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Home My WebLink About2019-2020 Budget Study Session - May 29thFISCAL YEAR 2019-2020 2 OVERVIEW FY 2019-2020 Budget Study Session ~~Schedule~~ Wednesday – May 29th 5:30 PM General Government and Safety Public comments at the end of the presentation Wednesday – June 5th 5:30 PM Capital Improvement Program/Fleet Public comments at the end of the presentation Monday – June 24th ~Budget Adoption~ FY2019-2020 Budget Workshop – May 29, 2019 3 OVERVIEW FY 2019-2020 Budget Process February 2019 Expense and personnel worksheets are released Revenue information begins to be compiled Finance staff coordinates deadlines for receiving information from departments Department Heads meet with City Manager to discuss budgetary needs and supplemental requests Preliminary budget is developed March City Council and Executive Strategic Planning Workshop April/May Staff meets individually with Council Members May Proposed budget is completed and includes supplemental requests as appropriate May/June Budget study sessions June Budget adoption FY2019-2020 Budget Workshop – May 29, 2019 4 Municipal Budgeting 101 What is a budget? What is a balanced budget? Balanced throughout the year? FY2019-2020 Budget Workshop – May 29, 2019 5 OVERVIEW FY 2019-2020 Budget Process Budget development: Zero-based budgeting Developed based upon Federal, State, and City Council Mandates Supplemental requests FY2019-2020 Budget Workshop – May 29, 2019 6 OVERVIEW FY 2019-2020 Budget Process Budget development (cont.): Revenue – Developed using prior 3 years’ actual receipts Adjusted for one-time events Based upon current economic conditions Expenses – Based upon historical costs Adjusted for one-time events and known price increases Personnel – Based upon existing agreements FY2019-2020 Budget Workshop – May 29, 2019 7 OVERVIEW FY 2019-2020 Budget Process Budget development (cont.): Capital - Project costs use Engineer’s estimates Reserves - Based upon adopted Reserve Policy FY2019-2020 Budget Workshop – May 29, 2019 8 Mission Statement The City of Seal Beach provides excellent city services to enhance the quality of life and to preserve our small town character FY2019-2020 Budget Workshop – May 29, 2019 9 Core Values/Guiding Principles (not in priority order) The City of Seal Beach Values: Excellent Customer Service Mutual Respect Teamwork Professionalism Honest and Ethical Behavior FY2019-2020 Budget Workshop – May 29, 2019 Official Measure “BB” Ballot Question Measure BB: Seal Beach Neighborhood Safety and Essential Services Protection. To offset significant budget cuts and state takeaways and maintain City services, including community police patrols, paramedic services, fire protection, marine safety/lifeguards, school safety, 9-1-1 response times, and other essential general services, shall an ordinance be adopted for a one percent sales tax to raise approximately $5,000,000 annually until ended by voters, with independent audits to ensure transparency and funds spent only in Seal Beach? YES NO 10 11 City Council Goals 3-year Goals (2017-2020) - not in priority order  Improve economic development while balancing quality of life  Achieve short- and long-term fiscal sustainability and implementation and monitoring of Measure BB  Improve and maintain the infrastructure and facilities  Attract, develop, compensate, and retain quality staff  Preserve Public Safety Services FY2019-2020 Budget Workshop – May 29, 2019 12 Present balanced budget Current projected surplus Re -establish expected service levels Restore work force Recruit and hire all vacant positions 3 additional Police Officers Conversion of Part-time Mechanic to Full-time Implement Reserve Policy guidelines FY2019-2020 Budget Workshop – May 29, 2019 13 REVENUE PROJECTIONS FY2019-2020 Budget Workshop – May 29, 2019 14 Revenues: Top Changes in Projections: Property Taxes - $547,800 Sales Tax – $4,787,800 Other Revenues – ($64,100) Transient Occupancy Tax – ($90,000) Franchise Fees – $29,300 Fines and Forfeitures - $35,000 FY2019-2020 Budget Workshop – May 29, 2019 15 Fiscal Year 2019-2020 Proposed Revenues - $35,461,400 Property Tax 11,940,700 33.7% Sales Tax 9,182,500 25.9% Utility Users Tax 4,175,000 11.8% Transient Occupancy Tax 1,585,000 4.5% Franchise Fees 1,073,800 3.0% Other Taxes 214,300 0.6% Licenses and Permits 1,462,100 4.1% Intergovernmental 104,300 0.3% Charges for Services 3,086,400 8.7% Fines and Forfeitures 1,410,500 4.0% Use of Money and Property 723,400 2.0% Other Revenue 