HomeMy WebLinkAbout06/05/1997, 7D - A PROPOSAL TO EXPLORE PLACING A COUNTY WIDE 1/2 CENT SALES TAX MEASURE ON THE NOVEMBER 1998 BALLOT MEMO
TO: HONORABLE MAYORS AND CITY COUNCILS
SUBJECT: A PROPOSAL TO EXPLORE PLACING A COUNTY WIDE '/z CENT SALES
TAX MEASURE ON THE NOVEMBER 1998 BALLOT
DATE: JUNE 5, 1997
Definition of the problem:
An analysis of local street and road maintenance needs prepared by the San Luis Obispo Council
of Governments determined that a backlog of$52 to$140 million in projects existing throughout
the region could not be fully funded within existing resources. Elected officials from each city
can readily identify needed transportation projects within their respective communities that have
not been addressed due to the lack of funding. With the passage of Proposition 218 the voters
reinforced their right to vote on taxes and have changed the way local governments raise
revenues for public purposes. When combined,these factors make it nearly impossible for any
one city alone to correct the transportation problems occurring within its jurisdiction.
No existing source of funding for transportation improvements appears to offer a comprehensive
solution to street maintenance needs of the cities within San Luis Obispo County. At the Federal
level,the Intermodal Surface Transportation Efficiency Act(ISTEA)monies are projected to rise
only nominally over the next few years. State efforts at funding transportation improvements
have focused on providing greater flexibility in using the funds but with no additional funding.
Potential solution:
Working together the cities could explore placing a county wide measure on the November 1998
ballot to provide additional revenue to correct the street maintenance problems in our local
jurisdictions. A ballof measure increasing the sales tax '/:percent would generate$11 million to
correct the transportation problems throughout the region. If approved,the county-wide measure
would comprehensively address the transportation needs of the region.There is a proven track
record for.this type of approach with numerous other counties having successfully addressed _
their transportation problems using a similar method.
Even though there are several advantages to this type of approach,placing a ballot measure on
the November ballot without sufficient study will virtually guarantee failure. A number of
questions must be answered before a final determination is made on whether or not to place a
ballot measure before the voters. The following is a summary of the issues that must be resolved
before a ballot measure could be placed before the voters:
ID -I
1. . Are the voters in San Luis Obispo County supportive of a sales tax measure to address
transportation problems in the region?
2. How will Proposition 218 affect the ballot measure?
3. Will the ballot measure be a special tax, general tax or modeled after the Santa Clara
measure?
4. Who will have administrative responsibility for distributing the revenues?
5. How will the revenue proceeds be distributed to the various cities and county?
Obviously there are more issues that would need to be resolved before a formal commitment to
place a ballot measure before the voters is made.
Proposed strategy
The first step in the process would begin with the seven cities adopting the attached resolution
agreeing to explore the potential of placing a transportation measure before the voters in 1998. In
addition, formation of a working group is needed to develop solutions to various concerns that
are raised when a ballot measure is proposed, ensure compliance with Proposition 218, conduct a
voter survey to determine the level of support and structure the ballot measure. It is
recommended that the working group consist of the Mayors, City Managers,two County
Supervisors, County Chief Administrative Officer and representatives from SLOCOG.The
working group members would have the added responsibility of providing regular status reports
to their respective boards.
Adoption of the attached resolution would allow the exploration of a method to correct the long
term transportation problems within the region.
Attachments:
Joint Resolution No.. 01-97
Countywide Local Option Sales Tax Measure; Special vs. General Purpose Options
Local Option Sales Tax Program Revenue Allocation; Comparison of Selected
Successful Counties
Draft Countywide pavement Maintenance&Rehabilitation Needs; Summary.of Findings,
May, 1997
Analysis of Options&Methods to Fund the Maintainance and Improvement of the Local
&Regional Transportation System
Map; Local Option Sales Tax Counties
— JOINT RESOLUTION NO. 01-97
A RESOLUTION OF THE CITIES
OF SAN LUIS OBISPO COUNTY
AGREEING TO EXPLORE THE FEASIBILITY OF
PLACING A %:CENT SALES TAX MEASURE ON THE
NOVEMBER 1998 BALLOT
WHEREAS, SLOCOG has identified a total of$52 to $140 million in existing backlog of
needed road maintenance and rehabilitation that could not be carried out within current funding;
and
WHEREAS,Federal and State funding for street maintenance and rehabilitation is not
expected to increase in the future; and
WHEREAS,exploring the feasibility of placing a%:cent sales tax measure on the ballot
could create the solution to the region's transportation problems;and
WHEREAS,other counties in the State encompassing 80%of the population of
California have utilized this method to successfully address their transportation problems.
