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MEASURE A FISCAL YEAR 2018-19, FISCAL YEAR 2019-20, AND FISCAL YEAR 2020-21 ANNUAL REPORTS UPDATE
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RECOMMENDATION
This is an informational item submitting Annual Reports for Fiscal Year (FY) 2018-19, FY 2019-20, and FY 2020-21 to the City Council as required by the “City of Stockton Transaction and Use Tax Ordinance Citizens’ Oversight Committee Charter.”
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Summary
Measures A was approved by Stockton voters in November 2013, authorizing a ¾-cent Transaction and Use tax effective April 1, 2014, and is a general tax. Measure B, an advisory measure, was concurrently approved and recommended that Measure A funds be used by the City to support law enforcement and crime prevention services through the implementation of the Marshall Plan and to be used to exit bankruptcy and provide other City services.
The Measure A Citizens’ Advisory Committee (Committee) is responsible for reviewing expenditures for Measure A proceeds and adopting and presenting an Annual Report to the City Council regarding whether the additional General Fund money generated by Measure A tax proceeds were expended in compliance with the purposes outlined in the Measures. As part of its Annual Report, the Committee is also responsible for reporting on the City’s progress in implementing the recommendations of the Marshall Plan and providing a summary of the Committee’s proceedings for the preceding year.
The Committee is four years behind on preparing annual reports. Initially, the reports were delayed due to the COVID-19 pandemic, and since then, the appointed subcommittee has shown no progress in producing these reports. To assist the Committee members to bring the annual reports up to date, Staff prepared the attached FY 2018-19, FY 2019-20, and FY 2020-21 Annual Reports (Attachments A, B, and C) for the Committee’s review, input, and approval. A meeting was scheduled for the Committee to review these reports on September 27, 2023, but had to be canceled due to a lack of quorum. The next available date for the Committee to convene was November 13, 2023. Since the communication of the results of Measure A funds to the Council and the public is so important, the draft annual reports prepared by Staff are being transmitted without the Committee’s approval for informational purposes.
Background
Measure A was approved by Stockton voters on November 5, 2013, and enacted a ¾-cent general transaction and use sales tax measure, effective April 1, 2014. The residents of Stockton approved Measure B, an advisory measure which recommended to the Council that 65% of the total sales tax revenue generated by Measure A be used for law enforcement and crime prevention services for implementation of the Marshall Plan and 35% be used for the City’s costs to exit bankruptcy and other City Services. Ordinance 2013-07-09-1601 established a seven-member Citizens’ Advisory Committee (Committee) appointed by City Council. The Committee is responsible for reviewing the expenditures of the additional General Fund revenues generated by Measure A. The specific requirements for this Annual Report are outlined in detail below.
As part of its commitment to the public to ensure accountability and transparency in the oversight of the expenditures of the Measure A tax proceeds, the Council adopted Resolution No. 2014-10-08-1505, establishing a Charter governing the Committee’s responsibilities. Once formed, the Committee adopted By-Laws establishing its objectives and duties. A principal part of those duties, as outlined in both section 2.2.3 of their Charter and Section 9 of the By-Laws, is preparation and adoption of a public Annual Report to be presented to the City Council reporting on the City’s compliance with the purposes set forth in Measures A and B. Charter section 2.2.3 reads as follows:
“The Committee shall present to the City Council, in public session, an annual written report, which shall include the following:
a) A statement indicating whether the City is in compliance with the purposes set forth in the applicable ballot measures with respect to the tax proceeds;
b) A review of tax revenues and expenditures to verify that amounts collected were expended for the purposes set forth in the applicable ballot measure with respect to the tax proceeds;
c) A review of the City’s progress in implementing the recommendation of the Marshall Plan on Crime, including the hiring of 120 additional police officers and other investments; and
d) A summary of the Committee’s Proceedings and activities for the Preceding Year.”
The Committee approved the FY 2017-18 Annual Report on October 16, 2019, and it was presented to the City Council on November 5, 2019.
The Committee opted to form a subcommittee to draft their annual reports from the informational materials provided by the City and auditors. At the March 20, 2019, and June 11, 2021 Committee meetings, members were appointed to a subcommittee tasked with preparing annual reports for FY 2018-19 and FY 2019-20. No draft reports have been provided by the subcommittee since that time, and two additional fiscal year reports are now needed.
Present Situation
In compliance with the Ordinance, Charter, and By-Laws, the Committee has continued to meet to review and discuss the Measure A revenues and expenditures and has received programmatic updates from the Police Department, Office of Violence Prevention, and Administrative Services Department.
The Committee met in four public meetings during FY 2018-19, four during FY 2019-20, three during FY 2020-21, three during FY 2021-22, and twice during FY 2022-23. The Measure, A Citizens’ Advisory Committee, received the audited Annual Comprehensive Financial Reports (ACFR) and independent accountants report on applying agreed-upon procedures for each of the fiscal years on the following meeting dates:
FY 2018-19 January 23, 2020
FY 2019-20 January 28, 2021
FY 2020-21 April 25, 2022
To assist the Committee members with the annual reports, Staff prepared the attached FY 2018-19, FY 2019-20, and FY 2020-21 Annual Reports for the Committee’s review and approval. It is common practice with the City’s transaction tax oversight committees for Staff to prepare a draft annual report for the committee’s review, input, and approval. A meeting was scheduled for September 27, 2023, but had to be canceled due to a lack of quorum. Multiple attempts to schedule meetings in October and early November were unsuccessful. The next available date for the Committee to convene was November 13, 2023. A committee meeting will be held to review the findings for extending the sunset of the tax.
Since the communication of the results of Measure A funds to the Council and the public is so important, and it is unknown at the time this report was published if the Committee will be able to meet to review these reports, the Staff-prepared draft annual reports are being transmitted without the Committee’s approval for informational purposes. The FY 2021-22 Annual Report was not prepared because the Committee still needs to review the audited financial statements for that year. The audit reports were included in the March 6, 2023, May 15, 2023, and September 27, 2023 meeting agendas. Both the March and September meetings were canceled due to a lack of quorum, and the Committee ran out of time to review the audits at the May meeting.
Financial Summary
This item is informational only and has no fiscal impact(s).
Attachment A - Annual Report for Fiscal Year 2018-19
Attachment B - Annual Report for Fiscal Year 2019-20
Attachment C - Annual Report for Fiscal Year 2020-21