HomeMy WebLinkAboutEmailed comments from Robert Goldberg1
Gloria Harper
From:Robert Goldberg <rgoldberg@live.com>
Sent:Monday, August 10, 2020 9:27 AM
To:Thomas Moore; Schelly Sustarsic; Mike Varipapa; Sandra Massa-Lavitt; Joe Kalmick
Cc:Jill Ingram; Gloria Harper; Kelly Telford; Phil Gonshak; Charles M. Kelly; Jeannette
Andruss; Steve Myrter
Subject:Questions and Comments for Monday's Open Session
Attachments:8.10.20 Questions.doc; Sewer Rate Forecast.Integrated Ops and Cap Funds.xls; 2011
Sewer Bonds.CAFR.pdf; Water Board Emails.2015.pdf; Water Position Allocation Costs
Since 05.06.xls
Dear Council and Staff,
Please see the attached questions for Monday's open session meeting. Also attached are referenced
documents and spreadsheets.
Thank you for your consideration and service,
Robert Goldberg
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you
recognize the sender and know the content is safe.
Questions for 8/10/20 Open Session from Robert Goldberg
Item B: Demand on Treasury (Warrants)
Page 5 check #16317 to Penhall Company for $4243 for removal of 20’ of block wall at “Bev.”
What is this for?
Item D: LB Animal Contract Amendment
There appears to be an error on page 2 of the Amendment in Section 4.C “Compensation
Schedule, “sub-section “ii. Year Two.” The subsection provides for a CPI increase in year two (July
2021- June 2022) based on the change in local inflation for the period of February 2019 to
February 2020. Based on prior inflation adjustments, the determinative period should be the
immediate preceding year, February 2020 to February 2021.
Local inflation from February 2019 to February 2020 was 3.4%. Therefore, if the error in the
determinative period is not corrected, then the City is, in effect, agreeing now to a 3.4% contract
increase in July 2021. With the current economic conditions, 3.4% is likely going to be considerably
higher than the local inflation rate from February 2020 to February 2021. To wit, the local inflation
index has dropped (deflated) by 0.2% from February 2020 through June.
Recommendation: Do not approve the contract amendment until this error has been
corrected.
Item E: Foundation Grant for Police K-9 Program
From what I can glean from the internet, most police dogs have a career of about six years.
Is the $50,000 grant sufficient to purchase and train a dog, provide initial training to a
handler, outfit at least one vehicle to accommodate a dog, and then pay ongoing program
expenses such as providing the handler a special assignment bonus (typically 5%) and/or
overtime pay and annual training for the next six years?
If not, I would recommend that the Council defer accepting this generous grant until after
the SBPD has presented their proposed canine program and long-term cost analysis to the
Council for approval.
Item F: Water Sewer Rate Update
I would like for this process to address several issues:
1. Early Pay off of the 2011 Sewer System Revenue Refunding Bonds. My analysis/budget
forecast is extremely positive for the combined Sewer Operations & Capital funds. With
the current revenue rates, and cash reserves that I estimate to be over $9 million, the
adopted 5-year CIP can be fully funded and still leave a surplus of almost $5 million in June
2025 (see attached spreadsheet). If staff confirms this assessment, it would be quite
beneficial to use a portion of these reserves ($1.94 million) to pay off the remaining principal
on the 2011 Sewer System Revenue Refunding Bond. Per a 2011 email from Ms. Ingram, the
bonds are “callable” on or after June 1, 2020.
The interest rate on these bonds is relatively very high at 4.8% resulting in total interest payments
of $472,000 through the bond maturity in 2029 (see attached CAFR page). Currently, the Sewer
Fund reserves are only making 0.8% in the State money market (“LAIF”) or not much more with our
investment advisor, PFM. By paying off this bond early, the Sewer Fund can “make” difference in
the rates (about 3.5-4.0%).
2. Why doesn’t the City’s General Fund pay for the water it uses? Unfortunately the
combined Water Operations and Capital Fund is not in good shape , and very large rate
increases will be necessary. The Water Rate Study will be evaluating the amount of water
used by various classes of customers, and the current and future costs of providing that
water to each class.
My understanding is that Prop 218 requires that these rates be directly related to the cost
of the water “service” provided to each customer class. If this is correct, I do not
understand why the General Fund does not make a direct payment to the Water Fund for
the water it consumes for park and median irrigation and City buildings.
