2020-09-15 CC Agenda Packet - ITEM #C6 - PRESENTATION - Proposed FY 2020-21 BudgetCity of EI Segundo
Proposed FY 2020-2021 Budget
Public Hearing
Overview
Economic Recovery Scenarios
.. Citywide Budget
4 General Fund
5. Special Revenue Funds
6. Enterprise Funds
7. Internal Service Funds
8. Capital Improvement Program
F)
9. Other Topics
Pensions
q. OPEB
Future Challenges
• Budget Balancing Tools
Future Opportunities
Long -Term Financial Strategic Plan
10. Future Budget Steps
11. Questions
9
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
Civi
COV I D- 19
IV
Unrest Impacts
!12"6" ■6"
FY 19-20 General Fund Budget update —April 21, 2020
FY 19-20 General Fund Budget Update —May S, 2020
Strategic Plan update -July 22, 2020
FY 20-21 Budget Study Session —August S, 2020
Water &Wastewater Rates Study Session —August 18, 2020
FY 20-21 Budget Public Hearing —September 15, 2020
FY 20-21 Commences —October 1, 2020
Scenario One: COVID-19 peaks in May 2020 & Economic Recovery starts in July 2020
With the General Fund projected to experience a $9.6 million (12%) revenue decline.
Scenario Two: COVID-19 peaks in Aug. 2020 & Economic Recovery starts in Oct. 2020
With the General Fund projected to experience a $15.2 million (or 20%) revenue decline.
Scenario Three: COVID-19 peaks in Dec. 2020 & Economic Recovery starts in Jan. 2021
With the General Fund projected to experience a $16.1 million (21%) revenue decline.
City Council's Top Ten Priorities:
Obtain an "Age Friendly City" designation
Determine future of the Teen Center
. Continue to advocate for EI Segundo's interests regarding LAX expansion
4. Consider guidelines for use of potential revenue from golf course lease
5. Identify further infrastructure and downtown improvements for Main
Street
City Council's Top Ten Priorities (continued):
I.- Attract senior living facilities to EI Segundo
7 Identify areas within the community that are appropriate for housing
8. Conduct a study of repurposing City Hall
9. Develop a unique value proposition for attracting new businesses
10. Ensure that the City is positioned for post-COVID-19 recovery
City Council's Five Broad Goals:
Enhance Customer Service., Engagement, and
Communication; embrace diversity, equity, and Inclusion
Support Community Safety and Preparedness
Develop as a Choice Employer and Workforce
Develop and Maintain Quality Infrastructure and Technology
Champion Economic Development and Fiscal Sustainability
1 General Fund
2 Water
MEquipment Replacement
4 Transportation Funds
M
6 Wastewater
7'II1/orker's Compen =
8 Public Safety Special Rev.
Mither Special Rev.
10 Dev. Services Trust
ener bility
12 Economic Uncertainty
13
14 Rec & Econ Dev Trusts
M Debt Service
16 Cultural Dev. Trust
MP—Orlwa
18 Senior Housing
$80,782,540
29,622,670
7,849,761
2,284,527
2,749,000
5,235,334
2,934,272
1,661,565
578,801M
M
$51,732 49.4%
21.5% 22,083,273 18.5%
7,871,IM 6.6%
1.7% 7,532,791 6.3%
,59 ,05
3.8% 4,660,165 3.9%
AMM& 1%
2,J64,421
1.2%
1,887,407
0.4%
1,792,851jr
2.1% a
1.6%
1.5%
0
0.0%
1,700,000
1.4%
1,783,33
1.3%
,269,39
0
0.0%
923,708
0.8%
1,417,800
1.0%
72701&
0.6%
0
0.0%
600,850
0.5%
545,000
K 0.4%
545,001=
0.4% a
0
0.0%
486,000
0.4%
230
0.2%
230,00
.20
741113
0.1%
75,500
0.1%
11
Adopted FY 2019-20 Proposed FY 2020-21
Revenue (12 months) (9 months) Change
1
Business License Tax
$121510,000
$10,489,360
$(21020,640)
2
Property Tax
81816,500
9,645,025
828,525
3
Sales Tax
1115001000
813731683
(31126,317)
4
Transient Occupancy Tax
15,200,000
7,524,570
(71675,430)
5
Chevron Tax Reso. Agreement
516001000
610001000
4001000
6
Utility Users Tax
61450,000
4,494,047
(11955,953)
7
Charges for Service
512981845
3,4151836
(11883,009)
8
Franchise Tax
31200,000
2,250,000
(950,000)
9
Intergovernmental Revenues
11851,490
11942,770
911280
10
Other Revenues
31218,995
1,916,964
(11302,031)
11
License & Permits
116881358
111531769
