HomeMy WebLinkAbout07 - Approval of Measure M2 Expenditure ReportQ �EwPpRT
CITY OF
s NEWPORT BEACH
`q44:09 City Council Staff Report
November 28, 2023
Agenda Item No. 7
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Jason AI -Imam, Finance Director/Treasurer - 949-644-3126,
jalimam@newportbeachca.gov
PREPARED BY: Jeremiah Lim, Senior Accountant, jlim@newportbeachca.gov,
949-644-3242
TITLE: Resolution No. 2023-79: Approval of Measure M2 Expenditure
Report
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.
RECOMMENDATIONS:
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. 2023-79, 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, 2023.
DISCUSSION:
During 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 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:
7-1
Resolution No. 2023-79: Approval of Measure M2 Expenditure Report
November 28, 2023
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."
M2 funds eligibility requires the City to maintain a minimum level of local streets and roads
expenditures using discretionary funds, known as the maintenance of effort (MOE). The
City's MOE requirement for Fiscal Year 2022-23 was approximately $12.5 million.
Approximately $15.9 million in eligible MOE expenditures were incurred during FY 2022-
23 as reflected in the exhibit included with Attachment A.
In FY 2022-23, the City of Newport Beach received approximately $2.9 million of
M2 Funds and expended approximately $3.2 million of M2 Funds, reducing the balance
of unexpended M2 funds compared to the beginning of the fiscal year. Unexpended
M2 Funds remaining at the end of fiscal year 2022-23 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. 2023-79
7-2
ATTACHMENT A
RESOLUTION NO. 2023-79
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, 2023
WHEREAS, local jurisdictions are required to meet eligibility requirements and
submit eligibility verification packages to the Orange County Transportation Authority
("OCTA") 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"), which Expenditure
Report is 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]ll 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.
7-3
Resolution No. 2023-
Page 2 of 3
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
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's Finance Director is hereby authorized to sign
and submit the M2 Expenditure Report to OCTA for the fiscal year ending
June 30, 2023.
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.
7-4
Resolution No. 2023-
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 28th day of November, 2023.
NOAH BLOM
Mayor
ATTEST:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
CI704
TTORNEY'S OFFICE
C _
Aaron C. Harp
City Attorney
Attachment: Exhibit A — Expenditure Report
7-5
Exhibit A
7-6
City of Newport Beach
Schedule
M2Expenditure Report
Fiscal Year Ended June 30,3U23
Beginning and Ending Balances
Description
Line
Amount
Interest
Balances at Beginning of Fiscal Year
P !Regional Traffic Signal Synchronization Program (RTSSP)
3
$
$
jConvert Metrolink Station(s) to Regional Gateways that
iSenior Mobility Program or Senior Non -Emergency Medical
8
$
U
X tEnvironmental Cleanup Program (Water Quality)
11
$ (287,509)
Balances at Beginning of Fiscal Year
13
$ 2,733,233
Balances at End of Fiscal Year
P Regional Traffic Signal Synchronization Program (RTSSP)
19
$ -
Convert Metrolink Station(s) to Regional Gateways that
,connect Orange County with High -Speed Rail Systems
Senior Mobility Program or Senior Non -Emergency Medical
X Cleanup Program (Water Quality)
27
$
Based oncomments from OCn\regarding the dtytMZexpenditure report for the fiscal year ended June 3lZUZ2,
cash balances are reported for projects 0, V, and X, and fund balance is reported for project Q.
7-7
City of Newport Beach M2 Expenditure Report Schedule 2
Fiscal Year Ended June 30, 2023
Sources and Uses
Description
Line
Amount
Interest
No.
Revenues:
A MFreeway Projects .-. _... ...,
1
$..
-.
$.........
-
...... ..........
0 ;Regional Capacity Program (RCP)
2
P Regional Traffic Signal Synchronization Program (RTSSP)
3
$
Q Local Fair Share
4
$
2,525,261
$
29,046
R High Frequency Metrolink Service
5
$
$
S :Transit Extensions to Metrolink
6
$
$
,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
$
192a278
..
$
1 ,562
... ...,.. ..-
V .'Community Based Transit/Circulators
9
$
149,189
$
-
W .Safe Transit Stops _.
