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HomeMy WebLinkAboutFiscal Year 2013/14 Third Quarter Budget Adjustmentsly {;�' C.," Dept. ID FN 14-006 Page 1 of 5 Meeting Date: 5/19/2014 -O CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 5/19/2014 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 Third Quarter Budget Adjustments Statement of Issue: The Finance Department is undergoing the third quarter budget review for Fiscal Year (FY) 2013/14. As a result of this process, certain budget adjustments are requested to reflect key changes in expenditures and revenues, as well as cost -neutral Table of Organization changes to ensure continuity of essential services. Financial Impact: 1. The Police Department is requesting a budget appropriation of $1.2 million from the General Fund (100) for: (1) $784,615 for additional one-time overtime costs due to the expiration of the provision in the Memorandum of Understanding (MOU) that allows the Huntington Beach Police Officers' Association employees to earn compensatory time; and, (2) $415,385 for additional overtime costs related to the expedited filling of Police Officer vacancies and for additional overtime expenditures in the Downtown area. 2. The Fire Department is in need of a one-time budget appropriation of $350,000 from the General Fund (100) to address the budget shortfall associated with the Huntington Beach Firefighters Association's reversion from a 6.75% employee pickup of CalPERS pension costs to a 2.25% employee pickup as of September 30, 2013. These costs are not recurring and are one-time only as the new MOU with the HBFA approved by the City Council on March 17, 2014 reflects a full pickup of the employee share of CalPERS costs for the HBFA effective October 1, 2014. This amount reflects the one-time costs associated with the reversion to 2.25% for the October 1, 2013 through March 17, 2014 period. 3. City Council approval is requested for the Fire Department's Marine Safety Division for a budget appropriation of $55,000 from the General Fund (100). This is for additional staffing of lifeguard towers on the beach due to the warm winter conditions resulting in an unusually high amount of beach visitors during the winter months. 4. The Fire Department's Marine Safety Division is requesting a budget appropriation of $110,000 from the General Fund (100) related to the restoration of funding for lifeguard tower services on Dog Beach, north of Goldenwest Street. HB -C9- Item 3. - I Dept. ID FN 14-006 Page 2 of 5 Meeting Date: 5/19/2014 5. Various budget appropriation requests are needed in Non -Departmental for debt service related transfers: $1,500 from General Fund (100) to the Huntington Beach Public Financing Authority (HBPFA) for bond costs, $1,000 for Debt Services Fund (401), and $500 to the Retiree Insurance Fund (702)., 6. The Downtown Business Improvement District is requesting an additional budget appropriation of $20,000 in Bid -Downtown Fund (710) for unbudgeted costs related to the Focused Environmental Impact Report (EIR) for the Surf City Nights and the extension onto the 51h Street Entitlement Project. There is no General Fund impact associated with this request. 7. The Library Services Department is requesting budget appropriation .of up to $145,000 from the Donations Fund (103) as a result of donations received from the Friends of the Huntington Beach Library for library services programs. 8. The Community Services Department is requesting budget appropriation of up to $145,000 from the Donations Fund (103) as a result of donations received from the Council on Aging for senior services programs. 9. A cost -neutral Table of Organization increase of 3.0 FTEs is requested in the Library Services, Finance and Community Services Departments. There are sufficient revenues, available cash, and/or fund balances to support the above adjustments. Recommended Action: A) Approve third quarter adjustments to the FY 2013/14 Revised Budget in the Funds by the amounts contained in Attachment 1; B) Accept donations from the Friends of the Huntington Beach Library in the amount of $145,000 with commensurate increases in budget appropriations not to exceed the total amount of donations received; C) Accept donations from the Council on Aging in the amount of $145,000 with commensurate increases in budget appropriations not to exceed the total amount of donations received; and, D) Approve the cost -neutral modifications to the FY 2013/14 Table of Organization as reflected in Attachment 1. Alternative Action(s): Do not approve the recommended actions and direct staff accordingly. Analysis: The FY 2013/14 Budget was adopted by the City Council on September 3, 2014. The Finance Department provides the City Council with budget updates throughout the fiscal year. The Finance Department has compiled numerous recommended budget adjustments to the General Fund and Other Funds to cover expenses associated with additional overtime, employee benefits, donations and enhanced public safety staffing costs. In addition, the Library Services, Community Services, and Finance Departments are requesting cost -neutral changes to the Table of Organization to Item 3. - 2 HB -70- Dept. ID FN 14-006 Page 3 of 5 Meeting Date: 5/19/2014 ensure the continuity and delivery of essential