2020-08-05 CC Agenda Packet - PRESENTATION - Budget Study SessionAugust 5, 2020
8:00 AM
CITY
ELOFSEGUNDO
Study Session Overview
Background Items
3. Proposed FY 2020-2021 Budget
Next Steps
City Strategic Plan - July 22 Study Session Follow-up
Update on the Economy
FY 2019-20 Budget Update
City Council's Top /Ten Priorities:
Obtain an "Age Friendly City" designation
Determine future of the Teen Center
3. Continue to advocate for EI Segundo's interests regarding
LAX expansion
City Council's Top /Ten Priorities (continued):
4. Consider guidelines for use of potential revenue from golf
course lease
Identify further infrastructure and downtown
improvements for Main Street
6. Attract senior living facilities to EI Segundo
City Council's Top /Ten Priorities (continued):
Identify areas within the community that are appropriate for
housing
8. Conduct a study of repurposing City Hall
� Develop a unique value proposition for attracting new
businesses
City Council's Top /Ten Priorities (continued):
Add New Priority:
10. Ensure that the City is positionedfor post-COVID-19 recovery
No changes to:
City Mission Statement
City Vision Statement
City Values & Culture Statement
Embrace diversity, equity,Is
R
inclusion; Enhance customer
service,, engagement,, and
communication
Revised Goal description only
Support community safety and
Goal 2 I-A preparedness
No change to Goal description
New Activity #5:
Complete COVID-19 emergency response analysis
evelop as a choice employer
and workforce
No change
Develop and maintain quality infrastructure
and technology
No change to Goal description
New Activity #10 (for Objective 4A):
Review the following environmental proposals:
Update Single -use Plastic Policy;
Establish Green Business Recognition Program;
Develop Green Construction Standards &Incentives;
Explore joining Clean Power Alliance; and
Expand water conservation efforts.
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Champion economic development and
Goal fiscal sustainability
No change to Goal description
New Activity #13 (for Objective SA):
Develop an EI Segundo Gross Domestic Product (GDP) metric, and
then incorporate into a Key Performance Indicator (KPI)
New Key Performance Indicators:
Track new building construction square footage
Track Annual EI Segundo GDP
Unemployment
Inflation
Gross Domestic Product
Federal Interest Rate Projections
10
0
E'9
7
Ce
5
0
3
2
1
0
2020
National Average Unemployment Projections
2021
June 2020 projection
i
P1i ► ►N
December 2019 projection
15
Long run
2.50
2.00
1.50
NO0
1.00
0.50
0.00
Average Inflation Projections -June 2020
Current Rate
plow$]
-*--PCE inflation
2021
-*--Core PCE inflation
16
2022
Long run
2C
National Average GDP Projections
2021
-o--June 2020 projection
2022
-*--December 2019 projection
17
Longer run
3.00
2.50
2.00
1.50
1.00
0.50
M KI
Current Rate
Average Federal Funds Rate Projections
t
WWII
-*--June 2020 projection
2021
2022 Long run
December 2019 projection
18
Scenario One — as presented to City Council on May 5, 2020
• Virus peaks in May 2020 & Recovery slowly starts in July 2020
General Fund was projected to experience a $9.6 million (or 12%) FY 2019-
2020 revenue reduction.
1 Beg. Fund Balance (10/01/19) $20,783,395 $24,198,953 $3,415,558 18%
2 Revenues 76,710,208 67,107,993 (9,6021215) (12%)
3 Appropriations (801782,540) (74,595,883) (6,186,657) (8%)
4 Use of Reserves 0 0 0 -
5 End. Fund Balance (9/30/20) 16,711,063 16,711,063 0 -
6 Transfer -out Pension Trust (11559,000) (1,5591000) 0 -
7 Total Reserves at Year-end $1511521063 $15,1521063 $0 -
20
I
Business License
$12126000
$121246,202
99%
2
Sales & Use Tax
10167600
791601652
67%
3
Transient Occupancy Tax (T.O.T.)
