HomeMy Public PortalAboutOctober 8, 2020 City Council Workshop Packet
CITY COUNCIL WORKSHOP
550 E. 6th Street, Beaumont, CA
Thursday, October 08, 2020
Workshop Meeting: 5:30 PM
Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packets
are available for public inspection in the City Clerk’s office at 550 E. 6th Street during normal business hours
AGENDA
MEETING PARTICIPATION NOTICE
This meeting will be conducted utilizing teleconference communications and will be recorded for live
streaming as well as open to public attendance subject to social distancing and applicable health
orders. All City of Beaumont public meetings will be available via live streaming and made available
on the City's official YouTube webpage. Please use the following link during the meeting for live
stream access.
BeaumontCa.gov/Livestream
Public comments will be accepted using the following options.
1. Written comments will be accepted via email and will be read aloud during the corresponding
item of the meeting. Public comments shall not exceed three (3) minutes unless otherwise
authorized by City Council. Comments can be submitted anytime prior to the meeting as well
as during the meeting up until the end of the corresponding item. Please submit your
comments to: NicoleW@BeaumontCA.gov
2. Phone-in comments will be accepted by joining a conference line prior to the corresponding
item of the meeting. Public comments shall not exceed three (3) minutes unless otherwise
authorized by City Council. Please use the following phone number to join the call:
(951) 922 - 4845
3. In person comments subject to the adherence of the applicable health orders and social
distancing requirements.
In compliance with the American Disabilities Act, if you require special assistance to participate in this
meeting, please contact the City Clerk's office using the above email or call (951) 572 - 3196.
Notification 48 hours prior to a meeting will ensure the best reasonable accommodation
arrangements.
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CALL TO ORDER
Mayor Santos, Mayor Pro Tem Lara, Council Member Carroll, Council Member Martinez, Council
Member White
Action of any requests for Excused Absence:
Pledge of Allegiance:
PUBLIC COMMENT PERIOD (ITEMS NOT ON THE AGENDA)
Any one person may address the City Council on any matter not on this agenda. If you wish to speak, please fill out a
“Public Comment Form” provided at the back table and give it to the City Clerk. There is a three (3) minute time limit on
public comments. There will be no sharing or passing of time to another person. State Law prohibits the City Council from
discussing or taking actions brought up by your comments.
ACTION ITEMS
Approval of all Ordinances and Resolutions to be read by title only.
1. Discuss and Provide Direction to Staff Regarding FY 2022 Budget
Recommended Action:
Review the financial condition of the City and provide direction to staff regarding
future budget decisions and allocation of one-time resources.
ADJOURNMENT
The next regular meeting of the Beaumont City Council, Beaumont Financing Authority, the Beaumont
Successor Agency (formerly RDA), the Beaumont Utility Authority, the Beaumont Parking Authority and
the Beaumont Public Improvement Agency is scheduled for Tuesday, October 20 2020, at 5:00 p.m. or
thereafter as noted on the posted Agenda for Closed Session items in the City Council Board Room
No. 5, followed by the regular meeting at 6:00 p.m. or thereafter as noted on the p osted Agenda at City
Hall.
Beaumont City Hall – Online www.BeaumontCa.gov
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Staff Report
TO: City Council
FROM: Jeff Mohlenkamp, Finance Director
DATE October 8, 2020
SUBJECT: Discuss and Provide Direction to Staff Regarding FY 2022 Budget
Background and Analysis:
This workshop is designed to provide the City Council with an update regarding the
current financial condition of Beaumont, to discuss some recommended budget
adjustments and to begin the discussion of long-term financial planning, including future
allocation of one-time resources.
This report provides the following sections:
1. Historical Background – highlights General Fund results from recent past years;
2. Estimated General Fund and Wastewater results for FY 2020;
3. Discussion of the Covid-19 pandemic, its results on financials to date and
unknowns regarding future impacts;
4. Adjustments to the General Fund long term financial forecast;
5. Estimate of FY 2021 General Fund results and proposed budget adjustments;
6. Estimate of FY 2021 Wastewater Fund results and proposed budget
adjustments;
7. Early discussion of FY 2022 budget and beyond; and
8. Discussion of allocating General Fund and CFD Fund unrestricted balances.
Historical Background
At the conclusion of FY 2016, the City had a General Fund deficit in excess of $4
million. By the end of FY 2018 the General Fund had a reserve balance of $10.5
million. This was a $14.5 million turn-around in the City finances over a two-year period
of which approximately $8.1 million of was one-time revenues. The remaining $6.4
million is the result of operating surpluses through cost saving measures deployed by
the City and increases in revenues supporting operations.
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Item 1.
At the conclusion of FY 2019 the General Fund had an unassigned balance of $15.3
million.
Unassigned General Fund Balance (ending balances, including transfers)
FY 2016 - ($ 4,070,636)
FY 2017 - $ 5,247,540 – included $8.1 million in one-time items to the General
Fund
FY 2018 - $10,531,271 – no one-time adjustments
FY 2019 - $15,284,159 – no one-time adjustments
Projected General Fund Results from FY 2020
The General Fund is projected to have an operating surplus of approximately $8.5
million from FY 2020. Revenues are projected to be $39.6 million and expenses $31.1
million. Of this surplus, fully $6.3 million is considered one-time in nature. This provides
for a true operating surplus of $2.2 million as follows:
Estimated GF Revenues - $39.6 million
Estimated GF Expenses - $31.1 million
GF Surplus - $ 8.5 million
Less: One-Time Solid Waste Retention Fee - $ 5.0 million
Less: One-Time Sales Tax Increase - $ 1.2 million
Less: Residual Solid Waste Revenues - $ .1 million
Total One-Time Revenues $ 6.3 million
Surplus From Operations - $ 2.2 million
after eliminating one-time items
After normalizing the impacts of the changes to solid waste FY 2020, revenues were
slightly below those for FY 2019. The primary factors were increases in tax revenues
that were more than offset by reductions in permitting/inspection revenues. Meanwhile,
expenses increased by approximately 4.7%. The primary driver of this was increases in
personnel costs.
This resulted in a comparable drop in ongoing operational surplus from over $4 million
in FY 2019 to $2.3 million in FY 2020.
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Item 1.
Projected Wastewater Fund Results for FY 2020
The Wastewater Fund is estimated to have a surplus from operations of $590,000. This
surplus is the result of revenues exceeding those budgeted by approximately $400,000
and savings in both personnel and operating costs.
Revenues - $10.5 million
Personnel Costs - $ 1.6 million
Operating Costs - $ 3.0 million
Equipment and Capital Maintenance - $ .8 million
Debt Service - $ 3.7 million
Committed to Capital Projects - $ .8 million
Total Costs/ Commitments $ 9.9 million
Estimated Surplus - $ .6 million
It should be noted that the current budget does not provide a structured approac h to
infrastructure replacement costs. Further, development impact fees were used to cover
$1 million of the fund’s debt service obligation in FY 2020. This has been reduced to
less than $300,000 in FY 2021.
COVID-19 Pandemic Impacts and Unknowns Going Forward
The COVID-19 pandemic has been impacting the City and its finances since March.
The impacts of State and Federal restrictions and resulting business interruptions was
projected to directly impact sales tax revenues, transient occupancy tax (TOT)
collections and to potentially stall development activity. To date the impacts to City
finances have been less than expected. Commercial development activity implemented
prior to the pandemic has continued; however, single family residential activity is on
pace to be about half of what it was in 2019, 250 projected new home permits in 2020
as compared to 513 for 2019. Further, after eliminating one-time receipts, sales tax
revenues are in line with the FY 2020 budget and approximately $165,000 les than
those for FY 2019. City staff assumes that Beaumont’s relative stability in sales tax
revenues experienced thus far may be attributed to the fact that the local retail market is
serving the basic needs of the community. Beaumont is not very reliant on tourism or
operations that rely on larger social gatherings. While service type businesses took
some major hits and gas stations also faired poorly, most of our retailers suffered losses
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Item 1.
that were less than expected. Further, some large retail/ wholesale b usinesses
increased sales during the COVID-19 pandemic.
The City’s finances are very reliant on property tax and CFD service charges. As a
result, while short term impacts to consumer confidence and household income levels
can weaken overall results. The primary concern for the City would be a longer term
decrease in household income or other factors that weaken the housing market or
disrupt the capital needed to fund development activity.
