HomeMy WebLinkAboutCC AG PKT 2005-04-11 #O City of Seal Beach
Agenda Report
n , Date: April 11, 2005 C�� / rs
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To: Honorable Mayor and City Council 4 V
From: John B. Bahors
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City Manager
Subject: Review and response to the LAFCO Municipal Service Review Report
SUMMARY OF REQUEST:
Review the LAFCO Municipal Service Review (MSR) report, and authorize the Mayor to
sign a comment letter regarding the report.
BACKGROUND:
City Council was provided a copy of the MSR report on March 8, 2005 to review. Staff
has reviewed the MSR report and prepared a draft comment letter for City Council
consideration. While most of the report has little impact on the City of Seal Beach, there
is financial and demographic data contained about Seal Beach in the report that is
inaccurate. The attached comment letter seeks to correct the data so that LAFCO is
presenting an accurate picture of the City. In discussions with LAFCO staff, they
understood the data would change based on comments received from the agencies
involved in the study and that corrections would need to be made.
The MSR report primarily focuses on the future of the unincorporated areas of Rossmoor
and Sunset Beach. Due to the recent actions at the State level, there is no incentive for
existing cities to annex unincorporated County areas. The report does point out several
areas where mutual cooperation could save money for the unincorporated areas. This
report also reviewed the operations of the two special districts, Rossmoor Sanitary
District and Sunset Beach Sanitary District. Overall, the MSR report is a cursory review
of the area and the report should be viewed a starting point rather than detailed analysis.
As the report states "Further analysis is needed, and it is up to the agencies and residents
now."
Staff will be attending the LAFCO public hearing on the MSR on April 13, 2005, to
present the City's comment letter on the MSR report to the LAFCO Commission.
AGENDA ITEM, 4
FISCAL IMPACT:
There is no fiscal impact.
RECOMMENDATION:
1) Receive and file.
2) Authorize the Mayor to sign the comment letter.
ATTACHMENTS:
A) Draft MSR comment letter
B) MSR report (Previously transmitted to Council)
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April 11, 2005
Ms. Joyce Crosthwaite ( `1 , ?-
Executive Officer �j
Orange County LAFCO
12 Civic Center Plaza, Room 235
Santa Ana, CA 92701
Dear Ms. Crosthwaite:
In response to the Municipal Service Review (MSR) Report dated March 9, 2005, the City of
Seal Beach offers the following comments and suggestions. Although the City reviewed the
vision plan portion of this report, LAFCO staff did not provide the actual MSR report and
LAFCO staff report until shortly before the public hearing on March 9, 2005. City staff did
transmit a letter to you stating that comments would be forthcoming after the City conducted a
thoughtful review of the Municipal Services Review Report.
Provided below are comments on the "Municipal Service Review Report — Los Alamitos/Seal
Beach/Rossmoor /Sunset Beach ", prepared by the Orange County Local Agency Formation
Commission, dated March 9, 2005 (MSR Report):
LAFCO Staff Report: Page 2, Staff Conclusions, Fiscal Stress:
The document indicates two agencies were forced to borrow from reserves to balance the
FY03 /04 budget. This implies the City of Seal Beach borrowed from the reserve and as a
result, may create a misunderstanding about the City's financial position to the public.
Throughout the report the financial data is a subject of concem to the City. The revenues and
expenditure figures are inconsistent. For example: the table on page 2 -5 of the report states
that Seal Beach has a $6 million deficit, however, Attachment 2 of the MSR Vision Plan
reflects the City having $22 million in reserves. Clearly, the financial data is not consistent
within the report. It is strongly recommended that to bring about consistency, all agencies use
general fund revenues and expenditure. This data will provide greater consistency and allow
for comparison between agencies. Using total expenditures and revenues skews the data
because it often includes one -time revenues such as grants. Further, the budget figures used
by LAFCO encompass all City funds including the enterprise funds, special revenue fund,
redevelopment fund, and bond proceeds. Often times these revenues are received, but not
spent in the same fiscal year. Seal Beach is not facing significant constraints if each fund is
examined individually and according to the function of each fund. Combining all the funds
together is not the way to look at the financial health of a municipality because the City cannot
legally take water and sewer revenues to pay for general fund expenditures.
Further, the City strongly urges the report to reflect the changes by the State that have led to
the fiscal stress at the local government level. The LAFCO staff conclusions related to fiscal
stress should also look at the long -term fiscal health of cities rather than a snapshot view. Seal
Beach has made the hard fiscal decisions such as reducing staffing from 101 to 79 in order to
improve the City's fiscal health. In addition, Seal Beach has made several tough decisions
such as contracting out animal control, building inspection services and landscaping, which
has allowed the City to improve its overall financial position. Currently, the City of Seal
Beach maintains a reserve of 25% of general fund expenditures and is fully complying with
the reserve policies of the City.
Page 2 of 5: MSR Determinations: City of Seal Beach, Determinations Summary,
Growth and Population Projections:
Note: The following comment applies to all locations within the MSR Report that indicate
outdated population information for Seal Beach and probably all of the other jurisdictions
discussed in the MSR Report.
