CITY OF COMMERCEAGENDA REPORTCITY OF COMMERCEAGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
TO: Honorable City Council
FROM: City Manager
SUBJECT FY 2024/25 Street Rehabilitation Project List Under the Road Repair and Accountability Act of 2017 (SB1 Beall) Meeting Date: June 25, 2024
RECOMMENDATION:
The City Council will consider adopting a Resolution approving the FY 2024/25 Street Rehabilitation Project List funded by SB 1: The Road Repair and Accountability Act of 2017.
BACKGROUND:
On April 28, 2017, the Governor signed Senate Bill (SB) 1 (Beall, Chapter 5, Statute 2017), which is known as the Road Repair and Accountability Act of 2017 to address basic road maintenance, rehabilitation, and critical safety needs on both the state highway and local streets and road system. SB1 increases per gallon fuel excise taxes; increases diesel fuel sales taxes and vehicle registration fees and provides for inflationary adjustments to tax rates in future years.
Beginning on November 1, 2017, the State Controller deposits various portions of this funding into the Road Maintenance and Rehabilitation Account (RMRA). A percentage of this RMRA funding is apportioned by formula to eligible cities and counties pursuant to Streets and Highways Code (SHC) Section 2032 (h) for basic road maintenance, rehabilitation, and critical safety projects on local streets and road systems. Pursuant to Streets and Highways Code Section 2030, RMRA local streets and roads allocations must be used for projects "that include, but are not limited to" the following:
Road maintenance and rehabilitation
Safety projects
Railroad grade separations
Traffic control devices
Complete street components, "including active transportation purposes, pedestrian and bicycle safety projects, transit facilities, and drainage and storm-water capture projects in conjunction with any other allowable project." Maintenance of Effort: RMRA
The Road Repair and Accountability Act contains a local agency maintenance of effort (MOE) requirement that applies to funds allocated through the RMRA. The Act states that the MOE requirement is to ensure that these new road funds do not supplant existing levels of city and county general revenue spending on streets and roads. The MOE for the receipt of RMRA funds state that a city or county must maintain general fund spending for street, road, and highway purposes at no less than the average of three years. In making this calculation, an agency may exclude one-time funds. A city or county that fails to comply in a particular year may make it up with additional expenditures in the following year. The Act provides that the State Controller may perform audits to ensure compliance with these MOE rules. If the State Controller determines that a city or county has not met its MOE, the agency will be required to reimburse the state for the funds it received during that fiscal year. However, a city or county that fails to comply in a particular fiscal year may expend during that fiscal year and the following fiscal year a total amount that is sufficient to comply. Any funds withheld or returned as a result of a failure to comply will be reapportioned to the other counties and cities whose expenditures are in compliance.
Spending Plans and Reports: RMRA
The Road Repair and Accountability Act stipulates that, prior to receiving RMRA funds in a fiscal year, a city or county must submit to the California Transportation Commission (CTC) a project list pursuant to an adopted budget. The list must include for each project: description, location, schedule, and useful life. [Streets and Highways Code Sec 2034(a)] The Road Repair and Accountability Act also requires that a city or county submit to the CTC an annual report of project completion in order to receive RMRA funds. The report must include descriptions of all projects for which RMRA funds were expended including: description, location, funds expended, completion date, and estimated useful life of the project.
ANALYSIS:
The City of Commerce allocation for FY 2024/25 is estimated to be $316,782 as shown on the table below:
The City is receiving a higher allocation for FY 2024/25 than prior years. Last year’s (FY 2023-24) allocation was $305,987.
The City’s required local Maintenance of Effort ( MOE) amount to be applied to the project under SB1 is estimated to be $2,136,745 as shown on the table below. This is the same amount as last year’s estimate. There has been no update in the formula for the MOE at the present time The required MOE is met through the City’s allocated Measure AA funds for the pavement rehabilitation project.
As a part of 2024/25 Pavement Rehabilitation Project, the City’s RMRA funds will be used on pavement rehabilitation of City streets and Alleys through reconstruction, asphalt coldmill & overlay, and slurry seal.
Staff recommends approval of the attached Resolution required by the State of California.
ALTERNATIVES:
Approve staff recommendation
Disapprove staff recommendation
Provide further direction to staff
FISCAL IMPACT:
There is no fiscal impact to the City’s General Fund. However, the City will be at the risk of losing $316,782 in SB 1 funds by not adopting the attached Resolution.
RELATIONSHIP TO STRATEGIC GOALS:
This agenda item relates to the 2016 Strategic Plan:
Fiscal Sustainability
Guiding Principle #5: Create and pursue opportunities for collaboration and regional partnerships to maximize resources and address regional issues.
Recommended by: Gina Nila, Department of Public Works
Reviewed by: Vilko Domic, Assistant City Manager
Approved as to form by: Noel Tapia, City Attorney
Respectfully submitted by: Ernie Hernandez, City Manager ATTACHMENT:
Resolution