HomeMy WebLinkAboutResolution 2014-35 authorizing the City to levy the Annual R CITY OF HUNT'INGTON. BEACH
- Finance Department
Lori Ann Farrell
Director of Finance
Via Email Frank.Davies(c)-ac.ocgov.com
Original Via U.S. Priority Mail
July 31, 2014
Mr. Frank Davies
Office of the Auditor-Controller
County of Orange — Property Tax Unit
P.O. Box 567
Santa Ana, CA 92702-0567
SUBJECT: CITY OF HUNTINGTON BEACH TAX RATE — FISCAL YEAR 2014115
Dear Mr. Davies:
On July 7, 2014, the City of Huntington Beach adopted the Fiscal Year 2014/2015 Tax Rate
by Resolution Number 2014-35, which levies a retirement property tax for Fiscal Year
2014/2015 to pay for pre-1978 employee retirement benefits. Enclosed are the executed
Resolution and staff report.
Please note this rate has not changed from Fiscal Year 2013/2014. Please continue to
incorporate the retirement tax levy of Zero and 0.01500/100th Dollars ($0.01500) per $100
of assessed value for the City of Huntington Beach.
If you have any questions or need additional information, please do not hesitate to contact
my office.
Sin erely,
Cam-
Lori Ann Farrell
Director of Finance
Enclosures: ,
1) City of Huntington Beach Resolution Number 2014-35
2) Request for City Council Action Agenda dated July 7, 2014, Item 7
3) Action Agenda, Item 7
cc: Fred A. Wilson, City Manager
Joan Flynn, City Clerk
Carol Molina-Espinoza, Budget Manager
LAF/mkl/jl
2000 Main Street, California 92648-2702 ♦ Phone 714-536-5630 4, Fax 714-374-5365 e
www.huntingtonbeachca.gov
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RESOLUTION NO. 2014-35
i
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH
LEVYING A RETIREMENT PROPERTY TAX FOR FISCAL YEAR 2014/2015 TO PAY
FOR PRE-1978 EMPLOYEE RETIREMENT BENEFITS
WHEREAS, since 1948,the City has provided for employee pensions through a contract
with the California Public Employees Retirement System (CalPERS). Pursuant to the 1966,
1978 and 2010 Charters, the voters of the City authorized the City Council to pay for the cost of
employee pensions through a separate retirement property tax. Section 607(b)(2) of the 2010
Charter provides that the City may impose a retirement tax`5sufficient to meet all obligations of
the City for the retirement system in which the City participates"and.
Proposition 13 was added to the California Constitution in 1978. It limits the local
property tax to 1% of assessed value, except that the City may levy an override tax in excess of
1% to pay"any indebtedness approved by the voters prior to July 1, 1979'(CaL Const. Art. 13A,
§1(b)); and
In the case entitled Carman v. Alvord, 31 Cal3d 318 (1982), the California Supreme
Court determined that under Proposition 13, an override property tax in excess of 1% of assessed
value may be levied to pay for employee pension benefits the voters approved prior to 1978.
Consequently, after Proposition 13, the Huntington Beach City Council continued to levy an
override tax to pay for employee pensions. Since 1983-84,Revenue and Taxation Code Section
96,31(a)(4) has limited the City to levying a maximum override tax of $0.04930 per $100 of
assessed value to pay for its retirement system; and
In 2003,the Court of Appeal in Howard Jarvis Taxpayers Assn v. County of Orange
(2003) 110 Cal.App.4th 1375 held that the City may levy a separate property tax to pay for
retirement benefits for all retired,current, and future city employees contracted for prior to July
1, 1978, but not enhancements to retirement benefits contracted for after July 1, 1978; and
Prior to July 1, 1978, the 'City entered into collective bargaining agreements with
employee associations representing its safety employees providing that, effective July 1, 1978,
they would be entitled to a CalPERS retirement benefit known as`20/o @ 50" Subsequently, on
June 30, 1999, pursuant to collective bargaining agreements the City had entered into with its
safety employees, the City provided its safety employees with the CalPERS retirement benefit
known as 3% @ 50. Consequently, it is necessary to allocate the employer contribution to
CalPERS for safety retirement between 2% @ 50 and 3% @ 50, because only the employer
contribution for 2% @ 50 may be paid through the override property tax; and
The City has received a report from John Bartel of Bartel Associates,,a professional
actuary experienced in pension calculations, entitled, "City of Huntington Beach CalPERS '
Actuarial Issues-Cost of 3% @ 50"dated August. 10, 2004. The Report identified the additional
cost of 3% @.50 as what CalPERS refers to as the`normal cost'of the benefit, which represents
the present value of future benefits employees earned during the current year. Under this
14-4291/110841.doc ATTACHMENT 1
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Resolution No, 2014-35 I
approach, the incremental cost of 3% @ 50 is 4,6% of safety payroll, and the remainder of the
employer contribution represents the cost of 2% @ 50; and
In April 2004, then Assemblyman Harman formally asked the Attorney General
regarding the correct method of allocating the employer contribution to Ca1PERS between its
pre-1978 and post-1978 components. In his February 7, 2005 Opinion (Opinion No. 04-413),
the Attorney General opined that"any reasonable accounting method may be used for purposes of
determining which costs are not subject to the 1%property tax limitation of the Constitution;'and
The City Council has determined that the allocation approach presented in the Bartel
Report is a reasonable accounting method for determining which costs are not subject to the 1%
property tax limitation of the Constitution; and
For 2014/2015, CalPERS is requiring the City to contribute 39.051% of safety employee
payroll as the Cites employer's contribution. In order to set the tax override, the City may
subtract the 4.6% normal cost of 3% @ 50 from the 39.051% to set the override tax at the
equivalent of 34,451% of safety employee payroll. The cost to the City of 34.451% of safety
employee payroll for 2014/2015 will be $14,772,270 and pursuant to Proposition 13, the City
could have set the override tax for 2014/2015 at$0,04921 per$100 of assessed value; and
The City Council added Chapter 3.07 to the Municipal Code which provides that the
maximum retirement override tax rate for 2013/2014 shall be set at the rate adopted for Fiscal
Year 2012/13, which is $0.01500 per $100 of assessed valuation, which amount is less than the
otherwise permitted retirement override tax of$0.04921 per$100 of assessed value.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington
Beach that a retirement property tax levy of Zero and 0.01500/100th Dollars($0.01500)per$100
of assessed value shall be levied for employee retirement costs-for Fiscal Year 2014/2015.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 7th day of July Q 2014.
