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First in a series.
The five-year forecast, according to the proposed 2025-26 budget, anticipates ending the next fiscal Year with a five-digit surplus. The figure shown in the forecast (see page 302 of the pdf) is $80,731.
A slide from the May 6 workshop (the first of two held last week), showed projected General Fund operating revenues of $48.2 million and General Fund operating expenditures of $48.1 million.
During the May 6 budget workshop, the city Finance Department director said Seal Beach had to cut $6 million last year.
During a May 10 in person interview, District One Council Member Joe Kalmick said staff projected $3 million in revenue from the Measure GG half-cent sales tax that voters approved in November 2024.
Kalmick said Seal Beach spent $2.6 million in price increases since last fiscal year.
Kalmick said the projected Measure GG revenue would just cover costs that Seal Beach can’t control.
Approximately 10 people sat in the audience during the May 6 workshop.
The May 8 workshop will be covered in a separate story.
Workshop
During the May 6 budget workshop, Interim City Manager Patrick Gallegos said, “Our fiscal outlook remains challenging.”
Finance Director Barbara Arenado said the city was short-staffed.
“The economic outlook remains highly uncertain and volatile, shaped by ongoing changes in public policy, new legislation, inflation and tariff concerns,” she said.
“Our potential revenue sources are not yet built into our long range forecast,” Arenado said.
She said the city has a target reserve of 25% of expenditures. She also said staff was requesting an economic contingency of $1.5 million to offset short term financial challenges.
“We are proposing $300,000 for the fleet fund,” Arenado said.
Staff also proposed a pension paydown of $250,000.
“Last year, we faced $6 million in cuts,” she said.
She said this year’s budget included budget cuts.
“This year in the budget we added a budget study session, newsletters, mailouts, social media updates and email and updates to the website,” Arenado said.
According to the slide presentation, the primary cost drivers are a 4.5% increase in Orange County Fire Authority costs, a 12.6% increase in general liability and workman’s comp, a 33.8% increase in medical insurance, a 12% increase in CalPERS costs, a 10.2% increase in gas, electricity, water/sewer, as well as additional costs for other employee benefits and the street lighting district subsidy. According to the slide, the street lighting subsidy increased $6,988.
Regular salaries increased 5.5%, according to the slide.
District Three Councilwoman/Mayor Lisa Landau asked if the OCFA cost increase was proportionate to other cities.
“We actually don’t know,” Arenado said. She said staff didn’t know the allocation that the OCFA provides to other cities. “But I can say that we’re not a structural fire fund city,” Arenado said.
Arenado said that was important for Seal Beach residents to understand. She said if you bought your home for $500,000 and sold it for $2 million, a percentage of that increase would go to the Fire Authority.
Council Member Kalmick said it was a complex formula based on calls, population and other items. Kalmick represents Seal Beach on the OCFA board.
Resident James Jensen asked if Seal Beach was allowed to increase the rental for the fire stations the OCFA uses.
Arenado said the OCFA contract says the Fire Authority can increase the cost 4% a year. “They can do a catch up,” she said. This year, the catch up was a 4.5% increase. She said the city can’t raise the rate for the OCFA to use the facilities.
Highlights from the proposed 2025-26 budget
- The City Clerk’s Office 2025-26 proposed budget is $301,817. (That is less than the $359,523 amended 2024-25 budget.
- The Community Development proposed budget is $2.7 million. (That’s less than the $3 million amended 2024-25 budget.) “The difference you see in expenditures there from last year is due to the winding down of some of those major planning efforts as we close in on the Housing Element certification,” said Community Development Director Alexa Smittle.
(The draft EIR for the Housing Element is available for inspection on the city website.)
“We get to start the whole process over again in a couple of years,” Smittle said.
- The Community Services proposed budget is $1.7 million. (That’s more than the $1.5 million amended 2024-25 budget.)
- The proposed Marine Safety budget is $2.36 million. (That’s more than the $2.27 million amended 2024-25 budget.) According to Marine Safety Chief Joe Bailey, most of the time lifesaving comes down to a lifeguard with fins and a can buoy. “And most of the time for us it’s a part-time employee,” Bailey said.
According to Bailey, there are four full-time Marine Safety employees and about 76 part-time employees. Bailey said he thinks lifeguards need to make double minimum wage.
Mayor Landau asked Public Works Director Iris Lee the actual cost of replacing the lifeguard headquarters. Lee said the last time the city did an assessment, the cost was “in the order of $12 million”.
“Of course, that was a couple of years ago,” Lee said.
James Jensen returned to the podium to say that there are tennis club members who are alive because staff was trained to use defibrillators.
Kalmick asked Bailey about the McGaugh pool.
Bailey said the city shut down the McGaugh pool at 3 p.m. that day for an unknown period of time. “The heater stopped working and so the water of the last two days has continued to cool,” Bailey said.
- The Police Department proposed budget is $18.9 million. (That’s an increase from the $17.9 million in the amended 2024-25 budget.) The SBPD has, according to the slide presentation , 66 employees. That includes five part time police aids, seven part-time crossing guards, and 39 sworn officers. According to Henderson, the city has an average response time of 3 minutes 52 seconds for a priority 1 (emergency) call. According to the slide presentation, the department made 1,562 arrests in 2024—205 more than in 2023. “We’re also looking to upgrade our drone program,” Henderson said.
“It’s fallen into disrepair,” he said. “We cut funding for that last year prior to Measure GG,” Henderson said.
“I’m looking to restore some of that funding through our asset forfeiture funding,” Henderson said.
He said the technology was advancing quickly. “Mayor Pro Tem [Nathan] Steele and I have discussed the drone as a first responder program,” Henderson said. Henderson said the SBPD was looking to acquire the Starlink emergency communication system. “This was a pivotal piece of equipment during the recent fires in Pacific Palisades,” Henderson said.
The chief said if the Coastal Commission approved the city’s application to raise beach parking rates (which they did three days later), he recommended that the city revising paid parking on Main Street.
In response to a question about revenue from citations, Henderson said only a small percentage of that money comes back to Seal Beach as revenue. “Before we even have this discussion, I say we don’t police for profit,” Henderson said.
He said fines were ways to change behavior. Chief Henderson said the department does see parking citations as revenue.
Henderson said with the administrative citation program that the city started last year, the SBPD was seeing more of the revenue coming back to Seal Beach.
Mayor Landau asked if “daylighting” tickets part of the Police Department budget. She was referring to a state law that forbids parking near intersections.
Henderson said right now SBPD was leaving it to the discretion of the community service officers.
“Again, this was an unfunded mandate from Sacramento,” Henderson said.
James Jensen he mentioned at a previous meeting the idea of having the Orange County Sheriff’s Department take over local policing.
“Since Rossmoor is being handled by the Orange County Sheriff, would it make any sense for us to bid against the Orange County Sheriff to take Rossmoor?” Jensen asked.
Henderson said that would probably be a question for the residents of Rossmoor.
Community Development Director Smittle said she had a lot of Local Area Formation Commission work over the years. (LAFCO is the county border commission.) She said because Rossmoor is an unincorporated area, Orange County is their priority service provider. She said changing service providers was laid out in state law.
“There’s quite a bit of involvement,” Smittle said.
