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01 January 23, 2006 Budget & Implementation75662 RIVERSIDE COUNTY TRANSPORTATION COMMISSION BUDGET AND IMPLEMENTATION COMMITTEE MEETING AGENDA TIME: 8:30 a.m. (PLEASE NOTE TIME CHANGE( DATE: Monday, January 23, 2006 LOCATION: Board Chambers County Administrative Center 4080 Lemon Street, 1st Floor Riverside, CA 92501 RECORDS ***COMMITTEE MEMBERS* * Bob Magee, Chair / Robert L. Schiffner, City of Lake Elsinore Jeff Stone Vice Chair / District Three / County of Riverside Barbara Hanna / Art Welch, City of Banning Roger Berg / Jeff Fox, City of Beaumont Robert Crain / George Thomas, City of Blythe Gregory S. Pettis / Charles 'Bud" England, City of Cathedral City Juan M. DeLara / Richard Macknicki, City of Coachella Alex Bias / Henry "Hank" Hohenstein, City of Desert Hot Springs Terry Henderson / Don Adolph, City of La Quinta Rick Gibbs / Douglas McAllister, City of Murrieta Ron Meepos / Alan Seman, City of Rancho Mirage Steve Adams, City of Riverside Chris Buydos / City of San Jacinto John F. Tavaglione, District Two / County of Riverside ***STAFF*** Eric Haley, Executive Director Theresia Trevino, Chief Financial Officer ***AREAS OF RESPONSIBILITY*** Annual Budget Development and Oversight Countywide Strategic Plan Legislation Measure "A" Implementation and Capital Programs Public Communications and Outreach Programs Competitive Grant Programs: TEA 21-CMAQ & STP, Transportation Enhancement and SB 821-Bicycle & Pedestrian Property Management SAFE/Freeway Service Patrol TUMF Program and other areas as may be prescribed by the Commission Comments are welcomed by the Committee. If you wish to provide comments to the Committee, please complete and submit a Testimony Card to the Clerk of the Commission. 11.36.06 • • RIVERSIDE COUNTY TRANSPORTATION COMMISSION BUDGET AND IMPLEMENTATION COMMITTEE www,rctc,org AGENDA* *Actions may be taken on any item listed on the agenda 8:30 a.m. (Please note time change) Monday, January 23, 2006 BOARD CHAMBERS County Administrative Center 4080 Lemon Street, lst Floor Riverside, California In compliance with the Americans with Disabilities Act and Government Code Section 54954.2, if you need special assistance to participate in a Committee meeting, please contact the Clerk of the Commission at (951) 787-7141. Notification of at least 48 hours prior to meeting time will assist staff in assuring that reasonable arrangements can be made to provide accessibility at the meeting. 1. CALL TO ORDER 2. ROLL CALL 3. PUBLIC COMMENTS 4. APPROVAL OF MINUTES October 24, 2005 and November 28, 2005 5. ADDITIONS/REVISIONS (The Committee may add an item to the Agenda after making a finding that there is a need to take immediate action on the item and that the item came to the attention of the Committee subsequent to the posting of the agenda. An action adding an item to the agenda requires 2/3 vote of the Committee. if there are less than 2/3 of the Committee members present, adding an item to the agenda requires a unanimous vote. Added items will be placed for discussion at the end of the agenda.) 6. CONSENT CALENDAR - All matters on the Consent Calendar will be approved in a single motion unless a Commissioner(s) requests separate action on specific item(s). Items pulled from the Consent Calendar will be placed for discussion at the end of the agenda. Budget and Implementation Committee January 23, 2006 Page 2 6A. INTERFUND LOAN ACTIVITY REPORT Overview This item is for the Committee to: Pg. 1 1) Receive and file the lnterfund Loan Activity Report for the second quarter ended December 31, 2005, and 2) Forward to the Commission for final action. 6B. QUARTERLY FINANCIAL STATEMENTS Overview This item is for the Committee to: Pg. 3 1) Receive and file the Quarterly Financial Statements for the second quarter ended December 31, 2005, and 2) Forward to the Commission for final action. 6C. SINGLE SIGNATURE AUTHORITY REPORT Overview This item is for the Committee to: Pg. 10 1) Receive and file the Single Signature Authority Report for the second quarter ended December 31, 2005, and 2) Forward to the Commission for final action. Budget and Implementation Committee January 23, 2006 Page 3 7. MEMORANDUM OF UNDERSTANDING NO. 06-31-016-00 FOR FUNDING OF THE CANTU-GALLEANO RANCH ROAD INTERCHANGE Overview This item is for the Committee to: Pg. 12 1) Approve the Memorandum of Understanding (MOU) No. 06-31- 016-00 for the Measure A balance amount for the Cantu-Galleano Road interchange project programmed for $2,734,000; and 2) Authorize the Chairman, pursuant to Legal Counsel review, to execute the MOU on behalf of the Commission; and 3) Forward to the Commission for final action. 8. MEMORANDUM OF UNDERSTANDING NO. 06-31-017-00 FOR THE FUNDING AND JOINT DEVELOPMENT OF STATE HIGHWAY 111 IMPROVEMENTS WITHIN THE CITY OF INDIO Pg. 23 Overview This item is for the Committee to: 1) Approve Memorandum of Understanding (MOU) No. 06-31-017- 00 for the funding reimbursement of State Highway 111 Jefferson Street to Madison Street Improvements within the City of Indio for a total amount not to exceed $3,200,000; 2) Authorize the Chairman, pursuant to Legal Counsel review, to execute the MOU on behalf of the Commission; and 3) Forward to the Commission for final action. Budget and Implementation Committee January 23, 2006 Page 4 9. MID -YEAR BUDGET ADJUSTMENTS Overview This item is for the Committee to: Pg. 39 1) Approve a $306,000 increase in expenditures for recruitment, employment screening, office reconfiguration and office systems, and salaries and benefits; 2) Approve a $65,000 increase in Service Authority for Freeway Emergencies (SAFE) general legal costs related to litigation; and 3) Forward to the Commission for final action. 10. FISCAL YEAR 2004/05 COMMISSION AUDIT RESULTS Overview This item is for the Committee to: Pg. 42 1) Receive and file the Fiscal Year (FY) 2004/05 Comprehensive Annual Financial Report; 2) Receive and file the FY 2004/05 Local Transportation Fund Audited Financial Statements; 3) Receive and file the FY 2004/05 State Transit Assistance Fund Audited Financial Statements; 4) Receive and file the FY 2004/05 Compliance Report; 5) Receive and file the FY 2004/05 Audit Results Report; 6) Receive and file the FY 2004/05 Management Letter; 7) Receive and file the FY 2004/05 Agreed -Upon Procedures Report related to the Commuter Assistance Program incentives; 8) Receive and file the FY 2004/05 Agreed -Upon Procedures Report related to the Appropriation Limit Calculation; and 9) Forward to the Commission for final action. • • • Budget and Implementation Committee January 23, 2006 Page 5 11. DEVELOPMENT OF ACCOUNTABILITY PROGRAM Overview This item is for the Committee to: Pg. 91 1) Approve the conceptual framework for a Commission Accountability Program; 2) Direct staff to develop specific accountability measures based on such framework and present such guidelines to the Commission for its future review and approval; 3) Receive and file the management certifications; and 4) Forward to the Commission for final action. 12. MID -YEAR REVENUE PROJECTIONS Overview This item is for the Committee to: 13. Pg. 96 1) Approve the Mid -Year Revenue Projections; 2) Approve the budget adjustments to reflect the revised Measure A revenues of $14,376,000 and expenditures of $7,065,000; 3) Approve the budget adjustments to reflect the revised Local Transportation Fund (LTF) Planning revenues of $747,728 and expenditures of $747,728; and 4) Forward to the Commission for final action. FISCAL YEAR 2006/07 LOCAL TRANSPORTATION FUND AND MEASURE A REVENUE PROJECTIONS Overview This item is for the Committee to: Pg. 101 1) Approve the projections of the Local Transportation Fund (LTF) apportionment for the Western Riverside County, Coachella Valley, and Palo Verde Valley areas; 2) Approve the projections for Measure A and the related allocations; and 3) Forward to the Commission for final action. Budget and Implementation Committee January 23, 2006 Page 6 14. AMENDMENT TO FY 2005/06 MEASURE A CAPITAL IMPROVEMENT PLAN FOR LOCAL STREETS AND ROADS FOR THE CITY OF PALM SPRINGS Pg. 106 15. Overview This item is for the Committee to: 1) Approve the amendment to the FY 2005/06 Measure A Capital Improvement Plan for Local Streets and Roads for the City of Palm Springs as submitted; and 2) Forward to the Commission for final action. STATE AND FEDERAL. LEGISLATIVE UPDATE Overview This item is for the Committee to: Pg. 110 1) Approve the following bill positions: SB 1165 (Dutton, R-Rancho Cucamonga) — SUPPORT AB 1838 (Oropeza, D-Long Beach) — SUPPORT; 2) Receive and file the state and federal legislative update; and 3) Forward to the Commission for final action. 16. ITEMS PULLED FROM CONSENT CALENDAR AGENDA 17. ELECTION OF OFFICERS 18. COMMISSIONERS / STAFF REPORT Overview 1) This item provides the opportunity for the Commissioners and staff to report on attended and upcoming meeting/conferences and issues related to Commission activities. 19. ADJOURNMENT AND NEXT MEETING The next Budget and Implementation Committee meeting is scheduled to be held at 8:30 A.M., Monday, February 27, 2006, Board Chambers, 1" Floor, County Administrative Center, 4080 Lemon Street, Riverside: ATTENDANCE ROSTER BUDGET AND IMPLEMENTATION COMMITTEE MEETING MONDAY, JANUARY 23, 2006 9:30 A.M. NAME 4, f I � tAr-g c�,5 Jvu4 .PE.1cuir&. REPRESENTING -y p vA v\ vv�D C i C TELEPHONE OR E-MAIL # 91Y-- ga _ a L a 05) -=78' - `t/ g6' 5f22- 57r-1��� ara1 rr,eo� • AGENDA ITEM 4 Minutes RIVERS/DE COUNTY TRANSPORTATION COMM/SS/ON BUDGET AND IMPLEMENTATION COMMITTEE Monday, October 24, 2005 MINUTES 1. CALL TO ORDER The meeting was called to order by Chairman Bob Magee at 10:03 a.m., in the Board Chambers at the County of Riverside Administrative Center, 4080 Lemon Street, First Floor, Riverside, California, 92501. 2. ROLL CALL Members/Alternates Present Members Absent Roger Berg Chris Buydos Barbara Hanna Terry Henderson Bob Magee Paul Marchand Ameal Moore Jeff Stone John F. Tavaglione Robert Crain Juan DeLara Ron Meepos Kelly Seyarto Matt Weyuker 3. PUBLIC COMMENTS There were no requests from the public to speak. 4. ADDITIONS / REVISIONS Eric Haley, Executive Director, noted additional information for Agenda Item 8, "Amendment to Measure `A" Capital Improvement Plan for Local Streets and Roads for the Cities of Desert Hot Springs and Palm Springs'. Budget and Implementation Committee Minutes October 24, 2005 Page 2 5. APPROVAL OF MINUTES — June 27 and August 22, 2005 M/S/C (Stone/Buydos) to approve the June 27 and August 22, 2005 minutes as submitted. Abstain: Henderson — August 22 Marchand — June 27 and August 22 6. CONSENT CALENDAR M/S/C (Henderson/Tavaglione) to approve the following Consent Calendar items and forward to the Commission for final action. 6A. INTERFUND LOAN ACTIVITY REPORT Receive and file the Interfund Loan Activity Report for the month ended September 30, 2005. 6B. SINGLE SIGNATURE AUTHORITY REPORT Receive and file the Single Signature Authority Report for the first quarter ended September 30, 2005. 6C. QUARTERLY FINANCIAL STATEMENTS Receive and file the Quarterly Financial Statements for the period ended September 30, 2005. 7. FISCAL YEAR 2006-2010 MEASURE "A" FIVE YEAR CAPITAL IMPROVEMENT PLAN FOR LOCAL STREETS AND ROADS FOR THE CITIES OF BEAUMONT AND INDIO Jerry Rivera, Program Manager, presented the FY 2006-2010 Measure "A" Five -Year Capital Improvement Plan for Local Streets and Roads for the Cities of Beaumont and Indio. He noted that notall of the cities have submitted the required documents. M/S/C (Henderson/Stone) to: 1) Approve the FY 2006-10 Measure "A" Five Year Capital Improvement Plan for Local Streets and Roads for the Cities of Beaumont and Indio; and, 2) Forward to the Commission for final action. Budget and Implementation Committee Minutes October 24, 2005 Page 3 8. AMENDMENT TO MEASURE "A" CAPITAL IMPROVEMENT PLAN FOR LOCAL STREETS AND ROADS FOR THE CITIES OF DESERT HOT SPRINGS AND PALM SPRINGS Jerry Rivera presented the requests from the Cities of Desert Hot Springs and Palm Springs to amend their Measure "A" Capital Improvement Plans for Local Streets and Roads. M/S/C (Buydos/Stone) to approve the amendment to the: 1) FY 2005 Measure "A" Capital Improvement Plan for Local Streets and Roads for the City of Desert Hot Springs; 2) FY 2006 Measure "A" Capital Improvement Plan for Local Streets and Roads for the City of Palm Springs; and, 3) Forward to the Commission for final action. 9. REQUEST FROM THE CITY OF BANNING TO REPROGRAM FISCAL YEAR 2004-2005 SB 821 BICYCLE AND PEDESTRIAN FACILITIES PROGRAM FUNDS M/S/C (Stone/Henderson) to: 1) Approve the request from the City of Banning to reprogram FY 2004-05 SB 821 funds; and, 2) Forward to the Commission for final action. 10. FUND TRANSFER AGREEMENT NO. 06-45-550 FOR OPERATION OF A FREEWAY SERVICE PATROL PROGRAM IN RIVERSIDE COUNTY Jerry Rivera provided a brief overview of the fund transfer agreement with the State of California Department of Transportation for the Freeway Service Patrol (FSP) program. M/S/C (Buydos/Marchand) to: 1) Approve the Fund Transfer Agreement No. 06-45-550 with the State of California Department of Transportation for the Riverside County Freeway Service Patrol program in the amount of $1,175,933 in State funding for FY 2005-06; 2) Authorize the Chairman, pursuant to Legal Counsel review, to execute the Agreement on behalf of the Commission; and, 3) Forward to the. Commission for final action. Budget and Implementation Committee Minutes October 24, 2005 Page 4 11. 2005 TRANSPORTATION ENHANCEMENT PROGRAM FUNDING RECOMMENDATIONS Shirley Medina, Program Manager, provided an overview of the Transportation Enhancement (TE) program and the evaluation process and criteria. She then reviewed the proposed TE funding recommendations and the estimated timeline for programming. In response to Commissioner John Tavaglione's question regarding opportunities to increase a jurisdiction's local match, Shirley Medina responded that the evaluation meeting was a jurisdiction's final opportunity to modify its respective projects. M/S/C (Buydos/Marchand) to: 1) Allocate Transportation Enhancement (TE) funds as presented in the Technical Advisory Committee funding recommendations listing; 2) Submit proposed TE funding recommendations to Ca!trans Headquarters; and, 3) Forward to the Commission for final action. 12. DEVELOPMENT OF PROJECT MANAGEMENT DATABASE Shirley Medina reviewed the need and benefit for the development of a project management database and provided an overview of the envisioned capabilities. She then explained the project schedule and budget. M/S/C (Henderson/Buydos) to: 1) Approve the development and implementation of a Project Management Database to be funded by Local Transportation Funds; 2) Issue a Request for Proposal for the development and implementation of a Project Management Database; and, 3) Forward to the Commission for final action. 13. TUMF REGIONAL ARTERIAL PRIORITY PROJECT RECOMMENDATION FOR THE CITY OF RIVERSIDE Marilyn Williams, Director of Regional Programs and Public Affairs, briefly reviewed the request from the City of Riverside for TUMF Regional funding for the Van Buren Boulevard widening project. • • Budget and Implementation Committee Minutes October 24, 2005 Page 5 M/S/C (Moore/Henderson) to: 1) Approve the City of Riverside's Van Buren Boulevard widening project from Andrew to Garfield Streets as eligible for TUMF Regional funding pursuant to the Commission's call for projects; 2) Program $905,000 in TUMF Regional funds for construction of the project in FY 2006 plus up to 10% in construction contingency costs ($90,500) pursuant to the TUMF Nexus Study; and, 3) Forward to the Commission for final action. At this time, the Commissioners operated as a "Committee as a Whole", due to lack of a quorum. 14. 2009 MEASURE "A" WESTERN COUNTY HIGHWAY PROGRAM TEN-YEAR STRATEGIC PLAN DEVELOPMENT AND NEGOTIATION OF BECHTEL INFRASTRUCTURE CONTRACT AMENDMENT Hideo Sugita, Deputy Executive Director, provided an overview of the elements in the development of the 2009 Measure "A" Western County Highway Program Ten -Year Strategic Plan. He then provided the basis for the recommendation to amend the Bechtel Infrastructure agreement to provide an objective assessment of the 2009 Measure "A" Western County Highway Program of Projects and update the delivery status of the 1989 Measure. Commissioner Paul Marchand asked if there is a model by which escalation can be factored for increases in land value and construction materials costs, and asked how the issue of correctly sizing a structure to meet the need will be addressed. Hideo Sugita responded that project costs will be forecast on a constant value and as the growth of the County continues, the constant value will be factored and comparable to the revenue forecasts. Also, projects will be sized based on 20-year forecasted traffic analysis, then its impact weighed against delivery costs and funding. He noted that staff has asked Ca!trans to review existing right-of-way for opportunities to deliver projects sooner. Eric Haley provided an overview of the predictability issue for project costs facing the Commission. Budget and Implementation Committee Minutes October 24, 2005 Page 6 M/S/C (Henderson/Marchand) to recommend to the Commission to: 1) Authorize staff to negotiate a contract amendment to Agreement No. 05-31-561 with Bechtel Infrastructure to provide a scope, schedule and cost to support the Commission's effort to develop a 2009 Measure "A" Western County Highway Ten -Year Strategic Plan including: a) An assessment on the status and issues of completing delivery of the Western County Highway Program for the 1989 Measure "A"; and, b) An objective based assessment of the Western County 2009 Measure "A" Highway Program (including the Mid County Parkway) as generally described in the agenda item. 15. STATE AND FEDERAL LEGISLATIVE UPDATE John Standiford, Director of Public Information, updated the Committee on the status and transportation impacts of the SB 1024 and Propositions 42 and 76. He explained that staff is recommending a change in the bill position on SB 1024 from "Oppose" to "Support with Amendments" to provide an opportunity to work with the author to ensure the state makes a needed investment in transportation issues in the region. He then provided an. overview of "Operation Offset" that attempts to identify potential offsets in response to Hurricane Katrina. In response to Commissioner Terry Henderson's question regarding allocation percentages for SB 1024, John Standiford responded that the allocation percentages are detailed in the bi►I. In response to Commissioner Marchand's question regarding the types of allocations, John Standiford indicated that infrastructure, goods movement, grade separations, and port issues will be an important priority in the coming year. Eric Haley noted. that Senator Don Perata has indicated that the decision making would be done at the California Transportation Commission. • • Budget and Implementation Committee Minutes October 24, 2005 Page 7 M/S/C (Marchand/Henderson) to recommend to the Commission to: 1) Approve the following change in state bill position: SB 1024 (Perata D-Oakland) — Change from OPPOSE to SUPPORT WITH AMENDMENTS; 2) Receive and file the State and Federal Legislative Update as an information item; and, 3) Forward to the Commission for final action. 16. ITEMS PULLED FROM CONSENT CALENDAR No items were pulled from the consent calendar for discussion. 17. COMMENTS BY COMMISSIONERS/STAFF There were no comments from Commissioners or staff. 18. ADJOURNMENT There being no further business for consideration by the Budget and Implementation Committee, the meeting was adjourned at 11:01 a.m. Respectfully submitted, 6.curs.m4 No.4 er.c Jennifer Harmon Deputy Clerk of the Board • RIVERS/DE COUNTY TRANSPORTATION COMM/SS/ON BUDGET AND IMPLEMENTATION "COMMITTEE OF THE WHOLE" (Due to lack of a quorum, the Commissioners present operated as a "Committee of the Whole". Recommendations from the "Committee of the Whole" were submitted to the Commission.) Monday, November 28, 2005 MINUTES ' 1. CALL TO ORDER Chair Bob Magee called the •"Committee of the Whole" to order at 10:01 a.m., in the Board Chambers at the County of Riverside Administrative Center, 4080 Lemon Street, First Floor, Riverside, California, 92501. 2. ROLL CALL Members/Alternates Present Roger Berg Chris Buydos Juan DeLara Terry Henderson Bob Magee Ameal Moore Jeff Stone Members Absent Robert Crain Barbara Hanna Ron Meepos Gregory S. Pettis Kelly Seyarto John F. Tavaglione Matt Weyuker 3. PUBLIC COMMENTS There were no requests from the public to speak. 4. ADDITIONS / REVISIONS Eric Haley, Executive Director, noted a revision to Agenda Item 7, "2005-2006 Bechtel Contract Amendment to Provide an Assessment on the Completion of the 1989 Measure NA" Western County Highway Program and Development of the Initial 2009 Measure "A" Western County Highway Program 10-year Delivery Plan" and additional information for Agenda Item 15, "Award Agreement No. 06-15-008-00 for Communications and Graphic Design Consultant Services". Budget and Implementation Committee Minutes November 28, 2005 Page 2 5. APPROVAL OF MINUTES - October 24, 2005 Approval of the minutes was deferred until the next meeting when there is a quorum present. 6. CONSENT CALENDAR M/S!C (Henderson/Buydos) to present the following Consent Calendar items to the Commission for approval: 6A. QUARTERLY INVESTMENT REPORT Receive and file the Quarterly Investment Report for the quarter ended September 30, 2005. 7. 2005-2006 BECHTEL CONTRACT AMENDMENT TO PROVIDE AN ASSESSMENT ON THE COMPLETION OF THE 1989 MEASURE "A" WESTERN COUNTY HIGHWAY PROGRAM AND DEVELOPMENT OF THE INITIAL 2009 MEASURE "A" WESTERN COUNTY HIGHWAY PROGRAM 10-YEAR DELIVERY PLAN Hideo Sugita, Deputy Executive Director, provided an overview of the scope, schedule, and cost for the development of the 2009. Measure "A" Western County Highway Program 10-Year Delivery Plan and an update of the delivery status of the 1989 Measure "A". Commissioner Jeff Stone stated that there is a resolution going before the Board of Supervisors requesting RCTC take a look at potential improvements to the existing freeway, 1-215 from Perris to the 1-15/1-215 split, utilizing the emergency lanes and asked if it should be delineated as part of this effort. Eric Haley responded that Commissioner Stone's initiative on 1-215 is welcomed and stated that the improvements on 1-215 is a concern the Commission is committed to and is viewed as part of normal operations. He assured Commissioner Stone that his immediate concerns are being addressed. In response to Chair Magee's inquiry, Eric Haley stated that the final report will be completed in time for the Commission's next workshop. With regard to the ad hoc committee, any Commissioners wishing to participate should contact Chair Robin Lowe and copy Eric Haley. • Budget and Implementation Committee Minutes November 28, 2005 Page 3 At Chair Magee's request, Hideo Sugita explained the development of a project evaluation model based on the State's recognized performance measures. M/S/C (Stone/Henderson) to recommend to the Commission to: 1) Approve Agreement No. 05-31-561-01, Amendment No. 1 to the FY 2005-06 Bechtel Infrastructure Agreement No. 05-31-561, in the amount of $603,244 with $96,756 contingency for a total of $700,000 to support the development of the status and deliverability of the 1989 Measure "A" Western County Highway Program of Projects and the development of the initial 10-year delivery plan for the 2009 Measure "A" Western County Highway Program; and 2) Authorize the Chair, pursuant to Legal Counsel review, to execute the agreement on behalf of the Commission. APPROVAL OF AGREEMENT NO. 04-51-030-02, AMENDMENT NO. 2 TO AGREEMENT NO. 04-51-030 WITH EPIC LAND SOLUTIONS, INC., FOR PROPERTY MANAGEMENT SUPPORT SERVICES Claudia Chase, Property Agent, reviewed the scope of services for the proposed amendment to the Epic Land Solutions agreement. In response to Commissioner Terry Henderson's inquiry regarding the linking of information, Claudia Chase responded that it is staff's goal to achieve a flow of information between database systems. At Eric Haley's request, Claudia Chase estimated that the Commission currently owns and/or anticipates to acquire more than 2,000 properties. Eric Haley added that there will be a need to increasingly commit more resources to handle the growing inventory of properties. M/S/C (Henderson/Stone) to recommend to the Commission to: 1) Enter into Agreement No. 04-51-030-02, Amendment No. 2 to Agreement No. 04-51-030 with Epic Land Solutions, Inc., for property management support services related to all Commission owned parcels for a not to exceed amount of $301,850; and 2) Authorize the Chair, pursuant to Legal Counsel review, to execute the agreement on behalf of the Commission. Budget and Implementation Committee Minutes November 28, 2005 Page 4 9. FISCAL YEAR 2006-2010 MEASURE "A" FIVE-YEAR CAPITAL IMPROVEMENT PLAN FOR LOCAL STREETS AND ROADS FOR THE CITY OF NORCO Jerry Rivera, Program Manager, briefly reviewed the City of Norco's FY 2006 2010 Measure "A" Five -Year Capital Improvement Plan for Local Streets and Roads. M/S/C (Henderson/Stone) to recommend to the Commission to approve the FY 2006-10 Measure "A" ;Five -Year Capital Improvement Plan for Local Streets and Roads for the City of Norco. 10. AMENDMENT TO FISCAL YEAR 2006 MEASURE "A" CAPITAL IMPROVEMENT PLAN FOR LOCAL STREETS AND ROADS FOR THE CITY OF DESERT HOT SPRINGS M/S/C (Stone/Henderson) to recommend to the Commission to approve the amendment to the FY 2006 Measure "A" Capital Improvement Plan for Local Streets and Roads for the City of Desert Hot Springs. 11. AWARD AGREEMENT NO. 06-19-009-00 FOR MEASURE "A" REVENUE FORECAST UPDATE TO THE UCLA ANDERSON FORECAST OF THE UCLA ANDERSON SCHOOL OF MANAGEMENT Theresia Trevino, Chief Financial Officer, reviewed the need to update the Measure "A" revenue forecast and the presented the evaluation team's recommendation. Commissioner Chris Buydos suggested staff confirm the UCLA Anderson Forecast team members as one of its members has resigned and ensure forecasting expertise of the Inland Empire. The Committee directed staff to include its findings in the staff report for the Commission meeting. M/S/C (Stone/Buydos) to recommend to the Commission to: 1) Award Agreement No. 06-19-009-00 to the UCLA Anderson Forecast of the UCLA Anderson School of Management (UCLA Anderson Forecast) to update the Commission's Measure "A" revenue forecast related to FY 2006-07 through FY 2038-39 at a cost not to exceed $20,000; and 2) Authorize the Executive Director, pursuant to Legal Counsel review, to execute the agreement on behalf of the Commission. Budget and Implementation Committee Minutes November 28, 2005 Page 5 12. APPROVAL OF AGREEMENT NO. 06-71-001-00 FOR ADVANCE TO THE CITY OF BLYTHE Theresia Trevino reviewed the request from the City of Blythe for an advance of new Measure "A" funds. M/S/C (Henderson/Stone) to recommend to the Commission to: 1) Approve Agreement No. 06-71-001-00, "Agreement for Advancement of 2009 Measure "A" Local Streets and Roads Funds," to advance up to $1,500,000 of new Measure "A" funds to the City of Blythe (Blythe) utilizing proceeds from the commercial paper program; and 2) Authorize the Chair, pursuant to Legal Counsel review, to execute the agreement on behalf of the Commission. 13. RIVERSIDE COUNTY CALL BOX SYSTEM REDUCTION AND MAINTENANCE AGREEMENT Jerry Rivera reviewed the recommendation to reduce the number of call boxes in Riverside County and the agreement with Comarco Wireless Technologies for the removal, installation and annual maintenance services of the call boxes. In response to Commissioner Stone's concern regarding removal of call boxes in remote access areas, Jerry Rivera responded that those areas have been factored into the analysis to ensure a safety net for motorists. In response to Commissioner Henderson's question regarding motorist awareness of call box spacing, Eric Haley indicated that motorists experience different call box spacing in every county. At Commissioner Roger Berg's request, Jerry Rivera explained that the removed call boxes will be stored and utilized in the replacement of call boxes that have been knocked down. • Budget and Implementation Committee Minutes November 28, 2005 Page 6 M/S/C (Henderson/Stone) to recommend to the Commission to: 1) Authorize staff to reduce the number of call boxes throughout the Riverside County Call Box system by approximately 422 boxes; 2) Award Agreement No. 06-45-003-00 to Comarco Wireless Technologies for the removal and installation of call boxes and annual maintenance services for the Riverside County Call Box Program; and 3) Authorize the Chair, pursuant to Legal Counsel review, to execute the agreement on behalf of the Commission. 14. AWARD AGREEMENTS FOR FREEWAY SERVICE PATROL TOW TRUCK SERVICE M/S/C (Henderson/Stone) to recommend to the Commission to: 1) Award Agreement No. 06-45-006-00, a three-year agreement with two one-year options, to Hamner Towing for tow truck service on Beat No. 2 of the Freeway Service Patrol program at a cost of $47.75 per hour per truck; 2) Award Agreement No. 06-45-005-00, a three-year agreement with two one-year options, to Pepe's Towing for tow truck service on Beat No. 25 of the Freeway Service Patrol program at a cost of $48.50 per hour per truck; 3) Award Agreement No. 06-45-004-00, a three-year agreement with two one-year options, to Hamner Towing for tow truck service on Beat No. 26 of the Freeway Service Patrol program at a cost of $49.50 per hour per truck; and 4) Authorize the Chair, pursuant to Legal Counsel review, to execute the agreements on behalf of the Commission. 15. AWARD AGREEMENT NO. 06-15-008-00 FOR COMMUNICATIONS AND GRAPHIC DESIGN CONSULTANT SERVICES John Standiford, Director of Public Information, reviewed the proposal and selection process for communications and graphic design consultant services and the recommendation of award to Geographics. Commissioner Henderson commended staff for the thorough manner utilized in this process. • • Budget and Implementation Committee Minutes November 28, 2005 Page 7 M/S/C (Henderson/Stone) to recommend to the Commission to: 1) Award Agreement No. 06-15-008-00 to Geographics for a three-year consultant agreement with two one-year term extension options for communications and graphic design services on an as needed, time and materials basis pursuant to the hourly rates stated in its proposal; and 2) Authorize the Chair, pursuant to Legal Counsel review, to execute the agreement on behalf of the Commission. 16. STATE AND FEDERAL LEGISLATIVE UPDATE John Standiford updated the Committee on efforts to fix the Proposition 42 loophole as well as the status of the potential statewide bond measure and the FY 2006 Transportation, Treasury, Housing and Urban Development Appropriations Bill. M/S/C (Henderson/Stone) to recommend to the Commission to receive and file the State and Federal Legislative Update as an information item. 17. ITEMS PULLED FROM CONSENT CALENDAR No items were pulled from the consent calendar for discussion. 18. COMMENTS BY COMMISSIONERS/STAFF Eric Haley announced the retirement of Naty Kopenhaver, Director of Administrative Services. 19. ADJOURNMENT There being no further business for consideration by the Budget and Implementation Committee, the meeting was adjourned at 10:56 a.m. The next meeting of the Budget and Implementation Committee is scheduled for January 23, 2006 at 8:30 a.m. Respectfully submitted, Jennifer Harmon Deputy Clerk of the Board • RIVERS/DE COUNTY TRANSPORTATION COMM/SS/ON DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: Michele Cisneros, Accounting Manager THROUGH: Theresia Trevino, Chief Financial Officer SUBJECT: Interfund Loan Activity Report STAFF RECOMMENDATION: This item is for the Committee to: 11 Receive and file the Interfund Loan Activity Report for the second quarter ended December 31, 2005, and 2) Forward to the Commission for final action. BACKGROUND INFORMATION: On April 14, 2004 the Commission approved the Interfund Loan Policy and adopted Resolution No. 04-009 "Resolution of the Riverside County Transportation Commission to Authorize /nterfund Loans". Subsequently, the Commission requested that the interfund loan activity be reported on a quarterly basis. The attached details all interfund loan activity through December 31, 2005. The total outstanding interfund loan amounts as of December 31, 2005 are $575,000. Attachment: (nterfund Loan Activity Report Riverside County Transportation Commission Interfund Loan Activity Report For2nd quarter ended December 31, 2005 Amount Maturity Date of Loan of Loan Date Lending Fund Borrowing Fund April 2, 2003 $ 300,000 July 1, 2006 Measure A - WC Highway (222) Measure A - WC LSR (227) March 4, 2004 275,000 Total $ 575,000 July 1, 2009 Measure A - WC Commuter Measure A - WC Highway (222) Assistance (226) Purpose of Loan Advance to make repairs and improvements to Railroad Canyon Road Additional local match for the SR71 Widening/Animal Crossing Project Date Commission Approved March 12, 2003 December 10, 2003 Va2006\02 February1Budget & Implementation1MC.e&I.Interfund Loan Act Rpt Attach 0 AGENDA ITEM 6B • • RIVERSIDE COUNTY TRANSPORTATION COMMISSION DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: Michele Cisneros, Accounting Manager THROUGH: Theresia Trevino, Chief Financial Officer SUBJECT: Quarterly Financial Statements STAFF RECOMMENDATION: This item is for the Committee to: 1) Receive and file the Quarterly Financial Statements for the second quarter ended December 31, 2005, and 2) Forward to the Commission for final action. BACKGROUND INFORMATION: During the last six months of the fiscal year, staff has monitored the revenues and expenditures of the Commission. The attached financial statements present the revenues and expenditures for the first six months of the fiscal year (FY). Period closing accrual adjustments are not included for revenues earned but not billed and expenditures incurred for goods and services received but not yet invoiced, as such adjustments are normally made during the year end closing activities. The operating statement shows the sales tax revenues through the second quarter at 38% of the budget. This is a result of the Governmental Accounting Standards Board (GASB) Statement No: 33. GASB 33 requires sales tax revenue to be accrued for the period in which it is collected at the point of sale. The State Board of Equalization collects the Measure A funds and remits them to the Commission after the reporting period for the businesses. This creates a two -month lag in the receipt of revenues by the Commission and related disbursement of local streets and roads allocations. Accordingly, these financial statements reflect the Measure A sales tax revenues and related local streets and roads expenditures related to collections through October 2005. On a cash basis, the Measure A and Local Transportation Fund (LTF) sales tax revenues are 20% and 19% higher respectively, than the same six-month period last fiscal year. Federal, state and local government reimbursements and other revenues are on a reimbursement basis, and the Commission will receive these revenues as the projects are completed and invoiced to the respective agencies. Transportation Uniform Mitigation Fee (TUMF), revenues are remitted to the Commission by the Western Riverside Council of Governments (WRCOG) the 10th of each month. During the second quarter, WRCOG remitted approximately $13,482, 600. The expenditure categories are in line overall with the expectations of the budget. General administrative expenditures are slightly higher due to one-time payments in September for certain FY 2005/06 membership dues renewals. This category is expected to be in line by the end of the third quarter. Listed below are the capital related projects, including budget amounts, which have significant variances along with a status report: Highway Engineering/Right of Way/Land • State Route (SR) 91 Van Buren Interchange ($7,600,000)—The city of Riverside is the lead agency and has experienced delays related to environmental issues. The environmental process is complete and right of way acquisition will commence in FY 2005-06. Construction will not commence for 18 months and the city requested, and the Commission approved, amending the Measure A Strategic Plan to allow the Van Buren funds to be used for the construction phase of the La Sierra interchange scheduled for spring 2006. • SR-91 HOV Lanes between Adams Street and 7th Street ($18,300,0001—The Commission is awaiting final approval of the environmental document and geometric approval drawings in order to commence the final .design phase currently forecasted for June 2006. • SR-79 Realignment ($7,010,000)—Engineering delays . were caused by requests from resource agencies to study new avoidance alternative alignments. An.amendment to the contract was required which resulted in the need for a preaward audit prior to the issuance of a notice to proceed. Additionally, the consultant is currently behind in submittal of invoices through December 2005. • SR-74 G Street to Interstate (I) 215 ($1,450,000)—The Commission is awaiting completion of the traffic studies in order to commence the • • 4 • • preliminary and environmental phase of work. Acquisition of right of way will not start until FY 2006/07. • SR-74 from 1-15 to Th ($4,175,000) —The County of Riverside (County) continues to negotiate with parcel owners to acquire the property needed to complete the mitigation requirements of the project. In addition, funding has been allocated to cover settlements through state condemnation for those properties acquired through eminent domain. • SR-60 East Junction to 1-215 HOV ($2,500,000)—Caltrans has approved the project to proceed with the final design. Funding authorization from the Federal Highway Administration is pending. • Commercial Paper Projects ($43,700,000)—Commercial Paper proceeds remain available for right of way and land acquisition related to projects and mitigation as opportunities arise; however, the second traunche of $55,000,000 included in the budget as bond proceeds has not been issued due to the balance of unexpended proceeds as of December 31, 2005. Highway Construction • 1-15 Cantu-Galleano Ranch Road Interchange ($2,700,000)—The County recently awarded the construction contract. Construction is forecasted for spring 2006 with an 18 month construction period. • SR-74 ($14,325,0001—The prior year's winter rainfalls caused delays in construction and utility relocation. Delivery of oil base material for asphalt has caused additional delays, and construction completion is currently forecasted for the end of the second quarter in FY 2006/07. • SR-60 ($2,010,000)—Project is complete; however, punch list items are still being reviewed, and final payment will be released upon settlement of claims. Additionally, the plant establishment was delayed due to the prior year's rainfalls and is expected to be complete by the fourth quarter of FY 2005/06. • SR-111 ($1,957,000)—The widening project in the city of La Quinta was awarded, and construction started June 2005. The Commission recently received a progress payment invoice from the city. The city of Indio will commence its project April 2006. The city of Rancho Mirage is expected to submit an invoice for the completed Magnesia Falls project in June 2006 for $1,000,000 as part of the terms of an agreement with the Commission. Rail Engineering/Right of Way/Land • North Main Corona Station Parking Structure ($1,100,000)—The CEQA environmental document was approved, and the NEPA environmental document was prepared and submitted for approval to the Federal Transit Administration. Funding to proceed with the start of final design has been appropriated with a consultant agreement to be awarded in February 2006. • Perris Valley Line ($10,050,000)—Preliminary engineering contract award was rescheduled for the third quarter in FY 2005/06. Additionally, property acquisition has been postponed as a result of the delay in the NEPA environmental document due to public comments on the noise and vibration study, which is now complete and awaiting comments. Rail Construction • Riverside Downtown Eastside Parking Lot ($1,735,000)—Delays in the final design have occurred due to the requirements for preparation and submittal of the engineering/planning application to the city to obtain permits. Accordingly, the start of construction has been delayed until the fourth quarter of FY 2005/06. • Rail Stations ($150,000)—Estimates for potential rehabilitation projects were included in the budget. Staff is developing a station rehabilitation plan to monitor costs going forward. TUMF Engineering/Right of Way/Land • Mid County Parkway ($29,100,000)—Approval of the preaward audit for the consultant was recently received, and Amendment #2 for Phase II preliminary engineering was approved and a notice to proceed was issued December 2005. Staff continues to have ongoing discussions with developers to try to reserve corridor right of way. • Various Western County TUMF Regional Arterial Projects ($28,300,000)— Agreements for more than half of the projects have been signed with the cities and County. These agencies are now in the process of preparing requests for proposal to award contracts. Commission staff will continue to actively work with the agencies to have agreements signed for the remaining projects. 6 • TUMF Construction ($13,097,500)—No construction activities on approved regional arterial projects will occur until the final design phases are completed and environmental documents are approved. Intergovernmental distributions are primarily expended as one-time LTF payments made at the beginning of the fiscal year based on claims submitted by the Coachella Valley Association of Governments and WRCOG. Staff will continue to monitor the revenues and expenditures and notify the Commission of any unusual events. 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Lo lso0 Pei alegw a6en19M ISBAOWI lednued aquas lgaO Cellno Iesee0 uo0ncIPSIP leluewwaro61(01 spelexpswekoxl l saopues 6u!wwel59.3 S 6u!uueld I!Suen eazlleneds 9=11006151P V1S soseuelulew 9 suo11e1Bdo 11e8 aouels!s4e Is!mpW Iuewa6eueul N180ad eauelslsse PorpupHYj 60!r01 dsj sipper leneds Poem 1eLP96PL1 Spem 9 sleeps leool Aem so 1PSO Annl eapruou00 jW111 6u11Beul6ua jWny her 10 9106 peN uapnosueo'!eg sipoo!6ue l!eN pussAem 40 IS65.(emg61H u099nosuoa Aemg6111 601,1e6u1,6U0 AtocLOH spelmd lemue0 sa0lnlas leuo!ssOlad seowesle6eusieue0 sloop is samples snelol0/swz6old u06eps1ulwpe Ielol samllpuedxe 0911$039ePe leleus0 se9!19n S Ogee' g01140 seances IBUOISSNOM sesWes'peel moos' 56caueq $ sPeeleS uipIPPP WwpV semLlpuedx3 sanuanellelol MAW! semen 16g10 (dWfll) 9aj uape6p!W wmqun Pollellodsuell sluawasmgwlw luawwaw6 leool S ems'lemped xel sales eenuaneg NOI1dIg0S30 • • • DESCRIPTION RIVERSIDE COUNTY TRANSPORTATION COMMISSION QUARTERLY BUDGET VS ACTUAL 2ND QUARTER FOR SIX MONTHS ENDED 12/31/05 REMAINING PERCENT BUDGET ACTUAL BALANCE UTILIZATION Revenues Sales tax $ 144,629,700 $ 55,293,663 $ (89,336,037) 38% Federal, state & local government reimbursements 43,608,200 1,272,627 (42,335,573) 3% Transportation Uniform Mitigation Fee (TUMF) 45,825,000 20,575,872 (25,249,128) 45% Other revenues 8,055,752 2,730,631 (5,325,121) 34% Interest 5,453,600 2,192,714 (3,260,886) 40% Total revenues 247,572,252 82,065,507 (165,506,745) 33% Expenditures Administration Salaries & benefits 1,608,000 762,887 845,113 47% General legal services 98,500 32,049 66,451 33% Professional services 1,068,200 457,603 - 610,597 43% Office lease & utilities 375,000 185,350 189,650 49% General administrative expenditures 1,128,200 642,799 485,401 57% Total administration 4,277,900 2,080,688 2,197,212 49% Programs/projects " Salaries & benefits 2,087,500 904,309 1,183,191 43% General legal services 1,472,300 558,880 913,420 38% Professional services 1,672,785 684,157 988,628 " 41% General projects 3,190,200 923,411 2,266,789 29% Highway engineering 30,871,000 1,734,549 29,136,451 6% Highway construction 26,720,800 2,175,890 24,544,910 8% Highway right of way/land 55,572,700 640,118 54,932,582 1% Rail engineering 7,660,000 99,195 7,560,805 1% Rail construction 2,089,000 220,227 1,868,773 11% Rail right of way 5,050,000 31,811 5,018,189 1% TUMF engineering 26,125,385 2,442,250 23,683,135 9% TUMF construction 13,097,500 13,097,500 0% TUMF right of way 26,120,000 2,298,146 23,821,854 9% Local streets & roads 49,465,500 18,811,074 30,654,426 38% Regional arterial 8,569,900 '4,008,881 4,561,019 47% Special studies 1,671,600 531,222 1,140,378 32% FSP towing 1,430,980 557,104 873,876 39% Commuter assistance 2,765,000 1,098,340 1,666,660 40% Property management 95,300 34,185 61,115 36% Motorist assistance 2,275,144 200,542 2,074,602 9% Rail operations & maintenance 6,587,900 3,009,691 3,578,209 - 469'0 STA distributions 5,617,000 2,078,290 3,538,710 37% Specialized transit 5,086,500 2,347,394 2,739,106 46% Planning & programming services 43,300 14,518 28,782 34% Total programs/projects - 285,337,294 45,404,184 239,933,110 16% Intergovernmental distribution Capital outlay 1,161,400 955,673 205,727 82% 855,000 155,517 699,483 18% Debt service Principal 28,669,500 - 28,669,500 0% Interest 8,345,200 3,806,472 4,538,728 46% Arbitrage rebate tax - - - 0% Cost of issuance 400,000 400,000 0% Total debt service 37,414,700 3,806,472 33,608,228 10% Total expenditures 329,046,294 52,402,534 276,643,760 16% Excess of revenues over (under) expenditures (81,474,042) 29,662,973 111,137,015 -36% Other financing sources/uses Operating transfer in 46,551,700 17,265,249 (29,286,451) 37% Operating transfer out 46,551,700 17,265,249 29,286,451 37% Bond proceeds 55,000,000 (55,000,000) 0% Payment to escrow agent - - - - 0% Total financing sources/uses 55,000,000 - (55,000,000) 0% Net change in fund balances (26,474,042) 29,662,973. 56,137,015 -112% Fund balance July 1, 2005 230,537,100 279,262,635 48,725,535 121% Fund balance December 31, 2005 - $ 204,063,058 $ 308,925,608 $ 104,862,550 151% r/,saNpreppnu,nrleuartenkslmemr wanaN 9 • AGENDA ITEM 6C • • RIVERSIDE COUNTY TRANSPORTATION COMMISSION DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: Michele Cisneros, Accounting Manager THROUGH: Theresia Trevino, Chief Financial Officer SUBJECT: Single Signature Authority Report STAFF RECOMMENDATION_ This item is for the Committee to: 1) Receive and file the Single Signature Authority Report for the second quarter ended December 31, 2005, and 2) Forward to the Commission for final action. BACKGROUND INFORMATION: The attached report details all professional services and administrative contracts that have been executed for the second quarter ended December 31, 2005 under the Single Signature Authority granted to the Executive Director by the Commission. The unused capacity at December 31, 2005 is $370,765. Attachment: Single Signature Authority Report as of December 31, 2005. 10 CONSULTANT AMOUNT AVAILABLE July 1, 2005 SCAG Advanced Marketing MHV Enterprises, Inc. MBI Media ERA' AMOUNT USED Less return of remaining contract value due to expiration: AMOUNT USED, net of adjustments -AMOUNT REMAINING through December 31, 2005 Towa Reabroi-DeMorst SINGLE SIGNATURE AUTHORITY AS OF DECEMBER 31, 2005 ORIGINAL CONTRACT REMAINING DESCRIPTION OF SERVICES AMOUNT PAID AMOUNT CONTRACT AMOUNT Amendment # 1 for travel demand analysis Commuter assistance mail -house fulfillment Amendment # 3 software development Construction lay down yard :Video Services - RCTCVideo - "Riverside County Land Value Trends Theresia Trevino Prepared by _ Reviewed by Note: Shaded area represents new contracts listed In the second quarter. $500,000.00 12,235.00 0.00 12,235.00 25,000.00 25,000.00 0.00 24,000.00 23,031.25 968.75 40,000.00 8,917.64. 