Regular Meeting of the MCAG Governing Board

Merced County Association of Governments Transit Joint Powers Authority for Merced County Merced County Regional Waste Management Authority

LOCATION: Meeting held via Zoom at: https://zoom.us/join Webinar ID: 810 6630 5543 Passcode: 36918 For audio only: 1-669-900-6833

Public comment may be made in advance of the meeting via email at: [email protected] or via voicemail at: (209) 330-9070 See instructions on the next page for submitting comments.

Date: Thursday, February 18, 2021

Time: Regular Meeting 3:00 p.m.

Governing Board Members Director April Hogue, Chair Mayor, City of Dos Palos Director Lloyd Pareira, Vice Chair Merced County Supervisor Director Juan Aguilar Mayor, City of Livingston Director John Cale Council Member, City of Atwater Director Rodrigo Espinoza Merced County Supervisor Director Tom Faria Mayor, City of Los Banos Director Daron McDaniel Merced County Supervisor Director Pat Nagy Mayor, City of Gustine Director Josh Pedrozo Merced County Supervisor Director Matthew Serratto Mayor, City of Merced Director Scott Silveira Merced County Supervisor

001 Welcome to the MCAG Governing Board Meeting!

AGENDA

Directors of the MCAG Governing Board and the general public receive the complete agenda packet at least 72 hours prior to each regular meeting. At least 72 hours prior to each regular MCAG Governing Board convening, a complete agenda packet is available for review on the MCAG website at www.mcagov.org. All public records relating to an open session item and copies of staff reports or other written documentation relating to items of business referred to on the agenda are on file at MCAG. Persons with questions concerning agenda items may call MCAG to make an inquiry regarding the nature of items described on the agenda.

INTERPRETING SERVICES

Interpretation services can be provided if requested at least three (3) business days in advance. Please contact Eva Garibay at (209) 723-3153 x 108 during regular business hours to request interpreting services.

Para solicitar servicios de interpretación por favor contacte por teléfono a Eva Garibay por lo menos tres (3) días antes de la junta al (209) 723-3153 x 108 durante horas de oficina.

INDIVIDUALS WITH DISABILITIES

Representatives or individuals with disabilities should contact MCAG at (209) 723-3153 at least three (3) days in advance of the meeting to request auxiliary aids or other accommodations necessary to participate in the public meeting.

REVISED INSTRUCTIONS FOR PUBLIC COMMENT

Public comment is available during the meeting and is limited to three minutes per person. To be recognized to speak from your smartphone, tablet or computer, please use the ‘raise your hand’ feature on Zoom. If you are participating by phone only, please press *9 to alert the moderator of your desire to speak. When recognized to speak, please state your name and city or community of residence for the record. For items not on the agenda, no action will be taken. If it requires action, the item will be referred to staff and/or placed on the next agenda.

Public comment is also available in advance of the meeting by email or telephone. All public comment email and voicemail received before noon on the day of the meeting will be read during the meeting. Any email or voicemail comments received after noon will be distributed to Board members and retained for the official record.

Email instructions: Email comments no longer than 500 words to [email protected]. Please note if the comments are associated with a specific item on the agenda or are general comments.

Phone instructions: You may provide comments via voicemail by calling (209) 330-9070. Recordings will be limited to three minutes. Please note if the comments are associated with a specific item on the agenda or are general comments.

002 ADDITIONAL INFORMATION

Merced County Association of Governments (209)723-3153 www.mcagov.org Transit Joint Powers Authority for Merced County (209)723-3100 www.mercedthebus.com Merced County Regional Waste Authority (209)723-4481 www.mcrwma.org Merced Data Special Services (209)723-3153 www.mcaggis.com Measure V (209)723-3153 www.mcagov.org/measurev

003 ITEM STAFF Pg. #

1. Call to Order

a. Roll Call Joy Young b. Pledge of Allegiance Chair or Designee

2. Approval of agenda

3. Public comment

Public comment is available in advance of, or during, the meeting. See instructions for public comment on page 2 of the agenda packet.

+ 4. Quarterly Financial Report Nav Bagri Pg. 10

+ 5. Citizens Advisory Committee report Shane Smith Pg. 13

The Citizens Advisory Committee is part of the Merced County Association of Governments. Its mission is to be the eyes, ears and the voice of the Citizens of Merced County and to make recommendations to the Governing Board concerning all areas of transportation.

MERCED COUNTY ASSOCIATION OF GOVERNMENTS

6. Information items:

These items are included for informational purposes. No presentation will be made by staff unless Board members have questions.

+ a. MCAG Governing Board calendar - 2021 Pg. 15 + b. Calendar of meetings, conferences, and events Pg. 17 + c. Minutes of the January 13, 2021 Technical Review Board Pg. 21 meeting + d. MCAG newsletter – February 2021 Pg. 28 + e. Quarterly Report on MCAG Board Approved Contracts Pg. 32 + f. Letter of Support for San Joaquin Rail Commission 2022 Pg. 36 Comprehensive Investment Plan Grant Application

+ Attachment 004 ITEM STAFF Pg. #

7. Consent calendar:

All consent calendar items listed below may be acted upon with "one vote" unless specifically removed for separate consideration by a member of the Board, a member of staff, or a member of the public.

+ a. Minutes of the January 21, 2021 MCAG Governing Board, Pg. 39 Transit Joint Powers Authority Board, and the Regional Waste Management Authority Board + b. Appoint Lucas Dias and Erika Segura to the Measure V Pg. 48 Citizens Oversight Committee + c. Approve and adopt the 2021 Federal Transportation Pg. 64 Improvement Program and Air Quality Conformity Analysis

8. Action items:

Action items will be considered separately by the Board. Public comment will be available during each item.

+ a. Accept the MCAG Audited Financial Statements for the Nav Bagri Pg. 136 year ending June 30, 2020 b. Appointment to the 2021 Anna Maria Fuentes Scholarship Mary-Michal Rawling Pg. 207 Selection Committee + c. Affirm One Voice delegation decision to conduct a virtual Mary-Michal Rawling Pg. 216 trip

9. Discussion items:

These items will be presented separately in order to allow Board members to ask questions or to provide staff direction.

a. Caltrans report Caltrans District 10 b. Transportation Planning and Measure V updates Matt Fell c. Regional Early Action Planning Funding Matt Fell Pg. 221

TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY

10. Information items:

These items are included for informational purposes. No presentation will be made by staff unless Board members have questions.

a. Quarterly Report on Transit Joint Powers Authority for Pg. 225 Merced County (TJPAMC) Board Approved Contracts

+ Attachment 005

ITEM STAFF Pg. #

11. Consent calendar:

None.

12. Action items:

Action items will be considered separately by the Board. Public comment will be available during each item.

+ a. Accept the TJPAMC Audited Financial Statements for the Nav Bagri Pg. 229 year ending June 30, 2020

13. Discussion items:

These items will be presented separately in order to allow Board members to ask questions or to provide staff direction.

+ a. Transit joint Powers Authority for Merced County Christine Chavez Pg. 261 monthly update: • Ridership update • Operations and Maintenance update

MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY

14. Information items:

These items are included for informational purposes. No presentation will be made by staff unless Board members have questions.

a. 2021 Merced County Regional Waste Management Pg. 265 Authority Calendar b. Solid Waste Association of North America (SWANA) Pg. 279 California Legislative Task Force 2021 Regulatory Platform + c. Quarterly Report on Merced County Regional Waste Pg. 319 Management Authority (MCRWMA) Board Approved Contracts

+ Attachment 006

ITEM STAFF Pg. #

15. Consent calendar:

None.

16. Action items:

Action items will be considered separately by the Board. Public comment will be available during each item.

a. Authorize Contract(s) for Transport and Processing of Eric Zetz Pg. 323 Recyclable Materials Services + b. Authorize Flow Control Policy Eric Zetz Pg. 327 + c. Accept the MCRWMA Audited Financial Statements for Nav Bagri Pg. 333 the Year Ending June 30, 2020 d. Proposed Agenda Item for Consideration – Illegal Stacie Guzman Pg. 363 Dumping

17. Discussion items:

These items will be presented separately in order to allow Board members to ask questions or to provide staff direction.

a. Merced County Regional Waste Management Authority Eric Zetz Pg. 369 monthly update: • Assembly Bill (AB) 332 (ESTM) • LGTE Workshop • Voluntary Offset Project • Title V • Community Collection Events • Anaergia • WASTECON • January Tonnages b. Landfill Gas to Energy Project Workshop No. 2 Eric Zetz Pg. 375

OTHER REPORTS

18. Executive Director’s report Stacie Guzman

19. Directors’ reports

+ Attachment 007

ITEM 4

009

PH: 209.723.3153 FAX: 209.723.0322 www.mcagov.org 369 W. 18th Street Merced, CA 95340

QUARTERLY FINANCIAL REPORT

FY 2020-2021 Unaudited Financial Review OVERVIEW Major Expenditures This report summarizes the overall financial positions for the MCAG’s top four expenditure categories account for about 2020-2021 fiscal year through December 31, 2020, for the 95% of total budgeted expenditures which provides a fairly Merced County Association of Governments (MCAG), Transit complete snapshot of MCAG’s expenditures at the end of the Joint Powers Authority for Merced County (TJPA), Merced second quarter. County Regional Waste Management Authority (RWA), and % Measure V. Major Expenditures Budget YTD Actual Expensed MCAG General / MPO Fund Salaries & Benefits $7,166,165 $2,854,178 40% Professional $1,347,551 $180,451 13% Services MCAG General/MPO total fund revenue is at 35% of Fixed Assets $94,429 $92,055 97% projection, and total expenditures are at 36%, as shown Legal Services $177,845 $21,430 12% below, as of December 31, 2020. - Total $8,786,989 $3,148,115

Totals Budget YTD Actual Percent Due to the Families First Coronavirus Act, salaries and Revenues $9,195,271 $3,181,594 35% benefits received a credit for employees who took time off Expenditures $9,195,271 $3,312,960 36% due to the pandemic. As such, salaries and benefits expense Gain/(loss) - ($131,366) - are slightly lower than expected. Professional services expenses are lower due to transportation studies that are Major Revenues scheduled to be completed this fiscal year but have not yet MCAG’s top four revenue sources account for about 92% of been initiated. The Fixed Assets account is almost at its total budgeted revenues, which provides a solid snapshot of maximum, with the completion of the front office security MCAG’s financial position. upgrade.

% Measure V Major Revenue Budget YTD Actual Received Measure V is Merced County's 30-year, 1/2 cent Contract Services $5,499,417 $2,234,195 41% transportation sales tax. Sales tax is remitted to the agency Federal Funding $1,400,183 $279,843 20% from the state on a fixed schedule. Currently, the State of Indirect Cost (ICAP) $1,470,186 $458,984 31% California has remitted sales tax for the month July through

October. Measure V $103,588 $57,630 56%

Total $8,473,374 $3,030,651 - Budget YTD Actual % Received MCAG’s funding sources are a combination of federal, state, Measure V $15,000,000 $7,236,475 48% and local funds. 93% of all revenues are received on a reimbursement basis. MCAG received its ICAP approval rate of 61.3% from Caltrans. Staff then billed its revenue sources to recuperate its indirect cost expenses.

Partnering for Regional Solutions 010

Quarterly Financial Report

Transit Joint Powers Authority (TJPA) Regional Waste Authority (RWA)

TJPA’s annual revenue from Local Transportation Fund (LTF), Totals Budget YTD Actual Percent State Transit Assistance (STA), and Farebox, all of which are affected by economic conditions, make up 61% of the total Revenues $12,976,735 $9,823,427 76% revenues. These funding sources have been significantly Expenditures $9,931,851 $3,126,498 31% impacted by the current COVID-19 crisis. In response to this crisis, the federal government passed a $2 trillion relief Gain/(loss) $3,044,884 $6,696,929 - program called the CARES Act. TJPA is one of the recipients of said funding and is utilizing $5.29 million in FY 20/21. Revenues are higher than what was projected for second quarter of fiscal year 20/21. Totals Budget YTD Actual Percent Revenues $14,928,370 $1,537,512 10% Major Expenditures

% Expenditures $14,928,370 $3,365,743 23% Totals Budget YTD Actual Expensed Gain/(loss) - ($1,828,231) - Equipment $350,000 $126,721 37% Maintenance Revenues Equipment $757,500 $125,365 17% Fuel/Oil Totals Budget YTD Actual Percent Staffing Cost $4,642,797 $1,246,489 27% CARES Act Funding $ 5,299,470 - - Professional $2,369,580 $823,342 35% State Funding $ 8,437,930 $1,523,881 18% Services Principal $2,170,924 $182,962 8% Local Funding $1,088,250 $13,631 1% Payment/Int Total $10,290,801 $2,504,879 - CMAQ $102,720 - -

Total $14,928,370 $1,537,512 - Overall expenditures are lower than the budgeted amount. Staff cost is in line with budget projections. In addition, bond Major Expenditures payments are scheduled in the second half of the fiscal year which compose a substantial expense portion of the budget. % Totals Budget YTD Actual The first installment of bond interest payment has been Expensed made. Professional service expenses are lower than budgeted Services Contractor $9,250,000 $1,722,017 19% due to multiple projects that are starting in the second half of the current fiscal year. Maintenance $1,150,000 $411,872 36% Equipment For more Information Fuel $1,500,000 $351,539 23%

Total $11,900,000 $2,485,428 - This summary is based on detailed information produced by the MCAG Finance Department. If you have any questions Operating costs make up 81% of the total budget about this report, please contact Nav Bagri at (209)-723-3153 expenditures. Operations and maintenance contractor costs x 154 or [email protected]. are lower than budgeted due to the temporary reduction in services. The service reduction started at the end of July Attachments: through end October due to the impact of COVID-19 related MCAG Quarterly Report and Check Register driver shortage. Measure V Allocation TJPA Quarterly Report and Check Register Maintenance/equipment costs are in line with the budget. RWA Quarterly Report and Check Register Actual fuel costs are lower than budgeted due to the savings from fueling on site as well as stable fuel prices and service reductions.

011

ITEM 5

012 ITEM

Citizens Advisory Committee Meeting Highlights

DATE Friday, February 5, 2021

Action items were approved as follows: • Minutes of the January 8, 2021 Citizens Advisory Committee meeting • 2021 Federal Transportation Improvement Program and air quality conformity analysis • Accepted the Merced County Association of Governments Audited Financial Statements for the year ending June 30, 2020 • Accepted the Transit Joint Powers Authority for Merced County Audited Financial Statements for the year ending June 30, 2020 Action item that was agreed upon by consensus; motion failed due to lack of a quorum during roll call vote: • Transit Joint Powers Authority for Merced County Audited Financial Statements for the year ending June 30, 2020 Information items: • Quarterly Financial Report • CAC Highlights of the January 8, 2021 meeting • Calendar of Meetings, Conferences and Events • Minutes of the January 21, 2021 MCAG Governing Board meeting • MCAG Newsletter – February 2021 • Quarterly Report on Merced County Association of Governments (MCAG) Board approved contracts • MCAG Letter of Support for San Joaquin Rail Commission 2022 Comprehensive Investment Plan Grant Application • Transportation Planning/Measure V update o Overall Work Program and Budget o San Joaquin Valley COG’s discussion on “Finishing Highway 99” effort • Regional Early Action Planning • Quarterly Report on TJPAMC Board approved contracts • Transit Joint Powers Authority for Merced County Monthly update o Ridership update stating that ridership is down o Operations and Maintenance update – Monday, February 8, 2021 bus service will be reinstated to full service

Announcements:

The committee discussed the importance of giving a Citizens Advisory Committee report to the MCAG Governing Board even if they do not have a quorum present at their meeting. 013 ITEM 6a

014

Merced County Association of Governments

2021

Governing Board Meeting Schedule

The 3rd Thursday of each month 3:00 pm

Meetings will be held by Zoom until action is taken to resume in-person meetings at the locations below.

Date Location

January 21 To be held via Zoom

February 18 To be held via Zoom

March 18 City of Los Banos

April 15 County of Merced

May 20 City of Livingston

June 17 County of Merced

July 15 City of Atwater

August 19 County of Merced

September 16 City of Gustine

October 21 County of Merced

November 18 City of Dos Palos

December 16 County of Merced

Partnering for Regional Solutions 015 ITEM 6b

016 ITEM 6b

Important Dates: February 2021 – December 2021 (Technical Review Board and Governing Board meeting dates and locations are subject to change) MCAG/YARTS meetings will be held via Zoom until action is taken to resume in-person meetings.

February • 2/5 Citizen’s Advisory Committee meeting, via zoom • 2/10 Technical Review Board meeting, via zoom • 2/10 Governing Board workshop, via zoom • 2/15 HOLIDAY – MCAG Office Closed • 2/18 Governing Board meeting, via zoom • 3/TBD Valley Voice Trip, Sacramento March • 3/5 Citizen’s Advisory Committee meeting, MCAG • 3/10 Technical Review Board meeting, City of Merced • 3/15 Measure V Citizens Oversight Committee meeting, MCAG • 3/18 Governing Board meeting, City of Los Banos • 3/22-23 CalCog Regional Leadership Forum, Riverside Convention Center or TBD April • 4/2 Citizen’s Advisory Committee meeting, MCAG • 4/7 YARTS Authority Advisory Committee meeting, MCAG

• 4/12 YARTS Joint Powers Authority meeting, MCAG • 4/14 Technical Review Board meeting, Los Banos Community Center Lounge

• 4/15 Governing Board meeting, Merced County Admin Building

May • 5/4-7 Virtual One Voice trip • 5/7 Citizen’s Advisory Committee Meeting, MCAG • 5/12 Technical Review Board meeting, MCAG • 5/19-21 San Joaquin Valley Regional Policy Council Conference, TBD • 5/20 MCAG Governing Board meeting, City of Livingston • 5/31 HOLIDAY – MCAG Office Closed

017 ITEM 6b

June • 6/4 Citizens Advisory Committee meeting, MCAG • 6/9 Technical Review Board meeting, City of Gustine • 6/17 MCAG Governing Board meeting, Merced County Admin Building • 6/21 Measure V Citizens Oversight Committee meeting, MCAG July • 7/2 Citizens Advisory Committee meeting, MCAG • 7/5 HOLIDAY (Observed) - MCAG Office Closed • 7/14 Technical Review Board meeting, Atwater Community Center • 7/15 MCAG Governing Board meeting, City of Atwater

August • 8/6 Citizens Advisory Committee meeting, MCAG • 8/11 Technical Review Board meeting, Los Banos Community Center • 8/19 MCAG Governing Board meeting, Merced County Admin Building

September • 9/3 Citizens Advisory Committee meeting, MCAG • 9/6 HOLIDAY - MCAG Office Closed • 9/8 Technical Review Board meeting, City of Livingston • 9/TBD Valley Voice Washington D.C. Trip, Washington D.C. • 9/16 MCAG Governing Board meeting, City of Gustine

October • 10/1 Citizens Advisory Committee meeting, MCAG • 10/13 Technical Review Board meeting, Merced County Admin Building, Room 310 • 10/18 Measure V Citizens Oversight Committee meeting, MCAG • 10/21 MCAG Governing Board meeting, Merced County Admin Building

November • 11/5 Citizens Advisory Committee meeting, MCAG • 11/10 Technical Review Board meeting, Atwater Community Center • 11/11 HOLIDAY - MCAG Office Closed • 11/14-16 Focus on the Future, Marriott, Marriott Marquis, San Francisco

018 ITEM 6b

• 11/18 MCAG Governing Board meeting, Dos Palos City/County Building • 11/25 HOLIDAY - MCAG Office Closed • 11/26 HOLIDAY - MCAG Office Closed

December • 12/3 Citizens Advisory Committee meeting, MCAG • 12/8 Technical Review Board meeting, MCAG • 12/16 MCAG Governing Board meeting • 12/23 (Observed) HOLIDAY - MCAG Office Closed • 12/24 (Observed) HOLIDAY - MCAG Office Closed • 12/30 (Observed) HOLIDAY - MCAG Office Closed • 12/31 (Observed) HOLIDAY - MCAG Office Closed

019 ITEM 6c

020 ITEM 6c

Technical Review Board MINUTES REVISED

DATE Wednesday, January 13, 2021

The regular meeting of the Technical Review Board was held on Wednesday, January 13, 2021 via teleconference/webinar and was called to order by Chair Stephanie Dietz at 12:06 p.m.

MEMBERS PRESENT Marci Barrera for Jim Brown, Chief Executive Officer of County of Merced Stephanie Dietz, City Manager of Merced, Chair Doug Dunford, City Manager of Gustine Darrell Fonseca, City Manager of Dos Palos Jose Antonio Ramirez, City Manager of Livingston (arrived at 1:02p.m.) Alex Terrazas, City Manager of Los Banos Lori Waterman, City Manager of Atwater

MEMBERS ABSENT None

STAFF PRESENT Natalia Austin, Associate Planner Nav Bagri, Finance Director Christine Chavez, Transit Manager Matt Fell, Deputy Director - Planning Eva Garibay, Public Program Specialist II Rochelle Garcia, Senior Accountant Stacie Guzman, Executive Director Stephanie Jackson, Executive Assistant Alicia Ochoa-Jones, Purchasing and Contracts Manager Kyle Loreto, Diversion Program Manager Adam Perez, Multimedia Specialist Kristina Hernandez, Human Resources /Risk Management Manager Kate Molthen, Assistant Transit Manager Mary-Michal Rawling, Public Affairs Manager Skyler Summers, Assistant Transit Manager Mauricio Torres, Assistant Planner Joy Young, Administrative Assistant II Eric Zetz, RWA Director

OTHERS PRESENT Tom Dumas, Caltrans District 10 Stephen Qualls, League of California Cities Hilda Sousa, Caltrans District 10 021

1. Call to order/roll call

Stephanie Dietz called the meeting to order and asked that roll call be taken. It was determined that a quorum was present.

2. Public comment

No public comments were received.

MERCED COUNTY ASSOCIATION OF GOVERNMENTS

3. Information items:

a. Technical Review Board calendar - 2021 b. Calendar of Meetings, Conferences and Events c. Minutes of the November 19, 2020 MCAG Governing Board meeting d. MCAG Newsletter - December e. MCAG Newsletter – Year End Review f. Second Quarter Board Summary g. Measure V Audited Financial Statements for the year ending June 30, 2020

So noted.

4. Consent calendar:

a. Minutes of the November 18, 2020 Technical Review Board meeting Lori Waterman moved to approve the consent calendar. Seconded by Darrell Fonseca. Roll call vote: AYES: Marci Barrera, Stephanie Dietz, Doug Dunford, Darrell Fonseca, Alex Terrazas, Lori Waterman NOES: None ABSENT: Jose Antonio Ramirez MOTION CARRIED UNANIMOUSLY.

5. Action items:

a. Approve the Unmet Transit Needs Finding of Fact for Fiscal Year 2021/2022

Natalia Austin summarized the request for approval of Resolution No. 2021/01-21-01 and the Unmet Transit Needs Finding of Fact for Fiscal Year 2021/2022.

Alex Terrazas moved to recommend the MCAG Governing Board: a. Adopt Resolution No. 2021/01-21-01 with a finding of fact that there are no unmet transit needs that are reasonable to meet for fiscal year 2021-2022; and b. Approve the Unmet Transit Needs FY 2021-2022 Analysis and Recommendations Report. Seconded by Doug Dunford. Roll call vote: AYES: Marci Barrera, Stephanie Dietz, Doug Dunford, Darrell Fonseca, Alex Terrazas, Lori Waterman NOES: None ABSENT: Jose Antonio Ramirez MOTION CARRIED UNANIMOUSLY. 022

b. Approve the Work Program Priorities for 2021-22

Matt Fell summarized the request to approve the nine transportation planning priorities for Fiscal Year 2021-22.

Lori Waterman moved to recommend the MCAG Governing Board approve the nine transportation planning priorities for Fiscal Year 2021-22. Seconded by Marci Barrera. Roll call vote: AYES: Marci Barrera, Stephanie Dietz, Doug Dunford, Darrell Fonseca, Alex Terrazas, Lori Waterman NOES: None ABSENT: Jose Antonio Ramirez MOTION CARRIED UNANIMOUSLY.

c. Contract Authorization for the Short Range Transit Plan

Matt Fell summarized the request for authorization to enter into a contract for a Short Range Transit Plan in an amount not to exceed $275,000.

After a lengthy discussion, Lori Waterman moved to recommend the MCAG Governing Board authorize the Executive Director enter into a contract for a Short Range Transit Plan in an amount not to exceed $159,902.00 and to choose Transportation Management & Design as the most responsive proposer. Seconded by Darrell Fonseca. Roll call vote: AYES: Marci Barrera, Stephanie Dietz, Doug Dunford, Darrell Fonseca, Lori Waterman NOES: Alex Terrazas ABSENT: Jose Antonio Ramirez MOTION CARRIED.

d. Contract Authorization for a Hosted VOIP Phone Service Provider

Nav Bagri summarized the request to authorize the Executive Director to enter into a contract for a Hosted VOIP phone service provider in an amount not to exceed $55,000 over three years.

Lori Waterman moved to recommend the MCAG Governing Board authorize the Executive Director to enter in enter into a contract for a Hosted VOIP phone service provider in an amount not to exceed $55,000 over three years Seconded by Doug Dunford. Roll call vote: AYES: Marci Barrera, Stephanie Dietz, Doug Dunford, Darrell Fonseca, Alex Terrazas, Lori Waterman NOES: None ABSENT: Jose Antonio Ramirez MOTION CARRIED UNANIMOUSLY.

6. Discussion items:

a. Transportation Planning and Measure V updates

Matt Fell gave the Transportation Planning and Measure V update and discussed the following: • Federal Transportation Improvement Program draft release will be next month • Measure V revenues still coming in higher than projected • Measure V Citizens Oversight Committee has vacancies

023

TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY

7. Information items:

None.

8. Consent calendar:

None.

9. Action items:

a. Authorize Contract for Internet Service Provider

Kate Molthen summarized the request to authorize a contract for Internet Service Provider.

Alex Terrazas moved to recommend the Transit Joint Powers Authority for Merced County Board authorize the Executive Director to enter into a five-year base contract, with two one-year extension options, for an internet service provider for the Operations and Maintenance Facility, TJPAMC administration office and the Merced Transportation Center in an amount not to exceed $163,800. Seconded by Marci Barrera. Roll call vote: AYES: Marci Barrera, Stephanie Dietz, Doug Dunford, Darrell Fonseca, Alex Terrazas, Lori Waterman NOES: None ABSENT: Jose Antonio Ramirez MOTION CARRIED UNANIMOUSLY.

b. Amend the architecture and Engineering services agreement of the Transit Joint Powers Authority for Merced County administration building remodel

Christine Chavez summarized the request for approval to amend the architecture and engineering services agreement for the Transit Joint Powers Authority for Merced County administration building remodel.

After a lengthy discussion, Lori Waterman moved to pull this item and to request that staff bring back more information at a future meeting with updated information on engineering cost and past funding allocations that include change orders. Seconded by Darrell Fonseca. Roll call vote: AYES: Marci Barrera, Stephanie Dietz, Doug Dunford, Darrell Fonseca, Jose Antonio Ramirez, Alex Terrazas, Lori Waterman NOES: None MOTION CARRIED UNANIMOUSLY.

c. Approve Transit Joint Powers Authority for Merced County Surplus Property Policy

Christine Chavez summarized the request to approve the Transit Joint Powers Authority for Merced County Surplus Property Policy.

024

Darrell Fonseca moved to recommend the Transit Joint Powers Authority for Merced County approve the Transit Joint Powers Authority for Merced County Surplus Property Policy. Seconded by Doug Dunford. Roll call vote: AYES: Marci Barrera, Stephanie Dietz, Doug Dunford, Darrell Fonseca, Jose Antonio Ramirez, Alex Terrazas, Lori Waterman NOES: None MOTION CARRIED UNANIMOUSLY.

10. Discussion items:

a. Transit Joint Powers Authority for Merced County monthly update:

Christine Chavez presented the Transit Joint Powers Authority for Merced County update and discussed the following topics: • Ridership update – decrease on fixed route • Operations and Maintenance – have resumed reduced service due to contractor shortage of staff • Introduction of Assistant Transit Manager Skyler Summers

MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY

11. Information items:

a. Landfill Gas to Energy Project update

So noted.

12. Consent calendar:

None.

13. Action items:

None.

14. Discussion items:

a. Merced County Regional Waste Management Authority monthly update

Eric Zetz presented the Merced County Regional Waste Management Authority monthly update and discussed the following topics: • Creek Fire update • Tonnage reports for November • Tonnage reports for December • SB 1383 • New requirements for treated wood waste in 2021- SB 68 (Galgiani)

025

OTHER REPORTS

15. Executive Director’s report

Stacie Guzman gave the Executive Director’s Report and discussed the following topics: • COVID-19 mitigation - teams are doing well with virtual meetings/workload • Governing Board Orientation – virtual orientation for new board members with positive reviews • New Board members – staff will reach out for head shots and bios for website • Citizens Oversight Committee – has vacancies

16. Caltrans report

Hilda Sousa presented the Caltrans report.

17. Oral report – League of California Cities update

Stephen Qualls presented the League of California Cities update.

18. Oral report - Jurisdictions

Lori Waterman thanked staff for their hard work.

Doug Dunford discussed CMAQ projects.

Alex Terrazas announced Los Banos’ new Mayor Tom Faria and stated that a new council member will be appointed to take Mayor Faria’s vacated seat.

Marci Barrera discussed distributions of COVID-19 vaccines and welcomed Josh Pedrozo as the District 2 Supervisor.

Stephanie Dietz introduced Derek Parker as the new Fire Chief and stated that the grant project gift bar was going well.

THERE BEING NO FURTHER BUSINESS, THE MEETING WAS ADJOURNED AT 1:48 p.m.

026 ITEM 6d

027 ITEM 6d

369 W. 18th Street Merced, CA 95340 (209)723-3153 www.mcagov.org

February 2021 COVID-19 INFORMATION AND UPDATE: The Merced County Department of Public Health is closely following the guidance of the Centers for Disease Control and Prevention and California Department of Public Health on the novel (new) virus that is causing an outbreak of pneumonia illness. Coronavirus is a type of virus that causes diseases of varying severities, ranging Natural disasters, like earthquakes, happen from the common cold to more serious respiratory unexpectedly and can create major disruptions that disease. For more information, including the latest last long after the event is over. Emergency situations updates please visit: www.countyofmerced.com/ may force individuals and families to quickly find coronavirus shelter or evacuate from their homes, workplaces, or other settings. By being prepared and planning ahead, MCAG Board Elects New Californians can quickly take life-saving actions to keep Governing Board Chair them safe in an earthquake. It’s important for all In January, the MCAG households and businesses in Merced County to Governing Board prepare a disaster plan; identify safe spots to take elected Director April cover in places where they live, work, and play; Hogue to serve as the familiarize themselves with emergency escape routes; Board Chair for 2021. develop a communication plan; and have an emergency supply kit readily available. To ensure all Director Hogue, 28th Californians are earthquake prepared, the California Mayor of the City of Governor’s Office of Emergency Services (Cal OES) Dos Palos, grew up developed Earthquake Warning California, which is the locally, the daughter of nation’s first statewide earthquake warning system the late longtime high that provides several seconds of warning to mobile school biology teacher device users in the area before shaking occurs. Roswell Smith and Earthquake Warning California offers no-cost Carol Pera of Dos Palos. earthquake warning resources, including: She attended Dos Palos ● MyShake App. A mobile app that can be High School and graduated from Fresno State earning downloaded for mobile devices at no-cost from a BA in Industrial Arts with an emphasis on Graphic Google Play the Apple App Store. Design and Advertising. After college, she moved to Seattle to pursue a career in graphic design. Director ● Android Earthquake Alerts. An earthquake warning Hogue worked as a designer for a contract food system available to any new or updated Android company and later obtained a vocational education devices credential from CSU Sacramento. In 2001, she ● Wireless Emergency Alerts (WEAs). Text-like returned to Dos Palos, teaching graphic arts until messages from the government during emergency 2010. She is currently a CTE instructor with Fresno situations. Unified School District at Cambridge High School in Earthquake Warning California resources are designed Southeast Fresno. to notify users to quickly take protective action such as Director Hogue is an accomplished musician who to drop, cover, and hold on. To learn more about performs in a duo called “It’s Just Us.” She has a Earthquake Warning California, the no-cost warning grown daughter and son. On November 8, 2016, alert tools, and additional resources available to the Director Hogue became the first female mayor of public, visit earthquake.ca.gov. Dos Palos and was re-elected in 2020.

028 MCAG FEBRUARY MEETINGS MCAG Accepting applications for the 02/04 One Voice Delegation Meeting, 3:00 pm 2021 Anna Maria Fuentes Scholarship 02/05 CAC Meeting, 8:30 am MCAG is now accepting applications for the 2021 Anna Maria Fuentes Scholarship. The MCAG Governing 02/15 President’s Day, MCAG offices closed Board and staff established the Anna Maria Fuentes 02/10 Technical Review Board meeting, 12:00 pm Scholarship program in memory and tribute to Anna 02/11 One Voice Delegation Meeting, 3:00 pm Maria Fuentes, Grants Program Manager, colleague and friend. 02/18 Governing Board meeting, 3:00 pm The 2020 scholarship will be awarded by the MCAG 02/26 AMF Scholarship applications due, 5:00 pm Governing Board in the amount of $1,000. Recipients 02/27 Delhi Community Cleanup, 8:30 am - 2:00 pm, may receive additional annual awards of up to $1,000 www.co.merced.ca.us/3205/Community-Cleanup for three years, or until their degree is achieved, whichever is less. The cumulative maximum is $4,000. Please note: All MCAG meetings will be held via Submission of annual scholastic documentation may Zoom until further notice. The call-in number and be required by MCAG. passcode will be located on the cover of each agenda. Graduating high school seniors from a high school in To access the agendas for the meetings listed, please Merced County with a grade point average of 3.8 or visit: www.mcagov.org/agendacenter higher who have demonstrated a high level of For more information about these meetings, please participation in extracurricular activities, including contact Eva Garibay at: [email protected] positions of leadership, are eligible to apply. Applicants must also include an explanation of scholarship need in a personal essay. Interested applicants can access the scholarship application and instructions at: www.mcagov.org/Scholarship. Applications can be mailed to MCAG, 369 W. 18th Street, Merced and must be received by 5:00pm on Friday, February 26, 2021. The selected scholarship recipient will be notified by May 1, 2021. General inquiries may be directed to Eva Garibay via email at [email protected] or phone at 209-723-3153 x 108.

Highway 59 Landfill Billy Wright Landfill

7040 N. Highway 59 17173 S Billy Wright Road Merced, CA 95348 Los Banos, CA 95348

Phone: 209-723-4481 Phone: 209-826-1163

Monday - Saturday Monday - Saturday: 7:00 am - 3:30 pm 7:00 am - 3:30 pm

For more information about Regional Waste Authority please visit: www.mcrwma.org or download the ‘Merced Recycles’ app on the App store and Google play.

029 February 2021 - Update Measure V, Merced County’s ½ cent transportation sales tax, was HAVE YOU SPOTTED passed by Merced County voters with 71% approval in November MEASURE V AT WORK 2016. In an effort to keep the community informed about this transformative 30 year measure, MCAG will feature monthly IN MERCED COUNTY? updates in this newsletter. You can also visitwww.mcagov.org/ measureV for the latest! Snap a picture and send it to [email protected] The 30-year Measure, which commenced in April of 2017, allocates or tag us on Facebook, 50% of all its revenue to the cities of Merced, Los Banos, Gustine, Instagram and Twitter Atwater, Livingston and Dos Palos, along with the County of Merced, to pay for local transportation projects including roads, bike paths, and @mcag_merced sidewalks. Regional transportation projects located on both the east or use the hashtag and west sides of the county receive 44% of the funding with five percent reserved for public transit purposes. MCAG receives one #MeasureV_mcag percent of the monies to administer all fiduciary and reporting requirements. Over the past four years, local jurisdictions have made steady progress on Measure V projects around the County. Merced County has completed several road improvement projects to extend the longevity of its streets, roads, and bridges. Recently, Merced County completed the River Road Rehabilitation project. The $966,565 project was mostly funded with Measure V Funds. The County allocated approximately $830,535 of local Measure V dollars towards this project. The project consisted of placing an asphaltic overlay on approximately three miles of roadway on River Road from Kelley Road to Keaton Road in Stevinson and applying a new layer of asphalt to the deteriorating road. This treatment extends the life of the road for 10-15 years. The benefits of this new overlay include improved ride quality, corrected rutting, impermeability, and reduced noise levels.

Contact: Mary-Michal Rawling, MPA, Public Affairs Manager (209) 723-3153 x 119 or [email protected]

030 ITEM 6e

031

PH: 209.723.3153 FAX: 209.723.0322 www.mcagov.org 369 W. 18th Street Merced, CA 95340

ITEM 6e

DATE: February 12, 2021

TO: MCAG Governing Board

FROM: Alicia Ochoa-Jones, Purchasing and Contracts Manager

RE: Information: Quarterly Report on Merced County Association of Governments (MCAG) Board Approved Contracts

SUMMARY

Enclosed for your review and information is the MCAG list of Governing Board approved contracts and their status. The list is as of December 31, 2020 and all contracts are open.

REQUESTED ACTION

For information only.

BACKGROUND

In April 2019, staff introduced the concept of this reporting tool as a means to improve transparency with contract management, and to provide the board with progress updates from the first step of board-approval to final step of contract closeout. Staff provided the most recent update in November of 2020.

If you have any questions regarding this staff report, please contact Alicia Ochoa-Jones at 209.723.3153 x164 or at [email protected].

PAST ACTION TAKEN

No previous action was taken as this is was an information only item.

NEXT STEPS

These updates will be provided to the Governing Board on a quarterly basis.

FISCAL IMPACT

None.

032

REQUESTED ACTION

For information only.

ATTACHMENT

MCAG GB Approved Contract Status as of 12.31.2020.

033 MCAG Governing Board Approved Contracts Status as of 12.31.2020

VENDOR AND SERVICE STATUS START DATE END DATE CONTRACT Expense REMAINING BALANCE Apex Technology Management, Inc. - Multi-location IT Support and Maintenance Open 7/1/2019 6/30/2022 $ 419,365.44 $ 207,115.00 $ 212,250.44 CalVans - Vanpool Project Open 3/1/2019 2/28/2021 $ 85,000.00 $ 33,114.31 $ 51,885.69 CVIN, LLC dba Vast Networks - MCAG Internet Service Provider Open 10/1/2020 9/30/2023 $ 42,000.00 $ 3,000.00 $ 39,000.00 Applied Research Associates (Dynatest North America Inc ) - Pavement Management System Open 1/2/2018 10/1/2021 $ 501,381.60 $ 440,813.62 $ 60,567.98 Fehr & Peers - Merced County Westside Commuter Bus Study Open 4/27/2020 6/30/2021 $ 99,340.00 $ 46,209.88 $ 53,130.12 Fortis Telecom - Telephone Services/Communication Service Open 3/16/2020 3/15/2021 $ 29,705.52 $ 23,157.01 $ 6,548.51 Heritage General - Construction of Front Office Security Upgrades Open 11/1/2019 9/5/2020 or until project completion $ 129,409.35 $ 122,939.14 $ 6,470.21 Hinderliter, De Llamas & Associates - Transactions Tax Audit and Information Services Open 6/1/2020 6/30/2022 $ 88,400.00 $ 2,400.00 $ 86,000.00 Hudson Henderson & Company - Financial and Compliance Auditing Services Open 7/1/2019 12/31/2021 $ 205,540.00 $ 114,310.00 $ 91,230.00 Janitek Cleaning Solution - MCAG Office Janitorial Services Open 1/2/2020 12/31/2021 $ 102,052.08 $ 25,926.35 $ 76,125.73 KNN Public Finance - Financial Advisor Services for Transportation Sales Tax Measure Open 10/2/2017 9/30/2021 $ 58,500.00 $ 15,666.40 $ 42,833.60 LSC Transportation Consultants, Inc. - YARTS 2021 Strategy Study Open 10/1/2020 11/1/2022 $ 100,000.00 $ 19,817.50 $ 80,182.50 San Joaquin COG - dibs TDM Services* Open 7/1/2020 6/30/2022 $ 150,000.00 $ 37,419.47 $ 112,580.53 San Joaquin COG - dibs Vanpool Project Open 7/1/2019 6/30/2021 $ 85,000.00 $ 48,643.21 $ 36,356.79 Spriggs, Inc. - Copier and Maintenance Services Open 1/22/2018 12/31/2022 $ 95,000.00 $ 56,060.33 $ 38,939.67 Townsend Public Affairs - Federal Lobbying Services Open 10/2/2017 9/30/2021 $ 87,498.00 $ 68,739.00 $ 18,759.00

*SJCOG bills Caltrans directly for these funds. SJCOG and MCAG have an LOU in place and SJCOG regularly reports program progress to MCAG staff.

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035 036 037 ITEM 7a

038 ITEM 7a

MCAG Governing Board Transit Joint Powers Authority Board Regional Waste Management Authority Board

REGULAR MEETING MINUTES

DATE Thursday, January 21, 2021

The regular meeting of the Merced County Association of Governments Governing Board held on Thursday, January 21, 2021 via teleconference/webinar was called to order by Vice Chair Lloyd Pareira at 3:00 p.m.

DIRECTORS PRESENT MCAG STAFF PRESENT Director Lloyd Pareira, Vice Chair Nav Bagri, Finance Director Director Juan Aguilar Christine Chavez, Transit Manager Director John Cale Blake Dunford, Assistant Planner Director Rodrigo Espinoza Matt Fell, Deputy Director - Planning Director Tom Faria Stacie Guzman, Executive Director Director April Hogue Emily Haden, Legal Counsel Director Daron McDaniel Stephanie Jackson, Executive Assistant Director Pat Nagy Alicia Ochoa-Jones, Purchasing and Contracts Manager Director Josh Pedrozo Kyle Loreto, Diversion Programs Manager Director Matthew Serratto Kristina Meraz, HR & Risk Management Manager Director Scott Silveira Skyler Summers, Assistant Transit Manager Adam Perez, Multimedia Specialist DIRECTORS ABSENT Mary-Michal Rawling, Public Affairs Manager None Mauricio Torres, Assistant Planner Joy Young, Administrative Assistant II GUESTS AND MEMBERS OF THE PUBLIC Eric Zetz, RWA Director Tom Dumas, Caltrans District 10 Rene Gutierrez, Citizens Advisory Committee Marlon Regisford, Caltrans District 10

* (“Arrived after roll call”)

039

1. Call to order/roll call/pledge of allegiance

Vice Chair Pareira called the meeting to order and led the pledge of allegiance. Roll call was taken, and it was determined that a quorum was present.

2. Approval of agenda

Director Espinoza moved to approve the January 21, 2021 MCAG Governing Board meeting agenda. Seconded by Director Silveira. This item was agreed upon by consensus as follows: AYES – Directors Aguilar, Cale, Espinoza, Faria, Hogue, McDaniel, Nagy, Pareira, Pedrozo, Serratto, Silveira NOES – None MOTION CARRIED UNANIMOUSLY.

3. Public Comment

Rene Gutierrez stated that the “Take out Tuesday” event went well last week and that there are now several restaurants participating: 1 – Winton 2 – Atwater 1 – Santa Nella 3 – Los Banos 10 - Merced

4. Citizens Advisory Committee report

Rene Gutierrez gave the Citizens Advisory Committee report.

At this time, Vice Chair Pareira introduced incoming board members Josh Pedrozo, John Cale, Tom Faria, Matthew Serratto, and Pat Nagy and welcomed them to the MCAG Governing Board.

Director Pedrozo thanked the board and stated that he looks forward working together and he also acknowledged the efforts of the previous board members.

Director Serratto thanked the board and stated that he looks forward to working with each other.

Director Nagy thanked the board and stated that he looks forward to working with each other.

Director Cale thanked the board and stated that he looks forward to working with each other.

Director Espinoza welcomed the incoming board members and stated that he looks forward to the new year and the opportunities it will bring.

040 MERCED COUNTY ASSOCIATION OF GOVERNMENTS

5. Information items:

a. MCAG Governing Board Calendar - 2021 b. Calendar of Meetings, Conferences and Events c. Minutes of the November 18, 2020 Technical Review Board meeting d. MCAG Newsletter – December 2020 e. MCAG Newsletter – 2020 Year End Review f. Second Quarter Board Summary

6. Consent calendar:

a. Minutes of the November 19, 2020 MCAG Governing Board, Transit Joint Powers Authority Board, and the Regional Waste Management Authority Board meeting b. Approve the Measure V Citizens Oversight Committee appointment

Director McDaniel moved to approve the consent calendar. Seconded by Director Aguilar. Roll call vote: AYES – Directors Aguilar, Cale, Espinoza, Faria, Hogue, McDaniel, Nagy, Pareira, Pedrozo, Serratto, Silveira NOES – None MOTION CARRIED UNANIMOUSLY.

7. Action items:

a. Election of Chair for remainder of FY 2020-21

Stacie Guzman discussed the vacancy for Chair requesting a nomination for the remainder of FY 2020- 21.

Director McDaniel moved to nominate and appoint Director April Hogue as Chair for the remainder of FY 2020-21. Seconded by Director Pedrozo. Roll call vote: AYES – Directors Aguilar, Cale, Espinoza, Faria, Hogue, McDaniel, Nagy, Pareira, Pedrozo, Serratto, Silveira NOES – None MOTION CARRIED UNANIMOUSLY.

b. Adopt Resolution No. 2021-01-21-01 and approve the Unmet Transit Needs Finding of Fact for Fiscal Year 2021/2022

Natalia Austin summarized the request for approval of Resolution No. 2021/01-21-01 and the Unmet Transit Needs Finding of Fact for Fiscal Year 2021/2022.

041 Director Silveira moved to: a. Adopt Resolution No. 2021/01-21-01 with a finding of fact that there are no unmet transit needs that are reasonable to meet for fiscal year 2021-2022; and b. Approve the Unmet Transit Needs FY 2021-2022 Analysis and Recommendations Report. Seconded by Director Cale. Roll call vote: AYES – Directors Aguilar, Cale, Espinoza, Faria, Hogue, McDaniel, Nagy, Pareira, Pedrozo, Serratto, Silveira NOES – None MOTION CARRIED UNANIMOUSLY. c. Approve the FY 2021-22 Overall Work Program Priorities

Matt Fell summarized the request to approve the nine transportation planning priorities for Fiscal Year 2021-22.

Director McDaniel moved to approve the nine transportation planning priorities for Fiscal Year 2021- 22. Seconded by Director Aguilar. Roll call vote: AYES – Directors Aguilar, Cale, Espinoza, Faria, Hogue, McDaniel, Nagy, Pareira, Pedrozo, Serratto, Silveira NOES – None MOTION CARRIED UNANIMOUSLY. d. Contract Authorization for a Hosted VOIP Phone Service Provider

Nav Bagri summarized the request to authorize the Executive Director to enter into a contract for a Hosted VOIP phone service provider in an amount not to exceed $55,000 over three years.

Director McDaniel moved to authorize the Executive Director to enter into a contract for a Hosted VOIP Phone Service Provider in an amount not to exceed $55,000 over three years. Seconded by Director Oliveira. Roll call vote: AYES – Directors Aguilar, Cale, Espinoza, Faria, Hogue, McDaniel, Nagy, Pareira, Pedrozo, Serratto, Silveira NOES – None MOTION CARRIED UNANIMOUSLY. e. Accept the Measure V Audited Financial Statements for the year ending June 30, 2020

Nav Bagri summarized the request to accept the Measure V Audited Financial Statements for the year ending June 30, 2020.

Director Silveira moved to accept the Measure V Audited Financial Statements for the year ending June 30, 2020. Seconded by Director Faria. Roll call vote: AYES – Directors Aguilar, Cale, Espinoza, Faria, Hogue, McDaniel, Nagy, Pareira, Pedrozo, Serratto, Silveira NOES – None MOTION CARRIED UNANIMOUSLY. 042 f. 2021 Appointments to Regional Boards and Commissions

Director Silveira moved appoint Directors to the following positions for the 2021 year: 1. California Association of Councils of Government a. Director Josh Pedrozo (2021) b. Director April Hogue (2019) - Alternate 2. San Joaquin Joint Powers Authority a. Director Rodrigo Espinoza b. Director Josh Pedrozo - Alternate 3. San Joaquin Valley Regional Policy Council a. Director John Cale (City), Daron McDaniel (County) b. Director Scott Silveira - Alternate 4. CalVans a. Director Tom Faria b. Director Pat Nagy - Alternate Seconded by Director McDaniel. Roll call vote: AYES – Directors Aguilar, Cale, Espinoza, Faria, Hogue, McDaniel, Nagy, Pareira, Pedrozo, Serratto, Silveira NOES – None MOTION CARRIED UNANIMOUSLY.

8. Discussion items:

a. Caltrans report

Marlon Regisford gave the Caltrans report and discussed the following: • SR 99 Corridor update – Caltrans working on regional strategy and will work with the board on future planning. • Caltrans Sustainable Transportation Planning Grant – Call for projects underway and applications deadline is Friday, February 12, 2021 • California Transportation Plan workshops are ongoing • Freight Plan to be discussed in the SR 99 Corridor summit • Highway 140 Plainsburg Road in Planada – working on a safety project study report • Highway 152 Pioneer Road in Los Banos – project study report moving along • Maintenance crews have been working to remove/clean up homeless encampments • Federal Land Access call for projects with a May 27, 2021 deadline • California State Parks applications for grants starts on February 4, 2021

Director Silveira asked about Highway 59 Mariposa Creek Bridge south side work and would like an update. He also asked about south bound Highway 33 in Santa Nella, no right-hand turn lane and it is a safety issue and would like an update.

Director Espinoza wanted to express his gratitude to Caltrans and the Caltrans Director and Tom Dumas for getting the stop signs put in at Highway 140/Plainsburg Road.

Director Serratto asked about homeless encampment clean-up and thanked Caltrans for their efforts. He also asked about the possibility of a Park and Ride in Merced and for an update on the one-way portion of 13th Street and R Street.

043

b. Transportation Planning and Measure V updates

TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY

9. Information items:

None.

10. Consent calendar:

a. Approve letter of support for transit coordination at new Rescue Mission location on Cone Avenue in Merced b. Authorize Contract for internet Service Provider c. Approve Transit Joint Powers Authority for Merced County Surplus Property Policy

Director McDaniel moved to approve the consent calendar. Seconded by Director Hogue. Roll call vote: AYES – Directors Aguilar, Cale, Espinoza, Faria, Hogue, McDaniel, Nagy, Pareira, Pedrozo, Serratto, Silveira NOES – None MOTION CARRIED UNANIMOUSLY.

11. Action items:

None.

12. Discussion items:

a. Transit Joint Powers Authority for Merced County monthly update:

MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY

13. Information items:

None.

044

14. Consent calendar:

None.

15. Action items:

None.

16. Discussion items:

a. Merced County Regional Waste Management Authority monthly update

b. Landfill Gas to Energy Project update

Eric Zetz discussed the Landfill Gas to Energy Project next steps including holding a series of informational workshops. Staff will poll for preferred meeting date/times and will schedule the selected time on board calendars.

OTHER REPORTS

17. Executive Director’s report

Stacie Guzman discussed the following topics: • Welcomed new board members – looking forward to working with everyone • Board Orientation – held virtually this year with positive reviews so far • Remodel for transit administration building on next agenda • Measure V Implementation Plan • Regional funds spending for housing – RHNA • Landfill Gas to Energy Project workshops coming up • Contract authorization for the transport and processing of recyclables • One Voice planning meeting next week

18. Directors’ report

Director McDaniel welcomed the new board members and encouraged them to reach out and get the history on the Landfill Gas to Energy Project prior to voting, Director McDaniel stated that he liked the virtual Board Orientation and would like to see this information open to the public.

Director Aguilar welcomed the new board members and is looking forward to working with everyone.

Director Faria thanked everyone for the welcome and is looking forward to working with everyone. Director Faria asked for an update on the progress of the tipping fees. Stacie Guzman stated that there will be an update before the end of the fiscal year. 045 Director Hogue thanked the board for the nomination as Chair and looks forward to a productive year.

Director Nagy thanked the board for the warm welcome and thanked staff for a well-presented agenda.

Director Silveira congratulated new board members and encourages new board members to reach out to staff on the Landfill Gas to Energy Project to catch up on its history.

Director Pedrozo thanked the board for a warm welcome and thanked staff for the Board Orientation binders and videos. Director Pedrozo is excited to work with staff again and is looking forward to a productive year.

Director Serratto is prepared for getting stuff done and thanked the board for the welcome.

Director Pareira congratulated Chair Hogue and is excited to see what the new year brings.

CLOSED SESSION

19. Public comment

None.

20. RWA: CONFERENCE WITH REAL PROPERTY NEGOTIATORS – Cal. Gov. Code 54956.8

Closed Session start time: 5:09 p.m.

Property: APNs 078-190-005, 078-200-090, 078-200-037, and 078-200-036 Agency Negotiator: Marty Yerrick and Clarence Oliveira Negotiating Parties: Merced County Regional Waste Management Authority, Fernando R. Patricia R. Barba, and the Albert Mangini Trust Under Negotiation: Price and Terms of Payment

Closed Session end time: 5:36 p.m.

Report out from closed session: staff was given direction.

There being no further business of the MCAG Governing Board, the meeting was adjourned at 5:37 p.m.

______/s/______Joy Young Administrative Assistant II

046 ITEM 7b

047

PH: 209.723.3153 FAX: 209.723.0322 www.mcagov.org 369 W. 18th Street Merced, CA 95340

ITEM 7b

DATE: February 12, 2021

TO: MCAG Governing Board

FROM: Mary-Michal Rawling, Public Affairs Manager

RE: Action: Measure V Citizens Oversight Committee Appointments

SUMMARY

This item is a request to appoint representatives from the building industry and an ethnic community group to the Measure V Citizens Oversight Committee, as specified by the Measure V Expenditure Plan.

REQUESTED ACTION

Appoint Lucas Dias to the Measure V Citizens Oversight Committee as outlined in the Measure V Expenditure Plan to serve the remainder of a two-year term through May 2021 and appoint Erika Segura to the Measure V Citizens Oversight Committee to serve the remainder of a two-year term through May 2022.

BACKGROUND

The Measure V Citizens Oversight Committee (COC) was established in the language of the Measure V Expenditure Plan that was passed by voters in November 2016. The COC is tasked with the review of financial and performance audits, reports from member agencies, annual receipts and other documents necessary to assess the program’s consistency with the Expenditure Plan. The committee also prepares an annual report to inform the public how Measure funds were spent.

The COC consists of 14 representatives approved by the Governing Board; one is nominated by each of the member jurisdictions (seven in total), with the remaining seven seats reflecting representation from various interest groups. Committee members serve two-year terms and may serve no more than eight years on the committee in total. COC members must be U.S. citizens, 18 years of age or older who reside in Merced County, and are not public employees at any state, county or local city agency, or an elected official at any level of government.

PAST ACTION TAKEN

May 18, 2017: Governing Board appoints first slate of COC representatives. March 19, 2020: Governing Board appoints bike/ped/transit and agriculture representatives April 16, 2020: Governing Board reappoints environmental advocacy group representative May 21, 2020: Governing Board reappoints Dos Palos and Atwater representatives June 18, 2020: Governing Board reappoints Los Banos representative January 21, 2021: Governing Board appoints Merced representative

048

DISCUSSION

There are currently five vacant seats on the COC. An application was received last month from Lucas Dias for the seat representing the building industry. Mr. Dias resides in the community of Hilmar and works in the road and pavement construction industry. His application and resume are attached. The seat for the building industry representative has been vacant since January 2020.

An application was received this month from Erika Segura for the seat representing an ethnic community group. Ms. Segura resides in the City of Merced and has worked most recently for Communities for a New California. Her application and resume are attached. Of note, Ms. Segura followed up in an email to staff indicating that she incorrectly marked ‘yes’ on the application to the question regarding whether she was a public employee or elected official. She confirmed in her message that she is neither employed by a public agency nor elected to office which means that she is eligible for appointment to the COC. The seat for the ethnic group representative has been vacant since September 2019.

FISCAL IMPACT

There is no fiscal impact associated with these appointments.

REQUESTED ACTION

ATTACHMENTS

Application and resume – Lucas Dias Application and resume – Erika Segura Email communication – Erika Segura Measure V Citizens Oversight Committee Roster

049 050 051 052 053 054 055 056 057

Erika Segura SKILLS

264 E 10th St, Merced, CA 95341 CPR Certified (209) 355-8269 Food Handler Certified [email protected] Fluent in Spanish

Strong communicator

Seeking an entry level position that will allow me to utilize my Enthusiastic skills, learn new skills and be a great asset to the company. Physical stamina Team-player Flexible

EDUCATION References California State University-Fresno— Undergraduate Monica Macias August 2019 - Present Merced College General Counselor -Criminology-Law Enforcement [email protected] (209) 381-6478

Buhach Colony High School, Atwater, CA —High School August 2015 - June 2019

WORK EXPERIENCE

Communities For New California, Merced, CA

— Team Lead October 2020 - November 2020

Managed a team of twenty. Made daily agendas and daily reports, did quality control, created a strong team bond, attended staff meetings, and strived to meet our daily contact goal.

—Canvasser/Phone-Banker February 2020 - October 2020 Canvassed and phonebanked in order to educate and inform residents about the 2020 Census and multiple election campaigns.

Miguel Orozco Farm Labor, Atwater, CA— Field Work June 2019 - August 2019 Picked tomatoes from various fields and assisted with preparing the tomatoes for transport.

058 059 060 061 MEASURE V CITIZENS OVERSIGHT COMMITTEE Per the Transportation Expenditure Plan, terms are 2 years (May to May). If a seat is vacated, the new appointee will serve the remainder of the term in progress. No member may serve more than eight years on the Committee. REAPPOINTED REAPPOINTED FIRST TERM FIRST TERM FOR 2 YEAR FOR 2 YEAR Terms expire in POSITION NAME BEGINS EXPIRES TERM TERM EXPIRES TERM TERM EXPIRES TERMED OUT even/odd years 1 Building Industry vacant 5/18/2019 5/18/2021 odd 2 Agriculture Industry Paul Danbom 5/18/2020 5/18/2022 May 2028 even 3 Ethnic Community Group vacant 5/18/2020 5/18/2022 even 4 Major Private Sector Employer vacant 5/18/2019 5/18/2021 odd 5 Bike/Pedestrian or Transit Lisa Kayser-Grant 5/18/2019 5/18/2021 May 2028 odd 6 Audit, Finance or Budget Professional Demetrios Tatum 5/18/2017 5/18/2019 7/18/2019 5/18/2021 May 2025 odd 7 Environmental Advocacy Group Jean Okuye 5/18/2017 5/18/2018 4/19/2018 5/18/2020 5/18/2020 5/18/2022 May 2025 even 8 County of Merced Jim Cunningham 5/18/2017 5/18/2019 7/18/2019 5/18/2021 May 2025 odd 9 City of Atwater Ron Daugherty 5/18/2018 5/18/2020 May 2026 even 10 City of Dos Palos Lynn Payne 5/18/2018 5/18/2020 May 2027 even 11 City of Gustine vacant 5/18/2019 5/18/2021 odd 12 City of Livingston vacant 5/18/2019 5/18/2021 odd 13 City of Los Banos John Cates 5/18/2018 5/18/2020 6/18/2020 5/18/2022 May 2024 even 14 City of Merced Don Bergman 5/18/2020 5/18/2022 May 2028 even

062 ITEM 7c

063

PH: 209.723.3153 FAX: 209.723.0322 www.mcagov.org 369 W. 18th Street Merced, CA 95340

ITEM 7c

DATE: February 12, 2021

TO: MCAG Governing Board

FROM: Ty Phimmasone, Senior Planner

RE: Action: Approve the 2021 Federal Transportation Improvement Program and Air Quality Conformity Analysis

SUMMARY

Per federal and state requirements, MCAG must prepare and adopt the 2021 Federal Transportation Improvement Program (FTIP) and the Air Quality Conformity Analysis. MCAG’s 2021 FTIP does not include new programming and only includes existing programming that was previously awarded/approved – in total over $250 million in transportation funding. The adopted FTIP must be submitted to the state by March 1 so they can compile all regionally-adopted FTIP’s for submission to the federal government.

