REPORT TO COUNCIL
SUBJECT
Title
Action on a Resolution to Adopt a List of Projects Funded by Senate Bill 1, The Road Repair and Accountability Act, for Fiscal Year 2026-27
Report
BACKGROUND
In April 2017, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017, was signed into law. SB 1 increased the per gallon fuel excise taxes, diesel fuel sales tax, and vehicle registration fees to address basic road maintenance and rehabilitation. SB 1 directs the State Controller to allocate 50 percent of the tax revenues to the State and 50 percent to cities and counties. The amount received by the City of Santa Clara and other eligible cities is determined by a formula.
Per SB 1, funding should be prioritized for basic road maintenance, rehabilitation, and critical safety projects. The Pavement Condition Index (PCI) is a numerical index between zero and 100 that is used to indicate the general condition of pavement, with zero considered as ‘Failed’ and 100 considered as ‘Brand New.’ A city may spend its portion of SB 1 funds on transportation priorities other than road maintenance and critical safety projects if the city’s average PCI meets or exceeds 80. As of March 2026, the City of Santa Clara’s current average PCI is 73.
In order to receive funding, the City must follow the Local Streets and Roads Funding Program Reporting Guidelines adopted by the California Transportation Commission. The guidelines require the City to submit a project list annually that identifies proposed projects (Project List).
This will be the tenth year the City will receive SB 1 funding and the City Council previously approved SB 1 Project Lists starting in FY 2017/18. Maintenance for the streets identified under the previous project lists has been completed, and the Project List for FY 2025/26 is projected to be completed in 2026. The streets listed within the Project List for FY 2026/27, considered in this report, are projected to be completed in 2027.
DISCUSSION
The City must adopt a Project List for FY 2026/27 by Resolution and submit it in order to be eligible to receive FY 2026/27 SB 1 funds. The Resolution (Attachment 1) and proposed Project List (Attachment 2) identify streets to receive maintenance and rehabilitation in order to extend the pavement surface life, improve ride quality, and improve the overall pavement condition of the City street network utilizing SB 1 funding.
The SB 1 Guidelines allow flexibility for the City to fund projects in accordance with local needs and priorities. The Project List can be revised at a later date should the City’s needs and priorities change. Additionally, the City can fund projects that were not included in the Project List in any given year and can also choose not to fund projects that were on the list without amending or resubmitting. The Project List is developed based on information from the City’s Pavement Management System, which prioritizes pavement projects to provide the most cost-effective maintenance program based on street conditions, remaining pavement service life, and available funds.
Adoption of the Resolution will allow the City to remain eligible to receive FY 2026/27 SB 1 funds. If the Resolution is not adopted, the funds may be forfeited and distributed to other eligible agencies.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment. Any project on the list that moves forward to construction will be evaluated in accordance with CEQA as part of the approval process.
FISCAL IMPACT
Based upon revenue estimates published by the League of California Cities in January 2026, it is projected that the City could receive up to $3.78 million of SB 1 funds in FY 2026/27. Appropriation of SB 1 revenues will be brought forward for Council’s consideration through the FY 2026/27 and 2027/28 Biennial Capital Improvement Program budget process, and budget amendments may be brought forward in the future should the actual SB 1 revenues received from the State increase or decrease from the budgeted amount.
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Adopt a Resolution with a List of Projects Funded by Senate Bill 1, The Road Repair and Accountability Act, for Fiscal Year 2026-27.
Staff
Reviewed by: Craig Mobeck, Director of Public Works
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Resolution
2. Senate Bill 1 Proposed Project List for FY 2026-27