31,082.36 28,000.00 129,235.00 0.00 129,235.00 $370,765.00 28,000.00 0:00 84,948.89 44,286.11 V:12006102 February\Budget & Implementation\MC.B&1.2nd Otr Single Signature Rpt.Attach.pdf, ® • RIVERS/DE COUNTY TRANSPORTATION COMM/SS/ON DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: Bill Hughes, Bechtel Project Manager Louie Martin, Bechtel Project Controls Manager THROUGH: Hideo Sugita, Deputy Executive Director SUBJECT: Memorandum of Understanding No. 06-31-016-00 for Funding of the Cantu-Galleano Ranch Road Interchange STAFF RECOMMENDATION: This item is for the Committee to: 1) Approve the Memorandum of Understanding (MOU) No. 06-31-016-00 for the Measure A balance amount for the Cantu-Galleano Ranch Road interchange project programmed for $2,734,000; 2) Authorize the Chairman, pursuant to Legal Counsel review, to execute the MOU on behalf of the Commission. 3) Forward to Commission for final action. BACKGROUND INFORMATION: The Cantu-Galleano Ranch Road interchange project (formerly Galena Street at Interstate 15 interchange project) is one of the projects included for funding as part of the Job Development Interchange Program in the 1989 Measure A program of projects. The amount of funds committed for this project is $5,000,000. In March 1996 an agreement between the County of Riverside (County) and the , Commission provided for an exchange of Measure A funds totaling $2,266,000 in receipt of federal Surface Transportation Program (STP) funds for this interchange project in order to provide non-federal funds to the State Route (SR) 79 Winchester Road widening project in the city of Temecula. Congestion on SR-79 was severe and worsening. Additionally a new school was being constructed, and the highway improvements were needed to provide safety for students traveling to and from the school. Allowing the exchange of funds prevented a two year delay in construction because of the federal review requirements. The County has made the STP funds available and applied them to the project's design and environmental phase. The construction phase of the project is to start in spring 2006 and the County is hereby requesting the remaining balance of the Measure A commitment totaling $2,734,000. 12 Financial Information In Fiscal Year Budget: Y Year: FY 2005/06 Amount: $2,734,000 Source of Funds: Measure A Budget Ad ustment: N GLA No.: 222 31 81301 P3013 Fiscal Procedures Approved: �,5Zi Date: 1 /23/06 Attachment: Memorandum of Understanding for Cantu-Galleano Ranch Road Interchange 13 • Agreement No. 06-31-016-00 MEMORANDUM OF UNDERSTANDING FOR THE FUNDING OF THE CANTU-GALLEANO RANCH ROAD INTERCHANGE PROJECT ( FORMER I-15 AND GALENA AVENUE INTERCHANGE IMPROVEMENTS) 1. Parties and Date. 1.1 This Funding Agreement is executed and entered into this day of , 2004, by and between the RIVERSIDE COUNTY TRANSPORTATION COMMISSION ("RCTC") and THE COUNTY OF RIVERSIDE ("County"). 2. Recitals. 2.1 RCTC is a county transportation commission created and existing pursuant to California Public Utilities Code Sections 130053 and 130053.5 2.2 On November 8, 1988 the Voters of Riverside County approved Measure A authorizing the collection of a one-half percent (1/2%) retail transactions and use tax (the "tax") to fund transportation programs and improvements within the County of Riverside, and adopting the Riverside County Transportation Improvement Plan (the "Plan"). 2.3 Among other things, the Plan allocates funds for the "Interchanges for Local Circulation Improvements" programs (the "Interchange Improvement Funds"). 2.4 Pursuant to Public Utility Code Sections 240000 et seq., RCTC is authorized to allocate the proceeds of the Tax in furtherance of the Plan. 2.5 The County would like to have constructed certain improvements to the Interstate 15 and Galena Avenue interchange, and has approached RCTC for funding. 2.6 RCTC intends by this Funding Agreement to allocate Interchange Improvement Funds towards construction and construction management. All funding hereunder shall be contingent on securing all necessary environmental approvals. 2.7 RCTC and the County acknowledge that RCTC's original total commitment to the Project had been $5 million. 2.8 RCTC and the County acknowledge that the County elected in 1996 to accept $2.266 million of funds which would have been allocated to the Project for the Route 79 Winchester Road Widening Project instead. RVPUB\HA V IVA.SHANE\672999.1 14 2.9 RCTC and the County acknowledge that by accepting the funds described in Section 2.8, the County committed to and will at this time commit $2.266 million dollars of Surface Transportation Program funds allocated to the County for the Project. 3. Terms. 3.1 Description of Improvements. This Funding Agreement is intended to allocate funding for authorized portions of the Cantu-Galleano Ranch Road Interchange (formerly the Interstate 15 and Galena Avenue Interchange) improvements, which are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference (the "Project"). The Project is subject to modification as requested by the County and approved by RCTC, pursuant to Section 3.3. It is understood and agreed that the County shall expend Interchange Improvement Funds only as set forth in this Funding Agreement and only for the Project. To this end, any use of funds provided pursuant to this Funding Agreement shall be subject to the review and approval of RCTC. 3.2 Funding Amount. RCTC hereby agrees to allocate for the Project, on the terms and conditions set forth herein and subject to the availability of funds, the maximum sum of two million seven -hundred thirty-four thousand dollars ($2,734,000) (the "Funding Amount"). 3.3 . Responsibilities of Parties/Project Description. The responsibilities of the County and RCTC with respect to this Agreement and the successful completion of the Project are described in Exhibit "B" attached hereto and incorporated herein by reference. Changes to the characteristics of the Project and any responsibilities of the County or RCTC may be requested in writing by the County and are subject to the approval of RCTC's Representative. 3.4 Term/Notice of Completion. The term of this Funding Agreement shall be from the date first hereinabove written until the date the County provides a written Notice of Completion to RCTC, until termination of this Agreement pursuant to Section 3.8 or until December 2007, whichever occurs first. All applicable indemnification provisions of this Agreement shall remain in effect following the termination of this Agreement. 3.5 RCTC's Representative. RCTC's Executive Director, or his or her designee, shall serve as RCTC's Representative and shall have the authority to act on behalf of RCTC for all purposes under this Funding Agreement. RCTC's Representative shall also review and give approval, as needed, to the details of the County's work as it progresses. 3.6 The County's Representative. County's Director of Transportation shall serve as County's Representative and shall have authority to act on behalf of County for all purposes under this Funding Agreement and shall coordinate all phases of the Project under County responsibility. 3.7 Standard of Care; Licenses. The County represents and maintains that it shall implement the Project in a skillful and competent manner and shall only involve in the Project persons or entities skilled in the calling(s) necessary to perform all services, duties and obligations required to fully and adequately complete the Project. RVPUB\HAVIVA.SHANE\672999.1 2 15 • • • 3.8 Review of Services. The County shall allow RCTC's Representative to inspect or review the progress of the Project at any reasonable time in order to determine whether the terms of this Funding Agreement are being met. 3.9 Termination. 3.9.1 Notice. RCTC may, by written notice to the County, terminate this Agreement for cause in whole or in part at any time, by giving written notice to the County of such termination and specifying the effective date thereof. Upon receipt of a written notice of termination, the County shall cease expenditure of funds which are expected to be reimbursed with Interchange Improvement Funds pursuant to this Funding Agreement. The County may also terminate this Agreement for cause. 3.9.2 Effect of Termination. Upon termination by RCTC or the County, RCTC shall allocate Interchange Improvement Funds towards the Project improvements of specifically identified portions thereof satisfactorily completed through the date of termination. The County shall provide documentation deemed adequate by RCTC's Representative to show the Project costs incurred and Program improvements actually completed prior to the date of termination. This Agreement shall terminate seven (7) days following receipt by the County of the written notice of termination. 3.9.3 Cumulative Remedies. The rights and remedies of the Parties provided in this Section are in addition to any other rights and remedies provided by law or under this Agreement. 3.10 Prevailing Wages. The County and any other person or entity hired to perform services on the Project are alerted to the requirements of California Labor Code Sections 1770 et seq., which would require the payment of prevailing wages were the services, or any portion thereof determined to be a public work, as defined therein. The County shall ensure compliance with these prevailing wage requirements by any person or entity hired to perform services on the Project. The County shall defend, indemnify, and hold harmless RCTC, its officers, employees, consultants, and agents from any claim or liability, including without limitation attorneys' fees, arising from any failure or alleged failure to comply with California Labor Code Sections 1770 et seq. 3.11 Copies of Materials. Each party shall have the right to inspect and to obtain for its records copies of all records and materials which may be prepared by the other party under this Agreement. 3.12 Indemnification. The County agrees to indemnify and hold harmless RCTC, its officers, agents, consultants, and employees from any and all claims, demands, costs or liability arising from or connected with all activities governed by this Funding Agreement, including all design and construction activities, due to acts, errors or omissions or willful misconduct of the County or its agents and contracting parties. The County will reimburse RCTC for any expenditures, including reasonable attorneys' fees, incurred by RCTC, in defending against claims ultimately determined to be due to acts, errors or omissions or willful misconduct of the County or its agents and contracting parties. RVPUB\HAVIVA_SBANEV672999.1 3 16 3.12.1 Effect of Acceptance. The County shall be responsible for the professional quality, technical accuracy and the coordination of any services provided to complete the Project. RCTC's review, acceptance or funding of any services performed by the County or any other person or entity working on the Project shall not be construed to operate as a waiver of any rights RCTC may hold under this Agreement or of any cause of action arising out of such person or entity's performance. Further, the County shall be and remain liable to RCTC, in accordance with applicable law, for all damages to RCTC caused by the County's negligent performance of this Agreement or supervision of any services provided to complete the Project. 3.13 Design/Construction Liability. It is understood and agreed that RCTC shall not be responsible or liable for any damages or liabilities arising out of the design or construction of the Project, and that the County, design consultant(s), contractor(s) or other persons or entities shall be responsible and liable for any such damages. 3.14 Insurance. The County shall require all persons or entities hired to perform services on the Project to obtain, and require their subconsultants to obtain, insurance of the types and in the amounts described below and satisfactory to RCTC. Such insurance shall be maintained throughout the terms of this Funding Agreement, or until completion of the Project, whichever occurs last. 3.14.1 Commercial General Liability Insurance. Occurrence version commercial general liability insurance or equivalent form with a combined single limit of not less than $1,000,000.00 per occurrence. If such insurance contains a general aggregate limit, it shall apply separately to the Project or be no less than two times the occurrence limit. Such insurance shall: 3.13.1.1 Name RCTC, its officials, officers, employees, agents, and consultants as insureds with respect to performance of the services on the Project and shall contain no special limitations on the scope of coverage or the protection afforded to these insureds; 3.13.1.2 Be primary with respect to any insurance or self insurance programs covering RCTC, its officials, officers, employees, agents, and consultants; and 3.13.1.3 Contain standard separation of insureds provisions. 3.14.2 Business Automobile Liability Insurance. Business automobile liability insurance o equivalent form with a combined single limit of not less than $1,000,000.00 per occurrence. Such insurance shall include coverage for owned, hired and non -owned automobiles. 3.14.3 Professional Liability Insurance. Errors and omissions liability insurance with a limit or not less than $1,000,000.00. Professional liability insurance shall only be required of design or engineering professionals. 3.14.4 Workers' Compensation Insurance. Workers' compensation insurance with statutory limits and employers' liability insurance with limits or not less than $1,000,000.00 each accident. RVPUB\HAVIVA.SHANB\672999.1 - 4 17 • s • 3.15 Payment of Funding Amount. 3.15.1 Payment to County. A. RCTC shall pay up to $2.734 million to the County for construction for the Project. The County shall not be reimbursed for administrative costs in preparing and processing invoices, billings or payments. B. County shall submit to RCTC monthly invoice statements which indicate the date and description of work completed and the costs for the invoicing period. The statement shall describe the work completed since the initial commencement date, or since the start of the subsequent billing period, as appropriate, through the date of the statement. RCTC shall, within thirty-five (35) days of receiving such statements, review the statements and pay all approved charges thereon. 3.15.2 Progress Reports. A Project schedule is attached hereto as Exhibit "C". The County shall submit to RCTC monthly progress reports in reference to the Project schedule. The progress reports shall include lists of current action items and the following information as to each action item: a completion schedule, including start and completion dates and milestones; a description of the individual or department responsible for completing each action; and a narrative description of progress made to date and during the reporting period. 3.16 Limited Scope of Duties. RCTC's duties and obligations under this Agreement are limited to those described herein. RCTC has no obligation with respect to the safety of the Project Site unless it knows or should know of a dangerous condition or activity and fails to report such condition or activity to the responsible party or otherwise make reasonable corrective efforts. In addition, as discussed above in Section 3.12, RCTC shall not be responsible or liable for any damages or liabilities arising out of the design or construction of the Project. 3.17 Books and Records. Each party shall maintain complete, accurate, and clearly identifiable records with respect to costs incurred for the Project or under this Agreement. They shall make such records available for examination by the other party. Further, each party shall furnish to the other party, its agents or employees such other evidence or information as they may require with respect to any such expense or disbursement charged by them. All such information shall be retained by the parties for at least three (3) years following termination of this Agreement. 3.18 Governing Law. This Agreement shall be governed by and construed with the laws of the State of California. 3.19 Attorneys' Fees. If either party commences an action against the other party arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorneys' fees and costs of suit. 3.20 Headings. Article and Section Headings, paragraph captions or marginal headings contained in this Agreement are for convenience only and shall have no effect in the construction or interpretation of any provision herein. RVPUB\HAVNA.SHANE\672999.1 5 18 3.21 Notification. All notices hereunder and communications regarding interpretation of the terms of the Agreement or changes thereto shall be provided by the mailing thereof by registered or certified mail, return receipt requested, postage prepaid and addressed as follows: County of Riverside Transportation and Land Management Agency Transportation Department County Regional Complex 4080 Lemon Street Riverside, CA 92502-1629 Attn: Director of Transportation RCTC Riverside County Transportation Commission County Regional Complex 4080 Lemon Street, 3rd Floor Y.O. Box 12008 Riverside, CA 92502-2208 Attn: Executive Director Any notice so given shall be considered served on the other party (3) days after deposit in the U.S. mail, first-class postage prepaid, return receive requested, and addressed to the party at its applicable address. 3.22 Contract Amendment. In the event that the parties determine that the provisions of this Agreement should be altered, the parties may execute a contract amendment to add any provision to this Agreement, or delete or amend any provision of this Agreement. All such contract amendments must be in the form of a written instruction signed by the original signatories to this Agreement, or their successors or designees. 3.23 Entire Agreement. This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof and supersedes any previous agreements or understandings. 3.24 Validity of Agreement. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date first written above. RIVERSIDE COUNTY COUNTY OF RIVERSIDE TRANSPORTATION COMMISSION By: By: Marion Ashley Its: APPROVED AS TO FORM: APPROVED AS TO FORM: By: By: Best, Best & Krieger, LLP Counsel to the Riverside County Transportation Commission RVPUBTAVIVA.SHANE\672999.1 6 19 County Counsel • • • EXHIBIT "A" DESCRIPTION OF PROJECT The Project shall be to construct a new interchange 6 lane bridge on Galena between Hamner and Wineville a total of approximately 1 mile and to construct new connecting ramps and extend the connecting roads to Hamner and Wineville. RV PUB\HA VNA.SHANE\672999. I Exhibit "A" 20 EXHIBIT "B" RESPONSIBILITIES OF PARTIES RCTC RESPONSIBILITIES RCTC shall provide funding for the Project, up to the maximums specified elsewhere in this Agreement COUNTY RESPONSIBILITIES 1. Funding. County shall provide $2.266 million of Surface Transportation Program funds allocated to the County for the Project and additional funding for the Project as necessary. 2. Lead Agency. The County shall be lead agency for all purposes of the Project, including all environmental review. The County understands and agrees that no funding for right-of-way appraisals and negotiations and construction plans, specifications and estimates for the Project shall be made until all environmental review is completed and the Project is approved. 3. Environmental Review/Right-of-Way/Design. The County shall be responsible for coordinating and securing all environmental review necessary to begin and complete the Project. In addition, the County shall be responsible for providing all right-of-way appraisals and negotiation services, as well as preparing all construction plans, specifications and estimates. 4. Administrative Fees. The County shall waive all fees necessary for the processing of this Project, including all permits, review and environmental fees. RV PUB\HAVIVA.SHAND672999.1 Exhibit "B" • • 21 EXHIBIT "C" PROJECT MILESTONE SCHEDULE MILESTONE START PLANS, SPECIFICATION & ESTIMATES JAN. 1998 COMPLETE JUN. 2005 AND COMPLETE ENVIRONMENTAL RIGHT OF WAY ACQUISITION AUG. 1998 MAR. 2005 CONSTRUCTION APR.2006 SEP.2007 RVPUB\HA VI V A.SHANEV672999.1 Exhibit "C" 22 • AGENDA ITEM 8 RIVERSIDE COUNTY TRANSPORTATION COMMISSION DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: Bill Hughes, Bechtel Project Manager Louie Martin, Project Controls Manager THROUGH: Hideo Sugita, Deputy Executive Director SUBJECT: Memorandum of Understanding No. 06-310-017-00 for the Funding and Joint Development of State Highway 111 Improvements within the City of Indio STAFF RECOMMENDATION: This item is for the Committee to: 1) Approve Memorandum of Understanding (MOU) No. 06-310-017-00 for the funding reimbursement of State Highway 111 Jefferson Street to Madison Street Improvements within the City of Indio for a total amount not to exceed $3,200,000; 2) Authorize the Chairman, pursuant to Legal Counsel review, to execute the MOU on behalf of the Commission; and 2) Forward to the Commission for final action. BACKGROUND INFORMATION: The 1988 Measure A Program includes a state highway element that provides 15% of the Coachella Valley area's Measure A funds to project improvements on Routes 86 and 111. At the July 2001 meeting, the Commission approved funding for Route 86 and 111 projects, as recommended by the Coachella Valley Association of Governments (CVAG) totaling $15.42 million. Subsequently, the Measure A revenue forecast was updated by Ernst & Young in 2001 to support the development of the extension programs. The updated revenue forecast projected a reduced revenue expectation between fiscal year (FY) 2003/04 and FY 2008/09 resulting in a need to realign the program for the Route 86 and 111 projects with the new revenue forecast. The new revenue forecast for the period is $12.0 million, a difference of $3.42 million in comparison to previously approved project costs. Through meetings with CVAG staff, the CVAG Transportation Technical Advisory Committee and Commission staff, project scope and cost estimates were refined reducing the projected costs for Tier II projects to $13.8 million. 23 Given the FY 2004-2009 revenue projection of $12.0 million, a shortfall of $1.8 million dollars is forecast. CVAG has committed to cover this shortfall in FY 2008-2009, if necessary. The CVAG Executive Committee approved this commitment at its March 2003 meeting. An MOU for the fifth of nine projects programmed for funding under the Measure A Tier II State Routes 86 and 111 program is being submitted for a total funding authorization of $3,200,00O for the city of Indio's Highway 1 1 1 Jefferson Street to Madison Street project. This MOU is consistent with CVAG's adopted Measure A state highway program of projects and cash flow is attached which was approved by the Commission at the July 9, 2003 meeting. Staff recommends approval of the MOU for the city of Indio, consistent with the approved list of Tier II Route 86 and 1 1 1 project improvements. Financial Information In Fiscal Year Budget: Y Year: FY 2005/06 Amount: $700,000 Source of Funds: Measure A Budget Ad ustment: N GLA No.:. 253 31 81102 P3416 Fiscal Procedures Approved: v44,4,:tacituiz Date: 1/23/06 Attachments: Memorandum of Understanding for City of Indio CVAG — Route 111 Funding Schedule 24 Agreement No. 06-31-017-00 MEMORANDUM OF UNDERSTANDING FOR THE FUNDING AND JOINT DEVELOPMENT OF STATE HIGHWAY 111 IMPROVEMENTS WITHIN THE CITY OF INDIO 1. Parties and Date. 1.1 This Agreement is executed and entered into this _ day of , 2006, by and between the RIVERSIDE COUNTY TRANSPORTATION COMMISSION ("RCTC") and THE CITY OF INDIO ("CITY"). 2. Recitals. 2.1 RCTC is a county transportation commission created and existing pursuant to California Public Utilities Code Sections 130053 and 130053.5. 2.2 On November 8, 1988 the Voters of Riverside County approved Measure A authorizing the collection of a one-half percent (1/2%) retail transactions and use tax (the "tax") to fund transportation programs and improvements within the County of Riverside, and adopting the Riverside County Transportation Improvement Plan (the "Plan"). 2.3 The Plan allocates 20 million dollars for the construction of improvements along Route 111 from Jefferson Street to Madison Street in the Coachella Valley (the "Highway 111 Funds"). 2.4 Pursuant to Public Utility Code Sections 240000 et seq., RCTC is authorized to allocate the proceeds of the Tax in furtherance of the Plan. 2.5 The City, RCTC and Caltrans are planning certain improvements along State Highway 111 with the City of Indio. 2.6 RCTC has determined that the improvements referenced in Section 2.5 above and described more fully herein qualify for Highway 111 Funds. 2.7 RCTC intends, by this Agreement, to allocate Highway 111 Funds towards the construction of these intersection improvements, subject to the conditions provided herein, and to participate in the joint development of the Project, as defined herein. 1 25 3. Terms. 3.1 Description of Improvements. This Agreement is intended to allocate Highway 111 Funds to provide finding, design and other services for authorized portions of the Route 111 improvements currently being planned on Highway 111, from Jefferson Street to Madison Street, within the City of Indio (the "Project"). The Project is more fully described in Exhibit "A" attached hereto and, pursuant to Section 3.3 below, is subject to modification as requested by the City and approved by RCTC which approval will not be unreasonably withheld. It is under stood and agreed that the City shall expend Highway 111 Funds only as set forth in this Agreement and only for the Project. To this end, any use of funds provided pursuant to this Agreement shall be subject to the review and approval of RCTC. 3.2 Funding Amount. RCTC hereby agrees to initially allocate to the City, on the terms and conditions set forth herein, the sum of Three Million Two Hundred Thousand Dollars ($3,200,000.00) for project development, right of way acquisition, and construction costs ("Funding Amount"). It is also understood and agreed that 100% of the proposed improvements will be installed within the existing State right-of-way. Therefore, the Initial Funding Amount represents one hundred percent (100%) of the estimated Total Project Costs, as defined in Sections 3.14.1 and 3.14.2 below. This cost/funding allocation percentage ("Cost/Funding Allocation Percentage") is subject to an adjustment pursuant to Section 3.14.3 below. In addition, the Funding Amount is subject to an adjustment pursuant to section 3.14.5 based upon the final Cost/Funding Allocation Percentage and the final Total Project Cost. 3.3 Responsibilities of Parties/Project Description. The responsibilities of the City and RCTC with respect to this Agreement and the successful completion of the Project are described in Exhibit `B", attached hereto and incorporated herein by reference. Changes to the characteristics of the Project and any responsibilities of the City or RCTC may be requested in writing by the City and are subject to the approval of RCTC's Representative, which approval will not be unreasonably withheld. 3.4 Teiin/Notice of Completion. The term of this Agreement shall be from the date first herein above written until the date the City provides a written Notice of Completion to RCTC, until termination of this Agreement pursuant to Section 3.9 or Until June 30, 2009, whichever occurs first. All applicable indemnification provisions of this Agreement shall remain in effect following the termination of this Agreement. 3.5 RCTC's Representative. RCTC's Executive Director, or his or her designee, shall serve as RCTC's Representative and shall have the authority to act on behalf of RCTC for all purposes under this Agreement. RCTC's Representative shall also review and give approval, as needed, to the details of the City's work as it progresses. 2 • • 26 • 3.6 The City's Representative. The City hereby designates Glenn Southard, City Manager, or his designee as the City's Representative to RCTC. The City's Representative shall have the authority to act on behalf of the City for all purposes under this Agreement and shall coordinate all phases of the Project under the City's responsibility. The City shall work closely and cooperate fully with RCTC's Representative and any other agencies which may have jurisdiction over or an interest in the Project. 3.7 Standard of Care; Licenses. The City and RCTC represent and maintain that they shall implement the Project in a skillful and competent manner and shall only involve in the Project persons or entities skilled in the calling(s) necessary to perform all services, duties and obligations required to fully and adequately complete the Project. 3.8 Review of Services. The City and RCTC shall allow RCTC's Representative and City's Representative, respectively, to inspect or review the progress of the Project at any reasonable time in order to determine whether the terms of this Agreement are being met. 3.9 Termination. 3.9.1 Notice. Either RCTC or City may, by written notice to the other party, terminate this Agreement for cause in whole or in part at any time, by giving written notice to the other party of such termination and specifying the effective date thereof. Upon receipt of a written notice of termination, RCTC or the City, respectively, shall cease expenditure of funds which are expected to be reimbursed with Highway 111 Funds pursuant to this Agreement. 3.9.2 Effect of Termination. Upon termination by RCTC or the City, RCTC shall allocate Highway 111 Funds towards the Project improvements satisfactorily completed through the date of termination. Such allocation shall be determined by multiplying the Cost/Funding Allocation Percentage (which shall be subject to adjustment pursuant to the procedures outlined in Section 3.13.3) by the amount of the Total Project Cost, as defined in Sections 3.13.1 and 3.13.2, incurred prior to the date of termination. The City shall provide documentation deemed adequate by RCTC's Representative to show the Project Costs incurred and Project improvements actually completed prior to the date of termination. This Agreement shall terminate seven (7) days following receipt by the City of the written notice of termination. 3.9.3 Cumulative Remedies. The rights and remedies of the Parties provided in this Section are in addition to any other rights and remedies provided by law or under this Agreement. 3.10 Prevailing Wages. The City and RCTC and any other person or entity hired to perform services on the Project are alerted to the requirements of California Labor Code Sections 1770 et seq., which would require the payment of prevailing wages were the services or any portion thereof determined to be a public work, as defined therein. The City or RCTC, as applicable, shall ensure compliance with these prevailing wage requirements by any person or entity hired to perform 3 27 services on the Project. The City shall defend, indemnify, and hold harmless RCTC, its officers, employees, consultants, and agents from any claim or liability, including without limitation attorneys, fees, arising from its failure or alleged failure to comply with California Labor Code Sections 1770 et seq. RCTC shall defend, indemnify, and hold harmless the City, its officers, employees, consultants; and agents from any claim or liability, including without limitation attorneys' fees, arising from its failure or alleged failure to comply with California Labor Code Sections 1770 et seq. 3.11 Copies of Materials. Each party shall have the right to inspect and to obtain for its record copies of all records and materials which may be prepared by the other party under this Agreement. 3.12 Indemnification. 3.12.1 City Responsibilities. The City agrees to indemnify and hold harmless RCTC, its officers, agents, consultants, and employees from any and all claims, demands, costs or liability arising from or connected with all activities govemed by this Agreement including all design and construction activities, due to negligent acts, errors or omissions or willful misconduct of the City or its sub -consultants. The City will reimburse RCTC for any expenditures, including reasonable attorneys' fees, incurred by RCTC, in defending against claims ultimately determined to be due to negligent acts, errors or omissions or willful misconduct of the City. 3.12.2 RCTC Responsibilities. RCTC agrees to indemnify and hold harmless the City, its officers, agents, consultants, and employees from any and all claims, demands, costs or liability arising from or connected with all activities governed by this Agreement including all design and construction activities, due to negligent acts, errors or omissions or willful misconduct of RCTC or its sub -consultants. RCTC will reimburse the City for any expenditures, including reasonable attorneys CI fees, incurred by the City, in defending against claims ultimately determined to be due to negligent acts, errors or omissions or willful misconduct of RCTC. 3.12.3 Effect of Acceptance. The City and RCTC shall be responsible for the professional quality, technical accuracy and the coordination of any services provided to complete the Project. One party's review, acceptance or funding of any services performed by the other party or any other person or entity under this agreement shall not be construed to operate as a waiver of any rights the other party hereto may hold under this Agreement or of any cause of action arising out such persons, or entities, performance. Further, the City shall be and remain liable to RCTC, in accordance with applicable law, for all damages to RCTC caused by the City's negligent performance of this Agreement or supervision of any services provided to complete the Project. In addition, RCTC shall be and remain liable to the City, in accordance with applicable law, for all damages to the City caused by RCTC's negligent performance of this Agreement or supervision of any services provided to complete the Project. 4 • s • 28 • 3.13 Insurance. The City and ROTC shall require all persons or entities hired to perform services on the Project to obtain, and require their sub -consultants to obtain, insurance of the types and in the amounts described below and satisfactory to RCTC and City. Such insurance shall be maintained throughout the term of this Agreement, or until completion of the Project, whichever occurs last. 3.13.1 Commercial General Liability Insurance. Occurrence version commercial general liability insurance or equivalent form with a combined single limit of not less than $1,000,000.00 per occurrence. If such insurance contains a general aggregate limit, it shall apply separately to the Project or be no less than two times the occurrence limit. Such insurance shall: 3.13.1.1 Name RCTC and City, their officials, officers, employees, agents, and consultants as insured with respect to performance of the services on the Project and shall contain no special limitations on the scope of coverage or the protection afforded to these insured; 3.13.1.2 Be primary with respect to any insurance or self insurance programs covering RCTC or City, their officials, officers, employees, agents, and consultants; and 3.13.1.3 Contain standard separation of insured provisions. 3.13.2 Business Automobile Liability Insurance. Business automobile liability insurance or equivalent form with a combined single limit of not less than $1,000,000.00 per occurrence. Such insurance shall include coverage for owned, hired and non -owned automobiles. 3.13.3 Professional Liability Insurance. Errors and omissions liability insurance with a limit of not less than $1,000,000.00 Professional liability insurance shall only be required of design or engineering professionals. 3.13.4 Workers' Compensation Insurance. Workers' compensation insurance with statutory limits and employers' liability insurance with limits of not less than $1,000,000.00 each accident. 3.14 Payment of Funding Amount. 3.14.1 Total Project Cost. The total Project costs (C`Total Project Cost') shall include the following items: (1) funds expended by in preparation ofpreliminary engineering study; (2) funds expended for preparation of environmental review documentation for the Project; (3) all costs associated with right-of-way acquisition, including right-of-way engineering, appraisal, acquisition, legal costs for condemnation procedures if authorized by the City, and costs of reviewing appraisals and offers for property acquisition; (4) costs reasonably incurred if condemnation proceeds; (5) costs incurred in the preparation of plans, specifications, and estimates by consultants or staff; (6) staff costs associated with bidding, advertising and awarding of the Project construction contract; (7) 5 29 construction costs, including change orders to construction contract approved by the City and ROTC; and (8) construction management, field inspection and material testing costs. It is understood and agreed that these costs include costs already incurred by RCTC and the City towards completion of the Project. 3.14.2 Excluded Total Project Cost. The Total Project Cost shall not include the following items which shall be bome solely by the individual parties without reimbursement: (1) RCTC management costs for Project coordination which are attributed to its total State Highway 111 Project of Measure "A"; (2) City Project coordination costs; (3) City and/or RCTC costs attributed to the preparation of invoices, billings and payments; (4) any City and/or RCTC fees attributed to the processing of the Project. 3.14.3 Cost/Funding Allocation Percentage Determination. The final determination of the appropriate Cost/Funding Allocation Percentage shall be made by the City's Representative and RCTC's Project Coordinator using the guidelines attached hereto as Exhibit "C" and incorporated herein by reference, and the best available cost estimate information from the project design engineer. The determination of the Cost/Funding Allocation Percentage shall be made after the design review process has terminated, but prior to the award of the Project for public contracting purposes. In the event of a disagreement between the City's Representative and RCTC's Project Coordinator regarding the Cost/Funding Allocation Percentage, RCTC's Executive Director and the City Manager shall review the determination and attempt to resolve the dispute. If the City Manager and Executive Director are unable to agree, either party may appeal, in writing, to the RCTC Board. The RCTC Board's determination regarding the Cost/Funding Allocation Percentage shall be final. 3.14.4 Payment. RCTC shall pay for all consultant costs as they are incurred and invoiced for design work, right-of-way services and any other services under its responsibilities, which payments shall serve as a credit towards its Funding Amount. The City shall pay for all Project contract costs and consultant and other costs for services under this responsibilities as they are incurred and invoiced, which amounts, if appropriate pursuant to Sections 3.13.1 and 3.13.2, shall be applied towards the Total Project Cost. Payment requirements for the City shall include backup documents for all charges requested for reimbursement. 3.14.5 Funding Amount/Adiustment. If the Project is completed before June 30, 2009, RCTC's Project Coordinator shall meet with the City's Representative within thirty (30) days following the filing of a proper written Notice of Completion of the Project by the City to determine the Funding Amount. This determination shall be made by multiplying the Cost/Funding Allocation Percentage by the Total Project cost. The Total Project Cost shall be determined upon completion of the Project. In the event the Project is not completed by June 30, 2009, RCTC's Project Coordinator and the City's Representative shall meet to determine the Funding Amount to be allocated up through June 30, 2009. The City shall not be entitled to any funding pursuant to this Agreement after June 30, 2009. If as a result of payments made under Section 3.14.4, above, either the City of RCTC has paid in excess of its allowable share of the Total Project Cost, the other party shall reimburse said party for the excess within 30 days of the determination and approval of the Funding Amount by 6 • • • 30 • • • the City Representative and RCTC Project Coordinator. 3.14.6 SB 300 Reimbursements. Any SB 300 (Streets & Highways Code Section 2600) reimbursements received from the State for the Project shall be split proportionally according to the Cost/Funding Allocation Percentage, and credited towards each party's funding of the Total Project Cost. (SB 300 Reimbursement does not apply to this project) 3.14.7 Progress Reports. Either party may request the other party to inform it of delays in the Project and provide it with any requested progress reports. 3.14.8 Reimbursement for Expenses. The City shall not be reimbursed for any expenses unless authorized in writing by RCTC's Representative. 3.15 Change Orders. Any change orders in excess of ten thousand dollars ($10,000) must be reviewed and approved in writing by RCTC and City. 3.16 Conflict of Interest. For the term of this Agreement, no member, officer or employee of the City or ROTC, during the tern of his or her service with the City or ROTC, as the case may be, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 3.17 Limited Scope of Duties. RCTC's and the City's duties and obligations under this Agreement are limited to those described herein. RCTC has no obligation with respect to the safety of the Project Site unless it knows or should know of a dangerous condition or activity and fails to report such condition or activity to the responsible party or otherwise make reasonable corrective efforts. In addition, RCTC shall not be liable for any action of City or its consultants relating to the condemnation of property undertaken by City for the Project or for the construction of the Project. 3.18 Books and Records. Each party shall maintain complete, accurate, and clearly identifiable records with respect to costs incurred for the Project or under this Agreement. They shall make available for examination by the other party, its authorized agents, officers or employees any and all ledgers and books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or related to the expenditures and disbursements charged to the other party pursuant to this disbursements charged to the other party pursuant to this Agreement. Further, each party shall furnish to the other party, its agents or employees such other evidence or information as they may require with respect to any such expense or disbursement charged by them. All such information shall be retained by the parties for at least three (3) years following termination of this Agreement, and they shall have access to such information during the three-year period for the purposes of examination or audit. 3.19 Equal Opportunity Employment. The City and RCTC represent that they are equal opportunity employers and they shall not discriminate against any employee or applicant of 7 31 reemployment because of race, religion, color, national origin, ancestry, sex or age. Such non- discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. 3.20 Governing Law. This Agreement shall be governed by and construed with the laws of the State of California. 3.21 Attorneys' Fees. If either party commences an action against the other party arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorneys' fees and costs of suit. 3.22 Time of Essence. Time is of the essence for each and every provision of this Agreement. 3.23 Headings. Article and Section Headings, paragraph captions or marginal headings contained in this Agreement are for convenience only and shall have no effect in the construction or interpretation of any provision herein. 3.24 Notification. All notices hereunder and communications regarding interpretation of the terms of the Agreement or changes thereto shall be provided by the mailing thereof by registered or certified mail, return receipt requested, postage prepaid and addressed as follows: City of Indio P.O. Drawer 1788 100 Civic Center Mall Indio, CA 92202 ATTN: City Manager RCTC Riverside County Transportation Commission 4080 Lemon, ri Floor Riverside, CA 92501 ATTN: Executive Director Any notice so given shall be considered served on the other party three (3) days after deposit in the U.S. mail, first class postage prepaid, return receipt requested, and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred regardless of the method of service. 3.25 Conflicting Provisions. In the event that provisions of any attached appendices or exhibits conflict in any way with the provisions set forth in this Agreement, the language, terms and conditions contained in this Agreement shall control the actions and obligations of the Parties and the interpretation of the Parties' understanding concerning the performance of the Services. 3.26 Contract Amendment. In the event that the parties determine that the provisions of this Agreement should be altered, the parties may execute a contract amendment to add any provision to this Agreement, or delete or amend any provision of this Agreement. All such 8 • 32 • contract amendments must be in the form of a written instrument signed by the original signatories to this Agreement, or their successors or designees. 3.27 Entire Agreement. This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof and supersedes any previous agreements or understandings. 3.28 Validity of Agreement. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement. 3.29 Independent Contractors. Any person or entities retained by the City or any Consultant shall be retained on an independent contractor basis and shall not be employees of RCTC. Any personnel performing services on the Project shall at all times be under the exclusive direction and control of the City or consultant, whichever is applicable. The City or consultant shall pay all wages, salaries and other amounts due such personnel in connection with their performance of services on the Project and as required by law. The City or consultant shall be responsible for all reports and obligations respecting such personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance and workers' compensation insurance. RIVERSIDE COUNTY CITY OF INDIO TRANSPORTATION COMMISSION By: By: Marion Ashley, Chairman Gene Gilbert, Mayor APPROVED AS TO FORM: APPROVED AS TO FORM: By: By: Best, Best & Krieger Counsel to the Riverside County Transportation Commission 9 Eddie Kotin, City Attorney 33 EXHIBIT "A" DESCRIPTION OF SERVICES Highway 111 Widening Project Project Description: The proposed road widening will be on State Highway 111 from Madison Street to Jefferson Street. Project Scope: This project is for preparation of environmental documentation, Plans, Specifications and Estimate (PS&E) and Construction of the road widening of SR-111 from Jefferson Street to Madison Street from 4 lanes to 61anes. The existing bridge over the storm channel must be widened to 120 feet to accommodate the proposed six lanes and two turning lanes at the intersection of Jefferson Street. The intent of the Project is to mitigate current congestion and operations problems occurring daily along SR-111 highway. The Highway 111 currently operates under heavy delays during peak travel hours. Heavy traffic volumes and short intersection spacing create severe congestion in the morning and afternoon commute hours. The preparation of the necessary initiation documents, environmental clearance, preparation of a utility plan, preparation of rights of way map including legal description and plot map, right of way acquisition services, site plan, construction plans, a cost estimate and specifications to construct a 120 feet six lane road including bridge widening. Traffic signal modification at the intersection of Highway 111 and Jefferson Street and installation of a new traffic signal at intersection of Highway 111 and Shields Road together with center median channelization along Highway 111 are also included in the scope of work. The following services will be provided, as necessary to complete the improvements: Completion of Project development activities in accordance with Caltrans Standards and Project Development Guidelines. 