HomeMy WebLinkAboutMINUTES - 12031991 - TC.1 TO: BOARD OF SUPERVISORS TC•
FROM: TRANSPORTATION COMMITTEE
DATE: December 3, 1991
SUBJECT: Report on Additional Revenue from Proposition 111
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) &BACKGROUND AND JUSTIFICATION
I. Recommended Action:
1. Accept the following report from the Transportation Committee on the additional local gas
tax revenue from Proposition 111.
2. Approve expenditure of the local gas tax revenue from Proposition 111 according to the
following guidelines: .
70 percent of Proposition 111 revenue for pavement maintenance;
- 20 percent of Proposition 111 revenue for capital improvements; and
10 percent of Proposition 111 revenue for safety projects
3. Direct the County Administrator to review the funding of the Congestion Management
Program and Growth Management Program with any future updates of the Countywide
Fee Study, and, if appropriate, to recommend adjusting development fees to include the
Congestion Management and Growth Management compliance costs.
II. Financiallmpact:
No overall impact to the General Fund with this recommendation. There are "maintenance of
effort" requirements included in Proposition 111 which requires maintaining General Fund
appropriation for transportation related programs at the same level as the.past several years.
Continued on Attachment: X SIGNATURE:
_ RECOMMENDATION OF COUNTY ADMINIST
X RECOMMENDATION OF BOARD COM
APPROVE OTHER �^
1
SIGNATURE(S):
ACTION OF BOARD ON December 3, 1991 APPROV D AS RECOMMENDED X OTHER
VOTE OF SUPERVISORS
X UNANIMOUS (ABSENT' I I I )
AYES: NOES:
ABSENT: ABSTAIN:
RMA:cl:fp
c:bop111.t12
attachments
Orig. Div: Public Works (RE)
cc: County Administrator
GMEDA Director I hereby certify that this Is a true and correct copy of
an action taken and entered on the minutes of the
Community Development Depart.
Board of Supe"
sora on the date shown.
ATTESTED:
Accounting ��� recember 3, 1991
Maintenance PHIL BATCHELOR,Clerk of the Board
of Supervisors and County Administrator
By ��� .Deputy
PROPOSITION 111
Page Two
III. Reasons for Recommendations and Background:
PROPOSITION 111 WILL GENERATE AN ADDITIONAL $2 MILLION IN REVENUE FOR FISCAL
YEAR 1990-1991 AND 2.5 MILLION IN 1991-1992.
Proposition 111, in conjunction with AB 471 (1990) and SB 300 (1990), increased the gas tax
by five cents on August 1, 1990 and will add an additional one cent each year for the next four
years beginning January 1, 1991. In addition, Proposition 111 increased commercial vehicle
weight fees by 40 percent beginning in August 1, 1990 with an additional 10 percent increase
on January 1, 1995.
It is estimated that we will receive an additional $2,000,000 in gas tax revenue in fiscal year
1990/91. That will increase to $2,500,000 in fiscal year 91/92, $3,000,000 in fiscal year 92/93,
$3,500,000 in fiscal year 93/94 and $4,000,000 in fiscal year 94/95. Fiscal year 94/95 will see the
last increase in the gas tax which will bring it up to a full 18 cents per gallon. Proposition 111
will provide the County's road program with a significant increase in revenue in the years to
come. This report analyzes the impacts of Proposition 111 and recommends guidelines for the
use of the funds.
THE COUNTY MUST COMPLY WITH NEW PLANNING REQUIREMENTS IN ORDER TO
RECEIVE PROPOSITION 111 FUNDS.
As a requisite to receiving the increased gas tax revenue, Proposition 111 requires preparation
of a Congestion Management Program (CMP) for each county that has an urbanized area of
50,000 in population. Contra Costa County qualifies under this definition. The CMP for the
County must include each city in the County and be updated annually. The CMP is similar to
the Growth Management Program under Measure "C" (1988) which is administered by the
Contra Costa Transportation Authority (CCTA). As a result, the County, along with the Cities,
has designated the Contra Costa Transportation Authority as the CMP Agency. This way, the
CMP for Contra Costa County can be prepared with very little additional cost.
Measure "C" allows the County to use the return to source revenues to administer, monitor and
report on the Growth Management program of the Measure. .The Board has approved the use
of. Measure "C" funds for that purpose. Proposition 111 is silent on the funding of CMP
compliance costs. This funding void may be corrected by AB 434 which would increase vehicle
registration fees to implement certain transportation control projects and provide funding for
related planning and technical studies necessary to implement the Clean Air Act. Whether AB
434 gets approved and whether local governments will receive any funding to cover congestion
management compliance costs remains to be seen. Any costs to comply with the congestion
management planning requirements of Proposition 111, not covered by AB 434 or other
proposed legislation, should be incorporated into any future updates of the Countywide Fee
Study. The Measure C compliance costs were not included in the Countywide Fee Study
recently adopted by the Board. These compliance costs, which are incurred as a result of
development in the County, should also be included in any future updates of the Fee Study.