fA�Mayor
Wa
AND APPROVED: INITIATED AND APPROVED:
ger Finance Director
APP OVED AS TO FORM:
City Attorney KU
14-4291/110841.doc ATTA&MENT I
Res. No. 2014-35
STATE OF CALIFORNIA
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of
Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby
certify that the whole number of members of the City Council of the City of
Huntington Beach is seven; that the foregoing resolution was passed and adopted
by the affirmative vote of at least a majority of all the members of said City Council
at a Regular meeting thereof held on July 7, 2014 by the following vote:
AYES: Katapodis, Hardy, Shaw, Boardman, Sullivan, Carchio
NOES: Harper
ABSENT: None
ABSTAIN: None
I:
City A rk and ex-officio' erk bf the
City Council of the City of
Huntington Beach, California
ATTACHMENT 1
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Dept. ID FN 14-010 Page 1 of 2
Meeting Date:7/7/2014
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CITY OF HUNTINGTON BEACH
REQUEST FOR. CITY COUNCIL ACTION
MEETING DATE: 7/7/2014
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A. Wilson, City Manager-
PREPARED BY: Lori Ann Farrell, Director of Finance
SUBJECT: Adopt Resolution No. 2014-35 authorizing the City to levy the Annual Retirement
Property Tax for Fiscal Year 2014/15 to pay for pre-1978 Employee Retirement
Benefit Levels
Statement of Issue:
The retirement property tax has been levied each year since 1966. The retirement property tax is
collected on all real property in the City of Huntington Beach to recover costs related to pre-1978
public employee retirement benefit levels. On July 16, 2012, the City Council adopted Chapter 3.07
of the Municipal Code, the Retirement Tax Cap. The Retirement Tax Cap states that the tax rate
"shall be set at the rate adopted for Fiscal Year 2012/13, which is $0,01500 per $100 of assessed
valuation."
Financial Impact:
Pursuant to Chapter 3.07 of the Municipal Code, the Proposed Budget for Fiscal Year 2014/15
reflects the Retirement Tax Cap of $0.01500 per $100 of assessed value. As of the most recent
audited financial statements, this tax rate resulted in $4.6 million in General Fund revenue in Fiscal
Year 2012/13. As this revenue source is included in the Proposed FY 2014/15 Budget, any
reductions in the tax rate will likely result in General Fund budget reductions.
Recommended Action:
Adopt Resolution No. 2014-35, "A Resolution of the City Council of the City of Huntington Beach
Levying a Retirement Property Tax for Fiscal Year 2014/15 to Pay for Pre-1978 Public Employee
Retirement Benefits" of $0,01500 per $100 of assessed valuation. The tax rate of $0.01500 would
continue the current tax rate included in the Fiscal Year 2013/14 adopted Budget.
Alternative Action(s): .
Do not approve the recommended action and direct staff accordingly.
Analysis:
The retirement property tax has been levied since 1966. The retirement property tax is collected on
all real property in the City of Huntington Beach to recover costs related to pre-1978 public
employee retirement benefit levels that can be legally collected in accordance with court cases,
state law, and the City Charter.
Staff Js recommending that the City Council adopt the same assessment rate for Fiscal Year.
2014/15 as in Fiscal Year 2013/14 of $0.01500 per $100 of assessed valuation pursuant to Chapter
3.07 of the Municipal Code. On July 16, 2012, the City Council voted to permanently cap the tax
rate at $0.01500 per $100 of assesseddvYACHMENT 2
Item 7. - I HB -104-
Dept. ID FN 14-010 Page 2 of 2
Meeting Date:7/7/2014
Moreover, on June 25, 2012, the Registrar of Voters of the County of Orange, certified a measure to
be placed on the ballot to repeal the Employee Tax Override in its entirety. On November 6, 2012,
the ballot measure, known as Measure Z, was defeated by a majority of Huntington Beach voters.
This tax rate results in an approximately $75 assessment for a property assessed at $500,000.
Revenue generated from this property tax helps the City fund CalPERS costs associated with pre-
1978 retirement benefit levels, (i.e. the estimated value of the costs associated with original benefit
formulas). This assessment has not been increased since Fiscal Year 2009/10 and can only be
modified by a vote of the electorate as the adoption of the Retirement Tax Cap contained in Chapter
3.07 of the Municipal Code established a permanent cap. Please note that based on the most
recent CalPERS actuarial valuations, pre-1978 employee retirement benefit costs total $14.8
million. As such, the proposed tax rate is recouping only 31.6 percent of eligible retirement costs.
