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HomeMy WebLinkAboutFiscal Year 2013/14 Mid-Year Budget Adjustments3f Gd> 7 as st.r,,u Dept. ID FN 14-002 Page 1 of 4 Meeting Date: 3/3/2014 CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL. ACTION MEETING DATE: 3/3/2014 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Lori Ann Farrell, Director of Finance SUBJECT: Fiscal Year 2013/14 Mid -Year Budget Adjustments Statement of Issue: The Finance Department has completed the mid -year review of the Fiscal Year 2013/14 Adopted Budget. Departments have requested adjustments to their budgets to ensure there are sufficient appropriations to expedite the hiring of critical public safety personnel, cover contracted costs, fund unanticipated and emergency expenses, address critical capital and facilities needs and adequately account for the City's workers' compensation costs. Financial Impact: 1. General Fund (Fund 100): This action will result in $899,500 in increased appropriations for the Fire, Police, Non -Departmental and Human Resources Departments as reflected in Attachment 1. Of this amount, $168,000 will be reimbursed by a commensurate amount of revenue for a net neutral impact. Of the remaining, $731,500 in appropriations requested, there is sufficient General Fund revenue to support these costs primarily from actual increases in State allocations to the City for Triple Flip sales tax revenues and Property Tax In -Lieu -of -VLF allocations above budgeted levels. 2. Disability Access Fund (Fund 234): City Council authorization is requested for $21,000 in additional appropriations offset by $21,000 in additional revenues for a net neutral fiscal impact. 3. Workers' Compensation Fund (551): This action will authorize $5,568,148 in additional appropriations for the new internal services Workers' Compensation Fund. A commensurate amount of revenue will be transferred from all Departments and Funds to cover these costs, for a net neutral fiscal impact. 4. Sewer Service Fund (511): This action will authorize $1,000,000 in additional appropriations to perform emergency sewer repairs. Recommended Action: Approve adjustments to the Fiscal Year 2013/14 Revised Budget in the following Funds and amounts: 1) $899,500 in the General Fund (100); 2) $21,000 in the Disability Access Fund (234); 3) $5,568,148 in the Workers' Compensation Fund (551); and 4) $1,000,000 in the Sewer Service Fund (511). Alternative Action(s): Do not approve the recommended action and direct staff accordingly. HB -109- Item 5. - I Dept. ID FN 14-002 Page 2 of 4 Meeting Date: 3/3/2014 Analysis: The Fiscal Year 2013/14 Budget was adopted by the City Council on September 3, 2013. The Finance Department provides regular budget updates and reports to the City Council throughout the year, typically returning to the City Council with a mid -year review approximately half -way through the fiscal year. The Finance Department has compiled recommended budget adjustments for certain Departments to cover these additional costs and/or provide appropriations necessary to expend funds that have been received for specific purposes. The City is currently experiencing a slight revenue improvement that can sufficiently cover appropriations requested by Departments to expedite hiring and to address pressing capital needs. 1. General Fund (100): General Fund budget appropriations are requested by various City departments totaling $899,500 as follows: a) The Fire Department is requesting an additional $193,000 for professional services that includes environmental engineering services and background investigative services. A total as -needed amount of $143,000 is requested for environmental services related to development activities and will be reimbursed by developers once the services are finalized, for a cost neutral impact. A budget adjustment of $50,000 in background investigative services is requested to expedite the hiring process and to increase the Fire Department's professional services listing authority by a commensurate amount to ensure compliance with Administrative Regulation No. 228. In addition, the FY 2013/14 Adopted Budget contains $250,000 for the OC Lifeguards Contract. On September 16, 2013, the Fire Department requested, and the City Council approved, a revised staffing model that reflects City personnel in the Marine Safety Division providing lifeguard services at Sunset Beach. A budget adjustment of $176,500 is requested to fully implement this approved service delivery model. b) The Police Department is requesting $180,000 to cover unexpected fee increases from the Animal Control Services Contract with the County of Orange Animal Care Agency. The Agency provides animal care and shelter services for Huntington Beach and 19 other Orange County cities. For FY 2013/14, the Police Department's Budget includes $475,515 for the Animal Control Service Contract. However, the total estimated cost for this contract is approximately $655,000 based on information presented by the County. It is anticipated there will be sufficient revenue in the General Fund Budget available to offset this increase. c) The Human Resources Department is requesting $25,000 to cover start-up costs for the new flexible spending