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HomeMy WebLinkAbout01-16-2018 Item 08 Road Repair and Accountability Act of 2017 Senate Bill 1 Meeting Date: 1/16/2018 FROM: Daryl Grigsby, Director of Public Works Prepared By: Gamaliel Anguiano, Transit Manager SUBJECT: ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017, SENATE BILL 1 (SB1) STATE OF GOOD REPAIR GRANT APPLICATION(S) RECOMMENDATION 1. Adopt a resolution authorizing the City Manager, or his designee, to execute and file grant applications with the State of California to receive SB1 Grant funds for transit projects and to execute any related grant applications, certifications, assurances, forms, agreements, and associated documents on behalf of the City on an ongoing basis; and 2. Approve a budget amendment to reflect received grant funds, if awarded; and 3. Approve the appropriation of grant money for the procurement of City-approved Transit CIP projects. DISCUSSION Background Financial Management Manual Policy 740 requires that the City Council approve grant applications equal or greater than $5,000. The application will request up to the maximum in combined City allocated and available discretionary competitive award amounts towards capital purchases that meet grant criteria On April 28, 2017 Governor Brown signed Senate Bill (SB) 1 (Chapter 5, Statutes of 2017), known as the Road Repair and Accountability Act of 2017. SB 1 will provide over $50 billion in transportation funding over the next decade to repair highways, bridges and local roads, to make strategic investments in congested commute and freight corridors, and to improve transit service. The direct allocation of transit funds will be under the State Transit Assistance (STA) Program formula to eligible agencies pursuant to Public Utilities Code (PUC) section 99312.1. Half is allocated according to population and half according to transit operator revenues. The SB1 transit assistance component is comprised of two parts. One part of the program augments the base of the State Transit Assistance program by an estimated $175 million in 2017- 18 and $274 million in 2018-19 stemming from a portion of the new sales tax on diesel fuel. From this, the City of San Luis Obispo is anticipated to receive approximately $137,000 or more annually to supplement operational costs. This program does not require pre-approval of projects before funding allocation. The second part of SB1 transit assistance is a competitive, discretionary grant process for capital purchase assistance. This investment in public transit is referred to as State of Good Repair Packet Pg 131 8 (SGR) Program. Access to SB1 SGR requires an annual grant application for both allocated and the competitive discretionary amounts. Such grant applications also require board/council approval. In FY 17-18 approximately $397,338 is available to transit operators in San Luis Obispo County for eligible transit maintenance, rehabilitation and capital projects. It is estimated that similar amounts will be available in this program thereafter. State of Good Repair (SGR), Capital Project The SGR Program provides funding for capital assistance to rehabilitate and modernize California’s existing local transit systems. SGR funds are available for capital projects that maintain the public transit system in a state of good repair. Statutes list the projects eligible for SGR funding, which are: • Transit capital projects or services to maintain or repair a transit operator’s existing transit vehicle fleet or transit facilities, including the rehabilitation or modernization of the existing vehicles or facilities. • The design, acquisition and construction of new vehicles or facilities that improve existing transit services. • Transit services that complement local efforts for repair and improvement of local transportation infrastructure. The City of San Luis Obispo’s direct annual allocation of SGR SB1 funding for FY 17/18 is only $7,358. This amount is only sufficient for smaller transit projects. However, SB1 allows for annual roll-over and combining of multiple years, up to four years to help achieve a larger project. Further, there is regional discretionary amounts, specific to transit programs, that the City of San Luis Obispo can purse for larger projects. Capital Projects, Vehicles The Council adopted FY 17-19 Financial Plan includes five-year fleet replacements forecast. Within this forecast includes replacement of the Trolley vehicle which is approaching the end of its Federal Transit Administration defined “useful life.” While this replacement is outside of the 2-year Financial Plan period, one use of available SB SGR funds would be to work now towards electrification of SLO transit vehicles. The trolley may be a good candidate for this purpose. Standard clean diesel vehicles range from $250,000 to $300,000 but can be upgraded to be fully electric with an additional $350,000. This price may come down as additional EV vehicles hit the market or additional rebates are offered stat ewide. With a combination of SB1 SGR, LCTOP grant funds and some local match, this project could be achieved. Other Transit approved CIP projects could also be achieved as an alternative or thereafter with other grant applications. Staff is recommending combining multiple grants, multiple year allocations and pursuing up to the maximum in discretionary competitive award amounts, towards pursuing Transit approved CIP capital purchases. Specifically, with regard to transit fleet needs, such capital needs are pursuing alternative energy vehicles. Packet Pg 132 8 FISCAL IMPACT There is no impact on the City’s General Fund as a result of applying or receiving these grants