REQUESTED ACTION

Adopt the 2021 Federal Transportation Improvement Program and corresponding Air Quality Conformity Analysis.

BACKGROUND

Per federal and state requirements, the federally-designated Metropolitan Planning Organization (MPO) must develop and adopt the Federal Transportation Improvement Program (FTIP). The FTIP, which is updated every two years, is a four-year list of financially-constrained transportation projects, which are federally-funded or are required due to their regional significance.

The MPO will need to perform an air quality conformity analysis and make a conformity finding for the FTIP based on current State and Federal air quality conformity regulations. Subsequently, the conformity analysis and/or finding on the FTIP must be approved by the State and Federal agencies. Failure to meet air quality requirements could result in a lapse of federal funding.

The importance of FTIP programming is addressed in the following: 1. Federal funds must be included in the FTIP before a project sponsor can access the funds; 2. Funds must be programmed in the FTIP in the year you will request funding approval via submittal of a Request for Authorization (RFA); 3. If the first or second requirement is not met, then local agencies cannot access federal funding.

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The FTIP shall include projects to be carried out in the first four years and may include additional years for information purposes. The FTIP shall include transportation projects programmed for funding under the following categories:

• Regionally-significant projects; • State Transportation Improvement Program (STIP); • State Highway Operation and Protection Program (SHOPP); • Congestion Mitigation and Air Quality (CMAQ); • Federal Transit Administration (FTA) Program; • CARES Act; • Highway Safety Improvement Program (HSIP); • Highway Bridge Program (HBP); • Active Transportation Program (ATP); • Highway Infrastructure Program (HIP); and • Other federally-funded grants/programs.

For each project, the FTIP shall include:

• Sufficient descriptive material to identify project phase; • Estimated total cost; • Amount of Federal funds, by category, to be obligated per year; • Responsible agency.

The FTIP shall include a financial plan and be financially constrained by year. “Financially constrained” refers to programming with “reasonably-available” funding.

PAST ACTIONS TAKEN

August 16, 2018: Governing Board adopted 2019 FTIP.

NEXT STEPS

MCAG is required to develop and adopt the FTIP and corresponding air quality conformity analysis and finding. FTIP data management is performed through the Caltrans-CTIPS computerized database.

The 2021 FTIP, which includes Federal Fiscal Years (FFY’s) 2020/21 through 2023/24, carries over programming from the latter two years of the 2019 FTIP.

The body of the Draft 2021 FTIP document is attached. The full Draft 2021 FTIP, with appendices, and the Conformity Analysis documentation are available on the MCAG website: http://www.mcagov.org/215/Federal-Transportation-Improvement-Progr

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These documents were released for public review on January 18, 2021. Comments are due by 5 p.m. on February 17, 2021.

A remote-access public hearing is scheduled on February 3, 2021 at 2:00 p.m.

After considering the comments, the 2021 FTIP and the Air Quality Conformity Analysis will be considered for adoption, by resolution, by the Merced County Association of Governments at a regularly scheduled meeting to be held on February 18, 2021. The documents will then be submitted to Caltrans.

Caltrans combines all individual MPO FTIP’s into a single 2021 Federal Statewide Transportation Improvement Program (FSTIP) document, which then undergoes a 30-day review and comment period. Following the review and comment period, Caltrans submits the Final 2021 FSTIP to the Federal Highway Administration (FHWA). FHWA then goes through its 30-day review period. The final approval of the 2021 FSTIP is estimated to be in mid-April 2021.

If you have any questions regarding this staff report, please contact Ty Phimmasone at 723.3153 x 123 or [email protected].

The Citizens Advisory Committee and the Technical Review Board concur with the requested action.

FISCAL IMPACT

None. The 2021 FTIP does not include new programming and only includes existing programming that was previously awarded/approved.

REQUESTED ACTION

Adopt the 2021 Federal Transportation Improvement Program and corresponding Air Quality Conformity Analysis.

ATTACHMENT

Final Draft 2021 FTIP (body of document) Draft Resolution No. 2021/02-18-01

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2021

Federal Transportation Improvement Program Fiscal Years 2020/2021 to FY 2023/2024

The preparation of this report Final Draft for Adoption has been financed in part by the State of California Department of Transportation, the Federal Highway Administration, the Federal Transit Administration, and the member agencies of the Merced County Association of Governments

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Merced County Association of Governments Governing Board

April Hogue, Mayor City of Dos Palos

Josh Pedrozo, Supervisor Matthew Serratto, Mayor County of Merced City of Merced

Daron McDaniel, Supervisor John Cale, Council Member County of Merced City of Atwater

Lloyd Pareira, Supervisor Pat Nagy, Mayor County of Merced City of Gustine

Scott Silveira, Supervisor Juan Aguilar, Mayor County of Merced City of Livingston

Rodrigo Espinoza, Supervisor Tom Faria, Mayor County of Merced City of Los Banos

Stacie Guzman Executive Director

Technical Review Board

Stephanie Dietz, City Manager, Chairperson City of Merced

Lori Waterman, City Manager Alex Terrazas, City Manager City of Atwater City of Los Banos

Darrell Fonseca, City Manager Doug Dunford, City Manager City of Dos Palos City of Gustine

Jose Antonio Ramirez, City Manager Jim Brown, County Executive Officer City of Livingston County of Merced

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Citizens Advisory Committee

Jose Delgadillo, Chairperson Citizen at Large

Paul Ward Ursula Stock Commerce/Finance Citizen at Large

Bryan Kroeger Roscoe (Jack) Jackson Construction Citizen at Large

Patricia Ramos‐Anderson Yamilet Valladolid Economic Development Healthcare

Jean Okuye Mike Jensen Agriculture Water/Irrigation

Paul Villarreal Jr. Michael Beltran Goods Movement Engineering

Brian Pena Jaswinder Singh Small Business Real Estate

Michelle Symes‐Thiara Rene Gutierrez Education Citizen‐at‐Large

Shane Smith Citizen‐at‐Large

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Table of Contents

Summary 1

Introduction 2 Merced County: Part of the Central San Joaquin Valley 2 Central San Joaquin Valley 2

The Federal Transportation Improvement Program Process & Requirements 6 Federal TIP Process and Development 7 Consistency with Other Documents 10 FTIP Certification by Board Resolution 10

Air Quality Conformity 11

Financial Plan 12 Financial Constraint and Funding Assumptions 12 Project Priority 13 Year of Expenditure (YOE) Dollars 14 Total Project Costs 14 Operations and Maintenance Costs 14

Transportation Performance Measures 19

Environmental Justice 43

Project Listings by Mode 47

FTIP Project Form Users Guide 48

Highway Projects 49 State Transportation Improvement Program (STIP) Proposition 1B SR‐99 Bond: Freeway Mitigation State Highway Operations and Protection Program (SHOPP)

Local Projects 52 Regionally‐Significant Priority Projects Safety: Highway Bridge Program (HBP) & Highway Safety Improvement Program (HSIP) Congestion Mitigation and Air Quality (CMAQ)

Mass Transportation 57 Transit Joint Powers Authority (TJPA) for Merced County: “The Bus” Yosemite Area Regional Transportation System (YARTS)

Non‐Motorized Transportation 60 Active Transportation Program (ATP)

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Appendices

Appendix A: Resolution and Certification 62

Appendix B: Glossary of Terms, Fund Types, and Air Quality Exempt Codes 66

Appendix C: FSTIP / FTIP Amendment and Administrative Modification 71 Procedures

Appendix D: FSTIP/FTIP Administrative Modification Approval Authority 75 Delegated by Caltrans to MCAG

Appendix E: Public Participation Plan (PPP) Process for FTIP 78

Appendix F: Expedited Process Selection Procedures (EPSP) 81

Appendix G: Transportation Control Measure (TCM) Projects 84

Appendix H: Projects Non‐Exempt from Air Quality Conformity 86

Appendix I: CTC Adoption of 2020 STIP 88

Appendix J: Grouped Projects Listings 91

Appendix K: Annual Obligation Report for FFY 2019/20 96

Appendix L: 2021 FTIP Financial Revenue and Expenditure Tables 98

Appendix M: 2021 FTIP CMAQ Cost‐Effectiveness Documentation 105

Appendix N: TIP Environmental Justice Analysis 115

Appendix O: Public Notice 130

Appendix P: 2021 FTIP Comments Received / Responses to Comments 133

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Summary

A Federal Transportation Improvement Program (FTIP) is a multi‐modal list of capital improvement programs to be implemented over a four‐year period. If there are any projects programmed in the FTIP with funding included in the fifth year or subsequent years, (FY24/25, or beyond) this is for information only. Biennially, Merced County Association of Governments (MCAG), in cooperation with member jurisdictions and the California State Department of Transportation (Caltrans), prepares an FTIP for all highways, streets, roads, aviation, transit and guideway projects in Merced County that use federal or state funding.

The FTIP program is specifically required to include:

 Any Merced County local transportation project that is awarded federal funds (on the federal‐aid route); and

 Any Merced County transportation project that is considered regionally significant (regardless of the funding source).

MCAG committees (Citizens Advisory Committee [CAC], Technical Review Board [TRB], and the Governing Board [GB]) review the FTIP for compliance with state and federal requirements.

The Regional Transportation Improvement Program (RTIP) is the official submittal to the state (Caltrans) and the California Transportation Commission (CTC) of projects that the Merced Region proposes to implement within the next five years. Projects not listed in this formal RTIP submittal will not be considered for funding. Once projects are approved by the CTC and programmed in the State Transportation Improvement Program (STIP), the projects are then incorporated into the FTIP for ultimate inclusion into the California Federal State Transportation Improvement Program (FSTIP). Amendments to the Merced County FTIP are made when projects submitted by local agencies are subsequently awarded funds contingent upon all requirements being met. This document makes revisions to the STIP that constitutes full compliance with federal legislation.

The FTIP establishes a systematic approach to programming capital improvement projects (CIP) over a four‐year term. Projects identified in the first 4‐years of the FTIP are identified as the quadrennial element. The quadrennial element is required to be fiscally constrained in the Federal Clean Air Act Regulations for MPO areas that do not meet the national ambient air quality standards. The FTIP is subject to continual review and modifications to assure timely delivery of programs and projects.

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Introduction

Merced County: Part of the Central San Joaquin Valley

Merced County is comprised of approximately 2,000 square miles of flat land in the northern portion of the San Joaquin Valley. Merced County is 30 miles wide and is 60 miles in length.

Merced County is the home of six incorporated cities (Atwater, Dos Palos, Gustine, Livingston, Los Banos, Merced) and the remaining unincorporated area of Merced County (Figure 1). According to the California Department of Finance, the population of Merced County is 283,521 (January 2020).

Merced County agricultural commodities grossed about $3.2 billion in 2018. Merced County’s top five farm commodities (Milk, Almonds, Chickens, Cattle, and Sweet Potatoes) made up a gross production value of about $2.3 billion.

Merced County lies between Stanislaus County to the north and Fresno and Madera Counties to the south, and is bounded by Santa Clara and San Benito Counties to the west and by Mariposa County to the east (Figure 2).

The Central San Joaquin Valley

The Central San Joaquin Valley is vast (27,500 miles in size) and consists of eight counties: San Joaquin, Stanislaus, Merced, Madera, Fresno, Tulare, Kings, and the western two thirds of Kern (Figure 2). These eight valley counties share the largest air basin in the United States and collaborate with the San Joaquin Valley Air Pollution Control District (SJV Air District).

The eight San Joaquin Valley Transportation Planning Agencies and the SJV Air District have entered into a Memorandum of Understanding (MOU) to ensure a coordinated transportation / air quality planning approach (Figure 3).

The MOU defines a cooperative process designed to achieve compliance with the air quality conformity provision of the multi‐year Federal Surface Transportation Act.

A second MOU exists with the eight county Councils of Governments (COGs) to ensure a coordinated, cooperative transportation planning process on issues of mutual concern. One of the transportation planning/programming efforts being addressed in a cooperative effort is the preparation and presentation of the federally required Transportation Improvement Program (FTIP).

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FTIP Process and Requirements

The FAST (Fixing America’s Surface Transportation) Act requires that each Metropolitan Planning Organization (MPO) prepare a FTIP. The FTIP is a financially constrained, multi‐ modal transportation planning program document that is developed by the MPO through its member agencies and in cooperation with state and federal agencies.

The FTIP is a compilation of project lists from the State Transportation Improvement Program (STIP), State Highway Operations and Protection Program (SHOPP), transit and other federal–aid programs, and regionally significant projects. The FTIP is composed of three parts:

 Part one is a priority list of projects and project segments by phase to be carried out in a four‐year period;

 Part two is a financial plan that demonstrates how the FTIP can be implemented. The financial plan is also required to indicate all public and private resources and financing techniques that are expected to carry out the program.

 Part three is the Expedited Process Selection Procedures (EPSP) that allows the movement of projects from year‐to‐year within the first four fiscal years (quadrennial element) of the FTIP, as needed.

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Federal TIP Development Process

MCAG prepares the FTIP in cooperation with its member agencies, transit operator, state and federal agencies, and public involvement.

Federal TIP Development Process

Regional Bid for State Caltrans Bid for State Programs (RTIP) Programs (PSTIP)

California Transportation Commission (CTC)

State Transportation Improvement Program (STIP) adopted by the CTC

State Funding Approved

Metropolitian Planning Caltrans Organizations (MPO)

Urbanized & Non-Urbanized Area Projects & Other Projects Requiring Federal Action

MPO Federal State Incorporates Federal State Transportation ------Transportation Improvement Program Improvement Program (FTIP) MPO FTIP (FSTIP)

US Department of Transportation: Federal Highway Administration (FHWA) Federal Transit Administration (FTA)

Federal Funding Approved

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The following flowcharts guide our committee and Board members and the public through the 2021 FTIP update process.

Caltrans combines all individual MPO FTIP’s into a single 2021 Federal Statewide Transportation Improvement Program (FSTIP) document, which then undergoes a public review and comment period. Following the review and comment period, Caltrans submits the Final 2021 FSTIP to the Federal Highway Administration (FHWA). FHWA then goes through its review period. The final approval of the 2021 FSTIP is estimated to be in April 16, 2021.

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The following illustration lays out the importance, process, and timing of making amendments to the FTIP in terms of programming projects, obligating the funding, and authorization to begin reimbursable work.

Please note that the above addresses major FTIP changes. With Caltrans’ delegation of authority to approve FTIP/FSTIP Administrative Modifications, which was approved on December 18, 2019, MCAG could make limit‐defined cost/program changes to existing projects/programs and amend them into the FTIP/FSTIP. The limit for the FTIP/FSTIP Administrative Modification is the LESSER of 50% of project cost or $20 million. Also, there is no limit on adding funds to grouped project listings.

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As federal‐aid programs are developed, notifications are distributed to eligible local agencies and the public, informing them of the appropriate manner in which projects may be submitted for consideration. The Congestion Mitigation Air Quality (CMAQ) program selection process is available on MCAG’s website (http://www.mcagov.org/218/Congestion‐Mitigation‐and‐Air‐Quality). The state undertakes a public participation process during development and adoption of its State programs. When the California Transportation Commission (CTC) approves Merced County transportation projects into the STIP, MCAG is required to modify the FTIP.

Consistency with Other Documents

Merced County Association of Governments’ 2021 FTIP is consistent with the following:

1. 2018 Regional Transportation Plan;

2. 2020 State Transportation Improvement Program (STIP);

3. 2020 State Highway Operations and Protection Program (SHOPP);

4. State Implementation Plan (SIP) for Air Quality.

FTIP Certification by Board Resolution

Merced County Association of Governments’ Board Resolution certifies:

1. FTIP is consistent with the metropolitan planning regulations per Title 23 CFR 450;

2. FTIP is consistent with the 2018 Regional Transportation Plan (RTP);

3. FTIP is financially‐constrained, and the financial plan affirms the availability of funding;

4. FTIP meets air quality conformity, and conforms to the applicable SIP’s;

5. FTIP does not interfere with the timely implementation of the TCM’s;

6. FTIP complies with the performance‐based planning requirements;

7. Completion of public participation was carried out in accordance with MCAG’s Public Participation Plan (Appendix E).

This language is also identified on the actual Board Resolution in Appendix A.

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Air Quality Conformity

The federal Clean Air Act Amendments (CAAA) of 1990 require that transportation improvement programs conform to applicable portions of the State Implementation Plan (SIP) for air quality. Section 176(c) of the CAAA requires that air quality be given priority in program implementation as required by Section 176(d).

Merced County is designated a non‐attainment area for ozone and particulate matter greater than 2.5 microns (PM2.5); and has a maintenance plan for PM10. As such, the FTIP must satisfy federal requirements to consider Transportation Control Measures (TCM) projects that would reduce mobile and stationary emissions adequate to demonstrate conformity with the SIP for air quality. These TCM projects are set forth in plans. Multiple Air Planning Basin plans in California cumulatively address air quality standards statewide. Each Air Planning Basin addresses their own local SIP(s) by pollutant as adopted by the California Air Resources Board and approved by state and federal Environmental Protection Agencies (EPA).

In nonattainment and maintenance areas, the Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) must be able to find that the FTIP conforms to the adopted air quality SIP and that priority has been given to timely implementation of TCMs identified in the SIP. Projects included in the FTIP cannot show a negative effect on air quality emissions budgets as identified in the SIP. MCAG processes an air quality conformity analysis/determination documenting that local air planning issues and programs demonstrate that TCMs have been identified through a thorough planning process; that TCMs have received the necessary federal, state and local commitment to ensure implementations. TCM commitments are maintained in the RTP and project funds programmed in the FTIP.

Current TCM’s CTIPS # Project Description 205‐0000‐0042 Transportation Demand Management / Alternative Modes Program 205‐0000‐0268 Vanpooling Program

The Air Quality Conformity Analysis, which supports the finding that the 2021 FTIP meets the air quality conformity requirements for ozone and particulate matter, is provided as an accompanying document.

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Financial Plan

Financial Constraint and Funding Assumptions

The FTIP by law must be financially constrained and include a financial plan demonstrating how projects can be delivered while the existing transportation system is being adequately operated and maintained. Only projects for which construction and operation funds can reasonably be expected may be included.

Delays in environmental clearance approvals continue to be normal considerations in project programming.

The revenues and expenditure charts on the following pages demonstrate currently available revenues to finance the projects contained with the FTIP. The federal and state revenue projections are based on the best available data as provided by Caltrans. MCAG uses established estimates through its project selection process to allocate all available revenues against eligible projects.

Revenue and expenditure summaries are further defined by the funding assumptions below:

 The California State Department of Transportation (Caltrans) provides revenue and apportionment estimates for the following programs: . Regional Surface Transportation Program (RSTP) / Surface Transportation Block Grant Program (STBGP); . Congestion Mitigation and Air Quality (CMAQ);

 The California State Department of Transportation (Caltrans) provides programming of projects for the following programs: . State Transportation Improvement Program (STIP); . Trade Corridor Enhancement Program (TCEP); . State Highway Operations and Protection Program (SHOPP); ‐ Bridge Preservation; ‐ Collision Reduction; ‐ Mandates; ‐ Mobility; ‐ Roadside Preservation; ‐ Roadway Preservation; ‐ Emergency Response; . SHOPP Minor Program; . Highway Safety Improvement Program (HSIP);

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. Highway Bridge Program (HBP); . Emergency Relief (ER) Program; . Active Transportation Program (ATP); . Highway Infrastructure Program (HIP); and . CARES Act for capital investments.

 For transit agencies, a financial capacity and certification of assessment that assures their continued ability to operate pursuant to FTA Circular 7008.1 (Appendix A). Because transit grants are on an annualized cycle, projects shown beyond 2020/21 are “projections”. As the transit funding grant amounts become available, actual figures are amended into the FTIP consistent with the actual grants.

 The local fund commitments are reflected in each entity’s capital improvement program and adopted annually by local resolution. Local revenue figures are local match requirements for state and federal funding.

 Projects with funding in the prior year and without programmed funding in fiscal years 2020/2021 through 2023/2024 are listed for information purposes only.

These projects were part of the 2021 FTIP and are listed either because: 1) They are close to being completed; or 2) They only have funding for the environmental phase; or 3) They have the potential to be funded.

All items for information purposes are listed to ensure accurate reimbursements.

 MCAG and Stanislaus Council of Governments (StanCOG) have entered into a Memorandum of Understanding (MOU) to coordinate transit services. The 2010 US Census included Merced County’s City of Livingston and Community of Delhi in the Turlock Urbanized Area (UZA). As an urbanized area, the Turlock UZA gets apportioned FTA‐5307 transit funding. The Transit Joint Powers Authority for Merced County (TJPAMC) provides service to Livingston and Delhi and, therefore, will receive a portion of Turlock’s UZA funding. StanCOG is the designated recipient for the Turlock Urbanized Area. Per MOU, MCAG will receive an FTA‐5307 apportionment fund from StanCOG that reflects the transit service TJPAMC provides to Livingston and Delhi.

Project Priority

In accordance with FAST Act federal requirements, MCAG establishes the following priorities: 1) All projects (as a group) shown in the first year (20/21) of the four‐year element shall have first priority; 2) All projects (as a group) shown in the second year (21/22) of the four‐year element shall have second priority; 3) All projects (as a group) shown in the third year (22/23) of the four‐year element shall have third priority; and 4)

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all projects (as a group) shown in the fourth year of the four year element (23/24) shall have fourth priority. MCAG first received approval of its Expedited Project Selection Procedure (EPSP) on October 18, 2007. The EPSP met the requirements of the Federal Regulations, 23 Code of Federal Regulations (CFR) Part 450 and Title 23 of the United State Code. All projects in the first four years of the MCAG 2021 FTIP were considered selected and could be advanced within the four‐year period of the 2021 California Federal Statewide Transportation Improvement Program (FSTIP) subject to the conditions set by the EPSP. An EPSP, for the new four‐year period of 2020/21‐2023/24, is included in Appendix F of this document as part of the 2021 FTIP submittal to Caltrans.

As a non‐attainment area, TCM projects, consistent with the approved SIP, will be implemented in a timely fashion.

Year of Expenditure (YOE) Dollars

Per title 23, Section 450.324(h), project costs are shown in year of expenditure (YOE) dollars. This means that a project shown as $1 million in 2021 is expected to cost $1 million in that year, in inflated dollars. If a project’s cost increases at the time of obligation, the agencies that control funding decisions must take further action to approve increased funding amounts.

Total project costs have been calculated to Year of Expenditure (YOE) dollars using a cost escalation methodology. The project sponsor uses the cost escalation percentage of 3% per year. Caltrans‐sponsored STIP projects are calculated to YOE in the 2020 adopted STIP.

Total Project Costs

Project phases are required to be 100% funded before the phase can be programmed.

Because the project revenue “need” from federal, state, and local sources is not identified, there are project phases that cannot be included within the first four years of the financially constrained 2021 FTIP and will have to be added in the future. The 2021 FTIP includes projects that do not have phases programmed within the quadrennial element or outside the quadrennial period (due to insufficient revenue).

Operations and Maintenance Costs

Streets, Roads, and Bridges

The responsibility to maintain pavement conditions of local streets and roads resides with each local agency. For road maintenance on the local road network, this region

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depends on state‐exchanged Regional Surface Transportation Program (RSTP) monies, Highway Users Tax Account (HUTA) monies, Senate Bill 1 (SB1) Road Maintenance and Rehabilitation Account (RMRA) funds, regional tax measure (Measure V) dollars, and other local funds. Federal RSTP monies are annually exchanged for state dollars and are distributed to local agencies to use on local road maintenance (with priority given to preventative maintenance on fed‐aid roadways). Even though monies from gas taxes have been unstable revenue streams due to less fund generation at the pumps (less driving due to COVID and more efficient vehicles), HUTA still remains a primary streets and roads funding source for local agencies. SB1 RMRA funds are also essential to roadway upkeep and are distributed to local agencies on a monthly basis. Measure V includes local share funding that can be used for street and road maintenance. Other local funds have also been used to fund maintenance of streets and roads.

As the result of the 2018 California Statewide Local Streets and Roads Needs Assessment, it was determined that Merced County has a Pavement Condition Index (PCI) of 56. This means that the average pavement condition for the system is “At Risk,” and would require thin asphalt overlays to repair the pavement. Note that this assessment was done for the region’s entire pavement system, which was inclusive of local streets and roads that are not considered Federal‐aid highways. Typically, major streets and roads, which are part of the federal‐aid system, are in much better condition than local roads, because they are designed to withstand more traffic and heavier loads. Since these represent the major travel corridors as matters of public safety and mobility, these streets and roads were prioritized for rehabilitation and/or maintenance.

The region has about $29 million annually for street and road maintenance, which includes: HUTA = $9.9 million; RSTP = $3.6 million; SB 1 RMRA = $9.5 million; Measure V Local Share = $6 million.

Local agencies try to make use of innovation and new technologies to make the most of their limited street/road maintenance funds. Since full reconstruction is costly, innovative maintenance strategies (fabric overlays; cape seals‐ scrub and thin overlays) are employed to extend life at reduced cost, which allows local agencies to treat more roadways. Also, local agencies have shared knowledge and collaborated on projects (to reduce bid costs). In utilizing existing technology, a countywide pavement management system, using a new collection of pavement condition data, has been developed and will assist local agencies make cost‐effective decisions.

As shown on the following, regularly‐updated Measure V projects map (https://www.mcagov.org/315/Measure‐V), local funds have been utilized on street and road maintenance and rehabilitation, as well as other infrastructure improvements. From the extensive list are notable, completed roadway projects:

 City of Atwater reconstruction of principal arterial Winton Way and major collector Fruitland Avenue;

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 City of Merced reconstruction of principal arterial streets: M Street and R Street;

 City of Merced cape seals of major collector streets: Canal Street, 26th Street, El Portal Drive, and Merced Avenue; and

 Merced County rehabilitation of major collector roads: Sandy Mush Road, Bradbury Road, Henry Miller Avenue, Palm Road, Indiana Road, Shanks Road, Bloss Road, Beachwood Drive, and Ashby Road.

Measure V projects are identified on the annual reports (https://www.mcagov.org/316/Reports‐Plans‐Documents).

It is important to note that Winton Way and R Street are on the National Highway System (NHS) and were in fair to poor condition prior to their reconstruction. These roadway activities work towards the State achieving the PM2 target.

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The County of Merced had been successful with obtaining Highway Bridge Program (HBP) funds to replace their bridges, but that situation may change with high HBP demand and low funding apportionments being available. Also awarded HBP funding, the City of Merced made repairs to the NHS bridges on G Street and M Street.

For maintenance on the state highway and bridge system, funds have been identified in the SHOPP programs to tend to these needs. The responsibility of maintaining the state highway and bridge system rests with Caltrans. In line with the TIP requirement to operate and maintain the Federal‐aid highways, Caltrans and the local agencies have prioritized the maintenance of these more‐traveled (highways, arterials, and major collectors) streets/roads, and bridges. Within the 2021 FTIP, the SHOPP dedicates $148,418,000 of revenue to address maintenance for the state‐managed infrastructure.

Transit Service

For transit operations and maintenance, the Transit Joint Powers Authority (TJPA) for Merced County and Yosemite Area Regional Transportation System (YARTS) transit services rely heavily on Federal Transit Administration (FTA) Grants, State Transit Assistance (STA) funds, Local Transportation Fund (LTF) monies, farebox revenues (cannot be used to match FTA grants), and partnership agreements (i.e. TJPAMC with City of Turlock; YARTS with Yosemite National Park, AMTRAK, and surrounding counties).

TJPA is the recipient of FTA 5307, FTA 5311, Local Transportation Fund (LTF), and State Transit Assistance (STA) funds for operations. Annually, these amounts total an estimated $11.9 million. Combined with farebox and other revenues, TJPA operates “The Bus” transit service. TJPA has worked with the University of California, Merced to provide coordinated service to the students and faculty. Last year, Merced College approved a tuition increase to pay for free transit service for their students. With COVID‐19 and its impacts, ridership had significantly dropped and Federal CARES Act provided operating assistance.

Towards progress on the State’s mandate to roll out zero emission buses by July 2023, the TJPA will be utilizing awarded $2,000,000 FTA 5339(b), $3,112,000 Transit Intercity Rail Capital Program (TIRCP), LTF, STA, State of Good Repair (SGR), State voucher program, and Regional Measure V monies to purchase eight electric buses, on‐board technology, and charging stations. The TJPA will put $410,778 SGR for engineering and electrical infrastructure at TJPA’s Operations and Maintenance Facility for these electric buses. TJPA will explore building charging infrastructure for up to 20 electric buses, and more grant opportunities to help fund further electrification infrastructure and capital.

YARTS receives its funding from FTA 5311(f), Local Transportation Funds from multiple counties, service agreement with the National Park Service, service agreement with AMTRAK, and farebox revenues. With these funds, shown in the FTIP to be about $2.6

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million annually, YARTS operates the intercity transit service to Yosemite National Park and surrounding areas (Counties of Merced, Mariposa, Mono, and Tuolumne). YARTS, via an expanded service contract with Yosemite National Park, is providing more transit runs. YARTS has received funding from FresnoCOG for providing expanded service to Fresno along State Route (SR‐) 41.

YARTS was awarded $4,335,000 FTA 5339(b). Along with the State voucher program and reserve funding, YARTS will be purchasing six electric buses.

Operations and maintenance for these transit services are fully covered by these revenue sources. If these funding levels decrease and/or costs increase, then the level of transit service is reduced (assessing costs/riderships for routes and determining necessary cuts to service) to match the available levels of funding. These are currently being explored with the development of the TJPA and YARTS short range transit plans.

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Transportation Performance Measures

Federal rules require that the Federal Transportation Improvement Program (FTIP) “be designed such that once implemented, it makes progress toward achieving the performance targets established under § 450.306(d).” Also, the FTIP “shall include, to the maximum extent practicable, a description of the anticipated effect of the FTIP toward achieving the performance targets identified in the metropolitan transportation plan, linking investment priorities to those performance targets.”

The Moving Ahead for Progress in the 21st Century Act (MAP‐21, 2012) established new requirements for metropolitan planning organizations (MPOs) to coordinate with transit providers, set performance targets, and integrate those performance targets and performance plans into their planning documents by certain dates. The most recent federal transportation act, Fixing America’s Surface Transportation Act of 2016 (FAST Act), carries forward the Performance Based Planning. Beginning in 2018, federal rules required that state departments of transportation and MPOs implement federal performance measures. In response, FHWA and FTA worked with state and regional agencies to identify performance measures that meet the requirements.

States and MPOs worked with FHWA to implement a performance‐based approach to planning and programming, including transportation performance measures, setting targets, reporting performance, and programming transportation investments directed towards achieving the systemwide goals in safety, infrastructure condition, reliability, congestion, freight movement, environmental sustainability, and reduced project delivery delays. The federal performance measures are split into three groups under the title “Performance Management” (PM):

 PM 1: Safety;

 PM 2: Pavement and Bridges on the National Highway System; and

 PM 3: System Reliability, Freight, Congestion, and Air Quality.

Caltrans is directly responsible for annually submitting performance targets and periodic progress reports to Federal agencies. PM 1 targets must be set by August 31st annually, while PM 2 and PM 3 must be set by May 20th annually. MPOs such as MCAG are required to establish targets for the same performance measures on all public roads in the MPO planning area within six months after the State establishes their targets: February for PM 1, and November for PM 2 and 3. The MPO may either: 1.) support these targets by agreeing to plan and program projects to contribute to the statewide performance targets for each measure; or 2.) establish its own targets for its metropolitan planning area. Furthermore, MPOs must incorporate these short‐range

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targets into their planning process, including the FTIP and the RTP. MCAG has supported (“elected to adopt”) the Caltrans statewide targets for all three PM categories.

There were also performance management requirements set for transit capital assets. The Federal Transit Administration (FTA) issued the TAM Final Rule (49 CFR §625 et seq.), effective October 1, 2016, to implement MAP‐21’s asset management provisions. This final rule mandates a National TAM System, defines ‘State of Good Repair’ (SGR), and requires transit providers to develop TAM plans. The Metropolitan Transportation Planning Final Rule (23 CFR §450.206) outlines the timelines and processes by which states, MPOs, and transit providers must coordinate in target setting. These transit requirements established four Transit Asset Management (TAM) performance measures:

 Revenue Vehicle: Percentage of Revenue Vehicles (by type) that exceed the Useful Life Benchmark (ULB);

 Non‐Revenue Vehicle: Percentage of Non‐Revenue Vehicles (by type) that exceed the Useful Life Benchmark (ULB);

 Facilities: Percentage of Facilities (by group) that are rated less than 3.0 on the Transit Economic Requirements Model (TERM) scale; and

 Infrastructure: Percentage of track segments (by mode) that have performance restrictions.

On July 19, 2018, the FTA published the Public Transportation Agency Safety Plan (PTASP) Final Rule (49 CFR §673.15) regulating how Chapter 53 grantees would have to implement federally mandated safety standards. The rule’s effective date is July 19, 2019, and the compliance date is July 20, 2020. Considering the extraordinary operational challenges presented by the COVID‐19 public health emergency, FTA issued a Notice of Enforcement Discretion effectively extending the PTASP compliance deadline from July 20, 2020, to December 31, 2020. The MPO’s initial transit safety targets are set within 180 days of receipt of the safety performance targets from the transit agencies. The first FTIP amendment, to be approved on or after July 20, 2021, is required to include the MPO’s transit safety targets. See FTA’s COVID‐19 FAQs page for more information about the Notice.

The final rule specifically requires transit agencies employing federal funds to develop a safety plan and annually self‐certify compliance with that plan. The National Public Transportation Safety Plan identifies four performance measures that must be included in the transit agency safety plans: fatalities, injuries, safety events, and system reliability. Each transit agency must make its safety performance targets available to MPOs to assist in the planning process, and coordinate, to the maximum extent practicable, with the MPO in selecting regional safety targets.

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PM 1: Safety

FHWA’s Safety Performance Final Rule (Safety PM) established five performance measures as an implementation of the Highway Safety Improvement Program (HSIP). These performance measures were designed to achieve the Federal safety goal “to achieve a significant reduction in traffic fatalities and serious injuries on all roads.” These measures are expressed as five‐year rolling averages in five categories.

 Number of Fatalities;

 Rate of Fatalities per 100 million Vehicle Miles Traveled (VMT);

 Number of Serious Injuries;

 Rate of Serious Injuries per 100 million Vehicle Miles Traveled (VMT); and

 Number of Non‐motorized Fatalities and Serious Injuries.

Caltrans is required to establish and report the annual statewide targets by August 31st each year. The MPO’s shall establish or support those statewide targets within six months (by the following February) of Caltrans’ announcement of the targets.

MCAG has supported and will continue to support the Caltrans statewide safety targets. MCAG’s 2020 Target Reporting documentation will be included within this document.

2021 Statewide Targets 5‐Year Rolling Percent Reduction Performance Target Data Source Average Target (2021) (2021) Number of Traffic Fatalities FARS 3,624.8 2.9% Rate of Fatalities per 100 million FARS & HPMS 1.044 2.9% VMT Number of Serious Injuries SWITRS 15,419.4 1.3% Rate of Serious Injuries per 100 SWITRS & 4.423 1.3% million VMT HPMS Number of Non‐motorized FARS & SWITRS 4,340.8 2.9% (Fatalities) Fatalities and Serious Injuries 1.3% (Serious Injuries)

It should be noted that the “serious injuries” category now includes “suspected serious traffic injuries.”

The following table applies the 2020 Statewide Target percentages to Merced County’s regional averages.

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Merced County Safety Targets for 2021 5‐Year Rolling Percent Numerical Data Performance Target Average (2014‐2018) Reduction Target Source for Merced Region* (2021) (2021) Number of Traffic FARS 57.6 2.9% 55.9 Fatalities Rate of Fatalities per FARS & 2.08 2.9% 2.0 100 million VMT HPMS Number of Serious SWITRS 151 1.3% 149.0 Injuries Rate of Serious SWITRS & 5.46 1.3% 5.4 Injuries per 100 HPMS million VMT Number of Non‐ FARS & 30.6 2.9% (Fatalities) 30 motorized Fatalities SWITRS 1.3% (Serious and Serious Injuries Injuries) *FARS and HPMS data sets for 2019 not available at this time

California did not meet their PM1 targets for 2018, specifically for rate of fatalities, number of serious injuries, and rate of serious injuries. While this does not have an immediate impact on planned projects, it will affect future HSIP funding. In April 2022, all local agencies applying for HSIP funding will be required to have a Local Road Safety Plan (LRSP). Merced County was awarded $72,000 in LSRP funding to prepare their plan.

Safety Project Highlights

MCAG is committed to the support and achievement of the statewide safety targets. Safety has been one of the highest priorities in our recent projects. Our region has made safety improvements throughout all jurisdictions and has many more planned in this 2021 FTIP. The following are examples of programmed safety projects, organized by primary funding source, and a closer look at three major projects.

Highway Safety Improvement Program (HSIP)

The Highway Safety Improvement Program is designed to directly address safety. The program’s stated purpose is to “achieve a significant reduction in traffic fatalities and serious injuries on all public roads, including non‐State‐owned public roads and roads on tribal land.” Successful project applications promise to reduce fatalities and injuries. The program is designed to focus local efforts on locations/corridors with the greatest safety needs and countermeasures with lower costs.

 In the City of Atwater, intersection improvements at Shaffer Road and Juniper Avenue will include the replacement of existing permissive left turn phasing for Juniper Ave with protective left turn phasing (split phasing). Additionally, the

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project will include the installation of ADA complaint ramps, high visibility crosswalks, ADA compliant pedestrian push buttons, and modified signage and striping. Construction is programmed in FFY 2021/22.

 In the Community of Planada, Merced County will install BNSF railroad crossing improvements at Childs Avenue and a traffic signal at Santa Fe Avenue and Childs Avenue. Construction is programmed in FFY 2020/21. This project is also supplemented with CMAQ funding.

 In the Community of Snelling area, Merced County will install centerline rumble strips/stripes, widen the paved shoulder, and install edgeline rumble strips/stripes on Merced Falls Road. Construction is programmed in FFY 2020/21.

Active Transportation Program (ATP)

The Active Transportation Program funds bicycle and/or pedestrian projects. Since people are more vulnerable while walking or biking as compared to traveling in a vehicle, any project that helps them do so is likely to yield safety benefits. The ATP further emphasizes safety by allotting points for project applications that promise to reduce the rate or number of pedestrian and bicyclist fatalities and injuries.

 In Community of Planada, Merced County will construct complete streets upgrades to Plainsburg Road that includes the construction of sidewalks, ADA curb ramps, crosswalk pavement markings, a Class 2 bikeway, and railroad pedestrian flashing beacons on the east side of Plainsburg Road. Plainsburg Road is a major route for pedestrians and bicyclists on their way to school or work. This project is also supplemented with CMAQ funding.

SHOPP Minor for FY 2020/21

The SHOPP is the State Highway System’s “fix‐it first” program that funds repairs and preservation, emergency repairs, safety improvements, and some highway operational improvements on the State Highway System (SHS). All SHOPP projects are limited to capital improvements that do not add capacity (no new highway lanes) to the SHS, though some new auxiliary lanes are eligible.

 In City of Merced, safety improvements will be made on SR‐59 from Cooper Avenue (PM 15.9) to Santa Fe Drive/West Olive Avenue (PM 16.1), including the installation of a pre‐emptive system to coordinate the traffic signal with the railroad crossing about 340 feet south of the SR‐59 and Santa Fe Drive/Olive Avenue.

 In Community of Hilmar, pedestrian safety improvements will be installed at the intersection of SR‐165 and Echo Street, including the installation of pedestrian

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hybrid beacon/high intensity activated crosswalk system to accommodate school children of Elm Elementary School located west of the intersection. A second project with similar improvements will also be made at the intersection of SR‐ 165 and Campbell Street to further provide safer access to Elm Elementary School.

 In the Community of Planada, flashing yellow beacons will be installed on stop ahead signs and flashing red beacons will be installed on stop signs to provide for safer pedestrian crossing of SR‐140 on Plainsburg Road.

SHOPP Collision Reduction Program

The Collision Reduction category is one of eight categories that make up SHOPP, with the intention to reduce the number or severity of collisions. Within this category are two programs: Safety Improvements and Collision Severity Reduction.

 Near Atwater, the guardrail on SR‐99 from Westside Boulevard to south of Hammatt Avenue, will be upgraded to current standards.

 Near Los Banos, the guardrail on SR‐152 from east of Midway Road to SR‐ 59, will be upgraded to current standards.

 In Los Banos, a new traffic signal will be installed on SR‐152 at South 11th Street to improve pedestrian and bicyclist safety. SR‐152 is a major principal arterial that carries significant levels of auto and truck traffic. Additionally, South 11th Street is the primary access route for Los Banos High School.

 On the outskirts of the City of Merced, improvements will be made at the intersection with SR‐59 and Gerard Avenue. SR‐59 is a two‐lane facility with significant levels of truck traffic.

 In and near Gustine and Merced, at various locations on SR‐140 from Outside Canal Bridge west of Mariposa County line, bridge approach guardrails will be replaced on two bridges and obstructions will be removed from clear recovery zones at twelve locations.

Congestion Mitigation Air Quality (CMAQ)

The CMAQ program supports improving air quality and relieving congestion. The following CMAQ projects promote pedestrian and bicycling safety.

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 A major three‐phase pedestrian improvement project in the City of Atwater including construction of sidewalks to access schools and downtown businesses from residential neighborhoods.

 Pedestrian improvements in the City of Gustine on North Avenue and around East Avenue. North Avenue improvements will provide safer routes to Gustine High School. Neighborhoods around East Avenue currently have a lack of sidewalks, forcing pedestrians to walk in the street, and this is unsafe due to vehicle traffic.

 Livingston Max Foster Multiuse Path will be constructed to provide residential neighborhoods access to the Max Foster Sports Complex and the Walnut Child Development Center.

 Merced pedestrian improvements near John Muir Elementary School include sidewalk infill and constructing ADA ramps for safe routes for students.

 The City of Merced additionally has five other sidewalk infill projects at various locations.

 Merced County Beachwood Drive Pedestrian Infill project includes filling in sidewalk gaps and constructing ADA ramps for pedestrians and for students dropped‐off by school bus on a very busy roadway.

Los Banos Pioneer Road Complete Streets Project

The Pioneer Road Complete Streets Project includes the conversion of the existing two‐ lane road into a four‐lane road with a center median and complete streets elements. Once fully built, this project will provide an alternative east‐west corridor to divert some traffic off a currently over‐congested SR‐152/Pacheco Boulevard Corridor. The additional complete streets elements will provide healthy and safe alternative transportation options for residents in South Los Banos and a secondary route for students to and from Los Banos High School and Merced College.

Atwater‐Merced Expressway, Phases 1B & 2

The Atwater‐Merced Expressway, or AME, is a new expressway from SR‐99 to the University of California (U.C.) Merced, connecting to Santa Fe Drive and Bellevue Drive. This is a phased project. Phases 1B will focus on extending the initial segment between SR‐99 and Green Sands Avenue near Atwater to Santa Fe Drive. Once constructed, this project will remove the dangerous, at‐grade intersection at Avenue Two and Santa Fe Drive / BNSF, and also will provide an alternative north‐south corridor to divert some traffic off peak‐period‐congested SR‐59. Phase 2 will further extend the expressway

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north and east to Bellevue Road, providing a safe connection to U.C. Merced and rerouting some student traffic out of residential areas.

State Route 99 (SR‐99) Livingston Widening (Southbound)

The Livingston Widening Project is the widening of SR‐99 from four to six lanes within the median of the existing state facility from south of Livingston to south of the Merced/Stanislaus County Line. This will provide continuity from the six‐lane freeway from Atwater and continuity to the six‐lane freeway in Stanislaus County. Widening SR‐ 99 will alleviate the congestion faced during peak periods, which will make it safer for motorists and freight traffic up and down the major corridor. Furthermore, removing the need to periodically change lanes will reduce the number of collisions. The project has been split into northbound and southbound segments, with the northbound segment currently in construction.

Programming Summary Table

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PM 2: Pavement and Bridges on the National Highway System

MAP‐21 and subsequent federal policy established new regulation that requires the development of a Transportation Asset Management Plan (TAMP) and the implementation of Performance Management. These regulations require all states to utilize the nationally defined measures for pavement and bridges on the National Highway System (NHS). The Bridge and Pavement Performance Management (PM2) Final Federal Rule established six performance measures related to the performance of the Interstate and non‐Interstate NHS for the purpose of carrying out the National Highway Performance Program (NHPP) to assess pavement and bridge condition. These performance measures are as follows:

Pavement Performance of the NHS:

 Percentage of Interstate pavements in Good condition;

 Percentage of Interstate pavements in Poor condition;

 Percentage of non‐Interstate NHS pavements in Good condition; and

 Percentage of non‐Interstate NHS pavements in Poor condition.

Bridge Performance of the NHS:

 Percentage of NHS bridges in Good condition; and

 Percentage of NHS bridges in Poor condition.

Caltrans must set two‐ and four‐year pavement and bridge targets in accordance with 23 U.S.C. 150. Caltrans then transmits these targets to the MPOs, which must choose to establish their own targets or support the statewide PM2 targets within 180 days. MCAG has regularly chosen to support statewide targets and will continue to do so in the future.

Current targets were originally set on May 20, 2018 and reaffirmed each year. As of September 17th, 2020, MCAG has again chosen to support Caltrans’ statewide targets as part of the Mid‐Performance Period Progress reporting.

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Statewide Targets 2‐Year NHS Targets 4‐Year NHS Targets Pavement and Bridge (1/1/2018 – 12/31/2019) (1/1/2020 – 12/31/2021) Performance Measures Good Poor Good Poor Pavements on the NHS Interstate 45.1% 3.5% 44.5% 3.8% Non‐Interstate 28.2% 7.3% 29.9% 7.2% Bridges on the NHS 69.1% 4.6% 70.5% 4.4%

NHS Infrastructure Assets in Merced County

Merced County has one interstate, Interstate 5, and infrastructure on the NHS in the City of Atwater, City of Merced, and the unincorporated County. There are 87 lane miles of pavement on the locally‐owned NHS and 10 locally‐owned bridges.

NHS assets listed by local agency are as follows:

City of Atwater – Pavement

 Applegate Road – Southbound SR‐99 to Atwater Boulevard;  Atwater Boulevard – 0.08 miles south of Bert Crane Road to Shaffer Road;  Bellevue Road – Winton Way to Santa Fe Drive;  Santa Fe Drive – Wallace Road to Buhach Avenue; and  Winton Way – Atwater Boulevard to 0.2 miles north of Fruitland Avenue. City of Atwater – Bridge

 Bellevue Road – 0.36 miles from East Shaffer Road, intersecting Livingston Canal.

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City of Merced – Pavement

 16th Street – V Street to Yosemite Parkway/Southbound SR‐99 On Ramp;  G Street – Southbound SR‐99 to Cardella Road;  Martin Luther King Jr Way – Southbound SR‐99 to 16th Street;  Olive Avenue – Southbound SR‐59 to G Street; and  R Street – Southbound SR‐ 99 to Yosemite Avenue. City of Merced – Bridge

 R Street – 200 feet north of West 25th Street intersecting Bear Creek;  G Street – 1.08 miles northeast from SR‐99 intersecting Bear Creek;  16th Street – 0.1 miles northwest of Yosemite Parkway intersecting Bear Creek Overflow;  16th Street – 0.1 miles northwest of Yosemite Parkway intersecting Bear Creek Overflow; and  16th Street – 0.2 miles southeast of G Street intersecting Bear Creek Overflow. County of Merced – Pavement

 16th Street – Southern Pacific Avenue to Southbound SR‐59 (Snelling Highway);  Atwater Boulevard – Bert Crane Road to 0.08 miles south of Bert Crane Road;  Atwater Boulevard – Shaffer Road to Southbound SR‐99;  Santa Fe Drive – Buhach Avenue to Livingston Canal;  Santa Fe Drive – Winton Way to Wallace Road;  Santa Fe Drive – Belcher Avenue to Southbound SR‐59; and  Winton Way – 0.2 miles north of Fruitland Avenue to Santa Fe Drive. County of Merced – Bridge

 Santa Fe Drive – 0.12 miles northwest of Avenue Two intersecting Canal Creek;  Santa Fe Drive – 0.28 miles northwest of SR‐59 intersecting Black Rascal Creek; and  Atwater Boulevard – 0.1 miles southeast of Bert Crane Road intersecting Atwater Canal. NHS Project Highlights

As noted in the Operations and Maintenance Costs section and depicted on the following PM2 Projects map, our region has significantly invested in maintenance and rehabilitation of many major roadways and bridges both on and off of the NHS. The following projects are some that have been completed on the NHS.

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Winton Way Reconstruction

Using regional sales tax measure monies, the City of Atwater has reconstructed Winton Way, a major arterial between the City of Atwater and the Community of Winton as well as one of the fastest connections between Santa Fe Drive and SR‐99 for local residents. Prior to reconstruction, approximately 4,500 feet of the four‐lane Winton Way was in Poor condition. 4,590 feet on all four lanes was restored or 3.5 miles of restored Good pavement.

R Street Reconstruction

Using regional sales tax measure and other non‐Federal funding sources, the City of Merced reconstructed R Street, also a major arterial, from Loughborough Drive to Yosemite Avenue. This section of R Street is highly trafficked as it passes through a major residential area and next to Rivera Middle School. It additionally provides a connection to Merced Mall and the surrounding commercial area. The roughly 3,000 foot stretch of four‐lane street was in Fair and Poor condition prior to reconstruction. 2.4 miles of Good pavement have been restored.

G and M Street Bridge Maintenance

With assistance from prior TIP HBP funding, the City of Merced was able to make minor‐ preventative maintenance and repairs to the bridges on G Street and M Street. Both bridges are of critical importance to the City and are the main routes for those commuting to work. These measures will keep these facilities from degrading to Poor conditions.

SHOPP Programs

There are five SHOPP projects with $58,510,000 programmed.

 Seismic retrofit and bridge rail upgrade of seven bridges at various locations.  Scour mitigation and preventative structural maintenance measures at thirteen bridges at various locations.  Roadway preservation near Merced from SR‐152 to Reilly Road.  Emergency repair of SR‐99 near Merced at 1.3 miles north of Plainsburg Road.  Pavement rehabilitation on SR‐140 east of Santa Fe Avenue.

Programming Summary Table

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H A

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R Street Reconstruction N MERCED D MERCED KD

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W ST N I ST N Good LOPES AVE W E W 11TH ST W E 18TH ST E E 21ST ST E

(! V VAUGHN AVE H ST N E MAIN ST E A W 10TH ST W National Highway System Bridges W E T V ST N W 9TH ST W 1 4T 16 S H T SCOTT RD S H Fair E T ORCHARD LN N W 12TH ST W W E 15THS TST E WARDROBE AVE W ARDROBE AVE W W E STOCKTON AVE BROOKS RD 99 Poor O ST N E 13TH ST E ÄÆ T ST N S ST N R ST N N ST N Q ST N GROGAN AVE W P ST N

000.25 .51 Merced Region's PM2 Pavement & Bridges on the National Highway System Miles μ August 24, 2020

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PM 3: System Reliability, Freight, Congestion, and Air Quality

On May 20, 2017, a Federal Highway Administration (FHWA) final rule took effect, with the exception of certain portions of the rule. The rule, published in the Federal Register (82 FR 5970) on January 18, 2017, establishes performance measures that State Departments of Transportation (State DOT) and Metropolitan Planning Organizations (MPOs) will use to report on the performance of the Interstate and Non‐Interstate National Highway System (NHS) to carry out the National Highway Performance Program (NHPP); freight movement on the Interstate system to carry out the National Highway Freight Program (NHFP); and traffic congestion and on‐road mobile source emissions for the purpose of carrying out the Congestion Mitigation and Air Quality Improvement (CMAQ) Program. The rule addresses requirements established by the Moving Ahead for Progress in the 21st Century Act (MAP‐21), and reflects passage of the Fixing America’s Surface Transportation (FAST) Act.

Federal regulations require State DOTs to establish and report annual targets related to each of the six performance measures by May 20th of each year. MPO’s shall establish a target six‐months after State DOTs establish targets (November 16th) by either: 1) Agreeing to plan and program projects so that they contribute toward the accomplishment of the State DOT system performance target for each respective performance measure; or 2) Committing to a quantifiable target for each respective performance measure for their metropolitan planning area. State DOTs and MPOs with NHS mileage in applicable urbanized areas must agree to single, unified targets for two of performance measures.

Of these six performance measures, two only apply to larger regions. Therefore, only the following four performance measures apply to MCAG and the Merced Region.

System Performance & Freight PM3 Performance Measures:

 Percent of reliable person‐miles traveled on the Interstate;

 Percent of reliable person‐miles traveled on the non‐Interstate NHS; and

 Percentage of Interstate system mileage providing reliable truck travel time (Truck Travel Time Reliability Index).

CMAQ PM3 Performance Measures:

 Total emissions reductions by applicable CMAQ pollutants.

In November 2018, MCAG had elected to adopt the “statewide” 2‐ and 4‐year system performance / freight / CMAQ targets, and MCAG had committed to plan and program

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projects so that they contribute toward the accomplishment of the State DOT system performance target for each performance measure.

Performance Measure 2017 2‐year 4‐year Baseline Target Target Data Percent of Reliable Person‐Miles Traveled 64.6% 65.1% (+0.5%) 65.6% (+1%) on the Interstate1 Percent of Reliable Person‐Miles Traveled 73.0% N/A 74.0% (+1%) on the Non‐Interstate NHS Percentage of Interstate System Mileage 1.69 1.68 (‐0.01) 1.67 (‐0.02) Providing Reliable Truck Travel Time (Truck Travel Time Reliability Index) Total Emissions Reductions by Applicable Pollutants under the CMAQ Program1 VOC (kg/day) 951.83 961.35 (+1%) 970.87 (+2%) CO (kg/day) 6,863.26 6,931.90 (+1%) 7,000.54 (+2%) NOx (kg/day) 1,753.36 1,770.89 (+1%) 1,788.43 (+2%) PM10 (kg/day) 2,431.21 2,455.52 (+1%) 2,479.83 (+2%) PM2.5 (kg/day) 904.25 913.29 (+1%) 922.34 (+2%)

Caltrans had also voluntarily submitted the GHG baseline numbers in the table below for California’s NHS, using the Greenhouse Gas (GHG) Measure methodology FHWA proposed in its original rule. The information, represented in the table below, was uploaded to the FHWA’s User Profile and Access Control System (UPACS). Additionally, California is firmly committed to setting GHG performance targets for the NHS in the near future.

Fuel Type 2012 2013 2014 2015 2016 Emissions Emissions Emissions Emissions Emissions (Metric Tons) (Metric Tons) (Metric Tons) (Metric Tons) (Metric Tons) Gasoline 125,599,006 125,624,932 126,829,188 130,694,456 134,172,599 Diesel Fuel 26,557,575 27,931,906 28,292,065 28,752,265 30,540,741 Total GHG 152,156,581 153,556,838 155,121,253 159,446,721 164,713,340 Emissions Total On‐NHS 103,016,599 102,522,799 103,166,921 105,111,424 110,264,455 Year 2012 2013 2014 2015 2016 NHS VMT (M) 216,017 215,228 213,290 215,739 222,370 Total VMT (M) 326,272 329,534 332,857 335,593 340,115 Gasoline (k) 14,525,691 14,553,305 14,943,098 15,119,963 15,507,693 Diesel (k) 2,748,351 2,859,342 2,918,733 3,012,037 3,182,368

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The following are our region’s projects, which are programmed in the MCAG 2021 FTIP, that support the “statewide” PM3 targets.

System Performance

Statewide Transportation Improvement Program (STIP)

 Livingston SR‐99 Widening on NHS is programmed in the STIP. The project is adding an extra travel lane in each direction on SR‐99. This 9‐mile, capacity‐ increasing project will alleviate congestion and ensure the smooth flow of freight and people on California’s major north‐south corridor.

Freight

Statewide Transportation Improvement Program (STIP)

 Livingston SR‐99 Widening on NHS is programmed in the STIP and will provide for freight movement on a nationally‐significant corridor.

Congestion Mitigation and Air Quality (CMAQ)

 Merced SR‐59/16th improvements on NHS are funded with CMAQ.  Gustine SR‐140/33 roundabout not on the NHS is funded with CMAQ.  Los Banos SR‐152 traffic signals synchronization not on the NHS is funded with CMAQ.

SHOPP Collision Reduction and Mobility

 Intersection improvements near Merced at SR‐59 & Gerard Avenue.  Intersection improvements near Hilmar at intersection of SR‐140 & SR‐165.  Widen shoulders at various NHS locations to accommodate truck turning movements.  Improve truck turning radius near Los Banos at SR‐152 & 33 and at SR‐165 & Interstate 5.

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Congestion Mitigation and Air Quality (CMAQ) Reductions

The CMAQ program supports improving air quality and relieving congestion. The purpose of the CMAQ program is to fund transportation projects or programs that will contribute to attainment or maintenance of the National Ambient Air Quality Standards (NAAQS) for ozone, and particulate matter (both PM10 and PM2.5).

Currently programmed in the 2021 FTIP is $12 million of CMAQ programs/projects. With the remaining capacities, more CMAQ projects will be programmed in the Fall of 2021.

Programming Summary Table

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Transit Asset Management (TAM) Performance Measures

The TIP includes funding from multiple FTA sources for projects that support Transit Asset Management. The MAP‐21 Act and FAST Act set performance management targets for transit capital assets through four Transit Asset Management (TAM) performance measures:

 Revenue Vehicle: Percentage of Revenue Vehicles (by type) that exceed the Useful Life Benchmark (ULB);

 Non‐Revenue Vehicle: Percentage of Non‐Revenue Vehicles (by type) that exceed the Useful Life Benchmark (ULB);

 Facilities: Percentage of Facilities (by group) that are rated less than 3.0 on the Transit Economic Requirements Model (TERM) scale; and

 Infrastructure: Percentage of track segments (by mode) that have performance restrictions.

All transit providers are required to develop TAM Plans and report TAM Targets for the aforementioned performance measures. These Plans and Targets are intended to help the transit providers achieve and maintain a state of good repair (SGR) for their public transportation assets.

Transit Providers for Merced Region

The two reporting entities for public transportation provided their targets to MCAG, as shown in the following tables. The targets for the metropolitan planning region are presented in tabular form to account for the differences in targets and standards among the providers of public transportation. Targets are the threshold for the maximum percentage of assets at or exceeding acceptable standards. In most cases for the 2017 target‐setting process, providers set targets that are approximately equivalent to their current performance. In future years, staff will work with the providers of public transportation to collate performance.

For the Merced Region, the two transit providers are:

 Transit Joint Powers Authority (TJPA); and

 Yosemite Area Regional Transportation System (YARTS).

YARTS provides intercity bus transit to commuters and park visitors, whereas TJPA provides conventional bus transit service to the Merced County residents.

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In October 2018, TJPA and YARTS had prepared their TAM Plans and had set their TAM Targets. For these transit providers, the Infrastructure performance measure was not applicable. These TAM Plans cover the period, 10/1/2018 to 9/30/2021. Transit Asset Management category projects could also be supported by state, local, and other federal funding sources (e.g., flexible CMAQ and RSTP). The funding and the program of projects in the TIP will enable the transit operators to achieve their respective transit asset management performance targets.