One of the reasons that COVID-19 has had limited impacts on City finances is the
Federal stimulus packages. The enhancement to unemployment benefits, direct
payments to taxpayers and other stimulus elements have artificially introduced a
significant level of cash and liquidity to the market. While it is impossible to fully assess
the impacts on consumer spending, it is likely significant.
Unknowns Going Forward
The COVID-19 pandemic is not over and it is unclear how this will unfold over the next 3
to 6 months. There is some evidence of another wave of COVID-19 infections which
could very well lead to additional economic impacts and worsening financial
performances. Some of the concerns to City finances are as follows:
Uncertainty of continued Federal stimulus – it is not clear how much additional
Federal stimulus will be provided to households and businesses,
Long term impacts of massive Federal spending and resulting deficits – likelihood
of inflation increases,
Long term impacts of the Federal Reserve Bank keeping interest levels at historic
low levels, and
Likelihood of a structural recession within the next 3 to 4 years – this could have
deeper impacts to the real estate market.
While COVID-19 impacts to Beaumont’s economy have not been as significant as
projected thus far, there is reason for continued caution as the unknowns are significant.
This is particularly true given the fact that the Country has been highly reliant on Federal
stimulus that cannot continue long-term. Further, economic policy to keep interest rates
low and high liquidity in the market cannot continue long term. As a result, a more
normal type of recession that is led by capital deficiencies, inflation and interest rate
increases remains likely during the next several years.
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Item 1.
Long Term Financial Forecast
While the City has enjoyed three years of operating surpluses in the $2 to $4 million
range, the most recent pattern suggests that expenditure growth will outpace revenue
growth leading to operating deficits within the next three to four years. This is especially
true if the City seeks to maintain service levels to this growing community.
Even if the City were to hold the line on new positions and risk falling behind on service
levels, the trendline and forecast suggests narrowing surpluses and possible deficits
within 5 years.
The revised forecast assumes a moderate level recession that impacts the City in FY
2023 with lingering impacts through FY 2025. The impacts are initially felt in sales tax
in the first year and to property related revenues in the second year. This model is
consistent with the City’s historical trends observed since 2000.
Staff also prepared a model that does not include a recession for comparison purposes.
It is important to note that even a model that contemplates no recession still
demonstrates narrowing surpluses. Those surpluses are consumed when adding any
new positions or costs to keep pace with demand for services.
Core Assumptions Used to Build the Forecast Models
Each of the models prepared provides for moderate growth in revenues. The recession
model provides for a higher growth profile before and after the contemplated recession,
whereas the non-recession model assumes consistent growth.
Revenue Type Recession Model
(Average growth)
Non-Recession Model
(Average growth)
Sales Tax 2.8% 4.8%
Property Tax/ VLF 3.3% 5.7%
Other Taxes/ Bus License 3.0% 3.0%
Permits and Fees
(development related)
4.0% 4.8%
CFD Transfer 3.7% 4.0%
Charges for Services 3.0% 3.0%
Overall Average 3.1% 4.3%
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Item 1.
The two forecasts provide for the same assumptions in estimating personnel costs,
operating expenses and vehicle/equipment needs.
Expense Type Average Growth
Personnel Expenses
Salaries 4.0%
Pensions 7.5%
Health Insurance 5.4%
Other personnel 4.0%
Operating
Contractual Services 5.0%
Utilities 3.5%
Insurance 4.0%
Repairs and Maintenance 2.5%
Other operating costs 2.5%
Vehicles and Equipment 3.0%
Overall Average 4.8%
As demonstrated above the forecast, with base level expenditures that does not include
new positions or costs to maintain services provides for narrowing surpluses or deficits
(Recession Model) as expenditure growth is likely to outpace revenue growth.
The costs to maintain services that includes adding positions and costs to maintain
infrastructure provides for likely budget deficits in future years under both models.
The following table summarizes the results of the two foreca st models, if positions and
operating costs are added to maintain service levels:
FY LTTF- Recession
Model
LTFF – NO Recession
(Moderate Growth)
2022 $ 1,813,879 $ 1,734,659
2023 ($ 255,087) $ 212,056
2024 ($ 3,586,818) ($ 376,596)
2025 ($ 4,924,764) ($ 933,007)
2026 ($ 5,230,058) ($ 1,560,808)
2027 ($ 6,066,558)) ($ 2,200,900)
2028 ($ 6,957,913)) ($ 2,918,089)
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Item 1.
2029 ($ 7,907,018) ($ 3,651,548)
2030 ($ 8,906,717) ($ 4,457,725)
Cumulative -
Surplus/(Deficit)
($42,021,084)
($14,152,047)
Attachment A provides the long-term financial forecast that includes a recession.
Attachment B provides the model with no recession. Attachment C provides the
assumptions for both models.
FY 2021 General Fund Initial Estimate
As the City was completing its budget for FY 2021, the COVID-19 pandemic was in its
earliest stages. The level of uncertainty resulted in the City Council adopting a very
conservative budget. The budget included significant reductions to revenue estimates
and expenses.
At this time, City staff projects that FY 2021 revenues will exceed budget estimates by
$2.2 million. General Fund revenue trends are continuously monitored and adjustments
will be made as is deemed prudent. The revised revenue estimates are based upon the
following assumptions:
Sales Tax - $1,700,000 (the budget is $4 million – projected to receive revenues of
$5.7 million),
Property Tax - $300,000 (the FY 2021 budget of $6.1 million was already
achieved in FY 2020, moderate growth provides for an increase of $300,000,
Other taxes - $100,000 (utility users tax and franchise fees were estimated very
low and the City is highly likely to exceed these targets as growth in the City
continues at higher levels), and
Business license - $100,000 (revenues came in higher than expected in FY 2020
as new businesses more than offset any business closures, Staff do not see this
trend changing in the near term as additional businesses have opened or are
scheduled to open during FY 2021.)
Totals - $2,200,000
Worsening economic conditions related to the COVID-19 pandemic would likely
negatively impact these projections.
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Item 1.
City staff is preparing budget adjustments for City Council consideration that would
allocate approximately $600,000 of this projected surplus. This includes the following
key elements:
Unfreezing 1 of 4 frozen Police Officer positions – December 2020,
Authorize an overfill of two Police Officer positions due to additional vacancies –
December 2020,
Unfreeze a Streets Maintenance Worker position – December 2020,
Unfreezing some Recreation Specialist positions beginning in March 2021,
Add a Payroll Technician position to support inhouse payroll management –
December 2020, and
Targeted operational cost addbacks from cuts made in the budget – to support
inspections and plan checks due to continued development activity.
Since these are ongoing costs, the full year costs for FY 2022 would be approximately
$1.0 million, which will increase incrementally in FY 2023 and beyond.
A summary of the proposed budget adjustments is included as Attachment D.
FY 2021 Wastewater Fund Initial Estimates
Revenues in FY 2020 have exceeded projections and expenses, provided operational
savings implemented for the fiscal year. City staff is projecting that FY 2021 will realize
retained revenues from $300,000 to $400,000.
Wastewater treatment plant management have identified critical needs in running the
new sewer system to ensure operational integrity and to meet new regulatory
requirements. City staff is proposing to add three positions to support operational
needs as follows:
Compliance Manager – this position would be responsible for monitoring and
reporting on all of the required elements that are to be established by the
Regional Water Quality Board through its issuance of Beaumont’s new discharge
permit;
2 Collections Maintenance Workers – these positions will provide maintenance
services on the brine line and plant collection infrastructure to reduce wear and
tear on the system. Two employees currently have responsibility to maintain 199
miles of sewer lines and soon to be 12 lift stations. Additional staffing will be
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Item 1.
required to ensure proper functioning and reduce the risk of backup or overflow;
and
Contract Costs – the wastewater plant is highly automated and will require
external expertise to monitor and adjust the system. This will include extensive
support over the next 6 to 9 months while configurations are being set and
adjustments are critical.
The estimated cost for these added positions in FY 2021 assuming a start date of
December 1, 2020, is approximately $312,000. The full year estimate is $ 460,000.
See Attachment E for additional details.
