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REVIEW FISCAL YEAR 2021-22 SECOND AND THIRD QUARTER MEASURES A AND B REVENUES AND EXPENDITURES
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RECOMMENDATION
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Summary
City Ordinance 2013-07-09-1601, Section 19-Citizen Oversight stipulates the Measure A Citizens’ Advisory Committee: “Shall meet at least annually to review the expenditure of revenues generated by the tax imposed by this Ordinance and make recommendations to the City Council regarding those expenditures.”
Section 7 of the Committee’s bylaws (Informational Materials) also states: “At least quarterly, financial reports including proposed Budgets and Actuals with detailed supporting schedules will be sent to each Committee member. The reports will show revenue generated by Measure A, detailed line-item expenditures as presented in the annual budget relative to Measure B (public safety), and all other uses of remaining Measure A funds and State Board of Equalization reports.”
Attached for review by the Measure A Citizens’ Advisory Committee is the second and third quarter financial reports for Fiscal Year (FY) 2021-22.
The FY 2021-22 Amended Budget, as shown in (Attachment A and B), includes encumbrance rollovers from FY 2020-21 and administrative budget amendments. Measure A funded Police Department and Office of Violence Prevention (OVP) expenditures in the Amended Budget totaled approximately $31.7 million, an increase of $278,220 from the adopted budget.
Total revenues included in the FY 2021-22 Amended Budget are approximately $36.1 million. Measure A transaction and use tax revenues received as of March 31, 2022 totaled $28,945,396 reflecting seven monthly payments for sales transactions occurring between July 2021 and January 2022. Also attached is the California Department of Tax and Fee Administration Sales Tax Revenues Report that indicates gross receipts of $12,591,552.98 for the quarter ended December 31, 2021 and $11,186,786 for the quarter ended March 31, 2022 (Attachment C).
Second quarter expenditures totaled $13.1 million, or 41% of the Amended Budget. At the end of the third quarter, total expenses were 62% of the budget where the Police Department expended $19.0 million and the OVP spent $566,541 for a total of $19.6 million in Marshall Plan expenses. Combined salary and benefit costs for Police sworn and non-sworn positions were at 42% of the annual budget, including the budgeted vacancy savings. The Police Department continues its efforts to fill the positions funded by Measure A. As of March 31, 2022, the number of Measure A funded sworn officer vacancies was 25 of the 120 authorized positions.
At the end of the third quarter, the Police Department expenditures were at 63% of the budget. Other supplies (vests, batons, flashlights, ammunition, etc.) are under budget due to expenditure timing. Inventory is kept and ordered as needed throughout the year.
OVP expended $566,541 through the end of the third quarter of FY 2021-22, which was 41% of the OVP Measure A funded budget. OVP salary and benefit expenses were 49% of the budget with two vacancies by the end of the third quarter. Staffing turnover and other available funding sources resulted in underspending the budget in other categories.
The Police Department and OVP expenses are expected to increase in several categories in the remainder of the year, with a current year-end projection of $27.0 million, as reflected on page C-7 of the FY 2022-23 Adopted Budget. If Marshall Plan expenses come in as projected, they will utilize 57% of the estimated FY 2020-21 Measure A tax revenues.
Third quarter financial reports include $297,000 Annual Budget for audit and tax collection expenses related to Measure A revenues in FY 2021-22, with $187,605 expended through the third quarter. General Fund Services and Reserves shows $9.4 million at the end of the third quarter.
The funds used for the City’s mission critical projects related to Measure A revenues have been exhausted. There was no General Fund appropriation related to mission critical projects during FY 2021-22. One of the nineteen Mission Critical Projects that are still active include the Police Communications System Upgrade, and the IT - Enterprise Resource Planning System.
Attachment A - Measure A and B FY 2021-22 Second Quarter Report
Attachment B - Measure A and B FY 2021-22 Third Quarter Report
Attachment C - Measure A CDTFA Quarterly Revenue Report