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Home My WebLink About37-City Manager c ,-. '- c CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Subject: Report from the Measure Z Oversight Committee on Uses of Measure Z Funds - April I, 2007 through June 30, 2007 Judith Valles, Chairperson Measure Z Committee Date: March 20, 2008 MICC Meeting Date: April 21,2008 Synopsis of Previous Council Action: March 5, 2007 - Mayor and Common Council adopt Roles and Responsibilities for the Measure Z Oversight Committee Recommended Motion: That the report from the Measure Z Oversight Committee on Uses of Measure Z Funds - April 1, 2007 through June 30, 2007 be received and filed, Contact person: Fred Wilson Phone: 5122 Supporting data attached: stllffreport r~ort Ward: All FUNDING REQUIREMENTS: Amount: none Source: (Acct No.) (Acct. Description) Finance: Council Notes: '1~ Agenda Item No. _ 37 c c c STAFF REPORT Subiect: Report from the Measure Z Oversight Committee on Uses of Measure Z Funds - April I , 2007 through June 30, 2007 Back2round Measure Z was approved by the voters of San Bernardino on November 7, 2006. The measure enacted a .25% district tax for a period of fifteen (15) years, beginning April 1,2007. Voters also approved the advisory Measure YY, which stated that the proceeds of Measure Z "be used only to fund more police officers and support personnel, and to fund anti-gang and anti-crime operations, including drug resistance education and supervised after-school youth activities." . Section 18 of Ordinance MC-I229, which was enacted by the voter approval of Measure Z, required the creation of a Citizen's Advisory Committee. This section states: Section 18. Citizen's Advisorv Committee. The Mayor and Common Council shall create a Citizen's Oversight Committee, which shall review the expenditure of proceeds of the taxes imposed by this ordinance and report on those expenditures to the voters of the City at least once a year. On March II, 2008, the Oversight Committee adopted the attached report regarding the first fiscal year of Measure Z funds, which was for the period of April 1 through June 30, 2007. The Committee also asked that it be forwarded to the Mayor and Council for receipt and filing. Financial impact: None Recommendation: That the report from the Measure Z Oversight Committee on Uses of Measure Z Funds - April 1, 2007 through June 30, 2007 be received and filed. c -- i...- c CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM To: Voters of the City of San Bernardino From: Measure Z Oversight Committee Subject: Report on Uses of Measure Z Funds - April I, 2007 through June 30, 2007 Date: February 26, 2008 Copies: Mayor and Common Council Backeround Measure Z was approved by the voters of San Bernardino on November 7, 2006. The measure enacted a .25% district tax for a period of fifteen (IS) years, beginning April 1,2007. Voters also approved the advisory Measure YY, which stated that the proceeds of Measure Z "be used only to fund more police officers and support personnel, and to fund anti-gang and anti-crime operations, including drug resistance education and supervised after-school youth activities". Section 18 of Ordinance MC-1229, which was enacted by the voter approval of Measure Z, required the creation of a Citizen's Advisory Committee. This section states: Section 18. Citizen's Advisorv Committee. The Mayor and Common Council shall create a Citizen's Oversight Committee, which shall review the expenditure of proceeds of the taxes imposed by this ordinance and report on those expenditures to the voters of the City at least once a year. On February 5, 2007, the Mayor and Common Council charged the Citizen's Advisory Committee (now known as the Measure Z Oversight Committee) with meeting, organizing, and electing officers and reviewing the Committee's charge. At our first meeting on February 13, 2007, the Committee unanimously approved a document further defining and clarifying our Roles and Responsibilities, which was also approved by the Mayor and Common Council on March 5, 2007. The adopted Roles and Responsibilities of the Oversight Committee are as follows: . Review the expenditure plan for proceeds from Measure Z funds beginning in FY 2007-08 Monitor plans and expenditures to ensure that funds are spent in accordance with Measure YY Report to the voters of the city at least once a year regarding the revenues and expenditures of Measure Z funds . . c c c Measure Z Expenditure Report Page 2 . Review an annual Measure Z financial report to ensure that funds are spent in accordance with Measure YY