WITHOUT THE PASSAGE OF PROPOSITION 111, OUR ROAD MAINTENANCE AND ROAD
ENGINEERING EXPENDITURES WOULD HAVE EXCEEDED OUR GAS TAX REVENUES IN 1994.
The first thing to look at when considering the use of the increased gas tax, is the relationship
between our current road fund expenditures and our current road fund revenues, along with the
growth projections for each of them. Our current maintenance budget is about 8.3 million
dollars per year, while our road engineering budget (including Traffic) is about 1.1 million dollars
per year. Both of these budgets have been increasing at about five percent per year over the
past several years. On the revenue side, things are a little different in terms of growth. The gas
tax is apportioned to the County under Streets and Highways Code Sections 2104, 2105 and
2106. Sections 2104 and 2106 apportion the "historic" gas tax, which is the gas tax revenue
prior to the passage of Proposition 111. Section 2105 will apportion the increased gas tax
revenue from Proposition 111. The 2106 apportionment, which makes up about 10 percent of
our historic gas tax revenue, has remained more or less constant over the last several years.
The increases in 2106 funds have been offset by fund reductions due to City annexations in
County areas and the resultant reduction in the Countys assessed valuation. The 2104
apportionment, which makes up about 90 percent of our current gas tax revenue, has increased
slightly over the last several years. The average increase was 1.04 percent over the last three
years. The bulk of our revenue, therefore, has been increasing at one percent per year, while
our expenditures have been increasing at five percent per year. Prior to Proposition 111
PROPOSITION 111
Page Three
we estimated that by 1994, our maintenance and engineering expenditures would equal our
revenue projection, leaving no money for our small capital and safety improvements program.
Beyond 1994 we would be in the negative column. This gloomy forecast however has changed
now with the passage of Proposition 111.
OUR GAS TAX REVENUE INCREASES ONE PERCENT PER YEAR WHILE OUR EXPENDITURES
INCREASE FIVE PERCENT PER YEAR.
For our revenue estimates we have assumed the gas tax will continue to grow at one percent
per year. We have also assumed our maintenance and engineering budgets will continue to
grow at five percent per year to keep up with inflation. The difference between our total revenue
and our expenditures on general road maintenance, road engineering and compliance costs,
is the amount available to program for preventative pavement maintenance and capital and
safety projects. Table 1 shows our revenue stream, expenditure stream and the resultant
amount available for programming for the next 10 years. The revenue side is made up of three
components; the historical road fund, Proposition 111 funds and Measure "C" return to source
monies. The "historical" road fund includes the revenue from the tax rate imposed on the sale
of gasoline and diesel fuel prior to Proposition 111 (historic gas tax), plus future revenue from
traffic fines and forfeitures, rental income, and interest income. The bulk of the historic road fund
and Proposition 111 funds are estimated assuming a one percent per year increase, which is
what we experienced the last three years. Measure "C" is estimated to keep up with an
assumed inflation rate of five percent plus three percent actual growth. The Measure "C"
forecasts, however, may change in the future as a result of annexations or incorporation.
The expenditure side shows the cost of general road maintenance and road engineering.
General road maintenance does not include any preventative maintenance work but provides
for routine maintenance to keep the County's 750 miles of roads and 90 bridges safe and
functional. Road engineering includes traffic engineering and operations, preparation of the road
budget, project programming, alignment studies, project development, project coordination with
interested and impacted entities, grant applications, and traffic studies. Planning compliance
costs are also shown in Table 1 as an expenditure. These are the costs associated with meeting
the Measure "C" growth management requirements and Proposition 111 congestion
management requirements, in order to receive Measure "C" return to source monies and
Proposition 111 funds. This compliance effort includes maintaining and refining the Circula-
tion/Transportation Element and the County Transportation database, transit planning, TSM,
project planning, project development, project programming/prioritization, and monitoring
intersection service levels on regional routes. Total expenditures would be reduced if the
planning compliance costs were funded by developer fees.
The amount available for programming shown in Table 1 reflects total funds available for
preventative pavement maintenance, capital and safety improvements. It does not show
anything deducted specifically for safety or capital improvement programs. The data in Table
1 is also shown on Figure 1 in the form of a graph. The dashed lines represent general road
maintenance, road engineering and compliance cost expenditures. The solid lines represent
revenues from the historic road fund, Proposition 111 funds and Measure "C" return to source
monies. The shaded area between the total expenditures and total revenues represents the total
funds available for programming. Figure 1 graphically shows that the rate of increase of our
revenue is less than the rate of increase of our expenditures.
