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REVIEW FISCAL YEAR 2025-26 THIRD 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 is the Third quarter financial report 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 March 31, 2026, totaled $27.8 million, reflecting nine (9) monthly payments for sales transactions occurring between July 2025 and March 2026. Also attached is the California Department of Tax and Fee Administration Sales Tax Revenues Report that indicates gross receipts of $11,659,605, $12,725,677, and $11,760,652 for the quarters ended September 30, 2025, December 31, 2025, and March 31, 2026 respectively (Attachment C), for a total of $36,145,934. 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 third quarter totaled $30.7 million, or 80% of the Amended Budget. The Police Department expended approximately $29.4 million, and the Office of Violence Prevention expended $1.3 million through the third quarter of the fiscal year.
At the end of the third quarter, combined salary and benefit costs for Police sworn and non-sworn positions accounted for roughly 67% of the projected budget, including budgeted vacancy savings. Most Police Department expenditure categories were trending below 75% of the allocated budget in the second quarter, as some departmental expenses are cyclical, with major expenses occurring towards the end of the fiscal year. The Recruitment, Retention, and Wellness line trended higher due to costs associated with a Measure A side letter for employee benefits. Radios and Technology upgrades were one-time purchases.
Office of Violence Prevention expenditures through the quarter totaled $1.3 million, which represents 69% of its Measure A-funded budget. Salary and benefit expenditures accounted for 70% of total expenditures.
Measure A expenditures exceeded revenues in the third quarter of fiscal year 2025-26, resulting in a $3 million cash flow gap. This interim shortfall was addressed using General Fund balance. Consistent with the Adopted Budget, revenues are projected to meet expenses by year-end.
Attachment A - Q3 Report
Attachment B - Measure A CDTFA Quarterly Taxes FY25-26