Review Measure Z 5-year expenditure plan focusing on suppression, intervention and prevention . On March 5, 2007, the Mayor and Council adopted a Measure Z Expenditure Policy. This Expenditure Policy specifies that funds will be spent in accordance with the advisory Measure YY. It also establishes programs budgeted in FY 06-07 as the baseline budget for the Police Department, and states that Measure Z funds will not supplant expenditures within that baseline, with some limited exceptions for specific programs that could not be continued without Measure Z funding. The expenditure policy states that Measure Z funds will be used to fund the incremental cost of the 14 sworn and 3 non-sworn Police Department positions created in FY 06-07. These positions were added but only partially funded in the FY 06-07 budget, which reflected the phased-in hiring of the employees to fill these new positions. The additional (incremental) cost to fully fund these 17 positions in FY 07-08 will be approximately $668,100, which will be funded through Measure Z. The remaining cost for these positions will remain funded through regular General Fund resources. Auditor's Report for Fiscal Year 2006-07 At our request, the City's auditors were engaged to provide a separate Independent Auditor's Report on Measure Z proceeds. Since the tax became effective on April I, 2007, this report covers only the period from April I through June 30, 2007. A copy of the report prepared by Rogers, Anderson, Malody & Scott LLP (RAMS) is attached for your review. In summary, the report found that revenues were properly recorded, and expenditures were in keeping with the uses outlined by Measure YY and the Measure Z Expenditure Policy. Highlights of the report are as follows: . All receipts of the voter approved transaction and use tax were properly recorded in the general fund of the City . Adequate supporting documentation existed for selected items and the expenditures related to the specific projects stated in the Measure . No unallowable costs were charged to Measure Z . Salaries charged to Measure Z were reasonable in relation to the activities and duties performed by the related personnel At our meeting of February 12,2008, the RAMS audit personnel provided us with an overview of their report. RAMS noted no issues or concerns as a result of the audit. We received and filed the report on that same date. Report on Expenditures of Measure Z Funds The Measure Z Oversight Committee found that the expenditures did not supplant existing services, but enhanced them. During this reporting period, Measure Z funds were used for crime Measure Z Expenditure Report Page 3 c suppression, recruitment, and administrative activities. The following summarizes the revenues and expenditures during FY 2007-08 by general category of use: REVENUES District Sales Tax 1,162,882 Recruitment expenditures: Recruitment & Travel - travel for college career nights, radio/newspaper ads, billboards $ 51,645 Background Investigations $ 9,007 Scantron Quick Score Machine $ 5.722 Subtotal $ 66,374 Crime suppression expenditures: Safety Overtime-Crime Impact Teams $ 547,909 Helicopter Services contract $ 211,774 Garage Charges - fuel and vehicle maintenance for Crime Impact Team vehicles $ 37,800 .- Supplies and small equipment - '-' Nextel phone car kit $ 86 Office Depot - Vertical File $ 114 Flight Suit for Helicopter Observer $ 234 Capital Outlay - Partial pay for Ballistic Vests $ 49,656 Equipment for 10 Patrol Cars - cages, door panels, bumpers, seats, etc $ 14,607 10 Priority Start! ProMax Software $ 1,061 6 each Helicopter Helmets, suites battery packs, earphones, etc . $ 8,984 10 Secure-Idle devices $ 1.252 Subtotal $ 873,477 Administrative expenditures: State Board of Equal. Fees $ 110,667 TOTAL EXPENDITURES 1,050,518 c ENDING BALANCE - June 30, 2007 112,364 Measure Z Expenditure Report Page 4 ,- As the chart indicates, most of the funds uses during this period were used for crime suppression \....