Title
Staff Report for Resolution Approval Establishing the Composition of the Citizen Oversight Committee Related to Measure Z and Defining the Scope of Responsibility of the Committee
Staffreport
RECOMMENDATIONS
The Finance Committee recommends the City Council approve establishing the composition of the Citizen Oversight Committee related to Measure Z and defining the scope of responsibility of the committee.
BACKGROUND
At the Municipal election in November 2010, San Leandro voters approved the ordinance putting in place a Transaction and Use Tax at the rate of 0.25%, the sales tax measure referred to as Measure Z.
The ordinance stated that at the time, local revenues were down $11.6 million over a 4-year period. As a result, the City had drastically reduced spending, including reducing staff by almost 20% over the prior two years (95 full-time positions), freezing most employee salaries, implementing a two-tier retirement system, furloughing employees, closing City offices once a month, and using a significant portion of the City's reserves. Without additional revenue, further significant cuts would have been necessary to address the budget shortfall.
Additional budget impacts would have been necessary to balance the General Fund budget if Measure Z was not approved by city voters. These included:
· 10 positions eliminated.
· Police reductions such as Crime Prevention Office, 2 Traffic Officers, and School Resource Office.
· Fire ladder truck and 9 firefighters eliminated.
· Critical service cuts:
ü Neighborhood police patrols and gang suppression.
ü Dramatically reducing street repairs.
ü Close library branches and reduce library services and reduce senior adult and youth recreation programs.
To insure that Measure Z revenues would be spent only on local services, the ordinance requires independent audits, an independent citizen oversight committee, and a 7-year sunset to ensure that funds are only efficiently and effectively used for community priority services.
Although approved by the voters in November 2010, the transaction and use tax ordinance did not become operative until March 31, 2011. The tax first started to be collected on April 1, 2011. The City received $869,000 during the initial quarter, April to June 2011. A complete year of the tax revenue, estimated at $3,600,000 will be collected during 2011-12. Through November 2011, the City has recorded about $1,575,000 in revenue.
DISCUSSION
Ordinance 2010-022, that created the Transaction and Use Tax calls for the formation of a Citizens Oversight Committee. Section 2-19-165 in summary states:
There shall be a five-member committee of members of the public to review and report on the revenue and expenditure of funds from the tax adopted by this chapter. Prior to the operative date, the City Council shall adopt a resolution establishing the composition of the committee and defining the scope of its responsibilities. The section called for the City Council to complete appoint of the members of the committee by the end of 2011.
Retail businesses and residential and business consumers represent community segments most directly impacted by Measure Z. The following is the suggested composition for the Citizens Oversight Committee:
· Representative of the San Leandro Chamber of Commerce.
· Retail representative from the Downtown Business Association
· Officer from a homeowner or neighborhood association.
· City Board or Commission member.
· Owner or manager of a business located in San Leandro.
The resolution approved by the City Council should also define the scope of the responsibilities for the committee. Duties should include developing an annual report on the following:
· Amount of Transaction and Use Tax revenue generated by Measure Z
· Use of the tax revenue and the impact on the City's operating budget including a statement on the impact of the revenue in reducing the amount of cuts resulting from addressing the budget shortfall
· Statement of expenditures funded by Measure Z revenues.
· Impacts of Measure Z on local business competitiveness and the collection of Sales Tax revenues.
· Measure Z public information and transparency efforts.
· Participation in developing a revenue sustainability plan and strategy.
The Finance Committee also discussed the meeting frequency and terms for members on the Citizen Oversight Committee. It was agreed that at least during the first year, the Citizen Oversight Committee may need to meet more than once, although it may not be necessary to meet more than once each year in the future. Membership limits should be set at two 3-year terms.
Committee Review and Actions
· Finance Committee reviewed and approved the recommended composition of the Citizen Oversight Committee related to Measure Z and definition of the scope of responsibility of the committee.
ATTACHMENTS
None
PREPARED BY: James H. O'Leary, Interim Finance Director, Finance Department