FY 2022 Budget and Beyond
As evidenced from the long-term financial forecast, even the more optimistic models
demonstrate financial challenges for the City in future years. This is especially true
when considering the following key areas:
The growth in population and commercial activity will demand additional police
officers and related support services in future years;
The City continues to add street miles and parks that will require maintenance
and additional contracting and/or staffing resources in future years;
Measure A funds to the City are set to decline pursuant to the settlement
agreement with WRCOG, reducing funds to maintain our streets and roadways;
The City is scheduled to begin construction on a new fire station in FY 2021 and
will need to staff the station by early FY 2023;
City facilities are aging and continue to require more maintenance than the
current budget allows. A failure to maintain would likely result in higher long-term
costs; and
Information technology is of growing importance for the City and will require more
investment to protect the information we manage and to provide continuity of
services. This was made even more clear during the COVID-19 pandemic as the
City has been highly reliant on technology to continue service levels to the
community. Additionally, technological enhancements will likely be key to
keeping pace with service demands in a more cost-effective manner.
While these needs and the absence of ongoing revenues to meet them is daunting,
Beaumont is well positioned to address these issues in a structured and coordinated
manner. To do so will require a clear look at what services the City needs to perform
and to prioritize expenditures to make best use of resources.
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Item 1.
It is likely that needs will outpace resources. In this event, the City will need to consider
other sources of revenues.
Allocation of One-Time Funds
With the estimated results from FY 2020, the City has approximately $18.5 million in
unrestricted General Funds and $7.5 million in unallocated CFD funds. If the City
maintains a fund balance reserve threshold of 25% to 35% reserve in unrestricted
General Funds, this would leave $11 million in unrestricted reserves and allow the
allocation of $7.5 million to one-time projects. For the CFD unallocated funds, City staff
is proposing the allocation of $6.5 million, leaving $1 million in unallocated CFD admin
reserves.
Due to the long-term financial picture discussed above, City staff is proposing that a
portion of these funds be placed into reserves designed for specific purposes. T he
remainder is recommended to be allocated to specific identified needs and to capital
projects. Attachment F provides concepts of proposed allocations for City Council
discussion.
Fiscal Impact:
There is no fiscal impact as this time.
Recommended Action:
Review the financial condition of the City and provide direction to staff regarding
future budget decisions and allocation of one-time resources.
Attachments:
A. General Fund Long Term Financial Forecast 2021-30 – Recession Model
B. General Fund Long Term Financial Forecast 2021-30 – No Recession Model
C. Long Term Forecast Assumptions
D. Proposed General Fund Adjustments for FY 2021
E. Proposed Wastewater Fund Adjustment for FY 2021
F. Proposed Allocation of One-Time General Fund and CFD Unassigned Funds
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Item 1.
City of Beaumont
General Fund Long Term Financial Forecast - RECESSION MODEL
FY 2021 through FY 2030
Updated October 8, 2020 Forecasted Years
FY 2018 Actual FY 2019 Actual
FY 2020 Actual
(Unaudited) - see notes
at bottom FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue
Taxes RECESSION IMPACTED YEARS
Sales Tax 5,029,443$ 5,558,667$ 5,393,630$ 5,700,000$ 6,099,000$ 5,611,080$ 5,442,748$ 5,878,167$ 6,113,294$ 6,357,826$ 6,612,139$ 6,876,624$ 7,151,689$
Property Tax 5,199,098$ 5,656,662$ 6,109,623$ 6,537,297$ 6,929,534$ 7,345,306$ 6,610,776$ 6,610,776$ 7,139,638$ 7,496,620$ 7,871,451$ 8,265,023$ 8,678,274$
Motor Vehicle - In
Lieu 4,125,661$ 4,517,090$ 4,997,852$ 5,347,702$ 5,668,564$ 6,008,678$ 5,407,810$ 5,407,810$ 5,840,435$ 6,132,456$ 6,439,079$ 6,761,033$ 7,099,085$
Solid Waste -
Franchise Fee -$ -$ 2,100,000$ 2,100,000$ 2,100,000$ 2,100,000$ 2,100,000$ 2,142,000$ 2,184,840$ 2,228,537$ 2,273,108$ 2,318,570$ 2,364,941$
Solid Waste
Operating
Revenues 7,267,452$ 8,086,893$
Other Franchise
Fees 876,551$ 912,924$ 974,504$ 1,003,739$ 1,033,851$ 1,064,867$ 1,064,867$ 1,096,813$ 1,129,717$ 1,163,609$ 1,198,517$ 1,234,473$ 1,271,507$
Business License 242,634$ 287,908$ 337,993$ 348,133$ 358,577$ 369,334$ 369,334$ 380,414$ 391,827$ 403,581$ 415,689$ 428,159$ 441,004$
Utility Users Tax 1,524,158$ 1,584,224$ 1,670,810$ 1,720,934$ 1,772,562$ 1,825,739$ 1,825,739$ 1,880,511$ 1,936,927$ 1,995,035$ 2,054,886$ 2,116,532$ 2,180,028$
Other Taxes 363,868$ 358,458$ 316,811$ 326,315$ 336,105$ 346,188$ 346,188$ 356,574$ 367,271$ 378,289$ 389,638$ 401,327$ 413,366$
Permits
Building Permits 2,321,187$ 4,067,985$ 2,134,650$ 2,220,036$ 2,375,439$ 2,589,228$ 2,589,228$ 2,589,228$ 2,770,474$ 2,853,588$ 2,939,196$ 3,027,372$ 3,118,193$
Inspections 1,504,952$ 653,401$ 262,854$ 273,368$ 292,504$ 318,829$ 318,829$ 318,829$ 341,147$ 351,382$ 361,923$ 372,781$ 383,964$
Other Permits 718,380$ 764,639$ 486,809$ 506,281$ 541,721$ 590,476$ 590,476$ 590,476$ 631,809$ 650,764$ 670,286$ 690,395$ 711,107$
