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REVIEW FISCAL YEAR 2017-18 FIRST QUARTER STRONG COMMUNITIES REVENUES AND EXPENDITURES
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Summary
On November 8, 2016, Stockton’s voters approved Strong Communities, a ¼ cent special transactions and use tax for the restoration and expansion of library and recreation services. The Strong Communities sales tax went into effect April 1, 2017.
The enacting ordinance (2016-06-07-1212), required a citizen advisory committee be established to review whether expenditures of the funds related to the special sales and use tax were made as represented to Stockton residents in accordance with the ordinance. Part of the committee’s authorized activities is to review copies of revenue and expenditure reports for the Strong Communities Fund. Attached for review by the Measure M Citizens’ Advisory Committee is the first quarter financial report for Fiscal Year (FY) 2017-18 (Attachment A).
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 FY 2017-18 budget development process, the Strong Communities budget was approved by City Council on June 20, 2017. Total budgeted revenues are $10.23 million, and the original expenditure budget was $4.27 million. The City Council amended the FY 2017-18 Strong Communities budget on August 21, 2017, to add $154,060 for the micro-library program and local arts initiatives for a total budget of $4.43 million.
The implementation of service restoration requires the addition of staff. Following the passage of the Strong Communities Initiative, the City Council acted to approve 26 new positions for the restoration of Library and Community Center Hours.
Present Situation
Revenues received as of September 30, 2017, were $583,500 reflecting only one month of tax revenues received for sales occurring during July 2017. Also attached is the State Board of Equalization (BOE) sales tax revenues report for the quarter ended September 30, 2017 (Attachment B). The BOE report dated 12/02/2017 shows full third quarter Strong Communities gross revenues of $2,645,626 under add-on code 537. These third quarter revenues are not reflected on Attachment A, as the City does not fully receive them until December.
Expenditures during the first three months of the fiscal year were $244,637. With 25% of the year completed, expenditures are a 6% of the budget. It was expected that expenditures in the first quarter would be low while the City continued planning for the Strong Community revenues and hiring new staff.
Salaries and benefits were $137,981 of the total first quarter expenditures with approximately 56% for Library programs and 44% for Recreation programs. In the first quarter of the fiscal year, Communities Services was in the process of hiring full-time and part-time staff to deliver programs. Staffing expenses will pick up in future quarters as the City fills new positions and implements services. Currently, the Community Services Department has either hired or is in the process of hiring all 11 Recreation positions and has filled 12 of the 15 Library positions. The department is also working on implementing an increase in hours of service. The necessary transition of employee work schedules requires meeting with employee labor unions. The increase in hours of service is anticipated to begin in May 2018.
Attachment A - Strong Communities FY 2017-18 First Quarter Report
Attachment B - Measure M Revenues BOE Quarterly Report July-Sept. 2017