Fiscal Year 2023-2024 Proposed Budget — Manhattan Beach City Council, May 2, 2023 (part 2 of 2)

The IT Department’s service framework and catalog include the following:

End-User Support
Help Desk
Desktop/Laptop/T ablet/Mobile
T elephone System
Website/Intranet
Broadcasting & Audio-Visual
Cybersecurity
Patch Management
End-User Device Refreshment
Infrastructure Support
Network and Data Center
Cybersecurity
Disaster Recovery
Network/System Monitoring
Capacity and Performance Management
Patch and Release Management
Network & Server Refreshment
Vendor Management
Application Security
Reporting and Data Analytics
Workflow Management
Patch and Release Management
Integration
Requirements Analysis
Project Management
Geographic Information Systems (GIS) Support
Data Updates
Data Analysis
Mapping
Website/Dashboard Development
System Management
Integration to Core Systems (i.e., ERP, LMS, EDMS, Website, etc.) Training
Large Format Printing Support
Management and Administration Support
IT Planning and Procurement
Service Management
Resource and Budget Management
Contract Management
Policy and Procedures
Project Management
Public Records Act
Accounts Payable
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RECENT ACCOMPLISHMENT HIGHLIGHTS
Continued to improve network and overall cybersecurity posture by implementing new solutions and additional features as recommended by the federal and state cybersecurity agencies.

Continued to provide ongoing cybersecurity awareness end-user training and phishing tests to further protect the City against the ever-evolving threats of cyberattacks.

T ogether with the Finance Department, IT replaced the Enterprise Resource Management System (ERP)/Utility Billing module that supports the City utility billing functions. The scope of the implementation includes electronic document content management, a dashboard, and integrations with the City’s cashiering and the online customer portal.

In concert with Finance, completed the implementation of the ERP/Inventory component to further digitize City business processes for warehouse supplies.

Continued to improve the City’s network and system resiliency and redundancy by replacing single points of failure. As an example, the IT Department implemented redundant Internet Service Providers and automated failover if one of the providers fails.

Continued to enhance the City’s disaster recovery processes, procedures, and systems in support of the technology’s critical role in the City's operations.

Implemented application support roles and responsibilities, and associated processes (issue management, change management, testing, etc.) to ensure the City’s critical enterprise applications perform as intended and remain current with changing technology.

Migrated the City’s Intranet from on-premise to the cloud to provide offsite access and upgrade the system for improved user experience.

Continued to support the City’s enterprise document management system and the online public access to City records facilitating greater government accessibility and transparency. This furthers the City's efforts for more streamlined work processes and reducing paper in alignment with the City's sustainability and Green City initiatives.

Continued to boost the City’s fiber network for greater resiliency and bandwidth to support the expanded use of technology when providing more efficient and streamlined business processes.

Continued to enhance the City’s helpdesk functionalities, anti-virus/malware protection, and patch management to further the network security, resiliency, and reliability.

Continued to expand the City’s Geographic Information System (GIS) mapping and integration with other core City systems such as Enterprise Permitting and Licensing (EPL), ERP, and Document Management System, to improve information access, sharing, and decision-making.

Continued support of remote workforce, including adding additional security features such as multi-factor authentication (MFA).

Continued to work on migrating from on-premise email and user file storage to cloud M365 and implementing collaboration tools (T eams).

Continued support of field technology (Ipads and tablets) for code enforcement and inspectors.

Continued support of City Council, Planning Commission, and community meetings broadcast including remote, on-site, or hybrid.

MAJOR SERVICE DELIVERY CHANGES
As the City continues to implement technology to enhance services and customer support and streamline business processes, the IT Department must constantly evaluate its support and services model. This is an ongoing process centered on improving processes, procedures, methods, and tools to ensure quality support with the budget available. As before, the focus is still on operational efficiencies through improved automation and streamlined work processes.

With the rapidly growing threats associated with cybersecurity, the Department continuously redefines staff roles and responsibilities to ensure appropriate support. Thus, the City is always adapting cybersecurity protections to address the ever-evolving threats and to ensure rapid response to alerts and notifications provided by the City’s security providers (sensors, malware, antivirus, etc.). In FY2022- 2023, two positions have been upgraded to realign the job classifications with the current duties, tasks, and skillset requirements and namely Network Administrator to T echnology System Engineer and GIS Analyst to GIS Administrator.

The Fiscal Year 2023-2024 budget includes the addition of a part-time resource. The IT Department occasionally requires assistance to address workload peaks associated with technology refreshment, help desk administration, project coordination, cybersecurity, and administrative functions.

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OBJECTIVES FY 2023-2024
Focus on continuous improvement in the following areas:

End-user support (help desk): Extend cybersecurity, and implement tools that automate and streamline processes to address the rapidly growing use of mobile computing.

City’s ERP and EPL solutions: Identify and implement selected enhanced features and functions.

Software/application installations: Implement patches, updates, and new releases to obtain the most value from the City’s investment(s).

Cybersecurity: Continue implementing best practices in cybersecurity as guided by state and local agencies to address new and evolving cyber threats against local governments.

Continue with the implementation of the M365 project: migration to the cloud for City email and online storage, and deployment of collaboration tools (T eams).

Continue to work with departments to proactively plan and implement technologies as identified in the budget process.

Continue with the next phases of Tyler ERP implementation: Business License and Transparency Portal.

Continue to address single points of failure within the City’s IT infrastructure to improve stability, resiliency, and performance.

Perform major GIS software platform upgrades to remain current with vendor standards and ensure ongoing support.

Upgrade the City’s Council Chamber broadcasting equipment to eliminate obsolete and/or unsupported equipment and enhance the overall broadcast quality.

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PERFORMANCE MEASURES

USER SATISFACTION RATING AS EXCELLENT OR GOOD

PRIOR YEAR TARGET
2020-2021 2021-2022 2022-2023 2023-2024
Actual Actual Estimate Budget
N/A* N/A* N/A* 80%

PERCENTAGE OF FIRST CALL TICKET RESOLUTION

PRIOR YEAR TARGET
2020-2021 2021-2022 2022-2023 2023-2024
Actual Actual Estimate Budget
N/A* N/A* 75% 70%

PERCENTAGE NETWORK INFRASTRUCTURE UPTIME

PRIOR YEAR TARGET
2020-2021 2021-2022 2022-2023 2023-2024
Actual Actual Estimate Budget
N/A* N/A* 99.9% 99.9%

PERCENTAGE CITY ENTERPRISE APPLICATIONS UPTIME

PRIOR YEAR TARGET
2020-2021 2021-2022 2022-2023 2023-2024
Actual Actual Estimate Budget
N/A* N/A* 99.5% 99.9%

USER PHISH-PRONE PERCENTAGE

PRIOR YEAR TARGET
2020-2021 2021-2022 2022-2023 2023-2024
Actual Actual Estimate Budget
N/A* N/A* 1.2% <2%

As a new performance measure, the Information T echnology Department will begin to assess and survey the user (customer) satisfaction rate and will seek to maintain a baseline of 75% satisfaction with services. Due to major helpdesk staffing changes, satisfaction analysis will be completed in FY2023-2024.

The Information T echnology Helpdesk's goal is to resolve service requests on the first call. The First Call Resolution industry standard is between 70% and 79%.

Maintain Network Infrastructure uptime of 99.9% outside of required maintenance windows in support of City staff providing essential services to residents.

Maintain City enterprise applications uptime of 99.9% outside of required maintenance windows. Some of the measured enterprise applications are Enterprise Resource Planning, Enterprise Permitting & Licensing, and Enterprise Document Management systems.

The Information T echnology Department regularly conducts simulated phishing attacks on network users which tests the City's phish- prone vulnerability. The targeted percentage is below the industry phish-prone 3.9% benchmark. Users who fail the phishing test must take additional cybersecurity awareness training.

*
This is a new performance measure that began to be tracked in FY 2022-2023. Some data may not be available for years prior to this.

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BY THE NUMBERS
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 367

DEPARTMENT EXPENDITURES BY PROGRAM
Budgeted Expenditures by Program
Information Technology (100%)Information Technology (100%) Information Technology (100%) Expenditures
Information Technology
Information Technology $2,865,803 $4,276,387 $4,034,448 $4,516,563 $240,176 5.6% Total Information Technology: $2,865,803 $4,276,387 $4,034,448 $4,516,563 $240,176 5.6% Total Expenditures: $2,865,803 $4,276,387 $4,034,448 $4,516,563 $240,176 5.6% Name FY2022 Actual FY2023 Adopted FY2023 Estimate FY2024 Proposed Chg from FY2023 Adopted % Change CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 368

SCHEDULE OF EXPENDITURE DETAIL
Budgeted Expenditures by Category
Materials & Services (54.6%)Materials & Services (54.6%) Materials & Services (54.6%)Salaries & Benefits (35.7%)Salaries & Benefits (35.7%) Salaries & Benefits (35.7%) Capital Projects & Equipment (6.4%)Capital Projects & Equipment (6.4%) Capital Projects & Equipment (6.4%) Debt Service (2.2%)Debt Service (2.2%) Debt Service (2.2%) Internal Services Charge (1.1%)Internal Services Charge (1.1%) Internal Services Charge (1.1%) Expense Objects
Salaries & Benefits
51101-Salaries & Allowances $1,140,658 $1,212,909 $1,213,742 $1,201,548 -$11,361 -0.9% 51103-Part Time Employee Salaries $27,622 $0 $71,190 $47,000 $47,000 N/A 51104-Overtime Regular Employees $30,982 $44,824 $32,153 $47,411 $2,587 5.8% 51201-Group Medical Insurance $138,182 $156,895 $145,584 $145,179 -$11,716 -7.5% 51202-Medicare $17,124 $17,587 $17,599 $17,422 -$165 -0.9% 51204-401A Plan City $29,948 $33,942 $32,230 $34,712 $770 2.3% 51211-PERS Regular Contributions $93,661 $106,979 $91,907 $119,554 $12,575 11.8% 51213-PERS Regular Net Pension
Liab $0 $0 $8,084 $0 $0 0%
Total Salaries & Benefits: $1,478,177 $1,573,136 $1,612,489 $1,612,826 $39,690 2.5% Materials & Services
52101-Contract Services $58,485 $91,347 $79,982 $91,347 $0 0% 52103-Computer Contract Services $507,931 $1,062,174 $1,126,918 $1,028,911 -$33,263 -3.1% 52201-Departmental Supplies $1,504 $1,200 $894 $1,200 $0 0% 52202-Office Supplies $463 $1,000 $423 $1,000 $0 0%
52203-Printing $116 $700 $500 $700 $0 0%
52301-Training, Conf & Meetings $14,622 $37,255 $28,522 $41,075 $3,820 10.3% 52304-Employee Awards & Events $0 $0 $1,500 $1,500 N/A
52307-Memberships & Dues $715 $1,100 $895 $1,100 $0 0%
Name FY2022
Actual
FY2023
Adopted
FY2023
Estimate
FY2024
Proposed
Chg from FY2023
Adopted
%
Change
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 369
52308-Reference Books &
Periodicals $0 $500 $350 $500 $0 0%
52801-Computers, Supplies &
Software $502,328 $1,028,782 $805,998 $1,270,349 $241,567 23.5% 52802-Computer Maintenance &
Repairs $2,359 $24,490 $17,300 $25,209 $719 2.9%
53101-Telephone $905 $3,575 $1,603 $2,121 -$1,454 -40.7% Total Materials & Services: $1,089,427 $2,252,123 $2,063,385 $2,465,012 $212,889 9.5% Internal Services Charge
54102-Warehouse Purchases $382 $800 $200 $800 $0 0%
54108-Building & Ops Allocation $31,845 $41,344 $41,344 $49,193 $7,849 19% Total Internal Services Charge: $32,227 $42,144 $41,544 $49,993 $7,849 18.6% Capital Projects & Equipment
61203-Computer Equipment &
Software $98,954 $278,221 $178,221 $269,382 -$8,839 -3.2% 61204-ERP Implementation $60,660 $32,854 $40,900 $20,119 -$12,735 -38.8% Total Capital Projects & Equipment: $159,614 $311,075 $219,121 $289,501 -$21,574 -6.9% Debt Service
71107-POB Miscellaneous Principal $66,406 $61,213 $61,213 $62,307 $1,094 1.8% 71108-POB Miscellaneous Interest $39,952 $36,696 $36,696 $36,924 $228 0.6% Total Debt Service: $106,358 $97,909 $97,909 $99,231 $1,322 1.4% Total Expense Objects: $2,865,803 $4,276,387 $4,034,448 $4,516,563 $240,176 5.6% Name FY2022
Actual
FY2023
Adopted
FY2023
Estimate
FY2024
Proposed
Chg from FY2023
Adopted
%
Change

SOURCE OFFUNDS
Information Technology Fund $2,865,803 $4,276,387 $4,034,448 $4,516,563 $240,176 5.6% Total Information Technology
Fund: $2,865,803 $4,276,387 $4,034,448 $4,516,563 $240,176 5.6% Name FY2022
Actual
FY2023
Adopted
FY2023 Estimate FY2024 Proposed Chg from FY2023 Adopted % Change CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 370

FIVEYEAR FORECAST
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FORECAST OVERVIEW
The City of Manhattan Beach is committed to strong stewardship of taxpayer dollars, including developing a responsive budget that delivers high quality services our residents expect and deserve. T o assist with this effort, staff prepares projections for revenues and expenditures over the next five-year period as the budget is developed each year. Estimates for revenue and expenditure growth are derived using trend analysis, economic data and known future changes.

The forecast also projects fund balances including policy reserves and unreserved balances. Fund transfers are highlighted for easy identification of fund subsidies, such as in the Street Lighting and Landscape Fund and Stormwater Fund, which are being subsidized by the General Fund. Identifying additional sources of funding for Stormwater operations, and our core services, remains a top priority to address pressure on the General Fund. The projected subsidies to the Street Lighting and Landscape Fund and Stormwater Fund are projected to total about $11.0 million over the next five years, which adds to the strain on our essential services valued by our public, as well as our ability to fund needed infrastructure improvements.

Nevertheless, the forecast included in this year’s budget shows that the City has been successful in maintaining a fiscally prudent policy of 20% of General Fund expenditures in reserve for emergencies and urgent needs and, additionally, an Economic Uncertainty reserve of $4 million through FY 2024-2025. During the pandemic, the City’s revenues were vulnerable to the dynamics of sporadic economic shutdowns, particularly in the travel and tourism industries.

By holding the line on costs, and taking prudent measures like issuing Pension Obligation Bonds (POBs) in 2021, the City was able to utilize $8.4 million from American Rescue Plan Act (ARPA) funds to offset the immediate impacts of revenue losses. Because of these measures, the City was able to make other investments such as for the reconstruction of Fire Station #2 ($1.4 million in FY 2020-2021) and a $4.0 million transfer to the CIP Fund for one-time parks and facilities projects.

