Measure Q
Performance Audit
Budget Transparency, Performance Management, and Stronger Oversight Needed to Ensure Oaklanders Benefit from Measure Q
Presentation to Finance & Management Committee
March 12, 2024
Photo: Greg Linhares, City of Oakland
Table Of Contents
Audit Team
Audit Objectives
Background
Finding 1
Budget-related
Recommendations
Finding 2
Performance Management
Recommendations
Finding 3
Oversight Recommendations
Questions
Audit Team
ACTING CITY AUDITOR
Michael C. Houston
PERFORMANCE AUDIT MANAGER
Stephanie Noble
SENIOR PERFORMANCE AUDITOR
Daniel Williams
Audit Objectives
1 Determine whether the City spent
Measure Q revenue in accordance with
the Act
2 Determine whether the City
appropriated Measure Q revenue in
accordance with the Act
3 Determine whether Measure Q has
improved park conditions
4 Assess the oversight of Measure Q
activities and expenditures
Background
Since March 2020, the City of Oakland has collected $82.5 million in taxes to fund park maintenance, litter reduction, and homelessness intervention in and around City parks. Oakland voters approved Measure Q by a vote of 68 percent. The Measure requires the City Auditor to review the tax’s revenues and uses every two years.
How were parks funded
prior to Measure Q?
Prior Funding
for Parks
Prior to Measure Q, the City primarily funded parks, trees, and ballfields with two different funds: the Lighting and Landscaping Assessment District Fund (LLAD) and the Comprehensive Clean-up Fund.
With the introduction of Measure Q, budgeted funding for Parks, Trees & Ballfields increased by 22 percent and staffing increased to 134 positions.
Other funding
Comprehensive Clean-up
Lighting and Landscape
Assessment District
Measure Q
100 100 102 102 106 106 107
130 132 132 134 134 Budgeted staff positions
$.0M
$4.0M
$8.0M
$12.0M
$16.0M
$20.0M
$24.0M
$28.0M
$32.0M
Budgeted Funds
How is Measure Q allocated?
Measure Q
Allocation
The Act prescribes allocation percentages to four different service categories (shown below).
The Act reserves a majority of the revenues, 64 percent, for parks maintenance, 30 percent for homelessness services, 5 percent for stormwater quality, and 1 percent for audit and evaluation. 64% 30% 5% 1%
Parks maintenance Homelessness services Stormwater quality Audit and evaluation FINDING 1
The City Underspent the Measure Q
Budget by $14 Million in FY 2020-21
and FY 2021-22 But Otherwise Spent
Funds in Accordance with Measure
Requirements
The City Collected More Revenue Than it Spent
The City’s Measure Q revenues and expenditures increased in each fiscal year, with revenues outpacing expenditures.
Category FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23
Revenues $ - $ 25,814,627 $ 27,059,349 $ 29,617,066
Expenditures $ 326,915 $ 13,500,144 $ 22,638,101 $ 24,249,867 Difference $ (326,915) $ 12,314,483 $ 4,421,248 $ 5,367,199 The City Budgeted $23.3 Million And Spent or
Encumbered $19.6 Million in FY 2020-21
Enhanced parks services budget
used was lowest due to COVID-
related challenges in hiring new
staff.
$222K $1.1M
$6.6M
$7.8M
$6.4M
59%, $131K 68%, $750K
94%, $6.3M
93%, $7.2M
56%, $3.6M
Audit/Evaluation Stormwater Quality Homelessness Services Parks - Existing Parks - Enhanced Budgeted Actuals + Encumbered
The City Budgeted $40.2 Million And Spent or
Encumbered $29.8 Million in FY 2021-22
Enhanced parks services budget
used was lowest despite hiring
more staff. The non-personnel
budget suffered from supply
chain issues.
