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CC 2024-03-26_09e Resolution_Projects Funded by SB1Item 9.e. MEMORANDUM TO: City Council FROM: Bill Robeson, Assistant City Manager/Public Works Director Nicole Valentine, Administrative Services Director BY: Shannon Sweeney, City Engineer SUBJECT: Consideration of a Resolution to Adopt Projects to be Funded by the Road Repair and Accountability Act of 2017 (SB1) For Fiscal Year 2024-25 DATE: March 26, 2024 SUMMARY OF ACTION: Adopting the Resolution enables the City to be eligible for Senate Bill 1 (SB1) funding for road repair projects during Fiscal Year 2024-25. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The City’s allocation of SB1 funding for FY 2024-25 is projected to be $469,236. This funding will be utilized to maintain the City’s streets. With this allocation, and the City’s Gas Tax funding of $522,887, the total funding available from the State for street and road maintenance is $992,123. RECOMMENDATION: 1) Adopt a Resolution approving use of funding from SB1 for the 2024 Pavement Management Program in FY 2024-25; 2) Authorize the Director of Administrative Services to submit the Resolution to the California Transportation Commission (CTC); and 3) Make findings that adopting the Resolution is not a project subject to the California Environmental Quality Act (CEQA) because the adoption in itself has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.) BACKGROUND: On April 28, 2017, the Governor signed SB1, known as the Road Repair and Accountability Act of 2017. SB1 increases gasoline and diesel taxes and vehicle registration fees to address deferred maintenance on the State highway sys tem and the local street and road system. These additional taxes are deposited by the State Controller Page 71 of 124 Item 9.e. City Council Consideration of a Resolution to Adopt Projects to be Funded by the Road Repair and Accountability Act of 2017 (SB1) For Fiscal Year 2024 -25 March 26, 2024 Page 2 into the Road Maintenance and Rehabilitation Account (RMRA). A portion of this funding is apportioned by formula to eligible cities and counties, including Arroyo Grande, pursuant to California Streets and Highways Code (SHC) Section 2032(h), and are to be used for basic road maintenance, rehabilitation, and critical safety projects on the local streets and roads system. Because SB1 emphasizes accountability and transparency in transportation funding, programming and use of the funds is contingent on recipient cities and counties providing annual project reporting. Per SHC Section 2034(a)(1), prior to receiving any RMRA funding, cities and counties must submit a list of projects, adopted by Resolution, to be funded with the RMRA funds. ANALYSIS OF ISSUES: SHC Section 2030(b) provides a number of types of projects and uses for RMRA funding that include, but are not limited to, the following:  Road Maintenance and Rehabilitation  Safety Projects  Railroad Grade Separations  Complete Streets Components, including active transportation purposes, pedestrian and bicycle safety projects, transit facilities, and drainage and storm water capture projects in conjunction with any other allowable project  Traffic Control Devices  Matching funds to State or federal funds for projects under this subdivision Pursuant to SHC Section 2037, a city or county may spend its apportionment of RMRA funds on transportation priorities other than those outlined in SHC Section 2030 if the city or county’s average Pavement Condition Index (PCI) meets or exceeds 80. The City of Arroyo Grande’s PCI is less than 80, therefore, this year’s RMRA funds must be spent on the transportation priorities listed above. The City’s annual Pavement Management Program (PMP) budget will revert to a much smaller budget in the near future unless a revenue generation measure is approved to allow for a consistent and increased annual PMP. The City maintains its approximately 73 miles of streets through two mechanisms: (1) he City’s in-house street crew that provides daily efforts to keep streets functional, and (2) capital projects as part of its PMP to provide long term maintenance and repair. Based on the SHC, the City can use its RMRA funds for either of these services. Historically, the City has utilized its RMRA funds to augment the City’s PMP for upcoming roadway rehabilitation projects as opposed to allocating the funds to the City’s in-house street maintenance program. This has been staff’s recommendation to the City Council due to uncertainties that would be created by a decline in RMRA revenues or a possible repeal of SB1. In these events, it would be less impactful to cut a specific long-term project or a Page 72 of 124 Item 9.e. City Council Consideration of a Resolution to Adopt Projects to be Funded by the Road Repair and Accountability Act of 2017 (SB1) For Fiscal Year 2024 -25 March 26, 2024 Page 3 portion thereof than to reduce the City’s in-house street maintenance program. Since the in-house street maintenance program addresses constant, immediate short- and medium-term street safety issues (e.g., debris removal, potholes, skin patching, re- striping, storm water and drainage repairs, etc.), funding must be readily available for those more immediate needs. In accordance with SHC Section 2036, the City must maintain its existing commitment of local funds for street purposes to remain eligible for allocations of RMRA funds. This commitment is generally referred to as Maintenance of Effort. To receive these RMRA funds, each year the City must expend from its General Fund for street purposes in an amount not less than