The City Council on Tuesday, June 20, adopted the budget for the next fiscal year.
“Since the budget presentation on June 6, 2023, Staff made the following updates,” wrote Finance Director Matthew Baker in his June 20 staff report to the council.
“• Increased salaries and benefits for General Administration correct wage amounts for anticipated step increases and promotions, impacting internal service expenditures across all funds
“• Increased maintenance and operations expenditures in Recreation by $7,000 to account for unspent donations received in current year for skate park improvements,” Baker wrote.
“The Citywide FY 2023-2024 Operating and Capital Improvement Budget for the City of Avalon is $61,229,652, including capital outlays and transfers, across 28 different finds. The budget includes 75.3 full-time equivalent positions, of which 63 positions are full-time,” according to the budget message signed by City Manager David Maistros.
“The proposed budget estimates Harbor Fund revenues totalling S16,294.812, comprised of $8,704,500 in operating revenues and $7,590,312 in grant revenues. Harbor Fund appropriations total $18,712,302 with $7,796,780 in operating expenditures and $10,915,522 in capital outlays,” according to the budget document.
“TOT, a 12% tax on gross receipts from hotels and short-term rental properties, is the largest General Fund revenue and accounts for over half of all General Fund operating revenues. The Love Catalina Island Tourism Authority receives 22% of the revenues collected to fund [marketing] and promotion of the City,” according to the budget.
“A wet winter season combined with cooler spring temperatures contributed to decreased TOT revenues during the second half of the fiscal year compared to the post-pandemic peaks; however, TOT revenues remained higher than its pre-pandemic levels over the same months,” according to the budget.
“The City had budgeted TOT in the current year to reflect a modest increase of approximately 5.5% from pre-pandemic levels; however, the current year TOT exceeded budget estimates by approximately $2 million or 35.1%,” according to the budget.
“This unbudgeted increase in revenues will now be available to fund significant capital outlays in the proposed budget. The proposed budget for the upcoming fiscal year estimates TOT revenues of $7 million, 29.6% higher than pre-pandemic averages but 10.2% below current year estimates and 19.3% below Fiscal Year 2021-2022,” according to the budget.
“Sales tax revenues, budgeted at $1,400,000, are the second largest revenue source in the General Fund, representing approximately 11.2% of operating revenues,” according to the budget.
“Current year sales tax revenues are estimated to be up 2.7% from FY 2021-2022 and 48.5% from pre pandemic FY 2018-2019,” according to the budget.
“ The City’s sales tax Sales Tax consultant estimates sales tax revenues to increase by an additional 5.5% next year; however, the budget estimates sales tax revenues to increase by a more modest 3.4%,” according to the budget.
According to the budget document, restaurants account for 55% of Avalon’s sales tax revenues.
“Based on statewide trends taxable sales activity is expected to slow with minimal growth expected in the next fiscal year; however, restaurants and hotels are expected to continue to grow due to a shift in consumers spending trends, with a greater emphasis from consumers on experiences, particularly on travel and leisure, compared to consumer items,” according to the budget.
“The proposed budget anticipates Harbor Fund revenues of $8,674,500,” according to the budget.
“Cross-channel wharfage accounts for 43.2% of operating revenues based on current year revenue estimates,” according to the budget.
“Nightly mooring fees are the second largest revenue source in the Harbor Fund and account for nearly a quarter of operating revenues,” according to the budget.
“The City charges a $5 per passenger charge on cruise ships disembarking through the harbor,” according to the budget.
“The current year estimated occupancy rates of 60% to account for cancellations due to weather and continued uncertainty arising from new CO VID variants. However, occupancy rates generally met or exceeded l00%, with the majority of cancelled arrivals rescheduled to another day during the week,” according to the budget.
“Cruise ship revenues account for nearly all of the growth in Harbor revenues, as a result of increased per passenger rates (previously $4 per passenger prior to the pandemic) and larger average ship capacities. The current year had 126 scheduled arrivals with an average capacity of 2,714 passengers. For the upcoming fiscal year, there are 118 scheduled arrivals with an average capacity of 2,812 passengers,” according to the budget.
“For the upcoming fiscal year, there are 118 scheduled arrivals with an average capacity of 2,812 passengers. The budget estimates cruise ship wharfage revenues totalling $1,400,000; however, assuming 90.0% occupancy rates, revenues would total $1,493,235. Cruise ship occupancy rates averaged 94.8% for the current fiscal year through April 2023,” according to the budget.
Copies of the April, May, and June 6 presentations are available on the city website at www.cityofavalon.com/166/Budgets.
