March 25, 2016 - From the March, 2016 issue

Metro Reveals Spending Priorities for a Likely LA County Ballot Measure Sales-Tax Increase

LA Metro recently released a draft expenditure plan detailing its proposed approach to the county’s transportation system over the next 40-50 years. The many ambitious projects described could change what it means to live and travel in Los Angeles, but their successful delivery will likely depend upon whether voters approve a tax-increase proposal that would generate $120 billion for Metro’s unprecedented transit build-out program. TPR presents excerpts of the plan here.


Phil Washington

“Metro has taken several steps to go beyond the traditional transit-oriented development focus to the creation of ‘Transit Oriented Communities.’” —Metro Draft Expenditure Proposal

Fund Elements of the Plan 

Major Transit Construction Projects - 35% Allocation 

The major transit construction fund includes a 33% allocation for new rail and Bus Rapid Transit (BRT) capital projects, whose final project definition will be determined following completion of an environmental review process. Rail yards, rail cars, and start-up clean fuel buses are also eligible for this fund. 

In addition to the elements listed above, the Major Transit Construction Fund includes a sub-category of $350 million for additions to the Countywide Bus Rapid Transit system. Bus Rapid Transit lines include enhanced speeds gained through protected rights-of-way, signal priority, and bus stop enhancements that reduce dwell time at each stop. During each decade, Bus Rapid Transit lines will be added to enhance Metro’s existing system already in place. Eligibility for the funds available includes advanced planning, environmental, and construction related costs. 

A total of $35 million is included for Streetcar and Circulator projects such as those proposed in Downtown Los Angeles, Glendale and other locales around the County. This allocation is eligible for capital only and will leverage operating and maintenance commitments as seed funding for Streetcar and Circulator type project sponsors. 

This category also includes $20 million in seed money for visionary projects, such as an express connection between the Los Angeles World Airport and Union Station in downtown Los Angeles or extending the Sepulveda Pass from LAX to Long Beach. These visionary ideas are important to foster as Los Angeles County grows. An additional 2% of the funds are recommended for Transit System Connectivity Projects.

Major Highway Projects - 17% Allocation 

The major highway construction fund includes a 15% allocation for safety enhancements, bottleneck relief, and capacity projects, whose final project definition will be determined based upon the completion of an environmental review process. Environmental studies, plans, specifications, and estimates, right-of-way acquisition, and construction are also eligible for this fund.

An additional 2% of the funds are recommended for Highway System Connectivity Projects.

Transit Operations - 20% Allocation

The transit operations fund includes a 20% allocation to support countywide transit operations (consistent with ridership patterns) for Metro and Municipal Operators. The funds will improve system safety, provide faster, frequent, reliable, accessible services, and improve customer service. Estimated to generate $23.9 billion during the term of the proposed new sales tax, this fund is critical to continue to grow the service and create a balanced more flexible multi-modal transit system. During the early years of the draft Plan, when transit expansion has not yet been fully implemented, some of these revenues can be used to address the transit State of Good repair backlog. For example, some of these funds could be used to meet bus system related repair.

Local Return - 16% Allocation 

The 88 cities and the County of Los Angeles are responsible for building, improving, operating and maintaining much of the transportation infrastructure throughout Los Angeles County; a 15% local return allocation of the existing ½ cent Measure R sales tax provides a key revenue source for needs, such as, potholes, curb cuts, sidewalks, and active transportation projects. The existing program is structured to provide maximum flexibility for local jurisdictions to meet their transportation priorities and needs and staff recommends that the additional local return allocation maintain this flexibility. 

In recent months, Metro has taken several steps to go beyond the traditional transit-oriented development focus to the creation of “Transit Oriented Communities” (TOC). TOCs represent an approach to development focused on compact, walkable and bikeable places in a community context (rather than focusing on a single development parcel), integrated with transit. Implementing TOCs requires coordination with local jurisdictions, as such, the draft Expenditure Plan proposes that the Local Return allocation include an expansion of the eligible use of funds for TOC development. 

Metro has also taken several steps to elevate our response to storm water needs both for our own projects and programs, as well as in collaboration with communities around the County. In particular, last month the Metro Board adopted the following:

• Created a new requirement that all Metro construction projects implement methods to capture and treat storm water; • Required that design and construction projects incorporate sustainability best practices; and 

• Expanded the Urban Greening Implementation Action Plan along with planning and technical tools to aid in project implementation. 

Consistent with the recent policy initiatives, the draft Expenditure Plan proposes that the Local Return allocation also include an expansion of the eligible use of funds for “Green Streets.”

Estimated to generate $19.1 billion during the term of the proposed new sales tax, it is important to note that the recommended fund allocation of 16% for Local Return results in a more than doubling of existing Measure R Local Return funds between FY18 and FY39 and extends the tax for another 18 years. Specifically, beginning in FY18, the proposed new fund allocation of 16% for Local Return will be added to the 15% Local Return currently generated by Measure R. The amount of Local Funds will exponentially grow beyond that during the later years of the new Measure (FY2040-FY2057).

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Metro Rail Operations - 5% Allocation 

Metro Rail is the backbone of the County’s transit network, providing service in highly congested corridors and moving riders at greater speeds. Historically, every time a rail line opens, transit ridership has increased, doubling in that rail corridor. As new rail projects open and the Metro Rail network expands, dedicated funding is needed to operate and maintain the service necessary to serve the expanding mobility needs of the region. During the early years of the draft Plan, when rail expansion has not yet been fully implemented, these revenues can be used to address the rail transit State of Good repair backlog. For example, some of these funds could be used to meet Blue Line repair needs and as well as the needs of other rail lines opened in the 1990s. The 5% allocation is estimated to generate $5.9 billion during the term of the proposed new sales tax.

