10-06-2020 - AGENDA ITEM 07 PROPOSITION A EXCHANGE - FOOTHILL TRANSIT12/1 /2020
Print Staff Report
AGENDA ITEM NO. 7
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE:
October 6, 2020
TO:
Mayor and City Council
FROM:
David Carmany
City Manager
SUBJECT:
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 City Manager to negotiate and execute the Assignment Agreement (Attachment No.
1).
BACKGROUND:
Under Proposition (Prop) A, the City receives a portion of the '/z 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 does not have any projects to utilize these funds. The City is in the practice of selling these restricted
transportation Prop A dollars to other cities or special districts 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 2020-21 there are approximately $1.8 million
available, which could be sold to another city or transit provider.
DISCUSSION:
In Fiscal Year 2019-20, 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. Due to the pandemic, an updated estimate of revenues for Prop
A was solicited and indicated that the City would only receive approximately $1.9 million. It was determined
that $1.8 million dollars was available to sell. Foothill Transit agreed to purchase the $1.8 million at seventy-
five cents on the dollar. 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 eighteen years.
LEGAL REVIEW:
The City Attorney's Office has reviewed the agreement and approved it as to form.
OPTIONS:
The City Council has the following options:
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12/1/2020 Print Staff Report
1) Approve staffs recommendation; or
2) Provide alternative direction.
Fiscal Impact
FISCAL IMPACT:
The Assignment Agreement for the Prop A exchange with Foothill Transit will generate $1,350,000 in
General Fund revenue.
Attachments
Attachment No. 1 - Assignment Agreement Foothill Transit
CITY Achieve Fiscal Sustainability and Financial Stability
COUNCIL
GOALS &
OBJECTIVES:
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ATTACHMENT NO. 1
ASSIGNMENT AGREEMENT
BETWEEN THE CITY OF WEST COVINA
AND FOOTHILL TRANSIT, CALIFORNIA
PROPOSITION A LOCAL RETURN FUND EXCHANGE
The effective date of this Agreement is October 6, 2020. This Assignment Agreement is entered
into by the City of West Covina, California and Foothill Transit with respect to the following
facts:
A. Foothill Transit provides community -oriented, environmentally friendly bus service
throughout Southern California's San Gabriel and Pomona Valleys, including express bus routes
to Pasadena and Downtown Los Angeles.
B. The City of West Covina has uncommitted Proposition A Local Return funds which
could be made available to Foothill Transit to assist in providing the services discussed in
Paragraph A of this Agreement. In exchange for the assignment by Foothill Transit of the
amount for its general use funds (non -formula allocation funds) indicated in Section 1 below, the
City of West Covina is willing to assign uncommitted Proposition A Local Return f mds to
Foothill Transit for the purpose identified in Paragraph A.
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. The City of West Covina agrees to assign a total of $1,800,000 of its Proposition
A Local Return funding authority to Foothill Transit from the Fiscal Year 2020-2021 allocation.
In return, Foothill Transit agrees to assign $1,350,000 of its general use funds (non -formula
allocation funds) to the City of West Covina.
2. Consideration. The City of West Covina shall assign the agreed upon Proposition A Local
Return funds to Foothill Transit in one lump -sum payment. Foothill Transit shall assign the
agreed upon general use funds to the City of West Covina in one lump -sum payment. Each
payment shall be due within 30 days of the first date that both of the following have occurred:
(a) execution of this Agreement, and (b) approval by Los Angeles County Metropolitan
Transportation Authority (LACMTA) of the Foothill Transit's project description.
3. Term. This Agreement is effective on the date above written and for such time as is necessary
for both parties to complete their mutual obligations under this Agreement.
4. Termination. Termination of this Agreement may be made by either party so long as both of
the following are correct: (a) written notice of intent to terminate is given to the other party at
least five (5) days prior to the termination and (b) the effective date of the termination is before
the date LACMTA approves the Foothill Transit project description.
5. Notice Notices shall be given pursuant to this Agreement by personal service on the parry to
be notified, or by written notice upon such party deposited in the custody of the United States
Postal Service addressed as follows:
A. David N. Carmany
City Manager
City of West Covina
1444 West Garvey Avenue South
West Covina, CA 91790
B. Doran J. Barnes
Executive Director
Foothill Transit Administrative Office, 2"d Floor
100 South Vincent Avenue
West Covina, CA 91790
If notice is provided via personal service, it is deemed "given" on the date of personal service. If
notice is provided via U.S. mail, then the notice is deemed "given" two days after the notice is
properly addressed and placed in the U.S. mail.
6. Assurances
A. Foothill Transit shall use the assigned Proposition A Local Return funds only for the
purpose of providing the services discussed in Paragraph A of this Agreement, and within the
time limits specified in LAC Metro's Proposition A Local Return Program Guidelines.
B. Concurrently with the execution of this Agreement, Foothill Transit shall provide
LAC Metro with the Standard Assurances and Understandings Regarding Receipt and Use of
Proposition A funds specified in the Guidelines regarding the use of the assigned Proposition A
Local Return funds.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers, duly authorized, by Foothill Transit on July 24, 2020, and by the City
of West Covina on October 6, 2020.
CITY OF WEST COVINA
BY:
Robbeyn Bird, Finance Director
BY
David N. Carmany, City Manager
ATTEST:
BY
Lisa Sherrick, Assistant City Clerk
FOOTHILL TRANSIT
BY:
Michelle Lopes Caldwell, Director of
Finance and Treasurer
BY: A,"
Doran J. Barnes, xecutive Director
ATTEST:
BY: C
Christina Lopez, Board Secretary