Audit of Library
Parcel Taxes
Presentation to the Life
Enrichment Committee |
October 8, 2024
FY 2019-20 through FY 2022-23
Table of Contents
Background
Audit Objectives
Audit Findings & Recommendations
Administration’s Response
Background
Oakland voters approved multiple measures that included special parcel taxes to supplement the City’s General Fund support of the Library. These measures mandate audits of the tax revenues and disbursements per the objectives stated within each act.
Background
1994 Oakland voters approved the Library Services Retention and Enhancement Act to help fund the Library for 20 years.
2004 The City renewed and amended the Act as Measure Q, which voters passed in 2004, for another 20-year term.
2018 Oakland voters approved another special parcel tax for the Library – Measure D, the 2018 Oakland Library Preservation Act – in June 2018. Measure D expires in 2038.
2022 The City again renewed and amended the Library Services Retention and Enhancement Act as Measure C, which voters passed in 2022. If not amended, Measure C will be in effect through 2052.
Background
● Owners of single-family, multi-
residential and non-residential
properties pay parcel taxes to
support the Library
● The measures require the City to
appropriate a specific matching
amount from the General Fund to
the Library to supplement the
parcel taxes
Measure D Measure C
Single-Family Home
$88.76 $114.50
Multiple Residential per
unit $60.64 $78.22
Non-Residential Parcels
per Single Family
Equivalent*
$45.46 $58.65
*Based on frontage and square footage
The Library received $124 million in parcel tax
revenue from Measures Q, C, and D over 4 years
The Library spent $111 million in Measure Q, C,
and D funds (FY 2019-20 through FY 2022-23)
Audit Objectives
Library spent tax
proceeds as intended by
the respective measures
Library met the Reserve
Fund requirement for
Measure Q
Library implemented the
previous audit
recommendation
City met the minimum
General Fund
appropriation
requirement
To Determine whether the:
Results
We found:
● The Library spent Measure Q, D, and C proceeds in accordance with their respective requirements.
● No significant issues with the Measure Q reserve fund requirement.
The Library is required to reserve 5 percent of the previous year’s revenue and deposit it into a separate reserve fund which may only be used with the City Council’s approval.
● The City implemented the previous audit recommendation intended to provide the Library Commission with additional financial reports to strengthen their oversight abilities.
However, the audit found the City did not meet
Measure C requirements in two respects:
1. The City fell short of Measure C’s General Fund appropriation and exemption requirements for FY 2022-23.
2. The City mistakenly collected approximately $112,000 in Measure C taxes from exempt property owners.
The City fell short of Measure C’s General Fund
appropriation and exemption requirements for
FY 2022-23
The City mistakenly collected approximately
$112,000 in Measure C taxes from exempt
property owners
● In July 2022, the City collected approximately $112,000 in Measure C taxes from 300 property owners that should have been considered exempt. ● The Finance Department processed the exemptions listed under Measure Q instead of Measure C, which includes additional exemptions for senior households and a 50 percent reduction for affordable housing projects.
● According to Finance, the error occurred because staff were unaware of the passage of Measure C and, as a result, had not updated their procedures to reflect the additional exemptions.
● Finance has since updated its internal procedures to account for the additional exemptions. Additionally, as of March 2024, the Finance Department mailed out refund checks to eligible taxpayers.
The City Administrator should validate the General Fund appropriation shortfall with the Finance Department and consult with the City Attorney’s Office to determine the appropriate course of remediation.
Recommendation 2
Recommendation 1
To ensure timely and accurate processing of new parcel taxes, the City Administrator should create an administrative instruction to notify affected departments of approved ballot measures so staff can review and update procedures to reflect additional parcel tax exemptions, changes to the general fund appropriation, and other requirements before processing the new measure.
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