Metropolitan Planning Organization (MPO) Requirement

MPO’s are required to establish TAM Targets specific to the MPO planning area for the same performance measures for all public transit providers in the MPO planning area within 180 days after the transit providers establish their targets.

The Merced County Association of Governments (MCAG) sets the region’s two individual TAM Targets based on the distinct services of the two transit providers.

MCAG will establish targets again with the next update of the transit agencies’ TAM Plans in 2021.

Useful Life Benchmark (ULB)

For rolling stock, the FTA Useful Life Benchmark (ULB) was used to gauge the need for replacement. The FTA table assigns the following ULB for the following vehicles in service: Bus = 12 years; Cutaway bus = 7 years; Van and minivan = 4‐5 years.

Transit Economic Requirements Model (TERM)

For facility evaluation, Transit Economic Requirements Model (TERM) Scale was used.

TERM Rating Condition Description Excellent 4.8‐5.0 No visible defects, near‐new condition Good 4.0‐4.7 Some slightly defective or deteriorated components Adequate 3.0‐3.9 Moderately defective or deteriorated components Marginal 2.0‐2.9 Defective or deteriorated components in need of replacement Poor 1.0‐1.9 Seriously damaged components in need of immediate repair

The TERM threshold for TAM target setting is a rating less than 3.0, which would be classifications of Marginal and Poor. These capital assets would require major repair or replacement.

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TAM Targets for TJPA

Shortly following the adoption of the 2018 TAMP, the TJPA had replaced eight paratransit cutaway buses, with five being zero‐emission buses. Rather than minivans for paratransit service, the TJPA will be replacing them with more cutaway buses, which provide more capacity, have longer useful life, and cost about the same.

The TJPA is also working on electrification capital and infrastructure. California mandates that the TJPA must roll out zero emission buses no later than July 2023. In Summer 2019, the City of Merced was awarded the Affordable Housing and Sustainable Communities (AHSC) grant, which includes the TJPA purchase of one electric bus. The TJPA will purchase of five electric buses , on‐board technology, and charging stations with newly‐awarded $2,000,000 FTA 5339(b), $975,000 California Heavy Duty Voucher Incentive Project (HVIP), $500,000 State Transit Assistance (STA), $795,513 State of Good Repair (SGR), $500,000 Measure V Regional for Transit, and $792,000 Local Transportation Fund (LTF) Reserve. TJPA’s $3,112,000 Transit Intercity Rail Capital Program (TIRCP) will pay for three electric buses.

TJPA completed the construction of their new operations and maintenance facility in November 2018 and moved in December 2018. The TJPA will be using $410,778 SGR for engineering and electrical infrastructure for the grant‐awarded electric buses. The TJPA will explore charging infrastructure for up to 20 electric buses – estimated to cost $550,000.

TJPA and YARTS purchased a building to remodel to house transit management and administrative staff. The administrative building will be remodeled in the coming years and has been supported with programmed CARES Act FTA 5307 funding.

The following are the TJPA’s 2021 TAM Targets, which were submitted to FTA.

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TJPA has a fleet of 56 buses (24 coach and 32 cutaways), 9 Vans, and 3 Minivans, for a fleet size in total of 68. As previously mentioned, the minivans will be replaced with cutaway buses.

TJPA has three non‐revenue vehicles. The TIP includes the programming of CARES Act FTA 5307 funding to replace these with utility support vehicles.

TJPA owns/operates one passenger facility hub station, one maintenance and operation facility, and an administrative building. As mentioned the maintenance and operation facility was recently constructed in November 2018. The administrative building is in good condition and will be remodeled with CARES Act FTA 5307 funding to supplement this cost.

TJPA does not own any infrastructure.

TAM Targets for YARTS YARTS Targets Regional Targets % Vehicle by Exceed # Exceed 2019 2020 2021 2022 2019 2020 2021 2022 ULB Type ULB Revenue 10 0 0% 0% 0% 0% 0% 0% 0% 0% 0% Bus Non‐ 0 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Revenue Vehicle

YARTS owns and operates ten buses. Regarding years of service, one bus has ten years, seven buses have eight years, and two buses have five years. Programmed in Spring 2020 was the awarded $4,335,000 FTA 5339(b), which will be supplemented with $540,000 California Heavy Duty Voucher Incentive Project (HVIP) and $225,000 Reserve Funds, for purchase of six electric buses. The FTA ULB for buses is 14 years.

YARTS Targets Regional Targets Facilities by Group 2019 2020 2021 2022 2019 2020 2021 2022 (Rated Less than 3.0 on TERM Scale) Park & Ride 0% 0% 0% 0% 0% 0% 0% 0%

The only facility, owned by YARTS, is the Park and Ride Lot in the City of Mariposa. YARTS does not own any infrastructure.

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MCAG TAM Targets

FTIP Investment

The TAM Final Rule also requires that, in the future, the FTIP describe the anticipated effect toward achieving the TAM targets set in the RTP, linking investment priorities to those targets (23 CFR 450.326(d)).

Federal investments will continue to be programmed that will contribute to the achievement of the region’s TAM Targets. There are also non‐Federal revenue sources that are invested in transit capital assets. These revenue sources include Low Carbon Transit Operations Program (LCTOP), Local Transportation Fund (LTF) and State of Good Repair (SGR).

There are five projects in the 2021 FTIP with $21,724,000 in FTA funds (FTA 5307, 5311, 5311f, CARES Act) that support the maintenance and replacement of transit assets.

For the Merced Region, key projects that address Transit Asset Management are:

 TJPA operations and maintenance with $16,724,000 of FTA 5307 and FTA 5311.

 YARTS operations and maintenance with $1,200,000 FTA 5311(f).

 TJPA purchase of eleven fleet bus replacements with $3,600,000 CARES Act FTA 5307, LCTOP, and LTF.

 TJPA remodeling of the transit administration building with $100,000 CARES Act FTA 5307.

 TJPA purchase of two support utility service vehicles with $100,000 CARES Act FTA 5307.

As more Federal funds (e.g. FTA 5339 allocations and Congestion Mitigation Air Quality apportionment capacity) become available, TJPA and YARTS will be continue pursuing

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these monies to help pay for electrification infrastructure and more transit vehicle replacements.

The TAM targets above were produced collaboratively with regional transit agencies based on their agency TAM plans and local targets. In developing the targets, MCAG reviewed and considered the transit operators’ TAM plans (including identified goals, objectives, measures, and targets), thereby incorporating them into the metropolitan planning process.

MCAG will continue to work with the region’s transit operators to seek ways to improve the methodology, data collection and analysis for future RTP updates, and to continue engaging in a regional discussion about transit state of good repair and the need for additional funding.

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Public Transportation Agency Safety Plan

On July 19, 2018, the FTA published the Public Transportation Agency Safety Plan (PTASP) Final Rule (49 CFR §673.15) regulating how Chapter 53 grantees would have to implement federally mandated safety standards. The rule’s effective date is July 19, 2019, and the compliance date is July 20, 2020. Considering the extraordinary operational challenges presented by the COVID‐19 public health emergency, FTA issued a Notice of Enforcement Discretion effectively extending the PTASP compliance deadline from July 20, 2020, to December 31, 2020. The MPO’s initial transit safety targets are set within 180 days of receipt of the safety performance targets from the transit agencies. The first FTIP amendment, to be approved on or after July 20, 2021, is required to include the MPO’s transit safety targets. Please visit FTA’s COVID‐19 FAQs page for more information about the Notice (MPO Frequently Asked Questions, Public Transportation Agency Safety Plan Final Rule, FTA https://www.transit.dot.gov/regulations‐and‐ programs/safety/public‐transportation‐agency‐safety‐program/mpo‐frequently‐ asked#SPTQ4).

Safety targets must be set every four years in the MPO’s Regional Transportation Plan (RTP) and must integrate into their RTP, either directly or by reference, the goals, objectives, performance measures, and targets from the transit providers’ safety plans.

Transit providers may choose to establish additional targets for safety performance monitoring and measurement. The following table documents existing performance targets set by transit operators in the Merced region.

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Environmental Justice

Based on federal and state requirements, MCAG has two primary responsibilities in addressing Environmental Justice (EJ) while developing the 2021 FTIP. First, MCAG must ensure there is equity in the distribution of potential benefits and burdens resulting from the proposed transportation investments identified in the 2021 FTIP. Second, MCAG’s planning process itself must provide an equal opportunity for all segments of the population to provide input into the transportation planning process. The goal of this process is to ensure racial, low‐income, and geographic equity of transportation investment benefits. Transportation investments should not be concentrated in one geographic region, but rather should be fairly distributed. Finally, all members of the community must have an equal opportunity to provide input into the transportation planning process.

A full analysis, including maps, of Environmental Justice in the Merced region is included in Appendix N.

Merced County Demographic View

The environmental justice equity analysis focuses on minority and low‐income residents. MCAG uses the Census Block Group, the smallest level of geography that both of these data sets are available for.

Merced County Racial/Ethnicity Demographics

Data based on 2018 American Community Survey 5‐Year Estimates:

Group Population Pop % White Alone 76,008 28.2%

Hispanic or Latino of Any Race 158,494 58.9% Asian alone 19,487 7.2% Black or African American alone 8,038 3.0% 71.7% American Indian and Alaska Native alone 840 0.3% Native Hawaiian and Other Pacific Islander alone 556 0.2% Other alone 501 0.2% Two or more races 5,151 1.9% 269,075 100%

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Merced County Income Demographics

Data based on 2018 American Community Survey 5‐Year Estimates:

Income and Benefits Population Pop % Less than $10,000 5,230 6.6% 23.8% $10,000 to $14,999 5,097 6.4% 49.9% (In Poverty) $15,000 to $24,999 8,627 10.8% (Low Income) $25,000 to $34,999 8,577 10.8% $35,000 to $49,999 12,196 15.3% $50,000 to $74,999 14,954 18.8% $75,000 to $99,999 9,425 11.8% $100,000 to $149,999 8,924 11.2% $150,000 to $199,999 3,506 4.4% $200,000 or more 3,070 3.9% Total Households 79,606

About the 2021 FTIP

Transit operations, pedestrian/bicycle projects, traffic flow improvement projects, and regionally significant roadway projects have been programmed and identified in the TIP document. The State‐Managed Programs, which have approved projects with the TIP quadrennial period, have also been programmed and identified in the TIP document.

Transit operations investment pays for fixed urban and rural inter‐community bus route service for most of the major population areas. Transit also provides for Americans with Disabilities Act (ADA) paratransit service, which represents the ¾‐mile area from the fixed‐route service. The regional transit system “The Bus” is currently evaluating how to continue to provide the best transit solutions for riders through the remainder of the COVID‐19 pandemic and into the reopening of the region. During the pandemic, various outreach efforts notified the public of free ridership as well as implemented safety measures to protect drivers and riders.

The primary goal of the Congestion Mitigation and Air Quality (CMAQ) program is to fund eligible projects that will relieve congestion and reduce ozone and particulate matter emissions. The twenty‐six programmed CMAQ projects include pedestrian/bicycle facilities and traffic flow improvements. Three projects, roundabouts, railroad safety, and complete streets, will also improve the safety of pedestrians and bicyclists. These programmed pedestrian/bicycle are also funded with Active Transportation Program (ATP) and local Measure V Alternative Modes Set‐Aside.

Three regionally‐significant roadway projects – SR‐99 Livingston Widening, the Atwater‐ Merced Expressway, and Pioneer Road Complete Streets Project – were programmed with funding in the TIP quadrennial period.

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Analysis Methodology

This environmental justice equity analysis looked at the benefits of transit operations, pedestrian/bicycle projects, and the three regionally‐significant roadway projects.

The environmental justice equity analysis focused on minority and low‐income residents. Minority refers to the total non‐white, non‐Hispanic population. Low‐income refers to households with incomes that fall below $52,400, which is 200 percent of the federal poverty level (200% of ~$26,200/household = $52,400). The data to map these minority and low‐income categories came from the 2010 U.S. Census. Again, a full explanation of our analysis and mapping examples can be found in Appendix N.

Pedestrian and Bicycle Projects (Active Transportation)

Pedestrian and bicycle projects are quality of life projects that offer Merced County residents an alternative to driving their vehicles, and that benefits air quality and congestion. Some of the pedestrian/bicycle projects provide driving alternatives during peak times in close proximity to schools. Other projects include installing bike lanes to visibly distinguish these mode corridors on shared roadways to motorists.

Several different revenue sources provide funding for these pedestrian/bicycle projects: Congestion Mitigation Air Quality (CMAQ); Active Transportation Program (ATP); and local Measure V Alternative Modes Set‐Aside. Of note, local Measure V has a 10% set‐ aside, estimated at $1,500,000 annually, for alternative mode projects.

Pedestrian/Bicycle Project: Plainsburg Road Complete Streets Upgrade and the Childs Avenue Improvements Project

This project includes the reconstruction and addition of pedestrian/bicycle facilities of Plainsburg Road, south of SR‐140 to East Childs Avenue across existing railroad right‐of‐ way. The Childs Avenue Improvements project will keep people off the busy roadways and will provide safe routes to the Cesar E Chavez Middle School. The Childs Avenue project includes a realignment of Childs Avenue and a safer railroad crossing. The Plainsburg Road project is funded with Active Transportation Program funding and MCAG’s CMAQ, and the Childs Avenue Safe Routes project is funded with Highway Safety Improvement Program (HSIP) and MCAG’s CMAQ. This project will provide better access to SR‐140 and safer connections for pedestrians, bicycles, and vehicles across the Burlington Northern Santa Fe Railway. The projects further present synergy with previous projects in the area by completing a safe walkable or bikeable route down Plainsburg Road to Cesar E Chavez Middle School. The projects will largely be kept within the existing right‐of‐way, thus will not largely impact minority and low‐income populations.

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State Route 99 (SR‐99) Livingston Widening (Southbound)

The Livingston Widening project is the widening of SR‐99, from four lanes to six lanes within the median of the existing state facility, from south of Livingston to south of the Merced/Stanislaus County Line. This will provide continuity from the six‐lane freeway from Atwater and continuity to the six‐lane freeway north of the Merced/Stanislaus County Line. This project includes the additions of a northbound lane and a southbound lane within Caltrans’ existing right‐of‐way (within the existing median), and therefore, will not require any relocation of minority or low‐income populations. Traffic volumes are expected to significantly increase along SR‐99 in future years. This capacity‐ increasing project looks to reduce future congestion issues that would result in poorer air quality.

Atwater‐Merced Expressway

The Atwater‐Merced Expressway, or AME, is the construction of a new expressway from SR‐99 to the University of California (U.C.) Merced, connecting with Santa Fe Drive and Bellevue Drive. This project will provide a new route around northwest Merced to Atwater and a direct connection between Castle Commerce Center and SR‐99. This is a phased project, and the first segment between SR‐99 and Green Sands Avenue near Atwater has been completed. Phases 1B and 2 will be included in the 2021 FTIP.

Students at the University of California Merced will have a direct connection to the satellite campus at Castle Airport. Populations in both Atwater and Merced will also have less congested surface roads. Currently, all traffic to the Castle Commerce Center traverse on local surface streets, Buhach Road and Gurr Road, passing neighborhoods and schools. For those without access to vehicles, the project will provide connections via UC Merced’s bus system and potential future fixed‐route transit service along with vanpooling and ridesharing. The overpass over the BNSF Railway will provide increased safety for vehicles, transit, and both freight and intercity rail service.

Los Banos Pioneer Road Complete Streets Project

The Pioneer Road Complete Streets Project includes conversion of the existing two‐lane road into a four‐lane road with a center median and complete streets elements, including pedestrian/bicycle facilities. The project will also extend Pioneer Road and ties back to SR‐152/Pacheco Boulevard. For those without access to vehicles, the improved pedestrian/bicycle facilities will provide safer transportation options. The capacity‐ increasing elements of the project are planned to reduce future congestion and provide relief for the current congestion on SR‐152/Pacheco Boulevard.

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Project Listings by Mode

The 2021 Federal Transportation Improvement Program is comprised of the following transportation program categories of project listings:

1. State highway projects (funded by RIP and IIP);

2. State Highway Operations and Protection Program (SHOPP): State highway safety, maintenance, and operational‐improvements projects funded by this State‐managed, federally‐funded program;

3. Local projects: Local projects funded by federal discretionary funding, by State‐ managed federal programs, and by regional CMAQ;

4. Mass transportation: FTA‐ and CMAQ‐funded transit projects and programs;

5. Non‐Motorized Transportation: Bicycle and pedestrian projects funded by Active Transportation Program (ATP).

State highway projects are located within Merced County and under the jurisdiction of Caltrans, District 10.

Even though Surface Transportation Block Grant Program (STBG) / Regional Surface Transportation Program (RSTP) is Federal, since this funding is annually exchanged for State‐only dollars, these apportionments do not need to be shown in the FTIP.

The Highway Infrastructure Program (HIP) provides federal funds for apportionment distribution. The apportioned amount is programmed as revenue. Once the region identifies the HIP projects, MCAG will process the FTIP Formal Amendment. Thus far, only Cycle 1 has been programmed to the Los Banos Pioneer Road Improvements.

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FTIP Project Form User’s Guide

Item 1: Program title is the name of the existing transportation program, a category of project types, a funding program or a combination of the three.

Item 2: Route and Post Mile are road segment information; PIN and ST/FED ID are identification codes used in databases; Fund is the main funding source; AQ identifies a project as conformity exempt or not; Lead is the agency responsible for expediting the project.

Item 3: Description provides project information. Total escalated cost adds all phases of cost for a project grand total. Status may be used to indicate the FTIP Amendment, when a project was last changed.

Item 4: Phase allows programming for standard steps or phases in a large project. PE is preliminary engineering, work done prior to contracting out a job. This is typical for roadwork. RW is right‐of‐way work that may be needed for the project and may include cost of property and engineering work. CON or construction phase typically includes the actual cost of the improvements (or capital) and the project administration. Total is the cost for each year as shown in the following columns.

Item 5: The four‐year element indicates federal funding years of FTIP.

Item 6: The years represent federal funding years. Federal Fiscal years begin October 1 and end September 31 of the following year. Prior year is offered when a project may still be in progress even though the funding years are past or if a phased project crosses from an earlier year into a current year.

Item 7: Local, state and federal funding sources represent an overall funding summary of the projects collective funding sources. This typically includes federal dollars and a local dollar match.

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Highway Projects

State Transportation Improvement Program (STIP)

Proposition 1B SR‐99 Bond: Freeway Mitigation

State Highway Operations and Protection Program (SHOPP)

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120 Merced County Association of Governments 2021 Federal Transportation Improvement Program San Joaquin Format ( Highest Version) Program Schedule Change Description Route Description Postmile PIN (Construction Costs escalated per Caltrans percentage) Project Comments Dist-EA Total Escalated Cost 5th year of BEYOND STIP Funding Summary (Current & Prior Years) Air Quality RTP page Fund Four Year Element STIP Conformity no. and AQ Exemption map alpha Lead Status 20/21 21/22 22/23 23/24 Carryover Local State Federal Phase Prior Years 24/25 25/26 Code no. * For info only. Reporting Category * For Beyond 5th Information year of STIP Highway Projects: State Transportation Improvement Program (STIP) only Fund Estimate

VARIOUS PE Carry Over EPA Table I/II N/A Planning, Programming and Monitoring (PPM) RW EXEMPT: pp. 13,58 Prior Non-construct. STIP ST-CASH Const 139,000 140,000 140,000 140,000 140,000 Current 559,000 Related 4.01 $ 559 ,000 CTIPS Activities MCAG2020 STIP 105-0000-0017 Total 139,000 140,000 140,000 140,000 140,000 NOTE: 2020 STIP PPM Total = $699,000 PE - 6.0

99 Livingston Widening Southbound PE 4,700,000 Carry Over 28.2/R37.3 RW 300,000 p. 14,18, Widen from 2 to 3 lanes southbound only from 0.8 mi.M south 10-0Q122 Prior 5,000,000 61,84,94 of Hammatt Avenue to Merced /Stanislaus Co. line. STIP AC Const 33,950,000 Current 33,950,000 Appdx. $ 33,950,000 CTIPS D,G,K Caltrans2020 STIP 105-0000-0135 Total 5,000,000 33,950,000 NOTE: Total project cost = $38,950,000

Reporting Category Proposition 1B State Route 99 Bond: Mitigation

99 PE 1,451,000 Carry Over 3.1/7.1 Plainsburg-Arboleda Freeway Mitigation RW 27,000 pp. 14,84 10-1K090 (Planting & paleontological mitigations) Prior SR99 Bond Const Current 1,478,000 4.09 $ 1,478,000 CTIPS Caltrans2020 STIP 105-0000-0182 Total 1,478,000 NOTE: CON is UNFUNDED. 121 Merced County Association of Governments 2021 Federal Transportation Improvement Program San Joaquin Format ( Highest Version)

Route Description Program Schedule Change Description Postmile (Construction Costs escalated per Caltrans percentage) Project Comments PIN Total Escalated Cost 5th year of BEYOND STIP Funding Summary (Current & Prior Years) Dist-EA Four Year Element Fund STIP Air Quality Status Carryover Local State Federal Conformity RTP page AQ Prior Years 20/21 21/22 22/23 23/24 24/25 25/26 Lead Phase Exemption Code no. * For info only. * For Reporting Category Beyond 5th Information year of STIP Safety: State Highway Operations and Protection Program (SHOPP) Grouped Projects Programs only Fund Estimate

VARIOUSGrouped Projects for SHOPP Bridge Rehabilitation and PE Carry Over EPA TABLE VARIOUS Reconstruction Program RW II or III pp. 12,58 Projects are consistent w- 40CFR Part 93.126 Exempt Table 2- Widening narrow pavements Prior EXEMPT: 61 SHOPPACor reconstructing bridges (no additional Const 3,293,000 8,296,000 0 18,200,000 0 Current26,496,000 Non capacity- Appdx. travel lanes) widening K 1.19$ 26,496,000 CTIPS Note: or Bridge Caltrans2020 SHOPP 205-0000-0126 Total 3,293,000 8,296,000 0 18,200,000 0 Reconstruction

VARIOUSGrouped Projects for Safety Improvements PE Carry Over EPA TABLE VARIOUS SHOPP Collision Reduction Program RW II or III pp. 12,58 Projects are consistent w- 40CFR Part 93.126 Exempt Tables 2 & 3- Railroad/Hwy crossing, Prior EXEMPT: 61 SHOPPACSafer non-Fed-aid system roads, Shoulder improvements, traffic control devices and Const 5,847,000 7,164,000 8,207,000 5,190,000 7,021,000 Current27,582,000 Safety Appdx. operating assistance other than signalization projects, Intersection signalizations at individual Improvement K intersections, Pavemetn marking demo, Truck climbing lanes outside urbanized area, Program Lighting improvements Emergency truck pullovers 1.06$ 27,582,000 CTIPS Note: Caltrans2020 SHOPP 305-0000-0000 Total 5,847,000 7,164,000 8,207,000 5,190,000 7,021,000

VARIOUS PE Carry Over EPA TABLE VARIOUS Grouped Projects for SHOPP Mandates Program RW II or III pp. 12,58 Projects are consistent w- 40CFR Part 93.126 Exempt Tables 2 & 3 categories. Prior EXEMPT: 61 SHOPPAC Const 0 1,134,000 1,594,000 5,799,000 0 Current8,527,000 Safety Appdx. 1.06$ 8,527,000 CTIPS Note: Improvement K Caltrans2020 SHOPP 205-0000-0222 Total 0 1,134,000 1,594,000 5,799,000 0 Program

VARIOUSGrouped Projects for Safety Improvements PE Carry Over EPA TABLE VARIOUS SHOPP Mobility Program RW II or III pp. 12,58 Projects are consistent w- 40CFR Part 93.126 Exempt Tables 2 & 3- RR/Hwy crossing, Safer Prior EXEMPT: 61 SHOPPACnon-Fed-aid system roads, Shoulder improv., traffic control devices & operating assist. other Const 1,409,000 2,218,000 4,330,000 2,222,000 12,681,000 Current21,451,000 Safety Appdx. than signalization projects, Signalizations at indiv. intersections, Pavement marking demo, Improvement K Rural truck climbing lanes, Lighting improv., Emergency truck pullovers. Program 1.06$ 21,451,000 CTIPS Note: Caltrans2020 SHOPP 205-0000-0128 Total 1,409,000 2,218,000 4,330,000 2,222,000 12,681,000

VARIOUSGrouped Projects for Safety Improvements PE Carry Over EPA TABLE VARIOUS SHOPP Roadside Preservation Program RW II or III pp. 12,58 Projects are consistent w- 40CFR Part 93.126 Exempt Tables 2- Fencing, Safety roadside Prior EXEMPT: 61 SHOPPACrest areas. Const 3,910,000 27,063,000 0 0 0 Current27,063,000 Safety Appdx. 1.06$ 27,063,000 CTIPS Note: Roadside K Caltrans2020 SHOPP 205-0000-0276 Total 3,910,000 27,063,000 0 0 0 Rest Areas

VARIOUS Grouped Projects for Pavement Resurfacing and/or PE Carry Over EPA TABLE VARIOUS Rehabilitation RW II or III pp. 12,58 SHOPP Roadway Preservation Program Prior EXEMPT: 61 SHOPPACProjects are consistent w- 40CFR Part 93.126 Exempt Table 2- Pavement resurface and/or Const 400,000 2,115,000 2,105,000 2,572,000 23,567,000 Current30,359,000 Pavement Appdx. rehab., Emergency relief (23 U.S.C. 125), Widen narrow pavements or recon. bridges (no Resurfacing K added travel lanes) and/or 1.10$ 30,359,000 CTIPS Note: Rehabilitation Caltrans2020 SHOPP 205-0000-0127 Total 400,000 2,115,000 2,105,000 2,572,000 23,567,000

VARIOUSGrouped Projects for Safety & Shoulder Improvements, PE Carry Over EPA TABLE VARIOUS Pavement Resurfacing and/or Rehabilitation – Minor RW II or III pp. 12,58 Program Prior EXEMPT: 61 SHOPPACProjects are consistent w- 40CFR Part 93.126 Exempt Tables 2 & 3- RR/Hwy crossing, Safer Const 6,490,000 Current6,490,000 Safety Appdx. non-Fed-aid system roads, Shoulder improv., traffic control devices & operating assist. other Improvement K 122 than signalization projects, Signalizations at indiv. intersections, Pavement marking demo, Program 1.06$ 6,490,000 CTIPS Note: Caltrans2020 SHOPP 305-0000-0000 Total 0 0 6,490,000 0 0

VARIOUSGrouped Projects for Emergency Repair - SHOPP PE Carry Over EPA TABLE VARIOUS Emergency Response RW II or III pp. 12,58 Projects are consistent w- 40CFR Part 93.126 Exempt Tables 2 & 3 categories. Repair Prior EXEMPT: 61 SHOPPACdamage caused by natural disasters, civil unrest, or terrorist acts. Const 450,000 Current450,000 Other- Damage Appdx. 4.13$ 450,000 CTIPS Note: Repair K Caltrans 2020 SHOPP 205-0000-0279 Total 0 450,000 0 0 0

Local Projects

Local, Regionally‐Significant Projects

MCAG has two priority regional projects: Atwater‐Merced Expressway (AME); and Los Banos Pioneer Road Improvements. These two projects have Board‐approved regional sales tax dollars allocated to them, as well as Federal discretionary funds.

Safety Programs

The Safety Program includes the following State‐managed, federally‐funded programs: Bridge replacement and rehabilitation under the Highway Bridge Program (HBP) and the Highway Safety Improvement Program (HSIP). These projects are selected on a discretionary basis. They compete with local projects submitted by other regions statewide.

Congestion Mitigation and Air Quality (CMAQ)

Congestion Mitigation and Air Quality (CMAQ) Program is another funding source for local projects. CMAQ projects are programmed to reflect the yearly apportionments for the Merced region. The $3,896,494 repayment in FFY 2020/21 from San Diego Association of Governments (SANDAG) is reflected in the Revenues table. The projects listed in this section are local streets and road projects and transit project.

Regional Surface Transportation Program (RSTP)

MCAG is allowed by California statute to exchange the federal RSTP apportionment for Merced County with state‐only dollars, therefore, there are no federal requirements on use of these funds. MCAG distributes the annual RSTP apportionment to local jurisdictions by formula. RSTP‐funded local road projects are not listed in the FTIP due to these being non‐regionally‐significant projects funded by state‐only dollars.

Merced County Association of Governments 52

123 Merced County Association of Governments 2021 Federal Transportation Improvement Program San Joaquin Format ( Highest Version) Route Description Program Schedule Change Description Postmile (Construction Costs escalated per Caltrans percentage) Project Comments PIN Total Escalated Cost 5th year of BEYOND STIP Funding Summary (Current & Prior Years) Dist-EA Four Year Element Fund STIP Air Quality Status Carryover Local State Federal Conformity RTP page AQ Prior Years 20/21 21/22 22/23 23/24 24/25 25/26 Lead Phase Exemption Code no. * For info only. * For Beyond 5th Reporting Category Information year of STIP only Local, Regionally-Significant Project (Repurposed Earmarks, Highway Infrastructure Program & Local Funding) Fund Estimate

Local PE 3,190,923 Carry Over EPA TABLE Atwater-Merced Expressway Phases 1B & 2 RW II or III pp. 14,15, Repurp. Earmark/ (PA/ED work) Prior EXEMPT: 20,61,87, Local Const Current 3,038,184 152,739 Non-CON 94 $ 3 ,190,923 CTIPS Related Appdx. Merced County 2019 FTIP Amend 16 205-0000-0295 Total 3,190,923 Activities D,G,K

Local PE 664,000 Carry Over EPA TABLE Los Banos Pioneer Road Improvements RW 613,000 II or III pp. 14,19, Repurp. Earmark/ (PE & R/W work) Prior EXEMPT: 61,89 HIP/Local Const Current 123,000 1,154,000 Non-CON Appdx. $ 1 ,277,000 CTIPS Related G,K City of Los Banos 2019 FTIP Amend 16 205-0000-0296 Total 664,000 613,000 Activities

Reporting Category Safety: Caltrans-Managed Grouped Projects Programs

VARIOUS PE Carry Over EPA TABLE VARIOUS Grouped Projects for Bridge Rehabilitation and RW II or III Reconstruction Program (HBP) Prior 886,739 7,267,933 EXEMPT: Projects are consistent w- 40CFR Part 93.126 Exempt Table 2- Widening narrow pavements or reconstructing bridges (no additional travel lanes) Current 33,650 4,026,725 Non-Capacity Const 8,154,672 0 4,060,375 0 0 14,538,000 Increasing pp. 12, 61 1.19 $ 4,060,375 CTIPS Bridge Widening Various Agencies 2019 FTIP Amend 23 205-0000-0037 Total 8,154,672 0 4,060,375 0 0 14,538,000 NOTE: Per 11/6/20 updated HBP backup listing or Reconstruction

VARIOUS PE Carry Over EPA TABLE VARIOUS Grouped Projects for Safety Improvements (HSIP) RW II or III Projects are consistent w- 40CFR Part 93.126 Exempt Tables 2 & 3 categories. Prior 46,370 571,430 EXEMPT: Const 617,800 1,768,000 154,300 0 0 Current 231,108 1,691,192 Safety p. 61 1.06 $ 1,922,300 CTIPS Improvement Various Agencies 205-0000-0134 Total 617,800 1,768,000 154,300 0 0 NOTE: Per 3/20/20 updated HSIP backup listing Program 124 Merced County Association of Governments 2021 Federal Transportation Improvement Program San Joaquin Format ( Highest Version)

Program Schedule Change Description Route Description Postmile PIN (Construction Costs escalated per Caltrans percentage) Project Comments Dist-EA Total Escalated Cost 5th year of BEYOND STIP Funding Summary (Current & Prior Years) Air Quality RTP page Fund Four Year Element STIP Conformity no. and AQ Exemption map alpha Lead Status Carryover Local State Federal Phase Prior Years 20/21 21/22 22/23 23/24 24/25 25/26 Code no. * For info only. * For Beyond 5th Reporting Category Information year of STIP only Congestion Mitigation and Air Quality Program (CMAQ): Non-Transit Fund Estimate

VARIOUS Transportation Demand Management / PE Carry Over EPA TABLE Alternative Modes Program RW Prior II / III EXEMPT: pp. 59,61 CMAQ [ TCM ] Const 150,000 150,000 Current 300,000 Rideshare & 3.01 $ 300,000 CTIPS Vanpool MCA 205-0000-0042 Total 150,000 150,000 NOTE: Total Cost reflects Four Year Element. Program

VARIOUS Vanpooling Program PE Carry Over EPA TABLE [ TCM ] RW Prior II / III EXEMPT: pp. 59,61 CMAQ Const 73,000 85,000 85,000 85,000 Current 328,000 Rideshare & 3.01 $ 328,000 CTIPS Vanpool MCA 205-0000-0268 Total 73,000 85,000 85,000 85,000 NOTE: Total Cost reflects Four Year Element. Program

Local PE 102,230 Carry Over EPA TABLE In Atwater. Construct Phase 1 Pedestrian Improvements to RW II or III Connect w Downtown. Prior EXEMPT: pp. 59,61 CMAQ/CITY Const 1,022,300 Current 128,984 995,546 Bicycle / 3.02 $ 1 ,124,530 CTIPS Pedestrian City of Atwater 2019 FTIP Amend 18 205-0000-0297 Total 1,124,530 NOTE: Total project cost = $1,124,530 Facility

Local PE 181,110 Carry Over EPA TABLE In Atwater. Construct Phase 2 Pedestrian Improvements to RW II or III Connect w Downtown. Prior EXEMPT: pp. 59,61 CMAQ/CITY Const Current 20,773 160,337 Bicycle / 3.02 $ 181 ,110 CTIPS Pedestrian City of Atwater 2019 FTIP Amend 18 205-0000-0298 Total 181,110 NOTE: Total project cost = $1,992,210 Facility

Local PE 131,910 Carry Over EPA TABLE In Atwater. Construct Phase 3 Pedestrian Improvements to RW II or III Connect w Downtown. Prior EXEMPT: pp. 59,61 CMAQ/CITY Const Current 15,130 116,780 Bicycle / 3.02 $ 131 ,910 CTIPS Pedestrian City of Atwater 2019 FTIP Amend 18 205-0000-0299 Total 131,910 NOTE: Total project cost = $1,451,010 Facility

Local PE 77,000 Carry Over EPA TABLE In Gustine. Construct Roundabout at 5th Street & 4th Ave. RW II or III Prior 8,603 66,397 EXEMPT: pp. 59,61 CMAQ/CITY Const 551,100 Current 63,212 487,888 Intersection 5.01 $ 551 ,100 CTIPS Channeli ation City of ustine 2019 FTIP Amend 3 205-0000-0238 Total 77,000 551,100 NOTE: Total project cost = $628,100 Project

Local PE 58,520 Carry Over EPA TABLE In Gustine. Construct Pedestrian Improvements on North RW II or III Ave. Prior EXEMPT: pp. 59,61 CMAQ/CITY Const 336,490 Current 45,308 349,702 Bicycle / 3.02 $ 395 ,010 CTIPS Pedestrian City of ustine 2019 FTIP Amend 18 205-0000-0300 Total 395,010 NOTE: Total project cost = $395,010 Facility

Local PE 98,687 Carry Over EPA TABLE In Gustine. Construct Pedestrian Improvements on 3rd RW II or III Ave, East Ave & South Ave. Prior EXEMPT: pp. 59,61 CMAQ/CITY Const Current 11,320 87,367 Bicycle / 3.02 $ 98 ,687 CTIPS Pedestrian

125 City of ustine 2019 FTIP Amend 18 205-0000-0301 Total 98,687 NOTE: Total project cost = $855,284 Facility

N/A PE Carry Over EPA TABLE In Livingston. Purchase One (1) CNG Street Sweeper. RW II or III Prior EXEMPT: pp. 59,61 CMAQ/City Const 350,000 Current 70,000 280,000 Non-CON- 4.01 $ 350 ,000 CTIPS Related City of Livingston 2019 FTIP Amend 18 205-0000-0265 Total 350,000 Total project cost = $350,000 Activity Local PE 67,000 Carry Over EPA TABLE In ivingston Construct Phase 1 Ma Foster Multiuse Path RW II or III Prior EXEMPT: pp. 59,61 CMAQ/CITY Const 513,683 Current 66,605 514,078 Bicycle / 3.02 0, 3 CTIPS Pedestrian City of Livingston 2019 FTIP Amend 18 205-0000-0302 Total 580,683 NOTE: otal project cost 0, 3 Facility

Local PE 100,000 Carry Over EPA TABLE In os Banos SR-1 2 / Pacheco Blvd Signals RW II or III Synchroni ation Prior EXEMPT: pp. 59,61 CMAQ Const 800,000 Current 0 900,000 Traffic 5.07 00,000 CTIPS oll Credits being used Signal City of Los Banos 2019 FTIP Amend 18 205-0000-0303 Total 100,000 800,000 NOTE: otal project cost 00,000 Sychronization

59 PE 35,000 Carry Over EPA TABLE In Merced Right- urn Channeli ation on Southbound SR- RW II or III Approaching 1 th Street Prior 4,000 31,000 EXEMPT: pp. 59,61 CMAQ/City Const 215,000 Current 24,661 190,339 Intersection 5.01 21 ,000 CTIPS Channelization City of Merced 2019 FTIP Amend 3 205-0000-0228 Total 35,000 215,000 NOTE: otal project cost 2 0,000 Project

59 PE 76,245 Carry Over EPA TABLE In Merced raffic Signal at SR- & 1 th Street RW II or III Prior 8,746 67,499 EXEMPT: pp. 59,61 CMAQ/City Const 448,500 Current 51,443 397,057 Intersection 5.02 44 , 00 CTIPS Signalization City of Merced 2019 FTIP Amend 3 205-0000-0231 Total 76,245 448,500 NOTE: otal project cost 24, 4 Project

N/A PE Carry Over EPA TABLE In Merced Purchase wo (2) CNG Street Sweepers RW II or III Prior EXEMPT: pp. 59,61 CMAQ/City Const 684,000 Current 78,455 605,545 Non-CON- 4.01 4,000 CTIPS Related City of Merced 2019 FTIP Amend 18 205-0000-0266 Total 684,000 NOTE: otal project cost 4,000 Activity

Local PE 77,000 Carry Over EPA TABLE In Merced Construct Pedestrian Improvements near ohn RW II or III Muir Elementary School Prior 9,000 68,000 EXEMPT: pp. 59,61 CMAQ/CITY Const 722,296 Current 82,847 639,449 Bicycle / 3.02 22,2 CTIPS Pedestrian City of Merced 2019 FTIP Amend 3 205-0000-0262 Total 77,000 722,296 NOTE: otal project cost ,2 Facility

Local PE 61,000 Carry Over EPA TABLE In Merced Construct Sidewal and Bi e ane on Motel RW II or III rive Prior 7,000 54,000 EXEMPT: pp. 59,61 CMAQ/CITY Const 574,209 Current 65,862 508,347 Bicycle / 3.02 4,20 CTIPS Pedestrian City of Merced 2019 FTIP Amend 3 205-0000-0263 Total 61,000 574,209 NOTE: otal project cost 3 ,20 Facility

Local PE 69,283 Carry Over EPA TABLE In Merced Construct Sidewal s Along R Street, S Street, RW II or III Street & Stuart rive Prior 7,947 61,336 EXEMPT: pp. 59,61 CMAQ/CITY Const 775,961 Current 89,003 686,958 Bicycle / 3.02 , 1 CTIPS Pedestrian City of Merced 2019 FTIP Amend 3 205-0000-0286 Total 69,283 775,961 NOTE: otal project cost 4 ,244 Facility

Local PE 79,167 Carry Over EPA TABLE In Merced Construct Sidewal s Along Olive Ave, Parsons RW II or III Ave & Ale ander Ave Prior 9,080 70,087 EXEMPT: pp. 59,61 CMAQ/CITY Const 455,211 Current 52,213 402,998 Bicycle / 3.02 4 ,211 CTIPS Pedestrian City of Merced 2019 FTIP Amend 3 205-0000-0287 Total 79,167 455,211 NOTE: otal project cost 34,3 Facility

Local PE 41,431 Carry Over EPA TABLE In Merced Construct Sidewal s Along th Street, th Street RW II or III & inda ane Prior 4,752 36,679 EXEMPT: pp. 59,61 CMAQ/CITY Const 455,746 Current 52,274 403,472 Bicycle / 3.02 4 , 4 CTIPS Pedestrian City of Merced 2019 FTIP Amend 3 205-0000-0288 Total 41,431 455,746 NOTE: otal project cost 4 ,1 Facility

Local PE 74,999 Carry Over EPA TABLE In Merced Construct North ransit Hub RW II or III 126 Prior EXEMPT: pp. 59,61 CMAQ/CITY Const 689,187 Current 87,652 676,534 Bicycle / 5.06 4,1 CTIPS Pedestrian City of Merced 2019 FTIP Amend 18 205-0000-0304 Total 764,186 NOTE: otal project cost 4,1 Facility Local PE 53,000 Carry Over EPA TABLE In Merced Construct Pedestrian Improvements on RW II or III Nottingham, amworth, Buc ingham & Ale ander Prior EXEMPT: pp. 59,61 CMAQ/CITY Const 531,812 Current 67,079 517,733 Bicycle / 3.02 4, 12 CTIPS Pedestrian City of Merced 2019 FTIP Amend 18 205-0000-0305 Total 584,812 NOTE: otal project cost 4, 12 Facility

Local PE 343,000 Carry Over EPA TABLE In Community of Fran lin/Beachwood Construct RW II or III Pedestrian Infill of Beachwood rive Prior 39,000 304,000 EXEMPT: pp. 59,61 CMAQ/COUNTY Const 1,373,031 Current 157,487 1,215,544 Bicycle / 3.02 1 ,33,031 CTIPS Pedestrian County of Merced 2019 FTIP Amend 3 205-0000-0264 Total 343,000 1,373,031 NOTE: otal project cost 1, 1 ,031 Facility

Local PE 194,000 Carry Over EPA TABLE In Community of Planada Construct Pedestrian/Bicycle RW II or III Safety Improvements at Railroad Crossing Prior 22,000 172,000 EXEMPT: pp. 59,61 CMAQ/COUNTY Const 300,000 Current 34,410 265,590 Bicycle / 3.02 300 ,000 CTIPS Pedestrian County of Merced 2019 FTIP Amend 3 205-0000-0289 Total 194,000 300,000 NOTE: otal project cost 1,24 ,000 Facility

Local PE Carry Over EPA TABLE In Community of Planada Construct Plainsburg Road RW II or III Complete Street A P Prior EXEMPT: pp. 59,61 CMAQ/COUNTY Const 564,780 Current 64,780 500,000 Bicycle / 3.02 4, 0 CTIPS Pedestrian County of Merced 2019 FTIP Amend 18 205-0000-0306 Total 564,780 NOTE: otal project cost 2,3 ,000 Facility 127

Mass Transportation

Mass Transit Project Development Funding

Three primary types of Federal Transit Administration (FTA) funding, for our region’s transit service providers, are listed in the FTIP:

49 USC 5307: The Large Urban Cities Program provides financial operating and capital purchase assistance to operators or urban public transportation services. Funds are apportioned to urbanized areas (UZA) (population over 50,000) based on a formula using population and population density.

49 USC 5311: The Rural and Small Urban Areas Program provides financial operating and capital purchase assistance to operators of non‐urban public transportation services. Funds are apportioned to non‐urbanized areas (population under 50,000).

49 USC 5311 ( f ): The Intercity Bus Program provides provide supplemental financial support to transit operators and to facilitate the most efficient and effective use of available Federal funds in support of projects that provide transportation between non‐ urbanized areas and urbanized areas that result in connections of greater regional, statewide, and national significance.

CARES Act: In April 2020, the Federal Transit Administration (FTA) 5307 Urbanized Coronavirus Aid, Relief, and Economic Security Act (CARES Act) fund provided the Transit Joint Powers Authority (TJPA) of Merced County with $10.183 million. A portion of this funding was used for transit operations. The $3,800,000 was programmed for capital projects, which includes the purchase of eleven buses, two utility service vehicles, and administration building remodel.

Transit Joint Powers Authority (TJPA) for Merced County: The Bus

The Transit Joints Powers Authority (TJPA) for Merced County oversees the transit service (The Bus) for Merced County (www.mercedthebus.com). The Bus provides for fixed urban and rural inter‐community bus route service for most of the population areas, and also provides for Americans with Disabilities Act (ADA) paratransit service. The Bus has streamlined its fixed‐route routes to provide better service and increased frequencies, and is still working on coordination with U.C. Merced to provide more effective transit to its students and faculty. Last year, Merced College approved a tuition increase to pay for free transit service for their students.

Merced County Association of Governments 57

128

Yosemite Area Regional Transportation System (YARTS)

YARTS is a regional public transit system that operates in the Yosemite region. YARTS operates year‐round on Hwy 140 between Merced and Yosemite Valley, through Mariposa County. In the summer, it also operates between Mono County destinations (Mammoth Lakes, June Lake Loop, and Lee Vining) and Yosemite Valley on Hwy 120 East. YARTS, via an expanded service contract with Yosemite National Park Service (NPS), is providing more transit runs. YARTS is also funded by Fresno COG to provide expanded service from Fresno to Yosemite National Park along SR‐41.

YARTS carries locals, commuters and visitors to the Yosemite region. Commuters make up about 35% or more of the ridership and travel in both directions (Mariposa to Yosemite and Mariposa to Merced).

YARTS service connects with Amtrak and Greyhound in Merced to provide travel connections. YARTS contracts with Amtrak to provide their thru‐way service between the trains, stopping in Merced, and Yosemite National Park.

Merced County Association of Governments 58

129 Merced County Association of Governments 2021 Federal Transportation Improvement Program San Joaquin Format ( Highest Version) Route Description Program Schedule Change Description Postmile (Construction Costs escalated per Caltrans percentage) Project Comments PIN Total Escalated Cost 5th year of BEYOND STIP Funding Summary (Current & Prior Years) Dist-EA Four Year Element Fund STIP Air Quality RTP page no. Status Carryover Local State Federal Conformity and map alpha AQ Prior Years 20/21 21/22 22/23 23/24 24/25 25/26 Lead Phase Exemption Code no. * For info only. Reporting Category * For Beyond 5th Information year of STIP Transit Joint Powers Authority for Merced County (TJPAMC) only Fund Estimate

VARIOUSTransit Joint Powers Authority for Merced County PE Carry Over EPA TABLE II/III N/A (TJPAMC): "The Bus" RW EXEMPT: pp. 7,11,12, Prior Transit 40,41,49,61, Operations & Maintenance 5307/5311/STA/LTF Const 12,497,000 10,889,000 10,512,000 10,607,000 Current 3,521,000 24,260,000 16,724,000 Operating 83 2.01 $44,505,000 CTIPS Assistance Appdx. S,W Transit JPA MCCarryover 205-0000-0022 Total 12,497,000 10,889,000 10,512,000 10,607,000 NOTE:

VARIOUSTJPAMC: "The Bus": PE Carry Over EPA TABLE II/III N/A Public Outreach and Marketing RW Prior EXEMPT: CMAQ Const 100,000 100,000 100,000 100,000 Current 400,000 Ride-Sharing pp. 22,28 3.01 $400,000 CTIPS & Van-Pooling Transit JPA MCCarryover 205-0000-0223 Total 100,000 100,000 100,000 100,000 NOTE: Program

VARIOUSTJPAMC: "The Bus" PE Carry Over EPA TABLE II/III N/A Administration Building Remodel RW Prior EXEMPT: pp. 12,40,41, CARES Act Const 100,000 Current 100,000 Recon of 61,83 2.08 $100,000 CTIPS Transit Transit JPA MCCarryover 205-0000-0310 Total 100,000 NOTE: Total estimated cost = $800,000 Structures

VARIOUSGrouped Projects for TJPA Purchase of new buses to PE Carry Over EPA TABLE II/III N/A replace existing vehicles or for minor expansions of the RW EXEMPT: pp. 12,40,41, CARES Act/ fleet Prior Purchase 60,61,83 LCTOP/LTF Const 4,200,000 Current 600,000 3,600,000 replacement 2.10 $4,200,000 CTIPS buses Transit JPA MCCarryover 205-0000-0307 Total 4,200,000 NOTE:

VARIOUS Transit Joint Powers Authority for Merced County: "The PE Carry Over EPA TABLE II/III N/A Bus" RW Prior EXEMPT: pp. 12,40,41, CARES Act Purchase Two Utility Vehicles Const 100,000 Current 100,000 Purchase 61,83 2.02 $100,000 CTIPS Support Transit JPA MCCarryover 205-0000-0311 Total 100,000 NOTE: Total estimated cost = $100,000 Vehicles

Reporting Category Yosemite Area Regional Transportation System (YARTS)

VARIOUSYARTS PE Carry Over EPA TABLE II/III N/A Operations and Maintenance RW Prior EXEMPT: pp. 42,61 5311f/LTF/FEE Const 3,039,000 2,491,000 2,478,000 2,546,000 Current 7,374,000 1,980,000 1,200,000 Transit 2.01 $10,554,000 CTIPS Operating YARTS Carryover 205-0000-0112 Total 3,039,000 2,491,000 2,478,000 2,546,000 NOTE: Assistance

VARIOUSYARTS PE Carry Over EPA TABLE II/III N/A Public Outreach and Marketing RW Prior EXEMPT: CMAQ Const 85,000 85,000 85,000 Current 255,000 Ride-Sharing pp. 22,28, 3.01 $255,000 CTIPS & Van-Pooling 42 YARTSCarryover 205-0000-0130 Total 85,000 85,000 85,000 NOTE: Program 130

Non‐Motorized Transportation

Non‐motorized transportation is defined as trips made on foot or by bicycle. Bicycling and walking are popular modes of travel for neighborhood trips. Mixed land use developments have been instituted within the Merced region to encourage non‐ motorized trips. Mixed land use developments can reduce air pollution, fuel consumption, and traffic congestion.

Merced County was awarded Active Transportation Program (ATP) funding for the Plainsburg Road Complete Street Upgrade project in the Community of Planada. Pedestrian/bicycle facilities have also been implemented with other Merced Region funds: CMAQ; HSIP; Regional sales tax funds reserved for alternative modes; and State‐ exchanged RSTP.

Active Transportation Program (ATP)

The selection process for ATP‐funded projects has become a state, grant‐award process through the California Transportation Commission (CTC). The ATP funding is distributed into three pots: 1) Large MPO’s with populations greater than 200,000; 2) Small urban and rural areas with populations 200,000 or less; 3) Statewide competitive pool. Our region’s projects can compete in categories 2) and 3). As awarded, these ATP projects are programmed in the TIP document.

Merced County Association of Governments 60

131 Merced County Association of Governments 2021 Federal Transportation Improvement Program San Joaquin Format ( Highest Version)

Program Schedule Change Description Route Description Postmile PIN (Construction Costs escalated per Caltrans percentage) Project Comments Dist-EA Total Escalated Cost 5th year of BEYOND STIP Funding Summary (Current & Prior Years) Air Quality RTP page Fund Four Year Element STIP Conformity no. and AQ Exemption map alpha Lead Status 20/21 21/22 22/23 23/24 Carryover Local State Federal Phase Prior Years 24/25 25/26 Code no. * For info only. * For Beyond 5th year Information only of STIP Fund Estimate Reporting Category Active Transportation Program (ATP)

Local PE 293,000 Carry Over EPA TABLE Plainsburg Road Complete Street Upgrade RW II or III pp. 59,61, Prior 17,000 276,000 EXEMPT: 83 ATP Const 1,395,000 Current 1,395,000 Bicycle / 3.02 $ 1 ,395,000 CTIPS Pedestrian Merced County 205-0000-0275 Total 293,000 1,395,000 NOTE: Total project cost = $1,688,000 Facility 132 RESOLUTION NO. 2021/02-18-01

RESOLUTION ADOPTING THE MERCED COUNTY ASSOCIATION OF GOVERNMENTS 2021 FEDERAL TRANSPORTATION IMPROVEMENT PROGRAM AND CONFORMITY ANALYSIS

WHEREAS, the Merced County Association of Governments (MCAG) is a Regional Transportation Planning Agency (RTPA) and a Metropolitan Planning Organization (MPO), pursuant to State and Federal designation; and

WHEREAS, federal planning regulations require that Metropolitan Planning Organizations prepare and adopt a short range Federal Transportation Improvement Program (FTIP) for their region; and

WHEREAS, the 2021 Federal Transportation Improvement Program (2021 FTIP) has been prepared to comply with Federal and State requirements for local projects and through a cooperative process between the Federal Highway Administration (FHWA), the Federal Transit Administration (FTA), the State Department of Transportation (Caltrans), principal elected officials of general purpose local governments and their staffs, and public owner operators of mass transportation services acting through the MCAG forum and general public involvement; and

WHEREAS, the 2021 FTIP program listing is consistent with: 1) the 2018 Regional Transportation Plan; 2) the 2020 State Transportation Improvement Program; and 3) the corresponding Conformity Analysis; and

WHEREAS, the 2021 FTIP contains the MPO’s certification of the transportation planning process assuring that all federal requirements have been fulfilled; and

WHEREAS, the 2021 FTIP meets all applicable transportation planning requirements per 23 CFR Part 450.

WHEREAS, MCAG has integrated into its metropolitan transportation planning process, directly or by reference, the goals, objectives, performance measures, and targets described in other State transportation plans and transportation processes, as well as any plans developed under 49 U.S.C. Chapter 53 by providers of public transportation, required as part of a performance-based program; and

WHEREAS, projects submitted in the 2021 FTIP must be financially constrained and the financial plan affirms that funding is available; and

WHEREAS, the MPO must demonstrate conformity per 40 CFR Part 93 for the RTP and FTIP; and

WHEREAS, the corresponding Conformity Analysis supports a finding that the 2021 FTIP and 2018 RTP meet the air quality conformity requirements for ozone and particulate matter; and

WHEREAS, the 2021 FTIP does not interfere with the timely implementation of the Transportation Control Measures; and

WHEREAS, the 2021 FTIP conforms to the applicable State Implementation Plans (SIPs); and

WHEREAS, the documents have been widely circulated and reviewed by the MCAG advisory committees representing the technical and management staffs of the member agencies; representatives of other governmental agencies, including State and Federal; representatives of special interest groups; representatives of

133 the private business sector; and residents of Merced County consistent with public participation process adopted by MCAG; and

WHEREAS, a public hearing was conducted on February 3, 2021 to hear and consider comments on the 2021 FTIP and corresponding Conformity Analysis;

NOW, THEREFORE, BE IT RESOLVED, that the Merced County Association of Governments adopts the 2021 FTIP and corresponding Conformity Analysis.

BE IT FURTHER RESOLVED, that MCAG finds that the 2021 FTIP is in conformity with the requirements of the Federal Clean Air Act Amendments and applicable SIPs for air quality.

The foregoing resolution was passed and adopted by MCAG this 18th day of February, 2021.

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST:

I hereby certify that the foregoing is a true copy of a resolution of the Merced County Association of Governments duly adopted at a regular meeting thereof held on the 18th day of February, 2021.

Signed: Signed:

______Stacie Guzman, Executive Director April Hogue, Chair Merced County Association of Governments Merced County Association of Governments Governing Board Governing Board

134 ITEM 8a

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PH: 209.723.3153 FAX: 209.723.0322 www.mcagov.org 369 W. 18th Street Merced, CA 95340

ITEM 8a

DATE: February 12, 2021

TO: MCAG Governing Board

FROM: Nav Bagri, Finance Director

RE: Action: Accept the Merced County Association of Governments Audited Financial Statements for the year ending June 30, 2020

SUMMARY

Staff is seeking a recommendation to the Governing Board to approve the Merced County Association of Governments Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020. The audit concluded with no findings.

REQUESTED ACTION

Accept the Merced County Association of Governments Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020.

BACKGROUND

The objective of the independent audit is to ensure that federal and state funding is being spent appropriately. Governmental audits include financial statement audits performed under government auditing standards on entities such as states, local governments, not-for-profit organizations, institutions of higher education, and certain for-profit organizations. MCAG is also required to conduct a single audit when the agency expends more than $750,000 of federal funds.

PAST ACTION TAKEN

January 2020: Governing Board accepted the Merced County Association of Governments Audited Financial Statement for the year ending June 30, 2019.

DISCUSSION

The MCAG Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020, is enclosed for your review. This is a combined audit that includes Merced County Association of Governments General Fund, Measure V, the Regional Transportation Impact Fee, the Local Transportation Fund, the State Exchange Fund, the State Transit Assistance Fund, Service Authority for Freeway Emergencies (SAFE), Non-Major Governmental Funds (Abandoned Vehicle Abatement, AVA) and Merced Data Special Services (MDSS).

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The conclusion of this audit includes no findings of “material weakness” relating to year-end financial close-out. In the prior year audit, there was one finding related to the prior years' accruals whichwere not properly reversed out in the 2018-19 fiscal year.

If you have any questions regarding this staff report, please contact Nav Bagri at 723.3153 x 154 or [email protected].

The Citizens Advisory Committee and the Technical Review Board concur with the requested action.

FISCAL IMPACT

None.

REQUESTED ACTION

Accept the Merced County Association of Governments Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020.

ATTACHMENT

MCAG Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020.

137

MERCED COUNTY ASSOCIATION OF GOVERNMENTS

FINANCIAL STATEMENTS WITH INDEPENDENT AUDITORS’ REPORT

FOR THE YEAR ENDED JUNE 30, 2020 DRAFT

138

TABLE OF CONTENTS Page Financial Section

Independent Auditors’ Report ...... 1

Management’s Discussion and Analysis...... 3

Basic Financial Statements

Government‐Wide Financial Statements:

Statement of Net Position ...... 10

Statement of Activities ...... 11

Fund Financial Statements:

Balance Sheet – Governmental Funds ...... 12

Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Position ...... 13

Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ...... 14

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds to the Statement of Activities...... 15

Statement of Net Position ‐ Proprietary Fund ...... 16

Statement of Revenues, Expenses and Changes in Net Position – Proprietary Fund ...... 17

Statement of Cash Flows – Proprietary Fund ...... DRAFT...... 18

Statement of Fiduciary Net Position – Fiduciary Funds ...... 19

Statement of Changes in Fiduciary Net Position – Fiduciary Funds ...... 20

Notes to the Basic Financial Statements ...... 21

Required Supplementary Information

Statement of Revenues, Expenditures, and Changes in Fund Balance Budget to Actual – General Fund ...... 36

Statement of Revenues, Expenditures, and Changes in Fund Balance Budget to Actual – Metropolitan Planning Organization Fund ...... 37

Statement of Revenues, Expenditures, and Changes in Fund Balance Budget to Actual – Regional Transportation Impact Fee Fund ...... 38

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Statement of Revenues, Expenditures, and Changes in Fund Balance Budget to Actual – Service Authority for Freeway Emergencies Fund ...... 39

Statement of Revenues, Expenditures, and Changes in Fund Balance Budget to Actual – Measure V Regional and Transit Funds ...... 40

Statement of Revenues, Expenditures, and Changes in Fund Balance Budget to Actual – Passenger Rail Fund ...... 41

Notes to the Required Supplementary Information ...... 42

Supplementary Information

Schedule of Expenditures of Federal Awards ...... 43

Notes to the Schedule of Expenditures of Federal Awards ...... 44

Other Schedules

Summary of Resources and Expenditures by Work Element ...... 45

Schedule of Regular Allocations and Disbursements by Purpose – Local Transportation Fund ...... 47

Schedule of Regular Allocations and Disbursements by Purpose – State Transit Assistance Fund ...... 48

Schedule of Regular Allocations and Disbursements by Purpose – State of Good Repair ...... 49

Schedule of Regular Allocations and Disbursements by Purpose Regional Surface Transportation Program Exchange Fund ...... 50

Schedule of Insurance Coverages ...... DRAFT...... 51

Other Auditors’ Reports

Independent Auditors’ Report on Internal Controls Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ...... 52

Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance...... 54

Findings and Recommendations

Schedule of Findings and Questioned Costs ...... 56

Summary Schedule of Prior Audit Findings ...... 58

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INDEPENDENT AUDITORS’ REPORT

To the Governing Board of the Merced County Association of Governments

Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business‐type activities, each major fund, and the aggregate remaining fund information of the Merced County Association of Governments (the Association) as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the Association’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility 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 from material misstatDRAFTement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Association’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Association’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business‐type activities, each major fund, and the aggregate remaining fund information of the Association, as of June 30, 2020, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

7473 N. INGRAM AVE., SUITE 102  FRESNO, CA 93711 ______

P (559) 412-7576  F (559) 493-5325  WWW.HHCCPAS.COM

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Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages 3‐9 and 36‐42 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Association’s basic financial statements. The other schedules, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. The schedule of expenditures of federal awards is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. The other schedules, as listed in the table of contents, have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. DRAFT Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January xx, 2021, on our consideration of the Association’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Association’s internal control over financial reporting and compliance.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California January XX, 2021

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MANAGEMENT’S DISCUSSION AND ANALYSIS

DRAFT

143

MERCED COUNTY ASSOCIATION OF GOVERNMENTS MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2020

The management of Merced County Association of Governments (MCAG) presents the following narrative overview and analysis of the financial statements for the year ended June 30, 2020. The financial information presented here should be considered in conjunction with the financial statements presented in the following pages.

