Proposition 1B was approved by voters at the November 7, 2006 general election. As part of the Highway Safety, Traffic Reduction, Air Quality and Port Security Bond Act of 2006, it authorized the issuance of $19.9 billion of general obligation bonds to fund a variety of transportation priorities. Of the $19.9 billion, $2 billion was designated for cities and counties to fund the maintenance and improvement of local transportation facilities. The County received a total of approximately $24 million in Proposition 1B funds in four disbursements. The first disbursement was received in March 2008 in the amount of $9.7 million. Cities and counties were given three fiscal years from the end of the fiscal year the funds were received to expend the Proposition 1B funds.
On March 11, 2008, the Board of Supervisors approved the Joint Exercise of Powers Agreement/Contribution Agreement (Agreement) with ECCRFFA for use of Proposition 1B funds for Phase 1 of the State Route 4 Bypass. At that time, revenues for the State Route 4 Bypass were expected to come in at lower than expected levels resulting in funding shortfalls. The Agreement allowed the County to contribute $3 million of Proposition 1B funds to ECCRFFA to assist with funding shortfalls and assured that bond proceeds would be expended within the three-year timeline. In return, the County would receive $3 million of Regional Transportation Development Impact Fees for the Vasco Road Safety Improvement Project.
The County has expended all allocations of Proposition 1B funds, including contribution of $3 million to ECCRFFA for Phase 1 of the State Route 4 Bypass. The original Agreement intended to include interest with the reimbursement, however, the interest was not included, which was strictly an oversight at the time. Thus, Amendment No. 1 provides for up to $350,000 in interest to be reimbursed to the County for a total not-to-exceed amount of $3,350,000. Interest is to be calculated as if the funds had been invested in the County Pooled Investment Earnings Account. Payment of funds by ECCRFFA is to be made a priority and must be completed by June 30, 2020. ECCRFFA has already approved Amendment No. 1 at the Board of Directors Meeting held on January 14, 2016.
The County will not receive reimbursement from ECCRFFA for interest on Proposition 1B funds contributed to Phase 1 of the State Route 4 Bypass.