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Home My WebLink About5-28-20 Budget Workshop PresentationPROPOSED OPERATING & CAPITAL IMPROVEMENT BUDGETFISCAL YEAR 2020-2021CITY OF SEAL BEACHBUDGET WORKSHOPMAY 28, 20201 OVERVIEW•Operating Budget•Budget Process•City Council Goals•Financial and Budget Policies•General Fund Revenues and Expenditure Summaries•Balancing Measures•Recommended Staffing Changes•Capital Improvement Budget•Ongoing CIP•Proposed CIP Projects•5-Year CIP Program2 BUDGET PROCESS•Finance Department•Estimate Revenues and Salary and Benefit Costs•Other Departments•Prepare Budget requests using zero based budgeting method•All Departments•Departments evaluate opportunities for reductions to help balance the budget•Finance Department/City Manager•Evaluate balancing measures and make final decisions based on City Council priorities and operational needs3 CITY COUNCIL GOALS1FISCAL SUSTAINABILITYORGANIZATIONAL CULTURECOMMUNITY OUTREACH AND CAPITAL PROJECTS23https://www.sealbeachca.gov/City-of-Seal-Beach-Strategic-Plan4 FINANCIAL AND BUDGET POLICIES•Balanced Budget and Use of One-Time Revenues•Reserve Fund Policy•Revenue Management•Expenditure Management •Capital Improvement Management•Investment Policy•Human Resource Management•Overhead Cost Allocation Plan•Appropriations Limit•Annual Reporting5 FY 2020-21 BUDGET OVERVIEW•General Fund is balanced without the use of reserves•Maintains the excellent level of service the community has come to enjoy•Does not propose changes that effect personnel such as furloughs, pay cuts, lay-offs or hiring freezes6 FY 2020-21 BUDGET CHALLENGES•Pre-COVID-19 – Revenues were already expected to slow to a 1% increase from FY 19/20 while expenses were expected to increase by nearly 5% •Post-COVID-19 – Closures have triggered an economic decline some are calling a recession•Projects were already in the works that are costly and would use a significant amount of General Fund Reserves7 FY 2020-21 BUDGET CHALLENGES•General Fund Revenue is expected to decline 3% from FY 19/20 budget due to COVID-19; projections have had to be revised four times due to extensions of closures•Cost increases that are unavoidable•2% increase in base salaries for already negotiated contracts•5% increase in PERS costs•Increase in contract costs for contracts that were already negotiated in prior years8 FY 2020-21 BUDGET CHALLENGES BIGGEST CHALLENGETo present a balanced budget, we needed to increase revenues, reduce costs or use reserves.9 FY 2020-21 BUDGET BALANCING APPROACHImplemented a tiered approach to balancing:Tier 1•Reduce budgets in accounts where spending wasn’t occurring•Re-evaluate use of restricted funding sources to make sure we maximize them before General Fund•Evaluate discretionary costs and see what can be deferred•Reduce overtime•Reduce supplies, training, etc. Tier 2•Pay for construction management costs using CDBG funds, currently paid for by General Fund.•Defer replacement of vehicles•Defer additional payment to pay down OPEB liabilityTier 3•Personnel impacts (hiring freeze, furloughs, layoffs, salary reductions, benefit suspensions)•Reduction in services to community•Use of reserves10 FY 2020-21 GENERAL FUNDREVENUES11 FY 2020-21 GENERAL FUNDAPPROPRIATIONS – BY CATEGORY12 FY 2020-21 GENERAL FUNDBALANCING MEASURES•Absorbed FY 19/20 budget surplus ($1.4 million)•Tier 1 reductions in various accounts (savings of $450,000)•Tier 2 - Deferral of vehicle replacement program (savings of $310,000)•Tier 2 - Charging 50% of the administration costs for CDBG to the program, rather than the General Fund (savings of $35,000)We did not need to exhaust all of Tier 2 or dip into Tier 313 FY 2020-21 APPROPRIATIONS BY DEPTGENRAL FUND and TIDELANDS14 MEASURE BB USES15 FY 2020-21 FUND BALANCEGENERAL FUND16 FY 2020-21 SUPPLEMENTAL ITEMS –ONE ITEM•Reclass staff in City Manager’s Office and Finance Department•Eliminate FT Accounting Clerk and PT Management Analyst•Add FT Management Analyst•NO CHANGE IN TOTAL FT PERSONNEL•Would be a shared resource to work on special projects:•Project management for the IT Master Plan•Project management for IT project implementations•Conduct community outreach •Assist with social media outreach•Assist with accomplishment of Strategic Plans and GoalsResource would assist in meeting City Council Goals 2 and 317 FY 2020-21 SUPPLEMENTAL ITEMS•No Increase in Full-Time Personnel•Results in Cost Savings to City•Allows time for Finance to conduct a needs assessment while utilizing resources needed today18 CAPITAL IMPROVEMENT PROGRAM BUDGET19 Proposed CIP Projects –By Funding SourceCIP 045, $1,928,000 Water 019, $2,710,000 SB1 RMRA 039, $400,000 Gas Tax 040, $670,000 Measure M2 042, $500,000 Sewer 044, $550,000 Citywide Grants 080, $1,305,000 20 Proposed CIP Projects –General Fund•Additional funding for ongoing projects:•Citywide Financial Information System•Citywide Technology – City Facilities•Citywide Technology – Police Department•Local Costal Plan – Phase II •HVAC Replacement at City Hall•New projects:•Lifeguard HQ/PD Substation Replacement•City Hall Staircase Repair/Replacement•Police Department HQ Building Upgrades•Tennis Center Locker Room •Playground Equipment Replacement•Lampson Bike Trail Gap Closure (grant match)•Seal Beach Blvd. Traffic Signal Synchronization (grant match)21 Proposed CIP Projects –Other Funds•Annual programs:•Annual Playground Replacement – Prop 68 grant•Annual Slurry Seal Program – Measure M2•Annual Local Paving Program – SB1 RMRA•Arterial Street Resurfacing Program – Gas Tax•Citywide Traffic Signal Improvements – Measure M2•Additional funding for ongoing projects: •Bolsa Chica Water Well Rehab – Water•Navy Reservoir Chlorination System Upgrades – Water•SCADA Improvement Upgrade Project – Water/Sewer•Lampson Well Head Treatment – Water•LCWA Watermain Lining – Water•Water System Vulnerability Assessment – Water 22 5-Year CIP Program•General Fund:•Lifeguard Headquarters/PD Substation•Tennis Center Locker Room•Main Street Improvements•Tidelands Fund (General Fund Subsidy):•Seal Beach Pier Concrete Abutment Restoration•Pier Restroom Restoration •Beach Planter Rings Replacement•Rivers End Restroom Restoration•Sewer Fund:•Sewer Mainline Improvement Program•6thSt. Alley Waterline/Sewerline Replacement•Water Fund:•Bolsa Chica Water Well Rehabilitation •Lampson Well Head Treatment•LCWA Watermain Lining•Advanced Metering Infrastructure23 FY 2020-21 FINAL TAKEAWAYS24•General Fund is balanced without the use of reserves•Maintains the excellent level of service the community has come to enjoy•Does not propose changes that effect personnel such as furloughs, pay cuts, lay-offs or hiring freezes 25QUESTIONS & ANSWERS