Watsonville City Council
February 11, 2025

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Background
California’s Senate Bill (SB) 743 is a legislative bill altering the approach to reviewing transportation impacts for proposed projects. It encompasses both land use initiatives like housing developments and transportation ventures such as road expansions. The bill shifts focus away from vehicle delay and instead to vehicle miles traveled (VMT) generated by a project.

Historically, before SB 743’s enactment, transportation impacts were evaluated based on delay, using the Level of Service (LOS) concept, a standard in the transportation sector since the first Highway Capacity Manual (HCM) was released in 1950. Over the HCM’s seven editions, LOS influenced decision-making, yet LOS is linked to unwanted outcomes such as urban sprawl and adverse effects on active transportation (bikes, pedestrians), public transit, road safety, and public health. LOS focuses on vehicle travel speed and throughput and neglects other travel modes. Since the metric is based on the driver’s experience and time cost, the solution is often to increase roadway capacity either by adding vehicle lanes or new roadways.

Another solution to improving LOS or reducing delay is to build in less populated areas, which increases sprawl and greenfield development. As has been shown in recent years, increased capacity can cause a phenomenon called “induced demand” wherein more people start using the previously congested facility, causing increases in driver demand and subsequent increases in delay, thereby starting the whole cycle of increasing capacity all over again. SB 743 aims to reverse these trends by adopting VMT as a more holistic measure of impact on transportation systems. This shift from LOS to VMT encourages urban infill development, where VMT is typically lower. However, it also highlights the lack of practical, cost-effective mitigation options for suburban and rural projects, as many previously employed LOS mitigations do not align with VMT reduction goals. This change led to different outcomes in CEQA-related transportation analyses and necessitated novel mitigation approaches. Exhibit 1 provides a summary of the differences between LOS and VMT.

Exhibit 1 – Level of Service vs. Vehicle Miles Traveled

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VMT is calculated exactly as the term sounds: the sum of the number of miles traveled by each vehicle in a system. As shown in Exhibit 2 below, four vehicles each traveling 3 miles results in each individual vehicle producing 3 VMT. When combined, all four vehicles account for a total of 12 VMT.

Exhibit 2 – How to Calculate Vehicle Miles Traveled (VMT) When determining if a project results in a significant transportation impact, the project must be compared to a threshold of significance which is determined by the jurisdiction. Two types of thresholds exist:
efficiency thresholds, such as VMT per capita, and net change thresholds. Residential and office projects can vary in size, so using an efficiency metric allows the projects to be easily compared to a threshold.

Retail and customer-serving projects often do not create new trips but can change trip lengths, so it is more appropriate to consider how the location of the project changes VMT; this is more easily measured as a net change in VMT.

Exhibit 3 summarizes how a residential project is evaluated using VMT. Each household has every trip measured, both to and from a location, to determine the total VMT. The graphic below shows how trips to the child’s school are 7 miles each way (14 miles total), the trip to work is 10 miles each way (20 miles total), and the trip to the store is 8 miles each way (16 miles total). When adding the total length of all trips together, the household has 50 daily VMT.

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Exhibit 3 – Vehicle Miles Traveled Residential Project Example To determine whether the project will have an environmental impact, the project’s VMT per capita must be compared to the regional threshold. In the example shown in Exhibit 3, the household contains 3 people, so the VMT per capita is determined by dividing the household’s total VMT (50) by the household size (3), resulting in a household VMT per capita of 16.7. If the regional threshold is 17.5 VMT per capita, the project would not have an impact as it is more efficient than the regional threshold.

There is a distinction between regional retail (e.g., Lowes or Target) and local-serving retail (e.g., coffee shops, restaurants, or gas stations) when it comes to evaluating VMT. Local-serving retail primarily serves preexisting needs: it does not generate new trips because it meets existing demand. Because of this, local-serving retail uses can be presumed to reduce trip lengths when a new store is proposed. Essentially, the assumption is that someone will travel to a newly constructed, local-serving store because of its proximity compared to a comparable store located further away. This results in a shorter trip to the roadway network ratherthan adding a new trip to the roadway network. Conversely, residential and office land uses often create new trips, given that they introduce new participants to the transportation system.

Exhibit 4 graphically explains this concept. It shows how a new retail store typically redistributes existing customer trips, reducing average trip lengths and thus decreasing VMT (e.g., reducing trip segments from 3 miles to 1 mile with the new store).

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Exhibit 4 – Effect of Local-Serving Retail on Regional Vehicle Miles Traveled Additional documentation on the County of Santa Cruz’s VMT policy, including thresholds by land use, can be found on the County of Santa Cruz’s VMT website3
.

VMT Mitigation Approaches
Various strategies are available for project applicants who need to reduce their VMT impacts. Exhibit 5 below highlights examples of mitigation measures that can reduce VMT in the region. Pedestrian initiatives aim to enhance walkability with additional sidewalks or intersection improvements such as crossings, reducing reliance on short-distance driving. Bike mitigation measures introduce new facilities and bike-share programs, promoting cycling as an efficient transport alternative. Transit improvements, such as new lines and Bus Rapid Transit (BRT) systems, increase public transport use by offering faster and more reliable options. Road Diets rebalance street space to better accommodate non-automotive travel, creating safer routes for cyclists and pedestrians while calming traffic. Intelligent Transportation Systems (ITS) and Traffic System Management (TSM) leverage technology for better traffic flow and information, reducing idle time and unnecessary trips. Mobility Hubs centralize transport options, streamlining the transition between modes like cycling, buses, and trains, fostering a cohesive network. Affordable Housing mitigation measures in dense, transit-accessible areas encourage a mode shift away from driving toward the use of public transport and active transportation modes. Vanpool and Carpool programs expand shared travel, diminishing the number of vehicles on the road. Park-and-Ride facilities support these efforts by enabling commuters to combine car travel with public transit, lessening the VMT for individual journeys. Trip reduction programs encourage employers to develop telecommuting programs to reduce 3 Santa Cruz County Vehicle Miles Traveled (VMT). https://sccoplanning.com/PlanningHome/Environmental/CEQAInitialStudiesEIRs/VehicleMilesTraveled(VMT).aspx

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the number of commute trips made by employees. Each strategy is instrumental in curbing VMT by offering convenient, sustainable alternatives to single-occupancy vehicle use.

Exhibit 5 – VMT Mitigation Measures

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Fee-Based VMT Mitigation Program Framework Options
To broaden the scope of VMT mitigation options, regional VMT mitigation programs, like those under consideration in this study, are being explored for implementation across California. These regional programs support larger-scale development projects with more significant impacts by providing alternative options to reduce VMT. Often larger projects are not able to mitigate their VMT entirely on site; however, given the high cost of more significant VMT mitigation measures, often reaching millions of dollars, it’s improbable for individual project applicants to afford such extensive VMT mitigation. A program as envisioned in this study would enable multiple applicants to collectively fund substantial VMTmitigation measures, thereby mitigating the impacts of their individual projects.

This study evaluated various programmatic methods for VMT mitigation, including VMT banks, VMT exchanges, and VMT impact fee programs.

Exhibit 6 visually illustrates the process of mitigating transportation impacts in regions with a fee-based VMT mitigation program. Even in areas with a fee-based VMT mitigation program, project applicants still must exhaust mitigations on-site to reduce their VMT impacts, using strategies such as a VMT bank to address any remaining VMT impacts.

The example project in Exhibit 6 below shows that the project is 450 VMT above its threshold (5,000 VMT – 4,550 VMT = 450 VMT). The project uses various on-site TDM measures to reduce its VMT by 225 (5,000 VMT – 4,775 VMT = 225 VMT) and then pays into the fee-based VMT mitigation program to reduce the final 225 VMT (450 VMT – 225 VMT = 225 VMT).

Exhibit 6 – Application of a VMT Mitigation Program
Although VMT mitigation programs can take multiple forms, the three most common program types and the primary focus of this study are discussed below.

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VMT Bank
As shown in Exhibit 7, the following steps are used to establish a VMT mitigation bank:

1. Identify VMT mitigation measures, such as bicycling facilities, pedestrian infrastructure, and public transit.

2. Evaluate these mitigation measures to determine the extent of VMT reduction.

3. Combine the VMT reductions from all mitigation measures to calculate the total mitigated VMT.

For this example, we will use the total VMT reduction is 1,000 VMT.

4. Sum the costs associated with each mitigation measure. In this instance, the collective cost of all VMT mitigation measures amounts to $1 million.

5. Calculate the cost per VMT reduced by dividing the total project cost by the total VMT reduction.

In this example, the cost to mitigate 1 VMT is $1,000.

Once the cost per VMT is established and the VMT bank is operational, a project can offset its VMT impact by paying a per VMT fee to the bank. As shown in Exhibit 7 below, the example project needs to reduce its VMT impact by 225 VMTs to meet the regional threshold. Therefore, the total fee would be $225,000, calculated by multiplying the cost of each VMT reduced by $1,000, and by the total VMT needing to be reduced by 225. Note that once the available VMT is used up by development projects purchasing VMT from the VMT bank, the VMT bank would need to be replenished with new VMT mitigation measures.

Exhibit 7 – VMT Bank Example

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VMT Exchange
VMT exchanges function similarly to VMT banks, with the main difference being that in a typical VMT exchange, applicants have the option to choose a single mitigation measure from an existing list or program of VMT mitigation measures or propose a VMT mitigation measure for implementation which may not appear in a list or program. In the case of a VMT exchange, it is not necessary to monetize the selected VMT mitigation measures unless the project applicant wishes to make excess VMT mitigation available to others for purchase as credits. As illustrated in Exhibit 8 below, an applicant develops a bicycle mitigation measure that reduces regional VMT by 2,000 VMT. However, the applicant only needs to reduce the VMT impact to the VMT threshold by 1,750 VMT. Consequently, the applicant has 250 surplus VMT available for sale to others at a market rate.

Exhibit 8 – VMT Exchange Example
VMT Impact Fee
Instead of establishing a VMT bank or exchange, the program could be structured in a manner similar to existing development fee programs. In this setup, a new development project would be obliged to pay a fee to offset its VMT impact, determined by factors such as the total number of planned dwelling units or the total square footage of planned building construction. The VMT impact fee program would function akin to existing development fee programs, with the distinction that it exclusively includes mitigation measures that reduce VMT.

As shown in Exhibit 9 below, the fees would be calculated by land use types based on the projected VMT generation from planned developments over the next 10-20 years, with a specific emphasis on offsetting the VMT mitigation requirement. Similar to the VMT bank, fees are computed by dividing the total VMT needed to be mitigated by future projects by the cumulative cost of VMT-reducing projects. However, unlike a VMT bank, this calculation is performed separately for each land use type rather than collectively.

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The fee for each land use type is determined by first quantifying the VMT that needs to be mitigated for each land use type, calculating the share of the total VMT requiring mitigation, multiplying that percent share by the total cost of the VMT mitigation measures, and then dividing the land-use specific cost by the growth for each land use (either dwelling units or square-feet). For example, in Exhibit 9 if residential land use accounts for 50 percent of all future VMT mitigation needs and the total cost of VMT mitigation measures is $1 million, then the residential land use would have a total mitigation cost of $500,000 (50% of $1 million). If the anticipated number of houses to be constructed in the future is 250, the fee would be calculated by dividing $500,000 by 250, resulting in a fee of $2,000 per home.

Exhibit 9 – VMT Impact Fee Example
When considering a VMT impact fee framework, it may be beneficial to divide the region into multiple benefit areas. This allows for fees to be assessed based on the VMT efficiency of a benefit zone in terms of overall VMT performance. This approach can incentivize projects to locate in VMT-efficient areas within the region. As shown in Exhibit 10 below, the areas that combine to form Zone 1 all fall below the regional VMT threshold for both residential and non-residential uses, resulting in no fees being administered for projects in that zone. Alternatively, Zone 2 has the worst VMT performance and contains the highest fees charged for the region.

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Exhibit 10 – VMT Impact Fee Program with Multiple Benefit Areas Fee-based VMT Mitigation Program Variations
Alongside the three primary fee-based VMT mitigation program frameworks, several alternative models were explored, including:

Micro (Localized) VMT Banking
This approach considers establishing multiple VMT banking programs instead of a singular regional program. This method allows for funding and implementing smaller groups of mitigation measures simultaneously, potentially addressing equity issues by ensuring mitigation projects are located near the development projects causing VMT impacts. Alternatively, a micro VMT bank could be integrated with a regional VMT bank or VMT exchange. Smaller jurisdictions in less-populated areas may not have as many mitigation measures included in the bank or exchange due to lower efficacy with smaller population densities. In these cases, multiple smaller jurisdictions may join to form a single multi-jurisdictional banking program or participate in the regional-scale program as a backstop while funding smaller groups of mitigation measures through their local bank.

Hybrid VMT Mitigation Programs
This approach involves a combination of different strategies such as banking, exchanges, impact fee programs, and micro VMT banking. Combining regional and micro VMT banking programs appears most effective. As shown in Exhibit 11, mitigation funds are distributed both regionally and locally by a predetermined value, utilizing the efficiency of regional mitigation measures while supporting local communities. This hybrid model also addresses equity concerns by funding VMT mitigation measures in the communities where the development projects are located. Similarly, a program may wish to form multiple “benefit basins” or zones within their respective regions to keep a sufficiently local focus under the rubric of a program administered by a single entity.

Exhibit 11 – VMT Bank with Regional and Local Split

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Literature Review and State of the Practice
The initial phase of this study involved conducting a comprehensive literature review and analyzing current practices. This entailed evaluating existing programmatic approaches and examining both legal and non-legal factors that could impact the program's development. The findings from this review are organized into four key sections: the advantages and disadvantages of various frameworks, legal considerations specific to fee-based VMT mitigation programs, details of the Mitigation Fee Act (AB 1600), and a general overview of the current state of practice.

The review covered a range of pertinent local documents. These included impact fee guidelines from member jurisdictions, regional guidelines for implementing SB 743 in Santa Cruz County, and screening criteria and threshold parameters. Additionally, the review encompassed various significant documents such as climate action plans, bicycle and pedestrian master plans, transit plans, and transportation demand management ordinances from within the region. Moreover, the review also considered best practices in CEQA mitigation methods that align with the objectives of SB 743.

Other resources and documents that were reviewed as a part of this effort included new analysis methodologies from industry experts and relevant professional organizations (ITE, ITS, APA, CAPCOA, OPR, CARB, etc.) for providing multimodal solutions to mitigate VMT impacts. The complete literature review can be found in Appendix A. The following are some of the key relevant findings that were identified during these efforts that helped shape this study:
• Agencies need to verify VMT reductions and additionality for mitigation measures before approving participation in the banking regime. Any agency implementing a bank or exchange

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must demonstrate both a reasonable substantive relationship and financial proportionality between the proposed development and the fee or condition placed on it. • Agencies should also be diligent in their VMT mitigation duration as the nexus between improvements and timely use of fees varies region by region. o Banks that receive and pool funds from multiple projects should account for the delay between payment and deployment of funds.
o All frameworks should also include a method of prioritization of individual mitigation measures to ensure that reductions are achieved as quickly and efficiently as possible. • A VMT exchange might be simpler for developers, but it could also limit the usefulness of funds from smaller developments and be less politically agreeable to local communities. o Offer more certainty for developers regarding the kinds and costs of mitigations needed to address cumulative VMT impacts.
• New plans and programs might increase new home costs, which can push disadvantaged communities further behind in their ability to access homeownership. o Significant equity issues may also arise if disadvantaged communities host developments that are not beneficial mitigation measures. o Any lead agency will need to include rigorous backstops to ensure that disadvantaged communities are not negatively impacted by—and ideally can benefit from—the ability of developers to move mitigation off-site. Such backstops would include an accounting of where money is spent and ensuring geographic equity and of who the users are of the mitigations that were funded.
• Implementing agencies should consider requiring or providing incentives for developers or lead agencies to demonstrate that onsite mitigation is not feasible before being permitted to undertake off-site measures.
• VMT Banks and Exchanges comprehensively address VMT impacts across jurisdictional boundaries.
• Geography plays an important role in VMT reduction impact assessment. According to the difference between the VMT impact and the mitigation strategy as well as the variation among low and high VMT zones, using different ratios for impact and mitigation in the pricing structure seems necessary. For instance, Low VMT is defined as 15% below the defined thresholds for that area. For a detailed analysis of geography, please refer to Appendix A: Literature Review. • Incorporating equity in VMT banking is essential and challenging, particularly in the case of offsite mitigation programs. The benefits of fee-based mitigation strategies must be carefully distributed. In general, VMT bank identifies lower income, communities of color, rural areas, and low transit accessible zones as equity priorities. However, the local definition of equity and disadvantaged communities should be considered as well since it affects public acceptance and political feasibility. In addition to local equity considerations, each mitigation measure category comes with specific equity criteria to address while evaluating the VMT impacts and the effectiveness of mitigation strategies. Agencies can prioritize equity at various points, mainly

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before/at the beginning of a program or during the program’s operation. Depending on this, the mechanism of intervention varies (Table 4). Community engagement in the jurisdictional decision-making process supports equity by reducing the risk of unintended consequences on communities of concern.
• Local jurisdictions should look for mitigation measures and programs and their financial constraints in the RTP before using them for VMT Mitigation to ensure that the additionality criteria are met and that the mitigation measure is feasible and timely.

Framework Pros and Cons
The literature review revealed the advantages and disadvantages of different programmatic approaches for VMT mitigation, aiding in decision-making for implementing agencies. Table 1 outlines the pros and cons for two program types: mitigation exchanges and banks. It highlights factors like complexity, cost implications, and effectiveness.

Fee-Based VMT Mitigation Program Legal Considerations
The following is a summary of the legal requirements related to fee-based VMT mitigation programs:
 A fee-based VMT mitigation program can encompass mitigation measures aimed at reducing VMT that require clearance under the California Environmental Quality Act (CEQA).  Fee-based VMT mitigation programs share many similarities with GHG (Greenhouse Gas) mitigation programs. CEQA case law offers guidance on the necessary features to meet legal requirements.
 A fee-based VMT mitigation program must adhere to the legal requirements regarding the timing of mitigation implementation.

More discussion of these considerations is provided in the “CEQA Considerations” section of this report.

Mitigation Fee Act (AB 1600)
The following presents a summary of essential considerations outlined in the Mitigation Fee Act as they pertain to non-voluntary fee-based VMT mitigation programs:
 The components of the Mitigation Fee Act apply to non-voluntary fee-based VMT mitigation programs, where developers make payments instead of constructing infrastructure. Many existing impact fee programs allow direct infrastructure construction, with credits to offset fees offered for the construction of those improvements. Voluntary programs are not fees as defined by the Mitigation Fee Act.
 A notable departure from existing fee-based mitigation programs is the shift in focus from trips to VMT as the primary metric.
 It is important to recognize that the options for managing fees, whether through banking, exchanges, or other means, do not necessarily fall into a strict dichotomy.  Regardless of the type of program, maintaining a clear nexus and proportionality remains a fundamental requirement. The nexus must demonstrate a balance between mitigation efforts

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and their corresponding impacts. Proportionality should serve as the foundation for calculating the cost of mitigation measures.
 Each jurisdiction should exercise caution when implementing a fee-based VMT mitigation program, considering potential unintended consequences, such as inhibiting overall housing growth if the program becomes overly expensive.

Table 1 – Framework Pros and Cons

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State of the Practice
Table 2– Fee-based VMT Mitigation Program State of the Practice provides a high-level summary of the current state of practice in California for fee-based VMT reduction/mitigation programs. As shown, there are relatively few fee-based VMT reduction/mitigation programs active in the state. Some of the programs included are not specifically focused on meeting CEQA VMT mitigation needs (they instead are focused on general VMT reductions). However, they are still important models that show how specific elements programs being considered by the study could function.

Table 2– Fee-based VMT Mitigation Program State of the Practice

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Program Evaluation
Once the candidate mitigation measures were evaluated, the framework options for a fee-based VMT mitigation program were revisited. Specifically, based on feedback received from the Stakeholder Advisory Committee (SAC), additional framework options were developed that combined portions of a VMT bank and VMT exchange into a new option. Details of the five framework options are summarized in Exhibit 24 below and the options include:

1. VMT Bank

2. VMT Exchange

3. VMT Bank with Exchange (newly developed)

4. VMT Impact Fee
The mitigation program options were subsequently evaluated in terms of their potential to meet the identified needs of the region. The following are considerations and questions that guided the evaluation of the feasibility of the VMT mitigation program options:

Legal
Does the fee-based VMT mitigation program meet CEQA and statutory requirements, including additionality?
Effective
Does the fee-based VMT mitigation program result in a long-term, financially feasible mitigation program? Geography
Can the fee-based VMT mitigation program scale to meet the region’s needs? Administration
Does the fee-based VMT mitigation program fund oversight and management of the program and maintain analysis and technical requirements for administering the program? Equitable
Does the fee-based VMT mitigation program avoid disproportionate impacts to disadvantaged and/or low-income communities? Does the program encourage an equitable benefit distribution throughout the region?
Alignment
Does the fee-based VMT mitigation program support good design of projects and align with community values and existing plans?

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Exhibit 12 – Fee-Based VMT Mitigation Program Framework Variations Program Recommendation
Exhibit 25 below provides a summary of how each type of VMT mitigation program was evaluated against the above considerations. Yellow dots indicate a “concern” that the complexity of a specific program element or the lack of practical experience with it may represent a challenge to its implementation. As it is believed that all the program types are ultimately implementable, these designations should simply be thought of as areas of consideration that will require additional evaluation prior to their respective programs being considered for implementation. As shown in Exhibit 25 only the VMT bank framework will address all considerations identified.

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Exhibit 13 – Regional VMT Mitigation Program Evaluation A VMT exchange raised concerns about nexus and proportionality if an applicant or a city were to request improvements that were disproportionate in consideration of the impact and/or not closely tied to the VMT threshold of the region. Additionally, administering a program where unknown mitigation measures are proposed raises questions about the predictability of VMT reductions available to the region. Since a VMT exchange allows for mitigation measures that may not be on the radar or in the plans of the jurisdiction, there are also questions as to whether proposed mitigation measures would align with jurisdictional goals as established in community plans. Lastly, such mitigation measures could be implemented indiscriminately around the region and/or with a bias towards certain areas, therefore raising concerns about equitable distribution of mitigation.

While a VMT impact fee addresses many of the concerns raised by the VMT Exchange model, it is fixed regarding geographic implementation and does not allow for as much flexibility to respond to development mitigation needs. The way impact fees are calculated adds more complexity to the program's administration and more staff time on both the part of the jurisdiction and the bank organization.

After discussions with stakeholders, it was decided that any program with a VMT Exchange should be removed due to these concerns and that an impact fee approach was not a good fit for a pilot program given its complexity to administer. This left the two VMT banking options for consideration. Ultimately, the stakeholders and the project team recommend that a VMT Bank be implemented for this pilot program to reduce complexity and allow the public agencies implementing the program to address concerns around equity.

In addition to the above and as mentioned previously, one of the important considerations that must be addressed when considering CEQA transportation mitigation is the requirement of additionality.

Depending on the program format, other legal and administrative considerations will also need to be considered during the implementation of a VMT mitigation program.

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Another important consideration incorporated into the evaluation of a fee-based VMT mitigation program was the concept of unintended consequences. Unintended consequences related to the implementation of a fee-based VMT mitigation program include significant changes to development or transportation costs, changes in development patterns, or changes to the priority of infrastructure implementation.

Historically, transportation programs and projects had disproportionate impacts on disadvantaged populations. Another important consideration is that the implementation of a VMT mitigation program should not discourage good project design or contradict community values.

Outreach Summary
A comprehensive outreach plan was established to assess the viability of a fee-based VMT mitigation program for Santa Cruz County (See Appendix C). This plan aimed to gather insights from various stakeholders in the region, including member agencies, community-based organization (CBO) representatives, and members of the development community. The goal was to form a Stakeholder Advisory Committee (SAC) and a Technical Advisory Committee (TAC) consisting of technical experts from across California. The project team convened with both committees twice during the beginning of the project, but due to the number of attendees and overlap between the two groups; the two committees were combined into one single Stakeholder Advisory Committee that was convened an additional three times for a total of five meetings. These meetings were held to share updates, gather feedback on possible VMT mitigation measures, discuss the most suitable framework type, choose between a regional or a hybrid regional/local framework, and decide on the method for calculating cost per VMT.

In addition to the five SAC meetings, there were a number of meetings held with each city and city managers to discuss the program and implementation concerns regarding a pilot program. The following public meetings were held throughout the region over the project lifecycle to solicit feedback on the study from members of the public.
• City of Santa Cruz and City of Capitola, March 6, 2023 • City of Watsonville, May 31, 2023
• Online Meeting, Nov 9, 2023
• SCCRTC Interagency Technical Advisory Meeting, June 20, 2024 • City of Santa Cruz City Council Meeting, September 24, 2024 • County of Santa Cruz Board of Supervisors Meeting, October 8, 2024 • Wheelie Good Time Bike Month event, October 19, 2024
The SAC provided valuable input throughout the process, including weighing in on which type of program to pursue (VMT Bank), which VMT mitigation measures to include in the program, and how the program should be administered. Each of these topics is covered in different sections throughout this report.

In conjunction with the three public meetings and the five meetings held with the SAC, a dedicated website4 was established. This website served as a central hub for information, allowing the public to stay informed about the program's developments, access meeting materials, and provide feedback. In addition, a public survey was drafted with a link posted on the study’s website and distributed to the public via social media posts to solicit direct feedback from the public on the study. 4 Santa Cruz County VMT Mitigation Program, https://sccoplanning.com/PlanningHome/Environmental/VMTMitigationProgram.aspx, accessed on 3/6/2024.

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Furthermore, to ensure wide-reaching engagement and accessibility, social media posts were crafted to spread awareness about the study and the public meetings. These posts are designed to capture the attention of various demographics across different platforms.

To cater to a diverse audience and address language barriers, informational videos in Spanish and English were produced and posted on the study’s website. These videos provide clear and concise explanations of the program's objectives, potential impact, and how individuals can get involved in the process.

Other Considerations
Often it is less expensive to construct development projects outside of urban areas than it is to construct those same projects at an infill location. This is primarily due to the use of “overriding considerations” for any VMT impacts identified at suburban and rural locations without feasible mitigations, as well as existing infrastructure and regulatory challenges facing infill sites, including the use of LOS to determine improvement recommendations by local jurisdictions. However, with the introduction of a fee-based VMT mitigation program, a new feasible mitigation for development projects is required, and the cost of developing at those suburban and rural locations may increase as mitigation costs are included in the overall development cost. The net result is to bring the costs of developing in a suburban or rural location more in line with the cost of developing an infill location. The equaling of development costs between infill and suburban or rural locations could result in long-lasting impacts on future development patterns that may bring them more in line with an agency’s long-term development plan and its associated Metropolitan Planning Organization’s (MPO) Sustainable Communities Strategy (SCS).

When combined with the number of state, regional, and local incentives to promote affordable and infill development, the implementation of a fee-based VMT mitigation program provides agencies with an additional tool to achieve their preferred long-range development growth plan and strengthens their overall strategy to achieve the VMT and GHG emission reduction goals set by the California Air Resources Board (CARB).

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Establishing Mitigation Need and
Identifying Mitigation Measures
Future development locations, development quantity, and the corresponding mitigation requirements play a crucial role in assessing the necessity of a regional VMT mitigation program and its potential scope.

To accomplish this, a dataset was created by utilizing data from the current countywide travel demand model. This dataset estimates the VMT mitigation needs for the region and projects the potential revenue that a fee-based VMT mitigation program could generate. This data analysis assisted in evaluating the overall feasibility of different program options and determining the scale of mitigation measures that would be needed to mitigate the region’s VMT. This dataset holds significance in understanding the potential cost magnitude that individual projects may need to bear to fully mitigate their VMT impacts. It also provides insights into how these costs may influence policy considerations concerning the definition of “feasible mitigation” under CEQA.

By leveraging the countywide travel demand model and previous VMT research in establishing thresholds, the total potential VMT to be mitigated was determined by calculating the difference between the VMT per capita and VMT per employee for each Traffic Analysis Zone (TAZ) that was over the established thresholds. The difference was then multiplied by the population and total employees for each TAZ to develop a total VMT per TAZ to be mitigated, which then allowed for a countywide total to be calculated.

