needs of transit, bicycles, transportation land use coordination, local streets and road rehabilitation, and strategic expansion. All of these programs are eligible for these funds.

See

RT 952:11-953:19.

289. STP and CMAQ funds are about the same in amount, although CMAQ is a little lower. CMAQ funds are allocated to the region based on its non-attainment status in meeting federal air quality thresholds. Because the Bay Area is relatively clean, it is not eligible for as many funds as other regions.

See

RT 953:25-954:18.

290. The type of project determines whether it is eligible for STP funds or CMAQ funds. Eligibility is de

*1032

termined by legislation.

See

Martin DT 38:6-23; 39:7-13.

291. STP and CMAQ funds are considered by MTC to be “regional discretionary funds” because MTC makes the programming decision about where and how to spend those funds.

See

RT 277:25-278:6; RT 460:17-22. By federal statute, highway funds under both STP and CMAQ are eligible to be “transferred” to transit projects.

See

23 U.S.C. § 104 (k); RT 276:19-277:5. MTC regularly converts a portion of STP funds from highway to transit.

See

RT 669:7-12.

292. MTC programs STP and CMAQ funds together.

See

RT 278:20-22. MTC programs approximately $65 million in STP funds to transit annually.

See

RT 277:6-10. MTC programs approximately $60 million in CMAQ funds to transit annually.

See

RT 277:11-13. In programming STP and CMAQ funds, MTC considers whether those capital projects are funded through the TCP process.

See

McMillan Dep. of 12-19-07 at 397:14-24.

293. MTC programmed over $50 million in STP and CMAQ funds to regional projects for which MTC was the sponsor in the Transportation Equity Act for the 21st Century (“TEA-21”) authorization period.

See

RT 281:16-282:11. TEA-21, successor to SAFETEA and passed by Congress in 1998, retained and expanded many of the programs created in 1991 under ISTEA. TEA-21 reauthorized federal surface transportation programs for six years (1998-2003), and significantly increased overall funding for transportation.

See

Joint Glossary at 17-18. MTC programmed over $44 million to projects for which MTC was the program sponsor in FY 2007-2008 and FY 2008-2009.

See

RT 282:12-283:22; Tr. Ex. 1694 at MTCP260327. MTC programmed approximately $12 million to AC Transit during that same two-year time period (during FY 2007-2008 and FY 2008-09).

See

RT 284:10-12; Tr. Ex. 1694 at MTCP260329.

294. In FY2004-2005, MTC had an unexpected windfall of STP and CMAQ funds of $107 million.

See

RT 284:13-16. MTC programmed that windfall in MTC Resolution 3695.

See

RT 285:4-5; Tr. Ex. 1038. The windfall funds were required to be used within one year.

See

RT 285:14-22. MTC programmed these funds under its TCP process.

See

RT 288:14-22.

295. In FY 2008-2009, MTC anticipated an additional $72 million in CMAQ funds.

See

RT 288:23-25; Tr. Ex. 1742 at MTCP270203. MTC used this money to fund regional initiatives addressing such issues as smart growth, congestion pricing, and transit expansion.

See

RT 289:14-22; Tr. Ex. 1742 at MTCP270203.

296. STP may be used for almost any capital need, including rehabilitation or expansion, for any mode of surface transportation.

See

RT 276:11-18; Tr. Ex. 112 Ex. C at 13-14. STP funds may be utilized for “[c]apital costs of transit projects that are eligible under Chapter 53 of 49 U.S.C., including vehicles and facilities, publicly or privately owned, that are used to provide intercity bus service; carpool projects and fringe & corridor parking facilities; transit safety infrastructure improvements and programs; transit research, development and technolo

*1033

gy transfer; surface transportation planning programs; public transportation management systems under 23 U.S.C. § 303 .” Tr. Ex. 112 Ex. C at 13-14 (quoting FTA, “FHWA and FTA Funds That May Be Used for Either Highway or Transit Purposes” http//:www.fhwa.dot.gov/hep/ flexfdtble.htm).

297. STP funds that come to the region total about $60 million per year. MTC allocates approximately 50% to non-transit and the other 50% to transit.

See

RT 563:20-565:10; Tr. Ex. 1694,1094-1097.1887.

298. MTC does not dedicate all of the region’s STP funds to transit because there are a lot more needs to be met with these funds than just transit, including local streets and road rehabilitation, Transportation for Livable Communities Program and bicycle needs.

See

RT 954:20-955:13.

299. Resolution 3618 sets forth MTC’s Transportation for Livable Communities Program guidelines. The TLC Program is to support community-based transportation projects that bring new vibrancy to downtown areas, commercial cores, neighborhoods, and transit corridors, enhancing their amenities and ambience and making them places where people want to live, work and visit.

See

Tr. Ex. 1653.

300. STP funds are also eligible to be used for preventive maintenance.

See

RT 279:17-280:2. It is not MTC’s general policy or practice to program STP funds for preventive maintenance.

See

RT 279:17-25.

301. Resolution 3738 sets out the agreement between BART and MTC to allocate STP funds to BART in exchange for “clean” (i.e. unrestricted) local funds to be used for BART’s future car replacement needs.

See

Tr. Ex. 521. The 2005 RTP projected a $1.3 billion transit capital shortfall for BART’s capital replacement needs. The BART car replacement accounted for a significant portion of this projected shortfall. MTC therefore approved a resolution to direct STP funds to the BART car replacement project.

See

RT 280:3-22. Resolution 3738 provides that BART will be programmed STP funds for preventive maintenance for at least a four-year period, while at the same time, BART will provide an equal amount of local funds in an account to fund the BART car replacement project.

See

Tr. Ex. 521; Bockelman Dep. of Dec. 5, 2007, at 113:7-114:5, 114:9-116:11, 120:16-121:3; Second Supplemental Joint Proposed Findings of Fact (docket # 353) at ¶ 285.

302. Resolution 3738 is a departure from MTC’s general policies and practices with respect to STP funds.

See

Second Supplemental Joint Proposed Findings of Fact (docket #353) at ¶ 294.

