Council members call for changes to budget process as June 30 deadline approaches
The Seal Beach City Council will hold a public hearing on the city budget on June 24.
The City Charter gives the council until June 30 to approve a budget.
At the end of the city’s third budget workshop, held on Monday, June 10, council members and called for the budget process to begin earlier.
The council held its third budget workshop on Monday, June 10. After the council discussed line-by-line the mayor’s proposals for changes to the draft of the budget, staff made adjustments that put the projected budget surplus for next year at about $1.4 million. (Beatley provided that figure after the meeting.)
The council held a third budget workshop, a special meeting called by the mayor, at 5:30 p.m., Monday, June 10. The workshop was adjourned for the regular council meeting and then resumed following the regular council meeting. The mayor called for the workshop following a Wednesday, June 5, workshop on the city’s Capital Improvement Plan, which includes buildings, software, etc.
Staff’s proposed budget projected a surplus of more than $1.2 million at the second budget workshop, an increase from the $1 million projected given at the first budget workshop in late May. (Budget numbers are basically moving targets.) Finance Director Victoria Beatley on June 5 said she added the additional revenue for federal detainees in the city jail.
On Wednesday, June 5, Mayor Thomas Moore proposed additional in budget cuts, but his motion died for lack of a second.
Residents raised concerns about transparency and where the projected $4.7 million in Measure BB sales tax revenue will go.
The city manager is concerned that without fully funding staff positions that have not been filled because of recent budget issues, the city won’t be able to provide services the public expects.
Council members are concerned with balancing those expectations for service with responsible spending. What follows is an overview of the recent workshops.
Monday’s June 10 workshop continued a discussion of the Capital Improvement Program, as well as a lengthy discussion about staff requests to fund positions that had been left unfilled in the recent past. Council members, particularly the mayor, had expressed concern about paying for those positions.
(Mayor Moore on Wednesday, June 5, had made several proposals for budget cuts. Beatley and City Manager Jill Ingram had reviewed those proposals.) After discussing Moore’s proposed changes basically line-by-line with the council on Monday, June 10, Beatley and staff made counter-proposals for changes to the budget. Staff made changes to the Citywide IT plan and the Main Street revitalization plan that added about $112,000 or $113,000 to the budget.
Beatley said there were some increased costs in the budget that were related to compliance requirements or contracts.
“We’ve restored tree trimming,” Beatley said.
According to City Manager Jill Ingram, there were several positions the city could hold off on filling rather than hire someone to fill them right away.
One discussion, among many that night, was the proposal to hire an executive recruiter. Ingram described an executive recruiter as an extra resource. She said it would be fine with her if the council took the position out of the budget, but she would not hesitate to come back to the council to ask for a budget amendment if she believed the city needed an executive recruiter. According to Ingram, the city has not needed to hire an executive recruiter in past years.
Then there was the strategic planning meeting which the staff holds twice a year. Ingram said the staff did an outstanding job of facilitating recent meetings. However, she thought it would be important to bring in a facilitator sometime in the future.
Ingram vigorously defended having crisis communications in place, reminding the council members that none of them were on the council when Seal Beach experienced a mass murder.
Beatley described the budget as a plan and a roadmap.
“The only day that the budget is balanced is the day that it’s adopted,” Beatley said.
Staff also recommended restoring the city’s Shopper Shuttle program because Leisure World had had issues operating it.
Robert Goldberg asked if the council would be committed to specific budget figures when the city published formal notice of the public hearing on the budget, which is expected to be held June 24.
City Attorney Craig Steele first spoke with Goldberg during a break, but then advised the council that the council was not bound to specific figures before the public hearing.
There was also a brief discussion of whether the council should hold another budget workshop.
Ingram, however, suggested staff needed time to prepare the budget for the June 24 meeting.
A call for change to budget process
District Two Councilman Mike Varipapa said it seemed like a more difficult budget process this year. He touched a hard copy of the budget as he said it was not always clear on the pages, apparently referring to the document.
Varipapa said he would like a new budget schedule for next year. He suggested an April update. He also suggested scheduling budget meetings by department.
Kalmick proposed creating a mechanism for the public to interact with the council.
Mayor Moore agreed that earlier meetings would be valuable.
He said the 5-minute time limit for citizens to speak was arbitrary. He said two, three or four people come to budget meetings and speak. (Brady went 21 seconds over his allotted time, according to a display projected onto a screen in the Council Chambers.) Earlier in the evening, Brady recommended the creation of a Measure BB Committee to review how the funds are used. He proposed the committee be comprised of two council members, the finance director and three members of the community. He said it was difficult track how the money from the Measure BB 1 cent sales tax would be spent.
Bruce Bennett, a resident and budget watcher, said, “I think you need to agendize a new process.”
Elizabeth Kane, who was Kalmick’s campaign manager, called the proposed revisions inadequate. Earlier in the evening, she predicted the years ahead would get tougher.
Earlier on June 10, Jerry Moreland of Old Town, called for the release of the Police Services Study.
He advised the council to put the proposal of issuing debt to pay for a community pool on a future ballot.
Carla Watson urged support for the city’s community pool project.
Budget deadline June 30
Near the end of the four-hour June 5 workshop, District Five Councilwoman Sandra Massa-Lavitt asked what would happen if the budget were not approved on time.