Charges for Services Others 1,224,365$ 1,161,400$ 1,387,488$ 1,387,488$ 1,429,113$ 1,471,986$ 1,516,146$ 1,561,630$ 1,608,479$ 1,656,733$ 1,706,435$ 1,757,628$ 1,810,357$
Other revenues 523,493$ 1,047,188$ 839,156$ 948,246$ 976,694$ 1,005,994$ 1,036,174$ 1,067,260$ 1,099,277$ 1,132,256$ 1,166,223$ 1,201,210$ 1,237,246$
CFD Transfer 3,650,001$ 4,427,745$ 5,276,410$ 5,540,231$ 5,761,840$ 5,992,313$ 6,112,160$ 6,234,403$ 6,483,779$ 6,743,130$ 7,012,855$ 7,293,369$ 7,585,104$
Gas Tax Transfer 680,119$ 900,000$ 948,000$ 976,440$ 1,005,733$ 1,035,905$ 1,066,982$ 1,098,992$ 1,131,962$ 1,165,920$ 1,200,898$ 1,236,925$ 1,274,033$
Admin Overhead 700,000$ 750,000$ 750,000$ 750,000$ 783,000$ 817,452$ 853,420$ 890,970$ 930,173$ 971,101$ 1,013,829$ 1,058,438$ 1,105,009$
Other Transfers 42,385$ 125,000$ 92,000$ 126,250$ 127,513$ 128,788$ 130,076$ 131,376$ 132,690$ 134,017$ 135,357$ 136,711$ 138,078$
Total Revenues 35,993,747$ 40,860,184$ 34,078,590$ 35,812,460$ 37,591,749$ 38,622,164$ 37,380,952$ 38,236,229$ 40,233,738$ 41,814,843$ 43,461,509$ 45,176,570$ 46,962,986$
Expenses
Personnel Costs
Salaries 9,952,591$ 11,395,747$ 12,017,670$ 12,498,377$ 12,998,312$ 13,518,244$ 14,058,974$ 14,621,333$ 15,206,186$ 15,814,434$ 16,447,011$ 17,104,892$ 17,789,087$
Pension Costs 2,244,152$ 2,434,460$ 2,855,969$ 3,070,167$ 3,300,429$ 3,547,961$ 3,814,058$ 4,100,113$ 4,407,621$ 4,738,193$ 5,093,557$ 5,475,574$ 5,886,242$
Health Insurance 1,384,032$ 1,585,813$ 1,678,104$ 1,768,722$ 1,864,233$ 1,964,901$ 2,071,006$ 2,182,840$ 2,300,713$ 2,424,952$ 2,555,899$ 2,693,918$ 2,839,390$
Workers Comp 392,934$ 903,184$ 945,682$ 983,509$ 1,022,850$ 1,063,764$ 1,106,314$ 1,150,567$ 1,196,589$ 1,244,453$ 1,294,231$ 1,346,000$ 1,399,840$
Other costs 542,930$ 918,807$ 1,057,172$ 1,099,459$ 1,143,437$ 1,189,175$ 1,236,742$ 1,286,211$ 1,337,660$ 1,391,166$ 1,446,813$ 1,504,685$ 1,564,873$
Subtotal 14,516,639$ 17,238,011$ 18,554,597$ 19,420,233$ 20,329,261$ 21,284,045$ 22,287,094$ 23,341,064$ 24,448,770$ 25,613,198$ 26,837,512$ 28,125,070$ 29,479,432$
Operating Costs
Contractual
Services 5,283,395$ 6,127,743$ 6,763,303$ 7,101,468$ 7,456,542$ 7,829,369$ 8,220,837$ 8,631,879$ 9,063,473$ 9,516,647$ 9,992,479$ 10,492,103$ 11,016,708$
Utilities 1,413,378$ 1,736,500$ 1,792,783$ 1,855,530$ 1,920,474$ 1,987,691$ 2,057,260$ 2,129,264$ 2,203,788$ 2,280,921$ 2,360,753$ 2,443,379$ 2,528,897$
Repairs and
Maintenance 481,883$ 417,061$ 512,077$ 524,879$ 538,001$ 551,451$ 565,237$ 579,368$ 593,852$ 608,699$ 623,916$ 639,514$ 655,502$
Solid Waste
Operating Costs 4,899,899$ 5,504,512$
Supplies 343,924$ 366,161$ 359,095$ 368,072$ 377,274$ 386,706$ 398,307$ 408,265$ 418,472$ 428,933$ 439,657$ 450,648$ 461,914$
Program Costs 511,580$ 465,383$ 370,514$ 425,000$ 435,625$ 446,516$ 457,679$ 469,120$ 480,848$ 492,870$ 505,191$ 517,821$ 530,767$
Vehicle
Maint/Fuel 443,474$ 378,447$ 454,633$ 465,999$ 477,649$ 489,590$ 501,830$ 514,376$ 527,235$ 540,416$ 553,926$ 567,774$ 581,969$
Insurance 745,750$ 894,848$ 1,111,127$ 1,155,572$ 1,201,795$ 1,249,867$ 1,299,861$ 1,351,856$ 1,405,930$ 1,462,167$ 1,520,654$ 1,581,480$ 1,644,739$
Other 1,920,568$ 2,096,739$ 1,484,918$ 1,760,000$ 1,804,000$ 1,849,100$ 1,895,328$ 1,942,711$ 1,991,278$ 2,041,060$ 2,092,087$ 2,144,389$ 2,197,999$
Subtotal 16,043,851$ 17,987,394$ 12,848,450$ 13,656,521$ 14,211,359$ 14,790,289$ 15,396,338$ 16,026,838$ 16,684,877$ 17,371,712$ 18,088,663$ 18,837,109$ 19,618,495$
Equipment Vehicles 602,312$ 209,275$ 327,862$ 371,000$ 382,130$ 393,594$ 405,402$ 417,564$ 430,091$ 442,993$ 456,283$ 469,972$ 484,071$
Furniture and
Equip 96,792$ 447,741$ 66,738$ 204,000$ 210,120$ 216,424$ 222,916$ 229,604$ 236,492$ 243,587$ 250,894$ 258,421$ 266,174$
Total Expenses 31,259,594$ 35,882,421$ 31,797,647$ 33,651,754$ 35,132,870$ 36,684,351$ 38,311,751$ 40,015,070$ 41,800,230$ 43,671,490$ 45,633,352$ 47,690,571$ 49,848,172$
Surplus/ (Deficit)4,734,153$ 4,977,763$ 2,280,943$ 2,160,706$ 2,458,879$ 1,937,813$ (930,799)$ (1,778,841)$ (1,566,492)$ (1,856,648)$ (2,171,844)$ (2,514,001)$ (2,885,186)$
Maintain Service Levels and Maintain What we Own
Additional Positions to maintain Service Levels (3 annually)365,000$ 755,550$ 1,170,119$ 1,609,548$ 2,074,708$ 2,566,497$ 3,085,850$ 3,633,730$ 4,200,785$
(1.0 PD position, 1.0 street or park maintenance, 1.0 other)
Fire Station staffing (new station) -1/3 staffing - staff moved from existing station 600,000$ 630,000$ 661,500$ 694,575$ 729,304$ 765,769$ 804,057$ 844,260$
IT Equipment and Software (security/ disaster recovery/stability of network)105,000$ 107,100$ 109,242$ 111,427$ 113,655$ 115,928$ 118,247$ 120,612$ 123,024$
Street Maintenance Program (offsets loss of Measure A funding)-$ 550,000$ 561,000$ 572,220$ 583,664$ 595,338$ 607,244$ 619,389$ 631,777$
Building/Facility Maintenance Program (preventative maintenance improvements)175,000$ 180,250$ 185,658$ 191,227$ 196,964$ 202,873$ 208,959$ 215,228$ 221,685$
Total New Costs 645,000$ 2,192,900$ 2,656,019$ 3,145,922$ 3,663,566$ 4,209,940$ 4,786,069$ 5,393,016$ 6,021,531$
Total Uses (including new costs)35,777,870$ 38,877,251$ 40,967,769$ 43,160,993$ 45,463,796$ 47,881,431$ 50,419,422$ 53,083,587$ 55,869,704$
Surplus/ (Deficit)1,813,879$ (255,087)$ (3,586,818)$ (4,924,764)$ (5,230,058)$ (6,066,588)$ (6,957,913)$ (7,907,018)$ (8,906,717)$
Notes:
$5 million one time solid waste retention eliminated in FY 2020
FY 2020 Sales tax includes $1.2 million in one-time receipts eliminated from this model
FY 2020 includes $131K in solid waste residual collections that need to be eliminated for the model - from charges for services
13
Item 1.
