To: Honorable Mayor and Members of City Council
From: Julie Lucido, Public Works Director
Prepared By: Ian Heid, Senior Civil Engineer – Engineering Division
TITLE:
Title
Napa Valley Transportation Improvement Act (Measure U) – Master Agreement
LABEL
RECOMMENDED ACTION:
Recommendation
Approve and authorize the City Manager to execute the Measure U Master Agreement (“Agreement”) between the City of Napa and the Napa Valley Transportation Authority – Tax Agency
Body
DISCUSSION:
At the General Election held on November 5, 2024, the voters of Napa County approved the Napa Valley Transportation Improvement Act, a ½-cent sales tax known as Measure U. Effective July 1, 2025, the Measure U sales tax replaced the previous road maintenance tax known as Measure T. A portion of the Measure U proceeds are to be distributed to the City of Napa as detailed in Ordinance No. 24-01 of the Napa Valley Transportation Authority – Tax Agency (NVTA-TA).
As part of the process to receive funding, NVTA-TA requires the City of Napa, City of American Canyon, Town of Yountville, City of St. Helena, City of Calistoga, Napa County and Napa Valley Transportation Authority enter into a Master Agreement. The Agreement documents the Measure U requirements. Many provisions are similar to the Measure T Master Agreement previously approved by the City, however, the Measure U replacement does include several significant changes. The changes include the authorization to obtain bonds for project financing, adding specific regional transportation enhancement projects, and modification to the funding allocations for each agency.
Key elements of the Measure U Agreement include:
Bike Facility Funding: Measure U requires the local agencies (cities, town, county and NVTA) collectively demonstrate committed funding of at least 7% of the value of the total Measure U allocated funds to develop and maintain Class I and Class IV bike facility projects identified in the Countywide Active Transportation Plan. The committed funds may not be from Measure U, philanthropy, or state/federal discretionary funding. (No more than 20% of the committed funds may be used for maintenance.)
Maintenance of Effort: Similar to the Measure T Ordinance, Measure U requires all local agencies to expend general fund revenue on street maintenance to ensure Measure U funds supplement existing road maintenance investments, not supplant funding. The City is required to expend general funds for road maintenance purposes in an amount equal to at least 20% of the Measure U funding allocated to the City each year. The City’s current, past and planned expenditures exceeded the required amount.
Five-Year List of Projects: At the request of NVTA-TA, the City adopted its initial Measure U Five-Year List of Projects on May 6, 2025. The City is required to provide NVTA-TA updates to the Five-Year List of Projects at least every two years.
A copy of the Master Agreement is included as Attachment 1 to this staff report. The Agreement was approved by the NVTA-TA Board on July 16, 2025. The proposed action includes authorization for staff to finalize the agreement with minor changes to the language to cover clerical corrections and other minor modifications that may be requested by the local agencies executing this Master Agreement. The attached agreement includes minor changes to the language approved by the NVTA-TA Board to supplement the description of the Maintenance of Effort requirement. City staff has shared these proposed changes with NVTA-TA staff.
FINANCIAL IMPACTS:
There is no general fund impact associated with the proposed action to adopt the Master Agreement. Adoption of the Master Agreement will enable the City to receive Measure U revenue on a quarterly basis to continue to leverage these tax dollars for delivery of local transportation improvements.
Projects that will be funded by Measure U are eligible for 100% reimbursement of incurred project costs. It should be noted however that all jurisdictions in the County must collectively demonstrate that at least 7% of the value of the Measure U allocations received each year are committed to Class I or Class IV Bike Facility projects identified in the Countywide Active Transportation Plan through funding not derived from this Ordinance, philanthropy, or state/federal discretionary funds.
CEQA:
The Public Works Director has determined that the Recommended Action described in this Agenda Report is not in-and-of-itself a “project” (pursuant to CEQA Guidelines Section 15378) since it does not result in a physical change in the environment.
However, the Recommended Action is a part of a larger “project” that will be subject to environmental review in accordance with CEQA at the “earliest feasible time” prior to “approval” consistent with CEQA Guidelines Sections 15004 and 15352. The larger “project” is future Capital Improvement Projects, and staff plans to bring back a CEQA analysis of each project to Council prior to approval of each project.
DOCUMENTS ATTACHED:
ATCH 1 – Measure U Master Agreement
NOTIFICATION:
None