Fullerton City Council held a special “study session” meeting on April 13 to discuss the state of Fullerton’s roads, what funding is available for repair, and ideas to improve them.

David Grantham, Principal Civil Engineer for the city of Fullerton gave a detailed presentation on the topic, which was followed by public comments and Council discussion.

Current Street Conditions

Altogether, Fullerton maintains around 300 miles of streets and roads. Every two years, the City is required to assess the state of its streets, which results in something called a Pavement Condition Index (PCI). The PCI rates streets from “very poor” to “very good.” Fullerton’s overall PCI in 2020 was “fair.”

Grantham said that Fullerton has not appropriately funded infrastructure maintenance and it has become  a long-term problem that has grown over many years.

How We Got Here

He then gave a history of some of the key factors over the decades that have made it difficult for Fullerton to keep up with the cost of road repairs.

Prior to the passage of Prop 13 (1978), cities were able to determine their expenditure needs and then set a local property tax rate to obtain the necessary revenues. Prop 13 set strict limits on property taxes, thereby reducing city revenues.

“As a resident, [Prop 13] is good for me. It keeps my property tax down,” Grantham said. “But from a city point of view, not very helpful. It certainly reduced the amount of revenue that could possibly be brought in for the City.”

A recession in 1990 impacted the City’s revenue and ability to fund maintenance. In 1993, the City Council voted to impose a 3% utility tax to provide new revenue of approximately $2.6 million per year. Voters recalled Council members and the tax was repealed.

In 2002, after the 9/11 attacks, City Council approved enhanced public safety pension amounts for police and fire, increasing the City’s pension obligations.

The 2008 recession significantly impacted City revenues, decreasing the General Fund.

“The bottom line is we’ve had increasing costs over the years, but our revenue sources have been limited,” Grantham said.

Mayor Pro Tem Nick Dunlap said that Grantham’s presentation focused on revenue losses but should also focus on expenditures.

“If you were to look at increases in sales and property tax revenues over that same time frame, over 20-30 years, my guess is you’d see any increases in property or sales tax revenue tied to increases in compensation for police, fire, and other public employees as well, as opposed to going to roads, streets, infrastructure,” Dunlap said.

Mayor Whitaker acknowledged that Prop 13 had an impact, but said it also allowed property values to rise because of the predictability created by Prop 13.

“A big part of the problem is the increasing share of property taxes that go to education in this State because of Educational Revenue Augmentation Funds (ERAF), as well,” Whitaker said.

Councilmember Fred Jung said, “If we cry it’s because of the lack of revenue, that just can’t be the excuse for me. If it’s decades of neglect, shouldn’t we as a city and a staff have figured out along the way how to make an adjustment, how to get more for that dollar, or find more inventive ways to use that money?”

City Manager Ken Domer said, “We can’t control the fact that 30 years ago there was a decision, but we are living with that fact. We’re going to be bringing to the Council a series of decisions based on our overall revenues and expenditures as they stand now.”

Street Rehabilitation Methods

There are five main types of road repair. They are:

• Slurry Seal. Typically installed on good condition streets. Helps seal and maintain smooth surface of the pavement.

• Grind and Overlay. Typically installed on fair condition streets. Intent is to remove and replace the top “surface” course (about 2”) of pavement.

• Reconstruction. Typically installed on poor condition streets. Requires removal of all existing pavement materials.

• Full Depth Reclamation (more modern method). Typically installed on poor condition streets. This method recycles the existing pavement materials into a new base. Less expensive than traditional reconstruction.

• Asphalt-Rubber Aggregate Membrane (ARAM) (newer method). 3/8” thick rubberized membrane with aggregate embedded into the membrane. Provides a flexible interlayer that mitigates reflective cracking and helps to hold together the old underlying pavement.

Mayor Pro Tem Dunlap asked if the City has incurred any additional road repair costs from the current fiberoptic micro trenching project being done by the company SiFi. Grantham said that, per their contract with the City, the SiFi project is not supposed to cost the City anything.

