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 History (Measure T) Budget to Actual Report for FY 2024/25
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RECO MILLIONENDATION
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
I am pleased to present the Measure T oversight report for the fiscal year (FY) ending June 30, 2025. The Citizens Oversight Committee provides oversight of Measure T district sales tax revenues and expenses. This Measure T Oversight Report covers the reporting period from July 1, 2024, through June 30, 2025. City staff also prepared a separate Measure T budget report for the FYs 2025/26 and 2026/27. This report includes a recap of all Measure T activities. As of the date of this report, the independent external audit for FY 2024/25 has not been concluded. As a result, the actual amounts are subject to change should accounting adjustments be necessary prior to finalizing the audit.
Revenues
The adopted and amended FY 2024/25 revenue projections were $31.4 million and $29.0 million, respectively. The City's sales tax consultant provided updated projections throughout the fiscal year based on factors such as the economic landscape, actual sales, collections, and upcoming economic developments in the fiscal year. The City opted to remain cautious in the second half of the fiscal year with its revenue projections due to expected decreases in sales attributable to uncertainty created by the national public policy, primarily with tariff impositions, inflation concerns, and potential changes to the Federal Fund rate. Furthermore, amending the budget to $27.9 million at the close of the fiscal year.
At the March 2025 Oversight Committee meeting, we projected sales tax revenue at the close of the fiscal year to be nearly $28.5 million based on sales tax collections through December 2024. Due to sales tax receipts being lower than expected for January and February 2025, staff recommended that the City Council amend the budget to $27.9 million. As of June 2025, the fiscal year-to-date Measure T revenue is $28.3 million, approximately $450,000 over the amended budget. The FY 2024/25 sales tax revenue was consistent with the prior year's revenue of approximately $28 million, a sign of revenue plateau during the last few fiscal years, as shown on the following graph.
Expenses
The FY 2024/25 amended expenditure budget is approximately $22.9 million. Akin to revenue projections, staff proposed amendments to the adopted budget to account for an increase in personnel cost based on approved labor agreements after budget adoption, influx of capital improvement projects, and unanticipated recurring and one-time expenses. The year-to-date expenditures at the close of the fiscal year are $25.2 million. This amount includes Capital Improvement Plan project expenditures. The operating budget was approximately $658,798 over budget. The various expenses categories over budgets are attributable to employee benefits costs higher than expected, such as CalPERS Health premium increase, CalPERS retirement, leave buyouts, and vacancy factors. These items were primarily linked with Fire and Police.
Below is a non-exhaustive list of significant Measure T fund expenses:
• 67 authorized positions funded by Measure T since inception;
• 77% of the Measure T budget is dedicated to public safety;
• Police
o Police vehicles, including upfitting costs;
o Police safety equipment for new hires;
o Police Taser and body-worn cameras, equipment, and license;
o Police License plate reader software; and
o Police Unmanned Aircraft Systems (AUS) equipment.
• Fire
o Fire annual hose test services;
o Fire annual ladder test services;
o Fire Emergency Medical Services (EMS) Priority Emergency Medical Dispatcher (EMD);
o Fire mapping response system and image trend annual fees;
o Fire Public Safety Enterprise Communication (PSEC) radio system annual subscription and radio installation;
o Fire Mobile data terminals;
o Fire PPE gear and safety equipment (i.e., turnout gear and other Fire Dept services and equipment);
o Fire replacement equipment (i.e., hoses and ladders);
o Wildland fire service agreement;
o Fire emergency software (i.e., table command, pulse point, Computer Aided Dispatch (CAD) integration system);
o Fire station annual facilities maintenance and major repairs;
o Fire stations PPE extractors for Fire Stations 1, 2, and 3;
o Fire EMS rental agreement;
o Fire Station 2 and 3 generator replacements; and
o Fire Stations maintenance/repairs.
• Economic Development data market research and event marketing;
• Graffiti & weed abatement;
• Vehicle Lease program; and
• Establish operating and sustainability reserves.
Capital Improvement Plan
The Measure T revenue source currently funds several projects in the five-year Capital Improvement Plan as adopted by the City Council that support various enhancements to the services provided to our residents. During the Fiscal Year 2024/25, Measure T allocated approximately $467,000 to fund the rehabilitation and improvement of four community park tot lots throughout the City. An additional $600,000 was allocated to the Parks and Rec Master Plan, Cal Oaks Sports Park Pool for design cost, and the design and construction of pickleball courts. Fire Station 1 is budgeted for about $2.8 million in improvements to rehabilitate the living quarters and for concrete repairs and sewer connections. Measure T fund will aid in funding new projects for the City’s library. Nearly $2.7 million has been contributed or will be contributed to the library’s improvements for the roof, HVAC, flooring, and walls, rain mitigation, and $1.0 million of this will go towards the children's area expansion.
In addition to these completed and current projects, the following table summarizes other Capital Improvement Plan projects funded or partially funded by the Measure T Fund.
The attached report provides a complete list of Measure T Fund Capital Improvement Projects, including year-to-date expenditures and the remaining balance for each project.
Operating and Sustainability Reserves
The City Council's formal policy calls for Operating Reserves of 25% of the adopted budget, with an informal goal of 30%. The Measure T operating reserve balance of $5.2 million fulfills the City Council's operating reserve requirement. In addition, the Measure T fund set aside approximately $2.3 million in FY 2023/24 and almost $283,000 in FY 2024/25 to supplement the operating reserve for the Fire District, Community Services District, and Murrieta Library funds to meet the required reserve requirements.
In addition to the Operating Reserve, certain commitments and assignments of fund balance will help ensure adequate financial resources for planned expenses and unforeseen circumstances and events such as an economic downturn, catastrophic events, unanticipated expenses, and one-time purchases.
For FY 2024/25, the Measure T fund will have an estimated ending balance of $35.5 million, net of contributions and uses, in various Operating and Sustainability Reserves. In February 2025, the City Council approved the use of the Fleet Replacement Reserve for $100,000 for the purchase of a used aerial apparatus. This apparatus will serve as a dedicated training device prior to receiving a new Pierce Tractor Drawn Aerial Apparatus for Murrieta Fire & Rescue (MFR). In April 2025, the City Council also approved the use of $120,000 from the Fleet Replacement Reserves for a portion of the cost of the Police Department Mobile Command Center, $200,000 from the Facility Replacement Reserves for the Police Department Locker Room project, and $900,000 from the Fire Facility Reserve for the Fire Station 1 concrete and sewer connection project. The amounts in each Operating and Sustainability Reserve account are shown in the table below.
Fiscally responsible budgeting, prudent long-term financial projections, fund 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; maintenance of public facilities, such as graffiti removal and other expenses that support the Murrieta quality of life. The FY 2024/25 Budget to Actual report can be found attached to this narrative report.
FISCAL IMPACT
There is no fiscal impact related to receiving and filing this report.
ATTACHMENTS
1. FY 2024/25 Budget to Actual Report