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REVIEW FISCAL YEAR 2023-24 THIRD QUARTER STRONG COMMUNITIES (MEASURE M) REVENUES AND EXPENDITURES
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RECOMMENDATION
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Summary
City ordinance (2016-06-07-1212) established a citizen advisory committee to review the expenditure of Measure M (Strong Communities) revenues to confirm they are made in accordance with the Measure as approved by the voters.
Background
On August 21, 2017, the City Council approved (Resolution 2017-08-21-0801) an expenditure plan with revenue and expenditure projections for the 16-year lifespan of the measure. Restoration of library and recreation services is a key element of the expenditure plan that includes increasing library and community center hours evenings and weekends.
As part of the City’s Fiscal Year (FY) 2023-24 budget development process, the City Council approved the Strong Communities budget on June 20, 2023. Total budgeted revenues are $15,039,465 from sales tax activity and investment income. The FY 2023-24 adopted expenditure budget of $25,754,476 was increased by $1,211,915 for encumbrances rolled from the prior year, $162,857 for increase in labor contracts, $87,000 for aquatics operations and $12,123,911 in capital appropriations for total expenditure authority of $39,253,162 as of March 31, 2024.
Present Situation
Attached for review by the Strong Communities Advisory Committee is the Third Quarter (Attachment A) financial report for FY 2023-24.
As of March 31, 2024, total revenues received for sales tax transactions were $8,999,907. Also, attached is the California Department of Tax and Fee Administration (CDTFA) sales tax revenue report for the quarter ended March 31, 2024 (Attachment B). The CDTFA data shows Strong Communities gross revenues of $3,642,987 for the quarter covering January, February, and March 2024.
Expenditures through the third quarter of the fiscal year were $5,598,744 for operating expenses, 44% of the annual operating budget. Expenses for Library programs were 43% of budget and Recreation Programs were at 46% of budget. One-time purchases, which include funding for the Bookmobile, Self-Checkout Machines, and the Weston Ranch branch refresh had not occurred by the end of the third quarter. Seasonal part- time staff and purchases for Aquatics and Library Materials have not yet occurred as of the third quarter. Salary savings resulting from the delay in opening the Northeast Library and Community Center will continue through year-end, while other positions will be filled prior to year-end.
Total salaries and benefits expenditures were $3,213,414 at the end of the third quarter with approximately 30% for Library programs and 70% for Recreation programs. Staffing expenses reflect the filling of approved full-time positions and part-time positions required to implement the restoration of hours of service which began in July 2018. Other major expense categories and expenses through the third quarter of FY 2023-24 were:
• Library Materials $ 432,248
• Utilities $ 457,120
• Facility Maintenance $441,255
Capital Projects, which are budgeted at $26,664,911 report $0 expended through the third quarter of the fiscal year. Many of the capital projects have multiple funding sources. Project expenses occur throughout the year and are later allocated to the correct funding source. The table below shows all project expenditures as of March 31, 2024, of $22,033,359, as well as total funding from Strong Communities tax dollars ($39,414,500) and other funding sources ($40,875,000).
As of March 31, 2024 (FY 2023-24 Third Quarter)
Attachment A - Strong Communities FY 2023-24 Budget Update - Third Quarter
Attachment B - Measure M Revenues CDTFA Quarterly Distribution Report