City of Hermosa Beach --- 02-08-00

MIDYEAR BUDGET REVIEW 1999-00

Recommendation :

It is recommended that the City Council approve the revisions to estimated revenue, appropriations, budget transfers and fund balances as shown in the attached Budget Summary and Revenue Worksheet.

Background :

The City has conducted a Midyear Budget Review annually since fiscal year 1981-82. The review is a good tool to ensure that assumptions and estimates originally used to prepare the budget ten months earlier remain realistic.

Analysis :

Overview

The revenue changes recommended at midyear 1999-00 reflect a continuing improved economy and an enhanced revenue picture, primarily in tax revenue. Approval of midyear revisions results in additional funds in the General Fund.

Revenue

(see Revenue Worksheet)

The net change in revenue in the General Fund is $1,611,017. Some of the most notable changes are mentioned below.

Taxes

Secured property taxes increased 6%, based on the new levy, which is 11% higher than 98-99. The budget assumption was an increase of 5%.

The transient occupancy tax estimate is being increased 18% due to higher receipts in general and high occupancy at the new hotel.

Sales Tax

Sales tax for the first two quarters is up 13% over 98-99. As reported at the last City Council meeting, sales tax was up 9% overall last year. The estimate is being increased by almost $196,000, or approximately 9%.

The chart below compares sales tax on major accounts for the first half of this year to first half of last year by the top ten categories.

Comparison of First Half of 1998/99 to 1999/00

Top Ten Categories

RANK

BUSINESS CLASS

1999-00

INC/
(DEC)

% CHANGE PREV YEAR

% OF
TOTAL

RANK PREV YR

1.

AUTO DEALERS AND SUPPLIERS

$326,279

$69,227

26.93%

29.82%

2

2.

EATING/DRINKING PLACES

256,106

791

0.31

29.62

1

3.

GROCERY STORES

89,326

(6,054)

(6.35)

11.06

3

4.

BUILDING MATERIALS

67,207

10,917

19.39

6.53

4

5.

AUTO LEASES

62,003

11,278

22.23

5.88

5

6.

SPECIALTY STORES

40,477

2,755

7.30

4.38

6

7.

SERVICE STATIONS

38,270

11,291

41.85

3.13

9

8.

SPORTING GOODS/BICYCLES

36,816

884

2.46

4.17

7

9.

WHOLESALE TEXTILES/FURNISHINGS

27,234

(2,084)

(7.11)

3.40

8

10.

HOUSEHOLD/HOME FURNISHINGS

20,333

2,968

17.09

2.01

10


Sales Tax Comparison by Geographic Area


The utility users tax estimate is being adjusted because of lower receipts stemming from discontinuation of the tax on international and interstate phone calls.

Estimates for the parking structure revenue and the related payment to the County, as well as revised estimates for Lot A, are included.

 

Additional Appropriations

The following additional appropriations are requested.

FUND/DEPARTMENT

Amount

Explanation

GENERAL FUND (001)
Community Resources

Part-time/Temporary

$ 3,841

On-going skate track monitoring.

Contract Service/Private

$ 7,056

Reinstate skate track security.


Public Works
    Street Maintenance/Traffic Safety

Equipment less than $1000

$ 4,500

Appropriate designation for trash cans in the downtown area.

    CIP 630
        Pier Renovation/Phase III

Contract Service/Private  $1,000,000 Appropriate donation received by the City for renovation of the Pier.


TOTAL GENERAL FUND             $1,015,397

DOWNTOWN ENHANCEMENT FUND (109)

Downtown Enhancement

Contract Service/Private $ 25,000 Increased maintenance for Lower Pier Avenue and downtown areas (weekly in summer) including extra steam cleaning (2 times per year) and porter service for heavy weekends.
County Share Parking Structure $ 100,093  50% of Parking Structure net income.
North Pier Parking Structure - Equipment less than $1000  $ 1,000 Trash cans needed for North Pier parking structure.

TOTAL DOWNTOWN
ENHANCEMENT FUND             $ 126,093

 

PROP A OPEN SPACE FUND (121)
Public Works

   CIP 144
Hermosa Beach Bike Path Contract Service/Private		 $ 200,000 County Beach and Harbor Funds from Supervisor Knabe to be used to complete construction costs.
    CIP 624
North Pier Parking Structure Contract Service/Private		 ($ 182,264) Correct appropriation to reflect available balance in grant.

TOTAL PROP A OPEN
SPACE FUND                                   $ 17,736

PARKS AND REC FACILITY TAX FUND (125)
Public Works

   CIP 529
Clark Field Improvements Contract Service/Private		 $ 75,000 Adjust funding between 4% UUT fund and Parks and Rec fund because 98-99 actual fund balance was lower at year end.

TOTAL PARKS AND REC
FACILITY TAX FUND                 $ 75,000

4% UTILITY USERS TAX Fund (126)

Public Works

    CIP 508
Greenbelt Improvements Contract Service/Private		 ($ 14,860) Project completed by City staff. Funds not needed.
    CIP 529
Clark Field Improvements Contract Service/Private		 ($ 75,000) Adjust funding between 4% UUT fund and Parks and Rec fund because 98-99 actual fund balance was lower at year end.

TOTAL 4% UTILITY USERS
TAX FUND                                     ($ 89,860)

 

PROP A TRANSIT FUND (145)
Recreation Transportation

Contract Service/Private  $ 4,116  Additional youth and senior excursion this year and Council-approved shuttle bus for Aloha Days and St. Patrick’s Day Events.

TOTAL PROP A
TRANSIT FUND                             $ 4,116

 

PROP C TRANSIT FUND (146)
Public Works

Pavement Management Study  $ 2,000  Project not completed in fiscal year 1998-99 as anticipated.

TOTAL PROP C
TRANSIT FUND                             $ 2,000

GRANTS FUND (150)

Coastal Permit Authority Grant

Contract Service/Private  $ 15,351  Adjust appropriation to reflect balance of project to be completed.

Public Works

    CIP 302
NPDES Improvements Contract Service/Private		  $ 8,959 Appropriate revenue received from California Waste Oil Recycling Grant.

TOTAL GRANTS FUND                      $ 24,310

 

Use of Additional Funds

It is recommended that the estimated additional funds of $ 492,460 be used in the following manner:

  • Transfer to Insurance Fund:                          $ 100,000
  • Transfer to Capital Improvement Fund:         $ 392,460 for restroom and street projects

 

        Summary

Midyear recommendations reflect the City’s continued progress toward the goal of adequate funding levels for long term liabilities and much needed street work.

Work on the 2000-01 budget begins this month!