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HomeMy WebLinkAboutCity of Huntington Beach Strategic Planning Session - Budget r:' y - -- r,.- -- -- - �'."�"r.�.-.4:��`0 i 'z11r"+��� �. t -.-� � �rsz�+s+2-� - i -`-. a = i r a'• '+ '-*'Ir �u - ^h�' >F•'• left efti �., 'w.. ...: � Aar'�i���l: 4t �d'�,._,.4.2 1� _i d'p�.i Lr d'�.'y,y ly r' AW.j, n �,T• �dl .�a i� `4d r 1 i .1, ;=t i ���ra: N r r view • FY 2014/15 Fund Balance Recommendations • Unfunded Liabilities Update • Police Officer Staffing II Strategic Planning Retreat F Y 2 0 14 15 Ye, ,da nE,E n d P e r 1,o ni a n c c ( P rc l i m i ra a ry/ [ 1 na u di-te d) ors g�r�w r s s � is E" ati q :t�.- p £ tr� ! a `� ,i•3t g I Expendi- (Prcfilllinar .IT Expenditures mActual Citywide Departmental HApenditures S'207.5 m Grant Fund Cleat? Up $0.4 Total Expenditures* S207.9 Actions to Address. Unfunded Liabilities inSection l l 5 Trust ` 1 .0 ■Workers' Compensation. Fund $1 .0 *Total (Expenditures & "Transfers) S209.9 his anic unt is oilk. an cs(Mlatc anal is Mill Subject to dwiluc ha4cd oil I livil adill"tm :sits b\ inclel)cndcnl midllors acid (iAAP rule•,;. E l � y 'undRevenue F 2014/1 ,5,_ it-joeneral v ( Preliminary Unatildited - a General Fund Recurring Revenue $209.3 General Fund [one-Time RevenUe 2.9 Total Estimated GF Revenue* $212.2 Total Estimated Fxpenses & Transfers* (209.9) 'Estimated Available Vear-End Fund Balance (Unaudited): r2.3 'This aillownt is only an estimate and is still Subject to eh7nwe based on 17rtal acljuslnients b�� the�C'ity"s irxleheradenl auditors and {_;rtAI' rules. *Year-end fund halance is onc-time in nature as the year's hudeet, FY 1-0I 5ll6 has prclp,rammed this available funding into, r'eertr'riiig costs. b mp b _ Strategic t Retreat 4 Ott ti 2 Y 2 0 '14' 1 R t_- � Of jJ mca-i i FY2014/ 15 Ye,Aar-End Fund Balance Options Option A Use entire one-tine laund Balance to I'trnd Economic Uricertairities Reserve Police: Ttivo months of Adopted FY 151116 Expenditures $6. 1 million Current Economic 1lncertainties Reserve — $-5.0 million Ccirrent Shortfall = $1 1 .1 m111ioln Revised Shortfall = ` 8.8 million This option will assist in retention ol'A " A credit rating Option B Assign the estimated one-time available FLlnd Balance to the following: FIB portion ofconstrrrction of`nevV County .Animal Shelter- ($1 .5 million); or 1 Undrng for park improvements/transfer to lnfraStl'Uctrlre FLIncl ($0.8 n11111on); or Option C Pay Do�vn Uni'Lrnded. Liabilities CUt Workers' Compensation Unfunded Liability ($ 1 1 .9 million est,) ; or Deposit into new Section 115 Trust; or Deduce l-ctiree Medical [?nfirncied Liabilities (Safiety 4_)r71y: $8.9 million est.) In OwPh 1, o o N 9� �. �, 1�_ �. h ��_ �� 1 Il�.• f _ 4,;. i _ • , 1'Conoillic Uncertainties 259011 S 25,(11 1 $ 25.011 Litigation Deserve 900 900 11C1() E.cluipsllel)t Replacement 8,205 9.295 8,205 l ccicvclopr7Icnl. DISSOIL IMI General flan mallitellanec. 72)0 720 720 Callilal Improvement Itcscrve (CID) 7,130 7.136 7,13)6 Senior-Center Debt Service Descrx c 2,000 2.000 2.()()() C APl?DS "Onc FCILal5 FiVC Plan'. 1.5(1(1 50(1 5()I) CAPERS Rale inc:leasc 1.287 1.287 1,2177 C'ityvicvv Deplacemen( 695 891) 889 Senior Center Donation. 