City of Beaumont
General Fund Long Term Financial Forecast - Moderate Growth NO Recession Model
FY 2021 through FY 2030
Updated October 8, 2020 Forecasted Years
FY 2018 Actual FY 2019 Actual
FY 2020 Actual
(Unaudited) - see notes
at bottom FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue
Taxes
Sales Tax 5,029,443$ 5,558,667$ 5,393,630$ 5,700,000$ 6,099,000$ 6,403,950$ 6,660,108$ 6,926,512$ 7,203,573$ 7,491,716$ 7,791,384$ 8,103,040$ 8,427,161$
Property Tax 5,199,098$ 5,656,662$ 6,109,623$ 6,537,297$ 6,929,534$ 7,276,011$ 7,639,812$ 8,021,802$ 8,422,892$ 8,844,037$ 9,286,239$ 9,750,551$ 10,238,078$
Motor Vehicle - In Lieu 4,125,661$ 4,517,090$ 4,997,852$ 5,347,702$ 5,668,564$ 5,951,992$ 6,249,592$ 6,562,071$ 6,890,175$ 7,234,683$ 7,596,418$ 7,976,238$ 8,375,050$
Solid Waste - Franchise
Fee -$ -$ 2,100,000$ 2,100,000$ 2,100,000$ 2,100,000$ 2,100,000$ 2,142,000$ 2,184,840$ 2,228,537$ 2,273,108$ 2,318,570$ 2,364,941$
Solid Waste Operating
Revenues 7,267,452$ 8,086,893$
Other Franchise Fees 876,551$ 912,924$ 974,504$ 1,003,739$ 1,033,851$ 1,064,867$ 1,096,813$ 1,129,717$ 1,163,609$ 1,198,517$ 1,234,473$ 1,271,507$ 1,309,652$
Business License 242,634$ 287,908$ 337,993$ 348,133$ 358,577$ 369,334$ 380,414$ 391,827$ 403,581$ 415,689$ 428,159$ 441,004$ 454,234$
Utility Users Tax 1,524,158$ 1,584,224$ 1,670,810$ 1,720,934$ 1,772,562$ 1,825,739$ 1,880,511$ 1,936,927$ 1,995,035$ 2,054,886$ 2,116,532$ 2,180,028$ 2,245,429$
Other Taxes 363,868$ 358,458$ 316,811$ 326,315$ 336,105$ 346,188$ 356,574$ 367,271$ 378,289$ 389,638$ 401,327$ 413,366$ 425,767$
Permits
Building Permits 2,321,187$ 4,067,985$ 2,134,650$ 2,220,036$ 2,353,238$ 2,494,432$ 2,594,210$ 2,697,978$ 2,805,897$ 2,918,133$ 3,034,858$ 3,156,253$ 3,282,503$
Inspections 1,504,952$ 653,401$ 262,854$ 273,368$ 289,770$ 307,156$ 319,443$ 332,220$ 345,509$ 359,330$ 373,703$ 388,651$ 404,197$
Other Permits 718,380$ 764,639$ 486,809$ 506,281$ 521,470$ 537,114$ 553,227$ 569,824$ 586,919$ 604,526$ 622,662$ 641,342$ 660,582$
Charges for Services Others 1,224,365$ 1,161,400$ 1,387,488$ 1,387,488$ 1,429,113$ 1,471,986$ 1,516,146$ 1,561,630$ 1,608,479$ 1,656,733$ 1,706,435$ 1,757,628$ 1,810,357$
Other revenues 523,493$ 1,047,188$ 839,156$ 948,246$ 971,952$ 996,251$ 1,021,158$ 1,046,686$ 1,072,854$ 1,099,675$ 1,127,167$ 1,155,346$ 1,184,230$
CFD Transfer 3,650,001$ 4,427,745$ 5,276,410$ 5,540,231$ 5,761,840$ 5,992,313$ 6,232,006$ 6,481,286$ 6,740,538$ 7,010,159$ 7,290,565$ 7,582,188$ 7,885,476$
Gas Tax Transfer 680,119$ 900,000$ 948,000$ 976,440$ 976,440$ 1,005,733$ 1,005,733$ 1,035,905$ 1,035,905$ 1,066,982$ 1,066,982$ 1,098,992$ 1,098,992$
Admin Overhead 700,000$ 750,000$ 750,000$ 750,000$ 783,000$ 817,452$ 853,420$ 890,970$ 930,173$ 971,101$ 1,013,829$ 1,058,438$ 1,105,009$
Other Transfers 42,385$ 125,000$ 92,000$ 126,250$ 127,513$ 128,788$ 130,076$ 131,376$ 132,690$ 134,017$ 135,357$ 136,711$ 138,078$
Total Revenues 35,993,747$ 40,860,184$ 34,078,590$ 35,812,460$ 37,512,529$ 39,089,307$ 40,589,240$ 42,226,004$ 43,900,957$ 45,678,358$ 47,499,199$ 49,429,852$ 51,409,737$
Expenses
Personnel Costs
Salaries 9,952,591$ 11,395,747$ 12,017,670$ 12,498,377$ 12,998,312$ 13,518,244$ 14,058,974$ 14,621,333$ 15,206,186$ 15,814,434$ 16,447,011$ 17,104,892$ 17,789,087$
Pension Costs 2,244,152$ 2,434,460$ 2,855,969$ 3,070,167$ 3,300,429$ 3,547,961$ 3,814,058$ 4,100,113$ 4,407,621$ 4,738,193$ 5,093,557$ 5,475,574$ 5,886,242$
Health Insurance 1,384,032$ 1,585,813$ 1,678,104$ 1,768,722$ 1,864,233$ 1,964,901$ 2,071,006$ 2,182,840$ 2,300,713$ 2,424,952$ 2,555,899$ 2,693,918$ 2,839,390$
Workers Comp 392,934$ 903,184$ 945,682$ 983,509$ 1,022,850$ 1,063,764$ 1,106,314$ 1,150,567$ 1,196,589$ 1,244,453$ 1,294,231$ 1,346,000$ 1,399,840$
Other costs 542,930$ 918,807$ 1,057,172$ 1,099,459$ 1,143,437$ 1,189,175$ 1,236,742$ 1,286,211$ 1,337,660$ 1,391,166$ 1,446,813$ 1,504,685$ 1,564,873$
Subtotal 14,516,639$ 17,238,011$ 18,554,597$ 19,420,233$ 20,329,261$ 21,284,045$ 22,287,094$ 23,341,064$ 24,448,770$ 25,613,198$ 26,837,512$ 28,125,070$ 29,479,432$
Operating Costs
Contractual Services 5,283,395$ 6,127,743$ 6,763,303$ 7,101,468$ 7,456,542$ 7,829,369$ 8,220,837$ 8,631,879$ 9,063,473$ 9,516,647$ 9,992,479$ 10,492,103$ 11,016,708$
Utilities 1,413,378$ 1,736,500$ 1,792,783$ 1,855,530$ 1,920,474$ 1,987,691$ 2,057,260$ 2,129,264$ 2,203,788$ 2,280,921$ 2,360,753$ 2,443,379$ 2,528,897$
Repairs and Maintenance 481,883$ 417,061$ 512,077$ 524,879$ 538,001$ 551,451$ 565,237$ 579,368$ 593,852$ 608,699$ 623,916$ 639,514$ 655,502$
Solid Waste Operating
Costs 4,899,899$ 5,504,512$
Supplies 343,924$ 366,161$ 359,095$ 368,072$ 377,274$ 386,706$ 396,374$ 406,283$ 416,440$ 426,851$ 437,522$ 448,460$ 459,672$
Program Costs 511,580$ 465,383$ 370,514$ 425,000$ 435,625$ 446,516$ 457,679$ 469,120$ 480,848$ 492,870$ 505,191$ 517,821$ 530,767$
Vehicle Maint/Fuel 443,474$ 378,447$ 454,633$ 465,999$ 477,649$ 489,590$ 501,830$ 514,376$ 527,235$ 540,416$ 553,926$ 567,774$ 581,969$
Insurance 745,750$ 894,848$ 1,111,127$ 1,155,572$ 1,201,795$ 1,249,867$ 1,299,861$ 1,351,856$ 1,405,930$ 1,462,167$ 1,520,654$ 1,581,480$ 1,644,739$
Other 1,920,568$ 2,096,739$ 1,484,918$ 1,760,000$ 1,804,000$ 1,849,100$ 1,895,328$ 1,942,711$ 1,991,278$ 2,041,060$ 2,092,087$ 2,144,389$ 2,197,999$
Subtotal 16,043,851$ 17,987,394$ 12,848,450$ 13,656,521$ 14,211,359$ 14,790,289$ 15,394,405$ 16,024,856$ 16,682,845$ 17,369,630$ 18,086,529$ 18,834,921$ 19,616,253$
Equipment Vehicles 602,312$ 209,275$ 327,862$ 371,000$ 382,130$ 393,594$ 405,402$ 417,564$ 430,091$ 442,993$ 456,283$ 469,972$ 484,071$
Furniture and Equip 96,792$ 447,741$ 66,738$ 204,000$ 210,120$ 216,424$ 222,916$ 229,604$ 236,492$ 243,587$ 250,894$ 258,421$ 266,174$
Total Expenses 31,259,594$ 35,882,421$ 31,797,647$ 33,651,754$ 35,132,870$ 36,684,351$ 38,309,817$ 40,013,088$ 41,798,198$ 43,669,408$ 45,631,218$ 47,688,384$ 49,845,930$
Surplus/ (Deficit) - No new positions 4,734,153$ 4,977,763$ 2,280,943$ 2,160,706$ 2,379,659$ 2,404,956$ 2,279,423$ 2,212,916$ 2,102,759$ 2,008,950$ 1,867,980$ 1,741,469$ 1,563,807$
Maintain Service Levels and Maintain What we Own
Additional Positions to maintain Service Levels (3 annually)365,000$ 755,550$ 1,170,119$ 1,609,548$ 2,074,708$ 2,566,497$ 3,085,850$ 3,633,730$ 4,200,785$
(1.0 PD position, 1.0 street or park maintenance, 1.0 other)
Fire Station staffing (new station) -1/3 staffing - staff moved from existing station 600,000$ 630,000$ 661,500$ 694,575$ 729,304$ 765,769$ 804,057$ 844,260$
IT Equipment and Software (security/ disaster recovery/stability of network)105,000$ 107,100$ 109,242$ 111,427$ 113,655$ 115,928$ 118,247$ 120,612$ 123,024$
Street Maintenance Program (offsets loss of Measure A funding)-$ 550,000$ 561,000$ 572,220$ 583,664$ 595,338$ 607,244$ 619,389$ 631,777$
Building/Facility Maintenance Program (preventative maintenance improvements)175,000$ 180,250$ 185,658$ 191,227$ 196,964$ 202,873$ 208,959$ 215,228$ 221,685$
Total New Costs 645,000$ 2,192,900$ 2,656,019$ 3,145,922$ 3,663,566$ 4,209,940$ 4,786,069$ 5,393,016$ 6,021,531$
Total Uses (including new costs)35,777,870$ 38,877,251$ 40,965,836$ 43,159,011$ 45,461,765$ 47,879,348$ 50,417,288$ 53,081,400$ 55,867,461$
Surplus/ (Deficit)1,734,659$ 212,056$ (376,596)$ (933,007)$ (1,560,808)$ (2,200,990)$ (2,918,089)$ (3,651,548)$ (4,457,725)$
Notes:
$5 million one time solid waste retention eliminated in FY 2020
FY 2020 Sales tax includes $1.2 million in one-time revenues that need to be eliminated for the model
FY 2020 includes $131K in solid waste residual collections that need to be eliminated for the model - from charges for services
14
Item 1.
