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AGENDA STAFF REPORT
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DATE: June 11, 2018
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Victoria L. Beatley, Director of Finance /City Treasurer
SUBJECT: Adopt the Operating Budget and 5 -Year Capital
Improvement Program (CIP); Approve the CIP Budget for
FY 2018 -2019; Set the Appropriations Limit for Fiscal Year
2018 -2019; and Authorize Appropriations by Fund
SUMMARY OF REQUEST:
That the City Council hold a public hearing and adopt Resolution 6833 adopting
the Fiscal Year 2018 -2019 Operating Budget and 5 -Year Capital Improvement
Program; approving the Capital Improvement Program budget for Fiscal Year
2018/2019; setting the Appropriations Limit for Fiscal Year 2018 -2019; and
authorizing appropriations by fund.
BACKGROUND AND ANALYSIS:
The City Council held two budget workshops on May 22nd and May 24th to
review and solicit public input on the Proposed Budget and 5 -Year Capital
Improvement Program for Fiscal Year 2018 -2019. The City Charter requires that
the City Council hold this public hearing prior to the adoption of the budget.
The proposed budget was prepared based on City Council goals, state and
federal mandates, and with consideration given to preserving core services that
the City provides to the residents, businesses, and visitors of Seal Beach.
In addition to being made available on the City's website, copies of the proposed
budget were made available to the public for purchase at the City Clerk's office
and copies were distributed to the libraries for interested parties to review.
Notice of the public hearing was published as required by law in the Sun
Newspaper.
At the budget study sessions, the estimated deficit was $477,600 as presented.
This deficit is significantly less than the deficit that was presented to the City
Council during their individual budget briefings. The primary reason for the
decrease is the anticipated receipt of one -time funds. The revenue received will
Agenda Item ,1
be accounted for in the Tidelands Fund and eliminates the need for a transfer
from the General Fund in FY 2018 — 2019.
During the May 24th Budget Workshop, staff received direction from the City
Council on some additional adjustments to the budget. Based upon that
direction, the Council Discretionary funding has been cut, some expenditure
estimates have been updated based upon the most recent information received,
and the proposed 2018 -2019 Cost Recovery Schedule (fees and charges) has
been completed and the proposed changes have been incorporated into the
revenue budget.
The current estimated deficit is now $145,200 and staff still needs direction on
changes to the following item:
1. Senior Transportation
Although unbalanced, the budget as proposed is fiscally prudent. City staff is
mindful of the constraints of the budget and, as always, will make decisions
about expenditures that are in the best financial interest of the City.
In addition, per Ordinance No. 1643, Section 4.50.125 of the City Municipal Code
requires that the rate of Utility Users Tax (UUT) be reviewed annually. Based on
the Fiscal Year 2018 -2019 revenue projections, UUT is the third largest revenue
source to the General Fund providing approximately $4.2 million of General Fund
revenue.
The UUT funds several capital improvement projects needed in the City; such as
street improvements, storm drains, and beach and pier projects. Without the
City's UUT, it would be impossible to continue the aggressive capital
improvement program established by the City and maintain the City's core
services at the current levels. The current Utility Users' Tax rate is 10% on
electric, gas, and telecommunications and 9% on pre -paid wireless services.
The attached resolution approving the City's Operating Budget and 5 -Year
Capital Improvement Program:
1. Adopts the Proposed Operating Budget and 5 -Year Capital
Improvement Program;
2. Approves the Capital Improvement Program budget for Fiscal Year
2018/2019;
3. Re- appropriates all encumbrances from Fiscal Year 2017 -2018 for
continued use in Fiscal Year 2018 -2019;
4. Authorizes the City Manager to make appropriation transfers within
functions and programs as long as such transfers do not increase
the adopted annual budget appropriations; and
5. Establishes the Appropriations Limit for Fiscal Year 2018 -2019
required under Article XIIIB of the State Constitution.
Page 2
ENVIRONMENTAL IMPACT:
There is no environmental impact related to this item.
LEGAL ANALYSIS:
There is no legal analysis required for this item.
FINANCIAL IMPACT:
For Fiscal Year 2018 -2019, the General Fund estimated revenues are projected
to be $30,263,900 compared to operating appropriations and transfers out of
$37,422,600 resulting in an estimated fund balance decrease of $7,158,700.
Included in the appropriations of $37,422,600 is $6,703,700 for Capital
Improvement projects. As a result of the changes highlighted in the staff report,
General Fund operating expenses exceed operating revenues and operating
transfers by $455,000 including the two additional Police Officers.
RECOMMENDATION:
That the City Council hold a public hearing and adopt Resolution 6833 adopting
the Fiscal Year 2018 -2019 Operating Budget and 5 -Year Capital Improvement
Program; approving the Capital Improvement Program budget for Fiscal Year
2018/2019; setting the Appropriations Limit for Fiscal Year 2018 -2019; and
authorizing appropriations by fund.
