Deferred street maintenance over the past ten-years has caused the City of Salinas’ Pavement Condition Index to drop to 54% (this is equivalent to a “D” grade). In response to this need, and consistent with the requirements of Measure X, Salinas is completing its Pavement Management System data analysis. The Pavement Management System effort describes a need for the City to spend $10 million per year for the next three years to address the backlog of deferred street maintenance. Some of this cost will be shared with the State’s Senate Bill 1 gas tax revenues that were enacted last year. Focusing on the worst streets in the City will help prevent Salinas’ Pavement Condition Index from getting worse.

As part of this proposal, the City identified new construction improvement projects that include: Boronda Road widening, Bardin Road safe routes to school, E. Laurel Drive extension, ADA sidewalk and ramps throughout the City, Main Street street-scape, traffic signal upgrades, new traffic signals, and traffic calming. All of these improvements are eligible costs payable from Measure X revenues, including engineering, inspection, contract administration and other incidental costs. The designation of the particular streets and roadways to be improved are part of the City’s Capital Improvement Program and budget approved by City Council.

In order to provide expedited funding for street improvement projects to address this backlog, the City of Salinas issued Transportation Revenue Certificates of Participation through the California Statewide Communities Development Authority Total Road Improvement Program pool for the improvement of local roads and infrastructure. The certificates will be secured by Measure X Revenues the City receives from the Transportation Agency for Monterey County’s Measure X, of which 60% of annual revenues are allocated to local cities’ projects, which are projected to amount to approximately $3,500,000 annually for the City of Salinas.

The Total Road Improvement Program financing program helps local agencies to "catch up" with their street repairs/transit projects by funding more projects upfront through debt financing. Through TRIP, local agencies borrow against their future local transportation sales tax revenues (counties with a dedicated, voter-approved, local transportation tax) at low interest rates for up to 30 years. The program is currently being utilized by 15 cities throughout California, with over $200 million in projects funded.

City of Salinas staff proposed the execution and delivery of the Transportation Revenue Certificates of Participation in an amount not to exceed $37.5 million for the initial Certificate series.  However, the pricing of the bonds exceeded the City's expectations, resulting in $40,673,602 in bond proceeds with an all-in borrowing cost of 3.59%.  Average annual installment payments will be approximately $2,349,550 and be paid through 2047 (the sunset date for Measure X revenues to be collected). Installment payments are expected to be paid solely from transportation revenues (e.g. Salinas's share of Measure X Revenues). Proceeds from the sale of the Certificates could be used to fund the road improvement projects described in the attached document.