Due to the County of Orange's timeline for approving the tax rate and the city's budget cycle, the
rate must be set before the City Council takes action on its annual budget. The recommended
assessment rate would maintain approximately$4.6 million in much needed revenue in the General
Fund for Fiscal Year 2014/15.
Environmental Status: Not Applicable.
Strategic Plan Goal:
Improve long-term financial sustainability.
Attachment(s):
1. Resolution No. 2014-2014-35 "A Resolution of the City Council of the City of Huntington
Beach Levying a Retirement Tax for Fiscal Year 2014/15 to Pay for Pre-1978 Public
Employee Retirement Benefits" of$0.01500 per$100 of Assessed Valuation.
ATTACHMENT 2
T/ N AGENDA
.e MAYOR
Monday, July 07, 2014
AND
CITY COUNCIL/PUBLIC FINANCING CITY COUNCIL
AUTHORITY
FRED A.WILSON MATTHEW M.HARPER
City Manager CITY OF HUNTINGTON BEACH Mayor
JENNIFER MCGRATH JOE SHAW CONNIE BOARDMAN
City Attorney 4:00 PM -Study Session, Room B-8 Mayor Pro Tern Councilmember
JOAN L.FLYNN 6:00 PM - Regular Meeting JOE CARCHIO JILL HARDY
City Clerk Council Chambers - 2000 Main Street Councilmember Councilmember
ALISA CUTCHEN Huntington Beach, CA 92648 JIM KATAPODIS DAVE SULLIVAN
City Treasurer http://www.huntingtonbeachGa:goy Councilmember Councilmember
jE
4:00 PM - ROOM B-8
CALL TO ORDER—4:03 PM
ROLL CALL
Katapodis, Hardy,",",'Shaw, Harper, Boa(dman, Sullivan (arrived at 4:34), Carchio
(arrived at 4 08)':: v:,
All present
ANNOUNCEMENT OFaSUPPLEMENTAL COMMUNICATIONS (Received After
Agendas Distribution) �b
City Clerk Joan L. Flynn announced supplemental communications: SS#1(1) and
SS #2 (1) ,
PUBLIC COMMENTS PERTAINING TO STUDY SESSION I CLOSED SESSION
ITEMS (3 Minute Time Limit) .'bone
fG
h eyi
STUDY SESSION
1. Bolsa Chica Lowlands Annexation Update.
2. Visit Huntington Beach will provide a presentation regarding an increase
in the current Huntington Beach Hotel/Motel Business Improvement
District from self-assessment 2% to 3% and changing the District to a
Tourism Business Improvement District.
RECESS TO CLOSED SESSION — 4:55 PM
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City Council/PFA Action Agenda—Monday, July 07,'2014
ATTACHMENT 3
Mayor Harper to announce: Pursuant to Government Code Section 54957.6.a,
the City Council takes this opportunity to publicly introduce and identify
designated labor negotiator City Manager Fred Wilson, who will be participating
today in Closed Session discussions regarding labor negotiations with FMA,.
MEA, MEO, MSMA, PMA, POA, SCLEA and/or Non-Associated City Employees.
CLOSED SESSION
3. Pursuant to Government Code § 54956.9(d)(1), the City Council shall
recess into closed session to confer with the City Attorney regarding the
following lawsuits [and potential lawsuits]: Terry Ingham v. City.of
Huntington Beach; Springhurst Townhome Assn Orange County
Superior Court Case No. 30-2013-00630439 In='this case, Plaintiff was
injured while walking in the City's Lambe rtPark;adjacent to the
Springhurst Townhomes area when a tree bianch:felI and struck him.
4. Pursuant to Government Code Section"54956.8, the City_Council shall
recess to Closed Session regardmgahe widening of Atlanta Avenue
between Delaware and Huntington Streets. The Council wiil[,give
instructions to the City's Negotiator, Ken Domer, Assistanf 6ity Manager,
concerning price and termsyfor the purchase of real property'iri the form of
a street easement and a temporary construction easement from Pacific
x^?Mobile Home Park located at 80 Huntington Street in Huntington Beach.
The easements for street purposes and temporaryconstruction are more
particularly described as an area of approximately 75,602 square feet
along Atlanta'Avenue between Delaware""and Huntington Street. The
property owner of the Park is 80 Huntington I, LLC and 80 Huntington Il,
LLC, and the"principal of Huntington�I and II is John Saunders, 4040
Macarthur Blvd , Suite.300, Newport Beach, CA.
In�addition, the Counci[will giveinstructions to Mr. Domer concerning
price and terms for the purchase of personal property in the form of three
Mobile homes located on land,within the area of the street easement. The
location,of these homes and`their owners are:
• Space 101, located at 80 Huntington Street, and owned by 80
Hunting tonl,_LLC and,Huntington II, LLC, whose principal is John
Saunders at 4040 MA 'Arthur, Suite 300, Newport Beach.
• Space 302,.51ocated at 80 Huntington Street, and owned by Rod and
Cindra Stolk.
• Space 401, located at 80 Huntington Street, and owned by James
and Sue Rock.
5. Pursuant to Government Code § 54957.6, the City Council shall recess to
Closed Session to meet with its designated labor negotiators and Fred
Wilson, City Manager regarding the following: FMA, MEA, MEO, MSMA,
PMA, POA, SCLEA and/or Non-Associated City Employees.
