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RESOLUTION NO. 2017-179 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING THE FISCAL YEAR 2017-2018 CIP BUDGET TO ESTABLISH NEW CAPITAL IMPROVEMENT PROJECTS, “RMRA MAJOR PAVEMENT REHABILITATION FY2017/18” (STM-395) AND “RMRA MAJOR PAVEMENT REHABILITATION PHASE 2 FY2017/18” (STM-396), AND APPROPRIATING $1,497,670 BASED ON UNANTICIPATED REVENUE FROM THE ROAD MAINTENANCE AND REHABILITATION ACCOUNT (RMRA) IN THE GAS TAX FUND TO STM-395 (4/5 VOTE REQUIRED)
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolution.
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SUMMARY
Beginning on November 1, 2017, a new transportation tax will be allocated to cities and counties through the Road Maintenance & Rehabilitation Account (RMRA) which allocates revenue from the Road Repair and Accountability Act of 2017 (SB1) for local streets and roads repairs and other transportation uses. In order to receive RMRA funding, SB1 requires local agencies to submit a project list from and approved budget to the California Transportation Commission (CTC) by October 16, 2017.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The Project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the California Environmental Quality Act State Guidelines.
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Environmental Determination
The Director of Development Services has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the State CEQA Guidelines. Thus, no further environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
The State of California imposes per-gallon excise taxes on gasoline and diesel fuel, sales taxes on gasoline and diesel fuel and registration taxes on motor vehicles with allocations dedicated to transportation purposes. These allocations flow through the Highway Users Tax Account (HUTA), the familiar gasoline tax revenues that have been in place for decades, and the new Road Maintenance and Rehabilitation Account (RMRA) which allocates much of the revenue from the Road Repair and Accountability Act of 2017 (SB1 Beall). A portion of these funds are allocated to cities and counties throughout California to use for street maintenance and rehabilitation and related purposes. Additional information on both Gas Tax allocations is found in the League of California Cities’ report (Attachment 1).
Road Maintenance and Rehabilitation Account (RMRA)
The Road Repair and Accountability Act of 2017 (SB1 Beall) is a significant new investment in California’s transportation systems of about $5.2 billion per year. The Act increases per gallon fuel excise taxes, diesel fuel sales taxes and vehicle registration taxes, stabilizes the fuel tax rates and provides for inflationary adjustments to rates in future years. The Act will likely double local streets and road funds.
RMRA local streets and roads allocations must be used for projects “that includes, but are not limited to,” the following:
• Road maintenance and rehabilitation
• Safety projects
• Railroad grade separations
• Traffic control devices
• Complete street components, “including active transportation purposes, pedestrian and bicycle safety projects, transit facilities, and drainage and stormwater capture projects in conjunction with any other allowable project.”
RMRA funds may also be used to satisfy a match requirement in order to obtain state or federal funds for eligible projects.
If a city or county has an average Pavement Condition Index (PCI) that meets or exceeds 80, the city or county may spend its RMRA funds on other transportation priorities. Chula Vista’s PCI is currently at 74, but with additional funding associated with Measure P and traditional TransNet funding, the PCI is anticipated to improve in the coming years.
Required Annual Authorization
The RMRA requires “that, prior to receiving RMRA funds in a fiscal year, a city or county must submit to the California Transportation Commission (CTC) a project list pursuant to an adopted budget. The list must include for each project: description, location, schedule and useful life.” This year’s list, including Council approval, is due to the CTC by October 16, 2017.
Staff proposes to create a separate CIP project under RMRA - Major Pavement Rehabilitation for Fiscal Year 2017-18. The RMRA street list for this proposed project consists of critical arterial and collector streets (Attachment 2). Since this fiscal year’s revenue ($1,497,670) is still an estimate and the number of streets rehabilitated will depend on the treatment method and contractors’ bids, the list may include some streets that will not be completed with the funding available. The RMRA estimate for Fiscal Year 2018-19 is $4,492,748. Staff’s preliminary estimate for pavement rehabilitation for the proposed list of streets is approximately $7.0 million, which covers the estimated funds for Fiscal Year 2018-19. The proposed guidelines do not limit the list of proposed streets to one fiscal year and revised lists can be submitted if priorities change as long as the revisions are consistent with RMRA regulations.
Additionally, if there are any agencies who do not submit the required information to the CTC by the October 16, 2017 due date, RMRA funds that are not distributed to those agencies will be divided among the compliant agencies. In order to accommodate any additional funds, staff recommends establishing a second CIP project (STM-396). This project will use the same street list as STM-395 and will only be funded if additional funds are distributed to the City. If no additional funds are distributed, STM-396 will be funded as part of the Fiscal Year 2018-19 CIP program.
The RMRA also requires that cities and counties submit an annual report of project completion for projects funded by the RMRA. This report needs to include: description, location, funds expended, completion date, and useful life of the completed streets. Any changes made to the original list should be included. A full description of local agencies’ reporting requirements is provided in the “2017 Local Streets and Roads Funding Annual Reporting Guidelines” by the CTC (Attachment 3).
Maintenance of Effort: RMRA [Streets and Highways Code Sec. 2036]
The RMRA contains a local agency maintenance of effort (MOE) requirement that applies to funds allocated through the RMRA, similar to the existing requirements for the Gas Tax and TransNet. The MOE requirement ensures that these new funds do not supplant existing levels of city and county general revenue spending on streets and roads. For RMRA, cities and counties must maintain general fund spending for street, road, and highway purposes at no less than the average of 2009-10, 2010-11, and 2011-12 fiscal years, excluding one-time funds. The RMRA MOE for Chula Vista is $4,515,412.
The State Controller may perform audits to ensure compliance with these MOE rules. If the State Controller determines that a city or county has not met its’ MOE, the agency will be required to reimburse the state for the funds it received during that fiscal year, although the agency may expend during that fiscal year and the following fiscal year a total amount that is sufficient to comply. Any funds withheld or returned as a result of a failure to comply will be reapportioned to the other counties and cities whose expenditures are in compliance.
Due to this requirement, staff recommends that a separate account be established for RMRA within the Gas Tax fund.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found that Councilmember Mike Diaz has property holdings within 500 feet of the boundaries of the properties which are the subject of this action. However, the decision solely concerns repairs, replacement or maintenance of existing streets. Consequently, pursuant to California Code of Regulations Title 2, sections 18700 and 18702.2(c(1)), this item does not present a real property-related conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. The goal of the “RMRA Major Pavement Rehabilitation FY 2017/18 (STM395 and STM396)” project is to support the Strong and Secure Neighborhood strategy identified in the City’s Strategic Plan. The maintenance and rehabilitation of public infrastructure is a key City function in providing a safe and efficient roadway system for residents, businesses and visitors alike.
CURRENT YEAR FISCAL IMPACT
Approval of the resolution will appropriate $1,497,670 from the RMRA Gas Tax Fund to CIP STM-395. The RMRA allocations will begin to be distributed on a monthly basis beginning on January 1, 2018.
ONGOING FISCAL IMPACT
Upon completion of the project, the improvements will require only routine City street maintenance. Since the improvements are anticipated to increase the life of the streets included, there should be a positive long term fiscal impact.
ATTACHMENTS
1. League of California Cities’ Report (excerpt) Fiscal Year 2017-18
2. List of Streets and Description of Work
3. Annual Reporting Guidelines
Staff Contact: Beth Chopp, Senior Civil Engineer
J:\Engineer\ADVPLAN\Gas Tax RMRA 2017\RMRA STM395 agenda statement fxr rev.doc