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2021-06-15 CC Agenda Packet - ITEM #18 - PRESENTATION - Proposed FY 2021-2022 Budget6/15/2021 June 15, 2021 6/15/2021 6/15/2021 6/15/2021 6/15/2021 6/15/2021 6/15/2021 6/15/2021 6/15/2021 ON 6/15/2021 10 Top Ten Priorities (Priorities 4 & 7 were revised and are reflected in italics) 4. "Develop a plan to ensure long-term viability of recreation programming (especially at the Aquatics Center and The Plunge facilities)" 5. Identify further infrastructure and downtown improvements for Main Street 6. Attract senior living facilities to El Segundo 11 6/15/2021 11 Top Ten Priorities (Priorities 4 & 7 were revised and are reflected in italics) 7. "Preserve the integrity of the City's R-7 zoning and identify potential areas for new housing to comply with State of California's Regional Housing Needs Assessment [RHNA] requirements" 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 12 6/15/2021 12 Five Broad Goals (Goal 5 Activities were revised and are reflected in italics) 5. Champion economic development and fiscal sustainability (New Activities in italics) New Fiscal Sustainabilit Activities: Q "Revise City's Administrative Code regarding Personnel Rules" • "Revise City's Business License Sales Tax with respect to Sales Tax Exemptions, Late Payment Credits, and Taxation Structure for various Business Classifications by bringing a proposed business license tax to City Council fora future ballot measure" 0 "Pursue appropriate revenue measures, such as a Parking Tax" 13 6/15/2021 13 Five Broad Goals (Goal 5 Activities were revised and are reflected in italics) 5. Champion economic development and fiscal sustainability (New Activities in italics) h New Business Incubator Activity: "Work with El Segundo Economic Development Corporation, Chamber of Commerce, and other stakeholders to explore the potential to establish an EI Segundo Business Incubator to stimulate economic development" 14 6/15/2021 14 Five Broad Goals (Goal 5 Activities were revised and are reflected in italics) 5. Champion economic development and fiscal sustainability (New Activities in italics) New Smoky Hollow Parking Plan Activity: "In compliance with the Smoky Hollow Specific Plan, accelerate the production of parking spaces, striping of public streets, and implementation of one-way streets" 15 6/15/2021 15 FY 2020-2022 FY 2021-2022 Adopted Budget Proposed Budget No. Fund 19 months] % (12 months) 1 General Fund $59,051,732 49.4% $77,651,553 2 Water 22,083,273 18.5% 31,314,039 3 Transportation Funds 7,532,791 6.3% 10,242,136 4 Debt Service POBs 0 0.0% 9,800,000 5 Wastewater 4,660,165 3.9% 6,520,356 6 General Fund CIP 5,597,057 4.7% 5,055,900 7 Equipment Replacement 7,871,674 6.6% 5,000,000 8 Worker's Compensation 2,564,421 2.1% 3,490,975 9 General Liability 1,269,399 1.1% 3,094,306 10 Dev. Services Trust 1,700,000 1.4% 1,900,000 11 Public Safety Special Rev. 1,887,407 1.6% 1,802,948 12 Other Special Rev. 1,792,850 1.5% 1,650,800 13 Rec & Econ Dev Trusts 600,850 0.5% 1,000,000 14 Cultural Dev. Trust 486,000 0.4% 585,346 15 Debt Service 545,000 0.5% 545,000 16 Solid Waste 230,000 0.2% 270,000 17 Senior Housing 75,500 0.1% 105,313 18 Golf 727,000 0.6% 10,000 19 Economic Uncertainty 923,708 0.8% 0 Total $119,598,827 100.0 % $160,038,672 16 48.5% 19.6% 6.4% 6.1% 4.1% 3.2% 3.1% 2.2% 1.9% 1.2% 1.1% 1.0% 0.6% 0.4 % 0.3 % 0.2 % 0.1% 0.0% 0.0% 100.0 % 6/15/2021 16 1 Sales Tax $8,373,683 $12,250,000 $3,876,317 2 Business License Tax 10,489,360 11,750,000 1,260,640 3 Property Tax 9,645,025 10,432,525 787,500 4 Transient Occupancy Tax 7,524,570 8,420,000 895,430 5 Chevron Tax Reso Agreement 6,000,000 6,600,000 600,000 6 Utility Users Tax 4,494,047 6,289,500 1,795,453 7 Charges