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HomeMy WebLinkAbout2008/2009 Mid Year Budget Review and the Comprehensive Annua > IR 1 r j 5,57. -Al Shorebrea YM 's gm 1q1 4 *aVe ' The St a dw 2 205,000,000 _.._- s195 million s199 million 200,OOO,000 VCNIZ�W 195,000,000 ��� s188million 190,000,000 185,000,000 _ si8o million $ rN 180,000,000 `' 175,000,000 -----.. 170,000,000 .___ General Fund Revenue General Fund Expenditures* Adopted Budget ul,Projected as of 3/31/09 *Projected expenditures do not include the$2.s million in funding for the Equipment Replacement reserve 3 tN*tt r jr * FYoag8 FY 2008/09 FY ioa8/o9x Ove N k dual ;Adoptedt ., P ectedUn �zPiopertyTaxes g65,aso;4?4. S67,i4o,000 s66,85o,63:1(s 89,369) Sales Tax �. z3,934,392 25,300;000�, 22,100,000 �� (3,200,0oo),:r_, Transient Occupancy Taz= 6 688 428 7 500,000' 6 3oo;poo (i;ioo,000) : Other-LocalTaxes' 29;'67;d77 3i,o65,000 29,510,000 (i,555,000) License&-Permits , '7,83�fi398= =T" 7,530,900" 5,88z,300 (1,648,660) Fines&Forfei'tures`. 4,o60,357_� _ -4,687', 6 �`' 49T350 "(6 354) Use of Money&Property „`�` i3,875,025„ i6 625 5005 13 So71755 ;(3�ii7,745), Revenue from;OtherA4encies 4,46o,izZ';' 4,950,500''' 3,794,275 (i,i56,2z5) Char es for5evices, g i6;oi8;8o4 22,568,�72, 2i,i89,972 t- r(I 278,z'do) r 'Pther Revenue"' i,785,02y,: 1,731,500 1,211,600 (519,900) Non Operating;(T'�ansfers)* ii 467,468y '-5 590 4 5 949;828 350,400 -Total c...si85;ig8.514 $i94r689�700`";: $18o,421711 `�' ($i4;265r989)': *Variance between FY 2oo7/08 actuals and FY 2008169 projected for Charges for Services and Non-Operating (Transfers)is due to the incorporation of several funds into the General Fund in FY 2008109 4 x 80,000 C c vMi 70,000 - 0 o ^—"'"'" .Sales Tax --� � H6o,000 �.. .----a m"""-w- �TOT 50,000 —+�Property 40,000 Tax —►Utility 30,000 Users Tax —o Licenses/ 20,000 Permits 10,000 r FYoS/o6 FYo6/07 FY07/08 FYo8/og* *FYo8/og Projections as of 3/3i/og s {{ � k �J , , t� U Q 0 �® FT @� V-00H FY zoo7/08 FY 26o8/4 FY zoos/og FY i og Over)/ t "Actuary Adapted Rev �d !?rode ns* sender Personnel $128,024,049 $139,315,585 $137,777,io6 $134353,093 $3,424,013 Operating .. &Transfers 48,482,333 49,309,981 55,841,241 47,688,ogg 8,153,142 Capital 7,942,985 . 10,526,118 12,357,402 6,383,830 5,973,57?..: Total s184,449,367 S199,15i,684 $205,975,749 5188,425,022 $17,550,727 *Increase in projected expenditures from FY 2007108 to FY 2oo8/og is partly due to the incorporation of several funds into the General Fund. Projections as of3/31/69 and do not include the$2.5 million transfer to the Equipment Replacement Reserve. 6 o _� fm ® 2% Reductions implemented in December from all departments ■ $4 million in savings Selective hiring freeze implemented ■ 61 General Fund current vacancies ■ 5 additional vacancies in other funds Is Decrease in the actuarial required contribution (ARC) to the minimum required amount for CalPERS, Retiree Medical, and Supplement Retirement Trusts ■ $3 million in savings Capital equipment and projects deferred ■ $6 million in savings F -9 t Ar 18% so decline C a Unreserved ° 45 g ^Insurance 40 ■Econ.Uncertainties 35 30 n Second Tier �5 }. ._t Council Projects 20 ! �----� o Capital Projects 15 a Equip.Replacement 10 o Reserved for 5 Encumbrances/Receivables FYoS/06 FYo6/07 FY07/08 FYo8/o9* *Projection asof3/31/o9 $40,586 $43,696 $44A43 $36A42 a _5] .rN DWO y @ {. .a ■ An additional $2.7 million in General Fund reductions requested of departments ■ Anticipated sale of Emerald Cove could add $3.4 million in revenue to the General Fund ■ Discussions ongoing with bargaining units to identify potential opportunities for savings ■ Letters have been sent to vendors requesting a lo% reduction in cost of service 9 ■ Additional potential reductions currently under consideration include: ■ Recommendations from the Finance Board and Employees ■ Savings generated by transitioning to the payment of market rate for maintenance contracts $200,0004400,000 ■ Increased revenue anticipated from the current fee study ■ $500,000-$i,000,000 (assumes full cost recovery) 10 k i > • Budget assumes 1% increase in revenue over the current FY 2oo8/og projections ® FY 20og/io revenue projected to be 6.4% less than the adopted FY 2oo8/og budget ■ Expenditures projected to decrease 7%from the FY 2oo8/og Adopted Budget • Memoranda of