6:00 PM — COUNCIL CHAMBERS
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City Council/PFA Action Agenda—Monday, July 07,2014
ATTACHMENT 3
RECONVENE CITY COUNCIUPUBLIC FINANCING AUTHORITY MEETING
6:16 PM
CLOSED SESSION REPORT BY CITY ATTORNEY - None
ROLL CALL
Katapodis, Hardy, Shaw, Harper, Boardman, Sullivan, Carchio
All present
PLEDGE OF ALLEGIANCE — led by Councilmember Jim Katapodis
INVOCATION - To be led by Father Christian Mondot of'Saints Simon and Jude
Parish and member of the Greater Huntington Beachl'nterfaith Council.
NM
In permitting a nonsectarian invocation, the City does not intend to proselytize or
advance any faith or belief. Neither the Citynor the City Council endorses any
particular religious belief or form of invocation.
AWARDS AND PRESENTATIONS gl,
V, -
Mayor Harper to call on Community,Services Recr6ition Supervisor Chris Slama
to present Parks Make Life Better_Month::
Mayor Harper and Councilman Katapodis to present commendations to Chief
Executive Officer Colleen Mensel and to,the Class of,,2014 El Viento students —
a program througKGolden West College 4
Mayor Harper to call or studer t's,from our Sister City Anjo, Japan for a special
presentation
Ilk
S '
Mayor Harper to call on,,representativesfrom our Sister City Manly, Australia for
a special presentation "" f
Mayor Harper to call on a representative from the Orange County Sanitation
District for a presentation about the OCSD.
ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After
Agenda Distribution) -'None
PUBLIC COMMENTS (3 Minute Time Limit)
16 speakers
COUNCIL COMMITTEE APPOINTMENTS - LIAISON REPORTS AND ALL AB
1234 DISCLOSURE REPORTING
Katapodis, Shaw, Boardman, Sullivan, Carchio reported
CITY MANAGER'S REPORT
City Manager Fred Wilson deferred to the City Clerk who provided information
on the candidate riling period scheduled to commence on July 14 for the
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City Council/PFA Action Agenda—Monday, July 07, 2014
ATTACHMENT 3
November 4, 2014 general municipal election; and to the Fire and Police Chiefs
who provided a summary of downtown events and activities related to the 4ffi"of
July.
CONSENT CALENDAR
1. Receive and file City Clerk's Quarterly Report listing of Professional
Service Contracts filed in the City Clerk's office for contracts executed
between July 1, 2013 and March 31, 2014
Recommended Action:
A) Receive and file the "List of Professional ServiteContracts Approved by
Department Heads Pursuant to Huntington Beach Municipal Code Chapter 3.03
and Submitted to the Office of the City ClerkP,for the Period of July 1, 2013
through September 30, 2013;" and,
B) Receive and file the "List of Professional Service Contracts Approved by
Department Heads Pursuant to Huntington Beach Municipal Code Chapter 3.03
and Submitted to the Office of the City Clerk for the Period o�October 1, 2013
through December 31, 2013," and, A
z, ,
C) Receive and file the "List of6,Professional`Service Contracts Approved by
Department Heads Pursuant to Huntington Beach=Municipal Code Chapter 3.03
and Submitted to the Office of the GityClerk for the Period of January 1, 2014
through March 31, 201,4." `
Approved 7-0 4RA " _ F
nS
2. Approve School'Board appointmentsjo Community Services Commission
(CSC),
Recommended Action
A) Reappoint Albert Gasp"avian, Coast"community College District
Representative to a-term of July 1, 2014, to June 30, 2015; and,
U!"
B) Reappoint Norm Westwell, Ocean View School District to a term of July 1,
2014, to June,30, 2015,and,
C) Reappoint VPaul Bur:kart, Fountain Valley School District Representative to a
term of July 1, 201,4 to June 30, 2015; and,
D) Reappoint Bridget Kaub, Huntington Beach City School District
Representative to a term of July 1, 2014, to June 30, 2015; and,
E) Reappoint Roy Miller, Huntington Beach Union High School District
Representative to a term of July 1, 2014, to June 30, 2015; and,
F) Appoint Shay Reardon, Westminster School District Representative to a
term of July 1, 2014, to June 30, 2015.
Approved 7-0
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City Council/PFA Action Agenda—Monday, July 07, 2014
ATTACHMENT 3
3. Award and authorize execution of a contract in the amount of$267,960.50
to California Professional Engineering, Inc. for the Safe Routes to School
Project in the Vicinity of Stacey Middle School and Clegg.Elementary
School, CC-1426; authorize fifteen(15) percent in change orders; and,
declare Unique Performance Construction, Inc. as non-responsive
Recommended Action:
A) Declare the apparent low bid from Unique Performance Construction, Inc.,
as non-responsive; and,
B) Accept the lowest responsive and responsible bid'submitted by California
Professional Engineering, Inc., in the amount of$2,67,960.50; and,
C) Authorize the Mayor and City Clerk to execute a 'construction contract in a
form approved by the City Attorney; and,
D) Authorize the Director of Public: yprks to execute change orders not to
exceed a total of 15 percent of the contract construction costseor-$40,194.
Approved 7-0
e .
4. Approve funds and in-kind donations for Surfboards on Parade and 100
Years of Surfing r� �.`
Recommended-Action:
A) Approver$5,000 and up to $5,000 in kind dorietion to the Huntington Beach
Rotary Club for=Surfboards,on Parade; and,
B) Approve $10,00'0 and i pto$5,000 in-kind donation to the International
SurfffigW, use�um for'"100 Years:of Surfing `n,
Approved 6-1 (Sull►vahi`No)
5. As recommended by the Intergovernmental Relations Committee (IRC),
approve a City Council position and authorize the Mayor to sign a letter of
support;forAssembly,Bill 1717 (Perea) which establishes a uniform,
statewide collection mechanism of Utility User Tax (UUT) on prepaid
wireless services
Recommended Action:
A) Approve a City position of support for Assembly Bill 1717 (Perea) - Utility
User Tax (UUT) on prepaid wireless sales; and,
B) Authorize the Mayor to sign a letter of support for Assembly Bill 1717.