for Service 3,415,836 4,755,511 1,339,675 8 Transfers -In 948,708 4,013,235 3,064,527 9 Franchise Tax 2,250,000 3,000,000 750,000 10 Other Revenues 1,916,964 2,267,770 350,806 11 Intergovernmental Revenues 1,942,770 2,178,909 236,139 12 License & Permits 1,153,769 1,825,000 671,231 13 Interest & Rentals 603,000 726,250 123,250 14 Fines & Forfeitures 294,000 294,000 0 17 6/15/2021 17 Proposed FY 2021-2022 General Fund Revenues $74,802,700 Franchise Tax, $3,000,000 (45A) Transient 0ccupanty Tax, $8,420,000 (11%) Charges for Services, $4,755,511 Other Revenues, $11,305,164 (15%1 Sales Tax, $12,250,DOO (16%) Chevron TRA, $6,600.000 (9%) , Business Licenses, $11,750,000 [A69G] Property Taxes, $10,432,525 (14°d,) 0 Utility Users Taxes, $6,289,500 (9%) r 18 6/15/2021 19 6/15/2021 0Ca] 6/15/2021 FY 2021 2022 Proposed General Fund Appropriations General Fund Appropriations FY i Adopted Budget Proposed Budget $ % No. Department (9 Months) (12 Months) Change change 1 Police $ 17,879,525 $ 19,436,175 $ 1,556,650 8.7% 2 Fire 13,068,393 13,782,667 714,274 5.5% 3 Transfers Out 1,250,000 10,538,908 9,288,908 743.1% 4 Public Works 7,253,488 8,695,404 1,441,916 19.9% 5 Non -Departmental 3,780,218 5,904,993 2,124,775 56.2% 6 Community Services 4,661,460 5,878,231 1,216,771 26.1% 7 Development Services 2,609,024 3,098,785 489,761 18.8% 8 Information Technology 2,440,068 3,023,930 583,862 23.9% 9 City Manager 1,909,586 2,453,282 543,696 28.5% 10 Finance 2,038,556 2,412,820 374,264 18.4% 11 Human Resources 917,405 977,063 59,659 6.5% 12 City Attorney 561,950 561,950 - 0.0% 13 City Clerk 421,157 530,749 109,592 26.0% 14 Ci Council 260,903 356,596 95,693 36.7% FT 20 Proposed FY 2021-2022 General Fund Salaries & Benefits ❑PEB & Other Benefits 0.00°/a Workers' Compensation $166,UOU ( ) Social Security/Medicare $2,645,000 (4.00%) $1,422,000 (2.00%) Group Insurance $6,798,000 (11.00%) Retirement CaIPERS $4,853,000 (8.00%) POBs $9,770,085 (16.00%) 21 6/15/2021 21 ° Began FY 2021-2022 Budget development with a $9 million deficit Actions to close budget gap: One-time use of OPEB Trust fund: $2,400,000 One-time use of General Fund Balance (Reserves): $2,025,125 23.5 frozen vacant positions: $2,174,875 - Operations & Maintenance reductions: $1,500,000 Equipment Replacement Fund Contribution: $900,000 22 6/15/2021 22 6/15/2021 Balancingthe GeneralFund Budget DepartmentPosition Police Lieutenant* Year • Positions 1.0 12 Police Sergeant* 1.0 12 Police Police Officer* 2.0 12 Fire Firefighter/Paramedic 1.0 12 Fire Fire Marshall 1.0 12 Finance Deputy City Treasurer II 1.0 12 I.T. Administrative Specialist 1.0 12 Public Works Equipment Maint. Supervisor 1.0 12 Public Works Park Maintenance Worker II 1.0 12 Public Works Senior Civil Engineer 1.0 12 Public Works Custodian (budgeted at .5 FTE) 0.5 12 Community Sery Executive Assistant *City Manager & Police Chief Discretion 1.0 12 23 23 6/15/2021 DepartmentBalancing the Develop. Services General Fund Budget Position Director of Dev. Services — Partial Year Frozen Positions Number 1.0 2 Develop. Services Planning Manager 1.0 3 Finance Management Analyst 1.0 2 Fire Fire Prevention Specialist 1.0 6 HR H.R. Manager 1.0 2 I.T. Sr. Network Assistant 1.0 3 Police PSO 2.0 3 Public Works Administrative Tech Specialist 1.0 6 Public Works PW Inspector 1.0 6 Community Sery Total 77 Sr. Admin. Specialist 1.0 11.0 2 1 24 24 25 6/15/2021 25 26 6/15/2021 26 27 6/15/2021 27 City Council authorized the issuance of POBs 0 City received AA+ Bond Rating City issued POBs in the amount of $144 million to pay off 95% of UAL POBs were 4.5x over subscribed POBs interest rate is 2.568% Saving the City -$82 million over nineteen years Level debt service of -$9.8 million per year for nineteen years City Council Strategic Priority of addressing rising pension costs has been adhered to 28 6/15/2021 93 29 6/15/2021 29 Cultural Development 1% for the Arts Fund 1. Cultural Arts Coordinator ($100,000) - This represents 75% funding for this full-time position. 