General Fund Long Term Financial Forecast Assumptions (2021 through 2030)
Recession Model – revised October 8, 2020
This forecast model assumes moderate growth in revenues and expenditures. The model includes a
moderate level recession that occurs in FY 2023 with initial impacts on sales tax, then impacts to
property tax in FY 2024. The recession is relieved by FY 2025 with stronger than normal growth both
before and after the recession. The remainder of the forecast period will have normalized growth.
Revenues
Sales Tax
Sales tax impacted less than expected by Covid-19. Fiscal year 2020 on a normalized basis finished at
$5.4 million. Growth expected in FY 2021 and FY 2022 due to new retail development coming online.
Recession impacts felt in 2023 and 2024. Stronger than normal growth out of the recession is expected.
Then normalized growth is expected through the remainder of the forecast period.
2021 – is increased from $4.0 million to $5.7 million as Covid-19 has had less impact than
expected. This is in line with the current HDL forecast.
2022 – 7% growth
2023 – (8%) reduction (recession)
2024 – (3)% reduction (lingering impacts of recession)
2025 – 8% growth
2026, 2027, 2028, 2029, 2030 – 4% growth
Property Tax and Motor Vehicle in Lieu
Growth is projected to slow in future years – reducing the base level of increase down to 7%. This
provides for 4% increase in base level valuation and 3% increase for expected new growth. Recession
has impact in FY 2024 and FY 2025 with stronger growth in FY 2026 as the City emerges from recession.
2021– 7% growth
2022, 2023 – 6% growth
2024 – (10%) reduction (recession)
2025 –0% growth
2026 – 8% growth – stronger growth out of recession
2027, 2028, 2029, 2030 – 5% growth (housing model projects slower pace of growth)
Utility Users Tax – increases at 3% annually except for FY 2024 which is flat due to the forecasted
recession
15
Item 1.
Business License - 3% increases annually except FY 2024 which is flat during the
recession
Other Taxes and Franchise Fees - increase at 3.0% for all years except FY 2024 with is flat due to
the forecasted recession
Permits and Fees - stronger growth in FY 2022 (7%) and FY 2023 (9%) due to planned projects,
otherwise 4% growth. FY 2024 and FY 2025 held flat due to recession.
Charges for Services - expected to stay flat in FY 2021 due to Covid-19, 3.0% growth for remainder of
forecast
Gas Tax - growth 3% throughout the forecast period
CFD Transfer – increase at 4% throughout the forecast period, except for FY 2024 and FY 2025 which
increase at 2% due to the forecasted recession.
Admin Transfer – from Wastewater and Transit – set to grow at same pace of expenditures
annually beginning in FY 2022
Expenses
Personnel Costs
Salaries – 4.0% annual increase (2.0% merit and 2.0% cost of living)
Pensions – 7.5% annual increase (costs set to escalate in future years due to unfunded liability)
Health Insurance – 5.4% annual increase
Workers Comp – 4% annual increase
Other personnel costs – 4% annual increase
Operating Costs
Contractual Services – 5% annual increase (normal costs increase at 4%, fire services contract
increases by 6% annually)
Utilities – 3.5% annual increase
Insurance Costs – 4% annual increase
All other costs – 2.5% annual increase (tied to 10 year CPI increase level)
Vehicles and Furniture – have varied considerably – set at the most recent 3-year average, then
increased by 3% annually
- Vehicles - $380,000
- Furniture - $204,000
16
Item 1.
General Fund Long Term Financial Forecast Assumptions (2021 through 2030)
Revised October 8, 2020
NO Recession Model
The revised model does NOT include a recession in the forecast. Instead it provides for steady growth at
moderately conservative levels that assumes continued growth in the next two years with growth
slowing through the remainder of the forecast.
Revenues
Sales Tax
2021 – is increased from $4.0 million to $5.7 million as Covid-19 has had less impact than expected.
This is in line with the most recent projections by HDL
2022 – 7% growth to include new retail coming on line
2023 – 5% continued absorption of new growth
2024, 2025, 2026, 2027, 2028, 2029, 2030 – 4% growth
Property Tax and Motor Vehicle in Lieu
Growth is expected to be strong through FY 2022 then moderate growth for the remainder of the
forecast period as the housing forecast is projecting lower growth.
2021 – 7% growth
2022- 6% growth
2023, 2024, 2025, 2026, 2027, 2028, 2029, 2030 – 5% growth
Utility Users Tax – 3% annual increase
Other Taxes and Franchise Fees - 3% annual increase
Business License - 3% annual increase
Permits and Fees - expected to grow at 6% in FY 2022 and FY 2023 due to planned projects
otherwise held steady at 4%.
Charges for Services - 3% annual increase, FY 2021 no increase due to Covid
Gas Tax - growth 3.0% throughout the forecast period
CFD Transfer – increase at 4%
17
Item 1.
Admin Transfer – from Waste Water and Transit – set to grow at same pace of expenditures
annually beginning in FY 2022
Other Revenues – 2.5% annual increase
Expenses
Personnel Costs
Salaries – 4% annual increase (2% merit and 2% cost of living)
Pensions – 7.5% annual increase
Health Insurance – 5.4% annual increase
Workers Comp – 4% annual increase
Other personnel costs – 4% annual increase
Operating Costs
Contractual Services – 5% annual increase (department costs increase at 4%, fire services contract
increases by 6% annually)
Utilities – 3.5% annual increase
Insurance Costs – 4% annual increase
All other costs – 2.5% annual increase (tied to 10 year CPI)
Vehicles and Furniture – have varied considerably – set at the most recent 3-year average, then
increased by 3% annually
- Vehicles - $371,000
- Furniture - $204,000
18
Item 1.
FY 2021- General Fund Notes
Budget Add Backs for Council Consideration
Full FY Cost FY 2021 Cost
Personnel Costs
Unfreeze 1 Police Officer Positions 160,000$ 93,333$ Filled by December 1st This unfreezes 1 of the 4 positions that are being held vacant in PD
PD Officer Overfill - 2 positions 320,000$ 186,667$ Filled by December 1st
Allows for overfill of two positions to cover vacancies/ workers comp/
etc. - helps ensure full staffing
Unfreeze 1 Streets Maintenance Position 100,000$ 58,333$ Filled by December 1st Unfreezes one maintenance position
Unfreeze Rec Specialist positions (beginning March 2021)175,000$ 58,333$
Provides for the reinstatement of severa; seasonal positions beginning
March 2021
New Position
Added Admin Position
(payroll)/ Needed if we
move payroll inhouse with
the Tyler payroll module
85,000$ 49,583$ Filled by December 1st If we move to the Tyler payroll/HR - this provides for adequate coverage
to ensure timely/ proper tax filings, retirement, etc.