Financial Highlights

 MCAG’s Total Net Position, as shown on the Statement of Net Position, for all fund types for the fiscal year ending June 30, 2020, is $26,907,200. This is an increase of $4,683,356, from the ending balance of the prior fiscal year.

 Total liabilities as shown on the Statement of Net Position for all fund types for the fiscal year ending June 30, 2020, is $5,102,930. This is a net increase from the prior year of $3,402,168.

 During the 2019‐2020 fiscal year, the Local Transportation Fund increased by $91,712, leaving a fiduciary net position of $2,242,578. The increase is due to the interest earned within the fiscal year.

 $26,588,114, of all Primary Government net position represents resources that are subject to restrictions on how they may be used. The restricted governmental funds include the Metropolitan Planning Organization (MPO) Fund, Regional Transportation Impact Fee (RTIF) Fund, Service Authority for Freeway Emergencies (SAFE) Fund, Measure V Regional Fund, and the Passenger Rail Fund.

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to MCAG's basic financial statements. MCAG’s basic financial statements are comprised of three components: 1) government‐wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains other required supplementary information.

Government‐wide Financial Statements

The government‐wide financial statements are designed to provide readers with a broad overview of MCAG's finances, in a matter similar to a private‐sector business. TheDRAFTse statements provide both long‐term and short‐term information about MCAG’s overall status.

The focus is on both MCAG as a whole and the fund financial statements, including the major individual funds of the government and business‐type categories, as well as fiduciary funds, and component units. Both the government‐ wide and fund financial statements (within the basic financial statements) categorize primary activities as either governmental or business types. In the government‐wide Statement of Net Position, both the governmental and business‐type activities columns are presented on a consolidated basis by column, and are reflected, on a full accrual basis, which incorporates long‐term assets and receivables as well as long‐term debt and obligations. Each presentation provides valuable information that can be analyzed and compared (between years and between agencies) to enhance the usefulness of the information.

The Statement of Net Position presents information on all of MCAG's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial picture of MCAG is improving or deteriorating.

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MERCED COUNTY ASSOCIATION OF GOVERNMENTS MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

The Statement of Activities presents information showing how the net position changed during the most recent 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. Thus, revenues and expense are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., earned but unused vacation leave).

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources segregated for specific activities or objectives. MCAG uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. MCAG's funds can be divided into three categories: governmental funds, proprietary 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, unlike the government‐wide financial statements, governmental fund financial statements focus on near‐term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating an agency’s near‐term financing requirements.

Because 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. By doing so, readers may better understand the long‐term impact of the association’s near‐term financing decisions. Both the governmental fund Balance Sheet and the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The Association’s governmental funds include the General Fund and seven Special Revenue Funds. The Special Revenue Funds include the Metropolitan Planning Organization Fund (MPO), the Regional Transportation Impact Fee Fund (RTIF), the Service Authority for Freeway Emergencies Fund (SAFE), the Passenger Rail Fund, the Measure V Regional Fund, the Measure V Transit Fund and the nonmajor governmental fund. The General Fund accounts for the primary planning activities of MCAG.

The Special Revenue Funds account for activity for which the receipts of federal, state and local monies are DRAFT designated for specific purposes.

Proprietary Funds report activity financed and operated like a private entity either as an enterprise fund or as an internal service fund. For MCAG the proprietary fund is the component unit Merced Data Special Services, Inc. Proprietary funds provide the same type of information as the government‐wide financial statements, only in more detail. In the proprietary fund, income is recorded when earned and expenses are recorded when incurred.

Fiduciary funds are used to account for resources held for the benefit of other parties outside the government. Fiduciary funds are not reflected in the government‐wide financial statements because the resources of those funds are not available to support the Association’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.

Notes to the Basic Financial Statements provide additional information that is essential to the full understanding of the data provided in the government‐wide and fund financial statements.

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MERCED COUNTY ASSOCIATION OF GOVERNMENTS MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

GOVERNMENT‐WIDE FINANCIAL ANALYSIS

As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of MCAG, assets exceed liabilities by $26,907,200, for all activities, at the close of the fiscal year.

Merced County Association of Governments Primary Government and Component Unit – Statement of Net Position

Business‐Type Governmental Activities Activities Total (restated) (restated) (restated) 2020 2019 2020 2019 2020 2019

ASSETS Current assets $ 31,421,067 $ 23,374,460 $ 186,028 $ 188,750 $ 31,607,095 $ 23,563,210 Capital assets, net 403,035 361,396 ‐ ‐ 403,035 361,396

Total Assets 31,824,102 23,735,856 186,028 188,750 32,010,130 23,924,606

LIABILITIES Current liabilities 5,098,172 1,698,853 4,758 1,909 5,102,930 1,700,762

Total Liabilities 5,098,172 1,698,853 4,758 1,909 5,102,930 1,700,762

NET POSITION

Net Investment in capital assets 403,035 361,396 ‐ ‐ 403,035 361,396 Restricted 26,588,114 21,873,917 ‐ ‐ 26,588,114 21,873,917 Unrestricted (265,219) (198,310) 181,270 186,841 (83,949) (11,469)

Total Net Position $ 26,725,930 $ 22,037,003 $ 181,270 $ 186,841 $ 26,907,200 $ 22,223,844

The largest portion of the Association’s net position represents resources that are subject to external restrictions on how they may be used. 84% of the restricted net position, or $22,461,527, belongs to the Measure V Regional Fund. Capital assets (e.g. land, improvements and equipment) reflect 1.5% of the net position. The remaining represents unrestricted net position. DRAFT There was a decrease of $5,571 in the net position of the business‐type activities.

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MERCED COUNTY ASSOCIATION OF GOVERNMENTS MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

Merced County Association of Governments Primary Government and Component Unit ‐ Statement of Activities

Business‐Type Governmental Activities Activities Total (restated) (restated) (restated) 2020 2019 2020 2019 2020 2019

REVENUES Program Revenues: Federal operating revenue $ 794,507 $ 769,627 ‐$ $ ‐ $ 794,507 $ 769,627 State and local operating revenue 9,986,315 10,297,619 ‐ ‐ 9,986,315 10,297,619 Charges for services 5,074,885 5,556,689 322 1,963 5,075,207 5,558,652 General revenues: Interest and investment earnings 543,031 699,763 ‐ 249 543,031 700,012 Internal revenue services 1,061,543 ‐ ‐ ‐ 1,061,543 ‐

Total Revenues 17,460,281 17,323,698 322 2,212 17,460,603 17,325,910

EXPENSES Program Expenditures: General Administration 4,977,596 4,795,954 5,869 3,819 4,983,465 4,799,773 Transportation Planning 451,546 6,754,549 ‐ ‐ 451,546 6,754,549 Other Planning 1,979,949 1,916,248 ‐ ‐ 1,979,949 1,916,248 Misc. expenses ‐ ‐ 24 24 ‐ Transfers to Other Local Agencies 5,362,263 25 ‐ ‐ 5,362,263 25

Total Expenditures 12,771,354 13,466,776 5,893 3,819 12,777,247 13,470,595

Change in Net Position 4,688,927 3,856,922 (5,571) (1,607) 4,683,356 3,855,315

Net Position, Beginning of Year 22,037,003 18,180,081 186,841 188,448 22,223,844 18,368,529

Net Position, End of Year $ 26,725,930 $ 22,037,003 $ 181,270 $ 186,841 $ 26,907,200 $ 22,223,844

Government Activities – Primary Government activities increased by $4,683,356, during this fiscal year. This is mainly due to the continued remittance of Measure V regional project and Measure V ridership reimbursements.

As shown on the Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds, total revenues for Governmental Funds for the fiscal year ending JuneDRAFT 30, 2020, are $17,460,281. This is an increase of $136,853 or 0.79%, from the prior fiscal year. The major change was due to the addition of Measure V Transit fund in the reporting of Governmental Funds.

Also shown on the Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds, total expenditures in Regional Transportation Impact Fee Funds for the fiscal year ending June 30, 2020 are $0. This is a decrease of $5,582,110, from the previous fiscal year. This change is due to dissolvement of the Regional Transportation Impact Fee fund by the jurisdictions.

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MERCED COUNTY ASSOCIATION OF GOVERNMENTS MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

FINANCIAL ANALYSIS OF THE GOVERNMENTAL FUND

As noted earlier, MCAG uses fund accounting to ensure and demonstrate compliance with finance‐related legal requirements.

Governmental Funds – The focus of MCAG’s governmental funds is to provide information on near‐term inflows and outflows, and balances of spendable resources. Such information is useful in assessing MCAG’s financing requirements. In particular, the unrestricted fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

The Association’s governmental funds reported a combined fund balance at June 30, 2020, of $26,602,307, a net increase of $4,697,448. This net increase was a result of increases in the Metropolitan Planning Organization Fund, Regional Transportation Impact Fee Fund, Services Authority for Freeway Emergencies Fund, Passenger Rail Fund, and Measure V Regional Fund, which were offset somewhat by a decrease in the General Fund.

The General Fund is the operating fund of the Association. At the end of the current fiscal year, the fund balance of the General Fund was $14,308.

The General Fund net change in fund balance was a decrease of $3,726, during the fiscal year. This decrease was a result of a slight difference in the actual salaries and benefits expenses versus the allocation of these expenses into different projects.

Other changes in fund balances include the following:

Regional Transportation Impact Fee:  This major fund increased by $911 due to revenues exceeding expenditures. The reason for the fund increase is due to the Regional Transportation Impact fee fund being dissolved by the jurisdiction. The funding got reallocated to the jurisdiction by a formula. Service Authority for Freeway Emergencies:  DMV fee collections exceeded actual service expenditures, increasing the major fund balance by $259,716 Measure V Regional Fund:  With the full year remittance of the Measure V sales tax, a netDRAFT change of $4,198,872 is recorded that will sustain different regional projects.

GENERAL FUND BUDGETARY HIGHLIGHTS

The Association’s General Fund budget is prepared in which total revenues equals total expenditures. During the course of the fiscal year, changes in staff members decreased the General Fund’s salaries and benefits expenditures which resulted in the decrease of charges for services.

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MERCED COUNTY ASSOCIATION OF GOVERNMENTS MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets – The Association’s net investment in capital assets for both governmental and business‐type activities as of June 30, 2020, amounted to $403,035. This investment in capital assets includes land, construction in progress, buildings and improvements, and furniture and equipment. Additional information on the Association’s capital assets can be found in Note 5 – Capital Assets.

Capital Assets

Governmental Business‐Type Activities Activities Total 2020 2019 2020 2019 2020 2019

Non‐Depreciable Assets Land$ 75,000 75,000$ ‐$ ‐$ 75,000$ 75,000$ Construction in progress 51,869 ‐ ‐ ‐ 51,869 ‐

Total Non‐Depreciable Assets 126,869 75,000 ‐ ‐ 126,869 75,000

Depreciable Assets Buildings and improvements 575,558 575,558 ‐ ‐ 575,558 575,558 Furniture and equipment 526,478 512,186 71,232 71,232 597,710 583,418

Total Depreciable Assets 1,102,036 1,087,744 71,232 71,232 1,173,268 1,158,976

Accumulated Depreciation Buildings and improvements (317,379) (301,867) ‐ ‐ (317,379) (301,867) Furniture and equipment (508,491) (499,481) (71,232) (71,232) (579,723) (570,713)

Total Depreciable Assets, Net 276,166 286,396 ‐ ‐ 276,166 286,396

Total Capital Assets $ 403,035 361,396$ ‐$ ‐$ 403,035$ $ 361,396

Long‐term debt – The Association has no long‐term debt. DRAFT

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

 The fiscal year 2020 budget was finalized during a period of unprecedented disruption from the COVID‐19 pandemic and the associated shelter in place order. The coronavirus pandemic has a significant and lasting impact, not just in Merced County but throughout the Central Valley. As of July 2020, the Bureau of Labor Statistics reported that the unemployment rates were 14.4% for Merced, 13.5% for California, and 10.2% for the Nation. The Association is not anticipating any cost of living allowance for the next fiscal year.

 The Association will complete the administration building’s front lobby security upgrades in fiscal year 2021.

 While it is clear that fiscal impacts will be significant, changes are too recent for clear indications of the magnitude and extent of the effects on Measure V sales tax revenues. The Association is anticipating a 10% reduction in sales tax revenues.

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MERCED COUNTY ASSOCIATION OF GOVERNMENTS MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

REQUEST FOR INFORMATION

This financial report is designated to provide a general overview of the Association’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Nav Bagri, Finance Director, Merced County Association of Governments, 369 West 18th Street, Merced, CA 95340, or at [email protected].

DRAFT

150

BASIC FINANCIAL STATEMENTS

DRAFT

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MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF NET POSITION JUNE 30, 2020

Primary Government Governmental Business‐Type Activities Activities Total

ASSETS Cash and investments$ 28,437,403 $ 184,858 $ 28,622,261 Accounts receivable 19,991 1,170 21,161 Due from other governments 2,830,889 ‐ 2,830,889 Prepaid expenses 132,784 ‐ 132,784 Capital assets: Nondepreciable 126,869 ‐ 126,869 Depreciable, net of accumulated depreciation 276,166 ‐ 276,166

Total Assets 31,824,102 186,028 32,010,130

LIABILITIES Accounts payable 139,284 1,909 141,193 Accrued payroll and related items 106,733 ‐ 106,733 Due to other governments ‐ ‐ ‐ Due to other local agencies 128,203 2,849 131,052 Unearned revenue 4,388,826 ‐ 4,388,826 Bank overdrafts 2,218 ‐ 2,218 Noncurrent liabilities: Due within one year: Compensated absences 332,908 ‐ 332,908

Total Liabilities 5,098,172 4,758 5,102,930

NET POSITION Net investment in capital assets 403,035 ‐ 403,035 Restricted for: DRAFT Highways and streets 22,506,592 ‐ 22,506,592 Other 4,081,522 ‐ 4,081,522 Unrestricted (265,219) 181,270 (83,949)

Total Net Position $ 26,725,930 $ 181,270 $ 26,907,200

The accompanying notes are an integral part of the financial statements.

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MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2020

Net (Expenses) Revenues and Program Revenues Changes in Net Position Charges Operating Capital Primary Government for Grants and Grants and Governmental Business‐Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total

Primary government: Governmental activities: General government$ 4,977,596 $ 5,074,885 $ ‐ $ 340,442 $ 437,731 $ ‐ $ 437,731 Transportation planning 451,546 ‐ 794,507 9,570,657 9,913,618 ‐ 9,913,618 Other planning 1,979,949 ‐ ‐ 75,216 (1,904,733) ‐ (1,904,733) Transfers to other local agencies 5,362,263 ‐ ‐ ‐ (5,362,263) ‐ (5,362,263)

Total primary government ‐ governmental activities 12,771,354 5,074,885 794,507 9,986,315 3,084,353 ‐ 3,084,353

Business‐type activities: Merced Data Special Services, Inc. 5,893 322 ‐ ‐ ‐ (5,571) (5,571)

Totals $ 12,777,247 $ 5,075,207 $ 794,507 $ 9,986,315 3,084,353 (5,571) 3,078,782

General Revenues: Interest and investment earnings 543,031 ‐ 543,031 Internal revenue services 1,061,543 ‐ 1,061,543 Total General RevenuesDRAFT 1,604,574 ‐ 1,604,574 Change in Net Position 4,688,927 (5,571) 4,683,356

Net Position, Beginning of Year 24,187,869 186,841 24,374,710

Prior Period Adjustment (2,150,866) ‐ (2,150,866)

Net Position, End of Year $ 26,725,930 $ 181,270 $ 26,907,200

The accompanying notes are an integral part of the financial statements.

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MERCED COUNTY ASSOCIATION OF GOVERNMENTS BALANCE SHEET – GOVERNMENTAL FUNDS JUNE 30, 2020

Service Regional Authority Transportation for Freeway Passenger Measure V Measure V Nonmajor Total General MPO Impact Fee Emergencies Rail Regional Transit Governmental Governmental Fund Fund Fund Fund Fund Fund Fund Fund Funds ASSETS Cash and investments$ ‐ $ 1,391,946 $ 84,672 $ 3,171,499 $ 700,639 $ 20,727,155 $ 2,361,492 ‐$ $ 28,437,403 Receivables: Accounts receivable ‐ 19,991 ‐ ‐ ‐ ‐ ‐ ‐ 19,991 Due from other governments 70,615 568,384 ‐ 41,287 96,875 1,734,372 260,267 59,089 2,830,889 Prepaid expenses 130,681 2,103 ‐ ‐ ‐ ‐ ‐ ‐ 132,784

Total Assets $ 201,296 $ 1,982,424 $ 84,672 $ 3,212,786 $ 797,514 $ 22,461,527 $ 2,621,759 $ 59,089 $ 31,421,067

LIABILITIES Accounts payable $ 120,646 $ 18,638 ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ $ 139,284 Accrued liabilities 66,342 40,391 ‐ ‐ ‐ ‐ ‐ ‐ 106,733 Due to other local agencies ‐ 29,379 ‐ 128 ‐ 39,607 ‐ 59,089 128,203 Due to other funds ‐ 53,496 ‐ ‐ ‐ ‐ ‐ ‐ 53,496 Unearned revenue ‐ 979,567 ‐ ‐ 787,500 ‐ 2,621,759 ‐ 4,388,826 Bank overdrafts ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,218 2,218 Total Liabilities 186,988 1,121,471 ‐ 128 787,500 39,607 2,621,759 61,307 4,818,760

FUND BALANCES (DEFICIT) Nonspendable 130,681 2,103 ‐ ‐ ‐ ‐ ‐ ‐ 132,784 Restricted for: Highways and streets ‐ ‐ 84,672 ‐ ‐ 22,421,920 ‐ ‐ 22,506,592 Other ‐ 858,850 ‐ 3,212,658 10,014 ‐ ‐ ‐ 4,081,522 Unassigned (116,373) ‐ ‐ ‐ ‐ ‐ ‐ (2,218) (118,591) Total Fund Balances (Deficit) 14,308 DRAFT 860,953 84,672 3,212,658 10,014 22,421,920 ‐ (2,218) 26,602,307 Total Liabilities and Fund Balances (Deficit) $ 201,296 $ 1,982,424 $ 84,672 $ 3,212,786 $ 797,514 $ 22,461,527 $ 2,621,759 $ 59,089 $ 31,421,067

The accompanying notes are an integral part of the financial statements.

154

MERCED COUNTY ASSOCIATION OF GOVERNMENTS RECONCILIATION OF THE BALANCE SHEET – GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2020

Reconciliation of the Balance Sheet of the Governmental Funds to the Statement of Net Position:

Total Fund Balances (Deficit) ‐ Governmental Funds $ 26,602,307

Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds: Total capital assets$ 1,228,905 Accumulated depreciation (825,870) 403,035 Long‐term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds: Compensated absences (332,908)

To eliminate interfund activities 53,496

Total Net Position ‐ Governmental Activities $ 26,725,930

DRAFT

The accompanying notes are an integral part of the financial statements.

155

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020

Service Regional Authority Transportation Local for Freeway Passenger Measure V Measure V Nonmaj or Total General MPO Impact Fee Transportation Emergencies Rail Regional Transi t Governmental Governmental Fund Fund Fund Fund Fund Fund Fund Fund Fund Funds

REVENUES Sales taxes$ ‐ $ 190,905 ‐$ ‐$ ‐$ ‐$ $ 8,970,366 $ 133,261 ‐$ $ 9,294,532 Charges for services 4,415,710 659,175 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,074,885 State and local revenues ‐ 142,660 ‐ ‐ 229,769 ‐ ‐ ‐ 229,054 601,483 Federal revenues ‐ 794,507 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 794,507 Investment earnings ‐ 32,644 911 ‐ 44,286 7,682 457,508 ‐ ‐ 543,031 Other income ‐ 90,300 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 90,300 Internal revenue services ‐ 1,061,543 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,061,543 Total Revenues 4,415,710 2,971,734 911 ‐ 274,055 7,682 9,427,874 133,261 229,054 17,460,281

EXPENDITURES Current: General government: Salaries and benefits 4,210,454 2,090,243 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6,300,697 Supplies and services 208,982 581,337 ‐ ‐ 14,339 ‐ 50 ‐ 229,054 1,033,762 Highways and streets ‐ ‐ ‐ ‐ ‐ ‐ 5,228,952 133,261 ‐ 5,362,213 Capital outlay: General government ‐ 66,161 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 66,161 Total Expenditures 4,419,436 2,737,741 ‐ ‐ 14,339 ‐ 5,229,002 133,261 229,054 12,762,833

Net Change in Fund Balances (3,726) 233,993 911 ‐ 259,716 7,682 4,198,872 ‐ ‐ 4,697,448

Fund Balances (Deficit), Beginning of Year 18,034 626,960 83,761 2,150,866 2,952,942 2,332 18,223,048 ‐ (2,218) 24,055,725

Prior Period Adjustment ‐ ‐ ‐ (2,150,866) ‐ ‐ ‐ ‐ ‐ (2,150,866)

Fund Balances (Deficit), End of Year $ 14,308 $ 860,953 $ 84,672 ‐$ $ 3,212,658 $ 10,014 $ 22,421,920 $ ‐ $ (2,218) $ 26,602,307

DRAFT

The accompanying notes are an integral part of the financial statements.

156

MERCED COUNTY ASSOCIATION OF GOVERNMENTS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2020

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of the Governmental Funds to the Statement of Activities:

Net Change in Fund Balances ‐ Governmental Funds $ 4,697,448

Capital outlays are reported in governmental funds as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlay exceeded depreciation expense in the current period: 41,639

Compensated absences: In governmental funds, compensated absences are measured by the amounts paid during the period. In the Statement of Activities, compensated absences are measured by the amounts earned. The difference between compensated absences paid and those earned was: (50,160)

Change in Net Position ‐ Governmental Activities $ 4,688,927

DRAFT

The accompanying notes are an integral part of the financial statements.

157

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF NET POSITION PROPRIETARY FUND JUNE 30, 2020

Enterprise Fund MDSS, Inc. ASSETS Current assets: Cash and investments $ 184,858 Accounts receivable 1,170 Due from other funds 53,496

Total current assets 239,524

Noncurrent assets: Capital assets: Depreciable capital assets 71,232 Accumulated depreciation (71,232)

Capital assets, net: ‐

Total noncurrent assets ‐

Total Assets 239,524

LIABILITIES Current liabilities: Accounts payable 1,909 Due to other governments 2,849

Total current liabilities 4,758

Total Liabilities 4,758

NET POSITION Unrestricted DRAFT 234,766 Total Net Position $ 234,766

Reconciliation of the Statement of Net Position of the Proprietary Fund to the Statement of Net Position of the Business‐Type Activities:

Total Net Position ‐ Proprietary Fund $ 234,766

To eliminate interfund activities (53,496)

Total Net Position ‐ Business‐Type Activities $ 181,270

The accompanying notes are an integral part of the financial statements.

158

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUND FOR THE YEAR ENDED JUNE 30, 2020

Enterprise Fund MDSS, Inc. OPERATING REVENUES Charges for services $ 322

Total Operating Revenues 322

OPERATING EXPENSES General administration 5,869 Misc. expenses 24

Total Operating Expenses 5,893

Operating Income (Loss) (5,571)

Change in Net Position (5,571)

Net Position, Beginning of Year 240,337

Net Position, End of Year$ 234,766

DRAFT

The accompanying notes are an integral part of the financial statements.

159

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF CASH FLOWS PROPRIETARY FUND FOR THE YEAR ENDED JUNE 30, 2020

Enterprise Fund MDSS, Inc. Cash Flows from Operating Activities: Receipts from customers$ 322 Payments to suppliers and service providers (5,893)

Net Cash Provided (Used) by Operating Revenues (5,571)

Cash Flows from Non‐Capital Financing Activities: Transfers from (to) other funds 2,849

Net Cash Provided (Used) by Non‐Capital Financing Activities 2,849

Net increase (decrease) in cash and investments (2,722)

Cash and investments at beginning of year 187,580

Cash and investments at end of year$ 184,858

Reconciliation of change in net position to net cash provided (used) by operating activities: Change in net position$ (5,571)

Net cash provided (used) by operating activities$ (5,571)

DRAFT

The accompanying notes are an integral part of the financial statements.

160

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2020

State Transit State Local Measure V Assistance Exchange Transportation Trust Fund Fund Fund Fund Total ASSETS Cash and investments $ 965,317 $ 2,997,374 $ 3,102,835 $ ‐ $ 7,065,526 Receivables: Due from other governments 727,191 ‐ 1,554,332 2,119,788 4,401,311

Total Assets 1,692,508 2,997,374 4,657,167 2,119,788 11,466,837

LIABILITIES Due to other local agencies 1,544,343 2,880,903 2,414,589 2,119,788 8,959,623

Total Liabilities 1,544,343 2,880,903 2,414,589 2,119,788 8,959,623

NET POSITION Held in trust for the benefit of others 148,165 116,471 2,242,578 ‐ 2,507,214

Total Net Position $ 148,165 $ 116,471 $ 2,242,578 $ ‐ $ 2,507,214

DRAFT

The accompanying notes are an integral part of the financial statements.

161

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2020

State Transit State Local Measure V Assistance Exchange Transportation Trust Fund Fund Fund Fund Total ADDITIONS Sales taxes $ 3,011,531 $ 3,119,555 $ 7,750,000 $ 10,963,781 $ 24,844,867 Investment earnings 18,691 3,317 91,712 ‐ 113,720

Total Revenues 3,030,222 3,122,872 7,841,712 10,963,781 24,958,587

DEDUCTIONS Contributions to other local agencies 3,021,020 3,119,555 7,750,000 10,963,781 24,854,356

Total Deductions 3,021,020 3,119,555 7,750,000 10,963,781 24,854,356

Changes in Net Position 9,202 3,317 91,712 ‐ 104,231

Net Position, Beginning of Year 886,956 113,154 ‐ ‐ 1,000,110

Prior Period Adjustment (747,993) ‐ 2,150,866 ‐ 1,402,873

Net Position, End of Year $ 148,165 $ 116,471 $ 2,242,578 $ ‐ $ 2,507,214

DRAFT

The accompanying notes are an integral part of the financial statements.

162

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity: In 1967, the Merced County Association of Governments (the Association) was created through a Joint Powers Agreement adopted by the cities and the County of Merced. This agreement has been subsequently renewed, most recently in 2013, for a term of ten years.

On July 20, 1972, the Merced County Association of Governments was designated as the Regional Transportation Planning Agency for the County of Merced by the Secretary of Business and Transportation Agency of the State of California. The Association and the State of California Department of Transportation (CALTRANS) have formally agreed to a continuous transportation planning process by mutually executing a Memorandum of Understanding.

The Association’s governing board is comprised of the five supervisors of the County of Merced and one representative from the cities of Merced, Atwater, Livingston, Dos Palos, Gustine, and Los Banos. The governing board exercises extensive control over the activities of the Association. These controls take the form of approvals, review of progress reports from the Association’s staff, decision‐making, and general administration.

Financial Reporting Entity: The Government Accounting Standards Board (GASB) establishes criteria for determining which organizations should be included in a governmental reporting entity. The focal point for preparing financial statements of a financial reporting entity is the primary government.

The identification of a financial reporting entity is built around the concept of financial accountability. That is, if a primary government is financially accountable for another entity, that entity’s financial statements must be included in the financial statements of the reporting entity. Thus, the financial reporting entity consists of the primary government and its component units.

Primary government is defined as a state, general purpose local or special purpose local government that has a separately elected governing body, is legally separate, and is fiscally independent of the other state or local governments.

Component units are defined as legally separate organizations for which the elected officials of the primary government are financially accountable. In addition, a component unit can be another organization for which the nature and significance of its relationship with a primary government is such that the exclusion would cause the reporting entity’s financial statements to be misleading or incDRAFTomplete. Merced Data Special Services, Inc. (MDSS) is a nonprofit corporation organized to provide special planning services and products to governmental agencies and other organizations. The MDSS governing body is identical to the Association. MDSS utilizes the employees of the Association.

Based on these criteria and definitions, the Association is the primary government and MDSS is reported as a blended component unit. MDSS is presented as an enterprise fund‐type within the accompanying financial statements of the Association.

Basis of Presentation: The Association’s basic financial statements consist of government‐wide statements, including a Statement of Net Position, Statement of Activities, and fund financial statements, which provide a more detailed level of financial information.

Management’s Discussion and Analysis – GASB Statement No. 34 requires the financial statements be accompanied by a narrative introduction and analytical overview of the Association’s financial activities in the form of “Management’s Discussion and Analysis” (MD&A). This analysis is similar to the analysis provided in the annual reports of private sector organizations.

163

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Basis of Presentation (continued):

Government‐Wide Financial Statements: The Statement of Net Position and the Statement of Activities report information on all of the non‐fiduciary activities of the Association and its component units. The government‐wide financial statements are prepared using the economic resources measurement focus. This is the same approach used in the preparation of the proprietary fund and fiduciary fund financial statements but differs from the manner in which governmental fund financial statements are prepared. Governmental fund financial statements, therefore, include a reconciliation with brief explanations to better identify the relationship between the government‐wide statements and the statements for the governmental funds. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business‐type activities, which rely to a significant extent on charges and fees for support.

Statement of Activities: 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 services 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 items, which are not included among program revenues, are reported instead as general revenues.

Fund Financial Statements: The fund financial statements provide information about the Association’s funds. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All the remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Separate statements for each fund category – governmental and proprietary – are presented. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from non‐exchange transaction or ancillary activities.

Major Funds: GASB Statement No. 34 defines major funds and reqDRAFTuires that the Association’s major governmental funds be identified and presented separately in the fund financial statements.

Major funds are defined as funds that have either assets, liabilities, revenues, or expenditures equal to ten percent of their fund‐type total and five percent of the grand total. The General Fund is always a major fund. The Association may also select other funds it believes should be presented as major funds.

The Association reports the following major governmental funds:

The General Fund is the Association’s primary operating fund. It accounts for all financial resources of the Association, except those required to be accounted for in another fund.

The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. The Association maintains six major special revenue funds:

 The Metropolitan Planning Organization (MPO) Fund accounts for revenues received and expenditures made in carrying out the metropolitan transportation planning process.

 The Regional Transportation Impact Fee (RTIF) Fund was organized in January 2005. The RTIF fund was established to provide a means to access and collect fees on new development throughout Merced County. However, during the fiscal year 2018‐19, jurisdictions finalized the termination of the program as they deemed the program to be no longer practical or appropriate. 22

164

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Major Funds (continued):

 The Service Authority for Freeway Emergencies Fund was organized in January 1995. The revenue to complete and maintain the system is derived from the $1.00 per year charge, per vehicle registered in Merced County. The system is envisioned to consist of 130 call boxes installed on Interstate 5 and State Routes 99 and 152.

 The Passenger Rail Fund was organized in 2018. The revenues received by this fund must be used for passenger rail expenditures.

 The Measure V Regional and Transit Funds is Merced County's 30‐year ½ cent transportation sales tax that was passed by voters in November 2016. The measure is estimated to generate $15 million in new revenue annually and $450 million over the life of the measure. Expenditure plans allocate the estimated $15 million in new annual revenue to the following funding categories: Regional Projects (east and west side shares), Local Projects and Alternative Modes Projects, Transit, and Administration. The funds were organized to administer the regional and transit project funds received.

Nonmajor Governmental Fund:

The Association maintains one nonmajor special revenue fund:

 The Abandoned Vehicle Abatement Fund is used to account for fees placed on every vehicle registered in Merced County. Participating jurisdictions are able to use those fees for vehicle abatement according to vehicle codes.

Major Enterprise Funds:

The Association reports the following major enterprise fund:

 Merced Data Special Services, Inc.DRAFT (MDSS) provides special planning services and products to governmental agencies and other organizations primarily within Central California. In addition, MDSS operates the www.yosemite.com website, which provides accurate, real‐time information about Yosemite National Park and the surrounding region.

Fiduciary Funds:

The Measure V Trust Fund is the portion of the Measure V activity that the Association receives and passes through to the participating jurisdictions. The following is a list of funding recipients:

 City of Atwater  City of Dos Palos  City of Gustine  City of Livingston  City of Los Banos  City of Merced  County of Merced

165

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fiduciary Funds (continued):

The State Transit Assistance Fund is used to account for public transportation monies derived from statewide sales taxes, and for the apportionment and disbursement of such funds to participating cities and Merced County according to approved claims.

The State Exchange Fund is used to account for the exchange of federal regional surface transportation program funds for nonfederal and state highway funds, and for the apportionment and disbursement of such funds to participating cities and Merced County in accordance with the approved claims.

The Local Transportation Fund accounts for revenues received for use on certain transportation and transit projects within Merced County. Financing is generated from a one quarter percent state sales and use tax made pursuant to the California Transportation Development Act (TDA). Expenditures of these moneys must be made in accordance with TDA provisions.

Allocations: The Council apportions, allocates, and makes payments of LTF and STA funds to various claimants based on their Transit Cost Sharing Procedures, which are approved by the Transportation Development Act.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation: The government‐wide and proprietary fund financial statements are reported using the economic resources measurement focus and the 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 Association 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 government funds are recorded only when payment is due.

Governmental funds are reported using the current financial resources measurement focus and the modified basis of accounting. Under this method, revenues are recognized when measurable and available. The Association considers all revenues reported in the governmental funds to be available if the revenues are collected 90 days after year‐end. Sales taxes, state and local revenues, federal revenuDRAFTes, and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long‐term debt, claims and judgments, as well as compensated absences, which are recognized as expenditures to the extent they have matured. General capital assets acquisitions are reported as expenditures in governmental funds. Proceeds of general long‐term debt and acquisitions under capital leases are reported as other financing sources.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Association’s proprietary fund are charges to customers for services. Operating expenses for proprietary funds include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

The major sources of revenue are federal operating revenue, state and local operating revenue, charges for services, sales taxes, investment earnings, and in‐kind contributed services as described below:

Federal Operating Revenue

Federal operating revenue is recognized when program expenditures are incurred in accordance with program guidelines. Such revenue is subject to review by the funding agency and may result in disallowance in subsequent periods. The funds are expended for transportation planning purposes. 24

166

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Measurement Focus, Basis of Accounting, and Financial Statement Presentation (continued):

State and Local Operating Revenue

State and local operating revenue takes the form of appropriations for transportation and other planning purposes. The amounts are generally earned when program expenditures are incurred.

Charges for Services

The Association provides various services to the County of Merced and the cities within the County. The local agencies contract with the Association for these services. Revenue is received on a reimbursement basis.

Sales Taxes

The Association receives revenues derived from sales tax transactions and are earmarked for use on certain transportation and transit projects within Merced County.

Investment Earnings

Interest revenues are recognized when they are measurable and available from the County of Merced Treasurer’s Office.

In‐Kind – Contributed Services

Local contributions, which include services provided by local governments, are used to match federal and state administered funding in various grants. Contributed services are recorded as revenue and expenditures in the individual grants. The amounts of each of these services, if any, are recorded in the accompanying financial statements at their estimated fair market values at the date of service.

Cash and investments: The Association’s cash and investments consist of cash on hand and short‐term investments with original maturities of three months DRAFT or less from the date of acquisition. Cash of all funds, excluding the component unit, is pooled in the treasury of Merced County. The County pools these funds with those of other entities of the County and invests the cash. These pooled funds are accounted for on a cost basis during the year and adjusted to fair value at year‐end. Interest earned is deposited quarterly in the participating funds. Any investment losses are proportionately shared by all funds in the pool. The County is authorized to deposit cash and invest excess funds by California Government Code Sections 53601 et. seq., 53635 et. seq., and 53648 et. seq.

Merced Data Special Services, Inc. (MDSS), the component unit, holds its cash in a commercial bank checking account.

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, including internal financing balances, are reported as due to/from other funds. As a general rule, the effect of interfund activity is eliminated from the government‐wide financial statements. Exceptions to this general rule are charges between the Association and the various transportation and service‐related programs. Elimination of these charges would distort the direct costs and program revenues reported for the various programs concerned.

167

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts Receivable: Accounts receivable results from charges for services. The “direct write‐off” method for accounts receivable was applied for accounts that have been established as uncollectible. The “direct write‐off” method is not in compliance with generally accepted accounting principles, but the result was deemed immaterial to the financial statements taken as a whole. The Association did not write off any accounts receivable during the fiscal year ended June 30, 2020.

Capital Assets: Capital assets which include land, building and improvements, equipment, furniture, database, and website, are reported in the applicable governmental or business‐type activities columns in the government‐wide and proprietary fund financial statements. Capital assets are defined by the Association as assets with an initial, individual cost of more than $5,000 and a useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized.

Buildings, equipment, furniture, database and website are depreciated using the straight‐line method over the following useful lives:

Asset Type Useful lives

Buildings and improvements 20 to 50 years Furniture and equipment 3 to 10 years Database 20 years Website 3 years

Payables: Certain costs are incurred by the Association during the current period but are not paid until after the beginning of the next fiscal period. These costs are reported as payables in the financial statements.

Unearned Revenue: In the government‐wide and fund financial statements, unearned revenue is recognized for transactions for which revenue has not yet been earned.

In the fund financial statements, unearned or unavailable revenue is recorded when transactions have not yet met DRAFT the revenue recognition criteria based on the modified accrued basis of accounting. The Association records unearned revenue for transactions for which revenues have not been earned and records unavailable revenues when funds are not available to meet current financial obligations.

Net Position: Net position represents the residual interest in the Association’s assets after liabilities are deducted. In accordance with GASB Statement No. 63, the fund equity section on the Statement of Net Position was combined to report total net position and present it in three broad components:

• Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets. • Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature. • Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.

168

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fund Balance: In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the Authority is bound to honor constraints on how specific amounts can be spent.

• Nonspendable fund balance ‐ amounts that cannot be spent because they are either (a) not spendable in form or (b) legally or contractually required to be maintained intact. • Restricted fund balance ‐ amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. • Committed fund balance ‐ amounts that can only be used for specific purposes determined by formal action of the Association’s highest level of decision‐making authority (the Governing Board) and that remain binding unless removed in the same manner. Committed fund balances do not lapse at year‐end. The formal action must occur prior to the end of the reporting period. However, the amount which will be subject to the constraint may be determined in the subsequent period. The formal action required to commit fund balance shall be Governing Board resolution. • Assigned fund balance ‐ amounts that are constrained by the Association’s intent to be used for specific purposes. The intent can be established at either the highest level of decision‐making authority, or by a body or an official designated for that purpose. Assigned funds cannot cause a deficit in unassigned fund balance. • Unassigned fund balance ‐ the residual classification for the Association’s General Fund that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes.

When both restricted and unrestricted resources are available for use, it is the Association’s policy to use restricted resources first, followed by the unrestricted committed, assigned, and unassigned resources as they are needed.

Indirect Costs: The negotiated Indirect Cost Allocation Plan (ICAP) rate is adjusted to reflect the actual indirect costs incurred by the Association on a revolving two‐year basis. For the fiscal year ended June 30, 2020, the Association's ICAP rate has been approved at 72.71% by the Audits and Investigation department of Caltrans. This rate has been applied across all programs and were billed at a lump sum at thDRAFTe end of the fiscal year.

Fair Value of Financial Instruments: Financial instruments include cash, accounts receivable, due from other governments, prepaid expenses, accounts payable, accrued payroll and related items, due to other local agencies, advances from other governments, unearned revenue, and bank overdrafts, none of which are held for trading purposes. The fair values of all financial instruments do not differ materially from the aggregate carrying values of the financial instruments recorded in the accompanying Statement of Net Position.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions the affect the reported amounts of certain assets and liabilities and disclosures of contingent assets and liabilities at the date of the basic financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. As such, actual results could differ from those estimates.

Compensated Absences: Full‐time employees are eligible for paid leave. During the first 3 years of employment, a full‐time employee accrues 10 days of vacation per year. During the next 6 years of employment, an employee accrues 15 days of vacation leave per year. After 9 years of employment, an employee accrues 20 days of vacation per year. Full‐time employees may accrue a maximum of two times their annual vacation accrual. Employees may not receive payment for unused vacation hours except when employment is terminated. The liability recorded for compensated absences as of June 30, 2020, is $332,908.

169

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Compensated Absences (continued):

Regular full‐time employees accrue 12 sick days per year. Salaried part‐time employees working a minimum of 20 hours per week accrue sick leave in proportion to the regular work schedule. Accrual of sick leave is unlimited. Employees are not paid for unused sick days upon termination of employment.

Risk Management Liability: The Association is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Association is insured with commercial carriers. The Association schedule of insurance coverage is included on page 51.

Governmental Accounting Standards Update: During the year ending June 30, 2020, the Association implemented the following standards on the financial statements:

GASB Statement No. 95 – Postponement of the Effective Dates of Certain Authoritative Guidance. The requirements of this statement are effective as of May 2020.

Released GASB Statements to be implemented in future financial statements are as follows:

GASB Statement No. 84 – Fiduciary Activities. The requirements of this statement are effective for reporting periods beginning after December 15, 2018. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to December 15, 2019.

GASB Statement No. 87 – Leases. The requirements of this statement are effective for reporting periods beginning after December 15, 2019. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to June 15, 2021.

GASB Statement No. 89 – Accounting for Interest Cost Incurred before the End of a Construction Period. The requirements of this statement are effective for reporting periods beginning after December 15, 2019. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to December 15, 2020.

GASB Statement No. 90 – Majority Equity Interests‐ an amendment of GASB Statements No. DRAFT 14 and No 61. The requirements of this statement are effective for reporting periods beginning after December 15, 2018. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to December 15, 2019.

GASB Statement No. 91 – Conduit Debt Obligations. The requirements of this statement are effective for reporting periods beginning after December 15, 2020. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to December 15, 2021.

GASB Statement No. 92 – Omnibus 2020. The requirements of this statement are effective for reporting periods beginning after June 15, 2020. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to June 15, 2021.

GASB Statement No. 93 – Replacement of Interbank Offered Rates. The requirements of this statement are effective for reporting periods beginning after June 15, 2021. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to June 15, 2021.

GASB Statement No. 94 – Public‐Private and Public‐Public Partnerships and Availability Payment Arrangements. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

GASB Statement No. 96 – Subscription‐Based Information Technology Arrangements. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

170

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Governmental Accounting Standards Update (continued):

GASB Statement No. 97 – Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. The requirements of this statement are effective for reporting periods beginning after June 15, 2021.

Subsequent Events: In compliance with accounting standards, management has evaluated events that have occurred after year‐end to determine if these events are required to be disclosed in the financial statements. Management has determined that no events require disclosure in accordance with accounting standards. These subsequent events have been evaluated through January xx, 2021, which is the date the financial statements were available to be issued.

NOTE 2 – CASH AND INVESTMENTS

Cash in Banks: The Association pools cash resources from all governmental funds, as well as other governmental entities, in order to facilitate the management of cash and achieve the goal of obtaining the highest yield with the greatest safety and least risk. The balance in the pooled cash account is available to meet current operating requirements. Cash in excess of current requirements is invested in various interest‐bearing accounts and other investments for varying terms. The Association has a collateralized agreement with Wells Fargo Bank that all government funds deposited are subject to Title 5, Division 2, Part 1, Chapter 4, Article 2 (commencing with Section 53630) of the Government Code of the State of California (the "Local Agency Deposit Security Law").

Cash and cash equivalents held in the proprietary fund consist only of cash held in financial banking institutions. Cash balances in banks are insured up to $250,000, per financial institution, by the Federal Depository Insurance Corporation (FDIC). Custodial credit risk is that in the event of a bank failure, the fund’s deposits will not be returned to it.

Investments in Merced County Treasury: The Association’s cash and investments in the governmental funds consist of cash in the Merced County Treasury as part of the common investment pool. These pooled funds are carried at cost during the year and adjusted to fair value at year‐end. Interest is paid quarterly into the participating funds. Any DRAFT investment gains or losses are proportionately shared by all funds in the pool. The fair market value of this pool, as of June 30, 2020, was provided by the pool sponsor.

The County is authorized to deposit cash and invest excess funds by the California Government Code Sections 53601 et. seq., 53635 et. seq., and 53648 et. seq. The County is restricted by California Government Code Section 53635, pursuant to Section 53601, to invest in time deposits, U.S. government securities, state registered warrants, notes or bonds, State Treasurer’s investment pool, bankers’ acceptances commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements. The investment policy for the Merced County Treasury prohibits reverse repurchase agreements and investments in foreign investments.

Cash and investments, including bank overdrafts, are comprised of the following at June 30, 2020:

Fair Market Cost Value DEPOSITS Governmental funds ‐ investments in Merced County Treasury $ 23,871,567 $ 24,145,086 Fiduciary funds ‐ investments in Merced County Treasury 4,124,813 4,184,623 Cash in bank 7,355,860 7,355,860

Total cash and investments $ 35,352,240 $ 35,685,569

171

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 2 – CASH AND INVESTMENTS (continued)

Investments in Merced County Treasury (continued):

Cash and investments, including bank overdrafts, are classified in the financials as shown below at June 30, 2020.

Fair Market Cost Value Governmental funds $ 28,161,666 $ 28,435,185 Proprietary funds 184,858 184,858 Fiduciary funds 7,005,716 7,065,526

Total cash and investments $ 35,352,240 $ 35,685,569

Investments in investment pools are considered unclassified as to credit risk because they are not evidenced by securities that exist in physical or book entry form. Investments in investment pools and other pooled investments are excluded from the concentration of credit risk disclosure under GASB Statement No. 40.

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rate. As of June 30, 2020, the weighted average maturity of the investments contained in the Merced County Treasury investment pool was approximately 432 days.

Custodial credit risk does not apply to a local government’s indirect investment in securities through the use of mutual funds or government investment pools. The County of Merced issues a financial report that includes custodial risk disclosures for the Cash in County Treasury. The report may be obtained by writing the Merced County Treasurer, 2222 M Street, Merced, California 95340.

Investment in Merced County Treasury Valuation: The Association categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assetsDRAFT; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

Fair value measurements of the Association’s investments are as follows at June 30, 2020:

 Cash in County of Merced Treasurer’s Investment Pool: valued at $28,331,627, the County of Merced Treasurer’s investment Pool is accounted for on a cost basis during the year and adjusted to fair value at year‐end. The fair market value of this pool as of June 30, 2020, was provided by the Merced County Treasury. The County of Merced Treasurer invests in numerous types of investments ranging all levels in the fair value hierarchy. Accordingly, it is not an investment type that can be categorized in any particular level in the fair value hierarchy.

172

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 3 – INTERFUND RECEIVABLES AND PAYABLES

The composition of due from and due to between Association’s funds at June 30, 2020, is as follows:

Due From Due To Explanation

MPO Fund$ ‐ $ 53,496 Operational Merced Data Special Services, Inc. 53,496 ‐ Operational

$ 53,496 $ 53,496

NOTE 4 – DUE TO/FROM OTHER LOCAL AGENCIES AND GOVERNMENTS

Amounts due to/from other local agencies and governments as of June 30, 2020, are as follows:

Other Governments:

Receivable Fund Payable From Amount Explanation

General Fund Other Government $ 70,615 Local MPO Fund State of California 568,384 Admin reimbursements Service Authority for Freeway Emergencies State of California 41,287 SAFE allocation Passenger Rail Fund Other Government 96,875 Local Measure V Regional Fund State of California 1,734,372 Measure V regional allocation Measure V Transit Fund State of California 260,267 Measure V transit allocation Nonmajor Fund State of California 59,089 AVA fees Total $ 2,830,889

Other Local Agencies: DRAFT

Payable Fund Payable To Amount Explanation

MPO Fund Various local agencies$ 29,379 Various services Service Authority for Freeway Emergencies Various local agencies 128 Various services Measure V Regional Fund Various local agencies 39,607 Measure V admin & various Nonmajor fund Various local agencies 59,089 AVA disbursements Total $ 128,203

173

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 5 – CAPITAL ASSETS

Capital assets activity for governmental activities for the year ended June 30, 2020, was as follows:

Balances Balances June 30, 2019 Increases Decreases June 30, 2020 Capital assets not being depreciated: Land $ 75,000 ‐$ ‐$ $ 75,000 Construction in progress ‐ 51,869 ‐ 51,869

Total capital assets not being depreciated 75,000 51,869 ‐ 126,869

Capital assets being depreciated: Buildings and improvements 575,558 ‐ ‐ 575,558 Furniture and equipment 512,186 14,292 ‐ 526,478

Total capital assets being depreciated 1,087,744 14,292 ‐ 1,102,036

Less accumulated depreciation for: Buildings and improvements (301,867) (15,512) ‐ (317,379) Furniture and equipment (499,481) (9,010) ‐ (508,491)

Total accumulated depreciation (801,348) (24,522) ‐ (825,870)

Total capital assets being depreciated, net 286,396 (10,230) ‐ 276,166

Governmental activities capital assets, net $ 361,396 $ 41,639 ‐$ $ 403,035

Depreciation expense of $24,522 was charged to general government in the Statement of Activities for the year ended June 30, 2020.

Capital assets activity for the business‐type activities for year ended June 30, 2020, was as follows:

Balances Balances DRAFTJune 30, 2019 Increases Decreases June 30, 2020 Capital assets being depreciated: GIS system $ 51,490 ‐$ ‐$ $ 51,490 Yosemite.com website 19,742 ‐ ‐ 19,742

Total capital assets being depreciated 71,232 ‐ ‐ 71,232

Less accumulated depreciation GIS system (51,490) ‐ ‐ (51,490) Yosemite.com website (19,742) ‐ ‐ (19,742)

Total accumulated depreciation (71,232) ‐ ‐ (71,232)

Business‐type activities capital assets, net $ ‐ ‐$ ‐$ ‐$

Depreciation expense for the business‐type activities was $0 for the year ended June 30, 2020.

174

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 6 – CHANGES IN LONG‐TERM LIABILITIES

Long‐term liabilities activity for the year ended June 30, 2020, was as follows:

Balance Balance Due Within June 30, 2019 Additions Deletions June 30, 2020 One Year

Governmental Activities

Compensated absences $ 282,748 $ 146,073 $ (95,913) $ 332,908 $ 332,908

Total Governmental Activities $ 282,748 $ 146,073 $ (95,913) $ 332,908 $ 332,908

NOTE 7 – LEASES

The Association is committed to various operating leases for business equipment. Operating leases do not give rise to property rights or lease obligations and, therefore, the results of the lease agreements are not reflected in the Association’s accounts. The Association entered into a lease agreement for certain office equipment under a non‐ cancelable operating lease expiring in January 2021. Total operating lease costs (including usage charges) were $16,342 for the year ended June 30, 2020.

The following is a schedule of future minimum operating lease payments:

Year Ending June 30,

2021$ 8,413

Total$ 8,413

NOTE 8 – MEASURE V REGIONAL FUND REVENUE DRAFT

Measure V Revenues are derived from a ½ cent transportation sales tax that was passed by voters in November 2016. Per GASB Statement No. 33 “Accounting and Financial Reporting for Nonexchange Transactions,” sales tax falls under the definition of a derived tax revenue, which is the result from assessments imposed on exchange transactions. As such, the funds received for the Measure V Regional Fund are classified as Sales Tax Revenues. For the year ended June 30, 2020, total Measure V Regional Fund Sales Tax Revenues totaled $8,970,366.

NOTE 9 – DEFINED CONTRIBUTION PLAN

The Association provides pension benefits for all of its full‐time employees through a defined contribution plan. The plan is administered by the ICMA Retirement Corporation. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. Employees are eligible to participate in the plan from the date of employment and are 100% vested after 364 days of employment. Under the terms of the plan, the employer contributes 15% and 18.5% of the qualified payroll for all eligible employees and the Executive Director, respectively. The contributions are 100% vested to all employees covered by the plan. As this is an employer only contribution plan, any employee terminating employment before being vested will forfeit all contributions. The employer may use those funds to pay for any future contributions. Any changes to the rates are approved by the Governing Board.

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MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 9 – DEFINED CONTRIBUTION PLAN (continued)

The Association’s total payroll eligible for pension benefits for the year ending June 30, 2020, was $1,495,347. The Association’s contributions were calculated using the base salary amount of $1,495,347. The Association made the required contribution amounting to $228,948. There were no forfeitures for the fiscal year ended June 30, 2020.

NOTE 10 – TRANSACTIONS WITH COMPONENT UNIT

The Association provided professional services in the amount of $2,849 to Merced Data Special Services, Inc. for the year ended June 30, 2020.

NOTE 11 – AFFILIATED ORGANIZATIONS

The Association’s Governing Board serves as the Solid Waste Policy Board (SWPB) for Merced County. The SWPB is a separate Joint Powers Authority responsible for the Merced County Regional Waste Management Authority (the Authority) and the Merced County Solid Waste Enterprise. A separate audit is performed for the Authority and financial information of the Authority can be obtained by writing to the Association’s Finance Director, 369 West 18th Street, Merced, California 95340.

The Association’s Governing Board also presides over the Merced County Transit Joint Powers Authority (TJPA) and Yosemite Area Regional Transportation System (YARTS). A separate audit is performed for TJPA and YARTS. Financial information of TJPA and YARTS can be obtained by writing to the Association’s Finance Director, 369 West 18th Street, Merced, California 95340.

NOTE 12 – DEFICIT FUND BALANCES/NET POSITIONS

The following fund had a deficit fund equity at June 30, 2020:

Nonmajor Governmental Fund: Abandoned Vehicle Abatement Fund DRAFT $ (2,218)

NOTE 13 – EXCESS OF EXPENDITURES OVER APPROPRIATIONS

The following funds incurred expenditures in excess of appropriations in the following amounts for the year ended June 30, 2020:

Service Authority for Freeway Emergencies: Supplies and services 14,339

The excess expenditures were covered by available surpluses in other accounts or available fund balance in the funds.

NOTE 14 – CONTINGENCIES

On March 4, 2020, Governor Newsom issued an emergency proclamation declaring a State of Emergency in California due to the novel Coronavirus (COVID‐19). The COVID‐19 outbreak is ongoing, and the ultimate geographic spread of the virus, the duration and severity of the outbreak, and the economic and other actions that may be taken by governmental authorities to contain the outbreak or to treat its impact are uncertain. The ultimate impact of COVID‐ 19 on the Association is unknown.

176

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 15 – PRIOR PERIOD ADJUSTMENT

A prior period adjustment was made to the beginning fund balance of the Local Transportation Fund governmental fund in the amount of $2,150,866 in order to move the Local Transportation Fund to a fiduciary fund that was previously recorded as a special revenue fund.

A prior period adjustment was made to the beginning net position of the State Transit Assistance fiduciary fund in the amount of $747,993 to record the State Transit Assistance funding due to other governments balance that should have been accrued in the prior year.

DRAFT

177

REQUIRED SUPPLEMENTARY INFORMATION

DRAFT

178

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET TO ACTUAL GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2020

Budgeted Amounts Variance with Original Final Amounts Final Budget REVENUES Charges for services$ 4,523,721 $ 4,675,115 $ 4,415,710 $ (259,405)

Total Revenues 4,523,721 4,675,115 4,415,710 (259,405)

EXPENDITURES Current: General government: Salaries and benefits 4,523,721 4,462,366 4,210,454 251,912 Supplies and services ‐ 212,749 208,982 3,767

Total expenditures 4,523,721 4,675,115 4,419,436 255,679

Net Change in Fund Balance$ ‐ $ ‐ (3,726) $ (3,726)

Fund Balance (Deficit), Beginning of Year 18,034

Fund Balance (Deficit), End of Year $ 14,308

DRAFT

179

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET TO ACTUAL METROPOLITAN PLANNING ORGANIZATION FUND FOR THE YEAR ENDED JUNE 30, 2020

Budgeted Amounts Variance with Original Final Amounts Final Budget REVENUES Sales taxes$ 342,017 $ 280,666 $ 190,905 $ (89,761) Charges for services 657,033 795,805 659,175 (136,630) State and local revenues 10,611 140,547 142,660 2,113 Federal revenues 1,327,511 1,312,200 794,507 (517,693) Investment earnings ‐ ‐ 32,644 32,644 Other Income 111,181 120,728 90,300 (30,428) Internal revenue services 1,521,273 1,520,296 1,061,543 (458,753)

Total Revenues 3,969,626 4,170,242 2,971,734 (1,198,508)

EXPENDITURES Current: General government: Salaries and benefits 2,420,892 2,482,168 2,090,243 391,925 Supplies and services 1,383,734 1,545,070 581,337 963,733 Capital outlay 165,000 143,004 66,161 76,843

Total expenditures 3,969,626 4,170,242 2,737,741 1,432,501

Net Change in Fund Balance $ ‐ ‐$ 233,993 $ 233,993

Fund Balance (Deficit), Beginning of YearDRAFT 626,960 Fund Balance (Deficit), End of Year $ 860,953

180

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET TO ACTUAL REGIONAL TRANSPORTATION IMPACT FEE FUND FOR THE YEAR ENDED JUNE 30, 2020

Budgeted Amounts Variance with Original Final Amounts Final Budget REVENUES Investment earnings$ ‐ ‐$ $ 911 $ 911

Total Revenues ‐ ‐ 911 911

EXPENDITURES

Total expenditures ‐ ‐ ‐ ‐

Net Change in Fund Balance $ ‐ ‐$ 911 $ 911

Fund Balance (Deficit), Beginning of Year 83,761

Fund Balance (Deficit), End of Year $ 84,672

DRAFT

181

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET TO ACTUAL SERVICE AUTHORITY FOR FREEWAY EMERGENCIES FUND FOR THE YEAR ENDED JUNE 30, 2020

Budgeted Amounts Variance with Original Final Amounts Final Budget REVENUES State and local revenues $ ‐ ‐$ $ 229,769 $ 229,769 Investment earnings ‐ ‐ 44,286 44,286

Total Revenues ‐ ‐ 274,055 274,055

EXPENDITURES Current: General government: Supplies and services ‐ ‐ 14,339 (14,339)

Total expenditures ‐ ‐ 14,339 (14,339)

Net Change in Fund Balance $ ‐ ‐$ 259,716 $ 259,716

Fund Balance (Deficit), Beginning of Year 2,952,942

Fund Balance (Deficit), End of Year $ 3,212,658

DRAFT

182

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET TO ACTUAL MEASURE V REGIONAL AND TRANSIT FUNDS FOR THE YEAR ENDED JUNE 30, 2020

Budgeted Amounts Variance with Original Final Amounts Final Budget REVENUES Sales taxes $ 7,500,000 $ 7,500,000 $ 9,103,627 $ 1,603,627 Investment earnings ‐ ‐ 457,508 457,508

Total Revenues 7,500,000 7,500,000 9,561,135 2,061,135

EXPENDITURES Current: Highways and streets 7,500,000 7,500,000 5,362,263 2,137,737

Total expenditures 7,500,000 7,500,000 5,362,263 2,137,737

Net Change in Fund Balance $ ‐ ‐$ 4,198,872 $ 4,198,872

Fund Balance (Deficit), Beginning of Year 18,223,048

Fund Balance (Deficit), End of Year $ 22,421,920

DRAFT

183

MERCED COUNTY ASSOCIATION OF GOVERNMENTS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET TO ACTUAL PASSENGER RAIL FUND FOR THE YEAR ENDED JUNE 30, 2020

Budgeted Amounts Variance with Original Final Amounts Final Budget REVENUES Investment earnings$ ‐ ‐$ $ 7,682 $ 7,682

Total Revenues ‐ ‐ 7,682 7,682

EXPENDITURES

Total expenditures ‐ ‐ ‐ ‐

Net Change in Fund Balance $ ‐ ‐$ 7,682 $ 7,682

Fund Balance (Deficit), Beginning of Year 2,332

Fund Balance (Deficit), End of Year $ 10,014

DRAFT

184

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION

NOTE 1 – BUDGETARY INFORMATION

Budgets and Budgetary Accounting

Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all government funds. The Association’s budget is a management tool that assists its users in analyzing financial activity for its fiscal year ending June 30. The Association’s primary funding sources are federal, state, and local grants, which may have grant periods that may or may not coincide with the Association’s fiscal year. These grants normally are awarded for a twelve‐month period; however, they can be awarded for periods shorter or longer than twelve months.