685 685 OtllCl' FLIIId 1 .187 1? 1 Unassigned - 2,300 2,300 Total Fund Balance 61,054 S 63,07G S 6.1,1l76 *f 1fltc'7'f r it 1 Pideill(V rirr'Inth'ti !'1 'jWh1 irr WeHIf e'. I.m rembi 0.01C t,w, Anti .`?pi,n,f(INt.and()1h A` Rr li !t'cl ri Arrn. i Strategic -Planning FY 20 -15/ 16 _ F �,-t! nd .Buclget Overvi' ew f fj "'24, 0, 1 5� 6 General Fund Revenues 212.2 $216.7 Total Sources of Funds S212.2 S216.7 General Fund Expenses $207.9 216.7 Transfers* 2.0 0 Total Uses of Funds S209.9 S216.7 Surplus/(Deficit) S2.3 S0.0 '11"cldd.t'I�'I'S'to l rel'Ii"i'rs I 'wlllff"11.Iellie ill I'drll[ illltl,ti�'a'lrffll II Irlrkf r r7t .. s FY } 20 -1 .5- M- 6 GeOverview Balanced General Fund Budget for F,Y 2015/ 16 A $3 million. budget set aside is included Fixed cast increases such as PERS, Workers' Compensation, insurance premiums and Utilities are included Equipment replacement funding i.s increased by $500,000 for a total of $5 million Increased funding and staffing for Public Safety ( 13 newly funded FTEs) and related capital, equipment and technology investments '@t.I -a- Sr _te. - L�- sal,J`r ,r� � � �� ix A},ef r'1 �I��I .�§�y<r �r.4� i f �s �' 6i C�!�� l� �E1 �� 4A �i � •,�.�;. p d p Public Safety Represents 53%► of General Fund Citr C6 Cif CiIL' l.ilrrarr f'Iruncil f'leI'I: 1;rn;Il er \Iltlrrrt r Sen ices Firi ance 0.2 Y, 0.4 l.fl",�`�Y 1.l"l�� 2.I 'fr ��-.. I IIlnl;trl { it) ' t Resmirceti��Crrfi,rattalinn Scl'L'aces YY; i ,ee,Se Police •:fi 44 3.31140 32.4% ��! I'Uhlli' ��rrla`liti tll,4'SSY Fire 2 rrffy tinrl el-Ilrn•I n l t•n t al Y, +[ tom._ ''yy - �'�_s[ �_-—.•i., _ — _� I I -FY 2 (015/ 16 GeFund Highlights A total of 8 newly funded Police officer positions are added bringing the number of sworn positions to 222 FTEs I i This represents an increase of 15 sworn FTEs since FY 2012/13 Three COMMI-inity Services officers and two Communication Operator positions This represents an increase of 13 newly funded positions for the Police Department in FY 2015I16 LeBard School site acquisition and funding for a new Senior Venter Infrastructure Funding Sidewalk repairs, street repairs, sand replenishment, campground expansion, and other projects -.;`1s�:, ru a f r p �� �{ t 'E�F� I�I 1`I � +,K K, .., � �,•1 f� .L !!. f:. E� Total Funded Sworn Officers in FY 2012/1.3 207.0 Additional Officers FLrnded in FY 2)0 13/20 14 +5.0 Additional 011 cers Funded in FY 2014/2015 + 2.0 Subtotal 214.0 Additional Officers 1i Landed in FY 20 15/201 G — Proposed BL1d�et +2.0 Additional Officers 1"ended in FY2015/2016 — Adopted Budget* 1-?.0 Additional 011icer-s Funded in FY 2015/2016 — Revised Midget* -+-4.0 FY 2015/16 Subtotal +$.0 Total Funded Sworn Police Officers 222.0 Increase in Sworn Police Officers :since FY 2012/1.3 15.0 T - _. .. .-s-ar Historical Fundec" FTEs Past-Recession Era 1.200 237 1,000 213 207 21 L, 214 222 +7% 20'7' Boo 144 126 123 119 122 123 128 +4/0 6no 100 763 631 G14 boo 615 61g 623 +1%€r 200 police: Sworn Police: Ncm Sawrn [a All Others FAY og/io FY to/11 FY 11/12 Fy 1•,}/1;-, Fy I31i<1 f�'141�.; I�- 1,5/1() 1,144 970 944 926 949 956 973 -- - - •Yf ,1- "-` +ram i'.;.4 +'� "!