Other ongoing transfers-out from the General Fund include a reallocation of the budgetary “savings” achieved by the issuance of the POBs in accordance with the Pension Liability Policy approved by the City Council in 2021. The “savings” derived from the difference between what would have been paid to CalPERS as escalating payments compared to the current level-debt payments of $5.5 million is being allocated to other funds as approved by the City Council each year during the budget process. In the FY 2023-2024 Proposed Budget, 80% is allocated to the CIP Fund for debt service and capital projects, including $1.0 million dedicated to the Senior and Scout Community Center, and 20% is allocated to the Pension Stabilization Fund for future pension costs.

Although operational costs are covered, the Five Year Forecast does show a lack of funding for significant capital improvement projects, such as recreational facilities, additional parking facilities, and upgrades to essential public buildings such as our community centers.

Furthermore, these challenges are now compounded with rising costs due to high inflation.

Like all materials and contract services, labor costs in California continue to rise. As a service organization, the City delivers services through our dedicated employees. Multi-year labor agreements were signed with most of the City’s bargaining units through June 30, 2025, bringing predictability to one of the City’s biggest cost centers. After salaries, the second largest compensation driver for the City is retirement system costs. In FY 2023-2024, the City has budgeted $5.7 million for current service costs associated with providing employees defined benefit pension plans through the California Public Employees’ Retirement System (CalPERS).

Using the FY 2023-2024 Budget as a base, growth factors are applied to fiscal years 2024-2025 through 2027-2028 in order to estimate revenues, expenditures, and fund balances over the upcoming five-year period. Decisions made for cost-controls, specifically pension cost reductions through the issuance of the POBs, have supported our goal of long-term financial sustainability.

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GROWTH FACTORS FOR FY 2023-2024 to FY 2027-2028 PROJECTIONSO_GFFactors4/24/2023 21 22 23 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Actual Actual Projection Budget Forecast Forecast Forecast Forecast Key Revenues
Property Tax 8.3% 5.1% 5.6% 4.1% 3.5% 3.5% 3.5% 3.5%
Sales & Use Tax -3.8% 29.5% 0.2% 4.8% 3.0% 3.0% 3.0% 3.0% Other Taxes & Assessments 1.8% 2.5% -5.6% 0.0% 3.0% 3.0% 3.0% 3.0% Transient Occupancy Tax -33.4% 134.5% 8.7% 24.8% 3.0% 3.5% 3.5% 3.5% Business License Tax 2.8% 37.8% -13.1% 7.8% 3.5% 3.5% 3.5% 3.5% Charges for Services 31.2% -11.2% -1.7% 12.3% 3.5% 3.5% 3.5% 3.5% Parks & Rec Class Fees -32.7% 80.9% 1.6% 13.0% 3.0% 3.0% 3.0% 3.0% Building Permits -11.3% 33.3% -13.6% 3.0% 3.5% 3.5% 3.5% 3.5% Building Plan Check Fees 40.0% 6.3% -14.7% 2.8% 3.5% 3.5% 3.5% 3.5% Licenses & Permits 32.9% 19.7% -3.7% -12.3% 3.5% 3.5% 3.5% 3.5% Fines -25.1% 63.4% 11.2% -3.7% 1.0% 1.0% 1.0% 1.0%
Interest Earnings -47.1% 11.1% 36.1% 12.1% 2.0% 2.0% 2.0% 2.0% Rents & Leases -16.9% 39.9% 7.0% 7.2% 1.8% 1.8% 1.8% 1.8% Real Estate Transfer Tax 36.7% 17.7% -40.0% 0.0% 2.0% 2.0% 2.0% 2.0% Key Expenditures
Salary & Wages -0.7% 4.8% 4.8% 6.7% 3.0% 3.0% 3.0% 3.0% Employee Benefits 2.0% -25.1% -1.6% 18.8% 3.1% 3.5% 3.5% 3.6% Contract & Professional Services -2.3% 32.7% 21.5% -3.5% 3.2% 1.8% 4.0% 2.1% Materials & Services -29.3% 15.3% 71.5% -6.8% 4.2% 3.8% 3.8% 3.9% Utilities 2.7% 11.9% 10.9% 6.8% 3.0% 3.0% 3.0% 3.0%
Internal Service Charges -17.0% 35.4% 22.4% 18.1% -6.1% 2.7% 3.6% 2.8% CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 373
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FIVE YEAR FORECAST GENERAL FUNDO_100Summary
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 GENERAL FUND Actual Actual Actual Projection Budget Forecast Forecast Forecast Forecast BEGINNING FUND BALANCE 25,378,484 25,167,211 30,693,696 38,150,421 30,662,647 26,572,475 24,286,949 21,699,555 18,681,100 Revenues
Core Revenues 72,069,886 72,971,392 86,782,277 88,258,333 93,103,981 95,931,078 98,839,987 101,897,330 105,056,433 Non-core Revenues (One-time & Grants)¹ 1,130,958 90,117,898 2,952,594 251,313 197,000 - - - - Total Revenues & Other Inflows (A) $73,200,844 $163,089,289 $89,734,871 $88,509,646 $93,300,981 $95,931,078 $98,839,987 $101,897,330 $105,056,433 - - - - - - - - -
Expenditures
Core Expenditures2
72,681,676 71,016,720 78,307,655 85,945,190 92,120,644 93,716,885 96,274,144 99,322,093 102,101,420 Non-core Expenditures (One-time & Capital)3
276,909 85,592,473 152,076 310,448 695,320 - - - -
Total Expenditures & Other Outflows (B) 72,958,584 156,609,193 78,459,731 86,255,638 92,815,964 93,716,885 96,274,144 99,322,093 102,101,420 Annual Structural (Core) Surplus/(Deficit) (611,790) 1,954,671 8,474,622 2,313,143 983,337 2,214,193 2,565,843 2,575,237 2,955,013 Annual Surplus/(Deficit) Before Transfers 242,260 6,480,097 11,275,140 2,254,008 485,017 2,214,193 2,565,843 2,575,237 2,955,013 Fund Equity Transfers Total4
(C) (453,533) (953,611) (3,818,416) (9,741,781) (4,575,189) (4,499,718) (5,153,236) (5,593,693) (5,284,510) Street Lighting & Landscape Fund O_201Summary(169,012) (325,242) (99,760) (253,345) (293,253) (311,784) (319,163) (326,771) (334,615) CIP Fund (Pension Liability Policy) O_401Summary- - (492,596) (1,596,585) (994,920) (1,194,471) (1,298,757) (1,391,131) (1,489,612) CIP Fund (One-time) - - (175,000) (5,691,000) (1,000,000) - - - - Stormwater Fund O_502Summary(298,337) (1,317,480) (2,183,688) (1,445,082) (2,690,561) (1,586,276) (1,965,430) (2,160,873) (1,590,929) Parking Fund - 71,020 - - - - - - -
County Parking Lots Fund O_521Summary263,816 489,165 532,628 382,271 395,925 384,519 378,250 371,778 365,066 Information Technology Fund O_605Summary- - - - 500,000 - - - - Refuse Fund (Closeout) O_510Summary- 378,926 - - - - - - - Fire Station 2 Construction Fund - - (1,400,000) - - - - - - Pension Stabilization Fund O_804Summary(250,000) (250,000) - (1,138,040) (492,380) (1,791,707) (1,948,136) (2,086,696) (2,234,419) Annual Incr./(Decr.) in Fund Balance (=A-B+C) (211,273) 5,526,486 7,456,724 (7,487,773) (4,090,172) (2,285,526) (2,587,394) (3,018,455) (2,329,497) ENDING FUND BALANCE $25,167,211 $30,693,696 $38,150,421 $30,662,647 $26,572,475 $24,286,949 $21,699,555 $18,681,100 $16,351,603 Financial Policy Designation 15,004,887$ 14,624,838$ 15,539,658$ 17,251,128$ 18,563,193$ 18,743,377$ 19,254,829$ 18,681,100$ 16,351,603$ Reserve for Economic Uncertainty 4,000,000$ 4,000,000$ 4,000,000$ 4,000,000$ 4,000,000$ 4,000,000$ 2,444,726$ - - Unreserved Fund Balance 6,162,324$ 12,068,858$ 18,610,763$ 9,411,519$ 4,009,282$ 1,543,572$ - - - Not Meeting Financial Policy by $1,183,319 $4,068,681
1 Includes Pension Obligation Bond proceeds in FY 2020-2021 and American Rescue Plan Act (ARPA) Funds in FY 2020-2021 and 2021-2022. 2 FY 2020-2021 includes repayment of CalPERS Unfunded Actuarial Liabilities (UAL) after issuance of Pension Obligation Bonds. 3 Fund Equity Transfers include reallocation of savings resulting from Pension Obligation Bonds. City Council approves the specific allocation each year during budget process. 4 Unreserved Fund Balance includes Reserve for Encumbrances and ARPA funds received in FY 2020-2021 and 2021-2022.

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FIVE YEAR FORECAST ALL FUNDS
FY 2023-2024 SCHEDULE OF RESERVED & DESIGNATED FUND BALANCES $X$8 X151 X152 X153 X154 2
07/01/2023
Beginning Estimated Operating Capital Equip Debt Service Total Fund Balance Fund Total Fund Reserves Unreserved Balance Revenues Expenditures & Projects Payments Expenditures Before Xfers Transfers Balance End Balance End Balance General Fund Undesignated $9,411,519 $93,300,981 ($86,783,174) ($395,320) ($5,637,470) ($92,815,964) $9,896,536 ($1,312,065) $4,009,282 $4,009,282 Transfer from County Lots Parking Fund 395,925
Transfer to Street Lighting Fund (293,253)
Transfer to Stormwater Fund (2,690,561)
Transfer to Capital Improvements Fund (994,920)
Transfer to Cap. Impr. Fund (One-time) (1,000,000)
Transfer to Pension Stabilization Fund (492,380)
Transfer from Information Technology Fund 500,000
Financial Policy Designation 17,251,128 17,251,128 1,312,065 18,563,193 18,563,193 Reserve for Economic Uncertainty 4,000,000 4,000,000 4,000,000 4,000,000 Total General Fund Balance $30,662,647 $93,300,981 ($86,783,174) ($395,320) ($5,637,470) ($92,815,964) $31,147,664 ($4,575,189) $26,572,475 $22,563,193 $4,009,282 Special Revenue Funds
Street Lighting & Landscape $11,375 $390,822 ($620,449) ($75,000) - ($695,449) ($293,253) $293,253 - - - Gas Tax 843,015 1,946,355 (60,138) (2,495,000) - (2,555,138) 234,232 234,232 - 234,232 Asset Forfeiture & Safety Grants 129,587 41,800 (90,500) - - (90,500) 80,887 80,887 - 80,887 Police Safety Grants 357,540 164,000 (212,000) - - (212,000) 309,540 309,540 - 309,540 Prop A 786,208 1,036,405 (751,428) - (11,973) (763,401) 1,059,212 1,059,212 - 1,059,212 Prop C 1,281,683 839,596 (60,138) (750,000) - (810,138) 1,311,141 1,311,141 - 1,311,141 AB 2766 229,967 47,500 (673) (275,000) - (275,673) 1,794 1,794 - 1,794 Measure R 539,661 2,482,521 (60,138) (1,000,000) - (1,060,138) 1,962,044 1,962,044 - 1,962,044 Measure M 352,104 3,999,190 (60,138) (3,880,000) - (3,940,138) 411,156 411,156 - 411,156 Measure W 852,264 25,530,264 - (26,348,763) - (26,348,763) 33,765 33,765 - 33,765 Total Special Revenue Funds Balance $5,383,403 $36,478,453 ($1,915,602) ($34,823,763) ($11,973) ($36,751,338) $5,110,518 $293,253 $5,403,771 - $5,403,771 Capital Project Funds
Capital Improvements Program Fund $4,799,769 2,072,438 ($184,456) ($6,544,048) ($1,168,137) ($7,896,641) ($1,024,434) $1,994,920 $970,486 - $970,486 Bond Construction Fund 772,076 - - - - - 772,076 772,076 - 772,076 Underground Utility Construction Fund 1,408,704 - (360,000) - - (360,000) 1,048,704 1,048,704 - 1,048,704 Total Capital Project Funds Balance $6,980,549 2,072,438 ($544,456) ($6,544,048) ($1,168,137) ($8,256,641) $796,346 $1,994,920 $2,791,266 - $2,791,266 Enterprise Funds
Water* $4,056,563 $16,201,728 ($12,997,669) ($3,980,000) ($254,587) ($17,232,256) $3,026,035 $3,026,035 3,026,035 - Stormwater* - 344,484 (1,138,698) (1,890,000) (6,347) (3,035,045) (2,690,561) 2,690,561 - - - Wastewater 3,903,693 3,898,500 (2,179,711) (1,460,000) (116,041) (3,755,752) 4,046,441 4,046,441 765,251 3,281,191 Parking* 1,127,482 4,457,200 (2,459,304) (1,025,000) (659,625) (4,143,929) 1,440,753 (900,000) 540,753 540,753 - County Parking Lots 30,345 1,382,200 (229,030) (25,000) (762,590) (1,016,620) 395,925 (395,925) - - - State Pier & Parking 708,890 858,500 (569,665) (50,000) (2,381) (622,046) 945,344 900,000 1,845,344 190,682 1,654,662 Enterprise Fund Reserves:

North Manhattan Beach BID Reserve 420,300 - - - - - 420,300 420,300 420,300 - Total Enterprise Funds Balance $10,247,273 $27,142,612 ($19,574,077) ($8,430,000) ($1,801,571) ($29,805,648) $7,584,237 $2,294,636 $9,878,873 $4,943,021 $4,935,853 FY 2023-2024 07/01/2024
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 376

CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 377

FIVE YEAR FORECAST ALL FUNDS
FY 2024-2025 SCHEDULE OF RESERVED & DESIGNATED FUND BALANCES y151 y152 y153 y154 2
07/01/2024
Beginning Estimated Operating Capital Equip Debt Service Total Fund Balance Fund Total Fund Reserves Unreserved Balance Revenues Expenditures & Projects Payments Expenditures Before Xfers Transfers Balance End Balance End Balance General Fund Undesignated $4,009,282 $95,931,078 ($88,078,515) - ($5,638,370) ($93,716,885) $6,223,475 ($180,184) $1,543,572 $1,543,572 Transfer from County Lots Parking Fund 384,519
Transfer to Street Lighting Fund (311,784)
Transfer to Stormwater Fund (1,586,276)
Transfer to Capital Improvements Fund (1,194,471)
Transfer to PARS Trust Fund (1,791,707)
Financial Policy Designation* 18,563,193 18,563,193 180,184 18,743,377 18,743,377 Reserve for Economic Uncertainty 4,000,000 4,000,000 4,000,000 4,000,000 Total General Fund Balance $26,572,475 $95,931,078 ($88,078,515) - ($5,638,370) ($93,716,885) $28,786,668 ($4,499,718) $24,286,949 $22,743,377 $1,543,572 Special Revenue Funds
Street Lighting & Landscape - $402,284 ($639,068) ($75,000) - ($714,068) ($311,784) $311,784 - - Gas Tax $234,232 1,966,039 (60,138) (1,615,000) - (1,675,138) 525,133 $525,133 $525,133 Asset Forfeiture & Safety Grants 80,887 42,236 - - - - 123,123 123,123 123,123 Police Safety Grants 309,540 164,080 (190,690) - - (190,690) 282,930 282,930 282,930 Prop A 1,059,212 1,067,153 (811,080) - (11,973) (823,053) 1,303,312 1,303,312 1,303,312 Prop C 1,311,141 864,754 (60,138) (750,000) - (810,138) 1,365,756 1,365,756 1,365,756 AB 2766 1,794 47,990 (673) - - (673) 49,111 49,111 49,111 Measure R 1,962,044 661,647 (60,138) (510,000) - (570,138) 2,053,553 2,053,553 2,053,553 Measure M 411,156 1,060,686 (60,138) (1,120,000) - (1,180,138) 291,704 291,704 291,704 Measure W 33,765 411,530 - - - - 445,295 445,295 445,295 Total Special Revenue Funds Balance $5,403,771 $6,688,398 ($1,882,063) ($4,070,000) ($11,973) ($5,964,036) $6,128,133 $311,784 $6,439,917 - $6,439,917 Capital Project Funds
Capital Improvement Fund $970,486 $1,699,771 ($189,990) ($2,350,000) ($1,167,762) ($3,707,752) ($1,037,494) $1,194,471 $156,977 - $156,977 Bond Construction Fund 772,076 - - - - - 772,076 772,076 772,076 Underground Utility Construction Fund 1,048,704 - - - - - 1,048,704 1,048,704 1,048,704 Total Capital Project Funds Balance $2,791,266 $1,699,771 ($189,990) ($2,350,000) ($1,167,762) ($3,707,752) $783,286 $1,194,471 $1,977,757 - $1,977,757 Enterprise Funds
Water* $3,026,035 $16,997,924 ($13,055,456) ($4,140,000) ($257,184) ($17,452,640) $2,571,319 $2,571,319 2,571,319 - Stormwater* - 344,941 (1,164,870) (760,000) (6,347) (1,931,217) (1,586,276) 1,586,276 - - - Wastewater* 4,046,441 4,211,773 (2,206,537) (5,380,000) (117,319) (7,703,856) 554,358 554,358 554,358 - Parking 540,753 4,461,542 (2,516,259) (1,000,000) (653,000) (4,169,259) 833,036 250,000 1,083,036 1,056,420 26,617 County Parking Lots - 1,382,200 (235,091) - (762,590) (997,681) 384,519 (384,519) - - - State Pier & Parking 1,845,344 858,665 (586,830) (400,000) (2,381) (989,211) 1,714,798 (250,000) 1,464,798 196,404 1,268,394 Enterprise Fund Reserves:

North Manhattan Beach BID Reserve 420,300 - - - - - 420,300 420,300 420,300 Total Enterprise Funds Balance $9,878,873 $28,257,045 ($19,765,042) ($11,680,000) ($1,798,821) ($33,243,863) $4,892,055 $1,201,756 $6,093,811 $4,798,801 $1,295,011 FY 2024-2025 07/01/2025
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 378

CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 379

FIVE YEAR FORECAST ALL FUNDS
FY 2025-2026 SCHEDULE OF RESERVED & DESIGNATED FUND BALANCES z151 z152 z153 z154 2
07/01/2025
Beginning Estimated Operating Capital Equip Debt Service Total Fund Balance Fund Total Fund Reserves Unreserved Balance Revenues Expenditures & Projects Payments Expenditures Before Xfers Transfers Balance End Balance End Balance General Fund Undesignated $1,543,572 $98,839,987 ($90,635,774) - ($5,638,370) ($96,274,144) $4,109,415 ($511,452) ($1,555,274) - Transfer from County Lots Parking Fund 378,250
Transfer to Street Lighting Fund (319,163)
Transfer to Stormwater Fund (1,965,430)
Transfer to Capital Improvements Fund (1,298,757)
Transfer to Pars Trust Fund (1,948,136)
Financial Policy Designation* 18,743,377 18,743,377 511,452 19,254,829 19,254,829 Reserve for Economic Uncertainty 4,000,000 4,000,000 4,000,000 2,444,726 Total General Fund Balance $24,286,949 $98,839,987 ($90,635,774) - ($5,638,370) ($96,274,144) $26,852,792 ($5,153,236) $21,699,555 $21,699,555 - Special Revenue Funds
Street Lighting & Landscape - $414,087 ($658,250) ($75,000) - ($733,250) ($319,163) $319,163 - - Gas Tax 525,133 1,985,923 (60,138) (1,865,000) - (1,925,138) 585,918 $585,918 $585,918 Asset Forfeiture & Safety Grants 123,123 42,677 - - - - 165,800 165,800 165,800 Police Safety Grants 282,930 164,162 (193,480) - - (193,480) 253,612 253,612 253,612 Prop A 1,303,312 1,098,821 (830,879) - (11,973) (842,852) 1,559,281 1,559,281 1,559,281 Prop C 1,365,756 890,666 (60,138) (750,000) - (810,138) 1,446,284 1,446,284 1,446,284 AB 2766 49,111 48,485 (673) - - (673) 96,923 96,923 96,923 Measure R 2,053,553 681,343 (60,138) (500,000) - (560,138) 2,174,758 2,174,758 2,174,758 Measure M 291,704 762,825 (60,138) (800,000) - (860,138) 194,390 194,390 194,390 Measure W 445,295 411,561 - (310,000) - (310,000) 546,856 546,856 546,856 Total Special Revenue Funds Balance $6,439,917 $6,500,549 ($1,923,834) ($4,300,000) ($11,973) ($6,235,807) $6,704,659 $319,163 $7,023,822 - $7,023,822 Capital Project Funds
Capital Improvement Fund $156,977 $1,732,309 ($195,689) ($1,700,000) ($1,161,238) ($3,056,927) ($1,167,642) $1,298,757 $131,116 - $131,116 Bond Construction Fund 772,076 - - - - - 772,076 772,076 772,076 Underground Utility Construction Fund 1,048,704 - - - - - 1,048,704 1,048,704 1,048,704 Total Capital Project Funds Balance $1,977,757 $1,732,309 ($195,689) ($1,700,000) ($1,161,238) ($3,056,927) $653,139 $1,298,757 $1,951,896 - $1,951,896 Enterprise Funds
Water* $2,571,319 $17,543,338 ($13,136,888) ($4,400,000) ($259,279) ($17,796,167) $2,318,491 $2,318,491 2,318,491 - Stormwater* - 345,409 (1,194,492) (1,110,000) (6,347) (2,310,839) (1,965,430) 1,965,430 - - - Wastewater* 554,358 4,298,667 (2,242,191) (2,050,000) (118,349) (4,410,540) 442,485 442,485 442,485 - Parking 1,083,036 4,466,006 (2,580,933) - (650,500) (3,231,433) 2,317,610 250,000 2,567,610 1,077,144 1,490,466 County Parking Lots - 1,382,200 (241,360) - (762,590) (1,003,950) 378,250 (378,250) - - - State Pier & Parking 1,464,798 858,833 (604,582) - (2,381) (606,963) 1,716,668 (250,000) 1,466,668 202,321 1,264,347 Enterprise Fund Reserves:

North Manhattan Beach BID Reserve 420,300 - - - - - 420,300 420,300 420,300 Total Enterprise Funds Balance $6,093,811 $28,894,455 ($20,000,446) ($7,560,000) ($1,799,446) ($29,359,892) $5,628,374 $1,587,180 $7,215,554 $4,460,742 $2,754,813 FY 2025-2026 07/01/2026
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 380

CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 381

FIVE YEAR FORECAST ALL FUNDS
FY 2026-2027 SCHEDULE OF RESERVED & DESIGNATED FUND BALANCES aa151 aa152 aa153 aa154 2
07/01/2026
Beginning Estimated Operating Capital Equip Debt Service Total Fund Balance Fund Total Fund Reserves Unreserved Balance Revenues Expenditures & Projects Payments Expenditures Before Xfers Transfers Balance End Balance End Balance General Fund Undesignated - $101,897,330 ($93,683,723) - ($5,638,370) ($99,322,093) $2,575,237 ($609,590) ($3,628,045) - Transfer from County Lots Parking Fund 371,778
Transfer to Street Lighting Fund (326,771)
Transfer to Stormwater Fund (2,160,873)
Transfer to Capital Improvements Fund (1,391,131)
Transfer to Pars Trust Fund (2,086,696)
Financial Policy Designation* 19,254,829 19,254,829 609,590 19,864,419 18,681,100 Reserve for Economic Uncertainty 2,444,726 2,444,726 2,444,726 - Total General Fund Balance $21,699,555 $101,897,330 ($93,683,723) - ($5,638,370) ($99,322,093) $24,274,793 ($5,593,693) $18,681,100 $18,681,100 - Special Revenue Funds
Street Lighting & Landscape - $426,242 ($678,013) ($75,000) - ($753,013) ($326,771) $326,771 - - Gas Tax $585,918 2,006,011 (60,138) (1,545,000) - (1,605,138) 986,791 $986,791 $986,791 Asset Forfeiture & Safety Grants 165,800 43,122 - - - - 208,922 208,922 208,922 Police Safety Grants 253,612 164,245 (196,372) - - (196,372) 221,485 221,485 221,485 Prop A 1,559,281 1,131,436 (851,281) - (11,973) (863,254) 1,827,463 1,827,463 1,827,463 Prop C 1,446,284 917,355 (60,138) (750,000) - (810,138) 1,553,501 1,553,501 1,553,501 AB 2766 96,923 48,986 (673) - - (673) 145,236 145,236 145,236 Measure R 2,174,758 701,627 (60,138) (500,000) - (560,138) 2,316,247 2,316,247 2,316,247 Measure M 194,390 785,626 (60,138) (800,000) - (860,138) 119,879 119,879 119,879 Measure W 546,856 411,592 - (920,000) - (920,000) 38,447 38,447 38,447 Total Special Revenue Funds Balance $7,023,822 $6,636,242 ($1,966,891) ($4,590,000) ($11,973) ($6,568,864) $7,091,200 $326,771 $7,417,971 - $7,417,971 Capital Project Funds
Capital Improvement Fund $131,116 $1,765,959 ($201,560) ($1,750,000) ($1,168,338) ($3,119,898) ($1,222,824) $1,391,131 $168,307 - $168,307 Bond Construction Fund 772,076 - - - - - 772,076 772,076 772,076 Underground Utility Construction Fund 1,048,704.00 - - - - - 1,048,704 1,048,704 1,048,704 Total Capital Project Funds Balance $1,951,896 $1,765,959 ($201,560) ($1,750,000) ($1,168,338) ($3,119,898) $597,957 $1,391,131 $1,989,088 - $1,989,088 Enterprise Funds
Water* $2,318,491 $18,149,360 ($13,272,830) ($6,900,000) ($90,563) ($20,263,393) $204,458 $204,458 204,458 - Stormwater* - 345,890 (1,190,415) (1,310,000) (6,347) (2,506,762) (2,160,873) 2,160,873 - - - Wastewater* 442,485 4,387,393 (2,278,977) (2,300,000) (35,340) (4,614,317) 215,561 215,561 215,561 - Parking 2,567,610 4,470,597 (2,647,790) - (656,750) (3,304,540) 3,733,667 250,000 3,983,667 1,101,513 2,882,153 County Parking Lots - 1,382,200 (247,832) - (762,590) (1,010,422) 371,778 (371,778) - - - State Pier & Parking 1,466,668 859,005 (622,926) - (2,381) (625,307) 1,700,366 (250,000) 1,450,366 208,436 1,241,931 Enterprise Fund Reserves:

North Manhattan Beach BID Reserve 420,300 - - - - - 420,300 420,300 420,300 Total Enterprise Funds Balance $7,215,554 $29,594,444 ($20,260,770) ($10,510,000) ($1,553,971) ($32,324,741) $4,485,257 $1,789,095 $6,274,352 $2,150,268 $4,124,084 FY 2026-2027 07/01/2027
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FIVE YEAR FORECAST ALL FUNDS
FY 2027-2028 SCHEDULE OF RESERVED & DESIGNATED FUND BALANCES ab151 ab152 ab153 ab154 2
07/01/2027
Beginning Estimated Operating Capital Equip Debt Service Total Fund Balance Fund Total Fund Reserves Unreserved Balance Revenues Expenditures & Projects Payments Expenditures Before Xfers Transfers Balance End Balance End Balance General Fund Unreserved - $105,056,433 ($96,463,050) - ($5,638,370) ($102,101,420) $2,955,013 ($1,739,184) ($4,068,681) - Transfer from County Lots Parking Fund 365,066
Transfer to Street Lighting Fund (334,615)
Transfer to Stormwater Fund (1,590,929)
Transfer to Capital Improvements Fund (1,489,612)
Transfer to PARS Trust Fund (2,234,419)
Financial Policy Designation 18,681,100 18,681,100 1,739,184 20,420,284 16,351,603 Reserve for Economic Uncertainty - - - -
Total General Fund Balance $18,681,100 $105,056,433 ($96,463,050) - ($5,638,370) ($102,101,420) $21,636,113 ($5,284,510) $16,351,603 $16,351,603 - Special Revenue Funds
Street Lighting & Landscape - $438,758 ($698,374) ($75,000) - ($773,374) ($334,615) $334,615 - - Gas Tax $986,791 2,026,305 (60,138) (2,315,000) - (2,375,138) 637,958 $637,958 $637,958 Asset Forfeiture & Safety Grants 208,922 43,573 - - - - 252,495 252,495 252,495 Police Safety Grants 221,485 164,330 (199,372) - - (199,372) 186,442 186,442 186,442 Prop A 1,827,463 1,165,026 (872,488) - (11,973) (884,461) 2,108,028 2,108,028 2,108,028 Prop C 1,553,501 944,843 (60,138) (1,250,000) - (1,310,138) 1,188,206 1,188,206 1,188,206 AB 2766 145,236 49,491 (673) - - (673) 194,054 194,054 194,054 Measure R 2,316,247 722,517 (60,138) (500,000) - (560,138) 2,478,626 2,478,626 2,478,626 Measure M 119,879 809,110 (60,138) (800,000) - (860,138) 68,851 68,851 68,851 Measure W 38,447 411,624 - - - - 450,071 450,071 450,071 Total Special Revenue Funds Balance $7,417,971 $6,775,578 ($2,011,459) ($4,940,000) ($11,973) ($6,963,432) $7,230,117 $334,615 $7,564,732 - $7,564,732 Capital Project Funds
Capital Improvement Fund $168,307 $1,800,759 ($207,607) ($1,350,000) ($1,168,338) ($2,725,945) ($756,879) $1,489,612 $732,733 - $732,733 Bond Construction Fund 772,076 - - - - - 772,076 772,076 772,076 Underground Utility Construction Fund 1,048,704.00 - - - - - 1,048,704 1,048,704 1,048,704 Total Capital Project Funds Balance $1,989,088 $1,800,759 ($207,607) ($1,350,000) ($1,168,338) ($2,725,945) $1,063,901 $1,489,612 $2,553,513 - $2,553,513 Enterprise Funds
Water* $204,458 $18,687,904 ($13,413,573) ($4,200,000) ($90,563) ($17,704,136) $1,188,226 $1,188,226 1,188,226 - Stormwater* - 346,382 (1,220,964) (710,000) (6,347) (1,937,311) (1,590,929) 1,590,929 - - - Wastewater* 215,561 4,457,780 (2,317,482) (2,200,000) (35,340) (4,552,822) 120,518 120,518 120,518 - Parking 3,983,667 4,475,317 (2,717,073) - (656,750) (3,373,823) 5,085,160 150,000 5,235,160 1,124,608 4,110,553 County Parking Lots - 1,382,200 (254,544) - (762,590) (1,017,134) 365,066 (365,066) - - - State Pier & Parking 1,450,366 859,180 (641,914) - (2,381) (644,295) 1,665,251 (150,000) 1,515,251 214,765 1,300,486 Enterprise Fund Reserves:

North Manhattan Beach BID Reserve 420,300 - - - - - 420,300 420,300 420,300 Total Enterprise Funds Balance $6,274,352 $30,208,762 ($20,565,550) ($7,110,000) ($1,553,971) ($29,229,521) $7,253,593 $1,225,863 $8,479,456 $3,068,417 $5,411,039 FY 2027-2028 07/01/2028
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 384

CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 385
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 386

CAPITAL BUDGET SUMMARY
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 387

Prior Year
Appropriations FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 TOTAL CIP Project Funding Summary
Total Street Lighting and Landscape Fund 150,000 - - - - - 1,200,000 Total Gas Tax Fund 1,605,776 24,288,763 - - - - 319,787 Total Prop C Fund - - - - - - -
Total AB 2766 Air Quality Fund $89,988 $75,000 $75,000 $75,000 $75,000 $75,000 $362,500 Total Measure R Fund - 400,000 - - - - 275,000
Total Measure M Fund - 150,000 - - - - -
Total Measure W Fund 172,833 - - - - - 416,975
Total CIP Fund - 400,000 - - - - 300,000
Total Construction Bond Fund 458,331 - - - - - 100,000
Total Water Fund 1,841,496 - 400,000 - - - 700,000
Total Stormwater Fund 4,515,647 3,980,000 4,140,000 4,400,000 6,900,000 4,200,000 45,298,888 Total Wastewater Fund - - 200,000 100,000 1,400,000 - 1,635,810 Total Parking Fund - - 100,000 - 100,000 - 1,200,000
Total State Pier and Lot Fund - - 80,000 - 100,000 - 25,117,980 Total Funding Sources $8,834,071 $29,293,763 $4,995,000 $4,575,000 $8,575,000 $4,275,000 $76,926,940 * Items with an asterisk are included in the City Council Work Plan.

Prior year appropriation column includes estimated carryover funding at the end of FY 2022-23 that will be expended as multi-year projects progress. Reported carryover funds reflect the amount of fund balance previously committed to projects in prior year adopted budgets. In the Five Year Forecast, Opening Fund Balances include assumptions for Committed Capital Project expenditures and, where applicable, anticipated grant revenue.

Items highlighted in gray shading represent grant funded projects.

CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 388

Prior Year
Appropriations FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 TOTAL Street Lighting and Landscape Fund
Annual Streetlight Replacement 89,988 75,000 75,000 75,000 75,000 75,000 362,500 Total Street Lighting and Landscape Fund $89,988 $75,000 $75,000 $75,000 $75,000 $75,000 $362,500 Gas Tax Fund
Ocean Drive Walk Street Crossings - 100,000 400,000 - - - 19,459,415 Annual Citywide Concrete Repair Program 623,506 365,000 365,000 365,000 365,000 365,000 - MBB Pavement Rehabilitation from Sepulveda Blvd. to Dianthus St. - - - 50,000 750,000 - - Annual Street Resurfacing Program 292,627 1,150,000 850,000 650,000 350,000 650,000 100,000 Biennial Slurry Seal Program 79,402 800,000 - 800,000 - 1,300,000 1,960,000 Triennial Pavement Management System Update - 80,000 - - 80,000 - 1,230,000 Total Gas Tax Fund $995,535 $2,495,000 $1,615,000 $1,865,000 $1,545,000 $2,315,000 $22,749,415 Prop C Fund
Annual Street Resurfacing Program 2,221,636 750,000 750,000 750,000 750,000 1,250,000 - Marine Ave at Cedar Ave Traffic Signal and Int. Improvements 346,804 - - - - - 573,475 MBB and Sepulveda Intersection Improvements 1,883,880 - - - - - 573,475 Total Prop C Fund $4,452,320 $750,000 $750,000 $750,000 $750,000 $1,250,000 $1,146,950 AB 2766 Air Quality Fund
Electric Vehicle Chargers at Marine Ave. Park - 275,000 - - - - 464,988 Total AB 2766 Air Quality Fund - $275,000 - - - - $464,988 Measure R Fund
Rosecrans Bike Lane Improvements (Partial Grant CPF) 240,000 1,000,000 510,000 - - - 200,000 Annual Street Resurfacing Program 250,000 - - 500,000 500,000 500,000 50,000 Aviation Blvd and 33rd Missing Sidewalk (Partial Grant 5310) 524,390 - - - - - 592,061 MBB and Peck Ave Traffic Signal Improvements 416,975 - - - - - 100,000 Joslyn Center Crosswalks 200,000 - - - - - 6,430
Total Measure R Fund $1,631,365 $1,000,000 $510,000 $500,000 $500,000 $500,000 $948,491 Measure M Fund
MBB and Pacific Ave Improvements - 880,000 320,000 - - - - MBB Complete Streets Corridor - Feasibility/Design - 400,000 - - - - 300,000 Annual Citywide Traffic Signal Replacements - 100,000 300,000 300,000 300,000 300,000 1,000,000 ADA Transition Plan within Public Rights of Way 15,431 - - - - - 400,000 Annual Street Resurfacing Program 1,000,000 500,000 500,000 500,000 500,000 500,000 300,000 Rowell Avenue Sidewalk Gap Closure (Curtis & 1st St.) 458,331 - - - - - 100,000 MBB Eastbound Left-Turn Improvement at Aviation Blvd. 1,200,000 - - - - - 100,000 Manhattan Beach Advanced Traffic Signal (MBATS) System 9,385,653 2,000,000 - - - - 100,000 Total Measure M Fund $12,059,415 $3,880,000 $1,120,000 $800,000 $800,000 $800,000 $2,300,000 Measure W Fund
Peck Avenue Storm Drain Improvements - 100,000 - - - - 842,500 TMDL Trash Treatment - 1,960,000 - - - - 1,175,534
Shelley Street Storm Drain Improvements - - - 310,000 920,000 - 100,000 28th Street Stormwater Infiltration 1,605,776 24,288,763 - - - - 319,787 Total Measure W Fund $1,605,776 $26,348,763 - $310,000 $920,000 - $2,437,821 CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 389
Prior Year
Appropriations FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 TOTAL CIP Fund
Police Facility Flooring Replacement - 300,000 - - - - 500,000 Deferred Park Maintenance 1,000,000 - - - - - 2,448,506 Marine Ave. Park Soccer Field Synthetic Turf Replacement - 400,000 - - - - 800,000 Manhattan Heights Park Restroom Building Rehabilitation - 150,000 150,000 - - - 3,942,627 Gateway and Monument Sign Replacement - Design - - - - - 100,000 2,979,402 Renovation of Employee Lounge in City Hall Basement - 100,000 - - - - 160,000 Way Finding Program - Phase 2 - Design - - - - - 100,000 10,830,535 Aquatic Center - Feasibility Study - 150,000 - - - - -
Mariposa Fitness Station Parcourse Equipment Replacement - - - - - 100,000 - Annual ADA Improvements Program (CDBG) 50,000 100,000 100,000 100,000 100,000 100,000 6,471,636 City Council Chambers Renovations - Feasibility - 200,000 - - - - 346,804 Sepulveda/Oak Neighborhood Traffic Calming - - 50,000 - - - 1,883,880 Annual Non-Motorized Transport. Program 242,061 150,000 50,000 50,000 50,000 50,000 8,702,320 City Owned Refuse Enclosures Improvements - Design - - - - - 100,000 - School District Project 6,430 - - - - - -
Begg Field Improvements - 400,000 - - - - 275,000
Sand Dune Park Improvements 200,000 - 1,000,000 - - - 275,000 Solar Power Installation at City Facilities - - - 50,000 50,000 150,000 - Park Improvements Program 50,000 42,500 50,000 200,000 250,000 250,000 - Annual Facilities Capital Maintenance Program 425,534 50,000 100,000 200,000 200,000 200,000 1,750,000 Polliwog Band Stage - Design (Public Arts Trust Fund) 100,000 - - - - - 1,750,000 City Hall HVAC Replacement 119,787 200,000 - - - - 524,390 National Fitness Campaign (NFC) Equipment Installation 172,833 - - - - - 416,975 Senior and Scout Community Center Renovation 2,900,000 3,691,548 - - - - 200,000 Ceramics Studio Renovations (Kiln) 274,120 - - - - - 4,641,365 City Facility Renovations 195,500 300,000 - - - - -
Citywide Security Cameras 560,712 310,000 750,000 1,100,000 1,000,000 200,000 - Biennial Slurry Seal Program - MBUSD - - 100,000 - 100,000 - 1,200,000 Total CIP Fund $6,296,977 $6,544,048 $2,350,000 $1,700,000 $1,750,000 $1,350,000 $50,098,440 Construction Bond Fund
Fire Station No. 2 Replacement 573,475 - - - - - 3,500,000 Total Construction Bond Fund $573,475 - - - - - $3,500,000 CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 390
Prior Year
Appropriations FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 TOTAL Water Fund
Electronics Automation - SCADA, etc. 60,955 - - - - - 4,200,167 Generator Upgrades - Well 15 and Block 35 - 250,000 250,000 - - - 5,619,309 El Porto Water Infrastructure Improvements - Phase 2 - Design - - - - - 200,000 3,170,380 Water Master Plan Update - - 80,000 - 100,000 - 25,117,980 Well Line Replacement on MBB - 1,600,000 - - - - -
Duncan Drive and Sepulveda Blvd Fire Flow Improvements - 80,000 - 450,000 - - - El Porto Water Infrastructure Improvements - Phase 1 - - - 1,200,000 3,400,000 - 474,778 Block 35 Ground Level Reservoir Replacement - Design - - - - 1,200,000 - 2,000,000 Block 35 Elevated Tank Improvements - 50,000 - - - - 2,474,778 Water Meter Upgrade and Automation 295,427 - - - - - -
Larsson Street and 2nd Street Booster Station Improvements 1,114,410 - 1,360,000 - - - - Peck Reservoir Replacement 2,014,665 - - - - - 400,000
Annual Water Infrastructure Improvements 1,030,190 2,000,000 2,450,000 2,750,000 2,200,000 4,000,000 1,841,496 Total Water Fund $4,515,647 $3,980,000 $4,140,000 $4,400,000 $6,900,000 $4,200,000 $45,298,888 Stormwater Fund
Beach Cities Green Streets 362,500 - - - - - 4,600,000
CCTV Storm Drain System 150,000 - - - - - 1,200,000
Golf Course Storm Drain Lift Station Electrical Upgrades - - 50,000 300,000 - - 50,000 Peck Avenue Storm Drain Improvements - 1,530,000 - - - - 295,427 Shelley Street Storm Drain Improvements - - - 100,000 600,000 - 2,474,410 Annual Storm Drain Repairs 1,622,073 - 500,000 500,000 500,000 500,000 2,014,665 Storm Drain Capital Best Management Practices (BMPs) 585,810 210,000 210,000 210,000 210,000 210,000 14,430,190 Total Stormwater Fund $2,720,383 $1,740,000 $760,000 $1,110,000 $1,310,000 $710,000 $25,064,692 Wastewater Fund
Wastewater Master Plan Update - - 330,000 - 100,000 - 700,000 Annual Rehabilitation of Gravity Sewer Mains 2,698,124 1,100,000 700,000 700,000 700,000 700,000 3,622,073 Bell Lift Station Upgrade - - 200,000 100,000 1,400,000 - 1,635,810 Palm Lift Station Upgrade - - 200,000 - 100,000 1,500,000 8,350,383 Meadows Lift Station Upgrade - - 350,000 1,250,000 - - - Voorhees Lift Station Upgrade 4,200,167 - - - - - -
Pacific Lift Station Replacement (Gravity Sewer) 2,019,309 - 3,600,000 - - - 430,000 Poinsettia Ave Sewer Lift Station and Force Main Replacement 3,170,380 - - - - - 6,598,124 Total Wastewater Fund $12,087,980 $1,100,000 $5,380,000 $2,050,000 $2,300,000 $2,200,000 $21,336,390 Parking Fund
Way Finding Program - Phase 1 474,778 - - - - - 495,500 Parking Structure Lot 3 Replacement* - Feasibility/Design - 1,000,000 1,000,000 - - - 3,920,712 Total Parking Fund $474,778 $1,000,000 $1,000,000 - - - $4,416,212 State Pier and Lot Fund
Pier Structural Inspection Update - - 400,000 - - - 500,000 Pier Railing Replacement 1,841,496 - - - - - 200,000
Total State Pier and Lot Fund $1,841,496 - $400,000 - - - $700,000 TOTAL ALL FUNDS $8,834,071 $29,293,763 $4,995,000 $4,575,000 $8,575,000 $4,275,000 $76,926,940 CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGETPage 391
Expenditure Prior Year Proposed FY 2024
Department Description / Vehicle to Be Replaced Type Carryforward Expenditure Proposed Management Services Online Records Management Software Upgrade $15,720 - $15,720 Police Department Bi-Directional Radio Amplifier Replacement 95,000 - 95,000 Police Department Communications & Interoperability Equipment New 72,000 - 72,000 Information Technology City Datacenter Infrastructure Replacement $129,382 129,382 Information Technology Application Delivery Controller Upgrade 85,000 - 85,000 Information Technology Storage Area Network Expansion Replacement 55,000 - 55,000 Information Technology ERP Implementation Consultant Upgrade 20,119 - 20,119 Total Equipment Purchases $342,839 $129,382 $472,221
New Vehicles for FY 2024
Police Department Patrol Vehices New - $160,000 $160,000 Public Works CCTV Van New - 360,000 360,000
Replacement Vehicles for FY 2024
Parks & Recreation Gas Bus (#1010) Replacement - 250,000 250,000 Parks & Recreation Gas Bus (#1008) Replacement - 150,000 150,000 Parks & Recreation Gas Bus (#1009) Replacement - 150,000 150,000 Police Department Replacement Police Go-4s with Trucks Replacement - 100,000 100,000 Police Department BMW Motorcycle (#613) Replacement - 50,000 50,000 Police Department Ford Ranger Truck (#647) Replacement - 50,000 50,000 Fire Department Outfitting and Equip for Fire Engine #715) Replacement - 130,000 130,000 Public Works Case Loader (#862) Replacement - 300,000 300,000 Public Works Ford F150 Truck (#523) Replacement - 60,000 60,000 Public Works National Signal Arrow Lite (#A11) Replacement - 8,000 8,000 Public Works Ford F250 Valve Cycle Truck (#362) Replacement $167,000 - 167,000 Public Works COPCO Portable Generator (#62) Replacement 90,000 - 90,000 Total Vehicle Purchases $257,000 $1,768,000 $2,025,000
Total Funded Capital Purchases - Equipment & Vehicles $599,839 $1,897,382 $2,497,221

TOTAL CAPITAL PURCHASES BY DEPARTMENT
Management Services 15,720 - $15,720
Finance - - -
Human Resources - - -
Parks & Recreation - 550,000 550,000
Police Department $167,000 $360,000 $527,000
Fire Department - 130,000 130,000
Community Development - - -
Public Works 257,000 728,000 985,000
Information Technology 160,119 129,382 289,501
Grand Total $599,839 $1,897,382 $2,497,221
Represents capital expenditures (units > $5k) only.

