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REPORT TO SHASTA COUNTY RTPA

RECOMMENDATION
It is recommended that the Agency:

(1) Review Shasta County projects adopted by the California Transportation Commission (CTC) in the 2002 State Transportation Improvement Program (STIP)as indicated in Table 1 attached; and

(2) Ratify the RTPA staff request for the CTC to reinstate programming for the State Route 299 Auxiliary Lane Project (Table 1: PPNOs 6650 and 3116) which was recommended for denial by the CTC.

SUMMARY
The California Transportation Commission (CTC) adopted the 2002 State Transportation Improvement Program (STIP) April 4, 2002. For Shasta County, the CTC recommended denial of a $10 million programming advance and denial of programming for the State Route 299 Auxiliary Lane Project (Table 1: PPNOs 6650 and 3116) which has been a high, long-standing regional priority. In response, RTPA staff requested removal of 14 projects totaling $10.479 million that were programmed in the last two years of the STIP. This freed up programming capacity to reinstate the State Route 299 Auxiliary Lane Project. The 14 projects removed in fiscal years 06/07 and 07/08 can be reprogrammed in the 2004 STIP.

BACKGROUND
Based on prior direction from the Agency, staff developed the 2002 RTIP.The RTIP proposed programming of $40 million in new transportation projects to be developed by the three cities, the County and Caltrans over the next five years. The $40 million request was predicated upon an approximately $10 million advance in addition to our $30 million County share. Upon approval by the Agency last December, the RTIP was forwarded to the California Transportation Commission (CTC) for incorporation into the State Transportation Improvement Program (STIP).

Due to a lack of programming capacity in the early years of the STIP (see Figure 1), Shasta County was asked to submit a prioritized list of its RTIP projects to the CTC in February, 2002. Table 1, developed in consultation with the Technical Advisory Committee and ratified by the Agency, lists RTIP projects in order of the stated priority.

Approval of RTIP projects in the STIP constitutes a commitment, or line of credit, by the State to fund the listed projects once requested by the local delivering agency. This line of credit generally applies to the year in which the project is programmed; however, the CTC may fund projects in earlier years at their discretion and subject to available funds.

DISCUSSION
The CTC amassed all RTIP proposals submitted Statewide by the regions and determined that project proposals in the early years of the five-year program far exceeded programming capacity (see Figure 1). The CTC moved programming for most Shasta County projects out to the fifth year (FY07).

While Shasta County's guarantee of $30 million in new project programming over five years is guaranteed, our ability to front-load programming in the early years of the STIP or receive an advance is limited. The front-loading of Shasta County projects was requested due to three major Caltrans projects that are near completion of the environmental phase and are now ready to program construction. These projects are as follows:

Programming for the above projects alone represents 87% of the Region's county share. This programming was requested within the first three years of the 2002 RTIP. These projects have been, and remain, among Shasta County's highest priorities.

The CTC adopted the 2002 STIP April 4, 2002. The CTC recommended denial of the Agency's request to advance over $10 million in STIP funds and, initially, recommended denial of programming for the State Route 299 Auxiliary Lane Project (Table 1: PPNOs 6650 and 3116). In response, RTPA staff recommended removal of 14 projects totaling over $10 million as indicated in Table 1 by costs shown in strikeout. These 14 projects were recommended for removal since they were programmed in the out-years of the STIP (FY05 & FY07)and can be reinstated in the next STIP cycle (2004).

Due to Statewide programming constraints, removal of these projects enabled the CTC to reinstate the State Route 299 Auxiliary Lane Project. In effect, the temporary removal of $10.479 million in project programming allowed this $40.172 million project to continue forward. This project includes a 46% match of State Interregional Improvement Program (ITIP) funds.

The $10 million advance request was denied by the CTC based on a formula which evaluated the percentage of a region's RTIP projects on local roads versus State Highways. Due to a high percentage of small base allocation projects - the local discretionary projects granted to the cities and county - Shasta County

was near the bottom of list resulting in denial of the advance. About one-half of the regions requesting advances were approved.

With adoption of the Shasta County projects in the 2002 STIP, approximately $333,000 in programming reserves remain until the 2004 STIP cycle. This provides a relatively small cushion for cost overruns.

Planning, Programming and Monitoring Funds: The STIP includes the programming of $310,000 to the Shasta County RTPA for Planning, Programming and Monitoring (PPM)funds. These funds are limited to 1% of the County share and are programmed by nearly all Metropolitan Planning Organizations (MPOs) for purposes of RTIP administration/development, project development studies, and RTIP monitoring. PPM funds have not typically been requested by the RTPA since adequate Federal planning funds currently exist for these purposes (see Overall Work Program item in this agenda). PPM funds were approved once for the City of Anderson for a $20,000 project development study. The PPM funds were requested for this STIP cycle because they were identified by the CTC as a high priority for early-year programming. PPM funds present an opportunity to more rapidly deliver STIP projects which would otherwise be delayed.