9105900
611261758
67%
4
Property Tax
89599,500
8031794
102%
5
Utility User's Tax (UUT)
519921062
4,6321503
77%
6
Tax Resolution (TRA)
5,9021063
5,9021063
100%
7
Charges for Services
3,7981845
3,0701930
81%
8
Franchise Tax
3,2001000
312129104
100%
9
Other Revenues
3,0181995
116069663
53%
10
Intergov. Revenues
1,926,490
11923,848
99%
11
License & Permits
115389358
11514,850
98%
12
Interest & Rentals
8041000
546,272
68%
13
Fines & Forfeitures
1921020
193,951
101%
14
Transfers In
140.0001
140.0001
100%
3rd Quarter = October 1, 2019 — June 30, 2020
21
$1210651344
6,762,838
8,432,590
8,103,693
5,310,020
6,171,627
3,870,028
2,568,833
2,442,371
1,773,917
1,670,804
1,112,588
418,142
Police
Fire
Public Works
Recreation & Parks
Non -department
Planning & Building Safety
Information Technology
City Manager
Finance
Library
Human Resources
City Attorney
City Clerk
City Treasurer
City Council
l
$21,780,602
$16,470,454
76%
$16,436,381
1519941908
12,2005541
76%
12,094,146
71612,426
417151756
62%
419101618
617591322
31679,227
54%
410451660
516161639
416535963
83%
410211146
310011130
119015877
63%
118581972
2,592,636
1,829,587
71%
1,534,583
213741470
154615328
62%
114981444
211811892
11494,789
69%
114731678
213941131
1,648,640
69%
1,734,663
1,163,432
7501157
64%
656,525
5851450
3721515
64%
3651698
6401038
339,660
53%
327,372
3411375
2421315
71%
2211409
3081432
2071431
67%
1885490
• 3rd Quarter = October 1, 2019 — June 30, 2020
22
Ir4e►aIPliwaRWIr_rm 2Trorer=im 0rErir:
• Revenues
FY 2019-20 Budget
$31,281,260
FY 2019-20 3rd Quarter
$18,3181581
FY 2018-19 3rd Quarter
$21,967,568
• Expenses:
FY 2019-20 Budget
$29,8121873
FY 2019-20 3rd Quarter
$17,462,547
FY 2018-19 3rd Quarter
$20,963,129
0 3rd Quarter = October 1, 2019 — June 30, 2020
D19-2020 Wastewater Fund — 3rd quarte
• Revenues
• Expenses
FY 2019-20 Budget *
$318861200
FY 2019-20 3rd Quarter
$21894,708 7
FY 2018-19 3rd Quarter
$31455,095
FY 2019-20
Budget
$5,3061636
FY 2019-20
3rd Quarter
$2,7251533
FY 2018-19
3rd Quarter
$310971594
• 3rd Quarter = October 1, 2019 — June 30, 2020
Revenues
Expenses
•
•
•
FY 2019-20 Budget
$1,450,667
FY 2019-20 3rd Quarter
$ 8821200
FY 2018-19 3rd Quarter
$1,127,272
FY 2019-20 Budget
$114171800
FY 2019-20 3rd Quarter
$ 9481307
FY 2018-19 3rd Quarter
$111301921
3rd Quarter = October 1, 2019 — June 30, 2020
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Shift from October 1—September 30 to July 1—June 30
FY 2020-21 Budget will be 9 months: Oct. 1, 2020 —June 30, 2021
FY 2021-2022 Budget will be 12 months: July 1, 2021 to June 30, 2022
City Manager's Office
Oversight of Departments
Deputy City Manager
• City Clerk's Office
• Development Services
• Fire
• Human Resources
• Police
Note: Actual distribution of departments may change
Deputy City Manager/
Finance Director
• Community Services
• Finance
• Information Technology
• Public Works
Community Services Department
Merger of Recreation & Parks and Library
Reorganization within the Library
O�i
Development Services Department
Rename from Planning & Building Safety Department
Establish a Housing Division
Affordable Housing
Senior Housing
—Park Vista Senior Center
Finance Department
Inclusion of City Treasurer's Office
Operational efficiencies
Consolidation of Risk Management function
New Risk Manager position
Workers' Compensation Fund (75%)
General Liability Fund (25%)
M'
Information Technology Services Department
Rename from Information Services Department
Public Works Department
Include Parks/Landscaping Maintenance Services
Scenario Two — as presented to City Council on May 5, 2020
• Virus peaks in August 2020 &Recovery starts in December 2020
General Fund is projected to experience a $12 million (or 15%) FY 2020-
2021 revenue reduction.*
*May 5, 2020 Scenario Two anticipated a $15.2 million or 20% reduction
Estimated FT2.U2U-2U21
ReUvinues
(all
of Total
% of Tota I
No.
