Guest opinion: Seal Beach resident wants budget clarity from city

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Resident Bruce Bennett requested that the following be placed on the City of Seal Beach agenda:

That the City of Seal Beach establish a five-year forward budget and projected balance sheet as a Strategic Objective to be completed by May 10th of 2017

Placing this proposal on the Agenda will allow the City Council members to discuss, modify and vote on the above objective. Without this being added to the Public Agenda the Council members are severely limited by the Brown Act as to  who, what, when and how they may speak or communicate on this topic.

Here are four main reasons I recommend this objective.

1. Compliance with County guidelines. The Orange County Grand Jury in 2013-2014 after hearing testimony from many OC city managers and financial officers recommended each City in the County have a 5 year forward budget. The Grand Jury required the Cities including the City of Seal Beach to respond to a number of recommendations. The City Manager responded in 2014. The letter stated that the city has not followed a few of the suggestions including the 5 year forward budget.

2. Increased understanding of the budgeting process. Our existing operations expose new council, staff, local businesses and interested residents to an issue-by-issue process over a long time period.  These issues include timing of bond redemption payments, timing and amount of funding pension liability, multiyear capital improvement projects, water costs and rate hikes, wage and salary contracts, sand replenishment projects, new pool replacement, health care liability, new fire department contract, future timing of grants etc.  It can take 2 to 4 years for those engaged to acquire a more complete understanding of the city’s needs and resources. A five-year projection will immediately provide a better understanding of the city’s financial outlook.

3. Improved decision making and operations. Certainly a single set of documents that projects these issues forward will add clarity to decision making on long term issues and improve operations. The City does a great job of providing an annual statement and a one year budget. (In fact I believe they have won a number of awards for their financial statements.) An extension of the one year budget to include the forward projection will assist existing and new council members, city staff and residents of the city’s resources and obligations and how they affect the city from day one.

4. Greater public transparency.  By placing this proposal on the agenda the Council may discuss the issue. It allows the Public more transparency and a better understanding of the willingness of the Council to deal with complex and continuing issues.

In summary, many items needed to prepare a five-year forward budget with a Projected Balance Sheet are already done on a routine basis. The staff prepares most of the necessary information in a number of reports and documents during the year. These include but are not limited to a 5-year capital improvement budget, a schedule of Bond Redemption and Interest payments, etc. Outside agencies, such as CalPERs, also provide a number of reports. For example, CalPERS’ Annual Summary of Pension Liability includes a funding payment schedule to reduce unfunded pension liability. The relevant internal and external reports need only be consolidated on one set of statements. These longer term budgets do not need to be as exact as the current one year budget. I believe it will better serve everyone to obtain a clear picture of the City’s projected financial situation. In addition the City will follow the OC Grand Jury’s recommendation.

I call for each council member to request the proposal be added to the agenda, discussed and voted on. If affirmed, add it to the city’s Strategic Objectives.

Bruce Bennett is a Seal Beach resident.

Guest opinion: Seal Beach resident wants budget clarity from city