A majority of the vehicles are purchased by Public Works through the Fleet Fund. A rental charge is then assessed to the respective departments for the estimated life of the vehicle.

FY 2023-2024 SCHEDULE OF CAPITAL PURCHASES - EQUIPMENT & VEHICLES COMPUTER EQUIPMENT & SOFTWARE (Objects 61203 & 61204)
VEHICLES (Object 61401)
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 392

APPENDIX
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 393

MAJOR REVENUE SOURCES
The following are the major revenue sources and basis for estimates for the General Fund. These revenue sources comprise over 75% percent of the City’s General Fund revenues. Other revenues not detailed here are estimated based on local economic trends and historical data.

PROPERTY TAX
Dollars ($)

PROPERTY TAX
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY2021FY2022FY 2023EFY 2024B 20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
Property T ax remains the largest component of General Fund revenues (47% of total), and is expected to increase by 4.1% from the FY 2022-2023 estimate. With a continued strong housing market, and residential construction and remodeling adding to the assessed valuation of properties, a measured continuation of steady growth is expected to continue. Property tax is estimated based on historical data, local economic trends, and independent third party analysis.

SALES & USE TAX
Dollars ($)

SALES & USETAX
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY2021FY2022FY 2023EFY 2024B 7 ,000,000
8,000,000
9,000,000
10,000,000
11,000,000
12,000,000
The City’s second largest General Fund revenue source (11.8% of total revenue) is expected to increase from the current year estimate by $550,000 (5.2%). Bolstered by the recent
revitalization of the Manhattan Village Mall, industry groups performing positively within the City include General Consumer Goods and Restaurants & Hotels.

PARKING CITATIONS
Dollars ($)

PARKING CITATIONS
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY2021FY2022FY 2023EFY 2024B 1,500,000
2,000,000
2,500,000
1,000,000
3,000,000
Parking Citation fees were last increased in FY 2015-2016 in an effort to offset losses in sales tax revenues. The current fine of $53 for most citations is slightly less that what other similar cities asses. A portion of parking citation revenues ($4 of all citations except expired meter cites) is dedicated to the Capital Improvement Fund (not included in the figures here). Additionally, $12.50 of each citations goes to the County and State
Construction Trust Funds.

CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 394

TRANSIENT OCCUPANCY TAX
Dollars ($)

TRANSIENT OCCUPANCY TAX
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY2021FY2022FY 2023EFY 2024B 2,000,000
4,000,000
6,000,000
8,000,000
This revenue is expected to generate approximately $7.2 million in revenue in FY 2023-2024, or $1,300,000 (21.8%) over the current year estimate. This increase is attributed to a planned 2% increase to the TOT rate, bringing the total TOT rate to 14%. TOT revenue also affects the CIP Fund since 15% of the first 10% of TOT is dedicated to that fund.

INTEREST EARNINGS
Dollars ($)

INTERESTEARNINGS
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY2021FY2022FY 2023EFY 2024B 400,000
600,000
800,000
1,000,000
1,200,000
The City invests a portion of its reserved funds as authorized by the Investment Policy. These high-grade investments include Federal agency securities, medium-term notes, and certificates of deposit. Recent moves by the Fed have increased rates slightly, resulting in the City’s maturing investments to be reinvested at slightly higher rates. Additional interest rate increases are predicted in the near future.

BUSINESS LICENSE TAX
Dollars ($)

BUSINESSLICENSETAX
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY2021FY2022FY 2023EFY 2024B 3,000,000
4,000,000
5,000,000
6,000,000
The City issues approximately 6,000 business licenses annually, and revenue from this tax is based primarily on the type of business and gross receipts reported. This tax has been resilient in economic downturns and has remained consistent over the past few years, but has seen impacts due to the nature of the social response to the COVID-19 pandemic. Business License T ax is anticipated to come in $350,000 (7.8%) above the FY 2022- 2023 estimate.

CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 395

BUILDING PERMITS & PLAN CHECK FEES
Dollars ($)

BUILDING PERMITS & PLAN

CHECK FEES
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY2021FY2022FY 2023EFY 2024B 2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
Residential and Commercial building activity remains strong within the City. Building Permit and Plan Check fees are currently at all- time highs due to several large commercial projects. At the current fee structure, fees from Building Permits and Plan Check Services are expected to decrease by roughly $100,000 (2.9%) from the year-end estimates in FY 2022-2023.

AMBULANCE & POLICE FALSE ALARM FEES
Dollars ($)

AMBULANCE & POLICE FALSE

ALARM FEES
FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY2021FY2022FY 2023EFY 2024B 600,000
700,000
800,000
900,000
1,000,000
1,100,000
Since FY 2010-2011, ambulance service fees are matched to those of Los Angeles County, and the number of free police false alarms per 12-month period was reduced from two to one
resulting in a jump in those fees that year. Since then, these fees have leveled off and are expected to remain steady in future years. Ambulance fees are based on the total number of
Advanced Life Support (ALS) and Basic Life Support (BLS) transports.

CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 396

CITYWIDE ADOPTED SCHEDULE OF FULL-TIME POSITIONS
DEPARTMENT FY 2021-2022 FY 2022-2023 FY 2023-2024 CHANGE Management Services* 16 16 16 -
Finance 18 18 18 -
Human Resources 8 8 8 -
Parks & Recreation 21 21 21 -
Police 105.8 106.8 117 10.2
Fire 32.2 34.2 37 2.8
Community Development 31 33 34 1
Public Works 64 71 72 1
Information Technology 9 10 10 -
TOTAL ADOPTED FULL-TIME POSITIONS 305 318 333 13
*Includes five elected Councilmembers and elected City Treasurer

PERSONNEL CHANGES
The Fiscal Year 2023-2024 Budget includes 333 authorized full-time positions, which includes three full-time Fire Department positions added on November 15, 2022, and 10 full-time Police Department positions added on February 21, 2023.

MANAGEMENT SERVICES
No Changes.

FINANCE
Upgraded three Account Services Representatives I/II to Account Specialists I/II.

Upgraded two Revenue Services Specialists to Revenue Analysts.

HUMAN RESOURCES
No Changes.

PARKS & RECREATION
Upgraded one Recreation Coordinator to Marketing Specialist.

POLICE
No changes.

FIRE
No changes.

COMMUNITY DEVELOPMENT
Added one Permit Technician.

Upgraded one Building Services Analyst to Senior Business Services Analyst Upgraded one Senior Building Inspector to Principal Building Inspector.

PUBLIC WORKS
Added one Associate Engineer.

Upgraded Utilities Senior Management Analyst to Water Compliance Administrator.

INFORMATION TECHNOLOGY
No changes.

CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 397

MANAGEMENT SERVICES DEPARTMENT
Assistant City Clerk 1
Assistant T o The City Manager 1
City Clerk 1
City Council Member 5
City Manager 1
City Treasurer 1
Comm/Civic Engagement Manager 1
Deputy City Clerk 1
Digital Comm & Graphics Coordinator 1
Executive Assistant T o CM/CC 1
Marketing & Communications Coordinator 1
Policy & Management Analyst 1
Management Services T otal 16

FINANCE DEPARTMENT
Account Specialist I/II 3
Accountant 1
Accounting & Payroll Supervisor 1
Administrative Assistant 1
Budget & Financial Analyst 1
Finance Director 1
Executive Assistant 1
Financial Controller 1
Financial Services Manager 1
Purchasing Analyst 1
Purchasing Assistant 1
Purchasing Supervisor 1
Revenue Analyst 2
Revenue Services Supervisor 1
Senior Accountant 1
Finance T otal 18

HUMAN RESOURCES DEPARTMENT
Human Resources Director 1
Executive Assistant 1
Human Resources Manager 1
Human Resources T echnician 3
Risk Manager 1
Senior Human Resources Analyst 1
Human Resources T otal 8
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 398

PARKS & RECREATION DEPARTMENT
Administrative Analyst 1
Administrative Assistant 1
Cultural Arts Manager 1
Director of Parks & Recreation 1
Marketing Specialist 1
Recreation Coordinator 2
Recreation Supervisor 8
Senior Management Analyst 1
Senior Recreation Manager 1
Senior Recreation Supervisor 3
Transportation Serv Operator 1
Parks & Recreation T otal 21

POLICE DEPARTMENT
Administrative Assistant 2
Background Investigator 1
Police Chief 1
Community Services Officer 12
Crime Analyst 1
Executive Assistant 2
Lead Police Records T echnician 2
Office Assistant 3
Park Services Enforcement Officer 1
Police Captain 2
Police Lieutenant 5
Police Officer 53
Police Records Manager 1
Police Records Specialist 1
Police Records T echnician 7
Police Sergeant 11
Police Services Officer 7
Police Support Supervisor 1
Property & Evidence Officer 1
Public Safety Systems Specialist 1
Senior Management Analyst 1
T echnology Specialist 1
Police T otal 117
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 399

FIRE DEPARTMENT
Division Chief 3
Emergency Preparedness Administrator 1
Executive Assistant 1
Fire Captain/Paramedic 9
Fire Chief 1
Fire Engineer/Paramedic 6
Fire Inspector 2
Fire Marshal 1
Firefighter/Paramedic 12
Management Analyst 1
Fire T otal 37

COMMUNITY DEVELOPMENT DEPARTMENT
2 2
1 3
2 1
4 1
1 1
1 1
3 1
1 1
1 1
1 1
1 1
1 1
Administrative Analyst
Administrative Assistant
Assistant Planner
Associate Planner
Building Inspector
Building Official
Code Enforcement Officer I/II
Code Enforcement Supervisor
Community Development Director
Environmental Programs Administrator
Executive Assistant
Office Assistant
Permits Technician
Plan Check Engineer
Planning Manager
Planning Technician
Principal Building Inspector
Senior Building Inspector
Senior Business Services Analyst
Senior Management Analyst
Senior Permits Technician
Senior Plan Check Engineer
Senior Planner
Traffic Engineer
Community Development Total
34 CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 400

PUBLIC WORKS DEPARTMENT
Administrative Assistant 3
Associate Engineer 2
Building Maintenance T echnician 3
City Engineer 1
Electrician 2
Equipment Maintenance Supervisor 1
Equipment Mechanic I/II 3
Executive Assistant 1
Facility Supervisor 1
Field Operations Manager 1
Field Operations Supervisor 1
Lead Maintenance Worker 4
Lead Sewer Maintenance Worker 1
Lead Water System Operator 1
Lead Water Treatment Operator 1
Maintenance Inspector 1
Maintenance Worker I/II 8
Management Analyst 1
Meter Repair Worker 2
Principal Civil Engineer 2
Public Works Director 1
Public Works Inspector 2
Senior Civil Engineer 6
Senior Engineering T echnician 1
Senior Management Analyst 3
Sewer Maintenance Worker 4
Urban Forester 1
Utilities Manager 1
Utilities T echnician 2
Wastewater Supervisor 1
Water Compliance Administrator 1
Water Meter T echnician 1
Water Supervisor 1
Water System Operator I/II 3
Water System Operator III 2
Water Treatment Operator 2
Public Works T otal 72

INFORMATION TECHNOLOGY DEPARTMENT
Applications Analyst 2
Director of Information T echnology 1
GIS Administrator 1
Senior Management Analyst 1
T echnology Specialist 3
T echnology Systems Engineer 2
Information T echnology T otal 10

CITYWIDE
T otal 333
CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 401

SCHEDULE OF ADMINISTRATIVE SERVICE CHARGES
In Fiscal Year 2019-2020, the City retained the services of Matrix Consulting Group, a firm that specializes in municipal cost allocation plans. Based on their analysis, the following funds receive support from the General Fund in the form of salary and benefits of support staff, utilities, depreciation on buildings, and other indirect costs. The study conducted in FY 2019-2020 was adopted by the City Council on February 18, 2020.

CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 402

CITY DEBT SERVICE
Pension Obligation Bonds – Citywide
Maturity Date: January 1, 2043
In Fiscal Year 2020-2021, the City issued $91.3 million in Pension Obligation Bonds and prepaid 100% of the CalPERS Unfunded Accrued Liability (UAL) of $90.8 million (projected UAL based on the June 30, 2019 valuation) in May 2021. With lower interest rates paid on the bonds compared to the current 7% discount rate charged by CalPERS, the City’s potential budgetary savings is estimated at $36.4 million over 22 years. The City’s Public Safety (Police and Fire) and Miscellaneous plans were combined to align repayment schedules with a maturity date of 2043 thereby reducing the amortization period. The new level debt service payments, averaging $5.5 million annually City-wide, can be found in the Debt Service category in each department’s General Fund Administration program as well as in any Enterprise and Internal Service Fund with a staffing allocation.

Marine Sports Fields Lease – General Fund
Maturity Date: January 1, 2033
In Fiscal Year 2001, the City entered into a Sale/Leaseback transaction with the Beach Cities Health District (BCHD). This transaction was a result of the City purchasing from TRW (now Northrup Grumman) seven acres of property located at the corner of Marine and Aviation within the City of Manhattan Beach. The City subsequently sold the property to BCHD with an exclusive agreement to lease back six of the seven acres. The lease authorized BCHD to spend funds up to $2.5 million to construct recreational facilities on the property. These improvements were completed in Fiscal Year 2000-2001. In Fiscal Year 2002, the City issued variable rate Certificates of Participation to effect a full internal financing of the Sports Fields. The proceeds were used to pay in full all principal and interest obligations under the aforementioned lease with BCHD.

In Fiscal Year 2016-17, the City refunded the variable rate Certificates of Participation and issued fixed rate Certificates of Participation to secure lower interest rate payments through the maturity date of 2033. Debt service payments can be found in the Parks & Recreation Administration program budget.

Metlox Refunding Certificates of Participation – Parking Fund Maturity Date: January 1, 2032
In January 2003, the City issued Certificates of Participation to pay for public improvements at the Metlox site. These funds were used to construct a two-level underground parking garage as well as a 45,000 square foot town square open space to complement the retail developments. The original amount issued was $13,350,000. In July 2012 and December 2021, with call dates approaching, the City took advantage of lower interest rates by refinancing the outstanding Certificates of Participation. The December 2021 refinancing for the outstanding balance of $5,025,000 resulted in savings of approximately $94,000 per fiscal year through 2032.

Water/Wastewater Refunding Certificates of Participation – Water Fund / Wastewater Fund Maturity Date: January 1, 2026
The original debt (issued in 1996) was used to finance 1996 and 1997 water and wastewater projects. Since these bonds could be called without penalty, the City issued Certificate of Participation refunding bonds in July 2012 and December 2021 (concurrent with the Metlox refunding bonds) to take advantage of lower interest rates. The December 2021 refinancing for the outstanding balance of $900,000 resulted in savings of approximately $9,950 per fiscal year through 2026.

