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Home My WebLink About09 - Approval of Measure M2 Expenditure ReportQ �EwPpRT CITY OF O � z NEWPORT BEACH <,FORN'P City Council Staff Report November 16, 2021 Agenda Item No. 9 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Scott Catlett, Finance Director/Treasurer - 949-644-3123, scatlett@newportbeachca.gov PREPARED BY: Trevor Power, Accounting Manager, tpower@newportbeachca.gov PHONE: 949-644-3125 TITLE: Resolution No. 2021-113: Approval of Measure M2 Expenditure Report ABSTRACT: Measure M2 requires local jurisdictions to submit an annual accounting of M2 revenues and expenditures to the Orange County Transportation Authority (OCTA) by December 31 each year. Prior to submitting the accounting to OCTA, the M2 Expenditure Report must be adopted by Resolution of the City Council. RECOMMENDATION: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and b) Adopt Resolution No. 2021-113, A Resolution of the City Council of the City of Newport Beach, California, Concerning the Measure M2 Expenditure Report for the City of Newport Beach for the Fiscal Year Ending June 30, 2021. DISCUSSION: In 1990, Orange County voters approved Measure M, a 20 -year program for local transportation improvements funded by a half -cent sales tax and entrusted the newly created OCTA to administer Measure M funds. Measure M was designed to fund transportation improvement projects in three major areas — freeways, streets and roads, and transit. The first Measure M program ended on March 31, 2011. On November 7, 2006, Orange County voters renewed Measure M, and Measure M2 (M2) was passed to keep the transportation improvements continuing for another 30 years, until 2041. With the passage of M2, local agencies must continue to demonstrate eligibility. One new requirement emphasizes financial accountability and requires each local agency to submit an expenditure report to OCTA each year. Specifically, Ordinance No. 3 of the Local Transportation Authority requires the following: 9-1 Resolution No. 2021-113: Approval of Measure M2 Expenditure Report November 16, 2021 Page 2 "Local jurisdictions must adopt and provide an annual expenditure report to OCTA to account for M2 funds, developer/traffic impact fees, and funds expended by the jurisdiction to satisfy maintenance of effort requirements. The report is required within six months of each jurisdiction's fiscal year end. The report will include all M2 net revenue, fund balances and interest earned, and will identify expenditures by activity type and funding source." The City of Newport Beach (City) has a maintenance of effort (MOE) requirement of approximately $12.5 million. As of the year ended June 30, 2021, the City expended approximately $17.8 million in eligible MOE expenditures as shown in the Exhibit included with Attachment A. In Fiscal Year 2020-21, the City received approximately $2.3 million of M2 Funds and expended approximately $1.1 million of M2 Funds. The unspent M2 Funds will be expended in future fiscal years. FISCAL IMPACT: If the Measure M2 Expenditure Report is not filed with OCTA, then OCTA could potentially suspend or delay M2 funding to the City. Filing the report provides the City with additional resources to fund transportation capital improvement projects that would otherwise need to be funded by the General Fund. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENT: Attachment A — Resolution No. 2021-113 9-2 ATTACHMENT A Resolution 2021-113 9-3 RESOLUTION NO. 2021-113 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, CONCERNING THE MEASURE M2 EXPENDITURE REPORT FOR THE CITY OF NEWPORT BEACH FOR THE FISCAL YEAR ENDING JUNE 30, 2021 WHEREAS, local jurisdictions are required to meet eligibility requirements and submit eligibility verification packages to the Orange County Transportation Authority ("OCTA") in order to remain eligible to receive Measure M2 ("M2") funds; WHEREAS, local jurisdictions are required to adopt an annual expenditure report as part of the eligibility requirements ("Expenditure Report"), attached hereto as Exhibit A and incorporated herein by reference; WHEREAS, local jurisdictions are required to account for developer/traffic impact fees, and funds expended by the local jurisdiction in the Expenditure Report that satisfy OCTA's Maintenance of Effort requirements; WHEREAS, local jurisdictions are also required to account for Net Revenues in such Expenditure Report, which is defined by OCTA as "[a]II of the gross revenues generated from the transactions and use tax plus any interest or other earnings thereon (collectively, "Revenues"), after the deduction for: (i) amounts payable to the State Board of Equalization for the performance of functions incidental to the administration and operation of the Ordinance, (ii) costs for the administration of the Ordinance as provided herein, (iii) two percent (2%) of the Revenues annually allocated for Environmental Cleanup, and (iv) satisfaction of debt service requirements of all bonds issued pursuant to the Ordinance that are not satisfied out of separate allocations, shall be defined as "Net Revenues" and shall be allocated solely for the transportation purposes described in the Ordinance"; WHEREAS, the Expenditure Report shall include all Net Revenue fund balances, interest earned and expenditures identified by type and program or project; and WHEREAS, the Expenditure Report must be adopted and submitted to OCTA each year within six months of the end of the local jurisdiction's fiscal year to be eligible to receive Net Revenues as part of M2. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Resolution No. 2021 - Page 2 of 3 Section 1: The City Council does hereby inform OCTA that: a) The Expenditure Report is in conformance with the template provided in the Measure M2 Eligibility Guidelines and accounts for Net Revenues including interest earned, expenditures during the fiscal year, and balances at the end of fiscal year. b) The Expenditure Report is hereby adopted by the City of Newport Beach. c) The City of Newport Beach Finance Director is hereby authorized to sign and submit the M2 Expenditure Report to OCTA for the fiscal year ending June 30, 2021. Section 2: The recitals provided in this resolution are true and correct and are incorporated into the operative part of this resolution. Section 3: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 4: The City Council finds the adoption of this resolution is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. 9-5 Resolution No. 2021 - Page 3 of 3 Section 5: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 16th day of November 2021. Brad Avery Mayor ATTEST: Leilani I. Brown City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE 4 44", c 0."—, Aaron C. Harp City Attorney Attachment: Exhibit A— Expenditure Report EXHIBIT A 9-7 City of Newport Beach M2 Expenditure Report Fiscal Year Ended June 30, 2021 Beginning and Ending Balances Schedule 1 Description Line LininAmount Interest Balances at Beginning of Fiscal Year --- ----------------------------------------------------------------- A-M ;Freeway Projects 1 $ - ------------------------ $ - ---------- ------ ------------------------------------------------------ O ;Regional Capacity Program (RCP)2 --------------------------------------------------------------- -------- --------- $ 226 ----------------------- ------------ $ - ------------------------ P ; Regional Traffic Signal Synchronization Program (RTSSP) 3 $ - $ - ----------------------------------------------------------- ---- Q--: Local Fair Share ------ -- 4 ------------------------ $ 2, 3 ------------------ $ ----------------- ----------- a. - - ----__ ._--_.- R ;High Frequency Metrolink Service5 --__---- .__------- ------ $ - ---------------------- $ - ---- -----------•--__-----_•..--.-._---__-----__-_----_____-_-_-_-___ S :Transit Extensions to Metrolink --.---.._- 6 ------ -_..__-__-._-_---__-__-- $ - ------- __-_.-__---_____-____-_- $ - --------------- I---------------------------------------------------------- T :Convert Metrolink Station(s) to Regional Gateways that 7 ----------..._ $ -------- $ :connect Orange County with High -Speed Rail Systems --------- ------------------------ ------------------------ -------------------------------------------------------- :Senior Mobility Program or Senior Non -Emergency Medical 8 $ $ .. _.Program V `Community Based Transit/Circulators 9 $ (266,617) $ - --------------------------- W :Safe Transit Stops10 $ - ----------- $ - ---------------------------------------------------------------------- X_ :Environmental Cleanup Program (Water Quality) --------• 11 --------- ------------------------ $ (131,475) -------- ------------------------ $ - r-----------------------------------------------•---------------- :Other* 12 '-- -----------. - Balances at Beginning of Fiscal Year --------------------------------------------------------------- 13 -------- $ 1,736,523 ----------------------- $- -------a_._........._.._ :Monies Made Available During Fiscal Year 14 $ 2,263,610 $ 4,174 Total Monies Available (Sum Lines 13 & 14) ---------------------------------------------•---------- 15$ ------•-- 4,000,133 .............. ............... $ 4,174 ------------------- r :Expenditures During Fiscal Year 16 $ 1,129,428 $ 4,174 Balances at End of Fiscal Year ------------------------------------------------------------------- A-M ; Freeway Projects ------------------------------------------------------------------ 17 ----------------------------------------------------------- - - $ - --------------------- $ - ------------------------ I O :Regional Capacity Program (RCP) 0 -------------------------------------------------------------- 18 ...................... $ 226 ----------- $ - ----------- ------ P ;Regional Traffic Signal Synchronization Program (RTSSP) 19 $ - $ - '---------------------------------------------------------------- Q :Local Fair Share Q-------------------------------------------------------------- ----------------------------------------------------------- ------- 20 --------- ----------------------- $ 3,159,550 ------------------------ ------------------------ $ - -------•---------------- RHigh Frequency Metrolink Service 21 $ - $ - ------------------------------------- S :Transit Extensions to Metrolink -----�---------------------------------------...--•-----.......... ............................ 22 .................................. $ - ------------------------ $ - ---......_--............ T :Convert Metrolink Station(s) to Regional Gateways that 23 $ $ :connect Orange County with High -Speed Rail Systems --------------------------------------------------------------------- --------------- ------------- --------------------------- U :Senior Mobility Program or Senior Non -Emergency Medical 24 $ $ ;Program V ;Community Based Transit/Circulators 25 $ (284,062) $ - ---------------------------•------------------------ W W :Safe Transit Stops ----------------------------------------------------------- ------- 26 ----------------------- $ - ------------------------ $ - ------ r ----------------------- --- ----------------------------- --- X :Environmental Cleanup Program Water Quality)27 --------- --- - __--------------------- $ (5,009- ----------------------- ----- —---------- $ - ---------------------- *--------------------------------------------------------- 'Other ----- 28 $ - $ - * Please provide a specific description .; City of Newport Beach M2 Expenditure Report Schedule 2 Fiscal Year Ended June 30, 2021 Sources and Uses Description Line LininAmount Interest Revenues: -------------------------- ..... I ------ ------------------------•--_------------------------------------- A-M: Freeway A-M:Freeway Projects 1 _$_________________ $ - i------- -------------------------- O :Regional Capacity Program (RCP) (See note below) 2 $ 45,966 $ ------------------ - a ------------------------------------ PRegional Traffic Signal Synchronization Program (RTSSP) 3 $ -------------- - - $ --------- - ------ -------------------- ------ ----------------------- ....... Q : Local Fair Share 4 $ 1,972 205 $ 4,103 -----------------------------------------•------------------------------- R :High Frequency Metrolink Service 5 $ _ $ - --,--------------------------------------------------- S :Transit Extensions to Metrolink6 ------------------------------------------------------------------•--------- -------------- $ - $ ------------------- - :Convert Metrolink Station(s) to Regional Gateways that connect 7 $ $ T :Orange County with High -Speed Rail Systems ---------------------------------------------------------------------------- U :Senior Mobility Program or Senior Non -Emergency Medical Program ------- 8 ---------- $ -------- 143,973 ------------------- $ ------------------- 71 ------------------------------------------------------------------------------- V :Community Based Transit/Circulators ------- 9 ---- $ -------------- - $ - i---------------------------------------------------------------------------- W :Safe Transit Stops ------- 10 $_________________ ' - - - ----- -------- ---- - ------------------ X ;Environmental Cleanup Program (Water Quality) (See note below) - 11 $ 101,466 _$--------_----_-_. $ - :Other* 12 $ - $ - TOTAL REVENUES (Sum lines 1 to 12) 13 $ 2,263,610 $ 4,174 Expenditures: ------------------- --------------------------------------------------- A-M:Freeway Projects 14 -------- $ -- ............ . $ ------------------- - •---------------------------------------------------------------------------- O ,Regional Capacity Program (RCP) 15_ $ 45,966 $ ------------------- ______________________________ P :Regional Traffic Signal Synchronization Program (RTSSP) 16 $ ------------------- - ------------ ---------------------- -------------------- -------- 17 $ 4,103 - ----------------- -----:Local_FairShare----------------------------------- --- - R :High Frequency Metrolink Service ----7 18 ------- __94----- _ _$-- $ ___ _ - --1 --- -------------- ;Transit Extensions to Metrolink ---------------------------------------------------------------------------- _- 19 _$_______________ $ ---------- - -------- ---- $ ------------------- -------------- - ------------------- T :Convert Metrolink Station(s) to Regional Gateways that connect 20 $ $ :Orange County with High -Speed Rail Systems ---- ------------------- ----------------------------- ------------------ -------_----------. ------------------------------------------- U :Senior Mobility Program or Senior Non -Emergency Medical Program21 $ 143,973 $ ------------------- 71 --------------------------------------------------------------------------------- V :Community Based Transit/Circulators22 --- -- ------------------- $ 17,445 $ --------------- - -- - �---------------------------------------------------------------------------- W:Safe Transit Stops ------- 23 ---- $ _ $ - ------ ---.. - - ------ ---- ------------- ------ X ;Environmental Cleanup Program (Water Quality) (See note below) 24 $_ (25,000) $ - --------------- :Other* 25 $ - $ - TOTAL EXPENDITURES (Sum lines 14 to 25) 26 $ 1,129,428 $ 4,174 TOTAL BALANCE (Subtract line 26 from 13) 27 1 $ 1,134,182 $ - * Please provide a specific description Note on Revenues from O: $583,938 of cash was received from OCTA, but $537,972 was deferred to a liability, leaving only $45,966 of revenue for fiscal year 2020-21. $537,972 was deferred because the cash was not spent by the end of fiscal year 2020-21. Note on Revenues from X: $120,216 was received from OCTA, and $18,750 of prior year revenue was returned to OCTA, for a net of $101.466. Note on Expenditures from X: $25,000 of fiscal year 2015-16 expenditures were disallowed by OCTA in fiscal year 2020-21. The general fund transferred $25,000 to the Measure M Fund in fiscal year 2020-21 to reimburse the Measure M Fund for these disallowed expenditures. City of Newport Beach M2 Expenditure Report Fiscal Year Ended June 30, 2021 Streets and Roads Detailed Use of Funds Schedule 3 ' Includes direct charges for stafftime ' Other M2 includes A -M, R,S,T,U,V, and W + Transportation related only * Please provide a specific description I a nnrl Project Line Developer/ Freeway Projects 0 Regional Capacity Program (RCP) P Q Q X X Other Other M2 other* TOTAL Type of Expenditure No MOE Impact Fees' O Interest P Interest X Interest Interest M2' Interest Indirect and/or Overhead 1 $ 10,358,536 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 10,358,536 .................................................._.......................................................... Construction & Rightof-Way .............................................................................. New Street Construction 0111111110111_ 2 $ - $ - $ - $ - $ - $ - $ - $ $ - ...................