FOR THE COUNCIL MEETING OF APRIL 16, 2024
COUNCIL AGENDA REPORT
TO: City Council
FROM: Interim City Manager Alex Posada
SUBJECT: Measure U Annual Report for the Period Ending June 30, 2023, as Submitted by the Measure U Citizens’ Oversight Committee
Description:
The City Council will receive a presentation from City Staff and the Vice-Chair of the Measure U Citizens’ Oversight Committee on the Measure U Annual Report.
RECOMMENDATIONS:
1. Receive a presentation from City staff and Vice-Chair of the Measure U Citizens’ Oversight Committee on the Measure U Annual Report for the period ending June 30, 2023; and
2. Receive and file the Measure U Citizens’ Oversight Committee 2022 -23 Annual Report.
BACKGROUND:
Measure U is a local transaction and use tax within the City of Santa Maria imposed within the incorporated City Limits and applies to gross receipts from any retailers from the sale of tangible property within City Limits. Originally approved and enacted as a one-quarter- cent general transaction and use tax by City voters in June 2012 , Measure U was extended and enhanced to a one-cent rate to support essential City services in November 2018.
On September 4, 2012, the City Council adopted a Resolution establishing the Measure U Citizens’ Oversight Committee (Committee). The Committee consists of five residents who ensure oversight of the revenue generated by and expenses made in relationship to Measure U are consistent with the City Council’s intended use for said tax proceeds. The Committee is not charged with decision -making responsibilities on spending priorities, funding decisions, or financing plans. Rather, Committee Member duties consist of reviewing the annual independent financial audit on the Measure U generated revenue and associated expenses during the previous fiscal year (2022 -2023), as well as reviewing any other relevant financial reports necessary to advise the City Council of its findings.
On March 5, 2019, the City Council set goals and objectives regarding the use of Measure U proceeds . The goals are to first maintain services, and second, to make service enhancements. The obje ctives are to make Santa Maria safer, with more services for 2 youth, and to improve the quality of life. To meet these goals and objectives, the City Council authorized Measure U proceeds, beginning in fiscal year 2019-20, to be used 90 percent for public safety, 5 percent for youth services, and 5 percent for quality of l ife.
The City Council als o indicated a desire to create a Measure U reserve to help ensure these vital services can be sustained during a temporary or cyclical reduction of revenue.
The City Council set an eventual goal of a 20 percent reserve.
The Measure U Fund began the year with a fund balance of $ 17,465,847, and because revenues ($ 27,104,495) exceeded expenditures ($25,787,354) by $ 1,317,141, the ending fund balance as of June 30, 2023, was increased to $17,840,663.
DISCUSSION:
On March 11, 2024, the Committee reviewed the draft (unaudited) Measure U Financial statements prepared by City staff and pending completion of the annual independent financial audit performed by Moss, Levy, and Harzheim (the City’s Auditors).
For 2022-23, approximately $ 25,787,354 in tax revenues were estimated and actual receipts came in at $27,104,495 (or 5.1 percent over budget). The significant $1.3 million positive variance in Measure U revenues is attributable to growth in fuel and service stations, restaurants and hotels, and autos and transportation industry categories.
However, revenues have flattened out in Fiscal Year 2023-24.
On the expenditure side, on June 21, 2022, the City Council approved 2022 -23 total Measure U appropriations of $31,843,788. The City Attorney’s Office, Recreation and Parks, Fire, and Police departments’ remaining 2021 -22 appropriations totaling $1,501,440 were carried over to 2022-23, thereby increasing the budget to $33,345,228.
The City Council authorized Measu re U 2022 -23 revenue to maintain a variety of municipal services and programs performed by 115 full -time and part-time positions. As part of the 2022 -24 Full -Cycle Budget process, the City Council authorized additional expenditures from Measure U from current year revenues as well as utilizing $6.06 million from reserves to preserve staffing and the City’s match requirement for nine firefighters, provide funding for ten limited -service Recreation Leader II positions; provide additional Library funding for B lack Gold Cooperative Library System; provide funding for a predicted increase in the annual subscription for a mass notification tool; some additional capital appropriations and to acquire some needed equipment.
Attached are the unaudited financial statements for the Measure U Fund which presents the budgeted versus actual revenue and expenditures. Accordingly, the budgeted expenditures comply with the City Council’s direction.
ATTACHMENTS
A: Measure U Citizens Oversight Committee 2022-2023 Annual Report B: Measure U Unaudited Financial Statements for the Period Ending June 30, 2023