Item 4 - Resolution Approving 2% Increase in Regional Transportation Congestion Improvement Program (RTCIP) Traffic Mitigation Fee for FY 23-24RESOLUTION NO. 23-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
POWAY, CALIFORNIA, APPROVING A 2% INCREASE IN THE
REGIONAL TRANSPORTATION CONGESTION IMPROVEMENT
PROGRAM (RTCIP) TRAFFIC MITIGATION FEE FOR THE
FISCAL YEAR (FY) 2023-24, AS REQUIRED BY THE TRANSNET
ORDINANCE
WHEREAS, in November 2004, voters in San Diego County approved a 40-year extension
to the existing TransNet program to fund improvements to the region's transportation system;
WHEREAS, the extension Ordinance requires local agencies to collect traffic mitigation
fees, starting July 1, 2008, from residential dwelling units to fund the Regional Transportation
Congestion Improvement Program (RTCIP) to ensure that new development directly invests in
the region's transportation system to offset the negative impact of growth on congestion and
mobility;
WHEREAS, on April 1, 2008, the City Council adopted the RTCIP Traffic Mitigation Fee
of $2,000 per residential dwelling unit pursuant to Section 9A of the TransNet Ordinance;
WHEREAS, Section 9A of the TransNet Ordinance also mandates that the RTCIP Traffic
Mitigation Fee shall be increased annually, in an amount not to exceed the percentage increase
set forth in the Engineering Construction Cost Index published by the Engineering News Record
or similar cost of construction index with a minimum increase of 2%;
WHEREAS , the City Council has adopted annual increases to the RTCIP Traffic Mitigation
Fee and the current fee is $2,688.21 per residential dwelling unit, pursuant to Section 9A of the
TransNet Ordinance;
WHEREAS, SANDAG has informed the City that the percentage increase in
the RTCIP Traffic Mitigation Fee for FY 2023-24 is set at 2%; and
WHEREAS, the City Council intends by this Resolution to increase the
City's RTCIP Traffic Mitigation Fee from $2,688.21 to $2,741 .97 per residential dwelling unit to
meet the requirement of Section 9A of the Trans Net Ordinance.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as
follows :
SECTION 1: The City Council finds that the adoption of this Resolution is exempt
from the requirements of the California Environmental Quality Act (CEQA), pursuant to Section
15061 (b)(3) of the CEQA Guidelines, as it entails State-mandated updates to current City
regulations, and there is no possibility that this will have a significant effect on the environment.
SECTION 2: The City Council, starting July 1, 2023, hereby increases the RTCIP Traffic
Mitigation Fee from $2,688.21 to $2,741.97 per residential dwelling unit, regardless of type,
to fund roadway and traffic signal improvements on Espola Road, Poway Road, Pomerado Road,
Twin Peaks Road, Community Road, Ted Williams Parkway, Camino Del Nortei[)and Scripps
Poway Parkway considered part of the Regional Arterial System . 1~
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Resolution No . 23-
Page 2
PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the
City of Poway, California on the 2nd day of May, 2023 by the following vote , to wit:
AYES:
NOES:
ABSTAINED:
ABSENT:
DISQUALIFIED:
Steve Vaus, Mayor
ATTEST:
Carrie Gallagher, CMC, City Clerk
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SA Item: 9
Board of Directors February 24, 2023
TransNet Regional Transportation Congestion Improvement
Program Proposed Fee Adjustment
Overview
The TransNet Extension Ordinance requires the
18 cities in the San Diego region and the County of
San Diego to collect a Regional Transportation
Congestion Improvement Program (RTCIP) fee from
the private sector for each new housing unit
constructed in its jurisdiction, with certain exceptions,
including low-income residential units and accessory
dwelling units.
Action: Approve
The Board of Directors is asked to approve a
2% adjustment to the Regional Transportation
Congestion Improvement Program, raising the
minimum fee from $2 ,688.21 to $2,741 .97
beginning July 1, 2023.
The purpose of this fee is to help ensure that future development contributes its proportional share of the
funding needed to pay for the impact of new growth on the Regional Arterial System and related regional
transportation facility improvements as defined in the most recent Regional Transportation Plan adopted
by SANDAG.
Key Considerations
SAN DAG is required to adjust the minimum RTCIP fee amount on July 1, of each year based on an
analysis of construction cost indices, but never less than 2%. The purpose of this annual adjustment is to
ensure that the RTCIP retains its purchasing power to improve the Regional Arterial System.
Based on an analysis of construction cost trends and relevant indices, staff recommends a 2% fee
adjustment to the RTCIP, raising the minimum RTCIP fee from $2,688.21 to $2,741 .97 beginning
July 1, 2023 (Attachment 1 ). Even though CCI inflation has accelerated from its previous low pace, this
2% increase is enough to ensure that the RTCIP fee maintains its purchasing power to complete
necessary transportation improvements due to past CCI increases being less than 2%. Staff will also
continue monitoring the performance of the economy and the construction cost indices and may propose
an increase larger than the 2% minimum in 2024. Further detail can be found in Attachment 1.
