May 11, 2004
SUBJECT: Positions on Transportation Legislation
EXECUTIVE SUMMARY
The Santa Clara County Cities Association Legislative Action Committee is asking cities to discuss and consider positions on two pieces of transportation-related legislation. AB 3011 will authorize the Santa Clara Valley Transportation Authority (VTA) to receive revenue from an increase in local vehicle registration fees of up to $4, for the purposes of congestion management. AB 2032 provides the Valley Transportation Authority with the appropriate statutory authority to implement high occupancy toll (HOT) lanes within Santa Clara County.
AB 3011 – Registration Fee
The City currently has policy which is generally supportive of this kind of action. This bill would create a new system user-based revenue source that would be controlled by the Santa Clara Valley Transportation Authority Board of Directors. Depending upon how the VTA Board allocated funds, some funding could be realized by Sunnyvale for transportation capital improvements or roadway maintenance. The funds would be used for “…congestion management and construction, improvement and maintenance of streets, roads, highways and expressways...” The bill’s stated intent is to recover the current deficit of State and Federal funding, which in Santa Clara County are used for roadway projects. These funds would not provide benefit to VTA bus and light rail operations, which is the area of most dire financial need for the agency. Because the proposed new registration fee funds could be used to fund additional transit capital projects as well as roadway projects, the fee would not necessarily perform a stop gap function for State and Federal funds, unless the VTA Board approved an expenditure plan which would utilize a fee on motor vehicle owners for transit purposes which is a significant policy consideration that is unanswered by this bill.
If approved, the fee would generate approximately $5.6 million per year, or about $28 million over the life of the fee. The VTA’s current capital improvement program has a deficiency in excess of $2 billion over its 30+ year life. There is clearly a need for funding. There is absolutely no assurance that any funds would be realized by the City. However, one outcome could be a redistribution of all funding sources governed by VTA that could result in a negative impact to the City. Expenditure of these funds to expand the transit system could exacerbate the VTA’s current transit operations funding crisis. Staff recommends support of AB 3011 with amendment requiring that funds be used for construction, improvement and maintenance of streets, roads, highways, and expressways only.
AB 2032 – HOT Lanes Demonstration
This bill would authorize the operation of demonstration programs on the Santa Clara County carpool lane system where single occupant motorists would be allowed to access carpool lanes by paying a toll. The VTA has commissioned a study to determine which facilities might make the most sense for a demonstration. The stated purpose is to maximize roadway efficiency and generate revenue. Revenue would be used within the corridor, but could be used for purposes other than maintenance or expansion of the roadway corridor, specifically for transit service.
HOT lanes are a form of congestion pricing, which in theory “prices” free flowing travel to balance cost and convenience. Those willing to pay more for a free flowing trip can, with the price set by the capacity of the free flowing lane. Because in Santa Clara County carpool lanes alone do not create incentive enough to fill a lane, conversion to HOT lanes would “sell” the excess capacity. Extensive capital construction is required, and facilities must be actively managed at some considerable cost. The financial record of some existing HOT facilities has been mixed; there is no assurance of success and there is considerable capital outlay required. In Santa Clara County, a primary impetus for this bill is the potential to generate revenue for transit operations. It is questionable whether this could actually be achievable, and it is a significant policy consideration whether automobile drivers in a corridor should directly subsidize transit riders. It is unlikely to have a significant affect on the VTA’s overall transit operations funding deficit, as HOT lane revenues would be corridor specific. The measure would not result in a direct significant fiscal impact to Sunnyvale. The cost of HOT lane capital construction might affect the programming of regional capital projects countywide, which could have a spillover affect to Sunnyvale by causing funding for Sunnyvale projects to be delayed. Staff recommends a watch position. Staff believes that until more specific information on the utility of HOT lanes in Santa Clara County becomes available from the VTA study, it is premature to support the granting of blanket implementation authority at this time.
BACKGROUND
Staff is providing this report to afford the City Council an opportunity to consider positions on two State legislative bills of direct import to Santa Clara County. Staff’s recommendations have been developed generally based on existing City policies from documents such as the General Plan and the Legislative Action Policies, as well as, technical and implementation considerations. However, the City does not currently have policy directly related to these two issues. New positions taken by the Council will become official policies of the City and will be added to the Legislative Action Policies.
EXISTING POLICY
Legislative Management Sub-element, Goal 7.3C: Participate in intergovernmental activities, including national, state and regional groups, in order to represent the City's interest, influence policy and regulations, and enhance awareness.
Legislative Management Sub-element, Policy 7.3C.1: Represent adopted City policy in intergovernmental activities.
DISCUSSION
The two bills could have potential impact on the City of Sunnyvale and its residents. The following section provides a summary of the legislation as well as staff analysis and position recommendation on these issues.
AB 3011 (Laird) Santa Clara Valley Transportation Authority, vehicle fee for traffic congestion management.
Summary: This bill would authorize the Santa Clara Valley Transportation Authority (VTA) to impose a fee of up to $4 on motor vehicles registered in Santa Clara County for traffic congestion management and transportation improvements. Specific elements of the bill include:
ü Authorizing VTA to levy an annual fee of up to $4 for registration of every vehicle registered to an address within Santa Clara County.