(534,589)
12
Transfers -In
140,000
948,708
808,708
13
Interest & Rentals
8241000
6031000
(221,000)
14
Fines & Forfeitures
4121020
2941000
(118,020)
Total
$76,710,208
$59,051,732
$(17,658,476)
FY 2020-2021 General Fund Revenues - $59,051,732
Franchise Tax (4%)
Charges for Services A91110
(6%) IM
Chevron TRA (10%)
Utility Users Taxes (7%)
Other Revenues Transient Occupancy 'Tax
(12%) (13%)
Property Taxes (16%)
Sales Tax (14%)
Business Licenses (18%)
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
5 Year Tax Revenue Overview
C
FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 Estimated FY Projected FY
2019/20 2020/21
Property Tax Sales & Use Tax -UUT Other Taxes Transient Occupancy Tax Business License
14
i
C
FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 Estimated FY Projected FY
2019/20 2020/21
Property Tax Sales & Use Tax -UUT Other Taxes Transient Occupancy Tax Business License
14
1
Police
$ 23,175,793
$ 17,879,525
$ (5,296,268)
-22.9%
2
Fire
1710151860
1310681393
(31947,467)
-23.2%
3
Public Works
8,098,326
71253,488
(844,838)
-10.4%
4
Community Services
91680,013
41661,460
(51018,553)
-51.8%
5
Non -Departmental
517431964
317801218
(11963,747)
-34.2%
6
Development Services
3,192,691
21609,024
(583,667)
-18.3%
7
Information Technology
217741264
21440,068
(334,196)
-12.0%
8
Finance
217671940
210381556
(729,384)
-26.4%
9
City Manager
2,526,032
11909,586
(616,446)
-24.4%
10
Transfers Out
21749,000
11250,000
(11499,000)
-54.5%
11
Human Resources
114301937
9171405
(513,532)
-35.9%
12
City Attorney
5851450
5611950
(23,500)
-4.0%
13
City Clerk
722,838
4211157
(301,681)
-41.7%
14
City Council
319,432
260,903
(58,529)
-18.3%
15
• Projected Budget shortfall = $5,812,588
Measures taken to balance budget
20 Full -Time Positions Frozen: $2,416,980
15% Operations & Maintenance Reduction: $2,087,900
Use of Economic Uncertainty Reserves (for CIP Projects): $923,708
25% Equipment Replacement Reduction: $384,000
Police 70
Public Works
Community Services
Fire
Development Services
Finance
Human Resources
Other Departments
Total
Note: Excludes part-time positions
J=
82
48
33
52
17
18
5
28
283
N
J.6
r5
�4
M2
1
1
1
0
20 (7.1%)
FY 2020-2021
General Fund Salaries & Benefits
Workers' Compensation (5%)
Social Security/Medicare
OPEB & Other Benefits (2/)
Group Insurance (14%)
Retirement CalPERS (22%) Salaries (57%)
Community Services Department
Merger of Library with Recreation & Park
Reorganization within the Library
Senior Librarian to City Librarian
Librarian I to Arts and Culture Specialist
Parks/Landscaping moves to Public Works
Park Vista Senior Housing moves to Development Services
Development Services Department
Rename from Planning & Building Safety
Establish a Housing Division
Affordable Housing
Senior Housing
—Park Vista Senior Center
• Finance Department
Inclusion of City Treasurer's Office
Operational efficiencies
Business Services Manager to Treasury & Customer Services
Manager
Consolidation of Risk Management Function
New Risk Manager position
—Workers' Compensation Fund (75%)
—General Liability Fund (25%)
Information Technology Services Department
Rename only
Public Works Department
Include Parks/Landscaping Maintenance Services
General Fund Reserve target for FY 2020-21 = 20%
o Remains 20% for FY 2021-22
o Increasing to 25% for subsequent years (policy discussion)
Economic
Uncertainty Fund
Reserve FY
2020-21 = $1,076,292
Increasing
to $2,000,000 in
subsequent
years
U
Total Special Revenue Funds = $11.1 million
Includes $5.95 million for Capital Improvement Projects
r�
1
City Gateway Entry Project — $200,000
Library Park Activation — $100,000
Downtown Art and Beautification — $100,000
Holding Account — $86,000
Cultural Arts Projects &Programming
Total Budget = $486,000
:)ronosediY 2020-2021mDPh
City's facility lease activity for the Douglas Street Gap Closure
Capital Improvement project.