10
'Environmental
X � I Cleanup Program (Water Quality)
11
$
5,009
$
-
Other*
12
$
-
$
-
TOTAL REVENUES (Sum lines 1 to 12)
13
$
2,871,737
$
30,608
Expenditures:
A-M Freeway Projects
14
$
-
$
O Regional, Capacity Program (RCP)
15
$
10,
-
P I Regional Traffic Signal Synchronization Program (RTSSP)
16
$
$
-
Q Local Fair Share
17
$
2,763,995
$
29,046
R :High Frequency Metrolink Service
18
$
$
=
S 'Transit Extensions to Metrolink
19
$
$
,.Convert Metrolink Station(s) to Regional Gateways that connect
20
$
$
T
Orange County with High -Speed Rail Systems
U '. Senior Mobility Program or Senior Non -Emergency Medical Program
21
$
192,278
$
1,562
V ;Community Based Transit/Circulators
22
$
174,431
$
W ' Safe Transit Stops
23
$
-
$
..... ............... .
X Environmental Cleanup Program (Water Quality)
24
$
-
$
-
Other*
25
$
$
-
TOTAL EXPENDITURES (Sum lines 14 to 25)
26
$
3,141,340
$
30,608
TOTAL BALANCE (Subtract line 26 from 13)
27
$
(269,603)
$
-
Based on comments from OCTA regarding the city's M2 expenditure report for the fiscal year ended June 30, 2022,
projects O, V, and X are reported on a cash basis, and project Q is reported on a modified accrual basis.
Project X revenue is a transfer from the city's general fund because of expenditures in prior fiscal years that are not
being reimbursed by OCTA.
7-8
City of Newport Beach Schedule 3
M2 Expenditure Report
Fiscal Year Ended June 30, 2023
Streets and Roads Detailed Use of Funds
Type of Expenditure
Line
MOE
Developer!
O
0
P
P
Q
Q
X
X
Other
Other
M2
Other-
TOTAL
No.
Impact Fees
Interest
Interest
Interest
Interest
me
Interest
Indirect and/or Overhead
1
$ 9,201,188
$ -
$
$ -
$ -
$ -
$
$ -
$ -
$ -
$ -
$ -
$ -
$ 9,201,188
Con st[ucdon & Right•of-Way
Now Street Construction
._._ ._.. .. ...__._._... .... .... ....._...... ... ...
2
$
$
$
$ -
$ -
$ -
$
$ -
$
$ -
$ -
$ -
$
$ -
Street Reconstruction
3
._ ._ _
$ 757,336
. _. __ _...
$ -
_...
$
_.___._.-. ...
$ -
_.... ..__.
$ -
_. ...
$ -
.. .__. ..____
$ 2,763,995
__-___... --
S 29,046
--_....
$ -
S
$
$
$ -
$ 3,550,377
Signals, Safety Devises, & Stroet Ulthes
_..,_._,....._..............._........._,...._.,.,__.__...,.._.,.......__.._.._......._..
4
S -
__..._.................._...,..__.,.,_.._...__._.,_.
$ -
$ -
_..._._..._....._.......
S
...__...`__.___....
S
_.....,.....__.._...__._._.._.....__.._,_..
S -
$ -
$
S -
$ -
S -
$
Pedestrian Ways & Bikepaths
.__.._..__ ......___............... ... .... . .......__,...._
S
....___._..._____....
$ .
S .
.__..._........__._......__...
$ 10,636
..... _._._.._._.-._._,..._
$
$ -
._........ ,.__._........._...........__.._._.._..__._.
S -
_....._._._._.._...._........._..........._....._
$
S
...,...._......._...._.,.
$ -
_...,._..,...._._._.__
S ........... ......
...._....._,...........__............___.,.._
S -
._.. ..
$
..._......_.__..._.._
$
_....._._..._.._._....�._
S 20,636
._�.._...._.....__
Storm Drains
6
$ -
$
S
S
- .
$ -
_ - _
$ -
_.
$ -
_........_...,_...._�.....__
$
$ -
$
S
$
S -
$
Storm Damage
7
$
$
$
$
$
-
$
. S �..S
S
5
$ -
$ .. ...
