public outreach program overview city financial situation update for public 10-17-13
DESCRIPTION
El Segundo RotaryTRANSCRIPT
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1O C T O B E R 2 0 1 3
CITY FINANCIAL SITUATION AND OPTIONS FOR THE FUTURE
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AGENDA• How are City funds spent?• How are City services funded?• Why do we have a future deficit?• What steps have been taken to reduce
expenditures in recent years?• What are the City’s options for dealing with the
deficit?• Questions/Comments
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CITY SERVICES• Police Department• Fire Department• City Library• Recreation and Parks• Public Works• Planning & Building Safety• Administration• Elected Officials
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HOW WILL YOUR DOLLAR BE SPENT IN 2014?
14% 15%60% 11%
$59,417,000
Salaries – 47%$27,890,700
Nonpersonnel – 22%$13,209,300
Benefits – 31%$18,317,000
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HOW WILL CITY SERVICES BE FUNDED IN 2014?
TAXES41703500
73%
CHEVRON TRA $5,906,900
10%
FEES FOR SERVICES $4,215,900
7%
OTHER REVENUE2799800
5%
LICENSES AND PERMITS, 1477500, 3% TRANSFERS FROM OTHER FUNDS, 400000, 1%
INTEREST INCOME240000
0%
$56,743,600
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BLT $10,294,500
UUT $10,026,800
Prop Tax $5,337,500
Sales Tax
$9,726,5
00
TOT
$5,125,000
Residential Taxes 2% $1,200,000
TAXPAYER ANALYSIS OF $41.7M
GENERAL FUND REVENUES
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Business 62%
Consumer
36%
Top 10 businesses pay 1/3 or, $14 Million
TAXES; $41,703,500
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$0.04 $0.06 $0.06
El Segundo Unified School District; $0.11
Educational Aug. Fund Impound $0.14
Los Angeles County $0.53
Property Tax Breakdown
Property Value: $
500,000
Payment to County: $
5,000
City's Tax Apportionment:
X 6.32%
Portion to City: $ 316
* Average assessed value of a single-family unit in El Segundo is $482,000
* L.A. County (88 Cities) Avg: 11%
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$316
How Will Your Dollar Be Spent in 2014?
$88Fire Dept. $102
Police Dept.$29
Rec./Parks
$14Library
$47
Admin.
$36Public Works
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GENERAL FUND FY 2013/14 REVENUES & EXPENDITURES
REVENUES EXPENDITURES$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$59,417,000
$56,743,600
Deficit$2,673,40
0
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WHAT DOES THE FUTURE LOOK LIKE?
2013-2014 2014-2015 2015-2016 2016-2017 56,000,000
58,000,000
60,000,000
62,000,000
64,000,000
Expenditures
2014-2015 2015-2016 2016-2017FORECAST FORECAST FORECAST
REVENUES 57,685,585 59,045,675 60,271,924 EXPENDITURES 61,288,387 62,496,903 63,172,708 SURPLUS/(SHORTFALL): $ (3,602,802) $ (3,451,227) $ (2,900,784)
Increase to Expenditures forCapital Infrastructure 2,000,000 2,000,000 2,000,000 SHORTFALL: $ (5,602,802) $ (5,451,227) $ (4,900,784)
Revenues
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WHAT IS PREVENTING A STRUCTURALLY BALANCED BUDGET? Stagnant Tax Revenues
Price of Natural Gas impacting core tax revenues Slow Property Tax Recovery (Commercial)
No significant projected increases in other revenues
Heavy Dependence on the Business Sector 62% of Tax Revenues come from Businesses Volatility and Risk Revenue needs diversification
Rising Benefit Costs have offset employee concessions
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A BIT OF HISTORYGENERAL FUND
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DEFICIT PERIOD
8-yr surplus: $33 MM
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017 24,000,000
29,000,000
34,000,000
39,000,000
44,000,000
49,000,000
54,000,000
59,000,000
64,000,000
REVENUES, NET OF TRANSFERS EXPENDITURES, NET OF TRANSFERS
GENERAL FUND HISTORY
Beginning Business
License Tax Reductions
