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Home My WebLink AboutSupplemental Communication - City of Huntington Beach FiscalCity of Huntington Beach 1; iscal Year 2016/17 PROPOSED BUDGET .. JON 18,2016 FY 2016/17 PROPOSED BUDGET "Back to Basics".., (to FY 2016/17 Proposed Budget Overview 'x y FY 2016/17 Proposed Budget Highlights CIP and Infrastructure Budget Summary y Status of General Fund Reserves Discussion of Unfunded Liabilities r FY 2016/17 Budget Calendar "Back to Basics" ■ FY 2016/17 is a "Back to Basics" Budget ■ Only minimal contractual increases are included a Essentially flat staffing levels are recommended, with two minor exceptions ■ FY 2016/17 Proposed Budget focuses on core services) ■ Public Safety ■ Infrastructure ■ Quality of Life Programs ■ Financial Sustainability FY 2016/17 Proposed Budget • The Proposed All Funds Budget totals $345.5 million, a $387K or 0.1% increase from the FY 2015/ 16 Adopted Budget • The Proposed General Fund Budget totals $220.4 o million, a $3.7 million, or 1.7 /o increase from the FY 2015/16 Adopted Budget FY 2016/17 General Fund Highlights F12015/16 F12016/17 Description Adopted Budget Proposed Budget :mount % Change (in million.) (in millions) Change General Fund Re%enues $216.7 $220.4 $3.7 1.7% General Fund Expenses 216.7 220.41 $3.7 1 1.7% surplus (Deficit) $0.0 $0.0 $0.o 0.0% FY 2016/17 General Fund Overview • Balanced General Fund Budget for FY 2016/17 • A slight General Fund revenue increase of 1.7% is projected • Fixed cost increases such as PERS ($2.8 million), Workers' Compensation, insurance premiums and utilities are included • Equipment replacement funding of $5.0 million • Increase of funding for Police Department — Animal Control Services $315K • 15% Charter requirement for Infrastructure is met FY 2016/17 General Fund Revenue NomOperaun $928,6 Other Revenue $1,295,130 ' Chargc Current $25.49' $220.4 Million Properly Tax $80.119,530 Other Agencies Use of Money Frnes & License & $3,676,493 &Property Farfertures Permits $16.362.667 $5,090,066 $8.336.140 Utility Users Tax $19,836,905 i Tran ent _ Occupa icyiax $10,504,660 `Franchise $7,338,931 ISales Tax $41,441.369 General Fund Revenue Highlights • Total General Fund projected revenue is $220.4 million, reflecting a 1.7% increase from the current year • Property Tax is estimated at $80.1 million, a decrease of $4.0 million due to the State's elimination of the Triple Flip • Transient Occupancy Tax continues to grow, reaching an estimated $10.5 million next year, an increase of 2.0 percent • Sales Tax is projected at $41.4 million, an increase of $8.2 million, or 24.81() from the current year due to restoration of 25% backfill for Triple Flip • Licenses and permits are down by -14% as the pace of new development begins to normalize • Utility Users Tax revenue is projected to decline by -4.1 % due to energy conservation efforts and bundled phone services FY 2016/17 General Fund Highlights Description In Millions El 2015/16.ldopled Budget $216.7 I'Ll S: l .ill'I RS Rate Increases 2.8 Labor Contracts and Minimum WI-c Adjustments 3.3 Reduction in Annual Bond Debt Sm ice (1.2) (icneral I iabilit% Insurance 0.4 Increase in Cilvmde Attrition Estimate (0.5) Animal Control Contract Increases 0.3 Say inks duc to l Infunded Liabiliq Plans (1.2) tltilm Sa%in as due to Cm %%ide EncrLN Iaiiciencies (0.3) One -Time Cite Election Cosh Fl 2015/1613aseline Structural Increases to Baseline from Fl 201.5/16 % Increase to Baseline from Fl 2015/16 0.1 5220.4 +S3.7 +1.7% Public Safety Public Safety Police anal Fire = 5,4% of General Fund LJ r Public Safety - Police Police Department Amount # Animal Control Sergi ices 315,000 j Part'Fime Student Worker Cadets 54,000 ONertime Impact of Negotiated Labor Contracts 112,948 Equipment Replacement — Helicopter