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Home My WebLink AboutCity of HB Long-Term Financial Plan Update - 8/18/14 - Study 11161 00 YEARS OF SURFING x HUBEIACHOH Z y CA C) A� C= In ptn W rq r > nit o � untin ton Bec g financial Plan n' :.µ Summ ► General Fund Five-Year Projections ■ Revenue Assumptions ■ Expenditure Assumptions ■ Unfunded Liabilities Review ► Recommendations z . I I f enef o a. Five-Fear Plan ► Builds a financially resilient government through long-term financial planning Improves long-term financial sustainability as required through the Strategic Plan ► Provides time to effect change and adapt to changing conditions ► Adds transparency and encourages involvement ► Creates methods to determine the costs/benefits of decisions over the long-term ► Implements a tool to help leaders balance competing demands for enhanced or new services, additional staff, infrastructure needs and financial reserves 3 100 YEARS OF SURFIN ; a - a NUNTINOTON BEACH CA = Five-Year Projections , vo- , _ q ib rt 4 Five-Year Plan Highlights ► The City's General Fund is benefiting from the economic recovery ► ri approximately However, the City's personnel costs comprise app imatel y 71° o/ of the General Fund Budget ► As such, fixed cost increases related to the existing payroll base will largely consume projected revenue increases ► The most significant cost increases projected over the next 5 to 10 years are the City's pension costs ► Hence, projected revenue increases will primarily assist in funding increased pension costs , a13i ; Ex enditure Assun1 bons ► The projections reflect the "Base Case" and do not reflect enhanced staffing levels ► Equipment Replacement increases by $500K annually until FY 18/19 ► Infrastructure spending increases by $lM in FY15/16, and thereafter, to meet the 15% infrastructure Charter requirement ► Funding of $lM is included for 800 MHz project each year ► Senior Center debt service of $1 .2M in FY 14/15 and thereafter ► LeBard School site acquisition funding of $333K per year for five years ► All employees are at full CalPERS pick-ups ► Reflects projected CalPERS cost increases per Bartel Associates 6 I a1PERS Cost Increase ► The City's Ca1PERS Unfunded Liability is $334.5 million* : Unfunded Liability(MV) % Funded Safety Plan $201.9 million 63.5% Miscellaneous Plan $132.6 million 69.3% ► Higher rates will be phased in starting in FY 15/16 and FY 16/17 ► In 30 years, unfunded liabilities should be paid off ► Total Ca1PERS costs will increase by 89% from $26. 1 million in FY 13/14 to $49.3 million by FY 21/22 (eight years) ► Safety rate will increase from 38.8% to 55.2% in eight years ► Miscellaneous rate will increase from 21 .4% to 34.7% in eight years * Market Value Unfunded Liability will be reflected in next Ca1PERS actuarial valuation in October 2014. 