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REVIEW FISCAL YEAR 2023-24 FIRST, 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 First, Second, and Third quarter financial reports for Fiscal Year (FY) 2023-24.
The FY 2023-24 Amended Budget, as shown on (Attachments A, B, and C), includes encumbrance rollovers from FY 2022-23 and Council approved budget amendments; an increase of $1.0 million approved after adoption of the annual budget. Measure A funded Police Department and Office of Violence Prevention (OVP) expenditures in the Amended Budget totaled approximately $39.0 million.
Total revenues included in the FY 2023-24 Amended Budget are approximately $46.3 million. Measure A transaction and use tax revenues received as of March 31, 2024, totaled $27.1 million reflecting seven (7) monthly payments for sales transactions occurring between July 2023 and January 2024. Also attached is the California Department of Tax and Fee Administration Sales Tax Revenues Report that indicates gross receipts of $11,704,493, $11,928,580, and $10,937,323 for the quarters ended September 30, 2023, December 31, 2023, and March 31, 2024, respectively (Attachment D), for a total of $34,570,396. The variance is due to the fact that remittances take some time to process on the state’s side and will not post to the City’s books until fourth quarter.
Expenditures through the third quarter totaled approximately $27.5 million, or 70% of the Amended Budget. The Police Department expended approximately $26.4 million, and the OVP spent approximately $1.0 million through the third quarter of the fiscal year. Combined salary and benefit costs for Police sworn and non-sworn positions were at 70% of the budget, including the budgeted vacancy savings.
At the third quarter, 75% is the target budget utilization. Most Police Department expenditure categories were under 75% of the budget at third quarter. Budget utilization for fuel is 90%, due to variations in fuel prices. Other supplies are utilizing 76% of the budget. Inventory is kept, and supplies are ordered as needed throughout the year. Measure A-funded training has utilized 55% of the amended budget. Training costs are cyclical and primarily consist of Police Academy costs based on the number of trainees and timing of classes.
OVP expended $1,045,649 through the end of the third quarter of FY 2023-24, which was 78% of the OVP Measure A-funded budget. OVP salary and benefit expenses were 79% of the budget. In addition, utilization of fuel and other supplies are currently under budget.
The Marshall Plan expenses through the end of the third quarter have utilized 101% of the FY 2023-2024 Measure A tax revenues along the same period, which is 36% over the Measure B advisement.
This quarterly report includes $70,807 in annual audit and tax collection expenses related to Measure A revenues. General Fund Services and Reserves display a shortfall of $410,881, because expenditures exceeded revenues at the end of the third quarter due to the fact that remittances take some time to process on the state’s side and will not post to the City’s books until the fourth quarter. The General Fund Services and Reserve dollars are required to fund vital City services and maintain service levels through the next economic downturn. The contribution Measure A makes to reserves would assist in continuing Police and OVP services in the next economic downturn.
Attachment A - Measure A and B FY 2023-24 1st Quarter Report
Attachment B - Measure A and B FY 2023-24 2nd Quarter Report
Attachment C - Measure A and B FY 2023-24 3rd Quarter Report
Attachment D - Measure A CFDTA Quarterly Revenue Report