HomeMy WebLinkAboutApprove Fiscal Year 2013/14 Year-End Audit Close-Out AdjustmDept. ID FN 15-006 Page 1 of 3
Meeting Date: 3/16/2015
CITY OF HUNTINGTON BEACH
REQUEST FOR. CITY COUNCIL ACTION
MEETING DATE: 3/16/2015
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A. Wilson, City Manager
PREPARED. BY: Lori Ann Farrell, Director of Finance
SUBJECT: Approve Fiscal Year 2013/14 Year -End Audit Close -Out Adjustments
Statement of Issue:
The Finance Department is currently undergoing the year-end closing process for Fiscal Year
2013/14, which began on October 1, 2013, and ended on September 30, 2014. Certain technical
adjustments need to be made to reconcile the budget with actual expenditures incurred, and
comply with auditing, actuarial, accounting or legal requirements. City Council authorization is
requested to perform these reconciliations in order to finalize the Fiscal Year 2013/14 financial
statements. There are sufficient revenues, available cash, or fund balances to support these
adjustments, except in one case (i.e. Redevelopment Obligation Retirement Fund) as explained in
further detail below.
Financial Impact:
Authorization is requested for budget transfers and adjustments as indicated below:
1. General Fund (100) $444,289;
2. Redevelopment Obligation Retirement (RORF) Administration Fund (350) $17,671,873; and
3. Grants and Other Funds (Various) $1,299,608.
Recommended Action:
Approve year-end adjustments to the Fiscal Year 2013/14 Revised Budget in the Funds and by the
amounts contained in Attachment 1 and Attachment 2.
Alternative Action(s):
Do not approve the recommended action and direct staff accordingly.
Analysis:
Technical year-end budget adjustments are requested to the Fiscal Year 2013/14 Revised Budget
to align appropriations in numerous Funds with actual expenditures incurred through September 30,
2014. As actual expenditures cannot exceed the appropriation amounts contained in the Revised
Budget, certain budget adjustments are required to align the budget with actual expenses incurred
in some of the City's grants and restricted funds. Other adjustments are required to ensure
compliance with GAAP, GASB and other regulatory, contractual or legal requirements, including
accounting requirements related to the State's dissolution of the Redevelopment Agency. Please
note that any appropriation increases are fully offset by commensurate amounts of revenue,
available cash or funds balances in each Fund, with the exception of the RORF Fund (Fund 350).
HB -59- Item 8. - I
Dept. ID FN 15-006 Page 2 of 3
Meeting Date: 3/16/2015
1. General Fund (100): City Council authorization is requested to transfer $409,420 from the
General Fund to the Huntington Beach Public Financing Authority (Fund 401) for the payment of
debt service related to the annual Emerald Cove Bond payment.
As the State Department of Finance disapproved the use of Successor Agency revenue for this
purpose, the General Fund is now financing this annual cost.
The Public Works Department requests City Council Authority to transfer $31,719 from the
General Fund to reimburse the Community Development Block Grant (CDBG) Fund (962) for
ineligible expenses incurred.
The Judgment Obligation Debt Service Fund (707) contains fees, such as arbitrage and bond
trustee fees, that were incurred. A budget transfer from the General Fund and a budget
adjustment of $3,150 is requested to increase the budget for these additional expenses.
2. Redevelopment Obligation Retirement Fund (RORF) (350): The RORF Fund was created
as a result of the State's dissolution of redevelopment agencies and subsequent creation of
Successor Agencies to oversee the schedule of payments and administrative costs associated
with the dissolution. As part of the dissolution process, the RORF, a private -purpose trust fund,
was established in accordance with guidance from the California Committee on Municipal
Accounting. This guidance requires all enforceable obligations of the Successor Agency to be
recorded in this Fund. The RORF Fund requires a budget appropriation of $17.0 million to
record the enforceable obligation related to the Bella Terra Affordable Housing Agreement long-
term debt obligation, as this Fund is on a full -accrual accounting basis. Please note this action
will increase the negative Fund Balance in this Fund from $19.9 million to $33.5 million. As the
Successor Agency receives property tax revenue over time as allowed by the State and pays
down its long-term obligations through the year 2032, this negative Fund Balance will decrease
and eventually be eliminated by the end of the Successor Agency's lifespan.
City Council authority is also requested to transfer $671,873 from the RORF Fund to the
General Fund for the Successor Agency's portion of unfunded pension liabilities and
administrative costs, as approved by the State Department of Finance and contained in the
Recognized Obligation Payment Schedules for the fiscal year.
3. Fiduciary Funds (709, 711, and 712): The Bella Terra and Strand Parking Structure Funds
are fiduciary funds that account for the activities related to the maintenance and operations of
the Bella Terra and Strand parking structures. An increase in budget appropriations totaling
$43,000 is requested to cover year-end accruals for expenditures related to Fiscal Year
2013/14.
On September 15, 2014, the City Council adopted a resolution to increase the Huntington
Beach Tourism Business District self assessment fee from 2% to 3%. As a result, additional
appropriation is requested in the amount of $19,500 for expenses incurred by the Tourism
Business District Fund (709) during Fiscal Year 2013/14.