There has been recent legislative action that will impact our road related revenue stream. The
State legislature recently approved a realignment in the State budget that will divert the "fines
and forfeitures" revenue that historically went to the Countys. In exchange, the State will be
supporting the court system. This can be seen on Table I where after fiscal year 1991/92 the
revenue is reduced by the $500,000 we received each year as "fines and forfeitures."
TO ELIMINATE OUR CURRENT BACKLOG OF ROADS THAT ARE BEYOND PREVENTATIVE
MAINTENANCE WOULD COST $32 MILLION DOLLARS.
The passage of Proposition 13 in 1978 reduced the amount available for our preventative
PROPOSITION 111
Page Four
pavement maintenance program. As a result, we had to prioritize the expenditure of our
maintenance dollars for preventative maintenance. Some roads were treated and some were
not. Several years after Proposition 13 we began to keep track of the deficiencies in our
pavement management program and identified a backlog of roads that were beyond
preventative maintenance. This was the subject of a report produced in March 1985, which
identified aback log of $5,800,000. The report also projected a backlog in fiscal year 89/90 of
$35,000,000 (in 1985 dollars), if the annual road maintenance funding was not increased. The
pavement .maintenance funding in 1985 was $2,000,000 per year, which is roughly what we
spend today on preventative maintenance. The $35,000,000 backlog for fiscal year 1989/90
projected in the 1985 report would equate to $45,000,000 in todays dollars. Information
gathered for the 1989-90 Grand Jury investigation of our maintenance program revealed that our
1989-90 backlog was $32 million. This is less than the projected estimate in our 1985 report,
which is due to a reduction in maintained road mileage (853 miles in 1985 vs. 745 in 1989), with
the incorporation of Orinda in 1986, and some annexations between then and now. In addition,
the passage of SB 300 (1986) several years ago provided a one time windfall of about
$3,000,000 for our pavement maintenance budget.
OUR BACKLOG PROJECTED TO THE YEAR 2000 COULD BE REDUCED TREMENDOUSLY IF
MEASURE "C" RETURN TO SOURCE MONIES AND PROPOSITION 111 FUNDS ARE USED TO
BOLSTER OUR PAVEMENT MAINTENANCE PROGRAM.
Table 2 shows our annual maintenance backlog with the allocation of 70% of Proposition 111
revenues towards pavement maintenance funding, in conjunction with Measure "C" return to
source monies. This shows that by fiscal year 1999/2000, our backlog will be $275,000,000.
Obviously, this size of backlog in the year 2000 is unacceptable and we will need to look for
additional funding sources to further reduce the backlog to an acceptable level. However, if no
Proposition 111 revenue or Measure "C" return to source monies are infused into our pavement
maintenance program at this time, then our backlog in the year 2000 would be $370,000,000;
an increase of approximately 35%.
The revenue estimates shown in Table.2 assume a one percent growth in the gas tax each year
and a eight percent growth in the sales tax (Measure "C"). As can be seen, the new source of
revenues will not solve our backlog problem. However, it is also evident that if none of the
Proposition 111 revenues or Measure "C" monies are spent on our pavement maintenance
program, then our backlog will grow tremendously.
WHAT ARE THE CONSEQUENCES OF NOT INVESTING IN OUR PAVEMENT
MAINTENANCE PROGRAM?
Most roads are designed for a twenty year life. If no maintenance is performed on a new road,
it will, in general, provide good service for ten to fifteen years, at which time failure of the
pavement section begins. Between fifteen and twenty years the pavement deteriorates at a
rapid rate. By the 20th year the road will have to be repaved or reconstructed, at which time
the life/deterioration cycle starts all over again if no maintenance is performed. Our pavement
management system is set up to recognize when various roads need a seal coat. Seal coats
are applied just prior to the beginning stages of pavement deterioration. When the seal coat is
applied prior to the initial stages of pavement deterioration, the pavement life is extended for
another five to seven years, at which time another seal coat is applied. By performing these
preventative treatments to the pavement, the pavement life can be extended ten to twelve years
before the road needs to be repaved. A newly paved road therefore, could last thirty years with
preventative maintenance instead of twenty years without maintenance. It costs 50% more to
overlay or reconstruct a road every twenty years with no intervening preventative maintenance,
than it does to perform preventative maintenance and extend its useful life to thirty years. The
consequences, therefore, of not investing in our preventative pavement maintenance program
is to incur major capitol investment needs to rebuild our road system, rather than a continuous
reduced level of funding for preventative maintenance.
