RECEIVE an update on the results of the Measure X annual audit and compliance reporting for 2018/19.

Approved by the 69% of the voters in 2016, Measure X was projected to generate an estimated $20 million annually, for a total of $600 million over thirty years.  Revenues have been collected since April, 2017, and in fact, the receipts for fiscal year 2018/19 totaled $30,855,130. The funding source is a retail transactions and use tax of 3/8% per dollar spent. The revenue from the sales tax measure can only be used to fund transportation safety and mobility projects in Monterey County.  A maintenance of effort requirement exists to assure that the cities and county do not use Measure X funding to backfill prior levels of transportation expenditures.

The Transportation Agency has fiduciary responsibility for the administration of the voter-approved Transportation Safety and Investment Plan (Measure X) funds.  Each jurisdiction entered into a tax sharing agreement with the Transportation Agency in order to receive their share of Measure X Local Streets & Roads revenues.  In exchange, these agreements require the jurisdictions to submit audit reports annually to the Transportation Agency detailing the steps taken to comply with the implementing ordinance.

In accordance with the Policies & Project Descriptions for the Transportation Safety & Investment Plan, a Citizens Oversight Committee representing a diverse range of community interests was formed within 6 months of voter approval of Measure X. Members and their alternates were nominated by the organization they are representing. Additional members were nominated by the Transportation Agency Board of Directors to assure that a broad range of geographic and stakeholder interests are represented on the committee.

 The duties of the Committee as defined in the Policies & Project Descriptions for the Transportation Safety & Investment Plan are as follows:

• Conduct independent audits to assure that funds are being expended in accordance with requirements of the Transportation Safety & Investment Plan;
• Review and make recommendations on any proposed changes to the plan,  prior to the Transportation Agency Board consideration;
• Review and comment on project delivery schedules as represented in the Strategic Expenditure Plan and make recommendations to the Transportation Agency on any proposals for changing project delivery priorities; and
• Prepare annual reports regarding the administration of the program, to be presented to the Transportation Agency Board of Directors and available for public review. 

In accordance, the Measure X Citizen Oversight Committee established a subcommittee on October 15, 2019 to conduct the independent audit of the revenues and expenditure of Measure X funds. The subcommittee was asked to report the results of the audit to the full committee at their next meeting and to prepare the Measure X Annual Report.

The second year of Measure X reporting, for fiscal year 2018/19, was due on December 31, 2019. For this year's independent audits, there has been a marked improvement in compliance by the jurisdictions from the previous reporting period.  All of the jurisdictions, with the exception of Greenfield, submitted their complete reports by the December 31, 2019 deadline.  For Pacific Grove, due to unanticipated project delays, the City did not make enough project expenditures to count towards their Maintenance of Effort requirement.  For the City of Salinas, their annual report indicated that Measure X funds were spent on a project that the City had been informed by the Transportation Agency was ineligible.  In both instances, the cities have repaid the funds to their Measure X accounts from non-Measure X sources as remediation, which staff is proposing would bring them into compliance.  For Greenfield, staff is proposing to withhold future Measure X distributions until the City is back in compliance by submitting the required audit reports.

The Transportation Agency is responsible for the implementation of the regional component of Measure X.  The following is a listing of fiscal year 2018/19 expenditures of Measure X regional funds:

Principal Transportation Planner Michael Zeller will present the staff's review of the 2018/19 audit reports from the cities and county, and the Committee Chair, Paula Getzelman will present the Measure X Oversight Committee's review of the 2018/19 Audit Results.