Council To Vote To Oppose Prop 6 - If Passed We Would Lose Money

Article Source: City of San Bruno CA

DATE: September 25, 2018

TO: Honorable Mayor and Members of the City Council

FROM: Jovan D. Grogan, City Manager

PREPARED BY: Jimmy Tan, Public Works Director

SUBJECT: Adopt Resolution Opposing State Proposition 6 – Voter Approval for Future Gas and Vehicle Taxes and 2017 Tax Repeal Initiative

BACKGROUND:

California Proposition 6 is a measure on the November 2018 ballot seeking to repeal the Road Repair and Accountability Act, which is also known as Senate Bill 1 (SB 1).

On April 28, 2017, SB 1 was signed into law. This legislative package is a long-term transportation solution that provides new revenue for road safety improvements such as filling potholes and repairing local streets, highways, and bridges as well as upgrading California’s public transportation network. By allocating funding by formula and through competitive grant programs, SB 1 invests in every community.

SB 1 increased the gas tax by $0.12 per gallon, increased the diesel fuel tax by $0.20 per gallon, increased the sales tax on diesel fuels by an additional 4 percentage points, increased vehicle registration fees, created an annual transportation improvement fee, and created an annual zero-emission vehicles fee. In June 2018, voters approved Proposition 69, which created a constitutional amendment for the legislature to spend SB 1 revenue on transportation-related purposes only. SB 1 empowers the California Transportation Commission (CTC) to hold state and local government accountable for making the transportation improvements they commit to delivering.

Revenues received from the increased fees will be phased in over several years as follows and allocated through a Road Maintenance and Rehabilitation Account (RMRA):

• The fuel tax increase became effective on November 1, 2017.
• The value-based transportation improvement became effective on January 1, 2018.
• The price-based excise tax will be reset on July 1, 2019.
• The new zero-emissions vehicle fee will begin on July 1, 2020.
• Masson Avenue between San Bruno Avenue and Angus Avenue
• Santa Helena Avenue between San Antonio Avenue and El Camino Real
• Mills Avenue between Kains Avenue and San Bruno Avenue
• Eastburn Court between Whitman Way and Cul-de-Sac

Once fully implemented, SB 1 anticipates to invest approximately $52 billion over the next decade to repair roads, freeways, bridges and the broader transit and transportation infrastructure across California. California’s state-maintained transportation system will receive roughly half of the SB 1 funding, while the other half will be directed to improve local streets and roads, expand the State’s growing network of pedestrian and bicycle routes, and increase transit reliability and service.

DISCUSSION:

Proposition 6 seeks to eliminate the recently enacted road repair and transportation funding by repealing revenues dedicated for those purposes and will require any measure to enact certain vehicle fuel taxes and vehicle fees be submitted to and approved by the electorate. The passage of Proposition 6 would jeopardize the funding needed for the execution of City’s street rehabilitation projects.

During the Surface Infrastructure Subcommittee meeting on July 27, 2017, staff provided information related to the street rehabilitation prioritization methodology that maximizes the City’s average Pavement Condition Index (PCI) for the entire City’s paving network using the available funding. However, in doing so, the methodology defers many streets that are in poor condition. Due to limited funding in the pavement management program, the Subcommittee was interested in using SB 1 funds to rehabilitate the poor condition street segments. The Subcommittee members tasked the staff to develop a criteria to prioritize the poor condition street segments by considering factors such as existing PCI, proximity to places of gathering such as parks and schools, and housing density to provide the most benefit to City residents. Based on the criteria, staff submitted to the CTC the following street segments that are proposed to be completed using SB 1 funding. Currently, there is a need of approximately $16.5 million to rehabilitate all the poor condition streets. The entire list is included in Attachment 2.

In FY 2017-18, the City of San Bruno received approximately $265,000 from RMRA. These funds will be used for the rehabilitation of Masson Avenue between San Bruno Avenue and Angus Avenue which is part of the 2018 Street Rehabilitation Project. Based on the State Department of Finance revenue projections in May 2018, the City San Bruno is projected to receive approximately $750,000 in FY 2018-19 through the RMRA. These funds are proposed to be used towards rehabilitation of Santa Helena Avenue between San Antonio Avenue and El Camino, Mills Avenue between Kains Avenue and San Bruno Avenue, and Eastburn Court between Whitman Way and cul-de-sac. If Proposition 6 passes, the City of San Bruno may lose a portion of the $750,000 funding and all future funding.

Additionally, the State Department of Transportation (Caltrans), Metropolitan Transportation Commission, and San Mateo County Transportation Authority have various projects utilizing RMRA funds to make regional improvements, some of which are within the City limits. The 101 Managed Lanes Project which passes through San Bruno seeks to ease congestion along US 101. Caltrans proposes to make bridge improvements on US 1, 101, 280 and 380. Attachment 3 provides information on some of the projects within San Mateo County.

An opposition to Proposition 6 by the voters will allow the fuel and vehicle taxes recently passed to continue to be in effect and pay for highways, roads, and bridge maintenance and repair projects, as well as transit programs.

Staff is recommending that the City Council adopt a resolution to formally oppose Proposition 6 – Voter Approval for Future Gas and Vehicle Taxes and 2017 Tax Repeal Initiative.

FISCAL IMPACT:

There is no fiscal impact associated with adopting a resolution opposing Proposition 6. However, should Proposition 6 pass on the November 2018 ballot, the City of San Bruno will experience a major loss of revenue for repairing local roads for the next decade. Funding in the pavement management program will decrease to approximately $1.0 million per year which will significantly reduce the amount street segments the City is able to rehabilitate.

ALTERNATIVES:

1. Reject adoption of resolution opposing Proposition 6. RECOMMENDATION:

Adopt Resolution Opposing State Proposition 6 – Voter Approval for Future Gas and Vehicle Taxes and 2017 Tax Repeal Initiative

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FULL Council Agenda Packet WITH Staff Reports can be viewed and downloaded from:

https://sanbruno.ca.gov/gov/elected_officials/city_council_minutes_n_agendas.htm

This document should be available late Thursday or Friday before the Tuesday Council Meeting

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Robert Riechel

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