$ -
$ -
Total Constructions
8
$ 757,336
$
$ 10,636
S
$
$ -
$ 2,763,995
$ 29,046
$ -
$ -
$
$
S
$ 3,561,013
Right of Way Acquisition
9
Total Construction & Right -of -Way
10
$ 757,336
$ -
$ 10,636
$
S
S -
S 2,763,995
$ 29,046
S -
$ -
$
$
$ -
$ 3,561,013
Maintenance
Patching
11
S 56AM
$ -
$
$
$
$ -
$
S
$
$
$
$
$
S 56,800
12
9697
$
$
$
$
$ 996,697
_.. _2O&5oalftg
...._._....
Street lights & Traffic Signals
...........___..._�.___ ..... ............._._.....,,
13
$ 2,745,712
......__...._._,.
.........
$ - ......._._.
$ -
$ -
.,......,...................,......_........_.,...........
S
$ -
$ -
$ -
$ -
._....
$ ._
$ ..
$ -
.. ..,.,.
$ -
.,.,..,_........
.. _... __..........__..
$ 2,745,712
_.....,......,.....
Storm Damage
14
$ -
$
...
$
is
-
$
$
$
Otter Wool Purpose Maintenance
15
$ 2,144,423
$ -
$
.
S -
S •
$
S
$
S
S -
$ -
$ -
$ 2,144,423
oral Maintenances
16
S 5,943,632
$
$
$
$
$
$
$
$ -
$
$ -
$
S
$ S,943,632
$ -
$ -
$ -
$ 36Q709
S 1,562
$
S 368,271
GRAND TOTALS (Sum Una 1,10,16,171
18
$ 15,002,1561
$
$ 10,636
$
$
$
$ 2,763,995
$ 29,046
$
$
$ W709
$ 1,562
$
$ 29,074,104
Any California State Constitution Article XIX sweets and road eligible expenditure may be'counted" In local Jurisdictions' calculation of MOE If the activity Is supported (funded) by a local JurisdledorW discretionary funds (e.g. general fund).
The California Sate Controller also provides useful Information on Ankle XIX and the Streets and Highways Code eligible expenditures In its'Gulclelines Relating to Gas Tax Expenditures for Cities and Counties'. I have reviewed and am aware
finance Director Cont rrmdIon
19
of these guidelines and their applicability in calculating and reporting on Maintenance of Effort expenditures.
Finance Director initial:
s
Based on comments from OCTA regarding the city s M2 expenditure report for the fiscal year ended June 30, 2022
projects O, V, and X are reported on a cash basis, and project Q Is reported on a modified accrual basis
Lcxend
Project
Description
A-M
Freeway Projects
0
Regional Capacity Program(RCP)
P
Regional Traffic SignalSynchronization Program (RTSSP;
Q
Local Fair Share
R
High Frequency Metrolink Service
S
Transit Extensions to Metrollnk
T
Convert Metrolink Statlon(s) to Regional Gateways that connect Orange County with
High -Speed Rail Systems
U
Senior Mobility Program or Senior Non-Emargency Medical Program
V
Community Based Transit/Circulators
W
Safe Transit Stops
%
Environmental Cleanup Program Water Quality)
7-9
City of Newport Beach
Schedule 4
M2 Expenditure Report
Fiscal Year Ended June 30, 2023
Local Fair Share Project List
PROJECT NAME
AMOUNT EXPENDED
East Coast Hwy Pavement Rehab (12201-980000-21R12)
$
449,270
Jamboree Rd. Pavement Rehab (12201 980000 21R15)
$_
813,718
Newport Coast Dr Pavement Rehab (12201-980000 22R14)
$
1,530,053
$
2,793,041
7-10
City of Newport Beach
Signature Page
M2 Expenditure Report
Fiscal Year Ended June 30, 2023
I hereby certify that:
0 All the information attached herein and included in schedules 1 through 4 is true and accurate to the best of
my knowledge;
0 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;
0 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;
0 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
0 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 or exceeding the FY 2022-23 MOE benchmark dollar amount"
Jason AI -Imam
Director of Finance (Print Name)
Signature
fo1,3/23
Date
" Jurisdictions are encouraged to submit MOE eligible expenditures higher than their MOE benchmark, so that
should certain expenses be ruled ineligible during an MOE audit, the local jurisdiction still has sufficient MOE
expenditures to demonstrate continued achievement of the MOE benchmark.
7-11