Next Steps
In accordance with TransNet Extension Ordinance provisions each jurisdiction's RTCIP funding program
must be submitted for review by the Independent Taxpayer Oversight Committee (ITOC) by April 1 of
each year to remain eligible for TransNet local street and road funding. The annual submittal of RTCIP
funding programs by local jurisdictions is scheduled for review at the April 12, 2023, ITOC meeting .
Susan Huntington, Director Financial Planning and Budgets
Key Staff Contacts: Michael Terlep, (619) 699-6929 michael.terlep@sandag.org
Marcia Smith, (619) 595-5338 marcia.smith@sandag.org
Attachment: 1. Discussion Memo
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May 2, 2023, Item #4
Attachment 1
Discussion Memo
Background
The TransNet Extension Ordinance requires the 18 cities and the County of San Diego to collect a fee
from the private sector for each new housing unit1 constructed in that jurisdiction for contribution to the
Regional Transportation Congestion Improvement Program (RTCIP). RTCIP revenue is required to be
used to construct improvements on the Regional Arterial System, such as new or widened arterials, traffic
signal coordination and other traffic improvements, freeway interchange and related freeway
improvements, railroad grade separations, and improvements required for express bus and rail transit.
The Ordinance further requires SAN DAG to adjust the RTCIP fee amount each year, and states that in no
event shall the adjustment be less than 2% per year or more than the percentage increase set forth in the
Engineering Construction Cost Index (CCI) published by the Engineering News-Record (ENR), or a
similar CCI. The purpose of this annual adjustment is to ensure that the RTCIP retains its purchasing
power to improve the Regional Arterial System and to help ensure future development contributes its
proportional share of the funding needed to pay for the impact of new growth on the Regional Arterial
System and related regional transportation facility improvements, as defined in the most recent
Regional Transportation Plan adopted by SANbAG.
The RTCI P funding programs fall under the responsibility of the 19 local jurisdictions, which must maintain
their RTCIP funding programs and comply with specific administrative requirements in order to remain
eligible for TransNet local street and road funding.
The RTCIP has been implemented in the San Diego region since July 1, 2008. Annual RTCIP fee
adjustments, funding program reports, and related audits can be found at the RTCIP page of the
SAN DAG Website. Relevant excerpts can be referenced at TransNet Extension Ordinance and SAN DAG
Board Policy No. 031 : TransNet Ordinance and Expenditure Plan Rules.
Analysis of Construction Cost Indices
SAN DAG staff evaluated changes recorded in the ENR Los Angeles CCI, which is based on monthly
price changes in four areas: lumber, cement, structural steel, and labor. Los Angeles reflects construction
cost trends similar to those in San Diego. From December 2021 to December 2022, the ENR Los
Angeles CCI increased by 5.8%, after a December 2020 to December 2021 increase of 7.0% in 2021 and
only 0.3% uptick from December 2019 to December 2020. The ENR National CCI grew by 7.2% in 2022,
after an annual increase 5.8% in 2021 and just 1.6% in 2020.
Because cost indices exhibit volatility, especially amid the COVID-19 pandemic-related disruptions and
inflation in recent years, it is important to take a broader view of historical trends, going back to 2008-
when the RTCIP was instituted-to consider the required annual adjustment.
The cumulative growth of the RTCIP from 2008 through 2022 was 34.4%, while the ENR Los Angeles
CCI seeing a 42.4% growth over the same period. The chart below shows how the RTCIP and the ENR
Los Angeles CCI compare over time. It shows that by maintaining the annual adjustment at the minimum
2% increase required, the RTCIP has kept pace with inflation and retained its purchasing power.
1 Units constructed for extremely low-, very low-, low-, and moderate-income households may be exempted.
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TransNet RTCIP vs. ENR-CCI -LA
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-ENR-CCI-LA -TransNet RTCI P
As expected, construction costs-and inflation, in general-surged in the second half of 2021, exhibiting
economic impact of the 2020 COVI D-19 recession and supply chain disruptions, including shortages of
labor and raw materials.
The Ordinance requires SANDAG to adjust the RTCIP fee amount each year, and states that in no event
shall the adjustment be less than 2% per year or more than the percentage increase set forth in the
Engineering CCI published by the ENR, or a similar CCI. The most recent available data shows Los
Angeles CCI increased much more than the minimum 2%, but staff recommends the RTCIP be adjusted
only by the required minimum of 2% in 2023 ($2,741.97). Even though CCI inflation has accelerated from
its previous low pace, this 2% increase is enough to ensure that the RTCIP fee maintains its purchasing
power to complete necessary transportation improvements due to past CCI increases being less than 2%.
Staff will also continue monitoring the performance of the economy and the construction cost indices.
Downside risks related to persistent inflation, a looming recession, and economic uncertainty, which can
sap growth and expansion, put additional pressure on commodity prices and labor costs. These
considerations may necessitate an increase larger than the 2% minimum RTCIP increase in 2024.
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