CITY OF LAGUNA NIGUEL
CITY COUNCIL AGENDA ITEM
To: Honorable Mayor and Council Members
FROM: Trevor Agrelius, Finance Director
Jacki Scott, Public Works Director
DATE: August 1, 2023
SUBJECT: Reallocation of Capital Project American Rescue Plan Act Fund Savings
RECOMMENDATION
Staff recommends that the City Council:
Approve the following FY 2023-2024 budget adjustment:
1. Transfer $53,716 from project savings from completed capital projects funded by the American Rescue Plan Act to the Marina Hills Drive - Niguel Road to Golden Lantern Project.
2. Transfer $146,284 in American Rescue Plan Act funds from the Residential Annual Resurfacing Program (Zones 3 & 4) to the Marina Hills Drive - Niguel Road to Golden Lantern Project.
BACKGROUND
At the mid-year budget update on February 7, 2023, the City Council increased the total appropriations to the Marina Hills Drive Resurfacing Project - Niguel Road to Golden Lantern to $2,300,000. $200,000 of that budgeted amount was to be funded by the Corona Virus Response and Relief Supplemental Appropriation Act of 2021 (CRRSAA).
The City qualified for this funding through the Orange County Transit Authority (OCTA) Pavement Management Relief Funding (PMRF) program.
H.R. 3746, the Fiscal Responsibility Act of 2023, was recently signed into law by the President of the United States on June 3, 2023. According to a press release from the White House on June 3, 2023, the law "rescinds certain unobligated balances." According to OCTA, this clause was applicable to unobligated CRRSAA funds. The Executive Director of Planning at OCTA stated that any project that did not receive an approved obligation document prior to the enactment of the new law will not be able to proceed with that funding. The Marina Hills Drive - Niguel Road to Gold Lantern Resurfacing Project was identified by OCTA as unobligated at the time the bill was enacted, putting that
$200,000 funding at risk.
Despite City staff submitting the paperwork to Caltrans in December 2022, severe delays in processing of the City's application by Caltrans staff prevented the funding being approved. To date, Caltrans has failed to provide the needed approvals to utilize the grant funding.
The California Transportation Committee elected to delegate authority for the CRRSAA funding to Caltrans, who can use any CRRSAA funds received as it deems appropriate.
OCTA is actively working with Caltrans to determine which projects within Orange County can be funded with received CRRSAA funds or an alternative funding source within the County, but the outcome of those efforts is uncertain. The County-wide total CRRSSA funds at risk is $7.3 million. Due to the importance of this project and the uncertainty of when a final decision will be made, staff is making a recommendation to change the funding source to fully fund this project. If the funding becomes available from Caltrans, the staff's intent is to use those funds for this project or substitute another shelf-ready project in its place, if permissible.
ANALYSIS
City staff has identified American Rescue Plan Act (ARPA) funded capital projects that have realized savings or future anticipated savings that can be reallocated to the Marina Hills Drive - Niguel Road to Golden Lantern Resurfacing Project to make up for the loss of the anticipated CRRSAA funding. In total, staff has identified $200,000 in ARPA Funds that can be transferred to the Marina Hills Drive - Niguel Road to Golden Lantern Project to fully compensate for the loss of the CRRSAA funding. There are several ARPA funded closed projects that have realized savings of $53,716, which staff is proposing to transfer to the Marina Hills Drive from Niguel Road to Golden Lantern project. Additionally, the Public Works staff has executed agreements that came in under budget for the Residential Annual Resurfacing program for zones 3 and 4, which allows an additional $146,284 in ARPA funds to the Marina Hills Drive from Niguel Road to Golden Lantern project. Thus, $200,000 in ARPA funds are available to transfer to the Marina Hills Project.
In addition to rehabilitation of the pavement of Marina Hills Drive from Niguel Road to Golden Lantern, this project includes bike lane enhancements, associated concrete improvements including curb and gutter, sidewalks and ADA access ramps and the installation of traffic signal video detection systems at two intersections providing bicycle detection capabilities. This project spans the entire length of Marina Hills (approximately
1.2 miles) and will add approximately 20 years of useful life to the roadway. Marina Hills Drive currently has a Pavement Condition Index (PCI) rating of 51 which is considered a "Poor" condition. As part of the Pavement Management Program, the City has committed to completing asphalt overlay construction on arterial streets that exhibit high levels of deterioration, which includes Marina Hills Drive. This is a high priority project for the City, and staff does not recommend waiting for a decision from CalTrans to begin construction on this project. City staff will continue to engage with both OCTA and CalTrans regarding the outcome of the use of CRRSAA funds or alternative funding sources that OCTA has requested.
