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HomeMy WebLinkAbout4.10 Measure B Funds Agreement 600 -so CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: July 21, 1987 SUBJECT Agreement for Distribution of "Measure B" Funds EXHIBITS ATTACHED Letter dated June 26, 1987 from Alameda County Transportation Authority Chairman. Agreement. RECOMMENDATION Authorize the Mayor to execute the Agreement and appropriate the 1987/88 Allocation to the Reserve Fund for Street Improvements. FINANCIAL STATEMENT: It is estimated that the City of Dublin will receive $85,450 in Fiscal Year 1987-88. DESCRIPTION At the General Election on November 4, 1986, the voters approved Measure B. This measure created the Alameda County Transportation Authority and imposed an additional 1/2 cent sales tax. The use of the funds generated were restricted for transportation purposes. The ballot measure included an expenditure plan which identified projects to be undertaken with the new revenue. Included in the plan was the provision of funding for local streets and roads. It was estimated that during the 15 year life of the measure, $183 million would be dedicated to local streets and roads. The funds are to be distributed based on the Mayor's Conference formula for gas tax. The formula provides for 10.3 percent of the new sales tax funds to be distributed among all of the cities and the County. An additional allocation would be made to the North County. cities. The allocation procedure is described in Attachment A of the Agreement. Attachment A identifies that the funds will be available for street and road maintenance as well as other transportation projects. The Expenditure Plan and Attachment A identified the construction of a LAVTA Bus Terminal Facility as an eligible project. The estimated cost was $4 million and the only "Measure B" funds available would be those allocated to the individual cities and the County. In essence LAVTA would need to ask each of the agencies to contribute funds to their project. The approved 1987-88 update to the City of Dublin Capital Improvement Program (CIP) identifies a deficit in the funding of currently identified street projects. In Fiscal Year 1989-90, a deficit of $1,055,000 is projected. The projects proposed for construction during that year include: -- Annual Street Overlay Program -- San Ramon Road Phase IV (Vomac to Silvergate) -- Traffic Signals - Village Parkway at both Brighton & Tamarack -- Dublin Boulevard Improvement - San Ramon Road to Village Parkway -- Downtown Street Light Additions - Design The total estimated cost of these improvements at this time is $3,009,976. The estimated available funding excluding reserves is $1,954,976 in general funds. This creates the $1.055 million dollar deficit. During the presentation of the update to the CIP, Staff informed the City Council that we would continue to seek additional funding sources for future projects. The use of "Measure B" funds would be an available resource to complete the important projects programmed for Fiscal Year 1989-90. The Alameda County Transportation Authority Staff has estimated that the City of Dublin will receive a total of $85,450 in 1987/88. The Authority can only provide a rough estimate due to the process carried out by the State Board of Equalization. Given that this is a new tax, the State Board uses conservative estimates. It is anticipated that over time the City's annual revenues from these funds will increase. The proposed agreement requires that the City refrain from replacing property tax expenditures with Measure B funds. This requirement has been deemed necessary to avoid conflict with Proposition 13 (This was the 1978 statewide measure which reduced property ----------=---------------------------------------------------------------- - COPIES TO: ITEM NO. L Q ' taxes and restricted the imposition of new taxes). These requirements also preclude the City from substituting the new revenue source for approved general fund appropriations. . 'The City will also be required to have an annual compliance audit completed and submitted to the Authority. The audit must identify that the funds have been expended in an appropriate manner. Staff would recommend that the City Council authorize the Mayor to execute the Agreement. Also, Staff would recommend that the City Council appropriate the 1987-88 allocation to the Reserve Fund for Street Improvements, in order that these funds might be spent in subsequent years to fund critical street improvements, which will be short of adequate funding in future years. June 26, 1987 The Honorable Linda Jeffery Mayor, City of Dublin P.O. Box 2340 Dublin, CA 94568 Dear Mayor .Jeffery: Earlier this month, the Alameda County Transportation Authority received its first allocation of money from the Board of Equalization derived from the Measure B, 1/2% sales tax program. As a result, we are now preparing to distribute the funds as required in the Expenditure Plan. Enclosed you will find the Agreement for Distribution of Measure B Funds along with the Policy for Non-Capital Projects which the Authority approved in May, 1987. The Agreement must be executed prior to the distribution of any funds. Because the process has been somewhat confusing, I would like to take this opportunity to explain what the Authority's process will be for collecting and distributing the Measure B funds to cities and