“We’re actually legally required by our City Charter to have a budget adopted no later than June 30th,” said City Manager Jill Ingram
“If not, as of July 1, we don’t have appropriated spending in order to provide operations,” Ingram said.
Massa-Lavitt said, “We can’t just revert to last year’s stuff,” she said.
At that point, Mayor Thomas Moore informally requested another workshop.
Ingram pointed out that Moore, as mayor, could call a special meeting before the regular meeting, which was set for June 10, or another date. Moore did so.
Capital Improvement Projects
On June 5, Public Works Director Steve Myrter gave the council an overview of the proposed Capital Improvement Program for 2019-20, which is basically the construction, maintenance, physical and software infrastructure program for the city.
He put the proposed first phase of Main Street revitalization at $1 million to cover concept design, pavement rehabilitation from Pacific Coast Highway to Electric Avenue, intersection treatment, and streetlight rehabilitation.
Myrter said the Pier Base Structural evaluation, which he described as separate from the recently completed Pier Improvement Project, would cost $40,000.
According to Myrter, staff recommends two full time mechanics to service the city fleet of vehicles.
Then there was the proposed community pool. Myrter now projects the cost of the pool project at $14.8 million. (Beatley on Wednesday, June 12, said $15 million is the new estimated cost.)
Beatley suggested the city issue debt, a bond, to pay for the pool. She put the debt service cost at about $500,000 a year.
Council and staff concerns
At the June 5 budget workshop, Mayor Moore had proposed changes to the budget, essentially cutting staff proposed increases in half.
Near the end of the June 5 workshop, Moore made a motion to have staff revise the budget to align with his proposed changes, but it died for lack of a second.
“I think the goal here is to come up with something that we can functionally live with,” said District One Councilman Joe Kalmick.
He said it was not just about numbers; it was about consequences. He said it would be easy for him to cut the council’s discretionary spending, but he said that was not really significant.
City Manager Ingram expressed concern about the ability of staff to perform services if the budget were cut.
She said employees are the ones who have had to sacrifice in order to provide the service the community expects. “And I’m telling you, that we can’t continue to sustain services at that level,” Ingram said.
Ingram said the proposed budget gets the city back to previous staffing levels.
She also said there was still some room in the budget.
During the meeting, Moore asked why the city couldn’t hire slowly.
“We want to get our staffing model back up to lean,” Ingram said. “We’re below lean now.”
She expressed similar sentiments at the June 10 workshop.
June 5 public comments
Unlike regular council meetings, the public was allowed to comment at the beginning and near the end of the budget workshop. During the first comment period, Jerry Moreland said continued spending at the level proposed in the budget would leave the city looking for funding in a few years.
He expressed concern about the cost of proposals for the pier structural study, the proposed Main Street revitalization project, playground repairs (that will be citywide), the Lifeguard Headquarters and wood bollards in Edison Park.
He said it would be nice to see a break out of revenue and expenses for the Sunset Aquatic Park. He asked what were the ramifications of turning the beach and pier over to the state. (Seal Beach owns the pier but leases the land on which the pier stands, including the land that’s under the ocean, from the State Lands Commission.)
Joyce Parque said the city was not saving money on the jail. “They need to tell us how much it’s going to cost.”
Brady, chair of the Measure BB Committee, said the purpose of the 1 cent sales tax (which started on April 1) was to raise revenue for public safety. He said that looking at the city budget last week, he believed the city manager thought it was Christmas.
“Maybe I was naïve,” he said.
Brady said he didn’t think Measure BB would have passed if the public thought it was to bail out the city.
Later, Brady requested a long list of items for public safety in Seal Beach. He wanted a school resources officer for McGaugh elementary, a K-9 officer, an additional administrative sergeant, another detective, and a special enforcement team. He said the two Community Oriented Policing officers currently assigned to the sub-station at the foot of the pier were assigned for three days.
Brady also called for more budget workshops and more transparency for Measure BB spending.
However, later in the meeting, the city finance director insisted the money is being spent on public safety. “It is our belief that every dime of Measure BB funds are being spent on public safety,” Beatley said.
She read a list of expenditures public safety-related, which she put at about $4.2 million. As reported last week, staff has projected $4.7 million in revenue from the 1 cent sales tax that voters approved in 2018.
The public safety expenses Beatley listed were increased spending on Marine Safety (Lifeguards), increases in police salaries, an IT project, incremental changes in Orange County Fire Authority costs, increases in police maintenance and operations, WestComm (the local 911 service), money for the city’s fleet and a mechanic. She said the need for the mechanic was purely for an increase in pursuit-rated vehicles.
Robert Goldberg said he looked at the community pool project, which Public Works Director Steve Myrter now estimates will cost $14.8 million. Finance Director Beatley suggested on June 5 that the city issue debt (that is, issue a bond) and put the debt service cost at half a million a year. She suggested the money now in the pool fund would be put into the city’s reserves.
Goldberg said the community needs to discuss where they will get the money for the pool project. Goldberg suggested putting off the pool project until the fire station debt (for the station near Leisure World) is paid off.
Bruce Bennett suggested council members physically look at things before approving the budget. He said he had been asking for a cost analysis of Sunset Aquatic Park for at least 10 years.
Carla Watson also expressed concern about the cost of Sunset Aquatic Park and the city jail. Kane also called for the release of the Seal Beach Police Services Study. She had made the same request on May 29.