The money owed annually to the Water Fund could be a significant amount. In June 2015,
the City informed the State Water Resources Board that irrigation of City properties had
consumed 30 acre-feet out of 285 acre-feet of water produced in April (see attached
correspondence). If April 2015 was and remains a representative month, then about 10%
of the Water Fund’s production is consumed by General Fund operations. With the
combined Water Operations and Capital Fund expected to expend about $8 million in FY
20-21, a 10% charge to the General Fund would be in the neighborhood of $800,000.
I expect staff’s first response to this concept will be to assert that the annual “overhead”
charge that the Water Fund pays to the General Fund of $324,500 has not increased since
FY 06-07. However, at that time, this charge included not only “non-departmental”
overhead such as insurance, info tech, and legal services, but also the cost of any “Water
time” spent by non-Public Works employees with two exceptions--- an Account Technician
and Meter Reader employed in the Finance Department, but whose salaries were allocated
to (i.e., paid by) the Water Fund. Over the years since FY 05-06 (the budget for 06-07 did
not show position allocations), more non-Public Works salaries and benefits, including
those of executive managers, were allocated to the Water Fund. The current cost to the
Water Fund of these subsequent allocations is now approximately $294,000 per year (see
attached spreadsheet). So, in effect, overhead costs to the Water Fund have almost
doubled since FY 06-07.
Non-payment by the General Fund for the water it uses requires that the cost of this water
be subsidized by all customer classes. Thus, it would seem that fairness (and perhaps Prop
218) would demand this issue be addressed by the Water Rate Study.
BUDGET PROJECTIONS FOR SEWER OPERATING & CAPITAL FUNDS
Expenditures for Combined Operations
& Capital Funds
FY 19-20
Estimated
Actual
FY 20-21
Adopted
Budget
Assumed
Annual
Increase
FY 21-22
Possible
Budget
FY 22-23
Possible
Budget
FY 23-24
Possible
Budget
FY 24-25
Possible
Budget
Salary & Benefits 1,024,600$ 1,213,800$ 3% 1,250,214$ 1,287,720$ 1,326,352$ 1,366,143$
Maintenance and Operations (Excluding
Overhead, Transfer Out- Operation, and
Bond payments)
$ 259,900 373,400$ 3% 384,602$ 396,140$ 408,024$ 420,265$
Overhead Payment to General Fund $ 54,000 54,000$ 0% 54,000$ 54,000$ 54,000$ 54,000$
Principal & Interest $ 238,900 542,600$
2011 Sewer System Revenue
Refunding Bonds Per CAFR 267,560$ 268,560$ 269,080$ 269,080$
Sewer CIP Loans #1 & #2 Per CAFR 276,503$ 276,503$ 276,503$ 276,503$
Budgeted Capital Projects $ 169,700 550,000$ Per CIP 3,120,000$ 670,000$ 625,000$ 625,000$
Non-Budgeted Carry-Over CIP
Appropriations (see p. 213)775,000$
Total Expenditures 1,747,100$ 3,508,800$ 5,352,879$ 2,952,923$ 2,958,959$ 3,010,991$
Revenues
Capital Revenue 1,946,000$ 1,951,000$ 0% 1,951,000$ 1,951,000$ 1,951,000$ 1,951,000$
Operations Revenue (Excluding
Transfer In from Sewer Cap) $ 739,500 739,000$ 0% 739,000$ 739,000$ 739,000$ 739,000$
Total Revenue 2,685,500$ 2,690,000$ 2,690,000$ 2,690,000$ 2,690,000$ 2,690,000$
Net Fund Surplus (Deficit) 938,400$ (818,800)$ (2,662,879)$ (262,923)$ (268,959)$ (320,991)$