453,400 1.3% Transfers 50,000 0.1% FY2019-2020 Budget Workshop – May 29, 2019 16 Property Tax 33.7% UUT 11.8% Sales Tax 25.9% 1.Sales Tax, Property Tax, and Utility User’s Tax make up 71.4% of Revenue 2.Revenue assumptions are conservative, based on historical trends and current economic information FY2019-2020 Budget Workshop – May 29, 2019 17 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 FY2019-2020 Budget Workshop – May 29, 2019 18 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 FY2019-2020 Budget Workshop – May 29, 2019 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 19 FY2019-2020 Budget Workshop – May 29, 2019 20 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 FY2019-2020 Budget Workshop – May 29, 2019 21 UUT Annual Review FY 2019-2020 Budget November 2014 – Ordinance 1643 requires annual review of UUT in conjunction with the annual Budget Estimated to generate $4.2 million in FY 2019-2020 3rd largest revenue source Used to maintain essential services (including infrasture R&R) Current rate of 10% FY2019-2020 Budget Workshop – May 29, 2019 22 EXPENDITURE ESTIMATES FY2019-2020 Budget Workshop – May 29, 2019 23 Community Development 1,224,200 3.2% General Administration 4,712,100 12.2% Liability/Risk Management 1,944,100 5.0% Police Department 12,703,600 32.8% Fire Protection Services 6,093,800 15.7% Public Works 4,938,400 12.8% Recreation and Community Services 1,027,000 2.6% Transfer Out 6,068,600 15.7% FY2019-2020 Budget Workshop – May 29, 2019 24 Community Development 1,224,200 3.6% General Administration 4,712,100 13.7% Liability/Risk Management 1,944,100 5.6% Police Department 12,703,600 36.9% Fire Protection Services 6,093,800 17.7% Public Works 4,938,400 14.3% Recreation and Community Services 1,027,000 3.0% Transfer Out 1,797,300 5.2% FY2019-2020 Budget Workshop – May 29, 2019 25 Expenditures: Pension Obligation Bond fully paid!!! Fire Station Bonds - $488,200 (principal and interest – 04/15/2024) OPEB - $738,200 lifetime medical (Retirees) GASB 45 – scheduled to be paid quarterly (include $148,800 from Actuarial Report) FY2019-2020 Budget Workshop – May 29, 2019 26 Expenditures: Salary and benefit related expenditures Orange County Fire Authority Joint Powers Insurance Authority FY2019-2020 Budget Workshop – May 29, 2019 27 Questions? FY2019-2020 Budget Workshop – May 29, 2019 28 General Government: Managing Department Head – City Manager 010 City Council - $51,900 (+38%) 011 City Manager - $108,100 (+26%) 014 Human Resources - $41,500 (+22%) 015 Legal Services - $32,000 (+7%) 018 Risk Management - $132,000 (+7%) 020 Information Systems - $146,000 (+22%) 026 Fire Services - $312,900 (+5%) FY2019-2020 Budget Workshop – May 29, 2019 29 General Government: Managing Department Head – City Clerk 012 City Clerk – ($42,700) (-12%) 013 Elections FY2019-2020 Budget Workshop – May 29, 2019 30 General Government: Managing Department Head – Director of Finance 017 Finance - $82,800 (+11%) 019 Non-departmental - $324,400 (+34%) FY2019-2020 Budget Workshop – May 29, 2019 31 Public Safety: Managing Department Head – Police Chief 021 EOC – ($8,200) (-3%) 022 Field Services - $995,300 (+14%) 023 Support Services - $94,600 (+7%) 024 Detention Center - $57,000 (+6%) 025 Parking Enforcement - $145,400 (+20%) 035 West Comm - $25,000 (+3%) FY2019-2020 Budget Workshop – May 29, 2019 32 Planning: Managing Department Head – Director of Community Development 030 Planning - $182,800 (+51%) 031 Building - $119,600 (21%) FY2019-2020 Budget Workshop – May 29, 2019 33 Public Works: Managing Department Head – Director of Public Works 042 Administration - $143,600 (+113%) 043 Storm Water - $31,100 (+7%) 044 Street Maintenance - $312,100 (30%) 050 Fleet Maintenance - $76,300 (18%) 051 Refuse - $34,500 (+3%) 052 Building Maintenance - $57,900 (+10%) FY2019-2020 Budget Workshop – May 29, 2019 34 Community Services: Managing Department Head – Director of Public Works 016 Senior Services - $41,000 (+22%) 049 Park and Landscape – ($10,100) (-3%) 070 Recreation Admin - $39,000 (+21%) 071 Sports - $11,600 (72%) 072 Park and Recreation - $900 (+0%) 074 Tennis Center - $30,700 (12%) FY2019-2020 Budget Workshop – May 29, 2019 35 Tidelands Beach: Managing Department Head – Marine Safety Chief 073 Aquatics - $9,200 (+5%) 034 Tidelands – ($257,200) (-14%) without Fleet - $63,000 (+4%) FY2019-2020 Budget Workshop – May 29, 2019 36 Discussion/Questions FY2019-2020 Budget Workshop – May 29, 2019 37 20,000,000 22,000,000 24,000,000 26,000,000 28,000,000 30,000,000 32,000,000 