Exhibit 12, and Exhibit 13 show the VMT amount that will need to be mitigated through 2045 numerically and spatially, based on current land use plans. As shown in Exhibit 12, based on the households and jobs that will be constructed or created between 2019 and 2045 in locations currently above the relevant adopted VMT threshold, a total VMT mitigation need of 119,005 VMT for residential land uses and 126,928 VMT for employment land uses is expected. Exhibit 13 displays the highest potential revenue per year that a fee-based VMT mitigation program could generate within the region when considering a cost of $1,000 per VMT reduced. It is important to emphasize that this calculation assumes that development will take place at the maximum possible rate per year, occurring in the same locations planned for through 2045. However, it is crucial to acknowledge that factors such as the need to mitigate VMT, economic fluctuations, and numerous other variables may diminish the actual revenue potential of implementing a fee-based VMT mitigation program.

Exhibit 12, and Exhibit 13 breakdown the total VMT need for residential and employment by TAZs. A higher VMT within a TAZ indicates a significant need for VMT mitigation by 2045. Furthermore, these figures can highlight the maximum possible annual revenue per TAZ, assuming a reduction cost of $1,000 per VMT.

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Table 3 – Potential Land Use Growth and VMT to Mitigate, 2019 to 2045 Exhibit 14 – Residential VMT Mitigation Need by TAZ

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Exhibit 15 – Employment VMT Mitigation Need by TAZ
Identifying and Evaluating Candidate VMT Mitigation Measures Along with evaluating the need and options for a fee-based VMT mitigation program, the study also analyzed the specific mitigation measures that could be offered. The initial phase involved identifying mitigation measure categories that would undergo review before individual mitigation measures were selected for evaluation. These mitigation measure categories encompassed two overarching groups:
transportation infrastructure mitigation measures and non-infrastructure mitigation measures. Further classification was applied to non-infrastructure mitigation measures, dividing them into land use and transportation demand management mitigation measures.

In 2023, possible candidate mitigation measures were solicited from study partner agencies. Example sources of mitigation measures include the Santa Cruz County Regional Transportation Commission’s (SCCRTC’s) Regional Transportation Plan, Active Transportation Plans produced by agencies throughout the region, the City of Watsonville VMT Mitigation Program, mitigation measures shared by Public Works departments, Santa Cruz Metro, the University of California-Santa Cruz, and affordable housing representatives.

Exhibit 14 below summarizes the mitigation measure categories and provides examples that are commonly considered in practice:

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Exhibit 16 – VMT Mitigation Project Types
Transportation Infrastructure Mitigation Measure Evaluation Only mitigation measures meeting the criteria of “additionality” can be considered for inclusion within a fee-based VMT mitigation program. A methodology has been devised to further scrutinize and assess transportation mitigation measures eligible for potential implementation as VMT mitigation measures. A separate methodology has also been crafted for land use mitigation measures, which will be elaborated upon later in this report. Below is the methodology designed for candidate transportation mitigation measures:
• Step 1 – Screen for Candidate Mitigation Measures
• Step 2 – Evaluate Mitigation Measure’s Performance (mitigation measure analysis) • Step 2A – Set Benefit Area (buffer)
• Step 2B – Monetize Mitigation Measure
• Step 3 – Implementation
To identify mitigation measures worthy of further evaluation, a screening process has been established for candidate mitigation measures. This process involves estimating the mitigation measure cost and potential VMT reduced to determine whether it would exceed $1,000 per VMT, the upper limit of what the market is likely to bear. Mitigations are also screened out if they are not feasible to construct within the next 5 years. Once the mitigation measure bucket is filtered down from the screening process, the following criteria are employed to select measures for further evaluation using the travel demand model, which determines their overall VMT reduction:

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1. High non-single occupancy or active transportation trip rate potential: improvements with higher usage (i.e., high bike ridership)

2. Located in a denser area: mitigation measures located in existing infill areas are favorable.

3. Shorter trip lengths: shorter trips tend to favor active transportation and transit usage.

4. Financial need: mitigation measure has financial need sufficient to meet additionality requirements. Note that this can also be accomplished by advancing a mitigation measure that would not otherwise be constructed in the next 5-10 years.

5. Mitigation measures feasibility: other than financial needs, the mitigation measure is likely to be constructed in the next 5-10 years.

Each mitigation measure was organized with an ID, title, a description of the mitigation measure, the estimated cost, and the mitigation measure’s total length in miles. The Replica big data platform was used to determine the average distance traveled for bicycle and pedestrian trips in the region. A cost of $1,000 per VMT was established as the upper bounds of the fee based on the result of the literature review and a review of existing or proposed fee-based VMT mitigation programs. Using the Replica data for the average trip distance, the number of trips needed to meet the cost of $1,000 per VMT was calculated.

These values were subsequently used to quickly sort the VMT-reducing potential of various mitigations both in terms of estimated usage and the cost/VMT so that mitigation measures could be screened for further analysis. Exhibit 15 below provides an example of how the screening process was applied for bicycle mitigation measures.

Exhibit 17 –Active Transportation Mitigation Measure Screening Example The screening process was completed for both active transportation mitigation measures and transit mitigation measures, as these types of mitigation measures could be evaluated using the countywide travel demand model. To evaluate the effect that a particular mitigation measure has on localized and regional VMT reductions, the baseline model run results were compared with the future build model run results to produce the VMT reduction associated with the mitigation measures.

The countywide travel demand model’s most recent update for this program includes land use updates, calibration, and validation to represent the region's most recent travel patterns. Documentation for the countywide travel demand model, including the recent update, is provided as Appendix B.

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VMT reductions due to small changes in the model network cannot be accurately captured by analyzing the change in regional VMT due to the size of the network and the inherency in the travel demand models.

Therefore, as the model failed to reflect these nuances, mitigation measures were analyzed utilizing Replica to identify and analyze patterns of travel behavior and mobility trends at a granular level. Replica is a data analytics platform that provides detailed insights into the movement, behaviors, and patterns of people. It leverages aggregated and anonymized mobile location data to model the travel habits and demographics of populations. Replica uses synthetic data that is calibrated and validated using anonymized real-world data sources. This approach allowed for a more precise understanding of the impacts of smaller-scale mitigation measures on regional VMT, ensuring that the smaller but significant changes in the transportation network were accounted for during evaluation.

Bike Mitigation Measure Evaluation
The modeling approach to calculate VMT reductions typically involves a multi-step process that integrates various data inputs and modeling techniques. Here’s an overview of the approach used in this study to analyze bicycle mitigation measures:
• Estimate future ridership based on National Cooperative Highway Research Program (NCHRP) 5525 methodology.
o Factor additional ridership using the Transit Cooperative Research Program (TCRP)6 bus rapid transit (BRT) Practitioner’s Guide 118 as needed. • Use big data (Replica) to determine the average trip distance along the alignment. o To better isolate the effects of the mitigation measure, the change in VMT was calculated for areas within 0.25, 0.5, and 1 mile of the mitigation. • Used big data to calibrate ridership levels using existing mode split and ridership along the alignment.
o Filter out trips not associated with replacing vehicle trips, such as exercise trips. • Multiply the factored ridership by average trip distance to determine total VMT reduction.

Nineteen active transportation mitigation measures were evaluated to determine their feasibility for inclusion in a fee-based VMT mitigation program. Table 4 below summarizes the change in VMT for the bicycle mitigation measures. Among the mitigation measureslisted, the Soquel Drive Road Improvements mitigation measure stands out as the most cost-effective, with a cost of $410,000 and a cost per VMT reduced of $85/VMT, reducing a total of 4,833 VMT daily. The Soquel Avenue Corridor Widening (between Branciforte and Morrissey) also offers relatively low costs at $303 per VMT reduced with a cost of $2,320,000, reducing a total of 7,653 VMT daily. Other notable mitigation measuresin terms of lower cost per VMT include the Freedom Boulevard Multimodal Improvements (Bonita Drive to the City of Watsonville) with a cost per VMT of $585 and the 41st Avenue Improvements Phase 2 (Hwy 1 Interchange to Soquel Drive) with a cost per VMT of $531/VMT. In addition, the Bike Share Expansion mitigation measure has a budget of $1,000,000 and aims to reduce 2,395 daily VMT, which results in a cost efficiency 5 NCHRP Report 552, produced under the auspices of the Transportation Research Board (TRB), offers a framework for evaluating bicycle infrastructure investments, guiding planners in assessing economic, social, and environmental impacts. It provides methods to quantify benefits like accessibility, reduced congestion, health, and environmental gains, supporting informed decisions on bike facilities. The NCHRP itself is a program funded by member states of the American Association of State Highway and Transportation Officials (AASHTO), in cooperation with the Federal Highway Administration (FHWA). 6 TCRP Report 118, is managed by the Transportation Research Board (TRB) of the National Academies of Sciences, Engineering, and Medicine, serves as an essential manual for designing and implementing Bus Rapid Transit (BRT) systems. It provides comprehensive insights into planning, operating, and maintaining BRT services to improve urban mobility efficiently. The guide outlines best practices, operational strategies, and design principles to help practitioners develop high-quality BRT systems that are adaptable to different urban contexts.

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of $418 per VMT reduced. This mitigation measure is specifically tailored for the Watsonville area, focusing on providing a realistic number of bikes for a bike-share program. In comparison, the Electric Bike Subsidies mitigation measure, with the same budget of $1,000,000, is $150 per VMT reduced and is expected to reduce a total of 6,667 daily VMT. It is also notable that this mitigation measure is designed to fund the expansion of the electric bike program.

Table 4 – Summary of Bike Mitigation Measure Evaluation Transit Mitigation Measure Evaluation
The modeling approach to calculate VMT reductions for transit was as follows:
• Used countywide travel demand model to determine ridership increases. • Factored additional ridership using BRT practitioners guide. • Determined average transit trip length using big data and countywide travel demand model. • Determined total VMT reduction by multiplying additional ridership by average trip length.

Table 5 below summarizes the change in VMT for the transit mitigation measures. The Youth Ride Free Program emerged as the most cost-effective with a low cost of $209 per daily VMT reduced, featuring a cost of $740,950 and reducing 3,553 VMT daily. The Real-Time Travel Information initiative also presents a lower cost per VMT of $529, with a cost of $1,600,000 and reducing 3,025 VMT daily. These mitigation measures are managed by METRO, with the Youth Ride Free Program allowing for free travel for youth, potentially increasing ridership and reducing the need for private vehicle trips. The Real-Time Travel Information measure aims to provide signage at bus stops indicating next arrivals, which can enhance the usability of public transport.

In contrast, the Capitola Mall Transit Center is significantly less cost-effective, with a high cost per VMT of $392,753, due to only a slight reduction in daily VMT of 64 despite and a cost of $25,000,000. This mitigation measure involves changes to move the transit center from the mall to the streetside for faster service.

The other mitigation measures, including the Intercity Transit Expansion and the University of California, Santa Cruz (UCSC) Terminal, have higher costs per VMT of $9,416 and $3,255, respectively. The Intercity

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Transit Expansion is aimed at expanding service on Highway 1 and Highway 17 to a 15-minute peak, while the UCSC Terminal mitigation measure would create a lay-over location at UCSC to restructure service routes and expand service beyond the downtown loop. The Rapid Bus Enhancements mitigation measure falls in the mid-range in terms of cost-effectiveness with a cost of $3,112 per VMT, aimed at providing passenger boarding islands and other improvements for rapid bus service on selected corridors.

Overall, the Youth Ride Free Program and Real-Time Travel Information offer more cost-effective solutions for reducing VMT and enhancing public transport usage, suggesting that they may provide better value for the investment in terms of daily VMT reduction.

Table 5 – Summary of Transit Mitigation Measure Evaluation Non-Infrastructure Mitigation Measures
The following methodology was developed for candidate land-use mitigation measures:
• Step 1 – Screen for Candidate Mitigation Measures
• Step 2 – Evaluate Mitigation Measure’s Performance
• Step 2A – Monetize Mitigation Measure (Optional)
• Step 3 – Implementation
A screening process was also developed for candidate land use mitigation measures based on several criteria, including the socioeconomic details of an area, the existing VMT efficiency of an area, the availability of mobility options apart from vehicular travel, and the feasibility of constructing the mitigation measure. The screening considerations used to develop the screening criteria are listed below:

1. Socioeconomic criteria – Low-income correlates to low vehicular trip generation (i.e., affordable housing)

2. Low trip rate – Land uses with abnormally low trip generation (i.e., transit-oriented development)

3. Located in a low VMT area – Existing land uses patterns in proximity are favorable to reducing trips.

4. Availability of alternate transportation options – Transportation options can lead to lower vehicular use.

5. Financial need – Mitigation measure has financial need sufficient to meet additionality requirements.

6. Mitigation measure feasibility – Other than financial need, it is likely to be constructed.

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To evaluate affordable housing mitigation measures, the project team identified three affordable housing projects currently proposed and or previously constructed in the Santa Cruz region with cost data. The first is an 88-unit affordable housing project in an unincorporated area just north of Watsonville. The second is another affordable housing project with 72 units located at Miles Ln and Kimberly Ln in Watsonville. The third, located near the second project on Freedom Blvd, has 53 units.

For evaluation purposes, it was assumed that the average occupancy rate for Santa Cruz County would apply, which is currently at 3.1 people per household. As summarized in Table 6 below, based on the location of the affordable housing, VMT per capita is compared to Santa Cruz County’s regional threshold of 13.6 VMT per capita. When multiplied by the total population identified previously, it resulted in overall VMT reductions summarized in Table 6 below. Focusing on the low cost per VMT, affordable housing in the unincorporated area on Freedom Blvd, referred to as Project 1, is the most cost-effective. It has a cost of $34,800,000 and a daily VMT reduction of 1,869, resulting in a cost of $20,634 per VMT.

In comparison, the affordable housing in Watsonville, referred to as Project 2 is the least cost-effective, with a high cost per VMT of $47,981 and a cost of $54,000,000; it achieves a relatively low daily VMT reduction of 1,125. Project 3, another potential affordable housing project in Watsonville, also has a cost per VMT of $35,676, with the same project cost of $43,000,000 but a lower daily VMT reduction of 1,205.

The variation and the range in the daily VMT and the cost per VMT depend on various factors, such as location of the project, total units, and the VMT threshold.

Table 6 – Summary of Affordable Housing Mitigation Measure Evaluation Mobility Hub Mitigation Measures
For the mobility hub mitigation measures, the following modeling approach was used:
• Used countywide travel demand model and BRT practitioners guide to estimate additional transit ridership
• Used NCHRP 552 to estimate additional bike ridership and pedestrian trips. • Used big data to estimate average trip length for bikes, transit and pedestrian. • Multiplied average trip distance by additional ridership/bike trips/pedestrian trips to determine total VMT reduction.

The Table 7 – Summary of Mobility Hubs Mitigation Measure Evaluation details two multi-modal hub mitigation measures with different cost efficiencies. The Delaware Multi-Modal Hub, which is a part of the UCSC and located on the west side of Santa Cruz, has a significantly lower cost per VMT of $204. It costs $580,000 and reduces daily VMT by 2,843. This hub includes bus, bicycle, kiss & ride facilities, and housing units, with connections to the rail trail, but it does not include affordable housing.

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On the other hand, the Watsonville Multi-Modal Hub is a more costly mitigation measure at $55,230,000.

It reduces daily VMT by $7,313, which results in a higher cost per VMT of $7,552. This hub is situated in downtown Watsonville and includes similar multi-modal facilities: bus, bicycle, kiss & ride. It also adds 60 affordable housing units with rail trail connections.

Table 7 – Summary of Mobility Hubs Mitigation Measure Evaluation Transportation Demand Management (TDM) Mitigation Measures The Federal Highway Administration (FHWA) traditionally defines TDM as commuter ridesharing and its planning applications restricted to air quality mitigation, reducing trip generation, and efforts to increase multi-modal travel7
. In that context, when defining TDM mitigation measures for the region’s VMT Mitigation Program, mitigation measures that focused on reducing car trips in the region either by increasing occupancy (carpools and vanpools) or incentivizing individual trip reduction (school bussing and commuter programs) were included. Smaller TDM mitigation measures or certain programmatic TDM measures that may commonly be used in commute reduction programs were not included as they are difficult to track and quantify. For instance, spot amenities cannot be tracked, and education programs are difficult to qualify under the additionality requirement as they already exist in the County and VMT reductions due to expansion would be difficult to track. Telework is also a measure that is traditionally defined as a TDM measure but was not included in the region’s program as it requires individual employers to implement the program on-site separately.

Therefore, for the region’s program several types of mitigation measures were evaluated under the TDM umbrella. For instance, a vanpool is a group of up to 15 people who lease a van for the purpose of commuting to and from work together and live at least 20 miles from their workplace. A carpool is a system administered and funded solely or in combination with an employer and/or a public agency that matches employees living in close proximity or along a similar commute route to ride together to and from their workplace. A school bussing program provides fixed school bus routes and stops to take children to and from school in school buses. Finally, a commuter program that involves incentives for commuters to rethink their ride and choose a different mode, such as walking, biking, carpooling, or riding a bus to work.

An evaluation of three types of TDM mitigation measures (Table 8 – Summary of TDM Mitigation Measure Evaluation) was undertaken to determine the feasibility of being included in a future fee-based VMT Mitigation Program.
7 Transportation Demand Management, U.S. Department of Transportation, Federal Highway Administration, https://ops.fhwa.dot.gov/plan4ops/trans_demand.htm, accessed on 3/20/2024.

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Vanpool
An exercise was undertaken to determine if the unit cost per VMT would be reduced if a vanpool program was implemented within the region based on previous vanpools operated by CalVans within the region.

Using the information provided by CalVans for vanpools that operated within Santa Cruz County, the following evaluation was undertaken:
• Average number of riders (excluding driver): 9.4
• Monthly VMT reduced: 10,190 VMT reduced.
• Monthly VMT reduced per person: 10,190 /9.4 passengers = 1,084 VMT reduced per person o This assumes that all vanpool participants would have driven separately absent the vanpool, but the driver of the vanpool’s VMT remains the same. • Number of workdays per month: 21
• Total daily VMT reduced: 10,190 / 21 = 485 VMT per day reduced • Monthly cost to operate vanpool: $1,202.
• Total cost for a 20-year lifespan (design life of comparable project): $288,480 • Total cost per VMT reduced: $594.50.

School Buses
The primary evaluation tool for this mitigation measure was the countywide travel demand model, supplemented with research8 on costs and participation in bussing programs throughout California. This evaluation assumes a 50% participation rate of students in the bussing program and an average cost per student to operate the program of $530. The remainder of the variables were obtained from the countywide travel demand model.

Using the information provided by the countywide travel demand model and the research on bussing programs throughout California, the following evaluation was undertaken with a reference provided for each assumption:
• Number of students within the region: 11,726 (countywide travel demand model) • Total number of shared-ride trips to a K12 school within the region: 13,800 (countywide travel demand model)
• Total daily VMT for shared-ride trips to a K12 school within the region: 66,767 VMT • Percent of students who would take a school bus: 50% (California statewide research) • Total daily VMT reduced when implementing a school bussing program: 66,767 VMT * 50% = 33,383 VMT
• Average cost per rider: $530 (California statewide research) • Average annual cost for school bussing program: $530/student * 11,726 students = $3,107,390 • Total cost for a 20-year lifespan: $3,107,390 * 20 years = $62,147,800 • Total cost per VMT reduced: $1,862.

Table 8 – Summary of TDM Mitigation Measure Evaluation
8 Review of School Transportation in California. State of California Legislative Analyst’s Office. February 25, 2014. https://lao.ca.gov/reports/2014/education/schooltransportation/school-transportation-022514.aspx. Accessed on 8/22/2023.

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Cruz511 Expansion
An exercise was undertaken to determine the unit cost per VMT reduced if a commuter program was implemented within the region. This program would involve incentives for commuters to rethink their ride and choose a different mode such as walk, bike, carpool or ride bus to work. The following evaluation was undertaken with a reference provided for each assumption:
• Trip Type: Home-Based Work
• Trip Period: 5:00 AM – 10:00 AM
• Primary Mode: Private Auto, Single Occupant
• Total Trips: 33,350
• Median Trip Distance: 5.4
• %Employees Eligible: 20
• %Max VMT Reduction: 6.2
• Total daily VMT reduced: 2,232
• Total cost for a 20-year lifespan: $7,874,000
• Total cost per VMT reduced: $3,528
Additionality
Caltrans defines additionality as “a critical step in asserting such mitigation is to assure that the investment provides additional resources that otherwise would not have been provided or providing the additional resources substantially earlier than they otherwise would have been available.” Put simply; additionality means that a mitigation can only be claimed by one person or project to avoid the benefits of mitigation being claimed by multiple future projects.

The concept of proportionality traditionally implies that mitigation efforts should correspond to the level of investment. For instance, if a bike lane leads to a 100 VMT reduction but is financed by various sources, with a fee-based VMT mitigation program covering 40 percent of the cost, then the bank can only claim a 40 VMT reduction.

This principle is particularly relevant for including affordable housing in a fee-based VMT mitigation program. The Caltrans SB 743 Program Mitigation Playbook notes that dense, affordable housing can reduce VMT more than lower-density housing. If a project funds half the cost of an affordable housing development that cuts VMT by 10,000 miles per day, it could claim a 5,000 mile per day reduction.

However, this raises challenges since affordable housing is complex to build and often requires multiple funding sources. Strict adherence to proportionality, as defined by Caltrans, could make the unit cost per VMT too high for inclusion in a fee-based VMT mitigation program.

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Caltrans has recently 9reconsidered this interpretation of proportionality, suggesting that a project does not need to be the sole funder to claim the full mitigation credit. This applies to models like in-lieu fee payments or mitigation programs where the sponsor transacts with another party for mitigation. As long as the mitigation is enforceable, feasible, not deferred, and mechanisms are in place to avoid double counting, a sponsor can claim full mitigation credit. This means a transportation project could claim full credit for a housing development’s mitigation if it is shown that the development depended on its contribution, likely enforced through a funding agreement. This interpretation allows Santa Cruz County to calculate the unit cost per VMT for VMT mitigation measures using three methods: proportionality, remaining cost, and fixed cost. The proportionality method reflects Caltrans’ original approach, assigning credit proportional to funding, and the unit cost is calculated by dividing the total cost of the mitigation measure by the proportional VMT credit. Caltrans’ updated approach allows for claiming full credit for VMT reduction, assuming no other claims. The unit cost is calculated by dividing the proportional cost by the full VMT credit. Fixed cost, a method developed by this study’s team, sets a standard unit cost per VMT for all mitigation measures, with the program’s contribution calculated by multiplying this cost by the total VMT reduction. If this funding doesn’t fully cover the mitigation measure, additional funding must be secured. This approach enables the inclusion of a wide array of mitigation measures in the program but could pose difficulties in justifying the pre-set unit VMT cost and in securing extra funding to fill any financial shortfall if the program does not fully fund the mitigation measure. Exhibit 16 provides a visual representation of how either the unit cost per VMT or the amount of funding provided by the feebased VMT mitigation program is calculated using each methodology.

Exhibit 18 – Calculating Cost per VMT Reduced
Exhibit 17 below provides an example of how much funding would be provided by the fee-based VMT mitigation program for four different mitigation measure types, the unit cost per VMT for each of the mitigation measures, and the overall unit price per VMT sold to project applicants looking to purchase 9Caltrans, Housing and VMT Mitigation https://dot.ca.gov/programs/esta/sb-743/resources/housing, accessed on 3/6/2024

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VMT to mitigate their project’s VMT impact, based on the additionality method chosen. Exhibit 17 assumes that all four mitigation measure types provide an identical amount of VMT reduction (250 VMT) and that costs range from $250,000 to $1.5 million. As shown in Exhibit 17, the proportionality method results in the highest unit price per VMT for each mitigation measure type both individually and collectively and the fixed cost method results in the lowest unit price per VMT for each mitigation measure type both individually and collectively. The fixed cost method also provides the least amount of funding for all mitigation measure types except bicycle/pedestrian, and the mitigation measures would require more than 50 percent of funding to be identified elsewhere to fully fund the VMT-reducing project.

Exhibit 19 – Cost per VMT Reduced by Mitigation Measures Type and Additionality Method Other factors
When setting up a fee-based VMT mitigation program, in addition to considering the additionality method to use, several additional factors should also be taken into consideration. These factors include the overall unit cost per VMT reduced, the availability of VMT mitigation, and the effect of mitigation measure feasibility. Consideration of the effect each factor will have on the overall success of the fee-based VMT mitigation program needs to be balanced as each factor can come into conflict with one another.

Exhibit 18 summarizes the balance needed between the three factors for a successful fee-based VMT mitigation program.

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Exhibit 20 – Balance of Factors Needed for Successful Fee-based VMT Mitigation Program As shown in Exhibit 18, an ideal fee-based VMT mitigation program can balance cost, availability, and the program’s effect on the feasibility of mitigation measures. Additional considerations include:
 Fewer mitigation options may be feasible given high funding requirements from other sources, which leads to a shortage of needed mitigation.
 Low, little, and minimal effects on cost, availability, and feasibility may encourage outcomes contrary to SB 743
 Low, little, and minimal effects on cost, availability, and feasibility may result in a minimal number of new mitigation measures being implemented due to the need for high funding requirements from other sources.
 High, much, and significant effects on cost, availability, and feasibility may result in many development projects still needing to seek a finding of overriding considerations.  High, much, and significant effects on cost, availability, and feasibility may exacerbate the need for housing or other land use issues.
 High, much, and significant effects on cost, availability, and feasibility may result in a minimal number of new mitigation measures being implemented.

Achieving a Feasible VMT Framework Cost
Based on select analysis of past and potential mitigation measures and the evaluation criteria above, it was determined that a unit cost of between $500 and $1,000 per VMT mitigated is a reasonable target that the market can bear. This range would provide necessary funding to the mitigation measures contained within a fee-based mitigation program and would not be so high as to discourage participation in the fee-based VMT mitigation program by project applicants. An exercise was undertaken using the higher end of this range to determine how much external funding would need to be secured to include each of the active transportation, transit, and TDM mitigation measures evaluated and summarized above in Santa Cruz County’s Fee-based VMT Mitigation Program.

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It is important to note that achieving this range will not necessarily result in all potential projects being able to feasibly mitigate. Potential projects in the most rural areas of the County may have VMT impacts that are an order of magnitude greater than the threshold and as a result they are likely not mitigatable, not only under a fee-based VMT mitigation program, but likely under any known approach.

Bicycle Mitigation Measures:
• Bike Share Expansion and Electric Bike Subsidies are highly cost-effective, with no additional funding needed. They were calculated to be funded at a unit cost well below the $1,000 per VMT target.
• Other mitigation measures, such as the Soquel Drive Road Improvements, also perform exceptionally well, with costs per VMT of $85, needing no additional funding. • Mitigation measures such as the Monterey Bay Sanctuary Scenic Trail segments and Soquel Drive Buffered Bike Lane have significant daily VMT reductions but also considerably higher costs, leading to considerable funding needs of $55,344,210 and $14,451,539, respectively. • Mitigation measures such as the Hwy 9 – Downtown Felton Bike Lanes & Sidewalks and Freedom Boulevard (Green Valley Road to Airport Boulevard) exceed the target cost per VMT but have relatively smaller funding needs compared to large-scale mitigation measures.

Non-Infrastructure Mitigation Measures:
• Affordable Housing, particularly in the unincorporated parts of the county, have high costs per VMT, far exceeding the $1,000 target, resulting in substantial funding needs of up to $52,874,545.

Mobility Hub Mitigation Measures:
• The Watsonville Multi-Modal Hub exceeds the cost per VMT target, with funding needs of $47,916,950.
• The Delaware Multi-Modal Hub is well within the target cost per VMT of $1,000, requiring no additional funding.

Transit Mitigation Measures:
• Intercity Transit Expansion and Capitola Mall TC have costs per VMT much higher than the target, indicating a significant need for funding of $28,422,841 and $24,936,347, respectively. • Ride-free programs and Real-Time Travel Information have costs per VMT below the target and do not require additional funding.