accounts provider. When changing providers, the City provides start- up costs to the new provider. These costs are recovered when the provider agreement is terminated. As a result, these costs were recovered from the previous provider resulting in a cost -neutral impact. d) The Public Works Department is requesting $325,000 for two infrastructure projects, $250,000 to upgrade the City Council Chamber, and $75,000 for the Bartlett Park landscape cleanup. The Council Chamber, Conference Rooms B-7 and B-8, and the lower level lobby are in disrepair due to many years of deferred maintenance. This project will replace the ripped and damaged carpet in all the rooms and lobby, rehabilitate and re -upholster the public stadium seating, replace the damaged accordion doors, update the paint and wall coverings, replace the window coverings and lobby cabinetry. If approved, funds are to be appropriated in the Non -Departmental Capital Projects Budget. This additional expense ensures that the City maintains compliance with the City Charter Section 617(b), which requires the City spend at least 15 percent of General Fund revenue received on Item 5. - 2 HB -110- Dept. ID FN 14-002 Page 3 of 4 Meeting Date: 3/3/2014 infrastructure each year, as measured by a five-year rolling average. Sufficient General Fund revenue is available to support this request. 2. Disability Access Fund (2341: On February 19, 2013, the City Council approved an appropriation for the new State Mandated Disability Access Fee SB 1186. This bill, effective, January 1, 2013, requires the City to: 1) charge and collect a $1.00 fee on any new or renewed business license issued between 2013 and 2018; 2) submit 30 percent of the fees collected to the State; and 3) use the remaining 70 percent of fees collected to improve access to businesses by individuals with disabilities, and develop education resources for businesses to facilitate compliance. Under the law, the City can use five percent of their 70 percent share of the funds towards related administrative costs. The City issues approximately 21,000 business license per year, resulting in approximately $21,000 per year in fee revenue. This additional appropriation is necessary to assist the City in covering the costs associated with administering the program, at a neutral fiscal impact. 3. Workers' Compensation Fund (551) The creation of the Workers' Compensation Internal Service Fund is requested in the FY 2012/13 Year -End Budget Adjustments Council Letter dated February 18, 2014, for last year's budget. If the new fund is approved for the last fiscal year, staff is also requesting $5,568,148 in budget appropriation for the current fiscal year, which began October 1, 2013, to reflect projected workers' compensation costs in all funds for FY 2013/14. These expenditures are cost -neutral as a commensurate amount of payroll charges will be received from all Departments and Funds citywide. Going forward, the annual Workers' Compensation appropriations will be included as part of the ongoing annual budget development process. 4. Sewer Service Fund (511): In February 2014, the Public Works Department performed emergency repairs on a sewer siphon located at the intersection of Brookhurst and Indianapolis. The leaking siphon, which was discovered during a routine inspection, created voids in the substructure underneath the pavement. The Public Works Department immediately solicited two bids from reputable contractors and processed a requisition to Mike Prilich and Sons in the amount of $977,597, utilizing funds previously designated for the construction of the Trinidad Lift Station (51189009) as approved in the FY 2013/14 Capital Improvement Program (CIP). As a result of this action, there is a budget shortfall in the approved CIP budget. The Public Works Department is requesting an appropriation of $1,000,000 from the Sewer Service Fund Balance (511) to the Sewer Service Maintenance Account 51185201.82600 in order to resolve the budget shortfall. Environmental Status: Not Applicable. Strategic Plan Goal: Improve Long -Term Financial Sustainability Improve the City's Infrastructure Enhance and Maintain Public Safety Enhance Economic Development Develop, Retain and Attract Quality Staff Enhance Quality of Life HB -111- Item 5. - 3 Dept. ID FN 14-002 Page 4 of 4 Meeting Date: 3/3/2014 Attachment(s): 1. Fiscal Year 2013/14 Recommended Mid -Year Budget Adjustments by Fund Item 5. - 4 HB -112- ATTACHMENT 1 Fiscal Year 2013/14 Recommended Mid -Year Budget Adjustments by Fund GENERALFUND and No Fund Name Appropriation Dept 100 General Fund $ 176,500 Fire 100 General Fund $ 143,000 Fire 100 General Fund $ 50,000 Fire 100 General Fund $ 180,000 Police 100 General Fund $ 25,000 Human Resources 100 General Fund $ 325,000 Non -Departmental / Infrastructure $ 899,500 DISABILITY ACCESS FUND Fund No Fund Name Appropriation Dept 234 Disablity Access Fund - City $ 14,700 Non -Departmental 234 Disablity Access Fund - State $ 6,300 Non -Departmental $ 21,000 WORKERS' COMPENSATION FUND Fund No Fund Name Appropriation Dept 551 Workers' Compensation Fund $ 5,568,148 Human Resources Fund No Fund Name Appropriation Dept 511 Sewer Service Fund $ 1,000,000 Public Works HB -10- Item 5. - 5