"Cash & Investments" Balance:
Beginning Cash* $8,369,833 9,308,233$ 8,489,433$ 5,826,554$ 5,563,631$ 5,294,671$
Ending Cash $9,308,233 8,489,433$ 5,826,554$ 5,563,631$ 5,294,671$ 4,973,681$
*First figure of $8,369,833 as of 6/30/19 per page 30 in FY 18-19 CAFR. All other Cash figures are derived from this data point. Revised 8/9/20
Fu, t8'lct ...'ftrr.-
City of Seal Beach
Notcs to the Basic Financial Statements (Continued)
For the Year f,nded June 30,2019
ttote 6 - Long-Term Liabilities (Continued)
B, Basiness-Tlpe Adirities
Summar!. of ohanges in long-term liabilities for business-6,pe activities for lhe yeat crded Junc 30, 2019 is as
follorvs:
l0 I I Sc{s Relenuc P\eftnding Bonds
Sexcr Capjtrl lmprovenlent ?rojcol ,l
Scwer Caprlal hrpovem@l Projecl #2
qrcst OrmgE (bunt) url( REd Lo(n
-loral
Bellnce i]8l rce Due*iftin Duernole
.l \ I l0!8 ldd,rn\ Dcldons ,une10 l0l9 Orc \'ea rlunonela,
s 2,270,000 I
r,97t,206
r,182,484
8?2,555
l3t9l? t73.8ll i61-251) 118.493 il ll? 8t-156
s 6,6:11,16r s t73,833 S (606,054) S 6,lr5,9tl S t06,8r8 S 5.689,081
s (160,000) 5 2,||0,000 s 170,000 s 1,941),000
(t 11J.528) 1,851,678
t1a,11|) 1,3u.706
(89,491) ?81,064
lll.610 1711,068
72,618 l,2l908ll
89.191 693.t71
Thc Water Utili[, Fund ard Sewcr Utiliry Fund hare been uscd to liquidate lhe liabilit-v lor coEpcnsakd
abscnces and nct peNion liabilities.
( )(tl t \, rcr \vsteh R.venuc RehnJtnp Bon Ls \
:
On March 2. 2011- thc Ci[ issucd 20I I Sclver S].stem Rel'eruc Refirnding Bonds in the amount of $3,310,000 to
pay ofl the 2000 Serrer Syslcm Certi,ioates of Participation. The 2000 Se$'er System Ccdficates of Participation
were issued to provide forimprovemenh to ihe City's se*er system.
Irterest rate or the 2011 Sewer system Rc\e e Rcfundrg Boflds isffiana tne ualancc of tle 20ll Serter
Sr stcm Rerenuc Rehrnding Bonds al June 30. 20 lc $as $2-l I 0.0(10. H
Aalg ro) pza it q+O,ooa
The annuildebr scn ice reqrLirements are as lollous r')
Jmc 10, I'riicipel hte',si _!91__. ?020 $ l?€;000 $ 9^i2l#26?,ZE--
202l r7r,000 91,080 266,080
2022 185,000
?l23 195,000 71,160 268,560
{l],i60 267.560
205,000 61,!80 269.0E0
r,r80.000 l6t,2m 1.341,21t0
202.1
1t25-)t1t
se\tet c.rpitar rhprotemenr proiect r.oan , t
qliwla | !.1\{Lo
On April 6- 201I- thc Cilt' entcred to afl agreemcnt \rith thc Clean Waier Statc Revolvr g Fl]nd Control Board
lbr consfiuction of the Sc\ er Capital Inrprovcment pro.jccl The Ci[ mq. bono$ up to $2,6.1.1-356 or the cligible
costs ofdre proJcct, whichcver is lcss. At Junc 30, 2019. the Ciq had drarn do$r thc entire loan 6rnd Thc loan
has ar intcrest ratc of 2.6Vo rvith malurities through 2031. The outstanding balarcc at June 30, 2019 was
$t.852.678.
Robert (Dr.) Goldberg
From:
Sent:
Subject:
Did you get this it's actually 49.1% residential use.
Darrick Escobedo < DEscobedo@ sea lbeachca.gov>
Monday, June 22,2015 7:10 AM
FW: here our the new numbers we got!
Darrick Escobedo
Water Sei-v,.es Supervisor- City of Seai Beach
!776 Adclf o Lcpez Dr.
Sea i Beach, CA 90740
562-431--2527 Ext i4A9
descobedo @ sea lbeachca.eov
From: Darrick Escobedo
Sent: Monday, June 15,2015 3:55 PM
To: Oppenheimer, Eric@Waterboards (Eric.Oppenheimer@waterboards.ca.gov)
Subject: here our the new numbers we got!
