TO: HONORABLE CHAIR AND MEMBERS OF THE TRANSACTION AND USE TAX OVERSIGHT COMMITTEE
FROM: Javier Carcamo, Finance Director
PREPARED BY: Javier Carcamo, Finance Director
SUBJECT:
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District Sales & Use Tax (Measure T Fund) Adopted Budget for Fiscal Years 2025/26 and 2026/27
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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 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.
I am pleased to present the Adopted Measure T Operating Budget for Fiscal Year (FY) 2025/26 and FY 2026/27. The estimated district sales tax revenue is $28.7 million and $29.5 million for FYs 2025/26 and 2026/27, respectively. 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 FY 2024/25 amended budget, primarily based on anticipated new retail activity, business growth, and population increases.
The table below summarizes the projected revenues, expenditures, and the contribution to the fund balance.
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 FY 2025/26 adopted budget, and 32% of the FY 2026/27 adopted budget. Historically, the Fire District, Community Service District, and recently, the Library funds have not been financially self-sustaining, requiring a transfer from the Measure T fund to support their operations. Aside from the transfer budget, the personnel budget represents approximately 51% and 52% for FY 2025/26 and FY 2026/27, respectively.
The adopted biennial budget incorporates expenditure budget requests from all City departments. The proposed use of Measure T Funds includes:
Personnel
• 67 authorized positions for FY 2025/26
• 70 authorized positions for FY 2026/27
• 77% of the Measure T budget is dedicated to public safety in FY2025/26.
Fire Operations
• Fire Service Agreement with CalFIRE
• Public Safety Enterprise Communication (PSEC) radio equipment and system subscriptions
• Emergency Medical Services (EMS) software subscriptions (EMS priority dispatching, Emergency Medical Dispatcher (EMD), image trend, NFIRS, base, elite, EMD Spanish, pulse point, tablet command, first watch)
• EMS lease/rental equipment
• Fleet Replacement Annual Allocation
• Computer Aided Dispatch (CAD) to CAD Integration system
• Mobile Data Terminals
• Equipment replacements (ladder, hose)
• Office (7) 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 (UAS) Program
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
• 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 48% of the budget to Fire and Paramedic services and an average of 28% to law enforcement for FY 2025/26 and FY 2026/27. This represents approximately 77% of the budget dedicated to public safety services. The chart below displays the allocation of Measure T funds to the various City operations for FY 2025/26.
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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 with a requirement of 25% of operating expenditures for the Measure T Fund. While the Operating Reserve Policy establishes the reserve levels at 25%, the City Council set an informal goal of 30% in reserve.
The adopted Operating Budget includes increasing the Measure T Fund reserve to 30% 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 $24.3 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.
In addition to contributions to the Operating Reserves, staff recommended that the City Council approve the transfer of the Measure T Replacement Reserves, set aside for City and Fire fleet, into the newly established Fleet Replacement Fund. This dedicated program was created to support a proactive, long-term replacement plan for the City’s fleet and fire equipment.
At the August 19, 2025, City Council meeting, staff also recommended approval of an interfund loan of $3.5 million from the Measure T Fund to the Library Fund for the Library expansion project. The loan would utilize Measure T reserves previously set aside for CSD facility needs. Rather than pursuing a traditional bank loan or municipal bond, staff evaluated an interfund loan as a more favorable alternative financing tool. The opportunity cost analysis indicated a positive benefit to both the lending and borrowing funds.
The estimated operating and sustainability balances funded by Measure T are shown in the table below.
ATTACHMENTS
Attachment 1: FY 2025/26 Budget Detail by Department