Contra Costa County Public Works to Highlight Budget Challenges

On Tuesday, the Contra Costa County Board of Supervisors will receive a report from the Public works Department on its budget challenges in the Flood Control, Roads, and Special Districts program.

The staff report says without addressing these structural budget issues, the three programs identified will continue to have insufficient and unstable funding to meet program expectations and increase the risk exposure in each.

This comes after Contra Costa County confirmed in early February that the series of storms that hit California has caused an estimated $43.9 million in damages. They have also broken down by jurisdiction where the damages have occurred.

The Board of Supervisors will provide staff with direction on addressing the structural budget deficit for each of the programs.

According to the agenda:

The budget challenges continue and have been magnified by inflation, hard caps on revenue streams, voting threshold requirements, pandemic impacts, a focus of government grant programs on capital improvements instead of maintenance and operations funding, and the general reluctance to increase taxes or fees to pay for necessary capital improvements, maintenance and services. In an effort to address or temporarily mitigate the budget shortfalls in these programs, the Public Works Department has implemented short-term solutions that in some cases are not sustainable.

The purpose of this presentation is to inform the Board of Supervisors of the ongoing budget challenges facing the Public Works Department, circumstances that led to the challenges, actions taken to mitigate the challenges, and request direction from the Board of Supervisors on possible long-term solutions.

In addition, the presentation will provide general information on available grants from the Infrastructure Investment and Jobs Act and how some grant funding may help, or in some cases perpetuate, the budget issues.

Tidbits from the Presentations

Public Infrastructure Budget Challenges (53 page power point slide presentation)

SB 1 was signed in 2016… county says getting the funds has been a challenge due to “unfortunate series of events such as:

Effort to rescind the new revenues from SB1 which resulted in a hesitant construction industry response to expanding construction capacity
◦ The lack of construction capacity had an unintended consequence; bid prices for street and bridge maintenance and repairs were as much as 23% higher than in 2018
2017 Storm Damage – several County roads were damaged by the 2017 storm events such as Alhambra Valley Road, Bear Creek Road, Morgan Territory Road, and Happy Valley Road. In 2023, we are now just completing the final restoration work with a final cost of $20.4 million. FEMA and CalOES only reimbursed 51% of the expenditures. Local share was $10.7 million. This was a large dollar impact on the road budget that impacted several fiscal years
Public Works staff adjusted project delivery timelines and fiscal year expenditures to address the increased construction bids, manage cash flow, and fund the storm damage projects

As SB 1 was fully phased in, COVID Pandemic Hit which resulted in gas tax revenues declining. Revenue estimates provided by CSAC in 2017 were revised $15.9 million lower for FY 20/21 and FY 21/22 combined (see table next slide). To address the revenue drop, Public Works depleted the funding reserves and delayed non-grant funded projects The County’s Pavement Surface Treatment Program (preventative maintenance), 100% funded with gas tax, took the largest impact including canceling the program for a fiscal year.

County highlights project cost increased.

Supply chain issues impact material costs and road project delivery timelines increasing overall project costs (cement, steel, etc.)
Contracting Community Capacity
Construction Costs: Using the Construction Cost Index for the Bay Area, construction costs have increased by 30% from 2017 to 2022 Example:

2022 Countywide Surface Treatment Project
◦ Engineer’s Estimate: $6,193,735
◦ Low Bid: $7,450,866
◦ Only two bidders
◦ Bids were allowed to expire. Project did not move forward. Work reprogrammed to future fiscal years. Deferred maintenance.
◦ Sites included: Contra Costa Centre ($2,186,484) and Bay Point ($4,007,251)

An opportunity filled with challenges

Pending Highway Safety Improvement Program (HSIP) Projects – IIJA (Potential Awarded Funding is $6,768,925)

Countywide Guardrail Upgrades – Phase 2 ($999,990)
Appian Way at Fran Way Pedestrian Crosswalk Enhancements ($246,840)
Walnut Boulevard Bike Safety Improvements ($249,415)
Camino Diablo Safety Improvements ($890,460)
Camino Tassajara Street Lighting Improvements ($1,221,840)
Byron Highway Safety Improvements ($1,316,520)
Vasco Road Safety Improvements ($715,050)
Deer Valley Road Traffic Safety Improvements ($1,125,810)
~$3M local match needed if all awarded
$3 million → Potential Grant Award $6,768,925 (leveraging gas tax)

There are many projects, unfunded needs and activities that have not been included in the current budget.

These include:

San Pablo Dam Road Retaining Wall and Pavement Rehabilitation ($15 million)
Pavement Rehabilitation on Walnut Avenue ($1.5 million)
New Stormwater Permit Requirements (MRP 3.0) (amount unknown)
Kirker Pass Southbound Truck Lane design ($2 million)
Local match for recently awarded ATP grants ($2.5 million).
Local match for pending HSIP projects ($3 million if all are granted)
Bridge replacements on Morgan Territory Road escalating (now $7 million)
2023 Storm Damage ($2.1 million initial estimates)
Vasco Road Safety Project ($7 million to match $15 million RM3 grant)
Norris Canyon Road Safety ($3.4 million to match $1.4 million in Measure J funds)

Barriers to Raising Revenues & Leveraging

Prop 13 froze tax rates in 1978

Tax Measures Challenges

Prop 218 (super majority, or 2/3rds vote needed to increase a tax or fee) did not include stormwater or flood control as exempt like drinking water, sewer, and trash
SB 231 redefined stormwater as a utility, but implementing a tax measure for stormwater is subject to legal challenges
Tax measures are costly to enact and generally unpopular in today’s environment
Unlikely to meet 2/3 approval
Leverage – Local match requirement for grants (FEMA, Army Corps, EPA, IIJA, etc.)

Infrastructure Investment and Jobs Act (IIJA) What it means for Contra Costa County’s infrastructure 2022

On November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act (aka IIJA or Bipartisan Infrastructure Law – BIL)

Provides $973 billion over five years from FY 2022 through FY 2026
Historic investment in the nation’s core infrastructure priorities – including roads and bridges, rail, transit, ports, airports, water systems, and broadband.
FAST ACT reauthorization is a 56 percent increase above Congress’s last five-year transportation bill (up from $305B)

Relevant Programs/Possible Contra Costa County Projects

The Public Works Department has prepared a draft document identifying IIJA relevant programs and possible County projects to be considered for funding
Out of 88 Programs in IIJA, 28 programs have some connection to County responsibilities, andless than 10 of the programs are directly relevant to County responsibilities

Contra Costa Flood Control

Fund Balance flat 2018–19 to current due to self–insurance and additional backfill to DA 55
Revenue began to exceed Expenditures in FY 2015–16, and as a result, both the Fund Balance and
Available Cash have increased.
Expenditures have declined due to staffing vacancies but are now increasing with additional staffing.
Expenditures peaked at $4.3M in FY 2015–16 from $3M in FY 2013–14
- A $535,816 reimbursement to 0330 during FY 2014–15
- A sum of $419,823 was paid to the Valentine Corporation during FY 2015–16 for North Richmond Pump Station