05-21-2019 - Item 09 - Consideration Of Proposition A Exchange- Foothill TransitAGENDA ITEM NO. 9
AGENDA STAFF REPORT
City of West Covina | Office of the City Manager
DATE:May 21, 2019
TO:Mayor and City Council
FROM:David Carmany
Interim City Manager
SUBJECT:CONSIDERATION OF PROPOSITION A EXCHANGE - FOOTHILL TRANSIT
RECOMMENDATION:
It is recommended that the City Council approve the Proposition A Local Return Fund Exchange
with Foothill Transit and authorize the Interim City Manager to execute the Assignment Agreement.
BACKGROUND:
The Proposition A and Proposition C Programs are funded by two 1/2 cent sales tax measures
approved by Los Angeles County voters to finance a Transit Development Program. The
Proposition A tax measure was approved in 1980 and the Proposition C tax measure was approved
in 1990. Collection of the taxes began on July 1, 1982, and April 1, 1991, respectively.
Twenty-five percent of the Proposition A tax and twenty percent of the Proposition C tax is
designated for the Local Return Program funds to be used by cities and the County (Jurisdictions) in
developing and/or improving public transit, paratransit, and the related transportation infrastructure.
Local Return funds are allocated and distributed monthly to jurisdictions on a per capita basis by the
Los Angeles County Metropolitan Transportation Authority (Metro).
Under Proposition A (Prop A), the City receives a portion of the ½ cent sales tax levied in Los
Angeles County to develop and improve local public transit, paratransit and related transportation
infrastructure. At this time, the City has not identified any projects to utilize these funds. The City is
in the practice of selling these restricted transportation "Prop A" funds to other cities in exchange for
non-restricted General Fund dollars to assist with balancing the budget. These exchanges are
allowed under the guidelines for this revenue source and provide benefits for both parties. The
buyer gets discounted transportation dollars and West Covina receives additional General Fund
dollars. For Fiscal Year 2019-20 there are approximately $2.2 million available, which could be
used for eligible projects or sold to another transit provider.
DISCUSSION:
In Fiscal Year 2018-19, the City exchanged $2.2 million in "Prop A" funds with Foothill Transit at
seventy-five cents on the dollar. City staff contacted Foothill Transit again this year to negotiate a
Prop A exchange of up to $2.2 million at seventy-five cents on the dollar, and Foothill Transit
agreed to purchase the entire amount. The exchange rate is a matter of supply and demand.
According to the Los Angeles County Metropolitan Transportation Authority, the exchange rate has
been at seventy to seventy-five cents on the dollar for the last seventeen years.
OPTIONS:
The City Council has the following options:
1.Approve staff’s recommendation; or
2.Provide alternative direction.
Prepared by: Robbeyn Bird, Interim Finance Director
Fiscal Impact
FISCAL IMPACT:
The Assignment Agreement (Attachment No. 1) for the Prop A exchange with Foothill Transit will
generate $1,650,000 in General Fund revenue.
Attachments
Attachment No. 1 - Assignment Agreement Foothill Transit
CITY COUNCIL GOALS & OBJECTIVES: