The city of Redondo Beach will absorb a $2.1 million increase to its retirement costs by dipping into some of its reserve funds in order to balance a $95.1 million general fund budget.
The City Council unanimously passed an annual budget Tuesday, June 18, which also included a $63.8 million capital improvement budget divided among 89 separate projects.
Among the key highlights, property tax revenues were up 5.5% this year compared to the year before to $27.8 million. Sales taxes were down 1.4% to $10.3 million.Taxes paid by hotel guests were down 1.1% to $8.9 million and utility taxes were down 2.8% to $6.9 million. Overall general fund revenues were up 1.2%.
On the expenditure side, if spending remained the same this year, the city would be facing a $1.2 million structural deficit, explained City Manager Joe Hoefgen. That deficit is largely based on rising California Public Employee Retirement System costs, which will go up more than 12% next year to $18.7 million.
To balance the budget, the city will dip into its CalPERS reserve funds and will also not fill six vacant positions at City Hall bringing to 432 the number of city employees. An additional position will be eliminated but that person will move to another department, Hoefgen said.
“We are proposing reductions in our work force not because we want to but because we feel we need to do in order to close a $1.2 million structural deficit,” Hoefgen told the City Council.
The city manager also explained how the city is saving roughly $1 million in insurance risk pool and $1.5 million in its health insurance pool costs because of changes made a few years ago.
“If there’s a theme of this year’s budget it is proactive budget management,” Hoefgen said.
As part of the budget, the city also set aside $100,000 for a skateboard park, though a location has yet to be decided, and roughly $250,000 toward increased homeless services, outreach and enforcement activities.
In a subsequent matter Tuesday, the City Council diverted $5,561 in community development block grant funding that would have gone to the First United Methodist Church on Broadway for its Shared Bread program, which provides meals every Wednesday. The church has been the subject of complaints in recent weeks by residents who say the homeless situation in the parking lot and on the church’s steps have been out of hand.
Resident Debbie Struff, representing a group of roughly two dozen residents calling themselves the Resident Action Committee, said she routinely sees people sleeping in their cars, hanging out on the church steps, drinking alcohol, using the bathroom, using drugs and fighting.
“We want to get people off the street,” Struff said. “But the well-intentioned act of feeding the homeless has had the unintended consequence of attracting individuals who are drug addicted and aggressive.”
Volunteers at First United appeared at prior meetings to defend the meals program. They also meet with city officials once a month, but absent from those meetings since complaints have increased in recent months have been church leaders.
Mayor Bill Brand said he intends to meet with the new pastor at the church in the coming weeks.
“There’s just so much concern right now about the increase in homeless in and around that area,” Brand said. “We want to take a different approach until the church is better able to control what’s going on in the neighborhood.”
When the discussion finally ended, the council voted 3-2, with Councilmen Todd Loewenstein and Nils Nehrenheim dissenting, to divert the $5,561 for the Shared Bread program to a mobility program run by the city that provides meals to older adults.
The council also allocated grand funding to South Bay Family Health Care, the Salvation Army, Family Crisis Center, St. Paul’s United Methodist Church and a disability program.