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Budget study session 2 - Cerritos City Council

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Budget study session 2 - Cerritos City Council

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Budget study session 2 - Cerritos City Council

  1. 1. City Of Cerritos Budget Study Sessions Session 1 – 4/27/17 Session 2 - 5/17/2017 – Item 6A www.ourcerritos.org
  2. 2. About us • We care! • We know Technology. Been there, done that! • Let us work together. Help us help you! • Let us spend $105 Million on What REALLY matters! • Make Cerritos Great Again! • Visit us at www.OurCerritos.org 2
  3. 3. www.ourcerritos.org 3 $2.6 M Astor insurance claims Additional $3M CCPA ticket sales ($4M- >$7M) Net loss ($5.6M) ($7M ) -> ($12.6M) ($1M) AB 1X PTR Revenue ($0.5M) Lease income Net total -> ($14.1M) • It is NOT about looking good on paper in May2017! • It is all about NOT beefing up numbers and NOT reporting a 1) Adjust projected revenue to reflect REALITY 2) Plan expenditure based on resident priorities 3) Report based on the above – Avoid a deficit!
  4. 4. From the 2017-18 Budget – “Sales tax - approximately 32% of the City's operating revenue budget for the upcoming year. For 2017-2018, the City is projecting sales tax receipts of approximately $34.6 million, an increase of approximately $2.6 million over the budgeted amount for the 2016-2017 fiscal year. Cerritos Auto Square continues to be the primary sales tax generator for the City.” US Auto sales are slowing down - Forbes, May 3, 2017 “Automobiles are not moving off the parking lot. That’s according to an industry report that showed a sharp decline in auto sales across all auto makers—see table. Meanwhile industry inventories have been climbing up from an average of 55 days back in April of 2015 to 70 days last month.” If the March-April downward trend continues, City 2017 projections can take a hit impacting the revenue and could result in deficit! Suggest adjusting these projections and other expenses to avoid 2017-18 deficit. $2.6Million increase in Sales Tax How much is from Auto Sales? www.ourcerritos.org 4 Auto maker April sales GM -5.8% Fiat/Chrysler -7.0 Honda -7.0 Ford -7.1 Toyota -4.4
  5. 5. 2017-18 Budget Adjustments - Raise questions? City just added another $500K to the already unrealistic $6.5M revenue from CCPA ticket sales! Astor museum building lease revenue ($540,000 below) is gone? 5
  6. 6. www.ourcerritos.org 6 $2.3M additional revenue - Franchise Fee (Trash) A gift from Calmet for the NO BID 10 year contract?
  7. 7. www.ourcerritos.org 7
  8. 8. Pennywise Pound Foolish? 8
  9. 9. www.ourcerritos.org 9
  10. 10. Cut Unnecessary Big ticket items First! 10
  11. 11. Astor Museum – Use it or lose it? • From the budget - • A large majority of this allocation will be dedicated to the renovation and refurbishment of the City-owned building located on the southeast corner of Bloomfield Avenue and 183rd Street. Again, this project is wholly funded utilizing insurance proceeds resulting from a settlement associated with significant damage that occurred to the building. • In addition to refurbishment of the referenced building, the City has allocated $950,000 for improvements related to the Cerritos-Astor Museum project. The funds for this project were generously provided by way of a grant the City received from the Los Angeles County Board of Supervisors. Why Astor Museum? 1. To establish the Cerritos Museum as a small, world-class cultural icon. 2. To provide quality traveling exhibitions that will enhance the cultural and educational benefits to the community. 3. To provide a variety of activities to promote art and culture for the community. 4. To provide an educational component for art and culture. www.ourcerritos.org 11
  12. 12. www.ourcerritos.org 12 • Why are we spending $5.2M on the losing project? • Refurbishment $4.2M + $1M Grant website (www.astorclassics.com) is suspended! No one can find it on internet! Need to reclaim it ASAP!
  13. 13. www.ourcerritos.org 13 • 2015-16 - $3.4M Sale of land + $1.6M Insurance claims = $5M • 2016-17 - $1M LA Board of Supervisors Grant Vs $2M projected => Total $6M • 2017-18 - $2.6M Insurance claims projected => Total $8.7M • Net amount: $4.2M insurance claims + $3.4M Sale of land + $1M Grant => $8.7M • How much of this can be used for other priority items? Astor Museum Endowment Fund
  14. 14. www.ourcerritos.org 14 CCPA Loss needs Fix!
  15. 15. 7,000,000 After $500K adjustment on 4/27 www.ourcerritos.org 15
  16. 16. www.ourcerritos.org 16 CCPA expenses Take a closer look - Cut costs and stop losing millions!
  17. 17. CCPA continues to lose Millions! Just Fix It! • STOP continuing the same losing strategy! Do a study to identify root cause and Fix It ASAP! Stop treating the symptoms! • Ticket sales (from slide 8, 2017-18 budget) • 2015-16 - $2,831,769 vs $3,675,000 budgeted • 2016-17 - $4M vs $4,375,000 budgeted • 2017-18 projections in budget $7M – Please provide supporting evidence. • Expenditure • 2016-17 – expenditure (from 2016-17 budget) • $7,256,960, Loss $3,256,960 (approx. only, facility rental income not included) • 2017-18 expenditure $9.8M ($4.43+$5.32) • Net projected loss of 2017-18 => 9.8-7 = $2.1M (Realistic 9.8M – 4M = 5.8M loss) • ~ $30 loss ($80 more real) per attendee based on 2016-17 number (70,000 attendees) www.ourcerritos.org 17
  18. 18. From the website of a Cerritos resident http://www.cpp.edu/~rdwestfall/ccpa/ www.ourcerritos.org 18
  19. 19. Magnolia Power Project Is this worth continuing? City is expected to lose $576,000 next year! Who is benefiting from this? Should residents subsidize electricity for local businesses? Charge more to avoid loss or make profit! www.ourcerritos.org 19
  20. 20. www.ourcerritos.org 20

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