Fiscal Year 2024-25 Budget with Reorganization to Improve Customer Service, Processes & Transparency

The City of Malibu's adopted budget for Fiscal Year 2024-25 is balanced, reflecting both its commitment to responsible fiscal management and efforts to improve customer service, processes, and transparency. The budget, adopted June 24, 2024, reflects the City's dedication to maintaining a strong financial foundation.

"With the adoption of the FY 2024-25 Budget, the City of Malibu continues its long record of outstanding financial management and balanced budgets thanks to the hard work of our skilled, dedicated staff," said Mayor Doug Stewart. "Our excellent financial status makes it possible for the City to provide the essential services, programs and policies that we need to protect Malibu's safety, quality of life, and environment, and achieve as well as the strong reserves to be able to weather disasters and economic downturns."

The General Fund is balanced with revenues of $61.79 million exceeding expenditures of $60.23 million. The General Fund Undesignated Reserve at July 1, 2024, is estimated at $73.37 million, with a projected ending balance of $69.45 million at June 30, 2025. The projected ending balance is 115.3% of the FY 2024-25 General Fund Program Expenditures of $60.23 million. This exceeds the City's goal of maintaining a minimum of 50% of the budgeted expenditures in reserves (Council Policy #3) and exceeds the 65% goal necessary to retain the highest credit rating for the City (per the City's underwriter). In addition, there is $6.5 million in Fund Balance designated for contingencies. The total projected General Fund balance (including Designated and Undesignated Reserves) at June 30, 2025, is $83.04 million.

The development cycle of the Budget included a City Council Budget Workshop to review the Proposed Budget for FY 2024-25 and give preliminary direction to staff, which took place on April 24, 2024. The Administration and Finance (A&F) Subcommittee met on May 2 and provided additional feedback and recommendations for Council consideration. And on May 28, the Council conducted a public Budget hearing.

The City's major General Fund revenue sources are Property Tax, Transient Occupancy Tax, and Sales and Use Tax. Property Taxes are budgeted at $19.5 million. Secured Property Taxes and Property Tax In-Lieu are displaying a growth of 5.5% over the FY 2023-24 estimate. Historically, Malibu has averaged over 6.0% growth in property taxes year-over-year for the past 10 years.

Transient Occupancy Tax (TOT) - Hotels and Motels is budgeted to remain unchanged, estimated at $3.7 million. The City currently collects TOT from six hotel/motel properties and one RV Park. The City's TOT rate is 15%.

TOT - Private Rentals is budgeted at the same level as last year at $5.8 million, which appears to be the steady post-pandemic level.

Sales and Use Tax is budgeted at $8.9 million, a growth of $2.5 million over FY 2022-23 Actuals and $500,000 over FY 2023-24 Amended. The growth is due to the City's Transactions and Use Tax (TUT) ½ cent increase approved by Malibu voters in November 2022. The proceeds are currently exceeding original expectations of $3 million per year, with FY 2024-25 forecasted to bring in $3.6 million.

Woolsey Rebuild
The impacts of the 2018 Woolsey Fire are winding down. The budget includes $4.9 million in expenditures for any additional rebuild expenses. The Council extended the Woolsey Fire rebuild deadline for applications to November 8, 2024, the fourth consecutive year the Council has approved rebuild fee waivers, which now total $5.6 million in waived fees in support for homeowners in their rebuild efforts.

At the time of adoption, 360 rebuild applications had been approved by Planning, 286 permits issued, and 178 rebuilds completed. The City received a $13.6 million settlement for the Woolsey Fire from Southern California Edison (SCE) and $4.2 million in escrow settlement funds, a total of $17.8 million. The settlement funds have a projected remaining balance at June 30, 2025, of $5.8 million.

Significant capital expenditures remain outstanding for repair and restoration projects necessary after recent storms, totaling $4.9 million in expenditures for FY 2024-25. A large share of these capital expenses will be covered by FEMA, CalOES and the City's insurance policy with CJPIA. In past disasters, these agencies have taken years to reimburse the City for these costs. To date, the City has received $6.1 million in reimbursements.

Public Safety
Ensuring Public Safety is the City's highest priority, which is reflected in the City Council commitment to continuously increasing the funding and resources dedicated to the Public Safety Department. The Public Safety Department budget is decreasing from FY 2023-24 by $169,000. The FY 2023-24 Budget was heavily loaded with increases due to the anticipated opening of the LA County Sheriff's Department (LASD) Substation. The Substation has yet to open due to LASD staffing constraints, which are not anticipated be resolved in the near term.