-- activities. This included officer overtime for Crime Impact Teams, the helicopter services contract, ballistic vests for officers, and other miscellaneous related equipment, supplies, and small technology purchases. The total expenditure on crime suppression activities and related support was $873,477. A total of $66,374 was spent during this reporting period on recruitment efforts. Enhanced recruitment efforts have been a focus of the City, as the competition continues to be significant among law enforcement agencies for qualified police officers. This expenditure category includes travel to career fairs, advertising costs, and equipment. The third category of expenditures is the administrative expenditures related to the collection and administration of Measure Z. The State Board of Equalization (BGE) charged the City $110,667 to begin the collection and administration of the tax. We understand that in future years this administrative charge will likely be reduced. The following chart illustrates the uses of the funds between these three categories of expenditures: Uses of Measure Z Funds. April 1 . June 30,2007 /- o Recruttment . Crime suppression C Administration \- Thank you for the opportunity to serve on this important Committee, and to provide you with this first report regarding Measure Z expenditures. We look forward to continuing to work with the Mayor and Council to help reduce crime and improve the quality of life in our community. c cl"il1IIT ROGERS, ANDERSON, MALODY & SCOTT, LLP CERTIFIED PUBLIC ACCOUNTANTS JAYH_ZERCHER,CP A AOSERTB.MEMORY,C P A PHILLIPH, WALLER, CPA BRENDA l OOLE. CP A TERAYP SHEA.C P A KIRK A. FRANKS, C FA MATTHEW B. WILSON. C PA SCOTT W, MANNO. CP A lEEN"- SHANBHAG, CPA NANCY O'RAFFERTY. C P It BRAD A. WElEBIR. CPA LYNN W. JENKINS. CPA MARION M. HABERKORN, CPA Citizens' Oversight Committee and City Council City of San Bernardino, California Independent Auditors' Report on the Measure Z Public Safety Tax (Measure Z) .- We have audited the accompanying schedule of revenues and expenditures of the Measure Z Public Safety Tax (Measure Z) of the City of San Bernardino for the period from inception (April 1, 2007) to June 30, 2007. This financial statement is the responsibility of the City of San Bernardino, California's management. Our responsibility is to express an opinion on this financial statement based on our audit. ,-. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the schedule of revenues and expenditures is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the schedule of revenues and expenditures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the schedule of revenues and expenditures. We believe that our audit provides a reasonable basis for our opinion. The accompanying schedule of revenues and expenditures presents only the revenues and expenditures of the Measure Z Public Safety Tax (Measure Z) of the City of San Bernardino. In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and expenditures of the Measure Z Public Safety Tax (Measure Z) of the City of San Bernardino for the period from inception (April 1 , 2007) to June 30, 2007 in conformity with accounting principles generally accepted in the United States of America. /<. ~I ~~, ~ 'rf~a~ January 22, 2008 C MEMBERS AMERICAN INSTITUTEOF C EATIFIEO PUBLIC ACCOUNl AN' S PCPS THE AICPAALlIANCE FORGPAllflMS VANIR Il)WER . 290NORTH "0" STREET. SUITE300 SAN BERNARDINO. CA 9240 1 (909) 8(1'11).,; I . (909) 824-6736 . FAX (909) 889-5361 Website.www,ramscpa nel CALIFORNIA SOCIETY OF CERTII'"IED PUBLIC ACCOUNT ANl S c c c CITY OF SAN BERNARDINO Measure Z Public Safety Tax (Measure Z) For the period from inception (April 1 , 2007) to June 30, 2007 Beginning Balance - April 1 , 2007 $ Revenues: Sales tax (0.25%) 1,162,882 Expenditures: Salaries and benefits 547,909 Maintenance and operations 52,0'(9 Contractural services 331 ,448 Internal services 37,800 Capital outlay 81,282 Total expenditures 1,050,518 Ending Balance - June 30, 2007 $ 112,364* * The ending balance of $112,364 at June 30, 2007 does not reflect the following carryovers from fiscal year 2006/07 to fiscal year 2007/08, approved by the City Council in December, 2007: Continuing Appropriations Encumbrances Total $ $ 318,300 128,200 446,500 cJillIIT . ROGERS, ANDERSON, MALODY & SCOTT, LLP CERTIFIED PUBLIC ACCOUNTANTS JAYH.ZERCHER,C P A AOBEAT B. MEMORY. CPA PHlLUP H WALLEA. CPA. BAENDAL.ODlE.C P A TEARVP.SHEA.CPA KIRK A FRANKS. C PA M1.TTHEW B WILSON. C PA SCOTT W. MANNO, CP A LEEN" SHANBHAG, CP A NANCY O'RAFFERTY, CPA BRAD A. WELEBIA, CPA LYNN W. JENKINS. CP A. MARION M. HABERKORN, CPA Citizen's Oversight Committee and City Council City of San Bernardino, California Additional Information Regarding the Audit ofthe Measure Z Public Safety Tax (Measure Z) of the City of San Bernardino c Our audit of the Measure Z Public Safety Tax (Measure Z) of the City of San Bernardino included the procedures identified below, as well as other procedures performed in connection with our audit of the financial statements of the City of San Bernardino (the City) for the period from inception (April 1 , 2007) to June 30, 2007 which resulted in our unqualified opinion that the financial statements of