2. Preparation of any needed environmental documentation in accordance with Caltrans procedures and State and Federal statues. 3. All needed right- of- way services and acquisition of property needed for improvements. 4. Construction of improvements as shown in attached Exhibit "C" 34 • EXHIBIT `B" RESPONSIBILITIES OF PARTIES RCTC SHALL: Reimburse City with appropriate funding contribution at completion of project or in accordance with the phased reimbursement schedule approved by the Coachella Valley Association of Govemments ("CVAG"). CVAG's phased reimbursement schedule allocates $700,000 during Fiscal Year 2005/06, $300,000 during Fiscal Year 2006/2007, $300,000 during Fiscal Year 2007/08 and $1,900,000 during fiscal year 2008/09 for eligible project components. RCTC will contribute a maximum of $3,200,000 for the Project. Arrive at appropriate funding allocation for overall Project in conjunction with City of Indio prior to award of construction contract by the City. CITY OF INDIO SHALL: Be responsible for design, environmental clearance, right of way acquisition, obtaining all permits required by impacted agencies prior to start of construction. Be responsible for the bidding, awarding, and administration of the construction contract. Be responsible for all Construction Management of the construction activities including survey and material testing. Arrive at appropriate funding allocation for overall project in conjunction with RCTC prior to award of construction contract by the City. CHANGES IN RESPONSIBILITIES The specific responsibilities of RCTC and the City as defined in this exhibit maybe changed pursuant to the terms of Section 3.3 of the Agreement. 35 1S NOSIOVW 011S NOS2iald3f ddW AVM-AO-11-1M 6 6 6 AMN • MA ONUSIX3 O C Z MRI 03S0d0Nd 0 r .L£t Z DCt .L6C A86 I ' Mal. I ,56ZL D o N zco m m co -I O z cn Ana 1 UUL4 Mni 0350d0bd = m r 0 m x o 36SI. 001.m_ NA ONI OG ,i0,1 IMBE C3 • EXHIBIT "D" Project Schedule: Preparation of Environmental Documents Acquisition of Right of Way Preparation of Plans and Specifications Construction of the Improvements START FINISH April 06 September 06 June 06 March 07 June 06 June 07 July 07 December 07 37 COACHELLA VALLEY ASSOCIATION OF GOVERNMENTS RIVERSIDE COUNTY TRANSPORTATION COMMISSION / 15% STATE HIGHWAY MEASURE "A" FUNDS PROJECTS PROGRAMMED TO RECEIVE 15% STATE HIGHWAY MEASURE "A" FUNDS SCHEDULE FOR RCTC PAYBACK BY FISCAL YEAR 02/03.08/09 Available Funds per RCTC Plan Lead Project Revised Description Agency Cost Cost State Route 111 Proiects 1- West Cathedral Canyon Channel Bridge CC 1,584,000 1,584,000 2• Jefferson St. to Madison St. IND 3,200,000 3,200,000 3- Simon Dr, to Adams St. LQ 291,507 311,644 4-Adams St. to Jefferson St. LQ 2,433,995 1,860,635 5- West City Limits to Washington St. LQ 244,616 321,255 6- Magnesia Falls to Fairway " RM 6,500,000 6,100,000 7- Intersection Improvements Qo Lincoln/4th COR 800,000 80,000 8- Left tumlane Qc Pierce COR 100,000 100,000 State Route 86 Projects 9- Traffic Signal CO 66th Ave. Total Authorized COR 271,000 271,000 15,425,118 13,823,534 FY02/03 FY03/04 FY04/05 FY05/06 FY06/07 FY07/08 FY08/09 "" TOTAL 0 1,600,000 1,800,000 1,900,000 2,100,000 2,200,000 2,400,000 12,000,000 0 100,000 100,000 200,000 300,000 400,000 484,000 1,564,000 0 0 300,000 400,000 300,000 300,000 1,900,000 3,200,000 0 200,000 111,644 0 0 0 0 311,644 0 100,000 100,000 96,101 400,000 500.000 664,534 1,860,635 0 0 100,000 121,255 100,000 321,255 0 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,100,000 6,100,000 0 0 0 0 0 0 80,000 - 80,000 0 100,000 0 0 0 0 0 100,000. 0 100,000 88,356 82,644 0 0 0 271,000 0 1,600,000 1,800,000 1,900,000 2,100,000 2,200,000 4,228,534 13,828,534 "' FY08/09 shortfall from RCTC funds of $1,828,534 will be covered by CVAG TUMF/Measure"A" funds, if necessary co*" CVAG will advance the City of Rancho Mirage project cost 46,100,000) in accordance with Available Funds per RCTC Plan, from TUMFIMeasure "A" funds . RCTC will reimburse CVAG CO according to the RCTC Payback by Fiscal Year 02/03.08/09 for the City of Rancho Mirage, shown in the table above t• West Cathedral Canyon Channel Bridge: This project is scheduled to start Design In Feb, Mar of 2003 (4-6 months) including Environmental, then 2 months advertising followed by 6-6 months constmction 2- Jefferson St. to Madison St. This project Is scheduled to start Construction in January 2004. Construction will be completed In 90 days. The cost for Design is $300,000 and construction is $2,900,000 3- Simon Dr. to Adams St. 4- Adams St. to Jefferson St. The above two La Quints Projects will be in design once the City finalizes an agreement with RCTC to secure the reimbursement. Start design in March, April 2003 for 6-8 months, followed by construction for 10-12 months 5- West City Limits to Washington SI. Project will start once funding is available. 6- Magnesia Falls to Fairway ----- Project completed 7- Intersection Improvements fig Lincoln/4th --- County of Riverside withdrew this project County of Riverside did some Design, Env. & Survey work which cost $50,000. This project needs more money, $1.6Million. If there are no funds, county will drop this project, otherwise they like to proceed with this project. 8- Left tumlane Pierce 9- Traffic Signal @ 66th Ave. The above two County projects are waiting for the money to be available so they can start working on them. • • AGENDA ITEM 9 • • RIVERS/DE COUNTY TRANSPORTATION COMMISSION DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: Michele Cisneros, Accounting Manager THROUGH: Theresia Trevino, Chief Financial Officer SUBJECT: Mid -Year Budget Adjustments STAFF RECOMMENDATION: This item is for the Committee to: 1) Approve a $306,000 increase in expenditures for recruitment, employment screening, office reconfiguration and office systems, and salaries and benefits; 2) Approve a $65,000 increase in Service Authority for Freeway Emergencies (SAFE) general legal costs related to litigation; and 3) Forward to the Commission for final action. BACKGROUND INFORMATION: Staff has performed a review of expenditures for the six months ended December 31, 2005 and an estimate of expenditures for the remaining six months of the fiscal year (FY) ending June 30, 2006. As a result of the review, the following mid -year budget adjustments are proposed. Adjustment 1 - $306,000 On December 14, 2005 the Executive Committee approved the recruitment of four new positions: a Right of Way Program Manager, two Capital Projects Managers; and one Staff Analyst. These recruitments were not anticipated at the time the FY 2005/06 budget was adopted in June 2005. Additionally, the recruitment of two Staff Analysts included in the FY 2005/06 budget has been initiated. As a result, staff is requesting budget adjustments for the recruitment, employment screenings, office reconfiguration, new office systems, and salaries and benefits to cover the costs associated with expanding Commission staff. • Adjustment 1 A To ensure the Commission received an ample pool of candidates with the desired qualifications, skills, and expertise, it was important to advertise 39 these job announcements with various media sources. The job announcements were advertised from December 25, 2005 to January 8, 2006 with Jobs Available, Women's Transportation Seminar (WTS), regional transportation planning agencies, Press Enterprise, Los Angeles Times, Desert Sun, La Opinion, and Black Voice. This approach has proven to -be very successful with a tremendous response of applicants. Staff is requesting a budget adjustment of $25,000 to cover the costs of these advertisements for the six new positions. Adequate General Fund fund balance exists to accommodate this budget adjustment. • Adjustment 1 B For those qualified applicants offered with conditional employment, a background investigation (applicable to finance and accounting -related positions) and a medical screening will be required. The intent of the background investigation is to determine if the selected candidate's past history might indicate any potential problems related to the ability to perform financial and accounting duties. The purpose of the health screening is to identify any potential drug issues and physical issues primarily concerning flexibility. The estimated cost of these employment screenings for the six new positions and the vacant senior accounting assistant position is $10,000. Adequate General Fund fund balance exists to accommodate this budget adjustment. • Adjustment 1 C In order to accommodate the six new staff positions, the Commission must add and/or redesign office systems and reconfigure existing office space. Staff estimates the cost for the new office systems including furniture and equipment at $24,000. The cost to construct office reconfigurations has preliminarily been estimated at $50,000. Adequate General Fund fund balance exists to accommodate this budget adjustment of $74,000. • Adjustment 1 D Staff has prepared a six-month salary and benefits cost ana►ysis to determine the effects of the retirement of two Directors and the six new recruitments. The analysis determined a total cost savings of $74,400 with the reassignment of duties from the retiring Director of Administrative Services to the acting Clerk of the Board, from the retiring Director of Regional Issues . and Public Affairs to the new Director of Regional Programs, and from the former Rail .Department Manager to the new Rail Program Manager. The cost to cover salaries and benefits for three Program Managers is partially • 40 • • offset by the cost savings above; therefore, a budget of adjustment of $197,000 is requested for the remaining costs. Staff had included the salaries and benefits for the Staff Analyst positions in the FY 2005/06 budget adopted in June 2005. Adequate Special Revenue Fund fund balance exists to accommodate this budget adjustment. Adjustment 2 - $65,000 As the SAFE for Riverside County (County), the Commission is in litigation against and has filed motions regarding a lawsuit filed by the California Center for Law and the Deaf. The lawsuit relates to the request for text -typewriter (TTY) equipment in the call boxes located within the County. Accordingly, legal costs are expected to be greater than those anticipated when the original budget was adopted in June 2005. Staff is requesting a budget adjustment of $65,000 to accommodate these legal expenditures. Adequate SAFE fund balance exists to accommodate this budget adjustment. Financial Information In Fiscal Year Budget: N Year: FY2005/06 Amount: $371,000 Source of Funds: Measure A/LTF/FSP/SAFE Budget Adjustment: Y S-18-73660 P1001- 01 $35,000 S-12-90501 P1001- 01 $74,000 GLA No.: 222-31-60000 P3999 $105,000 222-31-61000 P3999 $92,000 202-45-65101 $65,000 Fiscal Procedures Approved: \pt€4,4deitij Date: 1 /23/06 41 AGENDA ITEM 10 • RIVERS/DE COUNTY TRANSPORTATION COMMISSION DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: Audit Ad Hoc Committee Theresia Trevino, Chief Financial Officer THROUGH: Anne Mayer, Programming and Administration Director SUBJECT: Fiscal Year 2004/05 Commission Audit Results AUDIT AD HOC COMMITTEE AND STAFF RECOMMENDATION: This item is for the Committee to: 1) Receive and file the Fiscal Year (FY) 2004/05 Comprehensive Annual Financial Report; 2) Receive and file the FY 2004/05 Local Transportation Fund Audited Financial Statements; 3) Receive and file the FY 2004/05 State Transit Assistance Fund Audited Financial Statements; 4) Receive and file the FY 2004/05 Compliance Report; 5) Receive and file the FY 2004/05 Audit Results Report; 6) Receive and file the FY 2004/05 Management Letter; 7) Receive and file the FY 2004/05 Agreed -Upon Procedures Report related to the Commuter Assistance Program incentives; 8) Receive and file the FY 2004/05 Agreed -Upon Procedures Report related to the Appropriation Limit Calculation; and 9) Forward to the Commission for final action. BACKGROUND INFORMATION: In April 2003, McGladrey & Pullen LLP was selected to perform an audit of the Commission's basic financial statements included in the Comprehensive Annual Financial Report (CAFR), the Local Transportation Fund, the State Transit Assistance Fund, and federal awards. Additionally, it was requested to perform agreed -upon procedures related to the annual Appropriations Limit Calculation and the Commuter Assistance Program incentives. The audits and agreed -upon procedures for the fiscal year ended June 30, 2005 have been completed, and all reports have been issued by McGladrey & Pullen. The Commission's CAFR consists of three sections: introductory, financial, and statistical. While the introductory and statistical sections were not audited by 42 McGladrey & Pullen, the basic financial statements included in the financial section were audited by McGladrey & Pullen. The Commission received an unqualified opinion on its basic financial statements from McGladrey & Pullen, which is the highest form of assurance. Limited procedures were performed related to the required supplementary information, including Management's Discussion and Analysis; such information was not audited. The other supplementary information was subject to the auditing procedures applied in the audit of the basic financial statements, and, in the opinion of the auditors, it is fairly stated in relation to the basic financial statements. The auditors' opinion also includes an explanatory paragraph related to a restatement for capital assets and net assets that is discussed further in Note 13 to the financial statements. While the restatement did not affect the fund financial statements, it did result in a net increase to the government -wide financial statements for capital assets and net assets of $19,283,259. Staff determined that certain rail easements and property had not been properly accounted for in prior year financial statements upon implementation in FY 2001 /02 of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements —and Management's Discussion and Analysis —for State and Local Governments. The basic financial statements reflect the new reporting model as required by GASB Statement No. 34; this is the fourth consecutive year under the new reporting model. The basic financial statements include government -wide financial statements and fund financial statements. Additionally, Management's Discussion and Analysis is required and provides a narrative overview and analysis of the Commission's financial activities for the fiscal year. Financial highlights include net assets of $334,455,859 at June 30, 2005, representing an increase of $99,566,167 from the prior year (as restated), and governmental funds fund balances of $336,635,297 at June 30, 2005, representing an increase of $91,260,931 from the prior year. The audit reports related to the separately issued financial statements of the Local Transportation Fund and the State Transit Assistance Fund also reflect unqualified opinions from McGladrey & Pullen. These financial statements are required to be issued separately under the Transportation Development Act; however, they are also included in the fund financial statements in the CAFR. These reports noted no matters considered to be a material weakness in internal control and no instances of noncompliance. The Compliance Report, often referred to as the Single Audit Report, includes the reports on compliance and internal control over financial reporting and over federal 43 • awards. These reports noted no matters considered to be material weaknesses in internal control and no instances of noncompliance. A management letter usually includes recommendations for improvements and operational efficiencies related to internal control and other matters noted during the audit. McGladrey & Pullen's management letter consisted of a general comment on "Developing Policies That Address Fraud Risk." The Appropriations Limit Calculation and Commuter Assistance Program reports are based on specific procedures agreed to by the Commission and other agencies. The auditors noted no exceptions or findings related to the procedures performed. Professional auditing standards require the auditors to communicate to the audit committee, or an equivalent group, to ensure that it is provided with additional information regarding the scope and results of the audit that may assist the group in overseeing management's financial reporting and disclosure process. Such required communications will be discussed with the Committee in a presentation by McGladrey & Pullen. Attachments: 2005 Comprehensive Annual Financial Report 2005 Local Transportation Fund Financial and Compliance Report 2005 State Transit Assistance Fund Financial Report 2005 Compliance Report 2005 Communications to the Audit Ad Hoc Committee 2005 Management Letter 2005 Agreed -Upon Procedures Report on Commuter Assistance Program incentives 2005 Agreed -Upon Procedures Report on Appropriations Limit Calculation 44 Local Transportation Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Financial and Compliance Report June 30, 2005 McGladrey& Pullen Certified Public Accountants McGladrey & PaGen, LLP is a member firm of RSM International, an Abelian of separate and independent legal entities. 45 Contents Independent Auditor's Report on the Financial Statements and Supplementary Information 1 and 2 Financial Statements Balance Sheet Statement of Revenues, Expenditures and Change in Fund Balance Notes to Financial Statements 4 5-7 Supplementary Information Schedule of Allocations and Disbursements 8 Schedule of Unclaimed Apportionments (Articles 4 and 8) g • Schedule of Unclaimed Apportionments (Article 3) 10 Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 11 Schedule of Transportation Development Act Compliance Summary of Schedule of Prior Audit Findings 12 • 46 • McGladrey& Pullen Certified Public Accountants Independent Auditor's Report on the Financial Statements and Supplementary Information Board of Commissioners Riverside County Transportation Commission Riverside, California We have audited the accompanying financial statements of the Local Transportation Fund of the County of Riverside, as administered by the Riverside County Transportation Commission (Commission), as of and for the year ended June 30, 2005, as listed in the table of contents. These financial statements are the responsibility of the Commission's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As discussed in Note 1, the financial statements present only the Local Transportation Fund and do not purport to, and do not, present fairly the financial position of the Commission or the County of Riverside, California, as of June 30, 2005, and the respective changes in its financial position, where applicable, for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Local Transportation Fund of the County of Riverside, as administered by the Commission, as of June 30, 2005, and the respective changes in financial position, where applicable, thereof for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 14, 2005 on our consideration of the Commission's intemal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that reporl is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Govemment Auditing Standards and should be considered in assessing the results of our audit McGladrey 8 Pullen, LLP is a member firm of RSM Intemalionat an affiliation of separate and independent legal entities. 1 47 The Local Transportation Fund of the County of Riverside has not presented a Management's Discussion and Analysis required by Govemmental Accounting Standards Board (GASB) Statement No. 34 that the GASB has determined is necessary to supplement, although not required to be a part of, the financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The schedules listed in the table of contents as supplementary information are presented for purposes of additional analysis and are not a required part of the financial statements of the Local Transportation Fund. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. Riverside, California October 14, 2005 2 48 • Local Transportation Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Balance Sheet June 30, 2005 Assets Cash and Investments with County Treasurer $ 43,605,451 Accounts Receivable 13,692,556 Interest Receivable 256,097 Prepaid Allocations 239,640 Total assets $ 57,793,744 Liabilities and Fund Balance Liabilities Accounts payable $ 215,063 Due to other Riverside County Transportation Commission fund 2,845 Total liabilities 217,908 Fund Balance Reserved: Rail and bus transit and local streets and roads apportionments 37,853,099 Bicycle and pedestrian projects 1,360,685 Prepaid allocations 239,640 Transportation program 13,692,556 Unapportioned carryover 3,821,711 Unreserved and designated for bicycles and pedestrians 608,145 Total fund balance 57,575,836 Total liabilities and fund balance $ 57,793,744 See Notes to Financial Statements. 3 49 Local Transportation Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Statement of Revenues, Expenditures and Change in Fund Balance Year Ended June 30, 2005 Revenues: Sales taxes Interest Total revenues Expenditures: Disbursements to claimants Excess of revenues over expenditures Fund balance at beginning of year Fund balance at end of year See Notes to Financial Statements. 4 $ 66,776,381 605,717 67,382,098 52,399,514 14,982,584 42,593,252 $ 57,575,836 • 50 • Local Transportation Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Notes to Financial Statements Note 1. Nature of Operations and Significant Accounting Policies The Riverside County Transportation Commission (Commission), in its capacity as the transportation planning agency for the County of Riverside, California (County), is responsible for administering funds provided through the Local Transportation Fund (Fund), which was created in accordance with the provisions of the Transportation Development Act of 1971. The significant revenue to the Fund is derived from one-fourth of one percent of the seven and one -quarter percent statewide sales tax collected in the County by the State Board of Equalization. The accounting policies of the Commission conform to accounting principles generally accepted in the United States as applicable to governmental units. A summary of the Commission's significant accounting policies is as follows: Presentation: The accompanying financial statements of the Fund are intended to present the financial position and the changes in financial position of only that portion of the governmental activities of the Commission that is attributable to the transactions of the Local Transportation Fund of the Commission. They do not purport to, and do not, present fairly the financial position of the Commission as of June 30, 2005 and the changes in its financial position, where applicable, for the year then ended in conformity with accounting principles generally accepted in the United States. Basis of accounting: The modified accrual basis of accounting is followed in the Fund. Under the modified accrual basis of accounting, expenditures are recorded when they are expected to be liquidated with expendable available resources, and revenue is recorded when it becomes both measurable and available. "Measurable" means the amount of the transaction can be determined, and 'available" means collectible within the current period or soon enough thereafter to be used io pay liabilities of the current period. Funding: There is a three -step process for obtaining funds from the Fund: apportionment, allocation and payment. Annually, the Commission determines each area's share of the anticipated Fund. This share is the area apportionment. Once funds are apportioned to a given area, they are typically available only for allocation to claimants in that area. Allocation is the discretionary action by the Commission which designates funds for a speck claimant for a specific purpose. Payment is authorized by disbursement instructions issued by the Commission. Expenditures: Expenditures represent disbursements to the Commission, Southern California Association of Governments, cities, the County of Riverside and transit operators that have met the claimant eligibility requirements to receive Fund monies per various Public Utilities Code Sections. All disbursements are to be used for transportation purposes. Disbursements for subsequent year allocations are recorded as prepaid allocations. Note 2. Cash and Investments with County Treasurer The funds in the County Treasury are pooled with those of other entities in the County and invested in accordance with the County's investment policy. These pooled funds are carried at fair value. Fair value is based on quoted market prices and/or direct bids, when needed, from government dealers on some variable or floating rate items. Moneys in the Fund are legally required to be deposited in the County Treasury pool. An Investment Oversight Committee has been established by the County, which acts as a regulator of the pool. 5 51 Local Transportation Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Notes to Financial Statements Note 3. Fund Balance Reserves for the Fund represent the unclaimed apportionments related to claims for transit programs, the unexpired allocations available for bicycle and pedestrian projects, prepaid transit allocations, eamed but not received revenues for transportation programs, and unapportioned carryover. Expired allocations related to bicycle and pedestrian projects are unreserved and designated. At June 30, 2005, amounts held in trust are allocated as follows: Rail and Bus Transit and Local Streets and Roads Apportionments: Western County: Commuter rail: Allocated and undaimed $ 2,075,000 Apportioned and unallocated 13,915,940 Bus transit: City of Banning 50,000 City of Beaumont 760,500 Riverside Transit Agency (RTA) 5,685,950 Apportioned and unallocated 10,943,769 Total rail and bus transit —Western County 33,431,159 Coachella Valley apportioned and unallocated Allocated and unclaimed Apportioned and unallocated Total bus transit —Coachella Valley Palo Verde Valley: Apportioned and unallocated for transit and local streets and roads Total for rail and bus transit and local streets and roads apportionments Bicycle and pedestrian projects: Reserved for allocated amounts Unreserved and designated for unallocated amounts Total for bicycle and pedestrian projects Reserved for prepaid allocations Reserved for transportation program Reserved for unapportioned carryover 6 1,050,300 3,068,812 4,119,112 302,828 $ 37,853,099 $ 1,360,685 608,145 $ 1,968,830 $ 239,640 $ 13,692,556 $ 3,821,711 52 • Local Transportation Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Notes to Financial Statements Note 4. Commitments The RTA and the SunLine Transit Agency (collectively, the Agencies), major transit providers for the County, obtained available lease financing for bus acquisitions through the proceeds from certificates of participation issued by the California Transit Finance Corporation (Corporation) for each agency. Local transportation funds, to the extent of the Agencies' eligible share, along with other federal and state funds, were pledged as support for the Agencies' lease payments to the Corporation. For the year ended June 30, 2005, there were no Local Transportation Fund amounts expended for lease payments. 53 Supplementary Information 54 ® ® • Local Transportation Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Schedule of Allocations and Disbursements Year Ended June 30, 2005 SB 821 Article 3 Article 4 Article 8 Article 3 Planning, Programming and Administrative Totals Allocations Disbursements Allocations Unclaimed Disbursements Allocations Disbursements Allocations Disbursements Allocations Disbursements Amount Expenditures: City of Banning $ 307,500 $ 91,294 City of Beaumont City of Blythe 53,975 29,900 City of Cathedral City 60,000 60,000 City of Coachella 42,000 • City of Corona (),City of Desert Hot Springs 95,000 65,000 c-nCity of Hemet 56,341 City of La Quinta 88,090 City of Moreno Valley 152,520 57,520 City of Palm Desert 50,000 City of Palm Springs 109,939 30,426 City of Perris 145,000 85,000 City of Riverside 504,489 291,579 City of San Jacinto 117,000 52,000 City of Temecula 160,825 100,000 County of Riverside Auditor/Controller Road Department 552,450 158,918 Palo Verde Valley Transit Agency Commission Riverside Transit Agency SCAG SunLine Transit Agency Total expenditures 2,495,129 1,021,637 Prepaid allocations: Riverside Transit Agency Total prepaid allocations Total $ 2,495,129 $ 1,021,637 $ 987,116 $ 833,714 $ 736,481 1,235,700 906,009 1,910,570 1,910,570 789,300 7,017,800 28,534,769 789,300 5,195,645 28,659,832 11,517,007 10,466,707 52,728,743 48,761,777 239,640 239,640 $ 52,968,383 239,640 239,640 $ 49,001,417 7 $ 1,294,616 $ 925,008 $ 369,608 736,481 736,481 53,975 29,900 24,075 60,000 60,000 42,000 42,000 1,235,700 906,009 329,691 95,000 65,000 30,000 56,341 56,341 88,090 88,090 152,520 57,520 95,000 50,000 50,000 109,939 30,426 79,513 145,000 85,000 60,000 2,415,059 2,202,149 212,910 117,000 52,000 65,000 160,825 100,000 60,825 12,000 12,000 12,000 12,000 552,450 158,918 393,532 789,300 789,300 2,497,800 2,497,800 9,515,600 7,693,445 1,822,155 28,534,769 28,659,832 (125,063 106,300 106,300 106,300 106,300 11,517,007 10,466,707 1,050,300 2,616,100 2,616,100 57,839,972 52,399,514 5,440,458 239,640 239,640 239,640 239,640 $ 2,616,100 $ 2,616,100 $ 58,079,612 $ 52,639,154 $ 5,440,458 Local Transportation Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Schedule of Unclaimed Apportionments (Articles 4 and 8) Year Ended June 30, 2005 Western County, Rail Bus Coachella Valley Palo Verde Valley: 0,Transit °”Unallocated Total transportation Auditor/Controller Commission administration Commission planning SCAG planning Total administration and planning Total apportionments • Fiscal Year 2004/2005 Prior Fiscal Year Apportionment Amounts Claimed Unclaimed Apportionment $ 10,635,868 $ 5,195,645 $ 5,440,223 37,708,988 30,275,294 7,433,694 12,990,775 10,466,707 2,524,068 789,300 789,300 236,618 62,361,549 46,726,946 12,000 12,000 675,000 675,000 1,822,800 1,822,800 106,300 106,300 Unclaimed Apportionment $ 10,317,152 $ 7,698,490 Amount Claimed Amount Returned Unclaimed Apportionment Total Unclaim( Interest Apportionn Allocation June 30, 2 $ $ 10,317,152 $ 233,565 $ 15,990,E 2,274,471 4,300,000 9,724,019 282,506 17,440,', 143,558 1,400,000 1,543,558 51,486 4,119,1 236,618 61,122 15,634,603 18, 220, 322 2,616,100 2,616,100 $ 64,977,649 $ 49,343,046 $ 15,634,603 $ 18,220,322 $ 10 61,122 5,088 302,E 2,274,471 5,700,000 21,645,851 572,645 37,853,C 2,274,471 $ 5,700,000 $ 21,645,851 $ 572,645 $ 37,853,C • • Local Transportation Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Schedule of Unclaimed Apportionments (Article 3) Year Ended June 30, 2005 Unclaimed Unclaimed Apportionment Interest Apportionment July 1, 2004 Apportionment Disbursements Allocations June 30, 2005 Bicycle and pedestrian projects $ 1,684,710 $ 1,272,685 $ 1,021,637 $ 33,072 $ 1,968,830 10 57 McGiadrey& Pullen Certified Public Accountants Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Board of Commissioners Riverside County Transportation Commission Riverside, Califomia We have audited the financial statements of the Local Transportation Fund of the County of Riverside, as administered by the Riverside County Transportation Commission (Commission), as of and for the year ended June 30, 2005, and have issued our report thereon dated October 14, 2005. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United Slates. Internal Control over Financial Reporting In planning and performing our audit, we considered the Commission's intemal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the intemal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Commission's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. This included those provisions of laws and regulations identified in the Transportation Development Act of 1971, as amended, and corresponding regulations of the Califomia Govemment Code. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Govemment Auditing Standards. This report is intended solely for the information and use of the management of the Commission, the Board of Commissioners and the Department of Transportation of the State of Califomia, and is not intended to be, and should not be, used by anyone other than these specified parties. /*G'��.x�2c.L„ Riverside, Califomia October 14, 2005 McGiadrey 6 Pullen, LLP is a member firm of RSM International, an alfiriation of separate and independent legal entities. 11 • s 58 • Local Transportation Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Schedule of Transportation Development Act Compliance Summary Schedule of Prior Audit Findings Year Ended June 30, 2005 CF #2003-01—SunLine Transit Agency Conditions: The SunLine Transit Agency (SunLine) is an enterprise fund of the SunLine Joint Powers Transportation Agency (SunLine JPA), the primary government. The SunLine JPA is a stand-abne government that was originally formed by the County of Riverside and the cities in the Coachella Valley to provide local and regional transportation services in the Coachella Valley. An audit of SunLine's financial statements for the fiscal year ended June 30, 2002 revealed two findings related to TDA funding. The first finding reported that SunLine advanced $751,000 in TDA funding, which is restricted to transit purposes only, to its affiliate, SunLine Services Group (SSG), which did not have sufficient cash flow to repay SunLine in the current period. SunLine pays administrative expenses for allocated salaries and benefits on behalf of SSG. SSG's funding comes primarily from contracts that pay on a reimbursement basis for SSG's services. SSG did not have sufficient cash flows to reimburse SunLine in the current period and, therefore, SunLine reserved $751,000 as a potential bad debt. SunLine proposed to request that its funding agencies allow a transfer of certain transit related equipment from SSG to SunLine to recover a substantial portion of the unpaid receivable. The second finding reported that SunLine secured a loan from a bank for the benefit of its affiliate, SSG. SunLine agreed to provide financing for SSG in connection with a program to provide CNG vehicles to the taxi industry. SSG purchased 45 CNG taxicabs to sell through a capital lease program to private taxicab operators. SSG did not have sufficient creditworthiness to obtain a bank loan to purchase the cabs. SunLine borrowed the funds on behalf of SSG. Although the finding does not result in questioned costs, the loan encumbers funds restricted for transit use only. Current Status: On July .14, 2004, the Commission took action to approve the transfer of assets valued at $1,142,000 from SSG to SunLine in consideration of SSG's outstanding debt to SunLine. The matter regarding SunLine's securing a loan from a bank for the benefit of SSG has not been resolved. The Commission believes that the compliance matter has been substantively corrected. 12 59 State Transit Assistance Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Financial and Compliance Report June 30, 2005 McGladrey& Pullen Certified Public Accountants McGladrey & Pupen, LLP is a member firm of RSM International, an affiliation of separate and independent legal entities. 60 Contents I n 1 Financial Statements Balance Sheet 3 Statement of Revenues, Expenditures and Change in Fund Balance 4 Notes to Financial Statements 5 and 6 Supplementary Information Schedule of Allocations and Disbursements Approved During the Year 7 Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Govemment Auditing Standards 8 61 McGladrey& Pullen Certified Public Accountants Independent Auditor's Report on the Financial Statements and Supplementary Information Board of Commissioners Riverside County Transportation Commission Riverside, California We have audited the accompanying financial statements of the State Transit Assistance Fund of the County of Riverside, as administered by the Riverside County Transportation Commission (Commission), as of and for the year ended June 30, 2005, as listed in the table of contents. These financial statements are the responsibility of the Commission's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As discussed in Note 1, the financial statements present only the State Transit Assistance Fund and do not purport to, and do not, present fairly the financial position of the Commission or the County of Riverside, California, as of June 30, 2005, and the respective changes in its financial position, where applicable, for the year then ended in conformity with accounting principles generally accepted in the United States of America. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the State Transit Assistance Fund of the County of Riverside, as administered by the Commission, as of June 30, 2005, and the respective changes in financial position, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 14, 2005 on our consideration of the Commission's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of intemal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The State Transit Assistance Fund of the County of Riverside has not presented a Management's Discussion and Analysis required by Governmental Accounting Standards Board (GASB) Statement No. 34 that the GASB has determined is necessary to supplement, although not required to be a part of, the financial statements. McGladrey & Pullen, lLP is a member fine of RSM International, an aififiation of separate and independent legal entities 1 62 Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The Schedule of Allocations and Disbursements Approved During the Year listed in the table of contents as supplementary information is presented for purposes of additional analysis and is not a required part of the financial statements of the State Transit Assistance Fund. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. Riverside, California October 14, 2005 2 63 State Transit Assistance Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Balance Sheet June 30, 2005 Assets Cash and Investments $ 3,280,171 State Allocation Receivable 839,216 Interest Receivable 18,597 Total assets $ 4,137,984 Liabilities and Fund Balance Liabilities Accounts payable $ 41,120 Due to other Commission funds 170,538 Total liabilities 211,658 Fund Balance Reserved for allocations available for programming Reserved for unclaimed allocations Total fund balance Total liabilities and fund balance See Notes to Financial Statements, 3 2,022,854 1,903,472 3,926,326 $ 4,137,984 64 • State Transit Assistance Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Statement of Revenues, Expenditures and Change in Fund Balance Year Ended June 30, 2005 Revenues: Sales taxes $ 3,348,739 Interest 61,492 Total revenues 3,410,231 Expenditures: Disbursements to claimants Excess of revenues over expenditures 2,050,529 1,359,702 Fund balance at beginning of year 2,566,624 Fund balance at end of year $ 3,926,326 See Notes to Financial Statements. 65 State Transit Assistance Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Notes to FinancialStatements Note 1. Nature of Operations and Significant Accounting Policies The Riverside County Transportation Commission (Commission), in its capacity as the transportation planning agency for the County of Riverside, California (County), is responsible for administering funds provided through the State Transit Assistance Program, which was created in 1979 under Chapter 161 (SB 620) of the Califomia statutes to provide a second source of Transportation Development Act funding for the development of transit systems. The funds are derived from fuel sales tax revenue and are budgeted through legislation and appropriated to the State Controllers Office for allocation to local agencies. The accounting policies of the Commission conform to accounting principles generally accepted in the United States as applicable to governmental units. A summary of the Commission's significant accounting policies is as follows: Presentation: The accompanying financial statements of the State Transit Assistance Fund (Fund) are intended to present the financial position and the changes in financial position, of only that portion of the governmental activities of the Commission that is attributable to the transactions of the Fund. They do not purport to, and do not, present fairly the financial position of the Commission as of June 30, 2005 and the changes in its financial position, where applicable, for the year then ended in conformity with accounting principles generally accepted in the United States. Basis of accounting: The modified accrual basis of accounting is followed in the Fund. Under the modified accrual basis of accounting, expenditures are recorded when they are expected to be liquidated with expendable available resources, and revenue is recorded when it becomes both measurable and available. 'Measurable" means the amount of the transaction can be determined, and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Allocations to local agencies: State transit assistance funds are allocated to the operators within the County. Public Utilities Code (PUC) Section 99313 allocates funds to regional transportation planning agencies based on the ratio of area population to state population. PUC Section 99314 allocates funds to public operators based on their share of fares and local support to other operators in the state. The allocations must be made in a resolution adopted by the Commission. Cash: It is the Commission's policy to deposit all funds received with the County of Riverside Tax Collector -Treasurer for investment until the funds are required for disbursement. Interest income is earned while these funds are so deposited. Fund balance reservations: The reserve for allocations available for programming represents amounts apportioned but not allocated to claimants. The reserve for unclaimed allocations represents amounts allocated and due to claimants but not yet paid. Disbursements to claimants: Disbursements to claimants represent funds disbursed to transit operators that have met the eligibility requirements to receive State Transit Assistance Program funds per PUC Sections 99313 to 99314. All disbursements are to be used for transit purposes. 5 • 66 State Transit Assistance Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Notes to Financial Statements Note 2. Cash and Investments Cash and investments at June 30, 2005 consist of the following: Cash and investments with County Treasurer $ 2,813,402 Cash at bank 1,345 Investments at bank 465,424 Total cash and investments $ 3,280,171 The funds in the County Treasury are pooled with those of other entities in the County and invested. These pooled funds are carried at fair value. Fair value is based on quoted market prices and/or direct bids, when needed, from government dealers on some variable or floating rate items. The Commission is a voluntary participant in the pool. An Investment Oversight Committee has been established by the County, which acts as a regulator of the pool. Note 3. Fund Balance At June 30, 2005, amounts reserved for unpaid allocations and for apportioned and unallocated amounts are as follows: Reserved for allocations available for programming: Western County: Commuter rail $ 525,452 Bus 1,226,234 Coachella Valley 198,020 Palo Verde Valley 73,148 2,022,854 Reserved for unclaimed allocations: Western County: City of Beaumont 212,100 Riverside Transit Agency (RTA) 642,665 Coachella Valley: Sunline Transit Agency (STA) 1,048,707 1,903,472 Total fund balance $ 3,926,326 Note 4. Commitments The RTA and the STA (collectively, the Agencies), major transit providers for the County, obtained available lease financing for bus acquisitions through the proceeds from certificates of participation issued by the California Transit Finance Corporation (Corporation) for each agency. State transit assistance funds, to the extent of the Agencies' eligible share, along with other federal and state funds were pledged as support for the Agencies' lease payments to the Corporation. For the year ended June 30, 2005, Fund revenues of $94,117 were expended for lease payments by STA. 6 67 • Supplementary Information 68 State Transit Assistance Fund of the County of Riverside as Administered by the Riverside County Transportation Commission Schedule of. Allocations and Disbursements Approved During the Year Year Ended June 30, 2005 Recipient Western County: City of Banning City of Beaumont City of Corona City of Riverside Riverside Transit Agency Commission Commuter Rail Program Total Western County SunLine Transit Agency Palo Verde Valley Transit Agency Other Amount Allocated $ 41,000 212,000 111,000 107,000 953,361 750,000 California Code of Regulations Amount Section No. Disbursed Reference $ 41,000 6731 6731 111,000 6731 107,000 6731 832,466 6730 757,166 6730 7 1,848,632 181,805 6730 19,730 6730 362 $ 2,896,296 $. 2,050,529 2,174,361 702,205 19,730 69 McGiadrey& Pullen Certified Public Accountants Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Board of Commissioners Riverside County Transportation Commission Riverside, California We have audited the financial statements of the State Transit Assistance Fund of the County of Riverside, as administered by the Riverside County Transportation Commission (Commission), as of and for the year ended June 30, 2005, and have issued our report thereon dated October 14, 2005. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the Commission's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the intemal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the intemal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Commission's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of taws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. This included those provisions of laws and regulations identified in the Transportation Development Act of 1971, as amended, and corresponding regulations of the California Government Code. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of management of the Commission, the Board of Commissioners and the Department of Transportation of the State of California, and is not intended to be, and should not be, used by anyone other than those specified parties. /*C114.. 7�I�IiPP�xt� GGP Riverside, Califomia October 14, 2005 McGiadrey 8 Poden, LLP is a member firm of RSM International, an affiliation of separate and independent legal entities S 70 • Riverside County Transportation Commission Compliance Reports June 30, 2005 McGladrey& Pullen Certified Public Accountants McGladrey & Pullen, LLP iS a member firm of RSM International, an affiliation al separate and independent legal entities. 71 Contents Schedule of Expenditures of Federal Awards 1 Note to schedule of expenditures of federal awards 2 Independent Auditors Report on: Internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with Govemment Auditing Standards 3 Compliance with requirements applicable to each major program and on intemal control over compliance in accordance with OMB Circular A-133 and on the schedule of expenditures of federal awards 4 and 5 Schedule of Findings and Questioned Costs 6 and 7 Summary Schedule of Prior Year Audit Findings 8 72 Riverside County Transportation Commission Schedule of Expenditures of Federal Awards Year Ended June 30, 2005 Grantor/Pass-through Grantor Program Title U.S. Department of Transportation: Highway Research, Planning and Construction Program Pass -through State Department of Transportation: SR-60 from 1-215 to Redlands HOV Lanes SR-79 Realignment Riverside to Orange County Major Investment Study Callbox Traffic Monitor Pedley Station Security Enhancement Pedley Station Platform Extension Pass -through San Bernardino Associated Governments: Rideshare Programs Regional Ridematching Pass -through Southern California Association of Governments: Riverside to Orange County Corridor Pass -through Orange County Transportation Authority: Authority: Regional Ridematching Pass -through Ventura County Transportation Commission: Regional Ridematching Federal Transit Administration, Formula Grants: Pass -through Riverside Transit Agency: Perris Multimodal Direct program: N. Main Corona and La Siena Parking Expansion Total expenditures of federal awards * Denotes major program See Note to Schedule of Expenditures of Federal Awards. 