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Agenda Item 11.
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| City Council Meeting |
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| Subject: |
| The Road Repair and Accountability Act of 2017, Local Streets and Roads Funding Annual Reporting Guidelines |
| RECOMMENDATION |
- Approve City Manager or his Designee to submit a Project List to the California Transportation Commission for the SB1 Road Maintenance Rehabilitation Account funds; and
- Approve a Resolution to Amend the Capital Improvement Program Budget for the Cliffwood Industrial Park Pavement Rehabilitation Project, Project 7317.
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| BACKGROUND/DISCUSSION |
On April 28, 2017 the Governor signed Senate Bill (SB) 1 (Beall, Chapter 5, Statutes of 2017), which is known as the Road Repair and Accountability Act of 2017 ("RRAA"). The RRAA increases the per gallon fuel excise taxes by 12 cents, increases diesel fuel sales taxes by 20 cents, and increases vehicle registration fees with a provision for inflationary adjustments to tax rates in future years. The main objective of the RRAA is to address basic road maintenance, rehabilitation, and critical safety needs on both the state highway and local streets and road system.
Beginning November 1, 2017, the State Controller ("Controller") will deposit various portions of this new funding into the newly created Road Maintenance and Rehabilitation Account ("RMRA"). A percentage of this new RMRA funding will be apportioned by formula to eligible cities and counties pursuant to Streets and Highways Code ("SHC") Section 2032(h) for basic road maintenance, rehabilitation, and critical safety projects on the local streets and roads system. It is estimated that Orange County will receive approximately $12 M in Fiscal Year ("FY") 2017/18 and approximately $34 M in FY 2018/19 with projected increases out to FY 2026/27 (see Exhibit "A"). Of this County estimated apportionment amount, the City of Brea is estimated to receive approximately $246,000 in FY 2017/18 and $740,000 in FY 2018/19 pursuant to the SHC Section 2032 (h) formula (see Exhibit "B"). It is anticipated that the first apportionment for the disbursement of RMRA funds to cities and counties for FY 2017/18 will begin in mid-January, 2018.
Additionally, the RRAA emphasizes the importance of accountability and transparency in the delivery of California’s transportation programs. Therefore, in order to be eligible for RMRA funding, the statute requires cities and counties to provide basic annual RMRA project reporting to the California Transportation Commission ("Commission"). These reporting requirements as well as other fund use requirements and accounting processes were developed within a RRAC Local and Streets and Road Funding Annual Reporting Guidelines document ("RRAC Guidelines"). A draft of this document was circulated to all state, city, and county stakeholders in June and July of this year for review and comment and on August 16, 2017, the Commission approved the Final RRAC Guidelines (see attached RRAC Guidelines).
One of the requirements within the RRAC Guidelines requires cities and counties to submit a project list for the use of the funds in October of each year to the Commission for their review prior to the submittal to the State Controller. This first project list is due to the Commission on October 16, 2017. Additionally, the RRAC Guidelines require that the cities and counties appropriate the new funds within their respective FY budgets (Operations or Capital Improvement). The majority of the cities and counties have adopted their budgets pursuant to the State FY (July 1 to June 30), which did not include the appropriations of the new funds. Therefore, the cities and counties will be required to amend their budgets to include the new funding appropriations in order to be eligible to receive the FY 2017/18 apportionment. The City of Brea's Capital Improvement Program ("CIP") budget was approved on June 6, 2017, which did not anticipate the new RMRA funding.
Staff has evaluated the City's 2017 CIP with respect to utilizing the additional funds from RMRA and has determined that the Cliffwood Industrial Park Pavement Rehabilitation Project (Project No. 7317) ("Project") would be a good project to submit to the Commission for use of the RMRA funds. Currently, this Project is in design and will be ready to advertise bids in November. Also, the Project is fully funded with a combination of Measure M funds (Fund 260) and Gas Tax funds (Fund 220). Therefore, staff is recommending that City Council consider authorizing the City Manager or his designee to submit this Project as our FY 2017/18 list to the Commission for consideration of eligibility for the RMRA funding pursuant to the RRAC Guidelines.
Additionally, staff further recommends to the City Council that the current Gas Tax funds appropriated in FY 2016/17 for this Project ($241,992) be de-obligated and replaced with the new RMRA funds ($246,966). This added funding amount would increase the Project budget by $4,974. Staff has prepared a Resolution for this recommendation (see Resolution). The de-obligated Gas Tax funds will be reprogrammed at a later date to the ADA Transition Plan For Public Facilities, Project 7909, for the public right-of-way component of the project. This will help reduce the FARP (Fund 182) funding for this project. |
| COMMISSION/COMMITTEE RECOMMENDATION |
| The Finance Committee reviewed staff's recommendation at their September 26, 2017 meeting and it was recommended for City Council approval. |
| FISCAL IMPACT/SUMMARY |
SB 1 (RRAA) was signed by the Governor on April 28, 2017, which provides additional gas tax funds from increases to gas fuel and diesel fuel taxes, and vehicle registration fees. The main objective of the RRAA is to address basic road maintenance, rehabilitation, and critical safety needs on both the state highway and local streets and road system. Staff has identified a project within the 2017 CIP, Project 7317, that would be eligible for the new funding in the amount of $246,966. In order to obtain the State's apportionment of the new funds, the City is required to submit a project list to the Commission for their review by October 16, 2017. Therefore, staff recommends that the City Council consider authorizing the City Manager or his designee to submit the project list using Project 7317 to the Commission before the deadline pursuant to the RRAC Guidelines. Furthermore, staff recommends the City Council adopt a Resolution, which amends the CIP budget to de-obligate the current allocated Gas Tax funds and appropriates the new RRAA funds for Project 7317. See the following budget table:
| Expenditures |
Approved Budget |
Proposed Budget |
| Design |
$ 30,000 |
$ 30,000 |
| Right of Way |
0 |
0 |
| Construction |
465,000 |
469,974 |
| Contr. Engineering |
55,000 |
55,000 |
| Total |
$ 550,000 |
$ 554,974 |
| Funding Source |
Approved Budget |
Proposed Budget |
| Fund 220 (Gas tax) |
$ 255,000 |
$ 13,008 |
| Fund 260 (Measure M) |
295,000 |
295,000 |
| RRAA Funds (new) |
0 |
246,966 |
| Total |
$ 550,000 |
$ 554,974 |
Based on the proposed budget within the table above, there will be a net increase to the budget of $4,974 from the new RRAA funds. If the City Council adopts the Resolution, the reduction in Fund 220 (Gas Tax) amount will be de-obligated from 7317, which will be reprogrammed at a later date to Project 7909 for the public right-of-way component of the project. This will help reduce the FARP (Fund 182) funding for this project. There is no impact to the General Fund for this item. |
| RESPECTFULLY SUBMITTED: |
William Gallardo, City Manager
Prepared by: Steve Kooyman, P.E., City Engineer
Concurrence: Tony Olmos, P.E., Public Works Director
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