303. In 1994, pursuant to the STP Reimbursement Exchange Program (Resolution 3018), Santa Clara County Traffic Authority was provided $19.32 million in STP funds in exchange for SSCTA repaying the same amount of “clean” local dollars to MTC.

See

RT 464:1-6; Tr. Ex. 515. MTC restricted the use of the “clean” local funds to projects that could have received STP funds, but would have had difficulty completing the administrative steps required to receive federal funds.

See

Bockelman Dep. of 11-27-07 at 71:24-74:1;

see also

RT 464:20-465:5.

*1034

304. MTC had full discretion to determine how the “clean” local funds would be used. Second Supplemental Joint Proposed Findings of Fact (docket #353) at ¶ 283.

305. Clean local funds can be used for any transit purpose within statutory requirements. Second Supplemental Joint Proposed Findings of Fact (docket #353) at ¶ 284.

306. MTC made exceptions to its own policy and did not require all projects funded with STP Reimbursement Exchange Program funds to be eligible for STP funds. See RT 464:20-465:5. On at least one occasion, MTC used “clean” local funds provided to it pursuant to the STP Reimbursement Exchange Program for the Golden Gate Bridge Physical Suicide Deterrence System, which was not eligible for STP funds.

Id,.;

Bockelman Dep. of 11/27/07 at 79:17-80:10.

307. MTC also programmed to itself $1.2 million in “clean” local funds pursuant to the STP Reimbursement Exchange Program for a TransLink project.

See

RT 465:6-20; Bockelman Dep. of 11-27-07 at 82:3-83:2.

308. Congestion Mitigation and Air Quality funds may be utilized for “[a]ny transit capital projects and operating expenses for new services. Funds may only be used in non-attainment and maintenance areas and projects must demonstrate an air quality benefit. States without non-attainment or maintenance areas may use their minimum apportionment of CMAQ for any project in the State eligible under either CMAQ or STP. Operating assistance is limited to new or expanded transportation services. Operating assistance is limited to three (3) years.” Thus, CMAQ funds are generally limited to capital expenses, but may also be used to help fund operating costs for the first three years of new operations.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 154.

309. CMAQ funds transferred from highway to transit may be used for, among other purposes, new transit vehicles “to expand the fleet or replace existing vehicles,” for “operating assistance to introduce new transit service or expand existing transit service for a maximum of three years,” and for transit fare subsidies under specified conditions.

See

Tr. Ex. 501, Sections b., d. and e. at PL024143-44; Tr. Ex. 112 Ex. C at 13-14.

310. According to the guidance on eligibility of CMAQ funds, capital rehabilitation is not an eligible use.

See

RT 955:16-956:15, Tr. Ex. 1924 at 11. However, CMAQ funds are eligible for several projects that constitute capital rehabilitation, such as replacement of older vehicles with vehicles that utilize new clean air technologies, and diesel engine retrofits.

See

RT 1269:15-1271:5; Tr. Ex. 1924 at 17; Tr. Ex. 112 Ex. C at 13-14.

311. Resolution 3731 establishes an agreement between MTC and Sonoma County Transportation Authority to exchange $2.5 million in CMAQ funds with the same amount of Sonoma County “clean” local measure funds.

See

Tr. Ex. 523; Bockelman Dep. of 11-27-07 at 96:5-97:22. The “clean” local funds provided by Sonoma County would be used by MTC to continue the STP exchange program embodied in Resolution 3018.

See

Bockelman Dep. 12-5-07 at 134:17-135:5.

*1035

312. MTC has the ability to structure exchanges similar to the STP Reimbursement Exchange Program with other operators.

See

Tr. Ex. 112.

TEA

313. The Transportation Enhancement Activity (“TEA”) Program is a federal transportation funding category, as described in more detail above in paragraph 214.

314. The Intermodal Surface Transportation Efficiency Act (“ISTEA”) is federal legislation enacted in 1991 that initiated broad changes in the way transportation decisions are made. ISTEA emphasized diversity and balance of modes, as well as the preservation of existing systems before construction of new facilities. ISTEA expired in 1997, but much of its program structure was carried forward in successor federal legislation such as the Transportation Equity Act for the 21st Century (“TEA-21”) and the Safe, Accountable, Flexible, Efficient Transportation Equity Act (“SAFETEA”).

See

Joint Glossary at 9.

315. As set forth above in paragraph 295, TEA-21 succeeded ISTEA in 1998.

316. SAFETEA is a multi-year federal transportation bill, signed into law by President George Wilderness Act. Bush on August 10, 2005. The bill authorizes $255.5 billion in funding for federal surface transportation programs over five years. SAFETEA maintains the program structure of its predecessor, TEA 21, but provides a much higher number of earmarks for special projects chosen by Congress. SAFETEA is distinguished by its emphasis on safety, including a federal Safe Routes to School Program, and new flexibility for states to develop high

occupancy/toll (“HOT”) lanes.

See

Joint Glossary at 14.

CONCLUSIONS OF LAW Standing

The “irreducible minimum” of standing consists of three elements:

First, the plaintiff must have suffered an ‘injury in fact’ — an invasion of a legally protected interest which is (a) concrete and particularized, [citations omitted] and (b) ‘actual or imminent,’ not ‘conjectural’ or ‘hypothetical,’ [citations omitted], Second, there must be a causal connection between the injury and the conduct complained of — the injury has to be ‘fairly ... traceable to the challenged action of the defendant, and not ... the result of the independent action of some third party not before the court.’ [citations omitted]. Third, it must be ‘likely,’ as opposed to merely ‘speculative,’ that the injury will be ‘redressed by a favorable decision.’

Lujan v. Defenders of Wildlife,

504 U.S. 555, 560 , 112 S.Ct. 2130 , 119 L.Ed.2d 351 (1992). A plaintiff must have suffered or be threatened with an injury that is “concrete and particularized” and “actual or imminent” in order to have standing, coupled with a sufficient likelihood that he will again be wronged in a similar way.