the City were fairly stated in accordance with generally accepted accounting principles. This information regarding our audit of the Measure Z Public Safety Tax (Measure Z) has been provided to communicate to the Citizens' Oversight Committee the results of the audit procedures identified below: 1. We analyzed the following documents in order to gain an understanding of the requirements stated in Measure Z: . Ordinance No. MC-1229 . Resolution 2006-286 . Resolution 2006-287 . Resolution 2006-288 . Resolution 2006-289 Results: We noted that the City Council placed before the voters of the City of San Bernardino a Public Safety Transactions and Use Tax Ordinance (the Ordinance) relating to the imposition of a one-quarter of one percent (0.25%) transactions and use tax to fund pUblic safety operation. The election on the Measure was held on November 7, 2006 at which time the voters were asked whether or not the City should implement a quarter-cent sales tax for 15 years to improve public safety, fund anti-gang and anti- crime operations, and fund supervised after-school youth activities. The Measure presented to the voters provided that such funds would be utilized with the creation of a citizen's oversight committee and independent financial audits. At the election on November 7, 2006, the voters passed the Ordinance, identified as Measure Z on the ballot. C MEMBERS AMERICANINSTlTUTEOf CERTIFIED PUBLIC ACCOUNTANT S PCPS THE "lePA ALLIA"lCf FORCP/l, r lAMS VANIA lOWER. 290NQRTH "D" srREEf. SUITE 300 SAN BERNARDINO, CA 9240' (909/889 (Jill . (gag) 824.6736 . FAX (909) 889-536 1 Websife. wwwramscpanet CALIFORNiA SOCIETY OF CERTIFIED PUBlICACCOlJN"T ANTS C Citizens' Oversight Committee and City Council City of San Bernardino, California Page 2 2. We obtained and reviewed a summary revenue detail report from the City's general ledger for Measure Z Public Safety Tax for the period from inception (April 1, 2007) to June 30, 2007. We reviewed supporting cash receipts to test whether the City had properly recorded receipts of the voter approved transaction and use tax in the amount of one-quarter of one percent (0.25% sales tax) in the general fund of the City. Results: We noted no exceptions as a result of our procedures. All receipts of the voter approved transaction and use tax in the amount of one-quarter of one percent (0.25% sales tax) were properly recorded in the general fund of the City for the period from inception (April 1, 2007) to June 30, 2007. 3. We obtained and reviewed a summary expenditure detail from the City's general ledger for Measure Z Public Safety Tax for the period from inception (April 1 , 2007) to June 30, 2007. We selected individually significant invoices listed in this expenditure detail report and tested whether adequate supporting documentation (vendor/supplier invoices, receipts, etc.) existed and whether the expenditure related to the specific projects stated in the Measure. We also examined the supporting documentation to test whether the amounts agreed to the City's general ledger and that no unallowable costs were charged to Measure Z Public Safety Tax. ,'_. I \"""... Results: We noted no exceptions as a result of our procedures. Adequate supporting documentation existed for selected items and the expenditures related to the specific projects stated in the Measure. In addition, amounts on the supporting documentation agreed to the City's general ledger and no unallowable costs to Measure Z Public Safety Tax were detected by our testing. 4. We obtained and reviewed selected journal entries to test whether the allocation of salaries to Measure Z Public Safety Tax were reasonable. We obtained an understanding from the City of the methodology used to allocate salaries, as well as reviewed documentation supporting these allocations to Measure Z Public Safety Tax. In addition, we inquired selected employees charged to the Fund to determine if the salaries allocated were reasonable based upon duties performed. Results: We noted no exceptions as a result of our procedures. Salaries charged to Measure Z Public Safety Tax were reasonable in relation to the activities and duties performed by the related personnel. This report is intended solely for the information and use of the City Council, management of the City of San Bernardino and the Citizens' Oversight Committee and is not intended to be and should not be used by anyone other than these specified parties. However, this limitation is not meant to limit the distribution of this report which is a matter of public record. c t..~.II~' /II~ 'tr;JeAi aP January 22, 2008