RECEIVE report on audit process and ACCEPT the Transportation Safety and Investment Plan (Measure X) audit report for fiscal year ending June 30, 2017.

The auditors found no instances of noncompliance that are required to be reported under Government Auditing Standards, nor did they note any matters involving the internal control over financial reporting and its operation that they consider to be material weaknesses.

The auditors did not charge for the report in FY 16-17, as the ordinance was only in effect for April, May and June 2017.  The total funds and interest collected during the audit reporting period was $4,942,342. Payouts and expenditures made during the audit period were $3,334,281. The Transportation Safety and Investment Plan has a fund balance of $1,608,061 as of June 30, 2017.

The Transportation Agency has fiduciary responsibility for the administration of the Transportation Safety and Investment Plan (Measure X) funds. Ordinance 2016-01 was passed by 67.7% of the Monterey County voters in November 2016 and started being collected effective April 1, 2017.

Measure X, is anticipated to generate an estimated $20 million annually, for a total of $600 million over thirty years. The funding source is a retail transactions and use tax of 3/8 cents. The revenue from the sales tax measure can only be used to fund transportation safety and mobility projects in Monterey County. The trust fund’s administrative costs are paid for by the Transportation Agency for Monterey County and then reimbursed to the Agency as specified in the Measure X documents.

Based on extensive community and stakeholder input, the Measure X plan established priorities to:

• Maintain local roads and repair potholes
• Increase safety and reduce congestion
• Improve transportation for youth, seniors, people with disabilities and working families
• Make walking and biking safer

Measure X funds are divided into two programs:
1. Local road maintenance, pothole repairs and safety: 60% of Measure X funds are allocated to the County of Monterey and incorporated cities for local street and road safety and maintenance improvements.
2. Regional safety, mobility and walkability: 40% of Measure X funds are allocated to regional safety and congestion relief, transit and bicycle/pedestrian projects and expended on projects as prioritized in the Strategic Expenditure Plan.

The purpose of the audit is to confirm that the Transportation Agency for Monterey County complied with Ordinance 2016-01-Transportation Safety and Investment Plan, that the financial statements are free of material misstatement and assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

Moss, Levy & Hartzheim, Certified Public Accountants, completed the audit for fiscal year ending June 30, 2017. The auditors found no instances of noncompliance that are required to be reported under Government Auditing Standards, nor did they note any matters involving the internal control over financial reporting and its operation that they consider to be material weaknesses.

Attached with this report are the summary tables from the audit ending June 30, 2017. The audit is also available on the Agency website: http://www.tamcmonterey.org/information/audits/index.html.