Understanding assumptions of o-5.8% ® Overall personnel costs to remain flat due to decrease in ARC and Workers' Compensation funding ■ Operating expenses reduced bY7%from FY 2oo8/og Adopted Budget ■ FY zoog/so budget will continue management practices begun in FY 2oo8/og ■ Selective hiring freeze ■ Capital/equipment deferral • �,.4zM� sae (� �5+y ® Several factors that will impact the City of Huntington Beach: ■ State Budget: Continued takeaways could require further reductions and/or less funding available for infrastructure ■ PERS rate increase: Recent market performance has led CaIPERS to project rate increases of 5%for non-safety and 12% for safety,to be implemented in the latter part of FY 2010/11 • For Safety Employees this increase could cost the City an additional $1,335,000 in FY 2010/2011 and $5,391,000 in FY 2011/3.2 ® For Non-Safety Employees this increase could cost the City an additional $457,000 in FY 2010/2011 and $1,846,00o in FY 2011/12 ■ The economy: Should the economy remain flat,or continue to drop for an extended period of time,further expense reductions will be necessary 12 :. 3 Jul -. YJ" R ©O0 m as a ' ■ The City's Capital Improvement Program (CIP) is continuing in many areas, including: ■ Arterial rehabilitation on segments of Yorktown, Garfield, and Graham ■ Downtown street and alley replacement ■ Overlay of iog residential street segments I; 90 F �e i3 'S 4+.. �� i_sP,. " � `' w.. a1 ..,, ''•i3v�.r"Si .r.3"a. ■ The City is eligible for funding made available by the Federal Government's Economic Stimulus Plan Majority of funding available through competitive grant processes ■ Potential funding would be used for: • Energy efficiency improvements ■ Talbert Lake Phase I • Street and traffic improvements • Public Safety iy � Co�l1JGCR11� 4Ifs FYZoor�/o5 FY zoo5Jo6 . FY zoo6/o7 TFY zoo7(o8 To6 Change ; 64325 $5836Investment in $58i q Capital Assets Restricted 73,312 99,490 107,o87 101,791 z81479 Unrestricted 81,789 87,289 i:L1655 93,319 11,530 Total Government- $ o66 $77o,802 $82 1 $8 $ 8 6 wide Net. 737, 7,5 7 35,435 9 ,3 9 Assets ■ The City's Comprehensive Annual Financial Report received an unqualified(clean)opinion from the auditors,as well as the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association ■ An unqualified opinion is the best opinion possible 15 s F�sca ar E}eg nnfng Totat Chang ver 5 years 4 FundSatance �F. s - October 1,2003 -? •-:$14,974,000 October 1,2004 $26,332,000 October.i„zoos. $38,286,000 October 1,20o6 $40;586,000 October 1,2007 $,43,666,000 October 1,2008 $44,443,000 $29,469,000' Note: Increase in FY 2oo7/o8 fund balance due to the incorporation of several funds into the General Fund in FY2oo8/og 16 ry Current City Council approved financial policy outlines reserves as follows: ® 7% of General Fund revenues reserved for Economic Uncertainties ® Unreserved, Unclesignated funds at year end are split among Second Tier Reserve, Infrastructure Fund, and Capital Improvement Reserve (CIR) 5o%to Second Tier Reserve 25%to Infrastructure Fund 25%to Capital Improvement Reserve * Administrative Regulation 3o8 designates funding to be set aside in an Equipment Replacement Reserve for future capital purchases 17 Staff is reviewing the existing reserve policy as part of the Strategic Planning Process Objective of the review process and any proposed changes would be to: ® Strengthen the Economic Uncertainty Reserve • Provide the City Council with greater flexibility ® Simplify the accounting for reserve balance • Increase transparency of City's financial position 18 W an ■ The City of Huntington Beach has been greatly impacted by the current economic recession ® Management has implemented several cost savings strategies to minimize the negative impact on fund balance at fiscal year end ■ The FY 2oog/10 budget will be built conservatively based on current FY 2oo8/og projections ■ The City has increased fund balance over the past five years, minimizing the negative impact of the current economic conditions on city services • The City of Huntington Beach continues to make significant investment in infrastructure ig Finance Board cost savings ideas 1. Outsourcing Beach Operations Services. 2. Prevailing Wage — Overturn the prevailing wage. 3. Social Programs — revisit cost/benefit of the programs. 