1 Catalog of Federal Domestic Assistance Number 20.205* 20.205* 20.205* 20.205* 20.205 * 20.205* 20.205* 20.205* 20.205 * 20.205 * 20.205 * Pass -through Entity Identifying Number/ Grant Number CMLN-6054 (016) HP21 L-6054 (015) STPL-6054 (039) RPSTPL-6054 (018) CML-6054 (024) STPL-6054 (022) 04-003-0441-506 04-003/04/0441-506 OCTA MOU C-4-1184 04-41-516/C-4-0329 M 24-004/MOU RSO405 20.500 M23-001 20.507 CA-90-Y182-00 Federal Expenditures $ 13,025,854 4,221,771 104,011 7,061 (331) (22,254) 747,684 32,286 300,000 64,024 21,751 18,501,857 129,700 13,384 143,084 $ 18,644,941 73 Riverside County Transportation Commission Note to Schedule of Expenditures of Federal Awards Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (the Schedule) presents the activity of all federal award programs of the Riverside County Transportation Commission (Commission). The Schedule includes federal awards received directly from federal agencies, as well as federal awards passed through other agencies. The Commission's reporting entity is defined in Note 1 to the Commission's basic financial statements. Because the Schedule presents only a selected portion of the operations of the Commission, it is not intended to, and does not, present the financial position of the Commission. The accompanying Schedule is presented on the modified -accrual basis of accounting. The information in this Schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. Therefore, some amounts presented in this Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. 2 74 • • McGladrey& Pullen Certified Public Accountants Independent Auditor's Report and on Internal Control over Financial Reporting on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Govemment Auditing Standards Board of Commissioners Riverside County Transportation Commission Riverside, Califomia We have audited the financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Riverside County Transportation Commission (Commission) as of and for the year ended June 30, 2005, which collectively comprise the Commission's basic financial statements, and have issued our report thereon dated October 14, 2005. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the Commission's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the intemal control over financial reporting would not necessarily disclose all matters in the intemal control over financial reporting that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the intemal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the intemal control over financial reporting and its operation that we consider to be material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Commission's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended for the information of the Board of Commissioners, management, federal awarding agencies and pass -through entities, and is not intended to be, and should not be, used by anyone other than those specified parties. l*C.&41-4.tv �K-eeeve. Riverside, Califomia October 14, 2005 McGladrey & Pullen, ur is a member firth of RSM International, an affiliation of separate and independent legal entities 3 75 McGladrey& Pullen Certified Public Accountants Independent Auditor's Report on Compliance with Requirements Applicable to Its Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 and on the Schedule of Expenditures of Federal Awards Board of Commissioners Riverside County Transportation Commission Riverside, California Compliance' We have audited the compliance of the Riverside County Transportation Commission (Commission) with the types of compliance requirements described in the U.S. Office of Management and Budget's (OMB) Circular A-133, Compliance Supplement that are applicable to its major federal program for the year ended June 30, 2005. The Commission's major federal program is identified in the summary of the independent auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to its major federal program is the responsibility of the Commission's management. Our responsibility is to express an opinion on the Commission's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non - Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Commission's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the Commission's compliance with those requirements. In our opinion, the Commission complied, in all material respects, with the requirements referred to above that are applicable to its major federal program for the year ended June 30, 2005. Internal Control over Compliance The management of the Commission is responsible for establishing and maintaining effective intemal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the Commission's intemal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. dAcOladrey & Puden, UP is a member firth of RSM International, an affiliation of separate and independent legal entities 4 76 • Our consideration of the internal control over compliance would not necessarily disclose all matters in the intemal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants caused by error or fraud that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. Schedule of Expenditures of Federal Awards We have audited the financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Commission as of and for the year ended June 30, 2005, which collectively comprise the Commission's basic financial statements, and have issued our report thereon dated October 14, 2005. . Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. This report is intended for the information of the Commission's management, Board of Commissioners, federal awarding agencies and pass -through entities, and is not intended to be, and should not be, used by anyone other than those specified parties. Riverside, Califomia October 14, 2005 5 77 Riverside County Transportation Commission Schedule of Findings and Questioned Costs Year Ended June 30, 2005 I. Summary of Independent Auditor's Results Financial Statements Type of auditor's report issued: Unqualified Internal control over financial reporting: • Material weakness(es) identified? Yes X No • Reportable condition(s) identified that are not considered to be material weaknesses? Yes X None Reported Noncompliance material to financial statements noted? Yes X No Federal Awards Internal control over major program: • Material weakness(es) identified? Yes X No • Reportable condition(s) identified that are not considered to be material weaknesses? Yes X None Reported Type of auditor's report issued on compliance for major programs: Unqualified • Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of OMB Circular A-133? Yes X No Identification of major program: CFDA Number Name of Federal Program 20.205 Highway Research, Planning and Construction Program Dollar threshold used to distinguish between type A and type B programs: $ 559,348 Auditee qualified as low -risk auditee? X Yes No 6 Amount Expended $18,501,857 • 78 Riverside County Transportation Commission Schedule of Findings and Questioned Costs, Continued Year Ended June 30, 2005 li. Financial Statement Findings A. Reportable Conditions None reported. B. Compliance Findings None reported. III. Findings and Questioned Costs for Federal Awards A. Reportable Condition None reported. B. Compliance Findings None reported. 7 79 Riverside County Transportation Commission Summary Schedule of Prior Year Audit Findings Year Ended June 30, 2005 • There were no audit findings reported for the year ended June 30, 2004. • 8 80 McGladrey& Pullen Certified Public Accountants January 6, 2006 To the Audit Ad Hoc Committee of the Riverside County Transportation Commission Riverside, California This letter is intended to inform the Audit Ad Hoc Committee about significant matters related to the conduct of the annual audit so it can appropriately discharge its oversight responsibility and that we comply with our professional responsibilities to the Audit Ad Hoc Committee. The following summarizes various matters which must be communicated to you under auditing standards generally accepted in the United States of America. The Auditor's Responsibility Under Auditing Standards Generally Accepted in the United States of America Our audit of the financial statements of the Riverside County Transportation Commission (Commission) for the year ended June 30, 2005 was conducted in accordance with auditing standards generally accepted in the United States of America; Government Auditing Standards issued by the Comptroller General of the United States; the provisions of the Single Audit Act, OMB Circular A-133 and OMB's Compliance Supplement; the Transportation Development Act of 1971, as amended; and corresponding regulations of the California Code of Regulations. Those standards, circulars, regulations, and the supplement require we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error, fraudulent financial reporting or misappropriation of assets. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Accordingly, the audit was designed to obtain reasonable, rather than absolute, assurance about the financial statements. We believe our audit accomplished that objective. In accordance with Govemment Auditing Standards, we have also performed tests of controls over internal control over financial reporting and tests of compliance with certain provisions of laws, regulations, contracts, and grant agreements that contribute to the evidence supporting our opinion on the financial statements. However, they do not provide a basis for opining on the Commission's intemal control over financial reporting or on compliance and other matters. Management Judgments and Accounting Estimates Accounting estimates are an integral part of the preparation of financial statements and are based upon management's current judgment. The process used by management encompasses their knowledge and experience about past and current events and certain assumptions about future events. Management has informed us they used all the relevant facts available to them at the time to make the best judgments about accounting estimates and we considered this information in the scope of our audit. Estimates significant to the financial statements include such items as valuation of vacant land acquired and the useful lives of capital assets. The Audit Ad Hoc Committee may wish to monitor throughout the year the process used to compute and record these accounting estimates. McGladrey & Pullen, LLP is a member firm of RSM International, an affiliation of separate and independent legal entities. 81 Audit Ad Hoc Committee Riverside County Transportation Commission January 6, 2006 Page 2 Audit Adjustments There were no audit adjustments made to the original trial balance presented to us to begin our audit. However, the Commission's June 30, 2004 capital assets and net assets were restated to properly reflect the effects of rail easements previously acquired and not capitalized when the Commission initiallyadopted GASB 34. The total effect on capital assets and net assets of this restatement was a net increase in net assets as previously reported of $19,283,259. This restatement was brought to our attention by Commission management. Accounting Policies Management and the Audit Ad Hoc Committee have the ultimate responsibility for the appropriateness of the accounting policies used by the Commission. The Commission did not adopt any significant new accounting policies nor have there been any changes in existing significant accounting policies during the current period which should be brought to your attention for approval. The GASB has issued certain new pronouncements, which follow, that will/may impact the Commission's accounting policies in the future: GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, will be effective for the Commission beginning with its year ending June 30, 2006. GASB Statement No. 45, Accounting and Financial Reporting by Employers for PostemploymentBenefits Other Than Pensions, will be effective for the Commission beginning with its year ending June 30, 2008. GASB Statement No. 46, Net Assets Restricted for Enabling Legislation (An Amendment of GASB Statement No. 34), will be effective for the Commission beginning with its year ending June 30, 2006. GASB Statement No. 47, Accounting for Termination Benefits, will be effective for the Commission beginning with its year ending June 30, 2006. Other Information in Documents Containing Audited Financial Statements We are not aware of any other documents that contain the audited basic financial statements. If such documents were to be published, we would have a responsibility to determine that such financial information was not materially inconsistent with the audited statements of the Commission. Disagreements with Management We encountered no disagreements with management over the application of significant accounting principles, the basis for management's judgments on any significant matters, the scope of the audit or significant disclosures, to be included in the financial statements. Consultations. with Other Accountants We are not aware of any consultations management had with other accountants ahout accounting or auditing matters. Major Issues Discussed with Management Prior to Retention No major issues were discussed with management prior to our retention to perform the aforementioned audit. 82 Audit Ad Hoc Committee Riverside County Transportation Commission January 6, 2006 Page 3 Difficulties Encountered in Performing the Audit We did not encounter any difficulties in dealing with management relating to the performance of the audit. Closing We will be pleased to respond to any questions you have about the foregoing. We appreciate the opportunity to continue to be of service to Riverside County Transportation Commission. This report is intended solely for the information and use of the Audit Ad Hoc Committee, Board of Commissioners and management, and is not intended to be, and should not be, used by anyone other than the specified parties. Riverside, California 83 McGladrey& Pullen Certified Public Accountants Riverside County Transportation Commission Riverside, Califomia In connection with our audit of the basic financial statements of the Riverside County Transportation Commission (Commission) for the year ended June 30, 2005, we offer the following matter for the Commission's consideration: Developing Policies That Address Fraud Risk Management is ultimately responsible for designing and implementing effective internal controls over financial reporting including controls that ensure legal, regulatory and statutory compliance. In this regard, it is also management's responsibility to design and implement programs and controls to prevent, deter and detect fraud. Management, along with those who have responsibility for oversight of the financial reporting process, should set the proper tone; create and maintain a culture of honesty and high ethical standards; and establish appropriate controls to prevent, deter and detect fraud. When these responsibilities are fulfilled, the opportunities to commit fraud can be reduced significantly. The Board of Commissioners and management should consider establishing policies that address the risk of fraud and programs and controls that serve to prevent, deter and detect fraud. This process can be initiated by determining management's understanding about the risk of fraud in the Commission, including any specific fraud risks the Commission has identified or account balances or classes of transactions for which a risk of fraud may be likely to exist. The process continues with development of programs and controls to mitigate specific fraud risks the Commission has identified, or that otherwise help to prevent, deter and detect fraud, and how management intends to monitor those programs and controls. The policies should also address when and how management communicates to employees its views on business practices and ethical behavior. This process provides a framework within the Commission that sets the tone at the top and expectations of employees for ethical behavior and acceptable business practice. Finally, the policies should address when and how management reports to the Board of Commissioners regarding how internal controls serve to prevent, deter and detect material misstatements due to fraud. The policies should also address how the Board of Commissioners or any other board committee exercises oversight of the Commission's fraud risk assessment and the programs and controls the Commission has established to mitigate these risks. The policies and procedures a governmental agency develops to mitigate fraud risks or otherwise help to prevent, deter, and detect fraud will vary from agency to agency. Certain aspects of this discussion may be applicable to some governmental agencies and inapplicable to others. Also, the extent to which management and the goveming board are involved in the establishment and implementation of such policies and procedures will vary depending upon the nature of the governmental agency's operating activities and the size and complexity of the organization. In any event, establishing such policies and procedures can serve to further enhance a govemmental agency's internal controls and create an environment, which clearly defines expectations for employees and commissioners, alike. We will be pleased to respond to any questions you may have about the foregoing. We appreciate the opportunity to continue to be of service to the Riverside County Transportation Commission. Riverside, Califomia October 14, 2005 McGladrey 8 PUYen, uP a a member fine of RSM International, an affifiafion of separate and indepeadeM legal entities • 84 Exhibit 1 Riverside County Transportation Commission and Inland Transportation Services (Contractor) Schedule of Selected Purchases of Gift Certificates and Coupons by the Contractor Fiscal Year Ended June 30, 2005 Project# Vendor Voucher Date Amount Payment Voucher# P2101 Galleria 08/24/04 $ 5,000 27943 P2101 Stater Bros' 08/26/04 5,000 28082 P2102 Galleria 08/02/04 10,000 27834 P2102 Stater Bros' 10/07/04 15,000 28412 P2102 Stater Bros' 03/01/05 31,980 29610 P2110 Stater Bros' 08/26/04 7,500 28082 P2110 Stater Bros' 03/01/05 8,590 29610 P2111 Stater Bros' 11/09/04 10,000 28769 P2111 Ontario Mills 08/09/04 15,000 27862 P2111 Home Depot 10/11/04 2,300 28525 3 86 • Exhibit 2 Riverside County Transportation Commission and Inland Transportation Services (Contractor) Schedule of Selected Employee Incentive Payments Made by the Contractor Fiscal Year Ended June 30, 2005 Employee Initials Employer Name Incentive Type Commute Mode Disbursement Date Amount E.T. J.P. D.G. S.L. J.A. M.M. R.B. S.R. J.G. G.0 California State University Fullerton Forest River, Inc. Washington Mutual La Sierra University Teleflex Medical Ashley Furniture Industries, Inc. County of San Bernardino County of San Bernardino ADP Teletech Galleria Stater Bros' Home Depot Galleria Home Depot Stater Bros' Ontario Mills Ontario Mills Home Depot Stater Bros' 4 Commuter Rail Carpool Carpool Bicycle Carpool Walk Public Bus Bicycle Carpool Commuter Rail 08/20/04 $ 120 O6/13/05 126 10/13/04 122 09/22/04 134 07/27/04 120 05/23/05 136 10/21/04 116 05/23/05 114 06/07/05 106 09/22/04 128 87 McGladrey& Pullen Certified Public Accountants Independent Accountant's Report on Applying Agreed -upon Procedures Board of Commissioners Riverside County Transportation Commission Riverside, California We have performed the procedures enumerated below to the accompanying Appropriations Limit Calculation of the Riverside County Transportation Commission (the Commission) for the year ended June 30, 2005. These procedures, which were agreed to by the Commission and the League of California Cities (as presented in the publication entitled Agreed -upon Procedures Applied to the Appropriations Limitation Prescribed by Article APB of the California Constitution), were performed solely to assist the Commission in meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. The Commission's management is responsible for the Appropriations Limit Calculation. This agreed -upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our findings were as follows: 1. We obtained the completed internal calculations and compared the limit and annual adjustment factors included in those calculations to the limit and annual adjustment factors that were adopted by a resolution of the Board of Commissioners. We also compared the population and inflation options included in the aforementioned calculations to those that were selected by a recorded vote of the Board of Commissioners. Finding: No exceptions were noted as a result of our procedures. 2. For the accompanying Appropriations Limit Calculation, we added line A, last year's limit, to line E, total adjustments and compared the resulting amount to line F, this year's limit. Finding: No exceptions were noted as a result of our procedures. 3. We compared the current year information presented in the accompanying Appropriations Limit Calculation to the supporting calculations described in item 1 above. Finding: No exceptions were noted as a result of our procedures. 4. We compared the prior year Appropriations Limit presented in the accompanying Appropriations Limit Calculation to the prior year Appropriations Limit adopted by the Board of Commissioners during the prior year. Finding: No exceptions were noted as a result of our procedures. We were not engaged to, and did not, conduct an examination, the objective of which would be the expression of an opinion on the accompanying Appropriations Limit Calculation of the Commission. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by Article XIII-B of the California Constitution. McGladrey & Pullen, ur s a member firm of R&M International, an affiliation of separate and independent legal entities 88 • This report is intended solely for the information and use of the Board of Commissioners and management of the Commission, and is not intended to be, and should not be, used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. Riverside, California October 14, 2005 89 Riverside County Transportation Commission Appropriations Limit Calculation Year Ended June 30, 2005 Amount Source A. Last year's limit $ 212,121,630 B. Adjustment factors: 1. Population change 1.0336 State Finance 2. Per capita change 1.0230 State Finance Total adjustments [(B.1 x B.2)-1.0] 0.0574 C. Annual adjustment 12,17'0,012 (BM) D. Other adjustments: 1. Lost responsibility (-) 2. Transfer to private (-) 3. Transfer to fees (-) 4. Assumed responsibility (+) Subtotal E. Total adjustments 12,170,012 (C+D) F. This year's limit $ 224,291,642 (A+E) 90 AGENDA ITEM 11 RIVERS/DE COUNTY TRANSPORTATION COMMISSION DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: Audit Ad Hoc Committee Theresia Trevino, Chief Financial Officer THROUGH: Anne Mayer, Programming and Administration Director SUBJECT: Development of Accountability Program AUDIT AD HOC COMMITTEE AND STAFF RECOMMENDATION: This item is for the Committee to: 1) Approve the conceptual framework for a Commission Accountability Program; 2) Direct staff to develop specific accountability measures based on such framework and present such guidelines to the Commission for its future review and approval; 3) Receive and file the management certifications; and 4) Forward to the Commission for final action. BACKGROUND INFORMATION: In response to recent corporate accounting and ethics scandals as well as business failures, new federal laws and regulations have been enacted for public companies i required to file reports in accordance with the Securities Exchange Act of 1934. These reforms address oversight, auditor independence, governance and responsibility, disclosure, and fraud. While these laws and regulations are not yet applicable to state and local governments, it may be just a matter of time before such governments are required to follow similar laws and regulations. Furthermore, this topic has increasingly appeared in government finance conference agendas and publications and has been part of an ongoing discussion with the Commission's audit firm, McGladrey & Pullen LLP, for the last year. As a result of these discussions, McGladrey & Pullen's management letter to the Executive Director consisted of a single comment, "Developing Policies That Address Fraud Risk." The Commission's management fully supports the development of an Accountability Program that addresses fraud risk, ethical conduct, disclosure, and responsibilities to maintain the public's confidence in the Commission. Accordingly, management proposes the following conceptual framework to be used in the development of specific measures for this program: 91 • Oversight —strengthen the role and importance of the Audit Ad Committee; • Reporting —provide management disclosures related to financial and operational responsibilities; • Fraud —establish a confidential and anonymous mechanism to encourage employees to report potential fraud; • Internal Control —assess the effectiveness of controls and procedures; and • Ethics —develop a code of conduct regarding communication, conflicts of interest, compliance, and confidentiality. Hoc Management intends to be proactive regarding the management letter comment and has taken the first step toward the reporting objective of an Accountability Program with director certifications (draft) relating to financial reporting and operational disclosures. These certifications will be completed prior to the Budget and Implementation Committee meeting on January 23, 2006. In addition to obtaining the Committee's support for the conceptual framework outlined above, management is also seeking direction to develop specific accountability measures that would be presented at a future date for the Commission's review and approval. Attachments: Executive Director and Chief Financial Officer. Certifications (Draft) Directors' Certification (Draft) 92 • Riverside County Transportation Commission January 23, 2006 Riverside County Regional Complex 4080 Lemon Street, 3rd Floor • Riverside, California Mailing Address: Post Office Box 12008 • Riverside, California 92502-2208 Phone (951) 787-7141 • Fax (951) 787-7920 • www.rcte.org Board of Commissioners Riverside County Transportation Commission Riverside, California The Comprehensive Annual Financial Report (CAFR) of the Riverside County Transportation Commission (Commission) for the year ended June 30, 2005 is hereby submitted for your receipt and acceptance. The CAFR is presented in three sections consisting of Introductory, Financial, and Statistical. The Financial Section includes the audited financial statements and other supplementary information and the independent auditor's report on those financial statements. Management of the Commission is responsible for the financial statements and other information presented in the CAFR. As the Executive Director and Chief Financial Officer of the Commission, we have reviewed the CAFR for the year ended June 30, 2005. Based on our knowledge, the CAFR does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in the CAFR not misleading with respect to the period covered by the CAFR. Additionally, based on our knowledge, the financial statements and other financial information included in the CAFR fairly present in all material respects the financial condition and results of operations of the Commission as of and for the year ended June 30, 2005. Eric Haley, Executive Director te Theresia Trevino, Chief Financial Officer 93 Riverside County ransportation Commission January 23, 2006 Riverside County Regional Co 4080 Lemon Street, 3rd Floor • Riverside, Cali Mailing Address: Post Office Box 12008 • Riverside, California 92502-2 Phone (951) 787-7141 • Fax (951) 787-7920 • www.rctc.org Board of Commissioners Riverside County Transportation Commission Riverside, California In connection with the submission of the Comprehensive Annual Financial Report (CAFR) of the Riverside County Transportation Commission (Commission) for the year ended June 30, 2005, as the management and Directors of the Commission, we understand that we are responsible for the operations and activities of the Commission's programs, projects, and administration. Accordingly, we hereby make the following representations based upon our knowledge. We are responsible for establishing and maintaining controls and procedures related to these operations and activities. We have designed such controls and procedures to ensure that material information is made known to us, particularly during the year ended June 30, 2005. The controls and procedures have been effective for the year ended June 30, 2005 and through the date of this letter. There have been and are no significant deficiencies in the design or operation of internal controls regarding financial reporting for the same period' which could adversely affect the Commission's ability to record, process, summarize and report financial data. There have been and are no material weaknesses in internal controls. There have been no significant changes in internal control or in other factors that could significantly affect internal controls subsequent to June 30, 2005. Management also recognizes its responsibility for fostering a strong ethical climate so that the Commission's affairs are conducted according to the highest standards of personal and organizational conduct. In connection with this responsibility, we are not aware of any fraud, whether or not material, that involves management or other employees who have a significant role in the Commission's internal controls. Eric Huey, Executive Director Hid o Sugita, Deputy Executive Director Anne Mayer, Programming and Administration Director • 94 • i w(' " A ieG'(,)____ Cathy Bedrel, Project Dervery Director �1x2t-�ut-i 2e,I24,- 6 Thresia Trevino, Chief Financial Officer John Standifo C Steph&nie Wiggins, RegiO a_V Programs Director Public Affairs Director 95 RIe towriy Transportation Commission l tl l}'LILI�� Contents Introductory Section Letter of Transmittal i Organizational Chart xi List of Principal Officials xii Certificates of Achievement xiii Financial Section Independent Auditor's Report 1 Management's Discussion and Analysis 3 Basic Financial Statements Government -wide Financial Statements Statement of Net Assets • 13 Statement of Activities 14 Fund Financial Statements. Balance Sheet —Governmental Funds 15 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 16 Statement of Revenues, Expenditures and Changes in Fund Balances —Governmental Funds 17 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 18 Statement of Fiduciary Net Assets 19 Notes to Financial Statements 20 Required Supplementary Information Budgetary Comparison Schedules General Fund and Major Special Revenue Funds 39 Notes to Required Supplementary Information 40 Other Supplementary Information Nonmajor Governmental Funds 41 Combining Balance Sheet 42 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 43 Schedule of Revenues, Expenditures and Changes in Fund Balances —Budget and Actual: Nonmajor Special Revenue Funds 44 Capital Projects and Debt Service Funds 45 Schedule of Expenditures for Local Streets and Roads by Geographic Area —All Special Revenue Funds 46 Schedule of Expenditures for Transit and Specialized Transportation by Geographic Area —All Special Revenue Funds 47 Schedule of Changes in Assets and Liabilities —Local Projects Agency Fund 48 Contents, Continued Statistical Section Government -wide Revenues by Function 49 Government -wide Expenses by Function 50 Government -wide Net (Expenses) Revenues by Function 51 Government -wide Net Assets 52 General Revenues by Source 53 General Government Expenditures by Function 54 General Government Expenditures by Authorized Source 55 Governmental Funds —Fund Balances 56 Sales Tax Revenues by Program and Geographic Area —General and Special Revenue Funds 57 Taxable Sales and Population by City 58 Sources of County of Riverside Taxable Sales by Business Type 59 Computation of Legal Debt Margin 60 Ratio of General Bonded Debt Service Expenditures to Total General Government Expenditures 61 Historical Measure A Sales Tax Receipts and Bond Coverage Ratios 62 Miscellaneous Statistical Information 63 October 14, 2005 To the Riverside County Transportation Commission Commissioners and Citizens of the County of Riverside: Letter of Transmittal State law requires that the Riverside County Transportation Commission (Commission) publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States (GAAP) and audited in accordance with generally accepted auditing standards by independent certified public accountants. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report (CAFR) of the Commission for the fiscal year ended June 30, 2005. This report consists of management's representations concerning the finances of the Commission. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the Commission has established comprehensive internal controls that are designed both to protect the Commission's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Commission's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh its benefits, the Commission's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects. The enclosed data presents the financial position and results of operations of the Commission on a government -wide and fund basis. All disclosures necessary to enable the reader to gain an understanding of the Commission's financial activities have been included. The Commission's financial statements have been audited by McGladrey & Pullen, LLP. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Commission for the fiscal year ended June 30, 2005, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. McGladrey & Pullen, LLP concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the Commission's financial statements for the fiscal year ended June 30, 2005, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the Commission was part of a broader, federally mandated Single Audit designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements in accordance with Government Auditing Standards, issued by the Comptroller General of the United States, but also on the government's internal control and compliance with legal requirements, with a special emphasis on internal control and legal requirements involving the administration of federal awards. These reports are available in the Commission's separately issued Single Audit Report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The Commission's MD&A can be found immediately following the report of the independent auditors. This CAFR is presented in three sections: Introductory: Including the letter of transmittal, organization charts and information, and financial reporting awards. Financial: Including the independent auditor's report, the basic financial statements with accompanying notes, required supplementary information including the MD&A, and other supplementary information. Statistical: Including selected financial data relating to the Commission on a multiple -year basis, as well as demographic information relating to the County of Riverside, Califomia (County), where the Commission provides transportation services: Profile of the Government The Commission was established by state law in 1977 to oversee the funding and coordination of all public transportation services within the County. The Commission's mission is to assume a leadership role in improving mobility in Riverside County and to maximize the cost effectiveness of transportation dollars in the County. The governing body is the Board of Commissioners (Board), which consists of all five members of the County Board of Supervisors, one elected official from each of the County's 24 cities, and one non -voting member appointed by the Governor. The Commission is responsible for setting policies, establishing priorities, and coordinating activities among the County's various transportation operators and agencies. The Commission also programs and/or reviews the allocation of federal, state, and local funds for highway, transit, rail, non -motorized travel (bicycle and pedestrian), and other transportation activities. The Commission also serves as the tax authority and implementation agency for the voter -approved Measure A Transportation Improvement Program. Measure Awas approved by the County's electorate in 1988 and imposes a half -cent sales tax for 20 years, beginning in 1989, to fund a specific program of transportation improvements (1989 Measure A). In November 2002 Riverside County's voters approved a 30-year extension of Measure A through 2039 (2009 Measure A). Additionally, the Commission provides motorist aid services designed to expedite traffic flow. These services include the Service Authority for Freeway Emergencies (SAFE), a program that provides call box service for motorists, and the Freeway Service Patrol (FSP), a roving tow truck service to assist motorists with disabled vehicles on the main highways of the County during peak rush hour traffic periods. These services are provided at no charge to motorists and are funded through a $1 surcharge on vehicle registrations. The Commission is also legally responsible for allocating Transportation Development Act (TDA) funds, the major source of funds for transit in the County. The TDA provides two major sources of funding: Local Transportation Funds, which are derived from a one -quarter cent state sales tax, and State Transit Assistance, which is derived from the statewide sales tax on gasoline and diesel fuel. Finally, the Commission has been designated as the Congestion Management Agency (CMA) for the County. As the CMA, the Commission coordinates with local jurisdictions in the establishment of congestion mitigation procedures for the County's roadway system. The Commission accounts for its operations using separate funds to manage and report all financial activities of its many programs and SAFE, which is a legally separate entity for which the Commission is financially accountable. The General fund finances most of the administrative and planning functions of the Commission. Special revenue funds are used to account for many of the Commission's revenue sources restricted by law. Capital projects funds are used to account for capital projects supported by the issuance of sales tax revenue bonds and commercial paper notes. A debt service fund is used to account for debt service activities related to the Commission's sales tax revenue bonds. Annually the Commission develops its staffing, operating, and capital plans for the upcoming fiscal year budget. The budget outlines the expected funding sources and uses of funds that represent the Commission's annual commitment to transportation projects and services, and it presents the projected fund balance for all funds that encompass the Commission. The budget is recorded in the Commission's accounting system, where it is compared with actual performance. Staff ensures that the budget is adopted by the Board prior to the beginning of each fiscal year. During the fiscal year, all budget amendments requiring Board approval are presented to the Board for consideration and adoption. Economic Condition and Outlook Riverside County continues to experience significant growth due to population increase, available and affordable housing, and a wider base in its economic engine. This growth in the County has resulted in the highest levels of sales tax revenues in the Commission's history. In fiscal year (FY) 2004/05, sales tax revenues in the County increased approximately 15%. This reflects a good local economy that continues to grow, because the County has continued to draw jobs, residents, and affordable housing away from the Los Angeles area. New housing prices are rising and industrial vacancies continue to decline, as the Inland Empire (Riverside and San Bernardino counties) continues to expand its warehousing and support role to the. greater Los Angeles economy. The availability of affordable space for both residents and businesses along with improved access'to employment centers in Los Angeles and Orange counties are the primary reasons for expansion. In terms of employment, the County continues to add jobs but at a slower rate than in past years. The retail sector and population -serving sectors of the economy are expected to play major roles in creating thousands of new jobs. Regardless of recent trends, the County faces formidable challenges in terms of improving the educational levels of its residents as well as providing needed infrastructure. The state of California (State) and national economy remain in a slow growth period. The outlook for the County seems to be a moderate growth of sales and jobs, but perhaps not as significant as in prior years. Sales taxes are expected to remain at consistent levels due to the growth in population; however, Commission staff has conservatively projected sales taxes revenues to increase 6% in its FY 2005/06 budget. FINANCIAL PLANNING Proactive financial planning is a critical element for the success of the Commission as it builds for the future. Continually revisiting revenues and projecting expenditures ensures that the Commission's expectations are realistic and goals are achievable. Scarce resources can be directed to projects of regional significance or, with additional funding project priorities, can be expanded to address unfunded project requirements or developing needs. The Commission has taken action in prior years to update its projection of Measure A revenues, with the most recent update to this process in 2001. Revised projections are expected to be performed in 2006 and will provide the foundation for determining the Commission's strategic direction through 2019. Funding from the State is being used to augment Measure A sales tax revenues to ensure, to the extent possible, completion of the listed projects in the 1989 Measure A Expenditure Plan. The 2001 projection information also provided the foundation of future planning, which became the new expenditure plan for a 30-year renewal of Measure A. The 2009 Measure A was approved by the County's voters in November 2002, making the County the only county in California to successfully garner two-thirds (2/3) supermajorities for a transportation sales tax two separate times. The 2009 Measure A Expenditure Plan outlines the projects needed to keep up with the growth in the County. The State's budget problems have severely curtailed State spending on transportation. As a result, the Commission has taken a number of creative steps to fund projects and maintain progress. The process of review by the Commission will continue on an annual basis to ensure that steady progress is made toward project completion and that changes in direction made possible by increased revenues or innovative approaches such as public/private partnerships are quickly implemented. iii MAJOR HIGHLIGHTS AND ACHIEVEMENTS Capital Project Delivery and Implementation The Capital Project Development and Delivery Department is responsible for major highway and rail. capital projects from initial environmental study through preliminary engineering, final design, right of way acquisition, and construction. This past year was one of significant accomplishments for the Commission as progress was made on a number of major projects. Difficult funding decisions were made on millions of dollars in transportation projects to expand freeways, improve mobility on streets and roads, and improve rail passenger facilities. The Commission's most ambitious transportation project, done in cooperation with the California Department of Transportation (Ca!trans), brings improvements to the State Route (SR) 60/SR-91/Interstate (I) 215 interchange, which will add direct connectors, truck lanes, soundwalls, and new and widened bridges to improve the efficiency of this interchange. Work began in early 2004 and utilizes a construction process known as "design -sequencing." Design -sequencing is intended to combine many design and construction tasks and will likely shave construction by a number of months and generate cost savings for the overall project. The first major milestones on the project, the reopening of the overcrossings at Iowa and Linden Streets, took place in October 2005. The completion of the major connector between the westbound SR- 60 and southbound SR-91 is expected by the end of 2006. While the reconstruction of the SR-60/SR-91/1-215 interchange is a Measure project, it will be financed primarily from State Transportation Improvement Program (STIP) dollars. Given the State's budget woes and dependence on STIP dollars to balance its General Fund budget, funding for the SR-60/SR-9111-215 interchange became uncertain in early 2003. This uncertainty required the Commission to loan the State Measure A dollars to ensure the timely commencement of construction in January 2004. This advancement of local dollars that will be reimbursed by the STIP is known as an AB 3090 process and was approved by the Califomia Transportation Commission (CTC) in September 2003. This action ensures that the project will stay on schedule with completion expected in 2008. During the next few years, SR-60 will be home to a number of needed improvements. Federal Congestion Mitigation and Air Quality Program (CMAQ) dollars were used to fund the construction of high occupancy vehicle (HOV) lanes on SR-60 through Moreno Valley. Construction on this $41 million project began in summer 2003 and was completed in early 2005. The Commission and the CTC have approved the allocation of CMAQ dollars to construct an HOV lane and a general purpose lane in each direction on SR-60 between 1-15 and Valley Way in the western edge of the County. This project has already been environmentally cleared and will be ready for construction in early 2006. SR-74 between Lake Elsinore and Perris is also being improved by the Measure A program. This two-lane road is being widened into a four lane highway with medians, improved drainage, and safety features. The project is being constructed in two phases with construction on the first phase already complete. Construction began on the second phase in early 2004; and completion is expected by early 2006. Another Measure Aeffort that is benefiting motorists is improvements to SR-111 in the Coachella Valley. Improvements have been completed in a number of cities in the past year including three projects in the City of Palm Desert. As is the case with all arterial improvements in the Coachella Valley, the funding for the project and project development is a cooperative effort between the Commission, the Coachella Valley Association of Governments (CVAG), and affected cities. TUMF Funding Playing a Bigger Role In the Coachella Valley, a Transportation Uniform Mitigation Fee (TUMF) program was established shortly after the passage of the 1989 Measure A. The program requires developers to pay a fee on new development to fund arterial improvements. Cities are required to participate in the program or forfeit Measure A local dollars to CVAG, which oversees the arterial program and has been successful in funding a number of important arterial projects. iv For years a similar program did not exist in Western Riverside County (Western County); however with the passage of the 2009 Measure A extension, a TUMF program is now in place in the western part of the county. The Commission's role in the Western County TUMF program is spelled out in the 2009 Measure A, which allocates the first $400 million in TUMF funding to the Commission to be split evenly between new corridors and regional arterials. Since that requirement does