TO: Mayor and City Council
FROM: Philippe Eskandar, City Manager
BY: Amber Shah, Parks & Public Works Director/City Engineer DATE: June 11, 2025
SUBJECT: APPROVAL OF RESOLUTION NO. R-25-12, ADOPTING A LIST OF STREET PROJECTS FOR FISCAL YEAR 2025-26
FUNDED BY SB1, THE ROAD REPAIR AND
ACCOUNTABILITY ACT OF 2017
STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Fiscally Responsible and Transparent City Government
Well-Maintained Infrastructure
BACKGROUND
In April 2017, the Road Repair and Accountability Act (SB1) was enacted into law, establishing a new funding source intended to address deferred maintenance and infrastructure investment on the state highway system and local street and road system. In order to utilize this funding, the California Transportation Commission (CTC) established guidelines requiring an annual submittal of project lists and other reporting requirements. The City’s Capital Improvement Program budget identifies eligible projects for the expenditure of these street maintenance funds under the annual Street Rehabilitation Program. Additionally, the City’s street sweeping operation is eligible to be partially or wholly funded by this program. As the City recently solicited proposals for street sweeping for the first time in multiple decades, costs have increased substantially. Utilizing SB1 funding to partially fund street sweeping will help mitigate the impact the cost increase has on the General Fund. The adoption of the attached Resolution along with the accompanying list of street projects will meet the reporting requirements established by the CTC and maintain the City’s eligibility to receive the Road Repair and Accountability Act (SB1) funding.
Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
DISCUSSION
The Road Repair and Accountability Act of 2017 (SB1) was passed by the California Legislature on April 6, 2017, and signed into law by Governor Brown on April 28, 2017. The Act raises over $5 billion per year for transportation infrastructure improvements and established the Road Maintenance and Rehabilitation Account (RMRA). The funding distribution formula is population based from the following taxes enacted by SB1: 12 cents per gallon gasoline excise tax, 20 cents per gallon diesel fuel excise tax, miscellaneous state transportation improvement fees, and transportation loan repayments. The funding became effective November 1, 2017, with annual inflation adjustments beginning July 1, 2020. The City has received annual RMRA funding applied to eligible Street Rehabilitation Program projects. As noted earlier, the City also plans to utilize these funds for street sweeping services, as these services help maintain the City’s roadways.
In accordance with guidelines issued by the CTC for an agency to maintain eligibility to receive RMRA funding, the City must comply with all requirements, including submittal of annual project reporting to the CTC. This reporting includes developing and submitting a list of projects to the CTC by June 30th, as well as reporting project expenditures to the CTC following the end of each fiscal year.
In addition, in order to receive RMRA funds, cities and counties must meet and report upon a minimum “maintenance of effort” (MOE) expenditure requirement to ensure that these new road funds do not supplant existing levels of general revenue spending on streets and roads. The MOE report is submitted by staff on an annual basis, and the City continues to meet this requirement.
All streets in the City are eligible for FY 2025-26 RMRA funding. The street list for the Street Rehabilitation Program project was developed utilizing the City Council adopted 2021 Pavement Management Plan to ensure efficiency and cost effectiveness of the streets selected. The streets included in Resolution No. R-25-12 (Attachment 1) are scheduled for rehabilitation in FY 2025-26.
The sweeping of all streets citywide is also noted in Attachment 1.
FISCAL IMPACT & PROCUREMENT REVIEW
The ability of the City to gain access to the SB1 funding requires the adoption of an annual Resolution which conforms to the CTC’s guidelines. Approval of this Resolution will provide the City with approximately $329,219 in RMRA/SB1 funding for FY 2025-26. These funds, combined with other forms of Highway User Tax Account funds, will supplement revenue provided by Capital Improvement Fund 394 for streets and roads maintenance and improvement, and will supplement General Fund 101 and Measure W Fund 215 for street sweeping services.
LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.
RECOMMENDATION
Staff recommends the City Council approve Resolution No. R-25-12, adopting a list of fiscal year 2025-26 SB 1 projects. If the City Council concurs with staff’s recommendation, an appropriate motion would be:
“I move to approve Resolution No. R-25-12 adopting a list of Fiscal Year 2025- 26 projects to be funded by SB 1 Road Maintenance and Rehabilitation Account Funds.”
ATTACHMENTS
1. Draft Resolution No. R-25-12
2. Local Streets and Roads - Projected Revenues