Bates v. United Parcel Service, Inc.,

511 F.3d 974, 985-86 (9th Cir.2007) (quoting

Lujan,

504 U.S. at 560 , 112 S.Ct. 2130 );

City of Los Angeles v. Lyons,

461 U.S. 95, 111 , 103 S.Ct. 1660 , 75 L.Ed.2d 675 (1983).

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 1 (Conclusion of Law).

Plaintiffs may satisfy the first element with only one type of injury.

See Lujan,

504 U.S. at 560 , 112 S.Ct. 2130 .

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 2 (Conclusion of Law). Actual quality of

*1036

life injuries satisfy the injury in fact prong requirement.

See Duke Power Co. v. Carolina Env. Study Group,

438 U.S. 59, 73-74, n. 18 , 98 S.Ct. 2620 , 57 L.Ed.2d 595 (1978);

Lujan,

504 U.S. at 560 , 112 S.Ct. 2130 ;

see also

Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 8; Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 3 (Conclusion of Law). Concrete economic injury is also sufficient to establish injury in fact for standing purposes.

See Sierra Club v. Morion,

405 U.S. 727, 737 , 92 S.Ct. 1361 , 31 L.Ed.2d 636 (1972);

Lujan,

504 U.S. at 560 , 112 S.Ct. 2130 ; see

also

Sept. 19, 2005 Order on Motion to Dismiss at 6, 2005 WL 2277031 ; Jan. 20, 2006 Order on Motion to Dismiss at 8, 2006 WL 167657 ; Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 9; Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 4 (Conclusion of Law).

With respect to quality of life or economic harm, Plaintiffs must show “that a favorable decision is likely to redress [their] injuries], not that a favorable decision will inevitably redress [their] injuries],” in order to demonstrate redressability for the purposes of standing.

Graham v. Fed. Emerg. Mgmt. Agency,

149 F.3d 997 , 1003 (9th Cir.1998);

see also

Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 12; Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 6 (Conclusion of Law). The Court previously held that “Plaintiffs’ own experiences sufficiently demonstrate their quality of life injury.”

See

Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 9:23-24. The Court also previously held that “Plaintiffs have met their burden of demonstrating economic injury for purposes of summary judgment.”

See

Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 10:14-15.

The causation element of the standing analysis is satisfied if the alleged injury is fairly traceable to the purportedly illegal conduct.

See Lujan,

504 U.S. at 560-61 , 112 S.Ct. 2130 (quoting

Simon v. Eastern Kentucky Welfare Rights Organization,

426 U.S. 26, 41-42 , 96 S.Ct. 1917 , 48 L.Ed.2d 450 (1976)). The

Lujan

Court stated:

When, however, as in this case, a plaintiffs asserted injury arises from the government’s allegedly unlawful regulation (or lack of regulation) of someone else, much more is needed. In that circumstance, causation and redressability ordinarily hinge on the response of the regulated (or regulable) third party to the government action or inaction— and perhaps on the response of others as well. The existence of one or more of the essential elements of standing ‘depends on the unfettered choices made by independent actors not before the courts and whose exercise of broad and legitimate discretion the courts cannot presume either to control or to predict,’ [citation omitted]; and it becomes the burden of the plaintiff to adduce facts showing that those choices have been or will be made in such a manner as to produce causation and permit redressability of injury, [citation omitted]. Thus,

when the plaintiff is not himself the object of the government action or inaction he challenges, standing is not precluded, but it is ordinarily ‘substantially more difficult’ to establish,

[citation omitted]

Lujan,

504 U.S. at 562 , 112 S.Ct. 2130 (emphasis added).

A defendant’s actions must have a determinative or coercive effect on the third party’s decisions to the third party’s disadvantage.

See Bennett v. Spear,

520 U.S. 154, 168 , 117 S.Ct. 1154 , 137 L.Ed.2d 281 (1997); Aug. 21, 2008 Order at 11; Def.’s Proposed Separate Findings of Fact and Conclusions of Law ¶ 3. At a minimum, a

*1037

defendant’s actions must constitute a “substantial factor motivating” the conduct of the third party.

See

First Order on Motion to Dismiss at 8 (citing

Bennett v. Spear,

520 U.S. 154, 168 , 117 S.Ct. 1154 , 137 L.Ed.2d 281 (1997);

Tozzi v. U.S. Dep’t of Health & Human Servs.,

271 F.3d 301 (D.C.Cir.2002)) (internal citations and quotations omitted);

see also

Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 11 (quoting

Tozzi,

271 F.3d at 308 ); Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 5 (Conclusion of Law). The record must present “substantial evidence of a causal relationship between the government policy and the third-party conduct, leaving little doubt as to causation and the likelihood of redress.”

National Wrestling Coaches v. Dep’t of Education,

366 F.3d 930, 941 (D.C.Cir.2004);

see also Graham,

149 F.3d at 1003 (a plaintiff also lacks standing when redressability “depends on the unfettered choices made by independent actors not before the courts and whose exercise of broad and legitimate discretion the courts cannot presume either to control or predict.”) (quoting

ASARCO, Inc. v.Kadish,

490 U.S. 605, 615 , 109 S.Ct. 2037 , 104 L.Ed.2d 696 (1989) (plurality opinion));

Tozzi,

271 F.3d 301 ; Def.’s Proposed Separate Findings of Fact and Conclusions of Law ¶ 3.

Here, the question of causation and redressability for the purpose of standing is a close one because of the stricter test applied to government actions that are one step removed from the Plaintiffs due to the intervening actions of a third party not before the Court. On the one hand, AC Transit is an independent third party entity with an elected board of directors that controls its budget and determines all questions of policy, including what services to provide. RT 157:16-19; 158:7-15. For example, without any coercion or directive by MTC, AC Transit chooses to run Trans-bay service, which represents 13% of AC Transit’s Vehicle Revenue Hours (‘VRH”) and 20% of Vehicle Revenue Miles OVRM”). RT 1079:4-1080:1; 1327:9-19. This service aimed at commuters between the East Bay and San Francisco, often from the more affluent and whiter areas served by AC Transit, does not primarily benefit the Plaintiff Class of minority riders. Transbay service costs more than $20 million per year, with the farebox recovery rate of just over 20%, so if AC Transit reduced or eliminated that service, it would save money.