TDM Mitigation Measures:
• School Buses show a moderate cost per VMT of $1,862 but require a large funding need of $28,764,800.
• The Cruz511 Expansion exceeds the cost per VMT target, with funding needs of $5,642,000.

In summary, while several mitigation measures are efficient with costs per VMT below the $1,000 target and require no additional funding, others, particularly large-scale land use and transit mitigation measures, will need substantial financial support to meet the target cost per VMT reduced of $1,000 per VMT reduced.

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Table 9 below provides a summary of all mitigation measures analyzed in terms of their cost, VMT reduced, and price per VMT produced. As shown in Table 9 – Mitigation Measure Evaluation Summary, all thirty-three mitigation measures analyzed resulted in VMT reductions, with the daily VMT reduced ranging between 64 VMT (Capitola Mall Transit Center) and 33,383 VMT (School Bussing Program). The cost per VMT reduced ranged between $85 (Soquel Drive Road Improvements) and $392,753 (Capitola Mall Transit Center). The final test undertaken was a determination of what percentage of the total cost would be covered if the cost per VMT was fixed at $1,000/VMT reduced. As shown in Exhibit 19, a cost of $1,000 per VMT reduced would cover between 1% and 100% of the mitigation measures costs. Note that this considers the total cost of all mitigation measures, including affordable housing, without additional funding.

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Table 9 – Mitigation Measure Evaluation Summary

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Exhibit 21 – Mitigation Measure by Revenue Percentage of Total Cost based on $1,000/VMT Reduced Recommended Pilot Program Mitigation Measures and Ranking Criteria After evaluating the list of mitigation measures in Table 9 , the mitigation measures were further refined into a recommended list. Mitigation measures that included maintenance were eliminated to reduce the potential complexity of mixing non-VMT reducing mitigation measures into the program. Mitigation measures that were similar in nature were grouped together to allow the program administrators more flexibility to fund items based on readiness and other metrics, as discussed below.

The mitigation measures were also broken into two tiers: mitigation measuresfor a pilot program, or Tier 1, and mitigation measures for consideration at a later date if the program is established on a permanent basis, or Tier 2 mitigation measures. See Table 10 for a complete list. Initially, a pilot program with smaller mitigation measures that are considered relatively easy to implement and generally less expensive are recommended. A pilot program will allow the region to collaborate on the administrative aspects of program management and work out the logistics and legal mechanisms of the program prior to tackling

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complex land use mitigation measures or other expensive mitigation measures. Tier 1 mitigation measures are recommended for the pilot due to the ease of implementation, lower cost of implementation, and because they could feasibly be implemented within a 5-year timeframe.

Additionally, they tend to be lower cost, which would allow the program administrator to reduce the price per VMT for a pilot. Mitigation measuresthat are recommended for a Tier 2 phase are also shown in Table

10. These mitigation measures are more expensive and complex to implement as they may require land acquisition, multiple agencies, additional right of way, or other major infrastructure improvements. Due to the expense of these mitigation measures, they may only be able to be partially funded by the VMT mitigation program, as fully funding these mitigation measures from the fee-based VMT mitigation program may result in costs that increasingly infeasible from a project mitigation standpoint.

All mitigation measures provided in this report are subject to revision and re-evaluation. The VMT Bank pilot may take some time to get off the ground, and some of these mitigation measures may find alternative funding sources or become unviable for unforeseen reasons.

Table 10 – Recommended Mitigation Measures
Project
Type Tier Project Project Cost Daily VMT Reduced
Actual
Cost per
VMT
Proposed
Cost/VMT
Bicycle 1 Bike Share Expansion $1,000,000 2,395 $418 $418 Bicycle 1 Electric Bike Subsidies $1,000,000 6,667 $150 $150 TDM 1 Cal-Vans $288,480 485 $595 $595
Transit 1 Ride Free Programs $740,950 3,553 $209 $209
Transit 1 Real-Time Travel Information $1,600,000 3,025 $529 $529 Bicycle 1 Soquel Ave Corridor Widening
(Branciforte-Morrissey) $2,320,000 7,653 $303 $303
Bicycle 1
Freedom Blvd Multimodal
Improvements (Bonita Dr to City
of Watsonville)
$3,100,000 5,297 $585 $585
Bicycle 1 41st Ave Improvements Phase 2
(Hwy 1 Interchange to Soquel Dr) $1,240,000 2,335 $531 $531 Bicycle 1 Main St Modifications (City Limit
to Lake Ave $2,100,000 3,139 $669 $669
Land Use 2 Affordable Housing* $100,000,000 2,249 $44,469 $1,000 Mobility
Hub 2 Multi-Modal Hubs* $55,810,000 10,156 $5,495 $1,000 Transit 2 Intercity Transit Expansion* $31,800,000 3,377 $9,416 $1,000 Transit 2 Rapid Bus Enhancements* $7,875,000 2,531 $3,112 $1,000 Bicycle 2 MBSST (Segments 5, 7-12, & 18)* $146,300,000 23,756 $6,158 $1,000 Bicycle 2 Main St/Beach St/Lake Ave Bike
Facilities* $31,800,000 5,512 $5,769 $1,000
Bicycle 2 Highway 9 Bike Lanes* $13,500,000 1,902 $7,100 $1,000 *Assumes gap funding will be provided by the program rather than the program fully funding the project.

41 Santa Cruz County Regional
VMT Mitigation Program
Mitigation Measure Ranking Criteria
After a VMT Bank pilot is established, mitigation measures will need to be selected for funding as new funds are brought to the table by development. After reviewing potential ranking criteria with stakeholders, including city managers, the following metrics are recommended for use in ranking mitigation measures. As noted previously, the mitigation measures in the pilot program and future iterations of the program will be continuously updated; therefore, having a ranking system to enable decision-making when funding becomes available will help the program administrator provide a clear and transparent process for mitigation measure selection.

Exhibit 22: Mitigation Measure Ranking Criteria

42 Santa Cruz County Regional
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Equity Analysis
To determine whether the fee-based VMT mitigation program would be equitable, an environmental justice analysis was completed to determine whether the impact of new development and the mitigation measuresto reduce the VMT from new development would occur equitably across the region. Specifically, the analysis was used to determine whether VMT impacts would be concentrated in low-income and disadvantaged communities while the mitigation would occur outside of these communities.

Exhibit 21 identifies the areas in Santa Cruz County that are low-income communities (yellow), lowincome and disadvantaged communities (red), or neither (green). Understanding that VMT mitigation would be concentrated in areas where they would be most effective, i.e., areas with the densest population, Exhibit 21 shows that the majority of VMT mitigation measures would occur in environmental justice communities (non-green areas).

Exhibit 23 – Santa Cruz County Environmental Justice Communities The categorization shown above was combined with an analysis completed to determine the future need for VMT mitigation for both residential and employment uses, as shown in Exhibit 22 and Exhibit 23. The

43 Santa Cruz County Regional
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green areas in Exhibit 22 and Exhibit 23 are non-environmental justice communities, while the others are low-income, minority, or disadvantaged. The height of the area indicates the amount of VMT that may be needed in the future based on how closely the area is to the region’s VMT threshold multiplied by the total residential (dwelling unit) or employment (jobs) growth.

Exhibit 22 and Exhibit 23 show that VMT is spread relatively consistently throughout the region.

Therefore, the implementation of a fee-based VMT mitigation program can be considered equitable, as VMT impacts would not be concentrated in environmental justice communities, and VMT mitigation would not be concentrated in non-environmental justice communities.

Exhibit 24 – 20-year Vehicle Miles Traveled Mitigation Need (Residential)

44 Santa Cruz County Regional
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Exhibit 25 – 20-year Vehicle Miles Traveled Mitigation Need (Employment) VMT Mitigation Need
The VMT mitigation needs over the model horizon (2019 – 2045) is summarized in Table 11 – VMT Mitigation Need by Environmental Justice Community below by environmental justice community to provide a numeric summary of what is displayed in Exhibit 22 and Exhibit 23. VMT mitigation is often more effective for non-residential uses and when there is a high mix of residential and employment uses.

Table 10 shows the total VMT needing mitigation between 2019 and 2045, aggregating to 119,005 VMT for residential and 126,928 VMT for employment across all community types. Environmental Justice VMT to Mitigate constitutes almost 20-30% of the total VMT mitigation need for both residential and employment categories. Regions in poverty constitutes around 20% of the total VMT mitigation need for both categories. This comprehensive data underscores the varying needs for VMT mitigation across different community types, with environmental justice communities, especially those that are both low income and disadvantaged, requiring significantly more effort in reducing vehicular travel compared to their non-environmental justice counterparts.

Table 11 – VMT Mitigation Need by Environmental Justice Community

45 Santa Cruz County Regional
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Program Administration and Other
Considerations
Administration
When considering the administration of a fee-based VMT mitigation program, the responsibilities of the administering entity should be carefully considered during its development. It is anticipated that the administration of a fee-based VMT mitigation program will require the following:
• Technical support to ensure the accuracy and consistency of mitigation measure evaluations. • Approval and evaluation of mitigation measures for the VMT Mitigation Program based on the recommended criteria in this report or other criteria as determined by the selected governance format for the program.
• Collect fees from participating member agencies when new development is approved and administer funding to member agencies to construct mitigation measures. • Track program performance over time including the location of VMT impacts and VMT mitigation. • Provide an annual report on fees collected, VMT mitigation needed, and mitigation measures funded. This annual report could include an evaluation of the program and its performance.

There were several possible formations of an administrative body to fulfill these functions that were considered by the advisory committee and the jurisdictions within the region. including:

1. The Santa Cruz County Regional Transportation Commission (SCCRTC) could administer the program under the authority of a Joint Powers Agreement (JPA) or other similar contractual mechanism.

2. A multi-jurisdictional entity could administer the program through a JPA or other similar contractual mechanism on behalf of the participating agencies.

3. The County of Santa Cruz could implement the pilot program in cooperation with other participating agencies and switch to another method of administration once the pilot program is completed assuming there is a desire to then fully implement the program. If there were no JPA or other overarching contractual arrangement, this alternative would require an intergovernmental agreement for each instance in which one lead agency wanted to construct a mitigation measure outside of its jurisdictional authority.

4. A consultant could be procured to manage the tracking and reporting for the program with funding collection and administration being managed by the participating agencies. Similar to (3), this would require an intergovernmental agreement for each instance in which one lead agency wanted to construct a mitigation measure outside of its jurisdictional authority.

While the advisory committee recommended the SCCRTC as the best choice for administration, concerns were raised related to (1) the existing decision-making format wherein the County has more relative representation, (2) how well local jurisdiction mitigation measure would compete for funding, and (3) and “return to source” (how much of the fees collected in a jurisdiction would be also be spent within that

46 Santa Cruz County Regional
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jurisdiction on mitigation measures. These concerns resulted in modifications to the recommendations in this report, including a more detailed description of how mitigation measures could be ranked for funding, as well as a more explicit discussion regarding other options for the administration of the program.

Recommended Approach
The VMT Program is recommended as a pilot to provide insight and determine its feasibility before fully implementing it. Given the relative lack of industry experience with VMT Banks, it is also recommended that the pilot program be evaluated annually as part of the annual reporting process to determine whether the program is serving its purpose, is in need of modification, and if it should continue in its current format. The pilot program would include a limited number of mitigation measures, ideally those that are shovel-ready and cost-efficient, to determine the feasibility of continuing the program with a wider array of mitigation measures that may not be as cost-efficient. Table 10 provides initial recommendations for the pilot program (Tier 1). The frequency for updating the mitigation measure list would be on an as-needed basis, depending on how quickly the VMT is purchased from the program and when the pilot program launches. Based on the average amount of VMT purchased by each project applicant, the administrator could determine a point at which the program would need to be replenished with additional mitigation measures to provide enough VMT for future project applicants to purchase.

An administrator for the program will still need to be determined prior to the implementation of the program and should be selected based on the readiness, capacity, and interest of the regional agency and local jurisdictions to participate in the pilot program. The administrator is anticipated to be responsible for the implementation of the program, prioritization, monitoring, and enforcement of mitigation measures, facilitating the exchange of VMT credits, and maintaining transparency and accountability in the program's operations.

Nexus Documentation
The US Supreme Court has been clear on land-use regulations stating that any regulation must “substantially advance legitimate state interests”. This means including the establishment of an “essential nexus” between the mitigation fee and government interest. Furthermore, the doctrine requires those fees to be “rough[ly] proportional” to the adverse impacts of a project. This also means that mitigation must be appropriately sized to offset the actual impact. Under an approach where the VMT reductions are determined in terms of “vehicle miles” or similar units, an amount of mitigation that matches the impact can be purchased by developers through a fee program. As long as these fees are justified to further a legitimate purpose with an essential nexus to government interest and roughly proportional to the adverse impacts, they may be permissible.

Similar to traditional fee programs, the mitigation measures within the bank would be selected based on the need to mitigate VMT from anticipated development. However, unlike traditional fee programs, the application of the fee is directly tied to the individual development project and is not based on a future need but the VMT mitigation for that individual proposal. When a development project is proposed, the VMT reduction required for the proposal would be calculated, and the applicant would purchase the credits equal to the amount of VMT needed for their project. Once those VMT credits are purchased, a VMT-reducing mitigation would come online within a reasonable timeframe to mitigate the development proposal. Agencies should also be diligent in their VMT mitigation duration as the nexus between

47 Santa Cruz County Regional
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improvements and successful use of fees varies region by region. VMT Bank arrangements that receive and pool funds from multiple projects should account for the delay between payment and deployment of funds as it measures the cost of VMT mitigation and negotiates with developers.

CEQA Considerations
Lead agencies are pursuing a range of CEQA strategies to implement VMT mitigation programs based on their selected program’s requirements, other existing CEQA programmatic documentation, the underlying mitigation measures, and preferences. The simplest CEQA approach for a VMT bank, assuming it does not have a specific commitment to implement any particular mitigation measure, is to conclude the program is not a “project” under CEQA and any adoption of the Program is not a commitment to implement any particular project within the Plan; therefore, any adoption of the Plan is not subject to CEQA. Further, even if the Program was subject to CEQA, it would be exempt from substantive environmental review as a planning and feasibility study. This is because the Program is aspirational and is a planning document that does not provide approval for any potential future projects related to the County’s provision of transportation or other services.

Further, the County is not approving the construction of any projects that may result in a direct or indirect physical change in the environment. At such time that any of the mitigation measures identified herein are proposed to be undertaken, any and all appropriate state and federal environmental review will be required and completed prior to any future approval. Unless cleared through prior CEQA documentation, specific mitigation measures would be subject to environmental review. Based on their unique characteristics, individual mitigation measures may or may not be found to be individually exempt from CEQA.

Likewise, projects that would potentially benefit from the Regional VMT Bank would still have to complete any required environmental review. Within the environmental review process the project would document the reporting efforts conducted by the VMT Bank administrator to ensure that the mitigation monitoring and reporting requirements of CEQA are met.

Beyond this Program, several important considerations pertain to the concepts of feasible mitigation and nexus, which are both required to be addressed by CEQA-compliant mitigation.

Mitigation Measure Considerations
CEQA Guidelines Section 15370 outlines five primary ways to address mitigation for environmental impacts:

1. Avoid the impact altogether by not taking certain actions or parts of an action.

2. Minimize impacts by limiting the degree or magnitude of the action and its implementation.

3. Rectify the impact by repairing, rehabilitating, or restoring the impacted environment.

4. Reduce or eliminate the impact over time by preservation and maintenance operations during the life of the action.

5. Compensate for the impact by replacing or providing substitute resources or environments.

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CEQA Guidelines Section 21061.1 further clarifies that mitigation measures must be feasible, which generally means they must be capable of being accomplished in a successful manner within a reasonable period, considering economic, environmental, social, and technological factors. For a VMT bank, this requirement has been identified as requiring particular attention as full funding for a mitigation measure may require the participation of multiple projects, which may result in unforeseen delays in implementation given that the timing and need for mitigation payments to a VMT bank are not necessarily under the control of the VMT bank. The following should be considered to balance CEQA's requirements for feasible and timely mitigation with the practicalities of managing a VMT bank, allowing for more flexible and streamlined project development:

1. Reasonable time frame: CEQA discusses the concept of a reasonable time frame for mitigation measures to be implemented to address a project’s impact. While a project applicant contributing to a VMT mitigation program does not guarantee that a VMT-reducing mitigation measure will be constructed/implemented prior to building occupancy, it could be argued that the existence and operation of a VMT mitigation program provides enough evidence that mitigation will be constructed/implemented within a reasonable time frame.

2. Preloading Mitigation: The County, other participating agencies, or a project applicant could fund and implement mitigation measures in advance using general or external funds. This approach ensures that mitigation is in place before a project’s occupancy. A repayment mechanism would be established, allowing the entity that funded the mitigation to be reimbursed, with interest, as other projects contribute to the VMT bank.

3. Decreasing VMT Impacts Over Time: As regional development increases density, VMT impacts are expected to reduce over time. This means that the amount of VMT mitigation required today may be greater than what will be needed in the future. As such, delaying mitigation could still meet long-term VMT reduction goals. Further study is needed to determine the appropriate delay period based on the projected reduction in VMT by 2045.

4. Covering the Time Gap with Increased Fees: To account for any delays in implementing mitigation measures after project completion, the VMT mitigation program could charge additional fees to project applicants. These funds would be used to construct measures that reduce more VMT than originally required, compensating for the delayed implementation.

5. General Plan EIR Approach: The County’s General Plan included the VMT Mitigation Program as a mitigation measure for VMT impacts. However, this report, including recommendations for implementation of the VMT Mitigation Program, had not been completed at that time, and no specific mitigation measures had been identified for the VMT Mitigation Program. The General Plan EIR determined that the impacts, even with the VMT Mitigation Program, would be significant and unavoidable due to the uncertainty of funding available to mitigate the VMT generated by the General Plan. To streamline VMT analysis and mitigation for future projects, an Environmental Impact Report (EIR) addendum could be prepared as part of a General Plan Update or regional policy document that includes specific mitigation measures for the VMT Mitigation

49 Santa Cruz County Regional
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Program. Assuming the VMT program has been adopted or is in the process of being implemented, the updated EIR would be able to establish a clear mitigation strategy and could commit to reducing VMT. Future projects could then use this EIR as a basis for tiering, avoiding the need to develop individual environmental analyses for each project.

6. Feasibility and Participation in the VMT Bank: The VMT bank provides "feasible mitigation" under CEQA. Projects with significant VMT impacts must participate in the bank to the extent financially feasible. If mitigation becomes unaffordable, lead agencies would need to assess the validity of claims of unaffordability. Projects unable to fully mitigate their impacts through the VMT bank would pursue overriding considerations, potentially benefiting from a programmatic EIR to streamline this process. This concern could potentially be addressed programmatically as part of the preparation of the EIR described under (5) above, in lieu of an individual project having to make its own case.

7. Reporting: As mentioned in the Administration section above, reporting on annual basis is recommended to meet CEQA requirements of mitigation monitoring and reporting. The administrative entity could simply report annually on the amount of VMT that needs to be reduced due to projects and the amount of VMT that has been reduced due to funding from the Bank.

Other Considerations
If Santa Cruz County implements a VMT mitigation bank or other fee-based VMT mitigation program framework, such as a VMT exchange, a feasible mitigation option will be introduced that did not exist previously. The introduction of a feasible mitigation option will likely necessitate participation by development projects that have CEQA-specific significant impacts, whereas previously, they sought to obtain a finding of “overriding considerations.” The implementation of a fee-based VMT mitigation program results in more regional changes than solely providing an additional feasible mitigation option for development projects.

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Additional Study Outcomes and Next Steps
The next step for the County of Santa Cruz is to coordinate with the other cities in the County and determine who will participate in the program and who will be responsible for administering it. Once this decision is finalized, the participants can establish a contractual agreement with member agencies to administer the program. Recommendations for the pilot program are included at the beginning of this chapter and can be used by the program administrator once there is momentum to move forward.

Other findings and recommendations that have resulted from the study include:
 A regional VMT mitigation program offers a new viable mitigation option for project applicants facing VMT impacts that cannot be mitigated through other means.  Selectivity in choosing mitigation measures for the program is crucial to ensure financial and practical feasibility. Mitigation measures should be evaluated for potential other funding sources and their ability to meet additionality requirements.
 Equity must be a core element in both the final design of the VMT mitigation program and the mitigation measures selected for it. This study suggests that a fee-based VMT mitigation program could lead to equitable outcomes, avoid concentration of VMT impacts in environmental justice communities, and ensure mitigation is not limited to non-environmental justice areas.  Developing a mitigation measure list for the program will be an ongoing process, necessitating accurate VMT analysis methods in accordance with best analysis practices to ensure robust outcomes. The study’s established framework should serve as the basis for future analysis.  There needs to be clear documentation of the connection (nexus) between the program’s necessity and the impact of the VMT mitigation during the final program design.  The program’s success hinges on support from decision-makers, agencies, the community, and participants in the VMT mitigation program. A diverse range of perspectives should be considered in the final program design and mitigation measure selection.  Implementing a fee-based VMT mitigation program introduces a new fee, potentially increasing housing costs and other development expenses, as well as the cost of transportation capacityincreasing projects.  Without a well-defined and well-established VMT mitigation solution, significant uncertainty will persist for many projects, hindering their progress even if they align with other plans and programs.
 It is recommended that a pilot program be implemented prior to the full rollout of the program.

This pilot program would include shovel-ready or immediately implementable mitigation measures and cost-efficient programs that run for a set time period. Once the pilot program ends, its effectiveness should be evaluated, and any lessons learned should be incorporated into the full rollout of the program within the region.

Santa Cruz County Regional
VMT Mitigation Program
APPENDIX A – LITERATURE REVIEW

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VMT Mitigation Program
DRAFT Task 1: Review Existing and Concurrent
Research Efforts
05/09/2023

Table of Contents
Chapter 1: Introduction ...................................................................................................................................6 Chapter 2: Fee-based VMT Mitigation..............................................................................................................7 Chapter 3: Example Programs..........................................................................................................................8 ACTUAL PROGRAMS...............................................................................................................................8 City of San Diego – Active Transportation In-Lieu Fee Program .................................................................8 City of San Jose – Transportation Analysis Policy.......................................................................................9 Contra Costa Transportation Authority (CCTA)........................................................................................ 10 San Bernardino County Transportation Authority (SBCTA)...................................................................... 10 Tahoe Regional Planning Agency – Mobility Mitigation Fee Program ...................................................... 10 City of Salinas......................................................................................................................................... 11 City of Watsonville................................................................................................................................. 11 City of Tracy........................................................................................................................................... 12 QUASI PROGRAMS ............................................................................................................................... 12 San Francisco Transportation Demand Management Program................................................................ 12 San Francisco Transportation Sustainability Fee...................................................................................... 13 City of Pasadena Complete Streets Program........................................................................................... 13 City of Los Angeles Coastal Transportation Corridor Specific Plan, West LA Transportation Improvement and Mitigation Specific Plan ................................................................................................................... 14 Los Angeles Metro Transit Pass Study..................................................................................................... 14 Metropolitan Transportation Commission Bay Area Express Lanes Strategic Plan ................................... 14 WETLAND BANKS .................................................................................................................................. 15 Chapter 4: Legal Considerations..................................................................................................................... 16 Court Decisions...................................................................................................................................... 16 Regional Transportation Plans................................................................................................................ 16 The California Environmental Quality Act ............................................................................................... 16 Mitigation Fee Act (AB 1600).................................................................................................................. 17 Congestion Management Program......................................................................................................... 17 Senate Bill 375 ....................................................................................................................................... 18 Assembly Bill 602 ................................................................................................................................... 18

California Fish & Game Code.................................................................................................................. 18 LEGAL CHALLENGES ............................................................................................................................. 19 Case 1: Petitioners vs County of San Diego ............................................................................................. 19 Case 2: Petitioners vs County of San Diego ............................................................................................. 20 Case 3: Petitioners vs Governor’s Office of Planning and Research, California Natural Resources Agency, Office of Administrative Law .................................................................................................................. 20 Chapter 5: Non-legal Considerations.............................................................................................................. 21 TARGETED STRUCTURE ....................................................................................................................... 21 VERIFICATION AND ADDITIONALITY ................................................................................................ 21 GEOGRAPHY ........................................................................................................................................... 23 LINKAGE BETWEEN GOVERNMENTS................................................................................................. 23 EQUITY .................................................................................................................................................... 24 VMT MITIGATION FUNDING STATUS ............................................................................................... 26 Programmed Projects............................................................................................................................. 26 Projects in a “Fiscally-Constrained” Portion of a Regional Transportation Plan........................................ 26 Projects in an “Unconstrained” Portion of a Regional Transportation Plan.............................................. 26 UNINTENDED CONSEQUENCES.......................................................................................................... 27 OTHER CHALLENGES ............................................................................................................................ 27 Projects approved before SB743: ........................................................................................................... 27 Slow Down on Home Building: ............................................................................................................... 28 Charging Developers a VMT Tax ............................................................................................................. 28 Chapter 6: Current Situation in California....................................................................................................... 29 Chapter 7: Key Takeaways............................................................................................................................. 30

List of Figures
Figure 1 Sample VMT Mitigation Additionality Framework ............................................................................. 22 List of Tables
Table 1 Sample VMT Mitigation Bank/Exchange Plan .................................................................................... 19 Table 2 Evaluation Checklist for Program Administrator................................................................................. 22 Table 3 Categories for VMT Equity Concerns.................................................................................................. 25 Table 4 VMT Mechanism before and during the Program Operation .............................................................. 26 Table 5 Current Situation in California............................................................................................................ 29

Abbreviation Definition
AB Assembly Bills
C/CAG City/County Association of Governments of San Mateo County CA California
CAP Cap-and-Trade Program
CAPCOA California Air Pollution Control Officers Association CBTP Community-Based Transportation Plan
CCTA Contra Costa Transportation Authority
CEQA California Environmental Quality Act
CMP Congestion Management Program
COG Council of Governments
EIR Environmental Impact Report
FGC Fish & Game Code
Gov Government
GHG Greenhouse Gas
GPA
IE
General Plan Amendment
Inland Empire
MMF Mobility Mitigation Fee
MTC Metropolitan Transportation Commission
MUNI The San Francisco Municipal Railway
LA Los Angeles
LOS Level of Service
RFP Request for Proposal
ROI Return of Investment
RTIP Regional Transportation Improvement Program
RTP Regional Transportation Plan
SANDAG San Diego Association of Governments
SB
SBCTA
Senate Bill
San Bernardino County Transportation Authority
SCS
SEIR
Sustainable Communities Strategies
Supplemental Environmental Impact Report
SloCOG San Luis Obispo Council of Governments
SR State Route
TBD To Be Determined
TDM Transportation Demand Management
TIA Transportation Impact Assessment
TIM Traffic Impact Mitigation
TOD Transit-oriented development
TS Transportation System
TSF Transportation Sustainability Fee
TMP Transportation Master Plan
TPA Transportation Priority Area
TRPA Tahoe Regional Planning Agency
UC University of California
VMT Vehicle Miles Traveled
VTA Valley Transportation Authority

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Santa Cruz County Regional VMT Mitigation Program
6 Chapter 1: Introduction
The sustainable transportation planning grant program is released by The California Department of Transportation (Caltrans) for cities and counties to begin or complete planning toward a variety of sustainable transportation projects, including but not limited to environment friendly mobility and emission reduction technologies, with the aim to support state climate goals. This grant program consists of Sustainable Communities Grants and Strategic Partnerships Grants. The former is to encourage local and regional planning that extend state goals and the latter is to identify and address the deficiencies on the State highway system in partnership with Caltrans.

County of Santa Cruz is a grantee of Sustainable Communities Grants with City of Watsonville and Santa Cruz County Regional Transportation Commission to develop and adopt Vehicle Miles Traveled (VMT) mitigation program to work, school, and essential services by building active transportation and transit improvements on and off the state highway system that decrease VMT and greenhouse gas emissions, improve safety, combat climate change and improve the quality of lifeline infrastructure provided to disadvantaged communities within the Santa Cruz region. This document presented is the first task of this project.

