City adopts budget with slimmed-down deficit

The Seal Beach City Council adopted an unbalanced budget for the 2018-2019 fiscal year but it’s hoping a one percent sales tax hike will be approved by voters in November to ensure future budgets are balanced.

At the June 11 meeting, council members voted unanimously to adopt next year’s budget with a roughly $89,000 shortfall. That shortfall increases to around $400,000 when you include the cost of two new police officers whose first-year salaries are being paid for with a one-time loan from the city’s designated swimming pool fund. Still, the $400,000 is a drop from the roughly $830,000 deficit that was projected before Monday’s council meeting. Why is there a budget deficit? According to city staff, the city is paying more for fire services, insurance and pension payments while sales tax revenue has been flat and utility users tax revenue has dropped.

City staff and council members were able to ease the deficit with some last-minute cuts at Monday’s meeting most notably the reduction in the city’s senior transportation service. Council members voted to cut the city’s Dial-A-Ride service from five days a week to three days a week and reduce the hours it operates on those days. Also slated for elimination come December 31 is the Thursday Shopper Shuttle which transports seniors to shopping areas in town. The daily Senior Nutrition/Shopper Shuttle is not impacted by any cuts. City staff estimated the cost savings at $56,000.

Council members are working to ensure Leisure World and a senior bus program run by Orange County known as Senior Non-Emergency Medical Transportation will fill in gaps in senior transportation service. District Five Councilwoman Sandra Massa-Lavitt represents part of Leisure World and said the Golden Rain Foundation, which manages Leisure World, could take over the Thursday Shopper Shuttle at the start of 2019.

Sales tax hike planned

for November ballot

After the city voted to adopt the unbalanced budget for fiscal year 2018-2019, city council members considered ways to help increase revenue to help fix what’s being called the city’s “structural deficit.” Seal Beach Finance Director Vikki Beatley presented ideas for what was called a “Path to Fiscal Sustainability” that included increasing taxes, allowing short-term vacation rentals, launching a “shop local” campaign, adding meters to the parking lot next to the fire station in Old Town and bringing a car dealership to town.

But Beatley quickly zeroed in on one idea: “The most obvious, significant increase in revenue to the city would be a sales tax initiative.” Beatley estimated a one percent sales tax hike could generate $3.6 million in new revenue for the city.

Seal Beach currently has a sales tax of 7.75 percent. Huntington Beach has the same sales tax rate while Long Beach has a rate of 10.25 percent.

City council voted unanimously to direct staff to put together a one percent sales tax increase on the November ballot. The city faces an August 10 deadline to accomplish that.

Beatley described the effort to get the ballot measure together by then as a “100-meter dash.” City Manager Jill Ingram said staff would perhaps get the ballot measure before council for approval in July.

Public comment

The City Council meeting had quite a few members of the public in attendance and many residents spoke out about the city’s fiscal challenges.

Jeannie Dennison of Old Town said she was very disappointed in the budget crisis and asked council members, “What did you do wrong here? You can’t creep up on an almost million-dollar budget crisis and not know it’s coming.” Dennison later added, “And you need to think about what we do to support you…. [N]ow you’re telling us to sacrifice because you guys messed up. That’s really, really disappointing and I’m borderline speechless on what to say because it’s really unfair to us residents.”

Resident Johnny Waller noted that at the budget workshops in May no one brought up the idea of cutting the salaries of city administrators, such as the City Manager, as a way to save money. “The one area that no one wanted to touch, the pink elephant in the room, was wages,” Waller said.

Old Town resident Joyce Parque chided council members and city staff as she laid blame for the budget problems squarely on them. “It is not our fault that you can’t run the city,” Parque said.

Resident Tim Prangley spoke passionately about combatting crime in town and about encounters his son and grandchild have had in town.

He urged council members to keep public safety in mind during the budget crisis. “I know we’ve got serious financial problems but if you let this get lost in the shuffle, shame on you.”

A bright spot in the bleak budget picture came from resident Dr. Robert Goldberg, a longtime budget watcher in town. During public comment, Goldberg said he found an extra $666,000 in the city’s current fiscal year budget, which translates to a boost to the general fund operating budget. Finance Director Vikki Beatley confirmed Goldberg’s calculations but wouldn’t provide an exact surplus amount. She said the money was overlooked due to some reconfiguring of money in the Capital Improvement Program. Beatley cautioned that while the cash does represent extra money “in the bank” it does not impact the shortfall the city is facing for fiscal year 2018-2019 which starts on July 1.