The Association’s annual revenue estimates are based upon the best available information as to potential sources of funding. The Association’s annual budget differs from that of most local governments due to the dependency upon federal, state and local grants, and the uncertain nature of those grant awards. The resultant annual budget is subject to change within the fiscal year due to (1) increases/decreases in actual grant awards from those estimated; (2) changes in grant periods; (3) unanticipated grant awards not included in the initial budget; and (4) expected grant awards which fail to materialize.

The budget is known as the Overall Work Program. Management emphasis is given to complying with the grant budget, terms and conditions on a grant‐by‐grant basis. These terms and conditions usually specify the period during which costs may be incurred and outline budget restrictions or allowances. The Association follows the following procedures in establishing the general fund budget reflected in the general‐purpose financial statements:

 In February, the Executive Director submits the Overall Work Program to the Technical Review Board, the Association’s Governing Board, and State and Federal agencies for the input on the operating budget for the fiscal year commencing the following July 1.

 The budget for the general fund is adopted on a basis consistent with generally accepted accounting principles.

 Appropriations for the general fund lapse at the end of the fiscal year.

 Revisions to the budget, which increase total expenditures, must be approved by the Governing Board. DRAFT

185

SUPPLEMENTARY INFORMATION

DRAFT

186

MERCED COUNTY ASSOCIATION OF GOVERNMENTS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2020

Federal Contract Pass‐Through Federal Grantor/ Pass‐through CFDA or to Federal Grantor/ Program or Cluster Title Number Program Number Sub‐recipients Expenditures

U.S. DEPARTMENT OF TRANSPORTATION

Passed through the State of California Department of Transportation: Federal Highway Administration Planning 20.205 74A0126 $ ‐ $ 744,483 FTA Section 5303 20.205 74A0126 ‐ 50,024

Congestion Mitigation Air Quality 20.205 CMLNI‐6095(077) ‐ 22,800 Congestion Mitigation Air Quality 20.205 CML‐6095(074) ‐ 34,693

Total U.S. Department of Transportation ‐ 852,000

TOTAL EXPENDITURES OF FEDERAL AWARDS $ ‐ $ 852,000

DRAFT

187

MERCED COUNTY ASSOCIATION OF GOVERNMENTS NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

NOTE 1 – BASIS OF PRESENTATION

The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the Merced County Association of Governments (the Association). Federal awards received directly from federal agencies, as well as federal awards passed through other government agencies are included in the schedule. The information in this SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

NOTE 2 – BASIS OF ACCOUNTING

The accompanying SEFA is presented using the modified accrual basis of accounting, which is described in Note 1 of the Association’s basic financial statements.

NOTE 3 – INDIRECT COST RATE

The Association has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.

NOTE 4 – RELATIONSHIP TO FEDERAL FINANCIAL REPORTS

Amounts reported in the accompanying schedule agree with the amounts reported in the related periodic federal financial reports.

NOTE 5 – CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA)

The CFDA numbers included in the accompanying Schedule of Expenditures of Federal Awards were determined based on the program name, review of the grant or contract information and the Office Management and Budget’s Catalog of Federal Domestic Assistance. DRAFT

NOTE 6 – PASS‐THROUGH ENTITY IDENTIFYING NUMBERS

When Federal awards were received from pass‐through entity, the Schedule of Expenditures of Federal Awards show, if available, the identifying number assigned by the pass‐through entity. When no identifying number is shown, the Association has either determined that no identifying number is assigned for the program or the Association was unable to obtain an identifying number from the pass‐through entity.

188

OTHER SCHEDULES

DRAFT

189

MERCED COUNTY ASSOCIATION OF GOVERNMENTS SUMMARY OF RESOURCES AND EXPENDITURES BY WORK ELEMENT FOR THE YEAR ENDED JUNE 30, 2020

FTA Contributions MCAG FHWA Sec. from Admin Total PL 5303 CMAQ RIP/PPM TDA Adim SAFE AVA Members & Other

Resources: FHWA/PL $ 744,483 $ 446,024 $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ ‐$ $ ‐ $ 298,459 FTA Section 5303 50,024 ‐ 28,964 ‐ ‐ ‐ ‐ ‐ ‐ 21,060 CMAQ 57,493 ‐ ‐ 57,493 ‐ ‐ ‐ ‐ ‐ ‐ RIP 56,639 ‐ ‐ ‐ 23,934 ‐ ‐ ‐ ‐ 32,705 LTF Planning 87,838 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 87,838 LTF Admin 45,777 ‐ ‐ ‐ ‐ 26,667 ‐ ‐ ‐ 19,110 SAFE 12,297 ‐ ‐ ‐ ‐ ‐ 7,120 ‐ ‐ 5,177 AVA 6,000 ‐ ‐ ‐ ‐ ‐ ‐ 4,640 ‐ 1,360 One Voice 48,575 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 41,094 7,481 Public Records 3,358 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,988 1,370 Contributions from members 32,134 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 32,134 ‐ Local Contracts (PMS) 33,882 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 33,882 MDSS, Inc. 2,849 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,849 YARTS JPA 417,244 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 417,244 TJPA 1,529,242 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,529,242 RWMA 4,035,848 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,035,848 Measure V 175,145 ‐ DRAFT‐ ‐ ‐ ‐ ‐ ‐ ‐ 175,145 Interest 32,644 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 32,644 Other 15,973 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 15,973

Total Resources 7,387,445 446,024 28,964 57,493 23,934 26,667 7,120 4,640 75,216 6,717,387

190

MERCED COUNTY ASSOCIATION OF GOVERNMENTS SUMMARY OF RESOURCES AND EXPENDITURES BY WORK ELEMENT (continued) FOR THE YEAR ENDED JUNE 30, 2020

FTA Contributions MCAG FHWA Sec. from Admin Total PL 5303 CMAQ RIP/PPM TDA Adim SAFE AVA Members & Other

Expenditures: Citizen Part. & Coord.$ 121,482 92,879$ $ 28,475 $ ‐ $ ‐ $ ‐ $ ‐ ‐$ $ ‐ $ 128 Regional Transportation Plan (RTP) 132,619 68,083 ‐ ‐ 14,073 ‐ ‐ ‐ ‐ 50,463

Perform Measure & Monitoring 2,710 2,710 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Alternative Modes Planning 1,629 1,629 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Air Quality Planning 16,583 16,583 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Short Range Transit Plan 19,465 18,976 489 ‐ ‐ ‐ ‐ ‐ ‐ ‐ SJ Valley Trans Coord. 38,944 36,236 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,708 Passenger Rail 13,200 13,200 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ FTIP 84,491 54,683 ‐ ‐ 9,861 ‐ ‐ ‐ ‐ 19,947 RTIP 50,783 45,830 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,953 Traffic Model 8,263 8,263 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ GIS Maintenance 78,626 69,957 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 8,669 State Data Center Affiliate 1,458 1,458 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Trans Expenditure Program 113,654 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 113,654 TDM 58,537 ‐ ‐ 57,493 ‐ ‐ ‐ ‐ ‐ 1,044 TDA Administration 26,667 ‐ ‐ ‐ ‐ 26,667 ‐ ‐ ‐ ‐ Overall Work Program 15,537 15,537 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ One Voice 41,093 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 41,093 ‐ YARTS JPA 252,577 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 252,577 Transit JPA FTA Admin 942,047 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 942,047 MDSS, Inc. 1,691 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,691 SWPB 3,867,868 ‐ DRAFT‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,867,868 SAFE 7,130 ‐ ‐ ‐ ‐ ‐ 7,130 ‐ ‐ ‐ AVA 1,870 ‐ ‐ ‐ ‐ ‐ ‐ 1,870 ‐ ‐ Public Information Request 1,999 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,999 ‐ MCAG Administration 1,212,579 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,212,579

MCAG Administration ‐ Unallowed 43,676 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 33,531 10,145

Total Expenditures 7,157,178 446,024 28,964 57,493 23,934 26,667 7,130 1,870 76,623 6,488,473

Excess of revenues over (under) expenditures $ 230,267 $ ‐ $ ‐ $ ‐ $ ‐ ‐$ $ (10) $ 2,770 $ (1,407) $ 228,914

191

MERCED COUNTY ASSOCIATION OF GOVERNMENTS SCHEDULE OF REGULAR ALLOCATIONS AND DISBURSEMENTS BY PURPOSE LOCAL TRANSPORTATION FUND FOR THE YEAR ENDED JUNE 30, 2020

PUC 99402 Administration Planning PUC 99260(a) Total

Allocations

Transit Joint Powers Authority $ ‐ ‐$ $ 5,328,125 $ 5,328,125 Yosemite Area Rural Transit Services ‐ ‐ 290,625 290,625 Passenger Rail Reserve ‐ ‐ 387,500 387,500 City of Atwater ‐ ‐ 110,536 110,536 City of Dos Palos ‐ ‐ 19,598 19,598 City of Gustine ‐ ‐ 21,398 21,398 City of Livingston ‐ ‐ 50,702 50,702 City of Los Banos ‐ ‐ 145,388 145,388 City of Merced ‐ ‐ 307,056 307,056 Merced County ‐ ‐ 343,823 343,823 Merced County Auditor 3,294 ‐ ‐ 3,294 Merced County Association of Governments 50,412 ‐ ‐ 50,412 Merced County Association of Governments ‐ 691,543 ‐ 691,543

$ 53,706 $ 691,543 $ 7,004,751 $ 7,750,000

Disbursements

Transit Joint Powers Authority $ ‐ ‐$ $ 5,328,125 $ 5,328,125 Yosemite Area Rural Transit Services ‐ ‐ 290,625 290,625 Passenger Rail DRAFT ‐ ‐ 387,500 387,500 City of Atwater ‐ ‐ 110,536 110,536 City of Dos Palos ‐ ‐ 19,598 19,598 City of Gustine ‐ ‐ 21,398 21,398 City of Livingston ‐ ‐ 50,702 50,702 City of Los Banos ‐ ‐ 145,388 145,388 City of Merced ‐ ‐ 307,056 307,056 Merced County ‐ ‐ 343,823 343,823 Merced County Auditor 3,294 ‐ ‐ 3,294 Merced County Association of Governments 50,412 ‐ ‐ 50,412 Merced County Association of Governments ‐ 691,543 ‐ 691,543

$ 53,706 $ 691,543 $ 7,004,751 $ 7,750,000

192

MERCED COUNTY ASSOCIATION OF GOVERNMENTS SCHEDULE OF REGULAR ALLOCATIONS AND DISBURSEMENTS BY PURPOSE STATE TRANSIT ASSISTANCE FUND FOR THE YEAR ENDED JUNE 30, 2020

Allocations PUC 93313 PUC 93314 Total Disbursements

Yosemite Area Regional Transporation System$ ‐ $ 105,394 $ 105,394 $ 105,394 Transit Joint Powers Authority$ 2,485,138 $ ‐ $ 2,485,138 $ 2,485,138

DRAFT

193

MERCED COUNTY ASSOCIATION OF GOVERNMENTS SCHEDULE OF REGULAR ALLOCATIONS AND DISBURSEMENTS BY PURPOSE STATE OF GOOD REPAIR FOR THE YEAR ENDED JUNE 30, 2020

Allocations PUC 93313 PUC 93314 Total Disbursements

Yosemite Area Regional Transporation System $ ‐ $ 23,733 $ 23,733 $ 23,733 Transit Joint Powers Authority $ 397,266 $ ‐ $ 397,266 $ 397,266

DRAFT

194

MERCED COUNTY ASSOCIATION OF GOVERNMENTS SCHEDULE OF REGULAR ALLOCATIONS AND DISBURSEMENTS BY PURPOSE REGIONAL SURFACE TRANSPORTATION PROGRAM EXCHANGE FUND FOR THE YEAR ENDED JUNE 30, 2020

Section 182.6 Allocations Disbursements

City of Atwater$ 369,553 $ 369,553 City of Dos Palos 65,437 65,437 City of Gustine 69,864 69,864 City of Livingston 173,403 173,403 City of Los Banos 484,454 484,454 City of Merced 1,022,273 1,022,273 County of Merced 934,571 934,571

$ 3,119,555 $ 3,119,555

DRAFT

195

MERCED COUNTY ASSOCIATION OF GOVERNMENTS SCHEDULE OF INSURANCE COVERAGES FOR THE YEAR ENDED JUNE 30, 2020

Amount of Type of Coverage Coverage Effective Date

Building$ 1,297,900 2/12/20‐2/12/21

Business Property$ 281,200 2/12/20‐2/12/21

Business Income/Extra Expense$ 500,000 2/12/20‐2/12/21

General Aggregate$ 2,000,000 2/12/20‐2/12/21

Products and Completed Operations Aggregate$ 2,000,000 2/12/20‐2/12/21

Personal and Advertising Injury $ 1,000,000 2/12/20‐2/12/21

Damage to Rental Premises 100,000$ (each occurance) 2/12/20‐2/12/21

Medical Expense$ 5,000 (any one person) 2/12/20‐2/12/21

Employee Benefits $ 1,000,000 2/12/20‐2/12/21

Automobile ‐ Liability$ 1,000,000 (each accident) 2/12/20‐2/12/21

Automobile ‐ Medical Payments $ 5,000 (each insured) 2/12/20‐2/12/21

Automobile ‐ Uninsured Motorist $ 1,000,000 (each accident) 2/12/20‐2/12/21

DRAFT

196

OTHER AUDITORS’ REPORTS

DRAFT

197

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 GOVERNMENT AUDITING STANDARDS

To the Governing Board Merced County Association of Governments

We have audited, in accordance with the 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, the financial statements of the governmental activities, the business‐type activities, each major fund, and the aggregate remaining fund information of the Merced County Association of Governments (the Association), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the Association’s basic financial statements, and have issued our report thereon dated January xx, 2021. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Association’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Association’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Association’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a matDRAFTerial misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Association’s financial statements are free from 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.

7473 N. INGRAM AVE., SUITE 102  FRESNO, CA 93711 ______

P (559) 412-7576  F (559) 493-5325  WWW.HHCCPAS.COM

198

Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Association’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Association’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California January xx, 2021

DRAFT

199

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE

To the Governing Board Merced County Association of Governments

Report on Compliance for Each Major Federal Program We have audited the Merced County Association of Government’s (the Association) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Association’s major federal programs for the year ended June 30, 2020. The Association’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for each of the Association’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the UnDRAFTited States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 Association’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 on compliance for each major federal program. However, our audit does not provide a legal determination of the Association’s compliance. Opinion on Each Major Federal Program In our opinion, the Association complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020.

7473 N. INGRAM AVE., SUITE 102  FRESNO, CA 93711 ______

P (559) 412-7576  F (559) 493-5325  WWW.HHCCPAS.COM

200

Report on Internal Control over Compliance Management of the Association is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Association’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Association’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

HUDSON HENDERSON & COMPANY, INC. DRAFT

Fresno, California January xx, 2021

201

FINDINGS AND RECOMMENDATIONS

DRAFT

202

MERCED COUNTY ASSOCIATION OF GOVERNMENTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2020

SECTION I – SUMMARY OF AUDITORS’ RESULTS

Financial Statements

Type of auditors’ report issued: Unmodified

Internal control over financial reporting:

 Material weakness identified? Yes X No

 Significant deficiencies identified that are not considered to be material weaknesses? Yes X No

Noncompliance material to financial statements noted? Yes X No

Federal Awards

Internal control over major federal programs:

 Material weakness identified? Yes X No

 Significant deficiencies identified that are not considered to be material weaknesses? Yes X No

Noncompliance material to federal awards? Yes X No

Type of auditors’ report issued on compliance for major Federal programs: Unmodified

Any audit findings disclosed that are required to be reported in accordance with 2CRF section DRAFT 200.516(a)? Yes X No

Identification of Major Programs

CFDA Number Name of Federal Program or Cluster

20.205 Federal Highway Administration Planning

The dollar threshold used to distinguish between Type A and Type B programs: $750,000

Auditee qualified as low‐risk auditee? Yes X No

203

MERCED COUNTY ASSOCIATION OF GOVERNMENTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued) FOR THE YEAR ENDED JUNE 30, 2020

SECTION II – FINANCIAL STATEMENT FINDINGS

There are no reportable financial statement findings to be reported in accordance with Government Auditing Standards.

SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

There are no federal award findings or questioned costs to be reported in accordance with the Uniform Guidance.

DRAFT

204

MERCED COUNTY ASSOCIATION OF GOVERNMENTS SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30, 2019

SECTION II – FINANCIAL STATEMENT FINDINGS

Finding 2019‐001 – Material Weakness Financial Close and Reporting Process

Criteria: In accordance with accounting principles generally accepted in the United States of America, adequate internal controls should be implemented to ensure that all accruals for payables, receivables, related expenses and revenues are recorded during the year‐end closing process.

Condition: Per audit procedures performed over payables and expenditures, receivables and revenues, and fund balance we noted the following conditions:

1. During our testing procedures over accounts receivable, due from other governments accounts, accounts payables, due to accounts, and deferred revenue, we noted several accounts that had balances that needed final year‐end material adjustments or reclassification. 2. During our testing over fund balances, we needed to make several material adjustments to reconcile the balances to their correct amounts. 3. During our testing procedures over payroll and related administrative service revenues, we had to make a material adjustment to reduce payroll expenditures and administrative service revenues that were overstated.

Cause of Condition: The Association lacked a properly implemented cut‐off financial closing procedure that identified all payables and receivables that should be recorded back in the current fiscal year. The Association’s internal controls over the year‐ end financial reporting process were not properly designed and in operation.

Effect of Condition: This resulted in revenues and expenditures not being accrued accurately or in the correct account and thus materially misstating the financial statements of the Association. DRAFT Recommendation: We recommend the Association enhance their year‐end closing procedures to ensure that all accruals are reported accurately, as well as review subsequent receipts and disbursements in order to identify those that were earned/incurred in the previous fiscal year.

Management Response: Management agrees with the recommendations and acknowledges that there was a lapse in the financial close procedures during the fiscal year due to personnel being utilized in different areas due to the loss of employees during the financial close timeframe. Management will work to implement a stronger financial close process, including ensuring all year end balances are properly reconciled and classified at year end.

Current Year Status: Implemented in current year.

SECTION III – FEDERAL AWARD FINDINGS

There are no federal award findings or questioned costs to be reported in accordance with the Uniform Guidance.

205 ITEM 8b

206

PH: 209.723.3153 FAX: 209.723.0322 www.mcagov.org 369 W. 18th Street Merced, CA 95340

ITEM 8b

DATE: February 12, 2021

TO: MCAG Governing Board

FROM: Eva Garibay, Public Programs Specialist II

RE: Action: Appoint a Board Director to the 2021 Anna Maria Fuentes Scholarship Selection Committee

SUMMARY

MCAG staff requests the appointment of one Director to serve on the 2021 Anna Maria Fuentes scholarship selection committee.

REQUESTED ACTION

Appoint a member of the Board to the 2021 Anna Maria Fuentes Scholarship Selection Committee.

BACKGROUND

In October 2008, the Governing Board established the Anna Maria Fuentes Scholarship Program in memory of MCAG employee, Anna Maria Fuentes who passed away in 2008. Eleven scholarship awardees have been selected since 2010, each receiving up to four years of scholarship funds in the amount of $1,000 annually.

The scholarship is awarded to a graduating high school senior from a high school in Merced County with a grade point average of 3.8 or higher (4.0 =A), who has demonstrated a high level of participation in extracurricular activities including positions of leadership, and a financial need for the scholarship.

The 2021 application form was released and posted on the MCAG website on Monday, October 26, 2020. Completed applications are due to the MCAG office by 5:00 p.m. on Friday, February 26, 2021. Based on the scholarship funds available, MCAG will once again award the maximum scholarship to be paid annually in the amount of $1,000 to an awardee for up to four years, provided that the awardee continues to meet scholarship requirements.

PAST ACTION TAKEN

October 2008: Governing Board establishes scholarship fund. February 2020: Governing Board appoints Director Hogue to scholarship selection committee. May 2020: Governing Board selects Harleen Thandi of Livingston High School as 2020 scholarship recipient.

207

October 2020: 2021 Anna Maria Fuentes Scholarship Application released to the public.

NEXT STEPS

To select scholarship awardees, a Selection Committee composed of five individuals is appointed each year: three MCAG staff members as appointed by the Executive Director, one MCAG Board Director as appointed by the MCAG Governing Board, and one member of Anna Maria Fuentes’ family as designated by the family. The 2021 Selection Committee will convene at one virtual meeting in March to review applications. Time commitment consists of approximately two hours to review applications and one hour at one Selection Committee meeting. The Selection Committee’s recommendation will then be submitted for Governing Board consideration in April 2021. The selected student will be notified by May 3, 2021.

Directors that have participated in previous Scholarship Selection Committees include: Director Hogue (2020), Director Aguilar (2019), Director McCabe (2018), Director Lor (2017), Director Price (2016), Director McDaniel (2015), Director Thurston (2014), Director Villalta (2013), Director Villalta (2012), Director O’Banion (2011), Director Walsh (2010).

If you have any questions regarding this staff report or if you would like to contribute to the Anna Maria Fuentes scholarship fund, please contact Eva Garibay at (209) 723-3153 x 108 or [email protected].

FISCAL IMPACT

The scholarship is funded 100% by donations of staff members and the community. There is currently $25,000 available in the scholarship account which is adequate to cover obligations to existing recipients as well as fund a 2021 recipient for up to four years.

REQUESTED ACTION

Appoint a member of the Governing Board to the 2021 Anna Maria Fuentes Scholarship Selection Committee.

ATTACHMENTS

2021 Anna Maria Fuentes scholarship application

208

PH: 209.723.3153 FAX: 209.723.0322 www.mcagov.org 369 W. 18th Street Merced, CA 95340

2021 Anna Maria Fuentes Scholarship Application Application Deadline – February 26, 2021

The Merced County Association of Governments (MCAG) Governing Board and staff established the Anna Maria Fuentes Scholarship program in memory of, and tribute to, Anna Maria Fuentes, Grants Program Manager, colleague and friend.

The 2021 scholarship will be awarded by the MCAG Governing Board in the amount of $1,000. Recipients may receive additional annual awards of up to $1,000 for three years, or until their degree is achieved, whichever is less. The cumulative maximum is $4,000. Submission of annual scholastic documentation may be required by MCAG.

Eligibility Criteria

Graduating high school senior from a high school in Merced County with a grade point average of 3.8 or higher (4.0 =A) who has demonstrated a high level of participation in extracurricular activities including positions of leadership. Applicants must also include an explanation of scholarship need in a personal essay.

Students requesting to continue their award for additional years must maintain full-time enrollment and a 3.0 grade point average based on a 4.0 scale.

In addition, please read and follow the instructions attached carefully prior to submitting your application. It is suggested that applicants retain a copy of their application packages as they will not be returned. General inquiries may be directed to Eva Garibay, Public Program Specialist, at [email protected] or 209-723-3153 x 108.

Partnering for Regional Solutions

209

Anna Maria Fuentes Scholarship Application 2021 Application Deadline – February 26, 2021 by 5:00 P.M.

Instructions

All forms must be completed in blue or black ink, or typed, and be legible. Use this checklist to ensure all documents are included in your scholarship application package in the following order. Application deadline is Friday, February 26, 2021 by 5:00 P.M. at MCAG.

 Application Form - Do not forget required signatures!  Scholarship Survey  Personal Essay - Express your educational and career goals, and explain your need for the scholarship. Use this as an opportunity to tell the scholarship committee about yourself. (Two-page limit – single spaced, Times New Roman, 12-point font)  Three Letters of Recommendation - from school personnel, and/or community members  Official High School Transcript(s) - seven semesters. Note: Transcripts may be emailed directly from Parchment to [email protected]. If emailed, please have a note attached to your application stating that transcripts were emailed.  Staple your entire application package together, upper left-hand corner, in the order provided above.

General inquiries may be directed to Eva Garibay at 209-723-3153 x 108 or via email [email protected].

Your completed application package must be received by MCAG by Friday, February 26, 2021 by 5:00 PM.

Mail or deliver your application to:

Merced County Association of Governments AMF Scholarship Program 369 W. 18th Street Merced, CA 95340

NO POSTMARKS ACCEPTED – NO LATE APPLICATIONS WILL BE CONSIDERED.

Award notification will be sent to the selected scholarship candidate by May 1, 2021.

210

Anna Maria Fuentes Scholarship Application 2021 Application Deadline – February 26, 2021 by 5:00 P.M.

2021 Application Form 1. Personal Information

Full Name ______(Last) (First) (Middle)

Address ______(Number) (Street) (City) (Zip) Email ______Phone Number______Date of Birth ______Place of Birth ______Social Security Number ______Name of Father (or guardian) ______Occupation ______Annual Income $______Name of Mother (or guardian) ______Occupation ______Annual Income $______Number of siblings ____ Older _____ Younger

Optional Information The following information is completely optional and will not be in the evaluation process. Any information you provide will be kept confidential. Gender: M / F Are you a US Citizen? Y / N Are you a first-generation college student? o Yes, I am the first among my parents and grandparents to attend college. o No, either my parents or grandparents have attended college. What is your major area of study? ______

2. High School Information Name of High School ______Address ______(Number) (Street) (City) (Zip) Name of school counselor (for independent verification of your school records) ______Contact Phone Number ______Name of school Principal ______Contact Phone Number ______Anticipated graduation date ______Most recent cumulative GPA ______

211

Anna Maria Fuentes Scholarship Application 2021 Application Deadline – February 26, 2021 by 5:00 P.M.

3. Activities Record (You may attach a separate sheet if more space is needed) Year of participation Student Government/School Council: 9 10 11 12

Organizations/Clubs: (note leadership positions)

Athletics: (Specify Varsity, Junior Varsity or Freshman)

Awards/Recognition:

Community Service: (Include hours)

I hereby authorize ______(High school name) to release a transcript and such other information as may be necessary concerning ______(student name) for scholarship purposes.

Print Name______Print Name______(Parent/Guardian) (Student) Signature ______Signature ______Date ______Date ______

212

Anna Maria Fuentes Scholarship Application 2021 Application Deadline – February 26, 2021 by 5:00 P.M.

4. College / Vocational Plans Name of school you plan to attend ______Address ______(Number) (Street) (City) (Zip) ✓ Mark appropriate space below  2 Year College  4 Year College  Vocational/Technical School

Anticipated College Major ______Anticipated Vocational/Career Plans ______What is your career objective? ______

Student Signature ______Date ______

213

Anna Maria Fuentes Scholarship Application 2021 Application Deadline – February 26, 2021 by 5:00 P.M.

Scholarship Survey

Highlight or circle all areas that apply to you. You are required to complete this form as part of the scholarship application packet. If you list an activity on this survey, make sure it is included on your Activity report as well. For each activity highlight or circle the grade(s) you participated. It is to your advantage to highlight or circle all areas that apply to you.

Student Name______High School ______

Clubs Miscellaneous FFA 9 10 11 12 Boy State/Girls State 4-H 9 10 11 12 Rotary Leadership Key Club 9 10 11 12 Leadership (school or community) Track Club 9 10 11 12 Currently enrolled in or a member of Community Service o FFA Total Community Service Hours: ______o 4-H o Music Class AP Classes o Ag Class Total of AP Classes taken: ______o Other: o Career/Major Athletics o Agriculture Baseball Softball o Art/Graphic Art Basketball Swim/Dive o Business Cheerleading Tennis o Coach Color Guard Track o Computer Technology Cross country Volleyball o Engineering Football Water polo o Floriculture/Horticulture/Plant Science Golf Wrestling o Legal Soccer Other: o Medical/Medical related field o Music o Theatre Circle/Highlight all that apply o Education (Circle/Highlight all that apply) ASB/SBO Officer o Teacher (Grade ___); School Administrator; Professor; Math Teacher; Special Education FFA/4-H Office Club Advisor/Officer o Veterinarian Other: o Other

214 ITEM 8c

215

PH: 209.723.3153 FAX: 209.723.0322 www.mcagov.org 369 W. 18th Street Merced, CA 95340

ITEM 8c

DATE: February 12, 2021

TO: MCAG Governing Board

FROM: Mary-Michal Rawling, Public Affairs Manager

RE: Action: Affirm One Voice delegation decision to conduct a virtual trip

SUMMARY

Consider the provision made by the Governing Board to conduct a virtual One Voice program in 2021 should the delegation be unable to conduct in-person meetings with federal policymakers.

REQUESTED ACTION

Affirm the decision of the 2021 One Voice delegation to conduct a virtual legislative trip this year due to the ongoing COVID-19 pandemic.

BACKGROUND

At the September Governing Board meeting, the Board directed staff to proceed with the development of the 2021 One Voice program with support provided through a one-year contract extension with Townsend Public Affairs that was subsequently executed. As such, the program was to pursue an in- person trip to Washington D.C. with the provision that virtual advocacy visits would be coordinated with federal policymakers should the delegation be unable to travel to the capital and conduct face-to- face meetings.

In November, the Board adopted the 2021 One Voice program goals and schedule including a call for delegates and priority policies/projects as follows:

2021 One Voice Goals • Limit delegation to representatives from jurisdictions (2-3 per jurisdiction), MCAG staff, and Townsend staff • Make clear connections between the One Voice policy platform and current legislation and regulations • Develop project/issue list in concert with Congressman Costa’s staff • Require a non-refundable $50 participation fee of each delegate - revenue collected will be used to pay for a specific cost associated with the trip such as a group meal • Require delegate participation in planning process and all trip activities • Hold at least one practice session for speakers prior to the trip

2021 One Voice program schedule • November 2020: Call for projects from jurisdictions (deadline: 12/18/20)

216

• December 2020: Delegates appointed by jurisdictions and send delegate agreements to MCAG (deadline: 12/31/20) • January 2021: Jurisdictions submit delegation fee • January 2021: Delegation planning meeting – review program and jurisdictions’ projects • February 2021: Delegation planning meeting(s) – finalize platform • March 2021: Governing Board takes action to adopt platform • April 2021: Delegation planning meetings – one or more meetings to familiarize participants with issues, review final trip logistics, and conduct practice session • May 4-7, 2021: One Voice trip to Washington D.C. • May 2021: Delegation debrief meeting

PAST GOVERNING BOARD ACTION

March 2020: Board adopted 2020 One Voice legislative platform and cancelled Washington D.C. trip due to COVID-19 pandemic. September 2020: Board directed staff to proceed with the planning of 2021 One Voice program with in- person trip to Washington D.C. and execute one-year contract option with Townsend Public Affairs. November 2020: Board adopted 2021 One Voice program goals and schedule including a call for delegates and jurisdictions’ policy priorities.

DISCUSSION

Since the last action taken by the Governing Board, staff has continued to work toward the completion of the 2021 One Voice program in accordance with the adopted goals and schedule. In the last month, the members of the One Voice delegation have met two times to assemble the 2021 policy platform and discuss trip logistics. Through the course of those conversations, it has become increasingly evident that, due to several issues related to COVID-19, it is infeasible to conduct an in-person trip to Washington D.C. this spring. The most prominent factor being that no agencies or congressional offices whom we typically meet with have given any indication that their staff will be returning from telework settings by May and/or that their buildings will be open to members of the public. In addition, it is unclear when these conditions may change and, when they do, what the limitations imposed on meetings with constituents will entail. As a result, the delegation has come to the consensus that planning for a virtual trip in May is the most prudent course of action at this time.

The Citizens Advisory Committee and Technical Review Board took action in September 2020 to support a virtual trip.

If you have any questions about the One Voice program, please contact Mary-Michal Rawling, Public Affairs Manager at 209.723.3153 x 119 or [email protected].

FISCAL IMPACT

The FY 20-21 Overall Work Program includes element 550 – One Voice Legislative Program. This budget element includes a total program budget of $41,286 for the federal One Voice program and the state and federal Valley Voice program. This budget is funded by jurisdictions’ membership fees and includes costs for professional services performed by Townsend Public Affairs, travel, and staff time. All unexpended funds at that end of the fiscal year are carried over to the next fiscal year budget for the same work element.

217

REQUESTED ACTION

Affirm the decision of the 2021 One Voice delegation to conduct a virtual legislative trip this year due to the COVID-19 pandemic.

ATTACHMENT

2021 One Voice delegate list

218

One Voice 2021

Confirmed Delegates

• County o Supervisor Daron McDaniel o Supervisor Scott Silveira o Mike North • Atwater o Councilmember John Cale o Councilmember Danny Ambriz o Lori Waterman • Dos Palos – none • Gustine o Mayor Pro Tempore Derek Alexander o Councilmember Jim Bonta o Jami Westervelt • Livingston o Mayor Juan Aguilar Jr. o Councilmember Maria Soto • Los Banos - none • Merced o Mayor Matt Serratto o Stephanie Dietz

• MCAG Staff o Stacie Guzman o Matt Fell o Mary-Michal Rawling o Eva Garibay

219 ITEM 9c

220 PH: 209.723.3153 FAX: 209.723.0322 www.mcagov.org 369 W. 18th Street Merced, CA 95340

ITEM 9c

DATE: February 12, 2021

TO: MCAG Governing Board

FROM: Matt Fell, Deputy Director – Planning

RE: Discussion: Regional Early Action Planning Funding

SUMMARY

Almost $900,000 of funds from the state Housing and Community Development department will be available to the MCAG Governing Board for various housing planning activities to be determined.

REQUESTED ACTION

For information and discussion.

BACKGROUND

Assembly Bill (AB) 101 was signed into law in 2019. It created a one-time funding opportunity for cities, counties, and Metropolitan Planning Organizations (MPOs) statewide to prepare for and implement the sixth cycle Regional Housing Needs Assessment (RHNA). The funds are split between two programs: the Local Early Action Planning Grant Program (LEAP) and the Regional Early Action Planning Grant Program (REAP). Both programs are administered by the State Department of Housing and Community Development (HCD).

“LEAP”: Through LEAP, HCD allocated $119 million directly to cities and counties, on a population- weighted basis, for housing-related planning activities, such as planning document or zoning ordinance updates, environmental clearances, infrastructure plans, or other streamlining measures that accelerate the production of housing. The deadline for applications was July 1, 2020 but was extended to January 31, 2021.

“REAP”: HCD is also distributing $118.75 million to MPOs and regional entities through REAP. The San Joaquin Valley region, consisting of Fresno, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus, and Tulare counties, is eligible for about $19 million in funding through REAP. Eligible activities include developing education and outreach strategies, improving methodologies for RHNA, providing technical assistance, and establishing regional or jurisdictional housing trust funds, among other uses.

The San Joaquin Valley region was statutorily required to convene a multiagency working group to determine regional housing priorities, develop and submit applications for funding to HCD, and submit

221 reports to HCD. AB 101 required that a portion of the Valley’s REAP allocation be dedicated to valley- wide planning activities.

The regional REAP Committee convened in January 2020. To date, they have: • Selected Fresno Council of Governments (Fresno COG) to serve as the fiscal agent. • Approved the submission of an application for 25% of available funding to be distributed to the region’s respective transportation planning agencies on a population-weighted basis. HCD has approved the application. • Approved a second application for REAP funding for the $6 million set aside for coordinated valley-wide planning activities, which includes the development of a comprehensive regional housing report, guidance on regional housing trust fund implementation, regional planning and technical assistance, data gathering and sharing, and related valley-wide activities. HCD has also approved this application. • Approved a San Joaquin Valley REAP Program Manager. The Program Manager’s responsibilities include, but are not limited to, developing applications to HCD for additional REAP funding, coordinating with local agencies and San Joaquin Valley MPOs to monitor and develop progress reports on REAP-funded activities, and producing technical assistance materials to assist local agencies with REAP-funded activities.

PAST ACTION TAKEN

November 2020: MCAG Governing Board authorized execution of a Memorandum of Understanding concerning REAP.

NEXT STEPS

Per the REAP Memorandum of Understanding (MOU), Fresno COG has distributed “Part 1”, the initial $4.7 million of funding to each MPO on a population-weighted basis. Through this formula, MCAG received $310,394.79 in REAP funds.

The application for the remaining $8.75 million in REAP funding was submitted and is pending approval from HCD. MCAG will receive $572,948.27 from “Part 2”, potentially within a few months.

Thus the total MCAG will receive through Parts 1 and 2 is $883,343.06.

Staff at all eight MPOs have been sharing information on their approaches and process, and MCAG has developed the following summary of various approaches. First, similar to the other MPOs, staff is proposing using some of the funding for coordination and RHNA:

1. Regional Housing Needs Assessment – funds for MCAG staff time and for acquiring consultant assistance with the Regional Housing Needs Assessment (RHNA) which MCAG is required to prepare. In the past MCAG has not received state funds to do RHNA, and federal funding cannot be used. The adopted FY 2020-2021 Budget includes $193,729 in the Housing Planning element for these purposes, with about $27,000 of that staff time and the rest for professional services.

Staff is also seeking discussion and feedback on the following options:

222 2. Allocations to local jurisdictions for housing planning support – possibly up to the entire remaining amount. For example, if $193,729 of funding is taken off the top from the $883,343.06 total of Parts 1 and 2, and all of the remaining $689,614.06 is distributed by population, the amounts that would go to each jurisdiction are as follows:

Jurisdiction Population* % of Total Share Atwater 31,378 11.1% $76,321.37 Dos Palos 5,546 2.0% $13,489.65 Gustine 5,875 2.1% $14,289.89 Livingston 15,052 5.3% $36,611.29 Los Banos 41,923 14.8% $101,970.19 Merced 88,120 31.1% $214,336.12 County 95,627 33.7% $232,595.55 Total 283,521 100% $689,614.06 * California Department of Finance, E-1 Population Estimates, May 2020

3. Developing a regional approach instead of pro-rata - San Joaquin COG has adopted this approach, and proposes the following four priorities for the funds: a. Developing a regional housing trust fund. Note: contributing to the fund is not an eligible use. b. Streamlining the development process. c. Developing a regional project pipeline. d. Supporting jurisdictions impacted by COVID-19

4. Developing a housing planning grants program - Fresno COG is using this approach for most of their “Part 1” funding. Their program guidelines include a process for applications and scoring and identify the purpose of the grants as accelerating housing production and facilitating compliance to implement sixth-cycle RHNA.

5. Any other proposals.

Note that the funds are for planning only, not for implementing housing. All of the funds must be expended by the Fall of 2023.

If you have any questions regarding this staff report, please contact Matt Fell at 723.3153 x 128 or [email protected].

FISCAL IMPACT

In total, $883,343.06 for housing planning and support will be distributed to MCAG.

REQUESTED ACTION

For information and discussion.

223 ITEM 10a

224 The Public Transportation Services of the Transit Joint Powers Authority for Merced County 369 W. 18th Street .. Merced, CA 95340 .. (209) 723-3100 .. (209) 723-0322 fax .. mercedthebus.com

ITEM 10a

DATE: February 12, 2021

TO: Transit Joint Powers Authority for Merced County

FROM: Alicia Ochoa-Jones, Purchasing and Contracts Manager

RE: Information: Quarterly Report on Transit Joint Powers Authority for Merced County (TJPAMC) Board Approved Contracts

SUMMARY

Enclosed for your review and information is the TJPAMC list of Governing Board approved contracts and their status. The list is as of December 31, 2020 and most contracts are open with the exception of two that closed within the last quarter.

REQUESTED ACTION

For information only.

BACKGROUND

If you have any questions regarding this staff report, please contact Alicia Ochoa-Jones at 209.723.3153 x164 or at [email protected].

PAST ACTION TAKEN

No previous action was taken as this was an information only item.

NEXT STEPS

These updates will be provided to the Governing Board on a quarterly basis.

FISCAL IMPACT

None.

225

REQUESTED ACTION

For information only.

ATTACHMENT

TJPAMC GB Approved Contract Status as of 12.31.2020

226 TJPAMC Governing Board Approved Contracts Status as of 12.31.2020

VENDOR AND SERVICE STATUS START DATE END DATE CONTRACT TOTAL REMAINING BALANCE ADAride.com, LLC - Eligibility Paratransit Services Open 11/13/2018 11/30/2021 $ 84,000.00 $ 43,084.00 Comstock Johnson Architects -A&E for Transit Building Remodel Open 4/25/2018 until construction complete $ 86,495.00 $ 16,014.24 First Transit, Inc. - Transit Operations & Bus Maintenance Services Open 5/1/2020 4/30/2025 $ 51,033,857.24 $ 47,256,613.79 Genfare, A Division of SPX Corporation - Transit Fare Management Services Open 10/1/2020 9/30/2023 $ 275,000.00 $ 275,000.00 Hunt & Sons, Inc. (W.H Breshears, Inc.) - Fuel Card Program Open 7/1/2019 7/31/2022 $ 73,070.57* National Express Transit - Transit Operations & Bus Maintenance Services Closed 9/1/2015 4/30/2020 $ 32,043,853.00 $ 742,502.11 Power Security Group - Public Transit Security Services Open 6/20/2019 6/30/2022 $ 334,800.00 $ 181,593.40 Protech - Video Surveillance, Access Control System & Maintenance for Facility Open 1/16/2019 1/17/2022** $ 114,809.94 $ - Remix Software, Inc. - Planning and Scheduling Software Open 7/1/2020 6/30/2023 $ 139,500.00 $ 93,000.00 Syncromatics Corp. - Vehicle Location and Real Time Passenger info Open 2/1/2019 1/31/2022 $ 175,668.00 $ 58,556.00 Unified Dispatch, LLC - Hosted Interactive Voice Response Services Open 9/14/2017 9/30/2023 $ 82,100.00 $ 36,600.00 Van de Pol Enterprises, Inc. - Delivery of Bulk Fuel & Lubricants Open 7/1/2019 7/31/2022 $ 1,356,820.68* Vast Networks - Internet Services Closed 11/30/2016 11/30/2020 $ 49,984.00 $ 725.54

*Commodity - Total paid to date **Contract is fully paid. Services include maintenance, on-call services, and warranty through contract term.

227 ITEM 12a

228 The Public Transportation Services of the Transit Joint Powers Authority for Merced County 369 W. 18th Street .. Merced, CA 95340 .. (209) 723-3100 .. (209) 723-0322 fax .. mercedthebus.com

ITEM 12a

DATE: February 12, 2021

TO: Transit Joint Powers Authority for Merced County

FROM: Nav Bagri, Finance Director

RE: Action: Accept the Transit Joint Powers Authority for Merced County Audited Financial Statements for the year ending June 30, 2020

SUMMARY

Staff is requesting the Governing Board accept the Transit Joint Powers Authority for Merced County (TJPA) Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020. The audit concluded with no findings.

REQUESTED ACTION

Accept the Transit Joint Powers Authority for Merced County Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020.

BACKGROUND

The objective of the Independent Audit is to ensure that federal and state funding is being spent appropriately. Governmental audits include financial statement audits performed under government auditing standards on entities such as states, local governments, not-for-profit organizations, institutions of higher education, and certain for-profit organizations. TJPA is also required to conduct a single audit when the agency expends more than $750,000 of federal funds.

PAST ACTION TAKEN

January 2020: Governing Board accepted Transit Joint Powers Authority for Merced County Audited Financial Statement for the year ending June 30, 2019.

DISCUSSION

TJPA’s Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020, is enclosed for your review. This audit includes activity of the General, or Operating, Fund, the Public Transportation Modernization Improvement and Service Enhancement Act (PTMISEA) fund, the Local Transportation Fund (LTF) or Transportation Development Act Program, and the Cal-Office of Emergency Services Fund. The conclusion of this audit includes no finding of “material weakness” relating to year-end financial close-out. There were no findings in previous year audits.

TJPA has a noncompliance material finding to the financial statement due to not meeting TDA guidelines for the farebox recovery ratio.

229

The farebox recovery ratio is the fraction of operating expenses which are met by the fares paid by passengers. It is computed by dividing the system's total farebox revenue by its total operating expenses. Farebox recovery ratio for urbanized area should be no less than 15% and for rural area should be no less than 10%.

During a period of unprecedented disruption from the COVID-19 pandemic, TJPA experienced an overall 35% decline in ridership in the fourth quarter of FY 19/20. Due to the pandemic, TJPA did not meet the farebox recovery ratio. The farebox recovery ratio for FY 19/20 is detailed in the chart below.

If you have any questions regarding this staff report, please contact Nav Bagri at 723.3153 x 154 or [email protected].

The Technical Review Board concurs with the requested action.

FISCAL IMPACT

None.

REQUESTED ACTION

Accept the Transit Joint Powers Authority for Merced County Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020.

ATTACHMENT

TJPA Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020.

230

TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY

FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT

FOR THE YEAR ENDED JUNE 30, 2020 DRAFT

231

TABLE OF CONTENTS

Page

Independent Auditors’ Report...... 1

Management’s Discussion and Analysis ...... 3

Basic Financial Statements:

Statement of Net Position ...... 7

Statement of Revenues, Expenses, and Changes in Net Position ...... 8

Statement of Cash Flows ...... 9

Notes to the Financial Statements ...... 10

Supplementary Information:

Schedule of Insurance Coverage ...... 18

Schedule of Expenditures of Federal Awards ...... 19

Notes to the Schedule of Expenditures of Federal Awards ...... 20

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 Government Auditing Standards and the Transportation Development Act ...... 21

Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance ...... 23

Schedule of Findings and Questioned Costs ...... 25

Summary Schedule of Prior Year AuditDRAFT Findings ...... 26

232

INDEPENDENT AUDITORS’ REPORT

To the Governing Board of the Transit Joint Powers Authority for Merced County Merced, California

Report on the Financial Statements We have audited the accompanying financial statements of the business-type activities of the Transit Joint Powers Authority for Merced County (the Authority), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controlDRAFT relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities of the Authority as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711 ______

P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM 233

Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 3-6 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Authority’s basic financial statements. The schedule of insurance coverages is presented for purposes of additional analysis and is not a required part of the basic financial statements. The schedule of expenditures of federal awards and the schedule of insurance coverages were the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The schedule of expenditures of federal awards has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The schedule of insurance coverages has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards and the Transportation Development Act In accordance with Government Auditing Standards, we have also issued our report dated January 20, 2021, on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters as it relates to the Transportation Development Act Funds. The purpose of that report is solely 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 effectiveness of the Authority’s internal control over financial reporting or on compliance as it relates to the Transportation Development Act Funds. That report is an integral part of an audit performed in accordance with Government Auditing Standards inDRAFT considering the Authority’s internal control over financial reporting and compliance as it relates to the Transportation Development Act Funds.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California January 20, 2021

234

TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2020

Merced County Association of Governments (MCAG) is the administrative management of the Transit Joint Powers Authority for Merced County (TJPA), which is responsible for the county-wide transportation system known as The Bus. Management presents the following narrative overview and analysis of the financial activities of the TJPA for the year ended June 30, 2020. The financial information presented here should be considered in conjunction with the financial statements presented in the following pages.

FINANCIAL HIGHLIGHTS

• The TJPA’s total assets for the fiscal year ended June 30, 2020 are $57,594,119. This is an increase of $6,135,384 from the ending balance of the prior fiscal year. The significant changes were due to increases in cash and investments and dues from other governments. TJPA is deferring unearned revenues from FY 2019/2020 to later years. • Capital assets, net of accumulated depreciation, included in total assets, are $17,560,901, which is a decrease of $2,045,093 from the prior year. The decrease is due to disposition of capital assets. • Total liabilities as shown on the Statement of Net Position for the fiscal year ended June 30, 2020 are $9,868,542, which is an increase from the prior year of $4,841,365. The increase is due to an increase in accounts payable and unearned revenues.

OVERVIEW OF FINANCIAL STATEMENTS

The Management’s Discussion and Analysis is intended to serve as an introduction to TJPA’s basic financial statements. Since TJPA’s primary function is to provide transportation services to the region’s citizens and recover costs through user fees and charges, the financial statements include business-type activities.

Basic Financial Statements

The financial statements are designed to provide readers with a broad overview of TJPA’s finances in a manner similar to a private-sector business. The basic financial statements include the following:

The Statement of Net Position presents information on all TJPA’s assets and liabilities, with the difference between the two being reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether TJPA’s financial position is improving or deteriorating.

The Statement of Revenues, Expenses, and Changes in Net Position presents information showing how TJPA’s net position changed during the fiscal year ended June 30, 2020. All changes in net position are reported as soon as the underlying event giving rise to the change occurs (such as the receipt of goods and services or submittal of claims for capital and operating revenue) regardless of the timing of related cash flows. Thus, the revenues and expenses are reported in these statements DRAFT using the accrual basis of accounting, which is more fully described in the accompany Notes to the Basic Financial Statements.

The Statement of Cash Flows presents the cash flow of events that occurred during the fiscal year in cash and investments.

The Notes to the Basic Financial Statements provide additional information that is essential to a full understanding of the financial data provided in the basic financial statements.

235

TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

FINANCIAL ANALYSIS

As noted earlier, net position may serve as a useful indicator of a government’s financial position over time. In the case of TJPA, assets exceeded liabilities by $47,725,577 and $46,431,558 at June 30, 2020 and 2019, respectively.

The financial statements provide both short-term and long-term information about TJPA’s overall financial condition. This analysis addresses the financial statements of TJPA as a whole.

The financial statements include activity for all transit-related funds, including the general or operating Fund, the Public Transportation Modernization Improvement and Service Enhancement Act (PTMISEA) Fund, the Local Transportation Fund or Transportation Development Act programs, the Cal-OES Fund, and the Measure V Fund.

Statement of Net Position - Two Year Comparison

June 30, 2020 June 30, 2019 $ Changes % Changes Assets Current Assests $ 40,033,218 $ 31,852,741 $ 8,180,477 25.7% Capital Assets (net) 17,560,901 19,605,994 (2,045,093) (10.4)%

Total Assests 57,594,119 51,458,735 6,135,384 11.9%

Liabilities Current Liabilities 9,868,542 5,027,177 4,841,365 96.3%

Total Liabilities 9,868,542 5,027,177 4,841,365 96.3%

Net Position Net Investment in Capital Assets 17,560,901 19,605,994 (2,045,093) (10.4)% Unrestricted 30,164,676 26,825,564 3,339,112 12.4% Total Net Position $ 47,725,577 $ 46,431,558 $ 1,294,019 2.8%

TJPA’s Changes in net position for the years ended June 30, 2020 and 2019 are as follows:

Changes in Net Position - Two Year Comparison

June 30, 2020 June 30, 2019 $ Changes % Change

Operating Revenues $ 1,252,043 $ 1,315,746 $ (63,703) (4.8)% Operating Expenses DRAFT 12,807,153 13,384,324 (577,171) (4.3)% Operating Income (Loss) (11,555,110) (12,068,578) 513,468 (4.3)%

Nonoperating Revenues (Expenses) 12,849,129 14,405,634 (1,556,505) (10.8)%

Changes in Net Position 1,294,019 2,337,056 (1,043,037) (44.6)%

Net Position- Beginning 46,431,558 44,094,502 2,337,056 5.3 %

Net Position- Ending $ 47,725,577 $ 46,431,558 $ 1,294,019 2.8 %

236

TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

Transit Activities

As shown on the Statement of Revenues, Expenses, and Changes in Net Position for the fiscal year ending June 30, 2020, total operating expenses decreased by $577,171 over the prior year. Nonoperating revenues (expenses) decreased by $1,556,505 from the prior year. The decrease is due to reduced funding from Sales Tax LTF Revenue ($2,439,072), Federal Agency Grant ($3,506,783), LCTOP ($373,119), CAL-OES ($832,296), and General Operations LTF Money ($326,132). TJPA received $10,775,826 in revenues from the Coronavirus Aid, Relief and Economic Security (CARES) Act. These funds can only be used to prevent, prepare for, and respond to the coronavirus. Language in the bill states that 100% of operating expenses related to the response to the pandemic from January 20, 2020, are eligible for reimbursement through this funding. In the FY 2019/2020 TJPA utilized $4,223,940 of the CARES Act money and the remaining funds will be utilized in FY 2020/2021.

Capital Assets and Debt Administration

Capital Assets

The capital assets of the TJPA are those assets with a cost of at least $5,000 and have more than one year of life that are used in the performance of transit operations and any related functions. At June 30, 2020, the TJPA had $17,560,901 invested in capital assets including land, construction in progress, land improvements, buildings and improvements, and equipment, reduced by accumulated depreciation (see table below). This amount represents a net decrease (including additions and dispositions) of $2,045,093 or 10.4 percent from the prior year.

June 30, 2019 Additions Dispositions June 30, 2020 Nondepreciable Land $ 633,666 $ - $ - $ 633,666 Constructions in Progress 57,076 - - 57,076 Total Nondepreciable Assets 690,742 - - 690,742 Depreciable Land Improvements 108,445 - - 108,445 Buildings and Imrpovements 11,565,187 - - 11,565,187 Equipment 22,683,839 57,754 (2,344,379) 20,397,214 Total Depreciable Assets 34,357,471 57,754 (2,344,379) 32,070,846 Accumulated Depreciation Land Improvements (105,156) (7,230) - (112,386) Buildings and Improvements (994,755) (292,627) - (1,287,382) Equipment DRAFT (14,342,308) (1,577,438) 2,118,827 (13,800,919) Total Accumulated Depreciation (15,442,219) (1,877,295) 2,118,827 (15,200,687) Total Depreciable Assets, Net 18,915,252 (1,819,541) (225,552) 16,870,159

Net Capital Assets $ 19,605,994 $ (1,819,541) $ (225,552) $ 17,560,901

This year’s major dispositions included:

• Gillig Transit Buses, Ford Econoline E-450 Buses, and miscellaneous equipment, $2,344,379.

Debt

The TJPA for Merced County does not hold any debt.

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

❖ Merced County’s unemployment rate increased from the prior year. As of June 2020, the Bureau of Labor Statistics reports the unemployment rates were 15.6% for Merced, 14.9% for California and 11.1% for the Nation. Most of the jurisdictions in Merced County have indicated that they have some increase in building permits issued. The State-mandated increases in minimum wage will have impacts on the operations costs for the 2020-21 fiscal years.

❖ The FY2020/21 budget was finalized during a period of unprecedented disruption from the COVID-19 pandemic and the associated shelter in place order. COVID-19 has not only disrupted transit operations, with ridership and fare revenue down significantly, it has created extreme limitations on mobility and commerce that will impact Transit Joint Powers Authority primary revenue streams. While it is clear impacts will be significant, changes are too recent for there to be clear indications of the magnitude and extent of the impacts on farebox, local transportation funds, and diesel fuel taxes.

❖ TJPA will be utilizing funding received through the Coronavirus Aid, Relief and Economic Security (CARES) Act to offset the loss in previously mentioned funding sources. At the request of the Federal Transit Administration, these funds will be utilized in full before all other transit funding apportionments.

Major purchases budgeted for the 2020-21 fiscal years include the following:

Description Estimated Cost Funding Source Bus Shelter/Pullout Installation $ 645,000 LTF 357 W. 18th St. Building Renovation 754,871 5339, CARES ACT, SGR (as Local Match) Farebox Collection System 374,026 LCTOP Bus Purchase 500,000 Measure V Bus Purchase 875,648 LTF Capital Carryover Bus Purchase 566,396 STA SB-1 Bus Purchase 667,255 SGR Bus Purchase 2,000,000 Low or No Emission Grant Bus Purchase 3 Cutaway 410,980 LTF Bus Purchase 4 Cutaway 568,284 LTF, CARES ACT Wash Pit 60,000 LTF Driver Compartment 105,000 CARES ACT 11-Clean Diesel Buses 3,089,947 CARES ACT 2-Utility Trucks 100,000 CARES ACT Total DRAFT$ 10,717,407

Requests for information

The basic financial statements are designed to provide a general overview of the TJPA’s finances. Questions concerning any information provided in the report or requests for additional financial information should be addressed to Nav Bagri, Finance Director, Merced County Association of Governments, 369 W. 18th Street, Merced, CA 95340, or at [email protected].

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY STATEMENT OF NET POSITION JUNE 30, 2020

ASSETS Current assets: Cash and investments $ 27,051,772 Accounts receivable 406,638 Due from other governments 12,503,189 Prepaid expenses 58,146 Bus pass inventory 13,473

Total current assets 40,033,218

Noncurrent assets: Capital assets: Nondepreciable 690,742 Depreciable 32,070,846 Accumulated depreciation (15,200,687)

Capital assets, net of accumulated depreciation 17,560,901

Total noncurrent assets 17,560,901

Total assets 57,594,119

LIABILITIES Current liabilities: Accounts payable 3,412,626 Due to other governments 217,486 Unearned revenues 5,831,953 Unearned revenues - State of Good Repair 406,477

Total current liabilities 9,868,542

Total liabilities 9,868,542

NET POSITION Net investment in capital assetsDRAFT 17,560,901 Unrestricted 30,164,676

Total net position $ 47,725,577

The accompanying notes are an integral part of the financial statements.

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE YEAR ENDED JUNE 30, 2020

Operating revenues: Passenger fares $ 1,244,981 Other operating revenue 7,062

Total operating revenues 1,252,043

Operating expenses: Professional services 7,282,015 Fuel, repairs and maintenance 3,146,032 General and administrative 328,922 Insurance 86,201 Special department expense 150 Utilities 40,068 Rents and leases 46,470 Depreciation 1,877,295

Total operating expenses 12,807,153

Operating income (loss) (11,555,110)

Nonoperating revenues (expenses): Federal and state grants 4,802,275 Intergovernmental 5,227,692 Intergovernmental - State Transit Assistance 2,485,138 Interest income 559,575 Loss on sale of assets (225,551)

Total nonoperating revenues (expenses) 12,849,129

Change in Net Position 1,294,019

Net Position - Beginning 46,431,558

Net Position - Ending $ 47,725,577 DRAFT

The accompanying notes are an integral part of the financial statements.

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2020

Cash Flows from Operating Activities: Receipts from customers $ 854,707 Payments to suppliers, contracted entities and others (8,465,202)

Net cash provided by (used in) operating activities (7,610,495)

Cash Flows from Noncapital Financing Activities: Federal, state and local operating assistance net cash receipts 4,334,062 Intergovernmental net cash receipts 7,810,243

Net cash provided by (used in) noncapital financing activities 12,144,305

Cash Flows from Capital and Related Financing Activities: Payments for capital assets (57,754)

Net cash provided by (used in) capital and related financing activities (57,754)

Cash Flows from Investing Activities: Interest received 559,575

Net cash provided by (used in) investing activities 559,575

Net increase (decrease) in cash and investments 5,035,631

Cash and Investments at Beginning of Year 22,016,141

Cash and Investments at End of Year $ 27,051,772

Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities: Operating income (loss) $ (11,555,110) Depreciation and amortization 1,877,295 Increase (decrease) in: Accounts receivable (397,336) Prepaid expenses DRAFT 11,583 Bus pass inventory 26,278 (Increase) decrease in: Accounts payable 2,336,203 Due to other governments 90,592

Net cash provided by (used in) operating activities $ (7,610,495)

The accompanying notes are an integral part of the financial statements.

