SB 1 will generate over $5 billion dollars annually for local streets and roads maintenance and rehabilitation projects.
In recent months, cities and counties have noted the challenges associated with the fast-approaching Oct. 16 deadline to submit project lists to the California Transportation Commission (CTC) and the ambiguity over their cash management abilities.
A budget trailer bill, SB 112
, is the vehicle for the League and CSAC’s new language. If passed, this bill will help cities address the following four key issues with SB 1 funding:
- Allow Reimbursement to Expedite Project Delivery — Cities and counties are anxious to begin road maintenance, rehabilitation and safety projects with revenue from SB 1. Given the collection and verification process the State Controller’s Office (SCO) has to undertake in order to apportion SB 1 funds, January 2018 is the earliest cities and counties will receive SB 1 funding. Cities and counties would like to begin preparing projects for the 2018 construction season or even start construction on SB 1 projects now. However, existing law is unclear as to whether local agencies can spend other funds now and reimburse themselves once SB 1 funds start to flow. SB 112 makes clear that cities and counties can fast track SB 1 projects now.
- Flexibility in Project List Adoption — SB 1 requires cities and counties to annually adopt project lists within a city or county budget and submit adopted projects lists to CTC to establish eligibility for local streets and roads funding. Rather, this bill would allow cities and counties to adopt a project list at a regularly scheduled public hearing. This has a two-fold benefit. First, project lists can be adopted by resolution and are afforded individual attention at a council or board meeting. Second, adoption by resolution allows cities and counties to adopt project lists earlier in the year and to establish eligibility with the CTC outside of the more prescriptive local budget process.
- Establish a Grace Period — Unforeseen and/or unavoidable circumstances can occur that may lead a city or county to miss a deadline in a given year. SCO has unofficially opined that it will allocate monthly apportionments to all eligible recipients but will not hold funds for cities and counties that have yet to submit an approved project list. It is important that taxpayers in every jurisdiction in the state receive the benefit of SB 1 funds. SB 112 provides for a three-month grace period in order to ensure all cities and counties are eligible.
- Have Complete Fiscal Year Expenditure Reporting — SB 1 requires cities and counties to submit reports to CTC on completed projects at the end of each fiscal year. However, cities and counties may invest SB 1 funds into multi-year projects that are not clearly required to be reported under existing statute. In order to demonstrate to the public, elected officials, and other interested stakeholders the broad benefits of SB 1, cities and counties should report on the expenditure of all SB 1 local streets and roads funds in a given fiscal year.
If signed into law, this trailer bill would take effect immediately and give cities immediate clarification on these issues.
The Assembly Budget Committee will hear SB 112 on on Monday, Sept. 11 at 10 a.m. The League and CSAC will continue to monitor the status of this budget trailer bill and inform members about any new developments.