7 8-Year CalPERS Employer Rate Increases j r All Funds $60.0 (In Millions) g)1/o $50.0 $40.0 - $30.0 ■ Misc ■ Safety $10.0 FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 $26.1 $27.1 $29.5 $33.9 $37.7 $41.7 $45.8 $48.1 $49.3 8 ve- ear an roj ec io "Case Case" - Proposed ®� 1Projected Salaries $ 96,506 $ 97,875 $99,132 $100,386 $101,659 CalPERS* 25,669 27,645 31,188 34,684 38,364 Workers' Comp** & Other Benefits 25,668 26,328 27,026 27,764 28,544 Operating & Non-Operating 49,292 49,416 48,661 48,144 48,717 Infrastructure 3,000 4,000 5,000 6,000 7,000 Equipment 4,530 5,000 55500 6,000 6,500 Senior Center 4,200 1,200 1,200 1,200 1,200 Total Expenditures 2089865 211,464 217,707 2249178 2319984 Total Revenues 2079032 212,725 218,575 2249586 2309762 CIR- Senior Center/LeBard School 2,333 (Challenge)/Surplus $500 $15261 $868 $408 ($1,222) *General Fund share of total Ca1PERS costs. **General Fund amount needed to fund its share of Workers' Compensation Internal Services Fund's costs. 9 100 YEARS OF SURFING HUNTINOTON � CA 4 s for Additional Revenue Y� .;r `_ _ _. �"• ��wiew%'., � gym.-_'+- �. a.e_ '- ,..-_ :-�' �. _ - - _.. • • 7 MR d 71 , es BN-L -..."-r nrhm. Solid Waste Franchise Fees Budget Discussion 2020 $2,372s17 12% 2019 $1,337,3 i3 $2,292,288 12% �snx�S, , I 2018 $i,z91,949 $2,214,770 12% 2017 $1.069r9$y% $1,961,551 11% a Base 5% 2016 $699,170 Slsso,633 Adj. Fee 9% i 2015 92,93 51,165,26a j i 2014 $soa,lss 2013 $761,956 $- $1,000,000 $2,000,000 $3,000,000 =i Base fees calculated at 2.0% annual growth rate and 1.5% CPI rate adjustment Fees adjusted to comparative rates on a tiered schedule at 2% for Years 1 — 3 & 1% for Year 4 Source: Rainbow Environmental Services 11 i` 17 - Proposed :iea'Is oonBase Plus Franchise Fee I ' Total Expenditures $208,865 $211,464 $217,707 $224,178 $231,984 Total Funding 209,698 213,415 219,645 225,886 232,102 (Challenge)/Surplus $833 $19951 $19938 $19708 $118 mmftbL� 12 100 YEARS OF SURFING I. ' HUN TINO TON - � BE qCH g t Unfunded Liabilities _�..: . _ ""'�„� lei-�-�•�+-rw.=- _ _'_. .�, _: _ lan : to Deduce Unfunded Liab The 5-Year Plan reflects the City's award-winning, 3-pronged approach to reduce unfunded liabilities: Ca1PERS "One Equals Five" ■ The "25 to 10" Plan for Retiree Medical ■ The " 16 to 10" Plan for Retiree Supplemental 3 4 14 I i L Plan Address . PERS Liabilities ► The City will be facing significant increases in PERS Employer contribution rates starting in FY 15/16 ► The Proposed Budget includes a $500K surplus ► This surplus, coupled with the $500K in the "One Equals Five" set-aside, and Franchise Fee revenue, can create a $ 1 M+ Plan to (choose one): ■ Fund the "One Equals Five Plan" (each $ 1 M saves $5M); OR ■ Create a PERS Rate Stabilization Fund (minimize volatility); OR ■ Reduce amortization of Public Safety Plan by five years is PERS Safety Plan Option City of Hunfin•tm Beach Illusn ation d{lternare Amortization-CAPERS Safety Plat, ( 7) Amomia.,io.(an,(h,at.rr,30 P.."? A4drie.il S1,000,000 P.3m.a.Each year Orin Od64aal$A." Red.r.6mwtu..P.rid l Sear.