In discussing the population information with the Center for Demographic Research at Cal
State Fullerton , the following information needs to be utilized and considered in the MSR
document:
The Federal 2000 Census had Seal Beach population as 24,157.
The State Department of Finance has the January 1, 2004 population for Seal Beach as
24,964.
The Orange County Projections (OCP) 2004 (the latest adopted projections for OC, prepared
by the Center for Demographic Research) for Seal Beach are as follows:
July
2000 2 020 Growth 2000 -2020
Population 24,309 27,245 2,936
Housing 8,537 10,351 1,814
Persons per Housing Unit 2.85 2.63
If you multiply the 2020 PPHU by the growth in housing units (1,814 additional housing units
x 2.63 persons per housing unit) = 4,771 persons.
The population growth was restricted to about 60% of the above calculation and thus the
projected growth for population is 2,936.
2
The OCP 2000 and OCP 2000 Modified had a July 2005 population projection for Seal Beach
of 27,710. That was before the 2000 Census data came out. It would appear that LAFCO is
using the old projections. As can be seen above, the OCP 2004 incorporated the 2000 Census
and the projections are much lower. LAFCO should revise the report to consistently use the
current OCP 2004 projections for all of the jurisdictions.
Page 2 of 5: MSR Determinations: City of Seal Beach, Determinations Summary,
Financing Constraints and Opportunities:
City's budget numbers appear to be incorrect. Please refer to comment on Page 1 of this
letter. Opportunities for Cost Avoidance: Seal Beach has already contracted with the City of
Long Beach for animal services. The table should be corrected to reflect that new information.
Government Structure Options: The data is incorrect and should reflect that animal control for
Seal Beach has already been contracted out.
Municipal Service Review Report — Los Alamitos/Seal Beach/Rossmoor /Sunset Beach,
dated March 9, 2005:
Page I: Table of Contents, Section 2, Agency Profiles:
Although no "Agency Profile" for Los Alamitos is indicated, one is provided and it should be
so noted here.
Page ii: Table of Contents, Section 5.7, Local Accountability and Governance: This
section appears to be mis numbered and should be indicated as "Section 4.7".
Page 3: Determinations, City of Los Alamitos, Growth and Population Projections: The
second sentence indicates, "the current population is 12.340" and it should read "12 ".
Also see comment regarding population numbers and inconsistency with current Center for
Demographic Research information.
Page 4: Determinations, City of Seal Beach, Demographics:
Please see the discussion regarding Page 2 of 5: MSR Determinations: City of Seal Beach,
Determinations Summary, Growth and Population Projections.
Page 4: Determinations, City of Seal Beach, Financing Constraints and Opportunities:
City's budget numbers appear to be incorrect. Please refer to comment on Page 1 of this
letter.
Page 4: Determinations, City of Seal Beach, Opportunities for Cost Avoidance and
Shared Facilities, & Management Efficiencies and Government Structure Options:
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Both of these narrative sections indicate that "animal control" services should be considered
for "exploring other options for implementing shared services and/or use of facilities ". The
City has recently entered into an agreement with the City of Long Beach to provide animal
control services.
Page 14: Table 1.2 — Study Area Demographics:
The population figures for Seal Beach are not correct. See comment on Page 2 of this letter.
Page 19: City of Seal Beach (Incorporated 1915):
Demographics:
Please see comment regarding Page 2 of 5: MSR Determinations: City of Seal Beach,
Determinations Summary, Growth and Population Projections:
Size of Service Area is 11.5 square miles, not 13.23 square miles. Also, there is a note to
"refer to map on page 8"; there is no map on page 8. Please revise and indicate correct page
number.
"Services provided by City":
The City provides Lifeguard services.
"Services provided by city contract":
Consolidated Disposal provides trash service to Seal Beach under contract.
Animal Control services are provided under agreement by the City of Long Beach.
A joint powers authority provides self - insurance services to the City.
Page 19, Agency profile, Revenues, Expenditures, and Reserves:
The report uses total funds figures that skew the financial position of the City. The total
revenues and expenditures are for all funds combined including special revenues, general
fund, redevelopment and water and sewer enterprises. The total reserve figure is not correct. It
appears the report combined total fund balances that included water and sewer fund net assets.
Water and sewer net assets mean exactly that: net assets, it does not reflect any reserve. Net
assets reflect all fixed assets, including land and retained earnings, it is not reserves. The City's
total fund balance excluding water and sewer was $22 million. Please refer to comment on
Page 1 of this letter.
Page 36: Table 4.2 — Growth in the Los Alamitos/Seal Beach/Rossmoor/
Sunset Beach MSR Area:
The source for the population, housing and employment information is noted as the Center for
Demographic Research. Please review and revise information to accurately reflect OCP 2004
numbers as discussed on Page 2 of this letter.
