EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: May 16, 2023
TO: Honorable Mayor and Members of the City Council
VIA: Melvin E. Gaines, City Manager
BY: Batool Zaro, Associate Engineer
Humza Javed, Public Works Director
SUBJECT: Potential Project List Adoption for Senate Bill 1 (SB1) Road Repair and Accountability Act of 2017
Recommendation
Adopt a Resolution approving a list of projects for Fiscal Year 2023-24 funded by SB 1: The Road Repair and Accountability Act of 2017
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Ensure Our Financial and Organizational Health
Background
In April 2017 Senate Bill 1 (SB 1)-the Road Repair and Accountability Act of 2017-was passed by a two-thirds majority in the California Legislature and signed into law by Governor Brown.
As the largest transportation investment in California history, SB 1 is expected to raise $52.4 billion for transportation investments statewide over the next decade.
Most of the SB 1 funding will be directed to tackling the enormous backlog of maintenance and repairs for our local streets, roads and public transit systems. Funding will also be available for mobility improvements and expanding bicycle and pedestrian access. The Bay Area is also well-positioned to benefit from the new statewide competitive grant programs to reduce congestion and improve freight movement along trade corridors.
Revenues to pay for SB 1 programs will come from transportation-related fees and adjustments to state taxes on diesel fuel and gasoline. SB 1 will effectively take the state gas tax back where it used to be over 20 years ago. In 1994, the base excise tax on gasoline was 18 cents per gallon, or around $3 dollars per tank of gas, as a result of the voter-approved gas tax increase in Proposition 111. That rate has been fixed for more than two decades, even though $3 buys significantly less maintenance and construction than it did in the 1990’s. SB 1 sets the excise tax on gasoline at 30 cents per gallon, equivalent to what 18 cents in 1994 would be worth today.
The second part of the state gas tax is a price-based excise tax, which SB 1 sets at 17.3 cents per gallon beginning in 2019, precisely where it was set when the gas tax swap was enacted in 2011. SB 1 eliminates the yearly adjustment based on the price of fuel, which has resulted in wild swings in the past.
SB 1 establishes the Road Maintenance and Rehabilitation Program (RMRP) to address deferred maintenance on the state highway and local street and road systems. The California Transportation Commission (CTC) will allocate the funds based on adopted guidelines. The bill provides that funds shall be used for projects that include, but aren’t limited to, the following:
• Road maintenance and rehabilitation
• Safety projects
• Railroad grade separations
• Complete street components, including active transportation purposes, pedestrian and bicycle safety projects, transit facilities, and drainage and stormwater capture projects in conjunction with any other allowable project • Traffic control devices
The RMRP, which would receive approximately $3.7 billion annually once all new revenue streams take effect, is funded by the newly established Road Maintenance and Rehabilitation Account (RMRA), which receives four sources of new revenue.
Local Street & Road Funding
SB 1 continuously appropriates 50 percent of the RMRA revenues remaining after the takedowns described above to cities and counties using the same formula that applies to the existing base 18-cent per gallon gasoline excise tax. The bill includes a “maintenance of effort” requirement for local funds contributed to street and road repairs to help ensure that the new funding augments existing budgets for road repairs. Specifically, it requires each city and county to spend no less than the annual average from its general fund during 2009-10 through 2011-12.
The City has expended approximately $64,000 of general funds annually for street and road repair during this period. The City will maintain this level of expenditure. It also requires that a local jurisdiction submit a detailed list of proposed projects to be funded to the CTC prior to receiving an allocation, but authorizes cities and counties to fund projects outside of that list in accordance with local needs and priorities, so long as they are consistent with the program’s project eligibility provisions. If a city or county can demonstrate that it has attained a pavement condition index of 80 or higher, it may spend the funds on other transportation priorities.
Analysis
The City maintains 250 streets that amount to 38.8 centerline miles, 82.9 lane miles of road network. The current weighted average Pavement Condition Index (PCI) for the City's network is 62. The City still has over 15% of its pavement network in dire need of reconstruction and infrastructure improvements, such as the addition of storm drainage systems and curb, gutters and sidewalks. It is estimated that the City will need a budget of approximately $1 million per year over the next five years to address routine streets maintenance and rehabilitation backlog. By investing this amount, the City's network pavement condition index (PCI) will increase from 62 to around 70. The City does not have the ability to fund the projected maintenance needs to keep the City streets and roads in acceptable condition. However, SB 1 will help the City's ability to fund many critical infrastructure improvements as outlined in the discussion above.
The projects included on the SB1 project List, were approved by the City Council by Resolution No 50-2022 adopted in May 2022.
Fiscal Impact
No impact on the City General Funds is anticipated to adopt this Resolution. Each project will be presented to the City with its own fiscal impact and analysis. It is estimated the City will receive approximately $864,112 in HUTA funds, and $742,670 in RMRA funds, with the overall total being $1,606,782 in Local Streets and Roads Funding in Fiscal Year 2023-24 from SB 1.
Attachment 2 includes projected SB1 revenues for the City of East Palo Alto.
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo Co. Library located at 2415 University Avenue, East Palo Alto.
Environmental
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.
Attachments
1. Resolution - Final SB1
2. SB1 allocation 23-24