Senate Bill (SB) 743 reformed the transportation impacts review process under California Environmental Quality Act (CEQA) to align with greenhouse emissions reduction goals. As a result, VMT became the key metric to measure transportation impacts and estimate mitigation effects. The California Air Pollution Control Officers Association (CAPCOA) Handbook for Analyzing Greenhouse Gas Emission Reductions, Assessing Climate Vulnerabilities, and Advancing Health and Equity, which is an updated version of the VMT and Greenhouse Gas (GHG) mitigation guide released previously in 2010, was released in January 2022. CAPCOA’s Handbook is one of the primary sources for estimating mitigation effects in California (CA). Although this resource is invaluable, it is still challenged by the limitations of the prior 2010 version given that it provides solutions that work best in highly urbanized areas, with Transportation Demand Management (TDM) applications in suburban and rural contexts often having limited or questionable efficacy. TDMs can also be challenging from the standpoint of mitigation monitoring and are often unpopular with project applicants because they may need to be managed and paid for in perpetuity.

These limitations have led jurisdictions to increasingly consider other programmatic approaches to VMT mitigation. In response, policymakers started considering new designs such as “banks” and “exchanges”.

This document summarizes example programmatic approaches in practice, assesses the legal and nonlegal considerations that can identify a direction for jurisdictions, as well as provides key takeaways.

Santa Cruz County Regional VMT Mitigation Program
7 Chapter 2: Fee-based VMT Mitigation
Programmatic approaches that rely on collectively funding projects appear to hold great promise for VMT mitigation as they can allow a project to obtain an amount of mitigation precisely commensurate with their impact. In addition, these programmatic approaches allow developers to make a single payment, avoid the complexity of ongoing Transportation Demand Management (TDM) management and do not require mitigation monitoring by the project applicant. Programmatic approaches can also provide a public benefit in terms of funding transportation improvements that would not otherwise be constructed, resulting in potential improvements to congestion, Greenhouse Gas Emissions (GHG) emissions, increased transportation choices, and additional opportunities for active transportation and related health benefits. This study focuses on programmatic approaches to VMT mitigation including VMT Banking, VMT Exchanges, and VMT Mitigation Impact Fee Programs, as described below:

VMT Banking – Under a VMT Banking framework, multiple VMT-reducing projects are grouped and their associated VMT reductions are monetized in the form of credits. These credits are then purchased for the purposes of mitigating VMT in excess of determined impact thresholds. The underlying projects may be either regionally or locally beneficial to the area in which the project is located.

VMT Exchanges – VMT Exchanges are similar to VMT Banking with the exception that they deal with a single VMT-reducing project that can be established by the project applicant, other entity, or potentially be selected from a predetermined project list. As this approach eliminates the need to convert a group of projects into equivalent VMT-reducing credits, its administration could potentially be simplified, and funding can be directed at a single mitigation solution which may be of greater benefit to the project than funding a VMT Bank.

VMT Mitigation Impact Fee Programs – Some jurisdictions have also considered the creation or conversion of an existing Transportation Impact Mitigation (TIM) Fee Program to serve the purpose of VMT mitigation. This, however, can be complicated for most jurisdictions given that, to not be counterproductive in terms of VMT mitigation, all capacity-enhancing projects would need to be purged from the TIM Fee Program. Simply, a TIM Fee Program cannot have roadway widening projects and be VMT mitigating at the same time. While a full conversion to VMT mitigation projects is feasible in some urban locations, most jurisdictions still desire to have some level of roadway widening/capacity enhancement within their programs for the purpose of facilitating travel and reducing congestion, even if the approach may be conflicting with Senate Bill (SB) 743 given that most capacity-enhancing projects result in induced demand and increased VMT. An important difference between a VMT Mitigation Impact Fee Program and a Banking/Exchange program is that every project would participate in it, not just those projects that require VMT mitigation under CEQA law. Note that, SB 743 modifies CEQA for VMT to be used as the metric based on which the impacts from transportation projects are evaluated. In response to SB 743, agencies are required to use VMT to evaluate the transportation impacts under CEQA.

The next chapter will introduce some of the example programs across the state: actual programs, quasi programs, and wetland banks.

Santa Cruz County Regional VMT Mitigation Program
8 Chapter 3: Example Programs
This chapter will present some examples from around the state to compare how different jurisdictions have approached VMT mitigation under SB743 over the years. The chapter will consider examples as follows:
• Actual Programs that fully implements fee-based mitigation programs (Actual programs) within a jurisdiction
• Quasi programs focusing on one aspect of VMT mitigation • Wetland Banks where bank sponsors are allowed to transfer credits to permit developers to compensate for environmental impacts in exchange for permanent protection and monitoring of the wetlands
Mote that, unless otherwise noted all the examples provided here are using thresholds that follow the Office of Planning and Research Technical Guide to Implementing SB 743.

ACTUAL PROGRAMS
City of San Diego – Active Transportation In-Lieu Fee Program In 2020, the City of San Diego proposed implementing a program for the purpose of complying with SB 743.1 The intent of this program was to reduce Citywide VMT to address impacts of development related to noise, air pollution, and greenhouse gas emissions, and to promote public health and enjoyment, by investing in active transportation infrastructure and measures that will result in reductions to Citywide VMT.

Under the program, the city has identified four (4) zones, as follows:
• Mobility Zone 1 – reflects the Downtown Community Planning Area boundary • Mobility Zone 2 – includes any parcel that falls wholly, or partially, within the State’s identified • Transit Priority Areas (TPAs)
• Mobility Zone 3 – reflects any Community Planning Area boundary with a VMT threshold that is 85% or less of the regional average for either VMT per capita or VMT per employee • Mobility Zone 4 – represents an area that is not located within Mobility Zones 1, 2, or 3; Mobility. Zone 4 generally reflects the non-urban areas of the city Under the Program, all development located in Mobility Zone 4 would be required to pay an active transportation in-lieu fee instead of funding the cost of VMT reducing mitigation measures. In addition, development projects in Mobility Zone 4 would not be required to provide on-site TDM. This is mainly because zone 4 is less bike and walk friendly, located farther away from jobs, services, and shopping centers, and has limited access to transit. Thus, it is not effective to implement VMT reduction strategies though the VMT generation rate would be high. Funds collected from the program would be used to pay for transportation and VMT-reducing multimodal infrastructure projects within Mobility Zones 1, 2, and 3, thereby reducing Citywide VMT impacts. The regulations required that all development located in Mobility Zones 2 and 3 provide on-site TDM measures that reduce VMT. TDM measures could include a variety of pedestrian improvements (e.g., eliminating sidewalk gaps, new crosswalks), bicycle supportive 1 County of San Diego, San Diego Citywide Active Transportation In Lieu Fee Program Estimated Impacts and Cost Savings, https://www.sandiego.gov/sites/default/files/8_active_transportation_in_lieu_fee_cost_impact_analysis.pdf, accessed on April 11th,2022

Santa Cruz County Regional VMT Mitigation Program
9 amenities (e.g., lockers, showers), transit improvements (e.g., installing a shelter), and other multimodal enhancements (e.g., moving or adding a new stop closer to the project. Average total cost for regional VMT normalized across modes of bike/transit/pedestrian is identified $1,400.

KEY TAKEAWAYS
The city is divided into zones
Developments in non-urban areas pay an Active Transportation In-Lieu Fee Developments in urban areas would provide on-site Transportation Demand Management (TDM) amenities that reduce VMT
City of San Jose – Transportation Analysis Policy
Effective by March 29, 2018, the City adopted a Transportation Analysis Policy replacing the Transportation Impact Policy to align with SB 743.2 Transportation projects that are environment friendly and support land use and goals of City and State by mitigating traffic significantly or at least are neutral against City’s screening criteria are listed by SB 743 publication. Projects that do not meet the screening criteria must include a detailed evaluation to measure the VMT against City’s thresholds of significance and include feasible mitigation measures to offset the effects if needed. In case a project is unable to fully mitigate VMT, the project must fund multimodal transportation improvements—called Transportation System Improvements— that would improve system efficiency and/or safety, enhance non-auto travel modes, and promote the citywide reduction of VMT. San José provides an example of a way to use the VMT “budget” to create a transportation project threshold of significance. San José evaluates transportation projects in relation to the regional transportation plan. The City of San Jose Transportation Analysis Handbook identifies screening criteria that determines whether a CEQA transportation analysis would be required for development projects. The criteria are based on the type of project, characteristics, and/or location. If a project meets the City’s screening criteria, the project is expected to result in less-than-significant VMT impacts and a detailed CEQA VMT analysis is not required. Projects must demonstrate consistency with the Envision San José 2040 General Plan to address cumulative impacts. Consistency with the City’s General Plan is based on the project’s density, design, and conformance to the General Plan goals and policies. If a project is determined to be inconsistent with the General Plan, a cumulative impact analysis is required per the City’s Transportation Analysis Handbook. Per VMT cost was stated as follows:
• Commercial/Industrial: $3,200 per Vehicle Mile Traveled not mitigated • Residential $2,300 per Vehicle Mile Traveled not mitigated

KEY TAKEAWAYS
Applicants must construct or fund citywide multimodal transportation improvement(s) if a project was unable to fully mitigate VMT
Improvements to the citywide multimodal transportation system would not necessarily reduce or avoid the significance of VMT impacts that cannot be mitigated
An improvement would be one of the overriding benefits to the community 2 City of San Jose Council Policy, Transportation Analysis Policy, 636691896044230000 (sanjoseca.gov), accessed on April 11th,2022

Santa Cruz County Regional VMT Mitigation Program
10 Contra Costa Transportation Authority (CCTA)
A California Department of Transportation Sustainable Planning Grant of $400,000 was awarded to the Contra Costa Transportation Authority (CCTA) in 2021 to build a VMT Mitigation Framework.3 The study will examine the possibility of allowing developers and transportation agencies whose projects contribute to VMT increases to offset emissions by paying into a “VMT Mitigation Program”.

In March 2023, A draft VMT mitigation framework has been released. CCTA has expressed interest in establishing a pilot hybrid exchange/in-lieu fee program targeted toward implementing the Mobility on Demand (MOD) app. The MOD app would function as a voluntary commute trip reduction program and a source of community-based travel information. The app offers the ability to monitor the VMT generation, hence quantifying the VMT effects. This would create the ability to directly calculate the program’s cost-effectiveness for VMT. The draft framework estimates a $0.10 -$0.35 per VMT reduced over 10 years. If MOD proves to be effective, it could use demonstrated VMT reductions and cost data as the basis for a future fee program.

KEY TAKEAWAYS
The program is funded by the California Department of Transportation Sustainable Planning Grant The county is establishing a pilot hybrid exchange/in-lieu fee program Estimated cost: $0.10 -$0.35 per VMT reduced over 10 years San Bernardino County Transportation Authority (SBCTA)
In August 2022, A VMT mitigation bank was proposed by City/County Manager’s Technical Advisory Committee. SBTA would develop this bank using a mode-choice based framework, with telework as the initial regional mitigation measure. Initially, the program would focus on incentivizing individuals to earn reduction credits by making choices to reduce their travel. After establishing a verified home-based work trip (HBW) “baseline,” individuals who volunteer for the program can generate credits whenever they choose to telework for a particular day. The volunteers would need to live or work in the County.

The verified VMT reduction credit would then be assigned an economic value and the volunteers would be paid a share of that value as an incentive for reducing their VMT. The purchased credit would be banked by SBCTA and then sold to development projects that would need mitigation. Additional projects and programs already established under the Inland Empire (IE) Commuter Rideshare Program could be added in the future (e.g. choices to ride transit or vanpool/carpool). It is estimated to have a cost of $0.05 -$0.08 per VMT reduced over 20 years.

KEY TAKEAWAYS
SBCTA would develop a regional VTM Mitigation bank using a mode-choice based framework The program is focusing on telework as the initial regional mitigation measure Estimated cost: $0.05 -$0.08 per VMT reduced over 10 years Tahoe Regional Planning Agency – Mobility Mitigation Fee Program As of April 2021, the Tahoe Regional Planning Agency (TRPA) introduced the Mobility Mitigation Fee (MMF) program basing the fee on average daily VMT instead of the average daily trip ends.4 VMT mitigating projects are drawn from the 2020 Regional Transportation Plan (RTP) constrained project list. 3 Contra Costa Transportation Authority, Press Release, https://ccta.net/wp-content/uploads/2021/10/CCTA_SustainableGrantAward_FINAL.pdf, accessed on April 11th,2022
4 Tahoe Regional Planning Agency, Mobility Mitigation Fee Update, 2021. https://www.trpa.gov/wp-content/uploads/Ops-Committee-Item-5- Mobility-Mitigation-Fee-Update.pdf, accessed on April 11th,2022

Santa Cruz County Regional VMT Mitigation Program
11 MMF may charge as high as $218.00 per VMT depending on the development. This program is different from its equivalents in the region as it strictly charges a VMT mitigation fee. These fees are for mitigating project impacts on transportation, not for revenue-generating to offset the vehicular impacts of a project including roadway improvements. The updated process requires all projects to mitigate their transportation impacts through payment in the MMF Program and to do more at the project level if generated VMT is significant. The new process charges a fee for retail/commercial development only if it generates a net increase in VMT.

The process encourages projects located in low-VMT areas, and any needed VMT-reducing strategies to further reduce VMT can be reflected in lower MMF fees. TRPA’s mitigation fund release policy states that collected funds can only be used for VMT mitigating transportation projects.

KEY TAKEAWAYS
Fee based on VMT instead of daily trip ends and dependent on type of project Fees are strictly for mitigating project impacts on transportation, not for revenue-generating to offset the vehicular impacts of a project
The new process charges a fee only if project generates a net increase in VMT City of Salinas
As of October 2020, the City of Salinas started developing a VMT mitigation bank based solely on bicycle infrastructure projects. As a part of developing the bank, several key citywide bicycle projects were costed and the VMT reductions associated with them were calculated. Projects that could be constructed in the next ten years were included in the program.5 However, in order for the City to more easily administer the program, the cost was calculated on a per trip basis rather than a per mitigated VMT basis. The resulting program charges $204.89 per gross vehicle trip. A project that wishes to mitigate its VMT impact must determine the number of vehicle trips to be reduced before determining its overall mitigation cost.

An important aspect of this program is that additional projects can be added to the bank to increase the supply of VMT for mitigation purposes. The City of Salinas is one of the first cities in California to undertake the development of a VMT Banking program.

KEY TAKEAWAYS
VMT Bank comprised by bicycle infrastructure projects only Developer pays one time to mitigate amount of total VMT project that is over the threshold VMT Bank can be refilled by new projects if additional VMT is needed City of Watsonville
As of September 2022, The City of Watsonville developed a VMT mitigation bank based on bicycle and pedestrian infrastructure projects. The proposed projects were taken from existing plans such as the bicycle master plan. Then, projects were costed, and the VMT reductions associated with their construction were calculated. Projects that could be constructed in the next ten years were included in 5 While this VMT Banking program consists of potential projects that could be constructed in the next ten years, some but not all of them are anticipated to be constructed in that timeframe.
6 Project level depends on project site and land use types. Chapter 65: Air Quality / Transportation of the TRPA Code of Ordinances details the defined levels

Santa Cruz County Regional VMT Mitigation Program
12 the program.6 This provides a small program with a cost per VMT reduced that the developers can use to reduce their project’s VMT impact as part of a regional VMT banking approach to VMT mitigation. The resulting cost for each VMT to be reduced was calculated to be $1,524.21 per VMT reduced. Note that this rate does not include any non-fee funding sources (grants, etc.). The addition of any funding sources for these projects could significantly reduce the cost of per VMT reduction cost.

An important aspect of this program is that additional projects can be added to the bank to increase the supply of VMT for mitigation purposes.

KEY TAKEAWAYS
VMT Bank comprised by bicycle and pedestrian infrastructure projects Developer pays one time to mitigate amount of total VMT project that is over the threshold VMT Bank can be refilled by new projects if additional VMT is needed City of Tracy
As of July 2022, The City of Tracy developed a VMT mitigation bank based on bicycle and pedestrian infrastructure projects, as well as a mobility hub project. The mobility hub links several different modes of travel together at a transit station to make commuting by transit easier and reduce the number of drive-alone automobile trips. As a part of developing the bank, the proposed projects were taken from existing documents such as the transportation master plan (TMP), then the projects were costed, and the VMT reductions associated with their construction were calculated. Projects that could be constructed in the next ten years were included in the program. This resulted in a small program with a cost per VMT reduced that the developers can use to reduce their project’s VMT impact that can be use as part of a VMT banking approach to VMT mitigation. The resulting cost for each VMT to be reduced was calculated to be $633.11 per VMT reduced. Note that this rate does not include any non-fee funding sources (grants, etc.). The addition of any funding sources for these projects could significantly reduce the cost per VMT reduction cost.

An important aspect of this program is that additional projects can be added to the bank to increase the supply of VMT for mitigation purposes.

KEY TAKEAWAYS
VMT Bank comprised by bicycle, pedestrian, and mobility hub projects Developer pays one time to mitigate amount of total VMT project is over threshold VMT Bank can be refilled by new projects if additional VMT is needed

QUASI PROGRAMS
San Francisco Transportation Demand Management Program
The San Francisco Transportation Demand Management Program, which “seeks to promote sustainable travel modes by requiring new development projects to incorporate design features, incentives, and tools that support transit, ride-sharing, walking, and bicycle riding” is one potential example of a VMT exchange program. Each project was given several points based on its land-use category, size, and parking requirements by program staff. The project developers must then choose applicable demandmanagement measures (primarily on-site) totaling an equal number of points from a city-prepared 6 While this VMT Banking program consists of potential projects that could be constructed in the next ten years, some but not all of them are anticipated to be constructed in that timeframe.

Santa Cruz County Regional VMT Mitigation Program
13 menu of options and develop a plan to put the measures in place. Each point corresponds to a 1% reduction in VMT.7

KEY TAKEAWAYS
An early example of VMT Exchange
Each project was given several points based on its land-use category, size, and parking requirements Project developers choose applicable measures totaling the points from this menu and develop a plan San Francisco Transportation Sustainability Fee
San Francisco Transportation Sustainability Fee (TSF) required developers of qualifying projects to pay approximately $8 per square foot of residential development and $18 per square foot of commercial development into a fund. Millions of dollars generated from this program were funneled to transit improvements such as adding more The San Francisco Municipal Railway (MUNI) services, expanding the fleet, and improving services as well as transit stops, and streets. A thorough nexus study was conducted to explore legality, justified fees and other aspects, and potential projects. A well-designed analysis of transportation demand and adjusted fees and measures was enough to set the groundwork to satisfy core CEQA requirements.8

KEY TAKEAWAYS
San Francisco Transportation Sustainability Fee required developers of qualifying projects to pay development commercial development into a fund
Fees were funneled to transit improvements such as MUNI services expanding fleets, and improving services A well-designed analysis of transportation demand and adjusted fees and measures was enough to set the ground to satisfy core CEQA requirements
City of Pasadena Complete Streets Program
The City of Pasadena had organized its Complete Streets Program to implement innovative approaches to reduce VMT. 9 Thresholds that require analysis and potential mitigation for any significant impacts were included for both VMT and Level of Service (LOS), along with other metrics. The guidelines set the significance threshold for VMT at 22.6 additional trips per capita (residential population plus jobs) and require LOS to be held at D.

This also helped solve a potential CEQA-Congestion Management Plan (CMP) compliance conflict by evaluating LOS and VMT at the same geographical scale on which VMT mitigation is permitted. Since VMT programs are designed to reduce vehicle miles traveled, LOS may not be negatively impacted at the intersection level, for instance. If the scale of LOS evaluation is expanded from intersection impacts to larger segments in the region, then VMT mitigation should coincide with LOS goals under CMP.

Additionally, if project reduces VMT but would not comply with LOS requirements under CMP, jurisdiction can designate “infill opportunity zones” that are exempt from the LOS requirements under LOS. These zones are within one-half mile of a major transit stop or high-quality transit corridor included in the application regional transit plan.10 Agencies must consider all aspects of legal requirements. 7 City and County of San Francisco Planning Commission, Standards for the Transportation Demand Management Program (2016), See http://www.sftdmtool.org/, accessed on April 11th,2022
8 Robert D. Spencer, San Francisco Municipal Transportation Agency, San Francisco Transportation Sustainability Fee (TSF) Nexus Study (2015). 9 City of Pasadena Department of Transportation, Mobility Element (2015). https://ww5.cityofpasadena.net/transportation/completestreets/development-review/pasadena-transportation-management-association, accessed on April 11th,2022 10 See Cal. Gov’t Code § 65088.4.

Santa Cruz County Regional VMT Mitigation Program
14 KEY TAKEAWAYS
Complete Streets Program was organized to implement innovative approaches to reduce VMT Thresholds included both VMT and LOS, along with other metrics This helped solve a potential CEQA-CMP compliance conflict by evaluating LOS and VMT at the same level City of Los Angeles Coastal Transportation Corridor Specific Plan, West LA Transportation Improvement and Mitigation Specific Plan
As the earliest application of mitigation fee programs, these area-wide-specific plans included lists of transportation improvements such as transit, bicycle, pedestrian, roadway, intelligent transportation system (TS), and trip reduction programs to be funded by the impact fees collected from new development. The fair share (trip fee) is based on a “nexus” and is calculated in direct proportion to PM Peak hour trips generated by new development. The amount of the TIA fees is based on each land uses proportionate to the use of the transportation facilities. At the time, the Transportation Impact Assessment fee program was also updated to include a VMT-based nexus plan, revisions to the fees, exemptions, in-lieu credits, affordable housing credits; and new transit-oriented development credit.

Other proposed changes include administrative amendments and minor revisions that are consistent with SB 743.11

KEY TAKEAWAYS
The earliest application of VMT Mitigation programs
Area-specific plans included lists of transportation improvements to be funded by the impact fees The transportation Impact assessment program included VMT-based nexus plans, in-lieu credits, and new transitoriented development credit Los Angeles Metro Transit Pass Study
Metro is the Los Angeles County mobility provider. One of the programs they offer is a transit pass subsidy and based on a study in 2020 it may qualify as a VMT mitigation exchange. Metro offers some students and employees free transit by allowing anyone to ‘sponsor’ a particular school or employer. 12 LA Metro considered a program as an SB 743 VMT mitigation exchange where developers could purchase these passes and could use the Metro performance data to estimate the VMT reduction per pass. However, this process is still experimental.

KEY TAKEAWAYS
LA Metro transit passes could be sponsored by anyone
LA Metro considered a program as an SB 743 VMT mitigation exchange where developers could purchase these passes This may have qualified as a VMT exchange
Metropolitan Transportation Commission Bay Area Express Lanes Strategic Plan The Metropolitan Transportation Commission (MTC) is exploring a simplified VMT bank or exchange options as on-site mitigation may not be feasible for all projects. 13 MTC is considering a VMT exchange program that can reinforce existing multi-county efforts focusing on corridor-planning within the express lane corridor. Through VMT exchange, implementing agencies will offset any VMT impacts of 11 Los Angeles Department of Transportation, Transportation Impact Assessment (TIA) Fee Program Study for Coastal Transportation Corridor Specific Plan and West Los Angeles Transportation Improvement and Mitigation Specific Plans Amendment Project, 2015. 12 Fehr & Peers, VMT Mitigation Through Fees, Banks, and Exchanges, April 2020 13 Metropolitan Transportation Commission, Bay Area Express Lanes Strategic Plan, https://mtc.ca.gov/sites/default/files/Bay_Area_Express_Lanes_Strategic_Plan_Appendices.pdf, accessed on April 11th,2022

Santa Cruz County Regional VMT Mitigation Program
15 the express lanes. On the other hand, MTC is also considering VMT banks that allow developers to fund off-site mitigation projects. In this case, an improved Impact fee that is used to fund demonstrated VMT mitigation projects, could fund current mitigation such as a regional express bus service.

MTC notes that implementing agencies should consider scenarios where the toll revenue drops, and mitigation funds are needed to operate and maintain highways. In that sense, how and where these banks are used remains an important challenge for these agencies.

KEY TAKEAWAYS
MTC is exploring a simplified VMT bank or exchange options for Bay Area express lanes VMT exchange can reinforce existing multi-county efforts focusing on corridor planning within the express lane corridor Implementing agencies could offset any VMT impacts of the express lanes

WETLAND BANKS
Wetland banks have been in practice for years now. A wetland (mitigation) bank is “privately or publicly owned land managed for its natural resource values. In exchange for permanently protecting, managing, and monitoring the land, the bank sponsor is allowed to sell or transfer habitat credits to permits who need to satisfy legal requirements and compensate for the environmental impacts of developmental projects.”14 Although there may be a variety of technical and legal differences, they can be potential models for VMT mitigation strategies. These models typically include a process through which the impacts of various transportation projects are estimated. Mitigation (Wetlands) banking credits are established to compensate for unavoidable wetland losses. One of the differences with VMT banks is the use of mitigation banks. This must occur in advance of development when the mitigation is not possible at the site or would not be as beneficial. Here are some examples sponsored by Caltrans15:
• State Route (SR) 149 Freshwater Marsh (1990) – Caltrans mitigated impacts of SR 149 widening project. Initial mitigation funding was provided by local funds for cash flow that is later reimbursed by Caltrans.
• Beach Lake Mitigation Bank (1991) – Beach Lake Mitigation Bank compensated for losses to wetland resources from future Caltrans projects in 14 counties. As of 2014, 43 projects in total had been debited from the bank to mitigate the impacts. • Elkhorn Slough Early Mitigation Partnership (2009) – Program developed funding strategies and conservation agreements for the watershed. Caltrans sponsored the partnership to set up advance mitigation for four transportation projects.

KEY TAKEAWAYS
Collaboration with local/regional partners facilitates state-level (Caltrans) efforts to develop advanced mitigation The timeline for bank development could be different from agency to agency Sometimes smaller agencies can have the flexibility to achieve advance mitigation, since they may have less restricted processes compared to Caltrans.
14 California Department of Fish and Wildlife, Conservation and Mitigation Banking (ca.gov), accessed on April 11th,2022 15 Sciara, G., Bjorkman,J., Lederman,J., Thorne, J.H., Schlotterbeck, M., Wachs, M., Setting the Stage for Statewide Advance Mitigation in California, UC Davis, Institute of Transportation Studies, 2015.

Santa Cruz County Regional VMT Mitigation Program
16 Chapter 4: Legal Considerations
There are a few potential sources of legal considerations that need to be considered to create a VMT mitigation bank, exchange, or impact fee program including CEQA, associated court decisions, California’s Mitigation Fee Act, associated Assembly Bills (AB), the Congestion Management Program, and other Senate Bills. Any agency or authority designing or operating a bank would need to consider these to minimize risk of litigation. This section will discuss these considerations in further detail.

Court Decisions
The Court has been clear on land-use regulations stating that any regulation must “substantially advance legitimate state interests”. This means including the establishment of an “essential nexus” between the mitigation fee and government interest.16 Furthermore, the doctrine requires those fees to be “rough[ly] proportional” to the adverse impacts of a project.17 This also means that mitigation must be appropriately sized to offset the actual impact. Under an approach where the VMT reductions are determined in terms of “vehicle miles” or similar units, an amount of mitigation that matches the impact can be purchased by developers through a fee program. As long as these fees are justified to further a legitimate purpose with an essential nexus to government interest and roughly proportional to the adverse impacts, they may be permissible.

KEY TAKEAWAYS
Essential Nexus: There must be an essential nexus between the mitigation fee and the government interest Roughly Proportionality: Mitigation must be approximately sized to offset the actual impact Regional Transportation Plans
A bank or exchange may need to take into account certain transportation planning frameworks that are covered by California law. Regional Transportation Plans (RTPs) are long-term plans created and updated frequently by regional transportation agencies (RTAs) and metropolitan planning organizations (MPOs) incorporating local, regional, state and federal plans and priorities. While RTPs are not focused on VMT reduction, in certain cases there might be overlaps. A project that is to be funded under an RTP may not qualify as additional for mitigation. In addition, large scale mitigation investment might overlap with RTPs as they reflect regional transportation investment priorities. VMT Programs should include mechanisms to make sure additionality requirements are met.