See

RT 721:22-722:14; 1328:22-1329:11; Spencer DT 20:4-11. Moreover, AC Transit recently agreed to make a capital contribution of a total of $57 million to the Transbay terminal project, which facilitates transbay transit but not transit within the urbanized areas of higher minority concentration on which Plaintiffs focus. RT 209:23-210:1; 212:25-213:18.

Further, the state of the economy at times more directly affects service levels and fares than any funding decisions by MTC. Whereas projected shortfalls are predictions or best estimates that do not always materialize in reality, unanticipated economic downturns adversely affect revenues such as sales receipts. Like the observation by the economist John Kenneth Galbraith that “[t]he only function of economic forecasting is to make astrology look respectable,” forecasting transit funding levels is an imperfect science.

2

These

*1038

fundamental economic forces are beyond the control of either MTC or AC Transit. However, the state of the economy is not an independent third party decision-maker of the kind that led to the more stringent test for standing in

Lujan

and its progeny.

On the other hand, AC Transit must set its service levels within the parameters of its available funding (RT 158:10-15), and when it faces an imminent shortfall, must make cuts and perhaps also raise fares. AC Transit has been forced to cut urban bus service to the detriment of the Plaintiff Class in the past due to funding shortfalls, and would likely spend some, if not all, of any additional funds on avoiding further cuts and/or expanding those services. While an economic downturn will tend to reduce funding and may lead to reductions in service, a shift of funds from other transportation uses to AC Transit would alleviate the extent of those reductions. The Board of AC Transit is elected and is therefore designed to be responsive to the needs of its constituents, including the Plaintiff Class. While Plaintiffs’ witness, Mr. Peeples, did not testify on behalf of the Board, as a long time Board member and current President, he exemplified a commitment to improving service to the Plaintiff Class. Further, AC Transit’s Board adopted a “Strategic Vision” in 2001 which included many projects which would benefit the Plaintiff Class, and has requested more funding from MTC for such projects than it has received. The “Strategic Vision” remains the current policy of the AC Transit Board. RT 99:3-5. Therefore, on balance, AC Transit is likely to use a significant portion of any additional funds to benefit the Plaintiff Class.

An association has standing when: (1) its members would otherwise have standing to sue in their own right; (2) the interest that it seeks to protect are germane to the organization’s purpose; and (3) neither the claim asserted nor the relief requested requires the participation of individual members in the suit.

Hunt v. Wash. State Apple Adver. Comm’n,

432 U.S. 333, 343 , 97 S.Ct. 2434 , 53 L.Ed.2d 383 (1977);

see also

Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 15; Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 7 (Conclusion of Law). The first prong of

Hunt

is satisfied so long as an organization has at least one member who would have standing to bring the suit.

Nat’l Lime Assoc. v. Env. Prot. Agency,

233 F.3d 625, 636 (D.C.Cir.2000).

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 8 (Conclusion of Law). The second prong of the

Hunt

test is “undemanding,” and requires “only that an organization’s litigation goals be pertinent to its special expertise and the grounds that bring its membership together.”

Humane Society of the U.S. v. Hodel,

840 F.2d 45, 56, 58 (D.C.Cir.1988);

see also

Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 16; Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 9 (Conclusion of Law). The third

Hunt

prong does not require participation of individual members when the suit does not seek individualized damages.

See Presidio Golf Club v. Nat’l Park Service,

155 F.3d 1153 , 1159 (9th Cir.1998); Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 15; Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 10 (Conclusion of Law).

This case does not require the participation of individual members from either ATU or CBE because Plaintiffs seek prospective and equitable relief, not individualized damages.

See

Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 15; Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 11 (Conclusion of Law). ATU and CBE have established germaneness for purposes of

*1039

trial based on the record submitted for summary judgment.

See

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 264. To the extent that the individual members of the organizational Plaintiffs have standing, the organizational Plaintiffs also have standing. Here, class members Yvonne Williams and Margo Robinson are members of ATU, and class members Concepcion Chavez, Octavio Hernandez and Virginia Martinez are members of CBE.

3

The Court concludes that Plaintiffs have met their burden of showing standing.

Statute of Limitations

The statute of limitations for Plaintiffs’ claims under California Government Code Section 11135 is two years.

See

Cal.Civ.Proc.Code § 335.1;

Taylor v. Regents of Univ. of Cal.,

993 F.2d 710 , 712 (9th Cir.1993);

Gatto v. County of Sonoma,

98 Cal.App.4th 744, 759-60 , 120 Cal.Rptr.2d 550 (2002). MTC argues that because Plaintiffs’ complaint was filed on April 19, 2005, Plaintiffs’ claims are limited to actions taken by MTC on or after April 19, 2003. Therefore, MTC argues that Plaintiffs’ challenges to MTC’s funding policies with respect to Resolution 3434 and committed funds are time-barred because the fund allocation policies were adopted well before April 2003.

The question of whether some of Plaintiffs’ claims are time-barred was raised prior to trial in MTC’s Motion in Limine to exclude time-barred evidence. Without ruling on the merits of the statute of limitations issue, the Court denied MTC’s motion, stating: “Defendant’s Motion in Li-mine to exclude time-barred evidence is denied with respect to pre-2003 evidence on the basis that while Plaintiffs’ continuing violation theory may not be viable, historical information may be relevant as background.” Sept. 19, 2008 Order Following Pretrial Conference at 2:7-9. This issue was raised again by MTC in counsel’s opening statement at trial. RT 40:7-10. Yet Plaintiffs failed to address this issue in their post-trial brief, nor did they seek leave to file any additional briefing on this issue, which was raised in MTC’s post-trial brief. Thus, it appears that Plaintiffs have abandoned their opposition to MTC’s statute of limitations argument. Nonetheless, the Court will address the issue.

To determine the timeliness of Plaintiffs’ claims, the Court must examine the specific practices that are at issue.

