HomeMy WebLinkAbout04 - Approval of Measure M2 Expenditure ReportQ �EwPpRT
CITY OF
s NEWPORT BEACH
`q44:09 City Council Staff Report
November 18, 2025
Agenda Item No. 4
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, - 949-644-3242;
jlim@newportbeacha.gov
TITLE: Resolution No. 2025-79: 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 st each year. Prior to submitting the accounting to OCTA, the M2 Expenditure Report
must be adopted by City Council through a resolution.
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 2025-79, 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 Fiscal Year 2024-25.
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-
4-1
Resolution No. 2025-79: Approval of Measure M2 Expenditure Report
November 18, 2025
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 2024-25 was approximately $14.3 million.
Approximately $23.2 million in eligible MOE expenditures were incurred during FY 2024-
25, as reflected in the exhibit included in Attachment A.
In FY 2024-25, the City received approximately $3.0 million of M2 funds and expended
approximately $5.2 million of M2 funds, decreasing the balance of unexpended M2 funds
compared to the beginning of the fiscal year. Unexpended M2 funds remaining at the end
of fiscal year 2024-25 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 City's 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 2025-79
4-2
ATTACHMENT A
RESOLUTION NO. 2025- 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 FISCAL YEAR 2024-
25
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 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]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 must 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.
Resolution No. 2025-
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 2024-25.
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.
Resolution No. 2025-
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 18th day of November, 2025.
Joe Stapleton
Mayor
ATTEST:
Lena Shumway
City Clerk
APPROVED AS TO FORM:
CITY TTORNEY'S OFFICE
7
��
aron C. Harp
City Attorney
Attachment: Exhibit A — Expenditure Report
G�
City of Newport Beach
EXHIBIT A
Schedule 1
M2 Expenditure Report
Fiscal Year Ended June 30, 2025
Beginning and Ending Balances
Description
Line
Amount
Interest
No.
Balances at Beginning of Fiscal Year
.... ........ ............................... .....................
A-M 1 Freeway Projects
$ ., ...., ..
$ -
.. .. .. .. ........ ... , .,.
0 Regional Capacity Program (RCP) .............. .......
2
$ 503,349 75
-
P Regional Traffic Signal Synchronization Program (RTSSP)
3
..... ......... .......:...... ..... ..... .... .:...:....:..:..............:.:............................... ....::.::...................... ....:.......:......................... ................ ............................ ................... .................
Q -Local Fair Share ...,........................:,......::.
...... ............ ....... ......,...................................:.:....:.::.......::.:fi
4
...............
805.66..,
$ 3,086,805.66
,..,...........::..:............,.,..........,,,r..........,...................:.:,.,,.:,.::.:,.::.::.::::,::,.::..,.......,..:,.:,:.:,::,::,.....:,...:::::::,.::.:.....:
..........::..::.:..:..:.:::.._...............:.:..,...:.:.......:.....:.....,........_..
$
...:::........................................,:::,.:..:.,...............::..........................,
R :High Frequent Metrolink Service
..................::..::.::........::.:..:..::...........::..::...........................................:........................:.::::::.......................:.:..........::.::.:::.:.....:..............
5 :......::................::..::......................:::.::.....:................................::............................:..:......
$ -
$ :.........................::.. :............:-:..,
S Transit Extensions to Metrolink
... ...... ......................... :::.:.......::..:...:
.6
-
$„........,,..,..:,::..:,:....::....::,.::::::.:,:,,:,:,,,....:,.:,:.....
:::.::.:,..................................:::::................................ -
;Convert Metrolink Station(s) to Regional Gateways that
7
$
$
T
connect Orange Count with High -Speed Rail Systems
.,., .,.,.. ..:.........:...:.:�:,:,:,..,,.:::::::::::::.,
.:Y.:.... ..........::...............::.......
..............::
.....:,,..:,:,,:,.................. .....,,,::,,:,,:,,:,:,.,::............ :,,:,,:,,:
,:.,,.,,:,::,,,.,:,::.,.................... ,,:,::,,,:,,.:,,............. ::,::,:,:,.:
-Senior Mobility Program or Senior Non-EmergencyMedical
8
$
$ _
U„
Pro ram
V Communit Based Transit/Circulators
9
506 414.53
W :Safe Transit Stops
.:..::::: ..::.:..:..:..::......:::::..::................................:.::..........................::::..:::.::.::..................................::..:.:............................:::.::..:....
10
$ -
..,:..,........:,.:,.,,..,::,::,::,..:..:::::.:,...,.......,.:::,::,:,,.::,.:,.::,:: ,:,,
$ -
:::..,...:,.:::.......::::::........::::::.::::::::.::.::.::.::.:,.:,.:,.....:...,..:,.::.
-Environmental Cleanup Program Water Quality
11
-
-
=Other
$ -
$ -
Balances at Beginning of Fiscal Year
13
$ 3,083,740.88
$ -
Monies Made Available During Fiscal Year
14
$ 2,937,092.46
$ 90,149.76
Total Monies Available (Sum Lines 13 & 14)
$.:.:.::..:.:,.:,.::...:..::.::....90,149..76.:.
...............................1,5.:.::.:..::.:..$:.,
!..Expenditures During Fiscal Year
16
..:.:..,.:,.,6,020,,833.34.
$ 5,114,069.62
$ 90,149.76
Balances at End of Fiscal Year
"'
s
.................:......:.....:...:...::::::..:::.:::::.................... ....... .............. ..... :.....:.....:......,:.,::.,:..:,.,,.,,:,..:,,:,::,::,,:.:.,:..... .:,..:.:::.,:.,:.,::.::,:.,:.,,:,,...:...:.:::,:::,::,::...:..:,:::..
A-M Freeway Projects ::
17.:.......:...$,...:.:.,..:.,..:..,.:..:.::.:.::.::..:...:.:..:.:,.:,.,-.:,.:.:....
$.:..:.:,.,,.:,.,,.,,:..........:,.:,.:::::.::.::.:.....::.:....,..:,...:.:-:.,.
,0....:.......................::.:::::.......................::::::.....................:)::.............:,::.......
_Regional Capacity Program (RCP) ....
$ 439 195.13 1.11
r::::.....:.............:..::.
$ -
„
....
P-Regional Traffic Signal Synchronization Program (RTSSP)
g g Y
19
......... ,...,........:,::::::.::.:::,::,,.............$:,::,,::,:::,:::
... .........:,................................. ....... ,,.:.,.,,,:,,:,:,.
.:..:,g.......:................................,,.....,......................:,,.:,:,,:.:,
', 'Local "Fair Share::......:.....::.::.:.:.:..::...:......:......,...:..,.,,:.,:,::.::...,:,,.,:,,:,,,:,.,,,,,
........ .......:.,::,:,..,$......:..::.:,.:.::.:,::,.::
20
$ 1,276,982.83
$.:.:....:.:.,:.:,:.,:.,:.,.:.....:.....:,.........::,...::::::,::,..:,
R =Hi h Frequency Metrolink Service
21
-
-
S :Transit Extensions to Metrolink
...:..::.::.::.:::........:.............::..::.::.::.....::..:.::.::.......::.........,.:.,.:,:.:,...............::.:::::..............:,::,.......:...........::,.:,....:,.,,
,2.�......::..:,:
$ -
,...:.......:,.,:,.....................:......:,::,.:,.:,.................::.::,:............................................................,...........,:,.,..::,............:,::::
$ -
-Convert Metrolink Station(s) to Regional Gateways that
23
$
$ -
T
connect Orange County with High -Speed Rail Systems
........:.:.: ................. ..... .......................... :...... ..... :..:..,.:..:..:..:.:....... ........ :......
.:....... ............... ...,,.:,.....:........::...::.:,.:,...
........ ... .......... :::........ ... ..... ...... ..... ....... ..
............ ...................... ....... .:,................................. .......... :.:,.: ,.
Senior Mobility Program or Senior Non -Emergency Medical
24
$
$
P.
...1I.,::,::::::.:,..,:..,.,.:.....:.,:::.....:....:..::......,:::1.::.,.,.:........,::::........................
,
_...:.,::..,:.....,::.,.......::..:.....::::.::..m:,
V Community Based Transit/Circulators
25
01, 348.7
$ (3 4)
$ -
Transit Stops
26
$
$ "..... .... ........ -
"
Xafe ..,
Environmental Cleanup Program (Water Quality)
27
$
-
.
:Other
28
$ -
$ -
* Please provide a specific description
Based on comments from OCTA regarding the City's M2 expenditure report for the fiscal year ended June 30, 2022,
cash balances are reported for projects 0, V, and X, and fund balance is reported for project Q.
