That the City Council:
A.  Approve and adopt the Measure M2 Seven-Year Capital Improvement Program (CIP) for Fiscal Year 2024-2025; and, 

B.  Authorize staff to submit the required documents to the Orange County Transportation Authority (OCTA) to comply with the Measure M2 eligibility requirements for Fiscal Year 2024-2025.

In June 1990, California voters approved Proposition 111, which increased the tax paid by consumers upon the purchase of motor vehicle fuel (Gas Tax).  Pursuant to Proposition 111, cities in California are allocated a portion of gas tax revenue as a source of funds to pay for local transportation projects. Gas tax funding will provide the City of La Habra with approximately $1.7 million during Fiscal Year 2024-2025 and will be used to fund a variety of road improvement projects, including street rehabilitation and repaving, street widening, curb and gutter repair/reconstruction, sidewalks, curb access ramps, parkway improvements, signal and intersection improvements, signage and striping.

On November 7, 2006, Orange County voters approved a 30-year, multi-billion-dollar program extension of the original Measure M (1991-2011) funding program, a local half-cent transportation sales tax to fund transportation projects in Orange County. The Orange County Transportation Authority (OCTA) is responsible for the administration of Measure M funding. When it was extended, the original Measure M was rebranded as “Measure M2”, and provides an apportionment of countywide sales tax revenue to local jurisdictions in Orange County for street maintenance and improvements. Known as the Measure M2 “Fair Share”, the revenue is apportioned to local jurisdictions based on several factors, including population, miles of existing Master Plan of Arterial Highways (MPAH) roadways, and taxable sales. OCTA estimates that the City of La Habra will receive approximately $1.3 million from “Fair Share” apportionment during Fiscal Year 2024-2025.

In order to maintain its eligibility to receive Measure M2 sales tax revenues, the City of La Habra is required to submit to OCTA the M2 Seven-Year Capital Improvement Program (CIP). The City’s Measure M2 Seven-Year CIP for Fiscal Year 2024-25 through 2030-31 is consistent with the proposed citywide CIP Budget for Fiscal Year 2024-25. The submittal of the Measure M2 Seven-Year CIP does not commit the City to funding the identified improvements; however, projects must be included in the M2 Seven-Year CIP to be eligible to receive Measure M2 funding. This document is updated annually to allow for changes based on City Council priorities. The CIP emphasizes projects that improve traffic and pedestrian circulation, mitigate traffic congestion, and maintain the City’s investment in existing transportation infrastructure.

In order to continue receiving Measure M2 “Fair Share” and competitive funding, as well as continued eligibility for state Gas Tax funding, the City is required to submit specific documents each year to OCTA which, this year, also includes the Measure M2 Seven-Year CIP Program, attached to this report.

If approved by City Council, staff estimates that the City will receive approximately $1.7 million from state Gas Tax funding and approximately $1.3 million from Orange County Measure M2 Fair Share funding for Fiscal Year 2024-2025. Failure to submit the required documentation to OCTA could jeopardize the City's ability to receive these capital improvement funds and would impact the City's ability to complete previously planned projects.