Agenda Item No. 11
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: January 23, 2023 FROM: Matthew Bronson, City Manager
PREPARED BY: Deanne Purcell, Administrative Services Director SUBJECT: FY 2021-22 Citizens Oversight Committee for City Revenue Measures Report including K-14 Street Repair Bond, X-06 Transaction and Use Tax, and Measure F-20 Transaction and Use Tax
RECOMMENDATION
Receive and file the FY 2021-22 Citizens Oversight Committee for City Revenue Measures Report.
BACKGROUND
On January 11, 2023, the Citizens Oversight Committee for City Revenue Measures held its annual meeting. The committee consists of five members and includes reporting revenue and expenditures for Measure K-14 Street Bonds, Measure X-06 half cent Transaction and Use Tax and Measure F-20 one cent Transaction and Use Tax and submitting an annual report to the Council. In attendance at the meetings were four of the five committee members (Anne Holden, Karen Kass, Jonathon Reynolds, and Paula Tripp). Donna De La Rosa was unable to attend. Ms.
Holden was selected by the Committee at the meeting as Chair for 2023 with Mr. Reynolds selected as Vice Chair. Staff in attendance included City Manager Bronson, Administrative Services Director Purcell, and Public Works Director/City Engineer Ray. City Attorney Hale was also present at the meeting.
During the committee meeting, staff provided a review of Measure K-14 completed projects and projects currently underway along with the audited revenues and expenditures related to Measure K-14 and both sales tax measures including Measure X-06 and Measure F-20. To date, 260 blocks of roadway or 65% of all local streets have been completed since the beginning of the Measure K-14 street rehabilitation program. The City is authorized to issue general obligation bonds in an amount not to exceed $48,000,000 to finance improvements to streets within the City.
On January 26, 2022, the City issued an additional $10,000,000 in bonds. Total revenue for Measure K-14 includes four bonds issued for a total of $38,000,000 and interest revenue of $109,000, or a total project fund of $38,109,000, with $10,000,000 remaining in unissued bonds.
Expenditures through June 30, 2022 totaled $28,674,600 leaving a net balance of $9,434,400 in project funds. For comparison, there was a net balance of $4,137,600 in project funds as of June 30, 2021 as approximately $4.7 million was expended on Measure K-14 street repairs during FY 2021-22.
The City has two transaction and use tax measures (X-06 and F-20). Measure X-06, half cent sales tax revenue generated $1,215,000 in FY 2021-22 compared to $1,185,000 in the prior FY 2020-21 or an increase of 2.5%. In November 2020, voters approved Measure F-20, a one cent sales tax, which became effective April 1, 2021, and generated $573,000 for the last quarter of Staff Report: FY 2021-22 Citizen Oversight Committee Report Page 2 January 23, 2023
FY 2020-21 and $2,352,000 in FY 2021-22. Both sales tax measures are general revenue used to support City services and projects.
Consistent with previous years, staff prepared a draft Citizen Oversight Committee Annual Report which was reviewed and approved by the Committee for Council acceptance at the January 23rd meeting on a 3-1 vote (Vice Chair Reynolds voted no). The financial information cited in the report includes previously audited expenditures along with the audited FY 2021-22 financial information consistent with the Annual Comprehensive Financial Report also on the January 23rd agenda.
The final report is attached and will be placed on the City’s website pending Council acceptance.
The report includes a message from the committee members, a message from the City Manager, financial information regarding the status of Measure X-06 and Measure F-20 revenues from inception to date, Measure K-14 street projects to June 30, 2022, and a map of the completed street projects.
FISCAL IMPACT
There is no fiscal impact from this report.
ALTERNA
The Council has the following alternatives to consider:
1. Receive and file the FY 2021-22 Citizens Oversight Committee for the City Revenue Measures Report; or
2. Provide staff with additional direction
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
Attachments
1. Citizen Oversight Committee Annual Report
Citizen Oversight Committee
Measures X-06 and F-20 Transactions and Use Tax
& K-14 Street Bonds
Report to City Council as of June 30, 2022
Attachment 1
Donna De La Rosa
Anne Holden
Karen Kass
Jonathon Reynolds
Paula Tripp
Matthew Bronson
City Manager
Deanne Purcell
Administrative Services Director
Greg Ray
Public Works Director/City Engineer
Public Works Dept
154 South 8th Street
Grover Beach, CA 93433
Phone: 805-473-4520
Fax: 805-489-9657
[email protected]
Citizen Oversight
Committee Members
Measures X-06, F-20 & K-14
S TA F F
Please visit
www.groverbeach.org
for more information
regarding these
Measures
A Message from the City Manager
Thank you for your interest in the report of the Citizen Oversight Committee for City Revenue Measures. The oversight committee is an advisory body of the City Council and tasked by the Council with reviewing revenues and expenditures for Transactions and Use Tax Measures X-06 and F-20 along with the Measure K-14 Street Bond Program. Measure X -06 was approved by voters in 2006 and established a half-cent sales tax as a general revenue to fund City services and projects. Measure F-20 was approved by voters in 2020 and established an additional one-cent sales tax as general revenue to fund City services and projects. Measure K-14 was authorization approved by voters in 2014 to issue up to $48 million in general obligation bond funding to repair local streets and roads. The City has successfully completed 14 street rehabilitation projects as of June 30, 2022 with repair of 260 blocks representing approximately 65% of local city streets. This report provides the taxpayers a summary of how these voter-approved revenues are being spent consistent with the parameters of each measure.
