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Home My WebLink About _ 4.11(b)--Resolution Accepting List of Projects Funded by SB1 GI �" Y C� F � � �- ' � ° � � i � CITY OF REDDING �� REPORT TO THE CITY COUNCIL MEETING DATE: May 19, 2026 FROM: Michael Webb, Assistant City ITEM NO. 4.11(b) Manager/Public Works Director ***APPROVED BY*** �� 3,�� .nu„ �� ,,�� 5� � �� ,��,� � � � =µ 1" irel'We, .. v: aty Vf� a�et Rubliu\ c*rA�.;�Uectetcrr 5�7"?02G �}F��'�1'�3(JX �,�ti"�'��.��23a3�TG"I �,. `Yf'��.7 mwebb@cityofredding.org wtarbox@cityofredding.gov SUBJECT: 4.11(b)--Resolution Accepting the List of Projects Funded by Senate Bill 1: The Road Re air and Accountability Act of 2017 Recommendation Adopt Resolution accepting the City of Redding's List of Projects for Fiscal Year 2026-27 funded by Senate Bill 1: The Road Repair and Accountability Act of 2017. Fiscal Impact There is no negative impact to the General Fund with the recommended action. The estimated Fiscal Year (FY) 2026-27 Road Maintenance and Rehabilitation Account (RMRA) funding allocation to the City of Redding (City) is $2,630,375. Adopting a proposed projects list is a condition for receiving the City's formulaic disbursement. Senate Bill (SB) 1 contains a local agency Maintenance of Effort (MOE) requirement that applies to funds allocated through the RMRA. The intent of the MOE requirement is so that state funding does not fully supplant local spending, thus SB 1 requires that a city maintain general fund spending for street, road, and highway purposes at no less than the average of fiscal years 2009-10, 2010-11, and 2011-12, which for the City is calculated to be $1,573,112 per fiscal year. RMRA apportionments are deposited into the City's Special Gas Tax Fund upon receipt. The City's Streets Division operates within the General Fund; throughout and at the end of the fiscal year, the City determines the allowable transfer from the Special Gas Tax and Local Transportation/TDA Fund to the General Fund, which is then documented in the annual Streets Report to the State Controller. The report also serves as the basis for SB 1 expenditure reporting, which is due to the California Transportation Commission on December 1 each year. The Road Reimbursement payments from the City's three Public Works utility enterprises ($980,200 from So1id Waste and $290,050 each from Water and Wastewater, totaling $1,560,300) together with other miscellaneous reeeipts and discretionary funding, such as transferring Streets Rolling Stoek funds to the General Fund for equipment purchases, covers the small remaining balance of the MOE threshold. Report to Redding City Council May 8,2026 Re: 4.11(b)--Resolution Accepting List of Projects Funded by SB1 Page 2 Alter�native Actzon The City Council (Council) may choose not to adopt the attached resolution as written and provide staff with further direction, such as which projects should be included in the proposed project list. If Council chooses not to adopt a resolution approving a proposed projects list before July 1, then the City would not be eligible to receive its FY 2026-27 RMRA apportionment of$2,630,375. Under this alternative, the City would also not be obligated to meet the $1,573,112 MOE general fund spending requirelnent for that fiscal year, potentially preserving those discretionary dollars for other General Fund priorities during a period of fiscal constraint. Forgoing RMRA funds in one fiscal year does not affect the City's eligibility in future years; the loss of RMRA funding would be limited in effect to the year in which the resolution is not adopted. Without the $2,630,375 RMRA apportionment and the $1,5'73,112 General Fund MOE funding, the Streets Division's projected FY 2026-27 revenue of approximately $12.5 million would be reduced by roughly 33 percent, placing significant strain on the limited Gas Tax reserves. Deferred street maintenance also carries long-term cost consequences and reduced investment accelerates deterioration toward costlier reconstruction. Background/flnalysis On April 28, 2017, the Governor signed SB 1, the Road Repair and Accountability Act of 2017, to address basic road maintenance, rehabilitation, and critical safety needs on both the state highway and local streets and road systems. SB 1 increases per-gallon fuel excise taxes; increases diesel fuel sales taxes and vehicle registration fees; and provides for inflationary adj ustments to gas tax rates in future years. RMRA funds are apportioned by formula to eligible cities and counties. The City's portion of RMRA funds for FY 2026-27 is estimated to be $2,630,375. This represents one of seven revenue streams that together fund the City's Streets Division, which is projected to receive approximately $12.5 million in total Streets revenue in FY 2026-27. Streets Revenue Summar 1 FY RMRA� HUTA3 TDA4 RSTPs So1id Wastewater6°� Waterd°� Total Waste6°' 2025/26 $2,481 $2,783 $4,045 $1,631 $949 $281 $281 $12,451 2026/27 $2,630 $2,835 $4,045 $1,478 $980 $290 $290 $12,548 Notes: ' All costs are in $1,000's �Road Maintenance and Rehabilitation Account (SB 1) 3 Highway Users Tax Account � Transportation Development Act—Local Transportation Funds (LTF) 5 Regional Surface Transportation Program from Shasta Regional Transportation Agency (SRTA)—Exchanged Federal Funds for State Cash 6 Amounts derived by proportional impact to the roadways � Provides for the City's MOE requirement towards SB 1 eligibility Report to Redding City Council May 8,2026 Re: 4.11(b)--Resolution Accepting List of Projects Funded by SB1 Page 3 SB 1 emphasizes the importance of accountability and transparency in the delivery of California's transportation programs. Therefore, in order to be eligible for RMRA funding, cities must submit a project 1ist. The attached project list (Attachment A) may be funded with RMRA funds depending on the availability of other �unding sources within the Streets Division. On May 20, 2025, the Council held a Special Meeting to consider, and incorporate input on, the FY 2026- 27 Streets budget development. The RMRA legislation recognizes the need for, and provides agencies with, the flexibility to fund projects in accordance with local needs and priorities. As such, the project list is simply a proposal of potential projects that may utilize these funds. Agencies are required, however, to submit expenditure reports by December 1 of each year that detail each project and corresponding amount of RMRA funds utilized to ensure program accountability. The RMRA provides much needed funds to repair and rehabilitate existing transportation facilities at both the state and local level. FY 2026-27 wi11 mark the tenth year in which the City has received SB 1 RMRA funding. Since the program's inception in FY 2017-18, the City has received approximately $16.9 million in RMRA apportionments through FY 2025-26, with the FY 2026-27 allocation bringing the City's estimated cumulative total to approximately $19.6 million. SB 1 also includes a local agency MOE requirement that applies to allocated RMRA funds. The City of Redding must maintain at least $1,573,112 per year of discretionary spending for street, road, and highway purposes to continue to be eligible for these apportionments. A city that fails to comply with the MOE requirement in a particular year may make it up with additional expenditures in the following year. The City's Public Works Utilities (Water, Wastewater, and Solid Waste) are municipally owned and operated enterprises that are exempt from 1oca1 property taxation. In recognition of this exemption, and to equitably allocate the costs associated with accelerated street infrastructure wear caused by the routine operation of heavy utility vehicles, the City has established a Road Reimbursement mechanism. Essentially, garbage trucks, sewer lines, and water mains tear up roads, so these utilities should help pay for some repairs; under this arrangement, the Utilities make an annual payment to the General Fund equal to their estimated proportional share of street network impact and damage. The Road Reimbursement amount is escalated annually using the Construction Cost Index as calculated by Engineering News-Record, and the resulting revenue is budgeted directly to Streets Division activities for street, road, and highway purposes. In the FY 2025-27 Biennial Budget, Council has appropriated all of the FY 2026-27 Road Reimbursement amount to the Streets Division ($1,560,300 total: $290,050 each for Water and Wastewater, $980,200 for Solid Waste). The City's backlog of deferred maintenance continues to grow as need outpaces resources. As of April 2026, the City's Pavement Management System (PMS) reflects a measured citywide average Pavement Condition Index (PC� of 50, at the lower boundary of the "Fair" zone and at risk of further deterioration into the "Poor" category, which requires costlier reconstruction rather than more economical preventative maintenance and rehabilitation treatments. PCI is measured from 0 to 100, where 70 or above represents good condition only requiring preventative maintenance. Pav�ment management modeling indicates that without leveraging gas tax allocations and grant opportunities to sustain Capital investment of approximately $13.5 million per year, the average network PCI is projected to decline to approximately 39 by 2045, well into the Poor zone. RMRA funding represents a critical component of the City's strategy to reverse this trajectory and preserve existing infrastructure assets in a cost-effective manner. The City uses its PMS to prioritize projects that maximize the bene�t of available funding by targeting streets where timely treatment can prevent more expensive reconstruction in the future. 