As required by the Joint Exercise of Powers Agreement/Contribution Agreement entered into on March 13, 2008, an audit for Fiscal Year 2008/09 was performed on the finances of the East Contra Costa Regional Fee and Financing Authority. The report of the independent auditor, Wallace Rowe & Associates, Certified Public Accountants, had one finding regarding ambiguous language included in the Joint Exercise of Powers Agreement/Contribution Agreement between the East Contra Costa Regional Fee and Financing Authority and Contra Costa County. This amended Joint Exercise of Powers Agreement/Contribution Agreement includes clarifying language, which staff is recommending the Board approve.  
  
As additional background:  
Per The Highway Safety, Traffic Reduction, Air Quality and Port Security Bond Act of 2006, as approved by the voters as Proposition 1B at the November 7, 2006, general election, $19.9 billion of general bonds were obligated to fund a variety of transportation priorities.   
  
Contra Costa County (unincorporated) is expected to receive $24.5 million over the life of the program.  
  
The 2007 Budget Act and Chapter 181, Statutes of 2007, Senate Bill 88 (SB88), includes the first installment of $950 million of the Proposition 1B funds for State fiscal year 2007-08 for cities and counties. Of this amount, Chapter 314, Statutes of 2007 (AB 196), specified $550 million be allocated to cities and $400 million be allocated to counties. Contra Costa County’s share for Fiscal Year 2007-08 is $9.7million.  
  
The program allows three subsequent fiscal years to expend the funds from the date that the funds are allocated by the State Controller, and any funds not expended within that period will be returned and reallocated to other cities or counties. The funds are to be used for improvements to transportation facilities that will assist in reducing local traffic congestion and further deterioration, improving traffic flows, or increasing traffic safety. In order to receive funds, counties and cities must submit a plan to the Department of Finance for use of the amount of funds available in fiscal year 2007-08. At the end of each fiscal year, new plans must be submitted for the use of any new Proposition 1B funds provided in the most recent Budget Act.   
  
The Public Works Department has revised the Proposition 1B project list to include Phase 1 of the State Route 4 Bypass.   
  
The revenues for the State Route 4 Bypass are expected to come in at lower than expected levels resulting in funding shortfalls. The Joint Exercise of Powers Agreement/Contribution Agreement with the East Contra Costa Regional Fee and Financing Authority allows the County to contribute $3 million of the Proposition 1B funds to the East Contra Costa Regional Fee and Financing Authority to assist with funding shortfalls. In return, the County will receive $3 million plus interest of Regional Transportation Development Impact Fees for the Vasco Road Safety Improvement Project.   
  
The timeline required for the Proposition 1B funds were not known when the original project list was determined. The three-year timeline to expend the Proposition 1B funds and the funding shortfall of the East Contra Costa Regional Fee and Financing Authority for the State Route 4 Bypass Project provides an opportunity to expend a portion of the bond proceeds while ensuring future funding for the Vasco Road Safety Improvement Project.

The Amended Joint Exercise of Powers Agreement/Contribution Agreement will not be approved with clarifying language.