The good news: Seal Beach staff presented the City Council with a balanced budget at the Tuesday, April 5 budget workshop, according to Robbeyn Bird, director of administrative services and city treasurer.
Bird also said revenues were expected to exceed expenditures by $210,000 as of Monday, April 4. The staff presentation to the council originally said revenues would exceed expenditures by $60,000 in 2011-2012.
Bird explained the discrepancy by saying that staff found errors in the report that were to the city’s good.
The bad news:
• All city revenues are down. The city jail is running a deficit. (See related story on page 1.) The tennis center is running a deficit. Expenses are up, particularly police medical expenses and police overtime. The bonds to pay for Fire Station 48 cost Seal Beach $400,000 to $600,000 a year.
• The city’s total outstanding debt, according to page 248 of the Proposed Budget for Fiscal Year 2011-2012, is $33,305,147. According to the Proposed Budget, that figure does not exceed state debt limits.
• Late last year, staff found a $2.6 million deficit. Staff has addressed that deficit with budget cuts.
Reviewing the city’s lowered income, Bird said utility tax income was down $1 million. Property taxes were down $100,000. The hotel tax (officially called the transient occupancy tax) was down $129,000. Bird said interest income was down $600,000.
Bird said the city spent a significant amount of reserve money on capital improvement projects
Bird said that spending reserve monies reduced the savings on which interest was paid. She said the effect was a “double whammy” on interest income. Franchise fees were also down.
Then there were the increased expenses:
Police medical expenses were up $56,000. Police overtime was up $200,000.
Bird reviewed how Seal Beach “got here.”
In November 2010, staff implemented 2 percent budget cuts throughout all city departments.
Interim City Manager Pat Importuna recommended staff look at every item in the budget.
Staff compared the 2010-2011 budget with actual revenues and expenses.
Bird found a $2.6 million deficit.
Importuna had staff look at federal, state, county and city mandates before cutting the budget. Then the city manager implemented $100,000 in cuts.
Then, Bird eliminated items she considered optional from the budget. Staff eliminated overtime for civilian city employees and reduced overtime for police officers.
Finally, Bird reviewed five years of Seal Beach financial data. When she was done, Bird still had a $500,000 deficit to deal with.
To balance the budget, the city is leaving some jobs unfilled and has changed the equipment supervisor’s job to a part-time position.
As for the coming year, Bird said staff projected $26.3 million in revenue.
She said sales, property and utility taxes produced 66 percent of the city’s income.
Staff proposed $29.3 million in expenses. “This amount includes transfers for capital projects in the amount of $3.1 million for Fiscal Year 2011-12,” wrote Acting City Manager Jill Ingram in her introduction to the Proposed Budget.
Bird said staff had reviewed the Tennis Center’s revenues from 2006 to 2010. Bird said the center’s revenues had never exceeded expenses. She said the Tennis Center had a consistent gap of about $70,000 between revenues and expenses each year.
