TO: LINDA REICH, CITY MANAGER
FROM: HYE JIN LEE, PUBLIC WORKS DIRECTOR
SUBJECT
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Amended Measure I Five-Year Capital Project Needs Analysis for Fiscal Years 2025/2026 to 2029/2030.
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RECOMMENDATION
1) Adopt Resolution No. 2025-019, approving an amendment to the Measure I Five-Year Capital Project Needs Analysis (CPNA) for Fiscal Years 2025/2026 to 2029/2030 to reallocate Measure I Arterial funds and reflect previously unreimbursed costs for the Pine Avenue Connector Project ST061 and State Route (SR) 71 Interchange Project ST204; 2) approve the accompanying correction memorandum, which documents the reconciliation of Measure I arterial expenditures and outlines the use of General Fund balance, and formalizes funding allocations to ensure transparency, compliance with Measure I requirements, and readiness for audit review; and 3) authorize the City Manager to execute all the necessary documents on behalf of the City.
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FISCAL IMPACT
Approval of the CPNA amendment and correction memorandum reallocates Measure I Arterial funds to the appropriate fiscal years, corrects prior programming discrepancies, and preserves eligibility for reimbursement through the San Bernardino County Transportation Authority (SBCTA). Following Council approval, the Finance Department will make administrative adjustments to the Pine Avenue Connector Project ST061, which will reduce the General Fund balance in FY 2024-25 by $511,812.94. There is sufficient available General Fund balance for this transaction. While prior-year ledger entries remain unchanged, the approved documents will serve as the formal audit and reimbursement record. This action protects the City's ability to recover eligible costs, ensures compliance with Measure I program requirements, and maintains audit readiness.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above furthers the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Financial Stability
• Positive City Image
• Responsible Long-Range Planning
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Revenue: |
Expenditure: Accounts are listed on the Corrective Memorandum attached |
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Transfer In: |
Transfer Out: |
BACKGROUND
Measure I is a half-cent sales tax approved by San Bernardino County voters to fund transportation improvements across the region. Originally passed in 1989 and renewed in 2004, Measure I 2010-2040 provides continued financial support for regional mobility initiatives.
The Measure I 2010-2040 Expenditure Plan includes the Valley Major Street Program, which funds regional arterial projects identified in the San Bernardino County Transportation Authority (SBCTA) Nexus Study. The Nexus Study establishes a cost-sharing framework for transportation infrastructure and determines project eligibility for Measure I funding. To qualify for Measure I funds, or for State and Federal transportation funds administered by SBCTA, projects must be listed in the Nexus Study and fall under either the Major Street Arterial or Interchange Sub-Programs.
In addition, the Measure I Strategic Plan requires each local jurisdiction to annually adopt a five-year Capital Projects Needs Analysis (CPNA). The CPNA identifies transportation project needs by fiscal year, including anticipated funding sources, funding amounts, and implementation timelines. SBCTA relies on this information to evaluate cash flow requirements for the Valley Freeway Interchange and Major Arterial Streets Programs and for its annual budget planning. The CPNA and a corresponding Council resolution must be submitted to SBCTA no later than September 30 of each year.
The CPNA is a critical tool for maintaining eligibility for Measure I reimbursements. Local agencies must actively monitor their allocation balances and projected revenues to ensure expenditure stays within available funding.
On September 17, 2024, the City Council approved the City's annual CPNA report in compliance with the Measure I 2010-2040 Strategic Plan. Following Council approval, staff conducted a reconciliation of previously incurred Measure I Arterial expenditures. This review identified programming discrepancies that could affect the City’s ability to seek reimbursement for key regional infrastructure projects such as the Pine Avenue Connector and State Route 71 (SR 71) Interchange Improvements, which will be discussed in greater detail in the Issues and Analysis section of this report.
To address the reconciliation findings, staff recommends amending the CPNA report to reallocate Measure I Arterial funds to the correct fiscal years and accurately document eligible expenditures. A corrective memorandum will accompany the amendment, summarizing the findings, referencing this Council action, and outlining the appropriate cost share allocations. This action will enable the City to pursue reimbursement from SBCTA for eligible expenditures incurred between 2020 and 2025. Due to the absence of timely reimbursements, the City’s General Fund was required to temporarily backfill the negative balance in the Measure I Arterial Fund 328, resulting in a reduction in General Fund balance.
While retroactive adjustments to the City’s general ledger are not feasible, the amended CPNA report, staff report, and memorandum will together establish the formal administrative record necessary to correct past allocations and support current and future reimbursement efforts. This action ensures compliance with Measure I requirements and maintains a transparent audit trail.
ISSUES/ANALYSIS
The Pine Avenue Connector Project is included in the Federal Transportation Improvement Program (FTIP), which identifies transportation projects planned for implementation in alignment with regional transportation planning efforts / priorities and air quality standards. The Project consists of widening Pine Avenue from two to four lanes between Euclid Avenue and El Prado Road and constructing a new four-lane extension from El Prado Road to State Route 71 (SR-71). The Project has remained in the preliminary engineering and design phase for over a decade due to significant regulatory review challenges, such as:
1. The interchange improvements necessitated at SR-71 and Pine Avenue requires Caltrans and City of Chino Hills review and collaboration.
