Measure X FY 2018/19 Annual Audit:

1. RECEIVE an update on the results of the Measure X annual audit and compliance reporting for 2018/19; and
2. APPROVE remediation measures for the Cities of Pacific Grove and Salinas to remain in compliance with the Measure X implementing ordinance.

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% of each 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 Measure X Policies and Procedures, the Citizens Oversight Committee established a subcommittee on October 15, 2019 to conduct the independent review 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 Executive Committee requested that Agency staff provide assistance to the City of Greenfield in completing their audits.

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: