BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 644
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: Caballero
VERSION: 6/9/09
Analysis by: Art Bauer FISCAL: Yes
Hearing date: June 16, 2009
SUBJECT:
Formation of a transit district
DESCRIPTION:
This bill dissolves Monterey-Transit Agency and creates the
Monterey-Salinas Transit District.
ANALYSIS:
In 1981 the Monterey Peninsula Transit, a joint powers agency
(JPA), absorbed the Salinas Transit System and renamed the
agency the Monterey-Salinas Transit Agency.
This bill :
1. Dissolves the Monterey-Salinas Transit Agency JPA (MSTA)
on July 1, 2010 and creates the Monterey-Salinas Transit
District (MSTD) as the successor agency.
2. Specifies that the jurisdiction of MSTD to be the entire
area of Monterey County, and that the cites of
Carmel-by-the Sea, Del Rey Oaks, Marina, Monterey, Pacific
Grove, Salinas, Seaside, Gonzales, Soledad, Greenfield,
King City, Sand City and the County of Monterey are members
of the district.
3. Specifies that the board of directors of MSTD shall
include a representative of the County of Monterey and each
city within the county.
4. Requires each city as a condition of board membership to
give MSTD the right of first priority for use of any local,
state, or federal funds made available to the jurisdictions
AB 644 (CABALLERO) Page 2
for public mass transportation, including Transportation
Development Act (TDA) funds.
5. Requires the County of Monterey as a condition of board
membership to contribute its share of TDA attributable to
the ratio of unincorporated population within
three-quarters of a mile of MSTD's routes to the total
population in the unincorporated portion of the county.
6. Provides that each member agency has one vote.
7. Provides that MSTD is the successor to MSTA's interests
in any property, its rights and obligations under any
contract, any outstanding indebtedness, and its rights
under any grants.
8. Stipulates that upon dissolution of MTSA, the employees
of MTSA shall be deemed to be employees of the MTSD without
any break in service or any loss or reduction of
compensation or benefits, except as may be imposed by
express action of the MSTD Board.
9. Requires the board to do all of the following:
a) Adopt an annual budget;
b) Adopt an administrative code, by ordinance, which
prescribes the powers and duties of the MSTD officers,
the method of appointment of the district employees, and
methods, procedures, and systems of operation and
management of the district;
c) Cause an audit of the financial transactions and
records of the district to be made at least annually by
a certified public accountant; and,
d) Do any and all things necessary to carry out the
purposes of this bill.
10. Requires all meetings to be subject to the Ralph M.
Brown Open Meetings Act.
11. Authorizes the Board to set fares.
12. Authorizes the MSTD to impose and collect fees for the
operation, maintenance, and improvement of transit
AB 644 (CABALLERO) Page 3
services.
13. Authorizes MSTD's board, by a majority vote, to submit
to the voters of the districts a ballot measure for
imposing a property tax, sales tax, a general tax, or a
special tax.
14. Authorizes MSTD to issue revenue bonds guaranteed by the
one of the revenue sources approved by the voters.
15. Authorizes the MSTD to promulgate a plan to fund
transportation projects.
16. Authorizes MSTD to follow federal procurement
guidelines.
COMMENTS:
1. Purpose . The purpose of this bill is to create a new
transit district in order to provide more flexibility in
the organization of transit services and the development of
local funding sources. In order to offset the reductions in
state funding for transit programs, the new district would
have the power to seek voter approval of a continuous local
funding source for public transit services, and the
authority to issue revenue bonds to finance major capital
projects, such as bus replacement.
2. Use of Transportation Development Act Funds . The
Legislature enacted the Transportation Development Act
(TDA), Senate Bill 325, Chapter 1400, Statutes of 1971, in
order to ensure "the efficient and orderly movement of
people and goods in the urban areas of the state." The TDA
authorized the boards of supervisors in each county to
impose a -percent local sales tax for transportation
purposes. All counties imposed the tax in 1972, because if
they had not, the state, under California's uniform tax law
would not have collected the one-percent local sales that
supports the general funds of cities and counties. Although
the focus of the law is the provision of transit services
in urban areas, it recognizes that rural areas have a
different mix of transportation needs. To this end,
revenues from the tax must be used for public transit
purposes in counties with a population greater than 500,000
as of the 1970 census. Counties with a population under
500,000 as of 1970, including Monterey, and cities within
AB 644 (CABALLERO) Page 4
those counties, may use the revenues for transit and for
local streets and roads. In 2007, $1.4 billion was
generated by the statewide local -percent sales tax for
transportation. About 11 percent of the funds were used for
local street and road purposes.
TDA funds are allocated by regional transportation planning
agencies, which in the urban areas are often multicounty
entities, but in rural areas are generally single counties.
Before funds can be used for local streets and roads, the
regional transportation planning agency in a rural county
must hold public hearings and make one of three findings:
There are no unmet transit needs.
There are no unmet transit needs that are
reasonable to meet.
There are unmet transit needs, including needs
that are reasonable to meet.
In counties in which there was no transit as of 1971, the
funds are apportioned within a county among the cities and
the county on the basis of population. Since 1971, when a
new transit district is formed, the district must ask all
the entities to which TDA funds have been distributed to
contribute to transit services, unless the district's
enabling specifies otherwise. This bill would require the
cities in Monterey County, as a condition to being on the
board of directors of the MSTD, to allow all their TDA
funds to be used for transit purposes. The County of
Monterey, however, would be required to contribute its
share of TDA attributable to the ratio of unincorporated
population within three-quarters of a mile of MSTD's routes
to total unincorporated population. Any TDA funds that
would remain could be used by the county for streets and
road purposes, after going through the unmet needs process.
1. Conditions related to taxes . This bill provides MSTD
authority to levy a general tax. Being a special district,
the State Constitution only permits MSTD to levy special
taxes, which require a two-thirds voter approval to be
imposed. This bill also provides MSTD the authority to levy
a property tax. As a new special district, the MSTD is
prohibited from imposing a property tax under the terms of
AB 644 (CABALLERO) Page 5
Proposition 13. Since MSTD is unable to levy a general tax
or a property tax, the committee may wish to delete the
reference to a both taxes.
2. Contracting minimums . This bill authorizes MSTD to
follow Federal Transit Administration procedures for the
procurement of goods and services. All transit agencies
that receive federal funds must adhere to the procurement
standards. The one area where the Legislature has differed
from the federal guidelines relates to the limits for
informal bidding. This committee at its June 2, 2009
hearing passed AB 116 (Beall) setting contracting
procedures for contracts between $2,500 and $100,000. That
bill requires that when soliciting bids with a value of
between $2,500 and $100,000 for purchasing supplies,
equipment, and materials and agency must obtain three
quotes either in writing or verbally that permit prices and
terms to be compared. Among the reasons for stipulating the
contracting limits in state law is that the federal
procedures allow for automatic adjustments to inflation of
the bidding limits to inflation. The Legislature has
followed the principle that establishing bidding limits in
state law rather than relying upon federal regulations
contributes to enhance fiscal discipline and ensures the
integrity of the procurement process. To ensure uniformity
in transit procurement law, the committee may wish to amend
this bill to be consistent with AB 116 (Beall).
Assembly Votes:
Floor: 77-0
Appr: 16-0
Trans: 7-0
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
June 10, 2009)
SUPPORT: Monterey-Salinas Transit Agency (sponsor)
City of Carmel-by-the-Sea
City of Marina
City of Monterey
City of Salinas
City of Seaside
Transportation Agency for Monterey County
OPPOSED: None received.
AB 644 (CABALLERO) Page 6