NOW,THEREFORE,BE IT RESOLVED by the City Councils of the Cities of San Luis
Obispo County:
1. The cities agree to explore placing a ''/:cent sales tax measure on the November
1998 ballot
2. That a working group of Mayors and City Managers meet to determine the
feasibility of proposing a %z sales tax measure.
3. That County and SLOCOG representatives be invited to participate in the working
group to explore the feasibility of a ballot measure.
PASSED AND ADOPTED by the City Councils of the Cities of San Luis Obispo County
at a special joint meeting held on the 5th day of June, 1997.
MAYOR,CITY OF ARROYO GRANDE
ATTEST:
CITY CLERK
Joint Resolution No. 01-97
MAYOR, CITY OF ATASCADERO
ATTEST:
CITY CLERK
MAYOR, CITY OF GROVER BEACH
ATTEST: -
CITY CLERK
MAYOR, CITY OF MORRO BAY
ATTEST:
CITY CLERK
MAYOR,CITY OF PASO ROBLES
ATTEST:
CITY.CLERK
MAYOR, CITY OF PISMO BEACH
ATTEST:
CITY CLERK
-MAYOR, CITY OF SAN LUIS OBISPO
ATTEST: _
4 .
CITY CLERK
"M -4/
San Luis Obispo Council of Governments
Countywide Local Option Sales Tax Measure
Special vs General Purpose Options
&Special Tax General Tax -Santa Clara County Tax Advisory Measures
Revenue designated for specific Revenue uses are not designated
General purposes: highway, road &transit Revenue uses are not designated and may be used for any general
Definition improvements; street&road and may be used for any purpose purpose: accompanied by a
maintenance, etc separate advisory measure
Approved by Co. Bd.of Sups., No plan allowed since by No plan allowed. Ballot measure
Expenditure and City Councils representing definition it is a general tax, accompanied by non-binding,
Plan majority of cities with majority of revenue must go into general advisory measure providing
population in incorporated areas fund. -suggested expenditure plan.
Requires approval of ordinance Requires adoption of ordinance or Requires adoption of ordinance o
Placement on by majority of Cities with majority resolution on a 2/3rds vote by resolution on a 2/3rds vote Co.
Ballot of population in county and Co.
Bd.of Supervisors Co.Bd.of Supervisors Bd.of Supervisors(1)
Voter 2/3rds Majority(1)
Requirement Majority(1)
Tax Rate: Up.to 1%in .5 or 1%steps Up to 1% in .5 or 1%steps Up to 1% in .5 or 1% steps
al Years: Up to 20 years Up to 20 years Up to 20 years
Funding: At.5%$11 Million annually At.5%$11 Million annually At.5%$11 Million annually
Administrative New Authority established by Co.
Responsibility Bd.of Sups.or existing County Bd.of Supervisors County Bd. of Supervisors
transportation planning agency
Revenue May be approved concurrrently May be approved concurrrently May be approved concurrrently
Bonds with tax increase with tax increase with tax increase
Steering Committee;Community
Actions Steering Committee; Community based campaign organization;
suggested for based campaign organization; Steering Committee; Community Public opinion survey;
voter approval Public opinion survey; based campaign organization Expenditure plan based on poll;
Expenditure plan based on poll. Establishment of watchdog
committee.
Requires majority vote;Non-
binding advisory measure
Requires 2/3rd vote;All revenue Requires majority vote;Voters are suggests revenue uses and
Issues earmarked and allocated for asked s vote fora tax increase requires intergovernmental trust
projects and agencies. voters for no specific purpose voter knowledge of uses
know what they are voting for. enhances passage; expenditures
monitoried by watchdog
committee;
(1) Note: Enabling legislation required for any sales tax increase sought by a city.
