Hi, welcome.

This is the April 30th, 2026 special meeting of the Measure O Citizens Oversight Committee.

We're conducting this meeting meeting at City Hall in the chamber.

The meeting is being broadcast on TV, video streamed, and can be viewed later on the city's website or the city's YouTube channel.

First item, Jeff Feit, a committee member moved out of the area and so was no longer eligible and has resigned.

We will be looking for another committee member.

Will the Secretary please call the roll?

Yes, Chair Bartlett.

Here.

Vice Chair Mulligan?

Here.

Committee member Hildreth.

Here.

And committee member Smyers.

Here.

Thank you.

Have the committee members reviewed the minutes from the last special meeting?

I have.

I have.

Yes.

Would you conduct a roll call?

How about a motion to approve the minutes?

Acceptable without correction.

I'll second.

Okay, and roll call vote.

Chair Bartlett.

Approved.

Vice Chair Mulligan.

Approved.

Committee member Hildreth.

Yes.

Committee member Smyers.

Yes.

Thank you.

Under California public under California law, public comments in special meetings are limited to subjects that are on the agenda.

Therefore, public comment will take place during the committee consideration of the item.

The only item on today's agenda is to hear the Q3 report.

The Secretary would like to present the report.

Yes, thank you.

I am Karsten Lacass, Administrative Services Director, and today I'm going to walk through the fiscal year 26 third quarter budget update for Measure O.

So this afternoon I will cover our projected revenues and drivers for those expected results.

We will look at the expenditures to date and where we think we will be at year end, and the projected fund balance for fiscal year 26 and the requested action of this committee this afternoon.

So revenue and expenditure projections for the third quarter are based on actual results through March 30th of 2026, as well as anticipated changes in the economy and operations through the end of the fiscal year.

Measure O revenues and use of reserves are projected to be 23.16 million at the end of fiscal year 26, which exceeds budget by approximately 440,000.

Expenditures are projected to be under budget by approximately 80,000, and we will cover the expenditures in each budget category further into the presentation.

There is a projected contribution to fund balance at year end of approximately 2.3 million.

As you know, the transaction and use tax revenue is the primary revenue in Measure O.

For fiscal year 26, it is projected to be approximately 180,000 more than budget.

The interest earned is expected to exceed budget by about 260,000 for a total projected revenue of 13.28 million.

Beginning in fiscal year 24, the city set aside 9 million annually in a dedicated reserve for the Heather Farm Park Aquatic and Community Center project.

The reserved reached 16 million as of June 30th of 2025.

And in November of 2025, 9.88 million of that reserve was appropriated for phase two construction, leaving a reserve balance of 6.12 million.

The total revenue and use of reserves projected for fiscal year 26 is 23.16 million.

Next I will touch on the main drivers for the increases in the transaction and use tax revenues.

Sales and use taxes statewide are experiencing slower than anticipated growth over fiscal year 25 at only 1.2 percent.

Locally, Walnut Creek has been impacted by the changes in the auto and transportation category.

However, where we saw just a 0.4% growth in new motor vehicle sales, both the county and state had negative growth of 1.7 and 5.3 respectively.

Walnut Creek experienced growth of 3.5% across all categories year over year, which exceeds both the county growth of just 0.8% and the state at 1.2%.

Measure O is collected with sales tax and growth generally tracks similarly to sales tax growth with some differences within categories since it is a transaction in use tax.

When comparing quarters year over year, measure O revenue has increased by 5.5%.