AMERICAN RESCUE PLAN FUNDS UPDATE
The City received two allocations of $4,410,727 in May 2021 and June 2022 for a total of $8,821,454 in ARPA Funds. With the approval of the Fiscal Year 2023-2024 budget, a total of $8,821,454 in funding has been budgeted for various ARPA funded projects. All ARPA funds must be contractually obligated to be expended by December 31, 2024. An ARPA funding summary of projects has been included as Attachment A, which includes the $200,000 in proposed transfers identified in this staff report.
ALTERNATIVES CONSIDERED
The City Council could direct staff to defer the project to a future date. As a result of this action, the roadway would remain in its present condition and likely deteriorate further until the project is completed at a future date. The City Council could await further direction from OCTA, however there may not be funding to supplement the loss of CRRSA funds and would likely add significant delay to starting construction for the project.
FISCAL REVIEW
As staff was able to identify realized and future anticipated savings utilizing previously approved ARPA funds, the net fiscal impact to approved capital appropriations is $O. The table below provides a summary of how the funds will be reallocated:
Funding Source Transfer In (Out)
Savings from completed projects - ARPA funds $ (53,716) Resident. Annual Resurfacing Program (Zones 3 & 4) - ARPA funds (146,284) Marina Hills Drive - Niguel Road to Golden Lantern - ARPA funds 200,000 Net Change in Total Appropriations $ -
LEGAL REVIEW
No legal review is required for this report
CONCLUSION
Staff recommends that the City Council:
Approve the following FY 2023-2024 budget adjustments:
1. Transfer $53,716 from project savings from completed capital projects funded by the American Rescue Plan Act to the Marina Hills Drive - Niguel Road to Golden Lantern Project.
2. Transfer $146,284 in American Rescue Plan Act funds from the Residential Annual Resurfacing Program (Zones 3 & 4) to the Marina Hills Drive - Niguel Road to Golden Lantern Project.
Jamasa & Retornan
Tamara S. Letourneau Jacki Scott
City Manager Public Works Director
Trevor Agrelius
Finance Director
Attachments:
A. American Rescue Plan Act Schedule of Projects
ATTACHMENT A
American Rescue Plan Act Schedule of Projects
City of Laguna Niguel
American Rescue Plan Act 2021 - Budget Summary
In March 2021, the federal government passed the American Rescue Plan Act. The Act provides funding to local governments to combat the negative economic effects of the pandemic. The City received $8,821,454 from the Act.
All funds must be contractually obligated by December 31, 2024, and spent by December 31, 2026. Below is a budget summary identifying the projects that will be funded by the funds received.
Completed Projects
Project Actuals Spent Status
Chapparosa Park Playground Replacement 895,587.26 Completed Citywide VolP Telephone System Upgrade $ 250,000.00 Completed Crown Valley Park Interim Parking Lot $ 597,708.58 Completed La Paz Road Evaluation (Phase 1) $ 150,000.00 Completed La Plata Park Playground Replacement $ 161,687.41 Completed Marina Hills Park Playground Replacement $ 172,754.99 Completed La Paz Road Evaluation (Phase 2) $ 200,000.00 Completed Sub-Total $ 2,427,738.24
Fiscal Year 2021-22
Project Budget Amount Status
City Hall AV Equipment Upgrade Project 915,000.00 Construction Phase Crown Valley Westbound Widening I-5 to Oso Creek $ 750,000.00 Design Phase Sub-Total $ 1,665,000.00
Fiscal Year 2022-23
Project Budget Amount Status
Chapparosa Park Soccer Field Synthetic Turf Replacement $ 700,000.00 Construction Phase City Council Chamber Improvements (Furniture & Carpet) $ 300,000.00 Construction Phase Citywide Sports Field Grass Turf Rehabilitation Program $ 250,000.00 Proposed Project Crown Valley Parkway Landscape Improvements $ 100,000.00 Design Phase La Paz Road Evaluation (Phase 3) $ 250,000.00 Proposed Increase Marina Hills Park Improvements $ 100,000.00 Design Phase Parks Modernization Project $ 750,000.00 Design Phase
Residential Annual Resurfacing Program (Zones 3 and 4) $ 653,715.76 Proposed Transfer Crown Valley Park Wi-Fi Project (Phase 1) $ 130,000.00 Construction Phase Sub-Total $ 3,233,715.76
Fiscal Year 2023-24
Project Budget Amount Status
Marina Hills Park Improvements $ 1,000,000.00 Design Phase Crown Valley Park Wi-Fi Project (Phase 2) $ 170,000.00 Design Phase Sea Country Senior and Community Center Roof Replacement $ 50,000.00 Design Phase Traffic Signal Equipment Upgrades Program $ 75,000.00 Design Phase Marina Hills Drive - Niguel Road to Golden Lantern $ 200,000.00 Proposed Transfer Sub-Total $ 1,495,000.00
Total available funds from the Act is $8,821,254 Total $ 8,821,454.00