the annual average of General Fund expenditures during fiscal years (FY) 2009-10, FY 2010-11 and FY 2011- 12, as reported to the State Controller’s Office, pursuant to SHC Section 2151. For Arroyo Grande, the annual amount that must be spent from the General Fund for street purposes is $1,431,971. The City complies with this requirement using General Fund and Local Sales Tax Fund. Additionally, SHC Section 2034(a)(1) details the requirement that cities and counties must comply with when submitting its list of proposed projects to the CTC to be funded with RMRA funds each fiscal year. The requirements include: 1. Adopt the proposed project by Resolution at a regular public City Council meeting; 2. Describe the proposed project and its location; 3. Develop a proposed schedule for the project’s completion; and 4. Estimate the useful life of the improvement. The State has provided an estimate of $469,236 in FY 2024-25 RMRA funding available to the City of Arroyo Grande. It is recommended these RMRA funds be used to augment the City’s PMP. The City updated its PMP Report and its findings in April 2022. A list of streets and recommended rehabilitation for FY 2024-25 was identified at the January 23, 2024, City Council meeting. ALTERNATIVES: The following alternatives are provided for the Council’s consideration: 1. Adopt a Resolution approving a list of projects to be funded by SB1 in Fiscal Year 2024-25 2. Do not approve a Resolution approving a list of projects to be funded by SB1 in Fiscal Year 2024-25 and request further information; 3. Modify staff’s recommendation and adopt a Resolution approving a list of projects to be funded by SB1 in Fiscal Year 2024-25; or 4. Provide other direction to staff. Page 73 of 124 Item 9.e. City Council Consideration of a Resolution to Adopt Projects to be Funded by the Road Repair and Accountability Act of 2017 (SB1) For Fiscal Year 2024 -25 March 26, 2024 Page 4 ADVANTAGES: Submitting projects to the CTC will allow the City to receive RMRA funds. The projects will help to protect the Cities investment in its roadway system. DISADVANTAGES: None identified at this time. ENVIRONMENTAL REVIEW: Adopting the Resolution is not a project subject to the California Environmental Quality Act (CEQA) because the adoption in itself has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.) PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2. ATTACHMENT: 1. Proposed Resolution Page 74 of 124 65501.00002\41404558.1 ATTACHMENT 1 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ADOPTING A LIST OF PROJECTS FOR FISCAL YEAR 2024-25 FUNDED BY SENATE BILL 1: THE ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017 WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the California Legislature and signed into law by the Governor in April 2017 to address the significant multi-modal transportation funding shortfalls statewide; and WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of the City of Arroyo Grande (City) are aware of the projects proposed for funding in the community and which projects have been completed with such funding each fiscal year; and WHEREAS, the City must adopt by resolution a list of projects proposed to receive funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB1, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and WHEREAS, it is anticipated that the City will receive an estimated $469,236 in RMRA funding in Fiscal Year 2024-25 from SB1; and WHEREAS, this funding will enable the City to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options for the traveling public that would not have otherwise been possible without SB1 funding; and WHEREAS, the City has undergone a process to ensure public input into the community’s transportation priorities/the project list; and WHEREAS, the City uses its Pavement Management System and collaboration of the City’s various Departments to develop the SB1 project list to ensure revenues are being used on the most high-priority and cost-effective projects that also meet the community’s s priorities for transportation investment; and WHEREAS, the funding from SB1 will help the City maintain a nd rehabilitate its approximately 73 miles of streets/road throughout the City this year. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande hereby: 1. Finds that the foregoing recitals are true, correct and incorporated herein by this reference. Page 75 of 124 RESOLUTION NO. PAGE 2 2. Approves the following list of newly proposed projects that will be funded in-part with fiscal year 2024-25 Road Maintenance and Rehabilitation Account revenues: Project Title: 2024 Annual Pavement Rehabilitation Project, PW 2024-01 Project Description: This project will overlay pavement on City streets Project Location: Brighton Street neighborhood, Rancho Grande Phase 1 neighborhood, and Stagecoach neighborhood Estimated Project Schedule: Project development in Spring/Summer 2024; bidding in Summer 2024, and construction in Fall/Winter 2024-25. Estimated Project Useful Life: The useful life the hot mix asphalt overlay planned for these locations has a useful life of about 25 years. On motion by Council Member ________, seconded by Council Member _______, and by the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was adopted this 26th day of March, 2024. Page 76 of 124 RESOLUTION NO. PAGE 3 ________________________________ CAREN RAY RUSSOM, MAYOR ATTEST: JESSICA MATSON, CITY CLERK APPROVED AS TO CONTENT: _________________________________ MATTHEW DOWNING, CITY MANAGER APPROVED AS TO FORM: _________________________________ ISAAC ROSEN, CITY ATTORNEY Page 77 of 124