funds. These funds will assist and supplement the Transit Enterprise fund in achieving its capital projects for vehicle replacements.; Currently funding source are very limited to federal 5307 funding and its local match requirements usually through offsetting state grants. While there are no defined match requirements for the SB1 program, grants applications which show a matching source of funds tend to score higher in the evaluation process. Staff proposes to match grant amounts similar to federal grant match amounts of 20% of the total cost of the project. Funds would come out of the Transit Enterprise annual fund balance which has had modest year-end balance the last four fiscal years. ALTERNATIVES 1. Authorize the City Manager or their designee to annually apply for SB1 SGR funds on behalf of the City of San Luis Obispo and request City Council authority for each year’s grant application. 2. Deny grant application of these funds. Attachments: a - SB1 Resolution b - Exhibit A SB1 -Certs Assurances Packet Pg 133 8 R ______ RESOLUTION NO. _____ (2018 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AUTHORIZING THE EXECUTION OF THE CERTIFICATIONS AND ASSURANCES FOR THE CALIFORNIA STATE OF GOOD REPAIR PROGRAM WHEREAS, the City of San Luis Obispo (“City”) is an eligible project sponsor and may receive State Transit Assistance funding from the State of Good Repair Account (SGR) now or sometime in the future for transit projects; and WHEREAS, the statutes related to state-funded transit projects require a local or regional implementing agency to abide by various regulations; and WHEREAS, Senate Bill 1 (2017) named the Department of Transportation (Department) as the administrative agency for the SGR; and WHEREAS, the Department has developed guidelines for the purpose of administering and distributing SGR funds to eligible project sponsors (local agencies); and WHEREAS, the City wishes to delegate authorization to execute these documents and any amendments thereto to the City Manager. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo that the City is hereby approves the grant application for SB 1 funds and hereby agrees to comply with all conditions and requirements set forth in the Certification and Assurances document attached hereto as Exhibit “A” and all applicable statutes, regulations and guidelines for all SGR funded transit projects. NOW THEREFORE, BE IT FURTHER RESOLVED that the City Manager be authorized to execute all required documents of the SGR program and any Amendments thereto with the California Department of Transportation. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2018. ____________________________________ Mayor Heidi Harmon Packet Pg 134 8 Resolution No. _____ (2018 Series) Page 2 R ______ ATTEST: ____________________________________ Carrie Gallagher City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ______ day of ______________, _________. ____________________________________ Carrie Gallagher City Clerk Packet Pg 135 8 City of San Luis Obispo Page 1 State Transit Assistance State of Good Repair Program Recipient Certifications and Assurances Recipient: City of San Luis Obispo Effective Date: January 9th, 2018. In order to receive State of Good Repair Program (SGR) funds from the California Department of Transportation (Department), recipients must agree to following terms and conditions: A. General (1) The recipient agrees to abide by the State of Good Repair Guidelines as may be updated from time to time. (2) The potential recipient must submit to the Department a State of Good Repair Program Project List annually, listing all projects proposed to be funded by the SGR program. The project list should include the estimated SGR share assigned to each project along with the total estimated cost of each project.. (3) The recipient must submit a signed Authorized Agent form designating the representative who can submit documents on behalf of the recipient and a copy of the board resolution authorizing the agent. B. Project Administration (1) The recipient certifies that required environmental documentation will be completed prior to expending SGR funds. The recipient assures that each project approved for SGR funding comply with Public Resources Code § 21100 and § 21150. (2) The recipient certifies that SGR funds will be used for transit purposes and SGR funded projects will be completed and remain in operation for the estimated useful lives of the assets or improvements. (3) The recipient certifies that it has the legal, financial, and technical capacity to deliver the projects, including the safety and security aspects of each project. Packet Pg 136 8 City of San Luis Obispo Page 2 (4) The recipient certifies that there is no pending litigation, dispute, or negative audit findings related to any SGR project at the time an SGR project is submitted in the annual list. (5) Recipient agrees to notify the Department immediately if litigation is filed or disputes arise after submission of the annual project list and to notify the Department of any negative audit findings related to any project using SGR funds. (6) The recipient must maintain satisfactory continuing control over the use of project equipment and/or facilities and will adequately maintain project equipment and/or facilities for the estimated useful life of each project. (7) Any and all interest the recipient earns on SGR funds must be reported to the Department and may only be used on approved SGR projects or returned to the Department. (8) The recipient must notify the Department of any proposed changes to an approved project list by submitting an amended project list. (9) Funds will be expended in a timely