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The proposed FY 2026-27 RMRA-funded project list (Attachment A) includes three projects focused on maintaining City streets and assets, a primary goal for SB L The FY 26-27 General Street Maintenance project provides for the citywide procurement of Public Works safety equipment, materials, staffing, and servicing of Public Works systems; these are operational needs, total cost estimate of$5.2 million, essential to sustaining day-to-day streets maintenance activities. The Cape Seal 2026 and Replace AC Surfacing 2026 projects represent the City's primary annual capital pavement maintenance efforts, delivering large-scale, cost-effective treatments that extend pavement life and improve corridor conditions. The Cape Seal 2026 project, total cost estimate of $3.2 million, wi11 perform pavement rehabilitation and safety improvements in the Sunset Drive and Overhill Drive neighborhoods. The Replace AC Surfacing 2026 project, total cost estimate of $2.9 million, will rehabilitate pavement along multiple corridors, including Browning Street from Hilltop Drive to Old Alturas Road and Mistletoe Lane from Hilltop Drive to Churn Creek Road, and includes ADA curb ramp rehabilitation, bike lane improvements, and crosswalk repair. The resolution has been approved as to form by the City Attorney. Environmental Review Acceptance of the project list is not a project as defined by the California Environmental Quality Act (CEQA). Projects that move to the design phase will be reviewed for CEQA compliance individually, and no further action is required. Report to Redding City Council May 8,2026 Re: 4.11(b)--Resolution Accepting List of Projects Funded by SB1 Page 5 Council Prio�ity/City Manager Goals • This agenda item is a routine operational item. Attachments Resolution Attachment A-Proposed Projects List FY26 RESOLUTION NO. 2026- A RESOLUTION OF THE CITY OF REDDING ADOPTING THE LIST O� PROJECTS FOR FISCAL YEAR 2026-27 FUNDED BY SB L• THE ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017 WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 201� (Chapter 5, Statutes of 2017) was passed by the Legislature and Signed into law by the Governor in April 2017 in order to address the significant multi-modal transportation funding shortfalls statewide; and WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of the City of Redding (City) are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year; and WHEREAS, the City must include a list of all projects (Attachment A) proposed to receive funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB l, in the City budget, which must include a description and the location of each proposed project, a proposed schedule for the project's completion, and the estimated usefullife of the improvement; and WHEREAS, the City will receive an estimated $2,630,375 in RMRA funding in Fiscal Year 2026-27 from SB 1; and WHEREAS, this is the tenth year in which the City is receiving SB 1 funding and will enable the City to continue essential road maintenance and rehabilitation projects, safety improvements, increasing access and mobility options for the traveling public that would not have otherwise been possible without SB1; and WHEREAS,the City has undergone a public process to ensure public input into our community's project list; and WHEREAS, the City used a Pavement Management System to develop portions of the SB 1 project list to ensure revenues are being used on the most high-priority and cost-effective projects that also meet the community's priorities for transportation investment; and WHEREAS, the funding from SB 1 will help the City maintain and rehabilitate streets and roads and add active transportation infrastructure throughout the City this year and numerous similar projects into the future; and WHEREAS, the SB 1 project list and overall investment in our local streets and roads infrastructure with a focus on basic maintenance and safety, investing in complete streets infrastructure, and using cutting-edge technology, materials and practices, will have significant positive co-benefits statewide; NOW THEREFORE, BE IT RESOLVED THAT the City Council of Redding, County of Shasta, State of California, accepts the proposed projects which will utilize Fiscal Year 2026- 27 Road Maintenance and Rehabilitation revenues in their delivery. With the listing of these projects in the adopted fiscal year resolution, the City is reaffirming to the public and the State our intent to fund these projects (Attachment A) with Road Maintenance and Rehabilitation Account revenues funded by SB 1, the Road Maintenance and Rehabilitation Account for Fiscal Year 2026-27. I HEREBY CERTIFY that the foregoing resolution was introduced at a regular meeting of the City Council of the City of Redding on the 19th day of May, 2026, and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: MIKE LITTAU, Mayor ATTEST: FORM APPROVED: SHARLENE TIPTON, City Clerk BENJAMIN L. STOCK, Interim City Attorney �� T�0.��1�+.��a�M:4i"�+1��+�1"l�'!@Cf�I�C? ��t ��'s��5��r�a��d6�r�a��t.��Fas�� '� ��: ��,��: �� .� : � � ��s�� . 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