See National R.R. Passenger Corp. v. Morgan,

536 U.S. 101, 110-11 , 122 S.Ct. 2061 , 153 L.Ed.2d 106 (2002). Prior to the Supreme Court’s decision in

Morgan ,

the continuing violation doctrine preserved a plaintiffs claims for actions taken prior to the statute of limitations period pursuant to an ongoing discriminatory policy or practice, as long as at least one of the actions occurred during the limitations period.

See Morgan v. National R.R. Passenger Corp.,

232 F.3d 1008, 1015-16 (9th Cir. 2000),

aff'd in part and rev’d in part, National R.R. Passenger Corp. v. Morgan,

536 U.S. 101 , 122 S.Ct. 2061 , 153 L.Ed.2d 106 (2002). The Supreme Court in

Morgan

substantially limited the continuing violation doctrine, precluding its application to discrete acts of employment discrimination, such as termination, failure to promote, denial of transfer or refusal to

*1040

hire, even if done pursuant to an ongoing policy. At the same time, the Court allowed the application of the doctrine to a claim for hostile work environment, which by its nature consists of multiple related actions that by themselves may not constitute discrimination, but in the aggregate create an ongoing discriminatory workplace environment.

Morgan,

536 U.S. at 122 , 122 S.Ct. 2061 .

Morgan

did not consider whether the continuing violation doctrine applied to the pattern or practice claims, which were not raised in that case. 536 U.S. at 115, n. 9 , 122 S.Ct. 2061 . By the same token, it did not endorse the continued application of that doctrine to such claims.

See Lyons v. England,

307 F.3d 1092, 1106 (9th Cir.2002).

Although Plaintiffs’ claims are based on disparate impact, Plaintiffs appeared to argue pretrial that their claims involve a pattern or practice and so are timely under the continuing violation theory. Plaintiffs did not bring this case based on pattern and practice, but on disparate impact. The question of the applicability of the continuing violation doctrine to explicit pattern or practice claims is unsettled, so its extension to disparate impact claims is questionable.

4

A disparate treatment case,

Morgan

and its progeny did not address disparate impact claims. On the one hand, Plaintiffs’ claims are similar to the individual decisions at issue in a disparate treatment case such as

Morgan

in the sense that Plaintiffs challenge discrete policies and practices that arose at a particular time. Indeed, a successful disparate impact claim must identify a discrete practice.

See Stout v. Potter,

276 F.3d 1118, 1124 (9th Cir.2002) (“Plaintiffs generally cannot attack an overall decisionmaking process in the disparate impact context, but must instead identify the particular element or practice within the process that causes an adverse impact.”) (citing

Wards Cove Packing Co. v. Atonio,

490 U.S. 642, 656-57 , 109 S.Ct. 2115 , 104 L.Ed.2d 733 (1989)). On the other hand, Plaintiffs’ claims are arguably somewhat like pattern or practice or hostile work environment claims, which involve an empirical showing of wide-ranging and routine discrimination.

See Cherosky v. Henderson,

330 F.3d 1243, 1247 (9th Cir.2003) (concluding that the plaintiffs had not shown a wide-ranging discriminatory policy, and instead had shown only discrete acts: “As the district court aptly noted, the ‘heart of plaintiffs’ complaint does not stem from the policy regarding the use of respirators, but rather from the individualized decisions that resulted from implementation of a policy originating from OSHA.’ These individual

*1041

ized decisions are best characterized as discrete acts, rather than as a pattern or practice of discrimination.”).

Plaintiffs here, however, challenge MTC’s specific funding policies as they affect the class of minority AC Transit riders. An allegation by Plaintiffs that harmful discrete acts were taken in furtherance of a discriminatory policy does not extend the limitations period.

See

Cherosky, 330 F.3d at 1247 ;

Lyons,

307 F.3d at 1107 (the “assertion that this series of discrete acts flows from a company-wide, or systematic, discriminatory practice will not succeed in establishing the employer’s liability for acts occurring outside the limitations period because the Supreme Court has determined that each incident of discrimination constitutes a separate actionable unlawful employment practice.”). Thus, it appears that Plaintiffs’ challenges to ongoing effects of policies adopted prior to April 19, 2003 are likely time-barred under

Morgan.

Discrete decisions made up to two years before this lawsuit was filed are actionable. For example, AC Transit applied to have three projects, including a Bus Rapid Transit project in two phases and an enhanced bus projects on eight miscellaneous corridors, included in the 2001 call for projects pursuant to Resolution 3434. RT 116:18-117:4; 425:23-427:6. Prior to the statute of limitations period, MTC included only Phase 1 of the Bus Rapid Transit project and enhanced bus on three of the eight corridors on the 2001 project list. RT 430:12-16. After this suit was filed, AC Transit’s Resolution 3434 projects were further reduced by elimination of two of the three enhanced bus corridors. RT 431:21-432:2; 1350:19-21. The actions causing the reduction in the scope of AC Transit’s projects under Resolution 3434 did not flow automatically from the policy itself and are therefore actionable. Similarly, since as early as 2001, well before the statute of limitations began to run, MTC has made exceptions to its longstanding TCP scoring system to allocate funds to preventive maintenance. RT 179:8-181:5; 182:3-7; 183:3-6; 183:25-185:12. Thus, the policies did not dictate use of the funds. In any case, as the Court ruled prior to trial, evidence of prior practices is admissible in disparate impact cases

(Paige v. California,

291 F.3d 1141, 1149 (9th Cir.2002)), so the Court may consider time-barred events as evidence in connection with Plaintiffs’ timely claims.

Disparate Impact

California Government Code Section 11135 prohibits discrimination in state-funded programs, just as Title VI, 42 U.S.C. § 2000d,

et seq.,

prohibits discrimination in federally-funded programs. Section 11135(a) provides in relevant part:

(a) No person in the State of California shall, on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, or disability, be unlawfully denied full and equal access to the benefits of, or be unlawfully subjected to discrimination under, any program or activity that is conducted, operated, or administered by the state or by any state agency, is funded directly by the state, or receives any financial assistance from the state.

