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REVIEW FISCAL YEAR 2023-24 FIRST QUARTER MEASURES A AND B REVENUES AND EXPENDITURES
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RECOMMENDATION
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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 quarter financial reports for Fiscal Year (FY) 2023-24.
The FY 2023-24 Amended Budget, as shown on (Attachments A), includes encumbrance rollovers from FY 2022-23 and Council approved budget amendments with a net increase of $1,020,506 for various operational items, including $237,343 in increases due to memorandums of understanding (MOUs) with bargaining units.
Total revenues included in the FY 2023-24 Amended Budget are $46.3 million. Measure A transaction and use tax revenues received as of September 30, 2023, totaled $3,776,192, reflecting only one (1) monthly payment for sales transactions occurring in July 2023. Also attached is the California Department of Tax and Fee Administration Sales Tax Revenues Report that indicates gross receipts of $11.7 million for the quarter ended September 30, 2023 (Attachment B). The variance is because of the time it take for the State to process remittances.
Expenditures through the first quarter totaled approximately $8.4 million, or 22% of the Amended Budget. The Police Department expended approximately $8.1 million, and the OVP spent $311,652 through the first quarter of the fiscal year. Combined salary and benefit costs for Police sworn and non-sworn positions were at 24% of the budget, including the budgeted vacancy savings.
At the first quarter, 25% is the target budget utilization. Most Police Department expenditure categories were under 25% of the budget. Other supplies (vests, batons, flashlights, and ammunition, etc.) are under budget as this is the early in the fiscal year. Budget utilization for fuel is 37%, due to unpredictable fluctuations in the cost-per-unit. Measure A funded training has utilized 23% of the amended budget. Training costs are cyclical and primarily consist of Police Academy costs based on the number of trainees and timing of classes. This is also partially attributable to current vacancies.
OVP expended $311,652 through the end of the first quarter of FY 2023-24, which was 23% of the OVP Measure A funded budget. OVP salary and benefit expenses were 26% of the budget. Utilization of other services, and fuel are lower than expected. Other expenses are using up approximately 56% due to training activities in the first quarter.
The Marshall Plan expenses through the end of the first quarter have utilized 223% of the Measure A tax revenues. This ratio is highly overstated due to the timing of the August and September remittances, which will not be reflected until the second quarter.
This quarterly report includes $297,000 in annual audit and tax collection budget for expenses related to Measure A revenues. General Fund Services and Reserves display a deficit of $4.6 million, because expenditures exceeded revenues at the end of the first quarter. Consistent with the Amended Budget, year-end revenues are projected to exceed expenses by year end with 84% of Measure A revenues going toward Marshall Plan expenditures. The General Fund Services and Reserve dollars are required to fund vital city services, maintain service levels, and continue Police and OVP services through the next economic downturn. The Police Department made up over half (54% or $158 million) of the $290 million in FY 2023-24 budgeted General Fund expenditures.
Attachment A - Measure A and B FY 2023-24 1st Quarter Report
Attachment B - Measure A CFDTA Quarterly Revenue Report