-...................................................................................-............................................--................................................ $ - $ $ ................................................................................................._..............................,............................................................................................................,..............._.............................................................................,......................................._........._ Street Reconstruction 3 $ 868,587 $ - $ - $ - $ - $ - $ 838,682 $ 3,634 $ - $ - $ - $ - $ - $ 1,710,903 ...... .......................................................................................................................... ......_i.............................. Si pals, Safet Devices, & Street Lights gY 4 $ 468,211 ......................................................................................................................................................................................................................................................................_.............................................................................................................................................--......... . $ - $ - $ - $ - $ - S - $ - ..........................................................................................._......................................................,....................................................................... $ - $ - $ - $ - - 468,21.. ...........................................—........................................................................................................................................,................... Pedestrian Ways & Bikepaths 5 $ 104,240 $ - _.................................. $ 45,966 $ - $ - $ - .................................................................................................................................................................................................................................................................................................. . $ 108,362 $ 469 $ - $ - $ - $ - $ - $ 259,037 ....................... .....—....................................................................... ...................... StormDreins ......... ,.............. ............ 6 $ 456,902 ....... ............................ ..............,...................................................................................... $ - S $ - ...... ................................................. $ -. _$.......................................................$..........................5.................... ...... . _5....................... ... $.............................. 5..................._456,902.. ............................................................................................................................................................................................................................................................................................................ Storm Damage 7 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ $ - Total Construction' 8 $ 1,897,940 $ - $ 45,966 $ - $ - $ - $ 947,044 $ 4,103 $ - $ - $ - $ - $ - $ 2,895,053 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ Right of Way Acquisition 9 $ - $ - $ • $ - $ - $ - $ - $ - S - $ $ - $ $ - $ - Total Construction & Right -of -Way 10 $ 1,897,940 $ - $ 45,966 $ - $ - $ - $ 947,044 $ 4,103 $ - $ - $ - $ - $ - $ 2,895,053 Maintenance s ............................................................................................................... Patching $ $ $ ........... ......... .......................... ....... $ .................. _ ...................................._...._. $ $ ............... ......_ . Oveday &Sealing 12 $ 1,667,918 ................ $ - $ - $ - $ - $ - $ - $ - ............................................................................................................................................................................................. $ - $ - S - $ - $ - $ 1,667,918 .............. ......................... ..., .............................................................................................................. Street lights &Traffic Signals ...................._.........................,.........................................................,..........................._.....,..............................,......................................................................., 13 $ 789,978 $ 6,292 $ - $ - $ - $ - $ - $ - $ $ - $ - __.................. $ - ............ ................... $ - .... ......................................................... $ 796,270 ................. _.............................................................................................................................................................................................................................._...........................................