Payroll Total 840,000$ 446,250$
Non Personnel
Restoration of Contractual Services to Building and Safety 185,000$ 111,000$
The Building and Safety department significantly reduced plan check
contract costs during the FY 2021 budget process. Development has
continued at high levels, necessitating additional contract services.
These costs will be offset by added revenues from permitting processes.
Ransomware/ Disaster recover ongoing costs 15,000$ -$
An upgrade to our ransomware and disaster recovery is included in
recommended one-time allocations. This represents the ongoing cost to
maintain those functions.
Tyler Payroll/HR and Fixed Assets (40,000)$
A proposal to bring payroll functions in house is included in the proposed
allocation of one-time funds. This represents savings from eliminating
existing external contract that is partially offset by new costs to bring the
function in house.
Non Payroll Total 160,000$ 111,000$
Total Restoration and New 1,000,000$ 557,250$ Total Cost of Restoration/ New Costs
19
Item 1.
FY 2021 Wastewater Fund Proposed Budget Adjustments
Notes/ Justification
Personnel Costs Full Year Costs FY 2021 Cost
New Compliance Manager Position 136,000$ 81,600$
This position would handle the tracking and reporting
to various authorities to ensure the plant, collection
system and the pretreatment requirements maintain
compliance with requirements - assumes a start date
of December 1, 2020
Two - New Collection
MaintenanceWorker Positions 224,000$ 130,592$
These positions will monitor and maintain the 199
miles of sewer lines and lift stations. This brings the
current staffing from 2 to 4 and more in line with
similarly situated cities and allow for an oncall system
to better meet community needs- assumes start date
of December 1, 2020
Operating Costs
Contract with SKM to provide Plant
Computer System Monitoring 100,000$ 100,000$
With the new upgrades, the plant as well as collection
system is highly automated. As such a specific skill set
is required. This contract will be necessary for the first
year or more of operations to ensure the system is
functioning optimally. The amount for FY 2021 not
prorated as a significant level of effort is needed to get
the systems dialed in as the plant is fully brought
online - assumes contract start date of December 1,
2020
Total Costs 460,000$ 312,192$
20
Item 1.
Proposed One-Time Funds Allocation
General Fund $18.5 million in Unrestricted - $11 million to remain unassigned (35% reserve level)
CFD Admin Funds $7.5 million unallocated - $1 million to remain unassigned as reserve funds
Proposed General Fund Allocation - $7.5 million
Explanation Notes
Pension Trust 2,300,000$
This sets funds aside to address the pension liability
and escalating pension costs
Fiscally conservative approach as
this trust could be used to cover
liability or normal pension costs if
needed
Flood Preparation 200,000$ funds to prepare for flood
School Growth - traffic mitigation 300,000$ funds to address increase size of HS
Capital Projects 4,200,000$ addresses priority capital projects
One-Time 2.5% pay to employees 500,000$ This provides pay to employees that does not cause
long term impacts
Total 7,500,000$ leaves $11 million unallocated
Proposed allocation of CFD Admin Funds
Internal Service Funds
Vehical Replacement Fund (internal
service fund)1,125,000$
Equal to 3 years of average level purchases, vehicles
purchased out of this fund- fund replenished through
budget process by charging departments an annual
allocation
Establishing internal service funds
provides for continuity
Equipment Replacement Fund
(internal service fund)875,000$ Cost charged out to respective departments
of purchase authority and
eliminates backlogs in aquiring
needed vehicles and equipment.
21
Item 1.
IT Equipment Replacement Fund
(internal service fund)800,000$ Servers/ switches/disaster recovery/hardware/ etc.
This is fiscally prudent as these
funds are available to meet needs
during times when purchasing
vehicles and equipment would
otherwise be very difficult.
CIP Fund 3,500,000$ Fund Citywide Maintenance Projects
This concept provides for
establishing a capital maintenance
fund. This would be used for larger
maintenance projects.
IT Security 150,000$ improves data security ransomware/ disaster recovery
IT Enhancements 100,000$ payroll module/ fixed assets/ content mgmt completes automation of processes
in AP/ personnel/payroll
Total 6,550,000$ leaves $1 million unallocated as further reserves
22
Item 1.
Beaumont City Council
FY 2021-22 Budget Workshop
SPECIAL WORKSHOP | OCTOBER 8, 2020
1 23
Item 1.
`Workshop Objectives
•Review FY2020 Financial Results
o General Fund
o Wastewater Fund
•Discuss Impacts of COVID-19
o Impacts to Date
o Uncertainties
•Discuss Adjustments to the Multi-Year Forecast
o Long-Term Forecast Assumptions (FY2021 thru FY2030)
o Revised Estimates for FY021 + Suggested Budget Amendments
o Early Discussion of FY2022 and Beyond
•Allocation of Unassigned General Fund Reserves and Available
CFD Reserves
2 24
Item 1.
`General Fund Results FY2020
•Estimated Revenues vs. Expenditures
o Estimated Revenues =$39.6 Million
o Estimated Expenses =$31.1 Million
o Surplus = $ 8.5 Million
•One-Time Revenues
o Solid Waste Retention Fee =$ 5.0 Million
o Sales Tax Revenues =$ 1.2 Million
o Residual Solid Waste Revenue =$ 0.1 Million
o One-Time Revenues Total = $ 6.3 Million
•Surplus From Operations
o Operational Cuts for Savings =$ 2.2 Million
o Frozen Positions and Other Cost-Cutting Measures
3 25
Item 1.
`General Fund Results FY2020
•COVID -19 Pandemic Impacts Less Than Forecasted
o Actual Sales Tax Revenues $165,037 Less Than FY2019 (3% Loss)
o Commercial Activity Started Prior to Pandemic Continues
o Business License Revenues and Other Taxes Above Projections
•On an Equalized Basis Revenues Declined from $32.8 Million in
FY2019 to $32.0 Million in FY2020
o Tax Revenues Increased
o Development Revenues Dropped
•One-Time Inspections and Permits
•New SF Permit Issuance Declined Over Past 3 Years
4 26
Item 1.
`General Fund Results FY2020
•Expenses Increased 4.7% from FY2019 to FY2020
o Despite Cost Cutting Initiatives in Final Quarter of FY2020
o Personnel Costs Increased by $1.3 Million (7.6%)
o Operating Costs Increased by $336,000 (2.7%)
o Equipment and Vehicle Purchases Decreased by $263,000
•Annualized Surpluses Realized from Operations
o Including Transfers and Excluding One-Time Revenues
o FY2019 = $4.0 Million
o FY2020 = $2.2 Million
5 27
Item 1.
`WW Fund Results FY2020
•Revenues In Excess of Budget
o Approximately $400,000
•Expenses Lower Than Budget
o Personnel Costs
o Operating Costs
•Contingency Funds Utilized
o Unforseen Capital Maintenance Projects
•DIF Funds Utilized
o Approximately $1.0 Million of Balance Applied to Debt Service Payment
•Retained Earnings of Approximately $590,000
6 28
Item 1.
`COVID-19 Fiscal Impacts
•FY2020 Budget Anticipated Significant Revenue Retraction
o Sales Tax Revenues
o TOT Revenues
o Business License Revenues
•Actual Impacts Not As Severe as Projected
o TOT Revenues Declined Significantly
o Sales Taxes Declined Moderately (3%)
o Some Retail Sectors Suffering Significantly While Others Steady/Growing
•County Pool Collections Increased Significantly (On-Line Sales)
•New Business Openings Helped Make Up Revenue Losses
o Business License Revenues Increased Due to New Business Openings
7 29
Item 1.
`COVID-19 Uncertainty
•Reasons for Caution
o Trajectory of Pandemic Unknown
•Second Wave?
•National/State/County Responses?
o Federal Stimulus a Critical Factor
•Unemployment Enhancement Kept Households Afloat
•Federal Loans and Grants Kept Businesses Going
o Unclear Whether Future Stimulus is Forthcoming
o Loss/Reduction of Unemployment Enhancements
•Significant Unemployment and Business Disruption Continues
o Half of “Temporary” Lost Jobs Remain Unfilled Nationally
o Remains Unclear as to If/When Remaining Jobs Return
o Potential Rise in Rent/Mortgage Payment Delinquencies or Defaults
8 30
Item 1.