the County. (This process will also apply to the Measure B Paratransit allocations which are administered by Alameda County.) Measure B provides for an allocation to each city and the County based on a percentage formula which takes into account road mileage and population in a 50/50 split. The complete formula is layed out in Attachment A of the Agreement. Measure B made no reference to how this money would be allocated, what constraints would apply, or what would be eligible for expenditures. Attachment A is the sum total of the Measure B language regarding local allocations. Since Measure B leaves many questions unanswered, the Authority has adopted a policy to guide the distribution. It stipulates that: -Payments will be made on a monthly basis after the Authority received its check from the Board of Equalization. -Interest will be calculated for the period the Authority holds the money prior to distribution. At the end of each quarter, the Authority will pay any interest due. -The distribution formula for the Cities/County will be updated every two years in June using the most recent population (Source: Department of Finance Population Research Unit Estimations) and road mileage (Source: Assembly of Statistical Reports, Department of Transportation) data for the preceding full calendar year. -2- June 26, 1987 • -The Authority Technical Advisory Committee will review the formula data prior to submission to the Authority for approval. -Each jurisdiction shall enter into a cooperative agreement which covers a) restrictions on funds due to Proposition 13, b) willingness to comply with the Measure B provisions restricting the use of the funds to transportation purposes as defined in Measure B, and c) the agreement to submit annually, within 90 days of the close of the fiscal year, a compliance audit indicating the above provisions have been met. The audit is to be done at the expense of the local jurisdiction and may be provided by the agency's internal auditor or an independent auditor. This policy was approved at the May 28, 1987 meeting of the Authority. The Authority has delegated the ability to sign off on the completed agreement to the Chairman. As soon as it is completed and returned to the Authority offices, 399 Elmhurst Street, Hayward, CA 94544, it will be executed, a copy sent to you, and the first distributions made. The methodology for the distributions is somewhat complex. Although the formula will remain in effect until June, 1989, the allocations from the Board of Equalization will vary every month. This is due to the method of estimation used by the Board. Each quarter, they examine the previous year's like quarter revenues. Based on the previous year, they make advances of roughly 95%, building in factors for such things as economic trends and growth patterns. Each quarterly estimate is divided into three advances. The first two are 30% and the final one is 40%, one each month. When all the collections are made for the quarter, the administrative costs are tabulated and in the fourth month a final "clean-up" payment is made. This means that four times a year, we will receive both the 30% advance for the new quarter and the clean-up payment from the previous quar ter. For the first few quarters, the estimates will be very conservative. As a result, the payments may appear to be very low. The Board of Equalization has given us the following payment schedule for the first quarter: June $ 3,217,500 July $ 3,217,500 August $ 4,290.0 00 Total $10,725,000 ` -3- June 26, 1987 i Keep in mind that this is only about 90% of the previous year's estimates. When you add the additional 10%, plus factors for growth and inflation, the clean-up payment should help balance out the revenues to what is expected for the year. As the tax has been in place longer, revenue collection will stabilize and the Board will allocate the full 95%. As of this time, we can predict revenues on a monthly basis only for the current quarter. However, below is the estimate of quarterly revenues that we are using for the 1987/88 Authority budget. Note that these figures do not include any growth or inflation. Third Quarter 1987 $13,013,633 Fourth Quarter 1987 $12,921,439 First Quarter 1988 $12,126,612 Second Quarter 1988 $12,171,208 From these estimates, you can extrapolate your jurisdiction's percentage in order to budget for the next fiscal year. As I have said, estimates will become more precise with time. Enclosed are the computer estimates for the next three months. As new estimates are made, you will be notified. Every month, with your allocation, you will receive a statement of the revenues allocated for the month. The Authority looks forward to working with you in the coming years. If you have any questions, please contact Mary Kittleson at 415/670- 5467. Sincerely, 4 rt Kno , Char Alameda County Transportation Authority cc: City Manager '• r S y AGIM94ENT FOR DISTRIBUTION CF `M RE B" FUNDS This AGREEMENT is made this day of - 1987, by and between the Alameda County Transportation Authority, hereinafter (Authority) , a political subdivision, and the CITY of hereinafter (City) , a municipal corporation, with reference to the following: WHEREAS, at the General Election of November 4, 1986, the voters of Alameda County approved Measure B, "An ordinance providing for the Creation of the Alameda County Transportation Authority, for the Imposition