4. Hazard Materials (Hazmat) and Certified Unified Program Agency (CUPA) Fund (501):
The Fire Department is requesting an appropriation of $19,000 to cover expenses related to
hand-held citation devices. This expenditure is cost -neutral as commensurate revenues are
available.
5. Measure M (213) and Highway Safety Traffic Reduction 1 B (218): The Public Works
Department is requesting appropriation and. authority to transfer $282,385 from the Measure M
Fund to the Highway Safety Reduction Proposition 1 B Fund. This transfer allocates expenses
incurred for transportation improvement projects to the appropriate fund.
Item 8. - 2 HB -60-
Dept. ID FN 15-006 Page 3 of 3
Meeting Date: 3/16/2015
6. Grant Funds (Various): The City applies for and receives grants throughout the year, even
after the City's annual budget has been adopted. As a condition of receiving certain grants, the
City is required to provide a local match of funds in order to receive grant funds. City Council
authorization was requested in the Fiscal Year 2012/13 year-end process to utilize General
Fund Revenue to comply with local match requirements and/or to fund previously incurred
expenses in various departments administering numerous grants. After a thorough review of
the Domestic Violence Fund 924 it was determined that $222,220 in funds is not needed and,
therefore, this amount is to be returned to the General Fund.
The Police Department and the Community Services Department are requesting an
appropriation totaling $41,630 across multiple funds to cover expenses incurred over the current
allocated amount. Sufficient revenues are available to support this request.
7. Inter -Departmental Transfer Authority (Fund 100): General Fund inter -departmental transfer
requests total $270,725. For ease of budgeting, leave pay -outs are all appropriated in Non -
Departmental in the annual Adopted Budget. However, each City Department is charged for
their employees' actual leave -payout expenses during the fiscal year. Many departments can
absorb this expense within their overall budgets. However, there are departments that need
additional appropriation, as indicated in Attachment 2, in order to be balanced. These
adjustments are net -neutral to the General Fund's bottom line as they are simply transferring
funds from Non -Departmental to other departments as needed.
8. Professional Services Authority (Multiple Funds): As required, all professional services
require City Council approval. City Council authority ,is being requested to authorize Non -
Departmental professional services expenses totaling $25,000 for financial advisory services
and Community Facilities District (CFD) administrative and management services as indicated
in Attachment 2.
Environmental Status:
Not Applicable.
Strategic Plan Goal:
Improve Quality of Life.
Enhance and Maintain Infrastructure.
Strengthen Economic and Financial Sustainability.
Enhance and Maintain Public Safety.
Attachment(s):
1. Fiscal Year 2013/2014 Year -End Budget Adjustments by Fund.
2. Fiscal Year 2013/2014 Inter -Departmental and Professional Services Authority by Fund.
HB -61- Item 8. - 3
ATTACHMENT I
Fiscal Year 2013/2014 Year -End Budget Adjustments by Fund
APPROPRIATION AND TRANSFERS
From Fund
Fund Name
Appropriation
To Fund
Fund Name
100
General Fund
$
3,150
707
Judgement Obligation Bond
100
General Fund
$
31,719
962
CDBG 11/12
100
General Fund
$
409,420
401
HB Public Finance Authority
350
RORF
$
671,873
100
General Fund
924
Domestic Violence 09/10
$
222,220
100
General Fund
213
Measure M Fund
$
282,385
218
Highway Safety Traffic Reduction 113
$ 1,620,767
APPROPRIATION
Fund No
Fund Name
Appropriation
Department
350
RORF
$
17,000,000
Non -Departmental
709
Tourism BID
$
19,500
Non -Departmental
711
Parking Structure -Bella Terra
$
8;000
Non -Departmental
712
Parking Structure - Strand
$
351000
Non -Departmental
501
CUPA
$
19,000
Fire
838
Jail Training Grant
$
2,000
Police
875
SAAV Grant
$
250
Police
909
UASI/OCIAC Program
$
9,000
Police
1214
Justice Assistance Grant
$
30,000
Police
228
Park Dev. Impact: Residential
$
380
Community Services
$ 17,123,130
Item 8. - 4 H -62-
ATTACHMENT 2
Fiscal Year 2013/2014 Inter -Departmental and
Professional Services Authority by Fund
GENERAL FUND INTER -DEPARTMENTAL TRANSFER
Department
Authority
Non -Departmental
$
(270,725)
City Attorney
$
22,000
City Council
$
9,120
Fire Department
$
230,150
City Treasurer
$
9,455
PROFESSIONAL SERVICES AUTHORITY
Fund No Fund Name Authority
350
RORF
707
Judgement Obligation Bond
401
HB Public Finance Authority
405
Grand Coast CFD
406
Mello Roos
408
McDonnell CFD
410
Bella Terra
$
2,000
$
1,000
$
2,000
$
5,000
$
5,000
$
5,000
$
5,000
$ 25,000
H13-63- Item 8. - 5