SUBMITTED BY: NOTED AND APPROVED:
vier P- heat *
Victoria L. Beatley, Director of
Finance /City Treasurer
ATTACHMENTS:
A. Resolution 6833
B. Redline Version
Page 3
Jill R. Ingram, City Manager
Attachment "A"
RESOLUTION 6833
A RESOLUTION OF THE SEAL BEACH CITY COUNCIL
ADOPTING THE FISCAL YEAR 2018 -2019 OPERATING
BUDGET AND 5 -YEAR CAPITAL IMPROVEMENT PROGRAM,
APPROVING THE CAPITAL IMPROVEMENT PROGRAM
BUDGET FOR FISCAL YEAR 2018 -2019, SETTING THE
APPROPRIATION LIMIT FOR FISCAL YEAR 2018 -2019, AND
AUTHORIZING APPROPRIATIONS BY FUND
RECITALS
a. On May 22, 2018 and May 24, 2018, the City Council conducted budget
workshops to provide an opportunity to the public to comment on the
proposed budget for Fiscal Year 2018 -2019, the 5 -Year Capital
Improvement Program, and the Capital Improvement Program Budget for
Fiscal Year 2018 -2019.
b. Pursuant to Seal Beach City Charter Article X, the City Council held a duly
noticed public hearing on June 11, 2018 to consider adopting the budget
for Fiscal Year 2018 -2019 and the 5 -Year Capital Improvement Program.
Copies of the proposed budget have been available for inspection by the
public in the City Clerk's Office and on the City's website at least 10 days
prior to the public hearing.
c. On November 6, 1979, the voters of California added Article XIII B to the
State Constitution placing various limitations on the appropriations of the
State and local governments. Article XIII B provides that the
appropriations limit for the Fiscal Year 2018 -2019 shall not exceed the
appropriations limit for the prior year adjusted for the change in the cost of
living and the change in population. The proposed appropriations limit of
$30,215,496 does not exceed the appropriations limit for Fiscal Year
2018 -2019 adjusted for the change in the cost of living and the change in
population.
d. At the duly noticed workshops and the public hearing held on June 11,
2018, the City Council provided an opportunity for the public to comment
on the proposed budget for Fiscal Year 2018 -2019, the 5 -Year Capital
Improvement Program for the period FY 2018/2019 — FY 2022/2023, the
Capital Improvement Program Budget for Fiscal Year 2018 -2019, and the
appropriations limit.
Resolution 6833
NOW THEREFORE, THE SEAL BEACH CITY COUNCIL DOES HEREBY
RESOLVE:
SECTION 1. That certain document entitled "City of Seal Beach Fiscal Year
2018 -2019 Operating Budget ", a copy of which is on file in the office of the City
Clerk and on the City's website, which may hereafter be amended by the
Council, is hereby approved as the operating budget for the City of Seal Beach
for the Fiscal Year 2018 -2019, beginning July 1, 2018 and ending June 30, 2019.
The following list shows the appropriations by each fund:
Appropriations by Fund
General Fund
Street Lighting
Special Projects
Waste Management Act
Supplemental Law Enforcement Grant
Detention Facility
Asset Forfeiture - State
Air Quality Improvement
Asset Forfeiture - Federal
Water Operations
Water Capital
Pension Obligation Bond
Fire Station Bond
Vehicle Replacement
Tidelands Fund
S61 Program
Gas Tax
Measure M2
Sewer Operations
Sewer Capital
Capital Projects
Seal Beach Cable
Community Development Block Grant
Police Grants
City Wide Grants
CFD Landscape
CFD Heron Pointe
CFD Pacific Gateway
CFD Heron Pointe Admin
CFD Pacific Gateway Admin
Retirement Fund - Debt Service
Retirement Obligation Fund
Resolution 6833
FY 2018 -2019
37,422,600
196,400
250,800
382,700
116,200
20,000
2,700
30,600
362,500
4,746,100
9,794,500
1,199, 200
506,800
320,000
5,004,300
532,400
414,200
1,107,800
1,534,300
4,610,000
10, 781, 300
115,000
180,000
77,300
68,000
105,400
299,100
593,900
19,000
110,900
108,800
1,370,500
Appropriations 82,383,300
Resolution 6833
SECTION 2. Appropriations in the amount not to exceed $82,383,300 are
authorized for the purpose of carrying on the business of the City. The City
Manager is hereby authorized to make appropriation transfers within and
between functions and programs, in accordance with Fiscal Policy, as long as
such transfers do not increase the adopted annual budget appropriations.
SECTION 3. All encumbrances from FY 2017 -2018 are re- appropriated for
continued use in FY 2018 -2019.
SECTION 4. The City Council hereby adopts the 5 -Year Capital Improvement
Program for the City of Seal Beach, and approves the Capital Improvement
Program Budget for the fiscal year commencing July 1, 2018 and ending June
30, 2019. All capital project appropriation balances from FY 2017 -2018 shall be
carried forward for use in FY 2018 -2019.
SECTION 5. The City Council hereby establishes an appropriations limit of
$30,215,496 for fiscal year 2018 -2019, in full compliance with Article XIIIB of the
State Constitution.
PASSED, APPROVED, AND ADOPTED by the Seal Beach City Council at a
regular meeting held on 11'h day of June, 2018 by the following vote:
AYES:
Council Members:
NOES:
Council Members:
ABSENT:
Council Members:
ABSTAIN:
Council Members:
Mike Varipapa, Mayor
ATTEST:
Robin L. Roberts, City Clerk
Resolution 6833
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Robin L. Roberts, City Clerk of the City of Seal Beach, do hereby certify that
the foregoing resolution is the original copy of Resolution 6833 on file in the office
of the City Clerk, passed, approved, and adopted by the Seal Beach City Council
at a regular meeting held on 11th day of June, 2018.
Robin L. Roberts, City Clerk