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Measure U oversight panel: revenues flat, reserves at 25% and shortfall looming
Summary
The citizens oversight committee reported about $8.65 million in Measure U receipts for FY24–25, noted revenues have been flat for four years and warned the city may need to use reserves; the committee is producing a 10‑year capital finance forecast to identify funding gaps and options.
Citizens Oversight Committee Chair Bob McKennell told the Placentia City Council on Nov. 18 that Measure U generated about $8.65 million in receipts for fiscal year 2024–25 and that the city’s allocations — roughly 50% to infrastructure, 30% to salaries and retention, 10% to OPEB and 10% to reserves — remain in place under the measure.
McKennell said the oversight committee’s legally required annual statement shows Measure U revenues have been essentially flat for the last four years (around $8.6 million) and that sales-tax‑driven receipts are forecast to decline next year. He said contingency reserves are about $5.7 million, which the committee records as 25% of the operating budget, and cautioned the council that the city may need to draw on reserves this year.
The oversight chair described a recent, top-level capital needs assessment covering the next 10 years and said it shows a significant revenue shortfall that Measure U alone will not cover. The committee is working to develop a capital improvement financial forecast that pairs projects with funding sources; McKennell said the committee will return with possible responses, including reducing service levels, changing service delivery models to lower costs, or seeking new revenue sources.
Council members asked when the committee would report back with the full road-assessment picture; McKennell said staff expects to return with more complete findings around March. When asked how Measure U allocations would change if reserves drop below 25%, he said transfers for OPEB and employee-retention items remain fixed and that the local allocation mix would shift so reserves would receive 20% and capital 40% until reserves are rebuilt.
The committee’s presentation and the council’s questions focused on the practical effects of flat Measure U growth on long-term fiscal sustainability, saying the measure provided a one-time step change in salaries and benefits but has not kept pace with overall budget growth. The council accepted the report and thanked the committee; no formal budget action was taken at the meeting.
The oversight report and associated charts are posted on the city’s website as part of the Measure U annual report; the committee said it will continue to monitor revenues and return with recommendations.