Included in the proposed budget is an appropriation of $545,000
for the annual payment of principal and interest on the Douglas
Street Gap Closure project.
Water (501)
Wastewater (502)
Golf (503)*
18,285,000
3,110,000
802,000
20,183,273
3,865,165
727,000
1,900,000
795,000
22,083,273
4,660,165
727,000
Solid Waste (505) - 230,000 - 230,000
* Includes $5.7M loan payable to the Equipment Replacement Fund
Estimated
Beginning
Fund Name Fund Balance
Equipment Replacement $ 15,477,836
General Liability Insurance 499,049
Workers' Compensation (31785,741)
Total $ 12,191,144
Estimated
Revenues
(9 months)
$ 994,379
1,395,900
2,910,924
$ 5,301,203
Proposed
Budget
(9 months)
$ 71871,674
1,269,399
2,564,421
11,705,494
Estimated
Fund Balance
6/30/21
$
81600,541
625,550
(31439,238)
$ (5,786,853)
Workers' Compensation Program
Annual premium increased by 35% or $286,756:
$1,121,661 for FY 2020-21
$984,001 in FY 2019-20
$834,905 in FY 2018-19
General Liability Insurance
1-1 Annual premium decreased by 19% or ($195,291):
o $881,959 for FY 2020-21
$962,485 in FY 2019-20
$1,077,250 in FY 2018-19.
WiTA 14 V,1 PI I I I ILTM id VV -4 r., 111 IM 1010 41 [=
Auto Physical Damage Program
o annual premium of $32,410 for a decrease of 12%
Other Programs:
Crime, Cyber, Property & Equipment breakdown, & Terrorism
K51a
33 Total projects (year two of three-year plan) _ $14,902,057
New Projects (9) _ $8,,760,000
Carryover Projects (24) _ $6,142,057
posed 020-AAikk____
Proposed Citywide Capital Improvement Program (for all funds) Budget
(Prior Year Carryovers & FY 2020-2021 Budget Appropriations)
General Fund
Plunge Rehabilitation Funding Reserve
Recreation Park Projects (Restrooms, Skate Park, Teen Center)
Technology Related CIP (website, Intranet, Laserfische, Wi-Fi)
City Hall Windows Replacement
Acacia Park Construction
Storm Drain Pump Project
Police Firing Range Remodel - PD Develop. Impact Fees
Rec Park Restroom Rehabilitation
Access Control System -Facility Security for Police and Fire
Richmond Field Renovation with ADA Accessibility
California Street Storm Drain Improvement
Main & Imperial Gateway Beautification Proj (see item #34)
Carryover
$1,000,000
6051000
400,000
220,000
203,000
200,000
190,000
1601000
150,000
148,000
FY 2020/21
$800,000
450,000
Total
$1,000,000
800,000
6051000
450,000
400,000
220,000
203,000
200,000
190,000
160,000
150,000
148,000
General Fund
13 Citywide Facility Repair 2019
14 City Hall Security Improvements
15 Library Park Project (see item #35 below for additional funding)
16 Sidewalk Replacement - Citywide
17 Citywide Facility Repair 2018
18 The Plunge Replacement Scope Assessment
19 2019 Street Improvement
20 Hockey Rink Rehabilitation
21 Business Center Design
22 Rec Park Softball Field Bleacher Replacement
23 Park Facility Upgrades 2018
24 Downtown Beautification
Total General Fund CIP
* Projects�—�
lh� AL
Carryover FY 2020/21 Tota 1
1301000 1301000
1251000
1251000
1201000
1201000
1071000
1071000
105,000
105,000
100,000
100,000
95,000
95,000
75,000
75,000
70,000
70,000
68,944
68,944
46,994
46,994
281119
281119
$4,347,057 $1,250,000
$5,597,057
Water Enterprise Fund
1 Projects
& dj-�
Carryover FY 2020/21 Total
25 Grand Ave. Water Main Replacement 11200,000 11200,000
26 Indiana Street Water Main Replacement 7001000 700,000
Total Water Fund $700,000 $1,200,000
$1,900,000