A Message from the Citizen Oversight Committee
The Citizen Oversight Committee is pleased to forward its 2022 report on Measures X-06 and F-20 Transactions and Use Tax revenue and the progress of the $48 Million Measure K-14 Street Bond Program. The committee’s role is to ensure that revenues from these measures have been expended for the purposes set forth in the ballot language, report progress annually to the public, and provide a compliance statement.
The funding provided by Transactions and Use Taxes Measures X-06 and F-20 is used to support general City services including police, fire, public works, parks and recreation and general City administration. The committee’s task is to review the annual summary of revenues generated from the supplemental sales tax and budgeted expenditures for the upcoming fiscal year. The committee reviewed this information, which disclosed no issues or concerns.
The City to date has issued $38 million of the $48 million in approved bonds.
The funding provided by Measure K-14 is a community investment in improving local streets in Grover Beach. The improvements are essential to improve roadway conditions, maintain emergency response times, enhance safety for pedestrians, bicyclists, drivers, and promote economic growth in the City.
The committee wishes to report that, to the best of its knowledge, the City is in full compliance with the parameters of Measures X-06 and F-20 in generating general revenues to support general city services and Measure K-14 which states that “The object and specific single purpose of issuing the Bonds is the acquisition, construction and improvement of street improvements throughout the City” (the “Street Improvements”), and the proceeds of the Bonds may only be applied to that purpose.
Summary
In 2006, voters approved Measure X-06, a
transactions and use tax at the rate of one
-half percent (0.5%) to be administered by
the State Board of Equalization as a general revenue to support City services and projects.
The trend continues to show consistent increases in the Measure X-06 sales tax with a two-year average increase of 9.5% and
five-year average increase of 9.7%. The
larger increases in 2019-2021 can be
attributed to the introduction of cannabis
sales. Although cannabis tax revenues
have declined, other taxable sales have increased, including restaurants and service stations.
Measure X-06 Status Report
General Sales Tax Trends
Fiscal
Year
Ending Amount % Change
2011 518,873
2012 562,988 8.5%
2013 618,041 9.8%
2014 615,900 -0.3%
2015 695,089 12.9%
2016 747,043 7.5%
2017 771,475 3.3%
2018 770,164 -0.2%
2019 884,366 14.8%
2020 1,017,779 15.1%
2021 1,185,109 16.4%
2022 1,215,174 2.5%
Average Annual % Change
Last 2 Years 9.5%
Last 5 Years 9.7%
Last 10 Years 8.2%
Summary
In November 2020, voters approved
Measure F-20, a transactions and
use tax at the rate of one percent
(1.0%) to be administered by the
State Board of Equalization as a
general revenue to support City services and projects.
This new tax measure became effective April 1, 2021 or the fourth quarter of FY 2020-21 and total
Measure F-20 sales tax revenue
collected for 3 months (April, May &
June) was $572,799.Total collected
in the first full year or FY 2021-22
was $2,351,626.
Measure F-20 Status Report
C o m b i n e d R e p o r t
General Sales Tax Trends
Fiscal Year
Ending Amount % Change
2021 572,799
2022 2,351,626 310.5%
Average Annual % Change
Estimated 2 Years 310.5%
Revenues
History of Issuance
March 2015 Bond Sale $ 5,000,000
April 2016 Bond Sale 8,000,000
December 2017 Bond Sale 15,000.000
January 2022 Bond Sale 10,000,000
Interest 109,069
Total Revenues $ 38,109,069
Capital Expenditures
Prior Capital Expenditures $ 22,360,046
FY 2021-22 Expenditures:
Project #2295-10 $ 1,980,334
Project #2295-11 247,627
Project #2295-12 27,236
Project #2295-13 2,211,304
Project #2295-14 190,972
FY 2021-22 Expenditures $ 4,657,473
Total Capital Expenditures $ 27,017,519
Non Capital Expenditures
Prior Non-Capital Expend. $ 1,608,713
FY 2021-22 48,420
Total Non-Capital Expend. $ 1,657,133
Total Expenditures $ 28,674,652
Fund Balance June 30, 2022 $ 9,434,417
(After Accruals)
Summary
Through funds provided by the Measure K-14
Street Bond, the City of Grover Beach has completed 14 street projects, and the 15th project is currently out to bid with construction expected
to start in March. These projects, outlined in the
attached map, provided maintenance and repair
of 260 blocks, representing about 65% of all local
streets.
Design efforts for project 2295-16 will begin next
month. The project will provide maintenance and
repair of 14 city blocks. The construction is expected to start in the fall.
Measure K-14 Status Report
City of Grover Beach Street
Rehabilitation & Repair Program
Page
6 Completed Projects
2295-1 thru 2295-14
Current Projects
2295-15 and 2295-16
(projects under design or under construction)
Map Rev 1-5-2023