As part of the City's intensive efforts to address safety on Pacific Coast Highway (PCH), a top priority for the City, the FY 2024-25 includes $200,000 for the purchase and installation of speed cameras on PCH, and $1.3 million for the contract for California Highway Patrol (CHP) traffic enforcement in Malibu. The funding is in place in anticipation of the City's lobbying efforts succeeding in changes to state legislation that would allow speed cameras in Malibu. Grant funding is also being pursued. Staff estimated $50,000 for nine speed cameras and $150,000, for Professional Services help develop a plan and impact report.

Environmental Sustainability Department
The proposed Environmental Sustainability Department budget increases by $667,000, across all divisions. The increase is driven by $500,000, for the new Exterior Elevated Elements (E3) program. Nevertheless, these costs should be fully offset by the accompanying related fees. The Department is anticipating 800 zoned properties needing an assessment report. The Department's work is critical in protecting Malibu's fragile environment, safe building practices, and the public health and safety of the community.

Planning Department
The Planning Department budget remains relatively flat going into the next fiscal year. The Department will continue to balance the need for consultants while focusing on filling vacancies, with the goal of slowly reducing the dependence on consultants. Planning Department functions are essential for the sustainable development and growth of the community, ensuring that land use is in line with the City Mission and Vision Statement, and protection of the environment, community character, and quality of life in Malibu.

Environmental Sustainability and Planning Departments Restructuring
The FY 2024-25 Adopted Budget includes the creation of a new position of Director of Community Development. This is the initial step toward restructuring the City's Environmental Sustainability and Planning Departments to improve customer service, efficiency and transparency, improve staff morale and retention, reduce caseloads, and address resident and applicant concerns.

The changes and the new Department were key recommendations of the Development Services Review study that the City initiated in 2022.. The creation of the new Department will take time and will be initiated during FY 2024-25.

Permanent Skatepark Advancing in FY 2024-25
The budget for work on the City's Permanent Skatepark, a priority project to provide an important resource for sports, recreation and a community gathering place for the community, is estimated to be completed during the fiscal year with a budget of $2.5 million.

Malibu Community Lands
The Malibu Community Lands project started in April 2024, a comprehensive outreach and engagement effort to set the vision for the future uses of the City's five properties spanning over 61 acres, is another top Council priority. The project is ongoing, and the FY 2024-25 Budget includes an additional $200,000 for Professional Services for potential future design and development work (in addition to the original funding of $130,000).

Malibu Education Foundation (MEF) to Provide Resources to Malibu Public Schools
The FY 2024-25 Budget includes an additional $315,000 for a General Grant Fund for the MEF. The seed funding of $353,100 to start up the MEF was provided in FY 2023-24. The City's funding for the MEF was meant to help create a professionally run, centralized fundraising entity to enable the community to raise and spend funds to ensure Malibu public schools would have more resources for academics, arts, and athletics.

Capital Projects
The Proposed Budget for FY 2024-25 includes a Capital Improvement Plan (CIP) that addresses as many projects as possible that enhance safety and infrastructure, boost economic growth, and improve the quality of life for the community by upgrading facilities and systems. The CIP budget includes 29 projects totaling $24.45 million for FY 2024-25. Highlights include: Annual Street Maintenance Project, PCH Median Improvements, Malibu Community Labor Exchange Trailer, PCH Signal Synchronization Project, Civic Center Water Treatment Facility -Phase Two, City Hall Solar Power Project, Permanent Skate Park, PCH at Trancas Canyon Road Right Turn Lane, PCH Crosswalk Imp Big Rock Dr and 20326 PCH, City Traffic Signals Backup Power, PCH Pedestrian Undercrossing at Corral State Beach, Stuart Ranch Road Walkway, Charmlee Park Nature Center Renovations, Malibu Bluffs Park Snack Shack/Storage Building, Land Management System, and others.

Personnel
The Proposed Budget provides for 119.78 full-time equivalent (FTE) positions comprised of 107.50 full-time employees and 12.28 FTEs working as part-time employees.

For more details on the FY 2024-25 Budget, see the staff report.
The adopted FY 2024-25 Budget as well as past Budgets are available on the website.
Click here to watch video of the Proposed Budget presentation during the June 24 Council meeting.

VIDEO OF BUDGET PRESENTATION

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