—......................................................................................................................................,..................................... StormDamage 14 $ - $ - $ -...$ - $ - S - $ -...$ ......................... ...5 ............................5..........................5..........................5............................5.............................5.................................._.. .................................................................................................................................................................................................................................. Other Street PurposeMaintenance 15 $ 3,062,269 $ - $ - ......................................................................................................................... $ - $ $ - $ $ - $ - $ - $ - $ - S - $ 3,062,269 Total Maintenance' 16 $ 5,520,165 $ 6,292 $ - $ - $ - $ - $ - ... ........... •$ - ......................... • $ - .................................................................................._,................................................................................................................. $ - $ - $ - $ - $ 5,525,457 .............................._......................................................,.................................... Other 17 ..........,........................................................................................................................................................................ $ - $ - $ - $ - $ - $ - $ - $ (25,000) $ - $ 161,418 $ 71 $ - $ 136,489 GRAND TOTALS (Sum Lines 1, 10, 16,17) 18 $ 17,776,641 $ 6,292 $ 45,966 $ - $ - $ - $ 947,044 $ 4,103 1 $ (25.000)1 $ - $ 161,418 $ 71 $ - $ 18,916,535 Any California State Constitution Article XIX streets and road eligible expenditure may be "counted" in local jurisdictions' calculation of MOE if the activity is supported (funded) by a local jurisdictions' discretionary funds (e.g. general fund). The California State Controller also provides useful information on Article XIX and the Streets and Highways Code eligible expenditures in its "Guidelines Relating to Gas Tax Expenditures for Cities and Counties". I have reviewed and am Finance Director Confirmation 19 aware of these guideline eir pplicability in calculating and reporting on Maintenance of Effort expenditures. Finance Director initial: ' Includes direct charges for stafftime ' Other M2 includes A -M, R,S,T,U,V, and W + Transportation related only * Please provide a specific description I a nnrl Project Description A -M Freeway Projects O Regional Capacity Program (RCP) P Regional Traffic Signal Synchronization Program (RTSSP) Q Local Fair Share R High Frequency Metrolink Service S Transit Extensions to Metrolink T Convert Metrolink Station(s) to Regional Gateways that connect Orange County with High -Speed Rail Systems U Senior Mobility Program or Senior Non -Emergency Medical Program V Community Based Transit/Circulators W Safe Transit Stops X Environmental Cleanup Program (Water Quality) 9-10 City of Newport Beach M2 Expenditure Report Fiscal Year Ended June 30, 2021 Local Fair Share Project List PROJECT NAME AMOUNT EXPENDED Concrete Street Pavement Reconstruction (12201-980000-18R21) ---------- ------------------------------------- $ 689,684 ----- - ----- ---- Bison Ave Pavement Rehabilitation (12201-980000-19R21) $ 75,634 Balboa Peninsula Crosswalks Improvements (12201-980000- ------ $ 1 08,831 Concrete Replacement Program (12201-980000-20R06) --------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- --------------------------------------------------------- ---------------------------------------------- ---------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ 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---------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------. $ ----------------------- ----------------------- ----------------- ----------------------- ------------------------ ----------------------- ---------------------- ----------------------- 76,998 .......... -- $ 951,147 Schedule 4 9-11 City of Newport Beach M2 Expenditure Report Fiscal Year Ended June 30, 2021 I hereby certify that: Signature Page Q All the information attached herein and included in schedules 1 through 4 is true and accurate to the best of my knowledge; Q The interest earned on Net Revenues allocated pursuant to the Ordinance shall be expended only for those purposes for which the Net Revenues were allocated; Q The City of Newport Beach is aware of the State Controller's "Guidelines Relating to Gas Tax Expenditures for Cities and Counties", which is a guide for determining MOE Expenditures for M2 Eligibility purposes; Q The City's Expenditure Report is in compliance with direction provided in the State Controller's "Guidelines Relating to Gas Tax Expenditures for Cities and Counties;" and Q The City of Newport Beach has expended in this fiscal year an amount of local discretionary funds for streets and roads purposes at least equal to one of the maintenance of effort requirements belowlo: A) The City met the existing FY 2020-21 MOE benchmark dollar amount. B) The City met a proportional MOE benchmark amount of FY 2020-21 General Funds Revenues that is at least equal to the percent listed in column C of Exhibit 2 in the M2 Eligibility Guidelines. Scott Catlett I' I j I D-1 Director of Finance (Print Name) Date Signature 10 An actual General Fund Revenue excerpt from a jurisdiction's Comprehensive Annual Finance Report (CAFR) must be provided as backup documentation. 9-12