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Agenda Item # 8

BOARD MEMORANDUM

RECOMMENDATION:

Review and recommend that the VTA Board of Directors approve the programming of FY 2005-06 Transportation Fund for Clean Air Program Manager (TFCA 40%) funds to projects as shown in Attachment A, and further approve a fund exchange with the Metropolitan Transportation Commission (MTC) whereby VTA would exchange TFCA 40% funds for Congestion Mitigation and Air Quality (CMAQ) funds to be used to fund the Bicycle Expenditure Program (BEP) projects.

BACKGROUND:

The Transportation Fund for Clean Air (TFCA) is generated by a $4.00 surcharge on vehicle registrations.   The Bay Area Air Quality Management District (BAAQMD) administers these funds in the nine-county Bay Area.   Funds are available for allocation to alternative fuels, arterial management, bicycle, and trip-reduction projects that reduce vehicle emissions.

BAAQMD returns 40% of these funds to the county in which they are collected for allocation by a “program manager.”   This fund is called the TFCA Program Manager Fund (TFCA 40%) Fund.   VTA is the program manager for Santa Clara County.  Project sponsors apply directly to VTA for funding.  The VTA Board of Directors allocates these funds on a competitive basis to projects in Santa Clara County, subject to approval by BAAQMD.  Approximately $2.0 million is available for TFCA 40% projects in FY 2005-06.

At its August 3, 2000 meeting, the VTA Board of Directors designated half of the annual TFCA 40% allocation to Tier 1 Bicycle Projects in the Countywide Bicycle Plan for a ten-year period.

On December 9, 2004, the VTA Board merged the Tier 1 and Tier 2 projects into a single Bicycle Expenditure Program (BEP) list and extended the TFCA 40% commitment until 2030.

DISCUSSION:

Attachment A presents the FY 2005-06 project funding recommendations developed by the Capital Improvement Program (CIP) Scoring Subcommittee of the Technical Advisory Committee (TAC).   These recommendations are based on the TFCA 40% Policies and Criteria established by the VTA Board of Directors in September 1996 and amended in August 2000 and some additional considerations described in the following text.

Competitive Program

Approximately $890,000 is available for the competitive non-BEP projects.   Three eligible projects, totaling approximately $890,000 in grant requests, were submitted by the VTA Member Agencies.   Staff recommends that the Board of Directors program TFCA funds to these projects as shown in Attachment A. 

Bicycle Expenditure Program Projects

Approximately $1.1 million is available for the BEP projects during the FY 2005-06 fund cycle. This amount includes a $173,049 “payback” of BEP TFCA funds that were loaned to the Competitive Program in the FY 2002-03 cycle.   Staff recommends that these funds be programmed to MTC’s Vehicle Buyback Program as shown in Attachment A, in exchange for CMAQ funds. 

Staff’s recommendation for the fund exchange with MTC is prompted by a new TFCA policy direction and program criteria changes adopted by BAAQMD Board of Directors in February 2005.   The program criteria changes eliminated the Program Manager Cost Effectiveness aggregate and also required each project to meet a $90,000 per ton of reduced emissions cap.   The criteria change and policy direction from the BAAQMD points to the elimination of pedestrian and bicycle projects being eligible for TFCA funding in the future.  

Both of these changes will significantly impact VTA staff’s ability to fund the Bicycle Expenditure Program as directed by the VTA Board.    The staff recommended solution to this problem is to exchange the TFCA funds intended for the BEP with CMAQ funding from MTC.   The fund exchange will allow the BEP projects to be funded with CMAQ funds and MTC would use TFCA funding for TFCA eligible programs. 

MTC’s T2030 regional transportation plan calls for MTC to provide CMAQ funding to significantly increase BAAQMD’s Vehicle Buy Back (VBB) program in order to meet air quality goals.   MTC has offered to exchange its CMAQ funds for TFCA 40% funds from Santa Clara and Alameda Counties.   Bicycle projects are eligible to use CMAQ funds. 

In order to accomplish the exchange, VTA would commit to programming a minimum of $3.3 million in TFCA 40% funds to the VBB over the next three years (FY 2005-06 through FY 2007-08).   MTC, in turn will provide an equal amount of CMAQ funds for the VTA to program to BEP projects, beginning in FY 2005-06.   Because the exact amounts of future TFCA funds are not known at this time, the fund exchange over a three year period is estimated at approximately $3.3 million.

Summary of Board Actions

If approved, the VTA Board action would accomplish the following:

1. Provide funds to four eligible TFCA 40% Program Manager projects
2. Commit to approximately $3.3 million in TFCA 40% funds with MTC over a three-year period for approximately $3.3 million of CMAQ funds to be used for VTA BEP projects.

ALTERNATIVES:

There are no other practical alternatives that could assure the full amount of funding to the BEP.

FISCAL IMPACT:

The Board’s action will make approximately $890,000 in 2005-06 TFCA 40% funds available to the Competitive Projects in Santa Clara County and $3.3 million available to the BEP Projects via an exchange with MTC for CMAQ funds.

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