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Home My WebLink About2020-11-30 City Council Agendas (10) CITY OF PALO ALTO | 250 HAMILTON AVENUE, PALO ALTO, CA. 94301 | 650-329-2100 TO: HONORABLE COUNCIL MEMBERS FROM: PHILIP KAMHI, CHIEF TRANSPORTATION OFFICIAL DATE: CITY COUNCIL MEETING NOVEMBER 30, 2020 SUBJECT: CITY COUNCIL ENDORSEMENT OF THE LETTER EXPRESSING CONCERNS AND OBJECTION TO THE VALLEY TRANSPORTATION AUTHORITY (VTA) MEASURE B FUNDING PROPOSAL Following a meeting that occurred last week with County Supervisor Joe Simitian discussing the VTA Measure B issue, the attached cover memo and draft resolution opposing the VTA base scenario was sent out on Wednesday November 25, 2020. This at place memo provides this as additional information for the Council’s consideration regarding item #9A (ID # 11825). _______________________ _________________________ Philip Kamhi Ed Shikada Chief Transportation Official City Manager 9A DocuSign Envelope ID: 2E990468-CD36-4A7F-B51D-9DB1FC4BA24C Page 1 of 3 M E M O R A N D U M To: Interested Parties From: S. Joseph Simitian, Supervisor Re: VTA 2016 Measure B Funding Proposal/Scenario Date: November 25, 2020 In 2016, the Valley Transportation Authority (VTA) Board of Directors placed before the voters of Santa Clara County Measure B, a one-half cent sales tax measure operative for 30 years that would fund nine program categories, with the primary goals to provide meaningful congestion relief throughout the County and improve road pavement conditions. Measure B was approved by the voters by over a two-thirds vote. The nine program categories of transportation projects authorized in Measure B are: Local Streets and Roads; BART Phase II; Bicycle and Pedestrian; Caltrain Grade Separation; Caltrain Capacity Improvements; Highway Interchanges; County Expressways; State Route 85 Corridor; and Transit Operations. Measure B expressly caps the allocation for BART Phase II at a maximum of 25 percent of Program Tax Revenues, estimated to be about $1.5 Billion. The $1.5 Billion estimate is based on the April 2017 total Measure B revenues forecast of $6.3 Billion as stated in Measure B. This year VTA administration is proposing to establish a 10-year revenue and expenditure outlook exclusively for the Measure B program to include in its budget process. For Measure B, VTA administration have indicated that a combination of revenue shortfalls and the need to prioritize cash spending on the BART Phase II project may require spending deferrals in other Measure B program categories. In November 2020, VTA administration began presenting VTA Board of Directors’ advisory committees with a proposed 2016 Measure B 10-Year Outlook Base Scenario (attached), covering program allocations for Fiscal Year 2022 to Fiscal Year 2032. Among others, presentations were made to the Technical Advisory Committee (TAC) and the Policy Advisory Committee (PAC). S. JOSEPH SIMITIAN SUPERVISOR, FIFTH DISTRICT SANTA CLARA COUNTY COUNTY GOVERNMENT CENTER, EAST WING 70 WEST HEDDING STREET, 10TH FLOOR SAN JOSE, CALIFORNIA 95110 TEL: (408) 299-5050 or (650) 965-8737 FAX: (408) 280-0418 supervisor.simitian@bos.sccgov.org • www.supervisorsimitian.com DocuSign Envelope ID: 2E990468-CD36-4A7F-B51D-9DB1FC4BA24C Page 2 of 3 The TAC is comprised of one senior staff member (usually the public works or planning director) from each of the county's 15 cities, the County of Santa Clara, and various other local government jurisdictions. The TAC advises the VTA Board on technical aspects of transportation-related policy issues and initiatives. At its November 10 meeting, and in response to the presentation of the 2016 Measure B 10-Year Outlook Base Scenario, the TAC formed an Ad Hoc Committee to work with VTA administration to propose alternate 10-Year Outlook scenarios that balance the funding for BART Phase II with the needs of the other Measure B programs, to ensure Measure B continues to provide countywide benefits, and advise the TAC on a preferred scenario to recommend to the VTA Board of Directors. The PAC is comprised of representatives from each of the 15 cities and the County of Santa Clara. The PAC is intended to ensure that all jurisdictions within the county have access to the development of VTA's policies. At its November 12 meeting, the PAC voted 10-0 to refuse receipt of the informational presentation of the 2016 Measure B 10-Year Outlook Base Scenario. Both the TAC and PAC reacted negatively to the 2016 Measure B 10-Year Outlook Base Scenario containing built-in assumptions that result in little to no Measure B funding being available for the majority of the other Measure B programs during the 10-year period. The six program areas that are currently identified for zero Measure B funding over the ten-year period are Local Streets and Roads, Caltrain Grade Separation, Caltrain Corridor Capacity