`Fiscal Forecast General Fund
•Financial Forecasts Useful
o Provide Guidance Regarding Long-Term Financial Condition
o Establish a Framework for Incremental Decisions
•Today’s Decisions Have Long-Term Impacts on City’s Ability to
Meet Future Operating Needs
•Revenue Forecasts Typically Updated Every One or Two Years
o This is the Third Update This Calendar Year
o Significant Uncertainties Surrounding COVID-19 Pandemic
o Picture Remains Unclear
•Third Quarter Sales Tax Revenues are Expected to Provide Clarity
•Additional Resources will be Required to Meet Ongoing Public Service
Demands –Public Safety, Streets, Community Services
9 31
Item 1.
`Fiscal Forecast General Fund
•Forecasts Used When Considering Financial Decisions That
Have Ongoing Impacts
o Must Recognize that Actual Results will Likely Vary from Projections
o Must be Ready to Respond to the Unexpected
o Less Accuracy is Likely in the Later Periods of the Planning Horizon
o Variances Will Likely Have Growing Impacts Over Extended Periods of
Time Due to Compounding
•Forecasting is a Useful Tool In Considering Financial Decisions
that Have Ongoing Impacts on City Finances
10 32
Item 1.
`Fiscal Forecast General Fund
•Two Separate Models Prepared for City Council Review
o Recession Model –this forecast assumes a moderate level recession
that impacts the City in FY 2023 and lasts for two years
o NON recession model –this forecast does not include a recession
•Provides for moderate level growth throughout the forecast
The models are built using assumptions. The assumptions provide the
building blocks for year over year changes in revenues and expenditures
and contemplate the need for new positions and modifications to service
delivery.
Note: neither model contemplates expense reductions that would
naturally occur in the event of sustained deficits. This is to intended to
provide insight into the level of potential budget adjustments that may be
necessary and/or the need for new revenues.
11 33
Item 1.
`Fiscal Forecast Assumptions
12
•Assumptions Based on Historical Information, Consumer Price
Information and Assistance from Consultants
34
Item 1.
`Fiscal Forecast Assumptions
13 35
Item 1.
`Fiscal Forecast Results (GF)
14
•Recession Model Results
o Revenues Grow at an Average Pace of 3.1%
o Expenses Grow at an Average Pace of 4.8%
o Budget Deficit by FY2023
•Adds New Positions to Maintain Consistent Levels of Service
•Anticipates Increases to Current Operational Expenses
•Provides for an Estimated Deficit of $42 Million
o New Positions Added
o Increases for Roadway Maintenance, Buildings and IT Enhancements
(Security and Capabilities)
o Eliminating Positions and Increased Expenditures Reduces the Deficit to
Approximately $9 Million
36
Item 1.
`Fiscal Forecast Results (GF)
15
•Non-Recession Model Results
o Revenues Grow at an Average Pace of 4.3%
o Expenses Grow at an Average Pace of 4.8%
o Budget Deficit by FY2024
•Adds New Positions to Maintain Consistent Levels of Service
•Anticipates Increases to Current Operational Expenses
•Provides for an Estimated Deficit of $14 Million
o New Positions Added
o Increases for Roadway Maintenance, Buildings and IT Enhancements
(Security and Capabilities)
o Eliminating Positions and Increased Expenditures Provides for a Surplus
of $18 Million
37
Item 1.
`Early Estimates GF FY2021
•Budget Prepared in Early Stages of COVID-19 Pandemic
o Uncertainty at Highest Levels
o Picture More Clear Today
o High Degree of Uncertainty Remains
•Careful Approach Used to Estimate Revenues
o Implemented Near-Term Cost Containment Measures
•Frozen Positions in Police and Streets Operations
•Furloughed Employees in Recreation Services
•Reductions to Operating Expenses
•Re-Assessment of COVID-19 Impacts
o Certain Revenues Expected to Come in Significantly Higher than
Projected
o FY2021 General Fund Revenues Projected to Exceed Budget Estimates
by Approximately $2.2 Million
16 38
Item 1.
`Early Estimates GF FY2021
•Revised Revenue Projections = Another $2.2 Million
o Sales Tax Revenues =Additional $1,700,000
o Property Tax Revenues =Additional $300,00
o Other Tax Revenues =Additional $100,000
o Business License Revenues =Additional $100,000
17 39
Item 1.
`Budget Adjustment GF FY2021
•Cost Estimated to be $600,000 (Increases to $1.0
Million in FY2022)
o Unfreeze 1 of 4 Police Officer Positions –Dec. 2020
o Authorize Overhire of 2 Police Officer Positions –Dec. 2020
o Unfreeze 1 Streets Maintenance Position –Dec. 2020
o Unfreeze 4 Recreation Specialist Positions –Jan. 2021
o New Payroll Technician Position –Support In-House Payroll
Management –Dec. 2020
o Targeted Operational Add Backs from Budgetary Cuts
•Building Inspections
•Plan Checks
18 40
Item 1.
`Early Estimates WWF FY2021
•FY2021 Projected to Realize Retained Earnings of $300,000 to
$400,000
o In-House Wastewater Operations are New to the City of Beaumont
and Unknown Operational Costs Remain Outstanding
o New MBR/RO Plant Startup Adds an Additional Degree of Uncertainty
o Actual Operations Costs will be Solidified Once Field and Plant
Operations Stabilize
o Wastewater Master Plan is Nearing Completion
•Will Identify Areas of Criticality
•Will Provide Estimates to Fix/Upgrade System
•Will Include Recommendations for a Multi-Year CIP
19 41
Item 1.
`Early Estimates WWF FY2021
•Management Has Assessed Needs for WW Operations –
Estimated to be $312,000 (Increases to $460,000 in FY2022)
o Compliance Manager –responsible for monitoring and reporting on all
required elements (New Discharge Permit)
o 2 Collections Maintenance Workers –responsible for inspection and
operation of 23 miles of brine line (reduce chances of system failure)
o Contract Costs –WWTP is highly technical and will require external
expertise for system monitoring and adjustment
20 42
Item 1.
`The Future FY2022 and Beyond
•Beaumont Has Experienced 4 Years of Positive Revenue
Growth and Resulting Operating Surpluses
•FY2021 and FY2022 are Projected to See Additional Operating
Surpluses Barring an Economic Downturn
•Financial Reserves Need to be Deployed to Address
Operational and Infrastructure Needs
•Beaumont Well Positioned to Make Long-Term Financial
Decisions
21 43
Item 1.
`The Future FY2022 and Beyond
•City Services Will Be Stretched in the Future
o Population and Commercial Growth will Demand Additional Public
Safety and Support Staff
o Measure A Funds will Decline –WRCOG Settlement Agreement and
2039 Expiration
o Fire Station Construction Scheduled for FY2021 and Operational by
FY2023
o City Facilities are Aging with Significant Deferred Maintenance
o Information Technology is of Growing Importance and Will Require
Significant Investment
22 44
Item 1.
`Allocation of One-Time Funds
•General Fund and CFD Reserve Balances Have Been
Established Over the Past Several Years
o At the Conclusion of FY2020 –GF Reserve Balance Estimated to be
$18.5 Million
o Unallocated CFD Funds are Estimated to be $7.5 Million
o Reserve Funds Should Be Allocated to Costs that are NOT Ongoing in
Nature
23 45
Item 1.
`Allocation of One-Time Funds
•City Staff Proposes Allocating a Portion of These Reserve
Funds
o General Fund Reserves
•Allocate $7.5 Million
•Retain a Reserve Level of 35%
o CFD Reserves
•Allocate $6.5 Million
•Retain a Reserve Balance of $1 Million
24 46
Item 1.
`General Fund One-Time Funds
25 47
Item 1.
`CFD Fund One-Time Funds
26 48
Item 1.
`Next Steps Timing
27
•FY2021 Budget Amendments
o City Council Consideration November 3, 2020
o Continue to Monitor Budget and Amend As Needed
•FY2020 Audit
o Near Completion Early December 2020
o Confirm Available One-Time Resources
o City Council Consideration of One-Time Fund Allocations in December
2020
•FY2022 Budget Preparation
o Kick Off Budget Process January 2021
49
Item 1.