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HomeMy WebLinkAboutFinance Board Annual Report / Study Session HB City Council / Finance Board Study Session March 6, zoo6 Charles Falzon Chairman, Finance Board Purpose of Today's Meeting 6 Discuss the Finance Board Annual Report and zoos activities C Review & comment on the Finance Board's proposed activities for xoo6 z t i Background G Council/Finance Board joint study session of February zz, zoo5 • The Cost Allocation Plan & Fee Study • Unfunded Liabilities • Board Roles & Responsibilities • Long Term Financial Plan 3 Additional 2005 Activities 6 In addition, the Board was involved in the following items during 2005 • Financial policies • Prevailing Wage • Form 700 • Board Calendar Items (e g , CAFR, Budget) 4 2 Finance Board: zoo6 Activities Absent any additional duties or studies from the Council, the Finance Board will • Pursue our normal calendar activities (based upon the Municipal code) • And Ti k i - t Potential zoo6 Activities Actively Pursue • Long Term Financial Plan • Unfunded Liabilities • Finance Board Roles & Responsibilities • Prevailing Wage • Form 700 Review • Depreciation of Assets & Infrastructure • Grants/eCivis • Neighborhood Improvement Districts • Rainbow Disposal Trash Collection Proposal 3 Finance Board: zoo6 Activities 6, If the Council has potential areas of study for zoo6, early identification will allow more progress during 20o6 7 FE- Conclusion/Next Steps G The Finance Board looks forward to serving the Council in 2oo6 1, As always, the Finance Board will work with staff and make recommendations to the Council Consider another Council/FB Study Session in February zoo7 to review the FB's 20o6 activities and set direction for zoo? s 4 i � Additional Slides s Finance Board Origination Formed by Council action on 3/15/93 �'. Stated Purpose "The Finance Board shall act in an advisory capacity to the City Council on matters pertaining to financial planning " (chapter z zog of HB Municipal Code) Seven member advisory Board one member appointed by each Council Member • Note Three new Board members in zoos �o 5 Finance Board Duties Review and make recommendations regarding (i) Fiscal Policies (2) Annual Financial Audit (& Management Letter) (3) Debt Management (4) Capital Improvement Plans & CI Budgets (5) Long Term Financial Plans (b) New & Increased Revenue Sources (7) Proposed State or Federal Legislation which impacts HB finances 11 Finance Board Duties (cont'd) f. Prepare an Annual Report to the City Council, by Jan zot" • To do so, the Board shall review the adopted Budget, Annual Financial Audits, Capital Improvement Plans/Budgets, and any other financial information determined by the board to be applicable to its annual report • Other duties or studies as directed by Council 12 6 City of Huntington Beach Finance Board Annual Report 2005 INTRODUCTION/OVERVIEW OF 2005 With the election of November 2004 the year 2005 saw several new members added to the Finance Board It was also the first full year for both our new Council members and for our City Administrator As a result of some improvements in the city's near term financial situation, the Council was able to allocate more funds to infrastructure in the FY05/06 budget than we have been able to do at any time in recent memory The past year also saw the direct reporting of the Finance Officer to the City Administrator and the elimination of the city's Administrative Services department—both positive steps for our city CITY COUNCIL/FINANCE BOARD JOINT STUDY SESSION— FEBRUARY 22, 2005 The City Council and Finance Board held a joint Study Session on February 22, 2005 to review the Finance Board Annual report and to discuss the Finance Board's potential activities for 2005 The general consensus of the Council was that the Finance Board would concentrate on (1) the Cost Allocation Plan & Fee Study (2) unfunded liabilities, (3) the Finance Board s roles & responsibilities, and (4) a long term financial plan for the city 1 Cost Allocation Plan & Fee Study The Finance Board reviewed the Cost Allocation Plan and Fee Study during 2005 The prior Cost Allocation Plan and Fee Study was completed in September of 2003, using actual expenditure data from the year ended September 30, 2002 As the Finance Board noted at the time this resulted in FY03/04 fees being set based upon FY01/02 expenditures The most recent Cost Allocation Plan & Fee Study was started in late 2004 using the FY04/05 budget as opposed to a prior year s actual expenditures The Finance Board agreed with this approach and also generally agreed with the consultant s approach of increasing the number of bases for allocation of costs We were also pleased to note that all city departments (except the City Clerk's Office) were included in the final Fee Study In late 2005 the Council adopted most of the proposed fee changes representing a 3 year catch-up in fees (FY01/02 based fees versus FY04/05 based fees) While the Board was pleased with the overall outcome, we will work with staff during the next effort to ensure (a) more timely completion of the overall project and (b) better understanding of