Finance Director Matt Baker on Tuesday, May 5, presented a look at the proposed Avalon operations budget for 2026-27.
The sewer, saltwater, and trash budget will be covered at a future meeting.
What follows are highlights from the presentation.
“We’re kind of giving you a sneak peek at where we’re at in the budget process,” Baker said.
Baker said Finance was having conversations with various department heads.
According to Baker, he didn’t expect radical changes between what was presented that night and the final operating budget.
Right now, Avalon has the full time equivalent of 77.8 employees, Baker said.
“Right now, we don’t have any new full-time positions included in the budget, but we do have some requests for additional part-time hours in different departments,” Baker said.
“We’ve contracted out now the planning director position, if you will, and the building official services,” Baker said.
“So we just have the one FTE [full time equivalent] in planning currently,” Baker said.
General fund
“We entered this fiscal year with about 15.5 million in the general fund. Our operating revenues are estimated to come in about 15.1 million. Operating expenditures at if we spend everything that was budgeted would be 13.9,” Baker said.
“We had a lot of grant funded projects some of which are going to be delayed until the current fiscal year,” he said.
“We’re expecting to enter next fiscal year, the one we were budgeting for with approximately 14.5 million in the General Fund,” Baker said.
Baker said he was working under an assumption that there would be $14.2 million in operating revenues in 2026-27.
“Again, I feel that number is conservative, but you’ve heard me say it a million times, I want to make sure we’re um budgeting at a level we feel really confident we’re going to hit,” Baker said.
“So that way if there’s a storm on a weekend in August, I don’t lose sleep over what the impacts are on the budget,” Baker said.
He put the budget at $14.2 million, an increase of about half a million (or 3.6%) greater than last year.
Operating expenditures
Baker put the expected expenditures at about $14 million. Of that, $168,000 would represent new funding for new capital projects without touching the city’s reserves.
“So not a huge surplus but I also just want to stress the 14.2 million is a fairly conservative revenue estimate and I think there’s reason to be optimistic on some of my estimates particularly toot and property tax might be higher than where I’d set it,” Baker said.
According to Baker, wages are 54% of the expenditures and overtime is 10%.
There were lower costs in the Fire Department, according to Baker. He attributed that to “a couple” of retirees. He said when you have retirees and newer hires, there is some cost savings.
“That means there’s going to be other departments seeing an increase because it’s not a decrease in spend. It’s just a de a change in how we allocated that spend,” Baker said.
“Recreation and community services had some kind of one-time maintenance costs, so we had higher maintenance spend in the budget this current year than what we currently have planned,” Baker said.
According to Baker, 10% of operating and maintenance spending is what Avalon spends on the Fourth of July.
“Not suggesting we spend less. I just want to draw that it is not a insignificant amount to the overall budget that we do spend for that day,” Baker said.
He said 47% of Avalon contract service costs are the Sheriff’s Department contract with Los Angeles.
The other 35% of the contract spending is with the Chamber of Commerce (aka Love Catalina Island Tourism Authority).
The Chamber gets 22% of Avalon’s transient occupancy tax budget.
“Other major contracts in public works include our tree trimming contract, which we are likely going to be requesting an increase, a significant increase over prior years. I think this year in the budget, we had 100,000 and right now, again, it’s a draft and could change,” Baker said.
The city is looking at a $20,000 increase in the Community Services budget from last year.
Baker incensed the Chamber allocation to $1.7 million, compared with $1.65 this fiscal year.
He then looked at internal services. He said the General Fund picks up 51.5% of the total cost of administration.
He put the net operating revenue at $168,000.
Harbor fund
“We started the year with 2.4 4 million and we’re looking to finish the year with about 3.5 million in harbor working capital,” Baker said.
Harbor Department revenues are estimated to be $12.4 million next year and expenditures are estimated at $9.9 million.
He put net operating revenue at $2.5 million.
“While that number is high, we have a lot planned CIP [capital improvement projects] next year,” Baker said.
“Even though a lot of these projects are largely grant funded, there is still significant local match requirements for those projects,” Baker said.
The contract expenditures for the Harbor Department in 2026-27 is $2.1 million. More than half of that is the contract with Los Angeles County Lifeguards.