-N.Bme Si'.ghtd A,e, CWPM Aanal M-1th P..1 WdShrej Mg, .Smmn dmorthadoa Extra S1,0(q(DO Iaermre Aar.n. P.yu.1 Year UAL P.A.6 SAvnt %PAT UAL Period SPa mt %Pay orijimad UAL Perid SP 'meat all P Ieereax 2C1116 t136533,340 270 S 8,653�4: 2618% 136531,340 27.0 S 5,653-241 22,51% S ID00,000 S 13033,340 22.0 S 9:719,696 23,67% ( 1;)66,455 MPH C01,7S9,09 27.3 S 9,812,964 2222% 230,762,197 52.2 1 1C812966 24.41% S 1D00000 S 2D0,693r95 22.3 S Il,(3052s 2418% t 1,21.,562 201617 $1067!9,f46 26.3 S 11.034.486 24,26% 234608,240 31.2 S 12,034,48E 2645Ye S IDOQ000 $ 204,3MM 21.) S 12,411.262 27.28% S 1,376,776 2917,10 $110.825,121 253 $ 12,320,46' 26.29% 237,476,237 311 $ 13,320,467 NAM $ IPMO0 $ 2D6:763,472 20.4 $ 13,164,913 2939% $ 1,SIa,4=6 2(18'19 $t13,8f3,(26 24.4 $ 13,673,574 28.33% 20Rx_x6,W2 25.E S 14,673,074 306(% $ lAW,000 $ 247A95,215 19.4 $ 15,394,6E II90Y $ 1,T.0,938 211920 SS1$726.230 234 S 15,096.386 30.37% 209,703,952 21.6 S 16,096,98E 31311Y. S IA00.OW S 207,52i,957 19.4 S 17,(03.615 3411% S I.W6.6'9 M2021 S216^51,609 224 S 15,549,196 303 231.742.049 2L6 $ 1(549,06 3;31% S 1A00000 S 205,460,690 17.4 S 17513,734 All% S 1,9C,828 !MM $116349,194 214 S 16,016393 AM 237,338,435 13.6 S 17,016j93 31-M S IA06,000 (S 202,711,616 16.4 S I8,(39,136 34.21% S Zn%743 M2':3 S'_IS9f9,341 204 S 16,496,11IS 3037% 205,138,A]i 19.6 $ 17,4%.885 32.21% S IDOD,000 S 199211.613 15.4 $ 18580910 34.21% 1 2,013,4:5 2[:314 31-1 S,O(2,i08 19a S 16,991,79: 30.37.E 2T_,382,511 13.E S I1991,'91 33.1EX 5 IA00,OW S 195,888,009 144 S 19,137,719 M31% S 2,145,928 184 i 13.i $ 19,711$SI3113,5i4,S47 5 X 34±1% $ 2,510,30E $1L447,(80 174 f 11.(P6,59: 3037% I9/541,144 15.6 $ 15,026,591 32-06% S 1AO.000 3 183A49,114 L2.5 3 20,303,206 N11% $ 2,376,615 MCI S108615.243 164 5 18.567.319 383M4 18951).115 15.6 S 15,567.599 31.015i S 1DW.000 S 176,157.050 11.5 S 10.912302 A.21% S 2,514913 H21I8 320i010,308 IS4 S 19.124,411 30.37E 193,431,699 14.6 9 M.121,4❑ SIAM. S 1D00,000 S 167.686,553 I0.5 $ 21,539,671 W1% S 21415.261 M1'29 5200.557,470 144 S 19,698.141 30.37A 176131,147 13.6 1 X,699,143 51.91% $ im,000 S 157.030,114 9.3 S 32,185,262 14±1% S 2,4111,718 202930 $:95,175910 134 S 20289,3/1 3937•4 168095,713 12.E S 212t9,087 SIAM S IDD0.000 $ 146,772,1S7 9.5 1 22,151,437 A.21% 1 2,562,350 203Y31 5:66,Ti i,E23 125 S 20,897,760 30.3ML IS8,629,1% 11.6 1 21,897,760 31.91% S 1400,000 S 134,08TJM 74 S 23,53090 3421% 1 2,639,220 :0313! 331,2(8,501 11.5 3 21,524,691 3937% 147,823,058 DA S 22,524,693 31.71% S 1A00,000 $ 119,740,073 6.6 S 14:43,090 3421% S 4711,397 lC3933 S:T 546,i92 105 S �7,I70,431 AM 135555,639 36 S 23,170,434 9174% f 1D00,000 5 109,584,611 5.7 f 24,570,313 341M S 2.799,949 20334 S:62,5(1,(06 9.5 S 23,615,541 30.37E 12169S,748 1.6 S 23,135547 31.70% S im,000 S 35AM,825 4.9 S 25,319,494 3411% S 2,183,947 V038 5:51,011,133 8.5 S 23,520,613 30374 I%,11?,934 76 t 24,510.413 3166% S 1A00,000 S 65.207,073 4.4 S 26,491,OW 3411% 9 2,770,466 H38,34 $37,951,406 76 S 24,21423: 30.373 &SfA,991 9.6 9 25`26,l31 SIAM 3 1D00,008 S 42.631.058 34 S 27,285AI1 1411% 9 3,059,510 l03631 S:23,1i9.470 66 S 24.953.313 30.37% 69,141,370 56 S 25,953,018 313S% $ 1D00.000 S 17,537,857 4.0 S 7-IK354 923% S (17,348,664) 107,30 $:06,546,(91 57 $ 25,701,SOf 30.37% 4T,11I,310 46 S 2E,701,109 313!