Merced County Transportation Sales Tax Expenditure Plan November 2005 Prepared by Merced County Association of Governments 369 West 18 th Street Merced, CA 95340 209-723-3153 http://mcag.cog.ca.us
Summary This Plan will guide the use of more than $446 million in locally raised and locally controlled transportation funds. The revenue will be generated through the passage of the Merced County Transportation Measure, a ½ cent sales tax, if approved by the voters in the June 6, 2006 election. Why does Merced County need a transportation sales tax? Our transportation system is in crisis. There is not enough money available to maintain our roads or to build improvements to relieve congestion. We are falling farther behind each year. Existing sources of revenue are simply inadequate, because our needs have increased while funding has not. A sales tax is one of the only means of raising money that we can do ourselves. About $446 million would be raised over the 30-year life of a ½ cent tax, leveraging an additional $1 billion from State and Federal sources. What will this plan do for me? Local street and road maintenance and repairs will be significantly increased. Improvements such as road widening and new roadways will be built in communities throughout Merced County. See page 4. Transit service ( The Bus ) will be improved by adding routes and increasing frequency on existing routes. We already pay taxes for roads. Where does that money go? It goes to roads. Unfortunately, it is not enough, and hasn t been for years. Gas taxes have not increased since 1994, so buying power has decreased while road use has gone up dramatically. What about development? Will newcomers pay for new roads? Yes. Most areas have impact fee programs to charge new growth for its impacts on the transportation system. Also, there is now a Regional Transportation Impact Fee to help fund regional projects necessary to serve new growth. How can I be sure the money will be spent well? The money will be put into special accounts that can only be spent on transportation. An independent oversight committee of citizens will annually audit the funds, review the projects, and report its findings to the public. How will the money be spent? The Expenditure Plan provides for investments in three categories. Each category will receive a percentage share of sales tax revenues. Up to one percent of the revenues can be allocated for plan administration. Category Percent Share Expenditure (30 years) 1. Priority Projects Countywide 50.0 % $223 million 2. Local Street & Road Maintenance 44.5 % $198 million 3. Transit Service Improvements 4.5 % $20 million Administration & Audit 1.0 % $4.5 million Page 1
Background Our transportation infrastructure is overburdened as our demand to travel continually increases. This comes as no surprise to the people who live or work in Merced County. Transportation issues are consistently identified as a primary concern of County and Valley residents. There is no single solution to our transportation problems, and there is no single source that can fully fund all of our mobility needs. Transportation projects in Merced County are funded in a variety of ways, including local shares of gas tax and sales tax, grants from federal and state government, and other means. However, current funding will not be adequate to maintain the existing transportation system and will not keep pace with the growth in demands of an increasingly mobile Merced County over the coming 30 years. One of the few avenues for funding that can be directly controlled by Merced County residents is a transportation sales tax. While the sales tax will not close the funding gap, it provides a significant opportunity to improve our transportation system. This Transportation Sales Tax Expenditure Plan outlines a program for spending a half-cent (1/2- cent) increase in sales taxes, to be entirely dedicated to transportation purposes in Merced County. This plan is intended to provide a high degree of accountability, while maintaining the flexibility needed to respond to emerging transportation issues over a 30-year period. This Transportation Sales Tax Expenditure Plan was developed with extensive input from the public and from the cities and communities throughout the County. Dozens of public meetings were held to gather opinions and the Plan was crafted in response to what was heard. The plan was further shaped by input from the cities and County of Merced. Becoming a Self-Help County will help Merced get its fair share of state and federal sources. While a sales tax alone will not solve all of our transportation problems, implementing a transportation sales tax, approved by two-thirds of the voters of Merced County, opens new opportunities for leveraging or matching our local money with state and federal sources that require a local share. Using leveraging, our local sales tax has the potential of generating more funding from outside sources than the amount generated locally, while setting Merced County on a course of independence that will allow us to determine our own priorities for transportation projects. Page 2