Upgrade 485,150 Equipment Replacement — Fleet Vehicles 843,000 Building Enhancement Renovations 570,000 Total $2,380,098 Public Safety - Fire Fire Department Mku-o ( hies .I M and C I M Fund OI I rt OU Cim%idc Training (i.e.. NIMS. RACI S. and ( I RF certifications) Owrtime and Minimum Wage Impact Equipment Replacement — RelbrhiA Oil Wells Equipment Replacement — hncrgcnc� l ransport (iurnc\s Lease Financing for Ne\\ Fire Engine and Ambulance. ($1.0 M ) LLjIIipmcnt. I mcrguncy AlertingS\stcm and I O(' Rcmvation Total Amount 90.0�)9 51.000 122.956 122.700 108_ 328 200M00 ,97_ 00 $1,092,1143 Police Officer Staffing Review Police Officer Staffing Recap Ofliccrtitat'link Iuta1 Funded Fl fs IWill Funded S%%orn (►llicers in FY 2012 2013 207.0 Additional Officers Funded in FY 2013i201 I +5.0 Additional Officers Funded in FY 2014/2015 +2.0 +8.0 Additional Officers Funded in FY 2015/2016 ;Adopted Budget +2.0 Revised Buduet +6.0 Total Funded Sworn Officers I 222.0 I Increase Since FY 2012/13 1 +15.0 Quality of Life I. Quality of Life • Increase binding for new Senior Center maintenance ($76,000) • Repair and maintenance of beach facilities ($70,000) • Sand Replenishment Project — Huntington Harbour ($200,000) "• Repair of various beach facilities — restroom doors, parking meter housing, and trash receptacles at the pier ($105,000) • Park Improvements — Edison Playground ($110,000), Murdy Park Sports Field ($50,000), Central Park Tot Lot (85,000) , and Bartlett Park ($100,000) 4 Park & Beaches Rehabilitation Projects — Beach Service Road !''' ($150,000), Central Park East ($200,000) Economic & Financial Sustainability Economic and Financial Sustainability • The Proposed Budget continues fifnding for unfunded liabilities: ■ The " 25 to 10- Plan for Retiree Medical ■ The "Ib to 10" Plan for Retiree Supplemental ■ CalPERS "One Equals Five" Plan ■ Pension Rate Stabilization Program • Plans above will help maintain AAA Fitch Rating "The 'AAA' Il)R reflects the cith's strong operating performance. lo\\ long-term liabilit\ burden. moderate fixed costs. and robust resmes. The tax base and economic fundamentals supporting the citN's strong recent revenue performance ' null like[\ continue to position the citx N'Nell. and Fitch experts it to continue controlling expenditures and focusing on pa\ ing dome pension and 011E13 i liabilities' - Filch Ratings. June 23. 2016 Press Release Economic and Financial Sustainability • To ensure strong internal controls, replaces aged Citywide Cashiering System that is no longer supported b the vendor $569k tt Pp Y ( ) • Provides full funding for the City's annual (pay-as- you-go) Workers' Compensation costs • Includes $500K towards reducing the $11.9 million Workers' Compensation unfunded liability • At this funding level, the Workers' Compensation unfunded liability will be paid off in 20 — ?2 years Unfunded Liabilities Overview Benefit Klan T pe Amount (1)(m) IV" Funded flan to Eliminate t ntunded Liabilih• Timeline ('aIPERS (SalctN 1 184.182 70.5° -1=5- Plan 25 \cars CalPERS (Mist)* 110.231 77.2% Standard HERS 30 vcars Subtotal 294.413 73.40'o Retiree Medical (Misc)' (1 '25 to 10" Plan DONE Retiree Medical (Salct) )' 10.071 67.3" i, 10 dears Suhtotal 10.071 73.7% Retiree Supplemental 18.051 70.9% "I6 to 10" Plan 10 vears Workers' Compensation 11.927 49.0°tt fle\ihle Plan 20 \cars G RA N D TOTA L 334,362 H,n,J out AN lt� �,.In.ui.d \.du.Jml1......I Im„:u `ulI Funded FTE vs. Y-O-Y PERS Costs 4,100 0(1 1,600.00 3,100,00 2,600,00 2,100.00 1,600,00 1,10000 600.00 FY 08/09 FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 •- P1RSC-h Actual Actual Actual Actual Actual Actual Actual Revised Proposed ♦ Funded FTFS FY 2016/17 Staffing Changes i • City Attorney Department 1.0 FTE — Deputy City Attorney I (Deputy Community Prosecutor) • Community