Meeting_Body
FINANCE, BUDGET, AND AUDIT COMMITTEE
OCTOBER 15, 2026
Subject
SUBJECT: CALIFORNIA SB1 STATE OF GOOD REPAIR PROGRAM
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
APPROVE the Resolution in Attachment A that:
A. AUTHORIZE the Chief Executive Officer (CEO) or their designee to claim $45,745,590 in fiscal year (FY) 2026-27 State of Good Repair Program (SGR) grant funds as the Regional Entity for Los Angeles County for this program;
B. APPROVE the regional SGR Project List for FY2026-27 in Attachment B; and
C. CERTIFY that Metro will comply with all conditions and requirements set forth in the SB1 SGR Certification and Assurances document, applicable statutes, regulations and guidelines.
Issue
ISSUE
In order to receive SB1 SGR grant funds for Metro and other eligible operators in Los Angeles County, Metro, as the Regional Entity, is required to submit an adopted Board resolution approving the combined project list and certifying that Metro will comply with all conditions and requirements set forth in the Certifications and Assurances documents. The recommendation, if approved, would allow Metro to meet program requirements and ensure SB1 SGR funds are available for eligible Los Angeles County agencies.
Background
BACKGROUND
As defined in The Road Repair and Accountability Act of 2017, known as Senate Bill 1 (SB1), the SGR Program provides approximately $141 million in this cycle to transit operators in California for eligible transit repair, rehabilitation, and capital projects to help keep transit systems in a state of good repair. These new investments will lead to cleaner transit vehicle fleets, increased reliability and safety, and reduced greenhouse gas emissions.
Pursuant to PUC Section 99312.1, the funds for the SGR Program are distributed to eligible agencies using the State Transit Assistance formula. This formula distributes half of the funds based on population and half according to transit operator revenues. Within Los Angeles County, the revenues will be distributed according to the Metro Board-adopted Measure R 20% Bus Operations formula.
Discussion
DISCUSSION
Caltrans guidelines state that eligible transit operators shall submit their own project requests directly to Caltrans and provide a list of those projects to their Regional Entity, as defined by Public Utilities Code (PUC) Sections 99313 and 99314. For Los Angeles County, Metro is both the Regional Entity and a direct recipient of these funds.
Program requirements and deadlines are discussed at Bus Operations Subcommittee (BOS) meetings. Metro staff are available to provide guidance if requested. However, each individual agency is ultimately responsible for selecting their own projects and submitting their requests to Caltrans' online SMART system. Caltrans staff reviewed all submittals, asked follow-up questions if necessary, and sent the final list of county projects to Metro in early September. The 2026-2027 project list is included in Attachment B. Examples of capital improvements contained in the project list include replacement vehicle purchase, bus and rail preventive maintenance, rehabilitation of bus and facility equipment, replacement of bus stop shelters, electrification of bus maintenance facility and transit facility improvements.
Metro is required to submit the combined project list to Caltrans by September 1, 2026. The submittal package must include an adopted Board resolution approving the Project List and certifying that Metro will comply with all conditions and requirements set forth in the Certifications and Assurances documents. The final project list was not received by Metro until September 3, 2026, too late to include in the September Board cycle. Caltrans has accepted a draft resolution with the project list submittal pending receipt of a Board-adopted resolution. Therefore, staff is seeking Board approval of the resolution contained in Attachment A.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
The requested actions will provide additional funding for state of good repair activities that will enhance the safety of Metro's and the Municipal Operators' customers and employees.
Financial_Impact
FINANCIAL IMPACT
Adoption of the SGR resolution would positively impact the region by making an estimated $45.7 million available to support state of good repair efforts for Metro and the Municipal Operators. The actual amount is dependent upon SB1 revenues received during the year.
Impact to Budget
Claiming SGR funds will have a positive impact on the FY27 Budget, as Metro is one of the regional recipients of these funds. These funds are only eligible for capital projects.
Equity_Platform
EQUITY PLATFORM
This program helps fund rehabilitation and state of good repair activities for Metro and the Municipal Operators throughout Los Angeles County. Projects include bus stop shelter replacements, zero emission vehicles, charging facilities and repairs to existing vehicles and facilities. The SB1 SGR funded projects will focus on reducing greenhouse gas emissions while enhancing the customer experience in Equity-Focused Communities (EFCs). Transit riders in EFCs will benefit significantly from much needed service and capital improvements such as bus replacements projects and improved air quality.
Vehicle_Miles_Traveled_Outcome
VEHICLE MILES TRAVELED OUTCOME
VMT and VMT per capita in Los Angeles County are lower than national averages, the lowest in the SCAG region, and on the lower end of VMT per capita statewide, with these declining VMT trends due in part to Metro’s significant investment in rail and bus transit.* Metro’s Board-adopted VMT reduction targets align with California’s statewide climate goals, including achieving carbon neutrality by 2045. To ensure continued progress, all Board items are assessed for their potential impact on VMT.
As part of these ongoing efforts, this item is expected to contribute to further reductions in VMT. This item supports Metro’s systemwide strategy to reduce VMT through maintenance activities that will maintain and further encourage transit ridership. This item is a funding requirement and provides transparency and accountability. Metro’s Board-adopted VMT reduction targets were designed to build on the success of existing investments, and this item aligns with those objectives.
*Based on population estimates from the United States Census and VMT estimates from Caltrans’ Highway Performance Monitoring System (HPMS) data between 2001-2019.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The recommendation supports the following Metro Strategic Plan Goal:
Goal # 5: Provide responsive, accountable, and trustworthy governance within the Metro Organization.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Board may choose not to approve the resolution in Attachment A. Staff does not recommend this alternative because it would risk loss of the region's FY26-27 SGR fund allocation.
Next_Steps
NEXT STEPS
Upon approval, staff will submit the Resolution to Caltrans.
Attachments
ATTACHMENTS
Attachment A - Resolution to Accept and Distribute Los Angeles County SGR Funds
Attachment B - Submitted Project Listing From Metro & Municipal Operators
Prepared_by
Prepared by: Hasmig Chilingarian, Senior Manager, Local Programming,
(213) 922 3066
Rufus E. Cayetano, Senior Director, Finance, (213) 922-2379
Cosette Stark, Executive Officer, Finance, (213) 922-2822
Reviewed_By
Reviewed by: Michelle Navarro, Chief Financial Officer (Interim), (213) 922-3056
