Item 18 - Measure M2 Funding Eligibility 2026-27 Renewal

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EXHIBIT 2 4.0 Maintenance And Rehabilitation Strategies 4.2 FUNDING The City has estimated total funding amounts of$71.2 million and $43.6 million for the pavement expenditures of the arterial and local networks, respectively, for the next seven years (refer to City CIP on a separate document for further details). Generally, the future revenues for City street preventive and major M&R programs are from the following funding sources: • Community Development Block Grant (CDBG) — The Housing and Community Development Act of 1974 returns income tax funds to cities and counties to develop viable urban communities, primarily for the benefit of low and moderate income people. This U.S. Department of Housing and Urban Development program gives priority to activities that help to eliminate blight, with emphasis on residential areas. CDBG projects are carried out by several operating departments with the City and by sub-agents. Public hearings are held to plan projects for each fiscal fear. The selected projects are recommended by citizens, commissioners, and staff. • Gas Tax—Gas Tax funds are derived from the Motor Vehicle Fuel Tax(or Highway Users Tax Account (HUTA)). Motorists pay a tax for fuel consumption. It is apportioned to cities according to population and can only be utilized in the maintenance and construction of the street system. • Road Maintenance and Rehabilitation Account(RMRA—Streets and Highways Code Sec 2030 et sec.) includes funds from the following taxes enacted by Senate Bill 1 Road Repair and Accountability Act of 2017: the 12 cent gasoline excise tax, 20 cent diesel fuel excise tax, transportation improvement fees. These new gas tax funding sources contribute funding on an annual basis. • Local Street Bond Fund — In 2007, the City issued a $60 million bond as a certificate of participation (COP) against Gas Tax revenue to create the Residential Street Repair Program to repair and rehabilitate neighborhood streets Citywide. • Measure M2 — On November 7, 2006, voters approved the renewal of the Measure M half-cent sales tax (Measure M2), extending the program over a 30-year period beginning in 2011. In addition to the original three program components, this generation of the Measure M Transportation Plan expands the program to include Environmental Cleanup and Taxpayer Safeguards and Audits. To receive revenues from the one-half-cent sales tax, cities and the County of Orange must coordinate their land use and transportation decisions, establish cooperative transportation planning programs with neighboring jurisdictions, develop Growth Management programs, and guarantee that transportation funds are used for transportation purposes only. • Measure M2— Competitive—The competitive portion of the Measure M2 consists of the following programs: Regional Capacity Program (RCP), Regional Traffic Signal Synchronization Program (TSSP), and several transit programs. • Measure M2— Fairshare—This local fair share program returns a portion of the Measure M2 Streets and Roads revenues to the cities and the County of Orange once specific program requirements are met. Disbursement amounts are based on a formula that accounts for population, street mileage, and sales tax collected. City of Santa Ana 2026 Pavement Management Program 4-4-5