the multi-year nature of the final proposed fee changes 2 Unfunded Liabilities During the Study Session of February 22 the Council expressed concern regarding the city s unfunded liabilities The Finance Board offered to explore the subject to better understand these liabilities and to assist in communicating this subject to the general public The detailed presentation in the FY05/06 budget was a direct result of Finance Board recommendations to staff While we feel staffs presentation of unfunded liabilities has improved, the Finance Board will continue to examine this issue 2 City of Huntington Beach Finance Board Annual Report 2005 3 Finance Board Roles & Responsibilities During 2004 the Finance Board began a review of our Roles & Responsibilities The purpose of this review was to determine if a change in the Finance Board s role could better serve the City Council This item was continued from 2004 to 2005 Because the Finance Board had several new members in 2005, the Board decided to defer this item until 2006 giving the new Board members time to become familiar with the Board s current roles and responsibilities before considering changes We expect a subcommittee of the Finance Board to address this issue during 2006 4 Long Term Financial Plan Historically the Finance Board has been concerned about the long-term financial health of the city The city measured part of its financial health when it examined the long term cost of infrastructure in the year 2000 with the IIMP study Since then, the financial situation has continued to evolve, sometimes in a positive direction and sometimes not The Board believes a better understanding of the city's financial future is necessary and will benefit both the Council and the citizenry To that end during 2005 the Board has started to work with staff to develop a long-term financial plan for our city We understand that the Council is creating a Strategic Plan, due to be completed during the first quarter of 2006 We also understand that a consultant will soon be engaged to work with staff and the Finance Board on the long term financial plan We look forward to working on this item after the completion of the Council's current Strategic Planning effort ADDITIONAL FINANCE BOARD 2005 ACTIVITIES Financial Policies Subsequent to the Study Session of February 22, the City Administrator asked the Board to review three existing city financial policies that she felt were not supportive of her philosophical approach to budgeting The Board reviewed the policies in question and made recommendations to the City Administrator The modified financial policies were then forwarded to Council The Council approved the recommended changes Key provisions of these changes included (a) the establishment of a 2nd tier reserve fund, (b) the potential funding of the Infrastructure Fund, and (c) the reestablishment of an annual budget versus a two-year budget Prevailing Wage The City of Huntington Beach has recognized the need to identify opportunities to reduce costs and maximize funding to meet the growing needs of a developing city A number of Council members requested that the Finance Board study the possibility of realizing savings by eliminating the requirement to pay prevailing wages on certain projects administered and funded by the city The Finance Board created a subcommittee to investigate prevailing wage requirements and the Board presented its findings during a joint Study Session with Council in October The Board learned that the city is not legally obligated to pay prevailing wages on projects that are not funded with either state or federal funds 3 City of Huntington Beach Finance Board Annual Report 2005 The Board concluded that a significant savings could result from a decision to pay market prices for services whenever possible and the Board recommended that the City Council • Adopt a policy to accept non prevailing wage bids wherever possible, and • Provide staff the option of sourcing funds in the budget that would maximize opportunities to obtain non-prevailing wage contracts The Finance Board estimates that Huntington Beach could save in excess of $1 million annually with little or no adverse impact to the residents The city is in need of additional funds to meet immediate and long-term needs especially in the area of infrastructure While prevailing wages would continue to be paid on most city projects, the savings from the Board s recommendations could make a substantial contribution to the long-term financial needs of the city Area unions who are steadfastly against any changes relating to prevailing wage laws have raised the only opposition to this change While the Board emphasized that this change is not a union issue, they continue to mount fierce opposition despite the benefits to the city and residents Their justification is that prevailing wage laws help maintain the standard of living for the residents but they have not established either the fact or a direct impact on the residents of Huntington Beach The Board advised the Council that the percentage of projects affected by this change is minimal and that the impact on residents is