TO: HONORABLE CHAIR AND MEMBERS OF THE TRANSACTION AND USE TAX OVERSIGHT COMMITTEE
FROM: Javier Carcamo, Finance Director
PREPARED BY: Evan Crockett, Management Analyst - Special Projects
SUBJECT:
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District Sales & Use Tax (Measure T Fund) Amended Budget for Fiscal Year 2026/27
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RECOMMENDATION
recommendation
Receive and file.
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PRIOR ACTION/VOTE
On July 17, 2018, the City Council adopted Resolution No. 18-3953, proposing an ordinance enacting a transaction and use tax be placed on the November 6, 2018 ballot (Vote 5-0).
On December 18, 2018, the City Council adopted a Resolution declaring the results of the November 6, 2018, General Election, including therein adoption of Ordinance No. 540-18 enacting a Transaction and Use Tax (Vote 5-0).
On February 5, 2019, the City Council adopted a Resolution establishing an advisory Transaction and Use Tax Citizens Oversight Committee (Vote 5-0).
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
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 to maintain the City of Murrieta's long-term finances, provide 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 City of Murrieta (City) adopts a biennial budget every two (2) years, starting in odd-numbered years. The budget period runs from July 1 to June 30. The Fiscal Year (FY) 2026/27 budget was adopted on June 3, 2025. Since the budget was adopted, updates to the FY 2026/27 budget have been brought before the City Council and approved. These changes have already been applied to the budget with the City Council’s approval and will thus be labeled the Amended Budget. The estimated district sales tax revenue, all revenue sources, is $30.8 million for FY 2026/27. The adopted sales tax revenue was budgeted using the City’s sales tax consultant projections. Given economic uncertainties, the City took a conservative approach, projecting a 3% year-over-year increase compared to the amended budget, primarily based on anticipated new retail activity, business growth, and population increases. The following table summarizes the Measure T sales tax revenue collections since FY 2019/20, with the exception of FY 2026/27, which is based on the amended budget.
The table below summarizes projected revenues, expenditures, and contributions to the fund balance.
During the FY27 Operating Budget Update to City Council, staff proposed a revenue budget increase of $1,200,000, or four percent (4%), for investment earnings. Measure T Fund interest income will be recorded in Measure T rather than grouped with the General Fund going forward. Staff proposed a net increase to the Measure T expenditure budget of $808,702. This includes both decreases and increases across the expenditure accounts listed below:
• Personnel - An increase of $167,111 due to the newly approved public safety labor agreements and adjustments to the miscellaneous employee groups COLA. The new public safety MOUs for Fire and Police (PD) were approved by Council on June 16 and July 7, 2026, respectively.
• Operations & maintenance - A decrease of $80,000 in contract services that is associated with a planned PD expense that is being reallocated to the General Fund; and
• Allocations - Increase of $24,796 for the City’s Vehicle Replacement Program’s internal service program due to updated estimates of the future costs of various Fire Department vehicles. This results in an increase in annual allocations for the General Fund and Measure T Funds.
• Transfers Out - Staff also proposed to increase the transfers out for the Measure T Fund by $696,795. This is to account for the proposed changes in expenditures for the Fire District, Community Services District (CSD), and Library Funds. The City’s Measure T transfers out are utilized to cover Fire, CSD, and Library when their expenditures exceed their revenues and are true up at the end of the fiscal year.
The Measure T Fund adopted budget includes an operating transfer to the Fire District, Community Service District, and the Library District funds. The transfers represent approximately 33% of the adopted budget. Historically, the Fire District, Community Service District, and, recently, the Library have not been financially self-sustaining, requiring transfers from the Measure T fund to support their operations. Aside from the transfer budget, the personnel budget accounts for approximately 51% of the FY 2026/27 budget. The graph below identifies the percentage allocation by expense category.
The adopted biennial budget incorporates expenditure budget requests from all City departments. The proposed use of Measure T Funds includes:
Personnel
• 69 authorized positions for FY 2026/27
• 77% of the Measure T budget is dedicated to public safety in FY 2026/27.
Fire Operations
• Fire Service Agreement with CalFIRE
• Public Safety Enterprise Communication (PSEC) radio equipment and system subscriptions
• Emergency software subscriptions (EMS priority dispatching, EMD, image trend, NFIRS, base, elite, EMD Spanish, pulse point, tablet command, first watch)
• EMS lease/rental equipment
• Fleet Replacement Annual Allocation
• Computed-Aided Dispatch (CAD) to CAD Integration system
• Mobile Data Terminals
• Equipment replacements (ladder, hose)
• Office and Fire Station furniture
• Annual ladder and hose testing
• Deionized Water Treatment System
• Personal Protective Equipment (PPE) Extractor
• PPE gear and safety equipment
• Fire stations facilities maintenance & repairs
Police Operations
• Police safety equipment for new hires
• Narcan - Treatment of a known or suspected opioid overdose emergency
• Police Taser and body-worn cameras, equipment, and license
• Police License plate reader software and equipment
• Police Aircraft & accessories, software, maintenance & repairs for the Unmanned Aerial System Program
• Drone equipment and office enhancements
Other Operations
• Economic Development data, market research, and event marketing
• Citywide press relations, newsletter, magazine, community survey
• Professional growth development
• Enterprise Vehicle Lease Program
• Weed abatement and water-efficient landscape
• Capital Improvement Plan Projects
• Operating transfers to Fire, CSD, and Library
• Establish operating and sustainability reserves
Attachment 1 to this report details the approved budget requests by departments.
The Measure T budget allocates approximately 51% to Fire and Paramedic services and 27% to law enforcement for FY 2026/27. This represents approximately 77% of the budget dedicated to public safety services. The chart below shows the allocation of Measure T funds across various City operations for FY 2026/27.
Operating Reserves and Sustainability Reserves
Consistent with the stated goal of maintaining a high-performing organization that values fiscal sustainability, transparency, accountability, and organizational efficiency, the City Council established an operating reserve policy of 25% of the Measure T Fund's operating expenditures.
The adopted Operating Budget includes increasing the Measure T Fund reserve and using available (unassigned) fund balance to maintain the Fire District, Community Services District, and Library operating reserves to the City Council’s informal goal of 30% over the two-year cycle. The Measure T Fund unassigned fund balance is projected to end at approximately $18.7 million. This projection is subject to change until the financial audit is completed and the fund balance is determined in accordance with Governmental Accounting Standard Board Statement 54, Fund Balance Reporting.
The estimated operating and sustainability Reserves balances funded by Measure T are shown in the table below.
FISCAL IMPACT
There is no fiscal impact related to receiving and filing this report.
ATTACHMENTS
Attachment 1: FY 2026/27 Budget Detail by Department