Approved 6-9 (Harper-No)
6. Adopt Resolution No. 2014-30 ordering the Summary Vacation of portions
of several easements in the Brightwater Development due to the
reconfiguration of Ashville Drive
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City Council/PFA Action Agenda—Monday, July 07, 2014 .
ATTACHMENT 3
Recommended Action:
A) Adopt Resolution No. 2014-30, "A Resolution of the City Council of the City
of Huntington Beach Ordering the Summary Vacation of Portions of Several
Easements Due to the Reconfiguration of Ashville Drive" in the Brightwater
Development; and,
B) Instruct the City Clerk to record said Resolution (and attachments) with the
Orange County Recorder.
Approved 7-0
7. Adopt Resolution No. 2014-35 authorizing the City to levy the Annual
Retirement Property Tax for Fiscal Year 2014/15-1Q pay for pre-1978
Employee Retirement Benefit Levels
Recommended Action:
Adopt Resolution No. 2014-35, "A Resolution of the City,Gouncil of the City of -
Huntington Beach Levying a Retirement"Property Tax for Fiscal Year 2014/15
to Pay for Pre-1978 Public Employee Retirement Benefits" of$0.01500 per
$100 of assessed valuation. The tax-rate of$0.01500 wouldcontinue the
current tax rate included in the Fiscal Year 2013/1.4�adopted Budget.
A roved 6-1 Har er-N
pp ( p )
8. Adopt Resolution No. 2014 21 approving and" Implementing the
Memorandum of Understanding (MOU)_,between-the Police Officers'
Association (POA) and the City'for 10/01/13_throu '09/30/15; and,
approve budget appropriation
Recommended Action:
A) Adopt Resolution No ;20;14-21, "A`Resolution of the City Council of the City
of Huntington;Beach Approving"and Implementing the Memorandum of
,Understanding Between rthe Police Officers' Association (POA) and the City for
FOctober 1, 2013'th_rougli`September 30" 2015;" and,
B) Bya�doption of the resolution'.;approving and implementing the HBPOA
MOU, Council hereby approves the required Fiscal Year 2013-14 budget
appropriation adjustment in the amount of$292,554.
Approved 5 2,(LlarperSullivan-No)
9. Adopt Resolution'No. 2014-34, approving and implementing the
Memorandum of Understanding (MOU) between the Municipal Employees'
Association (MEA) and the City for July 1, 2013, through September 30,
2015, and approving the appropriation adjustment for FY 2013/14
Recommended Action:
A) Adopt Resolution No. 2014-34, "A Resolution of the City Council of the City
of Huntington Beach Approving and Implementing the Memorandum of
Understanding Between the Municipal Employees' Association (MEA) and the
City for July 1, 2013, through September 30, 2015;" and,
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City Council/PFA Action Agenda—Monday, July 07, 2014
ATTACHMENT 3
B) By adoption of the Resolution approving and implementing the MEA MOU,
.the City Council of the City of Huntington Beach hereby approves the required
Fiscal Year 2013-14 budget appropriation adjustment in the amount of$88,719.
Approved 6-1 (Harper-No)
10. Adopt Resolution No. 2014-33 amending the Memorandum of
Understanding (MOU) between the City and the Surf City Lifeguard
Employees' Association(SCLEA), by adopting a Side Letter Agreement
Recommended Action:
A) Adopt Resolution No. 2014-33, "A Resolution ofnthe City Council of the City
of Huntington Beach Amending the Memorandum of:Understanding Between
the City and the Surf City Lifeguard Employees'As (SCLEA), by
Adopting the Side Letter of Agreement;"
3 t �
B) Authorize the City Manager to sign the,Side Letter Agreement.
Approved 6-1 (Harper-No)
11. Adopt Resolution No. 2014-32, app'roving and implementing modifications
to salary and benefits for non-represented employees
r
Recommended Action: a
A) Adopt Resolution No. 2014 32', "A Resolution`bf the City Council of the City
of Huntington Beach Modifying',Sala`ry and Benefits! or Non-Represented
Employees;" and,
�
r
B) Approve,the City Clerks compensation adjustment request to move from the.
Start Point of the pay range,to the Control Point of the pay range.
Approved 6-1 Ha er-No z:
PP ( r P J.
12 Approve and authorize_execu of Amendment No. 3 to Professional
Services Contract,with-Liebert Cassidy & Whitmore to provide Legal
Services
Recommended Act11o'E,
Approve andrauthoriz =the Mayor and City Clerk to execute "Amendment No. 3
to Professional Services., ontract Between the City of Huntington Beach and
Liebert Cassidy &Whitmore to Provide Legal Services.
Approved 6-1 (Harper No)
13. Approve and authorize execution of a Professional Services Contract
between the City and RJM Design Group, Inc. for completion of a Citywide
Parks and Recreation Master Plan; and, authorize appropriation of funds
Recommended Action:
A) Approve and authorize the Mayor and City Clerk to execute "Professional
Services Contract Between the City of Huntington Beach and RJM Design
Group, Inc. For Citywide Parks and Recreation Master Plan" in an amount not
to exceed $220,000; and,
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City Council/PFA Action Agenda—Monday, July 07, 2014
ATTACHMENT 3
e
B) Authorize the appropriation of$220,000 from the Park Acquisition and
Development (PAD) Fund 209 fund balance to PAD Administration account
20945101.69300 for the completion of a Citywide Park Master Plan.