7D
San Luis Obispo Council of Governments
Local Option Sales Tax Program Revenue Allocation
Comparision of Selected Successful Counties
Responsible Ballot Total Funding Formula for
Agency Year Vote Years Allocations Allocations
Off the top: $1 million for bike facilities;
San Diego County and $50,000 base for each jurisdiction Any excess funds
Regional 54% distributed to locals
Transportation 1987 yes; 20 per year. Of the remainder: 1/3rd for
population & 113rd
State Highway Projects; 1/3rd for public based 2/3rd
on
Commission 46/o no on
(SANDAL) transit; 1/3rd for local streets & roads
maintenance & construction road miles
Off the top: $3 million for bike & ped.
Contra Costa trails; and $50,000 base for each After$50,000 basic
Transportation ' 58% jurisdiction per year. Of remainder allocation, remaining
Commission 1988 yes; 20 41% for highways & arterials; 20% for funds allocated 50%
(CCTC) 42% no street maintenance & improvement; on population & 50%
28% for transit including Bart extension on road miles
& regional commuter trails;
70% to W. Co., 55%for hwys & Funds for local
Riverside County 79% commuter rail, 40% for local streets; streets & roads
Transportation 1988 yes; 20 27% to Coachella Vly, with 55% for allocated based 75%
Ir- fission (RCTC) 21% no hwys & arterials, 40% local streets, 5% on population, 25%
for specialized trans; 3% to Palo Verde on measure revenue
Valley for local streets generated
Santa Barbara Off the top: $50,000 base for each
County Local 55% jurisdiction. Of the remainder. 30% for After$50,000 base all
Transportation 1989 yes; 20 highways, interchanges & regional local street& road
Authority 45% no projects, 70% for local street& road funds allocated based
(SBCOG) improvements and maintenance on population
Off the top: $50,000 base for each After$50,000 basic
Los Angeles County jurisdiction. Of the remainder. 25% for
reeways, highways, major streets, & allocation, remaining
51% freeways, funds allocated 50%
1990 yes; 20 interchanges; 30% for systems mgmt
Commission 49% no improvements, incl. signals, traffic mgmt on population &50%
(LACTC) & bike facilities; 30% for local streets & on square yards of
roads. 15% transit streets & roads
In 1992, in the Guardino Decision, the Ca.'Supreme Court invalidated sales tax increase measures
approved by majority but less than 213rds vote; since then special taxes have required a"213rds vote.
Santa Clara County Advisory measure containing a broad
Transportation Measure 79% list of highway, bus and rail transit, and
Commission A (1996) yes; 9 local street maintenance projects to be No formula
'SCCTC) 21% no reviewed by by a "citizens watchdog
committee"
banfa Clara County 51%
Transportation Measure General tax increase with no
Commission B (1996) 49 es, 9 expenditure plan
(SCCTC)
9r_I
San Luis ObispQ.CQuncfof Governments
Countywide Pavement M`a ntenan.cgA Rehabilitation Needs
S urrcicv #
-og s
µ T""»>t
Purpose and Background
This report provides an analysis of current local street and road pavement maintenance and rehabilitation
needs countywide. It is intended to assist the region and local jurisdictions in developing a strategy to
maintain and improve the existing street and road system and address the continued decline in funding for
this purpose.
There are 1,825 miles of local roads in the San Luis Obispo region: 1,284 miles are the responsibility of
the County, and 541 miles of the cities. Funding available for road maintenance has not kept pace with the
needs. Without an active maintenance program, the typical roadway surface will eventually deteriorate to
a point where it must be reconstructed at a significant cost. Based on this analysis, local jurisdictions
should consider expanding their preventive maintenance programs now in order to reduce the need to
carry out more extensive roadway rehabilitation or reconstruction projects in the future.
Note: This analysis is based on average urban and rural street widths, and common maintenance &
rehabilitation strategies and costs. Actual street and road widths, maintenance strategies and costs may
vary from those used in this analysis based on available resources, and engineering standards and
policies.
`4ajor Findings:
ountywide
1. 27% of all roads (a total of 492 miles) in the region are in poor condition. The statewide average
for roads in this condition is 11%. Typically, such roads require at least a thick (2') overlay for full
rehabilitation. The estimated total cost to carry out all thick overlay projects ranges from $40.3 million
to $97.6 million.
