Council trims $1.5 million from budget
The Manhattan Beach City Council is poised to approve a budget next Tuesday that will trim $1.5 million from the city’s general fund expenditures, and do so in a way that will hardly be noticeable for residents.
“The cuts that were taken frankly should not be noticeable and won’t have a big impact on residents,” said City Manager Bruce Moe. “Some of the cuts were organizational things that were nice to have but we can live without, while not diminishing the level of service we provide. I want to call it business as usual, but with just a little less expense.”
The council took an unusually detailed line item approach this year, which is technically a midyear adjustment to the two-year budget adopted in June 2018. Over the course of four meetings, including a four-hour workshop Thursday night in which the council considered a 130 line-item list from every department, the council sought to meet a goal of cutting 10 percent from all city expenses. Everything was on the chopping block, even the $100 yearly Daily Breeze subscription for the city manager’s office (that one made the cut), to $29,000 in yearly coffee costs in City Hall, mostly Keurig one-cup servings.
“That’s a lot of k-cups,” said Councilperson Suzanne Hadley at last Thursday’s meeting.
“We do need a lot of coffee,” said Finance Director Steve Charelian.
“They have to stay awake for budget meetings,” said Mayor Steve Napolitano.
The coffee made the cut as well, but many other small items didn’t. The “Man happenings” catalog of city events and program offerings, for example, will have it’s print run reduced by 80 percent and will only be available at city facilities, saving $73,000. The bigger ticket items that will likely be part of the cuts include $361,000 in water pumping rights annually paid to Chevron, a back-up plan for municipal water supplies that were determined to be inessential.
“We took a detailed review of the two-year budget, and we did go line-by-line,” said Councilperson Richard Montgomery. “This slow process was made for two reasons — so that we all could see exactly what our expenses were currently, and allow the two new council members the opportunity for an in-depth review of the budget.”
Some of the brighter news in the budget was a projected $296,000 increase in property tax revenues, due to the city’s ongoing real estate boom, and $160,000 in hotel bed tax revue, due to an increase in rate from 10 percent to 12 percent approved by voters as Measure A earlier this year. General Fund revenues at year-end are projected at $76,305,699 and expenditures at $73,777,030, resulting in a projected surplus of $2.5 million.
“We are budgeting conservatively and spending conservatively,” Moe said. “So we generally end up with a surplus at the end of the year.”
Unfunded pension liability costs, meanwhile, are projected to increase from $9.2 million this fiscal year to $12.5 million by 2023-24.
“Every year, pension costs are going up $1 million,” Moe said. “Manhattan Beach is in a fortunate position to be able to plan for and absorb those costs. We are fortunate not to be in a position that a lot of communities are in, where it could potentially bankrupt us.”