CITY OF GROVER BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 8
Placement: Business
Meeting Date: February 23, 2026
TO: Honorable Mayor and City Council
FROM: Matthew Bronson, City Manager
PREPARED BY: Nick Szamet, Administrative Services Director SUBJECT: Annual Reports for Citizen Oversight Committees on Transactions and Use Tax Measures and Revenue Measure K-14
RECOMMENDATION
Receive and file the FY 2024-25 annual reports for the Citizen Oversight Committees on Transaction and Use Tax Measures and Revenue Measure K-14 and consider committee feedback regarding structure of transaction and use tax reporting and provide direction to staff.
BACKGROUND
The Citizen Oversight Committees on Transactions and Use Tax Measures and Revenue Measure K-14 were created when voters approved Measure X-06 in 2006 and Measure K-14 in 2014. On September 8, 2025, the City Council adopted a revised structure for the two Citizen Oversight Committees. Following an open recruitment process, the Council on December 5, 2025 held interviews and appointed community members to each committee as follows:
• Transaction and Use Tax Measures
o Jerry Ferguson
o Jeff Lee
o Scott Steele
o Gabrielle Weeks
o Loren Westphal
• Revenue Measure K-14
o Karen Bright
o Michael Teeling
o Dennis Nulman
On January 13, 2026, both Citizen Oversight Committees held respective meetings and were provided with annual reports highlighting relevant information based on the respective measures including use of the transaction and use tax general revenue and use of Measure K-14 street rehabilitation bonds. The reports highlight current and prior uses of funding outlining investments in public safety, capital projects, economic development, and road maintenance. Below is a summary of each committee’s deliberation and action:
Staff Report: Citizen Oversight Committee Reports Page 2 February 23, 2026
Transaction and Use Tax Measures Committee
The Committee reviewed the report, provided input, and unanimously approved submission of the report to the City Council. The report is shown in Attachment 1. During deliberation, the Committee also discussed the concept of directly attributing revenues from Measures X-06 and F-20 into a segregated fund for specific expenditures and requested consideration by the Council.
Doing so would segment funding from these measures so they would not be represented with other revenues in the General Fund. For the Council’s reference, revenues from these two measures in FY 2024-25 totaled approximately $3.8 million or 17% of the General Fund revenues.
The City’s longstanding practice has been to deposit all sales tax revenues in the General Fund, including base sales tax revenues and the two transaction and use tax revenues. Both transaction and use tax measures were passed by voters in 2006 and 2020 as general revenue measures not tied to specific purposes unlike special tax measures. This is similar to other tax measures approved by voters over the past decade including the cannabis tax (2016), transient occupancy tax increase (2018), and business license tax increase (2018). General revenue measures enable the Council to have full discretion to allocate those funds for any City service, project, or use without having to apply the funds to a specified use. In contrast, Measure K-14 was approved by voters as a special tax measure and funding must be spent on local street rehabilitation.
This practice of using general revenues provides the Council with the greatest amount of discretion when determining the use of those funds to allocate funding to address current and emerging community needs. Staff would also note that tracking and using general tax measurerelated revenues in a separate fund would involve a significant restructuring of the City’s budget when the City is in the middle of a two-year budget cycle where budgetary changes for the upcoming year are typically minimal. If the Council wished to consider this concept further, staff would recommend bringing this topic back to the Council as part of the FY 2027-29 budget process. The Council could also direct staff to continue the approach used in this year’s report which highlighted major General Fund investments made possibly largely by increased revenues from these general tax measures.
Pursuant to the Committee’s request, staff is bringing this issue to the Council for consideration and direction to staff.
Revenue Measure K-14 Committee
The Committee reviewed the report, provided input, and unanimously approved submission of the report to the City Council. The report is shown as Attachment 2. The Committee also requested the inclusion of pavement condition index for Measure K-14 Streets as well as the total cost needed to complete the original scope of work for Measure K-14. These items have been added to the report.
FISCAL IMPACT
There are no funding impacts to this staff report.
