Report Prepared by: Laura Ivancich, Management Analyst, Engineering Department
Title
SUBJECT: Approval of Amendments No. 1 to the Measure V Regional Project Funding Agreement with Merced County Association of Governments to Receive Measure V Funds for the Highway 59 Widening Phase 1 Project CP200064 (Agreement No. 20180913SD_L-1) and Highway 59 Black Rascal Bridge Project CP200065 (Agreement No. 20180913SD-1)
REPORT IN BRIEF
Consider approving Amendments No. 1 to the Measure V Regional Funding Agreement with Merced County Association of Governments to receive Measure V Regional funds for the Highway 59 Widening Phase 1 Project CP200064 and Highway 59 Black Rascal Bridge Project CP200065 to continue with design, commence with right-of-way acquisition, and prepare for bidding the project for construction.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving Amendment No. 1 to the Measure V Regional Funding Agreement for the Highway 59 Widening Phase 1 Project CP200064, with Merced County Association of Governments; and,
B. Approving Amendment No. 1 to the Measure V Regional Funding Agreement for the Highway 59 Black Rascal Bridge Project CP200065, with Merced County Association of Governments; and,
C. Authorizing the use of pooled cash for expenditures until City receives reimbursement funds; and,
D. Authorizing the Finance Officer to make the necessary budget adjustments; and,
E. Authorizing the City Manager to execute the necessary documents.
Body
ALTERNATIVES
1. Approve the request as recommended by staff; or,
2. Deny the request; or,
3. Approve, subject to modifications as conditioned by Council; or,
4. Refer back to staff for reconsideration of specific items (specific items to be addressed in City Council motion); or,
5. Continue to a future City Council meeting (date and time to be specified in City Council motion).
AUTHORITY
Charter of the City of Merced, Section 200.
CITY COUNCIL PRIORITIES
Addresses Council’s priority of widening Highway 59 and replacing the Highway 59 Bridges at Black Rascal Creek.
DISCUSSION
Background
On November 8, 2016, the voters of Merced County approved “Measure V”, a one-half cent sales transaction and use tax to supplement transportation roads and alternative transportation project funding. The Measure V transportation sales tax will be in place for 30 years, expiring on March 31, 2047. MCAG is the administrator of the apportionment of sales tax funds to the County, six Cities, and the agreed upon regional areas within Merced County.
One half of the total Measure V funding will be allocated to each jurisdiction through three methods: an annual base allocation and proportional shares of population and approved road miles, the remaining funds will be allocated to regional projects, with a minimum annual amount allocated to transit projects and to the administration of the measure. As part of the Measure V ½ Cent Transportation Sales Tax, 44% of the Transportation Measure funds will be allocated to Regional Projects which are to be established in the adopted Regional Transportation Plan (RTP) approved by the MCAG Governing Board. Regional Projects are to provide for the movement of goods, services and people throughout Merced County and should benefit multiple jurisdictions. Additionally, 27% of the total is for an Eastside share, to be spent on projects east of the San Joaquin River and 17% of the total is for a Westside share, to be spent on projects west of the San Joaquin River. Other allocations are provided to Transit and administration.
As the Local Transportation Authority overseeing the funds, the Governing Board of Merced County Association of Governments has the authority to approve recommendations made by the Regional Projects Committees. However, the MCAG Governing Board shall not approve a project that has not been recommended by the Regional Projects Committee.
MCAG is required by the Expenditure Plan to develop and adopt an Implementation Plan update at least once every two years and the Implementation Plan is the primary financial document that provides an analysis of Measure V revenue and programs project expenditures over a specific period of time as authorized by the MCAG Governing Board.
Currently the City has three active projects under the Measure V Regional Allocation. They include Highway 59 Widening and the Black Rascal Creek Bridge, which are programmed as two separate projects, and Mission Avenue Widening.
Staff met with the Transportation Subcommittee on September 30, 2025, to discuss funding options for the 3 regional projects. It was advised to focus funding on the Highway 59 Black Rascal Bridge project due to the current unsafe conditions of the bridge for travelers.
At the June 1, 2020, City Council meeting, Council approved two funding agreements with MCAG for the Highway 59 Phase 1 Widening in the amount of $5,944,580 and for Highway 59 Black Rascal Bridge Project in the amount of $4,090,000.