not statutorily take affect until 2009, the Commission and the Western Riverside Council of Governments reached an agreement to split TUMF revenues evenly until 2009. During the latter part of 2004, the Commission took its first steps in allocating its share of Western County TUMF revenues with the allocation of $25 million to the development of the Mid County Parkway and the SR-79 realignment. Also in September 2004, the Commission approved allocating project development funding for 24 additional arterial projects throughout Western County. The projects are all part of an arterial network and include major thoroughfares such as Van Buren Boulevard, Sanderson Avenue, Perris Boulevard, and Green River Road. Since the inception of the program, the Commission has programmed more than $71 million in TUMF funding. Rail Development, Operations and Support The Commission is one of five partners in the Southern California Regional Rail Authority (SCRRA), which operates Metrolink commuter rail service in the Southland. Two of our Commissioners sit on the SCRRA's 11-member governing board, and Commission staff serves as liaison through Metrolink's Technical Advisory Committee. The operation of a regional railroad, with five funding partners, is a continual exercise in consensus building. The County's participation in commuter rail service began with the 1989 Measure A. The voters of this County were the first in Southern California to specify commuter rail service as a priority transportation improvement project. The subsequent passage of similar measures in adjoining counties and the passage of statewide rail infrastructure bonds in 1990 provided enough capital funding to build the initial system. Now consisting of seven lines, serving origins and destinations in six counties, the system carries an average of 39,000 passengers each weekday. The Commission owns and operates five stations served by Metrolink in the County. The Riverside Line originates in Downtown Riverside and stops at the Commission's Pedley station before proceeding through Ontario, Pomona, Industry, and Montebello to Los Angeles Union Station. Ridership on the Riverside Line remained steady in the past year with approximately 4,445 daily riders. The Inland Empire -Orange County (IEOC) Line originates in nearby San Bernardino with stops in the Downtown Riverside, La Sierra, North Main Corona, and West Corona stations before entering Orange County with stops in Anaheim, Orange, Santa Ana, Tustin, Irvine, Laguna Niguel/Mission Viejo, and San Juan Capistrano. The IEOC line has been described as the first suburb -to -suburb commuter rail service in the nation. Patronage on the line remained consistent with an average daily ridership that exceeds 3,600. Metrolink also offers the 91 Line to provide the commuters another altemative to commute from Riverside to Los Angeles with stops in Riverside County, Orange County and Los Angeles County. Patronage on the line continues to increase resulting in an average daily ridership that exceeds 1,900. The Commission also underwrites special trains under direct charter from Metrolink historically known es the Beach Trains. This popular service on weekends during the summer provides transportation to Orange County beaches for thousands of Inland Empire residents throughout the summer. The exposure to the Beach Trains on the weekend has been shown to increase demand and interest in Metrolink's regular weekday service. During the summer of 2005, Beach Train service expanded to 3 daily round trips and changed the name to SummerLink with partnerships from the Orange County Transportation Authority (OCTA) and the San Bernardino Associated Governments (SANBAG). The promotion of this service was effective due to a cooperative marketing agreement with the Press -Enterprise, the County's local newspaper. v Metrolink Capital Projects With the continued growth of patronage, commuter rail's challenges for the future include securing state or federal allocations for more passenger coaches and for additional train storage and maintenance facilities. Yet another challenge is the need to offer Metrolink service to a wider area of the County. In 2004, the Commission released a Draft Environmental Assessment for the expansion of commuter rail service along the San Jacinto Branch Line. Along with the release of the document, the Commission also held a series of public meetings. The meetings encouraged public input into the environmental clearance process and also raised the level of awareness and public support for the project. It is anticipated that this addition to Riverside County's Metrolink service will begin in 2008. As part of the marketing effort, the new line is now referred to as the Perris Valley Line; it will serve new destinations that include the University of California, Riverside; March Air Reserve Base; and the cities of Moreno Valley and Perris. Another ongoing concern for Metrolink passengers is the need for additional parking capacity at the Commission's stations. During 2006, RCTC will add 300 parking spaces to the Riverside -Downtown Station on the east side of the tracks, which, provides more capacity but also easier access for passengers to trains on the Inland Empire/Orange County Line. Future plans also call for more parking spaces and a new parking structure at the North Main Corona Station. Extending rail service to these areas of the County will require a substantial investment in upgrading the rail corridor to accommodate passenger trains. The expected cost exceeds $179 million, and the Commission will seek federal funding from the Federal Highway Act that was approved by Congress in July 2005. Planning for the Future—CETAP In terms of future progress, the Commission has given its unanimous support to the Riverside County Integrated Project and its transportation component, the Community Environmental Transportation Acceptability Process (CETAP). As a stakeholder driven planning process, CETAP has benefited from the guidance of a broad spectrum of citizens. The County and the Commission are working together in a first -of -its kind endeavor to provide for new transportation options and land use planning to support the economic growth of the County while providing for preservation of open space and protection for endangered species. CETAP addresses the impact of future population and economic growth on the existing transportation system by identifying and establishing new transportation corridors and arterial system improvements. The corridor options to be considered will include rail, bus, transit, and highway modes and will be considered through the careful study of future growth patterns. All work will be done in cooperation with federal and state mandated environmental and open space conservation efforts. The Commission's CETAP focuses on four new transportation corridors. Two of these corridors are located within the County, while the other two would link Riverside County with the neighboring counties of Orange and San Bernardino. The Commission has completed the Tier 1 environmental work for an internal north/south transportation corridor between Winchester and Temecula. The Commission now can protect right-of-way for the future widening of 1-15 and 1-215 in the South County as well as a future French Valley Parkway connection from Winchester Road to 1-15. A main focus for the Commission in 2006 is the advancement of an east -west corridor alternative along Cajalco Road and Ramona Expressway. This proposed corridor is the Mid County Parkway, and the Commission is now pursuing a project - level environmental document. This work began in 2004 and requires a great deal of cooperation between the Commission, the County, local cities, and resource agencies from the State and federal government. Public input is also a major component of this effort, and a series of public meetings have been held in the project area along with the creation of a website devoted solely to the project and newsletters regarding the project developed and distributed periodically with the public. vi A related project that affects the communities of Hemet and San Jacinto involves the realignment of SR-79. Approval has been granted by federal resource agencies to proceed with the environmental process that will determine an alignment for what will be a more efficient highway with greater capacity. The 2009 Measure A includes funding for the project that is expected to go to construction in 2010. Finally, the Commission continues a Major Investment Study in cooperation with the OCTA and Transportation Corridor Agencies to consider new transportation corridors and alternatives between Riverside and Orange counties. This 18-month study began in mid-2004 at a cost of $3.3 million and will be completed at the end of 2005. As part of the effort, the Commission and OCTA have hosted a number of public events in each county and are conducting public outreach programs. Commuter Assistance Program The Commission's Commuter Assistance Program provides a variety of rideshare services both to employers and commuters. Through voluntary participation, commuters and employers receive a direct benefit from their sales tax dollars, and the entire region benefits from reduced traffic congestion and improved air quality as a result of trip elimination or use of alternative means of transportation. The comerstone of the Commuter Assistance Program continues to be the Advantage Rideshare Program, a short-term incentive project, which offers $2 per day for each day new ridesharers use an altemate mode of transportation in a three-month period. Long-term ridesharers are recognized and rewarded for their continuing' commitment to using alternate modes of transportation to and from work through the Club Ride Program. The Commission's Commuter Assistance Program worked with 299 employers representing 909 worksites in providing commuter benefits to employees during FY 2004/05. This figure represents an increase of 157 additional employers to the program from the previous fiscal year. In working with these employers, the Commission attracted 824 drive alone commuters to take advantage of the Commission's $2 per day incentive -based Advantage Rideshare program. Additionally, FY 2004/05 saw an enhancement in the value of a membership in Club Ride with staff increasing the number of participating • vendors to over 500 in the catalog of offers. Membership for the year peaked at 2,837 employee participants. Another core activity of the Commission's rideshare activities is the operation of the Commuter Exchange. This is a 40' mobile resource center that participates at various events including employer transportation fairs, community activities, and elementary schools. The Commuter Exchange includes a service called Education on the Road for third and fourth grade classes in Western County. Education on the Road is a rolling transportation field trip, designed with imaginative, interactive exhibits and activities for all ages. It guides students and teachers through a structured learning experience. Getting students to start thinking early about how to reduce traffic congestion and clean the air before they start driving will payoff with clean air dividends in future years. During FY 2004/05, the Board directed staff to move forward with the procurement of a new 40' mobile education vehicle to replace the aging existing unit. Approved for purchase in September 2004, this vehicle is being constructed on a heavy duty commercial transit bus chassis and will utilize state of the art compressed natural gas clean air technology. It is expected to be delivered for service in mid-2006. Also in FY2004/05, the existing unit was refurbished with a new engine which has allowed it to continue to represent the Commission. Thirty-seven site visits were accomplished in FY 2004/05. Additional FY 2004/05 accomplishments include the development and implementation of the www.commutesmart.info regional ridesharing website. The Commission took the lead and developed the website in partnership with the transportation agencies in Los Angeles, Ventura, and Orange counties in order to promote ridesharing programs to a regional audience. Additionally, by working cooperatively with the Los Angeles County Department of Public Works, the Commission was able to leverage that agency's work in the development of a real time traffic information map and place it on the commutesmart website so as to provide additional value to our commuting constituents. At the direction of the Board, staff also worked to expand the traffic map in FY 2004/05. The new map when implemented will include traffic information for the entire Inland Empire region as well as the San Diego metropolitan area and the complete 1-15 corridor from Nevada to the Mexican border. vii The commutesmart website also featured another innovation for FY 2004/05, and that is the regional move from a written monthly rideshare publication called Crossroads to an electronic publication titled CommuteSmart News. Delivered directly to the email inboxes of 148 Employer Representatives in Riverside County, CommuteSmart News offers employers current rideshare news and information in a technology savvy high graphic content package. The Commission in FY 2004/05 further refined its electronic commuter survey format and process to help support the ridematching database. This survey tool allows employers the option to survey their employees electronically, which will reduce cost and make the surveying process more attractive to implement at their worksites. Finally, the Commission has been active in the procurement of partnering opportunities with Inland Empire media outlets to further promote the benefits of ridesharing. A radio campaign with local station KFRG and an employer ad campaign with the Business Press launched during the previous fiscal year were continued and expanded through FY 2004/05. The Commission's success in serving commuters and employers within the County continues to be replicated in adjoining San Bernardino County. SANBAG renewed its contract with the Commission for the ninth year to provide a sister commuter assistance program for its residents. This unique bi-county partnership allows for greater cost efficiency in program delivery and consistency of program application for all participants in the Inland Empire. Specialized Transit The Commission has maintained a long-term commitment to assist in the mobility of those with specialized transit needs. Through its Specialized Transit Program, the Commission has provided millions of dollars to public and nonprofit transit operators to assist in the provision of special transit services to improve the mobility of seniors and persons with disabilities. During FY 2004/05, the nonprofit operators provided 21,649 Measure A trips. Along with support of traditional dial -a -ride services, the Commission supports innovative programs providing transit assistance in hard -to -serve rural areas or for riders having very special transit needs. Two additional programs that receive a significant share of Measure A transit funding are the Transportation Reimbursement and Information Project (TRIP) and the Transportation Access Program (TAP). The TRIP program reimburses car trips made on behalf of seniors and persons with disabilities. As part of the TAP program, the Commission provides funding to various agencies for subsidized transit tickets that are distributed by social service agencies to clients who are truly needy and require access to medical appointments, job interviews, or other needed services. During FY 2004/05, the TRIP Program reimbursed 24,393 car trips and the TAP Program provided more than 72,740 transit tickets. Motorist Assistance Programs In cooperation with the California Highway Patrol (CHP) and Ca!trans, the Commission, in its capacity as the SAFE, assists motorists who experience accidents, mechanical breakdowns, or other unforeseen problems by providing access to cellular call boxes along the County's major highways. The Commission's system includes approximately 1,150 call boxes serving more than 650 miles of highways. The call box program is funded by an annual $1 surcharge added to vehicle registrations and generates more than $1.5 million annually for the County. Each call box is a battery -powered, solar -charged roadside terminal containing a microprocessor and cellular telephone. Spacing between call boxes ranges from one -quarter mile in high traffic areas to two miles in remote desert areas of the County. Call boxes in the County are installed on Interstates 10, 15, and 215; U.S. Route 95; and portions of State Routes 31, 60, 62, 71, 74, 78, 79, 86, 86S, 91, 111, 177, 243, and 371 as well as park and ride lots and commuter rail stations. The phones are programmed to call a private call answer center, and the call box operator responds to the call by routing emergency calls to the CHP for appropriate services (i.e., ambulance, tow truck, fire, or police unit) or providing a direct connection to routine service through auto clubs or other private tow and service providers. Call box operators answered approximately 22,000 calls during FY 2004/05. viii In February 2004, the Board adopted the Five Year Strategic and Financial Plan (5-Year Plan) for the County's call box program. The 5-Year Plan recommended five improvements to the call box system including enhancements for site accessibility; retrofit of all "B" and "C" sites to meet Caltrans' new design requirements; conversion from analog to digital technology; increased spacing between call boxes to a minimum of 1/2 mile; and, if necessary, installation of 5' X 5' pedestrian pads. The initial stages of this program have already been implemented with the issuance of an RFP in mid-2005 for construction activities. Also, new contracts for digital cellular services and the conversion to digital technology have already been awarded. In an effort to relieve congestion and reduce pollution, the Commission provides an additional motorist assistance program with the FSP. The FSP program is a special team of 13 tow trucks traveling along selected County freeways during peak commuter hours to assist drivers when their vehicles break down or experience other mechanical problems. The FSP tow trucks patrol portions of SR-91, 1-215, 1-15, and SR-60 from 5:00 a.m. to 8:30 a.m. and 3:00 p.m. to 7:00 p.m., Monday through Friday with the exception of holidays. The purpose of the FSP is to remove disabled vehicles from the freeway as quickly as possible to help keep freeway traffic moving during rush hour periods. The FSP program provides such services as changing a flat tire, providing one gallon of fuel, taping radiator hoses, or towing the vehicle off the freeway to designated locations where the motorist can make other arrangements for repair. Service provided by the FSP is free of charge to the motorist. The FSP is funded by the Riverside County SAFE and the State. During FY 2004/05, the FSP provided assistance to approximately 30,000 motorists. Another effort augments existing FSP service with additional tow trucks in construction areas as another means of construction -related congestion mitigation. This is currently taking place on SR-91 and SR-60/I-215 with service being provided from 8:30 a.m. to 3:00 p.m, to mitigate congestion during construction on the SR-60/SR-91/1-215 interchange. The Commission will work with Caltrans to provide additional service on SR-60 between Valley Way and 1-15 when construction begins in early 2006. Cash Management On June 30, 2005, approximately 78% of the Commission's cash and investments were deposited with the Riverside County Treasurer in the Riverside County Pooled Investment Fund. In addition, the Commission had approximately 1% of its cash and investments in the State of California Local Agency Investment Fund. Unexpended bond and commercial paper funds and debt reserve funds were maintained in money market mutual funds and investments in U.S. government securities held by the trustee. Restricted investments held by the trustee for the Commission's bonds are set aside in accordance with the bond indentures for the purpose of making bond interest and principal payments. The Commission's investments are in compliance with its investment policy, which is approved annually to ensure compliance with all applicable laws and regulations and the foremost investment objective: safeguarding of principal. Quarterly reports are presented to the Board to review compliance with the Commission's investment policy as well as the overall performance of the Commission's investment portfolio. Further details of the Commission's cash and investments at June 30, 2005, are set forth in notes to the financial statements. Debt Administration As of June 30, 2005, the Commission's outstanding debt consisting of sales tax revenue bonds was $124,335,000. Final maturity of the Measure A sales tax revenue bonds is scheduled for 2009, when the 1989 Measure A program expires. During FY 2004105 the Commission established a $185 million commercial paper program to provide advance funding for projects included in the 2009 Measure A. As of June 30, 2005, the Commission's outstanding commercial paper notes were $30,005,000. Further details of the Commission's long-term debt at June 30, 2005, are included in the notes to the financial statements. ix Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Commission for its CAFR for the fiscal year ended June 30, 2004. This was the 12th straight year the Commission has received this prestigious national award, which recognizes conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized CAFR conforming to program standards. Such CAFR must satisfy both GAAP and applicable legal requirements. The 2004 report was also awarded the Certificate of Achievement for Outstanding Financial Reporting by the California Society of Municipal Finance Officers (CSMFO). This was the first financial reporting award received from the CSMFO. These awards for financial reporting excellence are valid for a period of one year only. We believe our current report continues to conform to the programs' requirements, and we are submitting it to the GFOA and CSMFO for consideration for another certificate. Acknowledgments The CAFR each year is a collaborative effort by Commission staff, its independent auditors, and other consultants. The undersigned are grateful to all staff for their willingness to expend the effort necessary to ensure the financial information contained herein is informative and completed within established deadlines. Special thanks must be extended to the Commission's auditors, Finance staff, and the Director of Public Information for the time, effort, and commitment so vital for, the final completion of the CAFR. In closing, without the leadership and the support of the Board, preparation of this report would not have been possible. Its prudent management must be credited for the strength of the Commission's fiscal condition, and its vision ensures that the Riverside County Transportation Commission will be on the move planning for and building a better future. Very truly yours, ERIC A. HALEY Executive Director x THERESIA TREVI IVO Chief Financial Officer Riverside County Transportation Commission Organizational Chart Board of Commissiorters Polity Committees i • Transit • Plans & Programs Budget & Implementation s Property Executive Committee Advisory Committees • Technical Advisory • Citizens Advisory Legal Counsel Executive Management` I Major Capital & Other Programs — Highway & Rail Capi al Programs — TUMF Program — Rail Operations & Support —Property Management Transportat on Planning & Programming —State Transportatio Improvement Program —Regional Transporta ion Plan — New Corridor Planning —Congestion Management —Transit Planning Public Outreach &Services —Public Information Et Communications — Media Relations — Commuter Assistance —Call Box Program —Freeway Service Patrol Finance & Human Resources Administration — Financial Management — Budget Development — Contract Management and Procurement — Human Resources Administration Office Operations and Board Services — Clerk o the Board & Board Relations — Community Affairs — Office & Records Management —Disadvantaged Business Enterprise — Committee/Commission Support — Claims and Insurance Administration Intergovernmental & i Legislative Affairs — Air Quality — Legislative Advocacy — Legislative Analysis Name and Position Robin Lowe Marion Ashley Terry Henderson Barbara Hanna Roger Berg Robert Crain Shenna Moqeet Mary Craton Gregory S. Pettis Juan M. DeLara Jeff Miller Matt Weyuker Mary Roche Michael H. Wilson Bob Magee Frank West Kelly Seyarto Frank Hall Dick Kelly Ronald Oden Daryl Busch Ron Meepos Ameal Moore Chris Buydos Ron Roberts Bob Buster John F. Tavaglione Jeff Stone Roy Wilson Vacant Riverside County Transportation Commission List of Principal Officials As of September 1, 2005 Board of Commissioners Title Chairman (Commission) 1st Vice Chairman (Commission) 2nd Vice Chairman (Commission), Chair (Transit Policy Committee) Member Member Member Member Member Member Member Member Member Member Chairman (Plans & Programs Committee) Chairman (Budget & Implementation Committee) Vice Chairman (Transit Policy Committee) Member Member Member Member Vice Chairman (Plans & Programs Committee) Member Member Member Member Member Member Vice Chairman (Budget & Implementation Committee) Member Governor's Appointee Management Staff Eric A. Haley, Executive Director Hideo Sugita, Deputy Executive Director Anne Mayer, Division Head, Programming and Administration Cathy Bechtel, Division Head, Planning Theresia Trevino, Chief Financial Officer Naty Kopenhaver; Director of Office Operations and Board Services John Standiford, Director of Public Information Marilyn Williams, Director of Regional Programs and Public Affairs xii Agency City of Hemet County of Riverside, District 5 City of La Quinta City of Banning City of Beaumont City of Blythe City of Calimesa City of Canyon Lake City of Cathedral City City of Coachella City of Corona City of Desert Hot Springs City of Indian Wells City of Indio City of Lake Elsinore City of Moreno Valley City of Murrieta City of Norco City of Palm Desert City of Palm Springs City of Perris City of Rancho Mirage City of Riverside City of San Jacinto City of Temecula County of Riverside, District 1 County of Riverside, District 2 County of Riverside, District 3 County of Riverside, District 4 Caltrans District #8 Certificate of Achievement for Excellence in Financial Report ng Presented to Riverside County Transportation Commission, California For its Comprehensive .Alwual Financial Report for the Fiscal Year Ended June 34, 20\94 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Govei,mxent Finance Officers Association of the United Stakes and Canada to government units and public employee,retiirement systems whose conunchensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. esident 7 Executive Iitrector xiv McGladrey& Pullen Certified Public ACCOUntant5 Independent Auditor's Report Board of Commissioners Riverside County Transportation mission Riverside, California We have audited the accompanying financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Riverside County Transportation Commission (the Commission) as of. and for the year ended June 30, 2005, which collectively comprise the Commission's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Commission's management Our responsibility is to express opinions on these financial statements based on our audit We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentafion. We believe that our audit provides a reasonable basis for ow" opinions. In our opinion, the financial statements referred to above present fairly, in all material respects,; the respective financial position of the governmental activities, each major fund and the aggregate remaining fund information of the Commission as of June 30, 2005, and the respective changes in financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America. As discussed' in Note 13, previously reported amounts for capital assets and net assets ai June 30, 2004, have been restated. In accordance with Government Auditing Standards, we have also issued our report dated October 14, 2005 on our consideration of the Commission's internal control over financial reporting and our tests' of its compliance with certain provisions of laws„ regulations; contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that> testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report isc an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis and budgetary comparison information, as listed in the table of contents,- are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United states of America. We have applied certain limited procedures, which consisted principally of inquiries of mannagement regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. 1 Our audit was conducted for the purpose of formingopinions on the financial statements that collectively 'comprise the Commission's basic financial statements. The combining and individual nonmajor fund financial statements and other schedules, listed in the table of contents as other supplementary information, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements aid, in our opinion, is fairly slated in all material respects in relation to the basic financial statements: taken as a Mole, The accompanying introductory and statistical sections, as listed in the tattle of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. This information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. 4/C,4—e., G-,.oc' Riverside, California October 14, 2005 2 Riverside County Transportation Commission Management's Discussion and Analysis Year Ended June 30, 2005 As management of the Riverside County Transportation Commission (Commission), we offer readers of the Commission's financial statements this narrative overview and analysis of the Commission's financial activities for the fiscal year ended June 30, 2005. We encourage readers io consider the information on financial performance presented here in conjunction with the transmittal letter on pages i-x and the Commission's financial statements which begin on page 13. Financial Highlights Total net assets of the Commission were $334,455,859 and consisted of invested capital assets, net of related debt, of $133,225,528; restricted net assets of $325,504,623; and unrestricted net asset (deficit) of ($124,274,292). • The unrestricted net asset (deficit) represents liabilities in excess of assets. This results primarily from the recording of the debt issued for Measure A highway, local street and road, and regional arterial projects for which title vests with the State of California Department of Transportation (Ca!trans) or local jurisdictions. Accordingly, the Commission does not have sufficient current resources on hand to cover current and long-term liabilities; however, future Measure A sales taxes are pledged to cover Measure A debt service payments when made. • Net assets increased $99,566,167 during fiscal 2005. The increase was primarily attributable to Transportation Uniform Mitigation Fee (TUMF) revenues of $46,325,334 attributable to the Community Environmental Transportation Acceptability Process (CETAP) and regional arterials programs and a 15% increase in Measure A sales tax revenues. Subsequent to the renewal of Measure A in November 2002, the County of Riverside (County) and the 14 cities in Westem Riverside County (Western County) established a transportation development fee to mitigate the congestion impacts of new development in Western County. The Commission will receive $400 million in TUMF funding for new CETAP corridors and regional arterial projects. Total capital assets, net of accumulated depreciation, were $157,024,610 at June 30, 2005, representing an increase of $7,583,633, or 5%, from June 30, 2004. The increase in capital assets was primarily related to the purchase of land for the State Route (SR) 79 realignment project and the Mid County Parkway, a proposed corridor. The Commission's governmental funds reported combined ending fund balances of $336,635,297, an increase of $91,260,931 compared to fiscal 2004. Approximately 59% of the governmental fund balances represent amounts available for the Measure A program, including debt service and funding from the issuance of commercial paper. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the Commission's basic financial statements, which are comprised of three components consisting of government -wide financial statements, fund financial statements, and notes to the financial statements. This report also contains required supplementary information and other supplementary information in addition to the basic financial statements. 3 Government -wide Financial Statements The government -wide financial statements are designed to provide readers with a broad overview of the Commission's finances, in a manner similar to a private -sector business. The statement of net assets presents information on all of the Commission's assets and liabilities, with the difference between assets and liabilities reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Commission is improving or deteriorating. The statement of activities presents information showing how the Commission's net assets changed during the fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. The government -wide financial statements report the functions of the Commission that are principally supported by sales taxes and intergovernmental revenues, or govemmental activities. The governmental activities of the Commission include general government, the Measure A program, CETAP, regional arterials, commuter rail, transit and specialized transportation services, planning and programming, bicycle and pedestrian projects, motorist services, and property management. Measure A program services are divided within the three regions of the County, namely Western County, Coachella Valley, and Palo Verde Valley. The government -wide financial statements include only the Commission and its blended component unit. The government - wide financial statements can be found on pages 13-14 of this report. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Fund accounting is used to ensure and demonstrate compliance with finance -related legal requirements. All of the Commission's funds can be divided into two categories: governmental funds and fiduciary funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements; however, governmental fund financial statements focus on near -term inflows and outflows of spendable resources and on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Since the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. As a result, readers may better 'understand the long-term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and related statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Commission maintains 12 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the related statement of revenues, expenditures and changes in fund balances for the Commission's major governmental funds comprised of the General fund; Measure A Western County, Measure A Coachella Valley, Transportation Uniform Mitigation Fee, and Local Transportation Fund Special Revenue funds; Commercial Paper Capital Projects fund; and Debt Service fund. Data from the other five governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements in the other supplementary information section. 4 The Commission adopts an annual appropriated budget for the General fund, all Special Revenue funds except for the Local Transportation Fund, all Capital Projects funds, and the Debt Service fund. Budgetary comparison schedules have been provided for the General fund and major Special Revenue funds as required supplementary information and for the nonmajor Special Revenue funds and the Capital Projects and Debt Service funds as other supplementary information to demonstrate compliance with these budgets. The governmental fund financial statements can be found on pages 15-18 of this report. Fiduciary funds are used to account for resources held for the benefit of parties outside the Commission. Fiduciary funds are not reflected in the government -wide financial statements, as the resources of those funds are not available to the Commission to support the Commission's own programs. The fiduciary funds are accounted for using the accrual basis of accounting. The fiduciary fund financial statements can be found on page 19 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 20-38 of this report. Other information Other information is in addition to the basic financial statements and accompanying notes to the financial statements. This report also presents certain required supplementary information concerning the Commission's budgetary results for the General fund and major Special Revenue funds with appropriated budgets. Required supplementary information can be found on pages 39-40 of this report. The combining statements referred to earlier relating to nonmajor governmental funds are presented immediately following the required supplementary information. Other supplementary information includes budgetary results for the nonmajor Special Revenue funds, all Capital Projects funds, and the Debt Service fund as well as schedules of expenditures for local streets and roads and for transit and specialized transportation by geographic area and source for all Special Revenue funds. This other supplementary information can be found on pages 41-48 of this report. Government -wide Financial Analysis As noted previously, net assets may serve over time as a useful indicator of a government's financial position. At June 30, 2005, the Commission's assets exceeded liabilities by $334,455,859, a $99,566,167 increase from June 30, 2004. Our analysis below focuses on the net assets and changes in net assets of the Commission's governmental activities. Net Assets Approximately 40%, compared to 53% in 2004, of the Commission's net assets reflect its investment in capital assets (i.e., construction in progress; land and improvements; rail operating easements; rail stations; and office furniture, equipment, and automobiles), less any related debt used to acquire those assets, primarily related to rail and land, that is still outstanding. The Commission uses these capital assets to provide transportation and commuter rail transit services to the residents and business community of the County. The increase of $9,225,557 in net assets invested in capital assets; net of related debt, from governmental activities resulted primarily from the acquisition of land for the SR-79 and Mid County Parkway projects as well as the reduction in the related debt. The most significant portion of the Commission's net assets represents resources subject to external restrictions on how they may be used. Restricted net assets from governmental activities represented approximately 97% and 99% of the total net assets at June 30, 2005 and 2004, respectively. Restricted net assets from governmental activities increased $92,785,425 primarily as a result of the TUMF program and an increase in sales taxes. 5 Unrestricted net assets represent the portion of net assets that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, or other legal requirements. Unrestricted net assets from governmental activities changed from a $121,829,477 deficit at June 30, 2004 to a $124,274,292 deficit at June 30, 2005. This deficit results primarily from the impact of recording of the Commission's long-term debt issued for Measure A highway, local street and road, and regional arterial projects. While a significant portion of the debt has been incurred to build these projects which are capital assets; upon completion these projects are transferred to Ca!trans or the local jurisdiction. Accordingly, these projects are not assets of the Commission that offset the long-term debt in the statement of net assets. The following is condensed financial data related to net assets at June 30, 2005 and June 30, 2004: June 30, 2004, Net Assets June 30, 2005 as restated Current and other assets $ 374,795,535 $ 266,667,558 Capital assets not being depreciated 110,704,637 101,543,942 Capital assets being depreciated, net of accumulated depreciation 46,319,973 47,897,035 Total assets 531,820,145 416,108,535 Long-term obligations 158,976,227 157,088,200 Other liabilities 38,388,059 24,130,643 Total liabilities 197,364,286 181,218,843 Net assets: Invested in capital assets, net of related debt 133,225,528 123,999,971 Restricted 325,504,623 232,719,198 Unrestricted (124,274,292) (121,829,477) Total net assets $ 334,455,859 $ 234,889,692 Changes in Net Assets The Commission's total program and general revenues were $298,030,277, while the total cost of all programs was $198,464,110. Total revenues increased by 16%, and the total cost of all programs increased by 8%. Approximately 37% of the costs of the Commission's programs were paid by those who directly benefited from the programs or by other governments that subsidized certain programs with grants and contributions. Sales taxes ultimately financed a significant portion of the programs' net costs. Governmental activities increased the Commission's net assets by $99,566,167, and condensed financial data related to the change in net assets is presented in the table below. Key elements of this increase are as follows: • Charges for services decreased $596,162 due to a reduction in reimbursable expenses for commuter assistance services provided to other governmental agencies; • Operating grants and contributions increased as a result of the collection of TUMF fees in a strong housing market and a slight increase in federal and state reimbursements for major highway projects; • Capital grants and contributions decreased due to the completion of significant commuter rail capital projects in FY 2003/04; • Measure A sales tax revenues increased $18,356,357, or 15%, due to the strong local economy affected by increased population and jobs as well as available and affordable housing; 6 • Transportation Development Act (TDA) sales taxes increased $8,685,463, or 13%, due to the strong local economy; • Investment earnings increased 65% as a result of higher cash and investment balances and rising rates; • Other miscellaneous revenue decreased $1,068,687 as a result of a change in fiscal 2005 relating to the accounting for condemnation deposits returned to the Commission; • Gain on sale of capital assets relates to the sale of surplus rail property; • CETAP expenses increased $3,538,876 as a result of land acquisitions for new corridors; • Local streets and roads expenses increased $7,124,201 as such payments to local jurisdictions are directly affected by the increase in sales taxes; • Regional arterial expenses increased $3,625,205 primarily as a result of land acquisitions and reimbursements to local jurisdictions for arterial improvements in Western County; • Transit and specialized transportation expenses increased $2,493,893 due to increased allocations for public transit bus and rail operations; and • Interest expense decreased $3,387,201 primarily as a result of an arbitrage rebate liability recorded in the prior year. Changes in Net Assets Year Ended June 30, 2005 June 30, 2004 Revenues Program revenues: Charges for services $ 574,611 $ 1,170,773 Operating grants and contributions 72,202,430 58,513,817 Capital grants and contributions 877,665 1,183,922 General revenues: Measure A sales taxes 138,921,247 120,564,890 Transportation Development Act sales taxes 77,818,565 69,133,102 Unrestricted investment eamings 5,146,325 3,115,232 Other miscellaneous revenue 2,366,380 3,435,067 Gain on sale of capital assets 123,054 Total revenues 298,030,277 257,116,803 Expenses General government 4,115,907 3,909,942 Bicycle and pedestrian facilities 1,021,637 927,138 CETAP 4,147,758 608,882 Commuter assistance 2,599,448 2,959,732 Commuter rail 8,907,828 8,702,803 Highways 35,362,793 35,456,330 Local streets and roads 53,333,169 46,208,968 Motorist assistance 2,191,061 1,978,380 Planning and programming 4,328,038 4,287,696 Property management 580,224 338,353 Regional arterials 17,621,505 13,996,300 Transit and specialized transportation 55,905,814 53,411,921 Interest expense 8,348,928 11,736,129 Total expenses 198,464,110 184,522,574 Increase in net assets 99,566,167 72,594,229 Net assets at beginning of year, as restated 234,889,692 162,295,463 Net assets at end of year $ 334,455,859 $ 234,889,692 The following graph depicts program expenses and related program revenues for the Commission's govemmental activities for the fiscal year ended June 30, 2005: $50,000,000 $55,000,060 $50,000,000 $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,060,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- aee�\a�a c,<(/ `a�a�G ���e�`a�gr�a��a�°aaes•5`y�a�4 a� \moo, �a�e�a�e�\aQ13<`• 4S2 \�o �a�e Gea e<• God' 4 G°� e`sa • e Q`°°' dam •�°tea 44\ ekes o0. -\(, e •.t. Qua" aSQe .