Services Department 1.0 FTE — Funding of a previously defunded position — Community Services Recreation Supervisor* Funded by Parks Ivnds. nut Ibe Genoral Ivnd 7/18/2016 Economic Uncertainties 24,011 25,011 25,011 25,011 Litigation Reserve 900 900 900 900 Equipment Replacement 8,295 8,295 8,295 8,295 Redevelopment Dissolution 1,323 1,323 1,323 1,323 Retiree Medical Unfunded Liability 698 General Plan Maintenance 720 720 720 720 Capital Improvement Reserve 7,136 7,136 7,936 7,936 Senior Center Debt Service Reserve 2,000 2,000 2,000 2,000 CalPERS One Equals Five Plan 500 1,500 500 500 CalPERS Rate Increase 1,287 1,287 1,287 Cityview Replacement 695 889 889 Animal Control Shelter 1,500 1,500 City Facility Security Enhancements 350 350 Sand Replenishment and Park Improvements 366 366 Section 115 Trust 1,000 1,000 Other Fund Balance* 8,924 12,187 12,715 12,715 Total Fund Balance 54,507 61,054 64,792 64,792 N . 13 Capital Improvement Program (All Funds) $24,444,675 Infrastructure Fund _ Water Funds Sewer Funds 5% 25% 17% Prop 42 2% _Park Funds i 1% y Measure M J --Gas Tax 8% 12% Grants/Other J 15% —\_General Fund 15% Capital Improvement Program (All Funds) I • FY 2016/17 CIP includes $24.4 million in projects (All Funds) • Included in the CIP is $3.6 million in General Fund support for infrastructure • LeBard School Site funding of $667.000 for Year Two (split funding from General Fund and park development fees) • Concrete. arterial roadway. sand replenishment, beach service road rehabilitation. beach facilities repair and other projects fi. Infrastructure • Section 617 of the Charter requires that the City spend 15 percent of General Fund revenue on infrastructure • This calculation is based on a 5-year rolling average • The FY 2016/17 General Fund Budget exceeds the 15% Infrastructure requirement The General Fund contains approximately $33.6 million in spending for infrastructure improvements and maintenance • Included in this amount is $3.6 million in new capital projects for concrete, arterial roadway, sand replenishment, park improvements, and other projects • Roadway projects help nmintain a PCI of 76 or "Good" Challenges and Opportunities ��f Opportunities • User Fee Study and Review — Financial Best Practices are to update fees every 3-5 years — The City's fees have not been updated since 2009 — Recommendations will be forthcoming — Opportunities may exist for increased revenue — Certain fees are increasing, some are decreasing,, others are being eliminated, and some new fees are su.—Yested — A phased -in approach is recommended for some fees — Overall, the Citywide rate of recovery is less than 100 percent — A Fee Study Session will be held on August 15, 2016 Challenges �a • GASB 68 Impact to Other Funds • Water Fund Reserves and Long Term Maintenance Needs • Refuse Fund Balance • Pension and Other Fixed Cost Increases — Higher CalPERS Employer Rate Increases — Workers' Compensation costs continue to rise FY 2016/17 Proposed Budget Recap 1R Provides funding for quality of life enhancements at libraries, parks and beaches • Funds infrastructure improvements to roadways, parks, facilities and other capital assets • Enhances compliance with procedures and regulations promoting further financial sustainability FY 2016/17 Proposed Budget Calendar Proposed Date Item lulN 14. 2016 FY 2016/17 Proposed I;uduet Dehwred to Cite Council July IS. 2016 FY 2016/17 Proposed Budget StudN Session August I. 2016 FY 2016/17 Capital Improccment Projects August 15. 2016 l Iser Fee StudN K Long Term Financial Plan September 6. 2016 FY 2016/17 Budget Adoption: Cite Council PUb1iC I learing September 19. 2010 FY 2016/17 Budget Adoption: Cite Council Public I learing (AllernateAdoplion Dale) October I. 2016 Fiscal Year 2010,,17 Begins QUESTIONS? July 18, 2016