Approved 7-0
14. Approve and authorize execution of a Promotional Agreement with Toyota
Motor Sales USA, Inc. for provision of vehicles for Marine Safety and
Beach Operations
Recommended Action:
Approve and authorize the Mayor and City Clerk to execute the "Promotional
Agreement Between the City of Huntington Beach a'nd Toyota Motor Sales,
Inc." for the provision of 18 vehicles at no cost to the City for two years, with two
(2), 2-year options for use by the Marine Safety�DiVision of the Fire Department
and the Beach Operations Division of the Conirnu "it y Services Department.
Approved 7-0
15. Approve and authorize execution o pp f=Cooperative Agreement No. C-4-1626
between Orange County Transportation Authority (OCTA) and the City for
Atlanta Avenue Widening Project; and approveadditional appropriations
for the project
Recommended Action:
A) Approve and authorize the Mayor and City Clerk:to,execute "Cooperative
Agreement No G4=1626 Between_Orange�C�ounty Transportation Authority and
City of Huntington Beach for Atlanta.Avenue Widening Project;" and,
:.: n
>,
B) Approve antappropnat_on of$622,Q00 from the General Fund Capital
Improvement Reserve to Account No. 1.0040314.82700; and,
C �A rove an a ro nation off$566.944 in additional rant funds to MPAH
pp pp p. . .. g
Account No. 96585001.82000.
Approved 7-0
;.
16. Adopt Ordinance Not 1 4028 amending Huntington Beach Municipal Code
Chapter 10 44 relate&to oversized vehicle parking regulations, exceptions,
and overnightparking,in a commercial or industrial district
Approved formtroduc=tion June 16, 2014
Vote: 6-1 (Harper"61
Recommended Action:
Adopt Ordinance No. 4028, "An Ordinance of the City of Huntington Beach
Amending Chapter 10.44 of the Huntington Beach Municipal Code Relating to
Parking — Time Limits" (Oversized Vehicle Parking Regulations, Exceptions,
and Overnight Parking in a Commercial or Industrial District).
Approved 6-9 (Harper-No)
PUBLIC HEARING
-8-
City Council/PFA Action Agenda—Monday, July 07, 2014
ATTACHMENT 3
17. Request to approve and adopt a Resolution that makes findings,
authorizes financing, appropriates funding and awards a contract to
Seimens Industry, Inc. to upgrade City-owned streetlight and parking lot
LED lighting; and, authorize the City Manager to execute related
lease/purchase and escrow agreements. -
Recommended Action:.
Continue item to the July 21, 2014 City Council meeting.
Approved 6-0-1 (Shawn Out of Room)
18. Adopt Resolution No. 2014-31 approving General Plan Amendment No. 14-
001; and approve for introduction Ordinance No` 4029 -Zoning Map
Amendment No. 14-001 (Airport Circle Residential) located on the west
side of Airport Circle approximately 300 feet.north of Warner Avenue
Planning Commission and Staff Recommended Action:
A) Approve General Plan Amendment No. 14-001 by adopting City Council
Resolution No. 2014-31, "A Resolution°'of the City Council ofthe City of
Huntington Beach Approving General Plan Amendment No. `1'4-001 (Airport
Circle Residential);" and,
. o
B) Approve Zoning Map Am'etel dment No. 14 001,within findings for approval and
approve for introduction OrdinanceNo:4029, "An Ordinance of the City of
Huntington Beach Amending Ristrict'Map,24 (Sectional Map 21-5-11) of the
Huntington Beach Zoning and Subdivisions,Ordinance�to Rezone the Real
Property Generally-L 't 4ed on the�UVest Side ofxAirporf Circle Approximately 300
Feet North of Warner Aenue from�,Residential Medium Density (RM) to
Residential Medium High=Density (RMV ) (Zoning Map Amendment No.
2014 001)." "
Approved 7�0
COUNCILMEMBER ITEMS
19. Submitted by Counciltnembe'r,Sullivan - Establish an Ad Hoc Committee to
provide a;memorial fof Robin Samsoe
N.
Recommended�Action
A) As amendedffto_place Sullivan, Carchio and Shaw on a new Ad Hoc
Committee charged',',,.,.,' ith the task of placing a bench or other significant
memorial for Robin Samsoe, at City expense, in a very visible and prominent
spot in Pier Plaza to both honor her memory and to serve as a constant
reminder that Huntington Beach is determined to do everything possible to
protect our children; and,
B) The public safety services of Huntington Beach (Police, Fire and Marine
Safety) report to the City Council on the steps that they are taking to try to
prevent a repeat of this tragedy.
Approved 7-0
-9-
City Council/PFA Action Agenda—Monday, July 07, 2014
ATTACHMENT 3
20. Submitted by Councilmember Sullivan - Reconsider previous Council
action to restrict hours of new restaurants with alcohol Downtown
Recommended Action:
A) Reconsider the June 16, 2014 City Council action.directing staff to process a
Zoning Text Amendment to prohibit any new eating and drinking
establishments with alcohol sales in District 1 to remain open past 10:OOPM
Monday through Sunday, and the placing of a restriction on the number of
establishments serving liquor
Approved 6-1 (Boardman-No)
B) As amended to direct staff to process a Zoning=Text Amendment restricting
any new eating and drinking establishment with alcohol sales in District 1 of the
Downtown Specific Plan from serving alcohol past-10 .00 PM Sunday through
Thursday, and 11:00 PM Friday and Saturday, but allow food service until
midnight.