manner. C. Reporting (1) Per Public Utilities Code § 99312.1 (e) and (f), the recipient must submit the following SGR reports: a. Annual Expenditure Reports within six months of the close of the fiscal year (by December 31st) of each year. b. The annual audit required under the Transportation Development Act (TDA), to verify receipt and appropriate expenditure of SGR funds. A copy of the audit report must be submitted to the Department within six months of the close of each fiscal year in which SGR funds have been received or expended. D. Cost Principles (1) The recipient agrees to comply with Title 2 of the Code of Federal Regulations Part 200, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments. (2) The recipient agrees, and will assure that its contractors and subcontractors will be obligated to agree, that (a) Contract Cost Principles and Procedures, 48 CFR, Federal Acquisition Regulations System, Chapter 1, Part 31, et seq., shall be used to determine the allowability of individual project cost items and (b) those parties shall Packet Pg 137 8 City of San Luis Obispo Page 3 comply with Federal administrative procedures in accordance with 2 CFR, Part 200, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments. (3) Any project cost for which the recipient has received payment that are determined by subsequent audit to be unallowable under 2 CFR, Part 200, are subject to repayment by the recipient to the State of California (State). Should the recipient fail to reimburse moneys due to the State within thirty (30) days of demand, or within such other period as may be agreed in writing between the Parties hereto, the State is authorized to intercept and withhold future payments due the recipient from the State or any third-party source, including but not limited to, the State Treasurer and the State Controller. E. Record Retention (1) The recipient agrees, and will assure that its contractors and subcontractors shall establish and maintain an accounting system and records that properly accumulate and segregate incurred project costs and matching funds by line item for the project. The accounting system of the recipient, its contractors and all subcontractors shall conform to Generally Accepted Accounting Principles (GAAP), enable the determination of incurred costs at interim points of completion, and provide support for reimbursement payment vouchers or invoices. All accounting records and other supporting papers of the recipient, its contractors and subcontractors connected with SGR funding shall be maintained for a minimum of three (3) years from the date of final payment and shall be held open to inspection, copying, and audit by representatives of the State and the California State Auditor. Copies thereof will be furnished by the recipient, its contractors, and subcontractors upon receipt of any request made by the State or its agents. In conducting an audit of the costs claimed, the State will rely to the maximum extent possible on any prior audit of the recipient pursuant to the provisions of federal and State law. In the absence of such an audit, any acceptable audit work performed by the recipient’s external and internal auditors may be relied upon and used by the State when planning and conducting additional audits. (2) For the purpose of determining compliance with Title 21, California Code of Regulations, Section 2500 et seq., when applicable, and other matters connected with the performance of the recipient’s contracts with third parties pursuant to Government Code § 8546.7, the recipient, its contractors and subcontractors and the Department shall each maintain and make available for inspection all books, documents, papers, accounting records, and other evidence pertaining to the performance of such contracts, including, but not limited to, the costs of administering those various contracts. All of the above referenced parties shall make such materials available at their respective offices at all reasonable times during the entire project period and for three (3) years from the date of final payment. The State, the California State Auditor, or any duly authorized representative of the State, shall each have access to any books, records, and documents that are pertinent to a Packet Pg 138 8 City of San Luis Obispo Page 4 project for audits, examinations, excerpts, and transactions, and the recipient shall furnish copies thereof if requested. (3) The recipient, its contractors and subcontractors will permit access to all records of employment, employment advertisements, employment application forms, and other pertinent data and records by the State Fair Employment Practices and Housing Commission, or any other agency of the State of California designated by the State, for the purpose of any investigation to ascertain compliance with this document. F. Special Situations (1) Recipient acknowledges that if a project list is not submitted timely, the recipient forfeits its apportionment for that fiscal year. (2) Recipients with delinquent expenditure reports may risk future eligibility for future SGR funding. (3) Recipient acknowledges that the Department shall have the right to perform an audit and/or request detailed project information of the recipient’s SGR funded projects at the Department’s discretion from SGR award through 3 years after the completion and final billing of any SGR funded project.. Recipient agrees to provide any requested project information. I certify all of these conditions will be met. Agency: City of San Luis Obsipo BY: Derek Johnson, City Manager Packet Pg 139 8 City of San Luis Obispo Page 5 ATTACHMENT I (INSERT Agency Board Resolution approving this document) Packet Pg 140 8