KEY TAKEAWAYS
The components of the RTP must be considered by the VMT mitigation bank and exchange programs to guarantee that the project satisfies the criteria for additionality and prioritization requirements The California Environmental Quality Act
SB 743 directly amends The California Environmental Quality Act (CEQA) to require an updated analysis of transportation impacts. Reducing greenhouse gas emissions through means such as VMT is a justified purpose for the state’s interest. CEQA requires that feasible mitigation be applied to projects that result in a significant impact. The impact is defined as the changes to the baseline environment caused by the 16 See Nollan, 483 U.S. at 837. 17 Dolan v. City of Tigard, 512 U.S. 374, 391,1994

Santa Cruz County Regional VMT Mitigation Program
17 project. Lead agencies or authorities can choose their thresholds to determine the significance of the impact. Here are the main statutes and guidelines:
• CEQA Statute (CA Public Resources Code 21099)
• CEQA Guidelines (CA Code of Regulations, Title 14, Division 6, Chapter 3, Sections 15064.3) Other relevant statues and guidelines are as following:
• CEQA Statute (CA Public Resources Code 21068.5, 21083, 21093, 21094, 21100, 21002) • CEQA Guidelines (CA Code of Regulations, Title 14, Division 6, Chapter 3, Sections 15007, 15041(a), 15064(h)(3), 15093,15091,15125, 15151,15152, 15364, 15384,15385) Mitigation Fee Act (AB 1600)
Development Impact Fees thar\t were created under Assembly Bill 1600 (AB 1600), also known as the Mitigation Fee Act is now codified as Government (Gov.) Code Sections 66000 through 66008 (“Mitigation Fee Act”). The main purpose of the mitigation fee act is to “address concerns over the fact that local agencies are imposing fees for purposes unrelated to development projects.”18

KEY TAKEAWAYS
Gov. Code § 66000 (d) – The bank or the recipient of the fund should use funds for a public facility. While it is defined broadly, mitigation measures such as public transit infrastructures or subsidies can be defined as a public facility Gov. Code § 66001(a) – A reasonable relationship between the development fee, its use, and the need for the mitigation measure should be identified. Mitigation projects such as contributions to transit services should meet legal requirements and the relationship should be properly documented Gov. Code § 66005 identifies a course for a fee reduction regarding new infill or transit-oriented housing developments.

If development is a one-half mile from a transit station and meets basic requirements – generates lower auto trips–that development is entitled to a fee reduction. Under SB743, affordable housing, housing within ½ mile of transit, housing projects generating fewer than 110 trips per day, and new housing in existing low-VMT neighborhoods can forego transportation analysis and mitigation entirely. SB 743 makes it easier to use two CEQA exemptions for infill projects that can only be used when a project will not have significant transportation/traffic impacts. These are Public Resources Code section 21159.25’s statutory exemption for housing projects in unincorporated areas and the Class 32 categorical exemption for infill projects within city limits.

Congestion Management Program
The current CMP in California requires urban areas to develop and adopt a program to enforce the LOS of E or promote alternative methods if below LOS E. However, SB 743 identifies VMT as the new measure of effectiveness for CEQA considerations, which creates a conflict with the existing CMP. VMT mitigation banks or exchanges may be funding or permitting a VMT reducing project that does not necessarily improve LOS.

KEY TAKEAWAYS
Until the CMP is updated to comply with SB 743, a simple solution would be to consider, having transportation impact analysis thresholds for both LOS and VMT on the same geographical scale 18 Elkind, N.E., Lamm,T., Prather,E., Implementing SB 743 An Analysis of Vehicles Miles Traveled Banking and Exchange Frameworks, October 2018, U.C. Berkeley.

Santa Cruz County Regional VMT Mitigation Program
18 Senate Bill 375
SB 375 (Steinberg, 2008) requires MPOs to create and implement Sustainable Communities Strategies (SCS) and that adopted RTP components to integrate land use, housing, and transportation planning strategies to meet regional greenhouse gas emission reduction goals set by the state of California.SB475 promotes robust planning process that integrate regional and local strategies. However, in terms of implementation significant gaps has been observed. One of the limitations was the adequate incentives for inducing local development choices conducive to regional plan goals. Disruptive technology such as Uber, Lyft, and autonomous vehicles, increased vehicle availability, reduced time spent driving, lower operating costs in shared platforms potentially increases VMT absent new regulations. One of the other challenges were local zoning and permitting practices that constrain housing production and/or make it more expensive. Also, SB375 state that no aspect of it should be understood to initiate local control of land use decision-making, which makes it hard for MPOs to impose policy directives upon local jurisdictions. There has been concerns about infill strategies, lack of adequate incentives and support for compact development.

KEY TAKEAWAYS
While it is unlikely that SCSs will conflict with SB 743, lead agencies must review the applicable Sustainable Communities Strategies (SCS) for any potential conflicts.

SB 375 can provide useful considerations to design and operate VMT banks or exchanges as it ensures that cities and counties are closely involved in developing effective plans for the regions, increases public participation and local government input, strengthens several existing requirements for public involvement in regional planning. It establishes a collaborative process between regional and state agencies to set GHG goals and prices CEQA incentives for development projects that are consistent with regional plan.

Assembly Bill 602
AB 602 reforms housing impact fees to make them more fair, transparent and streamlined such that smaller, more affordable units are not unfairly penalized with higher costs.19 AB 602 requires impact fees to be proportional to the size of a new home so that smaller individual homes pay reduced fees.

However, before the adoption of the fee, an impact fee nexus study should be adopted that identifies the existing level of service for each public facility, proposed new level of service, and should include an explanation of why the new level of service is needed. If a fee program was adopted before the state adopted AB 602, it would require a capital improvement plan as part of its nexus study.

KEY TAKEAWAYS
This bill would require that a local agency that calculates fees proportionately to the square footage of the proposed units be deemed to have used a valid method to establish a reasonable relationship between the fee charged and the burden posed by the development. Bill went into effect on January 1, 2022 VMT banking rates are not calculated based on service levels or standards. The fee is based on VMT reduction and therefore housing square footage is not applicable. . However, lead agencies should review and consider AB 602 for potential conflicts with their programs
California Fish & Game Code
While research shows there are no specific statutes for VMT exchanges and banks, U.C. Berkeley used conservation programs as a proxy established under the California Fish & Game Code (FGC) to develop a 19 California Legislative Information, AB 602 Development Fees: Impact fee nexus study, https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB602, accessed on April 11th, 2022

Santa Cruz County Regional VMT Mitigation Program
19 list of requirements associated with existing statutes as shown in Table 1. 20 The intent is to show that
behind VMT exchanges and banks aligning as a VMT mitigation program, is a form of conservation where they are trying to limit environmental impacts and the VMT generated through development.

Table 1 Sample VMT Mitigation Bank/Exchange Plan
Requirements Statutory Ref.

An explanation of theVMT mitigation purpose and need for the bank or exchange. FGC § 1852(c)(1) The geographic area covered by the bank or exchange and rationale for the selection ofthe area,together with a description of the existing transportation and development dynamics that provide relevant context for the development of the bank or exchange.

FGC § 1852(c)(2)
The public transit andVMT reduction opportunities are currently located within the bank or exchange area. FGC § 1852(c)(3)
Important residential and commercial communities and transportation resources within the bank or exchange area, and an explanation of the criteria, data, and methods used to identify those important communities and resources.

FGC § 1852(c)(4)
A summary of historic, current, and projected future transportation stressors and pressuresin the bank or exchange area, including economic,population growth, and development trends. FGC § 1852(c)(5)-(6) Provisions ensure that the bank or exchange will be in compliance with all applicable state and local legal and other requirements and does not preempt the authority of local agencies to implement infrastructure and urban development in local general plans.

FGC § 1852(c)(7)
VMT mitigation goals and measurable objectives for regional transportation resources and important mitigation elementsidentified in the plan that address or respond to the identified stressors and pressures on transportation within the bank or exchange area.

FGC § 1852(c)(8)
VMT mitigation projects, including a description of specific projects that, if implemented, could achieve the mitigation goals and objectives, and a description of how the mitigation projects were prioritized and selected about the mitigation goals and objectives.

FGC § 1852(c)(9)
Provisions ensuring that the bank or exchange plan is consistent with and complements any local, regional, or federal transportation or congestion management plan that overlaps with the bank or exchange area, a summary of any such plans, and an explanation of such consistency.

FGC § 1852(c)(10)-(11)

LEGAL CHALLENGES
SB 743 has completely changed how jurisdictions analyze transportation impacts under CEQA. In 2018, the Governor's Office of Planning and Research (OPR) released technical recommendations regarding SB 743, which were helpful in evaluating transportation impacts for certain types of projects, such as housing, office and retail development. However, the guidelines do not comprehensively cover every land use scenario and there are still legal and practical scenarios falling through the cracks as shown in the three cases described below.

Case 1: Petitioners vs County of San Diego21
California Appellate Court rejected San Diego County’s plan to mitigate greenhouse gas impacts with offsite offsets. The appellate court held that a mitigation measure in the Supplemental Environmental 20 Elkind, N.E., Lamm,T., Prather,E., Implementing SB 743 An Analysis of Vehicles Miles Traveled Banking and Exchange Frameworks, October 2018, U.C. Berkeley.
21 Court of Appeal, Fourth Appellate District, https://law.justia.com/cases/california/court-of-appeal/2020/d075328.html, accessed on October 3rd, 2022

Santa Cruz County Regional VMT Mitigation Program
20 Impact Report (SEIR) that permitted the purchase of carbon offsets from projects outside the County, including international projects, violated CEQA because the mitigation measure did not require that offsets meet AB 32 requirements, that greenhouse gas emission reductions be additional, and that the offsets originating outside California have greenhouse emissions programs equivalent to or stricter than California’s program.

Case 2: Petitioners vs County of San Diego
VMT banks and exchanges are presenting unique solutions to VMT mitigation. However, they also bring quite a few legal challenges with them in terms of implementation. One of these challenges is the use of carbon offsets. Recently, the County of San Diego was challenged over the use of carbon offsets to achieve GHG reduction goals in the County’s climate action plan.22 The court petition states that revised CAP (Cap-and-Trade Program) and General Plan Amendment (GPA) Procedures lack standards sufficient to ensure that offsets are real, enforceable, additional, and otherwise consistent with CEQA’s mitigation requirements. It also states that these procedures also fail to ensure that offset purchases will mitigate GHG emissions because they defer any judgment regarding the adequacy of a particular offset purchase until the issuance of a building permit. This could be an obstacle to creating VMT banks or exchange programs.

Case 3: Petitioners vs Governor’s Office of Planning and Research, California Natural Resources Agency, Office of Administrative Law
In 2019, the Governor’s Office of Planning and Research, California Natural Resources Agency, and Office of Law were challenged by the Two Hundred, an unincorporated association of civic leaders and additional individuals. Petitioners challenged five new regulations, one regulatory appendix, and two underground regulations. Essentially, petitioners argued that new plans increase new home costs, which pushes too many families of color far behind in their ability to access homeownership. It also mandates a VMT mileage quote for each driver, a quote which will arguably raise commute costs of lower and moderate-income workers who commute from outlying affordable home communities.23 If successful, as the case is still ongoing, this could affect the legality of VMT policy setting. 22 Superior Court of the State of California, Court Petition, https://www.biologicaldiversity.org/programs/urban/pdfs/San-Diego-CAP-Petition-forWrit-of-Mandate.pdf, accessed on April 11th, 2022 23 Superior Court of the State of California, Court Petition, 200-v-OPR-Complaint-12-18.pdf (thetwohundred.org), accessed on April 11th, 2022

Santa Cruz County Regional VMT Mitigation Program
21 Chapter 5: Non-legal Considerations
Research shows that there are other important considerations to take into account namely targeted structure, verification and additionality, geography, linkage between governments, equity, funding status, unwanted consequences This chapter will shed light on these considerations to establish a basis for fee-based VMT programs.

TARGETED STRUCTURE
A Fee-Based VMT Mitigation Program should only be imposed when a project can’t sufficiently or costeffectively mitigate its transportation impact. Unlike a typical TIM Fee Program that requires every development project to pay into it, a VMT Fee-Based Mitigation Program would only collect money from projects that cannot effectively mitigate their significant transportation impacts on their own. As a result, forecasting revenue may be more difficult given the need to predict a project’s location and timing, its land-use characteristics, and whether it will require mitigation.

VERIFICATION AND ADDITIONALITY
Agencies need to consider questions concerning both “additionality” and verifiable VMT reductions before participating in a banking regime. Additionality concerns the requirement under CEQA that VMT reductions would not have occurred absent funding from the bank. The verification ensures that a project’s anticipated reductions match the need generated by the development in question. It also makes sure that those anticipated reductions occur after implementation/construction. These two interrelated considerations are important both from the perspective that VMT reductions are quantifiable and realistic in the VMT estimating technique and that this is truly new mitigation rather than shifting money around. For specific proposed reductions, the public agency or the developer must demonstrate that reductions would not have occurred under the current plan but under this new project (additionality). Otherwise, the developer is responsible on generating further reductions. To track the additionality in the context of VMT mitigation banking/exchanges, two basic approaches can be taken24 in the phases of investment selection and implementation:
• Project-specific (pre-investment): The lead agency or bank/exchange program administrator verifies the project’s additionality before funding an individual mitigation project using available documented assessments, plans and/or funding resources of the applicable RTP(s). • Programmatic (post-investment on a regular programmatic basis): The bank/exchange program administrator identifies classes of investment such as “likely to be added” or “unlikely to be added” based on the applicable RTP before selection. To do so, the program administrator conducts a comprehensive review of fund transactions, VMT impacts, mitigation supported investments, and the relationship of the investment cohort to the relevant investment plans (i.e., applicable RTP) and funding sources regularly. The administrator shall verify the additionality of the investments relative to a baseline scenario for the same period. 24 Berkeley Law – Center for Law, Energy & The Environment, Implementing SB 743: Design Considerations for Vehicle Miles Traveled Mitigation Bank and Exchange Programs, August 2022.

Santa Cruz County Regional VMT Mitigation Program
22 For verification purposes, agencies could try to create an in-house smaller body to handle verifications at the regional level. In that case, agencies will likely need to increase their computations capabilities and modeling capacities as there will be a significant need for monitoring of any potential discrepancies between the forecasts. If agencies cannot conduct verification efforts in-house, they could contract third-party off-set verifiers.25 This may have an added benefit of possibly avoiding concerns about selfverification, such as improper influence, that could undermine public trust.

Table 2 below represents the type of assessment a program administrator could make and the associated evaluation checklist.

Table 2 Evaluation Checklist for Program Administrator
Documentation
Project
Project location/status within
RTP
Investment type
New construction/installation
Previously unfunded project
phase/stage
Increased capacity/reliability
Accelerated deployment
Additionality of VMT
reduction compared to
Project type/origin
Agency/third party
commitment to project
implementation/ownership
Implementation/investment
plan
Unprogrammed and in the unconstrained portion of the RTP Unprogrammed and in the constrained portion of the RTP
Programmed in the RTP
Already built
Not included in the RTP
Housing/density
Planning action
Figure 1 below depicts a conceptual framework for VMT mitigation and additionally assessment for agencies and the existing limitations.26
Figure 1 Sample VMT Mitigation Additionality Framework
25 Elkind, N.E., Lamm,T., Prather,E., Implementing SB 743 An Analysis of Vehicles Miles Traveled Banking and Exchange Frameworks, October 2018, U.C. Berkeley.
26 Ibid.

Santa Cruz County Regional VMT Mitigation Program
23 GEOGRAPHY
While addressing the duration of a mitigation mechanism matters, the geography dimension and the distance between impact and mitigation must not be disregarded. Reflecting geography in pricing structure is essential for bank/exchange jurisdictions with distinct high- and low-VMT zones. In such cases, the bank/exchange could apply an equal or less than 1 ratio for mitigation projects within the vicinity or community of an impact, while requiring a greater than 1 level of mitigation for projects with a greater distance between mitigation and impact generation.

One line of thinking is that since VMT is largely a regional phenomenon, it should be addressed regionally in terms of VMT mitigation options. There is potentially a transparent exchange between local and regional approaches to VMT. Local programs that reduce VMT could be used to offset regional level VMT generating projects. However, Offsite mitigation for example, while promising, might disproportionally increase VMT or harm accessibility in disadvantaged communities.

Another study conducted among agencies states that larger infrastructure investments are not considered attractive options for off-site mitigation, whereas in practice they prefer roadway improvements (e.g., roadway shoulder enhancement). One of the interviewees argued that incremental approach taken by the cities satisfies the public’s desire to see some return. 27 Mitigation banks or exchanges could also include measures to ensure that developers or agencies to first exhaust their onsite VMT mitigation options before authorizing their participation in the program unless they direct those measures to disadvantaged communities. Programs such as bike-sharing or micro-mobility in different communities might not generate the same value for every community. These communities need to be engaged in a meaningful as part of the process. Program designers should work with the communities to identify current mobility needs and historic disinvestments. Finally, program designers should set goals to develop accessible, affordable, reliable, and safe mobility options while safeguarding equitable distribution of economic opportunity. Regional demand management practices potentially cause some local VMT mitigation banks or exchanges to be overlooked for developing transit-oriented or disadvantaged communities. Small elements such as streetlights, paved pathways, improved walking experiences are key elements in developing these communities where they can accomplish significant VMT reductions at a much lower cost. They beautify the area and can encourage active transportation and transit ridership in these communities.
28 Overall, the micro-design features can have significant impact on mitigating VMT. Thus, factors such as accessibility, built environment, urban design features, and income must be considered for VMT while addressing geographical dimension.

LINKAGE BETWEEN GOVERNMENTS
The linkage between local and regional governments and agencies must be strengthened to create linkages between VMT impact nexus, project and plan-level funding streams, and administrative/implementation pathways. The continual development of the VMT body of knowledge through grants could also be managed at the state level.

In addition, transportation experts note that VMT estimation is still challenging, and margin of error is still very large. A study noted that some agencies are using more than one tool since local experts don’t 27 MINETA Transportation Institute, Safeguarding Equity in Off-Ste Vehicle Miles Traveled (VMT) Mitigation in California, 2021 28 Ogra,A., and Ndebele,R. The Role of 6Ds: Density, Diversity, Design, Destination, Distance, and Demand Management in Transit Oriented Development (TOD), Conference Paper, published October 2014, https://www.researchgate.net/publication/268813431

Santa Cruz County Regional VMT Mitigation Program
24 have confidence in the existing tools to estimate VMT. 29 Developing robust VMT estimation and evaluation tools should be prioritized and deployed to local governments for their use.

EQUITY
Some programs that are not well-designed may lead to equity issues – where mitigation is provided in an area already suffering from VMT when the source is in a distant suburb. In another scenario, while off-site mitigation is considered, an existing community adjacent to the development could expect an immediate mitigation effort since they are the ones being impacted. Off-site mitigation that safeguards equity does not necessarily alleviate community’s localized concerns as they might not be aligning with the community’s mobility needs. For instance, programs such as bike-sharing or micro-mobility in different communities might not generate the same value for disadvantaged communities.

One study on the subject found that VMT-efficient areas should be identified since they present the biggest opportunities for VMT mitigation.30 If a development site is in a VMT-inefficient area, it might be too difficult to have the best opportunities for mitigation in that region. This consideration aligns with some of the current practices as equity is a foundational aspect of VMT mitigation. For instance, the Bay Area's Metropolitan Transportation Commission has developed Community-Based Transportation Plans (CBTPs) that help identify specific project sites. San Diego’s “Climate Equity Index” is another tool that is used to address historical inequities suffered by communities of color. It is argued that racial equity is as challenging as geographical equity to address. Off-site mitigation strategies might not necessarily address social and historical injustices, and inequalities by communities of color. While transportation investments might benefit these communities, that may not necessarily address the impacts of VMT increase as a result of the new development. Displaced low-income households that need access to job centers in downtowns or city centers find an increase in their VMT due to long commute. These disadvantaged communities are experiencing higher crash rates, and limited access to essential services.

It is important to integrate affordable housing strategies into transit-oriented development, and systematically analyze the potential impacts of such development on low-income and minority communities. However, the access to transit does not necessarily result in mode-shift. Any access to transit should be reinforced and supported with urban design features such as bus lanes, strong, streetlevel walkability, trees, and so on.

The programs need to be carefully vetted to avoid the potential for disproportionate impacts on lowincome and minority communities. Benefits of Fee-Based VMT Mitigation Programs should also be distributed equitably. Generally, the bank or exchange must ensure that the program does not exacerbate equity concerns at the first level, and then, it should address existing equity concerns. The way to prioritize equity in a program design differs based on the local definitions of inequity and disadvantaged communities, which impacts public acceptance, political feasibility, and efficacy in return.

This ensures the program is compatible with local city plans or legislations as well as the state’s broader social values and objectives. Various factors such as geography, demography, and socioeconomics, shape VMT equity definition in this context. Table 3 below summarizes the criteria for the main categories of concern. Specifically, banks/exchanges may consider the following when prioritizing VMT equity:
29 Alexander, S.E., Alfonzo,M., Lee,K., Safegurding Equity in Off-Site Vehicle Miles Traveled (VMT) Mitigation in California, 2021. https://transweb.sjsu.edu/sites/default/files/2027-Alexander-Equity-Off-Site-VMT-Mitigation.pdf 30 Ibid.

Santa Cruz County Regional VMT Mitigation Program
25 • Lower-income communities
• Communities of color
• Lower transit access communities
• Rural and exurban communities
• Total amount of geographic distance between impacts and benefits Table 3 Categories for VMT Equity Concerns
Category Criteria
Transit and
transportation
Transit access, current VMT, safety including rates of serious injuries and fatalities, historical transportation investment, age and quality of infrastructure, and vehicle ownership rates Built environment Neighborhood walkability, access to open space, bicycle and pedestrian safety and accessibility, and proximity to employment and critical services Socioeconomic and
demographic
Income, age, employment, public health data, and housing burdens Environmental Air quality, water quality, and proximity to hazardous waste sites In the context of VMT mitigation, VMT inequity arises when there is an unequal distribution of benefits and costs between different areas. Off-site VMT mitigation programs are major concerns in this regard as off-site mitigation could occur so far from the location of the initial impact that the benefit is not received by the community. VMT mitigation banks and exchanges should determine which neighborhoods may merit prioritization, either by keeping more mitigation on-site or by ensuring that a set amount of off-site mitigation occurs within those neighborhoods.

Points at which an agency could consider prioritizing equities include, but are not limited to, the initial point a lead agency enters a project into the bank/exchange, during the project prioritization process, or as a discount or incentive in project selection. Similarly, bank/exchange program designers can incorporate equity into their design and implementation at several different points. They can build equity thresholds into a pre-approved set of projects, geographic limitations, or geographic prioritization for off-site mitigation. They can also create minimum equity requirements for all projects to ensure equity throughout the program’s implementation. Table 4 below presents mechanisms to be implemented by bank/exchange program designers before and during the program operation.

Additionally, administrative leaders can integrate community engagement throughout the decisionmaking process in various ways, such as requiring specific, measurable engagement metrics, to identify the options that best serve the needs of the jurisdiction(s). This can also be facilitated by a commitment to having a diverse representation in policy making through including at least one local community representative on panels or on the administrative management bodies management team itself. This can reduce the risk of unintended negative consequences for affected communities.

Santa Cruz County Regional VMT Mitigation Program
26 Table 4 VMT Mechanism before and during the Program Operation Stage of
the
Program
Mechanism
Before or at the
program entry
threshold
 Limit the geographic range allowed for off-site mitigation  Pre-approve a set of projects that adhere to equity standards  Establish prerequisite equity standards for all projects to participant in the bank/exchange and qualify for mitigation credit
 Create an equity threshold for project entry into the program During the program’s operation  Prioritize projects that advance equity goals Create a point category for scoring projects and determining their eligibility for bank/exchange participation
 Assign a greater weight to mitigation projects located in the areas of greatest concern
 Set a minimum amount or percentage of funding

VMT MITIGATION FUNDING STATUS
Programmed Projects
An approved programming document, such as the Regional Transportation Improvement Program (RTIP), that lists a project or program as funded means that funds are or will be made available for that project. As a result, if a project with this level of funding commitment was suggested to mitigate VMT for another project, it would not be offering any new or extra benefits to offset the impact of VMT. The project is ineligible to be used to reduce VMT in this case. A scheduled project without full funding might be acceptable as mitigation, but this would require a strong justification to show why the project would not have advanced without the mitigation support.

Projects in a “Fiscally-Constrained” Portion of a Regional Transportation Plan A Regional Transportation Plan's section for fiscally constrained projects frequently does not have any short-term funding budgeted for the projects or services listed there. RTPs typically cover at least 20 years' worth of anticipated funding and projects. Consequently, throughout the planning period, a lot of projects are included in projected "phases". The impact of VMT may be mitigated in several ways by projects with this funding status, including by advancing the project from a later phase to deliver benefits earlier, ensuring funding certainty, and/or reducing the risk of unanticipated downturns in future funding. On the other hand, some projects included in the RTP's later phases for design or construction funding may have had development funds granted for earlier or completed phases, again indicating that there is a present or more significant commitment to providing funding for the project.

Therefore, to be used as VMT mitigation, projects or programs in the financially constrained RTP would need to individually present strong proof of VMT reduction over and beyond what was already committed for funding.

Projects in an “Unconstrained” Portion of a Regional Transportation Plan Projects or programs listed in the unconstrained portion of an RTP have no funding programmed or anticipated during the planning period covered by the Plan. These projects are, in principle, acknowledged as needs, but the estimated amount of funds that will likely be available throughout the

Santa Cruz County Regional VMT Mitigation Program
27 planning period is insufficient to cover their costs, as well as the investments needed for the projects in the budget-constrained section of the plan. Since the benefits would be in addition to those that are already committed, funded, or planned for funding, reviews projects from this component of the RTP to produce benefits to balance VMT impacts could be accelerated and therefore acceptable for VMT mitigation.

UNINTENDED CONSEQUENCES
Given the relative recent development of these programmatic approaches, the potential for unintended consequences exists. Care needs to be given to avoiding program designs that disincentivize good public policy or that do not create an appropriate balance between efficient VMT mitigation in terms of return on investment and community values. It is not easy to navigate between financial cost, political cost, and feasibility. Having an exchange program would lay the ground for the long-term market to track performances of different mitigation options and streamline fees at a regional scale.

Agencies should also be thorough in their VMT mitigation duration. If a roadway capacity investment is tied to LOS, the duration would last until additional traffic depreciates the LOS to what it was before the investment was implemented. If the mitigation is a program such as a transportation management organization, the duration could last in perpetuity, which would be very expensive. Neal Peacock’s paper provides examples of annual reporting mechanisms that demonstrate that transportation impact fees are being collected in sufficient volumes, year to year, to effectively fund projects.31 Research shows that the nexus methodologies between impacts and improvements and the successful use of these fee programs as mitigation under CEQA as discussed above vary by region.

OTHER CHALLENGES
Projects approved before SB743:

A challenge arises for those projects that rely on existing environmental documents, but where LOS analysis was used to approve the project. 32 As a result, some lead agencies are taking the position that previously relied-on mitigation measures are not feasible or enforceable. OPR provided guidance on when projects can rely on a prior environmental document that analyzed traffic impacts using LOS rather than VMT, finding that “an agency may use its discretion to determine that a VMT analysis is not required for later-prepared documents.”33 However, it is argued that VMT impacts are not new information and were known at the time. It can be argued that agencies were aware of VMT but did not choose to study and share those impacts. So far, courts have not yet had a chance to weigh on CEQA issues in this context of the project’s reliance on prior environmental documents that use a LOS analysis.

To avoid any challenges, VMT bank and exchange programs should rely on new environmental reports.

If not possible, demonstrating that the project falls below VMT thresholds or reviewing applied development policies to show findings that they would substantially mitigate the impact could be solutions.
31 Neil Peacock, The Potential for Regional Transportation Impact Mitigation Fee Programs and Mitigation Banks to Help Streamline the Implementation of SB 743, March 2017 32 Grid Legal, VMT Impacts: Can Prior CEQA Documents Be Relied on That Did Not Study VMT Impacts? , https://www.gridlegal.com/post/vmtimpacts-prior-ceqa-documents, accessed on October 19th, 2022. 33 SB 743 Frequently Asked Questions, https://opr.ca.gov/ceqa/sb-743/faq.html#draft-docs, accessed on October 19th, 2022.

