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HomeMy WebLinkAboutSupplemental Communications to the City Council received aft CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION J s Joan L. Flynn, City Clerk Office of the City Clerk TO: Honorable Mayor and City Council FROM: Joan L. Flynn, City Clerk DATE: July 28, 2011 SUBJECT: SUPPLEMENTAL COMMUNICATIONS TO THE CITY COUNCIL FOR THE JULY 29, 2011, SPECIAL CITY COUNCIL/RDA/PFA MEETING Attached are Supplemental Communications to the City Council that were received after distribution of the July 29, 2011 Special Meeting Agenda: • PowerPoint communication entitled City of Huntington Beach Proposed Budget—Fiscal Year2011-2012 Highlights submitted by Lori Ann Farrell, Director of Finance. • PowerPoint communication entitled Street Infrastructure Funding Analysis— City Council Strategic Planning Session July 29, 2011 submitted by Travis Hopkins, Director of Public Works. • Communication submitted by Mike Adams, Chair, Huntington Beach Art Center Foundation, untitled and dated July 28, 2011. 7/28/2011 City of Huntington Beach Proposed Budget J FISCAL YEAR 2011-2012 Highlights Fred A. Wilson, City Manager Lori Ann Farrell, Director of Finance r i FY 2011/12 Budget Presentation o FY 2011/12 Proposed Budget Highlights o Redevelopment Agency Options i 2 � 1 7/28/2011 i j FY 2011/12 Proposed Budget Highlights 1 o $3.5 million General Fund budget challenge identified in January 2011 I o Economy has slowly begun to come out of two years of recessionary period helping to increase revenues 1 o State Budget Challenges 3 o Redevelopment eliminated; new"pay to play"program instituted I o State take of VLF Revenue o Organization challenged to provide core services with less resources o FY 2012/13 still facing a projected deficit FY 2011/12 Proposed Budget o The Proposed All Funds budget totals $312.4 million, a 4 % increase from the Adopted FY 2010/11 budget o The Proposed General Fund budget totals $184.1 million, a 3% increase from the Adopted FY 2010/2011 budget 2 7/28/2011 General Fund Budget j Expenditures $184.1 Million* Revenues $182.8 Million j Operating, j Capital, Non Debt Operating Service 4% and From other Transfers Agencies 28% g2% i Use of 3 j Money 8% Fines and Forfeitures 2% I � Licenses and Permits 3% Sales Tax l Utility 12% j T.O.T 4% Users Tax / *Includes$1.3 million from capital reserves for street repairs 14% / 5 --------------------------------------------------------- Expenditures o Used 2010/2011 as abase budget ➢Continues budget reductions made in previous fiscal years ➢FY 2011/2012 represents the fourth year in which reductions have been made to balance the budget o Departments were required to submit Level 1 & Level 2 cuts totaling $5.1 million o Final Budget Gap determined that both Level 1 and Level 2 cuts were necessary to balance the budget s 3 7/28/2011 i Staffing Reductions i i 31 positions from various departments to be eliminated or I defunded Department Eliminate Defund Filled Vacant Economic Development 3 2 1 1 Community Services 1 2 1 2 Fire* 5 1 4 Library Services 2 2 Planning and Building 1 1 Police** 4 6 6 4 Public Works 7 4 3 Total 18 13 14 17 *The filled Fire position will be transferred to fill another vacant position **The filled Police sworn positions will retire in FY 11/12;vacant positions are non-sworn J 7 -------------------------------------------------------------------------------------------------------------------------------------------------------------------- Equipment and Capital o An additional $1.0 million is included in the budget for Equipment Replacements for a total of$3.0 million. o New Improvements totaling $28.0 million are proposed in the Capital Improvement Program. o Of this amount, $1.3 million is included in the budget for street repairs s 4 7/28/2011 Redevelopment Agency Current Status and Options 9 ------------------------------------------------------------------------- - - -- - / I I Redevelopment o On June 29, 2011 the Governor signed two State Budget Trailer bills I Assembly Bill XI 26 - Suspends Redevelopment Agency powers immediately - Abolishes redevelopment agencies as of October 1, 2011 11 If Agency is eliminated, will prevent the ability of Agency to make annual Cooperation Agreement payments to City - $4.9 million annual payment to the City's General Fund and i other funds for a total of$85.5 million i Agency property (cash, land, etc.) and Agency obligations are i transferred to "successor agencies" I io 5 7/28/2011 Redevelopment Assembly Bill X1 27 Creates Alternative Redevelopment