of a One-Half of One Percent Transactions and Use Tax, for the Issuance of Limited Tax Bowls, and for Other Purposes; and WHEREAS, Measure B contained the Alameda County Transportation Expenditure Plan, authorizing the collection and distribution by the Transportation Authority of a 1/2 cent transactions and use tax; and WHEREAS, both Measure B and the State legislation which enabled it to be presented to the voters (Public Utilities Code Section 131100 et seq.) were adopted with the intention that the funds generated by the aforementioned 1/2 cent transactions and use tax shall not constitute replacement by local entities of funds previously provided by property tax revenues for transportation purposes; and WHEREAS, Measure B authorized the distribution of the aforementioned use and transactions tax revenues according to the formula attached hereto as Exhibit A and by this reference made a part of this agreement as if fully set forth herein. THE PARTIES therefore agree as follows: I The Transportation Authority agrees: 1. That it shall, within ten (10) days of receipt of the monthly check from the State Board of Equalization evincing sales tax revenues for the previous month, remit to the City the City's portion of the previous month's revenue, calculated by the Authority according to the formula set forth at Exhibit A hereto. 2. Beginning on June 17, 1987, and thereafter continuing on a quarterly basis, calculate the period of time for which the aforementioned funds received monthly from the State Board of.Equalization were held by the Authority before remittance to the City, and remit to the city the interest derived during such temporary monthly holding. II CITY agrees to: 1. Refrain from substituting funds provided to it pursuant to this agreement for property tax funds which are currently being used to fund existing local transportation programs and instead limit the use of the said funds to the improvement of local transportation such as street and road maintenance and transit projects. 2. No later than ninety (90) days from the end of the fiscal year of each year during this agreement, submit to the Transportation Authority, a compliance audit prepared by the City's own internal independent auditor or by a Certified Public Accountant, to substantiate that the City has complied with the requirements of this agreement and state and local law concerning the purpose for which funds received by the City under this agreement have been spent. III TEM: The term of this contract shall be from 1987 to April, 2002. IV MODIFICATION: The parties may modify or amend this agreement, in writing by mutual consent. Dated: ALANEDA COUNTY TRANSPORTATION AUTHORITY Dated: CITY OF t } Attachment A . Annually, 17.78% - 18.9% of the total revenue generated by the sales tax will be allocated to the fourteen cities and the County for the improvement of local transportation including streets and roads. The distribution of the funds will be based on utilization of the Mayors Conference Formula for gas tax and the following: A. Years 1-5 1. 10.3% of the annual revenue will be allocated to all the cities and the County. 2. 7.48% of the annual revenue will be allocated to the North County cities only. B. Years 6-15 1. 10.3% of the annual revenue will be allocated to all the cities and the County. 2. 8.6% of the annual revenue will be allocated to the North County cities until the North cities have reached a ceiling of $159 million. When that point is reached, the allocation will return to its original 7.48%. The Mayors Conference Formula for gas tax divides the money based 50% on population and 50% on road miles. North cities include Albany, Alameda, Oakland, Piedmont, Berkeley, Emeryville and San Leandro. South cities include Hayward, Newark, Union City, Fremont, Livermore, Pleasanton and Dublin. These funds will be available to jurisdictions for street and road maintenance as well as other transportation projects. This is meant to include transit projects. One particular project has been raised for consideration: The LAVTA Bus Terminal Facility. This facility is expected to cost approximately $4 million to complete. The only sales tax money usable on this project would be that allocated to the cities and county for local projects. Section 4 of Proposition 13 requires that substantial new tax revenues not replace property taxes cut back because of Proposition 13. Since under the Expenditure Plan substantial revenues will flow to local governments and jurisdictions, the County's Special Counsel has advised that the Expenditure Plan include language similar to that included in Section t 142257(b) of Senate Bill 878 regarding Fresno County. To that end, prior to the Authority allocating funds, each local government shall certify to the Authority that the funds will not be substituted for property tax funds which are currently utilized to fund existing local transportation programs. If the local government is unable to segregate property tax revenues from other general fund revenues which cannot be so distinguished, substitution of funds from the Authority for general funds is also prohibited. The full percentage allocation of the total funds received from sales tax revenues will be distributed to each agency annually. r... > .i w-.t. .-. - ... '•'?t^.. -..n ., c. m. _ _....c .. ., '.'•4 .. ... 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