RECOMMEND that the Board APPROVE Resolution 2018-06 adopting the fiscal year 18/19 budget and overall work program and estimated budgets for fiscal years 19/20 and 20/21.

The resolution approves the final budget and overall work program for fiscal year 18/19, including federal, state and local grant authorizations and certifications, and out year budgets for fiscal years 19/20 and 20/21.  At its February adoption of the draft budget, the Board did not have any suggested changes for the final budget. This version makes changes to reflect the latest information on revenues and expenditures.

The Transportation Agency for Monterey County gets majority of its funding from state or federal sources. The funding is usually specific to the project or program for which it is granted and cannot be used to cover expenditures of a different project or program, e.g. the funding received for the call box program can only be used for motorist aid programs.

The Agency budget separates expenditures into two types: operating and direct program. Operating expenditures include staff salaries and benefits, materials and supplies, and equipment purchases.  Direct program expenditures include outside consultants, contracts, expenditures that apply to specific overall work program tasks such as rail program, highway projects, bicycle and pedestrian program. The proposed fiscal year operating expenditure budget is $3,196,343, a net increase over fiscal year 2017/18 of $282,429. The proposed fiscal year direct program expenditure budget is $18,508,891, a net decrease over fiscal year 2017/18 of $2,978,874.

Three Year Budget

Changes since the Board reviewed the draft budget on February 28, 2018 are as follows:

Operating Budget                 February Draft                        May Final              Difference

Revenue & Expenditures        $3,075,444                           $3,196,343         + $120,899

Revenues changed due to:

1.      Measure X Projects/Program funds increased by $100,000.

2.      SR 156 Project Management increased by $24,796

3.      Marina/Seaside Safe Routes to School funds (new grant) increased by $15,710.

4.      Reserve usage decreased by $19,607.

Expenditures changed due to:

1.    Addition of a part-time Principal Engineer staff position added $103,574.

2.    2 months overlap of Planner position added $17,325.

Capital Outlay decreased by $15,000; the funds budgeted in the FY 18/19 draft budget for a phone system will be expended in FY 17/18.

Direct Programs                    February Draft                  May Final           Difference

Revenue & Expenditures        $18,021,275                    $18,533,891         + $512,616

Revenues changed due to:

1.    Freeway Service Patrol - new SB 1 funding added $160,137.

2.    SAFE motorist aid funding to match the SB 1 Freeway Service Patrol  increase added $49,606.

3.    Seaside/Marina Safe Routes to School Caltrans planning grant added $244,404.

4.   Seaside/Marina Safe Routes to School Measure X funds to match the Caltrans planning grant added $32,469.

5.    Rural Planning Assistance increased by $25,000.

6.    Undesignated Reserve usage increased by $1,000.

Expenditures changed due to:

1.    Freeway Service Patrol contract costs for additional service added $209,743.

2.    Seaside/Marina Safe Routes to School consultant expenditures added $276,873.

3.    Leadership Training Administration pass-through added $25,000.

4.    Legislative contract expenditures increased by $1,000.

Due to the passage of Measure X in November 2016, the Agency has budgeted additional expenditures for administration and program/project management activities. It is possible that expenses for the administration of the sales tax measure will exceed the 1% allowed for salaries and, so non-Measure X funds are also budgeted. Additionally, there will be other direct (non-salary/benefits) expenditures, such as consultant and legal costs, which the Agency proposes to utilize the sales tax revenues to cover off the top, prior to distributing funds to the other Measure X subaccounts.

As a result of good fiscal management, the agency has grown its undesignated reserve over the past several years. As designated in its GASB 54 fund balance policy, the agency will continue to maintain a minimum of a six-month operating budget balance in this undesignated reserve. Any excess over the six-month level is designated as a “contingency” fund to cover short-term revenue shortfalls or unanticipated expenses. A portion of the undesignated contingency fund is forecast to be used in FY 18/19, 19/20 & 20/21 for Operating and Direct Program activities.

Potential risks to the agency continue to include a reduction in federal, state or planning funds and minimal new development and therefore reduced funds for the Regional Development Impact Fee Agency. No state funding has been cut or proposed for cuts due to transportation funding safeguards, but staff will keep the Board advised. Should major revenue reductions occur, the agency will need to reevaluate its revenues, costs and mission to determine essential vs. discretionary activities. Billing specific projects for staff time, when possible will continue to be priority.

Benefit and salary changes adopted in the draft February budget are set forth in the resolution, as well as the authority for out-of state travel trips.

Annual Work Program

The final overall work program primarily contains only minor changes made in response to comments by Caltrans. These edits effectively have very little effect on the 2018/19 work program that the Executive Committee and Board reviewed in February. The one exception is the new Work Element 1000, which adds $25,000 in Rural Planning Assistance funds above the Transportation Agency's normal allocation of Rural Planning Assistance funds.  These funds were added to the Agency's budget and overall work program at the request of Caltrans, to administer funds that will be used to provide scholarships for rural counties staff to attend leadership training provided by CalCOG.

Highlights of the 2018/19 Overall Work Program, and how they implement the adopted TAMC Goals, are as follows:

Deliver Projects and Programs

• Measure X administration and project/program delivery including:

• Work with Caltrans on environmental review & preliminary engineering for the Monterey to Salinas Route 68 corridor and final design & Right-of-Way for the SR 156/Castroville Boulevard Interchange project.
• Work with City of Marina on the Imjin Road section of the Marina to Salinas Multi-Modal Corridor.
• Work with City of Pacific Grove and Caltrans on Holman Highway compete streets projects.
• Work with MST and Caltrans to implement results from the Highway 1 busway study.
• Initiate environmental review and preliminary engineering for the SR 156-Blackie Road Extension.
• Initiate environmental review and preliminary engineering for the Fort Ord Regional Trail and Greenway project.
• Update Project Study Report for the US 101 Safety Improvements – South County.
• Initiate the Habitat Preservation/Advance Mitigation program.
• Coordinate the Pavement Management program.
• Implement the Safe Routes to School program and administer the Senior and Disabled Mobility program.

• Initiate construction of a portion of the improvements at the Salinas Intermodal Center and continue right-of-way and final design work for the Salinas Rail Extension Project.

• Finalize the following corridor studies in coordination with partner agencies:

• Pajaro to Prunedale - G12 corridor
• Canyon Del Rey (SR 218) corridor

• Assist Caltrans, Monterey-Salinas Transit and member agencies in securing funding and delivering transportation improvements.

Leverage Matching Funds

• Collect data needed to apply for the next cycle of SB 1 matching funds and Federal Lands Access Program.

• Position projects to be "shovel-ready" for the next grant funding cycles.

Inform and Involve the Public

• Educate the public on the benefits of SB 1 matching funds to Monterey County.
• Publicize Measure X accomplishments and upcoming improvements.
• Continue to integrate a strong public input component in all project phases, from Corridor Study to Environmental Review/Design to construction. 

Plan for Future Innovation

• Reach out to major employers and schools to help reduce and manage trips with the Traveler Information Program.
• Support local utilization of the Complete Street guidelines and implementing other components of the region’s Sustainable Communities Strategies.
• Fund bicycle racks and related hardware as part of the Bicycle Secure Program.
• Install signs for initial routes identified in the Regional Bicycle Wayfinding Plan.
• Initiate the Seaside/Marina Safe Routes to School program.

A summary of the Overall Work Program is attached to this report.