Agency Program Imposes"voluntary payments"to avoid AB X1 26 impacts Redevelopment activities continue if the City enacts an"opt in"ordinance by Nov. 1,2011 to comply with AB X1 27 For FY 2011/12,the City would pay its proportionate share of$1.7 Billion -Estimated at$6,851,687 For FY 2012/13 and annually thereafter,the City would pay(i)its proportionate share of$400 Million;and(ii)additional funds equal to 80% of the School District's share of tax increment needed to pay Agency indebtedness newly incurred after November 1,2011 - Estimated at$1,600,000 annually 11 j Estimated FY 2011/2012 RDA Funding Projected Projected Description Expenditures Revenue Tax Increment Revenue 11/12 17,395,000 Westminster Sale of Property 560,000 Lease Revenue (2 years) 1,160,000 MVB Loan Repayment 30,000 Total Projected Revenue 19,145,000 Required Payments Bonds/Section 108 Loan/Waterfront 3,539,000 Developer Tax Sharing Agreements 2,002,000 Payments to Schools/Districts 2,223,000 State"Pay-to-Play" 6,851,000 City General Fund Loan Repayment 4,914,000 Total Payments 19,529,000 Personnel/Operational* 1,300,000 i Total Expenditures 20,829,000 $ (1,684,000) ` *Assumes reduction of only 3 FTEs based on budget prior to AB X1-26&27 f1 12 / 6 7/28/2011 Options to address Shortfall in FY 11-12 ($196849000) Estimated Value 1. Refinance Bonds $1,000,000 2. Reduce Staff/Operations by 50%* $650,000 3. Grant from MVB $70,000 4. Partial Deferral of Developer Tax Sharing Agreements ** $500,000 5. Short-term Inter-fund Loan TBD 6. Other Revenue*** TBD * Assumes Total Reduction of 6 FTEs **Up to$2 million available ***As previously presented to City Council(4/18)—up to$300,000 f 13 Estimated FY 2012/2013 RDA Funding Projected Projected Description Expenditures Revenue Tax Increment Revenue 12/13* 17,745,000 Lease Revenue 580,000 Total Projected Revenue 18,325,000 Required Payments Bonds/Section 108 Loan/Waterfront 3,549,000 ` Developer Tax Sharing Agreements 2,002,000 Housing Set Aside-20% 3,549,000 Payments to Schools/Districts 2,267,460 State"Pay-to-Play" 1,600,000 City General Fund Loan Repayment 4,914,000 Housing Loan Repayment 500,000** Total Payments 18,381,460 I Personnel/Operational 650,000 j 1 Total Expenditures 19,031,460 3 $ (706,460) i *Estimated 2%increase over 11/12 **Partial repayment of$3.2 million outstanding loan from Housing Fund. j 14 7 7/28/2011 City of Huntington Beach Proposed Budget Fiscal Year 2011/2012 Next Steps: i> City Council direction on opting in 2) Selection of options to address temporary shortfall 8 Street Infrastructure Funding Analysis �C Ik City Council Strategic Planning Session July 29, 2011 Historical Perspective ' presented Pavement Management Plan. • Identified need to increase funding for Street Infrastructure. ' Council requested additional information to be presented at July Strategic Planning Session. ■ Identify cost to"touch"every street in a short time frame. ■ Identify cost to address alleys and parking lots • Discuss mechanism and"approximate"tax or fee charged to the property owners to supplement local funding. 1 Cost Analysis Assumptions f 85 or less are improved. • Scenario run for 5,'10, and 15-year term. ® Annual 3% inflation applied. Cost Analysis Results ® 5-Yr = $50,000,000 • 10-Yr = $55,000,000 ■ 15-Yr = $63,000,000 10 Year Coverage • _'fit SP i LOCALS '4;; B � ART IM k �f 91 I 2 Funding Options ■ Tax 2/3 voter approval(1 person, 1 vote). ■ No nexus or specific benefit analysis legally required. • "Flat"tax or"Proportional"tax can be proposed. ■ Tax collected for duration of Program ■ Benefit Assessment District • Majority property owner approval by mail in ballot. (based on proposed amount assessed) • Requires cost of improvements be apportioned to parcels that receive benefit. Implementation Options • Pay as You Go • Collect Tax or Assessment 1st year and build the next year ■ Bond • Allows for earlier implementation of improvements • Allows pay back over longer period to reduce annual assessment. • However;increases overall cost of program. (Due to required benefit analysis, upfront finance charges and debt service.) 3 51 10, or 15 Year Program? Arterial and Local Alleys and Parking 5-Year Program Area Flat Rate Fee Avg.Anrwal Fee Flat Rate Fee Avg.Annual Fee Total Fee snnm vmo•:, evso�•,Wvne sv sa�a•�ron:vr Pay As U Go $140 $24 Commercial 74,000,000 $768 $132 $899 Mixed Use 37,000,000 $384 $66 $450 Residential 345,000,000 $115 $20 $135 10-Yr.Bond $90 $19 Commercial 74.000,000 $493 $103 $596 Mixed Use 37.000,000 $247 $51 $298 Residential 345,000,000 $74 $15 $89 15-Yr.Bond $44 $15 Commercial 74,000,000 $241 $80 $321 Mixed Use 37,000,000 $121 $40 $160 Residential 345,000,000 $35 $12 $48 10-Year Program Area Fiat Rate Fee Avg.Anneal Fee Flat Rate Fee Avg.Annual Fee Total Fee i0,Om 4�ra�� B�SQ.,ae Faocitr By SB�a•<iagt.