$1.5 billion shortfall forces cuts and delays in Statewide Transportation Program; local projects on list

LAKE COUNTY, Calif. – Facing a massive budgetary shortfall, the California Transportation Commission has adopted a five-year state transportation funding plan that cuts hundreds of millions of dollars in projects statewide, with two local projects impacted.

The commission recently adopted a $754 million budget while delaying another $755 million in highway, rail, transit, bicycle and pedestrian project spending.  

Officials said these cuts are due in large part to the steady loss of gas tax revenue over the past two years because of the drop in gasoline prices.

It is the largest funding reduction since the current state transportation funding structure was adopted 20 years ago, the commission reported.

The cuts and delays are reflected in the State Transportation Improvement Program, or STIP, adopted biannually by the commission.

The STIP is a key planning document for funding future state highway, intercity rail, transit and pedestrian improvements throughout California.

Its primary funding source established by the Legislature is the price-based excise tax paid by drivers at the gas pump.

"It’s highly unfortunate that we had to take this action,” said CTC Chair Bob Alvarado. “This means that desperately needed transportation projects throughout California won’t happen at all or will be significantly delayed. In addition to the many missed near-term opportunities to reduce congestion, improve air quality and grow jobs in virtually all areas of the state, projects that are stalled risk the loss of leveraging additional funds from state, federal and local sources and will likely cost significantly more to construct later.  All Californians are paying a big price for the woefully inadequate investment in our transportation infrastructure.  In light of the urgency and scale of the problem, we need the Legislature and Governor to agree on a solution quickly.”

The commission is required by law to estimate the amount of funds projected to be available over the five-year STIP period.  The excise tax in 2010 was set at 17.3 cents per gallon and is adjusted annually by the State Board of Equalization based on fuel prices. 

On July 1, 2016, the tax will be reduced to 9.8 cents from the current 12 cents. Based on that reduction, the commission anticipates a $1.5 billion funding shortfall for project commitments previously made for fiscal years 2016-17 through 2018-19, leading to the project funding cuts and delays included in the 2016 STIP that was adopted earlier this month.

“Because transportation projects typically are funded from multiple sources, the total statewide economic impact of the funding cuts and delays likely will run into the billions,” said Alvarado.

In Lake County, $58,000 to go toward the extension of Dam Road and Phillips Avenue in Clearlake  was pushed back to the 2020-21 fiscal year.

At a special meeting May 19 the Clearlake City Council approved going forward with its project by using Series A bond proceeds.

In Lakeport, the improvement of the intersection of the Lakeport Boulevard and S. Main Street also was impacted.

The commission proposed delaying $71,000 to the 2020-21 fiscal year but deleted $194,000 that had been approved for the project.

Lakeport City Manager Margaret Silveira said that $194,000 was to go toward the project's engineering.

“We do not have the funds appropriated for the project at this time,” she said.

It is estimated that every $1 billion in highway and transit investment supports 13,000 jobs. Each penny reduction in the gas tax decreases revenue to fund state and local roads by about $140 million per year.

The Legislature is currently considering proposals to reform the transportation program and increase transportation revenue, and Gov. Jerry Brown also has advanced a proposed revenue and reform plan.

Clearlake City Council approves first reading of road sales tax ordinance

CLEARLAKE, Calif. – After a public hearing, council discussion and some fine-tuning of the language, the Clearlake City Council unanimously approved the first reading of an ordinance that would place a transaction and use tax for road improvements and repairs on the November ballot.

The one-cent sales tax is anticipated to raise $1.6 million annually. Those funds would be used for a wide variety of road repairs and improvement, not just for the city's 63 miles of asphalt paved streets but also for grading and fixes of the 49 miles of unpaved roads and dirt streets.

That potential $1.6 million for road work is compared to the $50,000 the city currently spends each year to repair and maintain streets, which City Manager Greg Folsom said only allows the city to patch the worst potholes and regrade a few gravel roads.

The proposed measure includes a sunset clause in which it would end after 20 years, unless put back before voters to extend it.

Other key aspects of the measure include an oversight committee to annually review expenditures and make recommendations to the council, and a requirement that expenditures be limited to costs directly related to road maintenance and expenditures, as outlined in the annual expenditure program.

If the ordinance gets final approval at its second reading – scheduled for the council's next regular meeting on June 9 – it would be the fifth sales tax measure put before city voters since 2006. The most recent was in 2014.

This new effort, like the previous ones, would be a specific tax and so must receive a supermajority vote of 66.7 percent. As a specific tax, proceeds would go into a special fund and not be placed in the general fund, Folsom said.

Folsom said another reason for making it a special tax is that, under the requirements of Measure P – the half-cent sales tax voters passed in 1996 for public safety – 63.5 percent of the general fund must go to public safety maintenance. That would mean that proceeds from another general sales tax would be diverted away from road repair.

This new sales tax effort differs from previous efforts in that it would be for road maintenance and improvement only. Previous efforts included road maintenance only, 2006; road maintenance and code enforcement in 2012 and 2013; and in 2014, a measure that was for code enforcement and animal control, with roadwork not included, according to Folsom's report.

Council members and staff stated that, without the measure, the city is unable to make the road repairs needed to improve conditions in the city. That inability to fix the roads impacts quality of life, tourism, businesses and property values.

Then there's the wear on vehicles – not just those belonging to the public but to the county's transit authority and public safety agencies.

When it comes to roads, “Clearlake has some of the worst conditions in the state, actually,” said Folsom.

A pavement condition index for the city's paved streets came in at 38, in the middle of the “poor” category. Folsom said the consultant who completed the index for the city said it was the lowest rating he had ever seen.

Folsom said Clearlake also is one of the state's poorest communities, and cannot maintain its streets with the funding currently available. Other resources, like the state's gas tax, is dropping each year, and he said there is no significant money coming in from the state or federal governments to help.

State road funds are being reduced, and Folsom said Gov. Jerry Brown feels that road improvements are a “local issue.”

The majority of the city's paved streets were constructed in the 1930s and 1940s. Folsom said the city has a total deferred deferred maintenance of $15.2 million just for the 63 miles of paved roads.

“Bad roads are costing us,” said Folsom.

Those costs include annual vehicle operating costs – for each city resident – of about $800 based on a national transportation research group study.

In addition, he said it's estimated that bad roads impact residents, public safety, school buses, public transit, tourism, business attraction, real estate values and the image of the city.

Folsom said the city created the Road Revenue Ad Hoc Committee last year to look at ways of addressing the city's infrastructure needs.

The city subsequently worked with the Area Planning Council to fund a survey that found that 76 percent of the voting population was in favor of a special tax that would go toward roads only.

The results of that survey were discussed at the council's April 21 meeting, at which point the council reached consensus to pursue the new sales tax measure.

In his analysis, Folsom said that the $1.6 million that the tax would generate annually breaks down to $106.67 per person, per year for the city's 15,000 residents. Broken down further, that's $8.89 per person, per month, or $0.29 per day, per person. Vice Mayor Gina Fortino Dickson pointed out that it's far less than the price of a cup of coffee.

Folsom said the proposed sales tax measure would eliminate the annual $800 per-person vehicle operating cost. Subtracting the estimated cost of $107 per city resident, Folsom said each city resident would actually have a net savings of $693 every year.

While he used the baseline calculation of $107 per city resident per year, Folsom emphasized that it wouldn't just be city residents paying the tax. In fact, visitors and tourists would play a big part in paying for it and so would contribute to helping improve the roads.

If passed, Clearlake would have a total sales tax of 9 percent, compared to 8 percent for the city of Lakeport and 7.5 percent for the county, which is considering its own 0.5 percent increase, Folsom said.

He also showed a list of cities with sales tax rates of 9 percent or above, many of them in the Bay area, where sales tax rates range as high as 10 percent in places like Albany and Hayward.

There are other options besides a sales tax, but Folsom pointed out the problems of each. They included assessment districts, which would be subject to voter approval and require a lot of staff time, and parcel and utility user taxes, which also would go into the general fund and so would be subject to the Measure P provisions.

During public comment, city resident Henry Bornstein argued that the language of the measure needed to be less flexible, as the people he's talked to are concerned that the council can divert the funds elsewhere.

He suggested that more specific language to guarantee that the funds go to road maintenance and improvement is necessary. “There's a big trust issue in the city with city government,” he said.

Other comments from the public included one woman's comment that some people she has spoken with believe a road tax already has been passed previously and nothing has come from it.

Marie Weathers suggested that the city hold a special town hall to discuss the measure further and allow people to come and ask questions.

Former Councilwoman Denise Loustalot said that the measure “has to happen,” although she acknowledged people are nervous. To address that, she said the language has to be clear.

Chuck Leonard, another former council member, recalled going door to door and holding a special meeting in order to support the passage of one of the previous failed measures. He also raised the issue of lack of trust for the government.

During the council's discussion, Councilwoman Joyce Overton said the people she's talked to are indicating they now wish the measure had gone through the last time. She said she hasn't heard anyone tell her they won't vote for it, which is unusual.

“I swore I would never support this again,” she said, but she added that she wants the city to improve. “This would enhance us so much if we can get everyone on board.”

Councilman Nick Bennett said he believes that one of the new measure's key selling points for people in the Avenues area of the city is the grading and work to maintain the gravel and dirt roads.