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General Statement: The cities of Atwater, Dos Palos, Gustine, Livingston, Los Banos, Merced, and the County of Merced, have entered into a joint powers agreement in 1995 to acquire, develop, maintain, and operate transportation services and related transit facilities. The Transit Joint Powers Authority of Merced County (the Authority) administers the operations subject to the terms and conditions provided in accordance with such agreements and the authority set forth in California Government Code Section 6508.

The Governing Board for the Authority is composed of the same members as the Governing Board of the Merced County Association of Governments, which consist of the five Supervisors of the County of Merced and one representative from the cities of Merced, Atwater, Livingston, Dos Palos, Gustine, and Los Banos.

The Authority contracts with Merced County Association of Governments for administrative and accounting support.

Basis of Accounting: The Authority uses an enterprise fund format to report its activities for financial statement purposes. Proprietary fund financial statements include a Statement of Net Position; Statement of Revenues, Expenses, and Changes in Net Position; and a Statement of Cash Flows.

Enterprise funds are used to account for operations that are financed and operated in a manner similar to a private business enterprise, where the intent of the governing body is that the costs and expenses of providing goods or services to its consumer be financed or recovered primarily through users charges; or where the governing body has decided that periodic determination of revenue earned, expenses incurred, and net income is appropriated for capital maintenances, public policy, management control, accountability, or other purposes.

Enterprise funds are accounted for using the economic resources measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included in the Statement of Net Position. The Statement of Revenues, Expenses, and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Operating revenues in the proprietary funds are those revenues that are generated from primary operations of the funds. All other revenues are reported as nonoperating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.

Cash and Investments: The Authority’s cash and investments are considered to be cash on hand and short-term investments with original maturities of three months or less from the date of acquisition. The Authority maintains cash in a financial institution, the treasuryDRAFT of Merced County and the Local Agency Investment Fund (LAIF). The County pools funds with those of other entities of the County and invests the cash. These pooled funds are carried at cost, which approximates market value. Interest earned is deposited quarterly in the participating funds. Any investment gains or losses are proportionately shared by all funds in the pool. The County is authorized to deposit cash and invest excess funds by California Government Code sections 53601 et. Seq., 53635 et. Seq., and 53648 et. Seq.

Accounts Receivable: Accounts receivable results from charges from goods and services. The “direct write-off” method for accounts receivable was applied for accounts that have been established as uncollectible. The “direct write-off” method is not in compliance with generally accepted accounting principles, but the result is immaterial to the financial statements taken as a whole. The Authority did not write off any accounts receivable during the fiscal year ended June 30, 2020. There were no accounts deemed to be uncollectible at June 30, 2020.

Bus Pass Inventory: Inventory of bus passes on hand at year-end is valued at cost.

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Capital Assets: Capital assets are recorded at cost or estimated cost where costs are not available. Assets acquired through gifts or contributions are recorded at fair value at the time received. Self-constructed assets are capitalized at cost plus ancillary charges, including interest. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized.

The Authority capitalizes equipment with a cost of at least $5,000 and an estimated useful life in excess of one year; and land, buildings and improvements with a cost of at least $10,000 and an estimated life in excess of one year. All capitalized assets are depreciated or amortized (assets under capital leases) using the straight-line method over their estimated useful lives. The estimated economic lives used to determine annual rates of depreciation or amortization are subject to periodic review and revision to assure that the costs of the respective assets will be written off over their economic lives.

The estimated useful lives for the various types of assets are as follows:

Land improvements 15 years Building and improvements 25 - 40 years Equipment 3 - 20 years

Accounts Payable/Due to Other Governments/Agencies: Certain costs are incurred by the Authority during the current period but are not paid until after the beginning of the next fiscal year. These costs are reported as payables in the financial statements. The Authority’s current accounts payable and due to other governments balances of $3,412,626 and $217,486, respectively, as of June 30, 2020, are related to certain contract services and payments for utility fees.

Unearned Revenues: The Authority records unearned revenue for transactions for which revenues have not been earned and have not yet met the revenue recognition criteria based on the accrual basis of accounting.

Fair Value of Financial Instruments: Financial instruments include cash and investments, accounts receivable, due from other governments, due from other agencies, prepaid expenses, bus pass inventory, accounts payable, due to other governments, unearned revenue, and due to other agencies, none of which are held for trading purposes. The fair values of all financial instruments do not differ materially from the aggregate carrying values of the financial instruments recorded in the accompanying Statement of Net Position.

Net Position: Net position is reported in three categories as follows:

• Net investment in capital assets – This amount consists of capital assets net of accumulated depreciation and reducedDRAFT by outstanding debt that is attributed to the acquisition of capital assets. • Restricted – This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments. • Unrestricted – This amount is all resources that do not meet the definition of “net investment in capital assets” or “restricted net position.”

When both restricted and unrestricted resources are available for use, it is the Authority’s policy to use restricted resources first, then unrestricted resources as needed.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosures at the date of the basic financial statements and the reported amounts of revenues and expenses during the reporting period. As such, actual results could differ from those estimates.

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Governmental Accounting Standards Update: During the year ending June 30, 2020, the Authority implemented the following standards with no financial impact on the financial statements:

GASB Statement No. 95 – Postponement of the Effective Dates of Certain Authoritative Guidance. The requirements of this statement are effective as of May 2020.

Released GASB Statements to be implemented in future financial statements are as follows:

GASB Statement No. 90 – Majority Equity Interests - an amendment of GASB Statements No. 14 and No 61. The requirements of this statement are effective for reporting periods beginning after December 15, 2018. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to reporting periods beginning after December 15, 2019.

GASB Statement No. 94 – Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

GASB Statement No. 96 – Subscription-Based Information Technology Arrangements. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – GENERAL STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Subsequent Events: In compliance with accounting standards, management has evaluated events that have occurred after year-end to determine if these events are required to be disclosed in the financial statements. Management has determined that no events require disclosure in accordance with accounting standards. These subsequent events have been evaluated through January 20, 2021, which is the date the financial statements were available to be issued.

NOTE 2 – CASH AND INVESTMENTS

Cash in Banks: The Authority’s cash is held in a financial banking institution. Cash balances in banks are insured up to $250,000, per financial institution, by the Federal Depository Insurance Corporation (FDIC). Custodial credit risk is that in the event of a bank failure, the deposits will not be returned. The Authority has a collateralized agreement with Wells Fargo Bank that all government funds deposited are subject to Title 5, Division 2, Part 1, Chapter 4, Article 2 (commencing with Section 53630) of the Government Code of the State of California (the “Local Agency Deposit Security Law”).

Cash in Merced County Treasury and Local Agency Investment Fund: The Authority’s cash and investments consist of cash in the Merced County Treasury and the Local Agency Investment Fund as part of common investment pools. These pooled funds are carried at cost during the year and adjusted to fair value at year-end. Interest is paid quarterly into the participating funds. Any investment gains or losses are proportionately shared by all funds in the pool. The fair market value of this pool, as of June 30, 2020, was provided by the pool sponsor.

The Authority is authorized to deposit cash and invest excess funds by the California Government Code Sections 53601 et. Seq., 53635 et. Seq., and 53648 et. seq. The County is restricted by Government Code Section 53635, pursuant to Section 53601, to invest in time deposits, U.S. government securities, state registered warrants, notes or bonds, State Treasurer’s investment pool, bankers acceptances, commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements. The investment policy for the Merced County Treasury prohibits reverse repurchase securities and foreign investments.

Cash and investments as of June 30, 2020 consisted of the following:

Cost FMV

Investment in Merced County Treasury $ 18,238,036 $ 18,504,530 Investment in Local Agency Investment Fund 1,615,662 1,621,557 Cash in Wells Fargo checking account 6,925,535 6,925,535 Petty cash DRAFT 150 150 Total Cash and Investments $ 26,779,383 $ 27,051,772

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rate. As of June 30, 2020, the weighted average maturity of investments contained in the Merced County Treasury investment pool was approximately 432 days.

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 2 – CASH AND INVESTMENTS (continued)

Custodial credit risk does not apply to a local government’s indirect investments in securities through the use of mutual funds or government investment pool. The County of Merced issues a financial report that includes custodial risk disclosures for the Cash in County Treasury. The report may be obtained by writing the Merced County Treasurer, 2222 M Street, Merced, California 95340.

Cash in Treasury and Local Agency Investment Fund Valuation: The Authority categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. Fair value measurements of the Authority’s investments are as follows at June 30, 2020:

• Cash in County of Merced Treasurer’s Investment Pool: valued at $18,504,530, the County of Merced Treasurer’s investment Pool is accounted for on a cost basis during the year and adjusted to fair value at year-end. The fair market value of this pool as of June 30, 2020 was provided by the Merced County Treasury. The County of Merced Treasurer invests in numerous types of investments ranging all levels in the fair value hierarchy. Accordingly, it is not an investment type that can be categorized in any particular level in the fair value hierarchy. • Cash in Local Agency Investment Fund: valued at $1,621,557, the Local Agency Investment Fund is accounted for on a cost basis during the year and adjusted to fair value at year-end. The fair market value of this pool as of June 30, 2020 was provided by the Local Agency Investment Fund. The Local Agency Investment Fund invests in numerous types of investments ranging all levels in the fair value hierarchy. Accordingly, it is not an investment type that can be categorized in any particular level in the fair value hierarchy.

DRAFT

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 3 – CAPITAL ASSETS

Capital assets activity for the year ended June 30, 2020 was as follows:

July 01, 2019 Additions Dispositions June 30, 2020 Nondepreciable: Land $ 633,666 -$ -$ $ 633,666 Construction in progress 57,076 - - 57,076

Total nondepreciable 690,742 - - 690,742

Depreciable: Land improvements 108,445 - - 108,445 Buildings and improvements 11,565,187 - - 11,565,187 Equipment 22,683,839 57,754 (2,344,379) 20,397,214

Total depreciable assets 34,357,471 57,754 (2,344,379) 32,070,846

Accumulated depreciation: Land improvements (105,156) (7,230) - (112,386) Buildings and improvements (994,755) (292,627) - (1,287,382) Equipment (14,342,308) (1,577,438) 2,118,827 (13,800,919)

Total accumulated depreciation (15,442,219) (1,877,295) 2,118,827 (15,200,687)

Total depreciable assets, net 18,915,252 (1,819,541) (225,552) 16,870,159

Net Capital Assets $ 19,605,994 $ (1,819,541) $ (225,552) $ 17,560,901

The amount recorded for depreciation was $1,877,295 for the year ended June 30, 2020.

NOTE 4 – TRANSPORTATION DEVELOPMENT ACT REQUIREMENTS

Section 6633 Pursuant to Section 6633.2 and 6633.5DRAFT of the California Administrative Code, the Authority is required to meet a passenger fare revenue recovery ratio of 15% for urban fixed services, 10% for rural fixed services, and 10% for the elderly and handicapped (Dial-A-Ride Paratransit). The ratios for the fiscal year ended June 30, 2020, were 14.7%, 9.6%, and 5.9%, respectively, for urban fixed services, rural fixed services, and Dial-A-Ride Paratransit. Since the ratio for urban fixed services is below the 15% requirement and the ratio for rural fixed services and Dial-A-Ride Paratransit is below the 10% requirement, the Authority is not in compliance under PUC Section 99268.4.

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 4 – TRANSPORTATION DEVELOPMENT ACT REQUIREMENTS (continued)

The Authority’s passenger fare recovery ratios for the urban and rural services with Fixed Route and Dial-A-Ride shown separately are as follows at June 30, 2020:

Fixed Routes Dial-A-Ride Urban Rural Paratransit

Passenger fare revenue $ 761,445 $ 94,207 $ 117,189 Subsidy from other sector of operations 405,400 - - Adjusted revenues $ 1,166,845 $ 94,207 $ 117,189

Operating costs $ 7,931,667 $ 981,320 $ 1,985,573 Adjusted operating costs $ 7,931,667 $ 981,320 $ 1,985,573

Revenue recovery ratio 14.7% 9.6% 5.9%

During the fiscal year ended June 30, 2020, the Authority provided Dial-A-Ride services in the Los Banos area at a fixed route fare. Dial-A-Ride services have higher costs than the fixed route services. The effects of these changes were a decrease in farebox revenue and an overall increase to total operational costs.

NOTE 5 – COMMITMENTS AND CONTINGENCIES

Grants have been received by the Authority for specific purposes that are subject to review and audit by the grantor agencies. Such audits could lead to a request for reimbursement for costs disallowed under the terms of the grants. The amount, if any, of costs that may be disallowed by the granting agencies cannot be determined at this time. The Authority expects such amounts, if any, to be immaterial.

Commitments and contingencies, undeterminable in amount, include normal recurring pending claims and litigation. In the opinion of management, based upon discussion with legal counsel, there is no pending litigation, which is likely to have a material adverse effect on the financial position of the Authority.

Coronavirus Pandemic

Management has determined the events regarding the Novel Coronavirus require disclosure in accordance with accounting standards. On March 4, 2020, Governor Newsom issued an emergency proclamation declaring a state of emergency in California due to theDRAFT Novel Coronavirus (COVID-19). The COVID-19 outbreak is ongoing, and the ultimate geographic spread of the virus, the duration and severity of the outbreak and the economic and other actions that may be taken by government authorities to contain the outbreak or treat its impact are uncertain. The ultimate impact of COVID-19 on the operations and finances of the Authority remain unknown.

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 6 – OPERATING LEASES

The Authority has entered into an operating lease agreement with the City of Merced whereby the Authority leases office and counter space at the Merced Transportation Center through December 2024.

The minimum rental payments required under these agreements is as follows:

For the years ending June 30, Amount 2021 $ 44,116 2022 45,439 2023 46,803 2024 48,206 2025 24,459 Total $ 209,023

NOTE 7 – CONTRACTUAL AGREEMENTS

Merced County Association of Governments (Related Party) The Authority has an on-going administrative agreement with the Merced County Association of Governments (MCAG), an affiliated organization, to provide administrative services, including transit service management and marketing, financial and grant administration, and transportation planning services. The most current agreement consists of a one-year term effective July 1, 2019, and allows for automatic annual extensions through June 30, 2020. Payment of MCAG’s services is based on a monthly cost reimbursement basis. The Authority incurred $1,409,819 in administrative services provided by MCAG for the year ended June 30, 2020.

National Express Transit Corporation On September 1, 2015, the Authority entered into an operating agreement with National Express Transit Corporation to provide transit operational services. On October 1, 2015, the Authority entered into a second operating agreement with national express to provide transit maintenance services. These agreements are set to expire on August 31, 2020. The Authority incurred $5,570,360 in operating services provided by National Express Transit Corporation for the year ended June 30, 2020.

First Transit, Inc. On May 2, 2020, the Authority entered into an operating agreement with First Transit, Inc. to provide transit operations and bus maintenance service for the fixed route and paratransit transit services. The agreement is set to expire on April 30, 2025. DRAFT

Merced College The Authority entered into an agreement with Merced College on January 13, 2020 for transit operational services at Merced College. The agreement is set to expire on August 16, 2020.

Caltrans Dot On September 4, 2019, the Authority entered into a contract with Caltrans Dot for marketing and outreach services. The contract is set to expire on September 30, 2023.

NOTE 8 – RISK MANAGEMENT

The Authority is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; injuries to employees; and natural disaster. The Authority provided coverage for these losses through commercial insurance policies.

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY

SUPPLEMENTARY INFORMATION

DRAFT

250

TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY SCHEDULE OF INSURANCE COVERAGES JUNE 30, 2020

The schedule below provides a list of the insurance coverages for the Transit Joint Powers Authority:

Type of Coverage Amount of Coverage Effective Dates General Liability $2,000,000 07/01/20 to 07/01/21 Automobile Liability $1,000,000 07/01/20 to 07/01/21 Commercial Package 90% value w/ $500 deductible 07/01/20 to 07/01/21 Professional Liability $2,000,000 07/01/20 to 07/01/21

The schedule below provides a list of the insurance coverages for the Transit Service Operator: General Liability $2,000,000 07/01/20 to 07/01/21 Excess General Liability $5,000,000 07/01/20 to 07/01/21 Workers Compensation $1,000,000 07/01/20 to 07/01/21 Automobile Liability $2,000,000 07/01/20 to 07/01/21 Automobile Physical Damage Replacement value 07/01/20 to 07/01/21 Auto Excess Liability $3,000,000 07/01/20 to 07/01/21

DRAFT

251

TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2020

Contract or Pass-Through Federal Program to Federal Federal Grantor/Pass-through Grantor/Program Title CFDA No. Number Sub-recipients Expenditures

U.S. DEPARTMENT OF TRANSPORTATION

Pass-through California State Department of Transportation: Federal Transit Cluster Federal Transit Formula Grants 20.507 5731-2020-2 -$ $ 4,793,215 Total Federal Transit Cluster - 4,793,215

Highway Planning and Construction 20.205 CML-6308(021) - 9,060

Total U.S. Department of Transportation - 4,802,275

Total Expenditures of Federal Awards -$ $ 4,802,275

DRAFT

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TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 1 – GENERAL

The accompanying Schedule of Expenditures of Federal Awards presents all the activity of all the federal award programs of the Transit Joint Powers Authority for Merced County (the Authority) for the year ended June 30, 2020. The Authority reporting entity is defined in Note 1 to the Authority’s basic financial statements. Federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included on the schedule.

NOTE 2 – BASIS OF ACCOUNTING & PRESENTATION

Consistent with the Authority’s method of filing federal financial reports, the accompanying Schedule of Expenditures of Federal Awards is prepared using the accrual basis method of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S., Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some of the amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. The amounts reported in the accompanying Schedule of Expenditures of Federal Awards agree, in all material respects, to amounts reported within the Authority’s financial statements.

NOTE 3 – RELATIONSHIP TO FEDERAL FINANCIAL REPORTS

Amounts reported in the accompanying schedule agree with the amounts reported in the related periodic federal financial reports.

NOTE 4 – CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA)

The CFDA numbers included in the accompanying Schedule of Expenditures of Federal Awards were determined based on the program name, review of the grant or contract information and the Office of Management and Budget’s Catalog of Federal Domestic Assistance.

NOTE 5 – PASS-THROUGH ENTITY IDENTIFYING NUMBERS

When Federal awards were received from a pass-through entity, the Schedule of Expenditures of Federal Awards show, if available, the identifying numberDRAFT assigned by the pass-through entity. When no identifying number is shown, the Authority has either determined that no identifying number is assigned for the program or the Authority was unable to obtain an identifying number from the pass-through entity.

NOTE 6 – INDIRECT COST RATE LIMITATION

The Authority does not use the 10 percent de minimis indirect cost rate.

253

To the Governing Board of the Transit Joint Powers Authority for Merced County Merced, California

We have audited, in accordance with the 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, the financial statements of the business-type activities of the Transit Joint Powers Authority for Merced County (the Authority), as of and for the year ended June 30, 2020 and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements, and have issued our report thereon dated January 20, 2021. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Authority’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonableDRAFT possibility that a material misstatement of the Authority’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711 ______

P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM 254

Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the applicable statutes, rules and regulations of the Transportation Development Act, including Public Utilities Code Section 99245 as enacted and amended by statute through June 30, 2020, 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. As a result of our tests, as disclosed in Note 4 to the financial statements, since the current year fare revenue ratio for urban fixed services is below the 15% requirement, the rural fixed services is below the 10% requirement, and Dial-A-Ride Paratransit is below the 10% requirement, the Authority is not in compliance under PUC Section 99268.4. Our tests disclosed no other instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or the Transportation Development Act. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards and the Transportation Development Act in considering the Authority’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California January 20, 2021

DRAFT

255

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE

To the Governing Board of the Transit Joint Powers Authority for Merced County Merced, California

Report on Compliance for Each Major Federal Program We have audited the Transit Joint Powers Authority for Merced County’s (the Authority) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Authority’s major federal programs for the year ended June 30, 2020. The Authority’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for each of the Authority’s major federal programs based on our audit of the types of compliance requirements referred to above. 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of complianceDRAFT 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 Authority’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 on compliance for each major federal program. However, our audit does not provide a legal determination of the Authority’s compliance. Opinion on Each Major Federal Program In our opinion the Authority complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020.

7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711 ______

P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM

256

Report on Internal Control over Compliance Management of the Authority is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Authority’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California January 20, 2021 DRAFT

257

TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2020

SECTION I – SUMMARY OF AUDITORS’ RESULTS

Financial Statements

Type of auditors’ report issued Unmodified

Internal control over financial reporting: Material weaknesses identified ______Yes ___X___ No

Significant deficiencies identified that are Not considered to be material weaknesses? ______Yes ___X__ No

Noncompliance material to financial Statements noted? __ X___ Yes __ ___ No

Federal Awards

Internal control over major programs: Material weaknesses identified? ______Yes ___X___ No

Significant deficiencies identified that are not considered to be material weaknesses? ______Yes ___X___ No

Type of auditors’ report issued on compliance for major programs: Unmodified

Any audit findings disclosed that are required to be reported in accordance with 2CFR section 200.516(a)? ______Yes ___X___ No

Identification of Major Programs

CFDA Number Name of Federal Program or Cluster

20.507 Federal Transit Cluster

Dollar threshold used to distinguish between type A and Type B programs: DRAFT $750,000

Auditee qualified as a low-risk auditee? ____X___ Yes ______No

SECTION II – FINANCIAL STATEMENT FINDINGS

There are no financial statement findings to be reported in accordance with Government Auditing Standards.

SECTION III – FEDERAL AWARD FINDINGS

There are no federal award findings to be reported in accordance with the Uniform Guidance.

258 TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY SUMMARY SCHEDULE OF PRIOR YEAR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30, 2019

FINANCIAL STATEMENT FINDINGS

There were no financial statement findings to be reported in accordance with Government Auditing Standards.

FEDERAL AWARD FINDINGS

There were no federal award findings to be reported in accordance with the Uniform Guidance.

DRAFT

259 ITEM 13a

260 The Public Transportation Services of the Transit Joint Powers Authority for Merced County 369 W. 18th Street .. Merced, CA 95340 .. (209) 723-3100 .. (209) 723-0322 fax .. mercedthebus.com

ITEM 13a

DATE: February 12, 2021

TO: Transit Joint Powers Authority for Merced County

FROM: Christine Chavez, Transit Manager

RE: Information: Transit Joint Powers Authority for Merced County monthly update

BACKGROUND

In order to keep the Citizens Advisory Committee (CAC), Technical Review Board (TRB) and the Transit Joint Powers Authority for Merced County (TJPAMC) Board informed, staff will provide a monthly update on TJPAMC activities.

Staff will give an oral report on the following items:

1) Ridership update 2) Operations and Maintenance update

FISCAL IMPACT

None, for information only.

REQUESTED ACTION

For information only.

ATTACHMENTS

December 2020 Ridership

261 The Bus - December 2020 Ridership % Change Total (Jan Fixed Route Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 (Dec 20 vs 20 - Dec 20) Dec 19) Local 14,598 16,924 17,006 14,297 Measure V Intercity 1,542 2,003 2,223 1,784 Total 16,140 18,927 19,229 16,081 General Students 3,894 2,113 2,241 1,765 Students UC Merced Students 6,616 6,250 9,278 3,234 25,571 32,198 37,214 36,587 28,456 23,868 27,494 30,804 28,985 466,602 (49.03%) Merced College Students 5,866 10,170 6,888 Free (PCA, Children & Staff) 1,308 1,866 2,244 1,201 General (Adult) 28,914 36,925 28,606 22,541 Grand Total Ridership 56,872 71,947 71,768 51,710 Revenue Miles 137,556 147,298 136,289 149,073 139,054 139,336 146,506 141,229 102,104 57,994 66,513 127,614 138,765 1,491,775 0.88% Revenue Hours 9,208 9,764 9,079 9,999 9,332 8,980 9,527 9,683 6,724 3,910 4,355 8,173 7,860 97,385 (14.64%)

% Change Total (Jan Paratransit/GDAR Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 (Dec 20 vs 20 - Dec 20) Dec 19) Adult 2,896 3,385 3,253 2,520 1/2 Fare Los Banos Only 821 958 904 582 Students 19 - - - UC Merced Students 30 22 67 35 1,343 935 900 1,279 1,714 2,825 3,233 1,992 1,978 28,427 (49.02%) Free (PCA, Children & Staff) 114 184 182 136 Grand Total Ridership 3,880 4,549 4,406 3,273 Revenue Miles 30,323 34,352 31,886 25,392 10,686 10,903 13,677 17,644 17,787 20,994 28,092 15,392 18,445 245,250 (39.17%) Revenue Hours 2,512 2,716 2,486 1,962 806 825 1,033 1,234 1,361 1,599 1,898 1,214 1,088 18,222 (56.69%)

Miles Miles per Day Miles per Day Fixed Route Annual Fixed Route Ridership Comparison by Month per Loop (Weekday) (Weekend) (January 2020 - December 2020) A1 10 127 99 Atwater December A2 10 127 90 6% January November 15% M1 19 471 114 7% M2 11 286 103 October M3 16 429 103 6% Merced M4 16 437 105 September M5 11 297 110 5% February M6 9 167 122 15% UC 20 405 0 August 6% Los Banos LB 81 521 164 Livingston L 41 386 167 July 166 119 Planada P 37 8% March Turlock T 65 914 230 11% June W1 34 454 161 April Winton 8% May W2 27 333 108 6% 7% Total 408 5,520 1,795

262 December 2020 - Ridership by Route 4,500

4,000 3,914 Monthly Ridership by Route 3,485 Average Daily Weekday Ridership 3,500 3,063 3,046 3,000 2,884 2,534 2,500 2,023 2,000

1,500 1,399 1,460 1,125 1,074 1,107 1,000 729 581 486 526 500

- A1 A2 M1 M2 M3 M4 M5 M6 LB L P T W1 W2 UC

December 2020 - Revenue Hours by Route 800 740 721 704 696 700

600 583 525 522 506 500 472

400 361 376 339 312 319 300 226 200

100

- A1 A2 M1 M2 M3 M4 M5 M6 LB L P T W1 W2 UC

263 ITEM 14a

264

PH: 209.723.4481 FAX: 209.384.3109 7040 N. Highway 59 Merced, CA 95348

ITEM 14a

DATE: February 12, 2021

TO: Merced County Regional Waste Management Authority

FROM: Kyle Loreto, Diversion Programs Manager

RE: Information: 2021 Merced County Regional Waste Management Authority Calendar

SUMMARY

Annual presentation of the coordination of the Merced County Regional Waste Management Authority (MCRWMA) with local jurisdictions for collection and disposal activities for the 2021 calendar year.

REQUESTED ACTION

For information only.

BACKGROUND

Every year MCRWMA staff prepares a calendar to note the scheduled holidays and closure dates for the Highway 59 and Billy Wright landfills. This calendar has also included Household Hazardous Waste events as well as community cleanup events held by the various jurisdictions. The dates of the quarterly household hazardous waste events and those held in conjunction with community cleanup events will be passed on to all agency members and posted on the MCRWMA website.

PAST ACTION TAKEN

January 20, 2020 : MCRWMA Board accepted the annual scheduled holidays and closure dates for 2020.

NEXT STEPS

The calendar is made available to the public and posted to the MCRWMA website and its information is shared through MCRWMA social media. The calendar is also made available to the jurisdictions to be shared on their websites and social media.

FISCAL IMPACT

None.

REQUESTED ACTION

For information only.

ATTACHMENTS

2021 Merced County Regional Waste Management Authority Community Calendar 265 Telephone: January 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 27 28 29 30 31 1 New Year's Day 2

CLOSED

3 4 5 6 7 8 9

CLOSED

10 11 12 13 14 15 16 HHW Event @ HWY59 CLOSED 8:00am-12:00pm

17 18 ML King Day 19 20 21 22 23 Community Cleanup CLOSED CLOSED El Nido (County)

24 25 26 27 28 29 30 Community Cleanup CLOSED Stevinson (County)

31 1

CLOSED

Hours of Operation (unless otherwise noted) Billy Wright Landfill 17173 S. Billy Wright Rd, Los Banos 93635 Mon-Sat: 7 AM - 3:30 PM Highway 59 Landfill 7040 N. Hwy 59, Merced 95348 Mon-Sat: 7 AM - 3:30 PM 266 Telephone: February 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 31 1 2 Groundhog Day 3 4 5 6

7 8 9 10 11 12 13

CLOSED

14 Valentine's Day 15 Presidents' Day 16 17 18 19 20

CLOSED CLOSED

21 22 23 24 25 26 27 Community Cleanup CLOSED Delhi (County)

28 1 2 3 4 5 6

CLOSED

7 8

Hours of Operation (unless otherwise noted) Billy Wright Landfill 17173 S. Billy Wright Rd, Los Banos 93635 Mon-Sat: 7 AM - 3:30 PM Highway 59 Landfill 7040 N. Hwy 59, Merced 95348 Mon-Sat: 7 AM - 3:30 PM 267 Telephone: March 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 28 1 2 3 4 5 6 Community Cleanup Santa Nella (County) Los Banos (City) HHW Event @ Los Banos (RWA) 7 8 9 10 11 12 13 Community Cleanup CLOSED Snelling (County)

14 Daylight Saving 15 16 17 St. Patrick's Day 18 19 20 Vernal equinox (GMT) Community Cleanup CLOSED Winton (County) Atwater (City)

21 22 23 24 25 26 27 Community Cleanup CLOSED Hilmar (County)

28 29 30 31 1 2 3

CLOSED

4 Easter 5

Hours of Operation (unless otherwise noted) Billy Wright Landfill 17173 S. Billy Wright Rd, Los Banos 93635 Mon-Sat: 7 AM - 3:30 PM Highway 59 Landfill 7040 N. Hwy 59, Merced 95348 Mon-Sat: 7 AM - 3:30 PM 268 Telephone: April 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 28 29 30 31 1 2 3 Community Cleanup South Dos Palos (County)

4 Easter 5 6 7 8 9 10 Community Cleanup CLOSED Le Grand (County) Dos Palos (City)

11 12 13 Ramadan begins 14 15 16 17 Community Cleanup CLOSED Livingston (City) HHW Event @ HWY59 8:00am-12:00pm 18 19 20 21 22 Earth Day 23 24 Community Cleanup CLOSED Franklin/Beachwood (County)

25 26 27 28 29 30 1

CLOSED

2 3

Hours of Operation (unless otherwise noted) Billy Wright Landfill 17173 S. Billy Wright Rd, Los Banos 93635 Mon-Sat: 7 AM - 3:30 PM Highway 59 Landfill 7040 N. Hwy 59, Merced 95348 Mon-Sat: 7 AM - 3:30 PM 269 Telephone: May 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 25 26 27 28 29 30 1

2 3 4 5 Cinco de Mayo 6 7 8

CLOSED

9 Mother's Day 10 11 12 13 14 15 Armed Forces Day

CLOSED

16 17 18 19 20 21 22

CLOSED

23 24 25 26 27 28 29

CLOSED

30 31 Memorial Day

CLOSED CLOSED

Hours of Operation (unless otherwise noted) Billy Wright Landfill 17173 S. Billy Wright Rd, Los Banos 93635 Mon-Sat: 7 AM - 3:30 PM Highway 59 Landfill 7040 N. Hwy 59, Merced 95348 Mon-Sat: 7 AM - 3:30 PM 270 Telephone: June 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 30 31 Memorial Day 1 2 3 4 5

6 7 8 9 10 11 12

CLOSED

13 14 Flag Day 15 16 17 18 19

CLOSED

20 Father's Day 21 22 23 24 25 26

CLOSED

27 28 29 30 1 2 3

CLOSED

4 Independence Day 5

Hours of Operation (unless otherwise noted) Billy Wright Landfill 17173 S. Billy Wright Rd, Los Banos 93635 Mon-Sat: 7 AM - 3:30 PM Highway 59 Landfill 7040 N. Hwy 59, Merced 95348 Mon-Sat: 7 AM - 3:30 PM 271 Telephone: July 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 27 28 29 30 1 2 3

4 Independence Day 5 6 7 8 9 10

CLOSED CLOSED

11 12 13 14 15 16 17 HHW Event @ HWY59 CLOSED 8:00am-12:00pm

18 19 20 21 22 23 24

CLOSED

25 26 27 28 29 30 31

CLOSED

1 2

Hours of Operation (unless otherwise noted) Billy Wright Landfill 17173 S. Billy Wright Rd, Los Banos 93635 Mon-Sat: 7 AM - 3:30 PM Highway 59 Landfill 7040 N. Hwy 59, Merced 95348 Mon-Sat: 7 AM - 3:30 PM 272 Telephone: August 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7

CLOSED

8 9 10 11 12 13 14

CLOSED

15 16 17 18 19 20 21

CLOSED

22 23 24 25 26 27 28

CLOSED

29 30 31 1 2 3 4

CLOSED

5 6 Labor Day

Hours of Operation (unless otherwise noted) Billy Wright Landfill 17173 S. Billy Wright Rd, Los Banos 93635 Mon-Sat: 7 AM - 3:30 PM Highway 59 Landfill 7040 N. Hwy 59, Merced 95348 Mon-Sat: 7 AM - 3:30 PM 273 Telephone: September 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 29 30 31 1 2 3 4

5 6 Labor Day 7 Rosh Hashanah 8 9 10 11

CLOSED CLOSED

12 13 14 15 16 Yom Kippur 17 18 Community Cleanup CLOSED Los Banos (City) HHW Event @ Los Banos (RWA) 19 20 21 22 23 24 25

CLOSED

26 27 28 29 30 1 2

CLOSED

3 4

Hours of Operation (unless otherwise noted) Billy Wright Landfill 17173 S. Billy Wright Rd, Los Banos 93635 Mon-Sat: 7 AM - 3:30 PM Highway 59 Landfill 7040 N. Hwy 59, Merced 95348 Mon-Sat: 7 AM - 3:30 PM 274 Telephone: October 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 26 27 28 29 30 1 2 Community Cleanup Dos Palos Y (county) Dos Palos (City)

3 4 5 6 7 8 9

CLOSED

10 11 12 13 14 15 16 Community Cleanup CLOSED Atwater (City) HHW Event - HWY59 8:00am-12:00pm 17 18 19 20 21 22 23 Community Cleanup CLOSED McSwain (County)

24 25 26 27 28 29 30

CLOSED

31 Halloween 1

CLOSED

Hours of Operation (unless otherwise noted) Billy Wright Landfill 17173 S. Billy Wright Rd, Los Banos 93635 Mon-Sat: 7 AM - 3:30 PM Highway 59 Landfill 7040 N. Hwy 59, Merced 95348 Mon-Sat: 7 AM - 3:30 PM 275 Telephone: November 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 31 Halloween 1 2 3 4 5 6 Community Cleanup CLOSED Planada (County)

7 Daylight Saving 8 9 10 11 Veterans Day 12 13

CLOSED CLOSED

14 15 16 17 18 19 20

CLOSED

21 22 23 24 25 Thanksgiving 26 27

CLOSED CLOSED

28 Hanukkah begins 29 30 1 2 3 4

CLOSED

5 6

Hours of Operation (unless otherwise noted) Billy Wright Landfill 17173 S. Billy Wright Rd, Los Banos 93635 Mon-Sat: 7 AM - 3:30 PM Highway 59 Landfill 7040 N. Hwy 59, Merced 95348 Mon-Sat: 7 AM - 3:30 PM 276 Telephone: December 2021 (209) 723-4481 www.MCRWMA.org

Sunday Monday Tuesday Wednesday Thursday Friday Saturday 28 Hanukkah begins 29 30 1 2 3 4

5 6 7 Pearl Harbor 8 9 10 11

CLOSED

12 13 14 15 16 17 18

CLOSED

19 20 21 22 23 24 Christmas Eve 25 Christmas Day

CLOSED CLOSED

26 Kwanzaa begins 27 28 29 30 31 New Year's Eve 1 New Years Day

CLOSED CLOSED

2 3

278

PH: 209.723.4481 FAX: 209.384.3109 7040 N. Highway 59 Merced, CA 95348

ITEM 14b

DATE: February 12, 2021

TO: Merced County Regional Waste Management Authority

FROM: Eric Zetz, RWA Director

RE: Information: Solid Waste Association of North America (SWANA) California Legislative Task Force 2021 Regulatory Platform

SUMMARY

The Merced County Regional Waste Management Authority (MCRWMA) staff participates, and actively seeks to represent local interests regarding state legislative and regulatory rule making processes through membership and participation in the Solid Waste Association of North America’s (SWANA) Central California Sierra Chapter Legislative Task Force (LTF). The Solid Waste Association of North America California Legislative Task Force 2021 Regulatory Platform Work Plan document (attached) is the guiding planning document to how staff will pursue legislative goals in assisting legislatures in shaping new and existing laws that impact local governments.

REQUESTED ACTION

For information only.

BACKGROUND

The Solid Waste Association of North America (SWANA) is the world’s largest association of solid waste professionals (over 11,000 members) with the three California chapters representing more than 1,000 of those members.

California’s 21-member Legislative Task Force, now in its 30th year, is comprised of five (5) elected delegates, and two (2) alternates, from each of the three California chapters and represents the majority of publicly owned and operated solid waste management facilities inside the state. This group reviews legislative and regulatory issues “in real time” and is proactive in advocating for environmentally and economically sound solid waste legislation and regulations.

The Legislative Task Force contracts with Shaw-Yoder-Antwih-Schmelzer-Lange (SYASL) for legislative and regulatory advocacy services. Together, annual activities include an annual spring planning meeting, annual visit to the State Capitol, monthly conference calls to monitor, review and take immediate action on bills and regulation of interest, and a year-end meeting to review the past legislative session and define the advocacy priorities for the coming year. SYASL staff and Legislative Task Force members actively attend legislative and regulatory hearings and provide comment.

279

PAST ACTIONS TAKEN

February 12, 2020: staff brought the 2020 Solid Waste Association of North America California Legislative Task Force Work Plan to the Board.

NEXT STEPS

In the coming year the Legislative Task Force will use the attached “2021 Legislative and Regulatory Platform” to advocate for environmentally sound, economical, and technically feasible solid waste policies; to promote for local government control of solid waste policy and operations; and, for the State to provide financial assistance to help build the vast new infrastructure needed to fulfill the recently-enacted organics recycling mandates.

The mission of the Legislative Task Force is to represent local government interests and the three California Chapters’ membership in developing and advocating environmentally and technically sound, economical solid waste policy at the most appropriate government level.

If you have any questions regarding this staff report, please contact Eric Zetz at (209) 723-4481 x221 or at [email protected].

REQUESTED ACTION

For information only.

ATTACHMENTS

Exhibit A: SWANA CA LTF 2021 Legislative Platform

280 2021 LEGISLATIVE

AND REGULATORY

PLATFORM

MISSION STATEMENT:

To represent local government interests and the three California Chapters’ membership in developing and advocating environmentally and technically sound, economical solid waste policy at the most appropriate government level.

1 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 281

Created by the SWANA California Chapters Legislative Task Force

2 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 282 2021 Regulatory and Legislative Platform

Table of Contents

Message from the Chair …………….……………………………………………………………………………..………………………..4

Overview ………………………………….…………………………………………………………………………….…..……………………..5

2020 Advocacy Report ………………………………………………………………………………………………………………………..6 A. Teleconferences and Meetings ………………………………………………….,……………………………………..6 B. Comments/White Papers/ Fact Sheets ………………………………………………………………………………6 C. Outreach ……………………………………………………………………………………………………………………………7 D. LTF Website ……………………………………………………………………………………………………………………….7 E. California 2020 – 2021 Budget ……………………………………………………………………………………………8 F. Legislative Positions ……………………………………………………………………………………………………………9

Policy Drivers ………………………………………………………….…………………………………………………….…………………..10 A. Requirements to Increase Waste Diversion ………………………………………………….…………………..10 B. Climate Change and Renewable Energy Requirements ………………………………….………………....11 C. China National Sword …………………………………………………………………………………….………………...11

2021 Work Plan ……………………………………………………………………………………………………………….……..………...12 A. Legislation and Regulation ……………………………………………………………………………….…………….…12 1. Organic and Recycling Infrastructure / SB 1383 Compliance ………………………..……………..12 2. Single‐Use Plastics and Packaging ………………………………………………………………….…………...13 3. Special Wastes: Lithium Ion Batteries, Vaping wastes, PFAS, Photovoltaic Panels …...... 14 4. CRV / CA Redemption Value ……………………………………………………………………………………....16 5. Conversion Technologies …………………………………………………………………………………………….17 6. Heavy Duty Transportation Infrastructure ………………………………………………………………..…18 7. Market Development ………………………………………………………………………………………………....19 B. Agency Monitoring ………………………………………………………………………………………………………..….20 C. Outreach and Education …………………………………………………………………………………………….…..…21

LTF Officers and Membership ……………………………………………………………………………………….…………….…….23 LTF Goals and Principles ……………………………………………………………………………………………………………….…...24

Appendix 1: 2020 End of Session Legislative Report

3 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 283 2021 Regulatory and Legislative Platform

Message from the Chair January 1, 2021

Over the last 30 years, the SWANA California Chapters Legislative Task Force (LTF) has represented local governments and publicly-owned solid waste facilities in the legislative and regulatory development processes. The LTF is a diverse volunteer group of solid waste industry professionals advocating for environmentally-sound and sustainable solid waste policies. The LTF also seeks funding from the State of California to support building and maintain the infrastructure needed to fulfill waste management mandating and adapt to global conditions such as COVID-19 and China’s “National Sword/Blue Sky” Policy of 2018.

COVID19 and continued wildfires throughout the state have exacerbated the difficulties of local governments in complying with State waste management mandates, such as AB 939 (Sher, 1989), AB 341 (Chesbro, 2011), AB 1826 (Chesbro, 2014), and SB 1383 (Lara, 2016). The SB 1383 regulation sets ambitious management goals for organic waste, incorporating significant penalties for noncompliance - this in an era where COVID19 and wildfires have decimated revenue sources for local government. COVID19 has increased the use of disposable products, and it has shifted organic waste from commercial to more- difficult-to-manage residential sources. Providing efficient collection is the first challenge. Processing waste materials is the second, even more challenging, obstacle course of siting, permitting, and financing several billion dollars’ worth of new facilities. And although last it is perhaps the most important, there must be markets for the materials once they are processed. China’s “National Sword Policy/Blue Sky” allows the importation of some types of contaminant-free recyclables, but it highlights need for local markets as we saw a significant drop in demand for separated recyclable materials in the export markets.

In 2020, the LTF addressed SB 1383 challenges by 1) participating in CalRecycle’s rulemaking, 2) supporting legislation that would recognize “good faith efforts” toward compliance (SB 1191, Dahle), and 3) communicating the complexities of solid waste management with legislators, the Governor’s office, CalRecycle, AB 1583’s Statewide Commission on Recycling Markets and Curbside Recycling, and other stakeholders. In 2021 the LTF will continue to address these issues, and it will respond to the increased financial pressures resulting from COVID19. On behalf of the LTF, I would like to thank the SWANA membership and those agencies that have contributed financially to allow the LTF to continue our advocacy.

With warmest regards:

Eric Zetz, Chair

4 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 284 2021 Regulatory and Legislative Platform

Overview The Solid Waste Association of North America (SWANA) is the world’s largest association of solid waste professionals (more than 10,000 members). SWANA’s three California chapters – Founding, Sierra, and Gold Rush - represent more than 1,100 of those members. The California Chapters Legislative Task Force (LTF) represents the California Chapters on solid waste-related legislative and regulatory issues, including:

 Collection and Processing: collection, transfer, processing and/or preprocessing, and hauling solid waste (refuse, organics, recyclables),  Disposal: disposing of refuse and residue from collection routes and non- disposal facilities;  Resource Recovery and Marketing: sorting and marketing of recyclables and processing organics for compost or conversion to fuel or power;  Regulatory Compliance: regulatory reporting and compliance. The LTF advocates environmentally- and economically-sound solid waste legislation and regulations. The LTF contracts with Shaw Yoder Antwih Schmelzer & Lange (SYASL) for legislative and regulatory advocacy services.

At the end of each year, the LTF prepares this Legislative and Regulatory Platform. It is comprised of:

An Advocacy Report (of the prior year’s activities, 2020) and A Work Plan (for the coming year, 2021).

This document also provides information on past legislation and regulations that continue to be policy drivers; information on the activities of the LTF; and, as an appendix, a Lobbyist Report detailing key issues that SYASL represented the LTF on in 2020. Additional information on the work of the group, including all LTF advocacy documents, can be found on the LTF website: https://swanacal-leg.org.

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2020 ADVOCACY REPORT

2020 Advocacy Report 2020 Teleconferences and Meetings Beginning in February, the LTF held monthly meetings via conference call. By April 2020 it was clear that, given the rapid changes associated with COVID19, more frequent e-mail exchanges and calls would be necessary, so additional teleconferences were added, while the usual “in person” meetings in Sacramento and in-person SWANA events were cancelled. Also as a result of the COVID19 pandemic, information regarding FEMA funding, operational impacts, safety measures, and the availability of PPE, and other issues of mutual interest were added to the agenda. Positions were taken on bills and on draft regulations. Meeting notes were taken, approved, and provided to the Chapters (see https://www.swanacal-leg.org/ltf-approved-meeting-minutes). Modifications were made to the 2020 LTF budget, as well as to the 2021 LTF budget, to minimize costs to adjust for reduced revenues due to COVID19.

In-person meetings with legislators and their staff were minimized, due to social distancing protocols, although on May 18, 2020, LTF representatives met with CalRecycle via conference call to discuss SB 1383 relief associated with COVID19 challenges. Additionally, SYASL continued to work with key stakeholders. The Governor’s Office responded to COVID19 with changes that affected local government requirements, such as temporarily lifting restrictions on plastic bag use (SB 270, Padilla 2014). COVID19 also further delayed issuance of SB 1383 regulations, but legislation that could have provided relief for local government was unable to move forward in the Senate (SB 1191, Dahle). The LTF’s workplan meeting was conducted by video conference in November 2020, with this 2021 Regulatory and Legislative Platform as the resulting product.

2020 Comments / White Papers / Fact Sheets

The LTF prepared facts sheets in 2020 on Photovoltaic Panels, Organic Wastes, Lithium Ion Batteries, PFAS and the China Sword/Blue Sky Policy, as well as submitting several policy proposals to AB 1583’s Statewide Commission on Recycling Markets and Curbside Recycling for their consideration in their preparation of their report to the Legislature. In addition, position letters were issued as listed on page 9. LTF documents, including correspondence regarding COVID, are posted on the LTF website https://swanacal-leg.org/.

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2020 ADVOCACY REPORT

2020 Outreach The LTF conferred with and provided comments to many other entities interested in solid waste and recycling, including:

Outreach Group Individuals Government organizations League of California Cities CSAC / California State Association of Counties RCRC / Rural County Representatives of California AB 1583’s Statewide Commission on Recycling Markets and Curbside Recycling Public interest associations CRRA / California Resource and Recovery Association CAW / Californians Against Waste CPSC / California Product Stewardship Council CCC / California Compost Coalition ACP / Association of Compost Producers Industry groups and individual SWIG / Solid Waste Industry Group corporations CWRA / California Waste and Recycling Association RRCC / Resource Recovery Council of California CWHC / California Waste Haulers Council Waste Management, Republic, Recology, Waste Connections, etc. Elected officials Legislators and their staff Regulators and their staff CalRecycle SWRCB / State Water Resources Control Board (and Regional Boards) CARB / CA Air Resources Board (and Regional Air Districts) DTSC / Department of Toxic Substances Control California Energy Commission

2020 LTF Website The LTF reformatted and updated its website, https://swanacal-leg.org/ to make it more user friendly and useful to SWANA members, local government representatives, and the general public. The website provides LTF meeting agendas and minutes, monitored bills and LTF positions (including bill number, sponsor if known and summaries), White Papers and Fact Sheets, comment letters and more. SWANA members are encouraged to register on the website to access all of its information. Additionally, a more informal facebook page was 7 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 287

2020 ADVOCACY REPORT

started, where general information articles could be posted, but it refers to the LTF Website for official positions https://www.facebook.com/Solid-Waste- Association-of-North-America-Legislative-Task-Force-103896561077374

2020-21 State Budget The COVID19 pandemic completely changed the usual budgeting priorities. In May, Governor Gavin Newsom proposed major budget cuts, much of which the Legislature rejected, and instead balanced a projected $54 billion shortfall on potential federal assistance, deferrals, and use of budget reserves. An August revision was also provided following the reporting of state income tax receipts in mid-July. Key budget bills include:

 SB 74, which would allocate $50 million one-time General Fund for Community Power Resiliency to support additional preparedness measures that bolster community resiliency and includes budget bill language reflecting the Legislature’s priorities in this area.  AB 89, which would clarify language that allows local governments to access $50 million for community power resiliency projects.  AB 78, which establishes a Climate Catalyst Revolving Loan Fund at the IBank to receive funds from non-state governmental entities and private sources. The Climate Catalyst Fund will provide loans for climate catalyst projects that further the state's climate goals. Defines “climate catalyst projects” as any building, structure, equipment, infrastructure, or other improvement that furthers California’s climate goals, activities that reduce climate risk, and the implementation of low-carbon technology and infrastructure.  AB 92, which implements an omnibus related to resources. Specifically this measure: Authorizes the State Water Resources Control Board (SWRCB) to issue a certificate or statement before completion of an environmental review, which is required under CEQA, if SWRCB determines that waiting until completion of the environmental review poses a substantial risk of waiver of the state’s certification authority under federal water quality control laws. Requires SWRCB, to the extent authorized by federal law, to reserve authority to reopen and revise the certificate or statement as appropriate based on the information provided in the environmental review document.

2020 Legislative Positions

The LTF advocated very successfully during the past year. Below is a summary table of legislation on which the LTF took a position or closely monitored during the 2019 legislative session. Additional information on the bills and SYASL’s 8 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 288

2020 ADVOCACY REPORT

advocacy efforts can be found in Appendix 1, 2020 End of Session Report by Shaw, Yoder, Antwih, Schmelzer & Lange.

Comments / Position Letters Bill Number Document Date AB 2612 Letter in support of the funding for organic processing April 2, 2020 infrastructure provided by the Cap and Trade program. SB 1258 Letter urging organic diversion infrastructure to be eligible for April 7, 2020 Climate Technology funding AB 2287 Letter supporting efforts to provide “truth in biodegradability.” May 12, 2020 AB 3163 Letter supporting the expansion of the definition of biogas. May 12, 2020

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2020 ADVOCACY REPORT

Policy Drivers State Requirements to Increase Waste Diversion Many significant solid waste bills have been enacted since 2011 that have had a significant impact on the solid waste industry and local governments. Some of the more notable include:

 AB 341 (2011) - This statute, among other things, establishes the State’s policy goal that 75% of solid waste generated be source reduced, recycled, or composted by 2020; the law imposes mandatory commercial recycling (MCR) on businesses and multi-family dwellings; and it requires jurisdictions to implement MCR programs and include those programs in their annual reports to CalRecycle.  AB 1594 (2014) - This statute provides that effective January 1, 2020, the use of green material as alternative daily cover or alternative intermediate cover does not constitute diversion through recycling and would be considered disposal for purposes of AB 939 (1989) compliance (which requires that local governments achieve and annually demonstrate a 50 percent waste diversion rate from a 1990 “base year” disposal rate).  AB 1826 (2014) - This statute requires certain businesses and multi- family dwellings to recycle organic waste (phased in over 4 years beginning in 2016) and jurisdictions to implement organic waste recycling programs. Under this Statute, “organic waste” means food waste, green waste, landscape and pruning waste, nonhazardous wood waste, and food-soiled paper.  AB 901 (2015) - This statute requires recycling, disposal, and compost facilities, as well as exporters, brokers, and transporters of recyclables or compost to submit information directly to CalRecycle on the types, jurisdiction of origin, quantities, and destinations of materials that are disposed of, sold, or transferred inside or outside of the state. Civil penalties may be imposed for failure to comply.  SB 1383 (2016) – This statute requires the Air Resources Board (ARB) to develop and implement a strategy to reduce short-lived climate pollutants (SLCP), including methane from landfills. The SLCP Reduction Strategy was approved by the ARB in March 2017. This statute requires CalRecycle to adopt regulations to achieve a 50 percent reduction in the level of statewide organic waste landfill disposal from the 2014 level by 2020, a 75 percent reduction by 2025, and not less than 20 percent recovery of edible food “currently” disposed by 2025. CalRecycle may impose penalties (up to $10,000/day) on a jurisdiction for noncompliance with CalRecycle’s adopted regulations.

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2020 ADVOCACY REPORT

 AB 617 (2017)/AB2588- These statutes require the state to track emissions of criteria air pollutants and toxic air contaminants of stationary sources. AB 617 addresses the highest priority locations in the state for the deployment of community air monitoring systems, and to prepare and update, at least once every 5 years, a statewide strategy to reduce emissions of toxic air contaminants and criteria pollutants in communities affected by a high cumulative exposure burden. It also stipulates the provision of grants to community-based organizations for technical assistance and to support community participation in the programs. This statute requires a district that is in nonattainment for one or more air pollutants to adopt an expedited schedule for the implementation of best available retrofit control technology. AB2588 requires that facilities meeting the requirements of the legislation report toxics, from a recently adopted expanded list, and potentially prepare health risk assessments. Of concern to the LTF are the expanded list of toxics that will impact waste facilities and a new focus on recycling facilities. As of this writing, discussions are continuing with the California Air Resources Board on these issues to ensure that recent changes do not impact recycling or other waste facilities in a negative way.

 AB 1583 (2019) - This statute requires CalRecycle by July 1, 2020, to convene a Statewide Commission on Recycling Markets and Curbside Recycling and would require the commission by January 1, 2021, among other things, to issue policy recommendations to achieve State specified market development goals and waste reduction goals, identify products that are recyclable or compostable, and share findings with the Legislature as well as providing regular feedback to CalRecycle on public messaging designed to encourage proper recycling and to minimize contamination in curbside recycling programs. [Note: subsequent legislation, AB 2287 (2020) extend the January 1, 2021 deadline to July 1, 2021]

State Climate Change and Renewable Energy Requirements Solid waste management and legislation in California is often driven by state policies related to climate change and renewable energy. Some of the more significant bills and policies enacted in recent years include:

 SB 32 (2015) – Extended cap-and-trade program to 2030  SB 350 (2015) – Extended Renewable Portfolio Standard to 50% by 2030  SB 1383 (2016) – Sets goals to reduce Short-Lived Climate Pollutants, including 40% reduction below 2013 levels in methane emissions by 2030

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2020 ADVOCACY REPORT

 Short-Lived Climate Pollutant Strategy (2017) – ARB strategy to reduce livestock and landfill methane emissions via organic waste diversion  SB 100 (2018) – Sets goal for renewable energy and zero-carbon resources to supply 100% of retail sales of electricity by 2045.

China National Sword/Blue Sky Policy

In 2017, China announced that 24 categories of materials including recovered mixed paper, recycled plastics, textiles and other materials, would be banned from import into the country later in the year. In January 2018, China confirmed strict contamination standards of 0.5% for plastic, ferrous metals, and other materials, that took effect March 1, 2018. The changes have resulted in significant challenges for statewide recycling industry and local governments as each year, California exports approximately one-third of its recyclable material – most of that to China. The LTF 2020 Fact Sheet on this topic is posted on the LTF website at https://swanacal-leg.org/.

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2021 Work Plan This coming year LTF advocacy will focus on the following priority issues. Once new bills are introduced in the 2021 session, additional priorities may be identified.

Legislation and Regulation

1. Organic and Recycling Infrastructure Development /SB 1383 Compliance Issue: SB 1383 (Lara, Chapter 395, Statutes of 2016) established methane emissions reduction targets in a statewide effort to reduce short-lived climate pollutants. Specifically, the bill established targets to achieve a 50% reduction in the level of statewide disposal of organic waste from the 2014 level by 2020 and a 75% reduction by 2025. The bill also established a target of not less than 20% of currently disposed edible food to be recovered for human consumption by 2025. The regulations require expansion of organic waste collection to all generators; expand definition of organic waste; specify mandatory local enforcement programs; mandate procurement of diverted organic waste end-products; specify prescriptive standards for collection and outreach programs; prescribe hauler requirements, landfill and MRF performance standards; formulate verification of new technologies for the use and recovery of solid waste; and stipulate enforcement penalties of up to $10,000/day on jurisdictions for noncompliance. For some jurisdictions, unique local conditions may prohibit compliance with all requirements; however, the regulations do not consider a jurisdiction’s “good faith effort” to comply with the regulations.

During the past five years, the LTF has actively engaged with CalRecycle and State lawmakers regarding the urgent and important need for infrastructure to comply with the requirements of Senate Bill 1383 (Lara, Chapter 395, Statutes of 2016) (SB 1383). CalRecycle estimates 41 percent of the waste disposed annually in California is compostable organics (approximately 16 million tons), half of which is considered food waste. Californians will be required to reduce the amount of organic waste (compostable and non-compostable, e.g. textile, carpet, etc.) from landfill disposal by 75 percent by the year 2025 compared to 2014 disposal rates. This will require billions of dollars in new waste processing infrastructure.

CalRecycle estimates the cost to construct an anaerobic digester facility is upward of $50 million and estimates the cost to construct a compost facility is upward of $15 million. It is estimated that approximately 100 new facilities will be required, resulting in capital investment among processors of up to $1 – $3 billion. The current GGRF allocations are significantly insufficient to provide the necessary financial support and there are limited other grant funding sources for the successful development of infrastructure to support the implementation of SB

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1383. In addition, successful siting and permitting of sufficient new organics facilities needed for implementation will require a longer timeframe than is necessary for compliance with SB1383 mandates.

The 2020 LTF fact sheet on this topic is posted on its website at https://swanacal- leg.org/.

Actions:

1. Develop and disseminate information on capacity deficits and costs associated with organic waste diversion. Identify the capability of existing facilities to process the anticipated additional materials. Inform Legislature and local officials of the compliance challenges and costs, both to comply and for noncompliance. Document and disseminate data on COVID-related cost impacts.

2. Encourage permit streamlining. For example, promote the development of Programmatic Environmental Impacts Reports to help streamline permitting for organic facilities – similar to the one developed for anaerobic digestors. Track and comment, as necessary, on State Water Resources Control Board regulatory activities that pertain to solid waste and composting facilities (e.g., waste discharge requirements and general permits). Comment on the efforts by the California Air Pollution Control Officers Association (CAPCOA), ARB, and CalRecycle to address air quality permitting and regulatory issues.

3. Promote funding sources for development and expansion of organics diversion solutions. Urge ARB and CalRecycle to support waste diversion and to help fund SB 1383 implementation.

4. Advocate for the development and use of conversion technologies to divert organic materials (especially non-compostable materials).

5. Promote flexibility for CalRecycle, at its discretion, to use a “good faith effort” approach to determine if a jurisdiction has made reasonable and justifiable efforts to comply.

6. Emphasize that achieving organic waste reduction goals is a shared responsibility between the waste sector, State government, local agencies, business community, and the public.

2. Single-Use Plastics and Packaging

Issue: China’s National Sword/Blue Sky policy continues to have significant impacts on the market value of recyclable materials, with the added complication

14 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 294 2021 WORK PLAN of protocols for worker safety at materials recovery facilities due to COVID19. Many materials are increasing in volume, but they have virtually no market value and increasingly must be landfilled. One of the best ways to address the massive volume of single-use plastics is to “source reduce” this material, or to generate less of it in the first place. A second important way to address plastic recycling challenges is to expand markets within California.