Approved 4-3 (Harper, Boardman, Sullivan-No)
COUNCILMEMBER COMMENTS (Not Agendized)
Kata odis Hard Shaw Ha er Boardman Sullivan, Carchio re orted
p y, ►� ,f p
9
ADJOURNMENT at 10:57 PM, in memory 6fNeWport864ch Lifeguard, Ben
Carlson, who passed away while performing his lifeRsaving>duties this past
weekend. `
The next regularly scheduled:meeting of the Huntington Beach City Council/Public Financing
Authority is Monday, July 21 2014 at 4:00"PM m Room B-8, Civic Center, 2000 Main Street,
Huntington rBeach, California. Fz j
,
INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA
AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL
MEETINGS AT
�http/%Hrww.huntin_gtonbeachca.gov
-10-
City Council/PFA Action Agenda—Monday, July 07, 2014
ATTACHMENT 3
s
Dept. ID FN 14-010 Page 1 of 2
Meeting Date:7/7/2014
CITY OF HUNTINGTON BEACH
REQUEST FOR. CITY COUNCIL ACTION
MEETING DATE: 7/7/2014
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A. Wilson, City Manager
PREPARED BY: Lori Ann Farrell, Director of Finance
SUBJECT: Adopt Resolution No. 2014-35 authorizing the City to levy the Annual Retirement
Property Tax for Fiscal Year 2014/15 to pay for pre-1978 Employee Retirement
Benefit Levels
Statement of Issue:
The retirement property tax has been levied each year since 1966. The retirement property tax is
collected on all real property in the City of Huntington Beach to recover costs related to pre-1978
public employee retirement benefit levels. On July 16, 2012, the City Council adopted Chapter 3.07
of the Municipal Code, the Retirement Tax Cap. The Retirement Tax Cap states that the tax rate
"shall be set at the rate adopted for Fiscal Year 2012/13, which is $0.01500 per $100 of assessed
valuation."
Financial Impact:
Pursuant to Chapter 3.07 of the Municipal Code, the Proposed Budget for Fiscal Year 2014/15
reflects the Retirement Tax Cap of $0.01500 per $100 of assessed value. As of the most recent
audited financial statements, this tax rate resulted in $4.6 million in General Fund revenue in Fiscal
Year 2012/13. As this revenue source is included in the Proposed FY 2014/15 Budget, any
reductions in the tax rate will likely result in General Fund budget reductions.
Recommended Action:
Adopt Resolution No. 2014-35, "A Resolution of the City Council of the City of Huntington Beach
Levying a Retirement Property Tax for Fiscal Year 2014/15 to Pay for Pre-1978 Public Employee
Retirement Benefits" of $0.01500 per $100 of assessed valuation. The tax rate of $0.01500 would
continue the current tax rate included in the Fiscal Year 2013/14 adopted Budget.
Alternative Action(s):
Do not approve the recommended action and direct staff accordingly.
Analysis:
The retirement property tax has been levied since 1966. The retirement property tax is collected on
all real property in the City of Huntington Beach to recover costs related to pre-1978 public
employee retirement benefit levels that can be legally collected in accordance with court cases,
state law, and the City Charter.
Staff is recommending that the City Council adopt the same assessment rate for Fiscal Year
2014/15 as in Fiscal Year 2013/14 of$0.01500 per $100 of assessed valuation pursuant to Chapter
3.07 of the Municipal Code. On July 16, 2012, the City Council voted to permanently cap the tax
rate at $0.01500 per$100 of assessed valuation.
Item 7. - 1 H -1 4-
Dept. ID FN 14-010 Page 2 of 2
Meeting Date:7/7/2014
Moreover, on June 25, 2012, the Registrar of Voters of the County of Orange certified a measure to
be placed on the ballot to repeal the Employee Tax Override in its entirety. On November 6, 2012,
the ballot measure, known as Measure Z, was defeated by a majority of Huntington Beach voters.
This tax rate results in an approximately $75 assessment for a property assessed at $500,000.
Revenue generated from this property tax helps the City fund CalPERS costs associated with pre-
1978 retirement benefit levels, (i.e. the estimated value of the costs associated with original benefit
formulas). This assessment has not been increased since Fiscal Year 2009/10 and can only be
modified by a vote of the electorate as the adoption of the Retirement Tax Cap contained in Chapter
3.07 of the Municipal Code established a permanent cap. Please note that based on the most
recent CalPERS actuarial valuations, pre-1978 employee retirement benefit costs total $14.8
million. As such, the proposed tax rate is recouping only 31.6 percent of eligible retirement costs.
Due to the County of Orange's timeline for approving the tax rate and the city's budget cycle, the
rate must be set before the City Council takes action on its annual budget. The recommended
assessment rate would maintain approximately $4.6 million in much needed revenue in the General
Fund for Fiscal Year 2014/15.
Environmental Status:
Not Applicable.
Strategic Plan Goal:
Improve long-term financial sustainability.
Attachment(s):
1. Resolution No. 2014-35, "A Resolution of the City Council of the City of Huntington Beach
Levying a Retirement Tax for Fiscal Year 2014/15 to Pay for Pre-1978 Public Employee
Retirement Benefits" of$0.01500 per $100 of Assessed Valuation.
