TO: Board of Supervisors
FROM: Steve Lederer, Director of Public Works
REPORT BY: Juan Arias, Deputy Director of Public Works
SUBJECT: Measure U Master Agreement
RECOMMENDATION
title
Adopt a Resolution approving Measure U Master Agreement No. 260112B between the County of Napa and the Napa Valley Transportation Authority - Tax Agency. (Fiscal Impact: Approximately $10 million/year Revenue; Measure U Special Revenue Fund; Budgeted; Discretionary)
body
BACKGROUND
In November 2024, voters in Napa County approved the Napa Valley Transportation Improvement Act, known as Measure U, which authorizes the continuation of a one-half cent transactions and use (sales) tax to fund local and regional transportation improvements. Measure U replaces Measure T, the Napa Countywide Road Maintenance Act, which was approved by voters in 2012 and which sunset on June 30, 2025.
Measure U extends the sales tax for 30 years, beginning July 1, 2025, and provides a dedicated source of revenue to support the maintenance and rehabilitation of local streets and roads, investments in active transportation infrastructure, and contributions to regional highway improvements. The Measure also introduces updated requirements for performance, accountability, and program flexibility based on feedback from stakeholders and jurisdiction partners.
To ensure consistent administration of Measure U funds across jurisdictions, the Napa Valley Transportation Authority - Tax Agency (NVTA-TA) developed Master Agreement No. 260112B establishing the framework for fund disbursement, project eligibility, and compliance procedures.
On February 26, 2025, NVTA convened a working group meeting with Public Works Directors and Finance staff from each jurisdiction to review and provide feedback on the draft agreement. Since then, NVTA has collected formal comments from each jurisdiction’s legal counsel, finance department, and public works director, and incorporated updates based on that feedback.
The Master Agreement includes:
- A funding distribution formula based on audited sales tax generation that is dynamic and will be updated every five years;
- A Maintenance of Effort (MOE) requirement set at 20% of the prior year’s eligible revenues;
- A 7% Equivalent Fund Commitment for active transportation improvements;
- A 5% Flex Fund allowance for additional transportation projects over the life of the measure;
- Project programming and reporting obligations, including biennial five-year project lists;
- Financial reporting, signage, and auditing provisions to ensure program transparency and voter accountability.
Execution of this agreement is required for each jurisdiction to begin receiving Measure U funds in FY 2025-26.
Requested Action:
Director of Public Works recommends adoption of a resolution approving the Measure U Master Agreement between the County of Napa and the Napa Valley Transportation Authority - Tax Agency (NVTA-TA) and execution of the Measure U Master Agreement by the Chair.
FISCAL IMPACT
|
Is there a Fiscal Impact? |
Yes |
|
Is it currently budgeted? |
Yes |
|
Where is it budgeted? |
Measure U Special Revenue Fund (Formerly Measure T Special Revenue Fund) |
|
Is it Mandatory or Discretionary? |
Discretionary |
|
Discretionary Justification: |
Measure U approvals are required for the County to be eligible to receive Measure U funds. |
|
Is the general fund affected? |
No |
|
Future fiscal impact: |
Future year’s revenue will be budgeted on an annual basis. |
|
Consequences if not approved: |
The County will not be eligible to receive Measure U funding. |
|
Additional Information |
Approval of the Master Agreement will enable Napa County to receive Measure U revenue on a quarterly basis. Funds must be deposited in a dedicated Special Revenue Fund and used solely for eligible transportation projects in accordance with the Expenditure Plan and agreement terms. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: Consideration and possible adoption of a Categorical Exemption Class 1: It has been determined that this type of project does not have a significant effect on the environment and is exempt from the California Environmental Quality Act. [See Class 1 (Existing Facilities) which may be found in the guidelines for the implementation of the California Environmental Quality Act at 14 CCR §15301; see also Napa County’s Local Procedures for Implementing the California Environmental Quality Act, Appendix B.]