During the 2023 Measure V Implementation Plan call for projects, staff requested additional funding to both projects. The Highway 59 Widening Phase 1 project was programmed an additional $555,420, to bring that project to a total of $6,500,000, and the Black Rascal Bridge project was programmed an additional $1,944,580, bringing that project total to $6,034,580. The amendments to increase the funding amount for the additional programmed amounts for each project were never provided or executed. The $1,944,580 from the 2023 Implementation Plan for CP200065 (Bridge) is reflected in of Amendment 1 (Attachment 4), and the reduction for the programmed funds for CP200064 (Widening) is reflected in Amendment 1 (Attachment 3).
At the October 10, 2025, City Council meeting, staff recommended the following projects under the implementation plan call:
|
|
Proposed Programming Period |
|
|
|
|
Project |
25/26 |
26/27 |
27/28 |
28/29 |
29/30 |
|
Hwy 59 Black Rascal Bridge Widening |
$4,000,000 |
$4,000,000 |
|
|
|
|
Hwy 59 Widening Ph 1 |
$(4,000,000) |
|
|
|
|
|
Mission Ave Widening |
$1,000,000 |
|
$1,000,000 |
$7,500,000 |
|
• Highway 59 Widening Ph 1 - Requested to reprogram $4,000,000 from the Highway 59 Widening project to the Black Rascal Bridge project
• Highway 59 Black Rascal Bridge - Requested the $4,000,000 in reprogrammed funds from the Highway 59 Widening project and requesting an additional $4,000,000 for project construction
• Mission Avenue Widening - Project scope and funding updates to phase the widening into two phases. Phase 1 will consist of widening Mission Avenue from Henry Street to Mather Road, and Phase 2 will consist of widening from just west Mather Road to approximately ¼ mile west of State Highway 59.
The city submitted the call for project applications for the above requests and the MCAG Governing Board approved said requests at their March 19, 2026, meeting.
The 2025 Implementation Plan was adopted on May 21, 2026, by the MCAG Governing Board.
Amendments No.1
As mentioned above, staff requested redirecting $4,000,000 of Measure V Regional from CP200064 (Highway 59 Widening Project) to CP200065 (Highway 59 Black Rascal Bridge Project), as well as requesting an additional $4,000,000, which will be programmed in fiscal year 28/29 to be added in the 2025 Implementation Plan update to fully fund the bridge project. Staff also requested leaving a balance of $2,500,000 in the Highway 59 Widening Phase 1 project for right-of-way acquisition purposes.
MCAG created the attached amendments (Attachments 3 and 4) to the existing funding agreements to reflect these approved changes and allow the project to move into the final phases of right-of-way acquisition and construction for the Bridge Widening project.
Since staff never originally received amendments for the 2023 Implementation Plan updates, a budget true up is now required to bring both projects to their current MCAG allocated balances.
CP200064 - Highway 59 Widening started with a project budget of $5,944,580 and is now being requested to be reduced to $2,500,000.
CP200065 - Highway 59 Black Rascal Bridge started with a project budget of $4,090,000 and is now being requested to be increased to a total project budget of $10,034,580.
The additional $4,000,000 request is programmed in fiscal year 28/29 per the 2025 Implementation Plan (Attachment 5). MCAG has verified that the funding could be made available in either fiscal year 27/28 or 28/29, if we were ready to move into construction sooner. Staff will incorporate this request to increase the budget by $4,000,000 into the future budget.
Staff is requesting approval of Amendments No. 1 for both projects in order to move forward with the right-of-way acquisition and construction phases for CP200065 Highway 59 Bridge Widening.
IMPACT ON CITY RESOURCES
Funding for CP200064 and CP200065 - Highway 59 Widening Phase 1 and Highway 59 Black Rascal Bridge are on a reimbursement basis. City pooled cash will be used to cover expenditures first until reimbursement is received from MCAG. The expenditures and reimbursements of Measure V regional projects will be tracked in Capital Improvement Fund 5002 - Measure V Regional Projects.
ATTACHMENTS
1. Executed Measure V Regional Funding Agreement for the Highway 59 Black Rascal Bridge Project
2. Executed Measure V Regional Funding Agreement for the Highway 59 Widening Phase 1 Bridge Project
3. Amendment 1 to Funding Agreement for Highway 59 Widening Phase 1 Project
4. Amendment 1 to Funding Agreement for Highway 59 Black Rascal Bridge Project
5. MCAG Measure V 2025 Implementation Plan