ü Requiring the VTA board of directors, if it chooses to impose the fee, to adopt a resolution by a two-thirds vote providing for both the fee and a corresponding program for the management of traffic congestion, with performance measures and a budget.
ü Specifies an operative schedule of January 1, 2005 to January 1, 2010, unless reauthorized by the Legislature.
ü Requires fee revenues to be used for congestion management and construction, improvement and maintenance of streets, roads, highways, and expressways within Santa Clara County as specified in the county's congestion management program, the purpose of which is to address the problem of motor vehicle congestion.
ü Establishes a cap of 5% for administrative costs.
ü Requires the fee revenue to be used to pay for projects or programs that have a relationship or benefit to those paying the fee.
Staff Analysis: The City currently has policy which advocates development of certain new transportation revenue sources, advocates for “user taxes”, specifically a gas tax, to pay for local transportation improvements, and that revenue for transportation improvements be under local control. This bill would create a new system user-based revenue source that would be controlled by the Santa Clara Valley Transportation Authority Board of Directors. The funds would be used for “…congestion management and construction, improvement and maintenance of streets, roads, highways and expressways...” There are three provisions which would guide the VTA Board in deciding specifically how funds were to be spent. Projects would need to be specified in the Santa Clara County Congestion Management Program to be eligible for funding; projects would need to relate or provide benefit to those paying the fee and an expenditure program would need to be approved by a 2/3 majority vote of the VTA Board. Depending upon how the VTA Board allocated funds, some funding could be realized by Sunnyvale for transportation capital improvements or roadway maintenance.
These funds would not provide benefit to VTA bus and light rail operations, which is the area of most dire financial need for the agency. The bill would provide funds for capital projects for a five year period, which would alleviate the gap in State and Federal transportation revenues that is currently being experienced. However, in 2002-03 the VTA Board and Santa Clara County voters approved the expenditure of State and Federal discretionary funds for highway projects only. Because the proposed new registration fee funds could be used to fund additional transit capital projects as well as roadway projects, the fee would not necessarily perform a stop gap function, unless the VTA Board approved an expenditure plan as such. The language regarding expenditure relative to benefit to those paying can be loosely interpreted to mean a broad range of potential projects. Utilizing a fee on motor vehicle owners for transit purposes is a significant policy consideration that is unanswered by this bill.
If approved, the fee would generate approximately $5.6 million per year, or about $28 million over the life of the fee. The VTA’s current capital improvement program has a deficiency of over $2 billion over its 30+ year life. There is clearly a need for funding. The bill as currently proposed provides a fairly broad interpretation for how the VTA Board can distribute these funds.
It is unclear what the legislative intent of the VTA, as the bill sponsor, is for these new fee revenues as they relate to the VTA’s current funding situation. Significant debate on the actual use and distribution of funds would be forthcoming. Sunnyvale could potentially see some level of funding for its capital needs; there are a number of freeway, expressway, and roadway projects in the congestion management program within Sunnyvale. There is absolutely no assurance that any funds would be realized by the City, however, one outcome could be a redistribution of all funding sources governed by VTA that could result in a negative impact to the City. Expenditure of these funds to expand the transit system could exacerbate the VTA’s current transit operations funding crisis. There is clearly a need for transportation funding in the region, but this bill will require diligence and further effort on the part of the City in its role as a VTA member agency to assure that benefits are equitably distributed.
Fiscal Impact: The bill would provide an estimated $28 million in new revenue for transportation capital projects in Santa Clara County over a five year period (2005-2010). It is unknown what the potential for direct new revenue to Sunnyvale would be.
Proponents: The VTA, as the bill’s sponsor, argues that California is in the midst of a transportation-funding crisis that is having a catastrophic impact on both state and local transportation programs. There is less revenue to fund projects that could help improve traffic and maintain and make improvements to existing streets, roads, highways and expressways in the county. The funding shortfall has led to a failure to meet state and local needs in the near term, forcing projects to be deferred until funding becomes available in the future. The deferred projects will likely grow in costs over time to an extent that they become out of reach or out of date.
Opponents: The bill is opposed by the California State Automobile Association.
City Policy:
Legislative Action Policy 1.i.(2): Support state funding for regional transportation projects; oppose eliminating or reducing state or federal funds due to local contributions. Support local input in determining project priorities. Oppose transfers of local and statewide transportation funds to balance the State General Fund budget.
Legislative Action Policy 1.i.(10): Support efforts to allow Bay Area voters to decide upon a regional gas tax that would raise funds for regional transportation improvements.
Legislative Action Policy 1.i.(11): Support flexible spending of state and federal transportation funds for locally determined needs. Oppose project or program specific earmarking of funds from existing funding sources.
Legislative Action Policy 1.i.(17): Support identification and pursuit of limited term revenue sources for transit capital and operating purposes only after stabilization of revenue and service levels sustainable to meet the needs of transit dependent populations.
