Item 5AGENDA ITEM NO.5
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: May 3, 2022
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 an Assignment Agreement.
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.
In Fiscal Year 2020-21, the City exchanged $1.8 million in Prop A funds with Foothill Transit at
seventy-five cents on the dollar. For Fiscal Year 2021-22 there are approximately $2.8 million in Prop A
funds available, which could be sold to another city or transit provider.
DISCUSSION:
The City has $2.8 million dollars in Prop A funds available to sell. Foothill Transit agreed to purchase the
$2.8 million at seventy-five cents on the dollar ($1,710,000). 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 19 years.
Fiscal Impact
FISCAL IMPACT:
The Assignment Agreement for the Prop A exchange with Foothill Transit will generate $1,710,000 in
General Fund revenue which is $210,000 more than the FY2021-22 Budget of $1,500,000.
Attachments
Attachment No. 1 -Assignment Agreement