Improvements, Highway Interchanges, County Expressways, and State Route 85 Corridor. These assumptions underlying the Base Scenario include placing the BART Phase II project as the highest priority for the next ten years, providing it with first call on Measure B revenues, and proposing minimal bonding to fund BART Phase II. Prioritizing BART Phase II funding over the next 10 years in a way that eliminates and/or significantly reduces investments in the other programs creates significant challenges and risks. These challenges and risks include worsening congestion throughout the entire County, worsening pavement conditions throughout the entire county; increased costs due to project delay; and increased delays for long lead-time projects. The 2016 Measure B 10-Year Outlook Base Scenario programs the BART Phase II project to receive nearly $2 billion in Program Tax Revenues (presumably in inflation-adjusted year of expenditure dollars), without providing similar inflation-adjusted funding for other programs, and notwithstanding the fact that anticipated tax revenues are down (thereby reducing the 25 percent share). The 2016 Measure B 10-Year Outlook Base Scenario also includes debt servicing and financing costs for Fiscal Year 2028 through Fiscal Year 2032 totaling $20 million. These costs are solely attributable to the BART Phase II project, yet they are presented in a separate line item. This approach results in the BART Phase II debt servicing financing costs being charged against overall Program revenues effectively reducing the amount of funding available for the other eight program categories. DocuSign Envelope ID: 2E990468-CD36-4A7F-B51D-9DB1FC4BA24C Page 3 of 3 It is understood that Measure B is a 30-year program and not all projects can be delivered in the first 10 to 15 years. However, the Measure B 10-Year Outlook needs to serve the entire County to the greatest extent possible, including by avoiding or minimizing reductions in the annual formula programs (Local Streets and Roads, Bicycle/Pedestrian, and Transit Operations) and maintaining progress for the capital projects in the other programs which are already under way. In short, the 10-Year Outlook cannot be focused on a single project to the exclusion of the other Measure B programs. The attached resolution is designed to serve as a vehicle for those who wish to formally oppose the 2016 Measure B 10-Year Outlook Base Scenario and urge the VTA Board of Directors to reject the Base Scenario. The resolution also calls on the VTA Board to support a Measure B 10-Year Outlook that balances the investments among the nine Measure B programs, thereby ensuring Countywide benefits as promised in the 2016 ballot measure. Finally, the resolution encourages the VTA Board of Directors to consider options for the BART Phase II project so other Measure B programs also receive funding during the 10-year period, including approaches such as more aggressive bonding, borrowing other funds, and/or using other funding sources for BART Phase II, as well as the possibility of further phasing or slowing the BART Phase II project. DocuSign Envelope ID: 2E990468-CD36-4A7F-B51D-9DB1FC4BA24C Page 1 of 2 RESOLUTION NO. ___________________ RESOLUTION OF THE CITY OF ____________________________ OPPOSING THE VALLEY TRANSPORTATION AUTHORITY’S 2016 MEASURE B 10-YEAR OUTLOOK BASE SCENARIO WHEREAS, in 2016, the Valley Transportation Authority (VTA) Board of Directors placed before the voters of Santa Clara County Measure B, a one-half cent sales tax measure operative for 30 years that would fund nine program categories, with the primary goals to provide meaningful congestion relief throughout the County and improve road pavement conditions; and, WHEREAS, the nine program categories included in 2016 Measure B are: Local Streets and Roads, BART Phase II, Bicycle/Pedestrian, Caltrain Grade Separation, Caltrain Corridor Capacity Improvements, Highway Interchanges, County Expressways, State Route 85 Corridor, and Transit Operations; and, WHEREAS, BART Phase II is just one of the nine programs authorized in the Measure and is limited to a maximum of 25 percent of the total Measure B revenues; and, WHEREAS, in November 2020, VTA administration began presenting VTA Board of Directors’ advisory committees with a proposed 2016 Measure B 10-Year Outlook Base Scenario, covering program allocations for Fiscal Year 2022 to Fiscal Year 2032, that contain built-in assumptions that are unacceptable to the City of __________; and, WHEREAS, the built-in assumptions are that the BART Phase II project is the highest priority for the next ten years, providing it with first call on the Measure B revenues, and that minimal bonding will be used to fund BART Phase II, which results in little to no Measure B funding being available for the majority of the other Measure B programs during this 10-year