HB -1 05- Item 7. - 2
RESOLUTION NO. 2014-35
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH
LEVYING A RETIREMENT PROPERTY TAX FOR FISCAL YEAR 2014/2015 TO PAY
FOR PRE-1978 EMPLOYEE RETIREMENT BENEFITS
WHEREAS, since 1948, the City has provided for employee pensions through a contract
with the California Public Employees Retirement System (CalPERS). Pursuant to the 1966,
1978 and 2010 Charters, the voters of the City authorized the City Council to pay for the cost of
employee pensions through a separate retirement property tax. Section 607(b)(2) of the 2010
Charter provides that the City may impose a retirement tax"sufficient to meet all obligations of
the City for the retirement system in which the City participates;'and
Proposition 13 was added to the California Constitution in 1978. It limits the local
property tax to 1% of assessed value, except that the City may levy an override tax in excess of
1% to pay"any indebtedness approved by the voters prior to July 1, 1979'(Cal. Const. Art. 13A,
§1(b)); and
In the case entitled Carman v. Alvord, 31 Cal.3d 318 (1982), the California Supreme
Court determined that under Proposition 13, an override property tax in excess of 1% of assessed
value may be levied to pay for employee pension benefits the voters approved prior to 1978.
Consequently, after Proposition 13, the Huntington Beach City Council continued to levy an
override tax to pay for employee pensions. Since 1983-84, Revenue and Taxation Code Section
96.31(a)(4) has limited the City to levying a maximum override tax of $0.04930 per $100 of
assessed value to pay for its retirement system; and
In 2003, the Court of Appeal in Howard Jarvis Taxpayers Assn v. County of Orange
(2003) 110 Cal.App.4th 1375 held that the City may levy a separate property tax to pay for
retirement benefits for all retired, current, and future city employees contracted for prior to July
1, 1978, but not enhancements to retirement benefits contracted for after July 1, 1978; and
Prior to July 1, 1978, the City entered into collective bargaining agreements with
employee associations representing its safety employees providing that, effective July 1, 1978,
they would be entitled to a CalPERS retirement benefit known as`2% @ 50" Subsequently, on
June 30, 1999, pursuant to collective bargaining agreements the City had entered into with its
safety employees, the City provided its safety employees with the CalPERS retirement benefit
known as 3% @ 50. Consequently, it is necessary to allocate the employer contribution to
CalPERS for safety retirement between 2% @ 50 and 3% @ 50, because only the employer
contribution for 2% @ 50 may be paid through the override property tax; and
The City has received a report from John Bartel of Bartel Associates, a professional
actuary experienced in pension calculations, entitled, "City of Huntington Beach CalPERS
Actuarial Issues-Cost of 3% @ 50,"dated August 10, 2004. The Report identified the additional
cost of 3% @ 50 as what CalPERS refers to as the`hormal cost'of the benefit, which represents
the present value of future benefits employees earned during the current year. Under this
14-4291/110841.doc 1
Resolution No. 2014-35
approach, the incremental cost of 3% @ 50 is 4.6% of safety payroll, and the remainder of the
employer contribution represents the cost of 2% @ 50; and
In April 2004, then Assemblyman Harman formally asked the Attorney General
regarding the correct method of allocating the employer contribution to CalPERS between its
pre-1978 and post-1978 components. In his February 7, 2005 Opinion (Opinion No. 04-413),
the Attorney General opined that"any reasonable accounting method may be used for purposes of
determining which costs are not subject to the 1%property tax limitation of the Constitution,"and
The City Council has determined that the allocation approach presented in the Bartel
Report is a reasonable accounting method for determining which costs are not subject to the 1%
property tax limitation of the Constitution; and
For 2014/2015, Ca1PERS is requiring the City to contribute 39.051% of safety employee
payroll as the Citys employee's contribution. In order to set the tax override, the City may
subtract the 4.6% normal cost of 3% @ 50 from the 39.051% to set the override tax at the
equivalent of 34.451% of safety employee payroll. The cost to the City of 34.451% of safety
employee payroll for 2014/2015 will be $14,772,270 and pursuant to Proposition 13, the City
could have set the override tax for 2014/2015 at $0.04921 per $100 of assessed value; and
The City Council added Chapter 3.07 to the Municipal Code which provides that the
maximum retirement override tax rate for 2013/2014 shall be set at the rate adopted for Fiscal
Year 2012/13, which is $0.01500 per $100 of assessed valuation, which amount is less than the
otherwise permitted retirement override tax of$0.04921 per $100 of assessed value.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington
Beach that a retirement property tax levy of Zero and 0.015001100th Dollars ($0.01500) per $100
of assessed value shall be levied for employee retirement costs for Fiscal Year 2014/2015.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 7th day of July , 2014.
t "Mayorvort
REV AND APPROVED: INITIATED AND APPROVED:
All-
AdVager finance Director
APPROVED AS TO FORM:
P - ,
f
City Attorney . KU _f~N`�
14-4291/110841.doc 2
Res. No. 2014-35
STATE OF CALIFORNIA
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of
Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby
certify that the whole number of members of the City Council of the City of
Huntington Beach is seven; that the foregoing resolution was passed and adopted
by the affirmative vote of at least a majority of all the members of said City Council
at a Regular meeting thereof held on July 7, 2014 by the following vote:
AYES: Katapodis, Hardy, Shaw, Boardman, Sullivan, Carchio
NOES: Harper
ABSENT: None
ABSTAIN: None
G"4
City Ark and ex-officio erk of the
City Council of the City of
Huntington Beach, California