Staff Report: Citizens Oversight Committee Reports Page 3 February 23, 2026
Multi-Year Goals
☐ Public Safety and Community Services ☐ Economic Development and Housing ☐ Community Infrastructure ☒ Financial and Organization Sustainability Council Priorities
☐ Water & Wastewater Infrastructure ☐ Community Engagement
ALTERNATIVES
The Council has the following alternatives to consider:
1. Receive and file the FY 2024-25 annual reports for the Citizen Oversight Committees on Transaction and Use Tax Measures and Revenue Measure K-14 and consider committee feedback regarding structure of transaction and use tax reporting and provide direction to staff; or
2. Provide alternative direction to staff.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
ATTACHMENTS
1. Annual Report for Citizen Oversight Committee on Transaction and Use Tax Measures
2. Annual Report for Citizen Oversight Committee on Revenue Measure K-14 FISCAL YEAR ENDING JUNE 30, 2025
CITIZEN OVERSIGHT COMMITTEE FOR
TRANSACTION AND USE REVENUE MEASURES
JANUARY 2026
CITY OF GROVER BEACH
Attachment 1
2 Table of Contents
Overview ............................................................................................................................................... 3 Measure X-06.................................................................................................................................... 3 Measure F-20.................................................................................................................................... 3 Responsibilities ................................................................................................................................. 3 Committee Members ......................................................................................................................... 3 Revenues.............................................................................................................................................. 4 Fiscal Year 2024-25 .......................................................................................................................... 4 Historical Revenues .......................................................................................................................... 4 Expenditures......................................................................................................................................... 5 Public Safety ..................................................................................................................................... 5 Capital Investments........................................................................................................................... 6 Economic Development..................................................................................................................... 6 Future Sales Tax Projections................................................................................................................ 7 Table of Figures
Figure 1: FY 2024-2025 Total General Fund Revenue......................................................................... 4 Figure 2: Toal Measure Related Revenue ............................................................................................ 4 Figure 3: Line Graph of Total Public Safety Expenses by Year ............................................................ 5 Figure 4: Bar Graph of General Fund Capital Contributions ................................................................. 6 Figure 5: Bar Chart Econ. Development Funding ................................................................................. 6 3 Overview
Measure X-06
Measure X-06 was a general tax passed in 2006 by Grover Beach voters which assessed a halfpercent transaction and use tax on sales within City limits. The goals of Measure X-06 as stated in the ballot measure language were:
To help preserve the safety and character of Grover Beach by funding essential services, including Police and Fire Departments, repair potholes and fix City streets and sidewalks, increase recreation opportunities for seniors and youth, improve City parks and beach access, and other general City services.
Measure F-20
Measure F-20 was a general tax passed in 2020 by Grover Beach voters which assessed a one percent transaction and use tax on sales within City limits. The goals of Measure F-20 as stated in the ballot measure language were:
To provide funding for maintaining major streets and sidewalks, supporting local business recovery from the COVID-19 pandemic, maintaining essential 9-1-1 emergency medical and fire services, property crime and youth violence prevention, and neighborhood policing services, and other general city services
Responsibilities
CITIZEN OVERSIGHT COMMITTEE FOR TRANSACTION & USE TAX MEAURES: Five (5) seats are open with the expiration of Committee terms in 2030. Terms on the Committee are four-year periods, with no term limits. The Committee is a body of five (5) residents that meets on an annual basis, usually in January consistent with the timing of developing the City’s annual outside audit with special meetings as needed. The Committee is an advisory board to the City Council that reviews the annual report for the two applicable transaction and use tax measures prior to submission of this report to the Council.
Committee Members
• Terms Ending 2029:
• Loren Westphal
• Jeff Lee
• Scott Steele
• Jerry Ferguson
• Gabrielle Weeks
Revenues
Fiscal Year 2024-25
For the fiscal year ending June 30, 2025, the City of Grover Beach collected nearly $3.8 million total revenues from transaction and use tax Measures X-06 and F-20. This amount represents 17% of General Fund revenue with non-measure related revenues totaling approximately $18.2 million. The pie chart below shows the revenues from each measure relative to all other General Fund tax revenues such as base sales tax, property tax, transient occupancy tax, or cannabis tax.
Figure 1: FY 2024-2025 Total General Fund Revenue
Historical Revenues
Measure X-06 now more than doubles its initial annual revenue, which was estimated at $500,000 when passed by voters in 2006. Likewise, Measure F-20 is well above $1.8 million initially estimated when passed by voters in 2020. Combined total revenues are shown in the graph below.
Figure 2: Toal Measure Related Revenue
2,541,053 , 11%
1,251,563 , 6%
18,182,060 , 83%
Measure F-20 Measure X-06 Non-Measure
-
1 1
2 2
3 3
4 4
FY2017 FY2019 FY2021 FY2023 FY2025
MILLIONS
F-20 X-06 Combined
5 Expenditures
Public Safety
Both Measures X-06 and F-20 are general
taxes providing revenues to the General Fund
for City services, projects, and other needs at
the discretion of the City Council. However, a
key reason for the City in placing both
measures on the ballot was to increase funding
for public safety needs which includes both Fire and Police services consistent with Council Goals and Priorities. As a result, public safety expenses have increased a total of 95% since 2018.
