Agenda Item No. 11
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: January 27, 2025 FROM: Matthew Bronson, City Manager
PREPARED BY: Greg Ray, City Engineer/Public Works Director Erin Wiggin, CIP Project Manager
SUBJECT: Street Repair Update
RECOMMENDATION
Receive an update on the status of street maintenance and rehabilitation efforts along with an update on private streets south of Farroll Road
BACKGROUND
The City Council has identified “Street Maintenance and Complete Streets” as one of the Council’s FY 2023-25 Major City Goals. Since 2014, major maintenance or rehabilitation projects on residential streets have been completed using voter-approved Measure K-14 bond proceeds. The City is approaching the 10th year of the Measure K-14 program which provides up to $48 million in bond funds for repair of residential streets with an estimated timeframe of 25 years. Work on the remainder of city streets, which are generally arterial streets referred to as “major streets,” including 4th Street, Oak Park Boulevard, El Camino Real, West Grand Avenue, Farroll Road and The Pike, are funded from other sources including the General Fund, Gas Tax funds allocated by the State, Local Transportation Funds (LTF) allocated by the San Luis Obispo Council of Governments (SLOCOG), and outside grants. The City also currently spends approximately $180,000 annually in Gas Tax and LTF funds on localized asphalt repairs and pothole patching on both residential and major streets as a temporary solution until the street is fully rehabilitated.
These repairs are contracted out due to a lack of adequate staffing and equipment necessary to perform this work in house by City maintenance employees.
Measure K-14 Projects
To date, the City has completed maintenance or rehabilitation of nearly 320 city blocks, which represents over 70 percent of the streets included in the Measure K-14 program. Construction of the most recent Measure K-14 project was completed in June 2024 on Capital Improvement Program (CIP) 2295-16, which included rehabilitation of 20 blocks including portions of Front Street, N. 2nd Street, Saratoga Avenue, and Ramona Street. CIP 2295-18, a maintenance sealcoat project on streets previously repaired under the Measure K-14 program, is scheduled for this fiscal year. In general, the City is on a cycle of completing about one Measure K-14 project per fiscal year to continue the extensive progress in improving residential streets.
Staff would note that bid documents have been prepared for the next Measure K-14 street repair project (CIP 2295-17) which includes rehabilitation of 14 blocks including portions of N. 9th, N. 11th, and 12th Streets, Brighton and Ramona Avenues, and Moss Beach and Alma Courts.
However, construction on this project has been put on hold since 2024 due to the delay in related sewer upgrade work on affected streets caused by the uncertainty in sewer rates necessary to fund these improvements. This uncertainty continued with passage of Measure G-24 which Staff Report: Street Repair Update Page 2
January 27, 2025
reverted sewer rates to the rate structure adopted in 2021. Staff would not recommend proceeding with this street repair project until the sewer rate structure is modified to fund these necessary improvements or the Council provided direction to advance other street projects in place of this project or carry out these street improvements now and then dig up the streets later to do the sewer improvements.
Attachment 1 shows the Measure K-14 projects that have been completed and remaining residential streets to repair in the Measure K-14 program. Staff believes the remaining projects could be completed by 2032, which is ahead of the original program completion date of 2040.
However, continued project delays for utility work ahead of the street projects would delay this anticipated completion date. Looking ahead, approximately $13 million in available funding remains from the $48 million bond funding with nine more projects planned to address all residential streets. Since 2020, inflation has increased significantly, and construction costs have escalated on average 10-15% per year. Given the escalating construction costs, staff is forecasting a funding shortage of $3-4 million to fully complete the programmed Measure K-14 projects by 2032. This forecast is based on the assumption that inflation will stabilize to the typical 2%-4% range within the next 1-2 years. Additional funding to complete these projects would need to come from other sources including the General Fund. No immediate action on this long-term funding gap is needed as there is sufficient funding for more immediate projects though staff will continue to engage the Council over time in ways to address this funding gap in completing all residential street repairs.