services, and to comply with legal and/or regulatory financial reporting requirements. General Fund (100): General Fund budget appropriations are requested by the Police and Fire Departments, as well as Non -Departmental totaling $1,716,500 as follows: a) The Police Department is requesting a total amount of $1.2 million for additional overtime expenditures. Of this total amount, a $784,615 expenditure increase is due to the expiration of a provision in the Memorandum of Understanding that allows the Huntington Beach Police Officers' Association (HBPOA) employees to earn compensatory time in -lieu -of paid overtime. With the expiration of the compensatory time provision, the estimated General Fund impact for a full twelve month period is $1.2 million. However, the pro -rated impact to the FY 2013/14 General Fund is approximately $784,615 through May 24, 2014. The remaining $415,385 in overtime expenditure increases is from the expedited filling of Police Officer vacancies and for additional overtime expenditures in the Downtown area. The Finance and Police Departments will continue to work closely throughout the year to determine whether additional overtime costs will be incurred related to expedited Police Officer hiring and training. b) The Fire Department is in need of an additional $350,000 appropriation to address the budget shortfall associated with the Huntington Beach Firefighters Association's reversion from a 6.75% employee pickup of CalPERS pension costs to 2.25% employee pickup as of September 30, 2013. These costs are not recurring and are one-time only as the new MOU with the HBFA approved by the City Council on March 17, 2014 reflects a full pickup of the employee share of CalPERS costs for the HBFA effective October 1, 2014. This amount reflects the one-time costs associated with the reversion to 2.25% from October 1, 2013 through March 17, 2014. c) City Council approval is requested for an additional $55,000 in the Fire Department's Marine Safety Division for additional temporary staffing costs incurred due to warmer than anticipated weather. The supplemental staffing was needed to operate additional lifeguard towers due to the increase in beach visitors during warmer winter weather in Southern California. d) The Fire Department's Marine Safety Division is requesting $110,000 for the restoration of lifeguard services on Dog Beach, north of Goldenwest Street. In FY 2009/10, funding for lifeguard services in this area was eliminated and the lifeguard towers were closed. Lifeguard services were restored in FY 2011/12, but without funding. The Marine Safety Division is now requesting funding as they can no longer absorb the additional expenses within their operating budget to provide lifeguard services north of Goldenwest Street. e) A minor $1,500 adjustment is needed in Non -Departmental for ongoing bond debt service and related costs. HBPFA (401) and Retiree Insurance (702) Debt Related Services Funds: In addition to the $1,500 budget adjustment request from the General Fund for ongoing bond costs, additional budget appropriation of $1,000 is required for payments to the bond trustee for the 2011A PFA Lease Revenue Bonds and $500 is required for payments to consultants for the 2004 Judgment Obligation Bonds' arbitrage calculations. These adjustments are needed to ensure payments for bond related costs are made expeditiously without incurring late payment penalties. 14B-7/1--Item 3.-3 Dept. ID FN 14-006 Page 4 of 5 Meeting Date: 5/19/2014 Business Improvement District (BID) Downtown (710): The Office of Business Development and Downtown BID have been co -applicants on the Surf City Nights and the extension onto the 5tn Street Entitlement Project application. The City prepared an Initial Study and circulated a draft Mitigated Negative Declaration (MMD) for the application. Following receipt of comment letters, it was determined that a Focused Environmental Impact Report (EIR) was necessary. Since the Downtown BID funded the MMD, sharing the costs of the Focused EIR was recommended. The Downtown BID's share is $20,000. This unbudgeted expense for the Downtown BID was not included in the FY 2013/14 Adopted Budget. As a result, staff is requesting approval to appropriate an additional $20,000 to the Downtown BID budget. This will increase the Downtown BID budget from $95,000 to $115,000. There is no General Fund impact associated with this request. Donations (103): The Friends of the Huntington Beach Library and the Council on Aging regularly donate funds to support library programs and senior services. To date, both donated $145,000 each, which brings the total donation from each source over the $100,000 threshold, thus requiring City Council approval. The Library Services and Community Services Departments are each requesting approval to receive up to $145,000 in donations, with commensurate budget appropriations. Table of Organization: Approval is requested for cost -neutral modifications to the current Table of Organization for the Library Services, Community Services, and Finance Departments. The modifications have a net -neutral General Fund impact as there are no appropriations requested for these changes, and the costs will be absorbed within their FY 2013/14 Adopted Budgets. The modifications while cost -neutral, will increase the FY 2013/14 Citywide Table of Organization by 3.0 FTEs in the General Fund, for a revised total of 972.75 FTEs. a) The Library Services Department is proposing to implement a minor change to their Table of Organization to enhance its capacity to provide service to the public. The proposed modification will allow for a full Library Services Clerk to provide direct customer service as needed throughout the library system. This results in a request to exchange a '/2 vacant Librarian position for a full Library Services Clerk position. The pro -rated General Fund impact in FY 2013/14 is approximately $11,308 and will be absorbed within the Library Services Department's current operating budget. b) The Finance Department is proposing to implement minor adjustments to its Table of Organization to ensure compliance with regulations and statutory requirements for accounting, budgeting, cash management and financial reporting functions. The proposed change would allow for an additional '/2 FTE to allow the department to fill a currently vacant '/2 Senior Administrative Analyst position to help ensure compliance with myriad complex accounting, auditing, budgeting and financial operations including, ensuring proper internal controls and accurate reporting to regulators, grantors, the Internal Revenue Service, Franchise Tax Board, State Controller, State Department of Finance and other governmental entities. In addition, to ensure compliance with State of California Government Code related to treasury operations, and other regulatory and statutory cash management requirements related to the timing and accuracy of cash handling, monitoring, daily posting and reporting requirements, the Finance Department is requesting a minor modification in the Cashiering and Collections Item 3. - 4 FiB -72- Dept. ID FN 14-006 Page 5 of 5 Meeting Date: 5/19/2014 Division. Specifically, the Department is requesting an exchange of two part-time positions for one full-time position. As a result of recent cutbacks, the Division has been struggling while relying heavily on temporary staffing to perform critical daily operations. This model is counterproductive as there have been operational inefficiencies due to high turnover, a loss of institutional memory, unnecessarily prolonged training due to truncated hours, and a constant reorganization of workloads due to a revolving door of employees. A permanent position will help restore much needed stability to these critical operations and help ensure proper internal controls, checks and balances, business continuity and compliance with State of California laws. The cost of the FTE will be offset by utilizing temporary salaries savings for the two part- time positions for a net -neutral impact. The pro -rated General Fund impact in FY 2013/14 is approximately $45,690 and will be absorbed by temporary salaries savings and reductions to the Finance Department's current operating budget. c) The Community Services Department is proposing to add a Recreation Specialist position to their FY 2013/14 Table of Organization. Three community centers support the needs for adult and youth programming and recreation services throughout Huntington Beach. Currently, two of the Community Centers operate with 2.0 Recreation Specialist positions and part-time staff. The Community Services Department proposes equal full-time staffing levels for the three centers to deliver consistent services to the community. This can be accomplished by adding a Recreation Specialist position for the third community center. The FY 2013/14 General Fund impact is approximately $19,800. To cover this cost, the department will utilize the savings from an under -filled position and will make reductions to its operating budget, for a net -neutral cost to the General Fund. Environmental Status: Not Applicable. Strategic Plan Goal: Improve long-term financial sustainability Develop, Retain and Attract Quality Staff Enhance Quality of Life Attachment(s): 1. Attachment 1 - Fiscal Year 2013/14 Recommended Third Quarter Adjustments KB -73- Item 3. - 5 ATTACHMENT 1 Fiscal Year 2013114 Recommended Third Quarter Adjustments Recommended Third Quarter Budget Adjustments by Fund: GENERALFUND Fund No Fund Name Appropriation Dept 100 General Fund $ 784,615 Police 100 General Fund $ 415,385 Police 100 General Fund $ 350,000 Fire 100 General Fund $ 55,000 Fire/Marine Safety 100 General Fund $ 110,000 Fire/Marine Safety 100 General Fund $ 1,500 Non -Departmental $ 1,716,500 DEBT SERVICES TRANSFER FROM NON -DEPARTMENTAL GENERAL FUND Fund No Fund Name Appropriation Dept 401 Debt Svc HBPFA $ 1,000 Non -Departmental 702 Retiree Insurance Fund $ 500 Non -Departmental $ 1,500 BUSINESS IMPROVEMENT DISTRICT (BID) DOWNTOWN Fund No Fund Name Appropriation Dept 710 BID - Downtown $ 20,000 Non -Departmental DONATIONS FUND Fund No Source/Donor Appropriation Dept 103 Friends of the Huntington Beach Library $ 145,000 Library Services 103 Council on Aging $ 145,000 Community Services $ 290,000 Recommended Table of Organization Adjustments: Fund No Dept FTE Increase Title 100 Library Services Y2 Library Services Clerk 100 Finance 1 Accounting Technician II 100 Finance Y2 Senior Administrative Analyst 100 Community Services 1 Recreation Specialist Item 3. - 6 HB - 7 4-