CITY COUNCIL MEETING
MAY 20, 2024
Item 12A (Revised)/13A (Original) – Adoption of the Fiscal Year 2024-25 Annual Operation Budget
HIBARD’S QUESTIONS
Our 22-23 fiscal year ended June 30, 2024 and Council has still not been presented with our Annual Comprehensive Financial Report. When do you expect to present that to us? The 22-23 ACFR is anticipated to go to the Budget Standing Committee in June, followed by Council.
After reviewing the budget, I have some questions and would like clarity on the following:
the logic behind this? I'm assuming we're cleaning up expenses that shouldn't have been attributed to City Council? Certain line item expenses like supplies, postage, advertising, employee service awards, commissioner appreciation, meeting cablecasting, and dues/subscriptions, were moved to Administration (City Manager) budget to better align with operations.
3,489,050. What's the explanation for the 1,030,293 increase? Reflects expansion of existing programs (Aquatics), and new programs (LAYTB), additional part-time staffing to support programs and events, and additional materials and supplies cost.
22-23 and 23-24 expenditures (22,187 and 18,000 respectively). All of the 4000 series accounts are revenues, not expenditures. See attached. 23-24 was an estimate of $18,000 at the time the prior budget was prepared, and the actual amount may be higher or lower depending on what taxes were received by the county that pertain to prior years. 23-24 is $21,566 as of April 2024.
support the 22-23 and 23-24 expenditures (432,512 and 300,000 respectively). See attached. At the time the 23-24 budget was prepared, a conservative estimate of $300,000 was used. Actual 23=24 to date is $422,661.
150,000. Send me the documents to support this amount.
See attached. Transfer tax is variable and depends on the level of sales activity. An amount of $84,000 was used as a conservative estimate at the the prior budget was prepared. The actual; for 22-23 was $138,000, and 23-24 to date is $99,000, with three more periods to record.
the documents to support this amount.
See attached backup from HdL.
me documents to support this credit.
Same as above, see attached.
show what amount came from Los Alamitos residents and what amount came from Rossmoor residents. RCSD is looking to get a different zip code than Los Alamitos because Rossmoor residents are not pleased about paying sales tax to the City of Los Alamitos.
Amount is provided by HdL. Unable to determine from available data.
withe breakdown showing expected sales tax from Rossmoor residents and expected sales tax from Los Alamitos residents.
Amount is provided by HdL. Unable to determine from available data.
6,088,000. Again, send me documents to show the breakdown of Rossmoor residents and Los Alamitos residents. If Rossmoor approves the new zip code this year, we'll need to factor this loss of revenue into our budget.
Amount is provided by HdL. Unable to determine from available data.
support the 23-24 figure of 530,000.
TOT is based on the economy, and may fluctuate with changes. The 23-24 $530,00 was a conservative estimate based on historical trends and economic information. 22-23 was $634,856, and 23-24 to date is $453,580, with four periods to be received.
65,000. Send me documents showing we received 140,000 in Cable TV Franchise fees in 23-24. Based on 22-23 of $146,000; 23-24 to date $36,000, with additional periods not yet recorded. See attached.
Contribution Abbott, Account 4212 Charitable Contribution Wildan - these appear to be "kickbacks". Why would a vendor's charitable contributions be in our budget unless we're forcing them to give the City of kickback in exchange for their business. As I understand it, Charitable Contributions are voluntary. Provide me with our contracts with each of these vendors. I want to see if this is "pay to play".
All three services – Waste Hauler (UWS), Building & Safety (Charles Abbott and Assoc.), and Engineering (Wildan) went through an RFP process. In the RFP, it states that a community contribution was required annually and through the RFP process, this line item was presented to all those that view the bid and ultimately submitted a bid. This is NOT a kickback or pay to play.
what we spend this money on.
This line item is used pay for scan and store public works, planning, and building and safety documents. Attached is the latest invoice that we just paid out.
