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Report regarding a resolution authorizing Budget Amendment No. 27.018 appropriating an additional $300,000 in Citywide Traffic Impact Fee funds to Capital Improvement Project tr2406 - Traffic Studies & Grant Support and authorizing staff to submit certain qualifying transportation grant applications. (John Wilson, Senior Engineer)
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RECOMMENDATION
Recommendation
Staff recommend that the City Council adopt a resolution authorizing:
(1) Budget Amendment Number 27.018 appropriating an additional $300,000 in Citywide Traffic Impact Fee funds to Capital Improvement Project tr2406 - Traffic Studies & Grant Support; and
(2) Staff to submit qualifying transportation grant applications with proposed local matching contributions of less than 30 percent using eligible Citywide Transportation Impact Fee and/or East of 101 Traffic Impact Fee funds.
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BACKGROUND/DISCUSSION
The City’s Capital Improvement Program includes Project tr2406 - Traffic Studies & Grant Support to fund traffic-related studies, transportation project development, and competitive grant applications. The fiscal year (FY) 2026-27 Capital Improvement Program includes $200,000 for tr2406, funded by the Citywide Traffic Impact Fee. The current five-year CIP anticipates continuing this level of funding annually.
Competitive transportation grants allow the City to leverage local transportation revenues to implement projects identified in the General Plan and other adopted plans that would otherwise require substantially greater local investment.
Transportation grant programs do not follow a uniform annual cycle. Major programs may solicit projects only every two or more years, and application schedules do not necessarily align with the City’s CIP development schedule or City Council meeting calendar. Competitive applications also often require advance project evaluation, planning, cost estimating, community engagement, and technical analysis.
Grant development activity during FY 2026-27 exceeded the level anticipated when the annual $200,000 appropriation for tr2406 was established. Staff have pursued or are developing applications for several competitive transportation funding programs, including the Highway Safety Improvement Program, Safe Routes to Transit and Bay Trail Program, Caltrans Sustainable Transportation Planning Grant Program, and other regional and county opportunities.
Some of this work advances projects identified in the City’s long-term plans or anticipated in future years of the CIP. Waiting until a project’s programmed CIP year to begin development may cause the City to miss competitive funding opportunities, particularly when application windows are short or substantial project development is required in advance.
The FY 2026-27 CIP resolution (81-2026) authorizes staff to apply for grant funding for projects within the adopted CIP when sufficient funding exists in the current project budget for required matching funds. This authority does not address transportation opportunities that are consistent with adopted City plans and priorities but have not yet been established as active CIP projects.
Staff recommend two related actions. First, staff recommend increasing the FY 2026-27 appropriation for tr2406 by $300,000 to continue current grant-development activities and pursue additional funding opportunities during the remainder of the fiscal year.
Second, staff recommend authorizing staff to submit competitive transportation grant applications for projects and programs consistent with the City’s General Plan, adopted plans and policies, and City Council priorities, including projects not yet included in the CIP. For applications requiring or benefiting from a local match of less than 30 percent, staff may identify eligible Citywide Transportation Impact Fee and/or East of 101 Traffic Impact Fee funds as the proposed matching source, subject to eligibility and availability. Grant opportunities requiring a City match of 30 percent or greater would be brought to City Council for authorization before an application is submitted.
Proposed matching amounts would be tracked for financial planning purposes but would not be appropriated or authorized for expenditure when an application is submitted. All grant awards would return to City Council for acceptance and, if Council elects to proceed, any necessary CIP action, budget amendment, appropriation of grant and matching funds, and authorization of funding agreements.
Attachment 1 summarizes transportation grant applications and outcomes since 2022 and illustrates the City’s use of local resources to pursue outside transportation funding.
FISCAL IMPACT
The proposed budget amendment would appropriate an additional $300,000 in Citywide Traffic Impact Fee funds to tr2406, increasing the FY 2026-27 project funding from $200,000 to $500,000. The FY 2025-26 ending fund balance in the Citywide Traffic Impact Fee Fund 825 is approximately $15 million. The standing grant-application authorization would not appropriate or authorize expenditure of Citywide Transportation Impact Fee or East of 101 Traffic Impact Fee funds for proposed grant matches. If an award were accepted, any necessary grant and matching-fund appropriations would return to City Council for review.
RELATIONSHIP TO CITY COUNCIL PRIORITIES ACTION PLAN
This project supports the Infrastructure and the Environment major focus area by advancing transportation projects identified in the City’s long-term plans and positioning them to compete for federal, state, regional, and county grant funding. Competitive grants allow the City to leverage local transportation revenues to accelerate roadway safety, multimodal, and transportation infrastructure improvements. The project also supports the Quality of Life and Welcoming and Connected Community major focus areas by pursuing funding for projects that improve safety, connectivity, and access for all roadway users.
ASSOCIATED DOCUMENTS
1. Transportation Grant Report Card