`a° P5 ® Expenses ■ Revenues The graph below presents the program and general revenues by source for the•Commission's governmental activities for the fiscal year ended June 30, 2005: Other miscellaneous revenue 1% Unrestricted investment earnings 2% Transportation Development Act sales taxes 26% Gain on sale of capital assets 0%, 8 Charges for services 0% Operating grants and contributions 24% Capital grants and contributions 0% Measure A sales taxes 47% Financial Analysis of the Commission's Funds As of June 30, 2005, the Commission's governmental funds reported combined ending fund balances of $336,635,297, an increase of $91,260,931 compared to 2004. Approximately 2%, or $7,111,435, of this total amount constitutes unreserved fund balance which is available for spending at the Commission's discretion. Approximately 69% of the unreserved fund balance has been designated for bicycle and pedestrian projects and for motorist assistance. The remainder of the fund balance is reserved to indicate that it is not available for new spending because of the following commitments: • $1,360,685 in TDA funds that have been allocated to cities within the County for bicycle and pedestrian projects; • $33,491,050 for new CETAP corridors in Western County; • $10,724,629 for commuter assistance activities such as the ridesharing program, the park -and -ride program, and several other incentives for commuters to use alternative modes of transportation; $33,179,561 for commuter rail projects including the Perris Valley Line extension which is expected to be completed in 2008; • $25,109,302 related to debt service that is to be paid over the next four years; • $84,727,570 for highway projects to be completed over the remainder of the 1989 Measure A; • $31,324,000 in advances to the State of California to ensure the timely commencement of the SR-60/SR-91/1-215 interchange project managed by Caltrans; $7,100,497 in loans receivable from cities for funds that were loaned to the cities to enable them to construct and maintain roads and to be repaid from their future Measure A local streets and roads funding; $13,692,556 in accounts receivable from the State Board of Equalization for the FY 2003/04 Local Transportation Fund sales tax clean up allocation; $219,132 for local streets and roads programs that are returned to the cities within the County for maintenance of their roads and local arterials; • $546,350 in the General fund available for planning and programming of the Local Transportation Fund program; • $582,947 in prepaid amounts for transit allocations and other expenditures; • $2,183,047 in property management funds that were generated from highway and rail properties that will be used for those programs; • $2,635,656 for regional arterials in the Coachella Valley and $30,123,109 for regional arterials in Western County; • $6,922,635 for specialized transportation projects funded through the end of the 1989 Measure A; and • $45,601,136 in TDA funds available to the commuter rail and bus transit operators in the County. The following table presents the changes in fund balances for the governmental funds for the fiscal years ended June 30, 2005 and 2004: Year Ended June 30 Fund Balances 2005 2004 % Change General fund $ 8,520,480 $ 7,352,174 16% Special Revenue major funds: Measure A Western County 134,743,081 115,098,845 17% Measure A Coachella Valley 8,357,088 7,253,630 15% Transportation Uniform Mitigation Fee 63,614,159 34,439,947 85% Local Transportation Fund 57,575,836 42,593,252 35% 9 Year Ended June 30 Fund Balances Commercial Paper Capital Projects fund 2005 2004 % Change $ 25,463,638 $ NIA Debt Service fund 29,981,473 30,253,999 (1)% Nonmajor governmental funds 8,379,542 8,382,519 0% Key elements for the changes in fund balances are as follows: • The 16% increase in the General fund can be attributed to increased reimbursements from a govemmental agency related to the Riverside County/Orange County Major Investment Study and a transfer from the TUMF Special Revenue fund as reimbursement for prior CETAP expenditures; • The 17% increase in the Measure A Western County Special Revenue fund can be attributed to the increased sales taxes from a strong local economy and decreased activity in commuter rail as a result of the completion of construction activities at various rail stations; • The 15% increase in the Measure A Coachella Valley Special Revenue fund can be attributed to the increased sales taxes; • The 85% increase in the Transportation Uniform Mitigation Fee Special Revenue fund can be attributed to the increase in TUMF fees collected relating to a strong housing market in Western County; and • The 35% increase in the Local Transportation Fund can be attributed to increased sales taxes. General Fund Budgetary Highlights Differences between the original budget and the final amended budget for the General fund resulted in a $1,236,374 increase in appropriations and were related to the following changes: $24,484 in decreases for various administration activities; $825,850 in increases to the commuter rail program for increased security and utility costs at the Commission's commuter rail stations; • $34,500 in decreases for various planning and programming services; • $91,089 in increases to property management activities related to support services for the development of a property inventory database, identification of unauthorized encroachments, and appraisals and special projects; $84,281 in increases to transit and specialized transportation to conduct a progress report and skills assessment of a public bus transit operator; • $192,780 in increases to intergovernmental distributions related to increased sales tax revenues; and • $101,358 in increases to capital outlay for the redesign of office systems and an additional computer server to accommodate three new staff positions. Budget increases were budgeted from available fund balance and new revenues. During the year, revenues exceeded budgetary estimates and expenditures were less than budgetary estimates, thus eliminating the need to draw upon existing fund balance. Capital Assets and Debt Administration Capital Assets As of June 30, 2005, the Commission had $157,024,610 net of accumulated depreciation, invested in a broad range of capital assets including construction in progress; land and land improvements; rail operating easements and stations; and office furniture, equipment, and automobiles. The total increase in the Commission's total capital assets, net for FY 2004/05 was 5%. 10 The table below is a comparative summary of the Commission's capital assets, net of accumulated depreciation: June 30, 2005 June 30, 2004, as restated Capital Assets not being depreciated Land and land improvements $ 70,497,323 $ 61,574,957 Rail operating easements 39,484,143 39,484,143 Construction in progress 723,171 484,842 Total capital assets not being depreciated 110,704,637 101,543,942 Capital Assets, net of accumulated depreciation Rail stations 46,100,756 47,613,608 Office furniture, equipment, and automobiles 219,217 283,427 Total capital assets, net of accumulated depreciation 46,319,973 47,897,035 Total capital assets $ 157,024,610 $ 149,440,977 Major capital asset additions during 2005 included land purchases for the SR-79 realignment and Mid County Parkway projects. During 2005, the Commission sold two parcels of land related to the commuter rail program with a book value approximating $83,400 for approximately $204,500. More detailed information about the Commission's capital assets is presented in Note 4 to the financial statements. Debt Administration As of June 30, 2005, the Commission had $124,335,000 in outstanding sales tax revenue bonds compared to $151,535,000 at June 30, 2004. The Commission maintains an overall "Aa2" rating from Standard & Poor's (S&P) and an "AA" rating from Moody's Investors Service (Moody's). The sales tax revenue bonds are among the highest -rated transportation bonds in the nation. The current debt limitation for the Commission is $525,000,000, which is significantly in excess of the Commission's outstanding general obligation debt. In March 2005 the Commission established a $185,000,000 commercial paper program to provide advance funding for 2009 Measure A capital projects. The commercial paper notes are rated "A1+" by S&P and "P1" by Moody's. As of June 30, 2005, the Commission has $30,005,000 in outstanding commercial paper notes. The commercial paper notes are expected to be refinanced with the issuance of long-term debt secured by sales taxes from the 2009 Measure A, which has a $500,000,000 debt limitation on outstanding debt. Additional information on the Commission's long-term debt can be found in Note 6 to the financial statements. Economic Factors and Other Factors During its March Commission meeting, the Commission adopted guiding principles for use in the preparation of the FY 2005/06 Budget. These principles have been incorporated in goals of the Commission and will be updated annually in response to the ever -changing social, political and economic environment. The principles are a business planning tool designed to assist the Commission in implementing its strategic goals and objectives and lays the foundation for future financial planning for the annual budget process. The Commission adopted the FY 2005/06 annual budget on June 2, 2005. This $321,498,100 balanced budget includes $18,500,000 for the SR-74 widening and the Mid County Parkway environmental study, $7,110,000 for the SR-79 realignment study and right of way acquisition, $18,300,000 for SR-91 high occupancy vehicle lanes engineering and right 11 of way acquisition, $10,050,000 for the Perris Valley Line Metrolink extension project engineering and right of way acquisition, $29,100,000 for planning a new corridor to Orange County, and $3,464,000 for parking improvements at commuter rail stations in Riverside and Corona. Leading economic indicators show that the local economy will continue to be strong. Home sales, the building of new homes, the population growth, and the continued creation of new jobs in the Inland Empire are reasons the County's economic indicators demonstrate a positive trend. Locally, job growth and taxable sales are forecasted to continue to increase. These factors were considered in preparing the Commission's budget for the 2006 fiscal year. There are obvious variables in terms of project financing available from federal and state funds. Federal reauthorization for transportation funding was finally approved in July 2005. There is continuing uncertainty related to the fiscal condition of the State of California and the impact on transportation, including the future viability of the State Transportation Improvement Program (STIP). Several significant projects in Riverside County may be delayed for an indeterminable period if the STIP • program is curtailed. Contacting the Commission's Management This financial report is designed to provide a general overview of the Commission's finances for all those with an interest in the govemment's finances and to show the Commission's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Chief Financial Officer, Finance Department at the Riverside County Transportation Commission, 4080 Lemon Street, 3rd Floor, P.O. Box 12008, Riverside, California 92502-2208. 12 Basic Financial Statements Riverside County Transportation Commission Statement of Net Assets June 30, 2005 Governmental Activities Assets Cash and investments $ 257,330,200 Receivables: Accounts 55,504,843 Advances to other governments 31,324,000 Loans 6,525,497 Interest 1,378,731 Prepaid expenses and other assets 994,105 Restricted investments held by trustee 21,738,159 Capital assets not being depreciated 110,704,637 Capital assets being depreciated, net of accumulated depreciation 46,319,973 Total assets 531,820,145 Liabilities Accounts payable 35,034,666 Accrued interest 638,979 Other liabilities 572,858 Arbitrage liability 2,141,556 Long-term liabilities: Due within one year 29,912,777 Due in more than one year 129,063,450 Total liabilities 197,364,286 Net assets Invested in capital assets, net of related debt 133,225,528 Restricted for: Bicycle and pedestrian facilities 1,360,685 CETAP 33,491,050 Commuter assistance 10,734,384 Commuter rail 33,182,710 Debt service 29,981,473 Highways 114,591,060 Local streets and roads 219,132 Planning and programming 546,350 Property management 2,183,047 Regional arterials 32,758,765 Transit and specialized transportation 66,455,967 Unrestricted (deficit) (124,274,292) Total net assets $ 334,455,859 See notes to financial statements 13 Riverside County Transportation Commission Statement of Activities Year Ended June 30, 2005 Functions/Programs Primary Government Governmental Activities: General government Bicycle and pedestrian facilities CETAP Commuter assistance Commuter rail Highways Local streets and roads Motorist assistance Planning and programming Property management Regional arterials Transit and specialized transportation Interest expense Total governmental activities $ See notes to financial statements Charges for Expenses Services 4,115,907 1,021,637 4,147,758 2,599,448 8,907,828 35,362,793 53,333,169 2,191,061 4,328,038 580,224 17,621,505 55,905,814 8,348,928 198,464,110 Program Revenues Operating Capital Grants Grants and and Contributions Contributions $ 24,613 $ - $ 23,162,667 1,162,642 2,564 179,396 215 20,688,877 25 2,988,799 119 838,807 547,075 23,162,667 18,575 $ 574,611 $ 72,202,430 $ Net (Expense) Revenue and Changes in Net Assets Governmental Activities - $ (4,091,294) (1,021,637) 19,014,909 (1,436,806) 877,665 (7,848,203) (14,673,701) (53,333,169) 797,763 (3,489,112) (33,149) 5,541,162 (55,887,239) (8,348,928) 877,665 (124,809,404) General Revenues: Measure A sales taxes Transportation Development Act sales taxes Unrestricted investment earnings Other miscellaneous revenue Gain on sale of capital assets Total general revenues Change in net assets Net assets at beginning of year, as restated Net assets at end of year 14 138,921,247 77,818,565 5,146,325 2,366,380 123,054 224,375,571 99,566,167 234,889,692 $ 334,455,859. Riverside County Transportation Commission • Balance Sheet -Governmental Funds • June 30, 2005 Major Funds General Assets Cash and investments $ 8,760,521 Receivables: Accounts 815,418 Advances to other governments Loans Interest Due from other funds Advances to other funds 58,314 396,433 Prepaid expenditures 317,752 Restricted investments held by trustee Total assets $ 10,348,438 Liabilities and Fund Balances Liabilities: Accounts payable Due to other funds Advances from other funds Other liabilities Total liabilities Fund balances Reserved for: Bicycle and pedestrian facilities CETAP Commuter assistance Commuter rail Debt service Highways Loans and accounts receivable Local streets and roads Planning and programming 546,350 Prepaid amounts 317,752 Property management 2,183,047 Regional arterials Transit and specialized transportation Unreserved: Designated for bicycles and pedestrians Designated for motorist assistance Undesignated 2,215,643 Total fund balances 8,520,480 Total liabilities and fund balances $ 10,348,438 Measure A Western County $ 94,323,445 28,190,746 31,324,000 1.653,326 562,888 173,737 575,000 9,905 Special Revenue Measure A Coachella Valley Transportation Uniform Mitigation Fee $ 6,531,913 $ 65,981,303 7,028,168 3,719,113 43,078 375,331 27 $ 156,813,047 $ 13,603,186 $ 70,075,747 Local Transportation Fund $ 43,605,451 13,692,556 256,097 239,640 $ 57,793,744 Commercial Other Paper Nonmajor Capital Debt Govemmental Projects Service Funds Total $ 25,560,816 $ 5,567,187 $ 6,999,564 $ 257,330,200 2,058,842 55,504,843 31,324,000 4,872,171 6,525,497 39,839 43,184 1,378,731 1,962 572,132 575,000 15,650 582,947 19,502,276 2,235,856 21,738,159 $ 25,560,816 $ 29,981,473 $ 11,355,058 $ 375,531,509 $ 1,654,196 $ 20,878,084 230,141 575,000 173,762 386,741 1,827,958 22,069,966 See notes to financial statements 3,257,688 10,724,629 29,921,873 $ 5,238,893 $ 6,402,572 6,506 53,547 699 5,469 5,246,098 6,461,588 54,362,000 4,801,382 33,552,326 104,799 64,964 9,905 2,635,656 6,067,549 855,086 33,491,050 30;123,109 134,743,081 8,357,088 63,614,159 $ 156,813,047 $ 13,603,186 $ 70,075,747 $ 215,063 $ 56,020 $ 2,845 41,158 217,908 1,360,685 13,692,556 239,640 41,674,810 608,145 57,575,836 $ 57,793,744 97,178 25,463,638 25,109,302 4,872,171 $ 2,731,394 $ 37,176,222 237,935 572,132 575,000 6,187 572,858 2,975,516 38,896,212 1,360,685 33,491,050 10,724,629 33,179,561 25,109,302 100,550 84,727,570 52,117,053 49,369 219,132 546,350 15,650 582,947 2,183,047 32,758,765 3,926,326 52,523,771 608,145 4,287,647 4,287,647 2,215,643 25,463,638 29,981,473 8,379,542 336,635,297 $ 25,560,816 $ 29,981,473 $ 11,355,058 $ 375,531,509 Riverside County Transportation Commission Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2005 Total fund balances - Governmental funds (page 15) $ 336,635,297 Amounts reported for governmental activities in the statement of net assets (page 13) are different because: Capital assets, less related accumulated depreciation, used in governmental activities are not financial resources and therefore are not reported in the funds. Interest payable on bonds outstanding is not due and payable in the current period and therefore is not reported in the funds. Debt issuance costs are not current financial resources and therefore are not reported in the governmental funds. Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Those liabilities consist of: 157,024,610 (638,979) 411,158 Compensated absences (481,218) Capital lease obligation (55,009) Contracts payable (4,100,000) Bonds payable (124,335,000) Commercial paper notes payable (30,005,000) Net adjustment (158,976,227) Net assets of governmental activities (page 13) $ 334,455,859 See notes to financial statements 16 Riverside County Transportation Commission • Statement of Revenues, Expenditures and Changes in Fund Balances -Governmental Funds • Year Ended June 30, 2005 Major Funds Revenues Sales taxes $ Transportation Uniform Mitigation Fee Intergovernmental Interest Vehicle registration user fees Other Total revenues Expenditures Current: Administration: Salaries and benefits General legal services Professional services Office lease Other Total administration Programs: Bicycle and pedestrian facilities CETAP Commuter assistance Commuter rail Highways Local streets and roads Motorist assistance Planning and programming Property management Regional arterials Transit and specialized transportation Total programs Debt service: Principal Interest Arbitrage rebate tax Cost of issuance Total debt service Intergovernmental distributions Capital outlay Total expenditures • Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): • Commercial paper proceeds Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year See notes to financial statements Measure A Western General County 10,690,600 $ 101,199,763 $ 1,044,313 22,747,974 162,984 1,572,678 744,527 907,834 12,642,424 126, 428,249 1,194,738 92,250 639,949 300,618 764,734 2,992,289 5,330,297- 1.692,710 580,224 218,193 7,821,424 26,717 3,139 29,856 2,583,679 2,250,187 34,024,132 40,479,949 1,573,059 80,911,006 706,228 113,995 60,038 11,663,792 80,971,044 978,632 45,457,205 190,102 (428) 189,674 1,168,306 7,352,174 $ 8,520,480 $ 428 (25,813,397) 25,812,969) 19,644,236 115,098,845 134,743,081 $ Special Revenue Measure A Coachella Valley 33,657,162 $ 104,196 1,430,221 35,191,579 1,044,562 11,786,053 10,056,326 3,302,256 26,189,197 Transportation Uniform Mitigation Fee Local Transportation Fund - $ 66,776,381 $ 605,717- 4/,189,837 67,382,098 46,325,334 864,503 8,600,659 12,118,080 687,000 687,000 1,021,637 1,929,100 48,761,777 20,718,739 51,712,514 26,189,197 20,/18,739 9,002,382 26,471,098 2,893,216 (7,898,924) (190,102) (7,898,924)2(,179003104 , 03,11 1,103,458 29,174,212 7,253,630 34,439,947 8,357,088 $ 63,614,159 $ Commercial Paper Capital Projects 174,127 174,127 1,272,124 Debt Service Other Nonmajor Governmental Funds $ - $ 4,415,906 $ 1,500,683 1,500,683 1,448,796 161,437 1,541,216 35,420 7,602,775 57,980 4,383 31,747 15,257 38,771 148,138 1,067,167 2,191,061 2,050,529 1,272.124 5,308,757 27,200,000 1,356 111,581 8,285,530 160 2,141,556 438,568 550,149 35,485,530 2,143,072 5,785 52,399,514 1,822,273 35,485,530 7,605,752 14,982,584 (1,648,146) (33,984,847) (2,977) 61,255,931 Total 216,739,812 46,325,334 25,241,083 5,146,325 1,541,216 3,118,002 298,111,772 1,252,718 96,633 671,696 315,875 1,490,505 3,827,427 1,021,637 8,600,659 2,583,679 7,580,484 36,340,818 53,333,169 2,191,061 3,621,810 580,224 22,174,406 55,905,814 193,933,761 27,228,073 8,400,410 2,141,556 438,568 38,208,607 14,982,584 42,593,252 57,575,836 $ 30,005,000 33,712,321 2,893, 111,7216 33,712,321 25,463,638 (272,526) 30,253,999 25,463,638 $ 29,981,4/3 $ 254,100 (254,100) (2,977) 8,382,519 8,3/9,542 $ 706,228 179,818 236.855,841 30,005,000 37,050,167 (37,050,167) 30,005,000 91,260,931 245,374,366 336,635,297 Riverside County Transportation Commission Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2005 Net change in fund balances - Total governmental funds (page 17) $ 91,260,931 Amounts reported for governmental activities in the statement of activities (page 14) are different because: Governmental funds report capital outlays as expenditures. However in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The adjustment combines the net changes of the following amounts: Capital outlay 9,936,635 Depreciation expense (2,269,566) Sale of capital assets (83,436) Net adjustments 7,583,633 The issuance of long-term debt (e.g., bonds) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, govemmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The adjustment combines the net changes of the following amounts: Principal payments for sales tax revenue bonds and capital leases Commercial paper proceeds Cost of issuance, net of amortization of $27,410 Arbitrage liability Change in accrued interest Highway expenditure related to contract payable Net adjustments Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. The adjustment combines the net changes of the following amounts: Compensated absences Change in net assets of governmental activities (page 14) See notes to financial statements 18 27,228,073 (30,005,000) 411,158 2,146,990 51,482 1,000,000 832,703 (111,100) $ 99,566,167 Riverside County Transportation Commission Statement of Fiduciary Net Assets June 30, 2005 Assets Interest receivable Restricted investments held by trustee Total assets Local Projects Agency Fund 1,841 943,606 945,447 Liabilities Due to other governments $ 945,447 See notes to financial statements 19 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 1. Summary of Significant Accounting Policies Reporting entity: The Riverside County Transportation Commission (Commission) was formed in 1976 under Division 12 (commencing with Section 130000) of the California Public Utilities Code. The Commission is a special district governed by a 30-member board of commissioners (Board) consisting of one representative from each city in the county, all five county supervisors, and a nonvoting state representative. The Commission provides short-range transportation planning and programming for Riverside County (County), which includes the administration of the Local Transportation Fund (LTF) and the State Transit Assistance (STA) programs created under the Transportation Development Act (TDA) by the State of California (State). The LTF is administered by the Commission on behalf of the County. The purpose of this program is to allocate funds for public transportation needs, local streets and roads, bicycle and pedestrian facilities, and multimodal transportation terminals. The STA program allocates funds for public transportation purposes to those geographic areas with special public transportation needs, which cannot be met otherwise. On November 8, 1988, the Commission was empowered by the voters of the County, under Ordinance No. 88-1 (1989 Measure A), to collect a one-half of one percent sales tax for the purpose of improving the transportation system of the County. Measure A was enacted, in part, pursuant to the provisions of Division 25 (commencing with Section 240000) of the California Public Utilities Code and Section 7252.22 of the Revenue and Taxation Code. On November 12, 2002 Riverside County's voters approved a 30-year renewal of Measure A under Ordinance No. 02-001 (2009 Measure A). The voter action ensures the replacement of the 1989 Measure A program when it expires in 2009 with a new 30 year program that will continue funding improvements until June 2039. In connection with the 2009 Measure A program, the County and cities in the Western County area implemented a Transportation Uniform Mitigation Fee (TUMF) program to fund a regional arterial system to handle the traffic demands in the Westem County area as a result of future development. Under the 2009 Measure A program, the Commission shall receive the first $400 million of TUMF revenues to fund the regional arterial projects and new Community Environmental Transportation Acceptability Process (CETAP) corridors included in the 2009 Measure ATransportation .Improvement Plan. As a result of the commencement of the TUMF program prior to the 2009 Measure A program, a Memorandum of Understanding (MOU) between the Commission and the Western Riverside Council of Governments (WRCOG), administrator of the TUMF program, was executed regarding the allocation of TUMF revenues until the 2009 Measure A program is effective. Under the MOU, the Commission is to receive 48.1% of the TUMF revenues after a set -aside for WRCOG administration costs, and the balance is allocated to local arterial projects (48.1%) administered by WRCOG and public transit (3.8%). As required by accounting principles generally accepted in the United States (GAAP), the basic financial statements include all funds of the Commission including those of the Service Authority for Freeway Emergencies (SAFE), a component unit, for which the Commission is considered financially accountable. SAFE was created under Chapter 14 (commencing with Section 2550) of Division 3 of the California Streets and Highways Code and Sections 2421.5 and 9250.1 of the Vehicle Code. SAFE receives monies from fees levied on registered vehicles to be used to implement and maintain an emergency motorist aid system, as specified, on portions of the California Freeway and Expressway System in the County. The governing body of SAFE is substantially identical to that of the Commission- and is responsible for approval of SAFE's budget. SAFE is presented as a special revenue fund. Separate financial statements are not issued for SAFE. There are many other governmental agencies, including the County of Riverside, providing services within the area served by the Commission. These other governmental agencies have independently elected goveming boards and consequently are not under the direction of the Commission. Financial information for these agencies is not included in the accompanying financial statements. 20 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 1. Summary of Significant Accounting Policies, Continued Basis of presentation: The Commission's basic financial statements consist of government -wide financial statements, including a statement of net assets and a statement of activities, and fund financial statements which provide a more detailed level of financial information. Government -wide statements: The statement of net assets and the statement of activities report information on all of the nonfiduciary activities of the Commission. For the most part, the effect of interfund activity has been removed from these statements. These statements report governmental activities, which normally are supported by taxes and intergovernmental revenues. The Commission does not have any business -type activities, which rely to a significant extent on charges and fees for support. The statement of activities demonstrates the degree to which the program expenses of a given function are offset by program revenues. Program expenses include direct expenses, which are clearly identifiable with a specific function, and allocated indirect expenses. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other intemally dedicated resources, which are properly not included among program revenues, are reported instead as general revenues. Fund financial statements: The fund financial statements provide information about the Commission's funds, including its fiduciary funds, though the latter are excluded from the government -wide financial statements. Separate financial statements are provided for governmental and fiduciary funds. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. The Commission reports the following major governmental funds: General Fund: The General Fund is the general operating fund of the Commission and accounts for financial resources not required to be accounted for in another fund. Measure A Western County Special Revenue Fund: This fund accounts for the revenues from sales taxes which are restricted to expenditures for Western County programs and activities. Measure A Coachella Valley Special Revenue Fund: This fund accounts for the revenues from sales taxes which are restricted to expenditures for Coachella Valley programs and activities. Transportation Uniform Mitigation Fee Fund: This special revenue fund accounts for TUMF revenues, which are restricted to expenditures for Western County regional arterial and CETAP projects. • Local Transportation Fund: This special revenue fund accounts for the one -quarter percent of the state sales tax collected within the County under TDA for planning and programming, bicycle and pedestrian facilities, and transit operations including the Commission's commuter rail operations. Commercial Paper Capital Projects Fund: This fund records proceeds from the issuance of commercial paper notes and the use of these proceeds to advance right-of-way and mitigation land acquisition and project development for capital projects included in the 2009 Measure A. 21 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 1. Summary of Significant Accounting Policies, Continued Debt Service Fund: This fund accounts for the resources accumulated and payments made for principal and interest on the sales tax revenue bonds. The Measure A Western County Capital Projects fund, which had previously been reported as a major governmental fund, was determined to be a nonmajor governmental fund in fiscal 2005. Additionally, the Commission reports the following fund type: Local Projects Agency Fund: This fiduciary fund accounts for proceeds from a subordinate debt issue for various cities' local street and road projects. Measurement focus and basis of accounting: The government -wide and the fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Commission considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred; however, principal and interest expenditures on long-term debt and compensated absences of governmental funds are recorded only when payment is due. Those revenues susceptible to accrual include sales taxes collected and held by the State at year-end on behalf of the Commission, TUMF, intergovernmental revenues, interest revenue, and vehicle registration user fees. In applying the susceptible -to -accrual concept to intergovernmental revenues, there are essentially two types of revenues. In one, moneys must be expended on the specific purpose or project before any amounts will be paid to the Commission; therefore, revenues are recognized based upon expenditures incurred. In the other, moneys are virtually unrestricted and are usually revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenues at the time of receipt or earlier if the susceptible -to -accrual criteria are met. Cash and investments: The Commission maintains cash and investments in accordance with an investment policy adopted initially by the Board on September 13, 1995, and most recently amended March 18, 2005. The investment policy complies with, or is more restrictive than, applicable state statutes. Investments of bond and commercial paper proceeds as permitted by the applicable bond documents are maintained by U.S. Bank as custodial bank, and the earnings for each bond and commercial paper issue are accounted for separately. Cash from other Commission revenue sources is commingled for investment purposes, with investment earnings allocated to the different accounts based on average monthly dollar account balances. The Commission's investment policy authorizes investments in U.S. Treasury notes and bonds, federal agency notes, repurchase agreements, corporate bonds, commercial paper, banker's acceptances, money market mutual funds, the Riverside County Pooled Investment Fund (RCPIF), the State of California Local Agency Investment Fund (LAIF), and certificates of deposit. Other investments permitted by the California Government Code (Code) are permitted but only with prior Board authorization, except for securities that could result in zero interest accrual if held to maturity that are ineligible. LAIF is regulated by Code Section 16429 and is under the management of the State Treasurer with oversight provided by 22 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 7. Summary of Significant Accounting Policies, Continued the Local Agency Investment Advisory Board. Oversight of the RCPIF is conducted by the County Treasury Oversight Committee. All investments, except for those related to bond reserve funds, are subject to a maximum maturity of five years unless specific direction to exceed the limit is given by the Board. Local Transportation Fund moneys are legally required to be deposited in the RCPIF. The RCPIF and the LAIF are carried at fair value based on the value of each participating dollar as provided by the RCPIF and LAIF, respectively. The fair value of the Commission's position in the RCPIF and LAIF is the same as the value of the pool shares. Investments in U.S. govemment and agency securities are carried at fair value based on quoted market prices. Money market mutual funds are carried at fair value based on each fund's share price. Bank balances are secured by the pledging of a pool of eligible securities to collateralize the Commission's deposits with the bank in accordance with the Code. Accounts receivable: Accounts receivable consist primarily of Measure A and LTF sales tax revenues from the State Board of Equalization on all taxable sales within the County of Riverside, California through June 30, 2005. Interfund transactions: During the course of operations, numerous transactions occur between individual funds involving goods provided or services rendered. There are also transfers of revenues from funds authorized to receive the revenue to funds authorized to expend it. Outstanding interfund balances are reported as due from/to other funds; internal financing balances are reported as advances to/from other funds. Restricted investments held by trustee: Restricted investments held by trustee represent unexpended bond proceeds, interest earnings thereon, and reserve amounts of sales tax revenue bonds. Under the related bond resolutions and indentures, any remaining bond proceeds are restricted for the use of future construction improvements to the respective projects, for debt service, or for reserve requirements in accordance with applicable debt covenants. Capital assets: Capital assets consisting of land and land improvements; construction in progress; rail easements; rail stations; and office furniture, equipment,and vehicles are reported in governmental activities in the government -wide financial statements. Capital assets are defined by the Commission as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of three years. Such assets are recorded at historical costs or estimated historical costs if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. Highway construction and certain purchases of right-of-way property, for which title vests with Caltrans, are included in highway program expenditures. Infrastructure consisting primarily of highway construction and right-of-way acquisition is not recorded as a capital asset, because the Commission does not have title to such assets or rights -of -way. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the life of the asset are not capitalized. Rail stations, furniture and equipment; and vehicles of the primary government are depreciated using the straight-line method over the following estimated useful lives: 23 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 1. Summary of Significant Accounting Policies, Continued Asset Type Useful Life Rail stations 10 to 30 years Office furniture and equipment 3 to 5 years Vehicles 5 years Compensated absences: Vacation leave in governmental funds that is due and payable at year-end is reported as an expenditure and a liability of the General fund. Sick leave is recorded as an expenditure in the General fund when taken by the employee. Employees with continuous five years of service have the option of being paid for sick leave accumulated in excess of 240 hours at a rate of 50% (i.e., one hour's pay for every two hours in excess of 240). Any sick leave in excess of 240 hours is accrued at fiscal year end, and a liability is reported in the government -wide financial statements. Sick leave that is due and payable at year-end is reported as an expenditure and a fund liability of the General fund. Risk management: The Commission is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; and errors or omissions. The Commission protects itself against such losses by a balanced program of risk retention, risk transfers, and the purchase of commercial insurance. Loss exposures retained by the Commission are treated as normal expenditures and include any loss contingency not covered by the Commission's purchased insurance policies. Construction projects and rail properties are protected through a combination of commercial insurance, insurance required of Commission consultants, and a self-insurance fund established by the Southern California Regional Rail Authority (SCRRA). Settled claims have not exceeded insurance coverage in any of the past three fiscal years. Fund equity: In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans and are subject to change. Net assets: In the government -wide financial statements, net assets represent the difference between assets and liabilities and are classified into three categories: Invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction, or improvement of those assets and excludes unspent debt proceeds. i Restricted net assets represent the net assets that are not accessible for general use because their use is subject to restrictions enforceable by third parties. Unrestricted net assets represent those net assets that are available for general use. When both restricted and unrestricted resources are available for use, it is the Commission's policy to use restricted resources first and then unrestricted resources, as they are needed. Administration expenditures: The Commission's staff and resources are used in the performance of its responsibilities relating to the activities of the Commission and its component unit. Accordingly, the Commission allocates salaries and benefits to each applicable fund on the basis of actual hours spent by activity, and other indirect overhead is allocated based on management's budgetary estimates. Administrative salaries and benefits of $968,065 allocated to Measure A were less than 1% of revenues as required by law. 24 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 1. Summary of Significant Accounting Policies, Continued Reclassifications: Certain reclassifications have been made to 2004 amounts in the Statement of Activities to conform to the presentation of 2005 amounts. Note 2. Cash and Investments Cash and investments at June 30, 2005 consist of the following: Unrestricted Cash and investments at bank Petty cash RCPIF RCPIF specific investments LAIF Investments with fiscal agents or custodians — Total cash and investments $ 78,943 Cash $ 77,925 1,018 Investments 205,682,306 13,949,870 3,019,553 34,599,528 $ 257,251,257 Restricted Total Investments $ 77,925 $ 1,018 205,682,306 13,949,870 3,019,553 34,599,528 22,681,765 $ 257,330,200 $ 22,681,765 Total $ 77,925 1,018 205,682,306 13,949,870 3,019,553 57,281,293 $ 280,011,965 As of June 30, 2005, the Commission had the following investments: Investment Maturities Fair Value CNI Charter Government mutual fund Federal Home Loan Bank — Global Notes Federal Home Loan Bank — Medium Term Note Federal Home Loan Mortgage Corporation Reference Notes Federal National Mortgage Association First American Government Obligations mutual fund First American Treasury mutual fund LAIF RCPIF RCPIF — Federal Farm Credit Bank RCPIF — Federal Home Loan Bank RCPIF — Federal Home Loan Bank RCPIF — Federal Home Loan Bank Mortgage Certificate RCPIF — Federal National Mortgage Association U. S. Treasury notes Total investments 32 days average May 15, 2006 November 15, 2005 August 15, 2006 March 17, 2006 22 days average 8 days average 165 days average 274 days average February 15, 2007 August 18, 2006 June 29, 2007 November 15, 2006 March 29, 2006 November 30, 2005 $ 181,007 2,467,975 1,990,000 2,471,875 1,928,063 25,560,608 7,140,743 3,019,553 205,682,306 2,984,0710 1,990,620 3,002,820 3,997,360 1,975,000 15,541,022 $ 279,933,022 Custodial credit risk: Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker -dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The Commission's investment policy requires that a third party bank trust department hold all securities owned by the Commission. All trades are settled on a delivery versus payment basis through the Commission's safekeeping agent. The Commission has deposits.with a bank balance of $375,000 with a financial institution; bank balances over $375,000 are swept daily into a money market account. Of the bank balance, 25 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 2. Cash and Investments, Continued $100,000 is federally insured and the balance is collateralized in accordance with the Code; however, the collateralized securities are not held in the name of the Commission. Interest rate risk: The Commission's investment policy follows the Code as it relates to limits on investment maturities as a means of managing exposure to fair value losses arising from increasing interest rates. Credit risk: As of June 30, 2005, the Commission's investment in the RCPIF was rated —MR1 by Moody's Investors Service (Moody's), AAA by Fitch Ratings (Fitch), and V+1 by Standard & Poor's (S&P). The investments in Federal Home Loan Association, Federal National Mortgage Association, Federal Farm Credit Bank, U.S. Treasury notes, First American Treasury and First American Government Obligations mutual funds, and CNI Charter Government mutual fund were rated AAA by both Moody's and Fitch. LAIF is not rated. The Commission's investment policy only requires credit quality ratings for repurchase agreements, U.S. corporate debt, commercial paper, bankers acceptances and certificates of deposit. Concentration of credit risk: The Commission places a limit of 10% on the amount of investment holdings with any one non -governmental issuer. More than 5 percent of the Commission's investments are in the RCPIF, U.S. Treasury notes, and First American Government Obligations mutual fund. These investments are 73%, 6%, and 9%, respectively, of the Commission's investments. The investments in the Commercial Paper Capital Projects fund are unexpended commercial paper note proceeds invested in the First American Government Obligations mutual fund. The investments in the Measure A Western County Capital Projects fund are unexpended bond proceeds invested in the First American Treasury mutual fund for project funds as required by the bond agreements. The investments in the Debt Service fund are sinking fund payments and reserve funds invested in First American Treasury funds and U.S. Treasury notes for interest and principal as required by the bond agreements. The investments in the Local Projects Agency Fund are unexpended bond proceeds invested in the First American Treasury mutual fund for project funds for various cities as required by the bond agreements. Note 3. Receivables Advances to other governments: On November 3, 2003, the Commission entered into a cooperative agreement with the State to provide for improvements to State highways within the County. Per the terms of this agreement, the Commission advanced the State $31,324,000 of Measure A funds in accordance with Assembly Bill 3090 and provided an additional $2,591,000 in Commission matching share requirements through Congestion Mitigation and Air Quality and Regional Surface Transportation Program funds to finance a portion of the total eligible improvement construction costs related to a major interchange project. The State has no responsibility to reimburse the Commission for the advance of $31,324,000 until such time an annual legislative appropriation occurs, a State Budget Authority exists to fund those eligible improvement reimbursements, the California Transportation Commission allocates funds to the improvements, and the Commission has satisfied any and all other necessary requirements. Based on information collected by the Commission regarding the State's fiscal condition, the Commission expects to receive reimbursement from the State in fiscal 2007. In May 2004, the Commission authorized the TUMF Special Revenue fund to advance $13,400,000 to the State to replace state and federal funding for the SR-91/Green River interchange project. In March 2005, the Commission increased the authorized advance amount to $14,541,000. In December 2004, the Commission authorized the TUMF Special Revenue fund to advance $13,046,000 to the State to replace state and federal funding for the SR-60 widening project from 1-15 to Valley Way. The final agreement with the State resulted in a reduction of the Commission's commitment to $8,881,000. As of June 30, 2005, no amounts had been advanced to the State from the TUMF Special Revenue fund. The advances are to be repaid in the form of a commitment of future State funding on TUMF projects. 26 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 3. Receivables, Continued Loans: Under the Commission's financing guidelines for local jurisdictions, the Commission has entered into Advance Funding Agreements with a number of local cities. The cities have pledged their future share of Measure A local streets and roads revenues in accordance with repayment amounts specified in each city's agreement. All loans are due on or before June 30, 2009. Outstanding advances to all cities, reflected as loans receivables at June 30, 2005, are summarized below: City of Canyon Lake City of Corona City of Norco City of Perris City of San Jacinto City of Temecula Total loans receivable $ 543,171 1,907,264 830,648 751,955 514,333 1,978,126 $ 6,525,497 Loan commitments: In May 2005, the Commission approved an advance loan of $3,000,000 to the city of Hemet to be funded by commercial paper note proceeds. No amounts were advanced to the city of Hemet as of June 30, 2005. Subsequently in September 2005 and October 2005, the Commission approved advance loans of $43,300,000 to the Coachella Valley Association of Governments (CVAG) and $4,000,000 to the city of Indio, respectively, to be funded by commercial paper note proceeds. The cities have pledged their share of 2009 Measure A local streets and roads revenues and CVAG has pledged its share of 2009 Measure A highway and regional road revenue allocations in accordance with repayment terms specified in each agreement for actual advances. These loans are due on or before September 1, 2019. Note 4. Capital Assets Capital assets activity for the year ended June 30, 2005 was as follows: Governmental activities Capital assets not being depreciated: Land and land improvements Construction in progress Rail operating easements Total capital assets not being depreciated Balance July 1, 2004, as restated Additions/ Retirements/ Transfers Transfers Balance June 30, 2005 $ 61,574,957 484,842 39,484,143 101,543,942 Capital assets being depreciated: Rail stations Office fumiture, equipment and automobiles Total capital assets being depreciated 60,217,220 689.562 60,906,782 $ 9,005,802 $ (83,436) $ 70,497,323 238,329 723,171 9,244,131 (83,436) 563,564 128,940 692,504 39,484,143 110,704,637 - 60,780,784 818,502 — 61,599,286 Less accumulated depreciation for: Rail stations Office furniture, equipment and automobiles Total accumulated depreciation Total capital assets being depreciated, net Governmental activities capital assets, net (12,603,612) (406,135) (13,009,747) 47,897,035 $ 149,440,977 27 (2,076,416) (193,150) (2,269,566) (1,577,062) $ 7,667,069 $ (83,436) (14,680,028) (599,285) (15,279,313) 46,319,973 $ 157,024,610 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 4. Capital Assets, Continued Depreciation expense was charged to functions/programs of the Commission's governmental activities during the year ended June 30, 2005 as follows: General government Commuter rail Commuter assistance Total depreciation expense Note 5. Interfund Transactions $ 177,381 2,076,416 15,769 2,269,566 Advances to/from Other Funds: In March 2005, the Measure A Westem County Special Revenue fund's commuter assistance program advanced $275,000 to the Measure A Western County Special Revenue fund's highway program to fund a local match for a highway project. The advance is payable on July 1, 2009. In April 2003, the Measure A Western County Special Revenue fund's highway program advanced $300,000 to the Measure A Western County local streets and roads program to fund repairs and improvements to a local road. The advance is payable on July 1, 2006. Due from/to Other Funds: The composition of balances related to due from other funds and due to other funds at June 30, 2005 is as follows: Receivable Fund Payable Fund General fund General fund General fund General fund General fund Measure A Westem County Special Revenue fund Measure A Westem County Special Revenue fund Measure A Western County Special Revenue fund Nonmajor Governmental fund Amount Explanation Measure A Western County $ 230,141 Special Revenue fund Measure A Coachella Valley Special Revenue fund TUMF Special Revenue fund Nonmajor Governmental fund Commercial Paper Capital Projects fund Commercial Paper Capital Projects fund Local Transportation Special Revenue fund Nonmajor Governmental fund Commercial Paper Capital Projects fund Total due from/to other funds $ 572,132 Reimbursement for fringe benefits 6,506 Reimbursement for fringe benefits 53,547 Reimbursement for fringe benefits 67,397 Reimbursement for fringe benefits 38,842 Reimbursement for staff and legal costs 354 Reimbursement for staff and legal costs' 2,845 Reimbursement to Measure A for various rail projects 170,538 Reimbursement to Measure A for various rail projects 1,962 Reimbursement for staff and legal costs 28 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 5. Interfund Transactions, Continued lnterfund Transfers: During 2005, interfund transfers were as follows: Transfers Out General fund Measure A Western County Special Revenue fund Measure A Coachella Valley Special Revenue fund TUMF Special Revenue fund Commercial Paper Capital Projects fund Nonmajor Governmental fund Transfers In Measure A Western County Special Revenue fund Debt Service fund Debt Service fund General fund TUMF Special Revenue fund Nonmajor Governmental fund Amount Explanation $ 428 Reimbursement of Measure A -funded rail projects 25,813,397 Debt service related to highways and commuter rail for Western County 7,898,924 Debt service related to highways and regional arterials for Coachella Valley 190,102 Reimbursement of LTF-funded CETAP projects 2,893,216 Reimbursements for Mid County Parkway property purchases 254,100 Call box program augmentation of freeway service patrol operations Total transfers $ 37,050,167 Note 6. tong -term Obligations The following is a summary of the changes in long-term obligations for the year ended June 30, 2005: Bonds payable Commercial paper notes Capital lease obligation Contract payable Compensated absences Total long-term obligations Balance July 1, 2004 Additions $ 151,535,000 $ 30,005,000 83,082 5,100,000 370,118 352,390 $ 157,088,200 $ 30,357,390 Balance Due Within Reductions June 30, 2005 One Year $ (27,200,000) $ 124,335,000 $ 28,640,000 30,005,000 (28,073) 55,009 29,418 (1,000,000) 4,100,000 1,000,000 (241,290) 481,218 243,359 $ (28,469,363) $ 158,976,227 $ 29,912,777 Bonds payable: Under the provisions of the 1989 Measure A, as amended by Ordinance No. 92-1 (Measure AA), the Commission has the authority to issue bonds subject to a bond debt limitation of $525,000,000. Under the provisions of the 2009 Measure A, the Commission has the authority to issue bonds subject to a bond debt limitation of $500,000,000. The following is a summary of bonds issued and secured by Measure A revenues: 2000 Sales Tax Revenue Bonds (Limited Tax Bonds), Series A: In July 2000, the Commission issued serial bonds in the principal amount of $35,825,000 to fund various major highway projects. Net proceeds amounted to $35,934,149, inclusive of premium of $109,148 and net of accrued interest. The bonds mature in annual installments of $2,975,000 to $4,785,000 on various dates through June 1, 2009 with interest rates ranging from 4.25% to 5.25%. The Commission posted a surety bond in lieu of cash reserve in the amount of $3,582,500. 