In FY 2024-25, combined public safety expenses were approximately $11 million. The following is a list of some of the City investments in public safety since 2018:
2018
• 11% equity increase for sworn nonmanagement personnel in the Police Department to provide more competitive
compensation
2020
• 1.5 additional Police Officer positions
added to the Police Department
2022
• Salary Equity increases approved to
maintain competitive compensation:
o Police Officer 7%
o Police Seargent 3%
o Police Trainee 15%
2023
• Authorization of lease of six new patrol
vehicles to replace outdated vehicles for
a total cost of $767,000
2024
• Police Department storage and
evidence facility $100,000 annually
• Five Cites Fire Authority Contract
increased by 38% to $2.8 million to fund
City’s share of the cost for a 24x7 third
company. FCFA Annual Cost
FY2018 1,636,836 18%
FY2019 1,819,444 11%
FY2020 2,034,854 12%
FY2021 2,035,233 0%
FY2022 2,027,953 0%
FY2023 2,038,123 1%
FY2024 2,817,730 38%
FY2025 2,907,728 3%
Police
FY2018 4,450,438 7%
FY2019 4,625,604 4%
FY2020 5,034,580 9%
FY2021 6,071,887 21%
FY2022 6,669,867 10%
FY2023 6,656,593 0%
FY2024 8,828,210 33%
FY2025 7,961,665 -10%
2024 One-Time
Grant
Expenditures.
$-
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
FY2017 FY2019 FY2021 FY2023 FY2025
Millions
FCFA Annual Cost Police
Figure 3: Line Graph of Total Public Safety Expenses by Year 6 Capital Investments
Another key reason for placing Measure F-20
on the ballot and included in the measure text
was the use of additional General Fund
funding for capital improvements. This
included the use of Measure F-20 revenues
for the repair of major streets and roads not
eligible for improvement in the Measure K-14
program such as the West Grand Avenue
Streetscape Project (CIP #2287). Additionally,
Measure F-20 funds have been used to fund
sidewalk improvements (CIP #2274) as well
as disability access improvements (CIP
#3003).
Figure 4: Bar Graph of General Fund Capital Contributions Economic Development
Implementation of economic development programs particularly during the COVID-19 pandemic was another intended use of additional General Fund funding from Measure F-20. The graph below shows the City’s General Fund contribution to economic development since FY 2021:
FY2021 898,165
FY2022 374,714
FY2023 320,365
FY2024 65,873
FY2025 100,120
Total 1,759,236
Amounts include four rounds of
microgrants distributed to various City
businesses during the pandemic with
awards averaging nearly $6,000. FY
- 500,000 1,000,000 1,500,000 2,000,000
FY2022
FY2023
FY2024
FY2025
FY2022 282,533
FY2023 346,707
FY2024 269,535
FY2025 1,747,937
Total 2,646,712
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
FY2021 FY2022 FY2023 FY2024 FY2025
Figure 5: Bar Chart Econ. Development Funding
7 2021 was also higher than the following years given addional COVID-19 relief funding provided by the American Rescue Plan Act. The City also pays for the Visit Grover Beach tourism marketing program with economic development funding which costs over $50,000. The Visit Grover Beach program markets the City to tourists as well as promotion of City events and services.
In 2018, the City installed fiber optic conduit as part of a public-private broadband fiber economic development partnership. This partnership leveraged the existing Pacific Crossing transoceanic cable that culimates in Grover Beach which has led to the installation of additional transoceanic cables which contribute lease revenue to the City. Digital West (now Astound) has also installed a citywide fiber optic network available to virtually every property in the city. To finance the City’s cost of installing the fiber optic conduit, the City authorized an interfund advance of $451,350, which it has been repaying with General Fund monies since FY 2022 and will be fully repaid by FY 2027.
Future Sales Tax Projections
The City hires and maintains a third-party consultant to assist in planning revenue derived from sales tax which includes future revenues derived from transaction and use tax Measures X-06 and F-20.
Although much of the information is proprietary and confidential, staff can share that projections for revenues remain stable with modest growth of 2% anticipated in the coming Fiscal Years. 1 ANNUAL
REPORT
CITY OF GROVER BEACH
CITIZENS OVERSIGHT COMMITTEE
MEASURE K-14 STREET BONDS
Street Rehabilitation and Repair Fund in the City’s ACFR FISCAL YEAR 2024-25
Attachment 2
2 Overview
On November 4, 2014 Grover Beach voters approved Measure K-14, the Grover Beach Street Rehabilitation; Safety Improvement Bond Measure. Measure K-14 provides up to $48 million in bond funds for repair of residential streets over a 25-year period. The importance of these improvements has been underscored by the City Council’s long-standing identification of street rehabilitation as one of the Council’s Goals.
Citizens Oversight Committee Responsibilities
The Committee is a body of three (3) residents that meet on an annual basis, with special meetings as needed. The Committee is an advisory board to the City Council for annual review of all Measure K-14 Bond proceeds and expenditures and an annual report to the City Council regarding their findings as to those expenditures.