� �� - - 4�. -=,A� �.'x,.t�.. Y€�F;;'�' „,�. y�e_� g ° yy..rWF�f W. i pd stl ki'lle"'IC I It] 1, g. Z f-, t t, e�a { 1 R IR I P E.R'Sly � s aae ltt1� f joi Unffinded Liabilities Overview Pretimimary U n1a u ch.te(] 1 r � H I I CalPERS (Safety)' 184,182 70.5% " 1 =5" Plan 25 years CalPERS (Misc)^ 1101230 77.2% Standard PERS Plan 30 years Subtotal 294,412 72.9% Retiree Medical (Safety)' 81924 TBD "25 to 10" Plan 10 years Retiree Supplemental 215563 62.7% "16 to 10" Plan 10 years I Workers' Compensation 119866 T B D " 10 in 10" Plan 10 years TOTAL 336,765 Total wifcr ded liability trrnounfs are not constant and rrrc su jert to clrrrrrg frar► ark et aunt tioln, rlemo raphie.s and etemarial changes. Basetl nrr 201 3 Ac°tiwrirr!1l00. 11-liNC-trllurICOIiS P0111011 Irc tit I t/011 W Itr:Yt t°t�trr. "1.-}`_014 15 Year End Estimate " litrsetl011 C'rrll'L'R,5'Aimmr/Actirtrriirl 1'rrlrrrrtirrrr Rcport tr.r o/.hme 30, 214 .. - - .-- . r • 4' .,�,,a , " _ ..c. Into � �� ,ter .� ��- ptl ~ •'+�?�M .g_r.�" d.�t ,�.'�,XS.'!ar �G., i I.fF GvkW-?` a I 1" FEJ R SS P' n c r Total CaIPERS casts will increase From $25 .0 million in FY 201 -3114 to $4 .3 million by FY 2021 /22 (eight years), a 97% increase Sal-ety rate increases from 3) 8.8% to S S .6% in eight years Miscellaneous rate increases from 21 .4% to .3 -3 .8% 111 eight years Employee compensation currently totals almost three quarters of the General Fund Budget (72%) Does not include the additional 8 Police officers approved in. FY 2015/ 16 d -E v s V Funded FT y E S Costs 2.2M ;,i�rtr.crtr :�2q.2M S'217 s}M (}sr{r.lrir $2,3.4M S23.6M © $19.9M ,C.i rer�r.cr�a $19.2M U Gr D 1,frt)[r.trll i w 1,143.00 1,141.30 �• P., 1,000.50 i)6Yj.75 �.icrer.cr�r - 9-2.00 9-3.00 93�7.'5 948.25 61)o.irlr F), 08/tit) 17'09/sa Fy to/11 THY 11/la Fy 12/13 17Y 13114 Fy 14/15 ry 15/16 Actual Actual Actual Actual Actual Actual Estimate Revised PEItS Casts Ftindvd I-1'Es - - ,.r� y.. try _ � ,r ,�'+.n�'- r- 3 � .,� .." � .s;;T .cam .. � - .`� �T'T i-• rr 9'�� - %F, i 41, AL Iv I i s 8 y e R ' d� S(10.0 7, 0 ( [n Millions) $1.2 $2.3 S5ri.0 54.E $4.0 $3•0 81-7 $4. w;;r7.r� ®�Iitii• =afct) 204 p A fom Prior Year $19-3 IN 1:j/Iq FY [�I/i F, FN' I,-, `10 I�' [[�jt7` 1 Y 1-7'/18', FY 18/tW FY 1(}!2W 1�'1 2(1j2t' I'1 �1 1/2 2 Actual Estimate RcvisCd" 2�.0 w29.2 ti32.2 S33.9 "+37.7 S 41.7 445.8 S48.1 S 49.3 -1If III 4'(fry Ilt)l 111['✓+l If 1,r fi.w[I/flllf It ic'r rrf I w I k'II t'fifit fit"cf r'r min[cls. Alt'S IIol IIIt'l I(/c lilt' (it hli(i?)l1,1 4 1'ri{1C't' ()//Ii't"i'.V'I/It � 'oIII u-il(Ipprol 'cfIt11I 1)c III/','I _'1 01?. ' I " Ir. w I I I CASB Effective the fiscal year ending September 30, 2015 the City � must implement a new rule, GA.SB 68 This new rule requires governments to book the unfunded liabilities for public pension casts on the face of the financial statelnents (not only in Notes) For the City, this will lead to a significant reduction in the Total Net Position on the Balance Sheet This change will occur nationwide but may impact the G ity 's credit ratings, etc. This may also impact existing Fund Balances in Enterprise and Internal Service Funds The GASB 68 adjustment will reduce the City's Net Position by an estimated 346 million "I. i IO& ~1c y -a4va. � •_ �3v�— �7� 1.sx:. .s 3 '1_.