See also

22 Cal.Code Regs. § 98101(i)(1) (prohibition against “in carrying out any program or activity directly, or through contractual, licensing or other arrangements, on the basis of ethnic group identification, religion, age, sex, color, or a physical or mental disability: ... (i) to utilize criteria or methods of administration that: (1) have the purpose or effect of subjecting a person to discrimination on the basis of ethnic group identification, religion, age, sex, color, or a physical or mental disability....”). Unlike Title VI, however, the analogous California statute and its implementing regulations provide a private

*1042

right of action.

See

Cal. Gov’t Code § 11139 (“This article and regulations adopted pursuant to this article may be enforced by a civil action for equitable relief.”);

see also Blumhorst v. Jewish Family Servs. of Los Angeles,

126 Cal. App.4th 993, 1002 , 24 Cal.Rptr.3d 474 (2005) (stating that: “the Legislature did create a private cause of action for civil rights discrimination by the amendments to section 11139....”); Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 19-20.

As under Title VI, a prima facie case of disparate impact discrimination under section 11135 requires a plaintiff to show: (1) the occurrence of certain outwardly neutral practices; and (2) a significantly adverse or disproportionate impact on minorities produced by the defendant’s facially neutral acts or practices.

See Gamble v. City of Escondido,

104 F.3d 300, 306 (9th Cir.1997) (quoting

Pfaff v. U.S. Dep’t of Housing and Urban Development,

88 F.3d 739, 745 (9th Cir.1996) (construing the Fair Housing Act));

see also

Aug. 21, 2008 Order on Summ. Adjudication/Judgment at 21; Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 16 (Conclusion of Law). Demonstration of discriminatory intent is not required under disparate impact theory.

See Griggs v. Duke Power Co.,

401 U.S. 424, 432 , 91 S.Ct. 849 , 28 L.Ed.2d 158 (1971);

Gamble,

104 F.3d at 306 ;

see also

Joint Proposed Findings of Fact and Conclusions of Law (docket # 291) at ¶ 17 (Conclusion of Law). Causation is established by offering “statistical evidence of a kind and degree sufficient to show that the practice in question has caused the exclusion of ... [plaintiffs] because of their membership in a protected group.”

Watson v. Fort Worth Bank & Trust,

487 U.S. 977, 994-95 , 108 S.Ct. 2777 , 101 L.Ed.2d 827 (1988) (“Our formulations, which have never been framed in terms of any rigid mathematical formula, have consistently stressed that statistical disparities must be sufficiently substantial that they raise such an inference of causation.”).

Once a prima facie case is established, a defendant must demonstrate a substantial legitimate justification for its actions.

See New York Urban League v. State of New York,

71 F.3d 1031 (2d Cir.1995);

Coalition of Concerned Citizens Against I-670 v. Damian,

608 F.Supp. 110 (S.D.Ohio 1984);

Committee for a Better No. Philadelphia v. Southeastern Pennsylvania Transportation Authority,

1990 WL 121177 , 1990 U.S. Dist. LEXIS 10895 (E.D.Pa. Aug. 9, 1990). If a defendant carries this burden, a plaintiff must then show an equally effective alternate practice that results in less racial disproportionality.

See Georgia State Conference of Branches of NAACP v. Georgia,

775 F.2d 1403, 1417 (11th Cir.1985).

Plaintiffs argue that MTC’s funding policies cause a disparate impact on the largely minority riders of AC Transit’s bus system in favor of the lower minority ridership of other Bay Area transit operators, including rail transit operators such as BART and Caltrain. Specifically, Plaintiffs argue that the emphasis on rail expansion that Plaintiffs contend is embodied in MTC’s Regional Transit Expansion Program (Resolution 3434) comes at the expense of improving the bus service used by the more heavily minority bus riders of AC Transit. Plaintiffs also argue that MTC’s policies for allocating both “committed” and “uncommitted” funds among transit operators has resulted in operating shortfall projections for AC Transit leading to cuts in service quality and quantity that disproportionately affect AC Transit’s minority ridership. As discussed below, Plaintiffs have established a prima facie case of disparate impact only with respect to MTC’s practice under Resolution 3434.

*1043

Prima Facie Case Resolution 3434

Resolution 3434 is a strategic long-range plan for transit expansion projects. In 2001, MTC invited proposals for Resolution 3434 projects to be evaluated under Resolution 3357, which provides financial and performance criteria for Resolution 3434 projects. The financial criteria include how much funding the project sponsor has already identified through local, state and/or federal sources. Performance criteria include congestion relief, air quality, connectivity, land use issues, smart growth goals and urban core support. Project sponsors are responsible for all funding and project delivery.

Plaintiffs argue that MTC’s practice of choosing projects for inclusion under Resolution 3357 causes a discriminatory adverse impact. Plaintiffs contend that MTC promoted a large expansion of costly rail projects while sacrificing more cost-effective expansion of bus service used by riders who are more heavily minority on a percentage basis. In particular, in 2001, MTC only funded about one-fifth of AC Transit’s requested approximately $1.25 billion, rejecting one of its three proposed projects altogether and part of a second, and further reduced the scope of the second in 2006. RT 119:13-21; 430:12-16; 431:18-432:2;

see

Findings of Fact,

supra,

at ¶¶ 148, 150.

The evidence showed that MTC applied different criteria to bus projects than to rail projects. RT 1255:8-11. AC Transit was required to show that its proposed bus projects would lure travelers out of their single occupancy vehicles, whereas rail projects did not have to make such a showing expressly. Instead, MTC’s Deputy Executive Director for Policy, Therese McMillan, testified that rail projects were simply assumed to do so. RT 1256:20-1258:3. The evidence also showed that MTC did not apply any rigorous cost effectiveness criteria across the board, which would probably have resulted in some additional bus expansion, which is less capital intensive because it generally shares existing roadways, compared to rail expansion, which requires laying down dedicated train tracks.

