title
REVIEW FISCAL YEAR 2020-21 FIRST AND SECOND QUARTER MEASURES A AND B REVENUES AND EXPENDITURES
recommended action
RECOMMENDATION
Information item only.
body
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 first and second quarter financial reports for Fiscal Year (FY) 2020-21.
The FY 2020-21 Amended Budget, as shown in (Attachment A), includes encumbrance rollovers from FY 2019-20 and administrative budget amendments. Measure A funded Police Department and Office of Violence Prevention (OVP) expenditures in the Amended Budget totaled approximately $29.8 million, an increase of $136,348 from the adopted budget.
Total revenues included in the FY 2020-21 Amended Budget are approximately $28.5 million. Measure A transaction and use tax revenues received as of December 31, 2020, totaled $12,601,117 reflecting four monthly payments for sales transactions occurring between July and October 2020. Also attached is the California Department of Tax and Fee Administration Sales Tax Revenues Report that indicates gross receipts of $9,924,622 for the quarter ended December 31, 2020 (Attachment B).
First-quarter expenditures totaled nearly $6.9 million, or 23% of the Amended Budget. At the end of the second quarter, total expenses were 46% of the budget where the Police Department expended $13.1 million and the OVP spent $480,858 for a total of $13.6 million in Marshall Plan expenses. Combined salary and benefit costs for Police sworn and non-sworn positions were at 46% of the budget, including the budgeted vacancy savings. The Police Department continues its efforts to fill the positions funded by Measure A. As of December 31, 2020, the number of Measure A funded sworn officer vacancies was 12 of the 120 authorized positions.
At the end of the second quarter, the Police Department expenditures were at 46% of the budget. Other supplies (vests, batons, flashlights, ammunition, etc.) are under budget due to expenditure timing. Inventory is kept and ordered as needed throughout the year. Measure A funded training is 83% of the budget through the second quarter of the fiscal year. Training costs are cyclical and primarily consist of Police Academy costs based on the number of trainees and timing of classes.
OVP expended $480,858 through the end of the second quarter of FY 2020-21, which was 39% of the OVP Measure A funded budget. OVP salary and benefit expenses were 43% of the budget as they were fully staffed but had some offsets to employee leave usage.
The Police Department and OVP expenses are expected to increase in several categories in the second half of the year, with a current year-end projection of $30.2 million, as reflected on page C-7 of the FY 2021-22 Proposed Budget. If Marshall Plan expenses come in as projected, they will utilize 88% of the estimated FY 2020-21 Measure A tax revenues.
The Annual Budget for audit and tax collection expenses related to Measure A revenues in FY 2020-21 is $297,000 with only $53,180 expended through the second quarter. General Fund Services and Reserves shows a negative $1.0 million because Marshall Plan related expenses exceeded revenues at the end of the second quarter. As revenues catch up to expenses, the year-end FY 2020-21 projection indicates approximately $3.7 million can be contributed to General Fund reserves.
Three of the nineteen Mission Critical Projects remain active as of December 31, 2020. There were no expenses related to mission critical projects in the General Fund during FY 2020-21. Approximately $3.7 million was expended on Mission Critical projects tracked in other City accounts. As of June 30, 2020, the funds used for the City’s mission critical projects related to Measure A revenues have been exhausted. The projects that are still active include the Police Communications System Upgrade, the IT - Enterprise Resource Planning System, and the Parks Irrigation Controller Upgrade.
Attachment A - Measure A and B FY 2020-21 1st and 2nd Quarter Report
Attachment B - Measure A CDTFA Quarterly Revenue Report