Fund
FY 2019-20
Budget
FY 2020-21
Budget
1
General Fund
$76,710,208
60.9%
$58,328,024
62.2%
2
Water Fund
31,2811360
24.8%
23,417,500
25.0%
3
Wastewater Fund
3,8861200
3.1%
31110,000
3.4%
4
Worker's Comp Fund
219751035
2.4%
21258,193
2.4%
5
CIP Fund
217491000
2.2%
11350,000
1.4%
6
Equip. Rep. Fund
21089,441
1.7%
110641200
1.1%
7
General Liability Fund
11914,179
1.5%
114001000
1.5%
8
Transportation Funds
11595,064
1.3%
112281835
1.3%
9
Golf Fund
11450,667
1.2%
7471500
0.8%
10
Other Special Rev. Funds
5121380
0.4%
378,500
0.4%
11
Federal & State Grants
4731748
0.3%
219,000
0.2%
12
Debt Service Fund
1831600
0.1%
137,000
0.1%
13
Public Safety Sp. Rev. Funds
1591712
0.1%
162,335
0.2%
14
Senior Housing Fund
21714
0.0%
10,000
0.0%
$125,983,308
100.0%
$93,811,087
100.0%
'
• • • - • '
1 1 Vz
• • ••ire,
. W
MI,
No.
Fund Name
FY 2019-20 Adopted
% of Total
FY 2020-21 Proposed
% of Total
1
General Fund
$80,782,540
58.6%
$58,128,024
64.5%
2
Water Fund
29,622,670
21.5%
18,285,000
20.3%
3
Equip. Rep. Fund
71849,761
5.7%
113641000
1.5%
4
Wastewater Fund
512351334
3.8%
31110,000
3.5%
5
Worker's Comp Fund
219341272
2.1%
21975,000
3.3%
6
CIP Fund
217491000
2.0%
11350,000
1.5%
7
Transportation Funds
21284,527
1.7%
1,228,835
1.4%
8
General Liability Fund
11783,333
1.3%
119001000
2.1%
9
Public Safety Sp. Rev. Funds
11661,565
1.2%
1401750
0.2%
10
Golf Fund
11417,800
1.0%
8471500
0.9%
11
Other Special Rev. Funds
5781806
0.4%
378,500
0.4%
12
Debt Service Fund
5451000
0.4%
137,000
0.2%
13
Solid Waste Fund
2301000
0.2%
-
0.0%
14
Senior Housing Fund
741113
0.1%
10,000
0.0%
$137,748,721
100.0%
$90,073,809
100.0%
a. ourqlj Reve n u % of Totc-
1
Business License Tax
$10,489,360
18%
2
Property Tax
91145,025
16%
3
Sales Tax
81573,683
14%
4
Transient Occupancy Tax (TOT)
71524,570
13%
5
Tax Resolution Agreement
61000,000
10%
6
Utility Users Tax (UUT)
414941047
8%
7
Charges for Service
31415,836
6%
8
Franchise Tax
212501000
4%
9
Intergovernmental Revenues
119421770
3%
10
Other Revenues
214161964
3%
11
License & Permits
111531769
2%
12
Interest & Rentals
6031000
1%
13
Fines & Forfeitures
2941000
1%
14
Transfers -in
251000
0%
37
➢T.O.T assumes a 20%-25% occupancy rate through December
2020 & slowly improving beginning in January 2021
� Business License Tax assumes an aggregate 16% reduction in
workforce for businesses within EI Segundo
Ift
➢Sales Tax is down ^'12% from pre-COVID-19 trend
➢UUT is down ^J35%from pre-COVI D-19 trend
1
1 Police $18,027,139
Fire 131296,783
Community Services 6,831,657
Public Works 5,347,923
Non -department 3,721,450
6 Development Services 2,537,394
Information Technology Services 2,23407
8 City Manager 1,914,089
Finance 118851575
10 Human Resources 9171405
11 City Attorney 5611950
12 City Clerk 4211157
13 City Council 260,903
' Total OperatingBudget i
91129213
115 ITransfers out to CIP 1,200,000
Total16 1 Expenditures $5993129213
MI
Personnel Costs
➢Salary & benefit adjustments based on multi-year MOUS
➢ Minimum hourly wage effective each January 1:
2020 = $13
2021 = $14
2022 = $15
Personnel Costs
City will continue to implement the Bartel Plan to reduce unfunded
CalPERS pension liabilities over 20 years
Public Safety Rate: 71.4% for FY 2019-20 increasing to 99.5% by FY
2029-30
Misc. Rate: 26.7% for FY 2018-19 increasing to 33.8% by FY 2029-30
Rates begin to
decrease
by
FY
2030-31 to normalize
