The Seal Beach Finance Department director said the city was in sound financial shape at the City Council’s annual mid-year budget review on Monday, Feb. 24.
According to Victoria Beatley, Seal Beach Finance Department director, most receipts and expenses for various city funds are in line with expectations.
But there were some exceptions. The city has collected more business license fees, for example, than projected in the budget. But the General Fund Revenue is showing a decrease from last year.
Seal Beach gets most of its money from five sources: property taxes, the utility users tax, sales tax, property-in-lieu of vehicle license fees and the transient occupancy tax (also known as the bed tax).
Beatley said taxable property values increased 2.3 percent locally. At the county level, the increase was 3.4 percent. She said this was due to a 2 percent Proposition 13 adjustment.
She also said Orange County had the second highest assessed values in the state. Los Angeles County had the highest.
As of November 2013, the median home price in Seal Beach was $706,500—up $76,500 from 2012.
Beatley said the assessed value of homes in Seal Beach increased $103.6 million.
Seal Beach budged $6.4 million for property tax revnues in 2013-14. Property tax received by mid-year: $3.5 million.
Beatley said receipts were ahead of the same time last year by $207,000.
According to Beatley, city staff is projecting property tax revenues will exceed budgeted expectations.
The city budgeted $1.15 million in Transient Occupancy Tax for this fiscal year. Received so far: $476,200.
According to Beatley, the receipts are consistent with the same period last year.
The city budgeted $500,000 in business license fees for 2013-14.
Received so far this year: $504,800.
According to Beatley, the increase was a result of staff looking for the fees and the result of staff redsigning the licensing process. In the past, the Finance Department processed licenses before the Community Development Services Departmentt finished its work. Now it is the other way around.
The General Fund Revenues were down from last year. The city budgeted more than $28.7 million. Received so far: more than $11 million—39 percent of the amount budgeted.
Beatley said staff was projecting an overall General Fund Revenue decrease from last year of $534,000.
“The combination of (the top five) sources has generated approximately $7.0 million for the period ended December 31, 2013 which is $472,000 less than the same period last year,” Beatley wrote in her staff report to the council.
“The primary reason for the decline is the result of less sales tax revenue. The decline was expected and was discussed during the budget presentation,” Beatley wrote.
“All of the other General Fund revenues combined are less than the same period last year by approximately $62,000. The primary reason is that all of the revenue from the beach parking lots was shifted to the Tidelands Fund,” Beatley wrote.
During the review of the city’s expenses, Beatley said there had been a $712,000 increase in expenses over the prvious year.
Summarizing what Beatley was reporting, Mayor Ellery Deaton said: “We’re operating within this year’s budget, not last year’s budget.”
Beatley also discussed Seal Beach’s employee pensions. Public employee pension reform has been an issue throughout the state.
According to Beatley, pension obligation bonds issued in 2008 covered the cost of the unfunded pension liability and saved Seal Beach $500,000. The bonds were short maturity bonds, maturing on June 2013 and June 2019.
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