Revenue The transportation sales tax will be ½ %; that is an additional ½ cent on each dollar of taxable goods and services. Over the 30-year duration of the tax, it is estimated that $446 million would be raised. Expenditures described in this plan are based on this estimate, but actual expenditures will depend on the actual revenues received, which could be more, or less. It is expected that additional revenues will be attracted to Merced County because of its status as a Self-Help County. These would come in the form of state and federal dollars that would otherwise not come to this county. It is estimated that up to $1 billion in additional funds could come to Merced County, based on the experiences of other counties, which have sales taxes specifically for transportation. Expenditure Categories The Expenditure Plan provides for investments in three categories. Each category will receive a percentage share of sales tax revenues. Up to one percent of the revenues can be allocated for plan administration. Category Percent Share Expenditure (30 years) 1. Priority Projects Countywide 50.0 % $223 million 2. Local Street & Road Maintenance 44.5 % $198 million 3. Transit Service Improvements 4.5 % $20 million Administration & Audit 1.0 % $4.5 million Descriptions of program categories follow. 1. Priority Projects Countywide Fifty percent (50%) of the funds will be allocated to this program. The Governing Board of the Merced County Association of Governments is the decision-maker for allocating these funds. The purpose of this program is to fund improvements, which will increase safety, increase capacity, reduce congestion, improve access, and promote economic development. Table 1 lists the priority projects countywide. Page 3
Table 1: Priority Projects Countywide Project Where Plan Allocation Other Fund Sources* Hwy. 99 Widening to 6 lanes throughout County Delhi, Livingston, $85,000,000 $370,000,000 Atwater, Merced Sidewalks, curbs and gutters in downtown Atwater Atwater $1,500,000 $0 Bellevue Rd. connection from Hwy. 99 to Atwater Atwater $4,000,000 $3,000,000 Atwater Blvd. Improvements Atwater $5,000,000 $0 Bradbury Ave. Reconstruction - Hwy. 165 to Ballico Delhi, Hilmar, Ballico $6,000,000 $0 Schendel Ave. sidewalks Delhi $500,000 $0 El Capitan Way and Delhi Ave. sidewalks Delhi $1,000,000 $0 Dos Palos Street reconstruction Dos Palos $6,000,000 $500,000 Hwy. 59 widening from Mission Ave. to Hwy. 152 El Nido, Dos Palos, $5,000,000 $45,000,000 Merced Franklin Rd. sidewalks, shoulders Franklin $600,000 $0 Ashby Rd. shoulders and repaving Franklin $1,500,000 $0 Hwy. 59 Re-alignment and new interchange on 99 Franklin, Atwater, $10,000,000 $127,000,000 Merced Gustine Streets reconstruction Gustine $2,000,000 $500,000 Gustine truck route / bypass Gustine $4,000,000 $3,100,000 Intersection Improvements on Lander Ave. Hilmar $900,000 $0 Pedestrian bridge to schools over Lateral 7 Canal Hilmar $200,000 $0 Hwy. 165 widening from Hilmar to Hwy. 99 Hilmar $5,000,000 $20,000,000 Hwy. 165 re-alignment bypassing Hilmar Hilmar, Delhi, Stevinson $5,000,000 $120,000,000 Buchanon Hollow Rd. reconstruction Le Grand $1,500,000 $1,000,000 Main St. reconstruction Livingston $3,500,000 $500,000 Hammatt Avenue interchange improvement Livingston $2,500,000 $8,000,000 Winton Parkway interchange improvement Livingston $2,500,000 $8,000,000 Los Banos Loop : Pioneer Rd. and Overland Ave. Los Banos $1,000,000 $10,000,000 Hwy. 152 Los Banos bypass Los Banos $10,000,000 $260,000,000 Hwy. 165 widening from Pioneer to Henry Miller Los Banos $5,000,000 $20,000,000 Buhach Rd. widening McSwain $1,400,000 $1,000,000 Buhach / Ashby signalize and rechannel McSwain, Atwater $1,000,000 $1,500,000 Mission Ave. improvement Merced $4,000,000 $8,000,000 Railroad under crossing at G St. Merced $5,000,000 $8,000,000 Campus Parkway - Phase One Merced $10,000,000 $57,000,000 Hwy. 59 widening (16 th St. to Black Rascal Creek) Merced $8,000,000 $23,000,000 Hwy. 59 widening from Childs to