Part one of two
The Seal Beach five-year forecast projects the 2026-27 fiscal year will have a surplus of $17,728. Future years are projected to have deficits, starting in 2027-28, which could impact Seal Beach’s ability to borrow money for projects.
Deficits are projected in the next four fiscal years. According to a slide shown to the City Council on Tuesday, May 5, the five-year forecast projects a revenue increase of 2.7% and an expenditure increase of 3.5%.
The proposed budget is balanced, according to the city manager and Finance Department director.
The City Council and four members of the public attended two budget workshops on May 5 and 7. The council will approve the proposed budget in June. The new fiscal year starts July 1.
The following are highlights from the May 5 workshop:
• The proposed budget is balanced.
• There is no structural deficit.
• Seal Beach has 25% in reserves ($12.4 million).
• The budget sets aside $838,000 for vehicle replacement.
• Total revenues for all funds are $106.2 million. “Just a few years ago, that fund had zero,” Arenado said.
“A few years ago, all the city vehicles were leased. This would have cost the city $6 to $8,000 a year today,” said Finance Director/Treasurer Barbara Arenado.
• Total expenditures for all funds are expected to be $131.5 million.
• The city has set aside $3.25 million as a buffer against the economy.
• The city has paid down the pension debt by $750,000.
• Seal Beach has $46.3 million in improvement projects.
• Maintenance costs are increasing.
• The city’s tax consultant is projecting a short-term sales tax decline of 2.5%. Arenado said increased fuel costs could change that outlook.
• “We also have opportunities tied to policy and market conditions including cannabis,” Arenado said.
“Future hotel development could also help strengthen our transient occupancy tax overtime and looking at STRs [short-term rentals],” Arenado said.