period; and, WHEREAS, under the Base Scenario, the six program areas that are currently identified for zero Measure B funding over the ten-year period are Local Streets and Roads, Caltrain Grade Separation, Caltrain Corridor Capacity Improvements, Highway Interchanges, County Expressways, and State Route 85 Corridor; and, WHEREAS, this approach is inconsistent with the promises made to the voters in 2016 because it will not result in meaningful progress being made for all nine programs over the first fifteen years of the measure; rather, progress will be deferred on most programs until the second fifteen years of the measure which violates voters’ and taxpayers’ trust and expectations in approving the Measure; and, WHEREAS, in approving Measure B, voters countywide agreed to pay an increased half cent sales tax for thirty years, thereby instituting one of the highest sales tax rates in the Bay Area and State, yet under the proposed 2016 Measure B 10-Year Outlook Base Scenario only a small portion of the County will benefit and the bulk of county taxpayers will be paying increased taxes and see few significant benefits for a ten-year period; and, DocuSign Envelope ID: 2E990468-CD36-4A7F-B51D-9DB1FC4BA24C Page 2 of 2 WHEREAS, eliminating and/or significantly reducing investments in the other programs will result in worsening congestion throughout the entire County, worsening pavement conditions throughout the entire county, increased costs due to project delays, and increased delays for long lead-time projects; and, WHEREAS, front-loading BART Phase II as proposed in the 2016 Measure B 10-Year Outlook Base Scenario programs the project to receive nearly $2 billion in tax revenues (presumably in inflation-adjusted year of expenditure dollars), without providing similar inflation-adjusted funding for other programs, and not withstanding the fact that anticipated tax revenues are down (thereby reducing the 25 percent share); and, WHEREAS, it is imperative that the Measure B 10-Year Outlook serve the needs of the entire county to the greatest extent possible and not be focused on a single project to the exclusion of the other essential Measure B programs; and, WHEREAS, the VTA Board of Directors should consider a range of options for the BART Phase II project so other Measure B programs also receive funding during this 10-year period, including approaches such as more aggressive bonding, borrowing other funds, and/or using other funding sources for BART Phase II, as well as the possibility of further phasing or slowing the BART Phase II project. NOW, THEREFORE, BE IT RESOLVED that the City of ________ opposes the VTA’s proposed 2016 Measure B 10-Year Outlook Base Scenario and urges the VTA Board of Directors to reject the proposal/scenario; and, BE IT FURTHER RESOLVED that the City of ___________ urges the VTA Board of Directors to support a Measure B 10-Year Outlook that balances investments among all nine Measure B programs, including avoiding or minimizing reductions in the annual formula programs (Local Streets and Roads, Bicycle/Pedestrian, and Transit Operations) and maintaining progress for the capital projects in the other programs that are already under way during this 10-year period, thereby ensuring countywide benefits as promised in the 2016 ballot measure. PASSED AND ADOPTED by the City of _________________, State of California, on _____________, 2020, by the following vote: AYES: NOES: ABSENT: ABSTAIN: DocuSign Envelope ID: 2E990468-CD36-4A7F-B51D-9DB1FC4BA24C Certificate Of Completion Envelope Id: 2E990468CD364A7FB51D9DB1FC4BA24C Status: Completed Subject: Please DocuSign: 2020-11-30_ID # 11825_VTA Measure B_At Places Memo & attachments.pdf Source Envelope: Document Pages: 6 Signatures: 2 Envelope Originator: Certificate Pages: 2 Initials: 0 Wilson, Sarah AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Sarah.Wilson@CityofPaloAlto.org IP Address: 199.33.32.254 Record Tracking Status: Original 11/30/2020 11:42:29 AM Holder: Wilson, Sarah Sarah.Wilson@CityofPaloAlto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp Philip Kamhi Philip.Kamhi@CityofPaloAlto.org Chief Transportation Official City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 11/30/2020 11:43:31 AM Viewed: 11/30/2020 11:46:07 AM Signed: 11/30/2020 11:46:16 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Ed Shikada Ed.Shikada@CityofPaloAlto.org Ed Shikada, City Manager City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 11/30/2020 11:46:18 AM Viewed: 11/30/2020 11:58:48 AM Signed: 11/30/2020 11:59:22 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 11/30/2020 11:43:31 AM Envelope Summary Events Status Timestamps Certified Delivered Security Checked 11/30/2020 11:58:48 AM Signing Complete Security Checked 11/30/2020 11:59:22 AM Completed Security Checked 11/30/2020 11:59:22 AM Payment Events Status Timestamps