HomeMy WebLinkAboutApprove Fiscal Year 2016/17 Year End Preliminary Unaudited GDept. ID FN18-002 Page 1 of 3
Meeting Date: 3/19/2018
1191PPROV eD 0-0-1
(6RF--wno l - A8SIGM ')
CITY OF HUNTINGTON BEACH
REQUEST FOR. CITY COUNCIL ACTION
MEETING DATE: 3/19/2018
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A. Wilson, City Manager
PREPARED BY: Chuck Adams, Interim Chief Financial Officer
SUBJECT: Approve Fiscal Year 2016/17 Year End Preliminary Unaudited General Fund
Balance Designations and Inter -fund Transfers
Statement of Issue: At the February 13, 2018, Strategic Planning Retreat, the Finance Department
provided an update regarding the preliminary, unaudited Fiscal Year 2016/17 General Fund Budget
performance for the year ended September 30, 2017. Certain technical adjustments and fund
transfers need to be made to reconcile the budget with actual expenditures incurred, and to comply
with auditing, actuarial, accounting or legal requirements. Authorization is requested to perform
these reconciliations in order to close Fiscal Year (FY) 2016/17. There are sufficient revenues,
available cash, and/or fund balances to support these adjustments. In addition, City Council
authorization is also requested to reallocate certain General Fund Balance set -asides in order to
finalize the City's Comprehensive Annual Financial Report (CAFR), subject to certification by the
City's independent external auditors.
Financial Impact:
1. General Fund Balance Designations (Fund 100): Authorization is requested to true -up certain
Fund Balance designations in the General Fund to reflect reductions in balances due to actual
expenses incurred and to allocate other available balances to critical one-time needs such as
Police facility enhancements. Attachment 1.
2. Inter -Fund Transfers (Various Funds): Authorization is requested for inter -fund transfers totaling
$1.4 million from the General Fund (Fund 100) to: A) the separate Section 115 Trust (Fund 716)
to help paydown unfunded liabilities ($1.0 million); B) the Enterprise Land Management System
Fund ($218,826) for costs of the new permitting system; and, 3) the Emergency Operations
Center Fund (Fund 238) for actual expenses incurred for Winter Storm 2017 ($142,212). A
transfer is also requested from the Debt Service Fund (Fund 401) to the Infrastructure Fund
(Fund 319) to close-out Senior Center expenses ($48,767). Attachment 2.
3. Appropriation Increases (Various Funds): Appropriation increases of $708,681 are requested to
reconcile the budget with actual expenditures incurred in several Funds. There is no General
Fund impact associated with these adjustments. Attachment 3.
Recommended Action:
A) Approve the assignment of preliminary FY 2016/17 year-end General Fund Balances in the
amounts and for the purposes indicated in Attachment 1, including the assignment and transfer of
$2.0 million to the Infrastructure Fund for Police facility enhancements; and,
HB -61- Item 5. - I
Dept. ID FN18-002 Page 2 of 3
Meeting Date: 3/19/2018
B) Approve $1.4 million in year-end inter -fund transfers for the Fiscal Year 2016/17 Revised
Budget in the Funds and by the amounts contained in Attachment 2; and,
C) Increase appropriations for the FY 2017/18 Revised Budget by $708,681 in the Funds and
amounts contained in Attachment 3 to reconcile the budget with actual expenses incurred.
Alternative Action(s): Do not approve the recommendation and direct staff accordingly.
Analysis:
For Fiscal Year 2016/17, which ended on September 30, 2017, preliminary, unaudited figures
reflect a total of approximately $217.2 million in recurring General Fund revenue and $1.6
million in one-time revenue for a total of $218.8 million in total estimated General Fund
revenue. An equal amount of $218.8 million is needed to fund actual General Fund
expenditures for a fully balanced year-end General Fund budget in FY 2016/17.
General Fund Designations
After accounting for actual expenditures and required set -asides, there is a need to reallocate
existing fund balance designations of $2.3 million, or 1,1 percent of the General Fund, that
were not used for their intended purpose due to the receipt of one-time revenue. At the City
Council's Strategic Planning Retreat on February 13, 2018, it was recommended that $1.7
million that was originally set -aside for the County Animal Control Shelter (but was funded from
unanticipated one-time revenue) be re -allocated for Police facility enhancements. Since that
time, Staff is recommending an additional $300,000 in Police facility enhancements for a total
of $2.0 million for these critical repairs. In addition, $350,000 in available fund balance is
recommended to be set -aside for anticipated CalPERS Rate Increases. Since the audit for FY
2016/17 is still currently in process and is scheduled for completion on March 31, 2018, the
available fund balance may change, up or down. In the event there are unallocated funds in
addition to this amount at the conclusion of the audit, staff recommends the funds be allocated
to Strategic Plan initiatives developed by the City Council at the February 13, 2018 retreat. The
unallocated funds are currently estimated to be between $500,000 and $600,000 at this time
and are included in Attachment 1 for this purpose.
Finance Commission Actions
On March 7, 2018, the Finance Commission met to review staff's recommendations to
reallocate fund balance designations available and passed two motions recommending to the
City Council to approve:
(1) Assign $2.0 million for Police facility enhancements, this motion passed 5-1-1; and
(2) Unanimously pass a second motion to deposit $350,000 towards the CalPERS Rate
Increase designation.