Actions:

1. Develop and discuss solutions with CalRecycle and legislators, including the authors of AB 1080 and SB 54 on Single-Use Plastic Packaging.

2. Encourage efforts to reduce the amount of unrecyclable, single-use packaging, or the cost to recycle it. (Some form of Extended Producer Responsibility (EPR) may play a role in this reform.)

3. Special Wastes: Lithium Ion Batteries; Vaping Wastes; PFAS; Photovoltaic Modules; Treated Wood Waste a. Lithium Ion Battery Issue: Lithium Ion Batteries (LI Batteries) have the potential to catch fire and explode when crushed or penetrated, and thus pose a significant public health and safety risk, as well as proven significant risk to infrastructure, especially to solid waste transportation and processing facilities in California and across the nation. AB 1509 (Mullin) was introduced during the 2019-2020 Legislative Session to create an extended producer responsibility solution to the threat of improper disposal of LI Batteries. SB 1156 (Archuleta) was also introduced during that legislative session and attempted to address this issue by prohibiting a person from knowingly disposing of a lithium-ion battery in a container or receptacle that is intended for the collection of solid waste or recyclable materials, unless the container or receptacle is designated for the collection of batteries for recycling. Neither of these bills passed in 2019-20, so legislation on this topic may be introduced again in 2021. A 2020 LTF Fact sheet on this topic is on the LTF website at https://swanacal-leg.org/.

Lithium Ion Battery Actions:

1. Work with industry to identify solutions to Lithium Ion Battery issues, such as promoting recyclability, EPR, E-waste program inclusion, and/or “Right to Repair” legislation to improve product design.

2. Develop further understanding of and compile additional data on the problems (e.g., number of fires) and potential solutions related to, Lithium Ion batteries.

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3. Continue to monitor legislation related to LI Batteries in the coming 2021- 2022 Legislative Session, and to take positions as appropriate. b. Vaping Waste Issue: Health risks and waste product issues are associated with single-use vaping devices. The LTF supported SB 424 introduced by Senator Jackson, a bill that attempted to restrict single-use vaping devices. School districts inherit these waste products through abandonment or confiscation. The device has a small lithium-ion battery (universal waste), a small circuit board (e-waste), and a nicotine containing pod (“p-listed” RCRA hazardous waste), along with other materials. Currently, there is no economical way to process these devices in California due to the variety of components and how those components are regulated.

Vaping Waste Action: Support legislation that provides waste management solutions. Identify/develop/suggest solutions. c. Per- and Poly-fluoroalkyl Substance (PFAS) Issue: Per- and Poly- fluoroalkyl substances (PFAS) are a human-made family of compounds that are resistant to heat, water, and oil. They are commonly used for non-stick coatings on paper plates, cookware, pizza boxes and similar products, which often are disposed of in landfills. Research indicates a potential for health impacts related to presence of PFAS in the environment, particularly as a contaminant in groundwater. Concerns about PFAS in drinking water have emerged and efforts are underway to understand the extent and severity of groundwater contamination, and landfills (e.g. via leachate) have been identified as one source of PFAS in both groundwater and municipal wastewater (i.e. when leachate is discharged to the sewer system). SB 1044 (Allen) passed in 2020, which will phase-out the use of PFAS in firefighting equipment and foam.

PFAS Actions:

1. Support efforts to reduce use of PFAS compounds in consumer products and other applications that may have a pathway to the environment via municipal solid waste management practices.

2. Track – and comment, as appropriate – on regulatory developments related to PFAS by state agencies. d. Photovoltaic Module Issue: The first generation of large electricity generating photovoltaic panels (solar panels) are reaching their end of useful life. SB 489 (Monning) was signed into law in September 2015. This bill requires the DTSC to designate solar panels, both RCRA (federal hazardous waste) and non- RCRA (California-only hazardous waste), as Universal Waste and promulgate regulations for the processing of these panels. However, Federal EPA gave DTSC

16 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 296 2021 WORK PLAN the authority to provide the necessary designation until 2020. Large electricity generating solar panels are made of a variety of components, one of which is the photovoltaic cells themselves. These cells are typically of two types, film type and silica type, and it is difficult to tell the difference between the two types. The film type cells have tested in the hazardous range and may be considered a RCRA waste (hazardous waste classification) or California hazardous waste. Unless DTSC develops regulations that allows for a DTSC designation of “universal waste,” solar panels, unless tested and shown to be the non-hazardous type, can only be legally disposed of in an expensive Subtitle C lined Class I landfill. Further, the only processing and recycling option for solar panels in the state, ECS Refining, went out of business in 2018.

The LTF has been closely monitoring the process and has urged DTSC to move quickly to adopt regulations to designate end-of-life photovoltaic modules as universal hazardous waste. These regulations were approved in 2020. The LTF’s 2020 Fact Sheet on this topic is on the LTF website at https://swanacal-leg.org/.

Photovoltaic Module Actions:

1. Identify solutions for the management of solar panels, such as improvement in labeling to reduce need to test. Assess the scope and cost of problem and discuss these details with solar manufacturers.

2. Include in outreach efforts the LTF fact sheet and other information about the problems associated with solar panel end-of-life management. e. Treated Wood Waste Issue: The veto of SB 68 will result in Treated Wood Waste (TWW) becoming a fully regulated hazardous waste and the allowance for disposal in Class II and Class III landfills sunsets December 31, 2020 along with the alternative management standards.

Treated Wood Waste Actions: The LTF will be working with the legislature and DTSC to reinstate the exemptions for alternative management and disposal in solid waste landfills. f. Fee Reform: AB 995 proposed to convert DTSC from a department into an appointed Board and restructure hazardous waste fees including removal of the exemptions for household hazardous waste, used oil collection, and load checking programs. AB 995 was vetoed by the governor for not providing more comprehensive measures.

Fee Reform Actions: The LTF will continue to engage in stakeholder discussions regarding fee reform and concern with removal of the fee exemptions for public service programs.

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4. CRV / California Redemption Value

Issue: California’s California Redemption Value (CRV) program, also known as the “Bottle Bill,” is a $0.05 or $0.10 deposit charged on eligible beverage containers. Established in 1986 (AB 2020) and operated and administered by CalEPA’s California Department of Resources Recycling and Recovery (CalRecycle), the deposit system generates approximately $1.3 billion collected by the state. Since an average of only 80% of containers are returned, CalRecycle uses some of the surplus fees to subsidize privately-owned and -operated redemption centers established in “convenience zones” located near beverage retailers. The CRV program has resulted in an average of 80% of qualified containers being recycled, but to remain fiscally stable, the program has required more than 60 legislative amendments.

In the past few years the state’s supplemental formula has become outdated, China’s recycling policy changes have crippled the global market, scrap value of beverage containers material has plummeted, and operating costs have steadily risen. The cumulative effect of these factors has resulted in a critical reduction in operating revenue for the privately-operated redemption centers and led to the closure of approximately half of the 2,500 CRV convenience zone centers statewide. The CRV program also requires beverage retailers to provide deposit redemption services to customers or pay penalties. Some retailers have attempted to provide service but were unprepared for the volumes and complexity of the program, while other retailers have just chosen to pay the fines associated with non-compliance with the law. With convenience center closures, the surviving convenience centers have been overwhelmed with customers trying to redeem their deposits.

Action: Support efforts to reform beverage container funding, such as adjustments to CRV and recycling-related payments.

5. Conversion Technologies / Advanced Recovery Technologies

Issue: Advanced Conversion Technologies (ACT) are also sometimes referred to as Waste Recovery Technologies. ACTs are non-incineration technologies that convert non-recyclable municipal solid waste to electricity, fuels, and/or industrial chemical feedstocks. Interest is growing in ACTs because of their potential role in addressing renewable energy and low carbon mandates and green jobs initiatives as well as meeting state and local solid waste management needs. 18 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 298 2021 WORK PLAN

Older burning technologies (waste to energy, or WTE) produced an undesirable level of emissions, and in an effort to protect air quality, California has enacted statutory obstacles that have discouraged not only the older WTE facilities, but also the cleaner more efficient ACTs commonly used in the EU and other nations that are eagerly participating in programs to minimize climate change. While California has enacted aggressive waste diversion goals (e.g., 75% by 2020) the California Public Resources Code (PRC) defines most ACTs as a form of “disposal” rather than waste diversion. Only Composting and Anaerobic Digestion are considered forms of recycling. To encourage climate-friendly low carbon fuels, energy, and chemicals, more technologies must be considered “resource recovery.”

SB 1383 provides a mechanism to promote appropriate technologies: CalRecycle may approve technologies that reduce the disposal of organic waste in landfills and achieve equal or greater GHG benefits than attained by composting technologies. ACTs that may be used to support SB 1383 include, but are not limited to:

 Gasification. Gasification is a commercially proven manufacturing process that converts hydrocarbons and biomass to a synthesis gas (syngas), which can be further processed to produce chemicals, fertilizers, liquid fuels, hydrogen, and electricity.  Pyrolysis. Pyrolysis involves thermal decomposition of feedstock at high temperatures in the absence of air. The resulting product is a mixture of solids (char), liquids (oxygenated oils), and gases (methane, carbon monoxide, and carbon dioxide) that may be further processed in energy, fuels, or chemicals.  Hydrolysis/fermentation. Also known as waste-to-ethanol, this anaerobic biological process uses microorganisms to metabolize sugars and produce alcohols to produce such fuel liquids as ethanol and other chemicals.  Autoclave/mechanical processing. This technology subjects wastes to high temperature (usually with superheated steam) under high pressure for a length of time sufficient to kill all the bacteria and pathogens that might be in the waste. The process may involve several steps to remove plastics, metal and glass if present. After preprocessing, the wastes are shredded and processed to produce an organic product for low carbon fuel and other uses. Actions:

1. Support the development and use of ACTs through amended California statutes and regulations, particularly to enhance the production of low

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carbon energy, fuels, and chemicals needed to achieve California’s GHG reduction goals.

2. Advocate for policies that promote and recognize the benefits of producing low-carbon renewable energy from solid waste, particularly from organic waste, to the Legislature and administrative agencies. Monitor and comment on policies related to biogas, landfill gas, and biomass, and regarding emerging technologies.

6. Heavy Duty Transportation Infrastructure

Issue: The solid waste and recycling industry in California that has largely transitioned from diesel fueled vehicles to cleaner fuels, such as Natural Gas and Renewable Natural Gas. This industry is estimated to have invested more than $1 billion in California to develop and use low carbon renewable natural gas in refuse and recycling vehicles. Renewable natural gas has the lowest carbon intensity of all available transportation fuels. The Governor issued an Executive Order in September 2020, stating his intent for California to transition to electrification. Grants now emphasize electrification. ARB’s Advanced Clean Truck regulations focus almost exclusively on zero emission vehicles and electrification instead of promoting the lowest carbon fuels that are available and consistent with the other mandates. While zero-emission vehicle (ZEV) transportation currently has a carbon intensity of about 30 gCO2e/MJ, renewable gaseous and liquid fuels have been shown to have virtually the same or much lower carbon intensity generally as follows: gCO2e/MJ Landfill RNG 33.89 – 52.57 Renewable Diesel 19.65 – 39.33 Bio‐Diesel 11.76 – 83.25 Wastewater RNG 8.68 – 34.36 Municipal Organic Waste RNG – 25.48 Dairy Waste RNG – 281.1

To date, ZEVs have not been shown to substantially reduce greenhouse gas emissions. This disappointing result is because of weight considerations and the need for more ZEV trucks to handle the same amount of refuse and recycling materials. Eventually, ZEV technology may be more cost-effective and more effective at GHG reduction. However, in the meantime, SB 1383’s focus on reducing short-lived climate pollutants, such as methane generated by organic waste, underscores the importance of using organic waste-derived methane as a fuel. SB 1383 mandates that 75% of all organic waste must be recycled and recovered from landfill disposal by 2025. One of the most effective ways to divert organic waste from landfills is to use it as feedstock in anaerobic digesters and

20 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 300 2021 WORK PLAN other advanced technologies to produce very low carbon transportation fuels – that can be used to fuel refuse, recycling and other transportation vehicles.

Actions:

1. Promote a technology-neutral approach to encourage the development of alternative transportation fuels suitable for specific purposes based on performance standards rather than a specific technology.

2. Promote the lowest carbon and most sustainable transportation fueling options, including renewable natural gas.

7. Market Development

Issue: The solid waste industry can collect, sort, and transport the waste materials that are generated, but solid waste policies are needed at the federal, state, and local level to 1) reduce the amount of waste generated by all sectors of society, 2) ensure that the greatest proportion as possible of waste materials generated can be reused, recycled, or composted, and 3) promote markets for the recyclable materials and compost. With the 2017 China National Sword/Blue Sky policy, the need for local markets and “closed loop” products, was highlighted. Additionally, increased organic waste processing will result in the generation of increasing amounts of compost material. Markets for compost are already challenging. The agricultural industry usually has very exacting specifications for soil amendments, and it has little use for composted organic waste. Markets for an increasingly abundant product must be promoted, for example with policies for use of these materials on State lands, and with local land use policies.

When there is no market for composted or recyclable materials, local governments are unable to comply with waste diversion mandates. When infrastructure to process materials does not exist, often because there is no market for the resultant products, local government cannot comply with waste diversion mandates.

In 2018, proposed legislation AB 3178 would have required CalRecycle to consider the availability of markets and a jurisdictions’ good faith efforts to recycle. Although the bill passed the legislature, it was vetoed by the Governor whose veto message stated that CalRecycle already has the authority to do that.

In 2019 SB 667 (Hueso) was introduced to comprehensively address market issues associated with GHGs and solid waste. This bill would have required the development of a needs assessment to support innovation and technological and infrastructure development, to meet specified organic waste reduction and recycling targets. It also included provisions to support development of interstate

21 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 301 2021 WORK PLAN recycling infrastructure and markets for recyclable materials. However, the bill did not make it through the legislative process.

The crucial need for local markets, resources to support necessary diversion infrastructure, new technologies to recover energy, fuels and chemicals, and support for producer responsibility will dominate the LTF’s 2021 efforts.

Actions:

1. Develop recommendations to promote markets and provide the recommendations to CalRecycle and other stakeholders.

2. Support market development efforts.

B. Agency Monitoring

Not all LTF work entails legislative activities. Although most regulatory agency work is in response to legislation, ongoing programs can be modified by agencies and this can result in major impacts to the solid waste industry and to local government. The following are some of the key aspects of agency monitoring in 2021:

Action: AB 901. Monitor CalRecycle AB 901 implementation to assure that it balances development of robust and accurate data with the administrative burden on haulers, facilities and jurisdictions.

Action: E-Waste. Watch and support CalRecycle efforts to add more products to the E-waste program. Watch and participate in proposed legislation related to the expansion of CalRecycle’s E-waste program.

Action: Greenhouse Gas. Track and comment as appropriate on implementation of new greenhouse gas reduction programs and requirements as well as air quality monitoring and reduction programs pursuant to SB 32.

Action: ARB. Track and comment, as necessary, on Air Resources Board and regional air control/management districts regulatory activities that impact solid waste facilities permitting and operation. This also includes activities associated with the AB 617 programs and updates to the AB 2588 (toxic hot spot) program.

Action: Photovoltaic Modules. Track and comment, as necessary, on DTSC’s implementation of the universal waste photovoltaic regulations.

Action: Fee Reform. Monitor and comment, as necessary, on efforts for DTSC’s fee reform.

22 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 302 2021 WORK PLAN

Action: AB 1583 Commission on Recycling Markets and Curbside Recycling. Proactively monitor and comment, as necessary on the Commission development of policies and recommendations on California markets for processing and re-manufacturing recycled materials and organics as well as related activities in re to 75% diversion of organics from landfills by 2025, development of needed infrastructures, and creation of funding mechanisms for implementation and consideration by CalRecycle and/or the Legislature.

C. Outreach and Education

The LTF positions on legislation are important, but coordination with other stakeholders and dissemination of fact sheets and white papers is also vital. The LTF will seek, in 2021, to:

 Maintain an active advocacy presence in the Legislature and at state agencies that oversee the management, recycling, and disposal of municipal solid waste, household hazardous waste, and pertinent special wastes, through involvement in the legislative and regulatory processes.  Develop relationships with key members of the Legislature and their staff, and with the appropriate staff in the Governor’s office and at CalRecycle, the Department of Toxic Substances Control, Air Resources Board, State Water Resources Control Board, and other agencies as appropriate.  Reach out to and engage other solid waste organizations (such as CAW, CRRA, SWIG) and local government organizations (such as CSAC, CA League of Cities, and RCRC).  Coordinate advocacy efforts with other local government groups, particularly for issues impacting local authority, governance and discretion.  Support SWANA International in advocacy and policy areas that apply to California, such as product stewardship policy, disposal bans, “Pushing the Envelope” documents, and applied research on emerging technologies.  Further enhance education and awareness of key legislation and regulations to SWANA membership through communications such as fact sheets, targeted communications such as the annual legislative platform, discussions at Chapters.  Improve and enhance the convenience and effectiveness of the LTF website to better serve and inform SWANA members of LTF activities. Ensure mobile compatibility of the website.

23 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 303

LTF OFFICERS & MEMBERSHIP

LTF Officers and Membership Nominated Officers Eric Zetz, MCRWMA, Chair Doug Kobold, California Product Stewardship Council, Vice Chair

Appointed Officers

Christina Hanson, Placer County/WPWMA, Secretary Hans Kernkamp, Riverside County Dept. of Waste Resources, Treasurer

Membership

GOLD RUSH CHAPTER: Doug Kobold, California Product Stewardship Council Christina Hanson, Placer County/Western Placer Waste Management Authority Larry Sweetser, Sweetser & Associates, Inc. Mark Bowers, City of Sunnyvale Charles White, Manatt, Phelps, & Phillips, LLC Guy Petraborg, Monterey Regional Waste Management District (Alternate) Joe La Mariana, South Bayside Waste Management Authority (Alternate)

SIERRA CHAPTER: Eric Zetz, Merced County Regional Waste Authority Curtis Larkin, Fresno County Herb Cantu, City of Santa Maria Chuck Magee, Kern County Nicole Riley, Kings Waste and Recycling Authority Brooks Stayer, Clovis (Alternate) Dawyne Balch (Alternate)

FOUNDING CHAPTER: Brian Probolsky, Orange County Waste and Recycling Hans Kernkamp, Riverside County Dept. of Waste Resources Sharon Green, Los Angeles County Sanitation Districts Mike Mohajer, P.E., So. California Waste Management Forum Lisa Wood, City of San Diego Frank Caponi, P.E., Los Angeles County Sanitation Districts (Alternate) Constance Hornig, Esq., Law Offices (Alternate)

24 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 304

LTF Goals and Principles

LTF Advocacy Goal Ensure, through active participation in the development and review process, that proposed laws and regulations protect health, safety and the environment, and are economically and technically feasible. LTF Principles The basis for establishing LTF’s policy positions on legislation and regulation are based on the following principles:

 Local Authority. Oppose state regulations and legislation that undermine or preempt local authority or discretion. Support local government control of solid waste policy and operations. Promote legislation that provides opportunities for local government stakeholder participation in regulatory and policy matters proposed for adoption by state and regional agencies.  State Funding: Increase State funding for mandated activities.  CalRecycle Review of IWMPs. Push for transparency, consistency, and consideration of reasonable and realistic “best efforts” in CalRecycle’s review of Integrated Waste Management Plan and Annual Reports.  Due Process: Develop regulatory frameworks that provide the regulated community with independent due process in State agency enforcement proceedings.  EPR: Extended Producer Responsibility: Foster product stewardship. Shift the financial burden of managing hazardous and difficult-to-handle products from local government to the producers of those products  Organics Management: Develop cost-effective organics management programs and infrastructure that best fits each jurisdiction’s demographics, waste characteristics, and facility availability.  Recyclables Market Development: Encourage the development of domestic markets for recycled materials, including organics; and increase of recycled content requirements for specific products.  Emerging Technology: Develop local and state regulatory framework, and create incentives, that encourages development of emerging technology to recover resources such as energy, fuels and chemicals from all waste streams (garbage, C&D, yard waste, organics, etc.). Eliminate legislative and regulatory barriers.  Worker Safety: Protect workers’ safety in the solid waste industry  Stakeholders: Foster opportunities for meaningful stakeholder input in the development of platforms, policies, and regulations.  Regulatory Clean-up: Streamline redundant and overlapping regulations and oppose underground regulations.

25 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 305

Appendix 1

2020 End of Session Legislative Report

Shaw Yoder Antwih Schmelzer & Lange

26 LEGISLATIVE ADVOCATES Priscilla Quiroz * Shaw Yoder Antwih Schmelzer & Lange (916) 446-4656 306

DATE: December 22, 2020

TO: Solid Waste Association of North American Legislative Task Force

FROM: Jason Schmelzer, Partner Priscilla Quiroz, Legislative Advocate Shaw Yoder Antwih Schmelzer & Lange

SUBJECT: SWANA LTF 2020 Year-End of Session Report

On behalf of all the employees of Shaw Yoder Antwih Schmelzer & Lange (SYASL), we’d like to thank the Solid Waste Association of North America Legislative Task Force (SWANA LTF) for once again entrusting our firm with the important task of providing legislative and regulatory advocacy services to the California chapters of SWANA.

This report highlights key legislation that SYASL worked on in 2020 for the SWANA LTF. We also discuss significant state budget developments and major legislative actions taken by the legislature this year. Furthermore, we highlight other policy objectives we pursued on behalf of SWANA LTF this year.

Attachment 1 to this memo displays a summary of the 18 bills we actively lobbied or monitored.

The following is a brief summary of relevant major actions taken by the Legislature this year:

Covid-19/Emergency Response The 2020 legislative session started off the way that most sessions begin in the second year of the biennial sessions: with a frantic race in January to pass bills out of their house of origin introduced in the prior year, in this case, 2019. Things proceeded apace with the bill introduction deadline in late February. The world then turned upside down with the global pandemic of COVID-19.

On March 4, 2020, Governor Newsom declared a state of emergency to address the spread of COVID-19. He subsequently issued several executive orders in response to the pandemic. This included allowing state and local legislative bodies to meet remotely, canceling large gatherings, and waiving the one week waiting period to apply for unemployment insurance benefits.

307 On March 16, at Governor Newsom's request, the Legislature passed SB 89 (Committee on Budget and Fiscal Review), which appropriated up to $1 billion for any purpose related to the March 4, 2020 emergency declaration. SB 89 established a process whereby the Administration must notify the Joint Legislative Budget Committee (JLBC) 72 hours before using any of the funds. The Governor transferred $1.3 billion to the Disaster Response Emergency Operations Account (DREOA), bringing its balance to $1.4 billion. The DREOA is the source of funds that the Administration uses to respond to emergencies. Immediately after the Governor's emergency declaration, the Legislature approved the emergency funding and immediately suspended legislative activity. The Legislature commenced their Spring Recess on March 16.

The Governor issued several other executive orders in mid-March, authorizing local governments to enact strict eviction protections for tenants, slow foreclosures, and protect against utility shutoffs for Californians affected by COVID-19. On March 19, the Governor issued an executive order asking Californians to stay in place at home or their place of residence unless going to an essential job or to shop for essential items. This led to the shutdown of most schools and businesses throughout the state. On March 27, another executive order was issued, which expanded protections for tenants and put in place a statewide moratorium on evictions.

The Legislature extended their Spring Recess until May 4 for the Assembly and May 11 for the Senate. Given the extended recess, legislative leadership ordered a reduction in the number of bills members planned on carrying through the shortened legislative process. In some cases, committee staff and Chairs, rather than authors, took the lead on reducing the number of bills that would be heard in committee. Many committee chairs only set bills for hearing that they deemed necessary to address the COVID-19 crisis or other priorities such as housing and homelessness. This, along with the authors' voluntary bill package reduction, led to a significant decrease in the number of bills that moved through the legislative process. These actions compressed the legislative schedule and resulted in some policy committees meeting only once or twice before the house of origin deadline (June 19 in the Assembly and June 26 in the Senate).

On May 14, the Governor released his May Revision to his proposed state budget for 2020-21, which eliminated many of the new programs proposed in his first budget. Given the projected downturn in the economy, the May Revise proposed substantial cuts across many state programs.

The Legislature passed a compromise budget on June 15 and sent to the Governor for his approval. The budget provided for "trigger cuts" on various state programs and entities that will go into effect if the state does not receive additional relief funding from the federal government. One of the budget's primary components allowed for the distribution of a portion of the Coronavirus Aid, Relief, and Economic Security (CARES) Act funding that the state received from the federal government.

While the Legislature worked on moving bills through the committee process, the Governor utilized the Legislature's emergency funding to purchase and distribute Personal Protective Equipment (PPE). The Governor would also issue several more executive orders during this time. Several legislators expressed concerns with the lack of oversight over the expenditures made by the Governor's Administration, particularly the $1 billion contract the Governor awarded BYD to manufacture facemasks. In response, the Senate and Assembly held several oversight hearings in which they reviewed the Administration's actions in-depth.

308 On July 2, the Legislature adjourned for their summer recess with the stated intent to return on July 13. However, due to a surge in COVID-19 cases around the state, the Legislature postponed their return to the Capitol until July 27.The legislative session continued until August, with legislators participating remotely and in-person at the Capitol, and the Legislature adjourned for the year on August 31.

2020-21 STATE BUDGET REPORT 2020-21 State Budget On June 29, 2020, Governor Gavin Newsom signed 20 bills that implemented the 2020–21 State Budget. Even after enacting hundreds of pages of new legislation and spending authority, the state’s fiscal fate over the 12-month fiscal year with billions of dollars at play is fraught with uncertainty. The $202.1 billion state spending plan relies on a combination of emergency pandemic funding, expanded unemployment and other forms of assistance as well as billions of dollars in cuts forced by the coronavirus-induced recession. Governor Newsom started the year projecting a multi-billion dollar surplus, but by May Governor Newsom projected a $54 billion deficit due largely to the virtual overnight shut down of the economy and the stay at home orders issued because of the COVID-19 pandemic. According to the Governor, this budget takes a balanced approach to closing the budget deficit and sets aside $2.6 billion in the Special Fund for Economic Uncertainties, including $716 million for the state to respond quickly to the changing conditions of the COVID-19 pandemic. The budget, which took effect July 1, also maintains spending on schools and health and safety net programs by tapping reserve accounts, borrowing from special funds, delaying billions of dollars in payments until future years and temporarily limiting corporate tax credits to raise new revenue.

Greenhouse Gas Reduction Fund The State Budget Package did not include an expenditure plan for Cap-and-Trade Auction proceeds. The Legislature delayed action on appropriating the discretionary portion of the funds, which populates the Greenhouse Gas Reduction Fund (GGRF), until a future date when a clearer picture of what the anticipated 2020-21 auction proceeds might look like. Note that the May quarterly Cap-and-Trade auction brought just $25 million in revenues to California due to COVID-19-related industry shutdowns, which was down from more than $600 million in February’s auction — a 96 percent drop in revenue.

In early September, the California Air Resources Board published the preliminary results from the August 2020 Cap-and- Trade action, suggesting that the state will collect approximately $475 million from the quarterly auction. While the results are not yet final, they show a marked improvement from the May 2020 Cap-and Trade auction, which raised questions about the viability of the Cap-and-Trade market during the pandemic.

2020 REGULATORY REPORT

Short-Lived Climate Pollutants SB 1383 (Lara, Chapter 395, Statutes of 2016) codified that ARB’s Short-Lived Climate Pollutants Reduction Strategy, establishing methane emissions reduction targets in a statewide effort to reduce short-lived climate pollutants. Specifically, the bill established targets to achieve a 50% reduction in the level of statewide disposal of organic waste from the 2014 level by 2020 and a 75% reduction by 2025. The bill also established a target of not less than 20% of currently disposed edible food to be recovered for human consumption by 2025. Proposed regulations impose numerous requirements on

309 generators, jurisdictions, and solid waste facilities Including, among other things, that organic waste processing facilities must meet certain organic waste recovery targets. CalRecycle submitted their final regulatory package for SB 1383 to the Office of Administrative Law (OAL) in early September. These regulations were approved on Tuesday, November 10, and they will go into effect on January 1, 2022.

In response to the COVID-19 pandemic, SWANA worked with local governments and associations, such as the League of California Cities, California State Association of Counties, and Rural Counties Representatives of California, in April, and requested state officials and CalRecycle to grant limited grace periods and temporary relief from specific requirements related to solid waste and recycling. Specifically, the request was to delay implementation of SB 1383, until at least six months after the COVID-19 emergency is deemed over by the State of California. Since the solid waste and recycling industry services are part of the essential infrastructure, under the Governor Gavin Newsom's March 19, 2020 Executive Order N-33-20, the coalition is concerned with their ability to meet specific statutory obligations during the COVID-19 pandemic.

The coalition met with CalRecycle several times and discussed the development of a guidance document that outlines the compliance program for SB 1383, which was subsequently released on August 11. In regards to the delayed implementation for SB 1383, CalRecycle expressed the dates could only be delayed if there is legislation. The coalition is currently discussing if there should be legislation introduced next year that will delay implementation of SB 1383. SYASL will continue to monitor and update SWANA LTF on these efforts.

SB 212 Regulatory Process On September 30, 2018, Governor Brown signed SB 212 (Jackson, Ting, and Gray), a bill to create a statewide takeback program for pharmaceutical medications and sharps products from households. The bill requires manufacturers of these products to create, fund, and operate a stewardship program that provides for the takeback of covered drugs and home- generated sharps waste from households as well as reimbursement of local agency sharps disposal costs. CalRecycle is required to adopt implementing regulations by January 1, 2021, with full implementation of stewardship by June 1, 2021.

On January 3, 2020, CalRecycle began the formal rulemaking progress and on September 30, 2020, CalRecycle’s Acting Director approved the proposed regulations. CalRecycle submitted the final regulatory package to the Office of Administrative Law as required per the Administrative Procedure Act.

SYASL will continue to monitor and engage in the SB 212 regulatory process on behalf of SWANA LTF.

Solar Panel Regulations In 2015, Senate Bill 489, Monning, authorized DTSC to designate solar panels as Universal Waste and promulgated regulations for the processing of these panels, similar to the existing eWaste processing existing today. In May 2018, the California Energy Commission mandated that all new homes under three stories will have solar systems installed. This mandate takes effect on January 1, 2020.

310 Many facilities have begun to receive solar panels that have reached the end of their useful life and expects to receive many more in the future. Large electricity generating solar panels are made of a variety of components, one of which is the photovoltaic cells themselves. Some cells exhibit the hazardous waste characteristic of toxicity, and some do not. Unless a determination can be visually made on the extent of toxicity, they must be managed as hazardous wastes, meaning they can only be legally disposed of in a Subtitle C lined Class I landfill, which can be very costly (up to $1,300 per ton). If the DTSC designates solar panels as Universal Waste, it would provide a simpler, alternative management option and enable them to be managed similar to electronic wastes and in a way that is commensurate to their low risk.

On March 25, 2019, the DTSC held a public informational seminar on California's Universal Waste Program and the proposed regulations to included waste photovoltaic modules (PV modules) on the list of hazardous waste eligible to be managed as universal waste. On September 28, 2020, DTSC received approval from Office of Administrative Law of the rulemaking. These regulations go into effect January 1, 2021.

2021 Preview The following is a brief preview of potential issues that could surface next year.

CalRecycle: Statewide Commission on Recycling Markets and Curbside Recycling In 2019, Governor Newsom signed into law The California Recycling Market Development Act (AB 1583, Eggman). This act requires CalRecycle to convene a Statewide Commission on Recycling Markets and Curbside Recycling consisting of representatives of public agencies, private solid waste enterprises and environmental organizations that have expertise in recycling. The Commission is tasked with providing policy and messaging recommendations to CalRecycle and identifying which items are truly recyclable or compostable.

The Commission held their first meeting on June 24, 2020 and have since been holding meetings on the first and third Wednesday every month. They have also developed four committees that cover: market development, organics, recycling, and labeling and media. These committees are currently reviewing policy proposals that have been submitted through the Commission’s public portal. The commission is required to submit preliminary policy recommendations to the legislature by January 1, 2021. However, with the governor approving AB 2287 (Eggman, 2020), it has given the Commission an additional six months to development policy recommendations. SYASL will continue monitoring the Commission's actions for SWANA LTF.

Treated Wood Waste On September 29, Governor Newsom vetoed SB 68 (Cathleen Galgiani), which would have deleted the December 31, 2020, sunset on treated wood waste (TWW) statute. According to the veto message, the governor believed this bill would create a significant additional mandate for DTSC to perform regular inspections of generators and disposal sites for treated wood waste. The governor also stated the Hazardous Waste Control Account (HWCA) currently has a structural deficit, and this unfunded new mandate will cost the department millions of dollars to implement, exacerbating this deficit.

Since SB 68 was vetoed, starting January 1, 2021, TWW is subject to full hazardous waste standards- 90 days on generators site, storage, labeling, shipment on a hazardous waste manifest, and sent to a full hazardous waste facility (landfill or transfer

311 station). TWW sent out of state will still need to follow California requirements for generation and transport – used a manifest and hazardous waste transporter – as long as that receiving facility is permitted in that state to accept TWW (which is basically any solid waste landfill outside of California). Department of Toxic Substances Control (DTSC) indicates Class I disposal is required but that designation is a California term. DTSC cannot interfere with interstate commerce.

A coalition group, including the SWANA LTF and local government associations, drafted a letter of concern to DTSC and the governor's office. The letter outlines concerns that the veto of SB 68 leaves them with no effective management standards or guidance for TWW, no clear alternatives for managing the handling and disposal of this waste and leaves them with very little time to adapt current practices without immediate guidance from the agency. On December 18, DTSC a fact sheet on management of treated wood waste in California that explains the new requirements, and their website states the department intends to offer interested parties a variance to allow the variance recipient’s TWW to be managed according to variance conditions that are similar to the existing AMS. The variances are intended to be short term in nature, providing time for the Legislature, DTSC, and impacted stakeholders to develop a longer-term strategy to effectively and safely manage TWW. SYASL will continue monitoring this issue. ______

Attachment 1 contains a list and descriptions of bills on which the SWANA LTF took a position or closely monitored during the 2020 legislative session, along with their final status, organized by issue area. Please note that in 2020, the Governor signed 457 and vetoed 56 bills.

Please do not hesitate to contact us if you have any questions about this material.

ATTACHMENT 1 Key Legislation by Issue Area

Beverage- Container Recycling

AB 793 (Ting) Recycling: plastic beverage containers: minimum content. - Support This bill establishes minimum recycled content requirements for plastic beverage containers, and makes California’s standards the strongest in the world. Specifically, AB 793 would require that beverage containers contain, on average, no less than 50 percent postconsumer recycled plastic content by January 1, 2030. The legislation is intended to develop domestic markets for recycled materials and take a critical step towards a circular economy.

Status: Signed Into Law

AB 2287 (Eggman) Solid waste: plastic products certification. - Support This bill authorizes the use of agricultural mulch film plastic labeled “soil degradable” if it meets specified standards. AB 2287 also gives the Statewide Commission on Recycling Markets and Curbside Recycling an additional six months to make

312 certain market development policy recommendations. According to the author, the bill will help support the development and use of truly degradable alternatives to traditional plastics by updating California’s existing “Truth in Environmental Advertising” law to reflect updated standards, certifications, and best practices for labeling products.

Status: Signed Into Law

SB 372 (Wieckowski) Beverage Container Recycling Act of 2020. - Watch This bill would require distributors of beverage containers in the state to form a beverage container stewardship organization. The organization would be required to develop and submit a plan and budget for the recovery and recycling of empty beverage containers similar to that described in the Used Mattress Recovery and Recycling Act, and would require the organization to establish a stewardship fee, to be paid by distributor members of the organization, to assist in covering the costs of implementing the program. The act would require the organization to reimburse the department for the department’s costs of enforcement. The bill would impose similar administrative civil penalties for a violation of these provisions.

Status: Failed on Senate Floor

Environmental Quality

AB 1672 (Bloom) Solid waste: flushable products. - Support The California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, generally regulates the disposal, management, and recycling of solid waste. This bill would, among other things, on or after January 1, 2021, prohibit a covered entity, as defined, from labeling a covered product as safe to flush, safe for sewer systems, or safe for septic systems, unless the product is a flushable wipe that meets certain performance standards. The bill would require nonflushable products to be labeled clearly and conspicuously to communicate that they should not be flushed, as specified.

Status: Held in the Senate Appropriations Committee

Hazardous Waste Regulations

AB 995 (Garcia, Cristina) Hazardous waste. - Concerns This bill would create the Board of Environmental Safety within the California Environmental Protection Agency (CalEPA) to provide policy direction to and oversight of the Department of Toxic Substances Control (DTSC). The bill would provide requirements for the membership of the board and would require the board to conduct no less than 6 public meetings per year. The bill would provide for the duties of the board, which would include, among others, reviewing specified policies, processes, and programs within the hazardous waste control laws; proposing statutory, regulatory, and policy changes; and hearing and deciding appeals of hazardous waste facility permit decisions and certain financial assurance decisions. The bill would establish an office of ombudsperson in the board to receive complaints and suggestions, to evaluate complaints received, to report findings and make recommendations to the Director of Toxic Substances Control and the board, and to

313 render assistance. According to the veto message, the governor believed that the bill as written falls short of the goals the state has previously set for needed changes to better protect public health and safety. Without necessary funding, DTSC will be unable to deliver on the promise of this legislation.

Status: Vetoed by Governor

AB 1509 (Mullin) Solid waste: lithium-ion batteries. - Support Creates a producer funded recycling program for lithium-ion batteries, including both loose batteries as well as ones embedded in products, reducing the number of improperly disposed of Li-ion batteries entering the waste stream. The intent of the bill is to improve the recycling of these products and also reduce fire hazards at solid waste facilitiesstarted by Li-ion batteries. Given the extended recess and legislative leadership ordering legislators to trim down their bill packages and focus on bills dealing with COVID-19 relief or homelessness, AB 1509 fell victim to this, and it did not make it through the legislative process.

Status: Held in the Senate Environmental Quality Committee

SB 68 (Galgiani) Hazardous waste: treated wood waste. - Support This bill deletes the December 31, 2020, sunset on treated wood waste (TWW) statute. It requires the wood preserving industry to prepare training materials on how to best handle, dispose of, and otherwise manage TWW. SB 68 passed through the legislative process with bi-partisan support but was vetoed by Governor Newsom. According to the veto message, the governor believed this bill would create a significant additional mandate for DTSC to perform regular inspections of generators and disposal sites for treated wood waste. The governor also stated the Hazardous Waste Control Account (HWCA) currently has a structural deficit, and this unfunded new mandate will cost the department millions of dollars to implement, exacerbating this deficit.

Status: Vetoed by Governor

SB 1156 (Archuleta) Lithium-ion batteries: illegal disposal: fire prevention. - Support This bill would require the Department of Forestry and Fire Protection (CAL FIRE), in consultation with relevant state agencies like the California Highway Patrol (CHP), the Department of Toxic Substances Control (DTSC), and the waste industry to develop protocols for the proper management of the disposal of lithium-ion batteries using existing resources, including safe handling, detection, and the suppression of fires originating from discarded lithium-ion batteries. It also requires CalRecycle to develop a guidance document to increase public knowledge and awareness regarding fire risk from improper disposal of lithium-ion batteries. The bill received bi-partisan support on the Assembly floor, but since amendments were made to the bill in the Assembly, the bill still needed to be taken up for a vote on the Senate floor for a concurrence vote. However, the clock ran out, and bill was not taken up before midnight, and therefore, failed passage out of the Legislature before the end of the legislative session.

Status: Failed on Senate floor

314

Miscellaneous

AB 2959 (Calderon) Solid waste: byproducts from the processing of food or beverages. – Watch The California Integrated Waste Management Act of 1989 authorizes each county, city, district, or other local governmental agency to determine, among other things, whether solid waste handling services are provided for by means of a nonexclusive, partially exclusive, or wholly exclusive franchise, contract, license, permit, or otherwise. The act prohibits those local governmental entities from exercising that authority with regard to the hauling of byproducts from the processing of food or beverages if certain conditions are met, including the condition that the byproducts originate from, among others, entities required to be registered for the manufacture, packing, or holding of any processed food in this state and certain entities exempt from that registration. This bill would reauthorize those local governmental entities to exercise that authority if those byproducts originate from a supermarket, grocer, restaurant, or other retail food establishment. Given the extended recess and legislative leadership ordering legislators to trim down their bill packages and focus on bills dealing with COVID-19 relief or homelessness, AB 2959 fell victim to this, and it did not make it through the legislative process.

Status: Failed on Senate Environmental Quality

AB 3163 (Salas) Energy: biomethane procurement. - Support This bill adds methane that is produced from the noncombustion thermal conversion of eligible biomass feedstock, as specified, to the definition of “biomethane” for purposes of gas utility biomethane procurement targets. Woody waste is a significant portion of organic waste in landfills which must be diverted to beneficial alternatives pursuant to SB 1383 (Lara, 2016).

Status: Signed Into Law

AB 3256 (E. Garcia) Economic Recovery, Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2020. - Support If Amended This bill would enact the Economic Recovery, Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2020, which, if approved by the voters, would authorize the issuance of bonds in the amount of $6,980,000,000 pursuant to the State General Obligation Bond Law to finance projects for an economic recovery, wildfire prevention, safe drinking water, drought preparation, and flood protection program.

Status: Held In Assembly Rules

SB 45 (Allen) Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2020.- Support If Amended This bill would enact the Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2020, which, if approved by the voters, would authorize the issuance of bonds in the amount of $5,510,000,000 pursuant to the State General Obligation Bond Law to finance projects for a wildfire prevention, safe drinking water, drought preparation, and flood protection program.

315

Status: Held In Assembly Rules

SB 424 (Jackson) Tobacco products: single-use and multiuse components. - Support This bill would prohibit a person or entity from selling, giving, or furnishing to another person of any age in this state a cigarette utilizing a single-use filter made of any material, an attachable and single-use plastic device meant to facilitate manual manipulation or filtration of a tobacco product, and a single-use electronic cigarette or vaporizer device. The bill would prohibit that selling, giving, or furnishing, whether conducted directly or indirectly through an in-person transaction, or by means of any public or private method of shipment or delivery to an address in this state.

Status: Held in the Assembly Governmental Organization Committee

Organic Source Reduction

SB 1191 (Dahle) Organic waste: reduction goals: local jurisdictions. - Support This bill would allow low population counties and rural jurisdictions, as defined, to develop and implement alternative organic waste management programs in place of the rigid and costly Senate Bill 1383 (Lara; 2016) mandates. SB 1191 aligns the California Department of Resources Recycling and Recovery’s (CalRecycle) organic waste management SB 1383 statute with the long-standing provisions that require CalRecycle to consider whether a jurisdiction or entity made a “good faith” effort to implement its recycling program before issuing a compliance order or imposing penalties on that jurisdiction or entity. However, given the truncated timeline, the proposal did not make it through this legislative session. The sponsor of this bill intends to reintroduce similar legislation the next legislative session.

Status: Held in Senate Environmental Quality

Recycling & Packaging Reform

AB 1080/SB 54 (Gonzalez/Allen) Solid waste: packaging and products. - Watch Would establish the California Circular Economy and Plastic Pollution Reduction Act, which would have established a framework to address the pollution and waste crisis and set a statewide goal of ensuring that manufacturers reduce the waste generated by single-use plastic packaging and food ware products by 75% by 2032 through source reduction and recycling and composting. On the last month of session, the authors significantly amended both bills, which narrowed their scope to plastic and plastic coated fiber. Even though the authors attempted to address the concerns of the opposition, in the end many groups continued to oppose this measure and it failed. There has been no indication yet if the authors plan to reintroduce the measures next year.

Status: Failed on the Assembly Floor

316 Recycling

SB 667 (Hueso) Greenhouse gases: recycling infrastructure and facilities. - Support This bill would have required CalRecycle to develop a five-year investment strategy necessary to meet specified organic waste reduction goals and allocate funding on a multi-year basis to CalRecycle’s organic waste recycling program. However, the authored made amendments to this two-year bill the last month of the legislative session to require CalRecycle to develop by January 1, 2023 a 5-year needs assessment to support waste reduction and recycling targets.

Status: Held in the Assembly Appropriations Committee

Transportation

AB 2920 (Obernolte) Hazardous waste: transportation: consolidated manifesting procedure.- Support This bill would authorize the consolidated manifesting procedure to be used additionally for retail hazardous waste, as defined, collected from a retailer engaged in business in the state. The bill would require, when using the consolidated manifesting procedure for retail hazardous waste, that incompatible materials transported in the same transport vehicle be managed pursuant to specified provisions that govern the transportation of hazardous waste.

Status: Signed Into Law

SB 895 (Archuleta) Energy: zero-emission fuel, infrastructure, and transportation technologies. - Watch Current law requires the State Energy Resources Conservation and Development Commission, within the limits of available funds, to provide technical assistance and support for the development of petroleum diesel fuels that are as clean or cleaner than alternative clean fuels and clean diesel engines. This bill would instead require the commission, within the limits of available funds, to provide technical assistance and support for the development of zero-emission fuels, zero- emission fueling infrastructure, and zero-emission fuel transportation technologies.

Status: Signed Into Law

317 ITEM 14c

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PH: 209.723.4481 FAX: 209.384.3109 7040 N. Highway 59 Merced, CA 95348

ITEM 14c

DATE: February 12, 2021

TO: Merced County Regional Waste Management Authority

FROM: Alicia Ochoa-Jones, Purchasing and Contracts Manager

RE: Information: Quarterly Report on Merced County Regional Waste Management Authority (MCRWMA) Board Approved Contracts

SUMMARY

Enclosed for your review and information is the MCRWMA Governing Board approved contracts and their status. The list is as of December 31, 2020 and all contracts are open with the exception of one that closed within the last quarter.

REQUESTED ACTION

For information only.

BACKGROUND

If you have any questions regarding this staff report, please contact Alicia Ochoa-Jones at 209.723.3153 x164 or at [email protected].

PAST ACTION TAKEN

No previous action was taken as this was an information only item.

NEXT STEPS

These updates will be provided to the Governing Board on a quarterly basis.

FISCAL IMPACT

None.

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REQUESTED ACTION

For information only.

ATTACHMENTS

MCRWMA GB Approved Contract Status as of 12.31.2020

320 MCRWMA Approved Contracts Status as of 12.31.2020

VENDOR AND SERVICE Status Start Date End Date Contract Total Remaining Balance

Ascent Environmental, Inc. - Preparation of Environmental Documents Open 3/21/2019 6/30/2021 $100,000 $12,189

Cal-Waste - Processing of Recyclable Materials Open 9/1/2020 6/30/2021 $109,872*** Clean Harbors Environmental Services - Household Hazardous Waste Management 3/1/2020 2/28/2023 Services Open $300,000 $238,790 Clean Harbors Environmental Services - Infectious Materials Emergency Response 4/22/2020 12/31/2020 Services Closed $50,000 $50,000 EBA Engineering - Engineering Services Open 10/20/2016 12/31/2021 $365,051* HF&H Consultants, LLC - On-Call Planning Assistance for SB1383 and Recycling 10/1/2019 9/30/2022 Consulting Services Open $337,895 $79,253

Hunt & Sons, Inc (W.H. Breshears) - Delivery of Gasoline and Diesel Open 9/1/2020 8/31/2023 $127,568*** KNN Public Finance, LLC - Financial Advisory Services for LFGTE Open 10/1/2019 ** $80,000 $80,000 Mastec Power Corp - Construction Manager at Risk for LFGTE Phase 1 Open 3/12/2020 ** $10,000 $10,000 Monterey Regional Waste Management Distric - Processing and Transportation of 9/1/2020 6/30/2021 Recyclable Materials Open $96,432*** ReCollect Systems, Inc - Waste Management Applications Open 9/28/2020 9/27/2023 $33,866.57 $33,866.57 Remy, Moose, Manley LLC - Legal Consulting Services Environmental Impact Review Open 12/21/2017 ** $75,000 $56,255 SCS Engineers, Inc. - Landfill Gas Collection System Monitoring, Maintenance and 12/16/2016 1/31/2021 Reporting Open $727,095* Taylor Backhoe Service (TBS Contractors) - Highway 59 Landfill Scale Addition Open 6/1/2020 4/30/2021 $1,760,000 $585,695 Tetra Tech BAS - Engineering Services Open 10/24/2016 12/31/2021 $4,831,801* Tiger Lines, LLC - Transportation of Recyclable Materials Open 9/1/2020 6/30/2021 $96,334***

* On call services based on MCRWMA budget - Total paid to date ** Open until all services are rendered/budget is expended *** Commodity - Total paid to date

321 ITEM 16a

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PH: 209.723.4481 FAX: 209.384.3109 7040 N. Highway 59 Merced, CA 95348

ITEM 16a

DATE: February 12, 2021

TO: Merced County Regional Waste Management Authority

FROM: Kyle Loreto, Diversion Programs Manager

RE: Action: Authorize Contract for Transportation and Processing of Recyclable Materials

SUMMARY

This item requests contract authorization for the transport and processing of recyclable materials at the Highway 59 landfill. The costs associated with this contract are pass-through costs to be paid by participating jurisdictions for the billable services they use. The proposed contract is for five years with five one-year extension options.

REQUESTED ACTION

Authorize the Executive Director to enter into a contract for the transportation and processing of recyclable materials at Highway 59 landfill for a period of five years (5) years, with up to an additional five (5), one (1) year extension options; but in no event shall the contract exceed ten (10) years.

BACKGROUND

On August 31, 2015 the Merced County Regional Waste Management Authority executed an agreement with Republic Services, Inc [formerly known as: Browning-Ferris Industries (BFI)] for the transportation and processing of recyclable materials from MCRWMA to Republic Services’ Newby Island Material Recycling Facility (MRF). This Agreement No. 2015-100, expired on August 31, 2020.

In March 2020, the Merced County Regional Waste Management Authority staff received several unsolicited proposals, including an extension offer from Republic Services for processing of recyclable materials from Highway 59 and Billy Wright landfills. Republic Services’ extension offer was the best option of the proposed offers; however, during negotiations, MCRWMA and Republic Services were unable to come to agreeable terms on an extension of the contract.

To continue to provide the service of accepting recycle materials to the jurisdictions and residents of Merced County, the Governing Board authorized the MCRWMA to enter month-to-month contracts with material processors and haulers.

The expired contract and current, month-to-month contracts are pass-through costs and the MCRWMA invoices the participating jurisdictions for the billable services they use. The month-to-month contracts utilize higher rates than the previous contract with Republic Services and the Governing Board has authorized MCRWMA to cover expenses over and above the original projected amounts until a new contract is approved by the Governing Board. MCRWMA anticipates expending up to $825,000 for these said services, through June 2021.

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UPDATE

On October 22, 2020 MCRWMA released an RFP (project number RFP20201022MCRWMA) for Recyclable Materials Transport and Processing Services. Four (4) proposals were received and evaluated by members of participating jurisdictions from the Cities of Atwater, Merced, Dos Palos, Los Banos, and the County of Merced; along with an outside jurisdiction; together with MCRWMA staff. The evaluation committee then ranked the proposals using the scoring matrix below:

Proposal Evaluation Matrix Evaluation Criteria Possible Points Cost 30 Understanding/Response to Scope of Services 30 Experience of Company/Personnel 25 References/Past Performance 15

Based on the evaluation criteria shown above, the evaluation team has ranked the proposals as follows:

Proposal Details and Scoring

Rank: Vendor Name Proposed Price: Transportation Evaluation plus Processing Score 1 Caglia Environmental/CARTS $25.00 + $39.95 = $64.95 96.57 2 Mid Valley Disposal $25.00 + $50.00 = $75.00 93.57 3 Monterey Regional Waste $60.00 + $50.00 = $110.00 79.86 Management District 4 California Waste $57.87 + $112.25 = $170.12 78.86

PAST ACTIONS TAKEN

August 31, 2015 – The Governing Board authorized an Agreement with Republic Services, with a five (5) year expiration date of August 31, 2020;

June 20, 2019 – Rob Hilton of HF&H held a workshop before the Governing Board regarding contract No. 2015-100, Agreement for Transportation and Processing of Recyclable Materials, and discussed the proposed contract rate increases requested by Republic Services. The Governing Board denied proposed contract rate increases as requested by Republic Services;

June 18, 2020 – The Governing Board directed staff to issue a letter to Republic Services requesting an extension of the current Agreement (2015-100) for Transport and Processing of Recyclable Materials under the same terms and conditions for a period of two (2) years;

July 16, 2020 – The Merced County Regional Waste Management Authority staff held a workshop before the Governing Board regarding contract No 2015-100, Agreement for Transportation and Processing of Recyclable Materials, and discussed the proposed extension and rate increases provided by Republic Services, Inc.;

September 17, 2020 – The Governing Board authorized the Executive Director to enter into month-to- month contract(s) with material processor and transportation companies, not to exceed a combined total of $115 per ton, for a period not to exceed 12 months or $825,000; OR until such time that the Governing Board authorizes a new agreement.

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NEXT STEPS

In order to continue to provide the transport and processing services of recyclable materials to the jurisdictions and residents of Merced County, MCRWMA proposes to enter a five (5) year contract with five (5), one (1) year extensions with the selected proposer Caglia Environmental/CARTS. The proposed contract is set to begin on July 1, 2021 and expire June 30, 2026, unless extended. Starting July 1, 2021 jurisdictions who bring, or have their contracted hauler bring, recyclable material to the Merced County Regional Waste Management Authority landfill sites will be responsible for all related transportation and processing of recyclable material costs.

If you have any questions regarding this staff report, please contact Kyle Loreto at (209) 723.4481 x226, or at [email protected].

The Technical Review Board concurs with the requested action.

FISCAL IMPACT

The MCRWMA invoices the participating jurisdictions for the billable services they use associated with the transport and processing of recyclable materials received. This service is a pass-through expense where the expenses that are incurred for services provided are then invoiced to the participating jurisdiction. MCRWMA will not be responsible for the costs associated with the transportation and processing of recyclable materials received by the jurisdictions. Therefore, there will be no further impact to the MCRWMA budget.

REQUESTED ACTION

Authorize the Executive Director to enter into a contract for the transportation and processing of recyclable materials at Highway 59 landfill for a period of five years (5) years, with up to an additional five (5) one (1) year extension options; but in no event shall the contract exceed ten (10) years.

ATTACHMENTS

None.

325 ITEM 16b

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PH: 209.723.4481 FAX: 209.384.3109 7040 N. Highway 59 Merced, CA 95348

ITEM 16b

DATE: February 12, 2021

TO: Merced County Regional Waste Management Authority

FROM: Eric Zetz, Director

RE: Action: Authorize and Adopt the MCRWMA Flow Control Policy

SUMMARY

Pursuant to Governing Board direction, consider adoption of new flow control requirements for all jurisdictions within Merced County.

REQUESTED ACTION

Recommend the Merced County Regional Waste Management Authority approve and adopt the attached Resolution establishing the MCRWMA Flow Control Policy.

BACKGROUND

The Merced County Regional Waste Management Authority (MCRWMA) Joint Powers Agreement (JPA) establishes flow control for solid waste, recycling and plant (otherwise known as green waste) materials generated within the service area – meaning, all such material must be directed to one of the Regional Waste Management Authority landfill sites, Billy Wright landfill or Highway 59 landfill. Currently, all seven (7) jurisdictions are bringing solid waste to MCRWMA facilities. However, the flow control requirement for recyclables and green waste is currently not being enforced. When the solid waste municipal bonds were issued, it was based in part upon the Authority’s commitment that it exercise flow control over revenue-generating materials in the service area. Should the Authority not have flow control over revenue-generating materials, then the bond covenants could be deemed to be in breach of the contract, and the bonds could be either downgraded or defaulted.

The State of California has increased diversion mandates upon all jurisdictions within the state. This increased diversion mandate has required jurisdictions to implement programs to divert materials away from landfills at ever increasing diversion rates. The increased costs associated with creating such programs, such as a blue bin recyclable material diversion program, results in some jurisdictions choosing not to participate in the programs. Additionally, the added scrutiny to contamination and increased costs for processing have turned disposal of recyclable materials and plant materials from a revenue to an expenditure. For example, the cost for the Authority’s current contract with its hauler for the transportation and processing of recyclables associated with processing of the materials from the Authority may increase significantly, up to three to four times the current cost. The Authority passes these costs onto the jurisdiction bringing the material to the Authority. Therefore, the recyclable material is a pass-through cost that does not pay towards the solid waste revenue bond at this time.

327

As the Authority prepares for investments in infrastructure related to SB 1383 (organics diversion) compliance, reliable projections of green waste are needed. If the Board is inclined to relax flow control requirements for the recycling and plant waste materials, infrastructure investments to handle that material at the two RWA landfill sites may not be needed. Finally, there is not currently a policy outlining the circumstances under which the relaxation of the flow control requirement for recyclables and green waste may occur.

PAST ACTIONS TAKEN

August 20, 2020: the Authority Governing Board directed staff to prepare a policy allowing for exceptions to the current flow control requirements and bring such policy back to the Board for discussion and adoption at a future meeting.

DISCUSSION

On August 20, 2020 the MCRWMA Board directed staff to draft a policy to relax the flow control requirement for diverted material (recycling and plant material/green waste) for all jurisdictions and to bring back a flow control policy for discussion and adoption at a future meeting. Pursuant to the Board’s direction, staff has developed a policy document that will establish a process by which all member agencies may seek alternative arrangements for their recycling and plant material outside of RWA.

The attached proposed resolution includes the following elements:

• All solid waste materials generated within the service area, including, but not limited to, construction and demolition debris and waste generated and collected from residences, businesses, institutions, and other locations within Merced County, shall be directed, without exception, to one of the Regional Waste Management Authority landfill sites, Billy Wright landfill or Highway 59 landfill, at rates established by the MCRWMA Board.

• All recycling and plant (otherwise known as organic green waste) materials generated within the service area, including, but not limited to, food wastes generated and collected from residences, businesses, institutions, and other locations within Merced County shall be directed to one of the Merced County Regional Waste Management Authority landfill sites at rates established by the MCRWMA Board, except:

• To the extent that recycling and plant (otherwise known as organic green waste) materials generated within the service area either (1) do not generate a net revenue and are a pass-through expense for the Merced County Regional Waste Management Authority or (2) the Merced County Regional Waste Management Authority is not permitted to accept such materials generated within the service area, the jurisdictions shall be permitted to seek their own haulers and processors for such excepted materials generated in the service area and divert the excepted materials away from the Merced County Regional Waste Management Authority landfill sites.

• The exceptions outlined above may be modified or revoked by the Authority.

328

• Any jurisdiction seeking to divert recycling and plant materials as set forth above must obtain approval of the Merced County Regional Waste Management Authority prior to the diversion of such material.

If you have any questions regarding this staff report, please contact Eric Zetz at 209.723.4481 x221 or at [email protected].

The Technical Review Board concurs with the requested action.

FISCAL IMPACT

Implications for RWA Budget

Garbage, or solid waste, material streams: Currently all jurisdictions participate in bringing their garbage or municipal solid waste (MSW) to one of the two Authority landfill sites. The tip fee revenue from MSW generates the funds necessary to make the Solid Waste Bond payment as agreed to by the jurisdictions in the JPA.

Recyclable material streams: Currently only three jurisdictions (City of Los Banos, City of Merced and a portion of the County of Merced) participate in bringing their recyclable material to one of the Authority landfill sites. The cost for the service to transport and process the recyclable materials received at the Authority is passed on to the participating jurisdiction. The Authority does not receive a revenue from this recyclable material stream since the revenues are passed onto the participating jurisdiction, which are applied to the jurisdiction’s charges for this service. Thus, at this time, there are no impacts to the Authority’s budget if recycle material streams are not brought to the Authority.

