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By Chris Frost
Oxnard-- The Measure O Citizen's Oversight Committee met, April 22, and it named Oxnard Chamber of Commerce CEO Nancy Lindholm, its new chairperson, and Deirdre Frank Vice-Chairperson.
Committee Member Steve Nash asked if the city has assigned funding sources for ongoing Measure O expenditures if Measure O ends prematurely.
"We've started to think in that direction," Deputy City Manager Shiri Klima said.
Nash said he wants to make sure the Measure O Committee makes its presentations to the council.
Klima said Measure N is in litigation, and the measure terminates Measure O if the city doesn't meet certain street conditions by certain dates.
"The city's current pavement condition index (PCI) is 64," she said. "The pavement condition index is a range between zero and 100. Zero is the worst, essentially an unpaved street and 100 is the best condition, a brand new street."
Measure N says that if the pavement condition index isn't at least a 65 by September of 2022, Measure O terminates in March 2023.
"If the PCI isn't at least a 70 by September of 2024, then Measure O terminates in March 2025," she said. "If the PCI isn't at least a 75 by September of 2026. then Measure O terminates in March 2027."
The matter will be resolved soon.
"Every two years, we have to make substantial improvements in the pavement condition index, or Measure O terminates early," Klima continued. "A hearing is scheduled for May 24, in which Judge Walsh is going to hear the merits of the city's post-election challenge to Measure N, as well as Measure M, which is another one of the Starr measures. Judge Walsh will determine the legal sufficiency of these initiatives."
Klima said the city did pose a pre-election challenge, and Judge Walsh said the city needed to wait until after the election.
"That's typical," Klima said. "The challenges have a much higher hurdle of being passed. If at that time, the judge determines that Measure N is not legally acceptable, then that's the end of the discussion. Measure N goes away, and Measure O continues as it was scheduled to continue until the end of 2028."
If Measure N is legally acceptable, she said the city needs a game plan.
"We, the city, need to decide what we're going to do," she said. "Are we going to meet these hurdles for the Pavement Condition Index and keep Measure O for increments of two more years, or are do decide that we're not going to meet those hurdles? On April 27, at the Public Works & Transportation Committee meeting, the three council members are going to discuss the pavement management update."
The same item will come before the council on May 18.
"The council members policy decision regarding the Pavement Condition Index as to what PCI we should reach, and what the schedule should be for the PCI will determine when Measure O terminates unless the court determines that it is invalid," she said. "Based on that discussion, staff will know if they determine they want to reach a 70, then Measure O will terminate in 2025. If the council determines they want a 75, then we'll have Measure O until 2027."
Klima said she would come back to the Oversight Committee and the council with an updated weaning schedule.
"We currently have a schedule to wean off Measure O and either remove programs entirely or move them onto the general fund," she said. "If we learn through that discussion that Measure O will terminate in 2025, then we will set up a new weaning schedule to terminate in that year. I will come back and update you all at our next meeting with a proposal. I will let you know, based on the council's decision, how much we must cut from Measure O. This is the staff's proposal on how to approach that."
Frank asked why the council is talking about the issue on May 18 when the hearing is on May 24?
"We do want to have a recommendation before we go into that court hearing," Klima said.
Commissioner Ruby Darias asked if there is a link for additional information on Measures M and N?
"The details I read about Measure N are in the city engineer's report for the Public Works & Transportation Committee," Klima said. "Within that Powerpoint, you will see a summary of Measure N, and it's a visual that makes it a lot easier."
Nash advised the commissioners to think about the issue and not assume that Judge Walsh will overturn the initiative.
"How do we fund whatever the cost of these ongoing costs of these programs are," he said. "I'm sure it's over $10 million, but it might be over $14 million."
He asked for a priority list they can rank.
Durias said the committee is already discussing the issue.
"That's why we're talking about the weaning off process," she said.
Representatives from city audit firm Eadie & Payne joined the meeting and updated the committee on Measure O as of June 30, 2020.
Hong Nguyen, a partner with Eadie & Payne, presented the update to the committee and said all the project expenditures were consistent with Measure O and noted no projects over budget.
"We issued a clean opinion on the city's financial statements," she said. "This is the best opinion you can have, and because we issue an opinion for the city overall, this clean opinion includes the activities of Measure O."
Fund number 104, the Measure O Fund, is part of the general fund group.
"If you look at the city's financial statement overall, the big schedules that are at the beginning of the report are included in the general fund column," she said.
For the fiscal year ending June 30, 2020, she said the city's Fund 104 has approximately $12 million in assets, including cash and investments.
"You also have a receivable coming back from the general fund of approximately $6 million, which leaves you a fund balance of $18 million, which be carried forward to use on future projects and expenditures," Nguyen said. "Your total revenues were approximately $14.4 million; there were expenditures of $13.8 million and transfers of $5 million."
That leaves the city with a $4.5 million decrease in its Measure O fund.
Eadie & Payne Audit Supervisor Mary Maxion delved into the city's revenues and said the primary source of Measure O revenue is sales taxes.
"While we usually expect a slight increase in sales tax each year, the last quarter of the fiscal year 2020 was impacted by Covid-19 and the pandemic," she said. "Sales taxes decreased overall for the fiscal year."
There was an increase in expenditures, she said, from $13.2 million to $13.8 million, but the expenditure's makeup remains consistent.
"There was a slight shift in expenditure allocations between the capital outlay expenditures that decreased by around 7 percent compared to last year's share," she said. "That moved over to community development and public safety expenditures."
The total revenues fell short by about $600,000 because of the sales tax decrease, Maxion said, but the city responded and made budget amendments from its original $15.5 million to $14.3 million.
"The city did a great job adapting to these budget cuts and ended the fiscal year under budget, with only $13.8 million in fund expenditures," she said.
The commissioners heard about the other financing uses, which consists of long-term debt service obligations, the re-creation of City Corp subsidies, and one-time transfers to the general fund for the fire department and performing arts center.
"There was a net annual activity of about $4.5 million," she said. "There was a positive net change of $600,000 before the transfers. Overall, I want to echo that the city did a great job balancing and managing its revenues and expenditures."
The Oversight Committee will hold a special meeting to address Measure N's impact on Measure 0 and develop a position, April 28.