2. 9% of all roads (a total of 173 miles) are in medium condition. The statewide average for roads-in
this condition is 12%. Typically, such roads require at least a thin (11 overlay for full rehabilitation. The
estimated total cost to cavy out all necessary thin overlay projects ranges from $6.8 million to $22.7
million.
3. 27% of all roads (a total of 493 miles) are in fair condition. The statewide average for roads in this
condition is 43%. Typically, such roads require only crack sealing and patching work to maintain and
extend their service fife. The estimated total cost to carry out all necessary sealing and patching work
ranges from $651.000 to $1.9 million.
4. 37% of all roads (a total of 669 miles) are in good or best condition., The statewide.average for
roads in this condition is 34%. Typically, such roads currently require no maintenance work."Typically,
such roads were built or resurfaced within the past ten years.
5. Total Cost to carry out all currently identified work - The estimated total cost to carry out all
necessary work, including: crack or slurry sealing, patching, and thin or thick overlays (based on the
standard strategies and costs used in this study ranges from $52.5 million to $142.8 million.
Local Jurisdiction Summaries
City of Arroyo Grande - No inventory was completed for Arroyo Grande or Pismo Beach at the time of
this report. The following. ratings are based on averaging the findings of the other five cities: 32% of
road miles (19 miles) are rated "good" or "best"and require no current work; 31% (19 miles) are rated
"fair", requiring sack sealing and patching; 15% (9 miles) are rated "medium", requiring a thin (1'
overlay; and 21% (13 miles) are rated "poor', requiring a thick (2") overlay. The estimated cost for all
work ranges from $2.25 million to $6.1 million. The FY 96/97 the road maintenance budget is
$115,000.
• City of Atascadero - Based on preliminary results from an inventory in 1997: 50% of road miles (70
miles) are rated "good" or"best" and require no current work; 13% (18 miles) are rated "fair', requiring
crack sealing and patching; 5% (7 miles) are rated "medium" requiring a thin (1") overlay; a--d 32% (45
miles) are rated "poor', requiring a thick (2") overlay. The estimated cost for all work range rom $6.18
million to $15.8 million. The FY 96/97 road maintenance budget is expected to be about IS 0;000.
• City of Grover Beach - Based on an inventory in 1996: 45% of road miles (23 miles) are rated "good"
or "best" and require no current work; 25% (13 miles) are rated "fair", requiring crack sealing and
patching; 15% `8 miles) are rated "medium", requiring a thin (1") overlay; and 15% (8 miles) are rated
poor, requiring a thick (2' overlay. The estimated cost for all work ranges from $1.54 million to $4.3
million. The FY 96/97 road maintenance budget is $80,000.
• City of Morro Bay- Based on an inventory completed in 1996: 35% of road miles (21 miles) are rated
"good" or"best" and require no current work; 10% (5 miles) are rated "fair", requiring crack sealing and
patching; 5% (2 miles) are rated "medium), requiring a thin (1") overlay; and 50% (24 miles) are rated
poor, requiring a thick (2" overlay). The estimated cost for all work ranges from $3.17 million to $8
million. The FY 96/97 road maintenance budget is $50,000. . .
• City of Paso Robles - Based on updated inventory: 20% of road miles (20 miles) are rated "good"-or
"best" and require no current work; 40% (40 miles) are rated "fair', requiring crack sealing and patching;
35% (35 miles) are rated "medium", requiring a thin (11 overlay; and 4% (4 miles) are rated "poor°,
requiring a thick (2') overlay. The estimated cost for all work ranges from $1.7 million to $8.9 million.
The City budget for road maintenance varies from year to year. In FY 95/96 it was about $340,000, the
FY 96/97 budget is $50,O00,and in FY 97/98 it is expected to increase to about$350,000.
• City of Pismo Beach - No inventory was completed for Arroyo Grande or Pismo Beach at the time of
this report, therefore the following ratings are based on averaging the findings of the other five cities:
32% of road miles (11 miles) are rated "good" or "best" and require no current work; 31% are rated
"fair" , requiring crack sealing and patching; 10% (3 miles) are rated medium, requiring a thin (1')
overlay; and 21% (7 miles) are rated "poor", requiring a thick (2' overlay. The estimated cost for all
work ranges from $1.1 million to $2.9 million. The FY 96/97 road maintenance budget is $60,000.