Wastewater (Sewer) Enterprise Fund
27 Lifeguard Pump Station Construction 445,000 445,000
28 Acacia Park Construction 200,000 2001000
29 Wastewater Infrastructure Replacement (Annual Program) 1501000 150,000
Total Wastewater Fund $645,000 $150,000
$795,000
W
i ed --q 12 Projects
rropos --. 1� M I & AL 'j—�
Transportation Funds - Gas Tax/ Prop C / SB 1/ Measure R/ Carryover FY 2020/21 Total
Measure M y
30 Park Place Gap Closure and Grade Separation Project (Design) 51000,000 51000,000
31 Roadway Rehabilitation (Annual Program) 500,000 500,000
32 Sidewalk Improvement and Construction (Annual Program) 200,000 250,000 450,000
Total Transportation Funds $200,000 $5,750,000 $5,950,000
Other Grant or Special Funds
33 Acacia Park Construction - Prop 68 Grant 200,000 200,000
CDF - Gateway Beautification Project (additional funding to
34 item #12) 200,000
35 CDF - Library Park Prject (additional funding to item #15) 1001000
36 Park Vista Senior Housing Plumbing (Senior Housing Funds) 60,000 601000
37 ADA Improvements - CDBG Funds 50,000 50,000 100,000
Total Grant & Special Funds $250,000 $410,000 $660,000
Total CIP (All Funding Sources) $6,142,057 $8,760,000 $14,902,057
37
Pension & OPEB Obligations
Continue implementation of 2018 Long -Term Pension Funding Plan
o Reduce Public Safety Employees Unfunded Liability Rate from 99.5% at it's
peak in FY 2029-2030 to 18% by FY 2039-2040
Reduce Miscellaneous Employees Unfunded Liability Rate from 33.8% at it's
peak in FY 2029-2030 to 9% by FY 2039-2040
39
IMI Use City Council Pension ad-hoc Committee to study:
o Reduction in annual CaIPERS payments via use of Pension Obligation Bonds
Continue to explore accelerated funding in FY 2021-2022 and other cost
savings options
Continue implementation of Long -Term OPEB Funding Plan
o Reduce the City's current unfunded liability from 60% to zero by FY 2029-2030
o Explore accelerated funding starting in FY 2021-2022
u_ = t _ 1t r_�'r!Jt��,r!JtJ�=lJsltlr
42
Ah
Prolonged economic recovery due to COVID-19
Potential double -dip recession
Rising retirement costs
Rising medical insurance costs
General Fund subsidies of other funds
Rising infrastructure and facilities maintenance costs
Rising service costs
Review Existing Labor Contracts
Use of Furloughs (including winter holidays furlough)
Further Position Reductions
Early Retirement Incentives
Increased use of private contracts/privatization of services
Regionalization of Services
Across-the-board Appropriation Reductions
Continued Deferred Maintenance
Sale of City Property and Assets
End of General Fund Subsidies
Use of General Fund Reserves
Revenue Enhancements
Additional Service Reductions
Further Reorganization of Departments
9
9fl
Pension Sub -Committee meetings start - Sept. 21, 2020
FY 2020-2021 Commences - October 1, 2020
Water and Wastewater Funds Financial Plan - October 6, 2020
Begin preparation of FY 2021-2022 Budget - December 2020
Long-term Financial Strategic Plan - Early 2021
FY 2020-2021 Mid -Year Report - March 2021
tureu�
Budge
Pension Sub -Committee meetings start - Sept. 21, 2020
FY 2020-2021 Commences - October 1, 2020
Water and Wastewater Funds Financial Plan - October 6, 2020
Begin preparation of FY 2021-2022 Budget - December 2020
Long-term Financial Strategic Plan - Early 2021
FY 2020-2021 Mid -Year Report - March 2021
Wrap-up & Questions
I