Santa Cruz County Regional VMT Mitigation Program
28 Slow Down on Home Building:

Adopting SB 743 arguably slowed down the amount of residential development and construction, especially the larger developments.34 For instance, Clovis County Council is moving forward with an allencompassing Environmental Impact Report (EIR) to take some of the law’s uncertainty out of the equation so that not every project is subject to preparing an EIR.35 Developers will be asked to fund an umbrella EIR, but questions arise about whether the city was helping developers make profits by paying for an umbrella EIR.

In addition, developers might be discouraged from building housing across the state if large mitigation fees are used to support public transportation projects. Another aspect of the problem is that retail development typically requires attracting customers who would drive to the shops. In the absence of truly exceptional transit service and service riders, mitigation efforts to reduce driving, say to a regional shopping center, would be counterproductive to the goals of the development.

Charging Developers a VMT Tax
San Diego Association of Governments (SANDAG)is considering taxing developers based on vehicle miles traveled by their tenants (an additional $10,000 - $22,000 per mile traveled). 36 As the revenue from gas tax shrinks due to electric and hybrid vehicles becoming more common, this could allow collecting revenue to achieve state and regional goals. A VMT tax would also encourage residential developments to be built close to job and activity centers. During the housing crisis, anything that increases the cost of housing could have adverse effects on the market and the public eye. A similar proposal faced opposition in other regions of the country. A proposal circulated to replace the 18.4 cents per gallon tax with a VMT tax in Washington D.C. was not successful.37 Proponents in California state that the state’s gas tax could be replaced by a “miles drive fee” of $0.05, even though the elimination of the gas tax is not guaranteed. However, opponents claim that this proposal penalizes low-income and working families who drive long distances to work. In addition, the VMT tax could singularly equate to or exceed the construction cost of a new home through its lifespan, which could go as high as $640,000 if the project is not close to a transit station.
34 GVWire, State’s VMT Law Driving Builders Away, Making Homes More Expensive, Say Valley Lawmakers, https://gvwire.com/2021/03/02/states-vmt-law-driving-builders-away-making-homes-more-expensive-say-valley-lawmakers/, accessed on April 11th, 2022. 35 GVWire, With State VMT Law Limiting Home Building, Clovis Takes Action, https://gvwire.com/2021/04/07/states-vehicle-miles-traveled-law-islimiting-home-building-city-of-clovis-takes-bold-action/, accessed on October 11th, 2022. 36 StreetBlog Cal, San Diego County Ponders a VMT Tax, with a Twist, San Diego County Ponders a VMT Tax, with a Twist – Streetsblog California,accessed on October 11th, 2022.
37 Powering California, ANALYSIS: Vehicle Miles Traveled Tax (VMT), https://poweringcalifornia.com/analysis-vehicle-miles-traveled-vmttax/,accessed on October 11th, 2022.

Santa Cruz County Regional VMT Mitigation Program
29 Chapter 6: Current Situation in California
In California, there is growing interest in considering mitigation projects that are less conventional, including affordable housing implementation, other land use options including transit-oriented development (TOD), TDM measures, mobility hubs, and micro-mobility options. There is also interest in considering mitigation projects that are already under development or programmed with the idea that either expediting their development or solidifying funding needs could be a basis for their inclusion in a VMT mitigation program. This is partly because agencies have difficulties identifying mitigation projects with a feasible return of investment (ROI), especially considering conventional options such as transit and active transportation options. Agencies believe in some locations the cost of conventional options may make VMT mitigation programs difficult to implement. In that sense, many agencies are taking an iterative approach. They are undertaking efforts to evaluate potential mitigation projects to be in included in the program as the first step towards viability rather than focusing on the format initially.

Table 5 includes the identified agencies as either planning to undertake a relevant study, having a relevant study ongoing, or identified as having a relevant program under development but the status is unknown, or completed.

Table 5 Current Situation in California
Agency VMT Mitigation
Program Format Status
Fresno COG TBD Ongoing, completion in 2023
Contra Costa Transportation Authority
(CCTA)
Pilot Hybrid
Exchange/In-Lieu Fee Draft Framework released in early 2023 City of Fresno Active Transportation
In-Lieu Impact Fee Ongoing, end date TBD
San Bernardino County Transportation
Authority Pilot VMT Bank Framework waiting Board of Directors approval Santa Cruz County and incorporated
Cities
TBD Beginning September 2022
City of San Diego Impact Fee Ongoing, end date TBD
City of Watsonville VMT Bank Pending implementation
City of Tracy VMT Bank Pending implementation
City of Salinas VMT Bank Pending implementation
City of Los Angeles Impact Fee Completed, understood to be implemented as part of the Westside Mobility Plan
City of Fremont TBD Ongoing, end date TBD
City of Lancaster VMT Mitigation Fee
Optional Program Pending, waiting for the council to adopt.

City of Concord Impact Fee/Bank Pending implementation
Santa Clara Valley Transportation
Authority (VTA) TBD Grant awarded; RFP dateunknown
San Luis Obispo Council of Governments
(SloCOG) TBD Grant awarded; RFP to bereleased in 2022
City/County Association of Governments
of San Mateo County (C/CAG) TBD Grant awarded; RFP dateunknown Town of Los Gatos Impact Fee Ongoing, end-date anticipated

Santa Cruz County Regional VMT Mitigation Program
30 Chapter 7: Key Takeaways
This chapter summarizes the key takeaways and detailed considerations for implementing agencies to successfully design and create fee-based VMT mitigation programs. • Agencies need to verify VMT reductions and additionality for projects before approving participation in the banking regime. The agencies can also try in-house verification upon availability of resources or can ask a thirds party off-set verifier. Any agency implementing a bank or exchange must demonstrate both a reasonable substantive relationship and financial proportionality between the proposed development and the fee or condition placed on it • Agencies should also be diligent in their VMT mitigation duration as the nexus between improvements and successful use of fees varies region by region o Bank arrangements that receive and pools funds from multiple projects should account for the delay between payment and deployment of funds as it measures the cost of VMT mitigation and negotiates with developers
o All models should also determine a comprehensive framework for the prioritization of individual mitigation projects, to ensure that reductions are achieved as quickly and efficiently as possible
• A VMT exchange might be simpler for developers, but it could also limit the usefulness of funds from smaller developments and be less politically agreeable to local communities o Offer more certainty for developers regarding the kinds and costs of appropriate mitigations needed to address cumulative VMT impacts
• New plans and programs might increase new home costs, which can push disadvantaged communities further behind in their ability to access homeownership o Significant equity issues may also arise if disadvantaged communities host developments but not beneficial mitigation projects
o Any lead agency will need to include rigorous backstops to ensure that disadvantaged communities are not negatively impacted by—and ideally can benefit from—the ability of developers to move mitigation off-site
• Implementing agencies should consider requiring or providing incentives for developers or lead agencies to demonstrate that on-site mitigation is not feasible before being permitted to undertake off-site measures
• VMT Banks and Exchanges comprehensively address VMT impacts across jurisdictional boundaries
• Geography plays an important role in VMT reduction impact assessment. According to the difference between the VMT impact and the mitigation strategy as well as the variation among low and high VMT zones, using different ratios for impact and mitigation relations in the pricing structure seems necessary.
• Incorporating equity in VMT banking is essential and challenging, particularly in the case of offsite mitigation programs. The benefits of fee-based mitigation strategies must carefully be distributed. In general, VMT bank identifies lower income, communities of color, rural areas, and low transit accessible zones as equity priority. However, the local definition of equity and

Santa Cruz County Regional VMT Mitigation Program
31 disadvantaged communities should be considered as well since it affects public acceptance and political feasibility. In addition to local equity considerations, each transportation project category comes with specific equity criteria to address while evaluating the VMT impacts and the effectiveness of mitigation strategies. Agencies can prioritize equity at various points, mainly before/at the beginning of a program or during the program’s operation. Depending on this, the mechanism of intervention varies (Table 4). Community engagement in the jurisdictional decision-making process supports equity by reducing the risk of unintended consequences on communities of concern.
• Local jurisdictions pay attention to projects and programs and their financial constraints in the RTP before using for VMT Mitigation.

PLACEHOLDER TITLE

Santa Cruz County Regional
VMT Mitigation Program
APPENDIX B – MODELING APPROACH

Santa Cruz County Travel Demand Model (SCC TDM) Update August 8, 2023 Santa Cruz County Regional VMT Mitigation Program
Memorandum
To: Anais Schenk
County of Santa Cruz, Community Development & Infrastructure

From: Ayberk Kocatepe, Ph.D
Chris Gregerson, P.E., T.E., PTOE, PTP
Michael Schmitt, P.E., AICP CTP, PTP, RSP1

Re: Santa Cruz County Travel Demand Model (SCC TDM) Update Santa Cruz County Regional VMT Mitigation Program, Santa Cruz County

Date: August 8, 2023
This memorandum documents the process undertaken to update the Santa Cruz County Travel Demand Model (SCC TDM) for the purposes of performing VMT Mitigation analysis for projects selected as part of the Santa Cruz County Regional VMT Mitigation Program.

Model Overview
The Santa Cruz County Travel Demand Model is designed to forecast future travel patterns on both roadway and transit routes throughout Santa Cruz County (SCC). The model can be used to assess how changes in population, employment, demographics, and transportation infrastructure affect travel patterns within the county. The SCC Model is a four-step travel demand model based on the TransCAD platform. The SCC Model was developed to provide more detailed information on travel patterns within Santa Cruz County than could be accomplished by the tri-county regional travel demand model provided by the Association of Monterey Bay Area Governments (AMBAG).

The California Transportation Commission publishes and periodically updates guidelines for the development of long-range transportation plans that includes guidelines for regional travel demand modeling. The SCC Model follows these guidelines. These guidelines include sensitivity to the following policies/programs including:
▪ Land Use
▪ Geographic scale
▪ Sensitivity to mode
▪ Pricing
▪ Sensitivity to congestion
▪ Validation
▪ Documentation
The SCC Model is an enhanced four-step model. The four primary sub-models making up the four-step model process are:

1. Trip Generation. This initial step calculates person ends using trip generation rates established during model estimation and refined to Santa Cruz County. Truck trips are currently included in non-home based and are not estimated separately. The SCC TDM runs a series of complex steps to estimate daily trip productions and attractions by various trip purposes for each TAZ. The trip purposes are listed below:
a. Home-Based Work (HW)

Santa Cruz County Travel Demand Model (SCC TDM) Update August 8, 2023 Santa Cruz County Regional VMT Mitigation Program
b. Home-Based Other (HO)
c. Home-Based School, K-12 (HK)
d. Home-Based College (HC)
e. Home-Based Shopping (HS)
f. Work-Based Other (WO)
g. Other-Based Other (OO)
The production model uses several variables to generate trips such as the number of workers, household income, age, household size, and car availability. Trip productions for every TAZ in the model are compiled separately by each trip purpose. The attraction model uses employment categories for the HW trip purpose and employment categories and the number of students (K12 and University) for all other trip purposes. The attraction model estimates trip attractions to each TAZ by regression coefficients that vary by employment type. Trip attractions for every TAZ are compiled by each purpose and by each employment type based on these regression coefficients.

2. Trip Distribution. The second general step estimates how many trips travel from one zone to any other zone. The distribution is based on the number of trip ends generated in each of the two zones, and on factors that relate the likelihood of travel between any two zones to the travel time between the two zones such as distance, cost, and time, and varies by accessibility to passenger vehicles, transit, and walking or biking. This step also determines how many trips enter or leave the model area.

3. Mode Choice. This step uses demographics and the comparison of distance, time, cost, and access between modes to estimate the proportions of the total person trips using drive-alone or shared-ride passenger auto, transit, walk, or bike modes for travel between each pair of zones.

4. Trip Assignment. In this final step, vehicle trips and transit trips from one zone to another are assigned to specific travel routes between the zones. Congested travel information is used to influence each of the steps described above starting with vehicle availability for all models and starting with land use location for integrated land-use transportation models.

Methodology
The SCC TDM was most recently updated to contain the base year of 2019 and a future year of 2045. The land use updates were incorporated into the model by updating the information at the Traffic Analysis Zone (TAZ) level. There are 696 TAZs within the County, including 364 TAZs within the unincorporated parts of the County. In consultation with the SCCRTC and Santa Cruz County, the transportation analysis zone (TAZ) geography for the SCC Model is based on the AMBAG TAZ geography with revisions for Santa Cruz County. The land use updates included updating the households and population information in each TAZ, as well as the employment by category.

Socioeconomic and Employment Data
In order to ensure that SCC travel demand model accurately reflects the current conditions of Santa Cruz County, we gathered the latest information on various key factors. We obtained this data from the AMBAG travel demand model that was updated in 2022. By leveraging the insights provided by AMBAG, we were able to incorporate the most up-to-date details on population growth, land use patterns, and socio-economic factors into the Santa Cruz County travel demand model.

When updating the residential data within the model (households and population), socioeconomic data (SED) associated with each TAZ must also be updated. The SED in the SCC TDM provides information about the makeup of the households in each TAZ. There are several different variables in the model SED,

Santa Cruz County Travel Demand Model (SCC TDM) Update August 8, 2023 Santa Cruz County Regional VMT Mitigation Program
including the age of the residents, household size, household income, number of vehicles per household, number of workers per household, and the number of vehicles per worker. It should be noted that while the SCC TDM uses dwelling units as its input, there is no differentiation between single-family and multifamily residential in terms of trip generation and distribution.

To update the employment variables, we made modifications to reflect the accurate number of workers based on specific employment categories. These categories were established by AMBAG and were inherited in the 2022 model update. They were defined using the North American Industry Classification System (NAICS) codes, as outlined in Exhibit 1. During the migration process of incorporating these employment categories into the SCC model, we regrouped them into six overarching categories.

1. Agriculture

2. Construction

3. Industrial and Manufacturing

4. Retail

5. Service (White Collar, Food Services, and jobs not included in other categories)

6. Public Administration (Government, Health Care, and Educational jobs) Exhibit 1 – Land Use Categories in the AMBAG TDM
Category Description and NAICS codes
Agriculture Agriculture, Forestry, Fishing, and Hunting (11)* Construction Construction (23), Utilities (22), Transportation and Warehousing (48- 49), Administrative and Support and Waste Management and Remediation Services (56), Public Administration (92)*
Manufacturing and Mining Mining (21), Manufacturing (22, 31-33), Wholesale Wholesale Trave (42), Agriculture, Forestry, Fishing, and Hunting (11)* Retail Retail Trade (44-45), Agriculture, Forestry, Fishing, and Hunting (11)* Finance and Real Estate Information (51), Finance and Insurance (52), Real Estate Rental and Leasing (53), Professional, Scientific, and Technical Services (54), Management of Companies and Enterprises (55)
Education Educational Services (61), Public Administration (92)* Healthcare Health Care and Social Assistance (62)
Service Art, Entertainment, and Recreation (71), Accommodation and Food Service (72), and Other Services (81)
Public Public Administration (92)*
*Note: Some NAICS industry sectors have been divided up, based on business operations and transportation demand, across AMBAG sectors.

Calibration and Validation
Once the travel demand model was updated with the latest information, we proceeded with the validation process to ensure its accuracy and reliability. A crucial aspect of this validation process was the utilization of traffic counts to validate the model at the link level. By comparing the model's predicted traffic volumes with the actual observed counts, we could assess the model's performance and identify any discrepancies. Furthermore, the validation of the model encompassed the evaluation of traffic flows across screenlines, which consist of multiple roadways. This comprehensive approach aimed to capture the overall traffic patterns effectively. Our objective was to meet or surpass the validation guidelines set by Caltrans and the Federal Highway Administration. As part of the validation process, adjustments were

Santa Cruz County Travel Demand Model (SCC TDM) Update August 8, 2023 Santa Cruz County Regional VMT Mitigation Program
made to elements within the trip generation, trip distribution, and traffic assignment modules whenever necessary to ensure the model's accuracy and reliability.

Traffic counts (50 locations) used for the travel demand model update were gathered during late October and November 2022 (Appendix A). All 7-day-hour ADT counts (21 locations) were specifically collected as part of this project. Other 3-day-hour ADT counts (29 locations) were part of the 'Countywide Traffic Data Collection Program' efforts currently ongoing in the county. To enhance the accuracy of the model, the project team also used big data sources by accessing their AADT data for 44 locations (Appendix A). These counts were used for link-level calibration. Where applicable, these counts were also used in the cutline/screenline calibration.

The results of the model validation and comparison to best practice standards are shown in Exhibit 2 and Exhibit 3. The calibration results were within industry-accepted ranges for all measures for the daily validation exercise. This certifies that the model meets standard validation criteria.

To facilitate this validation, we performed other tests that provide valuable insights into the model's accuracy at different levels. These included the percentage of Root Mean Square Error (%RMSE) by facility type or volume groups and the Model/Count comparison by facility type or volume groups. We observed that the margin of error was slightly higher for the small-volume links (Appendix B-C). The limitations of travel demand models cause small-volume links to have a higher margin of error. These limitations include focusing on overall trends, variability in traffic patterns compared to high-volume links, sensitivity to model assumptions, and spatial resolution.

Travel demand models strive to represent overall travel patterns as accurately as possible. As long as the model behaves consistently and aligns with the larger travel patterns, the acceptable margin of error for small-volume links is deemed reasonable for practical purposes in transportation planning and analysis.

Based on Caltrans and Federal Highway Administration (FHWA) requirements, and tests we performed, the Santa Cruz County Travel Demand Model (TDM) has been determined to be statistically valid.

Exhibit 2 – Static Model Validation for 2019 Base Year Model Static Model Validation
Criteria Target Daily
Model/Count Ratio 0.90-1.10 1.09
Percent Within Caltrans Maximum Deviation > 75% 75.2%
Percent Root Mean Square Error < 40% 37%
Correlation Coefficient > 0.88 0.97
Exhibit 3 – Static Model Validation for 2019 Base Year Model (Screenline) Static Model Validation (Screenline)
Criteria Target Daily
Model/Count Ratio 0.90-1.10 1.08
Percent Within Caltrans Maximum Deviation > 75% 75.2%
Percent Root Mean Square Error < 40% 44%
Correlation Coefficient > 0.88 0.96

Appendix A
Traffic Count Locations

No Location Description No Location Description
1 Freedom Blvd S of Alta Vista Ave,N of Crestview Dr 27 Graham Hill Rd W of Mt. Hermon Rd 2 7th ave South of Tanner Tt, North of Harbor Oaks Ct 28 Freedom Blvd N of Buena Vista Dr 3 Main St NW of Riverside Dr, SE of Beach St 29 Riverside Dr E of Coward Rd 4 7th Ave South of Soqeul Ave, North of Bostwick Ln 30 San Andreas Rd S of Bonita Dr 5 E Cliff Dr E of 9th Ave Sw of Prospect St 31 17th Ave S of Brommer St 6 Brommer St W of 30th Ave, E of Darlene Dr 32 Brommer St W of 17th Ave 7 Soqeul Wharf Road S of Cabrillo Hwy, N of Clares St 33 Soquel Dr W of Rodeo Gulch Rd 8 Bay Dr S of Meder St, N of Nobel Dr 34 Portola Dr E of 24th Ave 9 Empire Grade W of Western Dr, E of Highview Dr 35 Portola Dr W of 41st Ave 10 Park Ave W of Wesley St, E of Washburn Ave 36 Park Ave N of Hwy 1 11 Rodriquez St W of Koopmans Ave, E of Jose Ave 37 Porter St S of Main St 12 Seabright Ave North of Windsor St, S of Broadway 38 Soquel Dr W of 41st Ave 13 Murray St W of Brook Ave, E of Pilkington Ave 39 Soquel Dr W of Porter St 14 Blackburn St NW od Riverside Dr, SE of Wildcatz Way 40 Hwy 9 N of Redwood Dr 15 S Green Valley Rd N of Kralj Dr, S of Oakridge St 41 Hwy 9 West of Main St 16 Cabrillo Hwy E of Park Avenue interchange after ramps 42 Hwy 9 S of Clear Creek Rd 17 E Cliff Dr W of 24th Ave, E of Coastview Dr 43 Hwy 9 S of Pool Dr 18 Airport Boulevard W of Hangar Way, N/E of Nielson St 44 Hwy 9 N of Lakeview Dr 19 W Beach St W of Rodriguez, E Walker St 45 Hwy 9 N of Graham Hill Rd 20 Graham Hill Rd W of Lockewood Ln, E of E Zayante Road 46 Hwy 9 S of Glen Arbor Rd SOUTH 21 Front St N of Laurel St, S of Cathcart St 47 Central Ave/SR 9 S of Big Basin Way/SR 236 22 Freedom Blvd E of Soquel Dr 48 Hwy 9 S of Bear Creek Rd 23 Sea Ridge Rd W of State Park Dr 49 Hwy 9 S of Graham Hill Rd 24 Soquel Dr W of State Park Dr 50 Central Ave/SR 9 N of Big Basin Way/SR 236 25 State Park Dr S of Soquel Dr
26 Gross Rd W of 41st Ave S:South, N:North, E:East, W:West

Locations of AADT Data gathered from Big Data sources

No Location Description No Location Description
1 41st Ave North of Portola Dr 24 Capitola Rd W of El Dorado Ave 2 Ramp Westbound - S of Cory St 25 7th Ave S of Mello Ln 3 SR-1 NB West Of Bay E of Capitola Mall Interchange, 26 Brommer St E of 7th Ave 4 Bonita Dr Freedom Blvd And Vista Del Mar Dr 27 Ocean St Soquel Ave - Broadway 5 Freedom Blvd East of Green Valley Rd 28 State Hwy 1 Between Morissey And Soquel 6 17th Ave S of Kinsley St 29 Mcgregor Dr E of Potbelly Beach Rd 7 30th Ave N Or Roland Dr 30 Rodriguez St Main St - W Lake Ave 8 Soquel Dr Between Capitola Ave And Rosedale Ave 31 S Green Valley Rd Lawrence Rd - Freedom Blvd 9 Soquel Dr Between Capitola Rd And 7th Ave 32 Hwy 1 E of 41st Ave Interchange 10 Soquel Dr E of Perimeter Rd, W of Haas Dr. 33 Hwy 1 E of 41st Ave Interchange 11 Mount Hermon Rd W of Lockewood Ln 34 Hwy 1 E of Park Ave 12 Laurel St East of Front St 35 State Hwy 1 Between Freedom Blvd And San Andreas Rd 13 High St Cl Se/High View - Western Dr 36 41st Ave 41st Ave Interchange 14 Bear Creek Rd N Flat St, S of Mountain St 37 41st Ave Sprr - Clares St 15 Water St N Branciforte Ave - Poplar Ave 38 Glenn Coolidge Dr Coolidge Dr North of High St 16 41st Ave N of Clares St 39 Airport Blvd Ross Ave - Roache Rd 17 Wharf Rd Cliff Dr - Capitola Rd 40 Main St W of Rodriguez St 18 Portola Dr E of Laurel Ave, S of Nova Dr 41 Freedom Blvd S of Altavista Ave 19 Capitola Rd W of 30th Ave 42 Bay St S of Meder St
20 Soquel Dr Between Mattison Ln And Rodeo Gulch Rd 43 State Hwy 1 E of Park Ave 21 Eaton St Between Lake Ave And Lago Ln 44 N Rodeo Beach N of Soquel Dr 22 Soquel Ave Between Capitola Rd And 7th Ave
23 Capitola Rd 7th Ave And 17th Ave S:South, N:North, E:East, W:West

Appendix B
Tests performed for all links

Model/Count by ADT Volume Groups
Link Volume M/C
> 50,000 1.09
25,000 - 49,999 1.18
10,000 - 24,999 1.04
5,000 - 9,999 1.05
2,500 - 4,999 1.28
1,000 - 2,499 1.39
< 1,000 1.42

RMSE by ADT Volume Groups
Link Volume %RMSE FHWA threshold Target
> 50,000 10% < 21% < 20%
25,000 - 49,999 20% < 22% < 25%
10,000 - 24,999 22% < 25% < 25%
5,000 - 9,999 36% < 29% < 45%
2,500 - 4,999 64% < 36% < 100%
1,000 - 2,499 92% < 47% < 100%
< 1,000 171% < 60% < 100%

Model/Count by Facility Type
Facility Type M/C
Other Freeways or Expressways 1.16
Ramp 1.00
Principal Arterial 1.10
Minor Arterial 1.03
Major Collector 0.96
Minor Collector 1.76
Local 1.21

RMSE by Facility Type
Facility Type %RMSE Target
Other Freeways or Expressways 22% <20%
Ramp 39% N/A
Principal Arterial 34% <35%
Minor Arterial 41% <45%
Major Collector 45% <100%
Minor Collector 76% <100%
Local 77% <100%

Appendix C
Tests performed for Screenlines

Model/Count by ADT Volume Groups
Link Volume M/C
> 50,000 N/A
25,000 - 49,999 1.26
10,000 - 24,999 1.14
5,000 - 9,999 0.94
2,500 - 4,999 1.23
1,000 - 2,499 0.86
< 1,000 1.23
RMSE by ADT Volume Groups
Link Volume %RMSE FHWA Threshold Target
> 50,000 N/A < 21% < 20%
25,000 - 49,999 28% < 22% < 25%
10,000 - 24,999 21% < 25% < 25%
5,000 - 9,999 28% < 29% < 45%
2,500 - 4,999 94% < 36% < 100%
1,000 - 2,499 65% < 47% < 100%
< 1,000 42% < 60% < 100%
Model/Count by Facility Type
Facility Type M/C
Other Freeways or Expressways 1.26
Principal Arterial 1.08
Minor Arterial 1.04
Major Collector 0.84
Local 0.96
RMSE by Facility Type
Facility Type %RMSE
Other Freeways or Expressways 28%
Principal Arterial 27%
Minor Arterial 77%

Santa Cruz County Regional
VMT Mitigation Program

APPENDIX C – OUTREACH PLAN

Santa Cruz County Regional
VMT Mitigation Program
Outreach Plan

Contents
Background...................................................................................................................................1 Outreach Need..............................................................................................................................1 Outreach Goals.............................................................................................................................2 Target Audience and Stakeholders...............................................................................................2 Messaging.....................................................................................................................................4 Outreach Methods and Timeline...................................................................................................4 Survey Results..............................................................................................................................6

1 Background
In 2013, state law was changed with the passage Senate Bill (SB) 743 (Steinberg) to update the way transportation impacts are analyzed under the California environmental Quality Act (CEQA) for new land use and transportation projects. Previously, transportation analyses had been based on automobile delay, typically measured as “level of service,” or LOS. SB 743 also required the Governor’s Office of Planning and Research (OPR) to develop a new metric for evaluating transportation impacts other than LOS to more appropriately balance the needs of congestion management with statewide goals related to infill development, promotion of public health through active transportation, and reduction of greenhouse gas emissions.

In 2020, the County of Santa Cruz updated its thresholds for transportation impacts under CEQA to comply with SB 743. The thresholds and background information on are provided on the County’s website at:
https://cdi.santacruzcountyca.gov/UPC/GetInvolved/CEQAInitialStudiesEIRs/VehicleMilesTravele d(VMT).aspx
After updating the thresholds and developing screening maps for the County using the Technical Advisory on Evaluating Transportation Impacts in CEQA (Advisory) released by the California State Office of Planning and Research (OPR), the County observed that many economic and infill development projects within the County were not able to be screened out nor were these projects able to mitigate fully on-site. This prompted the County to apply for a grant from Caltrans in coordination with the City of Watsonville and the Santa Cruz County Regional Transportation Commission to provide an alternative means of mitigation such that development projects could mitigate their impacts offsite and move through the CEQA process.

Outreach Need
Planners understand the importance of reducing VMT to reduce greenhouse gas emissions and combat climate change. However, if people do not have a safe, connected, and reliable active transportation system we cannot expect them to bicycle or walk in place of driving. The greatest unmet need is in our disadvantaged communities which have historically been underrepresented and underfunded. Disadvantaged communities have the highest rates of bicycle and pedestrian serious injuries and fatalities. As public servants, we have a duty to provide safe public services to all people. Safe and reliable transportation is a basic lifeline resource, yet we struggle to fund projects that would provide this lifeline resource that gives people access to jobs, education, and essential services.

