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PRESENTATION OF FISCAL YEAR 2019-20 FOURTH QUARTER MEASURE W REVENUES AND EXPENDITURES
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RECOMMENDATION
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Background
On August 3, 2004, the Stockton City Council approved Resolution 04-0595, which authorized a special transaction and use tax for public safety services be put before voters. In November of that year, voters approved Measure W, Stockton Safe Neighborhood Gang and Drug Prevention Police/Fire Response Initiative, and the City established an ordinance and guidelines. The guidelines for the initiative stipulated an independent citizen oversight committee be created that would meet at least annually to review revenues and expenditures, and verify spending complied with the ordinance. The City Council later adopted Council Policy 3.04.060, which directs the City staff to submit quarterly financial reports for the Committee to review.
Present Situation
In compliance with Council Policy 3.04.060, attached for review by the Measure W Independent Citizen’s Oversight Committee, is a financial report for the 12 months ended June 30, 2020. The FY 2019-20 expenditure appropriation in the Adopted Budget of $10,892,881 was increased by $311,454 for encumbrances rolled from the prior year for items ordered that had not been received before the close of that year. Total approved expenditures for FY 2019-20 are $11,204,335.
During the year, tax revenue is recorded when it is physically received from the California Department of Tax and Fee Administration and typically follows the month earned by 60 to 90 days, whereas most expenses are incurred very evenly throughout the year and are recorded when paid. Revenue received as of June 30, 2020, of
$11.5 million was higher than the annual expectation by $671,000 or six percent.
Measure W expenditures totaled $10.7 million, which were lower than projections by $492,000 or four percent. The Police Department expended about 95% of budgeted expenses and the Fire Department spent about 96% of their budget. Salary and benefit budget appropriations are sufficient to cover the cost of 25 sworn staff in the Fire Department and 24 sworn staff in the Police Department. Both departments expended 99% of the salary and benefit budget.
The Fire Department spent less on equipment as some planned projects were not completed due to the COVID-19 pandemic. One-time funds approved in FY 2019-20 rolled to the following fiscal year to complete the procurement/installation of washer-extractors; and to complete the concrete floor maintenance at various stations. Police Department supplies and equipment expenditures are lower than anticipated for the 4th quarter due to supply chain delays caused by the pandemic.
The higher revenue and lower-than-anticipated expenditures resulted in positive net annual activity of $826,000. Ending fund balance of $5.5 million is 57% of projected revenues. A portion of these reserves will be needed to maintain funding for salary and benefits during economic downturns.
Attachment A - FY 2019-20 Measure W Budget Update for the twelve Months Ended June 30, 2020