negligible Further prevailing wage laws were established in the early 1930's and the laws do not take into account the economic and legal changes that have occurred in the ensuing 75 years The Board recognizes the difficult political position that the Council finds itself in with regard to this issue but we unanimously recommend that the Council step up to the plate and approve the limited elimination of prevailing wages to affect an immediate and significant annual savings for the taxpayers of the City of Huntington Beach We stand ready to render further assistance on this issue Form 700 Another item that came before the Finance Board this year was the existing requirement that Finance Board members complete form 700, the California State Fair Political Practices Commission statement of Economic Interests Several new Finance Board members were appointed in early 2005 as a result of the November 2004 City Council election During our Council Study Session in February one Council member expressed difficulty in appointing a Finance Board member because of the requirements of Form 700 and openly asked if Form 700 was truly required of Finance Board members Additionally, a recently appointed Board member decided to resign from the Board rather than complete Form 700 Finally a potential Board member removed himself from consideration after reviewing Form 700 and concluding that its requirements are too invasive to his personal privacy Clearly Form 700 is reducing the pool of qualified Finance Board candidates After these events, the Finance Board contacted the California State Fair Political Practices Commission and discussed the need for Board members to complete Form 700 The FPPC consultant advised over the telephone that the Board most likely did not need to complete Form 700—as long as their recommendations to the Council were not routinely adopted 4 City of Huntington Beach Finance Board Annual Report 2005 unaltered by the Council Further, the consultant stated that court decisions found it illegal to require reporting when not truly required This led the Finance Board to recommend to the City Council that the Board be excluded from the requirements of Form 700 On June 20th 2005 Councilmember Hansen, via an H item asked the City Attorney to look into this matter The Finance Board strongly encourages the Council to resolve this matter prior to the 2006 filing deadline of April l" Depreciation of Assets and Infrastructure As part of the Council s discussion and approval of the Cost Allocation and Fee Study in August/September of 2003, the issue was raised as to what processes and procedures the city would follow for cost recovery related to depreciation of assets and infrastructure In accordance with the City Charter these funds need to be tracked to ensure they are expended on future assets and infrastructure In 2004 staff worked on this matter for several months and then forwarded their approach to the City Attorney s office for an opinion The Board is still awaiting this opinion from the City Attorney s office Several other issues can be explored once the opinion is rendered (e g street cut ordinance) The Finance Board also intends to review staffs approach (once it is available) and to make recommendations to Council as appropriate Grants In last year s Finance Board Annual Report, the Finance Board recommended that the city subscribe to the eCivis Grants Locator Service and that the city establish standardized departmental reporting of grant data to measure and report the benefits of the eCivis subscription Upon Council approval the city subscribed to eCivis in April 2005 It is understood that staff will issue a one year evaluation of eCivis during April 2006 The Finance Board intends to review staff s report and make recommendations to Council as appropriate Neighborhood Improvement Districts The Finance Board first proposed this concept in our January 2003 Annual Report Subsequently, the city established a program similar to the one recommended by the Finance Board To date the Board understands that staff created a brochure describing the program but, otherwise, there has been little activity with this program The Board commends staff for the establishment of this program Since the Finance Board continues to support this program and its potential benefits for the city we intend to review the program during 2006 5 City of Huntington Beach Finance Board Annual Report 2005 PROPOSED 2006 ACTIVITIES Actively Pursue Long Term Financial Plan Unfunded Liabilities Finance Board Roles & Responsibilities Prevailing Wage Form 700 Review Depreciation of Assets and Infrastructure Grants/eCivis Neighborhood Improvement Districts Rainbow Disposal Trash Collection Proposal SUMMARY In summary the Finance Board s charter is to serve the Council, and through the Council the citizens of Huntington Beach While 2005 was a year of change, we expect no less in 2006 We welcome Council comment on our proposed 2006 activities and we look forward to working with the Council to address the city's financial challenges 6 R S 1 Al E OF ( ALIFORNIA _ ARNOLD SCHWARZFNFGGER,GOVER,%OR DEPARTMENT OF INDUSTRIAL RELATIONS �A DIVISION OF LABOR STATISTICS & RESEARCH ADDRESS RF PLY TO 4�D Golden Gate Avcnuc. 