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Home My WebLink AboutBUDGET 25-26 Mid Year Budget 4.13.26 PRINTMid-Year Budget Update FISCAL YEAR 2025-26 Assumptions Data Sources & Inputs •HDL revenue forecasts (Sales Tax & Property Tax) •City property tax & sales tax analysis historical data •Legislative Updates •Local economic conditions & historical trends •Local Economic Forecasts Revenue Assumptions •Property Tax: Steady assessed valuation growth •Sales Tax: Down from same time last year; fuel up; casual dining up •TOT: Flat; reflects three hotels at capacity Other Revenues: On Budget Expenditures: Mostly On Budget – Fire, Legal Services, General Liability Economic & Risk Assumptions •Inflation; interest rates normalize; federal policy impacts •General Consumer demand/discretionary spending •Construction & capital costs continue to rise •Impacts of War/unknown end date •Rising CalPERS, healthcare, and infrastructure costs considered Methodology Highlights •Continued conservative forecasting based on historical trends and economic forecasts, no changes •No structural deficit projected; contingency reserves maintained FISCAL YEAR 2025-26 Mid Year Budget Update FY 2025-26 Mid-Year General Fund Update 3 SOURCES ADOPTED BUDGET YTD-ACTUAL %ADOPTED BUDGET YTD-ACTUAL % 01-PROPERTY TAXES 15,390,000 5,539,754 36%16,327,000 6,509,908 40% 02-SALES AND USE TAXES 11,891,183 3,454,643 29%14,643,000 4,896,399 33% 03-UTILITY USERS TAX 5,100,000 2,308,720 45%5,440,000 2,289,721 42% 04-TRANSIENT OCCUPANCY TAX 1,850,000 556,046 30%1,890,000 593,316 31% 05-FRANCHISE FEES 1,108,000 237,016 21%1,160,000 221,087 19% 06-OTHER TAXES 829,800 616,830 74%810,000 353,279 44% 07-LICENSES AND PERMITS 872,000 609,284 70%861,000 630,796 73% 08-INTERGOVERNMENTAL 173,800 27,772 16%241,000 67,094 28% 09-CHARGES FOR SERVICES 3,114,700 1,706,830 55%3,315,450 2,123,732 64% 10-FINES AND FORFEITURES 1,598,800 690,014 43%1,582,300 577,670 37% 11-USE OF MONEY AND PROPERTY 750,000 634,092 85%953,000 838,499 88% 12-ALLOCATED COSTS - - - - 13-OTHER REVENUES 85,600 229,459 268%147,330 106,102 72% TOTAL OPERATING REVENUE 42,763,883 16,610,460 39%47,370,080 19,207,604 41% 14-TRANSFERS IN 1,220,781 1,220,781 100%822,000 822,000 100% TOTAL REVENUES & SOURCES 43,984,664 17,831,241 41%48,192,080 20,029,604 42% FY 2024-2025 FY 2025-2026 FISCAL YEAR 2025-26 Mid Year Budget Update FY 2025-26 General Fund Revenue Property Tax Sales Tax Utility Users Tax Charges for Services Fines & Forfeitures Hotel Tax (TOT) 76%90% Property Tax, $16.3 M, 34% Sales and Use Tax, $14.6 M, 31% Utility Users Tax, $5.4 M, 11% Charges for Services, $3.3 M, 7% Fines and Forfeitures, $1.6 M, 3% Transient Occupancy Tax, $1.9 M, 4% Other Revenue, $5. M, 10% FISCAL YEAR 2025-26 Mid Year Budget Update Property Tax Seal Beach Assessed Valuation •$7.9 Billion Orange County Assessor •6,494 Parcels •4.3% YOY/County 5.41% •Median Single-Family Home Sales $1.4 M •Property Tax $16.3 M •34% of General Fund •Stable Revenue Source •.15 of $1.00 •On Budget FISCAL YEAR 2025-26 Mid-Year Budget Update Sales Tax & Use Tax Sales and Use Tax Components $14.6 M: •Largest Consumer Goods and Restaurants •-12% down