The ending balances on the fiscal year 2023-24 report were rounded to dollars, but the beginning balances on
the fiscal year 2024-25 report are reported to the penny based on new guidance for fiscal year 2024-25.
i t
City of Newport Beach M2 Expenditure Report Schedule 2
Fiscal Year Ended June 30, 2025
Sources and Uses
Description
e
Line
Amount
Interest
Revenues:
.,
...._..
$ ..:::::::....::.:.::..::.:::::.:....::............::::
-
A . .....F..... :.....Pro'ects::...:....::::::::.....:.....:....:::::::....::.......:::::....:::::....................:::::::...:::::::::::::::::::::::...:::.:.:::::::::.:::::...........:.::......:.....::::::::...::::::..:................:.
Y J ...............:::::::::::::::.....::.:.............:::::.:.....................
1
...... ......
$ -
..::::::::...::::::...................:,,:.............
0.....:'Re...ional::.Ca.....acit.:::::.Pro:::::ra:�:::::.RCP.::.:::::::::.::::::::::::::::..::::.::::::::::::::....::::::....
' ��
g ( )
2 ......:.......:.....:.....:,..:::::::,:::::,:::,::::::,:,,::.:..,,.::..:::::::::::::::....,....................................................:.:
$...:
_:::........::...
-
P.::::..:::.........:::::::::........:P..,:::::.:....y....,:::::.:,nization Program RT:::::::.:...:.):..,,:........::::::::::::::::.:.....:.:::..:.m.
Regional Traffic Sign aLSynch.ro:::::::...::::...................:.::.::.:.::g ( SSP
3_
$
-
$
-
.... ......... :.:.:...:: :: .,.
Q Local Fair Share „ ......, ...........,, , ,.....,,........
$
2,495,250.15
$
87,513.40
,
:::::::::::.::....:..:.::....:..:.:::::::....::........................:......::.:
R _High Frequency Metrolink Service
....: 5:
„4
$
-
$
...................:.:...-.:..
c:::...:::::::.............:::::::::::..................:.:............:::::::.::.:,.................................,.........................::........................,............::::::::::::.......,......,......,:.,:::::::::.:::::........:::.........:..::::::.,...,
S -Transit Extensions to Metrolink
::::::...::::.:....................::::::::..::::::::::..::.:::::::::::::::::...::..::.......::...,......::::::::.....,.........:::::.::::::................:.......:.....
6
.....:...,:::....:::::::::::...,:.,::::::::::::....,.:.....:.....:,..,..:,:.,:.::,.....,..............:::::::::::::::::::::::::::.................1.............
$
-
$
-
-Convert Metrolink Station(s) to Regional Gateways that connect
7
$
$
T
Orange County with High -Speed Rail Systems
.
.......:.:....:
: :
:::::..::::::::::........::::::::.::::..::: ... ......... .............. ,:::.:::..:..:.,......:..:. „..::..:.:::::.::,.::::::::......::::::::.:::::,.:........,....,:::......:::::...,:.::.::..:..::::::::::.:,.:::::::::::::.:.....:..
USenior Mobility Program or Senior Non Emergenc Medical Program
_.........:::
.::.:.....:::..::
8
$
165,707.50
$
::::
2,636.36
,,.., ,
:::.......::::
V...Based Transit Circulators
=-Community /
9
,:,.,,::::,:....,,::::,,.::...,::::::,:,:.,.,.,.,..,:,,,:,::,..:,:::::::::::.....:,.:...:.................,$,:,::::::,,.,:::,::::::::::::,::,:::::::...:::::::.......:,.,:,
$
276,134.81
-
:::.::::::::::::............:.....::...........:::::..:::.:::::.....::.:::.:........::::::::::::.::..,......................:.........
W :Safe Transit Stops
10
$
-
$
-
X _Environmental Cleanup Program (Water Quality)
11
$
-
$
-
-.Other* ...........:.:::.::::::::.::::::::::::::.
12
$
$
TOTAL REVENUES (Sum lines 1 to 12)
13
$
2,937,092.46
$
90,149.76
Expenditures: ........... ,..,.,., ......................
:::::::::.................................
. ..................... ..:.::.:::::::....:::::::::..:::........::::::::.:......:::.................. ..::::....::::::..:::::.................... .::::::::::::::..::..::.......
14
$ ......
.......................................
O Re tonal Ca acity Program (RCP)
p1
15
$
1542
, 6.::.................................:.::::::::.....::..:::::::::::..:.:::::......:::::::::::
•:::::::::::::,.,,:,:,:,,:.