29 Amount Outstanding $ 17,845,000 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 6. Long-term Obligations, Continued 1997 Sales Tax Revenue Bonds (Limited Tax Bonds), Series A: In August 1997, the Commission issued serial bonds in the principal amount of $47,910,000 to retire outstanding commercial paper notes of $41,200,000 and to fund various major highway projects. Net proceeds amounted to $48,055,659, inclusive of premium of $263,196 and net of accrued interest. The bonds mature in annual installments of $2,490,000 to $5,115,000 on various dates through June 1, 2009 with interest rates ranging from 3.7% to 5.25%. The Commission posted a surety bond in lieu of cash reserve in the amount of $4,791,000. Portions of the bonds are subject to early redemption, at the option of the Commission beginning June 1, 2007. 1997 Junior Sales Tax Revenue Bonds (Limited Tax Bonds), Series B: In August 1997, the Commission issued subordinated serial bonds in the principal amount of $13,245,000 to retire outstanding commercial paper notes of $2,800,000 and to fund various local streets and roads projects. Net proceeds amounted to $13,223,717, inclusive of premium of $11,016 and net of accrued interest. The bonds mature in annual installments of $745,000 to $1,405,000 on various dates through June 1, 2009 with interest rates ranging from 3.75% to 5.0%. The Commission posted a surety bond in lieu of cash reserve in the amount of $1,324,500. Portions of the bonds are subject to early redemption, at the option of the Commission beginning June 1, 2007. 1996 Sales Tax Revenue Bonds (Limited Tax Bonds), Series A: In January 1996, the Commission issued serial bonds in the principal amount of $61,765,000 to refund a portion of the 1991 Sales Tax Revenue Bonds (Limited Tax Bonds), Series A. Net proceeds amounted to $66,252,576, inclusive of premium of $4,487,576 and net of accrued interest. The bonds mature in annual installments of $45,000 to $10,030,000 on various dates through June 1, 2009 with interest rates ranging from 3.75% to 6.0%. The Commission posted a surety bond of $3,251,625 in lieu of a portion of the required reserve amount of $4,485,000. The proceeds from the refunding bonds and a forward Float contract provided by a major bank were placed in an irrevocable escrow fund consisting of United States Treasury obligations. At June 30, 2005, there were no refunded sales tax bonds outstanding. 1993 Sales Tax Revenue Bonds (Limited Tax Bonds), Series A: In January 1993, the Commission issued serial bonds in the principal amount of $136,610,000 to finance certain highway and rail projects and Coachella Valley regional arterial projects. Net proceeds after original discount amounted to $135,448,305. The bonds mature in annual installments and require sinking fund payments of $5,910,000 to $12,295,000 on various dates through June 1, 2009 with interest rates ranging from 4.625% to 6.0%. The required reserve amount is $14,150,796. Annual debt service requirements to maturity for bonds payable are as follows: Amount Outstanding 19,075,000 5,245,000 36,855,000 45,315,000 $124,335,000 Years Ending June 30 Principal Interest Total 2006 $ 28,640,000 $ 6,843,220 $ 35,483,220 2007 30,200,000 5,274,945 35,474,945 2008 31,865,000 3,608,120 35,473,120 2009 33,630,000 1,843,358 35,473,358 Total debt service $ 124,335,000 $ 17,569,643 $ 141,904,643 30 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005. Note 6. Long-term Obligations, Continued Commercial paper notes payable: The Commission has authorized the issuance of tax-exempt commercial paper notes in an amount not to exceed $100,000,000 for the primary purpose of financing costs of certain highway and commuter rail projects under the 1989 Measure A. As of June 30, 2005, the Commission had no outstanding commercial paper notes. In February 2005, the Commission authorized the issuance of tax-exempt commercial paper notes in an amount not to exceed $200,000,000 for the primary purpose of financing right-of-way and mitigation land acquisition and project development costs of capital projects under the 2009 Measure A. In April 2005, the Commission issued commercial paper notes of $30,005,000. The commercial paper notes are expected to be refinanced with sales tax revenue bonds in or prior to fiscal 2009. The source of revenue to repay the commercial paper notes and any subsequent long -term -debt refinancing is the 2009 Measure A sales tax. Interest is payable on the respective maturity dates of the commercial paper notes, which is up to 270 days from the date of issuance. The maximum allowable interest rate on the commercial paper notes is 12%, with issuance rates at June 30, 2005 ranging from 2.4% to 2.8%. As a requirement for the issuance of the commercial paper notes, the Commission entered into a $190,000,000 irrevocable direct draw letter of credit and reimbursement agreement with a financial institution as credit and liquidity support for the commercial paper notes. Funds may be drawn under the letter of credit to pay debt service on the commercial paper notes in the event that the commercial paper dealers are unable to market commercial paper notes at the maturity dates of the outstanding commercial paper notes. Amounts drawn on the letter of credit are not due until expiration of the letter of credit in March 2010. Accordingly, the commercial paper notes are classified as long-term debt in the Commission's financial statements. The Commission did not draw on this letter of credit authorization during the year ended June 30, 2005, nor were there any amounts outstanding under this letter of credit agreement at June 30, 2005. Capital lease obligation: The Commission has entered into a lease agreement for financing the acquisition of office equipment. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of its future minimum lease payments. The office equipment value of $139,243 is recorded as a capital asset in the governmental activities. Total future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2005 are as follows: Years Ending June 30 2006 2007 Total minimum lease payments Less amount representing interest Present value of minimum lease payments Total $ 31,371 26,142 57,513 (2,504) $ 55,009 Contract payable: In December 2003, the Commission entered into an agreement with CVAG and the city of Rancho Mirage to reimburse CVAG $6,100,000 from Measure A Coachella Valley highway moneys for costs paid to the city of Rancho Mirage related to a completed state highway project. Under the agreement, the Commission will pay CVAG over a six -year period. As of June 30, 2005, the annual contract payments are as follows: 31 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 6. Long-term Obligations, Continued Years Ending June 30 Total 2006 $ 1,000,000 2007 1,000,000 2008 1,000,000 2009 1,100,000 Total contract payments $ 4,100,000 Arbitrage Rebate: The Tax Reform Act of 1986 instituted certain arbitrage restrictions with respect to the issuance of tax- exempt bonds after August 31, 1986. In general, arbitrage regulations deal with the investment of all tax-exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. Failure to follow the arbitrage regulations could result in all interest paid to bondholders retroactively rendered taxable. In accordance with the arbitrage regulations, if excess earnings were calculated, 90% of the amount calculated would be due to the Internal Revenue Service at the end of each five-year period. The remaining 10% would be recorded as a liability and paid after all bonds had been redeemed. During the current year, the Commission performed a calculation of excess investment earnings on one of the bond financings. A liability of $2,141,556 resulted from one of the calculations for the various issues and was paid in July 2005. Additional calculations on the other bond financings are being performed, and management does not expect such calculations to result in material arbitrage liabilities. Note 7. Reserved and Designated Fund Balances Measure A: Measure A sales tax revenues are allocated to the three defined geographic areas of Riverside County, consisting of Western County, Coachella Valley, and Palo Verde Valley in proportion to the funds generated within those areas. Revenues must then be allocated to the programs of the geographic areas according to percentages as defined by Measure A and are legally restricted for applicable program expenditures. Bond and commercial paper note proceeds are allocated to the geographic areas based on the estimated uses. Accordingly, the related fund balances are reserved as follows: Highways, commuter rail, and accounts and loans receivable: Funds for state highways are to be used for project costs including engineering, right-of-way acquisitions, and construction. Such funds are intended to supplement existing federal and state resources. Commuter rail projects anticipate the use of existing rail lines, and funds are used for costs related to planning, capital improvements, right-of-way purchase, and/or use rights agreements. Amounts advanced to the State and to certain cities under funding agreements are reflected in fund balance as reserved for advances to other govemments and loans receivable, respectively. Debt service: Certain bond proceeds have been used to make required sinking fund payments in the Debt Service fund as required by the bond agreements. Amounts held by the trustee equal to the maximum annual debt service are recorded in the Debt Service fund. Local streets and roads: Funds are expended by local jurisdictions for the construction, repair, and maintenance of local streets and roads. The County and local cities are required to supplement those expenditures with other previously dedicated revenue sources to maintain road improvements. Monies are disbursed to the jurisdictions which comply with the requirement to maintain the same level of funding for streets and roads as existed just prior to the passage of the 1989 Measure A and which annually submit a five-year capital improvement plan. 32 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 7. Reserved and Designated Fund Balances, Continued Regional arterials: Funds for regional arterials are used to implement the planned regional arterial system, as defined by CVAG, in the Coachella Valley. Funds are matched by Traffic Uniform Mitigation Fee revenues generated in the Coachella Valley. Commuter assistance and specialized transportation: Funds for specialized transportation are used to promote and subsidize commuter assistance programs such as ridesharing and telecommuting and to guarantee reduced transit fares, expand existing transit services, and implement new transit services for seniors and persons with disabilities. Additionally, CVAG has elected to use a portion of the Coachella Valley local streets and roads funds to provide additional funding for bus replacement or other transit programs that will improve air quality. Transportation Uniform Mitigation Fee: TUMF revenues of $400 million to be received by the Commission are to be used for new CETAP corridors and the regional arterial system in Western County and are reserved as follows: CETAP: Funds for the development of new transportation corridors are used to provide congestion relief and mobility within the County and between the County and its neighboring Orange and San Bernardino counties. Funds will be matched by revenues of $370 million generated from the 2009 Measure A. Regional arterials: Funds for regional arterials are used to implement the planned regional arterial system, as defined in the 2009 Measure A, in the Western County. Funds will be matched by revenues of $300 million generated from the 2009 Measure A. Transportation Development Act: Reserves for the Local Transportation Fund represent the unclaimed apportionments related to claims for transit programs, the unexpired allocations available for bicycle and pedestrian facilities, prepaid transit allocations, and earned but not received revenues. Expired allocations of $608,145 related to bicycle and pedestrian projects are unreserved and designated. Reserves for the State Transit Assistance represent the unclaimed apportionments related to claims for transit. The TDA reserves at June 30, 2005 are as follows: Local Transportation Fund State Transit Assistance Total Accounts receivable $ 13,692,556 $ — $ 13,692,556 Prepaid amounts $ 239,640 $ — $ 239,640 Bicycle and pedestrian facilities 1,360,685 5 — $ 1,360,685 Transit and specialized transportation Western County: Bus transit: City of Banning $ 50,000 $ — $ 50,000 City of Beaumont 760,500 212,100 972,600 Riverside Transit Agency 5,685,950 642,665 6,328,615 Apportioned and unallocated 10,943,769 1,226,234 12,170,003 33 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 7. Reserved and Designated Fund Balances, Continued Local Transportation Fund State Transit Assistance Total Commuter rail: Riverside County Transportation Commission 2,075,000 — 2,075,000 Apportioned and unallocated 13,915,940 525,452 14,441,392 Total Westem County 33,431,159 2,606,451 36,037,610 Coachella Valley: SunLine Transit Agency Apportioned and unallocated Total Coachella Valley Palo Verde Valley: Bus Transit: Apportioned and unallocated Total Palo Verde Valley 1,050,300 3,068,812 1,048,707 2,099,007 198,020 3,266,832 4,119,112 1,246,727 5,365,839 302,828 73,148 375,976 302,828 73,148 375,976 Unapportioned carryover 3,821,711 Total transit and specialized transportation — 3,821,711 $ 41,674,810 $ . 3,926,326 $ 45,601,136 Commuter rail: Reserves represent TDA monies in the General fund to be used for commuter rail operations. Planning and programming: Reserves represent TDA monies in the General fund to be used for planning and programming services. Property management: Reserves represent highway and rail lease monies to be used for the management of Commission properties. Prepaid amounts: Reserves represent amounts related to prepaid expenditures that are not available for appropriation. Motorist assistance: The Commission has designated unexpended funds in the Service Authority for Freeway Emergencies and Freeway Service Patrol Special Revenue funds to assist motorists on County roads. Note 8. Commitments and Contingencies Operating lease: The Commission has entered into an operating lease agreement for office facilities. The term of the lease is for a period of ten years expiring on October 30, 2012 and may be extended for two additional five-year terms. Rental expenditures for the fiscal year ended June 30, 2005 were $315,875. The total minimum rental commitment at June 30, 2005 is due as follows: 34 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 8. Commitments and Contingencies, Continued Year Ending June 30 Amount 2006 $ 307,172 2007 312,394 2008 317,708 2009 323,106 2010 328,598 2011-2013 617,407 Total minimum rental commitment $ 2,206,385 Forward delivery agreement: The Commission has entered into a forward delivery agreement with a German bank, which requires the bank to deliver and the Commission to purchase U.S. Treasury obligations beginning in 2001 and maturing in 2009. The payments will be made from the Commission's cash or securities held in the 1993 and 1996 Sales Tax Revenue Bonds Debt Service fund. The purpose for this agreement is to assure the Commission that the Debt Reserve fund's yield is no less than the required bond yield. Real property and project agreements: Measure A has entered into other agreements in the ordinary course of business with companies and other governmental agencies for the acquisition of real property as well as the engineering and construction of certain highway and commuter rail projects. Litigation: Certain claims involving disputed construction costs have arisen in the ordinary course of business. Additionally, the Commission is a defendant in lawsuits. Although the outcome of these matters is not presently determinable, management does not expect that the resolution of these matters will have a material adverse impact on the financial condition of the Commission. Local Transportation Fund and State Transit Assistance Fund: The Riverside Transit Agency (RTA) and the Sunline Transit Agency (STA), (collectively, the Agencies), major transit providers for the County of Riverside, obtained available lease financing for bus acquisitions through the proceeds from certificates of participation issued by the California Transit Finance Corporation (Corporation) for each agency. Local Transportation Funds and State Transit Assistance Funds, to the extent of the Agencies' eligible share, along with other federal and state funds were pledged as support for the Agencies' lease payments to the Corporation. For the year ended June 30, 2005, there was no Local Transportation Fund revenue expended for lease payments; however, State Transit Assistance Fund revenue of $94,117 was expended for lease payments by STA. Note 9. Joint Venture The Commission is one of five members of the SCRRA, a joint powers authority created in June 1992. The SCRRA's board consists of one member from the Ventura County Transportation Commission; two each from the Orange County Transportation Authority, the San Bernardino Associated Governments, and the Commission; and four members from the Los Angeles County Metropolitan Transportation Authority. The SCRRA is responsible for implementing and operating a regional commuter rail system (Metrolink) in five southern California counties. As a member of SCRRA, the Commission makes capital and operating contributions for its pro rata share of rail lines servicing the County. The Commission expended $3,214,595 during 2005 for its share of Metrolink capital and operating costs. As of June 30, 2005, cumulative capital contributions were $25,715,943.Other funds for rail service are contributed to the SCRRA by the State from state rail bonds on behalf of the Commission. Separate financial statements are prepared by and available from the SCRRA, which is located at 700 N. Flower Street, 26th Floor, Los Angeles, California 90017. 35 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 10. Employees' Pension Plans Public Employees' Retirement System Plan description and funding policy: The Commission contributes to the Public Employees' Retirement System (PERS) of the State of California (System), an agent multiple -employer public employee retirement system that acts as a common investment and administrative agent for participating public entities in the State. Copies of PERS' annual financial report may be obtained from its executive office located at 400 P Street, Sacramento, California 95814. All permanent Commission employees are eligible to participate in the System. Employees attaining the age of 55 with five years of credited California service (service) are eligible for normal retirement and are entitled to a monthly benefit of 2.7% of their final compensation for each year of service: Final compensation is defined as the highest annual salary eamed. Retirement may begin at age 50 with a reduced benefit rate. The Commission's PERS plan also provides death and retirement disability benefits. The plan also credits employees for unused sick leave. Upon separation from the plan prior to retirement, members' accumulated contributions are refundable with interest credited through the date of separation. The Commission pays the employees' required contribution of 8% of regular earnings. New employees hired after November 28, 2002 are responsible for 1 % of the 8% required contribution. The Commission is required to contribute the remaining amounts necessary to fund the benefits of its members, using the actuarially determined rate, which was 18.453% in 2005. Annual pension cost: For 2005 the Commission's annual pension cost of $491,316 was equal to the Commission's required and actual contributions. The required contribution was determined as a part of the June 30, 2003 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.75% investment rate of return, (b) projected annual salary increases that vary by duration of service, (c) the total inflation in future years at an assumed rate of 3%, (d) an assumption of a 3.25% across the board cost -of -living adjustment, and (e) merit increases that vary by length of service. The actuarial value of the PERS assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a three-year period (smoothed. market value). The PERS unfunded actuarial accrued liability is being amortized as a level percentage of payroll method over a closed 30-year period. Three-year trend information for PERS: Annual Percentage of Fiscal Year Pension Cost APC Net Pension Ended June 30 (APC) Contributed Obligation 2005 $ 491,316 100% $ — 2004 407,677 100% 2003 178,873 100% 36 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 10. Employees' Pension Plans, Continued Required supplementary information: Actuarial Valuation Date June 30,2003 June 30,2002 June 30,2001 (B) (A) Entry Age Actuarial Actuarial Asset Accrued Liability Value (AAL) $ 5,152,811 $ 6,701,699 4,750,376 5,536,620 4,861,370 4,910,828 (C) Excess of Assets Over AAL (A)-(B) $ (1,548,888) (786,244) (49,458) (D) (E) Funded Ratio Covered (A)/(B) Payroll 76.9% $ 2,142,203 85.8 1,634,320 99.0 1,645,655 (F) Excess Percentage of Covered Payroll (C)/(E) (72.3)% (48.1) (3.0) 401(a) plan: The Commission offers its employees a 401(a) defined contribution plan referred to as the Money Purchase Plan & Trust (Plan), which covers all permanent full-time employees. Employees are fully vested in the Plan after five years. The Plan, which is administered by the International City/County Management Association (ICMA), requires the Commission to make a contribution of 7.5% of the employees' earnings for the Plan year. Fiduciary responsibility and reporting of the Plan assets rests with ICMA. The Commission has the authority to amend the contribution requirements. Total payroll for covered employees for the current year was approximately $1,693,000. The Commission's contributions to the Plan were approximately $139,400 for the year ended June 30, 2005. Note 11. Postretirement Health Care Per Resolution of the Board, the Commission provides postretirement health benefits for eligible retirees and their dependents at retirement. For employees hired prior to July 12, 2000, retirees must have no less than five years of System service. For employees hired on or after July 12, 2000, retirees must have a total of 10 years of System service and no less than five years of Commission service. Currently, five retirees meet these eligibility requirements and are receiving benefits. The Commission contributes $551 per month toward premiums for retiree health insurance that is coordinated with Medicare and other benefits provided by federal and state law, when available, to the extent it reduces the cost of insurance premiums. Expenditures for post -retirement health care benefits are funded on a pay-as-you-go basis. Expenditures of $31,179 were incurred for post -retirement health care costs for the year ended June 30, 2005. The GASB recently issued Statement No. 45 to address the accounting and disclosure treatment for this type of plan. Effective with the fiscal year ending June 30, 2008, the Commission will be required to recognize post -retirement health care costs on an accrual basis over a period approximating the employees' years of service and to provide information about actuarial accrued liabilities • associated with these benefits and whether and to what extent progress is being made in funding the plan. Note 12. Measure A Conformance Requirements Measure A requires that the sales taxes collected may only be used for transportation purposes including administration and the construction, capital acquisition, maintenance, and operation of streets, roads, highways including state highways, and public transit systems and for related purposes. These purposes include expenditures for planning, environmental reviews, engineering and design costs, and related right-of-way acquisition. 37 Riverside County Transportation Commission Notes to Financial Statements June 30, 2005 Note 13. Prior Period Adjustments In connection with the accounting for certain rail property transactions during fiscal 2005, the Commission determined that certain acquisitions and dispositions of rail capital assets had not been properly accounted for in prior year financial statements. Rail easements of $19,598,413 acquired in fiscal 1994 were classified as infrastructure and not capitalized in accordance with prevailing GAAP at that time. Governmental Accounting Standards Board (GASB) Statement 34, Basic Financial Statements —and Management's Discussion and Analysis —for State and Local Governments, which was implemented in fiscal 2002, required the reporting for infrastructure assets. Additionally, it was determined that the sale of a portion of certain rail property with a book value of $315,154 during fiscal 2001 had not been recorded. Management has concluded that prior year capital asset and net asset balances, as previously reported, require restatement for the net effect of $19,283,259, as follows: Capital Assets, net Net Assets July 1, 2004 balance, as previously reported $ 130,157,718 $ 215,606,433 Restatement 19,283,259 19,283,259 July 1, 2004 balance, as restated $ 149,440,977 $ 234,889,692 These restatements have no impact on amounts reported in the statement of activities for the year ended June 30, 2004. Note 14. Pronouncements Issued, Not Yet Effective The GASB has issued several pronouncements prior to June 30, 2005 that have effective dates that may impact future financial presentations. Management has not currently determined what, if any, impact implementation of the following statements may have on the financial statements of the Commission. • GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and Insurance Recoveries. • GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. • GASB Statement No. 46, Net Assets Restricted for Enabling Legislation (An Amendment of GASB Statement No. 34). • GASB Statement No. 47, Accounting for Termination Benefits. 38 This page intentionally left blank. Required Supplementary Information plewio)u; kewswelddns paimbaa of sem an 651'919'29$ 990'LSE'9 $ L90'Evete $ 094'oZ5'8 $ 296'624 PC 0E9'E9Z'L 34E0960'911 9LCZ5E'L 992'599'0Z $ Z1Z1(21'6Z 998'816'8 $ 008'5L0'4Z $ esV'SL0'4 5 854201'1 (OL'126'Z) $ (00L'Z90'Z) $ 069066'L4 $ 923'969'61 (45£'94E'91$ (009'669'11 $ 624261 $ 900'991'1 (£L1'95/ $ 90£'L9Z $ g°06V6l. 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Budget numbers along with supporting documentation are provided to the Chief Financial Officer by March 15. That budget data is compiled and presented to the Executive Director for review and approval and is submitted to the Budget and Implementation Committee at its April meeting. After review by the Budget and Implementation Committee, the proposed budget is scheduled for preliminary review and comment as well as public hearing at the Commission's May meeting. The final budget for the new fiscal year is then adopted by motion of the Board of Commissioners (Board) no later than June 15 of the current year. This appropriated budget covers substantially all Commission expenditures by financial responsibility unit (i.e., General and Measure A special revenue) by fund, except for the Local Transportation Fund as a budget is not legally required for this fund. The Measure A Special Revenue funds for the three county areas (Western, Coachella Valley, and Palo Verde Valley) are adopted as a single budget. All appropriated amounts are as originally adopted or as amended by the Commission. Unexpended appropriations lapse at year-end. All budgets are adopted on a basis consistent with generally accepted accounting principles. As adopted by the Board, expenditure activities of the funds with adopted budgets are controlled at the budgetary unit, which is the financial responsibility level, for each function (i.e., administration, programs, intergovernmental distributions, and capital outlay). These functions provide the legal level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount). Management has the discretion to transfer the budgeted amounts within the financial responsibility unit according to function. Supplemental budget appropriations were necessary during the year. 40 Other Supplementary Information Riverside County Transportation Commission Nonmajor Governmental Funds Description Special Revenue Funds Measure A Palo Verde Valley: This fund is used to account for the revenues from sales taxes which are restricted to expenditures for Palo Verde Valley programs and activities. Freeway Service Patrol: This fund is used to record the revenues received for the purpose of implementing a freeway service patrol for motorists. Service Authority for Freeway Emergencies: This fund is used to record the revenues received from Department of Motor Vehicle user registration fees for the purpose of implementing an emergency call box system for motorists. State Transit Assistance: This fund is used to account for revenues from sales taxes on gasoline restricted for transit projects. Capital Projects Fund Measure A Western County: This fund is used to account for sales tax revenue bond proceeds used for Western County highway projects. 41 Assets Cash and investments Receivables: Accounts Interest Due from other funds Prepaid expenditures Restricted investments held by trustee Total assets Riverside County Transportation Commission Combining Balance Sheet-Nonmajor Governmental Funds June 30, 2005 Special Revenue Service Measure A Freeway Authority for Palo Verde Service Freeway Valley Patrol Emergencies $ 153,548 $ 195,104 $ 3,368,866 222,842 692,073 304,711 1,026 1,297 17,890 1,056 906 8,424 7,226 State Transit Assistance $ 3,280,170 839,216 18,597 Capital Projects Measure A Total Western County Total Nonmajor Governmental Funds $ 6,997,688 $ 1,876 $ 2,058,842 38,810 4,374 1,962 15,650 2,235,856 6,999,564 2,058,842 43,184 1,962 15,650 2,235,856 $ 377,416 $ 897,954 $ 3,699,599 $ 4,137,983 $ 9,112,952 $ 2,242,106 $ 11,355,058 Liabilities and fund balances Liabilities: Accounts payable $ Due to other funds Other liabilities Total liabilities 328,047 $ 130,989 25,056 2,501 $ 89,683 42,341 3,686 $ 41,119 170,538 $ 589,838 $ 2,141,556 237,935 - 6,187 $ 2,731,394 237,935 6,187 328,047 158,546 135,710 Fund balances: Reserved for: Highways Local streets and roads 49,369 Prepaid amounts Transit and specialized transportation Unreserved: Designated for motorist assistance 8,424 7,226 730,984 3,556,663 211,657 833,960 49,369 15,650 3,926,326 3,926,326 4,287,647 2,141,556 100,550 2,975,516 100,550 49,369 15,650 3,926,326 4,287,647 Total fund balances 49,369 Total liabilities and fund balances $ 377,416 739,408 3,563,889 $ 897,954 $ 3,699,599 3,926,326 8,278,992 100,550 8,379,542 $ 4,137,983 $ 9,112,952 $ 2,242,106 $ 11,355,058 42 Riverside County Transportation Commission Combining Statement of Revenues, Expenditures, and Changes in Fund Balances-Nonmajor Governmental Funds Year Ended June 30, 2005 Measure A Palo Verde Valley Revenues Sales taxes Intergovernmental Interest Vehicle registration user fees Other Total revenues 1,068,809 Expenditures Current: Administration: Salaries and benefits General legal services Professional services !Office lease Other Total administration $ 1,067,167 1,642 Freeway Service Patrol Special Revenue Service Authority for Freeway Emergencies $ - $ 1,448,223 573 5,525 58,874 1,541,216 8 35,412 State Transit Assistance $ 3,348,739 61,492 Capital Projects Measure A Total Western County $ 4,415,906 1,448,796 127,533 1,541,216 35,420 Total Nonmajor Governmental Funds $ - $ 4,415,906 - 1,448,796 33,904 161,437 1,541,216 35,420 1,453,756 1,636,075 3,410,231 7,568,871 33,904 7,602,775 31,227 26,753 2,359 2,024 17,077 14,670 8,213 7,044 20,868 17,903 57,980 4,383 31,747 15,257 38,771 57,980 4,383 31,747 15,257 38,771 Programs: !Local streets and roads 1,067,167 !Motorist assistance ,Transit and specialized transportation 79,744 68,394 1,526,088 664,973 Total programs 1,067,167 1,526,088 Debt service: Principal Interest Arbitrage rebate tax Total debt service Capital outlay 730 86 816 148,138 1,067,167 2,191,061 - 2,050,529 2,050,529 664,973 2,05U29 5,308,757 626 74 700 3,114 2,671 1,356 160 2,141,556 148,138 1,067,167 2,191,061 2,050,529 5,308,757' 1,356 160 2,141,556 1,516 5,785 2,141,556 2,143,072 5,785 Total expenditures 1,067,167 Excess (deficiency) of revenues over (under) expenditures 1,642 Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year 1,642 47,727 $ 49,369 1,609,762 736,738 2,050,529 5,464,196 . 2,141,556 (156,006) 899,337 1,359,702 2,104,675 254,100 254,100 254,100 254,100 98,094 645,237 1,359,702 641,314 2,918,652 2,566,624 $ 739,408 $ 3,563,889 $ 3,926,326 43 - 254,100 - (254,100) 2,104,675 6,174,317 $ 8,278,992 (2,107,652) (2,107,652) 2,208,202 $ 100,550 7,605,752 (2,977) 254,100 (254,100) (2,977) 8,382,519 $ 8,379,542 Riverside County Transportation Commission • Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual-Nonmajor Special Revenue Funds • Year Ended June 30, 2005 Measure A Palo Verde Valley Freeway Service Patrol Service Authority for Freeway Emergencies State Transit Assistance Variance with Variance with Variance with Variance with Final Budget Final Budget Final Budget Final Budget Original Final Positive Original Final Positive Original Final Positive Original Final Positive Budget Budget Actual (Negative) Budget Budget Actual (Negative) Budget Budget Actual (Negative) Budget Budget Actual (Negative) Revenues Sales taxes $ 1,061,000 $ 1,160,000 $ 1,067,167 $ (92,833) $ - $ - $ - $ - $ - $ - $ • - $ - $ 2,763,100 S 2,763,100 $ 3,348,739 $ 585,639 Intergovernmental - - - 1,323,339 1,323,339 1,448,223 124,884 33 33 573 540 - Interest 200 200 1,642 1,442 1,130 1,130 5,525 4,395 40,112 40,112 58,874 18,762 20,000 20,000 61,492 41,492 Vehicle registration user fees - - - - - - - - 1,350,000 1,350,000 1,541,216 191.216 - - - - Other - 121,468 120,168 8 (120,160) 6,173 5,058 35,412 30,354 - - - - Total revenues 1,061,200 1,160,200 1,068,809 (91,391) 1,445,937 1,444,637• 1,453,756 9,119 1,396,318 1,395,203 1,636,075 240,872 2,783,100 2,783,190 3,410,231 627,131 Expenditures Current: _ Administration: Salaries and benefits - 35,318 34,668 31,227 3,441 30,292 29,735 26,753 2,982 General legal services - - - - 2,821 2,404 2,359 45 2420 2,091 2,024 • 67 - - Professional services 25,961 26,052 17,077 8,975 22,268 22,346 14,670 7,676 - - - - Office lease - 9,438 9,438 8,213 1,225 8,095 8,095 7,044 1,051 - Other - - 24,121 24,265 20,868 3,397 20,685 20,809 17,903 2,906 - - Total administration - - - 97,659 96,827 79,744 17,083 83,760 83,076 68,394 14,682 - - - - A Programs Local streets and roads Motorist assistance Transit and specialized transportation Total programs 1,061,000 1,160,000 1,067,167 92,833 - - - - - - - - - - - 1,609,700 1,602,900 1,526,088 76,812 1,500,100 1,506,900 664,973 B41,927 - - • 2,762,300 3,348928 2,050,529 1,298,399 1,061,000 1,160,000 1,067,167 92,833 1,609,700 1,602,900 1,526,088 76,812 1,500,100 1,506,900 664,973 841,927 2,762,300 3,348,928 2,050,529 1,298,399 Debt service: Principal - - - - - - 730 (730) - • 626 (626) Interest - - - - - - 86 (86) - - 74 (74) Total debt service 816 (816) - - 700 (700) Capital outlay - - - - 130 2,899 3,114 (215) 112 2,485 2,671 (186) - - - Total expenditures 1,061,000 1,160,000 1,067,167 92,833 1,707,489 1,702,626 1,609,762 92,864 1,583,972 1,592,461 736,738 855,723 2,762,300 3,348,928 2,050,529 1,298,399 Excess (deficiency) of revenues over (under) expenditures 200 200 1.642 1,442 (261,552) (257,989) (156,006) 101,983 (187,654) (197,258) 899,337 1,096,595 20,800 (565,828) 1,359,702 1,925,530 Other financing sources (usesp. Transfers in - - - - 254,100 254,100 254,100 - - - - - - - - Transfers out - - - - - - (254,100) (254,100) (254,100) - Total other financing sources (uses) 254,100 254,100 254,100 (254,100) (254,100) (254,100) Net change in fund balances $ 200:$ 200 1,642 $ 1442 $ (7452) $ (3889) 98,094 $ 101983 3 (441754) $ (451353) 645,237 $ 109325 $ 20300 3-9566_328) 1359,702 S 1 925 530 Fund balances al beginning of year 47 727 641 314 2 918 652 2 566624 Fund balances al end of year . $ 49,369 $ 739,408 $ 3,563,889 $ 3,926,326 Riverside County Transportation Commission • Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual —Capital Projects and Debt Service Funds • Year Ended June 30, 2005 Revenues Interest Total revenues Expenditures Current: Administration: Salaries and benefits General legal services Professional services Office lease Other Total administration ,P Programs: cn Highways Total programs Debt service: Principal Interest . Arbitrage rebate tax Cost of issuance Total debt service Intergovernmental distributions Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Bond proceeds Transfers in Transfers out Total other financing sources (uses) Capital Projects Funds Measure A Western County Original Budget Final Budget Variance with Final Budget Positive Original Actual (Negative) Budget $30,253,999 $ 500,000 $ 33,904 5 (466,096) $ 30,253,999 500,000 33,904 (466,096) Commercial Paper Final Budget Variance with Final Budget Positive Actual (Negative) Debt Service Fund Original Budget Final Budget Variance with Final Budget Positive Actual (Negative) $ 174,127 $ 174,127 $ 1,272,000 $1,272,000 $ 1,500,683 $ 228,683 174,127 174,127 1,272,000 1,272,000 1,500,683 228,683 8,150,422 1,272,124 6,878,298 2,141,556 2,141,556 8,150,422 1,272,124 6,878,298 • 180,000 111,581 460,000 438,568 27,200,000 27,200,000 27,200,000 68,419 8,286,000 8,286,000 8,285,530 21,432 2,141,556 2,141,556 640,000 550,149 89,851 35,486,000 35,486,000 35,485,530 470 470 2,141,556 2,141,556 30,253,999 (1,641,556) (2,107,652) (466,096) 8,790,422 1,822,273 6,968,149 35,486,000 35,486,000 35,485,530 470 (8,790,422) (1,648,146) 7,142,276 (34,214,000) (34,214,000) (33,984,847) 229,153 30,005,000 (2,893,216) 30,005,000 (2,893,216) 27,111,784 27,111,784 35,486,000 35,486,000 33,712,321 (1,773,679) 35,486,000 35,486,000 33,712,321 (1,773,679) Net change in fund balances $ 30,253,999 $ (1,641,556) (2,107,652) $ (466,096) $ $18,321,362 Fund balances at beginning of year 2.208.202 Fund balances at end of year $ 100 550 $ 25,463,638 25,463,638 $ 7,142,276 $ 1,272,000 $1,272,000 (272,526) $ (1,544,526) 30,253,999 $ 29 981,473 Riverside County Transportation Commission Schedule of Expenditures for Local Streets and Roads by Geographic Area —All Special Revenue Funds Year Ended June 30, 2005 Western County: City of Banning $ 726,186 City of Beaumont 434,733 City of Calimesa 186,088 City of Canyon Lake 242,542 City of Corona 4,845,024 City of Hemet 1,942,944 City of Lake Elsinore 1,086,891 City of Moreno Valley 4,117,231 City of Murrieta 2,193,263 City of Norco 891,545 City of Perris 1,208,108 City of Riverside 8,827,615 City of San Jacinto 650,909 City of Temecula 3,191,286 Riverside County 9,934,402 Other 1,182 40,479,949 Coachella Valley: City of Cathedral City 1,629,842 City of Coachella 431,093 City of Desert Hot Springs 334,054 City of Indian Wells 217,202 City of Indio 1,375,769 City of Palm Desert 2,516,246 City of Palm Springs 1,711,397 City of Rancho Mirage 891,452 Riverside County 1,613,781 Coachella Valley Association of Governments 1,063,890 Other 1,327 Palo Verde Valley: City of Blythe Riverside County 11,786,053 851,563 215,604 1,067,167 Total local streets and roads expenditures $ 53,333,169 46 Riverside County Transportation Commission Schedule of Expenditures for Transit and Specialized Transportation by Geographic Area and Source -All Special Revenue Funds Year Ended June 30, 2005 Western County: Beaumont Unified School District Blindness Support Services, Inc. Care -A -Van Care Connexxus City of Banning City of Corona City of Norco City of Riverside Diversified Paratransit, Inc. Friends of the Moreno Valley Senior Citizens Inland Aids Project Partnership to Preserve Independent Living for Seniors and Persons with Disabilities Riverside County Transportation Commission Riverside Transit Agency Volunteer Center of Greater Riverside Other Coachella Valley: SunLine Transit Agency Palo Verde Valley: Palo Verde Valley Transit Agency Sales Taxes Local State Transportation Transit Measure A Fund Assistance $ 45,977 $ 62,465 195,500 65,000 17,112 70,020 44,800 89,000 261,742 603,865 88,360 29,218 $ 833,714 906,009 1,910,570 Total $ 45,977 62,465 195,500 65,000 41,000 874,714 111,000 1,017,009 17,112 107,000 2,017,570 70,020 44,800 89,000 5,195,645 757,166 28,659,832 832,466 218,193 362 261,742 5,952,811 30,096,163 88,360 247,773 1,573,059 3,302,256 37,723,963 1,848,994 41,146,016 10,466,707 181,805 13,950,768 789,300 19,730 809,030 Total transit and specialized transportation expenditures $ 4,875,315 $48,979,970 $2,050,529 $55,905,814 47 Riverside County Transportation Commission Schedule of Changes in Assets and Liabilities —Local Projects Agency Fund Year Ended June 30, 2005 Assets Interest receivable Restricted investments held by trustee Total assets Balance July 1, 2004 Additions $ 776 $ 1,996,246 $ 1,997,022 $ Balance Deductions June 30, 2005 1,841 $ 776 $ 13,767 1,066,407 15,608 $ 1,067,183 $ 1,841 943,606 945,447 Liabilities Due to other governments $ 1,997,022 $ 48 14,832 $ 1,066,407 $ 945,447 Riverside County Tmnsportution Commission Riverside County Transportation Commission Govemmentvide Revenues by Function Last Four Fiscal Years Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Taxes Investment earnings Other Gain on sale Total Fiscal Year Ended June 30 2002 (1) $ 11,804,372 4,746,603 102,673,943 5,942,480 6,176,905 2003 2004 $ 1,561,265 10,489,860 21,190,027 113,271,233 4,932,021 2,282,582 $ 1,170,773 61,412,882 1,183,922 189,697,992 3,115,232 536,002 2005 $ 574,611 72,202,430 877,665 216,739,812 5,146,325 2,366,380 123,054 $ 131,344,303 $ 153,726,988 $ 257,116,803 $ 298,030,277 (1) GASS 34 was implemented July 1, 2001. Prior years' information is not available. Source: Comprehensive Annual Financial Reports 49 Riverside County Transportation Commission Government -wide Expenses by Function Last Four Fiscal Years General government Bicycle and pedestrian facilities CETAP Commuter assistance Commuter rail Highways Local streets and roads Motorist assistance Planning and programming Property management Regional arterials Transit and specialized transportation Interest expense (2) Total Fiscal Year Ended June 30 2002 (1) 2003 2004 2005 $ 5,407,800 2,088,746 14,772,034 27,850,447 36,541,323 2,559,409 5,890,377 145,158 11,720,342 8,680,284 $ 4,307,544 $ 3,909,942 927,138 608,882 2,318,033 2,959,732 5,659,863 8,702,803 29,812,083 35,456,330 40,256,464 46,208,968 1,843,017 1,978,380 2,978,044 4,287,696 154,582 338,353 8,428,021 13,996,300 9,913,504 53,411,921 10,381,790 11,736,129 $ 4,115,907 1,021,637 4,147,758 2,599,448 8,907,828 35,362,793 53,333,169 2,191,061 4,328,038 580,224 17,621,505 55,905,814 8,348,928 $ 115,655,920 $ 116,052,945 $ 184,522,574 $ 198,464,110 (1) GASB 34 was implemented July 1, 2001. Prior years' information is not available. (2) Interest expense of $12,242,557 in 2002 was classified within each respective program. Source: Comprehensive Annual Financial Reports 50 Riverside County Transportation Commission Government -wide Net (Expenses) Revenues by Function Last Four Fiscal Years General government Bicycle and pedestrian facilities CETAP Commuter assistance Commuter rail Highways Local streets and roads Motorist assistance Planning and programming Property management Regional arterials Transit and specialized transportation Interest expense (2) Total Fiscal Year Ended June 30 2002 (1) $ (5,400,507) (521,906) (10,977,888) (24,921,874) (36,541,323) (2,559,409) (2,382,857) (145,158) (11,720,342) (3,933,681) $ (99,104,945) 2003 2004 $ (4,303,046) $ (3,900,976) (927,139) 17,198,731 (1,148,983) (1,224,463) 15,938,720 (7,194,979) (25,986,246) (17,644,525) (40,256,464) (46,208,968) 440,518 377,207 (1,647,709) (2,849,166) 58,729 56,952 (8,428,021) 3,811,313 (7,097,501) (50,512,856) (10,381,790) (11,736,129) $ (82,811,793) $ (120,754,998) $ (124,809,404) 2005 (1) GASB 34 was implemented July 1, 2001. Prior years' information is not available. (2) Interest expense of $12,242,557 in 2002 was classified within each respective program. Source: Comprehensive Annual Financial Reports 51 $ (4,091,294) (1,021,637) 19,014,909 (1,436,806) (7,848,203) (14,673,701) (53,333,169) 797,763 (3,489,112) (33,149) 5,541,162 (55,887,239) (8,348,928) i Fiscal Year Ended June 30 2002 (1) 2003 2004 2005 Riverside County Transportation Commission Government -wide Net Assets Last Four Fiscal Years Invested in capital assets, net of related debt $ 130,051,343 128,247,454 104,716,712 133,225,528 Governmental Activities Restricted Unrestricted $ (44,501,093) $ 5,985,213 154,913,051 (174,443,946) 232,719,198 (121,829,477) 325,504,623 (124,274,292) (1) GASB 34 was implemented July 1, 2001. Prior years' information is not available. Source: Comprehensive Annual Financial Reports 52 Total 91,535,463 108,716,559 215,606,433 334,455,859 Riverside County Transportation Commission General Revenues by Source Last Ten Fiscal Years Other Transportation Fiscal Measure A Sales Uniform Year Sales Tax Tax (1) Mitigation Fee 1996 $ 55,413,939 $ 32,794,325 $ 1997 57,888,149 33,505,474 1998 63,496,222 36,100,342 1999 70,396,828 39,599,825 2000 2001 2002 2003 2004 2005 81,543,733 93,850,494 95,797,286 105,782,596 120,564,890 138,921,247 45,517,349 52,670,566 53,848,505 59,225,011 69,133,102 35,615,226 77,818,565 46,325,334 Investment Reimbursements Income $ 8,114,912 $7,740,317 5,514,049 6,869,873 9,754,287 5,471,073 5,334,206 6,542,447 5,286,109 11,804,372 26,795,899 23,276,534 25,241,083 4,741,631 5,059,048 10,961,674 5,942,480 5,245,445 3,115,232 5,146,325 Other (2) 5,274,781 5,896,496 6,190,293 6,688,885 7,372,191 7,866,195 10,923,508 8,758,135 5,411,819 4,659,218 Total (3) $109,338,274 109,674,041 121,012,217 126,761,375 146,034,768 170,635,038 178,316,151 205,807,086 257,116,803 298,111,772 (1) The Local Transportation Fund annually allocates sales tax to the General fund for transportation planning activities and administration and commuter rail operations. For 2005 $7,690,600 was allocated for these purposes. Additionally, $2,845 was allocated to commuter rail for capital purposes. The other sales tax revenue amount has not been reduced by the annual allocation. (2) Other revenue includes vehicle registration user fees. State transit grant was included through 2003 and was classified as other sales taxes beginning in 2004. (3) Includes all governmental fund types. Source: Comprehensive Annual Financial Reports 53 Fiscal Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Riverside County Transportation Commission General Government Expenditures by Function Last Ten Fiscal Years Administration $ 2,732,131 2,677,290 2,813,814 2,954,923 3,031,640 3,012,800 3,641,770 4,120,493 3,663,957 3,827,427 Programs $ 106,225,072 105,374,197 104,875,560 87,155,032 98,323,375 113,272,372 129,440,537 175,709,386 165,001,873 193,933,761 (1) Includes all govemmental fund types. Source: Comprehensive Annual Financial Reports Intergovernmental Capital Debt Distributions Outlay $ 25,327,762 $ 367,936 $ 144,537 25,208,531 305,095 53,677 74,344,388 309,000 306,660 30,525,757 397,302 113,241 30,527,304 518,609 50,319 35,442,358 632,361 63,502 35,545,895 605,485 561,306 35,555,285 667,234 340,804 35,508,587 750,183 8,000 38,208,607 706,228 179,818 54 Total (1) $ 134,797,438 133,618,790 182,649,422 121,146,255 132,451,247 152,423,393 169,794,993 216,393,202 204,932,600 236,855,841 Riverside County Transportation Commission General Government Expenditures by Authorized Source Last Ten Fiscal Years Local State Transportation A82766 Fiscal Transportation Transit Motorist Uniform Mobile Source Year General (1) Fund Assistance Assistance (2) Measure A Mitigation Fee Reduction Total (3) 1996 $ 7,152,501 $ 27,821,652 $ 1,026,465 $ 1,655,156 $ 96,519,937 $ - $ 621,727 $ 134,797,438 1997 7,674,298 26,134,968 1,269,583 1,862,553 96,180,072 497,316 133,618,790 1998 8,650,986 28,847,714 1,535,401 1,814,989 141,800,332 182,649,422 1999 8,858,531 31,584,293 1,515,684 1,806,430 77,381,029 288 121,146,255 2000 11,451,808 36,029,016 1,527,661 1,888,858 81,553,904 132,451,247 2001 10,868,588 38,672,495 3,529,784 2,211,201 97,141,325 152,423,393 2002 13,745,778 45,087,604 4,255,114 2,728,151 103,978,346 169,794,993 2003 11,827,703 51,679,898 5,809,085 2,078789 144,997,727 216,393,202 2004 11,011,304 50,304,661 1,958,571 1,978,380 138,421,299 1,258,385 204,932,600 2005 11,819,231 52,399,514 2,050,529 2,191,061 147,676,767 20,718,739 236,855,841 (1) Includes General fund and motorist assistance administrative, debt service, and capital outlay expenditures. (2) Includes Service Authority for Freeway Emergencies and Freeway Service Patrol special revenue funds. (3) Includes all governmental fund types. 