$315K $2.5M
$13.6M
$10.1M
$13.2M
71%, $222K 75%, $1.9M
79%, $10.8M
76%, $7.7M
65%, $8.7M
Audit/Evaluation Stormwater Quality Homelessness Services Parks - Existing Parks - Enhanced Adjusted Budget Actuals + Encumbered
Compared to Other Special Taxes, the City
Encumbered Relatively More Measure Q Funds,
Effectively Rolling Over Funds Year Over Year
84% 96% 82% 81% 104% 82% 93%74% 96% 82% 92% 81% 92% 78% FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 Measure Q - Parks Lighting and Landscape
Assessment District
Measure D - Oakland
Public Library
Preservation Act
Measure M -
Emergency Medical
Services Retention Act
Measure N - Paramedic
Services Act
Measure Q - Library
Services Retention And
Enhancement Act
Measure Z - Public
Safety and Services
Violence Prevention
Act
Actuals Encumbrance
As a Result of Underspending, Fund Balance
Has Grown to Nearly $22 Million
-$327K
$11.99M
$16.41M
$21.78M
FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23
The City’s Carryforwards for Homelessness
Services Went 26 Percent and 32 Percent Over
Budget in FY 2020-21 and FY 2021-22
72% 100%
126%
93% 100%
Audit/Evaluation
Stormwater
Quality
Homelessness
Services
Parks - Existing
Parks - Enhanced
71% 80%
132%
98% 78%
Audit/Evaluation
Stormwater
Quality
Homelessness
Services
Parks - Existing
Parks - Enhanced
Carryforward Over Budget Budget Used with Carryforward Total Budget Budget-related
Recommendations
Recommendation 1
To prevent misallocated carryforwards, we recommend the Budget Bureau create a procedure to reconcile the appropriations with encumbrances and actuals once the fiscal year is closed. The procedure should check that the carryforwards are not greater than the balance of appropriations and encumbrances plus actuals, so that the carryforwards do not skew categorical spending allocations. The Budget Bureau should cross reference this procedure with the appropriate budget policies.
The Complicated Maintenance of Effort
Provision for Parks Contributed to Changing
Budgets and Reduced Spending
• The maintenance of effort funding
levels for homelessness services and
stormwater quality are static
($880,818 and $8,309,436)
• Maintenance of effort funding levels
for parks maintenance change based
on the Budget Bureau’s interpretation
of the 55% threshold
Program Category Maintenance of
Effort, per Act
FY 2020-21
Threshold
FY 2021-22
Threshold
Existing Parks
Services 55% $7,775,759
(55%)
$10,076,921
(55%)
Enhanced Parks
Services 45% $6,403,206
(45%)
$8,244,753
(45%)
Total Measure Q
Parks Maintenance
Budget
100% $14,178,965 $18,321,674
Service Levels
decreased in FY
2020-21
With the 55% maintenance of effort
threshold, the funding levels for parks
maintenance services in FY 2020-21
were $40,000 lower than FY 2019-20.
$14.72M $14.68M
$16.55M
FY 2019-20 FY 2020-21 FY 2021-22
Existing Services -
Other Funding Sources
Existing Services -
Measure Q Funding
Maintenance of Effort
Threshold
Recommendation 2
We recommend the City Administrator develop and propose to the City Council for its consideration, a policy for establishing future maintenance of effort thresholds that are simple, easy to interpret, and represent minimum service levels from base levels.
Recommendation 3
To ensure consistency in interpretation and application, we recommend the Budget Bureau document its methodology for calculating the maintenance of efforts for Measure Q.
Recommendation 4
For future special tax programs, we recommend the Budget Bureau create a maintenance of effort methodology and guidelines prior to developing the measures’ first budgets.
Recommendation 5
We recommend the Budget Bureau adjust its
budgeting for costs associated with
administering the ballot measure to reflect
the County’s collection fee amount of 1.7
percent of revenue.
Total
Expenses:
$1.65M
Total
Expenses:
$466K
$1.2M
$452K
FY 2020-21 FY 2021-22
Overspending
Budgeted
The City Consistently Underbudgeted for
Ballot Measure-Related Costs
FINDING 2
The City Needs More Performance Data
to Evaluate the Effectiveness of
Measure Q Funds Towards Improving
Park Conditions, Stormwater Quality,
and Homelessness Services
The City Has Reported Out on Limited Outputs
Deliverable How Deliverable is Reported
Cleaning bathrooms in major
parks twice per day
Reported as a monthly count of days that a restroom has been cleaned.
