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REVIEW FISCAL YEAR 2024-25 SECOND & 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) 2024-25 budget development process, the City Council approved the Strong Communities budget on June 18, 2024. Total budgeted revenues are $14,307,603 from sales tax activity and investment income. The FY 2024-25 adopted expenditure budget of $15,782,356 was increased by $956,179 for encumbrances and appropriations rolled from the prior year, and $13,500,000 capital appropriations for total expenditure authority of $30,238,535 as of March 31, 2025.
Present Situation
Attached for review by the Strong Communities Advisory Committee is the Second Quarter (Attachment A) and Third Quarter (Attachment B) financial report for FY 2024-25.
Total revenues received from sales tax transactions as of December 31, 2024, were $5,150,528. As of March 31, 2021, total revenues from sales tax transaction received were $9,247,515. Also attached is the California Department of Tax and Fee Administration (CDTFA) sales tax revenue report for the quarters that ended December 31, 2024 and March 31, 2025 (Attachment C). The CDTFA data shows Strong Communities’ gross revenues of $4,239,990 for the quarter covering October, November, and December 2024 and $3,620,310 for the quarter covering January, February, and March 2025.
Expenditures through the second quarter of the fiscal year were $4,705,301. As of March 31, 2025 total expenditures were $7,059,427. Total operating expenditures at the end of the third quarter, 23% of the annual operating budget. Expenses for Library programs were 47% of budget and Recreation Programs were at 52% of budget. Delayed opening of Ursula Meyer Library and Community Center and pools resulted in lower than planned expenditures in the first quarter. Salary savings result from vacancies which are being actively recruited.
Total salaries and benefits expenditures were $2,433,097 at the end of the second quarter. As of March 31, 2025, total salaries and benefits expenditures were $ 3,763,368 with approximately 26% for Library programs and 74% 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 2024-25 were:
• Library Materials $ 487,483
• Utilities $ 565,779
• Facility Maintenance $ 698,189
Capital Projects, which are budgeted at $16,000,000 report no expenditures through the second and third quarters 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, 2025, of $ 45,557,845, as well as total funding from Strong Communities tax dollars ($55,414,501) and other funding sources ($39,497,427).
As of March 31, 2025 (FY 2024-25 Third Quarter)
Attachment A - Strong Communities FY 2024-25 Budget Update - Second Quarter
Attachment B - Strong Communities FY 2024-25 Budget Update - Third Quarter
Attachment C - Measure M Revenues CDTFA Quarterly Distribution Report