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Agenda Item # 6.X.

BOARD MEMORANDUM

FOR DISCUSSION ONLY

BACKGROUND: 

Included in the state legislative program adopted by the VTA Board of Directors in January 2005 is the proposal for new legislation that would allow the VTA to include a vehicle registration fee (VRF) to automobiles registered within Santa Clara County.   VTA previously pursued this legislation in 2004 but was unsuccessful in moving the bill through the State Legislature.  San Mateo County however, was successful last year with a similar vehicle registration bill.  AB 1546 was approved by the legislature and signed by Governor Schwarzengger in September 2004.  This legislation allows the San Mateo County Association of Governments to include a $4 fee for every vehicle registered in San Mateo County. The fee is proposed to be used for congestion management relief projects and for mitigation of storm water pollution attributable to automobiles. 

This year, the Silicon Valley Manufacturing Group (SVMG) has taken the lead in developing the legislation for a VRF in Santa Clara County.  The sponsor of the bill is Senator Joe Simitian.  The proposed bill would include a $5 per year fee to all vehicle registrations in Santa Clara County.  Fee proceeds would be intended for congestion relief and other transportation improvement projects.   The bill establishes VTA as the implementing agency, which requires the VTA Board of Directors, by a 2/3-vote, to implement the fee and approve an expenditure plan.  The VRF is estimated to generate about $7 million per year over an eight-year duration, totaling approximately $56 million.

SVMG has coordinated an ad hoc working group made up of stakeholders including representatives from Senator Simitian’s Office, VTA, Caltrain, the County of Santa Clara and all of the cities and towns in Santa Clara County. The group has been discussing a potential expenditure plan to be used as a guideline for formal development of expenditure by VTA should the legislation be signed into law.    The goal of the SVMG-led effort is to gain consensus support of the draft expenditure plan by all stakeholder agencies. 

DISCUSSION:

The SVMG ad hoc working group has proposed the following expenditure plan.

$4 million         Caltrain capacity improvements.  These funds could be used for Santa Clara County’s share of purchasing additional Baby Bullet train cars, station or  parking improvements.  All improvements must meet the nexus test and serve Santa Clara County. 

$4 million         Freeway Litter Control and Landscape Replacement Program.  Implementation of the program to be established after completion of study by VTA.

The remaining funds would be split 1/3-1/3-1/3 into the following categories.

$16 million         Category 1: County Expressways.  These funds could be used by the County of  Santa Clara for improvements to the expressway system included in the Tier 1A County Expressway Plan. 

$16 million          Category 2: Local Streets and Roads – Direct Subvention.  These funds would be directed to the cites/towns and County based on vehicle registrations in each jurisdiction and are available for congestion relief, safety and operational improvement costs. 

$16 million         Category 3: Local Streets and Roads – Competitive Pool.  These funds are available to each city/town and County through a competitive process to be used for the same types of uses in Category 2.  Selection criteria would be established by the TAC and approved by the Board of Directors.

VTA staff is bringing the above proposal for discussion at the Technical Advisory Committee.  Based on a review of the proposal and previous discussions, VTA has highlighted some remaining issues regarding the proposal:

• There is a requirement that as a fee, the funds generated by the VRF be dedicated towards projects or services that are directly related to the fee payers.   The nexus test between the vehicle fee and projects benefiting the fee payers is important to consider for ultimate success of the bill through legislative process and the acceptance by the public.  The State Legislative Counsel is currently preparing an opinion on the nexus between the fee and proposed use of the fee on transit projects such as Caltrain improvements proposed in the draft expenditure plan.  If in the opinion of Legislative Counsel, the nexus of fee use for transit projects are not met, those projects could not be included in the expenditure plan.

• In addition to the nexus issue, any system-wide Caltrain capacity improvements are subject to the current cost sharing requirements of the Joint Powers Agreement between Santa Clara, San Mateo and San Francisco Counties.   Therefore, any proposed improvements such as the purchase of the Baby Bullet cars would require San Mateo and San Francisco to agree to provide their 1/3-share for purchase of rolling stock.  Currently, the two other counties do not have this specific rolling stock expenditure included in any plan.

• The proposed Litter Control and Landscape Restoration Program generated discussion regarding the need for the program, whether there was sufficient political or public support for the effort and its use for maintenance services.   VTA is currently in the process of preparing a study to investigate the litter control problem.  The study is expected to be complete in the Fall of 2005.   The study evaluate whether a program controlled by Santa Clara County jurisdictions could be effective at addressing the litter problem on freeways.

• Several jurisdiction raised issues with regard to their cities’ benefits under Category 1 since no expressways are located within their jurisdiction.   Possible amendments to address this concern included a dedication by the County of Santa Cara to use its Category 2 and Category 3 funds for rural roads in those areas and the suggestion to include City major arterials in the Category 1 in those jurisdictions not served directly by expressways.

The proposed expenditure plan is intended to be used as a guideline to describe the program both to State Legislators, local agency elected officials, agency staff, media and general public to explain the benefits of the new fee.   As requested by Senator Simitian, SVMG intends to use the expenditure plan guideline to gain formal support from each jurisdiction.  

As noted above, VTA staff can visualize several issues with the proposed expenditure plan.  The proposal, as stated, should not be considered an endorsement or VTA recommendation.  It is presented to the Technical Advisory Committee for further discussion and debate.

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