Agenda Item No. 8
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: January 22, 2024 FROM: Matthew Bronson, City Manager
PREPARED BY: Nick Szamet, Administrative Services Director SUBJECT: FY2022-23 Citizens Oversight Committee Report for City Revenue Measures 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 FY2022-23 Citizens Oversight Committee Report for City Revenue Measures.
BACKGROUND
On January 11, 2024, 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: Donna De La Rosa, Karen Kass, Jeff Lee, Jonathon Reynolds (Anne Holden was absent). Staff in attendance included Assistant City Manager Eriksson, Administrative Services Director Szamet, and Public Works Director/City Engineer Khan. City Attorney Hale was also present at the meeting.
During the committee meeting, staff provided a review of Measure K-14. To date, 300 blocks of roadway or 70% of local streets have been completed since the beginning of the Measure K-14 street rehabilitation program, or a total of 15 completed projects. The City is authorized to issue general obligation bonds in the amount up to $48,000,000 to finance improvements to streets within the City. The table below summarizes the revenues and expenditures derived from K-14 Street Rehabilitation Program.
Revenues
Debt Issued 38,000,000
Interest Income 318,698
Total 38,318,698
Expenditures
Capital
Prior Fiscal Years 27,017,519
FY2022-2023 3,681,880
Non-Capital
Prior Fiscal Years 1,657,133
FY2022-2023 123,211
Total 32,479,743
Fund Balance (June 30, 2023) 5,838,955
Remaining Debt Authority 10,000,000
Total 15,838,955
Staff Report: FY 2022-23 Citizen Oversight Committee Report Page 2 January 22, 2024
In addition to K-14 Bonds, the City has two sales and use tax measures (X-06 and F-20). Measure X-06, half cent sales tax revenue generated $1,336,159 in FY 2022-23 representing a 10% increase over FY 2021-22. Measure F-20, approved in 2020, is a one cent sales tax, which became effective April 1, 2021, and generated $2,452,292 in FY 2022-23, which represents an increase of 4.3% over 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’s acceptance at the January 22 meeting on a 3-1 vote (Committee Member Reynolds voting no). The financial information cited in the report includes previously audited expenditures along with the audited FY 2022-23 financial information consistent with the Annual Comprehensive Financial Report presented for Council’s acceptance on January 22 agenda.
The final report is attached and will be placed on the City’s website pending the Council’s 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, 2023, and a map of the completed street projects.
FISCAL IMPACT
There is no fiscal impact from this report.
ALTERNANATIVES CONSIDERED
The Council has the following alternatives to consider:
1. Receive and file the FY 2022-23 Citizens Oversight Committee Report for the City Revenue Measures; 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, 2023
Attachment 1
Anne Holden
Donna De La Rosa
Jeff Lee
Karen Kass
Jonathon Reynolds
Matthew Bronson
City Manager
Nick Szamet
Administrative Services Director
Steve Kahn
Interim 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. This oversight committee is tasked by the City Council with reviewing revenues and expenditures for Measure X-06 and Measure K-14 and now Measure F-20. Measure X-06 is a transactions and use tax approved by voters that established a half-cent sales tax as a general revenue to fund City services and projects. Measure K-14 was authorization approved by voters to issue up to $48 million in general obligation bond funding to repair local streets and roads. The City has funded important City services through annual revenue from Measure X-06 and has successfully completed fifteen street rehabilitation projects as of June 30, 2023 with repair of 300 blocks representing approximately 70% of local city streets. Measure F-20 is a one cent transactions and use tax also as general revenue to fund City services and projects. 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 2023 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 job is to carry out the principal duties of ensuring that revenues from these measures have been expended for the purposes set forth in the ballot language, reporting progress annually to the public, and providing a compliance statement.
The funding provided by Measures X-06 and F-20 Transactions and Use Tax 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 reviewed FY 2022-23 Annual Comprehensive Financial Report (ACFR) for both measures as provided in Note 6 — Long Term Liabilities. 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 6.2% and
five-year average increase of 11.8%. 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
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 followed by a 4.3%
increase of $2,452,292 in FY 2022-
23. Measure F-20 Status Report
C o m b i n e d R e p o r t
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 & Transfers In 318,698
Total Revenues $ 38,318,698
Capital Expenditures
Prior Capital Expenditures $ 27,017,519
FY 2022-23 Expenditures:
Project #2295-14 $ 2,587,378
Project #2295-15 866,270
Project #2295-16 200,710
Project #2295-17 27,522
FY 2022-23 Expenditures $ 3,681,880
Total Capital Expenditures $ 30,699,399
Non Capital Expenditures
Prior Non-Capital Expend. $ 1,657,133
FY 2022-23 123,211
Total Non-Capital Expend. $ 1,780,344
Total Expenditures $ 32,479,743
Fund Balance June 30, 2023 $ 5,838,955
(After Accruals)
Summary
Through funds provided by the Measure K-14
Street Bond, the City of Grover Beach has completed fifteen street projects, and construction on the sixteenth project is underway. These projects, outlined in the attached map, provided maintenance and repair of 300 blocks, representing about 70% of all local streets.
Construction for the seventeenth project will
start in the spring.
Measure K-14 Status Report
City of Grover Beach Street
Rehabilitation & Repair Program
Page
6 Map Rev 12-19-23
Completed Projects
2295-1 thru 2295-15
Current Projects
2295-16 and 2295-17
(projects under design or under construction)