4
Page 37, Size and Density with the MSR Area:
Should probably be titled "Size and Density within the MSR Area ". Also, the area of Seal
Beach is incorrect, the land area, as indicated previously is 11.5 square miles.
Page 38, Table 4.4 — Population per Square Mile:
Information will need to be recalculated based on the corrected land area and population of the
City.
Page 39, Table 4.5 — Median Sales Price (1993- 2001):
•
Why is more current information not presented?
Page 45, The population figure of 29,000 should be corrected and consistent with the
population data used in other portions of the report.
Page 48, Existing and Future Wastewater Service - City of Seal Beach, third paragraph:
Replace last sentence with: The City has adopted a new Fats, Oils and Grease Ordinance
to set policy and enforcement of FOG in the City's sewer system.
Page 51, first word on first line should be "responded ", not "responds ". In addition, the City
had 33 sworn officers rather than the 24 indicated in the report in FY 2002/03. Currently the
City of Seal Beach has 30 sworn officers.
Page 57, Existing Parks and Recreation Services, City of Seal Beach:
The first sentence presents incorrect information , and should be revised to read as follows:
"The City of Seal Beach has approximately 49 77 acres of parks and recreational lands and 40
80 acres of open space that consists of public beach lands."
The above corrections will require re- calculation of information for Seal Beach presented in
Table 4.18 — Acreage of Parks and Beaches per 1,000 Residents.
Page 57, Existing Parks and Recreation Services, City of Seal Beach:
A new third sentence should be inserted to read as follows:
"In addition to City -owned facilities, the following private recreation facilities and open space
areas exist within the community:
Sunset Marina, 19.2 acres operated by the County of Orange;
Old Ranch Country Club, 146.4 acres operated by Bixby Ranch Company; and
5
Seal Beach National Wildlife Refuge, 920 acres, located within the Seal Beach Naval
Weapons Station and managed by the United States Department of Fish and Wildlife.
Pages 55 - 58, Parks, Recreation, & Open Space Section:
This section states the City of Seal Beach also maintains a beach, but does not include those
services such as lifeguards. Also, the fiscal year 2003/04 budget figure for parks, recreation
and beach figures is incorrect. The correct figure is $1,697,676, which includes the
maintenance of the beach.
Page 62, Table 4.21, City of Seal Beach:
City's budget numbers appear to be incorrect, including references that the City is operating in
a deficit annually. Similar to the statements made in Table 4.16, when all city funds are used
it will include capital project revenues and expenditures that vary significantly from year to
year due to the completion of projects. The Seal Beach operating revenues have increased
every fiscal year since 2000/01 and expenditures have been budgeted conservatively over the
past four years allowing the general fund balance to increase.
Page 66, Table 4.27 — Shared Facilities:
The correct number of full time employees is 79.
Page 67, City of Seal Beach:
Incorrectly indicates that:
• Seal Beach contracts for human resources; full time staff provides this function.
• The dispatch center is not located in downtown Seal Beach, rather it is located in the
Police Department headquarters on Seal Beach Boulevard between Westminster
Avenue and Pacific Coast Highway.
• There are three libraries within Seal Beach — a county library in the coastal area of the
city, a county library at Rossmoor Center adjacent to the unincorporated community
of Rossmoor, and a previous county library in Leisure World that was acquired by
Leisure World, and is privately operated by Leisure World.
Page 69, County of Orange:
As indicated on the comments on page 67, there are two county libraries within the MSR
study area, a county library in the coastal area of the city and a county library at Rossmoor
Center adjacent to the unincorporated community of Rossmoor.
Page 73, Table 4.30 Retail Water Rate Comparison:
6
Does not include the City's water capital bimonthly charge of $20.16 for residential water
services (based on a 3 /4 -inch meter).
Page 74, Table 4.32 Sewer District Comparison:
The correct number of pump stations is eight.
Page 82 — Table 4.34:
Confine population number consistency.
Page 86, Animal Control, City of Seal Beach:
The City of Seal Beach contracts for animal control services to the City of Long Beach.
Page 87, Animal Control, last paragraph:
Discussion re "primary provider" should be revised to indicate "the County or other
interested governmental agency ".
Page 88, Table 4.36 Summary of Wastewater Service Expenditures:
Los Alamitos Sewer District Expenditures and per capita costs do not match Table 4.23, page
63 and, therefore, the per capita estimates are incorrect. City of Seal Beach expenditures for
Wastewater service are incorrect and are inconsistent with the information on page 74 of the
report. Summary of expenditures should clarify the difference between O &M expenses and
capital expenses.
Title Page for Section 5.7, "Local Accountability and Governance" should be numbered
"Section 4.7".
Page 91, Table 4.37 Local Accountability & Governance:
City of Seal Beach is indicated as having 7 elected members; should be 5.
Page 93, paragraph following "Local Representation" table, last sentence. Revise to read,
"The City's elected body is a 5- member Council elected by registered voters within
counci manic districts within the City." In addition, please correct the spelling of Council
Member Ybaben .
City of Seal Beach Community Profile:
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