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Home My WebLink AboutMINUTES - 01132009 - C.16 G � TO: BOARD OF SUPERVISORS �F Contra FROM: JULIA R. BUEREN PUBLIC WORKS DIRECTORmax' ' Costa x DATE: JANUARY 13, 2009 Cj o U n ty T'4 COLIP7' SUBJECT: APPROVE AND AUTHORIZE THE BOARD CHAIR TO SIGN LETTERS TO OUR STATE SENATOR AND ASSEMBLYMEMBERS OUTLINING THE IMPACT ON CONTRA COSTA COUNTY ON FREEZING BOND REVENUE. (ALL DISTRICTS) SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDED ACTION: APPROVE and AUTHORIZE the Board Chair to sign letters to our State Senator and Assemblymembers outlining the impact on Contra Costa County on Freezing Bond Revenue. FISCAL IMPACT: The State has frozen disbursement of all bond funds to Contra Costa County. For the Public Works Department this has impact on several projects and programs as outlined in the attached memo. CO TINUED ON ATTACHMENT: I]x SIGNAT RECOMMENDATION OF COUNTYADMIN/STRATOR RCOMME ATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON �I, l� "2tV< APPROVED AS RECOMMEND D OPER VOTE OF SUPERVISORS: I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT ,,� ) COPY OF AN ACTION TAKEN AND ENTERED ON _ UNANIMOUS(ABSENT (/t'�T L-- J MINUTES OF THE BOARD OF SUPERVISORS ON THE AYES: NOES: DATE SHOWN. ABSENT: ABSTAIN: Contact: Mitch Avalon 313-2203 JRB:RMA:Iz ATTESTED `��A G:Admin\Mitch\bo\2009\Frozen Bond Funds I-I3-09.doc DAVID TWA,CLE OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR cc: David Twa,County Administrator Jason Crapo,County Administrators Office r ' Lara Delaney,County Administrators Office � ��a, Catherine Kutsuris,DCD BY. �` �'(,(/ DEPUTY Silvano Marchesi,County Counsel Mitch Avalon,Public Works SUBJECT: APPROVE AND AUTHORIZE THE BOARD CHAIR TO SIGN LETTERS TO OUR STATE SENATOR AND ASSEMBLYMEMBERS OUTLINING THE IMPACT ON CONTRA COSTA COUNTY ON FREEZING BOND REVENUE. (ALL DISTRICTS) DATE: JANUARY 13, 2009 PAGE: 2 of 2 BACKGROUND AND REASONS FOR RECOMMENDATIONS: On December 18`h, 2008, the State suspended expenditures from General Obligation Revenue Bonds for Contra Costa County programs and projects. Freezing these bond funds has had a direct impact on a variety of projects and programs in the Public Works Department. In some cases we cannot pay staff time for work completed prior to the December I8`h cutoff date. In other cases we cannot complete construction projects and will have to renegotiate construction contracts. This has been disruptive and will increase costs for various Public Works projects and programs. Attached is a letter to our State legislative delegation requesting the State to release the frozen bond funds. In addition,to request the State not include projects under contract or grants that are about to be awarded in any long- term budget solution. That would have the result of postponing future bond funded projects rather than existing bond funded projects. Also attached is a memo from the Public Works Department dated January 7,2009 outlining the impacts of the bond revenue suspension for the department's projects and programs. Staff recommends the Board approve and authorize the Chair to sign letters to our State legislative delegation informing them of the impacts of freezing bond funds on our Public Works Department projects and programs. CONSEQUENCES OF NEGATIVE ACTION: Letters would not be sent and our State legislative delegation would not know impact of freezing bond funds. The Board of Supervisors Contra Costa John Cullen County Administration Building _ Clerk of the Board 651 Pine Street,Room 106 and Martinez,California 94553 County Co(925)335-;19 r0ator John Gioia, 1°District Gayle B.Uilkema,2ntl District Mary N.Piepho,3"District Susan A.Bonilla,4"'District ` Federal D.Glover,5'"District January 13, 2009 The Honorable Mark DeSaulnier The Honorable Tom Torlakson California State Senate California State Assembly Sacramento, CA 9581,4 Sacramento, CA 95814 The Honorable Loni Hancock The Honorable Nancy Skinner California State Senate California State Assembly Sacramento, CA 95814 Sacramento, CA 95814 The Honorable Joan Buchanan California State Assembly Sacramento, CA 95814 RE: Impact of Frozen Bond Funds on Contra Costa County Dear Senators DeSaulnier and Hancock and Assemblymembers Torlakson, Skinner, and Buchanan: On December 18, 2008, the State suspended expenditures from general .obligation revenue bonds for Contra Costa County programs and projects. Freezing these bond funds has had a direct impact on a variety of our County's projects and programs. In some cases, we cannot pay staff time for work completed prior to December 18th. In some cases, we cannot complete a project and will have to renegotiate a construction contract, which will increase project costs significantly. This has been very disruptive and will increase costs for these County projects and programs. We understand the State is in the midst of an unprecedented budget crisis. Whatever action is taken will have an impact on various sectors of the State and local government. We request the State resolve the budget problem and allow the release of frozen bond funds so we can pay for costs already incurred and complete our construction projects. In addition, if deferring the sale of bonds is part of a long-range budget solution, the deferred bond sales should be for future proiects and not existing proiects under contract with the State or for grants that are about to be awarded. That scenario would result in postponing future bond funded projects but not existing or near-term bond funded projects. Attached, for reference, is a memo from our Public Works Department outlining the impacts of the bond revenue suspension in the department. We appreciate the difficult position the State is in, and we understand that action must be taken and that undesirable impacts will result from those actions. Some impacts, however, are more injurious than others. If you have any questions or need additional information, please contact Public Works Director Julie Bueren at (925) 313-2201. Sincerely, 14 SUSAN A. BONILLA Chair, Board of Supervisors cc: Board of Supervisors David Twa, CAO Julia Bueren, Public Works Director Cathy Christian, Nielsen Merksamer Mark Watts, California Strategies and Advocacy 2 P/��Contra Costa County Public Works Julia R. . Director — Deputy Directors R. Mitch Avalon•Brian M. Balbas D e p a r t m e n t Stephen Kowalewski•Patricia McNamee Memo TO: hoard of Supervisors DATE: nua FROM: Iia R. Buer n, irector SUBJE BOND FUNDING FROZEN BY THE STATE On December 18, 2008, the State Department of Finance released a budget letter to other State departments instructing them to immediately suspend expenditures from general obligation revenue bond programs. On December 19, 2008, we received notice from the State that all invoices, commitments, and expenditures from Propositions 12, 13, 40, 50 and 84 are put on hold effective immediately. It is unknown at this time how long this freeze will take place. In addition, we have heard that Proposition 16 funding may also be frozen. This action by the State has the following impacts on projects in the Public Works Department. 1. Transportation — • Proposition 16: The State has informed us that we will not receive any additional Proposition 16 (Prop 113) funds until the State budget problems are resolved. We were ready to process a request for an additional $1.5 million, but the disbursements were frozen. Even after the budget is passed,'we question if the State will have the bonding capacity to continue to obtain Prop 113 bonds on the same schedule and if the disbursement timing will be significantly lengthened. To date we have received $11.8 million in Prop 16 funding. This is less than half of the $24.5 million we are to receive over the life of the 5 year program. Nineteen projects were identified to be fully or partially funded by these Prop 113 funds. Of those 19 projects, 4 projects have been constructed or are in construction at this time, accounting for $5.1 million of the $11.8 million received. The balance of $6.7 million has been allocated towards the development and construction of the remaining 15 projects. Without the next Prop 16 disbursements the combined funding shortfall for construction of these 'Accredited by the American Public Works Association" 255 Glacier Drive Martinez,CA 94553-4825 TEL: (925)313-2000•FAX: (925)313-2333 www.cccpublicworks.org Board of Supervisors January 7, 2009 Page 2 of 4 projects will be $12.7 million. This shortfall will impact the project schedules for all the projects listed below. In addition to the impacted schedules, staffing levels will be impacted due to the lack of funding. Staff could be reassigned to other projects as we have some flexibility in our department between programs, but that flexibility could be impacted if the State raids our other funding sources, which could ultimately result in layoffs (see below). Finally, if the funding is delayed to the point