4. Equipment/Vehicle Maintenance — Combine ALL ,fleet maintained by all city divisions. Look into the costs of contract outsourcingJ t4his work to be completed. 5. Aero Bureau — Look at civilian pilots vs. sworn offiders. Take a third helicopter off the budget. Only fly helicopters at night an&#.1aybe 24fl during the three summer months when we have a large amount of people visitingee the city. Consider joint agreement with other cities. Consider g9tsourcing maintenarge. 6. Plan Check — look at Fire sworn p�ersgnnel vs. ..non-sworn :�uilding & Safety employees. 7. Outsourcing Maintenance Services Street Sweeping Parks/Tree Maintenance — Partrtenng`w.ithaachool dis#ricts for city landscaping. Streets Maintenance ,. a Signs Maintenance.. Signal Maintenance Fleet Maintenance, 8. Additionao what City ordinances ca , we take to the City lobbyists to reduce staff time? 9. Can the street sweeping frequency be reduces? 10. Look at conferences, tripsfi& training budget for each department. 11. Reopen the current MOU's-- Understanding the associations would have to agree with City Council to'open xp their contracts and re-negotiate benefits/wages. 12. Change the MOU of the fire department to reduce staffing on City fire apparatus. 13. Look at the clerical staff within each department — Administrative Assistants, Administrative Secretaries, and Office Assistants. 14. Increase parking prices at the beach for special events. Page 1 of 2 15. Consider a furlough program. 16. Why are we still issuing paper checks? 17. Invoiceless processing for accounts payable. 18. Leverage procurement for early payment process. 19. Outsource opening mail and processing in the City Treasurer's Department. 20. Should the City charge more for credit card paymerts to recover bank fees? 21. Use a check reader for checks received at.they City Treasurer's Department (Wal Mart uses these at their registers as an example) 22. Can certain permits be purchased on they ipternet? 23. Business license renewal over the internet 24. Share expense of the cross i ng"c'gy6fd program withtae school districts. 25. Look at the Fire and Police Departs ent sworn-,vs. non sworn positions. 26. Should the City;be in the business of owning oil weHs? 27. Consider opportunit�es..to reduce overtime:-n the Fire Department. 28. Reduce staff,in the:Human Resources;department. (Vote: CaiR,ERS — Currents,iscaI Impact not felt for a minimum of three years to incur additional $3 milalion cost forthe neAthree years out of the General Fund. Page 2 of 2 J CITY OF HUNTINGTON BEACH INTER-DEPARTMENTAL. COMMUNICATION FINANCE DEPARTMENT TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS VIA: FRED A. WILSON, CITY ADMINISTRATOR FROM: BOB WINGENROTH, DIRECTOR OF FINANCE DATE: MAY 1, 2009 SUBJECT: FINANCE BOARD BUDGET SUGGESTIONS As you are aware, the economy has had a significant impact on municipalities including the City of Huntington Beach. The City is managing the declining revenue by implementing strategies such as: capital/ equipment deferral, a hiring freeze, department reductions, as well as adjusting the level of funding to various trusts. Administration and staff are monitoring approaches being implemented in other agencies, and have solicited suggestions for both revenue generation and expense reduction from both employees and the Finance Board. Attached are the Finance Board suggestions in draft form as discussed at their April meeting. This item remains on their agenda and will be discussed in further detail at their upcoming May meeting. If you have any questions, please do not hesitate to contact me or Charles Falzon, Chairman of the Finance Board. BW/jl Attachment Cc: Paul Emery, Deputy City Administrator Bob Hall, Deputy City Administrator Jennifer Lampman, Acting Budget Manager Finance Board From: Emery, Paul To: CITY COUNCIL Cc: Wilson, Fred; Executive Team Sent: Fri May 01 13:59:44 2009 Subject: Mayor and City Council— On behalf of Fred Wilson, attached please find copies of the Mid-Year Budget Report PowerPoint as well as correspondence regarding the Finance Boards recommendations that will be presented at the Study Session on Monday May 4, 2009. Hard copies of each of these documents will also be placed in your mailbox here at City Hall. Please let Fred or I know should you have any questions. Paul Emery Deputy City Administrator