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Home My WebLink About07/01/1997, A1 - CITY DESIGNATION OF REPRESENTATIVES TO THE JOINT CITY/COUNTY PROCESS OF EXAMINING ADDITIONAL REVENUE SOURCES FOR ROAD/TRANSPORTATION PURPOSES council ° j acEnaa RepoRt C I T Y O F SAN LU IS O B I S P O FROM: John Dunn,City Administrative OfficeE::D� SUBJECT: City Designation of Representatives to the Joint City/County Process of Examining Additional Revenue Sources for Road/Transportation Purposes CAO RECOMMENDATION That the City Council designate Vice Mayor Bill Roalman and City Administrative Officer John Dunn as the City's representatives to the Joint City/County process for development of a financial source for road/transportation purposes. DISCUSSION On June 101h you received a communication from the Mayor on this matter(see attached). As you know, this subject was also discussed at some length at the June 5te Joint Cities meeting (see attached). While the original suggestion from the City of Grover Beach was for the cities and the County to examine a prospective County-wide sales tax increase of'/z cent, discussion which followed also asked that we look at an increase in the gasoline tax or the Transient Occupancy Tax. The fundamental question is whether roadway maintenance needs are so underfunded that an additional revenue source is needed in order to make our roads safe and convenient for the traveling public,and to prevent future deterioration of our City and County roadway systems. A secondary,though very important consideration,and applicable to any selected revenue source, is how the money should be distributed back to the various jurisdictions, on a situs, population, combination or other basis. A third question is whether all of the new revenue should be for roadway purposes or whether there should be a"local option'choice for the use of a portion of the money. In the case where Vice-Mayor Mr. Roalman, or the CAO cannot attend established meetings, then their respective alternate, would be Councilman Romero, SLOCOG alternate, and ACAO Ken Hampian. cc: Mike McCluskey June 10, 1997 MEMORANDUM TO: Council Colleagues FROM: Allen Settle : O� SUBJECT: Mayors' Meeting on June 10, 1997 The mayors from all cities met today to review the resolution for funding road and transit improvements. It was agreed that the City SLOCOG representatives, along with two County Supervisors and representatives from City CAD's or ACAO's, and Ron DeCarli of SLOCOG, and County Counsel James Lendholm would make up the ad hoc committee on revenue sources for road and transit improvements. Voting members would be the seven city representatives and two supervisors. In accordance, I.would like to ask Vice Mayor Bill Roalman, as our SLOCOG representative, along with either John Dunn or Ken Hampian, to make up our City's representation for this committee. The next time this will be discussed by the mayors will be August 21'. I also distributed correspondence to the mayors on AB 107 (copy attached). AKS:ss Attachment c: J.:Dunn K Hampian J. Jorgensen B. Gawf Ah- MIEMo TO: HONORABLE MAYORS AND CITY COUNCILS SUBJECT: A PROPOSAL TO EXPLORE PLACING A COUNTY WIDE ''/i 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 fimded 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 finding 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 %z 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: 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 tolund the Maintainance and Improvement of the Local &Regional Transportation System - Map;Local Option Sales Tax Counties s — JOINT RESOLUTION NO. 01-97 A RESOLUTION OF THE CITIES OF SAN LUIS OBISPO COUNTY AGREEING TO EXPLORE THE FEASIBILITY OF PLACING A V2 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%z 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%z 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 V 'e ' . 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 Count-.,- at ount-.-at a special joint meeting held on the 5th day of June, 1997. MAYOR, CITY OF ARROYO GRAA T ATTEST: CITY CLERK Joint Resolution No. 01-97 ATTEST: MAYOR, CITY OF ATASCADERO CITY CLERK MAYOR, CITY OF GROVER BEACH ATTEST: CITY CLERK ATTEST: MAYOR,CITY OF MORRO BAY CITY CLERK ATTEST: MAYOR, CITY OF PASO ROBLES CITY.CLERK ATTEST: MAYOR, CITY OF PISMO BEACH -. CITY CLERK ATTEST: MAYOR,CITY OF SAN LUIS OBISPO CITY CLERK San Luis Obispo Council of Governments Countywide Local Option Sales Tax Measure Special vs General Purpose Options -Santa Clara County Tax & Special Tax General 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 goneral 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 2r3rds vote by resolution on a 2/3rds vote Co. Ballot of population in county and Co. Co.Bd.of Supervisors Bd.of Supervisors(1) Bd.of Supervisors Voter 213rds Requirement Majority(1) Majority(1) Tax Rate: Up.to 11%in .5 or I%steps Up to 1%in.5 or 1%steps Up to 1%in .5 or 1%steps -3tal 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 Reyenue May be approved concurrrentty May be approved concurrently May be approved concurrentty 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;Nob-- binding advisory r ieas'bre Requires 213rd vote;All revenue Requires ri maj o suggests revenue uses and asked to vote for earmarked and allocated for requires intergovernmental trust Issues projects and agencies. voters r a tax increase vote;Voters are for no specific voter knowledge of uses know what they are voting for. fic purpose enhances passage;expenditures monitoried by watchdog committee; (1) Note: Enabling legislation required for any sales tax increase sought by a city. 