Darrick Escobedo
Wate r Services Supervisor- city of Seal Beach
1776 Adolfo Lopez Dr.
Seal Beach, CA 90740
562-437-2577 Ext 1409
descobedo @ sea Ibeachca.pov
Non reven ue water 5 AF
Leisu re World 10 AF
Parks 30 AF
Com mercial/lndustrial 60 AF
Navy 40 AF
Total 1,45 AF
City total 28s AF
Percentage Credit 50.9%
Percentage Usage 49.1%
pop u la tio n 2 s,5 61
water in April 285 AF
Gallons per capita per day 59.49 AF
1
Robert (Dr.) Goldberg
From:
Sent:
Subject:
Luis Estevez <lestevez@sealbeachca-gov>
Thursday, June 25, 2015 2:59 PM
RE: here our the new numbers we got!
Hi Eric,
The information provided below shculd help to clarify and document how we arrived at the numtlers noted beiow.
Non-revanue water: 5 AF
This figure was determined by calcrlating water loss from the followinB maintenance activities mandated by the California
Department of Public Health and a water main break:
Hydra nt flushing
Blow-off flushing
Pump to wasie at two water wells
Water main break - L8" transmission line ruptured ove.night on Memorial Day
Total non-revenue water is calculated at 5 AF
!.
Leisure World: 10 AF
,.. ..Pumping data from the City's reservoir that distributes water to this development was collected as well as additional irrigation
data provided by Leisure World maintenance staff was enalyzed to arrive ai this calculation.
" Golf Course - 5.6 AF total
lndustrial/Commercial uses within Leisure World - 4.4 AF
Leisure World is a one-square mile private development that includes a hospital, grocery store, 16 clubhouses, Iibrary, bank,
swimming pool, and car wash.
Total Leisure World water is calculated at 10 AF
Parks/Public Landscapes: 30 AF
Water meter data r,vas analyzed for the City's public parks and was calcuiated at - 19 AF
The City maintains an additional 45 acres of publicly landscaped areas such as landscaped medians and parkways. These areas
are not metered however based on irrigation run times and gallons of water used per minute, per irri8ation station, a total of 11
AF of water was calculated for these areas
Total Parks/Public Landscapes is calculated at 30 AF
Commercial/lndustrial: 60 AF
This figure was determined by ana,yzinB water meter data for all commercial/industrial water customers
Total Commercial/lnd ustrial: 60 AF
Seal Beach Naval Weapons Station: 40 AF
This figure was determined by analyzing water meter data for the Navy base.
Total Seal Beach Naval Weapons siation: 40 AF
':,'hope this information has been helpful, and should you have any additional questions, please do not hesitate to contact the4ify any time.
'rerely,
Current Total Cost to Water Fund of Non‐Public Works Salaries & Benefits Allocated After FY 2005‐06
Department Division Position
Full‐Time
Salary Top‐
Step Salaries
Salary & 40%
Benefits (Full
Cost)
Percent
Allocated
to Water
Fund*
Cost to
Water Fund
City Manager
001‐011 City Manager City Manager 251,820$ 352,548$ 15% 52,882$
001‐011 City Manager Assistant City Manager 208,923$ 292,492$ 15% 43,874$
001‐014 City Manager Management Analyst 99,805$ 139,728$ 25% 34,932$
City Clerk
001‐012 City Clerk City Clerk 132,517$ 185,523$ 10% 18,552$
001‐012 City Clerk Deputy City Clerk 81,915$ 114,681$ 5% 5,734$
Finance
001‐017 Finance City Treasurer 182,675$ 255,746$ 15% 38,362$
001‐017 Finance Finance Manager 127,754$ 178,855$ 15% 26,828$
001‐017 Finance Accountant 97,372$ 136,321$ 20% 27,264$
Community Development
001‐030 Planning Dir of Community Development 182,675$ 255,746$ 10% 25,575$
001‐030 Building & Safety Code Enforcement Officer 76,066$ 106,493$ 10% 10,649$
Community Services
001‐070 Recreation Admin Recreation Manager 127,754$ 178,855$ 5% 8,943$
Total Salary & Benefits Allocated After FY 05‐06 (Excluding Public Works) 293,595$
* Per table on pages 311‐313 in the FY 20‐21 Budget.
Revised 08/10/20