The project is highly technical in nature but the results of the project will indirectly impact residents and employees of the County in that the project could result in a process to streamline the environmental process for housing and economic development resulting in much needed housing and jobs supply within the County. One of the reoccurring themes that has emerged from outreach conducted across the state is that education is foundational to understanding SB 743 both programmatically and from an analysis standpoint. SB 743 is not easily understood by the public or decision-makers, in fact, often we have found that technical staff struggle to fully understand SB

2 743 unless they are immersed in SB 743 related
analyses on an ongoing basis. For this reason, staff
selected a consultant to support this project, KimleyHorn.

Outreach Goals
Outreach for this project is important to connect people, groups, or communities that might not usually work
together. It allows stakeholders such as developers and housing advocates to share helpful information, offer
support, and understand the needs of the community.

This outreach effort can also help solve problems by bringing together different skills, ideas, and resources to inform the development of a mitigation program.

The County’s goal was to seek input from private and public stakeholders including small businesses, developers, affordable housing organizations, transportation advocates, and other community-based organizations. The County also will seek input from as many public agencies as possible.

Target Audience and Stakeholders
To reach as many people as possible the County developed a list of agencies and community organizations to reach out to. The group was divided into two– a stakeholder group and a technical advisory group. After a couple of meetings, it was apparent that there was overlap in the interests of the group, the content of the presentations was similar, and meeting attendance did not warrant having separate meetings. Therefore, these groups were combined into one advisory committee.

Table 1: Technical Advisory Committee
Name Agency
Paul Guirguis Caltrans
John Olejnik Caltrans
Alan Romero Monterey Bay Air District
Heather Adamson AMBAG
Paul Hierling AMBAG
John Urgo METRO
Mike Zeller TAMC
Veronica Lezama SBtCOG
Tommy Travers SCCRTC
Oxo Slayer UCSC
Theresia Rogerson County of Santa Cruz Health Services
Agency
Katie Herlihy City of Capitola Planning

3 Name Agency
Kailash Mozumder City of Capitola Public Works
Sam Haschert City of Santa Cruz Planning
Claire Gallogly City of Santa Cruz Public Works
Taylor Bateman City of Scotts Valley Planning
Chris Lamm City of Scotts Valley Public Works
Carlos Landaverry City of Watsonville Housing
Murray Fontes City of Watsonville Public Works
Matt Johnston County of Santa Cruz Planning
Russell Chen County of Santa Cruz Public Works
Table 2: Stakeholder Advisory Committee Invitees
Name Title/Agency/Org.

Juggy Tut Developer
Sonny Tut Developer
Haj Tut Developer
William ("Bill") Hansen Developer
Ben Ow Property Owner
William Ow Property Owner
George Ow Property Owner
Shaz Roth Chamber
Jane Barr Eden Housing
Carmen Herrera-Mansir El Pájaro Community Development Corp. (CDC)
Maria Elena De la Garza Community Action Board (CAB)
Francisco Estrada Council Member (soon to be a private
citizen)
Gina Cole Bike Santa Cruz County
John Swift Swift Consulting
Deidre Hamilton Hamilton Planning
Piet Canin Ecology Action
Joanna Carman MidPen
Amelia Conlen Bike Santa Cruz County
Peter Detlefs County of Santa Cruz
Ben Rosenfeld Developer
Sara Saunders SLOCOG
Kristine Cai Fresno COG
Dave Reid Santa Cruz County OR3
Casey Beyer Santa Cruz County Chamber
Emily Ham Santa Cruz County Business Council

4 Name Title/Agency/Org.

Karen Edwards Boulder Creek Business Association
Karen Hibble Aptos Chamber of Commerce
Mary Anderson San Lorenzo Valley Chamber
Derek Rupp Pleasure Point Business Association
Jessie Bristow Swenson
Jim Rendler For the Future Housing
Sarah Allen Eden Housing
Stephen Emami ROEM Development
Messaging
Creating outreach messaging for a technical topic like VMT (Vehicle Miles Traveled) Mitigation Bank programs requires breaking down complex concepts into everyday language. Every presentation and outreach events started by explaining what VMT is in simple terms: the total amount of driving people do in a certain area. Then, we described why reducing this is important—such as cutting down on traffic and pollution. We use relatable examples, like comparing a VMT bank to a savings account where developers deposit “credits” by supporting projects that reduce driving. Finally, we focused on clear, concise sentences and avoid technical jargon, using bullet points or visuals to make the main ideas easier to grasp.

Outreach Methods and Timeline
The project included a page hosted on the County’s website at https://cdi.santacruzcountyca.gov/UPC/EnvironmentalPermitsTechnicalReviews/VMTMitigationPr ogram.aspx , social media posts, public meetings, stakeholder group meetings, surveys, and participation in Bike Month. Below is a timeline of meetings and activities. This list does not include approximately 6 meetings that were held separately with individual public agencies in the spring and summer of 2023 to collect input on VMT reducing projects for inclusion in the program. • Technical Advisory Committee, November 1, 2022
• Stakeholder Advisory Committee, November 3, 2022
• Technical Advisory Committee, December 8, 2022
• Stakeholder Advisory Committee, December 8, 2022
• Combined Advisory Group Meeting, January 12, 2023
• City of Santa Cruz and City of Capitola, March 6, 2023 • City of Watsonville, May 31, 2023
• SCCRTC Interagency Technical Advisory Meeting, June 20, 2024

5 • Combined Advisory Committee Meeting, July 13, 2023
• Online Public Meeting, November 9, 2023
• Combined Advisory Committee Meeting, November 26, 2023 • City Managers Meeting, September 4, 2024
• City of Santa Cruz City Council Meeting, September 24, 2024 • City Managers Meeting, October 4,
2024
• County of Santa Cruz Board of
Supervisors Meeting, October 8,
2024
• Wheelie Good Time Bike Month
event, October 19, 2024
Factsheet

6 Survey Results and Social Media Reach
The results of stakeholder committee meetings are included in the Final Report and the survey results are included as attachments in the following pages.

Wheelie Good Time Bike Month Event Survey

7 Social Media Posts
Below are example posts from the social media
accounts for the County. Below the samples are
actual analytics as collected for each outreach
effort.
2023 Social Media Posts

8 CDI FACEBOOK
Reach Impressions Interactions Link Clicks
Facebook 117 129 2 1
Instagram 101 122 5 N/A

9 COUNTY FACEBOOK
Reach Impressions Interactions Link Clicks
Facebook 1,948 (1,811 from
followers; 140 from
non- followers)
2,051 (2,011 from
original post; 40
from shares)
14 (9 reactions, 1
comment, 4
shares,)
10

10 Reach Impressions Interactions Link Clicks
Facebook 16 N/A N/A N/A

11 Reach Impressions Interactions Link Clicks
Facebook 1,090 N/A 1 comment N/A
Unfortunately, the rest of the metrics aren’t available. 1 interaction was added because of the comment on the post.

12 COUNTY – X ACCOUNT
Impressions
(Times this post
was seen on X)
Engagements
(Total number of
times a user has
interacted
with a post.)
Detail expands
(Times people
viewed the
details about
this post)
Profile Visits
(Number of
profile views
from this post)
Link clicks
X 1,247 22 9 2 5

13 Impressions
(Times this post
was seen on X)
Engagements
(Total number of
times a user has
interacted
with a post.)
Detail expands
(Times people
viewed the
details about
this post)
Profile Visits
(Number of
profile views
from this post)
Link clicks
X 1,321 29 10 3 13

14 Impressions
(Times this post
was seen on X)
Engagements
(Total number of
times a user has
interacted
with a post.)
Detail expands
(Times people
viewed the
details about
this post)
Profile Visits
(Number of
profile views
from this post)
Link clicks
X 1,187 14 4 2 5

15 Impressions
(Times this post
was seen on X)
Engagements
(Total number of
times a user has
interacted with
a post.)
Detail expands
(Times people
viewed the
details about
this post)
Profile Visits
(Number of
profile views
from this
post)
Link Clicks
X 1,330 3 2 10

16 Impressions
(Times this post
was seen on X)
Engagements
(Total number of
times a user has
interacted with
a post.)
Detail expands
(Times people
viewed the
details about
this post)
Profile Visits
(Number of
profile views
from this
post)
Link Clicks
X 1,013 9 4 3

17 Impressions
(Times this post
was seen on X)
Engagements
(Total number of
times a user has
interacted with
a post.)
Detail expands
(Times people
viewed the
details about
this post)
Profile Visits
(Number of
profile views
from this
post)
Link Clicks
X 903 8 2 4

18 Impressions
(Times this post
was seen on X)
Engagements
(Total number of
times a user has
interacted with
a post.)
Detail expands
(Times people
viewed the
details about
this post)
Profile Visits
(Number of
profile views
from this
post)
Link Clicks
X 1,152 17 5 2 6

19 Impressions
(Times this post
was seen on X)
Engagements
(Total number of
times a user has
interacted with
a post.)
Detail expands
(Times people
viewed the
details about
this post)
Profile Visits
(Number of
profile views
from this
post)
Link Clicks
X 748 12 2 5

20 Impressions
(Times this post
was seen on X)
Engagements
(Total number of
times a user has
interacted with a
post.)
Detail expands
(Times people
viewed the
details about
this post)
Profile Visits
(Number of
profile views
from this post)
Link Clicks
X 953 24 3 2 11

21 Impressions
(Times this post
was seen on X)
Engagements
(Total number of
times a user has
interacted with a
post.)
Detail expands
(Times people
viewed the
details about
this post)
Profile Visits
(Number of
profile views
from this post)
Link Clicks
X 1,025 28 19 2 5

Santa Cruz County Regional
VMT Mitigation Program
22 Impressions
(Times this post
was seen on X)
Engagements
(Total number of
times a user has
interacted with a
post.)
Detail expands
(Times people
viewed the
details about
this post)
Profile Visits
(Number of
profile views
from this post)
Link Clicks
X 769 10 5 5

Santa Cruz County Regional
VMT Mitigation Program
23 Survey #1 Results

Santa Cruz County Regional
VMT Mitigation Program
24

Santa Cruz County Regional
VMT Mitigation Program
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Santa Cruz County Regional
VMT Mitigation Program
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Santa Cruz County Regional
VMT Mitigation Program
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Santa Cruz County Regional
VMT Mitigation Program
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Santa Cruz County Regional
VMT Mitigation Program
29 Survey #2

Santa Cruz County Regional
VMT Mitigation Program
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Santa Cruz County Regional
VMT Mitigation Program
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Santa Cruz County Regional
VMT Mitigation Program
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Santa Cruz County Regional
VMT Mitigation Program
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Santa Cruz County Regional
VMT Mitigation Program
34

Reso No. (CM)
Meeting Date: 021125 SWZ ______ TV ______ CDD ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE ACCEPTING THE SANTA CRUZ COUNTY REGIONAL

VMT MITIGATION PROGRAM PRELIMINARY FINAL REPORT AND

DIRECTING STAFF TO PARTICIPATE IN DEVELOPING

IMPLEMENTATION OF A MULTIJURISDICTIONAL REGIONAL VEHICLE

MILES TRAVELED (VMT) MITIGATION PROGRAM
WHEREAS, Senate Bill (SB) 743 was signed into law in 2013 and required the Governor’s Office of Planning and Research (OPR) to identify new metrics for identifying and mitigating transportation impacts under California Environmental Quality Act (CEQA) and that the OPR identified vehicle miles traveled (VMT) as the new metric where VMT is a measure of the number of vehicle trips multiplied by the length of those trips.; and WHEREAS, the City of Watsonville created a Vehicle Miles Traveled (VMT) Program by adopting Resolution No. 205-22 (CM) on September 27, 2022 to approve a Vehicle Miles Traveled (VMT) Policy and adopting Resolution No. 51-23 (CM) on March 14, 2023 to approve an in-lieu fee to reduce Vehicle Miles Traveled (VMT) associated with development projects; and
WHEREAS, in 2022, the County of Santa Cruz staff, in partnership with the City of Watsonville and the Santa Cruz County Regional Transportation Commission, began a project to develop a framework for a regional VMT mitigation program that would ensure compliance and provide streamlined options for project mitigation in accordance with the new metrics for transportation impacts under CEQA.; and WHEREAS, City staff has explored the possibility of expanding the City VMT Mitigation Program into a regional program, which would enable collaboration on broader initiatives, such as transit and transportation demand management projects, allow for more effective pooling of resources, and create more developer certainty which could result in more significant reductions in VMT and funding increases; and

Reso No. (CM)
Meeting Date: 021125
2 WHEREAS, staff recommends that the City Council receive a presentation on the Santa Cruz County Regional Vehicle Miles Traveled (VMT) Mitigation Program, provide input on the preliminary Final Report, accept the report, and direct staff to participate in developing the implementation of a multijurisdictional Regional VMT Mitigation program (Council is not being asked to confirm participation in the program at this time).

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. This action is not subject to review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as this is not a “project” that may cause a direct, or reasonably foreseeable indirect, physical change in the environment and because the action constitutes organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment. Additionally, even if a “project,” the action would be exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.

2. The Council accepts the Santa Cruz County Regional VMT Mitigation Program Preliminary Final Report and directs staff to participate in developing the implementation of a multijurisdictional Regional VMT Mitigation program (Council is not confirming City participation in the program at this time). **************************************

Regional VMT Mitigation Study
Regional VMT Mitigation Study
City of Watsonville Council Meeting – February 11, 2025

Regional VMT Mitigation Study
Agenda
• VMT/SB 743 Overview
• Project Overview
• Fee-Based Mitigation Program Options
• Local Program Summary
• Mitigation Project Types and Testing
• Project Testing Results
• Program Evaluation
• Findings
• Administration Recommendations

Regional VMT Mitigation Study
SB 743 Overview
• SB 743 is CEQA Specific, Implemented July 1, 2020
• Basis for a “transportation significant impact” determination • Sustainability and GHG reduction by
• Denser infill development
• Reducing single occupancy vehicles
• Improved mass transit
• Most recent guidance is from December 2018
• VMT is the principal metric

Regional VMT Mitigation Study
SB 743 Overview: OPR VMT Thresholds
• Residential: > 15% less than average VMT per/capita
• Office: > 15% less than average VMT per/employee
• Retail: Net increase in total VMT for region
• Transportation: Net increase to VMT
• Neither statute or CEQA Guidelines include thresholds • “Substantial evidence” (Section 15384) as the basis for not following OPR

SB 743 Overview: Regional VMT Mitigation Study Measuring VMT

Regional VMT Mitigation Study
Project Overview
• After SB 743 implementation many projects were unable to mitigate • Projects not moving forward impacts economic opportunities • County applied for a grant with Watsonville to explore VMT Mitigation Program
• Provides additional feasible mitigation options for VMT impacts

Regional VMT Mitigation Study
Understanding
• Image #2
VMT Program Options

Regional VMT Mitigation Study
Understanding
• Image #2
VMT Bank Pilot Program Recommendation How VMT Banking Works

Regional VMT Mitigation Study
Regional VMT Bank Benefits
• Provides additional feasible mitigation options
• VMT reducing projects could be completed sooner
• Reduces administrative burden for each agency
• Allows funding of more significant countywide solutions • Provides a regionally consistent approach
• Provides a regional solution to a regional problem

Regional VMT Mitigation Study
City VMT Program
• Local program adopted in September 2022
• To date the City’s VMT Bank has collected $114,315
• Funding collected from the Watsonville VMT Bank will stay in Watsonville

Regional VMT Mitigation Study
Recommendations
• VMT Banking would be the most appropriate initial program • Recommended to proceed as a pilot program
• Projects included in program average less than $1,000/VMT reduced • Unclear the magnitude as a funding source
• Considered low hanging fruit/low-cost projects
• Don’t expect will provide funding for large number of projects • Important that funding address “return to source”

Regional VMT Mitigation Study
Next Steps
• RTC and Board of Supervisors meetings
• Finalize the recommended program document including any input from today • Continue working to develop a pilot program that meets County/City needs

Regional VMT Mitigation Study
Questions

2/6/2025 7:52:50 PM
C:\Program Files\eSCRIBE\TEMP\19524861453\19524861453,,,Report - Pavement Management Plan .docx Agenda Report
MEETING DATE: Tuesday, February 11, 2025
TO: City Council
FROM: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG
SUBJECT: RECEIVE PRESENTATION ON THE PAVEMENT MANAGEMENT

PLAN AND ACCEPT THE PLAN
RECOMMENDED ACTION:

Staff recommend that the City Council receive a presentation on the Pavement Management Plan prepared by City staff with the assistance of Harris and Associates, Inc. and accept the Plan.

DISCUSSION:

On December 5, 2023, the City published a Request for Qualifications for qualified consultants to assist the City with preparation of a Pavement Management Plan and invited proposals to be submitted on January 4, 2024. Staff reviewed the proposals, conducted interviews and selected Harris & Associates, Inc. On April 9, 2024, the Council approved Resolution No. 54-24 (CM), authorizing the City Manager to execute a contract with Harris for preparation of a Pavement Management Plan. On October 22, 2024, Council received a presentation on the Draft Pavement Management Plan.

Harris completed preparation of the Pavement Management Plan and staff will present it to Council for acceptance. Preparation of the Plan included the following:
 Creation of a database through review of existing City documents and practices;  Conduct field surveys to assess the condition of City facilities including roads, alleys, and public parking lots;
 Generation of a Pavement Condition Index (PCI) number for individual City streets;  Develop treatment options and costs for City streets;  Prepare budget analysis and consider funding sources and scenarios;  Assist City staff to create a plan that identifies and prioritizes the maintenance of City facilities.

STRATEGIC PLAN:

The Pavement Management Plan addressed the following Strategic Plan items. 2-Infrastructure & Environment
5-Public Safety

2/6/2025 7:52:50 PM
C:\Program Files\eSCRIBE\TEMP\19524861453\19524861453,,,Report - Pavement Management Plan .docx FINANCIAL IMPACT:

Cost of preparation of the proposed Pavement Management Plan was included in the current City budget and no additional funding is needed for its completion. When completed, the Plan will assist the City with identifying future road projects and ensuring that funding is available for their construction.

ALTERNATIVE ACTION:

No reasonable alternatives are known at this time.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

Reso No. (CM)
Meeting Date: 021125 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE ACCEPTING THE CITY OF WATSONVILLE 2024

PAVEMENT MANAGEMENT PROGRAM UPDATE REPORT PREPARED
BY CITY STAFF WITH ASSISTANCE BY HARRIS & ASSOCIATES, INC.

WHEREAS, on December 5, 2023, the City published a Request for Qualifications for qualified consultants to assist the City with preparation of a Pavement Management Plan and invited proposals to be submitted on January 4, 2024; and WHEREAS, staff reviewed the proposals, conducted interviews and selected Harris & Associates, Inc. and on April 9, 2024, Council adopted Resolution No. 54-24 (CM), authorizing the City Manager to execute a contract with Harris & Associates, for assisting staff with preparation of a Pavement Management Plan; and WHEREAS, On October 22, 2024, Council received a presentation on the Draft Pavement Management Plan; and
WHEREAS, staff and Harris & Associates, Inc. completed preparation of the Pavement Management Plan, staff will present the Plan to Council and recommend acceptance.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. This action is not subject to review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as this is not a “project” that may cause a direct, or reasonably foreseeable indirect, physical change in the environment and because the action constitutes organizational or administrative activities of governments that will not result in direct or indirect physical

Reso No. (CM)
Meeting Date: 021125
2 changes in the environment. Additionally, even if a “project,” the action would be exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.

2. The Council hereby accepts the City of Watsonville 2024 Pavement Management Program Update Report dated January 24, 2025, a copy of which Report is attached hereto and incorporated herein by this reference. **************************************

City of Watsonville
2024 Pavement Management
Program Update
Report
January 24, 2025
Prepared by:

TABLE OF CONTENTS
List of Tables & Figures
Executive Summary ............................................................................................................................... 1 Purpose ................................................................................................................................................... 2 Network Description .............................................................................................................................. 2 Existing Pavement Condition ................................................................................................................ 5 Pavement Management Strategy ............................................................................................................ 7 Budget Needs ......................................................................................................................................... 9 Budget Analysis/Scenarios .................................................................................................................. 10

1. No Funds ($0) ...................................................................................................................... 12

2. Maintain PCI of 62 ($3.0 million) ........................................................................................... 13

3. Increase in PCI to 70 ($5.1 million) ........................................................................................... 14

4. Unconstrained Budget ($10.5 million)....................................................................................... 15

5. Current Funding Level ($1.6 million) ........................................................................................ 16 Recommendations ................................................................................................................................ 21 Limits of Study ........................................................................................................................ 21 Maintenance Strategy Development ........................................................................................ 22 Annual Budget Projections ...................................................................................................... 22 Maintenance Decisions ............................................................................................................ 23 Pavement Management Program Reports ............................................................................... 26 System Maintenance ................................................................................................................ 26 Appendix I – Pavement Condition Index & Remaining Service Life Section PCI/RSL Listing Report

Appendix II - Budget Analysis Report
A. Budget Needs Report – Six Years
B. Average PCI by Annual Funding Chart
C. Deferred Maintenance Cost Trend by Annual Funding Chart D. Budget Scenario Cost and Network Condition Summaries E. Annual Work Program-6 Year Plan - $1.6M
Appendix III - Backup Data
A. Section Description Inventory Report
B. Inventory of Applied Maintenance
C. Maintenance Treatment Decision Trees

LIST OF TABLES
Page
Table 1 Pavement Mileage by Functional Class .................................................................................... 2 Table 2 Percentage of Network Area by Functional Class and Condition Category ............................. 4 Table 3 Network Replacement Value .................................................................................................... 4 Table 4 PCI Breakdown Descriptions .................................................................................................... 5 Table 5 PCI by Functional Class............................................................................................................ 6 Table 6 Agency’s Maintenance Treatments by Condition Category ..................................................... 9 Table 7 Budget Needs Analysis ........................................................................................................... 10 Table 8 Treatment Unit Costs .............................................................................................................. 23 Table 9 Agency’s Maintenance Treatment by Condition Category ..................................................... 24

LIST OF FIGURES
Figure 1 Percentage of Network by Functional Class ............................................................................ 3 Figure 2 Total System by Functional Class by PCI ............................................................................... 3 Figure 3 Centerline Miles of Road by Condition ................................................................................... 6 Figure 4 Alligator Cracking Deduct Curve ............................................................................................ 7 Figure 5 Pavement Management – Applying Cost Effective Treatment ............................................... 8 Figure 6 PCI Chart ............................................................................................................................... 18 Figure 7 Deferred Maintenance Chart ................................................................................................. 19 Figure 8 PCI and Deferred Maintenance Chart ................................................................................... 20

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 1

EXECUTIVE SUMMARY
Between April and June 2024, the City of Watsonville’s Pavement Management Program (PMP) was updated using the Metropolitan Transportation Commission’s (MTC) StreetSaver® Online. A visual pavement distress survey was conducted across Watsonville’s streets, alleys, and parking lots, covering approximately 92 centerline miles. This survey followed MTC’s Pavement Management System (PMS) inspection methodology, where pavement distress, severity, and quantity are recorded for a 10% representative sample of each management segment. To ensure accuracy, 100% of each pavement segment was reviewed to identify the most representative sample unit. Field reviews were conducted using MTC’s Asphalt and Concrete distress identification manuals.

Before starting fieldwork, Harris updated the City’s StreetSaver database by adding approximately 2.5 centerline miles of new streets, 4.7 centerline miles of alleys, and 20 parking lots. The new streets and alleys were also integrated into the City’s StreetSaver shapefile. However, parking lots were not included in the City’s StreetSaver database shapefile. Additional refinements to database sections were made based on field observations to ensure the updated PMP accurately reflected on-the-ground conditions.

The Pavement Management Program (PMP) is a valuable tool that helps the City effectively manage its road network. It serves as both an inventory for road pavement and a software-based system to assess pavement conditions, record maintenance history, forecast budget needs, and evaluate the long-term impacts of funding on the Citywide Pavement Condition Index (PCI). Using MTC’s Pavement Management System, StreetSaver® Online, the City can make cost-effective decisions to maximize its return on investment from available maintenance and rehabilitation funds. The software analyzes pavement conditions and recommends optimal rehabilitation strategies, generating a prioritized plan that identifies specific areas in need of maintenance and repair.

The PMP emphasizes cost-effective solutions that enhance the overall system’s PCI. For example, preventive maintenance treatments, such as surface and crack seals, are recommended for 7% of the budget. These treatments are crucial for sustaining a high PCI at a relatively low cost, as they can cover large pavement areas for a fraction of the cost of more expensive asphalt overlays or reconstructions. The remaining budget is typically allocated to these more intensive treatments, which are necessary for severely deteriorated roads. By combining preventive maintenance with strategic rehabilitation efforts, the PMP helps the City maintain and improve its road network over time while optimizing available resources.

For the City of Watsonville, the following five annual budget scenarios were generated with 7% of the annual budget applied towards preventative maintenance. This report and analysis focus solely on the street network, excluding parking lots and alleys from both the analysis and reporting.

1. No Funds ($0)

2. Maintain PCI of 62 ($3.0 million)

3. Increase PCI to 70 ($5.1 million)

4. Unconstrained Budget ($10.5 million)

5. Expected Annual Budgets ($1.6 million)

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 2

PURPOSE
The Pavement Management Program assists the City by providing current distress survey data used to evaluate current pavement conditions. This helps to maintain a City-defined desirable level of pavement performance while optimizing the expenditure of limited fiscal resources. A PMP system is also required to be eligible to apply and obtain federal funds.

Specifically, the program provides administrators and maintenance personnel with:
 A current inventory of all public roadways
 The current pavement condition for all public roadways  A project list of all pavement segments in need of maintenance, rehabilitation, or replacement  The most cost-effective level of maintenance or repair appropriate at the time of the survey  A forecast of budget needs for maintenance, rehabilitation, or replacement of deficient pavement sections for a selected time period, at various alternative overall condition levels

NETWORK DESCRIPTION
The City of Watsonville’s street pavement network is comprised of approximately 86 centerline miles and is divided into 669 pavement management segments. To assist in planning maintenance needs, the City's roads are grouped according to functional classification. Table 1 (below) shows the City’s pavement mileage and PCI by functional classification.

Table 1
Arterial 54 9.92 32.92 2,925,786 12% 67
Collector 106 19.14 37.37 3,627,030 22% 65
Residential/Local 509 57.13 114.24 9,441,163 66% 58
Totals 669 86.19 184.53 15,993,979 100% 62
Street Pavement Mileage by Functional Class
Classification Total
Sections
Total
Center
Line Miles
Total Lane
Miles
Total Area
(sq. ft.)
Percentage of
Street Network PCI

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 3
Figure 1 (below) displays the percentage of each functional class in the overall network Figure 1
Figure 2 below shows the City’s Street system broken down into 10-point PCI Figure 2

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 4
Table 2 (below) breaks down the percentage of the road network by functional class (by area) in each condition category. Approximately 5% of the City’s network is in the “Excellent” condition category and approximately 36% is in the “Good” condition category. Approximately 6% is in the “Fair” condition category, 19% is in the “Poor” condition category and approximately 34% is in the “Failed” condition category.