“I think this is a great chance for our community and I think it needs to go forward, and I think we need to push it,” he said, adding that he liked Weathers' idea of a specific public forum to discuss it with the community.

One of the main points of discussion for the council was the measure's expenditure program, which called for 85 percent of the annual proceeds to be spent for road maintenance and improvements, including repairing potholes, pavement, shoulders, drainage and sidewalks; reconstructing existing pavement; and annual grading and graveling of unpaved roads.

Another 10 percent was to go toward maintenance equipment and personnel, including road construction equipment rental, lease, repair and purchase; and additional Public Works personnel to maintain the road system, as there are only three full-time Public Works staffers currently, according to department Director Doug Herren.

The remaining 5 percent would be used for matching grant funding, according to the plan.

It was that 10 percent that mentioned personnel that Councilman Bruno Sabatier said was a “red flag” and could jeopardize passage. Herren said it would add up to 1.5 full-time Public Works positions.

“I think we've covered every single base that can be covered to please the public,” said Overton, adding that they can't fix and maintain the roads without the proper personnel.

“This measure is critical and we have to see it through,” said Mayor Russ Perdock, who explained that he wanted an ordinance without red flags that would have people clamoring about something finally being done about the streets.

Finance Director Chris Becnel suggested that there was too much of a focus on the word “personnel.” He said that removing it would make no difference in the city's ability to hire someone down the road if needed, because the city could do it anyway. The council adopted his suggestion.

Ultimately, the council would adjust the percentages to 95 percent for road maintenance and improvements – with grading, or “residential street improvements” to be a highlighted task – and 5 percent for grant matching.

Folsom and City Attorney Ryan Jones said the changes weren't substantive enough to require the ordinance to come back for another first reading.

Fortino Dickson moved to approve the ordinance's introduction and first reading and set the second and final reading for the first meeting next month, with Overton seconding and Bennett, Perdock and Sabatier also offering “aye” votes.

In other business Thursday, the council received a report on marijuana-related issues from law enforcement and heard a presentation from the Konocti Regional Trails group.

Council members also approved Perdock's updated appointments to various committees, with Bennett to now take over appointments previously held by Loustalot, who he succeeded. Loustalot resigned in March after she moved just outside of city limits, and Bennett was selected by the council earlier this month to succeed her.

Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. . Follow her on Twitter, @ERLarson, or Lake County News, @LakeCoNews.

Supervisors appoint new Community Development director, interim Health Services head

LAKEPORT, Calif. – Two individuals – one a longtime county staffer and another a newcomer to the area – have been appointed to top posts with the county of Lake.

Emerging from a closed session discussion at its Tuesday meeting, the Board of Supervisors voted to appoint Denise Pomeroy as interim Health Services director and Robert Massarelli as the new head of the Community Development Department.

Board Chair Rob Brown praised both Pomeroy and Massarelli as outstanding individuals.

Pomeroy – currently the fiscal officer for Health Services – will be interim director beginning on July 6, according to County Administrative Officer Carol Huchingson.

Longtime Health Services Director Jim Brown will retire in July, county officials reported.

Huchingson and Rob Brown said the board chose to appoint Pomeroy on an interim basis while the county explores the possibility of creating a “super agency” by combining the Behavioral Health, Health Services and Social Services departments.

In an April interview, Huchingson said that model of a “health and human services” agency is used in 25 California counties. She said she expected that analysis to take at least a few months.

Massarelli will begin work on June 13, Huchingson said.

He is coming from Florida, and will bring with him a wealth of experience that he's gained in projects around the world, said Brown.

“He's sharp,” Brown added.

Brown said Massarelli has experience on lake-related issues, having worked in the Everglades area of Florida, and also has worked on projects overseas.

According to Massarelli's resume, he has worked on projects from Saudi Arabia to China, and formerly was a principal technologist of master planning for CH2M Hill.

He's held government positions and worked for private companies across the United States, and has a lengthy list of publications on water and planning to his name.

According to Brown, Massarelli said he was looking for a “small project” to work on for the next several years, and Lake County fit the bill.

He will arrive at a critical time for Lake County's Community Development Department, which includes planning and code enforcement divisions.

The agency has reportedly been taxed in keeping up with the rebuilding effort related to the Valley fire, as south county residents begin working their way through the permitting process to replace or repair their homes. An estimated 1,300 homes were destroyed and more than 1,900 structures altogether in the fire in September.

Brown said the board was delighted to get Massarelli and the extensive experience he brings for the Community Development post.

“I've got a real good feeling about this guy,” Brown added.

The appointments of Pomeroy and Massarelli are the latest hires made by the board as it has addressed a recent wave of retirements and resignations involving about 30 percent of the county's 21 department heads, as Lake County News has reported.

Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. . Follow her on Twitter, @ERLarson, or Lake County News, @LakeCoNews.