In 2001, AC Transit submitted three projects, Bus Rapid Transit Phase 1, Bus Rapid Transit Phase 2, and enhanced bus service on eight miscellaneous corridors, for a total capital cost of over $1 billion. RT 119:5-8; 426:2-427:6; Tr. Ex. 103 at MTCP000982-990. MTC included the Bus Rapid Transit Phase 1 in full, did not include Phase 2, and included enhanced bus service on only three of the proposed eight miscellaneous corridors, representing in total about one-fifth of the capital money sought by AC Transit. RT 430:12-16; 431:18-20. In 2006, AC Transit’s projects were further limited by elimination of two of the three enhanced bus projects. RT 431:21-32:2.

Plaintiffs’ expert in the areas of transit finance, transit funding and long-range transportation planning, Mr. Thomas Rubin, testified regarding the impact of MTC’s selection process. He concluded that approximately 94% of the Resolution 3434 project costs were for rail projects, and less than 5% were for bus projects. RT 517:8-12. He also opined that 84.4% of Resolution 3434 funds were dedicated to lower minority operators, and that higher minority operators received only 8%. RT 519:21-520:2. On the other hand, he conceded that it would be valid to attribute the BART to San Jose project to its sponsor, VTA, which like AC Transit is a higher minority operator, rather than to BART as he did in making those calculations. RT 613:2-20. Doing so would considerably reduce the disparity between Resolution 3434 funds allocated to higher minority operators and funds allocated to lower

*1044

minority operators. Similarly, Mr. Rubin also testified that he attributed a large portion of the cost of the Transbay Terminal to Caltrain (RT 516:1-517:1), even though the project sponsor was the Trans-bay Joint Powers Authority, of which AC Transit is a member, and Phase I of the Transbay Terminal project was limited to bus only. RT 566:16-18; 1295:14-15. Nonetheless, even if the BART project was attributed to VTA and the Transbay Terminal project was attributed at least in part to AC Transit, MTC’s selection process still causes a disparity in funding for rail projects that on the whole are used by a lower percentage of minority riders, as opposed to bus projects. Further, as capital-intensive rail operators such as BART increase their fleets of rail cars, there will be even more demand on Resolution 3434 funds for rail expansion (RT 412:10-413:1), likely at the expense of bus services. In addition, Mr. Rubin testified that AC Transit’s proposed expansion projects would not only have enabled AC Transit to provide better service at a lower cost, but might have also restored service that had been cut previously. RT 602:7-22; 1386:14-25.

On balance, Plaintiffs have shown that MTC’s practice with respect to Resolution 3434 caused disparate impact. As described above, MTC allocates more funding to rail projects than to bus projects, resulting in bus projects proposed by AC Transit being excluded from projects listed in Resolution 3434. Although Plaintiffs’ challenge to MTC’s initial decisions on which projects to include under Resolution 3434 appear to be barred by the statute of limitations, those decisions constitute relevant context for MTC’s further reductions in 2006 of the scope of the few AC Transit bus projects that had initially been included.

Committed Funds

Plaintiffs challenge MTC’s ostensibly neutral practices of: (a) committing to capital use federal formula funds under Section 5307 (urbanized area) and Section 5309 (fixed guideway modernization) that are eligible for transit operations; and (b) committing to expansion STIP/RTIP funds that are eligible for capital rehabilitation. Plaintiffs argue that the overall effect is to shift funds away from operating the éxisting transit system into costly expansion projects, including those in Resolution 3434, in effect starving the existing bus system to feed the growth of capital-hungry rail.

The allocation of federal formula funds is governed by MTC’s TCP process, which is set forth in Resolution 3688. The scoring system in Resolution 3688 was determined by a consensus of the region’s transit operators, including AC Transit. RT 993:24-995:15. The highest score, generally sixteen, goes to the equipment necessary to provide actual service: vehicles, rolling stock, BART cars, buses, ferry boats and fixed guideway. RT 965:7-10. In the San Francisco/Oakland urbanized area, it is rare that any project with a score of less than sixteen is funded because there are not enough federal funds to do so. RT 240:5-22. Although preventive maintenance, an operating expense, is eligible for Section 5307 funds (RT 233:25-234:5), it only receives a score of nine (RT 241:17-19). Other needs that receive a lower score include maintenance facilities, service vehicles and tools. RT 965:17-23. To prevent any one operator from monopolizing the funds, MTC placed a cap on the total amount of Section 5307 funds that any one operator can receive in any one year. RT 240:23-241:1.

Despite preventive maintenance’s low score, MTC has allowed some committed funds to be used for preventive mainte

*1045

nance in limited circumstances. RT 965:23-966:4. Although there is evidence that MTC has made ad hoc exceptions to provide AC Transit with preventive maintenance funds when it specifically requested them in every year since at least 2001 (RT 179:8-181:1; 181:2-5; 182:3-7; 183:3-6; 183:25-184:17; 184:18-185:12; Exhs. 504, 505, 1040, 1041), many of these exceptions were actually funding swaps to enable AC Transit to purchase buses with funds that would not otherwise be eligible for that purpose. RT 179:11-15. Therefore, the preventive maintenance allocations did not necessarily result in any net gain in operating revenue. RT 249:16-250:7. More importantly, in 2005, MTC revised its TCP process to allow a ten percent flexible set-aside by which operators could use their share of funds for whatever scored project they chose, including preventive maintenance, but specifically limited this use to twice in a twelve-year period. RT 996:11-997:16; Exhs. 504, 505. Thus, the current policy still limits the use of these funds for operating costs.

The second practice challenged by Plaintiffs that relates to committed funds is MTC’s policy of committing funds to expansion that could be used instead for capital rehabilitation. For example, Plaintiffs point to State/Regional Transportation Improvement Program (STIP/RTIP) funds, which can generally be used for capital rehabilitation. RT 294:14-20. These funds, however, must go to projects that are chosen initially by county congestion management agencies, and only then brought to MTC for inclusion in the RTP. RT 959:13-18. MTC’s sole role is to evaluate these projects to determine consistency with the RTP. RT 960:9-16. In light of MTC’s limited role in this process, Plaintiffs have not shown that MTC’s decisions on STIP/RTIP funds have a significant adverse impact on the Plaintiff Class.