from prior year •Drop in County and State Pools •Middle East / Discretionary Spending •Consumer Fear Impacts Largest Sectors •2025-26 reflect Measure GG FISCAL YEAR 2025-26 Mid-Year Budget Update Utility Users Tax (UUT) UUT $5.4 M Budget 11%: •Electric, Natural Gas, Telecommunications •Lowered in 2014 •Projection Back on Budget •Increases in utility rates FISCAL YEAR 2025-26 Mid-Year Budget Update Charges for Services Charges for Services 7% $3.3 M: •A fee collected to pay for services related to the activity. •Subsidized by General Fund •Planning Fees Offset Aquatics •On Budget/Exceed Budget FISCAL YEAR 2025-26 Mid-Year Budget Update Transient Occupancy Tax (TOT) TOT $1.6 M: •3 Hotels •The Pacific Inn •Ayres •Hampton •Continues to exceed all historic levels •47 Short Term Rentals FISCAL YEAR 2025-26 Mid-Year Budget Update FY 2025-26 Mid-Year General Fund Update FISCAL YEAR 2025-26 Mid-Year Budget Update USES, BY TYPE ADOPTED BUDGET YTD-ACTUAL %ADOPTED BUDGET YTD-ACTUAL % 01-REGULAR SALARIES 10,269,416 4,873,918 47%10,973,000 4,816,335 44% 02-OTHER PAY AND BENEFITS 4,780,729 2,416,169 51%5,837,084 2,586,706 44% 03-RETIREMENT 5,608,884 4,565,247 81%6,281,829 5,084,124 81% 04-MAINTENANCE AND OPERATIONS 21,324,656 10,937,001 51%22,338,460 11,985,541 54% 05-CAPITAL OUTLAY - - 5,000 2,031 41% 06-DEBT EXPENSE 91,811 - 0%- - TOTAL OPERATING EXPENDITURES 42,075,496 22,792,336 54%45,435,373 24,474,737 54% 07-TRANSFERS OUT 12,253,396 (141,226) -1%14,442,480 517,945 4% TOTAL EXPENDITURES & USES 54,328,892 22,651,110 42%59,877,853 24,992,681 42% FY 2024-2025 FY 2025-2026 Regular Salaries, $11. M, 24% Retirement, $6.3 M, 14% Other Pay & Benefits, $5.8 M, 13% Maintenance & Operations, $22.7 M, 49% FY 2025-26 General Fund Expenditures *Does not include Capital and Operational Transfer FISCAL YEAR 2025-26 Mid-Year Budget Update Maintenance & Operations *excludes transfers CC Discretionary, $.1M, 1% Supplies/Dues/Training, $.29M, 1% Rental/Lease Equipment, $.05M, 0% Contract Professional, $4.29M, 19% Insurance/Workers Comp, $3.16M, 14% Legal, $.59M, 3% Maintenance, $.19M, 1% Equipment, Materials, other, $2.1M, 9% IT Services, $1.26M, 6% Refuse, $1.4M, 6% Fire Services, $7.33M, 33% West Comm, $.98M, 4% Intergovernmental, $.58M, 3% FISCAL YEAR 2025-26 Mid-Year Budget Update •Fire Services •West Comm •Legal Services •Contract Services •Training •Equipment •Insurance •Was below budget – updated Budgeted Adjustments: Fire, Legal, Chamber upgrades 13 Salaries and Benefits FISCAL YEAR 2025-26 Mid-Year Budget Update Next Steps •Budget Planning & Development in Process •CIP/Budget April 13 •Budget Workshops May 5th and 7th •Budget Adoption June 8th Jan Feb Mar Apr May June Revenue and Expense Projections Personnel Budget Development Departmental Budget Preparation Department CIP Preparation City Manager Review Preliminary Budget Preparation Public Input and Engagement City Council Review Budget Adoption Budget Development Timeline Fiscal Outlook •Middle East Fears •Increased Inflation •US Economic Policy Uncertainty •Continue to Look for Revenue Opportunities FISCAL YEAR 2025-26 Mid-Year Budget Update Mid-Year Budget Update FISCAL YEAR 2025-26