TO: HONORABLE CHAIR AND MEMBERS OF THE TRANSACTION AND USE TAX OVERSIGHT COMMITTEE
FROM: Javier Carcamo, Finance Director
PREPARED BY: Paige Hartman-Salazar, Management Analyst - Special Projects
SUBJECT:
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Measure T 3rd Quarter Proposed Adjustments
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RECOMMENDATION
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Receive and file.
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BACKGROUND
The City of Murrieta adopts a biennial budget and operates on a June 30 year-end fiscal year. We are currently a little over halfway through the first year of the biennial budget cycle. As part of management best practices and as recommended by the Government Finance Officer Association, City staff monitors, measures, and evaluates financial performance through the mid-year mark. The mid-year or quarterly evaluation encompasses the review of financial activities and benchmarking against the adopted budget. Based on the mid-year financial review, staff prepared a quarterly budget report.
The adopted Transaction & Use Tax revenue is $30.5 for FY 2023-24. Based on the City's sales tax consultant's revised projections, staff proposes adjustments to budgeted revenues and expenditures. During the mid-year budget update, staff did not propose any budget adjustments for the Measure T Fund and purposedly deferred any budget adjustments to the third quarter budget update report to allow staff to gather additional sales tax receipt data. The major factors leading to revenue lower than forecast are primarily due to a softening of the economy as a result of extended federal bank high-interest rates, lower disposable income, and new big box retailers opening later than anticipated.
The proposed adjustments for the third quarter end will include a decrease in Transaction & Use Tax revenue of approximately $2.02 for a total of $28.5 million. The Measure T Fund total operating expenditure budget is roughly $28.7 million, excluding the Capital Outlay contribution. Based on the proposed end-of-third quarter budget request and operati...
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