Three Year Budget:
Attachment 1 is the budget for the three-year period from July 1, 2019 to June 30, 2022. Staff proposed several assumptions for the operating budget, which were reviewed by the Executive Committee in November 2018.
Operating Revenues: The Agency receives regular state planning and related operating funds from three primary state sources: Rural Planning Assistance, Project, Programming and Management funds, and Local Transportation Funds. Since November 2016, 1% revenues for Measure X administration have also been budgeted. In addition, TAMC receives funding related to specific project and program administration from several sources, which are estimated conservatively: Service Authority for Freeways and Expressways program, state rail project grants, Measure X project/program funds and railroad leases. Staff will continue to budget staff time in new grants, such as the recently received Rail Network Integration and Regional Conservation Investment Strategies studies. In FY 16/17 the Congestion Management Program assessment on cities and counties was changed to a Regional Transportation Planning Assessment; the contribution amounts will stay at the same dollar level as in prior years but monies will need to be paid from a local funding source. Staff time will be billed to all of these revenues, and expenditures will be tightly controlled.
The Transportation Agency continues to subsidize the activities of the Regional Impact Fee Agency. The budget is projecting the annual use of $10,000 in fee revenue to pay for operating expenses, although the ongoing annual cost to the Transportation Agency for this activity is much higher. Expenditures on regional fee activities are being tracked with the expectation that this cost will be repaid to the Transportation Agency as more fees are collected in the future.
Potential revenue risks to the agency continue to include a reduction in federal and state planning funds and minimal new development and therefore reduced administration funds for the Regional Development Impact Fee Agency. No state funding other than Planning, Programming and Monitoring has been cut recently, but staff will keep the Board advised. Should major revenue reductions occur, the agency would have to reevaluate its revenues, costs and mission to determine essential vs. discretionary activities. Billing staff time to specific projects, when possible, will continue to be a priority.
Operating Expenses: A 3% cost of living allowance is proposed for fiscal year 19/20. Merit increases and promotions will continue to be available subject to performance.
In order to seek ways to restrain rising health care costs, while still providing and protecting quality care, the Agency revised its cafeteria health benefit allowance for its active employees in FY 2011/12. The changes eliminated several variables that existed, permitted the Agency to better forecast its obligation under the cafeteria plan, and reduced the liability for future premium increases. Employees have the flexibility to choose from several plans that are offered by CalPERS. In order to offset recent premium cost increases, a change to TAMC’s cafeteria plan health allowance is proposed, which would result in an increase of $129.51/month for general employees and $259.02/month for management as of FY 2019/20. The last change to this allowance was made three years ago. No change is proposed to the cash-out allowance.
The Agency contribution to CalPERS in FY 2019/20 is projected to be higher than last year due to CalPERS lowering the discount rate (assumed rate of return on investments) from 7.25% to 7.0%. The Agency paid off its side-fund liability in December of 2013 and made a sizeable payment towards its unfunded liability in June 2016. These two factors help in keeping contributions lower than they would have otherwise been. However, due to Caltrans requiring the Agency to book the expense of the unfunded liability over a 5 year period ($110,168/year) in order to be reimbursed, the budget continues to reflect $110,168 towards the pension contributions.
The Public Employees’ Pension Reform Act of 2013 continues to help curtail the agency’s costs in the future due to the establishment of a 2nd tier, 3-year averaging and required sharing of employee contributions with future new members. In addition, all Agency employees pay a total contribution of 3.5% towards their CalPERS. These contributions help cover increases in CalPERS retirement costs and have brought the member share by employees at the payment percentage recommended in the new pension reform law.
Direct Program: Projects, programs and consultant work are funded out of the Direct Program budget. For example, the traffic counts program is funded from the Regional Surface Transportation Program in the Direct Program budget. Caltrans audit repayment, Public Outreach, Wayfinding signage and State legislative costs are funded from the unassigned reserve. No funds are budgeted for consultant Federal legislative costs. Regional Development Impact Fees have been designated by Board action to pay for project costs related to SR 156 improvements and the Highway 68 Monterey to Salinas Scenic Highway corridor.
As a result of good fiscal management, the agency has added to its reserve in past 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 its undesignated reserve. Also, as requested by the Executive Committee, 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 each of the three budget years for Operating and Direct Program activities.
Annual Work Program:
The annual Agency Overall Work Program describes the activities to be accomplished during the fiscal year beginning July 1, and ending June 30. After the draft Overall Work Plan is approved by the Transportation Agency Board of Directors at their February 27 meeting the draft plan will be submitted to Caltrans, who reviews the document and provides comments on the state funded activities in the plan. Agency staff then incorporates comments from Caltrans, as well as comments received from the Transportation Agency Board, into to a final proposed Overall Work Program to be presented to the Board of Directors in May for adoption in conjunction with the fiscal year 2019/20 budget.
Highlights of the Draft 2019/20 Overall Work Program include:
- Assist Caltrans, Monterey-Salinas Transit and member agencies in securing funding and delivering transportation improvements.
- Continue public outreach and education activities.
- Continue implementing the Go831 traveler information program.
- Coordinate with CHP to initial removal of underutilized call boxes.
- Initial planning for the 2022 Regional Transportation Plan update.
- 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.
- Continue installing signs for routes identified in the Regional Bicycle Wayfinding Plan.
- Construct Package 1 of the Salinas Rail Extension Project and continue the right-of-way phase and final design phase for the remainder of the project.
- Continue implementing the Marina-Seaside Safe Route to School grant.
- Proceed with the Monterey County Regional Conservation Investment Strategy study.
- Measure X administration and implementation including:
- Work with Caltrans on:
- environmental review and preliminary engineering for the Monterey to Salinas State Route 68 corridor,
- final design and Right-of-Way for the SR 156/Castroville Boulvard Interchange, and
- update Project Study Report and corridor study for the US 101 Safety Improvements – South County.
- Work with City of Marina on the Imjim 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 the Highway 1 busway on the Monterey Branch Line.
- Coordinate with County of Monterey on environmental review and preliminary engineering for the SR 156-Blackie Road Extension.
- Continue environmental review and preliminary engineering for the Fort Ord Regional Trail and Greenway project.
- Initiate the Habitat Preservation/Advance Mitigation program.
- Continue to advance the Safe Routes to School program.
- Administer the Senior and Disabled Mobility program.
- Promote public outreach and transparency working with the Measure X Citizen Oversight Committee.
The next steps in the process are to present the draft budget and Overall Work Program to the Board of Directors in February and in May to bring the final budget and Overall Work Program to the Executive Committee for review and the Board of Directors for adoption.