1st Quarter Budget Review Highlights

On Tuesday, the Council is expected to accept and file the 1st Quarter 2015-16 Budget Review Report.  Some noteworthy items from that report include:

• 2014-15 fiscal year end General Fund revenues of $173.3 Million fell short of expenditures of $176.1 Million – meaning the City operated at a $2.8 Million deficit last fiscal year.
• The unemployment rate for Torrance is currently at 4.3%.  That figure is well below the National, State, and County of Los Angeles averages, as well as some neighboring cities such as Inglewood (8.1%) Carson (7.9%), Gardena (6.2%) and Hawthorne (5.5%).
• The impact of the reported $537.5 Million sale of ExxonMobil to PBF Energy will be monitored by staff as the stated price of the sale is significantly below the assessed valuation of the property.
• Staff had projected the fiscal impact of Exxon shutting down the refinery at $500K to $700K a month.  The actual impact has been in the range of $250K to $300K a month.  It still remains unclear when the refinery will return to full operations and how the change in ownership will impact the City revenue stream.
• Water and Sewer rates increases are expected to come before Council for Consideration in the first quarter of 2016.
• It is unclear at this time if Sales Tax receipt will meet budget projections as the current projections are based on noteworthy events such as the opening of the Del Amo Fashion Center.  On that note, 70 of the expected 100 stores have already opened, including the two-story Nordstrom’s, with another 17 new stores expected to open by “Black Friday.”  The new Maserati dealership is also expected to open soon as well as Ganal Lumber and the larger and improved Costco
• Cultural Arts Center revenues came in well below budgeted revenues at $1,871,023 versus the projected $2,099,597 as a discounted mid-week rate program implemented in July 2014 to create incentives to enhance usage of the facility during off-peak hours is struggling to reach anticipated projections.

The report also noted growth in retail sales (particularly automobile sales), increases in hotel room bookings and the average daily rates (due to increased tourism), as well as modest increases in home sales as positive economic indicators.