718,675. Send me a line item report, detailing all activity on all red light cameras here in town for 23-24 (up to today). Please also send me a report detailing all expenses we've paid to the vendors who review/process these tickets. Also, send me a profit and loss report for Account 4703 for FY 23-24 (up to today).
See attached.
City's investment statements (all of the accounts listed on our quarterly treasurer's report) from July 1, 2023 - April 30, 2024. 24-25 shows 750,000. This means we're expecting to double our investment returns. This doesn't seem possible or realistic. The S&P has returns of maybe 12%, but this shows we're going to double our investment earnings.
Send me everything we have to support this drastic increase in investment returns. Quarter end 3/31/24 earnings of $190,000; $750,000 based on current trending and stipulation that market holds.
Send me a report showing what we've actually spent on this from July 1, 2023 - April 30, 2024.
Not an expenditure! This is a revenue; 23-24 to date is $138,000, attached.
CONFLICT OF INTEREST - Page 7 - Account 4561 - Los Alamitos Youth Baseball - 24-25 shows 384,415. We've bumped into this particular conflict of interest issue a few times this year. To my recollection, in March 2024, a councilmember voted in favor of 200,000 to Los Alamitos Youth Baseball. These two payments total 584,415 in to Los Alamitos Youth Baseball. This has been deleted from the proposed budget and will be brought back to Council for discussion at later date.
I'm copying in City Attorney Daudt on this email for this item - Mr. Daudt, is it a conflict of interest if a council member votes on an item, allocating funds to an organization where the councilmember's husband is the controlling party? If so, please provide legal advice on how we should proceed when we vote on the budget at Monday's council meeting. If it's not a conflict of interest, please also provide legal advice supporting that position. Thank you.
doing. What are we offering this service if we're only estimating receiving 2000 in 24-25? Provide a line item breakdown showing the costs associated with providing this service to the public. Did we pay to have an employee(s) trained? How much did that cost? What software will be used. How much does that cost. Will we need to snail mail anything? How will we do that and how much will it cost?
To be provided.
100,000. Send me a line item, detailed financial report, showing all transactions, showing how much in miscellaneous revenue we received from July 1, 2023 - today (May 15, 2024). This is a bit of an odd, vague category, but since we're doubling it, I'm assuming our 23-24 actuals are near 100,000, which would support our 24-25 figure. 23-24 at $82,000 to date; 22-23 at $514,000, but was an anomaly with a large one-time Monsanto settlement; account activity is within a range between $50,000 to $100,000, and $100,000 was used as an estimate for 24-25 based on current fiscal year.
statement showing all transfers in from July 1, 2022 - June 30, 2023 and July 1, 2023 to today (May 15, 2024). The figures for 22-23, 23-24, 24-25, and 25-26 are all 150,000.
This stands out to me, so I want to see actuals.
See attached.
taxpayers want to pay for life insurance policies for council members? How does this benefit the taxpayer? Send me the policy details and I'm particularly interested in seeing the death benefit details. I find it odd to burden my neighbors with paying for my life insurance. This seems fishy.
See attached policy, page 4. This is a benefit provided by the City. Your coverage cost the City $1.78 for basic life and $.35 for additional life ($10,000 each) per month for your coverage.
24-25 shows 10,125. Send me a list of what trainings are being added to support this additional expense. Also, as it is now, only the Mayor or Mayor Pro Tem or the 3rd longest serving Council Members may attend trainings with organizations such as the League of California Cities and ACC-OC over a certain financial threshold. Send me a list of trainings that the other two Council Members are able to travel to and attend in 24-25. Along withe trainings these two council members can attend, include a financial breakdown of estimated costs. We have elections in November and three Council Members are up for re-election. If for some reason, all three council members lose their elections, we'll have three new council members. As our Travel Policy currently reads, only the Mayor or Mayor Pro Tem or 3rd longest serving Council Member may attend a training when the cost is, if I recall, above $400-500. If all three seats are filled by new council members, our Travel Policy provides no clarification one of the three new council members would receiving training. In addition, provide a detailed line item financial report from July 1, 2023-today (May 15,2024) showing how many trainings Council members have attended and what the costs were for those trainings (registration, airfare, uber, meals, hotel, and anything else taxpayers paid for).
