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 Budget to Actuals
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RECOMMENDATION
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Receive and file.
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BACKGROUND
In November 2018, Murrieta voters passed ballot Measure “T,” a one-cent Transaction and Use Tax. Measure T is a general tax revenue source for the purpose of maintaining the City of Murrieta's long-term finances, providing funding for general services, including faster response times to emergencies, improved fire protection/paramedic services, increased police sworn personnel to strengthen crime prevention, reduced gang activity/drug crimes, graffiti removal, parks and recreation, and street maintenance/pothole repair.
The Citizens Oversight Committee provides oversight of Measure T sales tax revenues and expenses. This Measure T Oversight Report provides an update through February 2024. This report includes a recap of all Measure T activities. This Report shows the importance of Measure T revenues to the current and future financial health of the City and supports City Council priorities.
Revenues
The fiscal year 2023-24 Adopted revenue budget is $30.5 million. The City’s sales tax consultant provides quarterly reports along with revenue forecasts considering various factors such as current economic condition, actual sales, collections, and new economic developments scheduled to open within the current fiscal year. The consultant’s revised projections and revenue budget amendments will be discussed in the third quarter budget report. This report includes the staff’s proposed budget adjustments. The table below summarizes Transaction Sales & Use Tax collections through January 2024.
The fiscal year-to-date revenue as of February 2024 is approximately $16.7 million, which represents approximately 55% of the adopted budget. As of the preparation of this report, the February 2024 revenue has not been apportioned but is expected to be received by the end of April 2024. The $16.7 million denotes seven months’ worth of collections from July 2023 through January 2024. When comparing the Year-To-Date District Sales Tax receipt to the same period last fiscal year, current year revenue is lower by $101,235 or approximately .6%. Based on projections of sales tax receipt collection for the remainder of the fiscal year, the total Transaction and Use tax revenue is projected around $28.5 million. The detailed budget adjustments for the third quarter budget update are discussed in a separate report to the Measure T Committee.
Expenses
The fiscal year 2023-24 amended operating expenditure budget is $27.4 million as of February 2024. The year-to-date expenditures as of the preparation of this report are $15.2 million, or approximately 56% of the amended budget. The personnel cost budget of $12.3 million is approximately 49.4% of the total budget. The year-to-date personnel cost is approximately $7.5 million, or 61% of the personnel budget. At the seven-month point, personnel cost is slightly below the 65% mark. This is attributable to vacancies that occur throughout the fiscal year.
The Operations and Maintenance category is at 46%, slightly below the 58% mark. This is expected as some expenditures are not consistent each month. Capital Outlay expenditures are typically one-time purchases and may not reflect 58% of the budget at this point. As of February 2024, Capital Outlay expenditures have consumed 71% of the amended budget.
Expenses highlights
• 65 authorized positions funded by Measure T since inception;
- 32 Police Public Safety Positions
- 15 Fire Public Safety Positions
- 18 Non-Public Safety Positions
• 73% of measure T budget is dedicated to public safety;
• City of Murrieta's 2023 Community Opinion Survey;
• City of Murrieta’s Magazine and program marketing;
• Police vehicles, including upfitting costs;
• Police Taser and body-worn cameras, equipment, and license;
• Police License plate reader software;
• Police Drone equipment;
• Fire annual hose test services;
• Fire Annual dispatch system ESP system for PD and Fire;
• Fire PSEC radio system annual subscription and radio installation;
• Fire Mobile data terminals;
• Fire PPE gear and safety equipment (i.e., turnout gear and other Fire Dept services and equipment);
• Fire emergency software (i.e., table command, pulse point, CAD integration system);
• Fire station annual facilities maintenance and major repairs:
• Fire stations PPE extractors for FS 1, 2, and 3;
• Economic Development data market research and marketing;
• Graffiti & weed abatement;
• Vehicle Lease program;
• Establish operating and sustainability reserves.
Operating and sustainability reserves
The City Council’s formal policy calls for Operating Reserves of 25% of the adopted operating budget. The Measure T operating reserve balance of $3.84.9 million fulfills the City Council operating reserve requirement.
In addition to the operating reserve, certain commitments and assignments of fund balance will help ensure there will be adequate financial resources for both planned expenses and unforeseen circumstances and events such as an economic downturn, catastrophic events, unanticipated expenses, and one-time purchases. During fiscal year 2023-24 and prior to any mid-year adjustments to the reserve balances, the Measure T fund will set aside approximately $13.8 million, net of uses, in various sustainability reserves. Total operating and sustainability reserve balances are shown in the table below.
Fiscally responsible budgeting, prudent long-term financial projections, funds oversight, and financial transparency have strengthened the City’s reserves since the implementation of Measure T. It is consistent with the City Council's Goal to maintain a high-performing organization that values fiscal sustainability, transparency, accountability, and organizational efficiency.
Measure T is a general-purpose tax revenue source that supports the City’s operations, including emergency services such as police, fire, and paramedics; street maintenance and improvements; parks and recreation; and maintenance of public facilities, such as graffiti removal and other expenses that support the Murrieta quality of life. The financial report can be found attached to this narrative report.
Report to City Council
In accordance with the resolution that established the Advisory Transaction and Use Tax Citizens Oversight Committee, a biennial report by the Measure T Committee to the City Council on the revenue and expenditures of the Measure T Fund. Staff will work with the Measure T Committee Chairperson to prepare an agenda report to include on a future City Council meeting.
ATTACHMENTS
Attachment 1: FY 2023/24 Budget to Actual Report as of February 2024
Attachment 2: FY2023/24 Budget-in-Brief