LCC Position: Watch
Staff Recommendation: Support with amendment requiring that funds be used for construction, improvement and maintenance of streets, roads, highways, and expressways only.
AB 2032 (Dutra); HOT Lanes Demonstration
Summary: Authorizes the operation of demonstration programs on specified highways in the state where single occupant motorists would be allowed to access carpool lanes by paying a toll. Specifically, relevant to Santa Clara County. The bill:
ü Sets forth findings and declarations describing high occupancy toll (HOT) lanes as facilities that allow single occupant vehicles (SOVs) to access an HOV lane during peak congestion periods in exchange for paying an electronically-collected fee. The bill also establishes findings about the potential benefits of HOT lanes by utilizing the unused capacity of the transportation system during peak periods and generating additional revenue for transportation needs.
ü Finds that research on HOT lane projects has demonstrated that there are no adverse impacts on low-income users
ü Authorizes agencies, including the Santa Clara Valley Tranportation Authority, to conduct a value pricing and transit development demonstration program where SOVs are allowed to enter and use HOV lanes for a fee. The demonstration program would be authorized for a period of no more than five years for routes in the following corridors:
a) On the Sunol Grade segment of State Highway Route 680 (Interstate 680) in Alameda and Santa Clara Counties.
b) On the HOV system in Santa Clara County.
ü Requires the authorizing agencies to maintain a Level of Service (LOS) of C.
ü Allows lanes to be operated at a LOS of D, when authorized by a written agreement between Caltrans and the authorizing agency.
ü Requires unrestricted access to lanes by high occupancy vehicles at all times.
ü Specifies a 3% cap on VTA administrative cost
ü Requires that all remaining revenues be used exclusively in the corridor from which the revenue was generated for transportation related projects and the improvement of transit service, including, but not limited to, transit operations
ü Requires a report to the Legislature on its findings, conclusions, and recommendations .
Staff Analysis: This bill provides the statutory authority for the VTA, among other agencies, to convert existing carpool lanes to HOT (carpool + toll) lanes on a demonstration basis. The bill subjects all of the Santa Clara County carpool lanes network to its provisions; the VTA has commissioned a study to determine which facilities might make the most sense for a demonstration. The stated purpose is to maximize roadway efficiency and generate revenue. Revenue would be used within the corridor, but could be used for purposes other than maintenance or expansion of the roadway corridor, specifically for transit service.
HOT lanes are a form of congestion pricing, which in theory “prices” free flowing travel to balance cost and convenience. Those willing to pay more for a free flowing trip can, with the price set by the capacity of the free flowing lane. Because in Santa Clara County carpool lanes alone do not create incentive enough to fill a lane, conversion to HOT lanes would “sell” the excess capacity. Extensive capital construction is required, and the facility must be actively managed at some considerable cost. The financial record of some existing HOT facilities has been mixed; there is no assurance of success and there is considerable capital outlay required. In Santa Clara County, a primary impetus for this bill is the potential to generate revenue for transit operations. It is questionable whether this could actually be achievable, and it is a significant policy consideration whether automobile drivers in a corridor should directly subsidize transit riders. It is unlikely to have a significant affect on the VTA’s overall transit operations funding deficit, as HOT lane revenues would be corridor specific.
Fiscal Impact: The measure would not result in a direct significant fiscal impact to Sunnyvale. The cost of HOT lane capital construction might affect the programming of regional capital projects countywide, which could have a spill-over affect to Sunnyvale by causing funding for Sunnyvale projects to be delayed.
Proponents: Over the long-term, the author argues that traditional HOV lanes will be fully utilized by HOVs and transit. In the interim, operating them as HOT lanes allows the region to make efficient use of excess capacity and provide a fast and reliable travel choice for solo drivers
Opponents: There is no registered opposition at this time.
City Policy:
Land Use and Transportation R1.8, Support statewide, regional and subregional efforts that provide for an effective transportation system.
LCC Position: Watch
Staff Recommendation: Watch. Staff believes that until more specific information on the utility of HOT lanes in Santa Clara County becomes available from the VTA study, that it is premature to support the granting of blanket implementation authority at this time.
Fiscal Impact
There is no fiscal impact to this report. To the extent possible, fiscal impact of the ballot measures has been included in the discussion.
PUBLIC CONTACT
Public contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City's web page, publication of the Council agenda in the San Jose Mercury News, and the availability of the report in the Library and the City Clerk's Office.
ALTERNATIVES
1. Council adopts staff recommendations as noted in this report.
2. Council adopts alternative positions on the two bills.
3. Council takes no action at this time.
RECOMMENDATION
Staff recommends Alternative 1; Council adopts staff recommendations as noted in this report.
Prepared by:
Jack Witthaus
Transportation and Traffic Manager
Reviewed by:
Peter Bassett
Legislative Analyst
Marvin A. Rose
Director of Public Works
Approved by:
Amy Chan
City Manager
ATTACHMENTS:
A. Assembly Committee Analysis, AB 3011 pdf.file
B. Assembly Committee Analysis, AB 2032 pdf.file