2. The initial design proposed a raised bridge approach with fill dirt as high as 60’. The United States Army Corps of Engineers (USACE) raised concerns with the amount of soil import required to raise the proposed road and the environmental impacts associated with creating a dam structure in a flood prone inundation area.
3. Concerns by Southern California Edison (SCE) associated with access to its distribution towers for maintenance.
4. Santa Ana Watershed Project Authority (SAWPA) having its brine line buried under the proposed earth-filled structure.
5. Establishing consensus among multiple agencies on a safe design speed and posted speed necessary for a regionally critical mobility route.
To address these challenges, City staff has extensively collaborated with the City of Chino Hills, the San Bernardino County Transportation Authority (SBCTA), and Caltrans to develop a bridge concept that aligns with regional planning efforts and agency requirements. This preliminary concept has the support of the key stakeholders, allowing the City to advance to the next phases of preliminary design and environmental clearance.
In October 2024, Public Works presented a revised Project design to the Infrastructure Committee, proposing a bridge structure to minimize environmental impacts and provide a clear path forward. Due to this design pivot, a new Request for Proposals (RFP) is necessary to procure updated design services.
Staff have actively advanced the RFP process to align with the Project’s revised scope, which now includes the preparation of an Environmental Impact Report (EIR). The EIR will provide a comprehensive analysis of Project impacts and mitigation measures, ensure greater opportunities for community input, and establish a legally defensible environmental document. Under the California Environmental Quality Act (CEQA), challenges to the Project can only be pursued through litigation following the EIR’s certification.
In 2024, a Caltrans audit revealed that the City’s preliminary engineering and design agreement with Huitt-Zollars expired in 2020 (during COVID pandemic). As a result, approximately $1,529,549 in federal expenditures incurred between 2020 and 2024 under the Safe Accountable Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) were deemed ineligible for reimbursement. The City repaid this amount to Caltrans using a combination of sources, including the General Fund, Preserve Circulation Development Impact Fees (DIF), and Measure I Arterial funds. Expenditures funded through DIF and Measure I are not considered throwaway costs, as they will carry forward into the revised design and continue supporting project delivery. It should also be noted that, through the efforts of Congresswoman Norma Torres, the repayment amount was restored to the SAFETEA-LU budget and is now available for future use on the “new” Pine Avenue Connector Bridge Project ST261.
An internal reconciliation also identified additional discrepancies between 2022 and 2025, including expenditures that were mistakenly charged to the Pine Avenue Connector Project under Fund 328 (Measure I Arterial) instead of the Pine Avenue Repair Project. Costs related to federal advocacy consultant services were likewise misallocated to the project under Fund 328 and should have been funded through a general line item and backfilled by the General Fund. These discrepancies, along with other misallocations, will be corrected in the forthcoming memorandum accompanying the CPNA amendment.
Because these expenditures were charged to Fund 328 following the lapse of the professional services agreement and the expiration of SAFETEA-LU funding, the associated costs are now subject to the cost-sharing allocations outlined in the City’s CPNA Annual Report. The corrected budget for the Pine Avenue Connector Project (ST061) will guide the Finance Department’s adjustments and serve as the basis for future reimbursement requests to SBCTA.
Separately, the City’s Capital Improvement Program (CIP) includes the SR-71 Interchange Improvements Project (ST204), with expenditures dating back to 2020. Upon review, staff determined that many of these costs were charged to Fund 328 (Measure I Arterial) without the required cost-sharing between Measure I and DIF. Because retroactive adjustments to the City’s General Ledger are not feasible, this report and the accompanying correction memorandum will document the necessary funding reallocations to support reimbursement eligibility.
As part of ongoing coordination with SBCTA, City staff also explored options to include the SR-71/Pine Avenue ramps in the Measure I Nexus Study. Although these improvements are not currently listed under the Arterial or Interchange Programs, SBCTA confirmed they may be added to the Arterial List as part of the Pine Avenue Connector Bridge concept. Because the interchange improvements and the connector bridge are functionally interrelated and cannot be delivered independently, their combined implementation is essential, making them eligible for Measure I funding, and providing a viable path to support the expanded project scope.
SBCTA has requested that the City submit an updated funding plan, a revised project schedule, and a copy of the regional traffic study prepared to support future federal funding efforts. City staff is compiling this information to maintain active coordination with SBCTA and ensure all programming and funding opportunities remain available for this critical regional improvement.
The Pine Avenue Connector / Bridge Project ST261 remains a top regional transportation priority for the City. While prior funding and administrative challenges have required corrective action, the steps now being taken include the closeout of the original project ST061, reconciliation of expenditures, and establishment of a new project framework will position the City to pursue future reimbursement, maintain compliance with funding agency requirements, and advance the project toward environmental clearance and implementation. Staff will also submit the necessary documentation to SBCTA to request reimbursement of eligible Measure I Arterial expenditures before the close of the current fiscal year.
Attachments: Resolution No. 2025-019
Corrective Memorandum