Police/Fire Facility Refunding Certificates of Participation – CIP Fund Maturity Date: January 1, 2032
In February 2013, the City issued $10,510,000 of Certificates of Participation to advance refund the 2004 Police Fire Facility Certificates of Participation. This refunding mirrors that of the Metlox and Water/Wastewater refunding in that the City took advantage of the reduced interest rate environment. This advance refunding reduced debt service payments over 19 years by $3,608,790. The original certificates were issued to complete financing for the January 2007 construction of the Police/Fire/Civic Center.

Fire Station No. 2 Certificates of Participation – CIP Fund Maturity Date: January 1, 2051
In August 2021, the City issued $7,440,000 of Certificates of Participation to fund the reconstruction of Fire Station No. 2, which was originally constructed in 1954 and no longer met current standards for seismic retrofitting or operational needs.

Legal Debt Limit
The City is subject to a legal general bonded debt limit equal to 3.75 percent of the total assessed value of property in Manhattan Beach.

The City’s total net taxable assessed property value is approximately $21.2 billion, resulting in a legal general bonded debt limit of $795,000,000. The City has no general bonded debt subject to the debt limit.

CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 403

ASSESSMENT DISTRICTS
Underground Utility Assessment Bonds 2018 Refunding – Special Assessment UUAD 2018 Refunding Maturity Date: September 2, 2026
In fiscal years 2005 and 2006, the City issued 1915 Act Underground Utility Assessment Bonds that financed the undergrounding of overhead utilities in five districts within the City. The two series were refinanced in FY 2017-18 to take advantage of lower interest rates.

The City acts as a conduit between the property owners and the bond holders, and therefore these bonds are not debt of the City.

Assessments are placed on the property tax bill in order to fund annual debt service.

Underground Utility Assessment Bonds 19-12 & 19-14 – Special Assessment UUAD 19-12 & 19-14 Maturity Date: September 2, 2040
In 2019, the City issued 1915 Act Underground Utility Assessment Bonds that financed the undergrounding of overhead utilities in two districts (19-12 & 19-14) within the City. The City acts as a conduit between the property owners and the bond holders, and therefore these bonds are not debt of the City. Assessments are placed on the property tax bill in order to fund annual debt service.

Underground Utility Assessment Bonds 19-4 – Special Assessment UUAD 19-4 Maturity Date: September 2, 2040
In 2019, the City issued 1915 Act Underground Utility Assessment Bonds that financed the undergrounding of overhead utilities in district 19-4 within the City. The City acts as a conduit between the property owners and the bond holders, and therefore these bonds are not debt of the City. Assessments are placed on the property tax bill in order to fund annual debt service.

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FY 2023-2024 SCHEDULE OF DEBT SERVICE & LEASE PAYMENTS
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CITY OF MANHATTAN BEACH FINANCIAL POLICIES
Proposed for Adoption by City Council on June 6, 2023
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STATEMENT OF PURPOSE
The financial integrity of our City government is of utmost importance. T o discuss, write, and adopt a set of financial policies is a key element to maintaining this integrity. Our City has developed a variety of financial policies that can be found on the City’s website (www.manhattanbeach.gov). The set of policies within this document, adopted concurrently each year with our budget, serves as a central reference point of the most important of our policies, which are critical to the continued financial health of our local government.

Written, adopted financial policies have many benefits, such as assisting the elected officials and staff in the financial management of the City, saving time and effort when discussing financial matters, facilitating financial transparency, and providing continuity over time as elected officials and staff members change. While these policies will be amended periodically, they will provide the foundation and framework for many of the issues and decisions facing the City. They will promote sound financial management and assist in the City's fiscal stability, efficiency and effectiveness.

The Financial Policies are divided into nine general categories for ease of reference. These categories include:

1. General Policies;

2. Accounting, Auditing, and Financial Reporting Policies;

3. Fund Balance Policies;

4. Debt Policies;

5. Revenue Policies;

6. Capital Improvement Policies;

7. Capitalization & Depreciation Policies;

8. Cash Management & Investment Policies; and

9. Operating Budget Policies.

The Financial Policies also reference the following City Policies, which are also available on the City’s website at www.ManhattanBeach.gov/FinancialPolicies:

Budget Policy
Debt Management and Disclosure Policy
Investment Policy
Pension Policy

1 - GENERAL POLICIES
The City will:
manage its financial assets in a sound and prudent manner; maintain and further develop programs to ensure its long-term ability to pay all costs necessary to provide the level and quality of service required by its citizens;
implement performance measurements as part of an ongoing effort to ensure high-quality and efficient services; establish and maintain appropriate cash reserves;
establish and maintain investment policies that are in accordance with State laws; and maintain long-term fiscal sustainability through conservative forecasting and proactive efforts to achieve structurally balanced operating budgets where recurring revenues equal or exceed recurring expenditures.

2 - ACCOUNTING, AUDITING, AND FINANCIAL REPORTING POLICIES

FINANCIAL INFORMATION
It is the policy of the City of Manhattan Beach to provide all financial information in a thorough and timely fashion, and in a format that is easy for City Council, residents, and staff to understand and utilize.

ACCOUNTING STANDARDS
The City's accounting of financial systems shall be maintained in accordance with Generally Accepted Accounting Principles (GAAP), standards of the Governmental Accounting Standards Board (GASB), and the Government Finance Officers Association (GFOA).

ANNUAL AUDIT
An independent public accounting firm will perform an annual audit and its opinions will be included in the Annual Comprehensive Financial Report.

The independent audit firm will be reviewed and selected at least once every five years. The contract will be for a period of no more than five years. The Finance Subcommittee, City Manager and Finance Director will review the qualifications of prospective firms and make a recommendation to the City Council. The audit contract will be awarded by the City Council.

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An Annual Comprehensive Financial Report shall be prepared within six months of the close of the previous fiscal year. It will be reviewed with the Finance Subcommittee, and presented to the City Council and community at a public meeting no later than February 1 of the following year.

It is the City’s goal to maintain accounting records, processes and procedures in such a manner as to receive an unmodified audit opinion and to maintain a Certificate of Achievement for Excellence in Financial Reporting from the GFOA. 3 - FUND BALANCE POLICIES
The City utilizes a variety of accounting funds for recording revenues and expenditures. Fund balance is defined as the difference between the assets and liabilities within a fund. At each fiscal year-end, budgeted/appropriated expenditure authority lapses with the exception of capital project spending, and operating expenses that have been incurred but not paid (encumbered). The remaining dollars left in each fund that are Unassigned constitute available funds of the City. The Unassigned fund balance shall include the City’s Financial Policy components. The City Council authorizes the City Manager or Director of Finance to make assignment of funds. Where City Council has not established a formal policy, the Governmental Accounting Standards Board Statement 54 will be operative.

GENERAL FUND
The General Fund Unassigned Fund Balance will be maintained in an amount equal to at least 20 percent of the annual General Fund expenditure budget. These funds are designed to be used in the event of significant financial emergency.

City Council may, at its discretion, set aside additional policy reserve funds above the 20% minimum. The City currently has funds set aside in an Economic Uncertainty reserve to be used at City Council’s discretion.

Additional amounts may be allocated for specific purposes, such as capital projects or known significant future cost items. Any residual balance from these commitments shall be returned to the General Fund Unassigned Fund Balance for general operational working capital uses.

ENTERPRISE FUNDS
The City's Enterprise Funds (Water, Stormwater, Wastewater, Parking, County Parking Lots, and Pier) will maintain reserves equal to four months or 33% of operating expenses. If reserves in any Enterprise Fund are anticipated to be less than this policy, then it shall be noted in the City’s Budget document and a plan will be developed by Finance staff to address the reserve level.

FLEET MANAGEMENT FUND
Using the Fleet Management Fund, the City will annually budget sufficient funds to provide for the orderly maintenance, repair and replacement of the City's vehicles. This Fund is supported by charges to user departments, which are adjusted annually, based on the department’s proportionate share of estimated fleet management expenses. Sufficient working capital will be maintained in the fund to provide for the scheduled replacement of fleet vehicles at the end of their useful lives.

INFORMATION TECHNOLOGY FUND
Using the Information T echnology Fund, the City will annually budget sufficient funds to provide for the orderly maintenance, repair and replacement of the City's technology infrastructure. This Fund is supported by charges to user departments, which are adjusted annually, based on departments’ proportionate share of estimated expenses. Such share may be determined based upon the departments’ number of devices supported by the Information T echnology Department. Sufficient reserves will be maintained in the Fund for department operations and equipment replacements as appropriate.

INSURANCE RESERVE FUND
The City maintains a self-insurance fund for property, liability, and workers' compensation expenses. This fund pays insurance premiums, benefit and settlement payments up to the Self-Insured Retention (SIR), and administrative and operating expenses. The Insurance Reserve Fund is supported by charges to other City funds for the services it provides. These annual charges for service shall be established to approximately equal the annual expenses of the fund, plus any additional charges to maintain reserves.

Reserves shall be maintained for current and long-term general liability and workers’ compensation liability. Current liability is determined monthly by analyzing the current case reserves and determining the amount the City is liable for up to the SIR. The long-term liability reserves shall be at minimum 50% of the Incurred But Not Reported (IBNR) as determined by a biennial actuarial report. If the reserves fall below policy, then Finance staff will develop a long-term plan to raise reserves up to the policy.

TRUST AND AGENCY FUNDS
The City maintains funds on a trustee basis for a number of purposes. These funds shall be segregated from the City’s general funds.

Other Post-Employment Benefits (OPEB): This account was established to track payments for post-employment benefits. The City has a retiree medical program that pays a portion of the employee’s medical costs if certain criteria are met. Additionally, the CITY OF MANHATTAN BEACH | FY 2023-2024 BUDGET Page 409
City also funds ongoing PEMHCA contributions. These OPEB benefits are reimbursed with funds held by the California Employees’ Retirement Benefit Trust (CERBT) administered by CalPERS.

Section 115 Pension Trust: The purpose of this account is to track the funds deposited in the City’s Section 115 pension trust. This trust is used to set aside monies to meet future pension contributions or liabilities.

Utility Underground Assessment District (UUAD) Projects: When a UUAD is formed, the City establishes an account to track the bond proceeds and expenditures for each project. Additionally, revenues from direct assessments are deposited into these accounts and later used to pay debt service payments on bonds as well as other administrative fees.

4 - DEBT POLICIES

ISSUANCE OF DEBT
The City will not use long-term debt to pay for current operations. A Debt Management and Disclosure Policy was adopted by the City Council on January 16, 2018, to establish guidelines and parameters for the effective governance, management and administration of debt.

The use of bonds or certificates of participation will only be considered for significant capital and infrastructure improvements. The term of the debt shall not extend beyond the useful life of the improvements to be financed.

The use of pension obligation bonds (POBs) may be used to extinguish accrued actuarial pension liabilities if market conditions prove the debt issuance to be advantageous to the City’s long-term fiscal sustainability. Issuance of POBs and payments will be in accordance with the Unfunded Pension Liability Policy adopted by the City Council on March 2, 2021, to provide guidance on the development and adoption of funding plans for the City’s defined benefit pension plans.

CREDIT RATING
It is the City’s goal to maintain our AAA credit rating from one or more rating agencies. The factors that contribute to our high rating include the City’s strong financial management, low debt levels, budgetary and fiscal controls, and accountability. T o support this policy, the City will continue to maintain its position of full financial disclosure and proactive fiscal planning.

LEASE-PURCHASE
The City may lease-purchase equipment if necessary because of funding availability, or if lease rates are more favorable than the rate attained from investment return. Equipment may also be leased if the lease terms compare favorably when reviewing the total life cycle cost of the equipment. In no case shall the City lease-purchase equipment with a useful life less than the term of the lease.

5 - REVENUE POLICIES

GENERAL FUND REVENUE
The City will strive to develop and maintain diversified and reliable revenue streams to avoid becoming overly dependent on any single type of revenue. Efforts will be directed to optimize existing revenue sources while periodically reviewing potential new revenue sources.

Budgeted revenues will be estimated conservatively using accepted standards and estimates provided by the State, other governmental agencies or reliable economic forecasters when available.

If revenues from “one-time” or limited duration sources are used to balance the City’s annual operating budget, it is to be fully disclosed and explained at the time the budget is presented. It is the City’s goal to not rely on these types of revenues to balance the operating budget.

The City will pursue revenue collection and auditing to assure that moneys due the City are accurately received in a timely manner.

The City will seek reimbursement for State and Federal mandated costs whenever possible.

GRANTS
The City shall actively pursue Federal, State and other grant opportunities when deemed appropriate. Before accepting any grant, the City shall thoroughly consider the implications in terms of ongoing obligations that will be required in connection with acceptance of said grant.

ENTERPRISE FUND CHARGES
The City will set user fees for each enterprise fund at a rate that fully covers direct and indirect costs of providing the service, as well as planned capital improvements.

PARKS AND RECREATION FEES
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All Parks and Recreation department expenses and revenues will flow through the General Fund (except those transactions related to Proposition “A” transit funds). The goal of the Parks and Recreation Department shall be to generate General Fund revenue equal to at least 35 percent of the total General Fund expenditures of the department.

Recreation fees for such activities as classes and room rentals shall be established and reviewed periodically. The purpose of these fees is to recover the direct cost of the program, and to generate additional revenues to support the overall operation of the Parks and Recreation department and programs. As appropriate within the marketing of the recreation programs, higher non-resident fees are charged, as well as priority registration procedures for Manhattan Beach residents.

COST RECOVERY FEES
A user fee is a cost recovery charge for a service provided by a governmental agency to a public citizen or group. In accordance with State laws and government codes, such fees will recover the cost of providing the service, including all direct and indirect costs, administrative overhead, depreciation, etc.

The City conducts a user fee study and comprehensive cost allocation plan (CAP) to determine reasonable amounts to charge. The fees are reviewed periodically, but not less than every four years, to ensure that full cost recovery levels are identified and aligned with current salary and benefit rates as approved in employee labor group agreements. By policy, City Council may direct certain fees to be lowered for particular purposes. Waivers of user fees will be presented for City Council approval as appropriate.

The CAP study also determines appropriate administrative charge-outs for the support each fund receives from other funds. Additionally, engineering support is charged out directly by determining the amount of time each engineer works on a specific project or program.

Fees such as parking meter rates, fines, facility rentals, recreation class fees, etc. are based upon market conditions and are not subject to the limitations of cost recovery. These fees may be adjusted periodically by the City Council.

6 - CAPITAL IMPROVEMENT POLICIES

DEDICATED CIP FUNDING SOURCES
Most of the City's infrastructure has a designated revenue source to pay for its upgrade or replacement as appropriate. For example, water/wastewater rates fund utility infrastructure needs; gas tax revenues fund street needs; and storm drainage needs are paid for with related fees and assessments. However, our public buildings and our park system are the primary beneficiaries of the City's Capital Improvement Fund (CIP). Specific revenue sources have been designated to provide permanent funding in support of general operational infrastructure. In particular, the City has dedicated:

12.5% of annual hotel transient occupancy tax (1.5% of the 12% tax); Fifty cents of the per hour charge for all on-street City parking meter collections; and $4 of each parking citation (with the exception of expired meter citations).