-- ,` :>� .Y. .�M- �..yi ![ 'i GASB S — [unfunded Pension Liabilities (_I T tr''._,f- HUM TkrV°;T'.:rI EE:1.!_.H 'z c,vQ rn mn .III;.I '.a U zJ ei.6 as-T y'g)c .rA'b6kzIS ACAIWI tl Ac-t1 VIticS 70t-1 r11 Ir,._ rE'_ __ _ L1, I_:'_. - e4 'G•c 4..:- ,.,� k:,. a ..-41 Atdnno-__ *.a :Z LAC":1 C:r rlTr-:r' r __°i_; JUL ,. F._r. i 11 btry t„y1 1412.JIt+ 1U:1,4=J�! :z,,rbI Tc to& Re atri cte d F.e!I%eta ]t, Sc7 27„i:sl GG.510 "Ji I 'fir Total Capital AzncLm w`1 155, 14(,.T70 7rf', I65 T' to A—Lc 81"-.G81 23-",.1. 1-rt7C.,2st s t � & fa4.R11 1TIt<,4 �t F n•,•ce_•-_ 11 _- - - p .€-Lot_ __�• :+._ �•. r=� Mai 5urMto Cil 3- I s,ITO fw,pS1 L.�:.C}l t -a,,.z r•n _� Ira[ 1 2, 1_ _ Tr.l I I ,..I:i I Ii...-..P..y...1.1... f...... R.--d.i,:lr°I Ate.. Ir d.5'"-9 - 3•r.i9 L: -s- v, .. 1 [1 -.G _,,rr .+:rnc, =-nti r -C-;1-I r;.-- _ -._1 11[n_ _ L'J^ r:'..,}ram _. _I-T 2-21,, T.>tal Longs TDrm.7011p�Ltl,.�ns TY:.h.J fr:vra. E 1 AAA I c.t 11 I_1.7171 P I tl c "T.7 1 1 :8.266 '1 C.N,986 rwF r ! Vb I k P1_ahl r ,,r.l 01s_ ,1.'.c _+_''r i1L,^,1 [_. To"I R&cc.rI,_Tz r_! Mr t Pr,c v-:,n =fJ I . - ^ �^ Dt Tc431 Nct Rc.%Irlc�r"t .s r4Z.LNU S 2 P1.LUJe :li,".�.,s'S3 -/''/I"Pill 111114ICI r r.5"li ()S 1i11d7+1CML'Uh11ir!lt is ~fill ill4,10 IVI'il`II ZZAPmzyno ORIM- Strategic Planning Retreat N AI.il, - of 10 kll".,]R' .sli' l� - K z.�, 4 t�✓y x. 7+'t:,. r - " r _.s ;1 tl Gs I_.. Police. ' 2,02)4,468 $2,155,452 $2,494,377 $2,369,067 $2,42.6,703 $2,944,960 Fire 1 ,3 39,190 1 ,425,087 1 ,487,480 1 ,251 ,830 l ,321 ,408 1 ,808,641 Public Works 761,867 818,564 990,593 967,706 1 ,077,881 1 , 1 j9,997 Community Services 275,307 269,664 345,341 329,926 350,231 216,778 All Other 143,498 141,281 286,257 428,585 438,248 558,578 Total $4,544,330 $4,810,048 S5,604,048 $5,347,114 $5,614,471 $6,668,955 % Increase from FY 04/05 6% 230/4, 180/6 24% 47% ryAclii; 2_0I li 1 i 1V0r-11VI-S' t'0111pcll5,llloll 1c11a1 npunscs tN ill be hiL,11Cr than slu»�n �jl,MC h, �11)1,1OX. w 1.t1 Milli011 alnl IO OHC-111)1c' HICT_ dJ;l ill li,ih lil\ aS^()Ci�lte�d etiith ul_)dated OC111,111A 1i luatioul. ..F sent , e It7±�fui, Mm ti I Strategic l g Retreat -1 7 6 or overn t s B d PL Op 'V IPA �4. LIFO K. r ♦ a ,{ �, -y, ^y? i.r -i :!... �'.�*if'-Op ,v-sty ,r iY vt ln'R6�}ti yX _� r .� r s � :r �,yr i,'1�t} � r .� Sd-t a s - - - = q.=ate S 4=.,.i r tl = s, _ - tr t ,_ _ __- _ N +s. _�.•.rr .•se ..c x*rk�. , ' ,gyp" r c st '�y' r a • � rL,, If I C� B Budget Set Aside S350 million to fund potential employee compensation increases subject to bargainirl" Succession Planning Efforts Over 40% State workf'orc.e of retirement age by 2018 $ 1 .9 miI11on for 16 add itionaI I~'IT" fOl- succession 1)la1111iIIg efforts a11ci tfrcilitat1011 01' a broader applicant pool Implementation of a 5-Year Infrtrstrttcture Plan 1 .5 billion Tor State Capital Annex and other State buildings State EOC Emergency Services $35.2 million for emergency preparedness and response ellorts t5�1 E Governor -Brown 's FY 2016/ 17 Hiidicyet 1-l "gYbil'ahts Planning for the Next Recession Economy is finishing its 7111 year of expansion, ? years