Item Number: 11
City Council / Board of Directors
Written Communications
Meeting of: September 3, 2024
Submitted By:
Fredy Bonilla, City Engineer
Subject:
Green Tree Boulevard Extension Project – San Bernardino County Transportation Authority Loan Repayment
Recommendation:
That the Honorable City Council approve a full-term loan payment in the amount of $2,500,000.00 to the San Bernardino County Transportation Authority (SBCTA) for the Green Tree Boulevard Extension Project.
Fiscal Impact:
The recommended action will result in a fiscal impact of $2,500,000.00. Funding for this project was approved in the FY 2023/24 Budget. There are sufficient funds remaining to repay the full amount borrowed against the Term Loan Agreement required of Fund 352, Road Development Impact Fees (DIF). The account number and available budget for this repayment are provided in the following table.
Account Available Budget
3524500-52300-60013 $2,500,000.00
Strategic Plan Goal:
This project aligns with “Goal E Invest in Infrastructure” in the City of Victorville Strategic Plan 2023-2026. Repayment of the loan debt incurred for the construction of the Green Tree Blvd Extension project will enable the City to budget remaining road DIF funds for future road capacity improvement projects.
Background:
There are two approved funding agreements by the City Council between the City and SBCTA to cover the costs associated with the planning, design, and construction of the Green Tree Blvd Extension Project. Each agreement covers one of two types of funding 3 7
7 3
sources identified as a Public Share of Cost and Development Share of Cost. The Public Share of Cost can be defined as funding which may include earmarks and grants obtained by the City specifically for the project. The Development Share of Cost can be defined as funding which includes DIF fees collected by the City to plan for and mitigate the impact of increased congestion new developments will introduce on the existing transportation network. Road DIF is collected to fund new road construction or road capacity increase projects. Between these two types of funding sources, the reimbursement ratio varied depending on the activity. The activities included planning, engineering, environmental, Right-of-Way acquisition, construction, and construction management. The ratio among these activities varied requiring 0% to 49% of certain costs be funded by development and the other 51% to 100% of the same activity be public funds. All of this required much work to track and monitor by the City, SBCTA, and Caltrans.
The first agreement (15-1001115) with SBCTA involving a Public Share of Cost was approved on December 16, 2014, for design and Right-of-Way acquisition. There have been seven amendments to that agreement approved by the Council which have either extended the term or added funding to the project. Amendment No. 5 to the agreement was approved by the Council on July 16, 2019, adding $21,635,594 of public funding for the construction phase of the project. Amendment No. 6 to the agreement was approved by the Council on March 2, 2021, adding an additional $1,082,424 to the Public Share of Cost totaling $22,718,018 due to the increased estimated cost of the project. These funds include: federal demonstration earmark grant funds; Measure I Major Local Highway Program (MI MLHP) funds for the Victor Valley; County MI MLHP funds; Surface Transportation Program (STP), and Highway Improvement Program (HIP) federal grant funds. Some of these funds are administered by SBCTA such as the Measure I component, the other federal grant funds are administered by Caltrans. All of the funding sources are reported to SBCTA in the agreement to account for the ratios in the share of cost between public and development funds.
The second agreement (16-1001481) with SBCTA involving a Development Share of Cost was approved on September 6, 2016, for right-of-way acquisition and construction.
This Term Loan Agreement committed SBCTA to loan up to two-thirds of the development share for the Green Tree Blvd Extension Project and committed the City to repay the loan from available Road Development Impact Fees after the project was completed. On October 5, 2016, both parties entered into the agreement which authorized SBCTA to loan the City the estimated Local Share of Project Costs in an amount estimated to be $12,511,320 from the City’s Major Local Highway Program funds. In 2021, the development share of cost based upon construction estimates was re-evaluated and determined to be $19,888,492. Therefore, on March 2, 2021, the City Council approved Amendment No. 1 to the Term Loan Agreement with SBCTA in an amount of $747,675 increasing the two-thirds loan amount from $12,511,320 to $13,258,995.
In 2023, the City submitted a claim for $2,500,000 to SBCTA against the Term Loan Agreement for construction costs incurred during the period of 06/01/2021 to 04/30/2023 for Green Tree Blvd to replenish the Road DIF fund balance to support construction costs as needed. The fund transfer was received by the City in July of 2023. Subsequently, the 3 7
7 3
Green Tree Boulevard Extension Project was accepted as complete, and the issuance of the Notice of Completion was approved by the City Council on October 3, 2023.
Discussion:
With construction of the Green Tree Boulevard Extension Project being complete, repayment of the funds lent by SBCTA to the City are due Per Section 3.4.1 of the agreement, “Not later than September 30 of each year after the first Draw has been made by Lender, Borrower shall transfer to Lender all Uncommitted Development Impact Fees collected by Borrower in the prior Fiscal Year until the Loan Amount is paid in full.” With $3,090,189.61 remaining in the budget, there are more than sufficient funds available to repay the loan in full.
Staff recommends that the City Council approve the full-term loan payment in the amount of $2,500,000.00 to the SBCTA for the Green Tree Boulevard Extension Project.
Staff remains available for any questions Council may have.
Attachments: A. SBCTA Invoice
B. SBCTA Term Loan Agreement