Measure O oversight committee refers FY26 third-quarter update to Walnut Creek City Council

Kirsten Lacasse, Walnut Creek’s administrative services director, told the Measure O Citizens Oversight Committee on April 30 that Measure O revenues and use of reserves are projected at $23,160,000 for fiscal year 2026, about $440,000 more than budget, with projected expenditures of $20,880,000 and an estimated year-end contribution to fund balance of roughly $2.27 million.

Lacasse said the transaction-and-use tax that funds Measure O is projected to exceed the budgeted amount for FY26 in part because of stronger local growth in general consumer goods, restaurants and hotels, and building and construction. She reported the city has set aside an annual $9,000,000 reserve for the Heather Farm Aquatic and Community Center project; that reserve reached $16,000,000 as of June 30, 2025, and $9,880,000 was appropriated in November 2025 for phase 2 construction, leaving $6,120,000 in that reserve.

The presentation noted the city issued $55,000,000 in lease revenue bonds in December 2025 to fund Heather Farm; the bonds carry an approximate yield of 2.17 percent and produce about $7,530,000 in annual debt service. Lacasse said lower-than-expected debt service will yield about $1.5 million in savings compared with earlier assumptions. The total project budget for Heather Farm is $75,800,000 and the bond proceeds are obligated to construction costs.

Committee members pressed staff for construction and financing details. Mike Vickers, assistant director of public works, said crews completed initial clearing and site preparation, but recent rains briefly slowed earthmoving; crews expect to resume with underground drainage work next week. Vickers said construction crews have encountered more groundwater than last season and are conducting dewatering as part of planned work, causing only a few days’ delay.

A member who reviewed the bond repayment schedule asked why annual debt service appeared higher than a simple 2 percent calculation on $55 million; Lacasse clarified these lease revenue bonds amortize over the life of the issue, so the annual payment includes principal and interest and therefore is larger than a straight 2 percent-of-principal figure.

Lacasse also told the committee the California Department of Tax and Fee Administration reallocated how some auto sales are reported, and that change reduced the city’s general-fund sales tax receipts by about $2,000,000 in the current fiscal year. She said that reallocation affects the general fund but will not materially change Measure O receipts because Measure O’s auto portion is tied to where vehicles are registered.

Members discussed Measure O-funded personnel and services. Lacasse said positions paid from Measure O (the metro-funded public safety positions and crossing guards) would not be affected by the $2 million general-fund pressure, because that revenue shortfall is a general-fund issue. Committee members and a Contra Costa County library commissioner-style commenter praised Measure O’s funding for libraries: the county provides a base of service and Measure O adds 12 hours per week at each branch; Lacasse said the Measure O contribution to that program is about $250,000 of an approximately $284,000 annual cost.

The committee also heard from Kathy Hemmenway, executive director of the Walnut Creek Downtown Association, who described Measure O-funded downtown programming and placemaking: waived park fees and support for Walnut Creek on Ice and Oktoberfest, utility-box and painted-piano public art, expanded First Wednesday programming now evolving into the Locust Street Festival, and a downtown vision plan. Hemmenway said the association’s work supports roughly 4,650 local businesses and that events bring thousands of visitors and measurable foot traffic to downtown.

After discussion, Committee Member Smires moved to refer the FY26 third-quarter Measure O budget update to the Walnut Creek City Council for acceptance; another member seconded. The committee approved the referral by unanimous roll-call vote.

Staff announced the committee’s next meeting is expected in early December, when members will review the fiscal year-end results and the audit. The chair then adjourned the special meeting.