Plaintiffs’ expert, Mr. Rubin, expressed his opinion that MTC’s practices with regard to the allocation of committed funds (together with its practices regarding uncommitted funds) produced a disparate impact on high-percentage minority operators. He testified that AC Transit’s operating shortfall as a percentage of its operating budget was higher than that of any of the lower minority operators, and that the average for all high-minority operators was almost three times that of the lower-minority operators. Tr. Ex. 113, ¶¶99-102, Ex. F. The Court was impressed by Mr. Rubin’s deep expertise in transportation planning and his forceful advocacy on behalf of Plaintiffs in this case. However, by virtue of his position as an expert for Plaintiffs, he was not hired to provide a neutral viewpoint. In particular, the Court does not credit his analysis on this point because he unilaterally added approximately $500 million to AC Transit’s projected 2005 RTP operating shortfall without making similar adjustments for other operators. RT 528:13-529:11. While Mr. Rubin explained that he did so to account for a reduction of service prior to the 2005 RTP (RT 528:13-25), AC Transit had already included those service cuts in the information given to MTC pri- or to the issuance of the 2005 RTP. On cross-examination, Mr. Rubin admitted that he did not adjust GGT’s operating shortfall similarly, even though it had also made large cuts, citing GGT’s falling demand as the basis for the cuts and his rationale for treating it differently in his analysis. RT 593:4-594:2. Yet AC Transit’s ridership had also declined steadily, if modestly, from a peak in FY 2000-2001.

See

Tr. Ex. 1195 at 1-16 (May 2004 STRP); Stipulation re: Ridership, Revenue Vehicle Miles and Revenue Vehicle Hours (docket # 371) at Ex. C. Moreover, Mr. Rubin conceded that he did not analyze GGT’s service in detail so he could

*1046

not say whether the decline in ridership was the cause or rather the result, in whole or in part, of cuts in service, insofar as its customers in affluent Marin County could react to cuts in service that made bus travel less convenient by switching to cars, perhaps to a greater extent than AC Transit’s customers. RT 513:18-514:9.

Mr. Rubin also acknowledged that he did not make a similar adjustment for VTA either, despite its service cuts, citing a different reason: VTA’s projected increase in future service due to anticipated population and employment growth and its greater access to local (sales tax) funding set forth in the 2005 RTP. RT 594:20-595:1; Tr. Ex 213 at 2.1-23. Yet the same RTP goes on to project a deficit for VTA, despite its access to local funds and planned fare increases, that “will have to be eliminated either through additional funding or service cutbacks.” Tr. Ex. 213 at 2-1-24. Finally, Mr. Rubin had to acknowledge that all of the operators were cutting service as of the early part of the fiscal year 2003-2004. Thus, the operators had either already made cuts or their budget data showed imminent planned cuts at the time they supplied data to MTC for use in the 2005 RTP in response to its call for data during the period of June through December 2003. RT 595:23-598:6. This evidence seriously undermines the proffered rationale for only adjusting AC Transit’s data. On the other side of the ledger, the evidence cited by Plaintiffs in support of this unilateral adjustment

(see

Pis.’ Post Trial Brief at 16:10-26) is ambiguous at best and does not persuade the Court.

Mr. Boedeker testified more persuasively on this point that a sounder statistical comparison would adjust all the operators similarly for any cuts, or use unadjusted data for all of them. Indeed, without the one-sided adjustment of AC Transit’s operating shortfall, the projected operating shortfall for AC Transit is only one percent, the lowest operating shortfall per rider for the five operators with operating shortfalls. RT 743:24-744:10. Mr. Boedeker testified that MTC funded about 95% of AC Transit’s operating shortfall, a higher percentage than any other operator with a shortfall, although less than the 100% funding of operating shortfalls of SamTrans (a higher minority bus operator) and BART (a lower minority rail operator). RT 749:15-750:5; Tr. Ex. 1908. AC Transit would have had a much higher operating shortfall than any of the other five operators with shortfalls if not for MTC’s funding. Indeed, AC Transit starts at a disadvantage compared to other operators in terms of its ability to raise its own local funds, quite apart from any decisions by MTC. For example, 80% of VTA’s operating budget is supplied by local or state sales tax measures. RT 910:10-20. Similarly, between 50% and 60% of the revenues for GGT’s budget comes from Golden Gate Bridge tolls. RT 973:1-4. Further, Muni’s local and state dedicated funds constitute approximately 70% of its annual operating expenses. RT 1010:22-1011:5; Tr. Ex. 1908. MTC has no influence over these funds and cannot control operators’ access to them. RT 638:17-639:14. By contrast, AC Transit receives less support from dedicated local and state funds for reasons that have nothing to do with MTC. RT 641:2-643:6. Specifically, the only tax that AC Transit can put on the ballot is a parcel tax, which requires a two-thirds majority vote. Parcel taxes impose a uniform fee per property owner regardless of the size of the property. RT 136:7-137:3; 150:17-151:24; 536:14-19. Although three parcel tax measures proposed by AC Transit have passed in recent years, they do not generate as much revenue as sales taxes. RT 136:20-22; 632:20-23; 680:19-23. Therefore, even if MTC funded the same percentage of each operator’s projected operating shortfall, the op

*1047

erators would remain in different positions. Thus, to some extent, the argument is whether AC Transit’s glass is half full due to MTC’s funding some of its shortfall or half empty due to MTC’s failure to allocate additional funding to AC Transit over and above other operators who do not need as large subsidies from non-dedicated sources.

Other significant differences between the seven largest operators in the Bay Area compound the difficulty of making valid comparisons between them (the proverbial “apples and oranges” issue). First, some operators are bus only (AC Transit and SamTrans), one is heavy rail only (Caltrain), one is both light and heavy rail (BART), one is bus and ferry (G

This text is long and has been trimmed here. Open the source document for the complete record.