Transfers into the CIP Fund will be processed by the Finance Department on a monthly basis and recorded as such in the annual adopted budget.

FIVE YEAR CAPITAL IMPROVEMENT PROGRAM (CIP)
The City shall annually prepare a capital improvement spending program that projects capital needs for a five-year period. This CIP shall address all of the City’s funds.

The first year of the Five Year CIP will be consistent with, and adopted as a component of, the annual operating budget.

In the development of the Capital Improvement Program, operating costs associated with capital projects will be estimated and considered in conjunction with the CIP and operating budget as appropriate.

ENTERPRISE FUND CAPITAL IMPROVEMENTS
Capital Improvements funded from the Enterprise Funds shall be paid for in combination of "pay-as-you-go" financing and the use of long- term debt. The City shall periodically review its enterprise capital needs and establish capital spending plans that are appropriate and reflect a combination of debt and "pay-as-you-go," while attempting to keep our rates competitive with those in the surrounding area.

7 - CAPITALIZATION & DEPRECIATION POLICIES
The City shall capitalize equipment and facilities within the following parameters:

Fixed Asset Equipment $5,000 or more per unit
Capital Projects - $100,000 or more

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Minor equipment that falls below the $5,000 threshold, but is subject to shrinkage, such as cellular telephones and computers, shall have a non-numbered City of Manhattan Beach property tag affixed when placed into City service.

The City shall depreciate capital assets such as machinery, equipment, buildings and improvements, and infrastructure (roads, sidewalks, parks, etc.). Depreciation shall be performed on a straight-line basis over the expected useful life of the asset and in accordance with Generally Accepted Accounting Principles (GAAP). 8 - CASH MANAGEMENT & INVESTMENT POLICIES
The Finance Subcommittee & City Council shall annually review and update, or modify as appropriate, the City’s Investment Policy. The Policy shall be adopted by action of the City Council based upon the Finance Subcommittee’s recommendations.

Reports on the City's investment portfolio and cash position shall be provided to the City Council monthly. Invested funds will be managed in a prudent and diligent manner with emphasis on safety, liquidity, and yield, in that order. 9 - OPERATING BUDGET POLICIES

BALANCED OPERATING BUDGET
A Budget Policy was adopted by the City Council on October 15, 2019, to provide guiding budget principles encompassing the development, implementation, and evaluation of a spending plan for the provision of services and capital assets. It is the City’s policy to adopt a balanced budget where operating revenues are equal to, or exceed, operating expenditures. In the event a balanced budget is not attainable, and the cause of the imbalance is expected to last for no more than one year, the planned use of reserves to balance the budget or make one-time purchases is permitted. In the event that a budget shortfall is expected to continue beyond one year, the planned use of reserves must be developed as part of a corresponding strategic financial plan to close the gap through revenue increases or expenditure decreases.

Any year-end operating surpluses will revert to unassigned fund balances for use in maintaining reserve levels set by policy and will be available for capital projects and/or "one-time only" General Fund expenditures.

BUDGET DOCUMENT
The operating budget shall serve as the financial plan for the City. It will serve as the policy document of the City Council for implementing its goals and objectives. The budget shall also provide the resources necessary to accomplish City Council determined service levels.

The City Manager shall annually prepare and present a proposed operating budget to the City Council no later than the second regular City Council meeting in May of each year; and City Council will adopt the budget no later than June 30 of each year. Funds may not be expended or encumbered in the following fiscal year until the budget has been adopted by the City Council.

The City’s budget document will be presented by department, with a logical breakdown of programs and proposed expenditures. The purpose of this format is to clearly outline the major service areas and associated expenditures. The budget document will also summarize expenditures at the personnel, operating and maintenance, and capital levels.

The City's budget document will include budgetary goals and performance measures to describe the workload of each department as well as track departments’ efficiency and effectiveness in providing desired service levels.

BUDGET CONTROL AND ACCOUNTABILITY
Budget control is maintained at the departmental level. The City Manager has the authority to approve appropriation transfers between programs or departments. In no case may total expenditures of a particular fund exceed that which is appropriated by the City Council without a budget amendment. Amendments to the budget are approved by the City Council with the exception of unexpended appropriations from the prior fiscal year may be carried forward to the next fiscal year provided the funds have been previously encumbered for a specific purpose, or apply to authorized, but uncompleted, projects in the adopted Capital Improvement Plan. Such amendments may be approved by the City Manager.

Budget accountability rests primarily with the operating departments of the City.

BUDGET REPORTING
Monthly reports showing budgeted and actual revenues and expenditures will be prepared and provided to the City Council. Additionally, department staff have access to the City’s financial system and receive monthly year-to-date budget and actual expenditure reports.

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BUDGET POLICIES

GENERAL BUDGET POLICY
The budget process consists of activities that encompass the development, implementation, and evaluation of a plan for the provision of services and capital assets. The mission of the budget process is to help the City Council make informed choices about the provision of those services and capital assets, and to promote stakeholder participation in the process. According to the National Advisory Council on State and Local Budgeting, the budget process:

Incorporates a long-term perspective, including long range forecasting; Establishes linkages to broad organizational goals;
Focuses budget decisions on results and outcomes;
Involves and promotes effective communication with stakeholders; and Provides guidance to government management and employees.

I
n addition to these key characteristics, the City has Financial Policies (located in the Appendix of the Budget), and general Budget Policies which are the basis on which staff develops budget recommendations and establishes funding priorities within the limited resources the City has available to provide municipal services. These Budget Policies are as follows:
1 . Overall Budget Principles
a. The budget shall be a performance, financing, and spending plan adopted by the City Council. It will contain information and data regarding expected revenues and expenditures, as well as goals and performance metrics. b. The Finance Director shall prepare and present a budget preparation calendar to City Council by the end of January each year. The calendar will include review dates as well as City Council budget study session dates. c. The City Manager prepares and refines written policies and goals to guide the preparation of performance, financing and spending plans for the City’s Budget. Adopted budgets will comply with the adopted policies and City Council priorities. d. The City’s budget presentation shall display the City’s plan in a Council Constituent-friendly format. The City will use a program budgeting format to convey the purposes and goals of the City operations. The City will also prepare and post on its website the line item detail for those who wish to review that information. e. Decision making for capital improvements will be coordinated with the operating budget to make effective use of the City’s limited resources for operating and maintaining facilities. f. The City Manager has primary responsibility for formulating budget proposals in line with City Council priority directions, and implementing those proposals once they are approved.
g. The budget will be developed with an understanding of what the City is required to do versus what it has chosen to do. h. Consideration shall be given to alternative service delivery options and opportunities to innovate. a. Staff will pursue the streamlining of processes and reduction of costs wherever possible. j. The City shall actively pursue federal, state and other grant opportunities when deemed appropriate. k. T otal compensation will be considered when negotiating/setting employee salaries and benefits. l. Staffing will be set at a level appropriate to the service needs of the community. Authorized positions, as approved by the City Council, are included in the Budget. The City Manager may approve short-term over-hires for authorized positions based on organizational needs, provided that budgetary savings are available within the requesting department. 2 . Fiscal Integrity
a. Ongoing operating expenditure budgets will not exceed the amount of ongoing revenue budgets. New program requests will identify either a new ongoing source of revenue or identify offsetting/ongoing expenditures to be eliminated. b. Any year end operating surpluses will revert to unappropriated balances for use in maintaining reserve levels set by policy and will be available for capital projects and/or “one-time only” expenditures. c. The City will maintain the fiscal integrity of its operating and capital improvement budgets which provide services and maintain certain public facilities, streets and utilities. It is the City’s intent to maximize the level of public goods and services while minimizing the level of debt.
d. The City will maintain a structurally balanced operating budget which is defined as projected on-going (core) revenues equal to or in excess of planned expenditures, excluding approved one-time capital purchases. e. Prior year budgetary savings resulting from vacant full-time positions (“vacancy savings”) will be analyzed with each budget cycle. Vacancy savings may be included in the operating budget provided that:
f. The vacancy factor used to estimate savings is based on a three-year simple moving average of prior year trends. g. The vacancy factor does not exceed 4.0% of salaries in line with the City’s conservative budgeting approach. h. Restricted funds and non-General Fund moneys shall be utilized first when appropriate. a. One time resources shall not be used for on-going expenses. j. Long term debt shall not be utilized to fund on-going operations. k. Adequate reserves shall be maintained and enhanced, and reviewed annually by the City Council through the budget process.

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3. Revenues
a. Budgeted revenues will be estimated conservatively using accepted standards and estimates provided by the state, other governmental agencies or reliable economic forecasters when available. b. Generally, revenue estimates shall not assume growth rates in excess of inflation and scheduled rate increases. c. If revenues from “one-time” or limited duration sources are used to balance the City’s annual operating budget, it is to be fully disclosed and explained at the time the budget is presented. It is the City’s goal to not rely on these types of revenues to balance the operating budget.
4 . Funding Non-Current Liabilities
a. Maintenance and Replacement funding will be prioritized each year to ensure that capital facilities and equipment are sufficiently maintained to avoid service disruptions and minimize future costs. A schedule of equipment replacements will be maintained and included in the five year projections.
b. The City obtains Valuation Reports containing actuarially determined contributions (ADC) for the purpose of funding the long- term costs of benefits provided to employees and annuitants through Pension and Other Post-Employment Benefits (OPEB) plans. The ADC includes the “Normal Cost” for current service and Amortization of any under-funded amount. The City will review all Valuation Reports to validate the completeness and accuracy of the member census data and the reasonableness of the actuarial assumptions.
i. Pension and OPEB costs will be budgeted no less than the full amount of the ADC, including the Normal Cost (as a percent of current payroll) and Amortization to collect any under-funded amount. ii. The funding status of the City’s Pension and OPEB plans will be presented during annual budget presentations to assist the City Council in resource allocation decisions. In addition to the ADC, additional funds (e.g. budgetary surpluses or unanticipated one-time revenues) may also be allocated toward the City’s unfunded liabilities to accelerate the payoff.
5 . Internal Service Charges
The City will utilize Internal Service Funds to allocate costs incurred across multiple departments, including fleet, technology, insurance costs including workers compensation and liability, and building maintenance and operational costs. a. Fleet Management Fund
i. Through the use of the Fleet Management Fund, the City will annually budget sufficient funds to provide for the orderly maintenance, repair and replacement of the City's vehicles. This fund is supported by charges to user departments which are adjusted annually based on the department’s proportionate share of estimated fleet management expenses.

Sufficient working capital will be maintained in the fund to provide for the scheduled replacement of fleet vehicles at the end of their useful lives.
ii. In order to maintain an optimal working fleet and minimize repair costs, it is the City’s intent to follow the established vehicle replacement schedule.
b. Information T echnology Fund
i. Through the use of the Information T echnology Fund, the City will annually budget sufficient funds to provide for the orderly maintenance, repair and replacement of the City's technology infrastructure. This fund is supported by charges to user departments which are adjusted annually based on departments’ proportionate share of estimated expenses.

Such share may be determined based upon the departments’ number of devices supported by the IT Department. c. Insurance Reserve Fund
i. The City maintains a self-insurance fund for the purpose of property, liability, and workers' compensation expenses.

This fund pays insurance premiums, benefit and settlement payments, and administrative and operating expenses. ii. The Insurance Reserve Fund is supported by charges to other City funds for the services it provides. These annual charges for service shall reflect historical experience and shall be established to approximately equal the annual expenses of the fund.
iii. Separate reserves shall be maintained for current and long term general liability and workers’ compensation liability at a level which will adequately fund the City’s potential loss exposure in each area as determined by historical loss data. iv. The Insurance Reserve Fund shall maintain an annual working capital balance of $2 million. 6 . Reporting
a. A revenue/expenditure report will be produced monthly so that it can be directly compared to the actual results of the fiscal year to date.
b. At mid-year, staff will produce a Budget Status Report reflecting financial performance and present the data to City Council. c. With the presentation of the proposed budget, staff will provide revenue and expenditure projections for the next five years for all funds. Projections will include estimated operating costs for future capital improvements that are included in the capital budget (See the Capital Improvement Plan). This data will be presented to the City Council in a form to facilitate annual budget decisions, based on a multi-year strategic planning perspective. d. The City will also monitor progress toward citywide strategic objectives through performance measures. The measures will illustrate trends, targets, and other criteria by which the City’s efforts on a given program can be evaluated on a periodic basis. This evaluation is intended to inform organizational learning and assist policymakers in decision-making.

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7. Civic Engagement
a. Citizen involvement during the budget process shall be encouraged through community meetings, study sessions, and public hearings.
b. Social media, the City website, periodic resident surveys and other such tools shall be utilized. c. City Council budget study sessions shall be broadcast live to make available real-time information on the budget to those not able to attend in person.

8. Capital Budget – Fiscal Policies
a. Capital project proposals shall include substantially complete, reliable and attainable cost estimates. Project cost estimates for the Capital Budget should be based upon a preliminary analysis of the project and are expected to be as reliable as the level of detail known about the project.
b. Proposals shall include a comprehensive project sheet. The project sheet shall include a detailed description of the scope of the project, approximate schedule, and proposed funding plan. The plan should indicate resources necessary to complete any given phase of the project, e.g., design, rights-of-way acquisition, construction, project management, contingency, etc. c. All proposals for capital projects will be presented to the City Council within the framework of a Capital Budget. Consideration will be given to the commitment of capital funds outside the presentation of the annual capital budget review process for emergency capital projects, time sensitive projects, projects funded through grants or other non-city funding sources and for projects that present and answer the following questions for Council consideration: 1) Impacts to other projects, and 2) Funding sources.
d. Capital project proposals shall include all reasonably attainable cost estimates for operating and maintenance costs necessary for the life cycle of the asset.
e. Major changes in project cost must be presented to the City Council for review and approval. These changes are typically reviewed by City Council as part of the CIP budget process or through specific recommended actions for individual projects. f. Staff shall seek ways of ensuring administrative costs of implementing the Capital Budget are kept at appropriate levels. g. The Capital Budget shall contain only those projects that can by reasonably expected to be accomplished during the budget period, unless the project is a multi-year funded project. The detail sheet for each project shall contain a project schedule with milestones indicated.
h. Capital projects that are not expensed during the budget period will be re-budgeted or carried over to the next fiscal period except as reported to the City Council for its approval. Multi-year projects with unexpended funds will be carried over to the next fiscal period.
a. A capital project will not be budgeted unless there is a reasonable expectation that funding is available. j. Whenever feasible, practical and allowable, salaries and benefits for Public Works Engineers will be charged against enterprise, special revenue or grant funds utilized for the design and construction of capital projects. *As Adopted on October 15, 2019
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APPENDIX
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Glossary
Abatement: A reduction or elimination of a real or personal property tax, motor vehicle excise, a fee, charge, or special assessment imposed by a governmental unit. Granted only on application of the person seeking the abatement and only by the committing governmental unit.

