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REVIEW AND DISCUSS MEASURE A PROPOSED BUDGET FOR FISCAL YEAR 2025-26
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RECOMMENDATION
Review and discuss the City Manager’s Proposed Fiscal Year (FY) 2025-26 Annual Budget for the use of Measure A proceeds.
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Summary
The proposed Budget projects sales tax revenues will come in under budget at the end of fiscal year 2024-25 and decrease in fiscal year 2025-26. The fiscal year 2025-26 Annual Budget estimates $45.9 million in Measure A revenues. The proposed Budget includes $35.9 million for Police Department expenditures and $1.98 million for Office of Violence Prevention expenditures. The Police Department and Office of Violence Prevention (OVP) expenditures are projected to be over the fiscal year 2024-25 Adopted Budget.
Background
Measure A is a voter-approved ¾ cent general sales tax that supports law enforcement, crime prevention, essential city services, and fiscal recovery from bankruptcy. Measure B is a non-binding advisory measure that allowed voters to express a desire for Measure A proceeds to be spent 65% towards law enforcement and crime prevention services and 35% towards services to residents, businesses, property owners and efforts to end bankruptcy. The Measure A Citizens’ Advisory Committee may make recommendations to City Council regarding the Proposed Budget for Measures A and B before adoption pursuant to the Measure A Ordinance, and the Committee’s Charter and Bylaws.
Measure A Advisory Committee By-Laws
Section 8b (meetings): “the Committee will meet to review budgets for Measure A revenues and Measure B (public safety) expenditures before the City Council’s public sessions on the upcoming annual budget.”
Section 9 (Authorized Activities): “The City will propose a budget for the Measure A sales tax revenues and related uses of funds for the upcoming fiscal year which will be presented to the Committee members before City Council consideration and approval of the City’s Annual Budget. The Committee will consider the Proposed Budget in accordance with all City rules, regulations and policies and may make recommendations regarding the Proposed Budget for Measures A and B to the City Council in a public session.”
Present Situation
The Interim City Manager released the fiscal year 2025-26 Proposed Annual Budget to City Council and the public on May 15, 2025. The City Council will conduct two public budget study session meetings on June 4 and 5, 2025.
Measure A funds 60 sworn and 36 non-sworn Police Department positions, and 9 Office of Violence Prevention positions. In 2024, the number of sworn positions was reduced by 60 FTE to fund significant benefits incentives to improve retention and recruitment for Police Officers. Recruiting and retaining 120 additional officers has proven over the years to be a considerable challenge, despite aggressive campaigns and initiatives made by the Police Department management.
The current year 2024-25 projected year-end estimated revenues were budgeted at $47.0 million. Measure A actual revenues totaled $44.9 million, which was 4% less than projected.
Measure A revenues for fiscal year 2025-26 are projected to be $45.8 million. In the fiscal year 2025-26 Proposed Annual Budget, law enforcement and crime prevention appropriation of $37.9 million is 83% of the projected annual Measure A revenues. Measure A will fund $35.9 million for Police Department expenditures and $2.0 million for the Office of Violence Prevention expenditures.
In light of the picture conveyed by the City’s Long-Range Financial Plan (L-RFP), the City has limited the expansion of new ongoing services, particularly those funded by the General Fund, to strategic areas. The chart below, increasing costs, particularly from the CalPERS retirement system, will begin to exceed General Fund revenues, including Measure A. The L-RFP model predicts the City’s General Fund balance to start decreasing in fiscal year 2025-26 and will reach close to the minimum 5% reserve level in fiscal year 2030-31. The 5% reserve level is the minimum acceptable level and a warning that cost-cutting measures may be necessary.
Measure A revenues have contributed to the City’s accumulation of General Fund reserves. The General Fund is projected to end fiscal year 2024-25 with a total fund balance of $68.3 million, of which $56.4 million is required, by the City Council Reserve policy, to be put towards the Working Capital Reserve as a proportion of the fiscal year 2025-26 budgeted expenditures. The City will attempt to maintain its reserves to ensure long-term financial sustainability. These reserves will enable the City to maintain services through a recessionary period and through the projected CalPERS cost increases, which are all assumed in the City’s L-RFP.
The full fiscal year 2025-26 Proposed Annual Budget can be found on the City’s website at www.stocktonca.gov/budget <http://www.stocktonca.gov/budget>
The document includes the Measures A and B budget on page C-7 and more information on the Long-Range Financial Plan starting on page C-9.
Attachment A - Measures A and B FY 2025-26 Proposed Annual Budget
Attachment B - FY 2025-26 Proposed Annual Budget - Budget Message