Committee Members
• Terms Ending 2029:
o Karen Bright
o Michael Teeling
o Dennis Nulman
Executive Summary
As part of the oversight process in the ballot measure, staff annually prepare a report outlining activity from the past year related to Measure K-14. To date, the City has funded $35.5 million in street construction projects and has completed 320 blocks representing more than 70% of local city streets. The Pavement Condition Index for all Measure K-14 Streets is 73 up from 39 in 2014 before K-14. Additionally, staff estimates there is a funding gap of $3-4 million to complete the original Measure K-14 scope of work.
Table 1 below outlines historical and current year revenues and expenditures for the City’s Fund 201 Street Designated Construction Fund (K-14) titled Street Rehabilitation and Repair Fund in the City’s Financials.
Table 1
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 756,789
3 Total Revenues $38,756,789
Capital Expenditures
Prior Capital Expenditures $32,913,328
FY 2024-25 Expenditures:
Project #2295-16 $172,417
Project #2295-18 206,265
FY 2024-25 Expenditures $378,682
Total Capital Expenditures $33,292,010
Non-Capital Expenditures
Prior Non-Capital Expend. $1,990,887
Salaries and Benefits 213,761
Supplies and Services 7,635
Total Non-Capital Expend. 2,212,283
Total Expenditures $35,504,293
Fund Balance June 30, 2025 for K-14 Projects $3,252,496 Capital Expenditures
The City continues to make progress on Measure K-14 street projects over the past year, although this work was limited to completion of a prior Measure K-14 project and a light maintenance project on streets that had previous light maintenance work carried out.
Construction on future Measure K-14 street rehabilitation projects was halted to wait for sufficient funding to first complete sewer improvement work on streets to be repaired. With the City Council’s adoption of an updated sewer rate structure in June 2025, these sewer improvements are now funded and thus the impacted Measure K-14 street improvements can now proceed into construction.
There were expenditures recorded on two K-14 Projects in FY 2024-25:
1. Project #2295-16
Ramona from North 10th to North 14th Street, Front Street from Newport to Parkview Avenue, Saratoga from North 8th to Front Street, North 2nd from Newport to Saratoga.
Total project expenses were $172,417.54.
4 Account Name Amount
Design $22,344.40
Construction 150,073.14
Total 172,417.54
Design work on Project #2295-16 was done by MNS Engineers who also provided construction management services. Construction activity was primarily completed by J.F. Will Company. Payment in FY 2024-25 was retention held for construction work and is authorized for payment only by the City’s Capital Projects Manager when all construction activity is completed to the City’s requirements.
2. Project #2295-18
Maintenance work for previously
repaved Measure K-14 streets.
Staff utilizes Pavement
Management software to
determine the streets and
treatment methods.
Total Project Expenses were
$206,265.10
Account Name Amount
Design $33,864
Construction 172,401.1
Total 206,265.10
5 Design services were provided by AKA Engineering.
AKA Engineering also provided construction
management services. Construction was undertaken
by Pavement Coatings Co. and included 7,910 square
feet of asphalt, micro surfacing, as well as painting
and striping for project area.
Non-Capital Expenditures
Payroll Expenses
The City uses Measure K-14 Bond proceeds for the management and administration of capital projects as well as minimal amounts for the maintenance of the streets. Table 2, below, consists of personnel charged to Fund 201, the number of hours billed, and the total percentage of an FTE for that classification of employee.
Table 2
Class Hours Percent of FTE
Capital Projects Manager 1,077 52%
Maintenance Worker1 518 25%
Director 331 16%
Management Analyst 323 16%
Public Works Supervisor 271 13%
Senior Engineer 215 10%
Assistant Engineer 166 8%
Superintendent 158 8%
The Capital Projects Manager manages all Measure K-14 related work along with the City’s other capital improvement projects. The Maintenance Worker class covers all members of the City’s Public Works maintenance crew not just a single employee like the other positions shown.
Non-Payroll Expenses
The last category of expenditures for are non-payroll-related expenditures for supplies and services. Postage and shipping charges are charges apportioned by use of the City internal postage meter which includes mailing information to residents about upcoming project activity. Contractual obligations costs consisted of charges related to the City Municipal 1 More than one Maintenance Worker’s time is charged to Fund 201. 6 Advisor providing hourly services for the cost of annual disclosures filed with the State of California as well as ongoing work related to arbitrage rebates effecting the subsequent fiscal year. Below is a table of expenditures:
Table 3
Account Total
Postage and Shipping $1,095.94
Contractual Obligations 6,538.88
Total 7,635
Future Measure K-14 Projects
The map provides for completed, current and future projects to be undertaken with Measure K-14 funding. The next Measure K-14 project identified is Project 2295-17 which was the project delayed given the delay in related sewer improvement. Given this delay, the City Council provided direction to staff to begin designing the next project (Project 2295-19) and consider advancing this project before 2295-17. Included are maps showing the streets in each project and the Council will be asked to provide policy direction on which project to construct first during an upcoming street repair update on February 10.