CC SR 20160802 U - Prop A ExchangeRANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 08/02/2016
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA DESCRIPTION:
Consideration and possible action to enter into a Proposition A Local Return Fund
Exchange Agreement with the City of Diamond Bar for $450,000.
RECOMMENDED COUNCIL ACTION:
(1) Approve a Proposition A Local Return Fund Exchange Agreement with the City
of Diamond Bar; and,
(2) Approve an additional appropriation of $450,000 in exchange for $600,000 of
Proposition A Local Return Funds.
FISCAL IMPACT: $450,000
Amount Budgeted: $0
Additional Appropriation: $450,000
Account Number(s): 101-6000-411-69-00
ORIGINATED BY: Vina Ramos, Accounting Supervisor Vf —
REVIEWED BY: Deborah Cullen, Director of Finance
APPROVED BY: Doug Willmore, City Managerl,�14_j
ATTACHED SUPPORTING DOCUMENTS:
A. Proposition A Local Return Fund Exchange Agreement with the City of
Diamond Bar (page A-1)
BACKGROUND AND DISCUSSION:
Proposition A is a half -cent sales tax measure approved by Los Angeles County voters
in 1980 to finance a countywide transit development program. Twenty-five percent
(25%) of the Proposition A tax revenues are designated for the Local Return Program
funds (LR) administered by the Metropolitan Transit Authority (Metro). Annually, Metro
distributes the LR funds on a per capita basis to eighty-eight (88) cities and
unincorporated areas of Los Angeles County. The LR funds are restricted for
developing and/or improving public transit, paratransit, and the related transportation
infrastructure.
The City's allocation for FY16-17 is $779,900, of which 80% or $638,300 funds the
annual contribution to the Palos Verdes Peninsula Transit Authority (PVPTA)/Dial-A-
Ride and -Lift programs, printing costs, and bus stop shelter maintenance and
improvements.
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During the City's FY16-17 budget workshop, Staff received City Council approval to
seek information regarding LR fund exchange programs with other cities. Staff
contacted several cities for the exchange and identified the City of Diamond Bar with
uncommitted Proposition A funds of $600,000. The current exchange rate is $0.75 of
unrestricted General Fund monies for $1.00 of Proposition A funds. If approved, the
City will pay the City of Diamond Bar for $450,000 for these LR funds, a total discount of
25% or $150,000.
Per Metro's guidelines, the City has 3 years to spend the $600,000 for any projects with
a direct benefit to public transit. Proposition A's eligible projects include fixed -route and
paratransit services, transportation demand management, transportation systems
management and fare subsidy programs. In the City's FY16-17 Five -Year Capital
Improvement budget, there are over $5.4 million in projects identified in the Right -of -
Way and Traffic Control programs that may be eligible for this new funding.
CONCLUSION:
The City of Diamond Bar received approval from Metro to exchange their available
funds and accepted the City's letter of intent to exchange funds. The City Council of
Diamond Bar is tentatively scheduled to consider the exchange on August 18tH
Staff is requesting the City Council's approval to proceed with purchasing discounted
Proposition A funds from the City of Diamond Bar. If approved by City Council, the City
will enter into a Proposition A Local Return Fund Exchange Agreement with the City of
Diamond Bar for $600,000, costing the City only $450,000 from an additional
appropriation from the General Fund.
ALTERNATIVES:
In addition to the Staff recommendations, the following alternative action is available for
the City Council's consideration:
Do not enter into a Proposition A Local Return Fund Exchange Agreement
with the City of Diamond Bar.
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PROP A LOCAL RETURN FUND EXCHANGE AGREEMENT
This Assignment Agreement ("Agreement") is made and entered into this day of
, 2016, by and between the City of Diamond Bar, California, a municipal
corporation, ("Diamond Bar") and the City of Rancho Palos Verdes, California, a
municipal corporation ("Rancho Palos Verdes") with respect to the following facts:
A. Rancho Palos Verdes will be constructing capital improvements which have been
approved by the Los Angeles Metropolitan Transportation Authority ("Metro") for the use
of Proposition A Local Return monies. On (Date), Metro approved the use of
$ in Prop A funds for the (name of Project). Rancho Palos Verdes
desires to use a portion of Diamond Bar's uncommitted Prop A allocation for the above
project and any other Metro approved project.
B. Diamond Bar's uncommitted Proposition A Local Return funds can be made available
to Rancho Palos Verdes to assist in constructing the capital improvements discussed in
Paragraph A of this Agreement. Diamond Bar is willing to pay its uncommitted Proposition
A Local Return funds to Rancho Palos Verdes for the purpose identified in Paragraph A
in exchange for unrestricted Rancho Palos Verdes general funds which Diamond Bar may
use for any municipal purpose at a rate of $.75 in Rancho Palos Verdes general funds for
each $1.00 in Diamond Bar Proposition A Local Return funds.
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. Diamond Bar agrees to pay $600,000 of its Fiscal Year 2016-2017,
Proposition A Local Return funds to Rancho Palos Verdes. In exchange, Rancho Palos
Verdes agrees to pay $450,000 of its general funds to Diamond Bar.
2. Payment. Diamond Bar shall pay the agreed upon Proposition A Local Return funds
to Rancho Palos Verdes in one lump -sum payment from Proposition A funds currently on
hand. Rancho Palos Verdes shall pay the agreed upon general funds to Diamond Bar in
one lump -sum payment. The payments of both parties shall be due and payable within
15 calendar days of the last date of execution of this Agreement by both parties. Rancho
Palos Verdes shall be responsible for obtaining any necessary approvals from the Los
Angeles County Metropolitan Transportation Authority ("LACMTA") for the use of the
Proposition A Local Return funds.
992191.1
A-1
Assignment Agreement
3. Assurances
Rancho Palos Verdes shall use the assigned Proposition A Local Return funds
only for the purpose of constructing the capital improvements discussed in Paragraph A
of this Agreement or any other Metro approved project, and within the time limits specified
in LACMTA's Proposition A Local Return Program Guidelines. Rancho Palos Verdes
assumes all risks of obtaining the necessary approvals for expenditure of the Proposition
A Local Return funds within the applicable time limits and any failure to timely obtain such
approvals shall not give rise to any claim by Rancho Palos Verdes seeking
reimbursement of any monies received by Diamond Bar under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers.
CITY OF DIAMOND BAR
BY
Nancy A. Lyons, Mayor
Dated: , 2016
ATTEST:
BY:
Tommye A. Cribbins, City Clerk
Approved as to form:
David A. DeBerry, City Attorney
CITY OF RANCHO PALOS
VERDES
BY:
Mayor
Dated: , 2016
BY:
City Clerk
Approved as to form:
, City Attorney
992191.1 2
A-2