• Pay As U Go $50 $12 Commercial 74,000,000 $274 $66 $340 Mixed Use 37,000,000 $137 $33 $170 Residential 34$.000,000 S41 $10 $51 15-Yr.Bond $52 $15 Commercial 74,000,000 $285 $80 $365 Mixed Use 37,000,000 $143 $40 $182 Residential 345,000,000 $43 $12 $55 15-Year Program Area Flat Rate Fee A.S.Annual Fee Flat Rate Fee Avg.Annual Fee Total Fee ev sq—raa•yv ar W�,.r Foa:ev Pay As U Go $24 $8 Commercial 74,000,000 $132 S44 S175 Mixed Use 37,000,000 $65 $22 S88 Residential 345,(W.000 $20 $7 $26 Estimated Timeline Tax 2011 2012 Task A S O N D J F M A M J J A S O N D Feasibility Study Survey Public Tax Structure Study Subcomittee Meeting - City Council Study Session Resolution Due To Registrar Rebuttal Arguements Due Election Day Assessment 2011 2012 Task A S O N D J F M A M J J A S O N D Feasibility Study Survey Public Subcomittee Meeting Adopt Reso.of Initiation Engineer's Report Adopt Reso.Of intention Mail Ballots Public Hearing/Tabulate Ballots 4 Next Steps on to proceed ■ Perform an Assessment/Tax Feasibility Study ■ Develop a Public Opinion Survey 5, 10, or 15 Year Program? swar Proenm f+F AL Menfi (�3 bta1 Nx fmJ xx Rrte arawlfasl laftti iYL YY f 4muN i1rtRM Yxuai fmu! 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Men Mx�talFw helJnp ton fw teaflSF- Fee MMUGo 563,WO,OOc Sd,100.00t >IAL.000 Si.:06m0 •y Sis _aw... 56.cro0.000 aw.av 58 Cwnmernal TafYf OOf SOOJIfi b(pC S:12 SOOCFi.6 Sda Ss 1. 510 37 sEI.WD.rof so ME6 IS.CdG s66 SJ6fUR pmw.er�n 3as.OW.Q: ;O.OJ26 ].SW SJ tKKH 5) E6 5 i July 28, 2011 Huntington Beach City Council 2000 Main Street Huntington Beach, CA 92648 Dear Mayor Carchio and City Council Members: The Huntington Beach Art Center Foundation understands that in order to fill a 3.4 million dollar deficit in the City's budget, cuts in several City staff positions have been recommended. One of the recommended cuts is the curator position at the Art Center. Over the past twenty years our Art Center has earned an excellent reputation, in large part due to the work of the curator. We understand that the difference between retaining the position as a City position, or out sourcing as a contract service is $30,000. We believe the budget issues facing the City are very real, and we would like to offer a solution to this funding gap so that the curator's position can remain a City position. The Foundation Board met on July 25, 2011 and voted unanimously to commit to provide $30,000 for the retention of the full time curator position, during the 2011-2012 budget year. The Art Center Foundations has a proven track record of being able to raise funds to support the Art Center. Through the efforts of the Foundation the community has raised more than 2 million dollars to support the Huntington Beach Art Center since before its inception. We are confident that we can raise the$30,000 necessary to keep the curator position funded; and we are open to quarterly installments to assure Council that every dollar pledged will be in the City's treasury. This is an achievable goal for the Foundation; our organization has raised significantly more in less than a year. The Foundation recently donated $12,000 to the Art Center for their summer programming, which includes; Art Camp, Family Arts Day and the fall exhibition. You can be assured that our pledge of$30,000 to support the full-time curator's position will not diminish our ongoing contributions to the day to day operation of the Art Center. The Foundation believes an Art Center without a full-time curator significantly reduces the credibility of institution in the art community. The Art Center needs to retain its strong reputation with professional artists on the national stage to insure their participation in future shows, and be marketable to donors, including foundations, corporations, and arts supporters. The Foundation believes the retention of the curator position is instrumental in making the Art Center more self sustaining in the coming years. Please give us this opportunity to help preserve a staff position that is vital to the functioning of our Art Center and improves the quality of life in the City. The Art Center Foundation is ready for the challenge. Thank you for your consideration, Mike Adams Chair, Huntington Beach Art Center Foundation (714) 536-5258 Fax (714) 374-5304 538 Main Strut Huntington Beach,CA 92648