See attached general ledger detail.
cablecasting.
See attached.
60,000. Election year 24-25 shows 30,000. This seems odd that we'd spend twice as much on elections in a non-election year than in an election year. Send me a line item financial report for this account from July 1, 2023 - (today) May 15, 2024. I'm curious what we spent the 60,000 on. Please also send me a line item list of what we're looking to spend the 30,000 on in 24-25.
The prior budget was established with an estimate that was based on a ballot measure, which was not done. The current estimate is based on election costs for the November election.
shows zero. Did we move our contract to another vendor? If so, who? This was moved form Finance to Development Services to better align with operations.
The contract will be going out for RFP to rebid the services.
a list of all of the CPA firms who conduced an audit in 23-24 and list the specific audits that were performed. As we know, some audits are basic while others are more detailed, robust, and expensive. 24-25 shows 55,000 - send me a list of which CPA firms will be conducting which types of audits for us. Our 21-22 audit was just of our financial report - the firm stated they did not review bank statements, investment statements, or compare contracts to invoices, etc., so it was a pretty basic glance at the City's finances. This was also the same audit that included the $10 million error (franchise fees were overstated).
The CPA firm also stated the report with the $10 million audit was not their work product.
All this to say, I'm looking for a robust and accurate audit this go around.
Rogers, Anderson, Malody, Scott (RAMS), performed the audit for 22-23 and will do 23-
24. It was more detailed than the prior firm (Gruber & Lopez) at my request, and included a review of bank reconciliations, supporting statements, and sampling of contracts and other supporting documents. In connection with the claim by the prior audit firm that the error was not their work product, audit firms have a contractual responsibility to read the entire report, including information provided by the city. For example, RAMS has three levels of review, including separate partner reviews, to make sure the report is accurate and correctly states the financial position of the city. An RFP will be done in November to select a new firm for a new 5-year period (4 years + 2 one-year extensions, if the work is acceptable). New firm TBD will complete 24-25.
Electricity-Buildings, 10543-5251 Electricity-Parks, 10-543-5254 Electricity-McAuliffe, 10- 543-5256 Water, 10-544-5250 Electricity-Buildings, 10-544-5253 Electricity-Pump Station, 10-544-5255 Natural Gas, and 10-544-5256 Water.
See attached.
102,000. Send me a line item budget showing how we're arriving at 102,000. • Good Morning/Evening Los Alamitos (2 events; $5,000 per event) - $10,000 • Parklet (6 events x $4,500 per event) - $27,000
• Los Al Blvd. Banners – $10,000
• City Wide Banners (Storage & installation/removal, 4x per year) - $50,000 • Misc. items for give-aways - $5,000
o Total - $102,000
Send me a line item financial report detailing our expenses for 23-24.
See attached, $39,227 through May.
school' pool? JFTB's pool? Both? Send me a breakdown of how we got to 60,000.
The $60,000 is for rent for the Joint Forces Training Base Pool (MWR Aquatic Training Center). The High School was unable to provide us availability this Summer by the time we needed to market the program through our Summer Recreation Brochure. The High School offers limited availability due to their own camps and programs. The JFTB Pool allows us to utilize 5 lanes at $5,000 per month x 12 months to equal $60,000 per year to expand to year-round programming 7 days a week.
24-25. What happened to Day Camps?
Revised proposed budget added.
64,500. What's going on here? Send me a line item breakdown of how we got to 64,500.
10.557.5364 – Special Interest: Home Court Edge (HCE) budget of $44,000 was transferred from the Youth Basketball Budget 10.556.5306 to Special Interest Budget
10.557.5364. The reason for the move for HCE is that the Youth Basketball Budget
10.556.5306 traditionally includes the in-house Recreation staff led basketball program.
