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Council receives midyear budget update, adopts amendment tied to Resolution 76.26
Summary
Council received the FY 2024–25 midyear budget update, discussed revenue pressures including softer sales tax and a Measure GG estimate of $3 million, and approved a budget amendment under Resolution 76.26; the motion carried 5-0.
The Seal Beach City Council received a midyear general fund budget update and adopted a budget amendment identified in the staff report as BA 205-91 by approving Resolution 76.26.
Finance Director Arenado presented revenues and expenditures through the second quarter and said that overall revenues are coming in slightly lower than projections, primarily due to a slowdown in sales tax receipts. Arenado noted that property tax—roughly 35% of the general fund—was trending as expected and that sales tax results were down in the third quarter; she said, "our Q3 results were down 4.6% compared to last year." She also told the council staff remains optimistic that revenues will meet budget by year end, in part because Measure GG was conservatively estimated at $3,000,000 for the coming year.
On the expenditure side, Arenado outlined that maintenance and operations account for a rising share of the budget and listed several large, recurring contracts that limit discretionary flexibility, citing examples including the fire contract (~$7.1 million), IT (~$1.2 million), refuse (~$1.3 million) and insurance (~$2.8 million). She also described projects and reallocated revitalization funds for items such as additional CalPERS payments, lifeguard jet skis, two police patrol vehicles, an emergency public-works backhoe, and an IT master plan.
Council members asked clarifying questions about sales tax trends, timing of Measure GG revenue, fleet replacement and regulations affecting electric heavy equipment. Arenado said Measure GG goes into effect in April and that some revenue should be visible by July, with an accrual mechanism that will show a small portion in the current fiscal year. On sales tax, she said the city’s sales mix — heavier on general consumer goods and restaurants — makes it sensitive to consumer pullback.
Councilmember discussion included concerns over Main Street vacancies and the need to support local businesses, the budget impact of fleet electrification mandates, and whether outsourced grant-writing funds would bring new revenue. The council then voted to receive and file the midyear update and to adopt the resolution approving the amendment; the motion was recorded as carrying 5-0.
Staff will incorporate the amendment and continue monitoring revenues and expenditures as departments prepare for the FY 2025–26 budget process and for the upcoming budget study session on March 24.