• City of San Luis Obispo - The city is currently completing an update of its road inventory, of which
about 70% of the work has been completed. Based on the roads already evaluated: 50% of road
miles (64 miles) are rated "good" or"best" and require no current work; 22% (22 miles) are-rated °fair",
requiring crack sealing and patching; 13% (14 miles) are rated "medium) requiring a thin (1' overlay;
and 5% (6 miles) are rated "poor", requiring a thick (2' overlay. The estimated cost for all work (based
on the standard maintenance strategy and costs used in this analysis) ranges from.$2 million to $5.9
million. City staff estimate, based upon their new pavement management program, that the cost
ranges from $8.9 to $15 million to bring the roads up to 100%). The FY 96/97 road maintenance
budget is $1.2 million.
• San Luis Obispo County - An inventory was completed in 1989 (an update is scheduled to begin in
June, 1997). Based on the 1989 inventory: 35% of all road miles (449 miles) are rated "good" or"best"
and require no current work: 25% (321 miles) are rated "fair", requiring crack sealing and patching; 10%
(128.miles) are rated "medium" requiring a thin (11 overlay or seal coat (the County uses a seal coat
instead of a thin overlay); and 30% (385 miles) are rated "poor' requiring a thick (2' overlay. The
estimated cost for all work (based on the standard maintenance strategy and costs used in this
analysis) ranges from $34.5 million to $90.6 million County engineering staff estimate that the total
cost for all required work is approximately $28.5 million. The FY 96/97 road maintenance budget is
$2.5 million, which is being used only for crack sealing and patching. ,,.? M.
Q
AN ANALYSIS OF OPTIONS AND METHODS TO
FUND THE MAINTENANCE & IMPROVEMENT
OF THE LOCAL & REGIONAL TRANSPORTATION SYSTEM
Focused on implementation of the Local Option Sales Tax
What is the problem?
I : The ability of the government to raise taxes'to pay for all public purposes,
including transportation improvements,has been limited since the late 1970's by
significant legal challenges, including Proposition 13 which limited the use of the'
property tax as a primary method of funding improvements, and Proposition 62 which
established the 2/3 voter approval requirement for special taxes. In 1995, the State
Supreme Court ruled in the Guardino decision that a sales tax increase for a specific
purpose required a 2/3rd vote.
2. Since the mid 1980's the need to increase funding at the local, regional and state
level for transportation system maintenance and improvement has been recognized
throughout California In response,a number of laws were enacted by the State
Legislature providing counties with the authority to raise their local sales tax to provide
funding for these purposes. Every jurisdiction in the region is not spending sufficient
funding to adequately maintain their street and road system.
3. SLOCOG staff recently prepared an analysis of countywide local street and mad
maintenance needs for all jurisdictions in the region and found that there was about a S48
million total existing backlog of needed maintenance that could not be carried out within
currently limited funding.
4. In late 1989 SLOCOG funded a countywide public opinion survey to determine if there
would be support for a Measure to be placed on the 1990 ballot that would increase the
local.sales tax by '/s cent. A steering committee was formed and significant information
on the issue was developed;but the effort was abandoned when polling data questioned
whether a measure could succeed.The survey found that voters would give the highest
level of support for a%:cent increase in the sales tax if a portion of the funding was used
on the following priorities:
• 76%support for maintenance of existing streets and roads;
• 720%support for protecting open space;
• 68%support for road and highway improvements;
• 68%support for construction of an interchange at Highway I and Cuesta College;
• 63%support for widening Route 46 East to four lanes.
• 68%support for providing express bus service between San Luis Obispo and outlying.
communities.
5. Since 1994 the voters in nineteen counties (an area with over 90 percent of the state
population) have approved increases in the sales tax to pay for transportation system
improvements,or these two were overturned by the counts:a.5%increase in Monterey
County in 1989; and a.5%increase in Santa Clara County in 1992_ _ Ak �.
What are our options?