Mission Ave. Merced $5,000,000 $15,000,000 Hwy. 140 widening from Santa Fe to Campus Pkwy Merced $5,000,000 $14,000,000 Signalize Plainsburg Rd. at Hwy. 140 Planada $400,000 $0 Planada sidewalks and curbs Planada $1,200,000 $0 Hwy. 140 Bradley Overhead replacement Planada, Merced $8,000,000 $39,000,000 Safe Routes to School project Santa Nella $200,000 $0 Emma St. sidewalks Snelling $300,000 $0 South Dos Palos sidewalks South Dos Palos $300,000 $0 Signalize 3 rd Ave. at Hwy. 165 Stevinson $500,000 $100,000 3 rd Ave. shoulders and repaving Stevinson $1,500,000 $1,000,000 Santa Fe / Winton Way re-alignment (eng. only) Winton $1,500,000 $500,000 Winton sidewalks Winton $500,000 $500,000 TOTAL of all projects $223,000,000 $1 billion+ Page 4
2. Local Roads Maintenance and Improvements Forty-four and one-half percent (44.5%) of the funds will be allocated to this program. The decision-maker for these funds will be the local elected council or board. This program provides money for local street and road repairs, routine maintenance, safety improvements, rebuilding roads that have deteriorated due to a lack of funds, and related improvements. Every year, the funds will be divided among the seven local governments according to a formula, as follows: the County of Merced will receive half (50%) of the funds; each city will receive a base amount of $75,000; the remainder will be allocated to the cities in shares based 2/3 on their population and 1/3 on their maintained centerline road miles. Table 2 shows how the funds would be divided by jurisdiction assuming $198,000,000 is available over 30 years for this program. Table 2: Allocations for Local Roads Maintenance and Improvements Jurisdiction Average 30 Year Total Annual Allocation City of Atwater $550,000 $17,000,000 City of Dos Palos $225,000 $6,500,000 City of Gustine $225,000 $6,000,000 City of Livingston $325,000 $9,500,000 City of Los Banos $550,000 $17,000,000 City of Merced $1,425,000 $43,000,000 County of Merced $3,300,000 $99,000,000 Total $6,600,000 $198,000,000 Page 5
3. Transit Service Improvements Four and one-half percent (4.5%) of the funds will be allocated to this program. The Merced County Transit Joint Powers Authority is the decision-maker for allocating these funds. It is estimated that $20 million will be available over 30 years, or about $660,000 per year. Transit service, transit vehicle purchase, and related transit capital improvements are an essential element of the county s transportation system. Projects which could be funded under this program include: stabilization of fares for seniors and the disabled extension of service periods new and extended routes new and low emission transit vehicles transit stops and transfer facilities and maintenance/fueling facilities The use of the funds will be consistent with the Short-Range Transit Plan and Annual Transit Service Plan. Page 6
Administration Authority and Governance This transportation sales tax is authorized under the Local Transportation Authority and Improvement Act, California Public Utilities Code Section 180000 et. Seq. In approving this tax, the voters will authorize that the Merced County Association of Governments (abbreviated MCAG and referred to as Association hereafter) be given the responsibility to administer the tax proceeds. The Association s policy- and decision-making body is its Governing Board, which consists of 11 elected officials in Merced County, as follows: all five members of the Merced County Board of Supervisors one elected representative from each of the six cities in the county, to be selected by the elected governing body of each city Staffing and Administration Expenses The Association will employ and/or contract staff and professional assistance required to administer the proceeds of the tax and implement this Expenditure Plan. The total cost of salaries and benefits for administrative Association employees will not exceed 1% of the revenues generated by the authorized sales tax collected to support this Plan. The Association will prepare an annual report, identifying the total expenditures for administration, as well as other costs associated with delivering the program. Duration of Tax The duration of the tax will be 30 years. It will begin on September 1, 2006. It will end on August 31, 2036. Use of Funds Sales tax proceeds will be used to pay for transportation purposes, specifically the programs and projects outlined in this Expenditure Plan, and may not be used for any other purpose. Local jurisdictions may not redirect monies currently being used for transportation purposes to other purposes and then replace the redirected funds with dollars provided by this tax. Amendments to the Plan The Association may annually review and propose amendments to the Expenditure Plan to provide for the use of additional federal, state, or local funds, to account for unexpected revenue, or to take into consideration unforeseen circumstances. Amendments to this Plan will require a majority vote (6 of 11 members) of the Governing Board of the Association, following a noticed public hearing and a 45-day public comment period. Page 7
