City Council Agenda Report
Meeting Date: May 16, 2023
From: Daniel S. Wall, P.E., Director of Public Works
Department: Public Works
Submitted by: Lissette Melendez, Project Engineer
Subject
Project Funded by Senate Bill 1: The Road Repair and Accountability Act for Fiscal Year 2023- 2024
Recommendation
A. Find that the approval of the proposed resolution does not constitute at "project" pursuant to Sections 15378(b)(2) and (4) of the Guidelines to the California Environmental Quality Act (CEQA), because it constitutes an administrative activity and government funding mechanism that does not involve any commitment to any specific project which may result in a potentially significant impact on the environment; and even if the adoption of the proposed resolution did constitute a project, it would be exempt from CEQA in accordance with Section 15061(b)(3), the general rule that CEQA only applies to project that may have a significant effect on the environment; and
B. Adopt Resolution No. 2023-08 adopting a project list to be funded by Senate Bill 1: The Road Repair and Accountability Act for Fiscal Year (FY) 2023-2024.
Background
On April 28, 2017, the Governor signed Senate Bill 1 (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 street and road systems. SB 1 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.
On November 1, 2017, the State Controller commenced depositing a portion of this new funding into the newly created Road Maintenance and Rehabilitation Account (RMRA). Part of the RMRA funding is apportioned by formula to eligible cities and counties pursuant to Streets and Highways Code (SHC) Section 2032 (h)(2) for basic road maintenance, rehabilitation, and critical safety projects on the local streets and road systems. Pursuant to SHC 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 (e.g. active transportation purposes, pedestrian and bicycle safety projects, transit facilities, etc.)
The City's allocation for FY 2023-2024 is estimated to be $5,216 pursuant to the formula in SHC Section 2103(a)(3)(c)(i) and (ii). The formula proportions the total population of the City to the total population of all cities in the state.
MAINTENANCE OF EFFORT
There is a local agency Maintenance of Effort (MOE) requirement that applies to funds allocated through the RMRA. The MOE requirement is to ensure that 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 fiscal years 2009-2010, 2010- 2011, and 2011-2012 as reported to the State Controller pursuant to SHC Section 2151. 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 RMRA provides that the State Controller may perform audits to ensure compliance with these MOE requirements. 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 apportioned to the other cities and counties whose expenditures comply with MOE requirements.
The City's annual average of expenditures from its general fund during Fiscal Years 2009- 2010, 2010-2011, and 2011-2012 is $830,243 as depicted below:
Maintenance of Effort- General Fund for Streets and Roads RMRA Account per SHC Sec 2036 (Revised Est. 8-7-2017)
FY2009-2010 - $789,165
FY2010-2011 - $616,736
FY2011-2012 - $1,084,827
AVERAGE - $830,243
ADJUSTMENT - $0
RMRA MOE - $830,243
The City street improvement expenditures comply with MOE requirements, as the sum of anticipated budgeted street improvements for FY 2023-2024 is $1 million.
SPENDING PLANS AND REPORTS
The RMRA 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. For each project, the list must include a description, location, schedule, and useful life.
The RMRA also requires the submission of an annual report of project completion in order to receive RMRA funds. The report must include all projects for which RMRA funds were expended.
The Citywide Striping and Pavement Markings project is identified as a potential candidate for FY 2023-2024 SB 1 funding.
Fiscal Impact
The City will receive an estimated $5,216 in RMRA funding in FY 2023-2024 from SB 1 and will allocate funding once it fulfills the requirement under SB1.
Attachments
1. Resolution No. 2023-08