Upon completion of all Measure K-14 projects, the estimated cost to maintain residential streets in good condition, a Pavement Condition Index (PCI) value of 65 or better, is $1.5 million per year.
The City has begun programming maintenance of previously rehabilitated Measure K-14 funded streets in the Capital Improvement Program starting in FY 2026-27 with a recurring annual maintenance project funded by the General Fund (CIP 2250-1). Additional projects and ongoing funding will need to be included in annual budgets in future years. Staff plans to conduct an updated field assessment of all Measure K-14 streets in FY 2025-26 to provide more accurate information on street conditions and an updated estimate of costs which will be used to inform the budget process for future maintenance and rehabilitation needs.
Lastly, the City’s sidewalk infill public/private partnership program has been available for property owner participation on streets where Measure K-14 projects are being completed. With this program, the City will fund half of the cost to construct concrete sidewalk, curb, and gutter improvements. As a result of this program, the number of property owners funding sidewalk improvements has increased from 1-2 per project to an average of 6-7 per project. The City’s contribution is funded with an annual budget allocation of between $50,000-$100,000 depending on the scope of the planned Measure K-14 project from the General Fund.
Major Streets Projects
Improvements to major arterial streets have been historically limited due to lack of resources for these repairs. However, in recent years, the City has received additional general revenues including cannabis tax revenues after the approval of Measure X-06 in 2016 and increased sales tax revenues particularly through the additional 1% sales tax approved with Measure F-20 in 2020.
As a result, the Council has allocated additional general revenue funding for major streets projects with a priority on streets that are heavily used or located with numerous businesses and residents.
Following recent improvements on South Oak Park Boulevard between West Grand Avenue and Mentone Avenue, the City has been working on the West Grand Avenue Streetscape Project (CIP 2287) which has been under construction since June 2024. This long-standing and significant Staff Report: Street Repair Update Page 3
January 27, 2025
project in the City’s primary commercial corridor includes pavement rehabilitation, landscaped medians, sidewalk and crosswalk improvements, street trees, and installation of storm drains along West Grand Avenue from 4th Street to 8th Street. Improving this section of West Grand Avenue is important to enhance the vibrancy of this commercial corridor as well as enable redevelopment focused on housing and commercial uses. Work on this project has experienced delays due to unplanned repairs needed on water mains given aging infrastructure and to upgrade the sewer main in South 4th Street including in the intersection of West Grand Avenue. The project’s utility work is complete with pavement work almost completed and the project is expected to be fully completed by April.
Three additional major street projects are programmed in the FY 2025-29 CIP over the next three years including North 4th Street (West Grand Avenue to Ocean View Avenue), West Grand Avenue (11thStreet to Oak Park Boulevard), and South Oak Park Boulevard (Mentone Avenue to The Pike). However, based on recent bid experience, the cost for these projects is anticipated to increase which could delay their construction timeline. More information will be shared with the Council on March 24 when the updated CIP is brought to the Council for review. The CIP also lists the unfunded needs for paving major streets which include El Camino Real, Farroll Road, The Pike, and S. 4th Street from Farroll Road to the southern City limit next to Oceano for a total estimated need of $12 million along with $500,000 in annual maintenance costs for all major streets. As of now, there is no funding identified for improvements on these major streets which is a challenge as these streets will need to be improved in the future.
Lastly, South 4th Street south of Highland Way to the city limit is particularly challenging given the condition of the street and underlying drainage issues from adjacent properties. This street section has historically been lightly traveled given the proximity to Highway 1 and 13th Street and has been closed to through traffic since early 2023 given storm damage. Repairing this street section requires a complex redesign to address the challenges with flooding and debris with a total estimated repair cost of approximately $5 million. Staff is preparing a grant application for a Feasibility Study to improve this street and add bike and pedestrian improvements. Pending the outcome of this study, the City may be in a better position to apply for a large grant, such as an Active Transportation Program grant for significant improvements. Staff will continue to engage the Council over time on ways to identify additional funding to meet these repair needs as part of the City’s CIP program.