THE RECENT GRAND JURY REPORT RECOMMENDS USING MEASURE "C" RETURN TO
SOURCE MONIES FOR PAVEMENT MAINTENANCE.
The Board considered the expenditure of Measure "C" return to source monies with the County
Road Improvement Policy. This policy, adopted by the Board on May 9, 1989, prioritizes the
expenditure of Measure "C" monies as follows:
S
1
PROPOSITION 111
Page Five
1. A minimum program level of $300,000 a year for road safety and hazard elimination
projects, less any funds from gasoline tax, federal and state grants.
2. Reconstruction of County roads.
3. Rehabilitation of County roads.
4. Traffic congestion relief of problems which existed before November 1988.
As long as a minimum budget is maintained for safety projects, then the emphasis for
expenditure of Measure C funds lies in the pavement maintenance program to reduce the
backlog.
The 1989-90 Contra Costa County Grand Jury submitted a report entitled "County. Road
Preventative Maintenance." This report reveals that the road system in the County is
deteriorating at an alarming rate due to declining road maintenance, which has been brought
on by escalating maintenance costs and lack of adequate maintenance funding. Their report
recommends that the Board of Supervisors pursue ways to generate additional revenue for road
maintenance including "priority use of the County's.Measure "C" allocation".
PROPOSITION 111 FUNDS, SHOULD BE USED ALONG WITH MEASURE "C" RETURN TO
SOURCE MONIES TO BOLSTER OUR PAVEMENT MANAGEMENT SYSTEM AND REDUCE
OUR BACKLOG.
The Transportation Committee .has discussed the expenditure of Proposition 111 funds and
urges the Board to adopt a guideline for expending the new Proposition 111 revenues. For the
greatest return on the dollar, the bulk of the revenue should be spent on the pavement
maintenance program, however, there is also a desire that some should be expended for safety
improvements and for capital improvements. As a result, the Transportation Committee recom-
mends that Proposition 111 funds be spent in the following manner:
1. 70 percent of Proposition 111 revenue for pavement maintenance
2. 20 percent of Proposition 111 revenue for capitol improvements
3. 10 percent of Proposition 111 revenue for safety projects
First priority for the additional maintenance revenue will go to arterials and major thoroughfares.
Second priority for the additional maintenance revenue is to prevent roads not on the backlog
from deteriorating to a backlog condition. The third priority is to remove roads from the backlog.
Currently, we budget approximately $300,000 for safety projects and $300,000 for capital
projects from the road fund. The expenditure guideline recommended above would increase
our safety projects budget to approximately $500,000 and our capital budget to approximately
$660,000 for fiscal year 90/91. Table 3 shows the breakdown of funding that would be provided
for each of these three programs over the next 10 years if our Proposition 111 revenue was
distributed as recommended above. It should be noted that these recommendations go hand
in hand with the Grand Jury report on County Road Maintenance.
The above expenditure recommendations combine the gas tax and Measure "C" resources,
which together will satisfy the list of improvements identified separately in the County Road
Improvement Policy as gas tax expenditure priorities and Measure "C" expenditure priorities. In
other words, the combined Proposition 111 and Measure "C" expenditures shown in Table 3 will
satisfy the intent of the County Road Improvement Policy, which had identified separate
expenditures for Measure "C" revenues and gas tax revenues.
SPENDING PROPOSITION 111 FUNDS AND MEASURE"C" RETURN TO SOURCE MONIES ON
REBUILDING OUR ROAD SYSTEM WILL GIVE THE PUBLIC THE GREATEST AMOUNT OF
ROADWORK FOR THE DOLLAR.
Not only is expending revenue on our pavement maintenance program a sound investment in
our road system, but it is also highly visible to the public and will significantly improve the
appearance, durability, and the ride quality of roads in each Supervisorial District. The
recommendations made in this report would improve ninety-eight miles of County roads in the
form of chip seals and slurry seals, and six miles in the form of overlays or reconstruction over
PROPOSITION 111
Page Six
the next two years, if two thirds of the funds were allocated to surface treatments and one third
to overlays and reconstruction.
Discussions these days often center around the level of service of our roads in terms of
capacity. Nobody discusses the level of service of our roads in terms of maintenance or
serviceability. A road that is not maintained and is allowed to deteriorate will effectively have its
capacity reduced as cars are forced to reduce their speed due to a broken and rough pavement
surface. As the road deteriorates, the safe speed and the capacity of the road decreases.
Several years ago MTC did a study which revealed that poor pavement conditions cost the
public $60 per vehicle per year in terms of additional wear and tear. With the County's 640,000
registered vehicles, that equates to a total cost of $38,400,000.
IV. Consequences of Negative Action:
There would be no guidelines established for the expenditure of revenue from Proposition 111
and the level of service of our road system would suffer.
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