Accounting System: The total structure of records and procedures that identify record, classify, and report information on the financial position and operations of a governmental unit or any of its funds, account groups, and organizational components.

Accrued Interest: The amount of interest that has accumulated on the debt since the date of the last interest payment, and on the sale of a bond, the amount accrued up to but not including the date of delivery (settlement date). (See Interest) Amortization: The gradual repayment of an obligation over time and in accordance with a predetermined payment schedule.

Appropriation: A legal authorization from the community's legislative body to expend money and incur obligations for specific public purposes. An appropriation is usually limited in amount and as to the time period within which it may be expended.

Arbitrage: As applied to municipal debt, the investment of tax-exempt bonds or note proceeds in higher yielding, taxable securities. Section 103 of the Internal Revenue Service (IRS) Code restricts this practice and requires (beyond certain limits) that earnings be rebated (paid) to the IRS.

Assessed Valuation: A value assigned to real estate or other property by a government as the basis for levying taxes.

Audit: An examination of a community's financial systems, procedures, and data by a certified public accountant (independent auditor), and a report on the fairness of financial statements and on local compliance with statutes and regulations. The audit serves as a valuable management tool in evaluating the fiscal performance of a community.

Audit Report: Prepared by an independent auditor, an audit report includes: (a) a statement of the scope of the audit; (b) explanatory comments as to application of auditing procedures; (c) findings and opinions. It is almost always accompanied by a management letter which contains supplementary comments and recommendations.

Available Funds: Balances in the various fund types that represent non-recurring revenue sources. As a matter of sound practice, they are frequently appropriated to meet unforeseen expenses, for capital expenditures or other one-time costs.

Balance Sheet: A statement that discloses the assets, liabilities, reserves and equities of a fund or governmental unit at a specified date.

Betterments (Special Assessments): Whenever a specific area of a community receives benefit from a public improvement (e.g., water, sewer, sidewalk, etc.), special property taxes may be assessed to reimburse the governmental entity for all or part of the costs it incurred.

Each parcel receiving benefit from the improvement is assessed for its proportionate share of the cost of such improvements. The proportionate share may be paid in full or the property owner may request that the assessors apportion the betterment over 20 years. Over the life of the betterment, one year’s apportionment along with one year’s committed interest computed from October 1 to October 1 is added to the tax bill until the betterment has been paid.

Bond: A means to raise money through the issuance of debt. A bond issuer/borrower promises in writing to repay a specified sum of money, alternately referred to as face value, par value or bond principal, to the buyer of the bond on a specified future date (maturity date), together with periodic interest at a specified rate. The term of a bond is always greater than one year. (See Note) Bond and Interest Record: (Bond Register) – The permanent and complete record maintained by a treasurer for each bond issue. It shows the amount of interest and principal coming due each date and all other pertinent information concerning the bond issue.

Bonds Authorized and Unissued: Balance of a bond authorization not yet sold. Upon completion or abandonment of a project, any remaining balance of authorized and unissued bonds may not be used for other purposes, but must be rescinded by the community's legislative body to be removed from community's books.

Bond Issue: Generally, the sale of a certain number of bonds at one time by a governmental unit.

Bond Rating (Municipal): A credit rating assigned to a municipality to help investors assess the future ability, legal obligation, and willingness of the municipality (bond issuer) to make timely debt service payments. Stated otherwise, a rating helps prospective investors determine the level of risk associated with a given fixed-income investment. Rating agencies, such as Moody's and Standard and Poors, use rating systems, which designate a letter or a combination of letters and numerals where AAA is the highest rating and C1 is a very low rating.

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Budget: A plan for allocating resources to support particular services, purposes and functions over a specified period of time. (See Performance Budget, Program Budget)

Capital Assets: All real and tangible property used in the operation of government, which is not easily converted into cash, and has an initial useful live extending beyond a single financial reporting period. Capital assets include land and land improvements; infrastructure such as roads, bridges, water and sewer lines; easements; buildings and building improvements; vehicles, machinery and equipment. Communities typically define capital assets in terms of a minimum useful life and a minimum initial cost. (See Fixed Assets)

Capital Budget: An appropriation or spending plan that uses borrowing or direct outlay for capital or fixed asset improvements. Among other information, a capital budget should identify the method of financing each recommended expenditure, i.e., tax levy or rates, and identify those items that were not recommended. (See Capital Assets, Fixed Assets)

Cash: Currency, coin, checks, postal and express money orders and bankers’ drafts on hand or on deposit with an official or agent designated as custodian of cash and bank deposits.

Cash Management: The process of monitoring the ebb and flow of money in an out of municipal accounts to ensure cash availability to pay bills and to facilitate decisions on the need for short- term borrowing and investment of idle cash.

Certificate of Deposit (CD): A bank deposit evidenced by a negotiable or non-negotiable instrument, which provides on its face that the amount of such deposit plus a specified interest payable to a bearer or to any specified person on a certain specified date, at the expiration of a certain specified time, or upon notice in writing.

Classification of Real Property: Assessors are required to classify all real property according to use into one of four classes: residential, open space, commercial, and industrial. Having classified its real properties, local officials are permitted to determine locally, within limitations established by statute and the Commissioner of Revenue, what percentage of the tax burden is to be borne by each class of real property and by personal property owners.

Collective Bargaining: The process of negotiating workers' wages, hours, benefits, working conditions, etc., between an employer and some or all of its employees, who are represented by a recognized labor union. regarding wages, hours and working conditions.

Consumer Price Index: The statistical measure of changes, if any, in the overall price level of consumer goods and services. The index is often called the "cost-of-living index."

Cost-Benefit Analysis: A decision-making tool that allows a comparison of options based on the level of benefit derived and the cost to achieve the benefit from different alternatives.

Debt Burden: The amount of debt carried by an issuer usually expressed as a measure of value (i.e., debt as a percentage of assessed value, debt per capita, etc.). Sometimes debt burden refers to debt service costs as a percentage of the total annual budget.

Debt Service: The repayment cost, usually stated in annual terms and based on an amortization schedule, of the principal and interest on any particular bond issue.

Encumbrance: A reservation of funds to cover obligations arising from purchase orders, contracts, or salary commitments that are chargeable to, but not yet paid from, a specific appropriation account.

Enterprise Funds: An enterprise fund is a separate accounting and financial reporting mechanism for municipal services for which a fee is charged in exchange for goods or services. It allows a community to demonstrate to the public the portion of total costs of a service that is recovered through user charges and the portion that is subsidized by the tax levy, if any. With an enterprise fund, all costs of service delivery- -direct, indirect, and capital costs—are identified. This allows the community to recover total service costs through user fees if it chooses.

Enterprise accounting also enables communities to reserve the "surplus" or net assets unrestricted generated by the operation of the enterprise rather than closing it out to the general fund at year-end. Services that may be treated as enterprises include, but are not limited to, water, sewer, hospital, and airport services.

Equalized Valuations (EQVs): The determination of the full and fair cash value of all property in the community that is subject to local taxation.

Estimated Receipts: A term that typically refers to anticipated local revenues often based on the previous year's receipts and represent funding sources necessary to support a community's annual budget. (See Local Receipts)

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Exemptions: A discharge, established by statute, from the obligation to pay all or a portion of a property tax. The exemption is available to particular categories of property or persons upon the timely submission and approval of an application to the assessors. Properties exempt from taxation include hospitals, schools, houses of worship, and cultural institutions. Persons who may qualify for exemptions include disabled veterans, blind individuals, surviving spouses, and seniors.

Expenditure: An outlay of money made by municipalities to provide the programs and services within their approved budget.

Fiduciary Funds: Repository of money held by a municipality in a trustee capacity or as an agent for individuals, private organizations, other governmental units, and other funds. These include pension (and other employee benefit) trust funds, investment trust funds, private- purpose trust funds, and agency funds.

Fixed Assets: Long-lived, assets such as buildings, equipment and land obtained or controlled as a result of past transactions or circumstances.

Fixed Costs: Costs that are legally or contractually mandated such as retirement, FICA/Social Security, insurance, debt service costs or interest on loans.

Float: The difference between the bank balance for a local government’s account and its book balance at the end of the day. The primary factor creating float is clearing time on checks and deposits. Delays in receiving deposit and withdrawal information also influence float.

Full Faith and Credit: A pledge of the general taxing powers for the payment of governmental obligations. Bonds carrying such pledges are usually referred to as general obligation or full faith and credit bonds.

Fund: An accounting entity with a self-balancing set of accounts that are segregated for the purpose of carrying on identified activities or attaining certain objectives in accordance with specific regulations, restrictions, or limitations.

Fund Accounting: Organizing financial records into multiple, segregated locations for money. A fund is a distinct entity within the municipal government in which financial resources and activity (assets, liabilities, fund balances, revenues, and expenditures) are accounted for independently in accordance with specific regulations, restrictions or limitations. Examples of funds include the general fund and enterprise funds. Communities whose accounting records are organized according to the Uniform Municipal Accounting System (UMAS) use multiple funds.

GASB 34: A major pronouncement of the Governmental Accounting Standards Board that establishes new criteria on the form and content of governmental financial statements. GASB 34 requires a report on overall financial health, not just on individual funds. It requires more complete information on the cost of delivering value estimates on public infrastructure assets, such as bridges, road, sewers, etc. It also requires the presentation of a narrative statement the government's financial performance, trends and prospects for the future.

GASB 45: This is another Governmental Accounting Standards Board major pronouncement that each public entity account for and report other postemployment benefits in its accounting statements. Through actuarial analysis, municipalities must identify the true costs of the OPEB earned by employees over their estimated years of actual service.

General Fund: The fund used to account for most financial resources and activities governed by the normal appropriation process.

General Obligation Bonds: Bonds issued by a municipality for purposes allowed by statute that are backed by the full faith and credit of its taxing authority.

Governing Body: A board, committee, commission, or other executive or policymaking bodyof a municipality or school district.

Indirect Cost: Costs of a service not reflected in the operating budget of the entity providing the service. An example of an indirect cost of providing water service would be the value of time spent by non-water department employees processing water bills. A determination of these costs is necessary to analyze the total cost of service delivery. The matter of indirect costs arises most often in the context of enterprise funds.

Interest: Compensation paid or to be paid for the use of money, including amounts payable at periodic intervals or discounted at the time a loan is made. In the case of municipal bonds, interest payments accrue on a day-to-day basis, but are paid every six months.

Interest Rate: The interest payable, expressed as a percentage of the principal available for use during a specified period of time. It is always expressed in annual terms.

Investments: Securities and real estate held for the production of income in the form of interest, dividends, rentals or lease payments. The term does not include fixed assets used in governmental operations.

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Line Item Budget: A budget that separates spending into categories, or greater detail, such as supplies, equipment, maintenance, or salaries, as opposed to a program budget.

Local Aid: Revenue allocated by the state or counties to municipalities and school districts.

Maturity Date: The date that the principal of a bond becomes due and payable in full.

Municipal(s): (As used in the bond trade) "Municipal" refers to any state or subordinate governmental unit. "Municipals" (i.e., municipal bonds) include not only the bonds of all political subdivisions, such as cities, towns, school districts, special districts, counties but also bonds of the state and agencies of the state.

Note: A short-term loan, typically with a maturity date of a year or less.

Objects of Expenditures: A classification of expenditures that is used for coding any department disbursement, such as “personal services,” “expenses,” or “capital outlay.”

Official Statement: A document prepared for potential investors that contains information about a prospective bond or note issue and the issuer. The official statement is typically published with the notice of sale. It is sometimes called an offering circular or prospectus.

Operating Budget: A plan of proposed expenditures for personnel, supplies, and other expenses for the coming fiscal year.

Overlapping Debt: A community's proportionate share of the debt incurred by an overlapping government entity, such as a regional school district, regional transit authority, etc.

Performance Budget: A budget that stresses output both in terms of economy and efficiency.

Principal: The face amount of a bond, exclusive of accrued interest.

Program: A combination of activities to accomplish an end.

Program Budget: A budget that relates expenditures to the programs they fund. The emphasis of a program budget is on output.

Purchased Services: The cost of services that are provided by a vendor.

Refunding of Debt: Transaction where one bond issue is redeemed and replaced by a new bond issue under conditions generally more favorable to the issuer.

Reserve Fund: An amount set aside annually within the budget of a town to provide a funding source for extraordinary or unforeseen expenditures.

Revaluation: The assessors of each community are responsible for developing a reasonable and realistic program to achieve the fair cash valuation of property in accordance with constitutional and statutory requirements. The nature and extent of that program will depend on the assessors’ analysis and consideration of many factors, including, but not limited to, the status of the existing valuation system, the results of an in-depth sales ratio study, and the accuracy of existing property record information.

Revenue Anticipation Note (RAN): A short-term loan issued to be paid off by revenues, such as tax collections and state aid. RANs are full faith and credit obligations.

Revenue Bond: A bond payable from and secured solely by specific revenues and thereby not a full faith and credit obligation.

Revolving Fund: Allows a community to raise revenues from a specific service and use those revenues without appropriation to support the service.

Sale of Real Estate Fund: A fund established to account for the proceeds of the sale of municipal real estate other than proceeds acquired through tax title foreclosure.

Stabilization Fund: A fund designed to accumulate amounts for capital and other future spending purposes, although it may be appropriated for any lawful purpose.

Surplus Revenue: The amount by which cash, accounts receivable, and other assets exceed liabilities and reserves.

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Tax Rate: The amount of property tax stated in terms of a unit of the municipal tax base; for example, $14.80 per $1,000 of assessed valuation of taxable real and personal property.

Tax Title Foreclosure: The procedure initiated by a municipality to obtain legal title to real property already in tax title and on which property taxes are overdue.

Trust Fund: In general, a fund for money donated or transferred to a municipality with specific instructions on its use. As custodian of trust funds, the treasurer invests and expends such funds as stipulated by trust agreements, as directed by the commissioners of trust funds or by the community's legislative body. Both principal and interest may be used if the trust is established as an expendable trust. For nonexpendable trust funds, only interest (not principal) may be expended as directed.

Uncollected Funds: Recently deposited checks included in an account’s balance but drawn on other banks and not yet credited by the Federal Reserve Bank or local clearinghouse to the bank cashing the checks. (These funds may not be loaned or used as part of the bank’s reserves and they are not available for disbursement.)
Undesignated Fund Balance: Monies in the various government funds as of the end of the fiscal year that are neither encumbered nor reserved, and are therefore available for expenditure once certified as part of free cash.

Unreserved Fund Balance (Surplus Revenue Account): The amount by which cash, accounts receivable, and other assets exceed liabilities and restricted reserves. It is akin to a "stockholders’ equity" account on a corporate balance sheet. It is not, however, available for appropriation in full because a portion of the assets listed as "accounts receivable" may be taxes receivable and uncollected. (See Free Cash)
Valuation (100 Percent): The legal requirement that a community’s assessed value on property must reflect its market, or full and fair cash value.

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CITY OF MANHATTAN BEACH
1400 HIGHLAND AVENUE
MANHATTAN BEACH, CA 90266
www.manhattanbeach.gov

Manhattan Beach City CouncilMay 2, 2023

Manhattan Beach City Council
May 2, 2023