City manager Domer said that, with the SiFi micro trenching on older, poorer condition streets “their infill material and their patching looks sloppy. That’s one thing that we’re working with them on.”

Funding

Grantham said that sources of funding for road repair are limited. For example, the sanitation fund, the sewer enterprise fund, the water fund, and park-dwelling funds cannot be used for street rehabilitation.

Currently, road repair is funded from the following sources:

Mayor Pro Tem Dunlap asked if there has been any general fund allocation for road repair for the past few years.

Domer said, “General fund dollars are spoken for. They are prioritized for other uses.”

Grantham presented a graph showing that if the City continues with its current level of funding, our pavement conditions are going to get worse over time.

What Has the City Done?

Grantham discussed steps the City has taken to address road repair needs despite the funding shortfalls. These include:

• Combined water and sewer projects with street improvements, thereby reducing the contribution of the street funding.

• Sold surplus property and revenue from that was used for street improvements.

• Established an Infrastructure Fund using a minimum of 50% of any increased property tax and sales tax revenue above and beyond a baseline amount each year. This was created in July 2020 and is estimated to provide $400,000 for the next fiscal year.

• Partnering with county of Orange for roadway funding assistance.

• Some maintenance projects are designed in-house, rather than contractors.

• New developments have private streets that the City is not required to maintain.

What the City Needs

Grantham said that the City needs a minimum budget of $8 million a year just to maintain existing street conditions. The current budget is $5 million a year.

In April 2019, City Council tasked the Infrastructure and Natural Resources Advisory Committee (INRAC), composed of volunteers, to conduct an infrastructure needs assessment. They concluded:

• The condition and funding of our streets is the single most critical problem.

• Fullerton infrastructure needs an increase of approximately $10 million per year over current funding levels (from $5M to $15M).

INRAC’s recommendation for how to pay for this was to put a special, dedicated sales tax increase measure on the ballot. Instead, Council chose to put a general sales tax increase measure on the ballot, which was Measure S (2020). This measure failed.

Councilmember Zahra said that Council chose to do the general tax because a special tax requires a 2/3 voter approval to pass (as opposed to the 50% threshold of a general tax), and polling showed this was not feasible.

Councilmember Jung said he thinks voters would have approved the special tax.

Grantham presented Council with options for how to prioritize street repairs given current funding levels, and asked for Council input.

Council Discussion

After Grantham’s presentation, some members of the public addressed Council. Most were residents who were upset about the condition of Fullerton’s roads.

“Fullerton is a beautiful city with great schools, but our residential streets have been horribly neglected for so long,” Young Lee said.

“We’d like a plan developed so we know when our street will be repaired,” another resident said.

Councilmember Fred Jung said that, like our budget, “our infrastructure should reflect our values, and it just hasn’t.”

Mayor Pro Tem Dunlap said that he opposed Measure S because it would not have reserved dollars for road repair.

Councilmember Zahra disagreed, stating that half of the Measure S funding would have gone toward infrastructure because of the City’s recently-created Infrastructure Fund.

“That would have brought in the $10 million a year that we’re looking for,” Zahra said.

Dunlap said that Grantham’s presentation should have also focused on not just revenue losses, but expenditures, specifically how past councils have allocated discretionary spending, “cuts that could have been made over time in order to reallocate some of that funding into our roads and streets.” He said that the fact that there has been no funding to road and street repair from the general fund over the past few years “is offensive.”

Councilmember Jesus Silva suggested determining if there are neighborhoods willing to do a “special assessment” tax to repair their neighborhood roads. He also suggested charging utility companies for cutting into our streets.

Zahra said there is the possibility of a Federal Infrastructure Bill, but it is uncertain whether cities will get the money directly.

Councilmember Jung suggested raising business license fees to generate more revenue.

Mayor Whitaker said that, over the past decades, street repair has not been a priority for city councils. He said that the City is currently in the process of creating its budget for the next fiscal year, and that that budget “will speak to our priorities.”