Annual Budget An Expenditure Plan Budget will be adopted by the Association each year. The Budget will estimate the expected sales tax receipts and planned expenditures for administration, programs, and projects. The Budget will also identify the priority for projects and the schedule for each project s implementation based on its readiness, the availability of funds from other sources, and other relevant criteria. The Budget will be adopted at a public meeting of the Association s Governing Board. Bonding Authority The Association will be authorized to use bond financing as an alternative to pay as you go financing. The Association will have the authority to issue bonds payable from the proceeds of the tax for the construction of needed transportation improvements. The Association, in allocating the annual revenues from the tax, will be responsible for meeting all debt service requirements prior to allocating funds for other projects. Establishment of Special Accounts The Association and each local jurisdiction receiving funds from the tax shall deposit them in a separate interest bearing Transportation Improvement Account. Any interest earned on funds from the tax will be expended only for those purposes for which the funds were deposited, or will be returned to the Association. Development Mitigation To receive funds from the Local Roads Maintenance and Improvements program of this plan, a jurisdiction must have a development mitigation program and be collecting transportation impact fees, including, but not limited to, the Regional Transportation Impact Fee, to insure that new growth pays for its share of the transportation infrastructure costs associated with that growth. Accountability This plan has been designed to provide accountability to the taxpayers and maximum opportunity for public involvement. Public Proceedings All business of the Association will be conducted in an open and public meeting process. All decisions will be conducted in compliance with the Brown Act, also known as the Open Meeting Law, which requires that meetings of public bodies must be open and public, and actions may not be secret. The Association will also ensure that adequate public involvement has been included in the preparation of all plans and budgets. Page 8
Audit The Association will hire an independent auditor who will audit all sales tax revenues and expenditures, ensuring that they are made in accordance with the plan. Citizen s Advisory Committee The Association s Citizens Advisory Committee will serve as a watchdog, overseeing implementation of the Plan. It will report directly to the public and will be charged with reviewing all matters related to the Expenditure Plan. The Committee will generally meet once a month. The Committee reviews Association staff work, recommends actions to the Association Governing Board, and provides staff with input on transportation planning issues. With passage of the sales tax, the responsibilities of the committee will be expanded to include: issuance of a report, on at least an annual basis, to inform Merced County residents how the Expenditure Plan funds are being spent review and comment on the independent audit Citizens Advisory Committee members are private citizens who are not elected officials at any level of government, nor public employees from agencies that either oversee or benefit from the proceeds of the sales tax. Membership is restricted to individuals who live in Merced County. Members must submit a statement of financial disclosure and membership will be restricted to individuals with no economic interests in any Association projects or any projects of its member jurisdictions. The Committee is designed to reflect the diversity of the County and includes 14 members. Membership is as follows: Five at-large members will be selected with a consideration to geographic distribution in the county. Nine members will be selected to reflect a balance of viewpoints across the county. Page 9