Table 2
Condition
Category
PCI
Range Arterial Collector Residential Square Feet % Total Excellent 90-100 2.39% 1.47% 0.76% 742,632 4.63%
Good 70-89 6.97% 9.79% 19.45% 5,806,123 36.22%
Fair 50-69 0.13% 0.68% 5.25% 5,425,998 6.06%
Poor 25-49 3.79% 2.98% 12.47% 3,085,527 19.25%
Failed 0-24 4.96% 7.70% 21.18% 971,511 33.85%
Totals 18.25% 22.62% 59.13% 16,031,791 100%
Percentage of Network Area by Functional Class and Condition Category The City’s pavement network has a current reconstruction value of over $188 million. The current network reconstruction value (consisting of moderate base failure repair, removal of existing surface, and pavement overlay) by functional class is displayed in Table 3 (below):

Table 3
Functional
Class
Surface
Type
Lane
Miles
Unit Cost/
Square Foot
Pavement Area
(in SF)
Cost to
Replace
AC 24.0 $14.44 2,157,318 $31,161,164
AC/AC 8.1 $14.44 690,988 $9,980,907
PCC 0.8 $22.00 77,480 $1,704,560
AC 36.0 $11.11 3,498,222 $38,869,094
AC/AC 1.4 $11.11 128,808 $1,431,199
AC 114.4 $11.11 9,446,208 $104,957,759
AC/AC 0.4 $11.11 30,912 $343,466
185.1 $188,448,150 16,029,936
Network Reconstruction Value
Arterial
Collector
Grand Total
Residential/Local
Table 3 (above) provides network replacement costs sorted by Functional Class and Surface Type. For each combination of Functional Class and Surface Type, the number of Lane Miles, Unit Cost (sq.ft.), Pavement Area (sq.ft.), and the cost to replace is reported. The replacement cost is based on the Category V ("Failed ") treatment cost provided in the Decision Tree for each functional class and surface type combination. Grand totals are provided at the bottom of applicable columns.

It is important to consider the overall investment the City has in its pavements. The unit cost to repair a PMP segment in very poor condition (consisting of moderate base failure repair, removal of existing

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 5
surface, and pavement overlay to reconstruction) is from $11.11 to $14.44 per square foot or $100.00 to $130.00 per square yard. The cost to reconstruct all roads (full replacement of the pavement, base, and structure of the roads) is over $188 million.

EXISTING PAVEMENT CONDITION
The PCI is an overall measure of the condition of the road surface based on a scale of zero (0) (failed) to one hundred (100) (excellent). Table 4 (below) provides a brief description of the different distresses generally found in each PCI range.

Table 4
PCI Breakdown Descriptions
PCI Range Condition Description
90-100 Excellent Little or no distress.
70-89 Good
Little or no distress, with the exception of utility patches in good condition, or minor to moderate hairline cracks; typically lightly weathered.
50-69 Fair Light to moderate weathering, light load-related base failure, moderate linear cracking.
25-49 Poor Moderate to severe weathering, moderate levels of base failure, moderate to heavy linear cracking.
0-24 Failed Extensive weathering, moderate to heavy base failure, failed patches, extensive network of moderate to heavy linear cracking.

Upon completion of this survey, a Pavement Condition Index (PCI) was calculated for each PMP segment to reflect the overall pavement condition. A PCI of 0 would correspond to a badly deteriorated pavement with no remaining service life whereas a PCI of 100 would correspond to a pavement with no observed distresses. A summary of each segments representative PCI and remaining service life can be found in the Pavement Condition Index Report in Appendix I.

The network average Pavement Condition Index (PCI) for the City Watsonville is currently 62. ‡PCI’s for the City’s pavement network were based on a visual distress rating system. The overall condition of the City of Watsonville road network rests in the “Fair” range. MTC’s State of Repair report states that “Approximately 75 percent of a pavement’s serviceable life has been expended by the time its PCI rating falls to 60.” The City of Watsonville average PCI condition by functional class can be found in Table 5 (below).
‡Note: PCI weighted by area.

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 6
Table 5
PCI By Functional Class

CLASSIFICATION PCI
Arterial 67
Collector 65
Residential/Local 58
Overall Network 62
Figure 3 (below) shows the City’s total pavement mileage by condition category:

Figure 3
After the survey distress data was input into the StreetSaver® program, a distress rating was calculated for each PMP segment. The distress rating was calculated using MTC’s developed algorithms. The algorithms initially assign each pavement segment a score of 100 and then deducts point values based on the pavement distresses found within the segment weighted by the quantity of each distress. The algorithms assign deduct values based on the severity and the density of each distress. Figure 4 (below) is an example of the alligator cracking distress deduct curve:

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 7
Figure 4
The algorithms weigh the total deduct value within a segment and then calculate a total distress rating between 0 (failed) and 100 (excellent).

PAVEMENT MANAGEMENT STRATEGY
A visual survey of approximately 92 centerline miles of the City’s paved streets, alleys, and parking lots were conducted to assess the existing surface condition of each individual pavement segment within the road network. Data, including distress types and quantities, segment length and width, etc. were collected/verified for all surveyed roads. Data was categorized by road name and “pavement” segment.

PMP segment limits were identified by determining the logical maintenance practices that would be applied to each road and could vary from road to road, i.e. intersection to intersection, change in pavement width, drainage conditions, crown of the roadway, etc.

Once the PCI’s were calculated for all the PMP segments, budget analyses and workload predictions commenced. Predictions of future pavement performances were based on a pavement deterioration curve developed by MTC. As a pavement ages, the system predicts the PCI of the pavement based on the deterioration curves.

Studies have shown that the life cycle of a pavement falls in a particular pattern over time (See Figure 4 below). Please note that this figure is not to scale. A road’s pavement begins its life in excellent condition and generally remains in excellent condition for a few years without the need of any maintenance. Over time, however, the condition of the road starts to worsen and the rate at which its pavement condition deteriorates* will increase dramatically as the road passes the midpoint of its life. As a result of this continued deterioration, the quantity and cost of the maintenance activities needed to rehabilitate the pavement will increase in both scope and costs. It is at this half way point that pavement repair options must be weighed.
* A typical pavement section will deteriorate 40% in the first 75% of its lifespan. However, that same pavement section, if untreated, will experience another 40% reduction in overall quality in only the next 12% of lifespan, effectively deteriorating an equivalent amount in only one-sixth (1/6) of the time. 0 20
40 60
80 100

0.1 1.0 10.0 100.0
% of Density
Low Mod High
Alligator (Fatigue) Cracking
Deduct Curve

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 8
Figure 5
PAVEMENT MANAGEMENT – APPLYING A COST EFFECTIVE TREATMENT Questions must be asked such as: Will the investment related to a preventive maintenance treatment be offset by the opportunity cost of not doing such a repair? Is the pavement in such a state that it would be better to simply wait until the pavement completely deteriorates before making the repair? The answers (and, indeed, the questions themselves) depend upon the individual pavement segment. Figure 5 (above) illustrates the benefit of addressing pavement concerns before the pavement condition reaches a poor or failed state. Maintenance activities increase the PCI value as they are applied to the segment and thus extend the pavements life. By allowing pavements to deteriorate, roads that once might cost $5.98/SY for light maintenance may soon cost $38.09/SY for heavy rehabilitation or $130.00/SY to reconstruct with 8” HMA . In other words, delays in repairs can result in very large cost increases. It is not simply “pay today or pay tomorrow” but rather a “pay today or pay more tomorrow” proposition. Overall pavement maintenance costs are greatly reduced by the timely application of crack seals and or slurry/micro seals before the subgrade fails and requires a total pavement reconstruction.

Table 6 (below) describes the condition categories, their equivalent PCI range, and typical prescribed maintenance treatments used by the agency:

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 9
Table 6
Condition PCI Range Treatment Category Typical Maintenance Treatment Excellent 90-100 Do Nothing.

Crack Treatment Seal Cracks
Light Maintenance •Slurry Seal
•Microsurfacing
60-69 Heavy Maintenance •Slurry Seal
•Microsurfacing
50-59 Light Rehab •Slurry Seal+Digouts
•2” Overlay w/o Digouts
Poor 25-49 Heavy Rehabilitation •3-Layer System
•HMA Overlay
Failed 0-24 Reconstruct Reconstruction Structure w/ 8” HMA Agency’s Maintenance Treatments By Condition Category
Good 70-89
Fair
Table 6 created by Harris & Associates based on feedback from the City.

The maintenance strategy described above was based on PCI scores and the corresponding condition category. Roads with PCI scores from 90-100 are in “Excellent” condition and require no treatment.

Roads with scores from 70 to 89 are in “Good” condition but may require crack seals, and light maintenance such as slurry seal or microsurfacing. Roads with scores from 50 to 69 are in “Fair” condition but may require heavy maintenance such as slurry seal or microsurfacing, or light rehab such as slurry seal with digouts or 2” overlay. Roads with scores from 25 to 49 are in “Poor” condition and generally require heavy rehab like 3-Layer HMA overlay. Roads with scores below 25 are in “Failed” condition and need reconstruction with 8” HMA. After this update, about 3 miles of the City’s roads are in the “Excellent” condition category, approximately 31 miles are in the “Good” condition category, approximately 30 miles are in the “Fair” condition category, approximately 17 miles are in the “Poor” condition category and about 6 miles are in the “Failed” condition category.

BUDGET NEEDS
Following the treatment strategy described in Table 6 (above) the StreetSaver® software generated a Budget Needs analysis. The Budget Needs analysis projects the total budget needed to bring the City’s pavement system to a condition where most pavement segments require only preventive maintenance (i.e., PCI = 70 or higher). In Watsonville’s case, the software calculated the budget needs to be approximately $57.7 million over the 6-year analysis period (2025-2023). It is cost effective to keep pavement segments at or above a 70 PCI because the cost to maintain a high PCI is less than it costs to bring a low PCI up to a high PCI.

The Budget Needs Average is defined as the cumulative budget needs ($57.7 million) divided by the number of years in the analysis period (6 years). For this update, the Budget Needs Average was $9.6 million per year. After the Budget Needs was calculated, Budget Scenarios were run to determine the funding levels required to maintain and/or improve the current network PCI level and generate a list of

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 10
road maintenance (work plan) for the next six (6) years. The software analyzed each pavement management segment and assigned each with a specific maintenance treatment (including do nothing) in order to maximize the improvement of the entire pavement network. Maintenance treatments were allocated to as many PMP segments as the annual budget would allow. The budget scenarios that were generated were calculated utilizing a 7% preventative-maintenance-split, 5% interest, and 5% inflation years 2025-2030. The results of the budget needs analysis are summarized in Table 7 (below).

Table 7
Year PCI
(Treated)
Untreated
PCI
Preventative
Maintenance
($M)
Rehab
($M)
Total Needs
($M)
2025 77 61 2,561,795 $ 21,289,585 $ 23,851,380 $
2026 77 59 223,147 $ 5,561,934 $ 5,785,081 $
2027 79 56 17,530 $ 6,339,526 $ 6,357,056 $
2028 81 54 594,168 $ 10,247,693 $ 10,841,861 $
2029 81 52 258,407 $ 4,782,715 $ 5,041,122 $
2030 82 49 671,430 $ 5,127,545 $ 5,798,975 $
Totals N/A 4,326,477 $ 53,348,998 $ 57,675,475 $
Budget Needs
Preventative Maintenance (PM) is a schedule of planned maintenance actions aimed at preventing the failure of roads. These actions are designed to detect, preclude, or mitigate degradation of a road segment.

The goal of preventative maintenance is to minimize degradation and thus sustain or extend the useful life of the road. To reach that level of preventive maintenance for the entire network within the next 5 years (2025-2030), the Budget Needs analysis determined a total need of approximately $9.6 million per year.

See Appendix II -A for the Needs - Projected PCI/Cost Summary.

The MTC PMP software recommended spending 7% of the budget toward preventive maintenance because it was the optimum level according to the specific conditions of the City’s network. This meant that the program selected 7% of the annual budget towards crack seals and microsurfacing or slurry seals while the remainder of the budget was spent towards overlays and reconstructions. These budgets do not account for stopgap maintenance repairs, such as emergency pothole repair.

BUDGET ANALYSIS/SCENARIOS
After the MTC PMP software analyzed the pavement system according to the specified annual budgets over the 6-year analysis period, trends were evident in the PCI and deferred maintenance backlog (the amount of necessary reconstruction and overlays not performed each year due to budget constraints). An increase in deferred maintenance showed that necessary rehabilitation is currently not being performed.

The total deferred maintenance in 2025 is approximately $23.9 million.

Deferred maintenance consists of pavement maintenance that is needed but cannot be performed due to lack of funding. Shrinking budgets have forced many agencies to defer much needed road maintenance. Deferring maintenance not only increases the frequency of resident complaints about the network condition, but also increases the costs to repair the roads. It is cost effective to keep the pavement above a certain PCI because the cost to maintain a high PCI is less than the cost to bring a road segment with a low PCI to a high PCI.

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 11
For this update, the following five annual budget scenarios were generated:

1. No Funds ($0)

2. Maintain PCI of 62 ($3.0 million)

3. Increase PCI to ($5.1 million)

4. Unconstrained Budget ($9.6 million)

5. Current Funding Level ($1.6 million)
The following terms are defined for each of the budget scenarios:
“Year” – Year of the program
“Budget” – The projected budget for the given year
“Deferred” or “Deferred Maintenance” – The amount of money projected for pavement maintenance that cannot be performed due to the lack of funding.
“Average Condition” – The projected average pavement Condition Index after completion of the Work Program.

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2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 12

1. No Funds ($0) - If the City spent no money over the next 6 years on pavement maintenance needs, the amount of deferred maintenance (or “backlog”) would increase from approximately $23.9 million to approximately $53.8 million and the average pavement condition index would decrease from 62 to 49.

Year Budget Deferred
Maintenance
Average
Network
PCI
2025 Prior to
Treatment $23.9M 62
2025 $0 $23.9M 61
2026 $0 $28.8M 59
2027 $0 $33.3M 57
2028 $0 $42.6M 54
2029 $0 $47.8M 52
2030 $0 $53.8M 49
No Funds ($0)

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PMP Report – January 24, 2025
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2. Maintain PCI of 62 ($3.0 million) – In order to maintain the network PCI of 62 over the next 6 years, approximately $3.0 million per year would need to be budgeted. Using this budget, the deferred maintenance would increase from approximately $23.9 million in 2025 to approximately $44.1 million in 2030.

Year Budget Deferred
Maintenance
Average
Network
PCI
2025 Prior to
Treatment $23.9M 62
2025 $3.0M $21.0M 63
2026 $3.0M $23.5M 63
2027 $3.0M $26.2M 62
2028 $3.0M $34.8M 62
2029 $3.0M $38.8M 62
2030 $3.0M $44.1M 62
Maintain PCI of 62 ($3.0 million)

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 14

3. Increase PCI t 70 ($5.1 million) – In order to increase the network PCI to 70 after six years, approximately $5.1 million per year would need to be budgeted. Using this budget, the deferred maintenance would increase from approximately $23.9 million in 2025 to approximately $33.5 million in 2030.

Year Budget Deferred
Maintenance
Average
Network
PCI
2025 Prior to
Treatment $23.9M 62
2025 $5.1M $18.8M 65
2026 $5.1M $19.1M 66
2027 $5.1M $21.3M 68
2028 $5.1M $28.3M 69
2029 $5.1M $31.3M 69
2030 $5.1M $33.5M 70
Increase PCI to 70 ($5.1 million)

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 15

4. Unconstrained Budget ($9.6 million) – In order to get the network to an optimal level in which only preventative maintenance is needed, approximately $9.6 million would need to be budgeted each year.

This would increase the network PCI from a 62 to an 81 and the deferred maintenance would decrease to

3.1 million in 2030.

Year Budget Deferred
Maintenance
Average
Network
PCI
2025 Prior to
Treatment $23.9M 62
2025 $9.6M $14.3M 69
2026 $9.6M $11.1M 72
2027 $9.6M $8.4M 75
2028 $9.6M $10.7M 77
2029 $9.6M $6.4M 79
2030 $9.6M $3.1M 81
Unconstrained Budget ($9.6 milion)

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 16

5. Current Funding Level ($1.6M) – The City’s current funding level for pavement maintenance is approximately $1.6 million annually. This budget has been allocated to ensure equitable distribution among the seven council districts, with priority roads scheduled for maintenance in Years 1 and 2 of the plan.. Under this funding scenario, the network PCI is projected to decrease from 62 in 2025 to 57 by the end of the six-year period. Additionally, deferred maintenance costs are expected to rise significantly, increasing from $23.9 million in 2025 to $42 million by 2030.

A more detailed analysis of the proposed 6 year work program can be found Appendix II-E.

Year Budget Deferred
Maintenance
Average
Network
PCI
2025 Prior to
Treatment $23.9M 62
2025 $1.6M $18.0M 62
2026 $1.6M $21.3M 61
2027 $1.6M $24.4M 60
2028 $1.6M $31M 59
2029 $1.6M $36.2M 58
2030 $1.6M $42.0M 57
Current Funding Level ($1.6M)
6 Year Plan

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 17
Figure 6 and 7 (below) show the impact each of the five budgets have on the PCI and deferred maintenance backlog. These charts can also be found in Appendix II-B & C. The Cost Summary Reports, which provide information on pavement funding distribution by pavement condition and the Network Condition Summary Reports, which project pavement condition trends, can be found in Appendix II-D.

City of Watsonville
2024 Pavement Management Program Update PMP Report – January 24, 2025 Page | 18 Figure 6

City of Watsonville
2024 Pavement Management Program Update PMP Report – January 24, 2025 Page | 19 Figure 7

City of Watsonville
2024 Pavement Management Program Update PMP Report – January 24, 2025 Page | 20 Figure 8

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 21

RECOMMENDATIONS
The City should utilize cost effective treatments where appropriate, such as slurry/micro seals and crack seals and continue to evaluate emerging cost-effective techniques such as thin-bonded wearing courses and rubberized overlays. Any maintenance and rehabilitation treatments that are performed should always be input into the MTC PMP software (Harris can do this at the agencies request).

Harris & Associates commends the City for its active participation in the pavement management program and recommends that the City continue to maintain its pavement management program in order to be eligible for federal grants and funding. Harris recommends that all arterial and collector roads be re-surveyed every two years and all residential roads every four years. The costs for the distress surveys should be included in the annual pavement management budget.

The City should also perform annual database updates that include:
 Reviewing and updating the decision tree (maintenance activities and unit costs)  Updating the road network when roads are annexed or newly constructed  Continuing to input maintenance and rehabilitation activities The City should update its Finance Department with any changes or adjustments that have been made to the road network and subsystems (roads assets and pavement subsystems that have been acquired through annexation, deletion, etc.) for GASB‐34 compliance.

The City should continue utilizing the StreetSaver Online GIS module or in-house GIS to assist in managing the roads within the City limits. GIS technology is very useful to spatially view tabular reports and data that are derived from the pavement management system including: scenarios, identification of maintenance and rehabilitation treatments, planning, maintenance and rehabilitation history, pavement condition index, etc.

The City of Watsonville’s road network is currently in the range of MTC’s “Fair” condition category.

To help maintain and or improve the current condition, certain projects have been recommended within the context of this report. Annual work program reports for the expected annual budgets can be found in Appendix II-E. These reports provide detailed listings of suggested maintenance projects for the City of Watsonville based on the overall PMP suggested needs funding and base annual budgets. The report also provides a first step in identifying segments to be treated under City of Watsonville’s annual work programs.

LIMITS OF STUDY
It must be recognized that this report is limited to the existing pavement repairs. It does not include existing deficiencies for right-of-way concrete sidewalks, curb & gutter, drainage, trees, bus pads and non-structural improvements such as decorative crosswalks, medians, lighting and road furniture.

Costs for these right-of-way repairs and improvements throughout the City would easily exceed the deferred maintenance costs (the cost of crucial maintenance work not performed in a specific year) identified in this report and can be identified and estimated separately in future reports.

The following recommendations generated by the Pavement Management Program are for planning purposes only. The resulting general recommendations are not intended to replace sound engineering

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 22
judgment, which should dictate specific needs for an individual project. Draft project recommendations should be weighed against the actual approach the City wishes to utilize in scheduling the workloads for contracting purposes. Once a road segment is identified for repair by the program, a closer site visit and detailed project repair scope is required.

Maintenance and rehabilitation projects should be based on a combination of the system’s recommendations weighed against the City’s preferences, budget constraints, and other contributing factors. In addition, further refinements may be warranted from an engineering staff review of the pavement condition. For example, a particular pavement section may have been selected for a treatment in a given year but that work may need be postponed in order to coordinate activities with other planned work; such as utility replacement work.

In the context of a PMP report, detailed project-level inspections are essential to supplement PMP recommendations for pavement treatment decisions. While PMP inspections provide valuable insights into the overall pavement network's condition and highlight areas needing maintenance or rehabilitation, they may not account for all site-specific factors affecting treatment effectiveness.

Conducting predesign inspections can address this gap by identifying issues such as site conditions, environmental factors, or existing infrastructure that might impact project design and construction.

These inspections enable more informed decision-making, ensuring treatments are effective and durable while potentially saving time and money by preempting issues that could lead to delays or cost overruns.

It is important to note that the PMP report serves as a planning tool and does not replace the need for thorough, site-specific inspections. Agencies should prioritize these inspections before finalizing pavement treatments to minimize risks and avoid potential litigation.

MAINTENANCE STRATEGY DEVELOPMENT
Based on the results of the condition survey and input from the City, pavement maintenance/rehabilitation strategies were developed. A standard agreement at the outset was to identify the City’s maintenance work program for the next six (6) years (2024-2030), showing resource alternatives that affect the maintenance backlog and increase the overall condition of the pavement network.

Strategies have been recommended to try to come up with the most cost-effective work programs. A listing of the maintenance activities utilized in the strategy development can be found in Appendix III-C. Each activity represents the type of work that has been recommended for the long-term maintenance recommendations of the City’s roads.

ANNUAL BUDGET PROJECTIONS
The budgeting process was approached with the following in mind: generate a work program for the next six (6) years based upon actual road pavement conditions and determine the funding levels required to maintain and/or improve the current level (PCI) of overall condition.

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 23
Based on current and projected pavement maintenance needs, annual work plan program alternatives have been prepared. A detailed work plan program for the City’s 6 Year Plan with a Current Funding Level of $1.6 million can be found in Appendix II-E. The following section provides a description of the methodology and rationale utilized in determining the recommended actions identified in this report.

MAINTENANCE DECISIONS
The PCI is used by the program to schedule maintenance activities for each pavement segment. The program recommends a specific maintenance activity based on the PCI and budget constraints. The unit costs for each maintenance activity account for various construction costs including labor materials, design, for construction inspection and for contingency Once the City has selected the appropriate maintenance activities and calculated unit costs, the “Maintenance Decision Tree” (a StreetSaver application that lists all the treatments and corresponding unit costs; found in Appendix III-C) was updated. This decision tree assigns appropriate treatments by the specific needs of the roads.

The decision tree lists costs associated with treatments on specific types of pavement according to the jurisdiction. StreetSaver® uses a decision tree to model the decision-making process that agencies follow to select a maintenance or rehabilitation strategy. The decision tree contains "branches" for each functional classification, surface type, and condition category. Jurisdictions can outline their maintenance and rehabilitation strategy, choosing a treatment for each branch. See Table 8 below.

Table 8
Treatment Arterial Collector Residential
Crack Seal ($$/LF) $2.75 $2.75 $2.75
Light Maintenance $5.98 $5.98 $5.52
Heavy Maintenance $45.71 $45.71 $7.92
Light Rehab. $26.13 $26.13 $21.02
Heavy Rehab $38.09 $38.09 $32.06
Reconstruct $130.00 $130.00 $100.00
Treament Unit Costs (SY)

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 24
Typical treatments within each generalized treatment range are listed in Table 9 below.

Table 9
Condition PCI Range Treatment Category Typical Maintenance Treatment Excellent 90-100 Do Nothing.

Crack Treatment Seal Cracks
Light Maintenance •Slurry Seal
•Microsurfacing
60-69 Heavy Maintenance •Slurry Seal
•Microsurfacing
50-59 Light Rehab
•Slurry Seal+Digouts
•2” Overlay w/o Digouts
•Mill & Fill
Poor 25-49 Heavy Rehabilitation •3-Layer System
•HMA Overlay
Failed 0-24 Reconstruct Reconstruction Structure w/ 8” HMA Agency’s Maintenance Treatments By Condition Category
Good 70-89
Fair
The City has selected a series of maintenance activities to apply to the pavement network.

Definitions of each maintenance activity are defined as below:

1. Crack Seals - A surface treatment generally utilized to prevent entry of water or other non compressible substances into the pavement.

Crack seals are used to fill individual pavement cracks to prevent entry of water or other noncompressible substances such as sand, dirt, rocks or weeds. Crack sealant is typically used on early stage longitudinal cracks, transverse cracks and reflection cracks. It is placed over the existing pavement surface and is typically applied at three (3) year intervals

2. Dig-Outs (DO) or Localized Repairs
Dig-outs are repairs performed of areas of deteriorated pavements, which are removed and replaced with full depth asphalt concrete. Pavement removal is typically performed by cold milling or saw cutting and removing. New asphalt is placed and compacted in multiple lifts or layer. The dig-out depth is dependent on the failure type (load or surface related) and the roadway classification.

3. Slurry Seals (SS) - A surface treatment generally utilized to provide new wearing surfaces and prevent water penetration of the pavement surface, thereby extending pavement life. Slurry seals are surface treatments applied to pavements with minimal surface distress to provide new wearing surfaces and extend pavement life. A slurry seal generally consists of a mixture of conventional or latex-modified emulsified asphalt, well-graded fine aggregate, mineral filler and water. It is placed over the existing pavement surface and is typically applied at eight (8) year intervals.

City of Watsonville
2024 Pavement Management Program Update
PMP Report – January 24, 2025
Page | 25

4. Microsurfacing (MS) – A surface treatment generally utilized to provide new wearing surfaces and prevent water penetration of the pavement surface, thereby extending pavement life.

Micro surfacing is a polymer-modified cold-mix paving system that begins as a mixture of densegraded aggregate, asphalt emulsion, water, and mineral fillers. While conventional slurry seal is widely used as an economical treatment for sealing and extending service life, micro surfacing offers enhanced performance with advanced polymers and other modern additives. The City typically prefers to apply a double microsurfacing treatment, which provides added durability and improved protection for its pavement network.

5. Three Layer System - A combination of multiple treatments into 2 and 3 layer systems (Chip Seals and Cape Seals) that are a cost-effective alternative to expensive asphalt overlays or mill and fill operations.

This process has been used over structurally sound, but severely alligatored and aged pavements. It involves a microsurfacing course that is the ideal leveling course and can be used in a wide range of weather conditions with minimal disruption to the public. In these applications, the microsurfacing is applied to the surface. The asphalt residue is highly polymerized. A asphalt rubber chip seal membrane provides a stress absorbent layer to mitigate reflective cracking and stop water from draining into the base layer of the road pavement. The use of hot pre-coated chips insures chip retention and quick sweeping. Finally a slurry or microsurfacing wearing course. Microsurfacing can be installed in traffic sensitive areas or in problematic climates. The systems can be made to increase skid resistance or provide the public with the smooth local roads they desire

6. Hot-Mix Asphalt (HMA) Overlay (OL) - Thin hot mix asphalt HMA OL are plant-mixed combinations of asphalt cement and aggregate placed over aging pavements as a pavement preservation treatment. Process typically includes cold milling the existing pavement at the join edges and along the gutter, and placing HMA in depths of 1-1/2 to 3 inches on the existing surface.The HMA is designed to seal and protect the existing pavement, to correct surface deficiencies, and to improve rideability and surface friction. HMA’s are one of the most effective and commonly used maintenance treatments. The mixes used for thin HMA overlays can be dense-graded, open-graded or rubberized. Open-graded overlays allow surface water to drain away quickly, preventing hydroplaning and improving visibility in wet weather.

7. Mill & Fill / Surface Reconstruction - Mill and fill is the process of removing of existing asphalt through a process called cold milling, then replacing it with a suitable depth of new HMA. The proposed Mill & fill is mainly used to create a smooth ride by eliminating the effects of tire ruts and asphalt movement that occur over years of use. The existing pavement should have a good base and AC reconstruction often utilizes 4 to 8 inches of HMA or other durable materials designed to withstand significant traffic loads. While costly, this treatment is essential for roads with severe base failures and extensive surface distresses, ensuring long-term performance and minimizing future maintenance needs.

8. Reconstruct Structure – This process involves completely rebuilding the pavement structure, including the base and surface layers, to restore full structural integrity and functionality.

Reconstruction can take many forms including, thick full depth HMA reconstruction and HMA over and crushed aggregate base. Reconstruction utilizes durable materials designed to withstand the anticipated traffic loads. While costly, this treatment is essential for roads with severe base