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REVIEW FISCAL YEAR 2025-26 FIRST AND SECOND QUARTER MEASURES A AND B REVENUES AND EXPENDITURES
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RECOMMENDATION
Information item only. No action required.
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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 are the First and Second quarter financial reports for Fiscal Year (FY) 2025-26.
The FY 2025-26 Amended Budget, as shown on Attachment A, includes encumbrance rollovers from FY 2024-25 and Council-approved budget amendments. Measure A funded Police Department and Office of Violence Prevention (OVP) expenditures in the Amended Budget totaled approximately $38.2 million.
Budgeted revenues are $45.8 million. Measure A transaction and use tax revenues received as of December 31, 2025, totaled $15,658,867, reflecting six (6) monthly payments for sales transactions occurring between July 2025 and December 2025. Also attached is the California Department of Tax and Fee Administration Sales Tax Revenues Report that indicates gross receipts of $11,659,605 and $12,725,677 for the quarters ended September 30, 2025, and December 31, 2025, respectively (Attachment C), for a total of $24,385,282. The variance is due to the lag time in receiving the remittances from the State. Full gross amounts for the year will post at the close of the fiscal year.
Expenditures through the second quarter totaled $19.5 million, or 51% of the Amended Budget. The Police Department expended approximately $18.5 million, and the Office of Violence Prevention expended $0.9 million through the second quarter of the fiscal year. Quarterly expenditures include $66,110 in annual tax collection and audit recovery expenses payable to CDTFA related to Measure A revenues.
At the second quarter, 50% is the target budget utilization. Combined salary and benefit costs for Police sworn and non-sworn positions were at 44% of the budget, including the budgeted vacancy savings. Most Police Department expenditure categories were under 50% of the budget in the third quarter, the Police Department’s expenses tend to be cyclical with some major expenses occurring towards the end of the fiscal year. The Recruitment, Retention, and Wellness line is trending higher due to costs associated with Measure A side-letter. Radios and Technology upgrades are expenses tied to one-time purchases.
Office of Violence Prevention expenditures through the third quarter totaled $0.9 million, which represents 46% of its Measure A-funded budget. Salary and benefit expenditures are 48% of the budget.
Measure A expenditures exceed revenues in the second quarter of fiscal year 2025-26, resulting in a $3.8 million cash flow gap. Any shortfall will be addressed using General Fund fund balance. Consistent with the Adopted Budget, revenues are projected to meet expenses by year-end.
Attachment A - Q2 Report
Attachment B - Measure A CDTFA Quarterly Taxes FY25-26