HCE is a contract class and is better fit under 10.557.5364 Special Interest Classes. The Special Interest Budget was adjusted to $64,000 for FY 24-25 to cover the cost of paying 10 contract instructors for special interest classes - $20,500 and the HCE classes - $44,000.
shows 18,500. This is more than double. send me a line item breakdown how we got to 18,500.
In this line item, we have increased the amount of contracted Special Interest Camps and in-house staff led Special Interest Camps, reflecting pre-Covid participation and an increased demand from the community to offer these types of camps in the Summer, in addition to our offerings of Day Camp and Summer Parks Program.
FY 21-22 we offered 15 Special Interest Camps
FY 22-23 we offered 26 Special Interest Camps
FY 23-24 we are offering 30 Special Interest Camps
Account 10-518-5260 Contractual Services for 24-25 shows 45,000.
Account 10-560-5260 is also for Contractual Services and 24-25 shows 144,000.
Send me line item breakdowns for each to show how we're getting here.
See attached. To date, expenses are running $182,000 between the two accounts. The combined budget estimate of $189,000 was used based on prior year activity.
Account 10-560-5285 Credit Card fees - 24-25 shows 40,000. To my understanding, we're processing credit cards mostly for our Recreation programs. Last year I was told the City is paying these out of pocket and not passing this expense on to the registrant.
Why are we not passing this fee on to registrants? It would save us 40,000.
This is something that will be addressed with the Cost Recovery Study being conducted by Willdan Financial Services.
Account 10-562-5161 Health Insurance-Retirees - 24-25 shows 300,000. Please send me a line item breakdown how we're getting here.
It historically runs around $300,000; i.e. the actual for 21-21 was $298,000, attached.
Account 10-560-5290 Additional UAL Funding for Trust - 600,000 - I'm pleased to see we're funding the trust now. Send me the CalPERS Annual Valuation Reports, as of 6- 30-23, for all of the City's Plans. Our unfunded pension liability, last I saw, was hovering around $26 million. So although I'm pleased to see 600,000 going towards the $26 million we owe, we're still way off. Please send me our payment schedule - I'd like to see the amounts and time period we're looking to pay off this debt in.
See Council PPT presented November 2022 based on consultants work.
Account 10-570-5501.1003 Street Markings/Striping - I'm not seeing anything allocated to this in 24-25. Are we not planning on any maintenance? To be provided with CIP, if applicable.
Account 10-570-5501.2401 Community Center Roof Project - Nothing is being allocated to this, yet we've been pouring heaps of cash into the Community Center. Where are we accounting for our community center expenses?
Expenses incurred in 23-24.
Account 10-570-5501.2420 Armored Police Vehicle (Grant Reimbursement) - If I recall, this ran us 300-400k. If we're not expecting to get reimbursed in 24-25, when are we expecting to get reimbursed?
Expenses and reimbursement incurred in 23-24.
General Fund (10) to Vehicle/Equip Repl (50) - 24-25 shows 500.000 - what vehicles and/or equipment are we replacing? Please provide a list and how much we're budgeting to each.
Covers expenses in Fund 50, see attached.
General Fund (10) to Technology Repl (53) - 24-25 shows 200,000 - what technology are we replacing? Please provide a list and how much we're budgeting to each item.
Covers expenses in Fund 53, see attached.
General Fund (10) to Buildg Improv (25) - FY 24-25 shows zero. Are we not planning on improving any City buildings this year?
Not contemplating any transfer to Fund 25, current fund balance $461,000.
Miscellaneous
I'm looking for our bond payments for Laurel Park. I'm not seeing it. Could you let me know where we have it if I missed it? Thank you.
See attached, Fund 31.
Non-Represented Employees - Last month, council approved an 18% increase in pay for Non-Represented Employees. Can you please clarify how we're calculating the increase?
Example: If an employee is earning $1000, and over the next 4 years will receive an 18% increase in pay, will the incremental increase apply to the original base pay amount of of $1000? If not, that would be a "raise upon raise" and end up costing us more like 20% than 18%. Which method did we use for this budget proposal? The estimate for the 4-year contract was compounded to arrive at the total cost, as provided to and approved by Council.