8" Floor h 5 in ] rancisco CA 94102 P D Box 4.20603 San Francesco C.4 94142 0603 SCOPE OF WORK PROVISIONS FOR LANDSCAPE MAINTENANCE LABORER 1N IMPERIAL, INYO, KERN, LOS ANGELES, MONO, ORANGE, RIVERSIDE, SAN BERNARDINO, SAN DIEGO, SAN LUIS OBISPO, SANTA BARBARA, AND VENTURA COUNTIES The information in this packet is not based on a collective bargaining agreement a SC L11 { STA"I E OF CALIFORNIA GRAY DAV[S GOVERNOR DEPARTMENT OF INDUSTRIAL RELATIONS OFFICE OF THE DIRECTOR ADDRESS REPLY TO 455 Golden Gate Avenue 100 Floor J San Francisco CA 94102 P D Box 420603 San Franciaco CA 94142 0603 NOTICE TO AWARDING BODIES Subject General Prevailing Wage Determination Landscape Maintenance Laborer March 30 2000 Dear Public Official The current prevailing wage determination for Landscape Maintenance Laborer in your county will be in effect until superseded by the Director A description of the Landscape work covered is provided below for your immediate reference Please retain this letter in your records until further notice ROUTINE-mo-wing watering pruning trimming,weeding spraying occasional planting and replacement of plants and janitorial work incidental to such landscape maintenance COMPLEX-servicing of irrigation and sprinkler systems repairing of equipment used in such landscape rnaintenance Note This determination does not apply to work of a landscape laborer employed on landscape construction (work incidental to construction or post construction maintenance during the plant installation and establishment period) Please distribute copies of this letter and wage determination to departments in your agency that may be involved in contracting out for landscape maintenance work If you have any questions please contact the Prevailing Wage Unit at P O Box 420603 San Francisco CA 94142 C603 or call(415) 703-4774 Also our fax number is (415)703-4771 i Sincerely Daniel M Curtin Chief Deputy Director f I 0 I r a GLNLRAL PREVAILING WAGE DETERMINA'I[ON MADE BY THE DIRECTOR OF INDUSTRIAL RELATIONS PURSUAN f TO CALIFORNIA LABOR CODE PART 7 CHAPTER 1 ARTICLE 2 SECTIONS 1770 1773 AND 1773 1 CRAFT ##LANDSCAPE MAINTENANCE LABORER DETERMINATION SC LML 2000 1 ISSUL DATL February 22 2000 EXPIRATION DATE OF DETERMINATION April 1 2000* Effective until superseded by a new determination issued by the Director of Industrial Relations Contact the Division of Labor Statistics and Research at(415)703 4774 for the new rates after 10 days from the expiration date if no subsequent determination is issued Emplover Pavments Straight Time Overtime LOCALI fY Basic Health Pension Vacation Holiday Training Hours Total 1 1/2X Hourly and Hourly Rate Welfare Rate Imperial $5 75 0 115 0 17 8 b 6 035 b 8 91 Inyo Mono and San Bernardino 5 75 030 0 17 8 622 9 095 kern 5 75 0 16 0 17 8 b 6 08 n 8 955 IiA,tip' 1000 d 027 046 8 '10 73 '15 73 Idiot- Los Angcles 5 75 089 0 115 0 14 8 b 6 895 b 9 77 C 7 Otan�'e 5 75 oil 0 11 8 n 597 n 8 845 Riverside 5 75 9020 0 16 8 n 6 11 6 8 985 San Diego 5 75 022 0 115 8 6 085 8 96 I 625 024 012 8 661 9735 San Luis Obispo 750 k 0 15 0 15 8 780 11 55 800 '0 16 016 8 832 1232 Santa Barbara 600 n 0 12 0 12 8 b 624 b 9 24 700 0 13 0 13 8 b 726 n l0 76 Ventura 5 75 0 115 0 16 8 6 025 990 700 297 10 19 026 8 b 10 42 '13 92 94 Craft is not apprentii.eable NOI F It there are two rates the first rate is for routine work the second rate is for complex work $0 22'iftt r 3 years of service t$0 22 after 4 years of service Computation is based on the first years of employment This ISO 40 after 3 years of service rue should be increased by any applicable vacation increase 'SO 23 after 2 years of service as stated in other footnotes $0 27 after 2 years of service $0 31 after 2 years of service a$0 38 after 3 years of service $0 54 after 2 years of service $0 81 after 3 years of service k$0 29 after 2 years of service $0 24 after 3 years of service $0 37 after 7 years of service '$0 31 after 2 years of service RFCOGNI7FD HOI ID kl S Holidays upon which thin general prevailing hourly vvdge rate for I Iolida) work shall be p ud shall be all holed ivs in the collective bargaining dgreement applicable to the particular craft classification or type of worker emplo}ed on the piojeut which i,on life with the Director of Industrial Relations If the prevailing rate is not based on a collectively bargained rate the holidays upon which t1%prev2ilinf,rite shall be paid shall be as provided in Section 6700 of the Government Code You may obtain the holiday provisions for the current dc,termin itions on the Internet at littp/hvwvv dtr ca gov/DLSR/PWD Hohddy provisions for current or superseded df.ler1n111dlloiiS nldv be obtained by contacting the Prev ailing W age Unit at(415)703 4774 I Ray LL AND/OR SIi6SIS I I NCF PAN MN N I In accordance with Labor Code Seetionti 1773 1 tnd 1771 9 contractors shall make travc,l uid/oi ,ubsntence p ty Inert,to each worker to eXe(,LILL the work 7 ravel and/or subsistence requirements for each era el is,thc.auon or h pe of wort ti may be obtsuied from the Prtvathnf,Wa,e tJntt it(415)703 4774 18C