2. Festival of Holidays ($60,000) - New project for FY 2021-2022. 3. Outdoor Dining Enhancements ($55,000) — To pay for cultural arts projects and programming proposed by the Arts and Culture Committee and approved by City Council. 4. TEDx El Segundo ($50,000) 5. Poet Laureate Program ($8.000) Total = $273,000 (new appropriations for FY 2021-2022) 30 6/15/2021 0C, 31 6/15/2021 31 32 6/15/2021 32 33 6/15/2021 33 Water rate adjustments: January 1 of 2022, 2023, 2024, and 2025, ° The rate adjustments are: 34 6/15/2021 34 35 6/15/2021 35 Wastewater rate adjustments: April 2, 2021, January 1 of 2022, 2023, 2024, and 2025. u The rate adjustments are: 36 6/15/2021 U- Starting FY 2022-2023 — General Fund Payments • Annual $1,300,000 driving range ground lease payment • Annual $200,000 Community Benefit Contribution © Annual $200,000 Golf Course and Driving Range Capital Contribution Recurring 3% beverage fee payment at driving range & golf course (minimum guarantee of $200,000) o Annual $20,000 golf course ground lease payment ,, Total = $1,900,000+ per year 37 6/15/2021 37 Ground lease Revenue 60%-70% of the revenue generated from the driving range ground lease (estimated to start at $1,300,000 per year) will be dedicated to funding the City's pension related liabilities. This would result in a starting annual pension contribution of $780,000 to $910,000. 30%-40% of the revenue generated from the driving range ground lease (estimated to start at $1,300,000 per year) will be dedicated to repaying the Equipment Replacement Fund. This would result in a starting annual loan repayment of $390,000 to $520,000 until the loan is paid off. Once the Equipment Replacement Fund loan is paid off, this revenue will be dedicated to City's Capital Improvement Program (public infrastructure) needs. 38 6/15/2021 38 Golf Course and Driving Range Capital Contribution The Annual minimum $200,000 Golf Course and Driving Range Capital Contribution to Golf Fund will be made as required in the Ground Lease and Agreement and Golf Course Management Agreement. The annual 3% beverage fee payment from driving range and golf course (with a minimum guarantee of $200,000 from the driving range) will go to the General Fund to be used for general use purposes. ➢ The annual $20,000 golf course ground lease payment (with a 10% adjustment every five years) will go to the General Fund for general use purposes. 39 6/15/2021 39 40 6/15/2021 40 41 6/15/2021 41 42 6/15/2021 42 Total CIP budget of $25,835,400 (all Funds) for FY 2021-2022 $10,800,000 Proposed Special Revenue Fund Appropriations $9,979,500 Proposed Enterprise Fund Appropriations $4,830,400 in Carryover Projects $225,500 General Fund Appropriation 43 6/15/2021 43 6/15/2021 Capital • •Program Project • Proposed 2021-22 Proposed CIP Projects.• No. Other Grant or Special Funds 1 City Facilities ADA Compliance $75,000 2 HVAC (Citywide) 60,000 3 Safe Routes to School Project 50,000 4 Electrical (Citywide) 19,000 5 Exterior Lighting 17,000 6 Plumbing 4,500 Total General Fund Allocation to CIP $225,500 4� 44 44 45 6/15/2021 45 6/15/2021 ICRIVIA Insurance Risk Pool — Premium Re newals for FY 2021-2022 i 020 El Segundo $2,107,715 $2,112,209 (0.2%) ($4,494) City A 4,587,555 2,640,907 73.7% 1,946,648 City B 3,441,562 2,340,554 47.0% 1,101,008 City C 3,280,312 2,423,319 35.4% 856,993 City D 2,714,685 2,357,877 15.1% 356,808 City E 2,681,876 2,262,492 18.5% 419,384 City F 2,645,138 1,653,274 60.0% 991,864 City G 2,635,830 