34,000,000 36,000,000 38,000,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Revenues Expenses FY2019-2020 Budget Workshop – May 29, 2019 38 FY 2019-2020 Budget Revenues exceed Expenditures: Projected Revenues $35,461,400 Projected Expenditures ($34,440,500) Estimated Surplus $1,020,900 FY2019-2020 Budget Workshop – May 29, 2019 39 FUND BALANCE RESERVES FY2019-2020 Budget Workshop – May 29, 2019 40 + = Beginning Fund Balance Annual Surplus/ Deficit Ending Fund Balance FY2019-2020 Budget Workshop – May 29, 2019 41 2019-2020 Beginning Fund Balance $ 19,937,965 Net Revenues (Expenditures) (3,250,400) Estimated Ending Fund Balance $ 16,687,565 Assigned for Encumbrances $ 220,222 Assigned for Designations 7,970,452 Assigned for Fiscal Policy 7,475,991 Unassigned Fund Balance 1,020,900 Total Estimated General Fund Balance $ 16,687,565 FY2019-2020 Budget Workshop – May 29, 2019 42 FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Prior year adjustment 365,794 RESERVED 102,500 353,098 41,586 229,625 246,858 191,831 393,092 393,092 220,222 220,222 UNRESERVED: DESIGNATED 17,685,550 18,592,975 18,887,580 17,302,061 16,568,196 16,677,296 16,649,450 16,592,707 16,187,019 15,446,443 UNDESIGNATED 8,288,007 9,212,512 10,333,009 12,296,409 12,156,317 11,091,243 8,600,651 4,674,894 3,530,724 1,020,900 TOTAL FUND BALANCE 26,076,057 28,158,585 29,627,969 29,828,095 28,971,371 27,960,370 25,643,193 21,660,693 19,937,965 16,687,565 - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 FY2019-2020 Budget Workshop – May 29, 2019 43 FY2019-2020 Budget Workshop – May 29, 2019 City Clerk Fiscal Policy College Park East Disaster/Haz Mitigation Comp. Absences Encumb.Total Beginning Balance 0 7,697,725 477,000 1,750,000 1,224,014 220,222 11,368,961 Year End Adjustment (221,734)0 (221,734) 0 (221,734)0 0 0 0 (221,734) 0 7,475,991 477,000 1,750,000 1,224,014 220,222 11,147,227 Increase (Decrease) Total Expenditures Ending Balance Projected 44 FY2019-2020 Budget Workshop – May 29, 2019 Swimming Pool Street Improvement Storm Drain Buildings Old Town Total 4,702,271 117,167 - 18,300 - 4,837,738 BG1901 Tennis Center Roof Repair Project - (18,300) (18,300) BG0904 Community Swimming Pool (300,000) - - (300,000) (300,000) - - (18,300) - (318,300) 4,402,271 117,167 - - - 4,519,438 Ending Balance Projected Beginning Balance Projects Total Expenditures 45 FY2019-2020 Budget Workshop – May 29, 2019 Estimated Estimated Beginning Proposed Ending Balance Decreases Balance Assigned for Encumbrances 220,222$ -$ 220,222$ College Park East 477,000 - 477,000 Swimming Pool 4,702,271 (300,000) 4,402,271 Disaster/Hazard Mitigation Reserve 1,750,000 - 1,750,000 Street Improvement 117,167 - 117,167 Buildings 18,300 (18,300) - Compensated Absences 1,224,014 - 1,224,014 Total Assigned 8,288,752 (318,300) 7,970,452 Assigned for Fiscal Policy 7,697,725 (221,734) 7,475,991 Grand Total 16,206,699$ (540,034)$ 15,666,665$ 46 Supplemental Personnel Requests: None approved FY2019-2020 Budget Workshop – May 29, 2019 47 Additional Discussion Points  Council Discretionary  Centennial/Founders’ Day  Non-profit grant requests  Negotiations – on-going with Executive, SBMMA, SBMSA, SBSPA, and OCEA  Cost Recovery (Fees)  Sunset Aquatic  Consultants (Project Managers)  Storm Water Projects (Funding)  Surplus and Reserves FY2019-2020 Budget Workshop – May 29, 2019 48 FY 2019-2020 Budget Revenues exceed Expenditures: Projected Revenues $35,461,400 Projected Expenditures (34,440,500) Estimated Surplus 1,020,900 FY2019-2020 Budget Workshop – May 29, 2019 49 Structural Changes in CalPERS Practices Reduction in the discount rate (continues) Unfunded Liability Retiree Health commitments Unfunded Liability FY2019-2020 Budget Workshop – May 29, 2019 *CalPERS 101: Key Terms League of California Cities® │ www.cacities.org *The Pension Buck: The amount of every dollar paid out in retirement broken down by funding source Note: Employee portion set by statute. Does not account for negotiated employer share paid by employees through negotiations *CalPERS 101: Discount Rate League of California Cities® │ www.cacities.org CalPERS Lowered Its Discount Rate From 7.50% To 7.00% Phased In Over Time 52 Future Challenges  CalPERS  Orange County Fire Authority  Joint Powers Insurance Authority  General Fund Subsidies oTree Trimming oStreet Sweeping oStreet Lighting District  Revenue generation  Surplus and Reserves  Path to Long-term Fiscal Sustainability FY2019-2020 Budget Workshop – May 29, 2019 53 FY2019-2020 Budget Workshop – May 29, 2019