COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Rebecca Campbell, Director of Finance
DATE: March 3, 2026
SUBJECT: Measure U Annual Report for the Period Ending June 30, 2025, as Submitted by the Measure U Citizens’ Oversight Committee
Description:
The City Council will receive a presentation from City Staff on the Measure U Annual Report.
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
RECOMMENDATION:
1. Receive a presentation from City staff on the Measure U Annual Report for the period ending June 30, 2025; and
2. Receive and file the Measure U Citizens’ Oversight Committee F iscal Year 2024-25 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 (2024-25), 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 objectives are to make Santa Maria safer, with more services for 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 (FY) 2019-20, to be used 90 percent for public safety, 5 percent for youth services, and 5 percent for quality of life. The City Council also 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 $12,583,667, and because revenues ($25,946,335) were lower than expenditures ($29,875,299) by $3,928,964, the ending fund balance as of June 30, 2025, was decreased to $8,654,703.
DISCUSSION:
On January 26, 2026, 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 CliftonLarsonAllen LLP (the City’s Auditors).
For FY 2024 -25, approximately $25.7 million in tax revenues were estimated and actual receipts came in at $25.9 million (or 2.9 percent under budget). The $770,000 negative variance in Measure U revenues is attributable to concerns about the economy as reflected in consumers reducing spending in the categories of general consumer goods in discount stores, home furnishings, and electronics, as well as autos-transportation because of the challenges posed by elevated auto process, escalating financing expenses, and diminished access to credit.
On the expenditure side , on June 18, 2024, the City Council approved FY 2024 -25 total Measure U appropriations of $31,129,953. The Fire, Police, and Recreation and Parks departments’ remaining FY 2023 -24 appropriations totaling $6,444,901 were carried over to FY 2024-25. Including the budget carryover, FY 2024-25 appropriations increased to $37,574,854.
The City Council authorized Measure U FY 2024 -25 revenue to maintain a variety of municipal services and programs performed by 137.60 full -time and part -time positions.
Attachment A provides the Measure U Citizens’ Oversight Committee FY 2024-25 Annual Report , and Attachment B 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.
ATTACHMENT(S):
A. Annual Report City of Santa Maria Measure U (unaudited) for the Period Ending June 30, 2025 B. Measure U (Unaudited) Financial Statements for the Period Ending June 30, 2025