at
an estimated
18% for Public
Safety &
9%
for
Miscellaneous plans
by
FY 2039-40
Potential to reduce future costs (Council Pension Sub -Committee)
35 vacant full-time positions (August 2020):
Public Works — 9
Police — 8
Community Services — 5
Fire -3
Information Technology — 3
Finance — 3
Development Services — 2
City Manager - 1
Human Resources —1
Police
82
8
6
Fire
52
3
2
Public Works
48
9
5
Community Services
33
5
4
Development Services
17
2
1
Finance
3
1
1
Human Resources
5
1
1
Other Departments
43
6
0
Tota 1
283
35 (12.4%)
20 (7.1%)
Note: Excludes part-time positions
Operating & Maintenance (O&M) Budgets
� Departmental O&M reduced by approximately 15%
� Equipment replacement charges funded at 50% for FY 2020-
2021; returning to 100% in FY 2021-22
� No funding for new technology or infrastructure projects
Notes:
Revenue forecast for FY 2020-2021 assumes continued COVID-19 impacts to the local economy and after assumes
conservative growth for each year
Appropriations forecast for FY 2020-2021 assumes continued COVID-19 impacts to City services and after assumes 100%
expenditures for each year
Fiscal Year (FY)
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
Revenues
$80,014,542
67,107,993
58,328,024
77,036,780
78,622,452
80,220,799
Appropriations
$78,056,312
74,595,883
59,462,213
80,089,122
82,945,246
85,921,209
Fund Balance
$22,298,953
16,811,063
15,676,874
12,624,532
8,301,738
2,601,328
GFOA Minimum
16.66% reserve
$12,956,700
12,432,150
9,909,972
13,347,653
13,823,655
14,319,629
2024-25 $81,859,887 $88,100,604 -$3,639,389 $14,682,847
Notes:
Revenue forecast for FY 2020-2021 assumes continued COVID-19 impacts to the local economy and after assumes conservative growth for each year
Appropriations forecast for FY 2020-2021 assumes continued COVID-19 impacts to City services and after assumes 100% expenditures for each year
New Budget Requests
11
Arts &Cultural Commission budget recommendations
Public Art
Gateway Project - $150,000
Library Park Activation - $50,000
Programming
Library - $25,000
Recreation & Parks - $25,000
Community Grants
Non-profit Cultural Institutions - $150,000
Artistic Programming - $30,000
Urban Placemaking/Parklets - $30,000
Administration — $15,000
Total Request = $475,000 (Fund Balance = $486,850)
'l Tri
Ah
1. IT Strategic Plan Update
2. Development Permitting System
3. Network Infrastructure Upgrade
4. Agenda Management System
5. City-wide Security Cameras
6. Start ERP (Eden) evaluation
7. City Council Chamber AV upgrade
8. Smoky Hollow ISP solutions evaluation
9. Facilities Work Order System evaluation
Capital Improvements Program
r,
Total projects (year one of three-year plan) _ $9,880,000
Projects completed or near completed = $4,720,000
Projects in -progress = $2,750,000
Deferred projects (May 5, 2020) _ $1,410,000
$1,000,000 reserved for Plunge
Project Completed or Near Completed - $4,720,000
Walnut Ave. Drainage and Street
Clubhouse Ductwork
Washington Park Playground
McCarthy Court Street
Fiber Vault Lids Replacement
Annual Pavement Rehabilitation
CDBG ADA Parking Facilities Restriping
EI Segundo Blvd. Parking Pilot
Cedar Street Water Main Replacement
Others
a"I
Projects In -Progress - $2,750,000
Grand Ave. water main replacement - $1,200,000 (Water Fund)
Park Place Design - $600,000 (Measure R Fund)