Streets South of Farroll Road
The Council has previously provided direction to include the streets south of Farroll Road as part of the Measure K-14 street program. However, the program’s street projects approved by the Council lists these streets south of Farroll Road in the last set of projects due to issues regarding existing easements, dedications and ownership of streets in the area between private property owners and the City. Staff has conducted a thorough analysis of the City’s vested interest in the roads south of Farroll Road. While these roads were initially reserved for developers and their successors in interest according to the applicable 1926 resubdivision map of the area, identified as the Pismo Beach Gardens on the original subdivision map, the City has established significant vested rights through its long-term maintenance and improvement activities on these roads.
Support of the City’s vested rights is found in California Civil Code § 1009(d), which provides that a governmental entity can acquire vested rights in private land through public improvement and maintenance. The statute specifically states that when a governmental entity uses private lands through the expenditure of public funds on visible improvements and conducts maintenance related to public use in a manner where the owner knows or should know of such use, these actions confer upon the governmental entity a vested right to continue such use after five years, Staff Report: Street Repair Update Page 4
January 27, 2025
provided the owner neither gives express permission nor takes steps to prohibit such use.
Importantly, these rights include “any public use reasonably related to the purposes of such improvement.”
The City has firmly established these vested rights through its historical construction of the roads, ongoing improvements to the road infrastructure, and regular maintenance activities, all funded through public expenditure. These activities clearly meet the statutory requirements as they constitute visible improvements and maintenance related to public use. The long-term nature of these activities, extending well beyond the five-year statutory period, has solidified these rights.
The City's vested rights in these roadways, while substantial, are limited to the existing established road footprint and do not constitute ownership of the underlying property. These rights encompass basic road maintenance, traffic and parking regulation, street lighting installation and maintenance, drainage system implementation, and other standard street-related improvements necessary for public safety and convenience. While the City may utilize these roads for additional public infrastructure that could be considered "reasonably related to the purposes of such improvement," the determination of what constitutes a reasonable use is not definitive. The potential scope may include underground utilities such as water lines, sewer connections, storm drainage systems, electrical conduits, and telecommunications infrastructure, as well as surface improvements like sidewalks, pedestrian facilities, bicycle lanes, street lighting, and traffic calming measures. These uses may be considered reasonable as they relate to the road's primary purpose of providing public transportation infrastructure and align with modern street requirements. However, without property ownership, the City cannot expand beyond the established roadway footprint and any improvements must remain within these physical constraints.
It should also be noted that the City’s vested rights can be challenged by the private landowners to whom the land was reserved within the 1926 resubdivision map. Staff continues to explore opportunities to secure full ownership of these roadways through appropriate mechanisms, which would provide the City with comprehensive control and enable implementation of improvements typically associated with dedicated public rights-of-way, thereby enhancing the City's ability to serve the public interest effectively.
At this time, given the City's extensive history of maintaining and improving these roads, staff concludes that the City has established vested rights in the Pismo Beach Gardens roads and that these rights provide the City with the authority to continue maintaining and improving these roads as part of the larger street improvement program. Staff would add that currently there is not funding allocated for maintenance work on these streets prior to full rehabilitation in the future but this is something that could be included in the FY 2025-27 budget.
FISCAL IMPACT
There are no immediate fiscal impacts associated with this update.
ALTERNATIVES
The Council has the following alternatives to consider:
1. Receive an update on the status of Measure K-14 street rehabilitation projects and Major Street rehabilitation projects; or
2. Provide alternative direction to staff.
Staff Report: Street Repair Update Page 5
January 27, 2025
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
Attachments
1. Map of Measure K-14 Street Projects
2. List of Future Measure K-14 Street Projects
Completed Projects
2295-1 thru 2295-16
Current Projects
2295-17
(project delayed due to sewer work delay)
Future Projects
2295-18 – 2295-24
(projects identified, not yet scheduled)
Map Rev 10-2-24
Attachment 1
Attachment 2