The City of Redding wishes to immediately contract for preliminary feasibility studies relating to the Downtown Mall and Downtown Railroad Projects (Table 1: PPNOs 2362 & 2363). These projects (collectively referred to as the Downtown projects) are programed beginning July 1, 2003. The State intent for use of PPM funds is a good fit to City of Redding needs for the Downtown projects in that PPM funds can be used for early feasibility studies, but not environmental review or other project delivery phases. Use of PPM funds on the Downtown projects has several advantages. Unlike the $1 million in funds specifically programmed for the Downtown projects in 2003, PPM funds:

• are available immediately;
• do not require further CTC action for expenditure;
• are not subject to Federal processing requirements; and
• can be used in small increments without the risk of lost funds to the region.

Use of PPM funds have been discussed with the City of Redding. Redding staff highly endorses this option.

It is understood that any expenditure of PPM funds by Redding would count directly against the $1 million currently programmed for the downtown projects. As such, use of the PPM funds by Redding would free up programming capacity and could allow up to $310,000 in new project programming through a latter STIP amendment. Staff would recommend that any freed up capacity would be made available to Anderson and Shasta Lake as part of their originally approved base allocations. A total of four base allocation projects were proposed for Anderson and Shasta Lake. All were among the fourteen projects removed from programming (since they were in the last two years of the STIP) in order to reinstate the State Route 299 projects. Anderson, Shasta Lake, Redding, and Shasta County staffs are supportive of this concept, the details of which would

be developed further and brought back to the Agency in the form of an RTIP amendment.

Opportunities Presented by 2002 STIP: Although CTC denial of the Agency's $10 million advance request -- and the corresponding need to remove 14 projects -- presents a setback, there were several favorable outcomes for Shasta County resulting from adoption of the 2002 STIP. First, requests to carryover prior STIP projects, such as the Cypress projects, were approved.

Second, Shasta County will receive funds much earlier than most regions during the first two years of the STIP (Figure 2). Early funding for large projects is important in light of cost escalations, traffic congestion over time, and benefits to the local economy.

Last, Shasta County has successfully leveraged its $29.270 million in RTIP funds program to receive $18.365 million in State discretionary ITIP funds. This equates to receiving an extra 63-cents in ITIP funds for each RTIP dollar spent. On average for this STIP cycle, regions will receive about 25-cents in ITIP road funds for each RTIP dollar spent.

Future STIP Amendments: Now that the STIP has been adopted, the CTC will allow agencies to air their grievances through the STIP amendment process. STIP amendments will likely be limited to the swapping of projects within the region. For example, a Shasta County project in an early year can be moved out to advance a project from a later year. Amendments may by submitted at any time throughout the two-year STIP cycle.

Staff does not recommend any STIP amendments at this time (see alternatives below).

ALTERNATIVES
STIP: The Agency could ask the CTC to consider amending the STIP by adding new projects or project components and eliminating other projects with the same or higher costs and, within the same program year. Although not ideal, staff feels that the Shasta County STIP projects selected by the CTC best represents the region's priorities as well as regional goals for delivering these projects as early as possible.

Use of PPM Funds: The Agency may also designate an alternative use for the $310 thousand in Planning Programming and Monitoring funds. The use would need to be consistent with CTC requirements to expend such funds on project planning and project development as opposed to project delivery (environmental through construction). At this time, staff has identified no other qualifying needs for expenditure of these funds.

Use of $310,000 in Programming Capacity Freed Up by Use of PPM Funds: The Agency may also designate a different priority, such as maintaining additional programming reserve, for the $310,000 in programming potentially freed up by Redding's use of PPM funds for the Downtown projects. Staff has recommended for use of these funds by Shasta Lake and Anderson since they were the only project sponsors to not receive STIP programming this cycle.

OTHER AGENCY INVOLVEMENT
The list of adopted STIP projects and the need to unprogram $10 million in projects was reviewed by the Technical Advisory Committee (TAC). While the local agencies were understandably displeased with the CTC's denial of our $10 million advance request, they concurred that the adopted STIP program as shown in Table 1 represents the best opportunity under the circumstances for early use and leveraging of STIP funds for projects of high regional priority.

FINANCING
STIP projects are funded from State and Federal sources generated by taxes levied on fuel. The Region's ability (or inability) to program a project in the STIP has an effect on when, not if, projects are to be funded. Projects that were unprogrammed can be reinstated during the 2004 STIP cycle. New projects could also be added during the 2002 cycle if currently programmed projects experience delays or a project savings.

_________________________________________
Daniel J. Kovacich, Executive Officer

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Attachments:

Figures 1 & 2
Table 1