1,841,276 43.2% 794,554 City H 2,391,164 1,552,237 54.0% 838,927 City 1 2,183,662 1,409,394 54.9% 774,268 City J 2,060,055 1,495,416 37.8% 564,639 City K 1,261,136 1,042,430 21.0% 218,706 City L 1,169,610 969,140 20.7% 200,470 City M 1,004,094 688,607 45.8% 315,487 City N 762,335 573,021 33.0% 189,314 City 0 636,577 373,140 70.6% �c 263,437 46 46 W"� Ten -Year Financial Strategic Plan momm— General Fund Ten Year Projection $120,000,000 $30,000,000 5100.000.000 $25,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 202E FY 2029 FY 2030 FY 2031 FY 2032 mRevenues E_.Appropriations Fund Balance $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 48 6/15/2021 48 0 Future Challenges Potential FY 2022-2023 Budget Balancing Options Future Opportunities Long-term Financial Strategic Plan ° Biennial Budget Format 49 6/15/2021 Eli, Approve: 1. Resolution to adopt FY 2021-2022 Operating and CIP Budget and FY 2021-2022 Appropriations Limit I Resolution to approve change in Fiscal Year to July 1 to June 30 3. The following Financial Policies: General Fund Reserve Policy Economic Uncertainty Reserve Policy Unfunded Actuarial Liability (UAL) Policy Topgolf Revenue Allocation Policy 4. Revisions to Year -Three (FY 2021-2022) of the 2020-2022 City Strategic Plan 671: 6/15/2021 50 n u 51 6/15/2021 51 6/15/2021 Capital Improvement Program Project (Water Fund) Prior Years No. By Fund and Project (Carryover) FY 2021/22 Water Fund 1 Annual Water Main Maintenance $0 $2,000,000 2 lWater Facilities Maintenance 0 0 3 IGrand Avenue Water Main Replacement _ 11200,000 0 Water Division Office and Maintenance Yard 4 Improvements 0 110,000 5 Water Valve Replacements 0 0 �btal Water Fund $1,200,000 $2,110,000 52 52 �. �By Fund and Project stewater Fund 1 1I_ifeguard Pump Station Construction r Infrastructure Replacement (Annual 2 JProgram) Total Wastewater Fund 53 Prior Years (Carryover) $650,000 01 FY 2021/22 675.00 $650,0001 $675,00 6/15/2021 53 Prior Years No. By Fund and Project (Carryover) FY 2021/22 Transportation Funds (Gas Tax/Prop C/SB 1/Measure R/Measure M) 1 Park Place Extension Transportation Project --Design $0 $3,200,000 2 Roadway Rehabilitation (Annual Program) 0 1,200,000 3 El Segundo Blvd. Improvements 0 1,000,000 4 Sidewalk Maintenance Program (Annual Program) 0 200,000 5 Arena Street Improvements Study 0 30,000 Total Transportation Funds $0 $5,630,000 54 6/15/2021 54 Av Fund and Proiect water Fund (Measure 1 JAlondra Park (Regional project 2 Infiltration projects 3 California Street Storm Drain Improvement otal Stormwater Fund 55 Prior Years tarrvover) FY 202 $01 $200,0 150,00 $150,000 $400,0 6/15/2021 55 6/15/2021 Capital Improvement Program Project (Special Revenue Funds) Prior Years No. By Fund and Project (Carryover) FY 2021/22 Special Revenue Funds/Other Civic Center Maintenance & Repairs (CIP Fund 1 Carryover & Fund 708) $350,000 $450,000 2 Entryway Projects (1% for the Arts Fee) 300,000 0 Park Vista Senior Housing Plumbing (Senior Housing 3 Fund) 60,000 0 4 DA Ramp Improvements - CDBG Funds 0 122,000 PD Women Locker Room Remodel (Dev. Impact Fees 5 & Asset Forfeiture) 0 2501000 6 Fire Stations #1 & #2 Carpet (Development Fees) 0 85,000 otal Special Revenue Funds/Other $710,000 $907,000 56 56 o. IBv Fund and Proiect General Fund Prior Years (Carryover) 17 he Plunge Rehabilitation (Funding Reserve) $1,500,000 18 Recreation Park Projects (to be determined) 800,000 City Hall Windows Replacement (work to be completed by Dec. 19 2021) 500,000 20 Library Park Activation Project 220,000 21 Recreation Park Checkout Building Restrooms Rehabilitation 200,000 22 Main & Imperial Entryway 1501000 23 IPolice & Fire Access Control System -Facility Security 110,000 Total General Fund 57 6/15/2021 57