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Home My WebLink AboutCC Min 2017-05-24 (Special Study Session)Seal Beach, California May 24, 2017 The City Council met in a Special Study Session at 5:32 p.m. in the City Council Chambers. Mayor Massa -Lavitt led the Salute to the Flag. ROLL CALL Present: Mayor Massa -Lavitt Council Members: Varipapa, Deaton, Moore, Sustarsic Absent: None City Staff: Jill R. Ingram, City Manager Patrick Gallegos, Assistant City Manager Interim Chief Joe Miller, Seal Beach Police Department Chief Joe Bailey, Marine Safety /Lifeguard Victoria L. Beatley, Director of Finance /City Treasurer Crystal Landavazo, Interim Director of Community Development Steve Myrter, Director of Public Works Robin L. Roberts, City Clerk Alayna Hoang, Finance Manager CITY MANAGER REPORT City Manager Jill Ingram indicated she is pleased to report a balanced budget ensuring healthy reserves through the Council's Fiscal Policy. She noted that this is a collaborative team effort that begins in January with staff and City Council. City Manager Ingram noted that we each take ownership of the budget and noted that this year the City faced significant expenditure increases beyond our control while maintaining excellent services and preserving the quality of life expected in Seal Beach. City Manager Ingram thanked the City Council for their policy guidance, the executive management team and their teams for their collaborative efforts and Director Beatley and Finance Manager Hoang for their financial expertise. BUDGET STUDY SESSION Director of Finance /City Treasurer Victoria L. Beatley and Finance Manager Alayna Hoang provided the 2017 -2018 FY Budget PowerPoint presentation. • Overview of the FY 2016 -2017 Budget process. • Municipal Budgeting 101: Discussion of a balanced budget. • Budget Development: Zero -based budgeting developed based on Federal, State and City Council mandates, supplemental requests; revenue based on the prior three years of actual receipts adjusting for one -time events and known trends, General Fund revenue; expenses based on historical costs; personnel costs based on existing agreements noting that Public Safety agreements are still under negotiations; Capital based on project costs using Engineer's estimates; and reserves based upon adopted Fiscal Policies. • Seal Beach Mission Statement: The City of Seal Beach provides excellent city services to enhance the quality of life and to preserve our small town character. • Core Values/Guiding Principles: Excellent customer service; mutual respect; teamwork; professionalism; and honest and ethical behavior. • City Council Goals: Provide a quality and pier environment, including a restaurant; achieve short and long -tens fiscal sustainability; improve and maintain infrastructure and facilities; attract, develop; compensate and retain quality staff; and enhance public safety. • Budget Goals: Present balanced budget; preserve current service levels; preserve core work force; and maintain 20 -25% fund balance. • Budget Challenges: Oil related revenues; Franchise fees; structural changes tin CalPERS practices; Orange County Fire Authority; and Joint Powers Insurance Authority. • Revenue Projections: Top changes in projections are Property Taxes at $268,300, Franchise fees at- $172,600, Transient Occupancy Tax at $100,000 and Barrel Tax - $50,000. Page 2 — City Council 5124 /2017 • Major Revenue Sources Percentages: Sales Tax 15 %, Property Tax 35% and Utility User's Tax 15 %. Revenue assumptions are conservative, based on historical trends and current economic information. • Utility User Tax Annual Review: November 2014 - Ordinance 1643 requires annual review of UUT in conjunction with the Annual Budget. Estimate is to generate $4.5 million in FY 2016 -2017, is the 2nd or 3rd largest revenue source and is used to maintain essential services at a current rate of 10 %. • Expenditure Estimates: Fire Station Bonds - $519,000 (principal and interest — 04/15/2024); OPEB - $305,200 lifetime medical (Retirees); GASB 45 — scheduled to be paid quarterly (include $144,500 from Actuarial Report); Pension Bond - $1,258,200 (principal and interest) and Police - (06/1512019); COLA — 2.7% for Executive, Mid - management, SBSPA and OCEA. • Council Discretionary Fund Review: Included all Districts. • General Fund Summary (Operating Budget Only) FY 2017 -2018 Budget Revenues over Expenditures: Projected Revenues $30,195,900; Projected Expenditures $30,184,900; and the Estimated Surplus is $11,000. • General Fund Balance: Estimated General Fund Balance is $14,514,570. • Supplemental Requests: Management Analyst Part-Time; two Police Officers; eliminate an Officer, add a Sergeant; renovate Detective Bureau; Police Department building security/access control expansion; two Police Aides for parking division; and three Marine Safety Officers. • Additional Discussion Points: Non -profit grant request in -kind services only; Classification and Compensation Study; DEA Officer funded by Asset Seizure fund; labor negotiations with Police Management Association; Police Officer's Association; and Marine Safety Management Association; Fees; and surplus and reserves. Council Members received clarification during the presentation and staff received direction to present funding options for the supplemental request of two additional Police Officers. ORAL COMMUNICATIONS Mayor Massa -Lavitt opened oral communications. Speakers: Seth Eaker thanked staff for a detailed report and expressed interest in many budget related topics. Robert Goldberg thanked staff for the detailed report, thanked Council Member Deaton for discussion regarding the Orange County Fire Authority contract and then addressed his questions and concerns including spreadsheet calculations and long term stability. Bruce Bennett thanked staff for the detailed report and inquired about specific budget item increases. Director Beatley briefly clarified questions asked during oral communications. �1 ADJOURNMENT With no objections, Mayor Massa -Lavitt adjourned the meeting at 9:02 p.m. to Tuesday, May 30, 2017 at 5:30 p.m. for a Special Study Session — Budget Workshop, Capital Improvements Projects. Robin L. Roberts, City Clerk Approved: r 1� City of Seal Beach , Sandra Massa - Lavitt, i ayor Attested: Robin L. Roberts, City Clerk