Cities receiving millions in special transportation tax dollars can’t misspend them without consequences. s
That was the message sent out Monday morning by some of Orange County’s highest ranking transportation officials amid discussions about weakening punishments for cities that misspend voter approved transit taxes, reaffirming that any city that fails to properly administer the funds will lose funding for five years.
The money in question comes from Measure M2, a half cent sales tax approved by voters in 2006 exclusively to fund new transportation projects throughout the county over the next 30 years.
When voters approved the tax, which was an extension of a similar program that previously ran for 20 years and funded over $4 billion of transit improvements, there were strict rules over how the money had to be spent – including a five year funding lockout from any city that misused it.
“When new transportation dollars are approved, they should go for transportation and transportation purposes alone. No bait-and-switch. No using transportation dollars for other purposes,” the agency’s leaders wrote in a letter to the voters on the ballot. “The original Measure M went solely for transportation purposes. The Renewed Measure M must be just as airtight.”
Both Buena Park and Huntington Beach recently got caught up in that five year penalty when they were found to have misspent the money, according to the agency’s records.
According to the agency’s disclosures, Buena Park did not have enough documentation for over $387,000 that was spent, while an accounting error in Huntington Beach led to $29,000 being misspent on payroll.
For both cities, board members agreed to stick the money they would’ve received in escrow so they can access it again in five years when their penalty is up.
But County Supervisor Janet Nguyen, who also sits on the agency’s board of directors, asked for staff to look at making a new process that would let the board decide the penalty depending on the infraction.
“This is a mistake that is $29,000, way way less than 1% of the funds,” Nguyen said at the board’s May 12 meeting. “A five year punishment for this immaterial mistake without any intervention from this board is not fulfilling our commitment to the taxpayers.”
Huntington Beach is the largest city in Nguyen’s district, and she campaigned repeatedly with the city council majority and appointed one of them as her representative on county committees.
But members of the agency’s executive board, a smaller section of the board, overwhelmingly rejected that idea at their executive meeting earlier today.
“A wise man once said to me if it ain’t broke don’t fix it. I feel like we’re fixing something that’s fundamentally not broken,” said Michael Hennessy, who chairs the agency’s finance committee. “I am really loath to mess with that…politics will rule the day.”
County Supervisor Doug Chaffee was the sole voice calling for a possible change, saying that he wants more flexibility.
“There’s some meaningful dialogue that goes on when you talk about all the facts that’re there,” Chaffee said.
Fellow supervisor Don Wagner disagreed with him, saying a shift would be “breaking faith,” and that they should reconsider even letting them keep the funds in escrow.
“Five years no money means five years no money,” Wagner said. “It doesn’t mean you get five years worth of money in year six.”
The idea is still likely to come back for a full vote of the board, which is scheduled to meet on August 25.
Transportation agency officials recently made it easier for members of the public to view debates like this on video – a departure from previous practice to not videotape proceedings.
Read: OC’s Transportation Agency Begins Video Streaming Public Meetings
That changed after a series of articles from Voice of OC – even though subcommittee meetings like today’s remain only available on audio.
It looks like taxpayers will get a chance to actually see the debate later this month with Nguyen pointing out in a text that she wanted to bring the debate to the full board.
“I am looking forward to having this come before the Board for a full vote.”
Noah Biesiada is a Voice of OC reporter. Contact him at nbiesiada@voiceofoc.org.