% j I,000,000 $ 70,989,581 3.0 $ S,8S0,914 6.92% { (19,342,695 :E38.39 517,889,(5'_ 48 $ 26,472,557 3037% 23�89,856 3.6 3 N,147,447 27.70% S R}23.210 $ 5,739,149 2.0 3 4,t23,121 412% S (1_2,449,5A) !O M %7,033,296 40 S 29,266,837 3637% - S S (27,266,8] f 1.998,325 ID S 2,(71507 2.31% 1 Q5,194,930) !040141 S43719935 34 S 29,094,141 3037% - S S (28A94,812) S - S - f (21,W,842) !(41142 S17955,196 40 S 7,764,93. 2,13% - S S (7,764211) S - S - I C7,764,Ml 214243 Sl Ir51A81 3.0 $ 5,998,332 611% - S - $ (599t,332) S - $ - 1 (5,)98,352) :(4344 S5.875.717 20 S 4,118354 408% - S S (4J18,854) S - $ - S (41JI8154) :f444- $2,0451an 10 $ 2,121,210 204% $ $ 4 10 9 $ $ (117 10 S 536,511,419 S 482,331,304 S Ep S 491,430?7 S 1E S 163,d80,116) S (6J,E16,JL•) �� ?area C.rrem amwtlmria.wis".6 simplified f.,il.�rrodea. Bazad..6 M:2 umarid.-doadoa.d ahue.am......rp...d ia.rnu•Dam ant,merl.Adw far 2113 r.l..Ee.bat mr anompe.a A......r i..eztmm.Om..fa 7614edma0.a. S'a14e)iv suantizd are.31 part,iosludiN a$-3ear fl m LP and ramp dorm. Baal An.,i.*,,LLC L4-Aa6-14 16 CAPERS Safety Plan y. m 0 bons to Accelerate Unfunded Liability Payment 250,000 200,000 150,000 b iD 100,000 m v � I w c 50,000 Year Year10 Year15 Year20 a 5 e a r 3 0 0 --' - 0) M In n O1 M Vl N N N N N M_ M M 7_ 1 1 1 V to 00 O fV I* to 00 O N V' to 00 O N 7 }N} }N} }N} N N M M }M} }M} M L}l. L}L t}L. IL lL LL l}i I}i l}L LL LL tL l}L tL l}l. LL Years to Eliminate Unfunded Liability jftWM—Current Amor —+$1 Million/Yr — 5 Yr Amort *For discussion purposes,final results will be based on actual market conditions and actuarial changes. 17 L Sceinarriog # 1 Additional Annual Pa ment of $IM . . 250,000 200,000 150,000 L ro 100,000 v ar $54M Savings c 50,000 Years Year20 Year15 Year20 Year 5 Year30 0 -_ in N CA M IA n CT M in N C1 M in M_ M t'r It to 00 00 V l0 e0 O N IT t0 e0 O N lD W O IrIjT V' N N N NM M M M M � qT ti li [i I}i l}i LL l}i LL LL L}i LL LL LL LL l}i L}L Years to Eliminate Unfunded Liability --Current Amort —+$1 Million/Yr For discussion purposes, final results will be based on actual market conditions and actuarial changes. 18 CAPERS Safety Flan a Scenario #2 : Reduce Amortization Period by 5 Years (luFhuusandsl 250,000 200,000 150,000 a b 100,000 t�MS50,000Year5 Year10 Year15 Year20 ar25 0 I vt N 0) M V1 r` Q1 en V1 N 0) M V1 N N N N N M M 00 0 r4 v LD 00 V l0 00 O N V' oO 0 N M l0 O N V' � }N C4 M M}N N }N }N M }M M M M 'r V' V}}' LL LL {L LL �!. LL l}L LYL lL l}L LL Years to Ellminate Unfunded LlabllltV i —Current Amort — 5 Yr Amort `For discussion purposes, final results will be based on actual market conditions and actuarial changes. R 19 Fund the "One Equals Five" Plan for Safety * Reduces amortization period from 30 years to 24 years (est.) ■ Saves taxpayers an estimated $53.7 million ■ Provides more predictable budgeting while still creating long- term savings ► Amend City Council Financial Policies ■ Budgeting ■ Include annual funding for the "One Equals Five" Plan for the PERS Safety Plan in the annual budget *For discussion purposes. Final results will be based on actual market conditions and actuarial changes. 