Inter -Fund Transfers and Budget Adjustments
Technical year-end budget adjustments to the FY 2016/17 Revised Budget are requested to
align appropriations in certain funds with actual expenditures incurred through September 30,
2017, as actual expenditures cannot exceed the appropriation amounts contained in the
Revised Budget. Adjustments are also required to ensure compliance with GAAP, GASB, and
other regulatory, contractual or legal requirements. Please note any appropriation increases
are fully offset by commensurate amounts of revenues, available cash, or fund balances in
each Fund.
Item 5, - 2 HB -62-
Dept. ID FN18-002 Page 3 of 3
Meeting Date 3/19/2018
Inter -Fund Transfers (Attachment 2)
1. General Fund (100): City Council authorization is requested as follows: 1) $1.0 million transfer
to the Section 115 Trust to help mitigate unfunded pension liabilities; 2) $218,826 to the ELM
Automation Fund to support the permit; and, 3) $142,212 to the Emergency Operations Fund to
properly account for the City's costs associated with rainstorm related activities.
2. Senior Center Development (319): An appropriation transfer of $48,767 from the Debt
Service Fund (401) is requested to the Infrastructure Fund to reconcile the funds related to the
Senior Center Project with actual revenues received.
Appropriation Adjustments (Attachment 3)
1. Retiree Supplemental (703): An appropriation increase of $332,704 is requested to reconcile
the budget with actual Retiree Supplemental Pension Payments made for FY 2016/17.
2. BID — Hotel/Motel (709): An appropriation increase of $300,269 is requested to meet
contractual obligations with Visit HB. There are sufficient revenues to support this expense for
a net neutral fiscal impact
3. Home Program (843, 1209 and 1220): An appropriation increase of $75,708 in various Home
Program Funds is requested to increase appropriations to the level of the grants and/or funds
received, and to reconcile funding with the Integrated Disbursement and Information System
(IRIS) to better track Tenant Based Rental Assistance for program years 2013, 2014 and 2015.
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.
Enhance and Maintain City Service Delivery.
Attachment(s):
1. Recommended Fiscal Year 2016/17 General Fund Balance Designations.
2. Fiscal Year 2016/17 Inter -Fund Transfers.
3. Fiscal Year 2016/17 Appropriation Adjustments.
HB -631- Item 50 - 3
ATTACHMENT 1
Recommended FY 2016/17 General Fund Balance Designations*
(in thousands)
Fund Balance Category
Economic Uncertainties
Equipment Replacement
Redevelopment Dissolution
General Plan Maintenance
Capital Improvement Reserve (CIR)A
Senior Center Debt Service Reserve
CalPERS Rate Increase
Cityview Replacement
Animal Control Shelter
Sand Replenishment and Park Improvement
Section 115 Trust
Triple Flip
Police Facility Enhancements
Strategic Planning Initiatives
Other Fund Balance AA
Total Fund Balance
Notes
FY 2015/16
Audited
FY 2016/17
Recommended
Year over Year
Change
$ 25,011
$ 25,01.1.
$ -
8,295
8,295
$ -
1,080
1,080
$ -
232
380
$ 148
8,046
8,046
$ -
2,000
2,000
$ -
1,287
1,637
$ 350
1,028
1,028
$ -
1,685
-
$ (1,685)
650
200
$ (450)
500
500
$ -
3,745
2,118
$ (1,627)
2,000
$ 2,000
558
$ 558
9,288
8,327
$ (961)
$ 62,847
$ 61,180
1 $ (1,667)
*These recommended fund balance designations maybe subject to change upon further review and certification by the
City's external independent auditors.
^Any required adjustments, either positive or negative, will be made to the Strategic Planning initiatives.
^^Other Fund Balance - includes Encumbrances, Non -Spendable and Other Restricted items which may also be subject to
further change as per audited review and GAAP rules.
Item 5. - 4 H B -64-
ATTACHMENT 2
Fiscal Year 2016/2017 Inter -Fund Transfers
Department From Name Amount To Fund Name
Non -Departmental
Information Services
Non -Departmental
Public Works
Community Services
Library
Fire
Police
100 General Fund
100 General Fund
401. Debt Svc HBPFA
Subtotal
100 General Fund
100 General Fund
100 General Fund
100 General Fund
100 General Fund
Subtotal
Total
$ 1,000,000
716 Section 115 Trust
$ 21.8,826
322 ELM Automation Fund
$ 48,767
319 Senior Center Development
$ 1,267,593
$ 89,613
238 Emergency Operations Ctr
$ 35,230
238 Emergency Operations Ctr
$ 7,165
238 Emergency Operations Ctr
$ 9,117
238 Emergency Operations Ctr
$ 1,087
238 Emergency Operations Ctr
$ 1,409,805
HB -65-
Item 5. - 5
ATTACHMENT 3
FY 2016/2017 Appropriation Adjustments
Appropriation
Fund No.
Fund Name
Department
Adjustment
703
Retirement Supplemental
Finance
332,704
709
BID m Hotel/Motel
Office of Business Development
300,269
843
HOME Program 13/14
Office of Business Development
63,277
1209
HOME Program 14/15
Office of Business Development
2,378
1220
HOME Program 1S/16
Office of Business Development
10,053
Total
$ 708,681
Item 5. - 6 HB -66-