Metro State of Good Repair (SGR), Safety Improvements, & Aging Infrastructure - 2% Allocation

This new category is critical given the aging nature of Metro’s system and is closely aligned with safety and security. An emphasis on SGR is necessary to keep the expanding transit system in top form. The fund will help ensure safety, earthquake retrofitting of infrastructure, and minimize breaks in service delivery or unanticipated equipment failures during the course of providing transit service. 

Specifically, the combination of older and newer rail systems places increased loads on the older rail infrastructure to service new destinations. To address this, Metro must ensure maintenance of the existing Metro Rail system, which in some corridors is over a quarter century old and does not have a dedicated funding source for its increasing SGR needs. The 2% allocation is estimated to generate $2.4 billion during the term of the proposed new sales tax. 

Transit Operations (20%) and Rail Operations (5%) are eligible to fund state of good repair needs. In addition, Metro is developing an asset management plan that evaluates the age and condition of assets. The draft Expenditure Plan also proposes a provision where Metro Board may, after fiscal year 2039, increase the SGR percentage allocation based on the condition of the transportation assets. These provisions will help mitigate funding needs for state of good repair.

Americans with Disabilities Act Paratransit Service for the Disabled; Discounts for Seniors and Students - 2%

Allocation Proposed as a new category of funds, ADA-mandated Paratransit Service is a mobility lifeline for disabled residents. Currently, no dedicated funding for ADA-mandated paratransit exists, yet ADA ridership is expected to more than double in the next decade. The projected growth is due to the aging population of baby boomers and the cuts in federal human services transportation funding. This portion of funding could also include funding for discounting Metro transit passes for students and seniors. The 2% allocation is estimated to generate $2.4 billion during the term of the proposed new sales tax. 

Regional Rail - 1% Allocation

The regional rail fund includes a 1% allocation (or $1.2 billion) as supplementary funding for improvements to regional rail service within Los Angeles County, with service in Antelope Valley as a first priority. Regional rail operations, maintenance, expansion, and State of Good Repair are eligible uses of these funds. The proposed 1% allocation builds upon the existing 3% Measure R commuter rail allocation. Specifically, beginning in FY18, the proposed new fund allocation of 1% for Regional Rail will build upon the existing Measure R 3% allocation for Regional Rail for a combined total of 4% of 1/2 cent until 2039. The draft Expenditure Plan also proposes a provision where the Metro Board can, after FY2039, increase the Regional Rail percentage up to an additional 1% based on verifiable service improvements and need. In addition, Metrolink Capital Projects are eligible for Transit System Connectivity funds. 

Regional Active Transportation Program (ATP) - 2% Allocation 

The Regional Active Transportation program is a multimodal program of regionally significant projects that encourage, promote and facilitate environments that promote walking, bicycling, rolling modes and transit use, as part of a robust and integrated countywide transportation system. 

To support this effort, and in response to stakeholders, Metro has created a 2% portion of the draft Expenditure Plan, which is expected to generate $17 million annually in the first year and more than $2.4 billion over the 40-year life of the measure.

Approximately half of the 2% allocated ATP funds would be used to fund Projects that would be consistent with Metro’s Active Transportation Strategic Plan. Potentially eligible projects include Safe Routes to Schools, complete streets improvements, and first/last mile connections with public transit such as bicycle facilities including bike hubs, protected bike lanes connecting the transportation network, and the countywide bike share program. These funds, administered by Metro, will be available for the purposes of implementing the Countywide Active Transportation Network, as identified in Metro’s Active Transportation Strategic Plan. Additional information about ATP and Regional ATP eligibility criteria is available in Attachment K. The other half of this 2% allocation will go towards two major LA River Bike Path projects: Complete LA River Bike Path - San Fernando Valley Gap Closure; and LA River Bike Path - Central Connector.

Regional ATP fund allocation can leverage and enhance local investments being made through the Local Return allocation from Proposition A, Proposition C, and Measure R. Over the last six years, $443.8 million of Local Return funds (Prop A, Prop C, & Measure R) have been spent on Active Transportation. The Local Return of the Potential Ballot Measure is intended to be eligible for municipal ATP projects. Furthermore, subregions have identified active transportation projects as part of their subregional priorities in the Framework Funding Targets (Attachment D). An additional $2.853 billion (in 2015 dollars) in active transportation projects were selected by the subregions. In total, the amount of funding utilized for ATP is approximately 4.5% or $5.4 billion, exclusive of any Local Return Funds used for ATP projects.

Administration - 1.5%

Up to one and one-half percent (1.5%) of gross sales tax revenues may be appropriated by to Metro for administrative costs related to the measure. The magnitude of the projects to be delivered through the new Potential Ballot Measure require additional oversight, infrastructure, and other related resources, to ensure a timely and cost effective delivery. Examples of eligible costs are: audits and audit-related functions, development and adoption of criteria, guidelines, rules and regulations, administrative and procedural responsibilities, planning and feasibility studies, compliance monitoring, and other associated costs of administering the measure. In no case shall the gross sales tax revenues appropriated for such costs exceed more than one and one-half percent (1.5%) of the gross sales tax revenues in any one year. 

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