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HomeMy Public PortalAbout09) 7E Prop A Exchange-Foothill TransitAGENDA ITEM 7.E. ADMINISTRATIVE SERVICES DEPARTMENT MEMORANDUM DATE: May 19, 2020 TO: The Honorable City Council FROM: Bryan Cook, City Manager Via: Susan Paragas, Administrative Services Director SUBJECT: APPROVAL OF PROPOSITION A FUNDS ASSIGNMENT AGREEMENT WITH FOOTHILL TRANSIT RECOMMENDATION: It is recommended that the City Council: 1. Approve the Proposition A Local Return fund exchange with Foothill Transit; 2. Authorize the City Manager to execute the Assignment Agreement; and 3. Approve the budget amendments: a. Increase Expenditure Budget of $750,000 from Proposition A Fund; and b. Increase Revenue Budget of $562,500 in General Fund. BACKGROUND: 1. In 1980, the Los Angeles County voters approved a ½ cent sales tax measure for the Proposition A program to finance a Transit Development Program. 2. On July 1, 1982, the collection of the approved sales tax began. Twenty-five percent was designated for the Local Return Program fund to be used by cities and Los Angeles County (Jurisdictions) in developing and/or improving public transit, paratransit and the related transportation infrastructure. City Council May 19, 2020 Page 2 of 3 ANALYSIS: Proposition A Local Return (Prop A) monies have restrictions that require its funds to be used exclusively to benefit public transit. Expenditures related to fixed route and paratransit services, Transportation Demand Management, Transportation Systems Management and fare subsidy programs that exclusively benefit transit are all eligible uses of Prop A funds. Cities receive Prop A allocations based on a per capita basis. The Los Angeles County Metropolitan Transportation Authority (LACMTA), which administers the Prop A funds, allows cities with restricted Prop A funds to exchange such funds for unrestricted revenues such as general fund monies provided that the Prop A funds are used by for approved projects. Prop A exchanges usually involve an agreement by a city/agency that can utilize the restricted funds to pay another city/agency that has available Prop A funds at a discounted rate. On June 30, 2019, the City has accumulated a fund balance of approximately $1.18 million and is estimated to have a fund balance of $1.23 million by June 30, 2020. At this time, the City primarily uses its Prop A funding for Dial-A-Ride. The City evaluated additional projects. However, they were not viable at this point. With the COVID-19 pandemic, the City’s General Fund will experience reductions in its revenues not only during the remainder of this current fiscal year, but also in the next few years as the economy is not expected to rebound immediately after the virus has been eradicated. Therefore, to help offset the losses, staff is recommending to exchange $750,000 of the City’s Prop A funds to Foothill Transit for general fund monies at the rate of $.75 resulting in $562,500 to the City’s General Fund. The Foothill Transit operates a fixed-route bus public transit service that provides community-oriented, environmentally friendly bus service throughout Southern California's San Gabriel and Pomona Valleys, including express bus routes to Pasadena and Downtown Los Angeles. Staff recommends that the City Council approve and authorize the City Manager to execute the attached Assignment Agreement with the Foothill Transit authorizing the exchange of $750,000 in Prop A funds for $562,500 in General Funds. CITY STRATEGIC GOALS: City Council approval of this agreement would further the Strategic Goal of Good Governance. City Council May 19, 2020 Page 3 of 3 FISCAL IMPACT: The Prop A exchange will result in an increase of $562,500 in the City’s General Fund and reduce the fund balance in Prop A funds by $750,000. ATTACHMENT: A. Assignment Agreement with Foothill Transit ATTACHMENT A ASSIGNMENT AGREEMENT BETWEEN THE CITY OF TEMPLE CITY AND FOOTHILL TRANSIT This Fund Exchange Agreement (Agreement) is made and entered into this ___ day of May 2020, by and between the City of Temple City, California and the Foothill Transit, California with respect to the following facts: A. Foothill Transit provides community-oriented, environmentally friendly bus service throughout Southern California's San Gabriel and Pomona Valleys, including express bus routes to Pasadena and Downtown Los Angeles. B. The City of Temple City (City) has uncommitted Proposition A Local Return (Prop A LR) funds which could be made available to Foothill Transit to assist in providing the services discussed in Paragraph A of this Agreement. In exchange for the assignment by Foothill Transit of the amount for its general use funds (non -formula allocation funds) indicated in Section 1 below, the City is willing to assign uncommitted Prop A LR funds to Foothill Transit for the purpose identified in Paragraph A. Now, therefore, in consideration of the mutual benefits to be derived by the parties and of the premises herein contained, it is mutually agreed as follows: 1. Exchange. The City agrees to assign a total of $750,000 of its Prop A LR funding to Foothill Transit from the Fiscal Year 2018-19 and 2019-2020 allocations. In return, Foothill Transit agrees to assign $562,500 of its general use funds (non-formula allocation funds) to the City. 2. Consideration. The City shall assign the agreed upon Prop A LR funds to Foothill Transit in one lump-sum payment. Foothill Transit shall assign the agreed upon general use funds to the City in one lump-sum payment. Each payment shall be due within 30 days of the first date that bot h of the following have occurred: (a) execution of this Agreement, and (b) approval by Los Angeles County Metropolitan Transportation Authority (LACMTA) of the Foothill Transit's project description. 3. Term. This Agreement is effective on the date above written and for such time as is necessary for both parties to complete their mutual obligations under this Agreement. 4. Termination. Termination of this Agreement may be made by either party so long as both of the following are correct: (a) written notice of intent to terminate is given to the other party at least five (5) days prior to the termination and (b) the effective date of the termination is before the date LACMTA approves the Foothill Transit project description. Page 2 of 3 5. Notice. Notices shall be given pursuant to this Agreement by personal service on the party to be notified, or by written notice upon such party deposited in the custody of the United States Postal Service addressed as follows: a. Bryan Cook City Manager City of Temple City 9701 Las Tunas Dr. Temple City, CA 91780 b. Doran J. Barnes Executive Director Foothill Transit Administrative Office, 2nd Floor 100 South Vincent Avenue West Covina, CA 91790 If notice is provided via personal service, it is deemed "given" on the date of personal service. If notice is provided via U.S. mail, then the notice is deemed "given" two days after the notice is properly addressed and placed in the U.S. mail. 6. Assurances a. Foothill Transit shall use the assigned Prop A LR funds only for the purpose of providing the services discussed in Paragraph A of this Agreement, and within the time limits specified in LACMTA Proposition A Local Return Program Guidelines. b. Concurrently with the execution of this Agreement, Foothill Transit shall provide LACMTA with the Standard Assurances and Understandings Regarding Receipt and Use of Proposition A funds specified in the Guidelines regarding the use of the assigned Proposition A LR funds. 7. This Agreement constitutes the entire understanding between the parties, with respect to the subject matter herein. This Agreement shall not be amended nor any provisions or breach hereof waived, except in writing signed by the parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers, duly authorized, by Foothill Transit on ______________________ and the City of Temple City on ___________________. Page 3 of 3 CITY OF TEMPLE CITY: FOOTHILL TRANSIT: BY: __________________________ BY: ______________________ Susan Paragas Michelle Lopes Caldwell Director of Administrative Services Director of Finance and Treasurer BY: __________________________ BY: ______________________ Bryan Cook Doran J. Barnes City Manager Executive Director ATTEST: ATTEST: BY: __________________________ BY: ______________________ Peggy Kuo Christina Lopez City Clerk Board Secretary