Having dedicated staff at each
park
Reported as a sum of labor hours entered from workorders for parks that the department has classified as “major parks”.
Increasing the frequency of
mowing fields Reported as a count of work orders related to mowing ballfields.
Increased litter pick up Reported as a sum of minutes picking up litter and volume of litter (estimated amount), which are reported on work orders.
Like San Francisco and San Jose, Oakland
Should Develop Outcome Measures to Show
Improvement Against a Baseline
In San Francisco and San Jose, Parks
Conditions Drive Equity Decision-Making
One of the Objectives of Measure Q is to
Reduce Homelessness in or Around Parks
Performance Management
Recommendations
Recommendation 6
To track the effectiveness of Measure Q funds in reaching voter-approved objectives, we recommend the City Administrator’s Office, in conjunction with the Public Works and Human Services departments, at a minimum, set a baseline for parks maintenance conditions and the number of people experiencing homelessness in or adjacent to City parks for measurement going forward.
Recommendation 7
We recommend the City Administrator’s Office identify baseline performance related to objectives of City special tax programs and establish outcome measures to periodically report to the City Council.
Recommendation 8
We recommend the Public Works Department develop outcomes-based park condition standards for all City parks and use those standards to inform its routine maintenance schedule based on the condition standards and what condition levels it can achieve.
Recommendation 9
We recommend the Public Works Department implement an annual parks condition assessment informed by park condition standards, and report on that annually to the Parks and Recreation Advisory Commission.
Recommendation 10
We recommend the Human Services Department, in conjunction with the City Administrator’s Homelessness Division, develop performance measures, with an emphasis on reducing the number of people experiencing homelessness in or adjacent to City parks, and report on those measures to the Commission on Homelessness.
Recommendation 11
We recommend the Public Works Department assign staff to report on the progress of stormwater quality projects funded by Measure Q to the Parks and Recreation Advisory Commission.
Recommendation 12
We recommend the City Administrator’s Office periodically evaluate and report on special tax programs’ ongoing performance and outcome measures against baseline performance.
Annual Evaluations of Outcomes Improve
Transparency and Public Accountability
An annual evaluation of programs that have
been funded by the ballot measure would
align with Council direction and improve
transparency in the effectiveness of
Measure Q funding in reaching the goals
approved by the voters.
FINDING 3
The City Needs to Strengthen its
Oversight and Reporting of Measure Q
Funds
Measure Q included a section on planning and
accountability, requiring one or more boards or
commissions to review reports related to the
expenditure of revenue collected
• The PRAC discussed Measure Q expenditures or performance at 18 meetings between October 2020 and June 2022. In contrast, the COH discussed Measure Q in three total meetings. • Measure Q makes an annual financial audit optional. The City budgeted $36,000 in FY 2020-21 and $73,000 in FY 2021-22 to complete a financial audit, though to date, that money has not been spent and a financial audit has not been completed.
Oversight
Recommendations
Recommendation 13
To facilitate citizen oversight of homelessness efforts, we recommend the City Administrator’s Office bring regular operational and expenditure reports to the Commission on Homelessness, and that the Commission establish a regular agenda item for this purpose.
Recommendation 14
We recommend the Commission on Homelessness fulfill its statutory obligation by publishing an annual report, pursuant to Oakland Municipal Code Section 4.56.060, including a section on Measure Q.
Recommendation 15
We recommend the City spend its budget allocation for an annual audit of Measure Q funds collected and expended, as required by California Government Code sections 50071.1 and 50075.3.
Recommendation 16
We recommend that for future special tax programs, the City Administrator’s Office initiate a best practice policy requiring an annual report on revenues, expenditures, and the status of open projects, to make sure that the City satisfies California Government Code sections 50075.1 and 50075.3.
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