Plant or organic (i.e. green bin) material streams: Currently only three jurisdictions (City of Atwater, City of Los Banos, City of Merced and a portion of the County of Merced) participate in bringing their plant or organic material to one of the Authority landfill sites. The cost for the service to process the plant or organic materials received at the Authority is passed on to the participating jurisdiction. The byproduct of the material is compost, which is then sold to cover the operational costs to create the compost. Additionally, the Authority does not have a permit at either of its facilities to receive food waste material streams. Therefore, the jurisdictions are required to look elsewhere to comply with Assembly Bill 1826. At this time, there are no impacts to the Authority’s budget if plant or organic material streams are not brought to the Authority.

REQUESTED ACTION

Recommend the Merced County Regional Waste Management Authority approve and adopt the attached Resolution authorizing the Flow Control Policy.

ATTACHMENTS

Exhibit A: Resolution No. 2021/02-18-01 – Flow Control Policy

329

RESOLUTION NO. 2021/02-18-01

A RESOLUTION OF THE MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY (MCRWMA) ESTABLISHING A FLOW CONTROL POLICY

WHEREAS, The Merced County Regional Waste Management Authority (MCRWMA) Joint Powers Agreement (JPA) contains provisions requiring that the participating jurisdictions have the authority, commitment, and agreement to direct all solid waste, recycling, and plant (otherwise known as organic green waste) materials generated within the service area to one of the MCRWMA landfill sites; and

WHEREAS, the jurisdictions’ disposal of all solid waste, recycling, and plant materials generated within the service area at one of the MCRWMA landfill sites was an assumption on which the MCRWMA Revenue Bonds were issued; and

WHEREAS, due to the many applicable requirements and regulations on the disposal of recyclable and plant materials, as well as changes in market conditions, the disposal of recyclable and plant materials no longer generates income for MCRWMA; and

WHEREAS, the diversion of such materials would therefore not impact MCRWMA’s ability to meet its bond payment obligations; and

WHEREAS, all seven (7) jurisdictions - Atwater, Dos Palos, Livingston, Los Banos, Gustine, Merced, and Merced County - are bringing solid waste to MCRWMA facilities; and

WHEREAS, the flow control requirement for recyclables and plant materials is currently not being enforced and not all jurisdictions are participating in recycling and green waste collection programs; and

WHEREAS, the expenses for the transport and processing of recyclable materials have surpassed the net revenues, resulting in a significant expense to those jurisdictions participating in recyclable and green waste collection programs, such that the participating jursidictions desire to seek their own services and divert recycling and plant (otherwise known as organic green waste) materials generated within the service area from the MCRWMA landfill sites in order to reduce expenses; and

WHEREAS, the MCRWMA JPA provides, in Article 7.1(p), that MCRWMA is authorized but not required to require all jurisdictions to direct all solid waste, recycling, and plant materials generated and collected within the jurisdictions’ boundaries to one of MCRWMA’s facilities;

NOW, THEREFORE, THE BOARD OF DIRECTORS OF MCRWMA HEREBY RESOLVES AS FOLLOWS:

Section 1. All Solid Waste materials generated within the service area, including, but not limited to, construction and demolition debris, and waste generated and collected from residences, businesses, institutions and other locations within Merced County, shall be directed, without

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exception, to one of the Regional Waste Management Authority landfill sites, Billy Wright landfill or Highway 59 landfill, at rates established by the MCRWMA Board.

Section 2. All recycling and plant (otherwise known as organic green waste) materials generated within the service area, including, but not limited to, food wastes generated and collected from residences, businesses, institutions and other locations within Merced County shall be directed to the Merced County Regional Waste Management Authority landfill sites at rates established by the MCRWMA Board, except as otherwise provided pursuant to Section 3, below.

Section 3. Exceptions. To the extent that recycling and plant (otherwise known as organic green waste) materials generated within the service area either (1) do not generate a net revenue and are a pass-through expense for the Merced County Regional Waste Management Authority or (2) the Merced County Regional Waste Management Authority is not permitted to accept such materials generated within the service area, the jurisdictions shall be permitted to seek their own haulers and processors for such excepted materials generated in the service area and divert the excepted materials away from the Merced County Regional Waste Management Authority landfill sites.

Section 4. Any jurisdiction seeking to divert recycling and plant materials as set forth above must obtain approval of the Merced County Regional Waste Management Authority prior to the diversion of such material.

Section 5. The exceptions outlined above may be modified or revoked by the Merced County Regional Waste Management Authority.

PASSED AND ADOPTED this ______day of ______2021 by the following vote:

AYES: NOES: ABSENT: ABSTAIN:

______Stacie Guzman, Executive Director April Hogue, MCRWMA Chair

APPROVED AS TO FORM:

______Emily Haden, MCRWMA Counsel

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331 ITEM 16c

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PH: 209.723.4481 FAX: 209.384.3109 7040 N. Highway 59 Merced, CA 95348

ITEM 16c

DATE: February 12, 2021

TO: Merced County Regional Waste Management Authority

FROM: Nav Bagri, Finance Director

RE: Action: Accept the MCRWMA Audited Financial Statements for the Year Ending June 30, 2020

SUMMARY

Staff is seeking board action to accept the MCRWMA Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020. The audit concluded with no findings.

REQUESTED ACTION

Accept the MCRWMA Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020.

BACKGROUND

Enclosed for your review is the MCRWMA Audited Financial Statements for the year ending June 30, 2020. This audit includes the operating fund and the related trust funds for bonds and closure funds. The audit concluded with no findings.

PAST ACTION TAKEN

January 2020: Governing Board accepted the Regional Waste Management Authority Audited Financial Statement for the year ending June 30, 2019.

DISCUSSION

The conclusion of this audit includes NO finding of “material weakness” relating to year-end financial close-out. Also, there were no findings in previous year audits.

If you have any questions regarding this staff report, please contact Nav Bagri at 723.3153 x 154 or [email protected].

The Technical Review Board concurs with the requested action.

333

FISCAL IMPACT

None.

REQUESTED ACTION

Accept the MCRWMA Financial Statements and Independent Auditor’s Report for the year ending June 30, 2020.

ATTACHMENT

MCRWMA audited financial statement and auditor’s report

334 MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY

FINANCIAL STATEMENTS WITH INDEPENDENT AUDITORS’ REPORT

FOR THE YEAR ENDED JUNE 30, 2020

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335

TABLE OF CONTENTS

Page

Independent Auditors’ Report...... 1

Management’s Discussion and Analysis ...... 3

Financial Statements:

Statement of Net Position ...... 9

Statement of Revenues, Expenses, and Changes in Net Position ...... 11

Statement of Cash Flows ...... 12

Notes to Financial Statements ...... 14

Schedule of Findings and Questioned Costs ...... 24

Summary Schedule of Prior Audit Findings ...... 25

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336

INDEPENDENT AUDITORS’ REPORT

To the Governing Board of the Merced County Regional Waste Management Authority Merced, California

Report on the Financial Statements We have audited the accompanying financial statements of the business-type activities of the Merced County Regional Waste Management Authority (the Authority) as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the Authority’s financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design auditDRAFT procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities of the Authority, as of June 30, 2020, and the respective changes in financial position, and, where applicable, cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711 ______

P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM 337

Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, as listed in the table of contents, be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 19, 2021, on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control over financial reporting and compliance.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California January 19, 2021

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2020

This section of the Merced County Regional Waste Management Authority’s (the Authority) audit presents a discussion and analysis of the Authority’s performance during the fiscal year ended June 30, 2020. This is to be read in conjunction with the Independent Auditors’ Report and the financial statements that follow this section.

FINANCIAL HIGHLIGHTS

• Authority assets and deferred outflows of resources exceeded liabilities at the close of the 2019/20 fiscal year by $52,170,754, $6.7 million more than the prior year. Unrestricted net position of $29 million may be used to meet ongoing obligations to creditors. Net investment in capital assets totaled $19,395,341. • The Authority’s net position increased by $6.7 million during the fiscal year ended June 30, 2020. Operating revenues exceeded expenses by nearly $6.2 million. • Debt service payments on bonds reduced long-term liabilities by $1.8 million.

OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the Authority’s financial statements. The Authority’s financial statements are comprised of two components 1) financial statements and 2) notes to financial statements.

Fund financial statements are designed to provide readers with a broad overview of Authority finances.

The Statement of Net Position presents information on all Authority assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating.

The Statement of Revenues, Expenses, and Changes in Net Position presents information showing how net position changed during the last fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g., uncollected service charges and earned but unused vacation leave).

The Statement of Cash Flows presents information about the cash receipts and cash payments of the Authority during the last fiscal year. When used with related disclosures and information in the other financial statements, the information provided in the statement of cash flows should help financial report users assess the Authority’s ability to generate future net cash flows, its ability to meet its obligations as they come due, its need for external financing, the reasons for differences between operating income and associated cash receipts and payments, and the effect on the Authority’s financial positionDRAFT of both its current and its noncash investing, capital and related financing transactions during the fiscal year.

Notes to financial statements provide additional information that is essential to a full understanding of the data provided in the Authority’s financial statements. The notes can be found on pages 14-21 of this report.

FINANCIAL ANALYSIS

The analysis of the Authority’s financial condition begins on page 9 of the financial statements. The Statement of Net Position and the Statement of Revenues, Expenses, and Changes in Net Position provide an indication of the Authority’s financial well-being. Over time, net position can be used to gauge the economic welfare of an organization.

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

FINANCIAL ANALYSIS (continued)

Assets and deferred outflows exceeded liabilities and deferred inflows by $52.2 million. The 0.4% increase in current and other assets is attributed to a growth in cash, cash equivalents, and investments of $289K over the prior fiscal year. Land, infrastructure, and equipment acquisitions totaled $10.1 million. Construction in Progress projects decreased $2.4 million from the prior year. Asset disposals of $1.3 million and amortization and depreciation expense of $2.9 million netted an increase of $4,661,422 in capital assets.

Current liabilities at year end were 22.6% lower than the previous year. Current liabilities decreased $912,977 from the prior year due to a decrease in accounts payable and revising corrective liabilities. The Authority was able to satisfy its current year debt service payments to the 2015 Revenue Bond Series A and B.

Long-term liabilities decreased by $1.2 million largely due to a decrease in solid waste refunding revenue bond after making an annual principal and interest payment.

Investments in capital assets (land, structures, improvements, equipment, and construction in progress) make up 37% of the Authority’s net position, less any related debt used to acquire those assets that were still outstanding.

NET POSITION

(Restated) Change 2020 2019 $ %

Current and other assets $ 39,575,341 $ 39,424,609 $ 150,732 0.4% Capital assets 31,858,312 27,196,890 4,661,422 17.1% Total assets 71,433,653 66,621,499 4,812,154 7.2%

Total deferred outflows of resources 1,242,720 1,420,251 (177,531) -12.5%

Current liabilities: 3,120,089 4,033,066 (912,977) -22.6% Long-term liabilities 17,385,530 18,584,929 (1,199,399) -6.5% Total liabilities DRAFT 20,505,619 22,617,995 (2,112,376) -9.3% Net investment in capital assets 19,395,341 13,158,878 6,236,463 47.4% Restricted 3,322,867 3,118,568 204,299 6.6% Unrestricted 29,452,546 29,146,309 306,237 1.1% Total net position $ 52,170,754 $ 45,423,755 $ 6,746,999 14.9%

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

FINANCIAL ANALYSIS (continued)

The Authority uses these capital assets to provide services to customers; therefore, these assets are not available for future spending. Although the Authority’s investment in its capital assets was reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

Resources that are subject to external restrictions make up 6% of the Authority’s net position. Actual available closure funds of $3,322,867 are netted against a closure/post closure liability of $5,485,530. The difference of $2,162,663 must be covered by unrestricted net position. The remaining unrestricted net position of $27,289,883 may be used to meet the Authority’s ongoing obligations to vendors and creditors.

At the end of the fiscal year, the Authority reported positive balance in net investment in capital assets and unrestricted net position.

Various short-term contracts in the prior year resulted in an increase of 2% in landfill tipping fee revenue during the current year. Decreases in the market prices for electronic waste and other commodities, and lower sales of compost and other organics resulted in a 33% decrease in other operating revenues.

Total operating expenses were 22% higher than the prior year. By excluding non-cash expenses such as bad debt, amortization/depreciation, and closure/post closure expense, “true” operating costs increased by $783,562. The Authority has leased all staff from MCAG since 2016.

Solid waste (504,580 disposed tons) processed at both sites resulted in higher than expected BOE integrated waste fees and caused a $95,600 increase to special department expense. An 85.7% increase in rent expense from the prior year is due to heavy equipment rental at Billy Wright to cover unexpected equipment failure. General administrative costs decreased 6.1%, mainly due to less travel and office expenses because of COVID-19 travel restrictions. Bad debt expense increased $19,592 from the prior year due to a write off after review of the uncollected accounts in the waste works and standard 2% of annual accounts receivable balance.

Closure and post closure expense was recorded per GASB 18; however, a pledge of revenue agreement with Cal Recycle allowed the minimum deposit of $97,308 into the appropriate closure funds.

Pooled cash and investment balances increased by $288,879; this resulted in 13% more in interest earned over the prior year. A fair market value of 101.45% in the Authority’s invested funds led to an investment gain of approximately $358,966. Vehicles and equipment sold during the fiscal year resulted in a disposal asset loss of $33,223. DRAFT

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

FINANCIAL ANALYSIS (continued)

Activities: The comparative changes in net position for the Authority’s activities for the fiscal years ended June 30, 2020 and 2019 are as follows:

CHANGES IN NET POSITION

(Restated) Change 2020 2019 $ % OPERATING REVENUES Charges for services $ 17,110,933 $ 16,796,556 $ 314,377 1.9% Other 181,369270,649 (89,280) -33.0%

Total operating revenues 17,292,30217,067,205 225,097 1.3%

OPERATING EXPENSES Special departmental 890,635795,035 95,600 12.0% Professional services 5,057,9784,389,373 668,605 15.2% Repairs and equipment maintenance 1,015,0011,062,433 (47,432) -4.5% Rents and leases 15,406 8,298 7,108 85.7% General and administrative 417,380444,543 (27,163) -6.1% Utilities 158,18571,341 86,844 121.7% Closure and postclosure care costs 605,601331,895 273,706 82.5% Amortization and depreciation 2,869,3351,927,557 941,778 48.9% Bad debt expense 21,500 1,908 19,5921026.8%

Total operating expenses 11,051,0219,032,383 2,018,638 22.3%

Operating income (loss) 6,241,2818,034,822 (1,793,541) -22.3%

NONOPERATING REVENUES (EXPENSES) Interest income 766,633679,308 87,325 12.9% Interest expense DRAFT (586,658) (632,480) 45,822 -7.2% Gain (loss) on disposal of assets (33,223) (1,083) (32,140)2967.7% Unrealized gain (loss) on investments 358,966394,715 (35,749) -9.1%

Total nonoperating revenues (expenses) 505,718440,460 65,258 14.8%

Changes in net position 6,746,9998,475,282 (1,728,283) -20.4%

Net position - beginning 45,423,75536,948,4738,475,282 22.9%

Net position - ending $ 52,170,754 $ 45,423,755 $ 6,746,999 14.9%

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

CAPITAL ASSETS AND LONG-TERM DEBT

Capital Assets

As of June 30, 2020, the Authority’s capital assets (net of accumulated depreciation) totaled $31,858,312, 17.1% more than the $27,196,890 at June 30, 2019.

The following table summarizes the changes in capital assets for the fiscal years ended June 30, 2020 and 2019:

CHANGES IN CAPITAL ASSETS

(Restated) 2020 2019 %

Land $ 1,772,410 $ 1,772,410 0.0% Land improvements 9,684,983 8,027,566 20.6% Infrastructure 34,575,982 28,607,316 20.9% Buildings and improvements 4,123,888 4,123,888 0.0% Machinery and equipment 15,404,710 14,274,734 7.9% Contruction in progress 1,906,089 4,340,906 -56.1% Accumulated depreciation (35,609,750) (33,949,930) 4.9%

Total Capital Assets (Net of Accum. Depreciation)$ 31,858,312 $ 27,196,890 17.1%

The purchase of a $13,412 tire wash flocculant and upgrades and completion of the Highway 59 Phase 6B-Phase 1 increased infrastructure by 20.9%. Installation of ground water well pumps, redrilling, and an LFGCC system replacement for Highway 59 increased land improvements by 20.6% from the prior year. The completion and capitalization of these projects caused a decrease of 58.9% in construction in progress. Accumulated depreciation is 5% greater than the previous year.

Long-Term Debt

Long-term debt totaled $17,385,530DRAFT at June 30, 2020. This is comprised of closure and post closure liability for both Billy Wright and Highway 59 totaling $5,485,530 and $11,900,000 for the 2015 Series A and B Revenue Bonds.

Amounts June 30, Incurred Satisfied June 30, Due Within 2019 or Issued or Matured 2020 One Year L-T Debt

Closure and Postclosure $ 4,879,929 605,601$ $ - $ 5,485,530 $ - $ 5,485,530 2015 Refunding Bonds 15,468,000 - (1,762,309) 13,705,691 1,805,691 11,900,000

Total Long-Term Debt $ 20,347,929 605,601$ $ (1,762,309) $ 19,191,221 $ 1,805,691 $ 17,385,530

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) FOR THE YEAR ENDED JUNE 30, 2020

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET A healthy economy and a healthy environment play a vital role in revenue sustainability and growth. Due to the projected economic recession related to COVID-19, RWA is expecting revenue to decrease by 12% from the current fiscal year. The majority of the revenue decrease is coming from the Landfill tipping fee, which is the primary source of revenue. Operating expenditures remain very similar to the current fiscal year except for salaries, professional services, and publication. We are projecting salaries and benefits to increase by 8% over the current fiscal year due to merit increases and fringe benefits.

Jurisdictions of California, including Merced County, will be required to comply with Senate Bill 1383 (SB 1383) pursuant to General Provisions, Section 0.1.2.c. Jurisdictions, including Merced County, are required to offer organic waste collection and recycling services beginning January 1, 2022. The Regional Waste Management Authority has flow control over all waste/recycle materials, including organic waste materials, in Merced County.

REQUEST FOR INFORMATION This financial report is designed to provide a general overview of the Authority’s finances for all those with an interest. Questions concerning any of the information provided in the report or request for additional information should be addressed to Nav Bagri, Finance Director, Merced County Association of Governments, 369 W. 18th Street, Merced, CA 95340, or by email at [email protected].

DRAFT

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY STATEMENT OF NET POSITION JUNE 30, 2020

ASSETS Current assets: Cash and cash equivalents $ 34,374,561 Accounts receivable, net of allowance for doubtful accounts of $45,287 1,062,778 Due from other agencies 622,859 Prepaids 176,586 Supplies inventory 15,690

Total currents assets 36,252,474

Noncurrent assets: Cash and investments - restricted 3,322,867 Capital assets: Nondepreciable assets: Land reserved for landfill 1,772,410 Contruction in progress 1,906,089 Depreciable assets: Land improvements 9,684,983 Infrastructure 34,575,982 Buildings and improvements 4,123,888 Machinery and equipment 15,404,710 Less accumulated depletion and depreciation (35,609,750)

Total capital assets, net 31,858,312

Total noncurrent assets 35,181,179

Total assets 71,433,653 DEFERRED OUTFLOWS OF RESOURCESDRAFT Loss on refunding of debt 1,242,720

Total deferred outflows of resources 1,242,720

Total assets and deferred outflows of resources $ 72,676,373

The accompanying notes are an integral part of the financial statements.

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY STATEMENT OF NET POSITION (continued) JUNE 30, 2020

LIABILITIES Current liabilities: Accounts payable and accrued expenses $ 1,198,753 Interest payable 30,076 Bond payable, current portion 1,805,691 Unearned revenue 85,569

Total current liabilities 3,120,089

Long-term liabilities: Bond payable 11,900,000 Closure and postclosure care liability 5,485,530

Total long-term liabilities 17,385,530

Total liabilities 20,505,619

NET POSITION Net investment in capital assets 19,395,341 Restricted for closure costs 3,322,867 Unrestricted 29,452,546

Total net position 52,170,754

Total liabilities and net position $ 72,676,373

DRAFT

The accompanying notes are an integral part of the financial statements.

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE YEAR ENDED JUNE 30, 2020

OPERATING REVENUES Charges for services $ 17,110,933 Other 181,369

Total operating revenues 17,292,302

OPERATING EXPENSES Special departmental 890,635 Professional services 5,057,978 Repairs and equipment maintenance 1,015,001 Rents and leases 15,406 General and administrative 417,380 Utilities 158,185 Closure and postclosure care costs 605,601 Amortization and depreciation 2,869,335 Bad debt expense 21,500

Total operating expenses 11,051,021

Operating income (loss) 6,241,281

NONOPERATING REVENUES (EXPENSES) Interest income 766,633 Interest expense (586,658) Gain (loss) on disposal of fixed assets (33,223) Unrealized gain (loss) on investments 358,966

Total nonoperating revenues (expenses) 505,718 Change in net position DRAFT 6,746,999 Net position - beginning 44,474,114

Prior period adjustment 949,641

Net position - beginning (restated) 45,423,755

Net position - ending $ 52,170,754

The accompanying notes are an integral part of the financial statements.

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2020

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users $ 17,443,962 Payments to suppliers (8,551,134)

Net cash provided (used) by operating activities 8,892,828

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on long-term debt (1,762,309) Acquisition of capital assets (7,636,682) Proceeds from the sale of assets 82,439 Interest paid (412,996)

Net cash provided (used) by capital and related financing activities (9,729,548)

CASH FLOWS FROM INVESTING ACTIVITIES Cash received from interest 766,633 Unrealized gain (loss) on investments 358,966

Net cash provided (used) by investing activities 1,125,599

Net increase (decrease) in cash and cash equivalents 288,879

Cash and cash equivalents - beginning 37,408,549

Cash and cash equivalents - ending $ 37,697,428

Reconciliation of cash and cash equivalents to the Statement of Net Position: Cash and cash equivalents $ 34,374,561 Cash and investments - restrictedDRAFT 3,322,867 Total cash and cash equivalents $ 37,697,428

Supplemental Cash Flow Disclosures: Cash payments during the year for: Interest $ 590,527

The accompanying notes are an integral part of the financial statements.

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY STATEMENT OF CASH FLOWS (continued) FOR THE YEAR ENDED JUNE 30, 2020

Reconciliation of operating income (loss) to net cash provided (used) by operating activities:

Operating income (loss) $ 6,241,281

Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Amortization and depreciation 2,869,335 Bad debt expense 21,500 Closure and postclosure care costs 605,601 (Increase) decrease in: Accounts receivable, net of allowance 220,706 Due from other agencies (70,619) Prepaids (47,143) Supplies inventory 3,966 Increase (decrease) in: Accounts payable and accrued expenses (953,372) Unearned revenue 1,573

Net cash provided (used) by operating activities $ 8,892,828

DRAFT

The accompanying notes are an integral part of the financial statements.

349

MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity: The cities of Atwater, Dos Palos, Gustine, Livingston, Los Banos, Merced, and the County of Merced, have entered in a joint powers agreement to acquire, develop, maintain, and operate disposal sites located in Merced and Los Banos. The Merced County Regional Waste Management Authority (the Authority) both administers and operates the disposal sites subject to the terms and conditions provided in accordance with such agreements and the authority set forth in California Government Code Section 6508.

The Board of the Authority is composed of the same members as the Board of the Merced County Association of Governments. The Authority contracts with Merced County Association of Governments for administrative and accounting support.

Enterprise funds are used to account for operations that are financed and operated in a manner similar to a private business enterprise, where the intent of the governing body is that the costs and expenses of providing goods or services to its consumers are financed or recovered primarily through users charges; or where the governing body has decided that periodic determination of revenue earned, expenses incurred, and net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes.

Enterprise funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses, and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as nonoperating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.

When both restricted and unrestricted resources are available for use, it is the Authority’s policy to use restricted resources first, then unrestricted resources as they are needed.

Cash and Cash Equivalents: The Authority’s cash and cash equivalents are considered to be cash on hand and short- term investments with original maturities of three months or less from the date of acquisition. A portion of the Authority’s cash is pooled in the treasuryDRAFT of Merced County. The County pools these funds with those of other entities of the County and invests the cash. These pooled funds are carried at cost, which approximates market value. Interest earned is deposited quarterly in the participating funds. Any investment gains or losses are proportionately shared by all funds in the pool. The County is authorized to deposit cash and invest excess funds by California Government Code Sections 53601 et. seq., 53635 et. seq., and 53648 et. seq.

Accounts Receivable: Accounts receivable results from amounts due from charges for goods or services. The Authority established an allowance for doubtful accounts receivable which is in compliance with generally accepted accounting principles. The Authority estimates 96% of all outstanding accounts receivables are collectible and as of June 30, 2020, has recorded a $45,287 allowance for doubtful accounts. Bad debt expense for the year ended June 30, 2020 was $21,500.

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS (continued)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts Payable and Accrued Expenses: Certain costs are incurred by the Authority during the current period but are not paid until after the beginning of the next fiscal period. These costs are reported as accounts payable and accrued expenses in the financial statements.

Restricted Assets: Restricted assets represent monies or other resources, the use of which is restricted by legal or contractual requirements. Restricted cash and investments are considered cash equivalents for cash flow reporting purposes. The Closure Fund monies are set aside based on an estimate to cover closure costs to provide financial assurance once the landfill is closed. The Authority entered into an agreement with CALRECYCLE to establish a pledge of revenue to demonstrate financial assurance for post closure maintenance and the most recent corrective action cost estimate of the Highway 59 and Billy Wright Landfills.

Capital Assets: Capital assets are recorded at cost or estimated cost where cost is not available. The capitalization threshold for reporting capital assets is $2,500. Interest is capitalized on assets acquired with tax-exempt debt. The amount of interest capitalized is the excess of interest expense over interest earned on invested proceeds from the date of borrowing through project completion. Depletion of the landfill is computed using a ratio of total costs to total volume used. Depreciation and amortization of property, plant and equipment, including capital leases, is computed using the straight-line method applied over estimated useful lives of the assets as follows:

Estimated Useful Type of Assets Life in Years

Land improvements 10-40 Infrastructure 5-30 Building improvements 10-30 Machinery and equipment 5-20

Supplies Inventory: Supplies Inventory is valued at the lower of cost (determined by first in, first out) or market.

Net Position: Net position is reported in three categories as follows:

• Net investment in capital assets – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that is attributed to the acquisition of capital assets. • Restricted – This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments. DRAFT • Unrestricted – This amount consists of all resources that do not meet the definition of “net investment in capital assets” or “restricted net position.”

Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Fair Value of Financial Instruments: Financial instruments include cash and cash equivalents, accounts receivable, due from other agencies, prepaids, supplies inventory, accounts payable and accrued expenses, interest payable, and unearned revenue, none of which are held for trading purposes. The fair values of all financial instruments do not differ materially from the aggregate carrying values of the financial instruments recorded in the accompanying Statement of Net Position.

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Governmental Accounting Standards Update: During the year ending June 30, 2020, the Authority implemented the following standards on the financial statements:

GASB Statement No. 95 – Postponement of the Effective Dates of Certain Authoritative Guidance. The requirements of this statement are effective as of May 2020.

Released GASB Statements to be implemented in future financial statements are as follows:

GASB Statement No. 90 – Majority Equity Interests- an amendment of GASB Statements No. 14 and No 61. The requirements of this statement are effective for reporting periods beginning after December 15, 2018. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to reporting periods beginning after December 15, 2019.

GASB Statement No. 93 – Replacement of Interbank Offered Rates. The requirements of this statement are effective for reporting periods beginning afterDRAFT June 15, 2021. Subsequent to issuance, GASB Statement No. 95 postponed the certain requirements of this statement to reporting periods beginning after June 15, 2022.

GASB Statement No. 96 – Subscription-Based Information Technology Arrangements. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Subsequent Events: In compliance with accounting standards, management has evaluated events that have occurred after year-end to determine if these events are required to be disclosed in the financial statements. Management has determined that no events require disclosure in accordance with accounting standards. These subsequent events have been evaluated through January 19, 2021, which is the date the financial statements were available to be issued.

NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS

Cash in Banks: Cash and cash equivalents consist only of cash held in a financial banking institution. Cash balances in banks are insured up to $250,000, per financial institution, by the Federal Depository Insurance Corporation (FDIC). Custodial credit risk is that in the event of a bank failure, the Authority’s deposits will not be returned to it. However, the Authority has a collateralized agreement with Wells Fargo Bank that all government funds deposited are subject to Title 5, Division 2, Part 1, Chapter 4, Article 2 (commencing with Section 53630) of the Government Code of the State of California (the "Local Agency Deposit Security Law").

Cash, cash equivalents, and investments at June 30, 2020 consisted of the following:

Carrying Amount

Cash and cash equivalents $ 3,722,586 County of Merced Treasurer's Investment Pool 33,974,842

Total cash, cash equivalents, and investments $ 37,697,428

Cash, cash equivalents, and investments as of June 30, 2020 were classified in the accompanying financial statements as follows: Statement of Net Position:

Cash and cash equivalents $ 34,374,561 Cash and investments - restricted 3,322,867

Total cash, cash equivalents,DRAFT and investments $ 37,697,428

Cash in County Treasury: The Authority maintains cash in the Merced County Treasury as part of the common investment pool. These pooled funds are carried at cost, which approximates market value. Interest is paid quarterly into the participating funds. Any investment gains or losses are proportionately shared by all funds in the pool. The fair market value of this pool as of June 30, 2020 was provided by the Merced County Treasury.

The County of Merced is authorized to deposit cash and invest excess funds by the California Government Code Sections 53601 et. seq., 53635 et. seq., and 53648 et. seq. The County of Merced is restricted by California Government Code Section 53635, pursuant to Section 53601, to invest in time deposits, U.S. government securities, state registered warrants, notes or bonds, State Treasurer’s investment pool, bankers’ acceptances commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements. The investment policy for the Merced County Treasury prohibits reverse repurchase agreements and investments in foreign investments.

353

MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (continued)

Cash in County Treasury (continued): Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rate. As of June 30, 2020, the weighted average maturity of the investments contained in the County Treasury investment pool was approximately 432 days.

County of Merced Treasurer's Investment Pool consists of cash in the Merced County Treasury as part of the common investment pool. The fair market value of this pool, as provided by the pool sponsor, was $33,974,842 as of June 30, 2020.

Credit Risk: Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. At June 30, 2020, the Authority’s credit risks, expressed on a percentage basis, are as follows:

Moody's % of Investment type Credit Rating S & P's Rating Investments Amount

County of Merced Treasurer's Investment Pool Not Rated Not Rated 100% $ 33,974,842

Total 100% $ 33,974,842

Investments Valuation: The Authority categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Fair value measurements of the Authority’s investments are as follows at June 30, 2020: DRAFT • Investment in County of Merced Treasurer’s Investment Pool: valued at $33,974,842, the County of Merced Treasurer’s Investment Pool is accounted for on a cost basis during the year and adjusted to fair value at year-end. The fair market value of this pool as of June 30, 2020 was provided by the Merced County Treasury. The County of Merced Treasurer’s invests in numerous types of investments ranging all levels in the fair value hierarchy. Accordingly, it is not an investment type that can be categorized in any particular level in the fair value hierarchy.

354

MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 3 – CAPITAL ASSETS

At June 30, 2020, capital assets consisted of the following:

Balances Deletions/ Balances June 30, 2019 Additions Adjustments June 30, 2020 Capital assets, not being depreciated: Land reserved for landfill $ 1,772,410 $ - $ - $ 1,772,410 Contruction in progress 4,340,906 5,191,267 (7,626,084) 1,906,089

Total capital assets, not being depreciated 6,113,316 5,191,267 (7,626,084) 3,678,499

Capital assets, being depleted: Land improvements 8,027,566 1,657,417 - 9,684,983

Total capital assets, being depleted 8,027,566 1,657,417 - 9,684,983

Capital assets, being depreciated: Infrastructure 28,607,316 5,968,666 - 34,575,982 Buildings and improvements 4,123,888 - - 4,123,888 Machinery and equipment 14,274,734 2,422,351 (1,292,375) 15,404,710

Total capital assets, being depreciated: 47,005,938 8,391,017 (1,292,375) 54,104,580

Less accumulated depletion and depreciation (33,949,930) (2,869,335) 1,209,515 (35,609,750)

Total capital assets, being depleted and depreciated, net 13,056,008 5,521,682 (82,860) 28,179,813

Total capital assets $ 27,196,890 $ 12,370,366 $ (7,708,944) $ 31,858,312

Amortization and depreciation expense for the year ended June 30, 2020, was $2,869,335. DRAFT

NOTE 4 – LONG TERM DEBT

The following is a schedule of long term liabilities for the year ended June 30, 2020: Amounts June 30, Incurred Satisfied June 30, Due Within 2019 or Issued or Matured 2020 One Year

Closure and Postclosure $ 4,879,929 605,601$ -$ $ 5,485,530 -$ 2015 Refunding Bonds 15,468,000 - (1,762,309) 13,705,691 1,805,691

Total $ 20,347,929 605,601$ $ (1,762,309) $ 19,191,221 $ 1,805,691

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 4 – LONG TERM DEBT (continued)

During the 2007/2008 fiscal year the Authority issued $33,415,000 in Solid Waste Revenue Bonds, Series 2007 to assist in financing and the expansion of Highway 59 and Billy Wright Landfills. On March 31, 2015, the Authority issued $23,572,000, 2015 Solid Waste Revenue Refunding Bonds, Series A & B and used internal reserve sources to refund the outstanding amount of $25,460,000 of the Series 2007 Solid Waste Revenue Bonds. The difference between the cash flows required to service the 2007/2008 Series Bonds and the cash flows required to service the new 2015 Refunding Bonds and complete the refunding resulted in savings of $5,847,511. The net present value of the savings adjusted for additional cash paid of $4,425,384 was $584,821.

Terms of the agreement for the 2015 Solid Waste Revenue Refunding Bonds, Series A & B require the Authority to pay interest due payable on June 1 and December 1 of each year commencing June 1, 2015. The interest rate is 2.67%. The annual installment payments range from $1,510,000 beginning on June 1, 2015 to $2,505,000 on June 1, 2027. The Authority has the option to advance refund the bonds beginning June 1, 2017.

Debt service requirements to maturity are as follows:

Years Ending June 30, Principal Interest Total

2021 $ 1,805,691 $ 365,924 $ 2,171,615 2022 1,854,000 317,730 2,171,730 2023 1,905,000 268,228 2,173,228 2024 1,956,000 217,365 2,173,365 2025 2,010,000 165,140 2,175,140 2026-2027 4,175,000 167,943 4,342,943

Total $ 13,705,691 $ 1,502,330 $ 15,208,021

Interest expense for the year ended June 30, 2020 was $586,658.

NOTE 5 – LANDFILL CLOSURE AND POSTCLOSURE COSTS

The Authority accounts for closure and postclosure care costs in accordance with GASB Statement No. 18, Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Costs. State and Federal laws and regulations require the Authority toDRAFT place a final cover on its site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the Authority reports a portion of these closure and postclosure care costs as an operating expense and liability in each period based on landfill capacity used as of each Statement of Net Position date.

The amount of $5,485,530 reported as landfill closure and postclosure care liability, at June 30, 2020, represents the cumulative amount reported to date based on the landfill capacity used to date, calculated at 11.45% and 33.66% for Highway 59 and Billy Wright Landfills, respectively, at June 30, 2020. The Authority will recognize the remaining estimated cost of closure and postclosure care of $23,800,271 as the remaining estimated capacity is filled over the estimated 34-54 years remaining at June 30, 2020. This amount is based on current estimates of remaining closure and postclosure care costs at June 30, 2020. Actual costs may be higher when the landfill closes due to inflation, changes in technology, or changes in regulations.

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 5 – LANDFILL CLOSURE AND POSTCLOSURE COSTS (continued)

The Authority is required by State and Federal laws to finance closure and postclosure care costs. The Authority expects that future user fees and interest earnings over the remaining landfill life will fund the closure and postclosure liabilities.

Closure and postclosure care liability activity for the year ended June 30, 2020 was as follows:

Closure and postclosure care liability, beginning of year $ 4,879,929 Closure and postclosure expense realized 605,601

Closure and postclosure care liability, end of year $ 5,485,530

NOTE 6 – RISK MANAGEMENT

The Authority is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets; errors or omissions, injuries to employees; and natural disaster. The Authority provides coverage for these losses through commercial insurance policies.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Commitments and contingencies, undeterminable in amount, include normal recurring pending claims and litigation. Management expects any ongoing costs associated with the corrective action will be minimal and likely be part of normal operating expenses. In the opinion of management, based upon discussions with legal counsel, there is no pending litigation which is likely to have a material adverse effect on the financial position of the Authority.

Coronavirus Pandemic: Management has determined the events regarding the Novel Coronavirus require disclosure in accordance with accounting standards. On March 4, 2020, Governor Newsom issued an emergency proclamation declaring a State of Emergency in California due to the Novel Coronavirus (COVID-19). The COVID-19 outbreak is ongoing, and the ultimate geographic spread of the virus, the duration and severity of the outbreak and the economic and other actions that may be taken by the governmental authorities to contain the outbreak or to treat its impact are uncertain. The ultimate impact of COVID-19 on the operations and finances of the Authority is unknown.

DRAFT NOTE 8 – PRIOR PERIOD ADJUSTMENTS

For the fiscal year ended June 30, 2019, a prior period adjustment of $949,641 was recorded to include construction in progress costs that were incorrectly expensed in the prior year. The effect of the prior period adjustment is an increase to net position for the year ended June 30, 2019 of $949,641.

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To the Governing Board of the Merced County Regional Waste Management Authority Merced, California

We have audited, in accordance with the 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, the financial statements of the business-type activities of the Merced County Regional Waste Management Authority (the Authority), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the Authority’s financial statements, and have issued our report thereon dated January 19, 2021. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Authority’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those chargedDRAFT with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have 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.

7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711 ______

P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM

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Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California January 19, 2021

DRAFT

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2020

SECTION I – SUMMARY OF AUDITORS’ RESULTS

Financial Statements

Type of auditors’ report issued: Unmodified

Internal control over financial reporting: Material weaknesses identified? _____ Yes __X__ No

Significant deficiencies identified that are considered to be material weaknesses? _____ Yes __X__ No

Noncompliance material to financial statements noted? _____ Yes __X__ No

SECTION II – FINANCIAL STATEMENT FINDINGS

None reported.

DRAFT

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MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30, 2019

FINANCIAL STATEMENT FINDINGS

None reported.

DRAFT

361 ITEM 16d

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PH: 209.723.4481 FAX: 209.384.3109 7040 N. Highway 59 Merced, CA 95348

ITEM 16d

DATE: February 12, 2021

TO: Merced County Regional Waste Management Authority

FROM: Stacie Guzman, Executive Director

RE: Action: Proposed Agenda Item for Consideration – Illegal Dumping

SUMMARY

At the January Governing Board meeting, Director Daron McDaniel requested an item be placed on the February agenda to discuss illegal dumping. Per the Merced County Association of Governments (MCAG) agenda item request policy, such requests are to be placed on the next board meeting agenda “at which time the Governing Board will consider whether there is a majority consensus to have staff expend time on the issue and to have it considered at a future meeting.” This item provides the Board with the opportunity to discuss the topic of illegal dumping and to take action to direct staff on next steps, if desired.

REQUESTED ACTION

With an affirmative vote of the board, direct staff on the preferred next steps.

DISCUSSION

All seven jurisdictions bring their garbage, or municipal solid waste (MSW), to one of the two Authority landfill sites: Billy Wright landfill or Highway 59 landfill. Each jurisdiction is responsible for collection operations of their jurisdiction’s MSW, recycle and organic materials. These streams are then brought to the Authority for processing, transfer and disposal. The Authority sites are open six days a week and offer disposal options of various materials, shown on the attached RWA Disposal Rate sheet. The Authority offers free disposal to the residences of Merced County for: household hazardous waste materials, recycle materials, asphalt, clean concrete and up to five mattresses.

In 2019, the Governing Board approved extending the Authority’s hour of operations to curb illegal dumping. The Authority is now open six days a week, excluding holidays.

PAST ACTION TAKEN

March 16, 2017 – The Agenda Item Request Policy was adopted by the Governing Board;

December 19, 2019 – The MCRWMA Board approved extending Saturday service hours at the Authority landfill sites to full Saturdays for all fifty-two Saturdays of the year, beginning Saturday, December 21, 2019;

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December 19, 2019 – The MCRWMA Board authorized a budget amendment to fiscal year budget 2019/20 Authority budget to add three full time employees: two equipment operators and one scale house clerk in the amount of $338,424 related to extended Saturday service operations.

REQUESTED ACTION

With an affirmative vote of the board, direct staff on the preferred next steps.

ATTACHMENT

RWA Disposal Rates (July 1, 2016) MCAG Agenda Item Request Policy

364 365 366

MERCED COUNTY ASSOCIATION OF GOVERNMENTS, TRANSIT JOINT POWERS AUTHORITY FOR MERCED COUNTY, AND MERCED COUNTY REGIONAL WASTE MANAGEMENT AUTHORITY AGENDA ITEM REQUEST POLICY

A Merced County Association of Governments (“MCAG”)/Transit Joint Powers Authority for Merced County (“TJPA”)/Merced County Regional Waste Management Authority(“MCRWA”) Board Member may request that an item be added to the agenda of a future MCAG/TJPA/MCRWA meeting by raising the request during a public meeting of the foregoing Board(s) or by direct written communication to the Executive Director. The Executive Director will add the item to the next meeting’s agenda, at which time the Governing Board will consider whether there is a majority consensus to have staff expend time on the issue and to have it considered at a future meeting. If the item is approved for further consideration, staff would bring information forward on the item at a future Governing Board meeting, including staff recommendations and budget ramifications.

Adopted March 16, 2017

367 ITEM 17a

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PH: 209.723.4481 FAX: 209.384.3109 7040 N. Highway 59 Merced, CA 95348

ITEM 17a

DATE: February 12, 2021

TO: Merced County Regional Waste Management Authority

FROM: Eric Zetz, RWA Director

RE: Information: Merced County Regional Waste Management Authority monthly update

SUMMARY

Monthly update of the Merced County Regional Waste Management Authority activities for the month of January 2021.

REQUESTED ACTION

For information only.

BACKGROUND

None.

PAST ACTION TAKEN

Monthly updates were provided to the Technical Review Board and Merced County Regional Waste Management Authority Board at their meetings in January 2021.

UPDATES

The following is provided to the Technical Review Board and Merced County Regional Waste Management Authority Board, as informational items for the month of January 2021:

Assembly Bill (AB) 332 (ESTM):

AB 332 will be the treated wood waste bill. It is an Environmental Safety and Toxic Materials (ESTM) committee bill, and eight of the nine members signed onto it with one that had not reviewed it yet. This bill will have an urgency clause as well. The coalition will begin discussions with key stakeholders and policymakers, and regulators to work on a consensus bill.

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On January 27, 2021 the California State Assembly Committee on ESTM introduced AB 332 which aims to repeal Section 25150.75 of the Health and Safety Code, relating to hazardous waste, specifically treated wood waste management standards. AB 332 is a work in progress and is nearly guaranteed to change significantly through the Legislative process as the Chair, Committee, stakeholders, and Department of Toxic Substance Control (DTSC) work out a long-term solution to the treated wood waste (TWW) management issue.

The former law, as part of the hazardous waste control laws, required treated wood waste to be disposed of in either a class I hazardous waste landfill or in a composite-lined portion of a solid waste landfill unit that meets specified requirements. The former law required the Department of Toxic Substances Control, on or before January 1, 2007, in consultation with specified state agencies and after consideration of any known health hazards associated with treated wood waste, to adopt, and authorized the department to subsequently revise as necessary, regulations establishing management standards for treated wood waste as an alternative to the requirements specified in the hazardous waste control laws and implementing regulations. These provisions were repealed as of January 1, 2021.

AB 332 would require a regulation that was adopted before January 1, 2008, pursuant to the above specified provisions exempting a hazardous waste management activity from one or more of the requirements of the hazardous waste control laws to remain valid unless repealed. The bill would repeal this provision as of an unspecified date and would declare that it is to take effect immediately as an urgency statute. AB 332 requires a two-thirds vote. The members of the Committee of ESTM are made up of Assembly Members: Bill Quirk (Chair), Thurston “Smitty” Smith (Vice Chair), Dr. Joaquin Arambula, Rebecca Bauer-Kahan, Megan Dahle, Christina Garcia, Chris Holden, Devon Mathis, and Al Muratsuchi. Staff believes that AB 332 will take several months for the bill to work its way through the Legislature and hopefully will get to the Governor’s desk for approval.

The Department of Toxic Substance Control has posted an updated frequently asked questions (FAQ’s) on treated wood waste that can be found on its website:  https://dtsc.ca.gov/toxics-in-products/treated-wood-waste/

The FAQ’s include how to manage treated wood today and the status of treated wood waste’s variances. The Department of Toxic Substance Control expects to release the variance application questions and fee schedule by February 1, 2021. The Department of Toxic Substance Control also anticipates activating an online variance application portal by February 16, 2021 in order to begin issuing site variances on March 1, 2021. Staff will continue to monitor this situation.

Landfill Gas to Energy: PLEASE SAVE THE DATE: Virtual Landfill Gas to Energy Project Workshop Wednesday, February 10, 2021 3-4pm via Zoom (details forthcoming)

The Executive Director sent out a doodle poll to the MCRWMA Board to schedule the Landfill Gas to Energy workshops. Based on the responses received, it is clear that there may not be a date that works for everyone and so we plan to record the Zoom meetings and send the link to Board members who

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have missed the workshop. Therefore, staff is scheduling the first workshop for Wednesday, February 10th from 3-4pm via Zoom and will record the workshop presentation to ensure all Directors have the opportunity to listen when most convenient to them. For those Directors who cannot participate in real time, you can either follow up with the Executive Director or the MCRWMA Director with any questions you may have or be prepared to discuss your questions at the February board meeting the following week. Staff’s goal with this first workshop is to provide the Board, particularly new Board Directors, with the history and scope of the project. The second workshop will focus the latest updates from our project partners, at a date to be determined. An agenda and workshop participation details will be sent one week before the workshop meeting.

Voluntary Offset Project:

The Authority has been approached by an investor, Element Markets, who invests in carbon credits. Element Markets is researching all methane reduction projects, such as landfill methane gas reductions in order to secure carbon credits for investors. Staff has had two meetings with SCS Engineers, and one with Element Markets, on such a proposal for the Billy Wright landfill. The proposal consists of a turn- key project where Element Markets would procure and pay for a gas collection system and flare system at the Billy Wright landfill site that once permitted and operating, would remove greenhouse gases like methane from the environment up to the amount of reductions required by the Local Enforcement Agency for in-place waste; the difference of the reduction equals the carbon credit for the investors. Staff plans to bring the proposal to the Board once it an evaluation of the project has been completed.

Title V:

SCS Engineers, on behalf of MCRWMA has submitted to the San Joaquin Valley Air Pollution Control District (SJVAPCD) and the U.S. Environmental Protection Agency (EPA) the New Source Performance Standards (NSPS) Semi-Annual Report, also known as a Title V report; for the Highway 59 Landfill. This Semi-Annual Report complies with the sections within the NSPS (40 Code of Federal Regulations [CFR] Part 60, Subpart WWW), including 40 CFR 60.757(f), which describe the items to be submitted in a report for landfills seeking to comply with NSPS using an active collection system.

The landfill gas (LFG) collection and control system (GCCS) at the Landfill was installed and commenced operation in December 2010, as reported in the Initial NSPS Semi-Annual Report, dated June 2011. This semi-annual report complies with the sections within the NSPS (40 CFR Part 60, Subpart WWW), including 40 CFR 60.757(f), which describe the items to be submitted in a report for landfills seeking to comply with NSPS/EG using an active collection system.

In compliance with 40 CFR 63, Subpart AAAA (NESHAP for Landfills), the Title V report is submitted semi-annually. The recent report covers the six-month reporting period of July 1 through December 31, 2020, and includes the information specified by 40 CFR 60.757(f), as detailed in Section 3.0 of this report.

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Community Collection Events:

Below is the collection event calendar for 2021 categorized by date of the event, type of event, location and the agency host who will be responsible for organizing the collection event:

DATE: EVENT: LOCATION: HOST: January 16, 2021 Household Hazardous Highway 59 Landfill MCRWMA January 23, 2021 Community Cleanup El Nido Merced County January 30, 2021 Community Cleanup Stevinson Merced County February 27, 2021 Community Cleanup Delhi Merced County March 6, 2021 Community Cleanup Santa Nella Merced County Los Banos Los Banos Household Hazardous Los Banos MCRWMA March 13, 2021 Community Cleanup Snelling Merced County March 20, 2021 Community Cleanup Winton Merced County Atwater Atwater March 27, 2021 Community Cleanup Hilmar Merced County April 3, 2021 Community Cleanup South Dos Palos Merced County April 10, 2021 Community Cleanup Los Banos Los Banos Le Grand Merced County April 17, 2021 Community Cleanup Livingston Livingston Household Hazardous Highway 59 Landfill MCRWMA April 24, 2021 Community Cleanup Franklin / Beachwood Merced County July 17, 2021 Household Hazardous Highway 59 Landfill MCRWMA September 18, 2021 Community Cleanup Los Banos Los Banos Household Hazardous Los Banos MCRWMA October 2, 2021 Community Cleanup Dos Palos Y Merced County Dos Palos Dos Palos October 16, 2021 Community Cleanup Atwater Atwater Household Hazardous Highway 59 Landfill MCRWMA October 23, 2021 Community Cleanup McSwain Merced County November 6, 2021 Community Cleanup Planada Merced County

Anaergia:

Staff was approached by a representative of Anaergia, a renewable energy company, on how they could assist the Authority in complying with SB 1383. Anaergia is a resource recovery company whose equipment can recover resources from most waste streams, transforming waste into renewable energy, clean water, high-quality fertilizer, and recyclables. Anaergia provides complete, integrated solutions for municipal solid waste management, resource recovery in wastewater sector, and large‐scale farming and food production waste management. Representatives from Anaergia met with Authority staff who put them in touch with HF&H and the City of Merced staff. Anaergia proposes an equipment solution called: OREX-500 which can take in municipal solid waste together with food waste materials and produce three streams: recyclables, landfilled materials, and wet fraction materials

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which are the food waste materials squeezed to form the wet fraction. Wet fraction materials are then sent to anerobic digestors at waste-water treatment plants as feed stock. Staff has asked HF&H to research the proposal amongst the jurisdictions need to meet SB 1383 compliance.

WASTECON:

The 2020 WASTECON was held virtually after being postponed twice in 2020 due to COVID restrictions. The virtual training offered key insights on industry measure to combat COVID-19 and operational challenges during a loss revenue year due to COVID. New landfill equipment was highlighted and continuing educational units were earned.

Please contact Eric Zetz by email: [email protected] or by phone: (209) 723.4481 x221, should you have any questions.

FISCAL IMPACT

None, for information only.

REQUESTED ACTION

For information only.

ATTACHMENTS

None.

373 ITEM 17b

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PH: 209.723.4481 FAX: 209.384.3109 7040 N. Highway 59 Merced, CA 95348

ITEM 17b

DATE: February 12, 2021

TO: Merced County Regional Waste Management Authority

FROM: Eric Zetz, Director

RE: Information: Landfill Gas to Energy Project Workshop No. 2

SUMMARY

The purpose of this workshop series is to provide dedicated time for the Governing Board to review the history and status of, and inform future decisions regarding, the Merced County Regional Waste Management Authority (RWA) Landfill Gas to Energy (LGTE) project.

REQUESTED ACTION

For information only.

BACKGROUND

RWA is exploring opportunities for utilizing landfill gas from its Highway 59 Landfill, located at 7040 N. Highway 59 Merced, CA 95348, for a potential cogeneration of heat and electricity project at the University of California (UC) Merced campus. To date, RWA has completed a concept design, prepared a California Environmental Quality Act (CEQA) document for the project, and has signed a Memorandum of Understanding with UC Merced outlining the basic agreements surrounding this project. The CEQA document is currently pending final review and approval by the RWA Board. A power purchase agreement is pending final review and approval by RWA Board and UC Merced. The RWA had also completed a financial pro forma based on the concept design.

Phase 1 of the LGTE project is nearing completion by the Construction Manager at Risk (CMAR), MasTec Power. Phase 1 encompasses value engineering during the full design of the project, review of the final plans and specifications, development of a construction budget and contract with MCRWMA, the bidding of major equipment and materials for the project, the bidding of major subcontractors, the review of materials and equipment submittals, construction management, municipality coordination, potential construction, and commissioning of the project. Phase 2 of the LGTE project is for construction of the project, and staff will return to the Governing Board for a decision at a future Governing Board meeting on whether to proceed with Phase 2.

Currently, as part of disposal operations, a landfill gas collection and control system collects and disposes of landfill gas to prevent the release of odor-causing and explosive gases and hazardous air pollutants produced by buried waste. The landfill gas collection and control system currently consists of 1) the collection system, including over 70 active vertical extraction wells, several horizontal collector wells, collection and transport piping, and; 2) the control system, including an enclosed flare

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station to combust the landfill gas and associated hazardous air pollutants pursuant to applicable regulatory requirements. The landfill is permitted to expand the collection system, as needed, to effectively capture landfill gas generated by continued waste placement. The flare is permitted for a flow of 2,100 standard cubic feet per minute of landfill gas. The current flow of landfill gas is approximately 900 to 1,100 standard cubic feet per minute of landfill gas leaving adequate additional capacity for future landfilling and associated increases in landfill flow.

The Landfill Gas to Energy project area includes both the Highway 59 Landfill and the UC Merced Central Plant, as well as the pipeline route between the two locations.

The pipeline route extends south from the landfill and heads east along Bellevue Road, between the two termini, as shown on the map below:

The LFGTE project objectives are to: 1. Allow for the beneficial reuse of existing and future landfill gas collected by the RWA at the Highway 59 Landfill on the UC Merced campus in a manner that furthers the University’s long- term sustainability goals; 2. Provide the most feasible and cost-effective method of transporting landfill gas from RWA to UC Merced; 3. Assist UC Merced in meeting its goals to reduce its dependence on fossil fuels and become more sustainable and energy independent; 4. Reduce long-term operational costs associated with RWA’s current landfill gas collection and disposal system generated at the Highway 59 Landfill; 5. Reduce the dependence on less efficient boilers at the UC Merced campus with a more efficient cogeneration facility to produce both electricity and heat onsite; and, 6. Provide short and long-term employment for local Merced County residences.

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Summary of Related Activities:

2016 1. 06/30/16: The Governing Board is presented with a LGTE project study session; 2. 10/20/16: The Governing Board directs staff to begin developing a Power Purchase Agreement (PPA) with UC Merced for the LGTE project. 2017 3. 06/15/17: The Governing Board approves $300,000 budget for engineering design work for the LGTE project at Highway 59 landfill site to the UC Merced campus. 2018 4. 03/22/18: The Governing Board authorizes Executive Director to execute a Memorandum of Understanding (MOU) with UC Merced for the LGTE project, at a rate of $0.14/kWh, 95% uptime/10% heat loss, RWA to provide up to 5.75 MMBTU/hour of waste heat; 5. 04/19/18: The Governing Board authorizes $40,000 contract with Ascent Environmental for environmental services for the LGTE project; 6. 05/17/18: The Governing Board approves RWA budget for Fiscal Year 2018/19 that adds $300,000 to the LGTE Capital Improvement Project (CIP) budget. 2019 7. 03/21/19: The RWA executes agreement not to exceed $100,000 with Ascent Environmental Inc., to prepare California Environmental Quality Act (CEQA) compliance documents for LGTE project; 8. 06/14/19: Ascent Environmental releases the draft Initial Study, proposed Mitigated Negative Declaration (Draft IS/MND) to the public for a 30-day review and comment period, as required by CEQA; 9. 09/19/19: The Governing Board authorizes contract for financial services with KNN Public Finance, LLC, for the LGTE project in the amount not to exceed $80,000 for one year and on call, as needed, for an additional year, not to exceed an additional $15,000; 10. 09/19/19: Public hearing on Final Initial Study/Mitigated Negative Declaration held at City of Gustine 11. 12/18/19: The RWA released the CMAR RFP for the LGTE project. 2020 12. 02/03/20: The selection Committee made up of Merced County jurisdictions evaluated CMAR proposals for the LGTE project; 13. 03/12/20: Executive Director executes contract with MasTec Power, Inc for Phase 1 (value engineering) of the LGTE project in an amount not to exceed $10,000; 14. 11/23/20: MasTec Power, Inc. the LGTE CMAR, submits Phase 1 cost proposal completing the value engineering work required for Phase 1 2021 15. 01/21/21: RWA provides the Governing Board an update to the LGTE project; 16. 02/10/21: The Governing Board is presented with a LGTE project workshop #1; 17. 02/18/21: The Governing Board is presented with a LGTE project workshop #2; 18. 03/18/21: Tentatively scheduled, the Governing Board will be presented with a LGTE project workshop #3.

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Project Expenditures For all activities to date related to the conceptual development of the LGTE project (contracts, staff time, etc.) the Governing Board has previously authorized $600K for the LGTE project, for the following expenses are attributed to the LGTE project:

Vendor Name: Description: Amount: Ascent Environmental Inc. CEQA $111,838 Day, Carter & Murphy LLP Consultation $12,150 Foothill Associates Consultation $25,929 HELIX Environmental Planning CEQA $20,758 NewGen Strategies & Solutions Consultation $7,080 PG&E Rule 21 deposits $22,400 Remy, Moose, Manley, LLP Consultation $4,624 Tetra Tech / BAS Plans, specs & estimates; MOU $348,511

TOTAL: $553,293

PAST ACTIONS TAKEN

10/20/16: The Governing Board directs staff to begin developing a Power Purchase Agreement (PPA) with UC Merced for the LGTE project;

6/15/17: The Governing Board approves $300,000 budget for engineering design work for the LGTE project at Highway 59 landfill site to the UC Merced campus.

3/22/18: The Governing Board authorizes Executive Director to execute a Memorandum of Understanding (MOU) with UC Merced for the LGTE project, at a rate of $0.14/kWh, 95% uptime/10% heat loss, RWA to provide up to 5.75 MMBTU/hour of waste heat;

4/19/18: The Governing Board authorizes $40,000 contract with Ascent Environmental for environmental services for the LGTE project;

5/17/18: The Governing Board approves RWA budget for Fiscal Year 2018/19 that adds $300,000 to the LGTE Capital Improvement Project (CIP) budget;

3/21/19: The Governing Board authorizes issuance of RFP/RFQ for Financial Advisory Services for the LGTE project in an amount of $100,000;

3/21/19: The RWA executes agreement not to exceed $100,000 with Ascent Environmental Inc., to prepare California Environmental Quality Act (CEQA) compliance documents for LFGTE project;

7/18/19: The Governing Board holds a Special Meeting on the LGTE project at the City of Atwater Council Chambers where a project update and discussion of next steps were held.

9/19/19: Governing Board authorizes contract for financial services for the LGTE project in the amount not to exceed $80,000 for one year and on call, as needed, for an additional year not to exceed $15,000;

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NEXT STEPS

Staff has now initiated a series of informational workshops for the Governing Board for the purpose of educating Directors about the project in order to assist them in determining whether to proceed to Phase 2. Staff anticipates scheduling a total of three workshops to ensure the Directors have adequate time to ask questions and discuss the project.

Unless directed otherwise by the Governing Board, staff plans to hold the final of the three workshops at the March 18, 2021 Governing Board meeting. The previous two workshops were held as per the schedule below.

Day: Date: Time: Wednesday February 10, 2021 3:00pm

Thursday February 18, 2021 4:00pm

Wednesday March 18, 2021 4:00pm

If you have any questions regarding this staff report, please contact Eric Zetz at (209) 723.4481 x221, or at [email protected].

FISCAL IMPACT

None.

REQUESTED ACTION

For information only.

ATTACHMENTS

None.

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