Without Chevron TRA
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141995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
24,000,000
29,000,000
34,000,000
39,000,000
44,000,000
49,000,000
54,000,000
59,000,000
64,000,000
GENERAL FUND HISTORY
$5.1 Million Reduction in 2010: - Froze 34 vacant position created through attrition - Offered Early Retirements - Negotiated health cost-sharing with employee groups - Outsourced 911 Dispatch - Reduced mandatory staffing in Fire Dept., resulting in a savings of $1.8 Million in OT
$4 million loss on investment portfolio
$ 2.4 million loss from price of natural gas
$2.6 million loss from Sales Tax$1.2 million loss from Franchise Tax
Balanced with:$19.3 million from Econ Uncertainty
$5.9 million in Developer Fees
$4.4 million from Capital Designations
2012: -Negotiated pension cost-sharing with employeesFroze Additional 12 positions, for a total vacancy of 62 positions, or 20% of total staffing
$3 Million Additional Reduction in 2011: - Saved 12.83% in Salaries & Benefits through employee furloughs - Offered Additional Early Retirements - Froze Additional 16 positions, for a total vacancy of 50 positions
2009:Cost of Living (COLA) increase given to all employees
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DEFICIT PERIOD
8-yr surplus: $33 MM
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017 24,000,000
29,000,000
34,000,000
39,000,000
44,000,000
49,000,000
54,000,000
59,000,000
64,000,000
REVENUES, NET OF TRANSFERS EXPENDITURES, NET OF TRANSFERS
GENERAL FUND HISTORY
Without Chevron TRA
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3-Year Forecast
Budget Balancing Options
Raise Revenues (tax increases)
Outsource Services
22 FT positions 28 PT positions= 8% Reduction in
Salaries & Benefits
County FireCounty SheriffCounty Library
UUTTOTBusiness LicenseParking Tax
Option 1 Option 2 Option 3
1% Comp - $440k
Reduce Compensation,
Staffing & Service Levels
Reduce School Support Services
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RECOMMENDATIONS TO ADDRESS FINANCIAL STABILITY
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• Ongoing Cost Containment
• Economic Development
• Tax Measures:• Utility User Tax Increase (UUT)• “Hotel Tax” - Transient Occupancy
Tax (TOT)• Business License Tax (BLT)
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0%
2%
4%
6%
8%
10%
12%
3%
GAS, ELECTRIC & WATER UTILITY USERS’ TAX
Average
7%
City of El Segundo Charges Commercial Only; All Others Charge Commercial and Residential
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El S
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0%
2%
4%
6%
8%
10%
12%
14%
8%
HOTEL (VISITOR)TAX (TOT)Average
12%
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ESTIMATED VALUE OF PROPOSED TAX MEASURES
1% Increase Value:
UUT:(Elec., Gas, Telecom., Water)
Hotel (Visitor) Tax (TOT):
Residential UUT (Elec., Gas, Telecom., Water):
$1,401,200 $637,500 $342,350**
**ANNUAL ESTIMATED Residential UUT Impact per household: $48.84 (Based on 7010 units not currently paying UUT)
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BUSINESS LICENSE TAX2013 SALES TAX CREDITS (NOT INCLUDING CHEVRON)
TOTAL $1,105,500
Manufacturing Other Retail
254 out of 4,160 businesses take the Sales Tax Credits
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ESTIMATED POTENTIAL PARKING TAX REVENUES
ASSUMING 10% PARKING TAX• Airport Parking (Long-term Parking):
$295,000
• Transient (Visitor), Validation, & Valet Parking: $346,400
• Monthly Tenant Parking: $516,900
TOTAL: $1,158,300
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Tax measures
• All would require a ballot measure; must have 50% of the votes plus one to pass.
• Next regular election – April 2014
• Council would need to agendize and vote on tax measures in the Fall 2013
• The earliest we would see any new revenues would be July 2014.