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 o and $50,000 base for each jurisdiction Any excess funds Regional 54/o distributed to locals Transportation 1987 yes; 20 per year. Of the remainder. 1/3rd for o State Highway Projects; 1/3rd for public based 2/3 11 rd on Commission 46/o no population & 1/3rrdd 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% C 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 After$50,000 base all County Local 55% jurisdiction. Of the remainder. 30% for local street& road Transportation 1989 yes; 20 highways, interchanges & regional 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$50,000 basic Los Angeles County jurisdiction. Of the remainder. 25% for g ty allocation, remaining 51% freeways, highways, major streets, & Transportation funds allocated 50% Commission 1990 yes; 20 interchanges; 30%for systems mgmt o 49% no improvements, incl. signals, traffic mgmt on population &50/o (LACTC) on square yams of &bike facilities; 30%for local streets & roads. 15% transit streets & roads In 1992, in the Guardino Decision, the Ca.'Supreme Court invalidated sales tax increase measures approved by majority but less than 2/3rds vote; since then special taxes have required a'2/3rds vote. Santa Clara County Advisory measure containing a broad Transportation Measure 79% list of highway, bus and rail transit, and Commission A (1996) yes; 9 local street maintenance projects to be No formula 'SCCTC) 21% no reviewed by by a "citizens watchdog committee" Ld Clara County Transportation Measure 51° ; 9 General tax increase with no Commission B (1996) 49%no expenditure plan (SCCTC) 0/4 San Luis Obis o'C.oun , c <of Governments Pim: 0, �ecu7CW Countywide Pavement M"afK: n j�N F: mtenance$k Rehabilitation Needs n.�.:.,�;.. ngs 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 tarty 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. Major Findings: Countywide 1. 270/6 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 (1' 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 life. The estimated total cost to cant' out all necessary sealing and patchima 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 aver= co for roads in this condition is 34%. Typically, such roads currently require no maintenance work. 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 car= all necessary work, including: crack or slung sealing, patching, and thin or thick overlays standard strategies and costs used in this study ranges from $52.5 million to $142.8 millionasec Local Jurisdiction Summaries • City of Arroyo Grande - No inventory was completed for Arroyo Grande or Pismo Beach a: this report. The following. ratings are based on averaging the findings of the other five citie road miles (19 miles) are rated "good" or"best"and require no current work; 31% (19 miles. sG "fair', requiring crack sealing and patching; 15% (9 miles) are rated "medium", 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 rpm $6.18 million to $15.8 million. The FY 96/97 road maintenance budget is expected to be about I 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 "faire, 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 (21 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 "fain', 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 (1' 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 95196 it was about $340,000, the FY 96/97 budget is $50,OOO,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 (11 overlay; and 21% (7 miles) are rated "poor', requiring a thick (21 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 "fain', 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' ,nd require no current work; 25% (321 miles) are rated "fain', requiring crack sealing and patching; 10% ,28.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. 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? 1 : 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 finding for these purposes. Everyjurisdiction in the region is not spending sufficient finding to adequately maintain their street and road system. 3. SLOCOG staff recently prepared an analysis of countywide local street and road 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 ftmding. 4. Ia 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 %: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 :W 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 1 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 ^=` 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 County in 1989; and a.5%increase in Santa Clara County in 1992- eid 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 Lias been some discussion of providing increased flexibility in theuse of Federal funding, and in providing nominal fund increases through changes in formulas,no major increase in finding 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 yea=s led by Senator Kopp. The current version of his bill (SB45) will, if enacted into law,provide additional flexibility to local jurisdictions for the use of State gas tax funds but does not provide an increase in funding. 4. Since additional funding 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 genes finds,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 %z percent increase in the sales tax is approximately$10 million,at 1 percent it would produce approximately$20 million. i� 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. 3. 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. 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