55 Fiscal Year General 1996 $ 4,287,989 1997 4,596,712 1998 3,859,266 1999 3,934,367 2000 4,119,844 2001 5,591,400 2002 6,480,117 2003 5,757,792 2004 7,352,174 2005 8,520,480 Measure A Western County Special Revenue $ 18,202,760 20,479,011 20,611,011 25,847,423 35,465,719 48,710,889 60,383,031 87,281,322 115,098,845 134,743,081 Measure A Coachella Valley Special Revenue $ 33,386,188 35,589,083 12,869,418 14,113,167 13,083,218 9,279,185 6,070,965 7,428,955 7,253,630 8,357,088 Riverside County Transportation Commission Governmental Funds —Fund Balances Last Ten Fiscal Years Transportation Local Uniform Transportation Mitigation Fee Fund $ - $ 4,865,103 7,444,230 9,803,703 12,824,801 16,893,969 25,356,677 33,925,445 34,295,645 34,439,947 42,593,252 63,614,159 57,575,836 Commercial Paper Capital Projects Fund $ $ 25,463,638 (1) Beginning in 2005 the Measure A Western County Capital Projects fund was classified as nonmajor. Source: Comprehensive Annual Financial Reports Measure A Western County Capital Projects (1) 21,532,220 21,590,742 39,716,130 36,192,064 34,131,796 68,555,031 45,938,904 15,928,766 2,208,202 Nonmajor Debt Governmental Service Funds $ 2,748,357 $ 47,782,885 3,092,422 17,673,648 4,811,306 18,587,005 6,907,720 16,053,698 8,219,824 17,542,391 10, 727, 286 15, 382, 087 38,179,974 7,613,525 37,624,807 4,872,876 30,253,999 6,174,317 29,981,473 8,379,542 Total Fund Balances $ 132,805,502 110,465,848 110,257,839 115,873,240 129,456,761 183,602,555 198,591,961 193,190,163 245,374,366 336,635,297 Riverside County Transportation Commission Table of Sales Tax Revenues by Program and Geographic Area —General and Special Revenue Funds Year Ended June 30, 2005 Special Revenue Funds General Western Coachella Palo Fund County Valley Verde Total Administration $ 3,675,000 $ $ $ - $ 3,675,000 Planning and programming 1,822,800 1,822,800 Commuter assistance 2,529,923 . 2,529,923 Highways 39,239,915 5,048,574 44,288,489 Commuter rail 5,192,800 16,421,235 - 21,614,035 Local streets and roads 40,478,767 11,780,007 1,067,167 53,325,941 Regional arterials 13,462,865 - 13,462,865 Specialized transportation 2,529,923 3,365,716 - 5,895,639 Transportation Development Act - 54,334,590 14,640,147 1,150,383 70,125,120 Source: Finance Department $10,690,600 $155,534,353 $ 48,297,309 $ 2,217,550 $216,739,812 57 Riverside County Transportation Commission Taxable Sales and Population by City Taxable Sales (1) Population (2) City of Banning $ 189,089 27,954 City of Beaumont 107,334 18,982 City of Blythe 147,010 22,005 City of Calimesa 34,896 7,434 City of Canyon Lake 10,817 10,912 City of Cathedral City 814,737 50,632 City of Coachella 176,051 30,764 City of Corona 2,454,467 144,070 City of Desert Hot Springs 71,943 19,386 City of Hemet 761,734 66,455 City of Indian Wells 67,186 4,781 City of Indio 589,327 66,118 City of La Quinta 447,877 36,145 City of Lake Elsinore 448,196 38,045 City of Moreno Valley 1,021,275 165,328 City of Murrieta 701,427 85,102 City of Norco 487,537 26,703 City of Palm Desert 1,296,730 49,280 City of Palm Springs 675,487 45,731 City of Perris 430,139 44,594 City of Rancho Mirage 387,603 16,416 City of Riverside 3,974,583 285,537 City of San Jacinto 91,502 28,437 City of Temecula 2,149,360 81,397 Incorporated 17,536,307 1,372,208 Unincorporated 4,172,828 504,792 Countywide $ 21,709,135 1,877,000 California 460,096,468 36,810,358 Source: (1) California State Board of Equalization, expressed in thousands, for the calendar ended December 31, 2003 (2) State Department of Finance as of January 1, 2005 58 9EV602'1.Z $ 1766'966'61. $ 99S'4EZ'84$ 61717'6L6'94 $ 9176'9/0'91. $ 1798'0t7VE1,$ 1.L£'ZL6'1.1. $ 1.99'9E1:4 $ 91.9'0Z£b1 $ EE5'bl8'6 $ E8l'9L9'S LEL'99E'17 ZLL'9ZZ'17 L£Z'LE6'E 17LE'965'E 95E'99L'E 699'9b9'Z 686'1719'Z 91.1'b1£'Z ZZ6'98L'Z 91.1q65 29'LSl'L 560'60:1. ZlO'ZLL'L £OE'LZZ'L LSO'969 Z6L'849 49'099 690'4S 96E'96tr 1.9L'Z99'£ 9Z9'E95'E SE6'b£4'E SL£'1711Z 8L9'[9l'Z 40Z'£96'1, 299'002'L 691'LL9'L E09'9617'1. 171.9'99£'L 01729E9'1. 9tr9'617Z'L ESL'£ZZ't C69'96L'1. 6E1'E86 9E17'009 ZZ9'£99 L91'9E8 919'19L 9E17'147L L17E'9L9'1. l£9`LZ17'1. OZO'6£E'L 8E8'OLZ'L 1795'21.0'1. £68'EL0'1. 6LL'L06 906'L8L 969'EZL 950'90L 1.90'1.69 6170'tr69 EN'9Z5 9LS'LLS 1769'2117 Z1.9'L9£ E68'8Z£ ££b'1££ LLS'LZE 9171'662 Z£9'EIII. SLZ'699'1. L917'99b'1. 908179£'L trIZ'£EZ'L LZ6'LLL't 999'0E0'1. 9E5'616 EEZ'6L6 OL6'b88 tr1.5'L9 6917'99 05Z'99 917E'L9 1.96'29 49L'817 Z00'Z9 OOL'ES 8Z6'ES 8Lb`ES Z6E'8Z0't lLl'L96 Z£Z'O£6 1769'689 Ltr9'9Z9 6Z8'9SL Z£9'17EL 229'969 965'299 9917'9179 trZZ'6179'L 90CLOS'l 616'6LE'L 69E'LL2'1, 1.EZ'98VI. EOZ1700'1. 0176'068 E8406L 816'9L9 98Z'6179 1.L6'1.2.9'2 9170'69b'Z 9E2'9LZ'Z 9EL'Z90'Z L99'9178'1. 9E9'Z179'1. 966'01.9'1. 8£E'6Z17'l 616'1.6£'1, EEZ'OS£'l 9L0'917L $ 898'049 $ 96Z'S99 $ 9L9'8£9 $ 9176'966 $ E91'8617 $ 9Z9'8817 $ 179£'17L17 $ L00'LZ17 $ EL6'9017 $ (l)EOOZ ZOOZ LOOZ 000Z 6661 8661 1664 9664 966E 0661 (spuesnoyl un) smaA npualep ual }set aclAi sseuisng lIq sales eigexel apisaaAm Awno3 Jo saamos uolsslwwoo uoppodsueu *nap appienm uoliezpenb3 Jo pine elels :aaanos opepene elep lueoeJ pow sluesaadaa (t) slaw aelpo Ile qui snoeueposm eueld pue ep6oaolow 'wog 'allpowolny suopels eawas sluawaldwl wael pue sieualew 6umng seouelidde pue 6uNquanl awoH 6upiu0p/6upe3 mop aonbg a6e)aed saaols pool saaols Apepeds semis eslpumpiew piano 56a04s laaeddy Riverside County Transportation Commission Computation of Legal Debt Margin June 30, 2005 Ordinance 88-1, as amended by Ordinance 92-1 Ordinance 02-001 Total debt limit authorized under Measure A $ 525,000,000 $ 500,000,000 Amount of debt applicable to debt limit (124,335,000) (30,005,000) Legal debt margin $ 400,665,000 $ 469,995,000 60 Riverside County Transportation Commission Ratio of General Bonded Debt Service Expenditures to Total General Governmental Expenditures Last Ten Fiscal Years Fiscal Year Principal 1996 $ 11,608,286 1997 12,071,814 1998 59,930,614 1999 17,629,705 2000 18,529,107 2001 22,478,844 2002 24,068,939 2003 25,173,492 2004 26,290,000 2005 27,200,000 Total Debt Interest Service $ 12,768,332 $ 24,376,618 13,136,717 25,208,531 13,684,563 73,615,177 12,896,052 30,525,757 11,998,197 30,527,304 12,530,366 35,009,210 11,476,956 35,545,895 10,381,793 35,555,285 9,187,217 35,477,217 8,285,530 35,485,530 (1) Includes all governmental fund types Source: Comprehensive Annual Financial Reports 61 Total General Governmental Expenditures (1) $ 134,797,438 133,618,790 182,649,422 121,146,255 132,451,247 152,423,393 169,794,993 216,393,202 204,932,600 236,855,841 Ratio of Debt Service to General Governmental Expenditures 18.1 % 18.9% 40.3% 25.2% 23.0% 23.0% 20.9% 16.4% 17.3% 15.0% Riverside County Transportation Commission Historical Measure A Sales Tax Receipts and Bond Coverage Ratios Last Ten Fiscal Years Net Measure Measure A Sales Senior Lien Total Total Debt Fiscal 'A Sales Tax Tax Receipt Total Senior Lien Coverage Subordinate Lien Total Service Year Receipts Growth Rate Debt Service Ratio Debt Service Debt Service Coverage Ratio 1996 $ 55,413,939 NIA $ 23,704,392 2.34 $ $ 23,704,392 2.34 1997 57,888,147 4.46% 23,631,568 2.45 23,631,568 2.45 1998 63,496,222 9.69% 27,885,728 2.28 1,229,481 29,115,209 2.18 1999 70,396,828 10.87% 28,997,965 2.43 1,468,440 30,466,405 2.31 2000 81,543,732 15.83% 28,989,523 2.81 1,473,213 30,462,736 2.68 2001 89,464,634 9.71% 33,473,335 2.67 1,470,013 34,943,348 2.56 2002 94,400,890 5.52% 34,008,303 2.78 1,470,413 35,478,716 2.66 2003 102,817,407 8.92% 34,008,031 3.02 1,472,925 35,480,956 2.90 2004 117,632,722 14.41% 34,004,979 3.46 1,472,238 35,477,217 3.32 2005 134,516,986 14.35% 34,012,292 3.95 1,473,238 35,485,530 3.79 Source: Finance Department 62 Riverside County Transportation Commission Miscellaneous Statistical Information June 30, 2005 Date Organized: 1976 Form of Government: County Transportation Commission Board of Commissioners with full-time Executive Director Number of Commissioners: 30 including one non -voting state representative Number of Employees: 26 budgeted full-time positions County of Operations and Geographical Location: Riverside County, Califomia Riverside County is bordered on the north by San Bernardino County, on the east by the state of Arizona, on the south by San Diego and Imperial Counties and on the west by Orange and Los Angeles Counties. The County encompasses 7,177 square miles and is the fourth largest by area in the state. It stretches 185 miles from the Arizona border to within 20 miles of the Pacific Ocean. Fiscal Year: July 1 - June 30 Type of Tax Support: 1/2% of local sales tax for Measure A 1/4% of statewide sales tax for Local Transportation Fund Sales tax on gasoline allocation for State Transit Assistance Sales Tax Revenue Bond Rating: Aa2/AA Commercial Paper Rating: P-1/A-1+ Number of Call Boxes in County: 1,159 of which 1,058 are active Number of Calls Made from Call Boxes: 19,945 Freeway Service Patrol Vehicles: 13 Number of Vehicles Assisted by Freeway Service Patrol: 32,542 Commuter Rail Stations: 5 (Riverside Downtown, Pedley, La Sierra, North Main Corona, and West Corona) Commuter Rail Service: 12 Trips each weekday on the Riverside County Line 12 Trips each weekday on the Inland Empire Orange County Line (IEOC) 9 Trips each weekday on the 91 Line Number of Club Ride Members: 2,057 63 This page intentionally left blank. 64 (951 ) 787-7141 • www.rctc.org 4080 Lemon Street, 3rd Floor • P.O. Box 12008 • Riverside, CA 92502-2208 my Transportation Commission AGENDA ITEM 12 • RIVERS/DE COUNTY TRANSPORTATION COMMISSION DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: Theresia Trevino, Chief Financial Officer THROUGH: Anne Mayer, Programming and Administration Director SUBJECT: Mid -Year Revenue Projections STAFF RECOMMENDATION: This item is for the Committee to: 1) Approve the Mid -Year Revenue Projections; 2) Approve the budget adjustments to reflect the revised Measure A revenues of $14,376,000 and expenditures of $7,065,000; 3) Approve the budget adjustments to reflect the revised Local Transportation Fund (LTF) Planning revenues of $747,728 and expenditures of $747,728; and 4) Forward to the Commission for final action. BACKGROUND. INFORMATION: Prior to the beginning of the fiscal year, staff made projections regarding the revenue received from Measure A and LTF funds for budget and apportionment purposes, respectively. Staff has tracked these revenues on a monthly basis. Current trends indicate that Measure A and LTF receipts are about 19.9% and 19.1 % higher, respectively, for the six months ended December 31, 2005 compared to the same period last year. For FY 2004/05, Measure A and LTF receipts were about 14.4% and 12.8% higher, respectively, than the prior year. The Inland Empire's local economy and in particular, Riverside County has continued to perform better than the rest of the State of California. The local economy's strength appears to be attributable to continued growth in population, jobs, taxable retail sales and affordable housing. The local economists are cautious and continue to project moderate growth in Riverside County. Based on the economic data and an emphasis on the trends of sales tax receipts for the last six months and FY 2004/05, staff is recommending that the Commission increase the current year revenue projections as follows: 96 FY 2005/06 Revenue Projections Original (January 2005) Revised for FY 2005/06 Budget Revised for Mid -Year Adjustment Increase from Budget Measure A LTF $130,416,000 63,190,000 $132,924,000 63,190,000 $147, 300, 000 70, 600, 000 $14, 376,000 7,410,000 For reference purposes, audited Measure A and LTF revenues for FY 2004/05 were $138,921,247 and $66,776,381, respectively. The FY 2005/06 mid -year projections reflect an approximate 6% increase over the FY 2004/05 actual revenues. The increase in Measure A revenues has a direct effect on the distributions to the geographic areas and related programs, especially local streets and roads (LSR). Accordingly, in addition to the revenue budget adjustments, budget adjustments are required for the LSR aggregating $5,641,000 as well as regional arterial expenditures of $1,424,000 related to Measure A. The LTF audit was completed and financial statements were issued in November 2005. Staff has revised the original projections to include the carryover that is now available to the local governments and transit agencies amounting to $17,514,267. This carryover also includes accounts receivable of $13,692,556 for LTF amounts due to the Commission from the State of California as of June 30, 2005 which were not received as of year end. The revised projections include a budget adjustment to RCTC Planning for $747,728. The increase for SB821 bicycle and pedestrian projects of $483,405 does not require a budget adjustment as such expenditures are made from the Local Transportation Fund, which is an unbudgeted fund of the Commission. Upon Commission approval of this item, staff will provide this updated information to the necessary local governments and transit operators. Financial Information In Fiscal Year Budget: N Year: FY2005/06 Amount: $747,728 sales tax $747,728 planning Source of Funds: Local Transportation Fund Budget Ad ustment: Y GLA No.: 106-65-40101 $747,728 106-65-86205 $747,728 LTF Planning sales tax revenues LTF Planning expenditures Fiscal Procedures Approved: \44.6cti.evi - Date: 1 /23/06 • 97 • Financial Information $14,376,000 sales tax In Fiscal Year Budget: N Year: FY 2005/06 Amount: $7,065,000 LSR & regional arterials Source of Funds: Measure A Budget Adjustment: Y Revenues: 227 71 40100 $4,281,000 Western County LSR sales tax 221 33 40100 1,766,000 Western County Rail sales tax 222 31 40100 4,121,000 Western County Highway sales tax 225 26 40100 267,000 Western County Special Transit sales tax 226 41 40100 267,000 Western County Commuter Assistance sales tax 254 71 40100 1,247,000 Coachella Valley LSR sales tax 252 26 40100 356,000 Coachella Valley Special Transit sales tax 253 31-40100 534,000 Coachella Valley Highway sales tax GLA No.: 255-72 40100 1,424,000 Coachella Valley Regional Arterial sales tax 233-71 40100 113,000 Palo Verde Valley LSR sales tax $14,376,00 0 Appropriations: 227-71-86104 $ 4,281,000 Western County LSR 254-71-86104 1,247,000 Coachella Valley LSR 233-71-86104 113,000 Palo Verde Valley LSR 255 72 86405 1,424,000 Coachella Valley Regional Arterials $7,065,000 Fiscal Procedures Approved: \141 Date: 1 /23/06 Attachments: FY 2005/06 Mid -Year Revenue Projections for Measure A and LTF 98 RIVERSIDE COUNTY LOCAL TRANSPORTATION FUND FY 2005/2006 APPORTIONMENT (Revised 1/06) Budget FY 2005/2006 Projection (revised) Estimated Carryover (Unapportioned) $17,514,267 Est. Receipts 70,600,000 TOTAL 88,114,267 Less: Auditor 12,000 Less: RCTC Administration 700,000 Less: RCTC Planning (3% of revenues) 2,643,428 Less: SCAG Planning - 116,300 BALANCE 84,642,539 Less: SB 821 (2%of balance) 1,692,851 BALANCE AVAILABLE BEFORE RESERVES 82,949,688 Less: 10% Transit Reserves 8,294,969 BALANCE AVAILABLE FOR APPORTIONMENT $74 654,719 APPORTIONMENT Revised Budget Original Population FY 2005/2006 FY 2005/2006 Population %of Total Apportionment Apportionment Increase Western 1,379,556 77.65% Coachella Valley 368,205 20.72% Palo Verde Valley 28,981 1.63% 1,776,744 100.00% $57,965,872 $41,409,018 $16,556,854 15,471,132 11,052,096 4,419,036 1,217,715 869,898 347,817 $74 654,719 $53 331 012 $21, 323 707 ALLOCATION OF TRANSIT RESERVES (in accordance with Reserve Policy adopted January 12, 2005:) Western: Rail $1,416,944 Transit: RTA Banning Beaumont Corona Riverside Subtotal Transit $5 0233 709 5,023,709 Subtotal Western 6,440,652 Coachella Valley 1,719,015 Palo Verde Valley 135,302 Total Reserves $8, 294,969 $4,308,618 123,137 132,421 179,939 279,594 NOTES: Estimate for Planning Purposes, subject to change and rounding differences Population Source: California Department of Finance, Demographic Research Unit as of January 1, 2004 Allocation of Reserves: FY 2003/04 SRTP Funding Allocations Approved July 9, 2003 V:12006102 February\Budget B Implement&6661T7.138117F 2005-2006 Rev 4 Midyr Apportionments Attachment Rail 22% Transit 78% $12,752 492 $45 213 380 1/18/20063 03 PM 99 RIVERSIDE COUNTY TRANSPORTATION COMMISSIOP MEASURE A DISTRIBUTION PROJECTIOD FY 2005/2006 (Revised 1/06) FY 2005/2006 FY 2005/2006 FY 2005/2006 Revised Projection Budget Original MEASURE "A" PROJECTION $ 147,300,000 $ 132,924,000 $130,416,000 LESS: ADMINISTRATION 3,090,000 3,090,000 3,090,000 TOTAL PROJECTION $ 144,210,000 $ 129,834,000 $127,326,000 Local Streets - Commuter Special CITIES & Roads Highway Rail Assistance . Transportation 40.00% 38.50% 16.50% 2.50% 2.50% WESTERN COUNTY PORTION $ 107,368,000 $ 42,946,000 $ 41,337,000 $ 17,716,000 $ 2,684,000 $ 2,684,000 BANNING $ 770,000 BEAUMONT 461,000 CALIMESA 197,000 CANYON LAKES - 257,000 CORONA 5,140,000 HEMET 2,061,000 LAKE ELSINORE 1,153,000 MORENO VALLEY 4,368,000 MURRIETA 2,327,000 NORCO 946,000 PERRIS 1,282,000 RIVERSIDE 9,366,000 SAN JACINTO 691,000 TEMECULA 3,386,000 RIVERSIDE COUNTY 10,539,000 . AREA TOTAL $ 42,944,000 $ 41,337,000 $ 17,716,000 $ 2,684,000 $ 2,684,000 Local Streets Regional Special Roads Highway Arterial Transportation 35% 15% 40% 10% COACHELLA VALLEY PORTION $ 35,710,000 $ 12,498,000 $ 5,357,000 $ 14,284,000 $ 3,571,000 CATHEDRAL CITY $ 1,729,00D COACHELLA 457,000 DESERT HOT SPRINGS 354,000 INDIAN WELLS 230,000 INDIO 1,455,000 LA QUINTA PALM SPRINGS 1,816,000 PALM DESERT 2,670,000 RANCHO MIRAGE 946,000 RIVERSIDE COUNTY 1,713,000 CVAG 1,129,000 AREA TOTAL $ 12,499,000 $ 5,357,000 $ 14,284,000 $ 3,571,000 Local Streets Roads 100% PALO VERDE PORTION $ 1,132,000 $ 1,132,000 BLYTHE $ 903,000 RIVERSIDE COUNTY 229,000 AREA TOTAL $ 1,132,000 NOTES: Estimate for Planning Purposes, subject to change and rounding differences V:12006102 February \Budget & Implementation\TT.B&I.Measure A Proj FY06 MidYr AdjAttachment 1/18/20063:03 PM 100 • • AGENDA ITEM 13 RIVERSIDE COUNTY TRANSPORTATION COMMISSION DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: Theresia Trevino, Chief Financial Officer THROUGH: Anne Mayer, Programming and Administration Director SUBJECT: Fiscal Year 2006/07 Local Transportation Fund and Measure A Revenue Projections STAFF RECOMMENDATION: This item is for the Committee to 1) Approve the projections of the Local Transportation Fund (LTF). apportionment for the Western Riverside County, Coachella Valley, and Palo Verde Valley areas; 2) Approve the projections for Measure A and the related allocations; and 3) Forward to the Commission for final action. BACKGROUND INFORMATION: Local Transportation Fund The LTF projection consists of revenues generated from a quarter cent of the statewide sales tax. These LTF funds are principally used to fund transit requirements within the County of Riverside (County). The Transportation Development Act (TDA) legislation that created LTF requires the County Auditor Controller to annually estimate the amount of revenues expected to be generated from the sales tax. That estimate then becomes the basis for geographic apportionment and for claimant allocation through the Short Range Transit Plan process, which commences in January for the next fiscal year. While the County is the taxing authority and maintains custodial responsibility over the LTF revenues, the Commission by statute is charged with administration of the LTF funding process. The practice has therefore been for the Commission staff to develop the revenue estimate and then submit it to the County Auditor Controller for concurrence. Once the Commission and the County have agreed on a revenue amount, Commission staff prepares the statutorily required apportionment. Apportionment is the process that assigns revenues to the three major geographic areas (as defined by TDA law) within the County. They are Western Riverside, Coachella Valley, and Palo Verde Valley. The revenues are divided based on the respective populations for each area. The apportionment occurs after off -the -top allocations for administration (distributed to the County, Commission, and SCAG) 101 and set asides for planning activities (3%) and bicycle and pedestrian projects (2%) Attached is the FY 2006/07 LTF apportionment based on a revenue estimate of $74,850,000. The County has reviewed the estimate and concurs with it. The estimate is based on a revised projection for FY 2005/06 of $70,600,000 plus an increase of 6%. After the deductions for administration of $885,500 and set - asides of $3,679,880, the amount available for apportionment is $70,284,620. The balance available for apportionment is as follows: Apportionment Area Amount Western County Coachella Valley Palo Verde Valley Total $ 54,288,222 14,879,370 1,117,028 $ 70,284,620 In accordance with the Reserve Policy adopted by the Commission on January 12, 2005, a reserve of 10% .for each apportionment area will be established and set aside for FY 2006/07 for unforeseen cost increases or other, emergency. For the Western County apportionment area, a portion of the reserve will be allocated to each of the transit operators. For public bus transit operators, the allocation of the reserve is based on each operator's proportionate share of FY 2004/05 LTF operating allocations. Operators may access reserve funds by amending their Short Range Transit Plans through the established amendment process. Measure A The Measure A projection consists of revenues generated from the local half -cent sales tax approved by the voters in November 1988. These Measure A funds are principally used to fund highway, commuter rail, regional arterial, local streets and roads, commuter assistance and specialized transportation .projects needs in the three geographic areas of Riverside County. The Measure A projection for FY 2006/07 is $156,150,000. This projection will become the basis for the preparation of the FY 2006/07 budget. The budget process typically commences in January of each year following the development of the Measure A revenue projections. Additionally, the amounts for the local streets and roads and regional arterial programs are usually provided to the local jurisdictions for planning purposes. The attached Measure A estimate of $156,150,000 is based on a revised projection for FY 2005/06 of $147,300,000 plus an increase of 6%. After the deduction for administration. of $3,500,000 which is approximately 2.2% of Measure A revenues, the amount available for distribution to the three geographic areas is $152,650,000, which is allocated as follows: • 102 • • Geographic Area Amount Western County Coachella Valley Palo Verde Valley Total $1 13,162,000 38,407,000 1,081,000 $152,650,000 Upon Commission approval of this item, staff will provide this information to the necessary local jurisdictions and transit operators for planning purposes. Attachments: Local Transportation Fund FY 2006/07 Apportionment, Measure A Distribution Projection FY 2006/07 103 RIVERSIDE COUNTY LOCAL TRANSPORTATION FUND FY 2006/2007 APPORTIONMENT Budget FY 2006/2007 Projection Estimated Carryover (Unapportioned) $0 Est. Receipts 74,850,000 TOTAL 74,850,000 Less: Auditor 12,000 Less: RCTC Administration 750,000 Less: RCTC Planning (3% of revenues) 2,245,500 Less: SCAG Planning 123,500 BALANCE 71,719,000 Less: SB 821 (2% of balance) 1,434,380 BALANCE AVAILABLE BEFORE RESERVES 70,284,620 Less: 10% Transit Reserves 7,028,462 BALANCE AVAILABLE FOR APPORTIONMENT $63,256,158 APPORTIONMENT Budget Population FY 2005/2006 Rail Transit Population % of Total Apportionment 22% 78% Western 1,449,805 77.24% $48,859,400 $10,749,068 $38,110,332 Coachella Valley 397,364 21.17% 13,391,433 Palo Verde Valley 29,831 1.59% 1,005,325 1,877,000 100.00% $63,256,158 ALLOCATION OF TRANSIT RESERVES (in accordance with Reserve Policy adopted January 12, 2005) Western: Rail $1,194,341 Transit: RTA $3,597,878 Banning 116,924 Beaumont 102,775 Corona 156,588 Riverside 260,316 Subtotal Transit $4,234,481 4,234,481 Subtotal Western 5,428,822 Coachella Valley 1,487,937 Palo Verde Valley 111,703 Total Reserves $7,028,462 NOTES: Estimate for Planning Purposes, subject to change and rounding differences Population Source: Califomia Department of Finance, Demographic Research Unit as of January 1, 2005, as adjusted for annexations Allocation of Reserves: FY 2004/05 SRTP Funding Allocations Approved July 14, 2004 V:12006\02 February Budget & ImplementationlTT.B&I.LTF 2006-2007 Apportionments.Attachment 1/18/20063:08 PM 104 MEASURE "A" PROJECTION LESS: ADMINISTRATION TOTAL PROJECTION CITIES WESTERN COUNTY PORTION BANNING BEAUMONT CALIMESA CANYON LAKES CORONA HEMET LAKE ELSINORE MORENO VALLEY MURRIETA NORCO PERRIS RIVERSIDE SAN JACINTO TEMECULA RIVERSIDE COUNTY AREA TOTAL RIVERSIDE COUNTY TRANSPORTATION COMMISSIOP MEASURE A DISTRIBUTION PROJECTIOI FY 2006/2007 FY 2006/2007 Original Projection $156,150,000 3,500,000 $ 152,650,000 $ 113,162,000 COACHELLA VALLEY PORTION $ 38,407,000 CATHEDRAL CITY COACHELLA DESERT HOT SPRINGS INDIAN WELLS INDIO LA QUINTA PALM SPRINGS PALM DESERT RANCHO MIRAGE RIVERSIDE COUNTY CVAG AREA TOTAL Local Streets & Roads 40.00% $ 45,264,00D $ 797,000 535,000 202,000 267,000 5,297,000 2,126,00D 1,214,000 4,614,000 2,586,000 967,000 1,360,000 9,775,000 739,000 3,739,000 11,046,000 Highway 38.50% $43,567,000 Rail 16.50% $18,672,000 Commuter Special Assistance Transportation 2.50% 2.50% $ 2,829,000 $ 2,829,000 $ 45,264,000 $ 43,567,000 $18,672,000 $ 2,829,000 $ 2,829,000 Local Streets Regional Roads Highway Arterial 35% 15% 40% $ 13,441,000 $ 5,761,000 $15,363,000 $ 1,758,000 510,000 400,000 241,000 1,680,000 1,968,000 2,773,000 944,000 1,885,000 1,284,000 $ 13,443,000_ $ 5,761,000 $15,363,000 Local Streets Roads 100% PALO VERDE PORTION $ 1,081,000 $ 1,081,000 BLYTHE RIVERSIDE COUNTY AREA TOTAL $ 836,000 245,000 $ 1,081,000 NOTES: Estimate for Planning Purposes, subject to change and rounding differences Special Transportation 10% $ 3,841,000 $ 3,841,000 V:12006\02 February\Budget & Implementation\TT.B&I.Measure A Proj FY07.Attachment 1/18/20063:08 PM 105 • • • AGENDA ITEM 14 • RIVERSIDE COUNTY TRANSPORTATION COMM/SS/ON DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: Jerry Rivera, Program Manager THROUGH: Theresia Trevino, Chief Financial Officer SUBJECT: Amendment to FY 2005/06 Measure A Capital Improvement Plan for Local Streets and Roads for the City of Palm Springs STAFF RECOMMENDATION: This item is for the Committee to: 1► Approve the amendment to the FY 2005/06 Measure A Capital Improvement Plan for Local Streets and Roads for the city of Palm Springs (City) as submitted; and 2) Forward to the Commission for final action. BACKGROUND INFORMATION: The Measure A Ordinance requires each recipient of local streets and roads monies to annually provide to the Commission a five year plan on how those funds are to be expended in order to receive its Measure A disbursements. In addition, the cities in the Coachella Valley and the County (representing the unincorporated area of the Coachella Valley) must be participating in CVAG's Transportation Uniform Mitigation Fee (TUMF) program. The agencies are also required to submit an annual certification of Maintenance of Effort (MOE) along with documentation supporting the calculation. The Measure A plan for the City of Palm Springs was approved by the Commission at its July 13, 2005 meeting. Any revisions to the adopted plan must be returned to the Commission for approval. The city of Palm Springs is requesting to amend its FY 2005/06 Measure A plan to cancel three (3) projects carried over from fiscal year 2004/05, cancel another project (#8 SB 821 Sidewalk Project) in the FY 2005/06 plan, and increase the Measure A funding for the Mesquite Avenue Improvement project programmed in FY 2005/06 by $150,670. As noted in its letter, the City has invested a lot of time into this project, the neighborhood has been promised delivery of this project for several years, and the City Council has determined that this is a top priority project. Attachment: Letter from the City of Palm Springs with revised FY 2006 schedule 106 75202 JR City of Palm Springs Department of Public Works and Engineering - 3200 E. Tahquitz Canyon Way" • Palm Springs, California 92262 Tel: (760) 323-8253 • Fax: (760) 322-8360 • Web: www.ci.palrn-springs.ca.us Mr. Jerry Rivera Measure "A" Program Mariager Riverside County Transportation Commission 4080 Lemon Street, 3r° Floor Riverside, CA 92502-22083 Re: Fiscal Year 2006-2010, 5-Year Measure "A" Local Street 8 Road Program Proposed City of Palm Springs Annual 5-Year Measure "A" Plan • (Fiscal Year 2005/2006 - 2009/2010) — REVISED • Dear Mr: Rivera: I am enclosing the first revision to the Measure A lists for funds that are listed on the "2004/2005 continued to 2005/2006" Table and the "2005/2006"•Table for Fiscal Year 2008-2010 5-Year Plan. The purpose of this request is to switch the listed funds from the identified projects to, fund the "Mesquite Avenue Improvement Project", which currently has Measure A funding identified for it. The project had a final engineer's estimate of $1.7 Million. In December we solicited construction bids and at bld opening received one bid from Yeager Skanska, lnc., for almost $4 Million. Due to the fact that the City has invested a loi of time into this project, and the neighborhood has been. promised delivery of this project for several years, the City Council has determined that this is a top priority project, and a number of other funding sources were used to come up with the additional funding necessary to award the construction contract. It is our intent to cancel the Measure A funded projects listed on the two Tables, and transfer $150,670 of Measure Afunds into the existing Measure A project account for the Mesquite Avenue improvement Project. Please review the information and let me know if you have any further questions. I can be reached at (760) 323-8253, ext. 8744.. I Sincerely, Marcus L. Fuller; P.E., P.L.S. Assistant Director of Public Works/Assistant City Engineer. enc Thomas Mison, Assistant City Manager • David riaraklen, DOector of Pubik WrekS/Chy Engineer Craig Graves, Director or Finance?reasorer Post Office. 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(raag6u3 l!n10 rogues 'rapnd smelt)! Aq) laau!Bu3 Alla/s)poM o!lgnd;oro;oaga `ueNereg .r.p!nea :,iq peredard s6'upds, wled Jo ha :Aouaey .:, _ WVNO_ONd SONflailt0.01-01,r 3ansd3w - NOISSIWW00 NOI-LVIA0dSNda1 h1Nn00 3015a3Alt1 • rn 0 RIVERS/DE COUNTY TRANSPORTATION COMM/SS/ON DATE: January 23, 2006 TO: Budget and Implementation Committee FROM: John Standiford, Public Affairs Director THROUGH: Eric Haley, Executive Director SUBJECT: State and Federal Legislative Update STAFF RECOMMENDATION: This item is for the Committee to: 1) Approve the following bill positions: SB 1165 (Dutton, R-Rancho Cucamonga) - SUPPORT AB 1838 (Oropeza, D-Long Beach) - SUPPORT; 2) Receive and file the state and federal legislative update; and 3) Forward to the Commission for final action. BACKGROUND INFORMATION: State Update: Governor Unveils Growth Plan and Budget The first few days of January have proven to be full of action in Sacramento with Governor Schwarzenegger's announcements of a multi -billion dollar infrastructure bond and investment plan as well as the annual release of the proposed budget. After years of neglect from the state, transportation efforts are poised to receive significant investment. During his State of the State Address, the Governor Unveiled his Strategic Growth Plan which is a plan to invest $222 billion in the state's infrastructure through a combination of bond revenue, private sector investment and funding from other sources such as the federal government. The plan includes funding for transportation, schools, water infrastructure and even correctional facilities. A total of $12 billion in state bond funding is slated for transportation and should go before voters in June of this year and in November 2008. The proposal would allocate the $12 billion in the following manner: • Highways • Technology (ITS) • Rail and Transit $5.6 billion $ .2 billion $ .7 billion 110 • Trade Infrastructure • Safety and Preservation $4.0 billion $1.5 billion Within these categories are a number of specific projects that would benefit Riverside County. The plan allocates $265 million for the widening of Interstate (I)215 between State Route (SR) 60 and Interstate 15, $65 million for technology upgrades throughout the Inland region to support real time traffic monitoring, $6.1 million for park and ride facilities, $250 million for HOV or managed lanes on the I- 15 in San Bernardino County and $320 million for improvements to SR-91 in Orange County. Although the 1-15 and SR-91 projects are located outside of Riverside County, both facilities are depended on by Riverside County residents. Moreover the future release of the state's goods movement plan will likely allocate a significant amount of the $4 billion for trade infrastructure to projects in the Inland Area. The goods movement plan will also depend on private sector financing and should result in the state's largest commitment to grade crossings and truck lanes. What is especially striking about the Governor's proposal is its recognition of transportation needs in the Inland Empire. Excluding the trade infrastructure component of the plan, Riverside and San Bernardino counties receive $887 million for specific projects. This compares to $320 million for Orange County, $670 million for San Diego and Imperial Counties and $1.2 'billion for Los Angeles County. The State of the State Announcement was the first draft of the overall plan and will now become part of the legislative process — a process that must move swiftly in order to make the June ballot. Two identical bills have been introduced that contain the Governor's plan. They are SB 1165 authored by local Senator Bob Dutton and AB 1838 by Assembly Transportation Chair, Jenny Oropeza. Senator Dutton is taking a strong leadership role on this effort and recently hosted a meeting in Rancho Cucamonga with Senator Torlakson that involved the business community and included participation from RCTC, SANBAG, Metrolink and local governments. The legislation also includes authorization for the use of design build contracting and the ability to enter into arrangements with private sector entities to finance and lease transportation facilities. These provisions are similar to other legislation introduced earlier in the session and supported by the Commission. Staff suggests a SUPPORT position on SB 1165 and AB 1838 although it will be critical to monitor and participate in the legislative process as these bills advance in 111 • the Legislature. The bills will require a two-thirds vote in the Legislature and it will be especially important to obtain approval in time for the June election since some counties fear that a bond measure in November could jeopardize their efforts to pass local, half -cent sales tax programs. It will also be important to monitor how the Governor's proposal will affect other infrastructure bond bills such as SB 1024 introduced by Senator Perata and AB 1783 by Assembly Speaker Nunez. Budget Released — Proposition 42 Funded & More On January 10, Governor Schwarzenegger introduced his proposed state budget for Fiscal Year 2006/07. For the second year in a row the budget fully funds Proposition 42 and this year, the budget includes $920 million for the early repayment of previously -diverted transportation funds. Over the next few months, the overall budget and the $920 million repayment will be the subject of intense negotiations in the Legislature. One item that will remain constant is the decision to fund Proposition 42. Currently, there is a clause that allows the Governor and the Legislature to suspend the Proposition when the state faces budget shortfalls. The process called out in the law requires the Governor to initiate the suspension with the issuance of a proclamation detailing the need for the suspension. Instead the Governor has indicated his support in funding Proposition 42 and a suspension cannot be initiated by the Legislature. Moreover, in his unveiling of the infrastructure bond plan, the Governor expressed his support for legislation to further strengthen Proposition 42. Federal Update The first month of the year in Washington has been especially newsworthy with ethics investigations, Supreme Court confirmation hearings, a fight for the post of House Majority Leader and the ongoing debate over the war. Although transportation has received scant attention, one item of interest is the possibility of a technical corrections bill to SAFETEA-LU that might be introduced in February. Southern California interests are working with Congressional leaders to clarify wording regarding a funding earmark for the Alameda Corridor East. Staff will return with details on a potential corrections bill once it is introduced. Attachment: Legislative Matrix 112 � POSITIONSRIVERSIDE COUNTY TRANS PORTATI ON -CO M M ISSION- - O STATE FEDERAL - - ~~_~~.~,T ~~ 414 == 426 (Bogh) This um would require Camunx to convert all Huv lanes on state highways in Riverside County that currently operate on a 24'hour basis into part-time HC>V lanes that operate as nnixod'f|ovv lanes except during peak periods, subject to any required approvals of the federal government. 5/25/05'|n Committee on Appropriations. Set second hearing, Held under submission. SUPPORT|N CONCEPT 4/13/05 AB 453 (Benoit) This bill would extend the time limit that is currently in place under state |avv for state funding of railroad grade crossings. 9/22/05 - Signed by Governor. SUPPORT 4/13/05 AB 850 (Canoianni||a) This bill vvVu|d authorize the Department of Transportation to enter into comprehensive development franchise agreements with public and private entities for specified types of transportation projects subject to certain requirements and conditions. The bill would require a franchise agreement to o||ovv the department to acquire by condemnation or negotiation the financial value of a competing toll facility ifitopens a competitive state facility inthe same corridor. 5/25/05 ~ In Committee on Appropriations. Set second hearing. Held under submission. SUPPORT WITH AMENDMENTS 4/13/05 AB 1266 (Nie||o) This bill would generally authorize the Department of Transportation to award contracts for projects using the design -sequencing contract method, ifcertain requirements are met. 5/25/05 - In Committee on Appropriations, Set second hearing. Held under submission. SUPPORT 4/13/05 AB 1699 (Frumrner) This bill would state the intent of the Legislature to authorize certain transportation authorities to use design -build process for bidding on one highway construction project within the jurisdiction of the applicable transportation authority. 7/5/06 Hearing postponed bySenate Trans &Housing Committee. SUPPORTIN CONCEPT 5/11/05 AB 1714 (P|aacio) This bill would require the construction of the more affordable skyway structure and would limit the use of additional toll. revenue to seismic retrofit p,ujoutu such as the Boy Bridge repair. The otato'n responsibility of $300 million will be for the demolition of the old bridge. The rest of the money needed to complete the new bridge would have to be raised from u combination of increased tn||o, local bond sales and existing state and federal highway appropriations. AB 1714reflects the Governor's position onthe Bridge issue. 5/25/05 Re -referred to Committee on Appropriations. Governor's Plan later adopted. SUPPORT 5/11/05 ACA 4 (P|ennia) This measure would delete the provision authorizing the Governor and the Legislature to suspend the transfer of revenues from the General Fund tnthe Transportation Investment Fund fora fiscal year during o fiscal emergency, specific tuProposition 42. Approved by A000rnb|y Transportation Committee on 1/9/06 and referred to SUPPORT 1/12/05 F:\us ero\pxepdot\juDuQm8.dnc o-v i ��l (Y`i�� Gi � { 'M 9 $ x t'ka 'rr i� u,,, � vry ,y�Fd�� � I��. � e iFriH �.... s. I ^� � ••- �) • e i,iu� _ i�d., � �+ �( i'�:m 10 SUPPORT �'` �'� J�� }�s �'?L�,. 3/18/05 I 0_� ACA 9 (Bogh) This measure would change the vote requirement to 4/5 of the membership of each house of the Legislature in order to enact a stature suspending in whole or in part the transfer of motor vehicle tax revenue from the General Fund to the Transportation Investment Fund, specific to Proposition 42. Approved by Assembly Transportation Committee on 1 /9/06 and referred to Appropriations. ACA 11 (Oropeza) This measure would delete the provisions authorizing the transfer of revenues from the General Fund to the Transportation Investment Fund to be suspended. The measure would authorize the Legislature to loan funds in the Transportation Investment Fund to the General Fund or any other state fund or account, or to local agencies, under conditions that are similar to conditions applicable to loans of revenues under Article XIX of the California Constitution, and would require interest to be paid on a loan that is not repaid within the same Approved by Assembly Transportation Committee on 1 /9/06 and referred to Appropriations. SUPPORT 3/18/05 ACA 22 (LaMalfa) Proposed Constitutional Amendment would severely restrict the use of eminent domain. Referred to Judiciary Committee SEEK AMENDMENTS 9/14/05 ACA X 1 4 (Keene) This measure would, on and after July 1, 2006, prohibit the transfer of funds from a special fund to the General Fund as a loan, with specified exceptions. Any funds that were transferred prior to that date from a special fund for the purpose of making a loan to the General Fund and that have not been repaid would be required to be repaid over the next 15 years. In exchange, Proposition 42 would be Amended. Re -referred to Committee on Budget Process 4/12/05. WATCH 4/1 3/05 SB 371 (Torlakson) This bill would allow state, regional, and local • transportation authorities to try design -build contracting under specific criteria and for these projects to be audited. to determine the success or failure of Set for Hearing in Senate Appropriations on 1 /19/06 SUPPORT IN CONCEPT 5/11 /05 SB 427 (Hollingsworth) Originally, this bill would exempt from CEQA requirements the construction of any overpass, onramp, or offramp that is built on an existing State Department of Transportation (CAL -TRANS) right -of- way. It is has now been amended to 'make changes to the Set for hearing in Senate Appropriations on 1 /17/06. SUPPORT 4/13/05 SB 561 (Runner & Torlakson) This bill would provide additional transportation options in allowing for toll facilities, but does so in a manner that eliminates the inherent unfairness to the public from the imposition of non -compete clauses. Read second time. Amended. Re -referred to Senate Committee on Appropriations 5/24/05. SUPPORT 7/13/05 F Ausers\preprint\j s\legmat.doc • • SB 705 (Runner) SB 1024 Torlakson & Perata) SCA 15 (McClintock) This bill would authorize the Department of Transportation to contract using the design -build process for the design and construction of transportation projects. The bill would require the director of the department to establish a prequalification and selection process. This bill would enact the Safe Facilities, Improved Mobility, and Clean Air Bond Act of 2005 to authorize $7,688,000,000 in state general obligation bonds for specified purposes, including the seismic retrofit of toll bridges, levee improvements, restoration of Proposition 42 transportation funds, port infrastructure and security projects, trade corridors of significance, emissions reduction projects, environmental enhancement projects, and transportation needs in cities, counties, and cities and counties that meet certain requirements relative to provisions of housing needs in their communities, subject to voter approval. Proposed Constitutional Amendment would severely restrict the use of eminent domain. FEDERAL LEGISLATION H.R. 3 (Young) The U.S. House of Representatives approved H.R. 3 authored by Alaska Republican Don Young which provides a six -year renewal of the Federal Transportation Act. Known as SAFETEA-LU (Transportation Equity Act: A Legacy for Users), H.R. 3 authorizes the expenditure of $284 billion over six years on federal transportation programs and also sets a number of federal transportation policies. F:\users\preprint\js\legmat.doc Set for hearing 4/19/05 in the Senate Transportation and Housing Committee. Hearing canceled at request of author. 9/8/05 In Senate Appropriations Committee for third reading. Read third time and amended. SUPPORT SUPPORT WITH AMENDMENTS • 4/13/05 12/14/05 8/30/05 Set first hearing. Failed passage in Committee 3-2. Reconsideration granted. Signed by the President on Aug. 10 SEEK AMENDMENTS SUPPORT 9/14/05 4/ 13/05