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    3.    
Finance Committee
Meeting Date: 11/29/2022  
FROM: Bill Gallardo

Subject:
Orange County Transportation Authority Annual Measure M2 Expenditure Report
 
RECOMMENDATION
Adopt Resolution concerning the Measure M expenditure report. Authorize staff to amend the Orange County Transportation Authority (OCTA) Measure M2 7-Year Capital Improvement Program for Fiscal Years 2022-23 through 2028-29 to include CIP 7251, SR-57 Freeway/Lambert Road Interchange Project.
BACKGROUND/DISCUSSION
On November 7, 2006, voters approved Renewed Measure M, which is commonly referred to as M2.  M2 is a 30-year program extension of the original Measure M (1991-2011) to fund countywide transportation facility and service improvements by transactions and use tax of one-half of one percent (1/2%).  M2 requires that each jurisdiction adopt an annual expenditure report to account for funds expended that satisfy the Measure M Maintenance of Effort (MOE) requirement and expenditures of all activities funded with M2 revenues within six (6) months of the jurisdiction’s fiscal year-end.

Each year, the City must provide specific documentation to the Orange County Transportation Authority (OCTA) in order to maintain Measure M2 eligibility for local fair share and competitive grant funding.  OCTA is the local transportation authority responsible for administering proceeds of the M2 sales tax.  The City of Brea routinely applies for competitive funding through the Comprehensive Transportation Funding Program (CTFP), which is a component of M2.  The CTFP brings a number of competitive grant programs through M2 under one set of procedures and guidelines.  M2 funds enable the City to undertake significant capital projects that improve the transportation and circulation system in Brea.  

To maintain eligibility to receive Measure M2 sales tax revenue, the City is required to submit annual documentation on its transportation related programs to OCTA.  The submittal for Fiscal Year 2022-23 required documentation including the submittal of an Eligibility Checklist & Certification, the 7-Year Capital Improvement Program (CIP) Budget presented in OCTA OC Fundtracker format, the staff report and minutes for City Council adoption of the 7-Year CIP, a Maintenance of Effort (MOE) Documentation & Certification, and Letter regarding Transit/Non-Motorized Transportation in the General Plan. 
 
The City’s Measure M2 Eligibility Submittal Package for Fiscal Year 2022-23 was approved by the City Council at the June 21, 2022, meeting, and staff completed the submittal to OCTA.  The City’s Measure M2 Eligibility Submittal Package was subsequently reviewed by OCTA, where it was identified that CIP 7251, the SR-57 Freeway/Lambert Road Interchange Project, would need to be added to the 7-Year CIP Budget as the project has not yet been completed, as the project schedule has been extended by the lead agency.  Amending the OCTA Measure M2 7-Year CIP allows all projects on the M2 7-Year CIP to be eligible to receive Measure M2 funding. 
 
As mentioned previously, this Measure M2 Expenditure Report is required to be submitted within six (6) months of year-end to complete our eligibility requirements.  OCTA staff has reviewed a draft of this report and all attachments and provided preliminary approval.  By adopting this resolution, the City will maintain its compliance with this requirement.
SUMMARY/FISCAL IMPACT
Continued compliance with the M2 Maintenance of Effort requirement will enable the City of Brea to continue being eligible for Local Fair Share and competitive grant funding.  The annual submittal of the Measure M2 Eligibility Submittal Package to the Orange County Transportation Authority (OCTA) is required to confirm the City’s ability to receive Measure M2 sales tax revenue funds.  Approval of the recommended action will satisfy these requirements for Fiscal Year 2022-23.  This action has no negative impact to the General Fund.  
RESPECTFULLY SUBMITTED
William Gallardo, City Manager
Prepared by:  Wade Whitman, Management Analyst
Concurrence: Michael Ho, P.E., Director of Public Works/City Engineer
                       Ryan Chapman, P.E., Assistant City Engineer
Attachments
Resolution
Annual M2 Expenditure Report

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