20 Five-Year Plan Projections Base Plus Franchise Fee Plus 13EI S Safety " l Proposed Projected Projected Projected Projected Total Expenditures $209,865 $212,463 $218,707 $225,178 $232,984 Total Funding 210,198 213,415 219,645 225,886 232,102 (Challenge)/Surplus $333 $952 $938 $708 ($882) 21 CCOMPIls ments ► The "16 to 10" Plan for Retiree Supplemental will save $7.4M ► The "25 to 10" Plan for Retiree Medical will save $9.2M ► Based on increased contributions into the "25 to 10" Plan for Retiree Medical and market gains, the following success has been achieved: ■ As of 9/30/13, the Plan's Unfunded Liability has been reduced from $10.6M to $3.1M ■ As such, it is possible this plan can be paid off in less than 10 years; perhaps in 3 more years 22 Base + franchise fec Total Expenditures $208,865 $211,464 $217,707 $224,178 $231,984 Total Revenues/CIR 209,698 213,415 219,645 225,886 232,102 (Challenge)/Surplus $833 $1,951 $19938 $19708 $118 Base + Franchise + "1 = 5" Safety Plan Total Expenditures $209,865 $212,463 $218,707 $225,178 $2321984 Total Revenues/CIR 210,198 213,415 219,645 225,886 232,102 (Challenge)/Surplus $333 $952 $938 $708 ($882) Base + Franchise + "1=5" Safety Plan + Retiree Medical Savings Total Expenditures* $209,865 $213,394 $217,730 $224,232 $232,038 Total Revenues/CIR 210,198 213,415 219,645 225,886 232,102 (Challenge)/Surplus $333 $21 $19915 $19654 $64 *Includes minor labor adjustments in f Y 15/16 and forward. ��l 1 t, t'�'s4a 2 3 3 1 ELI Total Taxpayers' J Actions Taken to Reduce Unfunded Liabilities PARS Pre-Payment $595606 7.75% Discount Rate Change — No Phase In 110279000 Retiree Supplemental " 16 to 10" Plan 75400,000 Retiree Medical "25 to 10" Plan 9,200,000 Subtotal $17,6869606 PERS "I — 5" Safety Plan 53,680, 116 Total $7193669722 Actual performance will be based on market conditions and actuarial changes during the amortization period. a , , 24 100 YEARS `"" P - HU NTINOTON '�"4 BEACH J ty ppy 100 Years of Surri - --I w_ x �c - ;,y:.+�•- _- � �� i��. � _ 1M. 1 - . —�yy��-�T`+fie-�y'��..�. — '_'„_ate: - � a.'�d:Y` ..�aP dP✓ :.l - X. S•Cv' yC`o_,.'�3 .u�$\a "-^WlYr�CL'MYiu4ti.--ti��t''��} TIONS ? City Clerk -- User Fees Fee Description Updated 6115/09 per Res#2009-31 Copies: Per page $0.10(per case law) Miscellaneous(includes micro film) Cost of Reproduction Video Tapes* $ 1.45 Audio Tapes' $ 0.35 DVD-R• $ 2.37 CD-R* $ 0.44 Other: Agenda Subscription (Annual) $ 63.00 Minutes Subscription (Annual) $ 57.00 Huntington Beach Municipal Code $27.00+$5.00 postage Huntington Beach Zoning Code $27.00 +$5.00 postage Historical Data Booklet $ 5.00 Certification of Document $ 3.00 Passport Program (application fee) $25.00 Federal Program Mandate Passport Photograph (optional) $ 10.00 City Code Mailing Service $32.00 per subscription (annually) 'Plus cost of postage Pagel