Annual Roadway Rehabilitation - $500,000 (Transportation Funds)
Annual sidewalk Improvement Program - $250,000 (Gas Tax Fund)
Annual Wastewater infrastructure replacement - $150,000 (Wastewater Fund)
ADA sidewalk ramp improvements - $50,000 (CDBG Fund)
M
Deferred Projects - $1,410,000
Recreation Park Projects
(Restrooms, Skate Park, Teen Center) - $800,000 ($750K GF & $50K Dev Funds)
City Hall Windows (health &safety/energy efficiency) - $450,.000 (Gen Fund)
Memory Row Fitness Trail - $100,000 (Dev Funds)
Park Vista Senior Center Plumbing Design - $60,000 (Senior Housing Fund)
No new projects added to Three -Year CIP
Fund FY 2019-2020 Deferred Projects:
Recreation Park Projects
(Restrooms, Skate Park, Teen Center) - $800,000 ($750,000 GF & $50,000 Dev Funds)
City Hall Windows (health &safety/energy efficiency) - $450,000 (Gen Fund)
Memory Row Fitness Trail - $100,000 (Dev Funds)
Park Vista Senior Center Plumbing Design - $60,000 (Senior Housing Fund)
Several Facilities Condition Assessment projects originally scheduled for FY 2020-2021 will
be deferred until FY 2021-2022
57
Estimated Revenues M $5813281024
Proposed Appropriations (without CI P)
Difference
Proposed CIP Projects
Difference
Use of Economic Uncertainty Reserve*
r
Estimated Ending Unassigned Fund Balance (June 30, 2021)
0% Reserve (9 -month budget)
(58,112,2131
215,811
(11200,000)
(984,189)
984,189
13,152,063
11,892,442
*Economic Uncertainty Reserve will temporarily decrease from $2,000,000 to $1,015,811. The difference ($984,189)
will be restored as the economy and revenue improves.
General Fund: Retain 20% reserve
Economic Uncertainty Reserve: Temporary decrease from
$2,000,000 to $1,015,811 with goal to restore
Worker's Comp Fund: $7,100,000 (^,070% funded)
General Liability Fund: $1,000,000 (actuary)
Pension Trust: $4.31M (June 30, 2020)
No additional funding proposed for FY 2020-21
❑OPEB Trust: $26.1M (June 30, 2020)
Cr^'40% funded
❑Full funding anticipated by 2030
❑No additional funding proposed for FY 2020-21
Scenario Three — as presented to City Council on May 5, 2020
• Virus peaks in December 2020 &Recovery starts in January 2021
General Fund is projected to experience a ^'20% revenue reduction.*
*May 5, 2020 Scenario Three anticipated a $16.1 million or 20% reduction
Review Existing Labor Contracts
Use of Furloughs (including winter holidays furlough)
Voluntary Reduction in Hours
Further Position Reductions
Increased use of private contracts/privatization of services
Regionalization of Services
Additional "Pension Reform" Options
Across-the-board Appropriation Reductions
Continued Deferred Maintenance
Service Reductions
Use of General Fund Reserves
Use of Economic Uncertainty Reserves
Revenue Enhancements
Early Retirement Incentives
Other items (TBD)
� N ek
❑Water and Wastewater Funds Financial Plan — August 18, 2020
City-wide Fee Resolution — September 1, 2020
LJ Proposed Budget Public Hearing & Adoption — September 15, 2020
FY 2020-2021 Commences — October 1, 2020
LJ Begin preparation of FY 2021-2022 Budget — December 2020
Long-term Financial Strategic Plan
VTwenty-year plan being developed by a consultant
City Council Pension Sub -Committee meetings to discuss pension
and OPEB funding options
LJ Municipal (Financial) Advisor retained
m :: W-
Wrap-up & Questions
1 yt -
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