Measure K Transaction and Use Tax Oversight Committee
March 20, 2023
To: Mayor Flaherty and Councilmembers
From: Measure K Oversight Committee
Subject: Measure K Oversight Committee’s Report of the Measure K Transactions and Use Tax Revenue and Expenditures for Fiscal Years 2020/21 and 2021/22.
Brief Background
Pleasant Hill voters passed Measure “K,” a 20-year one-half cent transactions and use tax (TUT) in November 2016. This transactions and use tax took effect on April 1, 2017 with the stated purpose “to provide and maintain Pleasant Hill city services and facilities, including fixing potholes, and repairing neighborhood and city streets; replacing the aging library with a 21st century facility including space for after-school homework and tutoring; creating additional walking and biking paths; maintaining storm drains; and other city services.” The City Council also established a “Pleasant Hill Transactions and Use Tax Oversight Committee” whose primary duties are to review semi-annual revenue and expenditure reports produced by the City and to provide to the City Council an annual report on whether the revenues were expended efficiently and effectively and make, if necessary, recommendations to ensure that future revenues are expended appropriately.
Committee Activity
The Oversight Committee continues to meet semi-annually, in person or via Zoom, and has transitioned from original members as their terms expired and new members are appointed. It should be noted that there remains a vacancy for a representative from the Pleasant Hill Chamber of Commerce. The Committee met on April 6, 2022 and February 23, 2023 to review the Macias Gini & O’Connell LLP (MGO) Auditor’s Report for Fiscal Years 2020/21 and 2021/22 respectively. Additional meetings for two Committee members have taken place for a review of accruals, wires, and vendor payments and their respective journal entries.
Findings
From April 1, 2017 thru June 30, 2022:
o Total Revenue $24,183,708 (TUT $23,650,865)
o Other Financing Sources $18,786,467
o Total expenditures $32,779,710
o Funding Balance $10,190,465
The MGO audit of the financial statements of the Measure K Fund for the year ending June 30, 2021 “did not identify any deficiencies in internal control that we consider to be material weakness.” “The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.”
Additionally, the MGO audit of the financial statements of the Measure K Fund for the year ending June 30, 2022 “did not identify any deficiencies in internal control that we considered to be of material weakness.” “The results of our tests disclosed no instances of noncompliance or other matters required to be reported under Government Auditing Standards.”
Members of the Measure K Oversight Committee reviewed a sampling of revenues and expenditures from both years and concluded that data was entered correctly, reflective of the efficiency of the City’s accounting system and staff, and effectively applied to Measure K projects per the intent of the TUT. We further concluded that revenues were expended appropriately.
Measure K improvements, to date, benefitting Pleasant Hill residents:
The new Pleasant Hill Library cost was budgeted at $34 million and had a grand opening on July 30, 2022. As of June 30, 2022, costs totaled $28 million. With accrued bills and minor cost items remaining, the overall library cost is on target with the budgeted amount.
Neighborhood street resurfacing program is on target to complete in project areas R 7, R 19, R20 and portions of R 17.
The Oak Park Blvd./Monticello Improvement project has been completed, providing safety and street improvements in the vicinity of the library, Pleasant Hill Middle School, and the Davidon housing project.
Storm drain improvements have been completed in three areas of the City. It should be noted that these improvements have minimized major flooding during the recent rain events.
Pedestrian & Bike Program improvements: Traffic signal at Gregory Lane/Elinora intersection, sidewalks installed on Elinora and portions of Pleasant Hill Road, bike lanes have been added on Pleasant Hill Road and Chilpancingo Parkway. Further appropriate Measure K improvements are forecasted in the 2022-2027 Capital Improvement Plan.
Conclusion
All expenditures from the Measure K Fund were appropriate to the intent and purpose of the voter approved Measure K Transaction and Use Tax and appear to be “efficiently and effectively” executed. The City’s Finance and Engineering departments continue to be forthcoming and open to our oversight activities.
Respectfully submitted,
Jim Bonato
Chairperson
Measure K Oversight Committee
Attachment 1. 2021 Audit Report, Macias Gini & O’Connell LLP Attachment 2. 2022 Audit Report, Macias Gini & O’Connell LLP