longer than the average recession Moderate recession model starting in FY 2017/18 for three years Loss of 500,000 California _jobs accompanied by a stock nrlarket doWratnrn RCSLlltlrag In a $29 billion to $43 billion General Fund deficit by FY 201 �/20 1 igme HIT-06 Recession Could Cause Loss of$55 Billion in Revenues by 2019-20 (Ddlais in Millions) 140 lif'IC} 110 COD 10r,G1"I �G OCl Gil 000 C1 5 G4 1-O.0013 FeCesSi•`_,E' �CiC•x�rf1G'c5iiiyzl "SIAOrt-Sighted in the extreme (o 11mv en kil—k ulj«n 4j ll{)5t tfl`ile� SI)CIICI111 r- OIIIv, (0 SCC 177asSiv e eutti ~vNhell tlic ncyt recesti Ion lilts" [_�o ernor BroNvn +�,.� r - i _ T- _. „ •; , .1 y»,u' v "o. r c l^.;, R -�y a. .-. FN _ .r �. :.: li�oi~. -`E.atS� _ �',..a�..�-=.x .-; t�kt s: "..:,'A ,. 1 '43 IJ Economic Indicators Dow Jones closed ??2 points lower at 15,944 yesterday, down 8.-'-)% YTD U.S. GDP for the )rd gUarter Nvas a modest ?.0%, The Los Angeles/Oran e CoLInty CPI is 2.0% as of December 201 5 Oil prices are at or hear historic Ioxvs at L5)?. per barrel, vel-sLrs over S 100 per barrel this same time last year Federal Reserve left rates uncliailged yesterday and is "closely monitorilig global economic and financial dexrelopmeiits and is assessincy their implicatimis for the labor market and inflation, and for the balance of risks to the outlook.`` Significant concerns over the Chinese economy and slokN in4,y groNrrth Worldwide r eqU ire contilILieCi tinaticlal prudence and restraint i SL:7 H i s 0, r c nc ijI----FrodLK- t j 1)0 m s T.L�i Heal GDP xi p r J if T ,r 4 - ce;, - - - - ,y b ► '96 M 1666 '5-1 'io 'ice Chart Source:JP Wigan Guide to the Markets 1Q 2016 In '�- s:, � il b.% 9y F'.,c--,ems ..`�} __,5' t a1%�� u. o .'#`. <.F .#yi3f •cam' .. a4r- d 1 i 2 0 16 Preliminary analysis of FY 2016/17 projections indicates the need to "hold the line" in the City's General Fund Budget Modest revenue ClroNvth Slight to modest General FUrad r-evCraue projections of between `_'-4 percent Pension and Other Fixed Cost Increases d li(Ylaer CaIPI Ids Emplover late Increases C_'ontinuation of' budgeted strategies to reduce unfiincled liabilities Infrastructure A recent analysis by Public Works indicates there is a `200 mrlhon funding gap for- the City's critical yet significantly antiquated storm drain sYstena In addition, another- study revealed that an additional $ l .2 raaillicara anraually is needed to achieve a Pavement Condition Index of 80 or "Good" Isar Citywide arterials Farther, to improve residential streets to a PCI of 80, an annual investment of $,. million is needed - - J� - ga OEM , z`f.. Y tl Recap p Next ext St � February/March 2016 — Final FY 2014/ 15 Year-end Close-Out Aqj ustments and Fund Balance Assignments March 2016 — budget Dick Off for FY 2U 16117 ---� May 2016 — FY 2015/16 Mid-Year Budget Update July 2016 — FY 2016/17 Proposed Budget Recommendations !. : October 1 , 2016 — New Fiscal Year Begins LAI M x• �' 1. 3 P - ,�� i �k �,g$. �r e r - t i i£t _ s , ,: are a. ,rT•ai t� ,Tf '��.. p ✓ � y :� r i.' r �� irl.. ;'LI 3r � Va I, 4 i ie a .. 1� —,- �'� x :h ;l�4� y �,+ X t- _ y• N'�',,.�`i,� � _ T s A; -': aa } d - h QUESTIONS ? January 28, 2016