that project costs have increased with time, then there won't be enough funding to construct all of the remaining 15 projects and some will drop off the list and not be built with Prop 1B funds. These projects include: Camino Tassa'ara Shoulders Summer 2010 Byron Highway Shoulder Widening Summer 2010 Alhambra Valley Road Shoulder Widening- East of Castro Summer 2011 Ranch Road Marsh Creek Road Shoulder Widening -Round Valley Park to Summer 2011 Lydia Lane Deer Valley Road Shoulder Widening - Marsh Creek Road to Summer 2011 Briones Valley Road Vasco Road Camino Diablo Intersection Improvements Summer 2011 Willow Pass Road Improvements Summer 2011 Vasco Road Safety Improvement Project (Vasco Road Median Summer 2011 Barrier Marsh Creek Road Safety Improvements Russelmann Park Summer 2012 Road Marsh Creek Road safety Improvements 2 miles west of Deer Summer 2012 Valley Road Deer valley Road Safety Improvements South of Chadbourne Summer 2012 Road Highland Road Improvements TBD Kirker Pass Road SB Truck Climbing Lane TBD Kirker Pass Road NB Truck Climbing Lane TBD San Pablo Dam Road Downtown TBD Board of Supervisors January 7, 2009 Page 3 of 4 • Gas Tax: We currently receive approximately $16 million per year for our road system from the State gas tax. This money is specifically for use within the road rights of way. The State Legislature has proposed to eliminate the tax and replace the tax with a fee. Increasing a fee would only be subject to a simple majority vote, rather than a super majority vote for a tax increase. If the total revenue from the current gas tax is not received, the Public Works Department would have to delay or eliminate projects and most probably face layoffs. • Proposition 42: We are anticipating $7 million from the State for sales tax on gas (Prop 42). In prior years this money has been diverted by the State to cover budget shortfalls. In 2006 California voters passed Proposition 1A to prevent State lawmakers from raiding Prop 42 funds, although the State is allowed to borrow the funds but would then be subject to strict rules to repay the monies. If the sales tax on gas is diverted, once again projects and maintenance work will have to be delayed or eliminated, with possible layoffs of staff to make up for the budget shortfall. 2. Flood Control/Natural Resources • Marina Program: The "Keep the Delta Clean Program" has been stopped. Unfortunately, an invoice for work performed prior to the freeze was received by the State on December 18, 2008, and will not be paid until the freeze is lifted. That invoice is for $230,000. A team of five people work on this program, which encompasses other Delta counties and improves Delta water quality by providing boaters with: a place to recycle boat oil and marina batteries, maps, education kits and much, much more. • Levee Certification for Wildcat and San Pablo Creeks: The Flood Control District applied for a grant to analyze the levees along Wildcat/San Pablo Creeks for certification pursuant to FEMA standards. This-grant is on hold. Without this funding and analysis, FEMA may modify the floodplain maps requiring properties in the disadvantaged community of North Richmond to purchase flood insurance. • Pinole Creek Restoration Project: The $2.6 million Rivers Parkway grant to construct the restoration of Pinole Creek near San Pablo Bay is on hold. The design for this project is almost complete and expected to be built in summer of 2009. An extended freeze would delay construction for a year. Board of Supervisors January 7, 2009 Page 4 of 4 3. Parks Projects • Creekside Park: Construction of a trail in Creekside Park along Grayson Creek in Pacheco is on hold. The trail is a long awaited project for the Pacheco community. • Big Oak Tree Park: Construction of a new park in Clyde is on hold. This park is currently under construction and $102,000 of Prop 12 funds are frozen. We are faced with stopping construction mid way through the contract, which will increase project costs. Hopefully the budget impasse will be resolved and the flow of bond funds resumed in the near future so that we are able to avoid or at least minimize the impacts. JRB:RMA:lz G:\Admin\Mitch\BOS\Ltr re freeze.doc c David Twa, County Administrator Jason Crapo, County Administrator's Office Lara Delaney, County Administrator's Office Brian Balbas, Deputy Director Steve Kowalewski, Deputy Director Pattie McNamee, Deputy Director Mitch Avalon, Deputy Director Catherine Kutsuris, DCD Director I