-
a.:,..,..:,g.:::.:::::.::
S'g Synchronization Program (RTSSP)
Regional Traffic Signal nchro
16
-
....
Q...::�...:::::,.....:..::::.......:::::.::.............:.:......::............::.......:::..:.::::::::....:::
:Local Fair Share
,17,::,::,..::::::..:...::..:..4,305.,,072„98:,,,
$
..,$..,::::::::::::::::,87:,
513;40
R _Hi h Frequency Metrolink Service
$
::::::,....::..:::::::,::::::::::::::::::
$
............... .................. .......,,......::::::
..,�:...: ......: ......::::::.:.
S -Transit Extensions to Metrolink ............................:.......:.....:......................,:.::::::::,:.......,.,::..........
......:19:::,::,
$
,...::::::..::............::::::::.............................
-
$,::::::.::.....::::::::::::..................:::,,:...
-
_Convert Metrolink Station(s) to Regional Gateways that connect
20
$
$
T
gy g p Systems Oran a Count with High -Speed eed Rail.:,S.:::::.:..:..:::::.::::.:...:........:::..:....:..::.::.::::::::.::::::........::.:..::.::.:::::::::::::::::...::::::::::::::::::....:.:::::::...::::::.:::......
:...:::::::::::::::::......:.::::::.:.:::::::.:.:::.:..:.....:......:...:
..... :::.:::::........:::::::::::.:.:........::.:...:::::..:...::::::...
U:.,.,.....Senior ....::::.:::::....:::::::............::::::... ::::........,... ,.::::::::::..:.... :...:::::....::
ency Medical Pro ram
:...:.:::::::::::........::::::::::::.:....:::.::::...::::...::::.
22
$
::......:.....:......:..::.::....:.:::.::................:....................................................
161,069.02
2 636,36
2r:::::,:..:,:
,,,,,,,,,,,,,,,Mobi,Bas.ed T ansit Transit/Circulators
V' Com m u n t /:::::::.::::::........:.................... .,.:..,....:::.:23.....,.....::$::::
$
........:::::.................:..::::::$:::,
$
-....,,.,:::::::,:..................................::-
.:...:.:...::::......;,:....afe Trans t...Sto...s::::::::::,,..::::.......:.::.:::.:::.:.::.::.::..:.:...:.:.:::..:.:::.::::..............:.:::::::::::::.....::::::::.,..,.....,.
W=S�:,...,:::,::::::::,:.....,:.::,.:,,::::::::,,:,.:::::..,:::::::.,,:::::,,:,::,::.:,.,,,:
...
......: -
::.:::::::
............................ ....................
o:::::,::::::::..,:,..,,:,,,,.,:,.::.:.... :::::::::.::......:.....:.....:.....::.::.::.....::::::......:...........::.::.::::.
X Environmental cleanup Program (Water Quality
.
24
.....::...,::::.::::,..:,....:......::,:::::::::......,...............::::::......:::::
$
508 065.50
$
:::::::....:::....:....,.....::.:...
:::::....::::::::::::::::::..::...::.:.::......:...:..:..::::::::X:.:::::::::::.:,:.:..,.,.:,:::,::,::::::::::::::..,.::,::,::,..,.:::....:,.:::::::..........................
:Other
25
$
-
$
-
TOTAL EXPENDITURES (Sum lines 14 to 25)
26
1 $
5,114,069.62
$
90,149.76
TOTAL BALANCE (Subtract line 26 from 13)
1 27
$
(2,176,977.16)
$
* Please provide a specific description
Based on comments from OCTA regarding the City's M2 expenditure report for the fiscal year ended June 30, 2022,
projects 0, V, and X are reported on a cash basis, and project Q is reported on a modified accrual basis.
For project X's revenues the City's records do not reflect receipt of a $33,065.50 payment from OCTA until July 2025.
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City of Newport Beach
Schedule 4
K03Expenditure Report
Fiscal Year Ended June 3U.2O2s
Local Fair Share Project List
PROJECT NAME
TYPE OF EXPENDITURE
AMOUNT
INTEREST
GRAND TOTAL PROJECT Q EXPENDED 4,392,586.38
me
City of Newport Beach
Signature Page
M2 Expenditure Report
Fiscal Year Ended June 30, 2025
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;
2 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 2024-25 MOE benchmark dollar amount 11.
Jason AI -Imam
Director of Finance (Print Name)
Signature
10/27/2025
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.
4-10