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PROGRAM APPROACH RECOMMENDATIONS The regional funding needs and the case study programs provide enough understanding to provide some recommendations about potential program approaches that would be appropriate for the Bay Area. The following are initial recommendations for the structure of a TOD Financing program. A. Funding structure There are benefits to both grant and loan structures for a TOD financing program. Grants are simpler and easier to administer, but require ongoing allocations of funding. A loan fund can be self- sustaining but requires more overhead for administration. Existing MPO programs are set up as both grants and loans. If Federal funds are used for the program, once funds are put out as loans, restrictions on usage are often removed when issued for a second time. Federal funding provides an important source of capital for the program —and is the source of the current TLC program —but also limits flexibility of funding Recommendations A.1) Create a hybrid program structure with grants and loans. Grant funds may be more appropriate for some fund uses, such as affordable housing, or major infrastructure upgrades. Loan funds may be more appropriate for other uses, including land acquisition and parking management strategies. A.2) Create flexibility in funding uses. Federal funds carry substantial restrictions that limit the potential program options outlined above. MTC should work with local jurisdictions to identify creative ways to "swap" local infrastructure and transportation funds, which are usually more flexible, for federal funds. In the long term, identifying regional funding sources, as has been done in the Twin Cities, can help reduce the need to use Federal funds at all. A.3) Loan funds should have clearly defined requirements. Funds used for parking management strategies should require pricing to be part of the menu of strategies. Funds for and acquisition should require repayment of principal and potentially some sharing of profit or use of profit for affordable housing or other goals. An important benefit of loan funds is the long -term financial self - sufficiency of the program. B. Metrics and Evaluation A regional TOD financing program will require clear evaluation metrics and a transparent funding allocation process. There are many potential evaluation metrics that can link potential projects to local and regional goals and measurable outcomes (an initial discussion of potential metrics is included as Appendix C). Other regions use a variety of approaches in evaluating potential projects. The Met Council LCDA uses an Advisory Committee composed of a broad range of stakeholders, including community members, local agency staff, architects and designers, and policymakers to evaluate projects and make recommendations for funding. This approach has helped build the credibility of the program. 26 FINANCING TRANSIT ORII.N rED DEYELCF9IENT 'N THE SAN FRANCISCO BAY AREA