1. At the Federal level, the reauthorization of the Intermodal Surface transportation
Efficiency Act of 1991 (ISTEA) is.expected to occur by the end of 1997. While there has
been some discussion of providing increased flexibility in the use of Federal funding,and
in providing nominal fund increases through changes in formulas, no major increase in
funding is expected
2. It appears unlikely the State Legislature will by itself enact legislation increasing the gas
tax or the state sales tax to pay for transportation improvements. In fact, recent history
has shown that at the state level there is no desire to increase taxes of any kind. The State
reaction has been to provide local and regional entities the authority needed to increase
taxes as necessary by local action.
3. A major legislative effort to reform the State Transportation Improvement Program
(STIP)process has been ongoing for the past two years led by Senator Kopp. The current
version of his bill(SB45)will, if enacted into law,provide additional flexibility tc local
jurisdictions for the use of State gas tax funds but does not provide an increase in
funding.
4. Since additional f aiding probably won't or can't be provided at the State or Federal level,
the practical conclusion to make is that local and regional agencies must take more
responsibility to pay for the maintenance and improvement of their transportation system
via general funds, assessment districts, developer fees, or regional sales taxes.
5. State law does provide for a local option fuel tax increase with approval of the
Supervisors,a majority of the city councils which represent a majority of the population
and a two thirds approval of the electorate. Such a tax is considered very difficult if not
impossible to implement in an area like San-Luis Obispo County. It has been estimated
that it would take a 20 cent increase in the fuel tax to provide the same revenue as a %:
cent increase in the sales tax. No local option gas tax measure has ever been approved
6. The means of raising finding for transportation improvements that is the most technically
feasible,politically appropriate, and most acceptable to.the public is to seek an increase in
the sales tax, either for a specific purpose(requiring a two-thirds vote)or a general
purpose(requiring a majority vote).
7. The amount of new revenue which would be produced annually in San Luis Obispo
County from a %:percent increase in the sales tax is approximately$10 million, at 1
percent it would produce approximately$20 million.
ID- lo
What is the impact of recent elections?
In 1996, Santa Clara County successfully received voter approval of a 5 % increase in the
local sales tax for general purposes (a major portion of which is likely to be expanded on
transportation system maintenance and improvements based on the results of the
companion advisory measure):
a) The Santa Clara County measures were successful because of the use of
complimentary measures (A & B), the first of which was an "advisory expenditure
plan", and the second which actually raised the sales tax by .5%.
b) Measure A in Santa Clara, which was an advisory measure asking the voters what
transportation system improvement priorities they would support for the use of any
new sales tax revenue won by 73%. Measure B, which raised the sales tax by .5% for
general purposes passed by 52%.
c) The Santa Clara measures were carefully presented to the voters without an "official"
promise linking the two measures, thereby minimizing the possibility of successful
legal challenges based on state law concerning imposition of special taxes.
d) The success of the Santa Clara County methodology in the 1996 election required the
cities and the county to develop a close and trusting relationship since the county is
the entity imposing the tax and allocating the revenue. There can be no formal
agreement between the two entities as to how the increased sales tax revenue will be
spent due to the possibility of a legal challenge based on the tax being for a special
purpose.
e) Information received from Santa Clara county staff indicates that no challenges to the
measures will be made by the Gann/Proposition Group since they accept their
legitimacy within the scope of state law, the Guardino Decision, and Prop 62.
2. Locally, in southern San Luis Obispo County, on March 4, 1997, the voters in the Lucia
Mar Unified School District overwhelmingly (by 74.5%) approved a $24 million school
bond issue to construct new school facilities.
The success of the Lucia Mar bond issue, which raised property taxes by $28 per
$100,000 in assess valuation, was attributed to the fact that the need was well defined and
communicated, that there was a strong and well organized community based campaign.
Conclusions
Increasing the local sales tax for general purpose, based on the Santa Clara County
method used in November, 1996, appears to be well grounded in law, and may have the
most potential for success in providing funding for needed transportation system
maintenance improvements.
2. Based on the trend in State and Federal government policies. it is becoming necessary for
action at the local (county) level to provide the additional funding necessary for the
maintenance and improvement of the transportation system.
I Statewide data shows that the success of the vast majority of sales tax increase measures
(70%) was primarily due to the measure being carefully designed based on
comprehensive initial public opinion poling and follow-up tracking polls. and a clearly
defined expenditure plan based on the polling data including only those projects that have
broad based support and excluding any project that would be opposed by any segment of
the population.
Local Option Sales Tax Counties
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