First of two parts.
The May 2 budget workshop looked at the city’s improvement projects and the city’s financial situation for nearly two hours. The City Council took no action.
Highlights:
• This year’s budget is balanced, with $20,000 left over.
• During the meeting, the Public Works director put the cost of Seal Beach’s unfunded capital improvement projects at more than $200 million.
• Cost pressures are limiting discretionary spending.
• Council members did not see a place to cut staff.
• The Finance Department director said cuts are not sustainable. Due to space limitations, this is the first of a two-part series.
Overview
At the start of the meeting, District Two Councilman/Mayor Tom Moore, referring to the previous day’s workshop, said that his number one takeaway was that the economy was slowing a little and that expenses were outpacing revenue, making it more difficult in future years to balance the budget.
Moore said that while going over the budget, what stood out for him were higher salaries, pensions, medical expenses, and increased costs for fire service and insurance.
He said he was glad the city had a balanced budget.
“If possible, I’d like to get consensus on the ARPA money,” Moore said.
He was referring to $3.1 million that the city had received from the Federal government. The council had recently discussed options for spending that money during the April 4 Strategic Planning Workshop. (For details, see “Expenditures expected to outpace revenue,” at sunnews.org.)
Finance Director Barbara Arenado summarized the information the council received from the previous day’s budget workshop before discussing the city’s improvement program. Arenado said the proposed 2022-23 budget was balanced with $20,000 remaining.
She said overall revenues increased by $1.4 million.
Arenado said planned expenditures increased by $1.7 million from the previous budget.
Arenado said this year’s improvement projects include the community swimming pool, finalizing the Tennis and Pickleball Center, as well as emergency pier repairs.
In response to a question from District One Councilman Joe Kalmick, Seal Beach Police Chief Michael Henderson said parking revenue could fluctuate from $225,000 to $300,000 with a 50-cent increase by the hour. Henderson said the city had consulted with the city’s parking consultant.
He said there are limitations on what the city can do about parking. He said the California Coastal Commission would be reluctant to allow sweeping changes to parking rates.
Henderson said staff anticipated that the Coastal Commission would allow a 50 cent an hour increase every other year to parking rates.
Henderson said parking in the Main Street and beach lot areas was interconnected. He said imposing restrictions on some parking has effects on other parking within the Old Town Main Street/beach area.
Henderson said encouraging parking equity is done through parking rates, enforcement, and through a variety of programs.
According to Henderson, because there is no hourly rate for parking on Main Street, people would use Main Street. (He did not mention the metered lots in the Main Street area.)
“The goal would be to encourage the beach goers to use the beach lots while allowing parking for those who are visiting businesses or restaurants on Main Street,” Chief Henderson said.
Then Public Works Director Iris Lee gave a presentation on the city’s improvement programs.
According to Lee, depending on what’s being discussed, prices have increased as much as 50% in some places.
Lee said some of Seal Beach’s legacy contracts are expiring and when they are re-bid, the prices will go up.
Lee put the proposed Public Works budget expenditures at $42.6 million. Lee said 57% of that would be for capital outlay, 30% for operations and maintenance, with 13% going for personnel services.
Lee said the maintenance and operations was increasing by $1.2 million.
She said much that had to do with increased costs. For example, Lee said that the landscaping maintenance contract amounts to $700,000 a year.
“But that agreement is expiring,” Lee said.
Lee said the winter sand berm contract amounted to about a quarter million dollars a year.
“That will likely need to be rebid as well,” Lee said.
Kalmick asked if the city is still required to pay prevailing wages for work done by outside contractors.
Lee said that was correct.
Moore asked if the city had started negotiating contracts for the sand berm or for landscaping.
According to Lee, the city will be releasing requests for proposals shortly for those two contracts.
According to Public Works Director Iris Lee, projects that are ready to start construction include the pier restrooms, the concrete pier abutment, and the Lampson Avenue Bike Trail project.
Lee said the pier restroom upgrade redesign is complete and the city has the permits in place. However, observing that the summer months are almost here, Lee said the city would delay the project until after the Labor Day Weekend.
According to Lee, the city is proposing $1.5 million in water projects.
Lee said staff is evaluating a number of water projects to determine how to prioritize construction and potential funding alternatives.
Unfunded capital improvement projects: more than $200
million
The unfunded improvement projects, which a slide put at $200 million, include sand replenishment, citywide facility upgrades and park upgrades.
The Lifeguard headquarters/police substation is among the projects. City officials have been looking at renovation or replacement of the Lifeguard headquarters since 2020.
Lee said the city’s infrastructure was aging, but the city’s program needs were ever-increasing.
Lee described the $200 million figure shown on the slide as “quite daunting.”
The City Council
District One Councilman Joe Kalmick argued that so much is coming in and so much is going out and asked how would the city deal with that.
Kalmick did not think the city should be looking at reducing personnel.
“To me, it boils down to revenue,” Kalmick said.
District Two Councilman/Mayor Moore asked about funding for the West End Pump Station project.
Lee said the city had allocated $190,000 toward the pump station. She described that money as a band aid to keep the system going.
Moore said he agreed with Kalmick. “I don’t think we can go any lower on personnel,” Moore said.
In part two: a look at the five-year budget outlook.
