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HomeMy WebLinkAboutStrategic Planning Session - Facilitator Marilyn Snider of S CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION Joan L. Flynn, City Clerk Office of the City Clerk TO: Honorable Mayor and City Council FROM: Joan L. Flynn, City Clerk DATE: January 27, 2011 SUBJECT: COMMUNICATIONS TO THE CITY COUNCIL FOR THE JANUARY 28, 2011, SPECIAL CITY COUNCIL/RDA/PFA MEETING Attached are the communications to the City Council received after distribution of the Agenda: Administrative Item #3 Huntington Beach Six-Month Strategic Objectives (29 January 2010 through December 2010) submitted by facilitator Marilyn Snider of Snider and Associates. PowerPoint submitted by Lori Ann Farrell, Director of Finance entitled Strategic Planning Session— Budget Update and Discussion, January 28, 2011. Comments Regarding Budget Issues and Priorities dated January 27, 2011, submitted by Mayor Pro Tem Don Hansen. Flynn, Joan From: Farrell, Lori Ann Sent: Thursday, January 27, 2011 12:14 PM To: Flynn, Joan; Wilson, Fred Cc: Emery, Paul Subject: Strategic Planning Session Presentation Attachments: January 28 2011 Strategic Planning Session.pptx Attached is the Finance presentation for tomorrow's Strategic Planning Session for distribution. Please let me know if you need anything else. Thanks. Lori Ann Farrell Director of Finance City of Huntington Beach 2000 Main Street P.O. BOX 190 Huntington Beach, CA 92648-2702 (714) 536-5225 (714)374-1571 Fax loriann.farrellgsurfcity-hb.org 1 Strategic Planning Session BUDGET UPDATE AND DISCUSSION January 28, 2011 SUMMARY Recap of Last Year 's Budget — FY 10 Update on Current Year — FY I I r Estimated FY 12 and FY 13 Shortfalls v Options to Address FY 12 and FY 13 Challenges Discuss ion and Council Direction FY 10 and. FY 11 Budget Recap General Fund FY 10 Update — September 30, 2010 o Annual external audit in progress General Fund FY 11 Update • The budget will be closely monitored throughout the year • The State's FY 12 Budget will also be monitored for impacts including: • FY 12 CalPERS rates are resulting in $538k impact to General Fund in FY 11 • Estimated Library Services cuts of$120,000 • Additional severe cuts if voters do not extend $9 billion in Statewide taxes • Impact of proposed Redevelopment Agency elimination: • Loss of$4.9 million annual transfer to the General Fund from the RDA • Potential loss of$20 million annually for housing, capital projects and infrastructure • Loss of General Fund loan repayments totaling $70 million over 20 years -,__\ --�---- 3 FY 2011/2012 General Fund Budget FY 12 Preliminary General fund Budget Assumptions: Maintain the Status Quo: • No additional FTEs • Vacant positions remain only if approved by City Manager (on a case-by-case basis) • No service enhancements • Unfunded Capital Improvement Projects will exceed $230 million • No improvement to funded status of City's pension and retiree benefit plans • Outstanding General Fund bond issues remain at $57 million • Infrastructure Funding remains at current levels • No significant increase to the City's emergency reserves • Negotiated pay raises reflect contractual agreements • The 2% additional employee pick-up of pensions costs sunsets in September 2011 • Reflects a 5-Fear Plan to restore equipment funding to appropriate levels • Slight General Fund revenue growth given some improvement in the economy '� Except for Elected Officials, City Manager and Department Heads who will continue to contribute an additional 2%. HUNTING ®TON BEACH * SIX - MONTH STRATEGIC OBJECTIVES 29 January 2010 through December 2010 THREE-YEAR GOAL: MAINTAIN FINANCIAL VIAB®L®TYAND OUR RESERVES WHEN WHO WHAT; STATUS COMMENTS . . DONE ON" REVISED r TARGET,- 1. Updates presented at the At the Feb. 16, '10 Finance Director Present financial updates to the City Council. X February 16th and May 3rd City Council Study and August 2"d City Council Session and Study Sessions. Remaining quarterly thereafter update scheduled for Nov 1st. 2. Report completed and Mar. 1,2010 Fire Chief Investigate and report results to the City Council on the X distributed to the City DCA Paul internal revisit of mandatory staffing in the Fire Dept. Council. (e.g., reduction in staffing from 4 to 3 on fire trucks). 3. Side letter agreements Mar. 1,2010 HR Director Investigate and report results to the City Council on X completed with six DCA Paul increasing employee contributions to PERS and the associations increasing evaluation of the two-tier benefit. employee contributions to PERS. An evaluation of two tier benefits will be assessed as future MOU's are negotiated. 4. Side letter agreements with Mar. 1, 2010 HR Director Investigate and report results to the City Council on the X Associations include wage City Administrator deferral of wage increases, including cost of living and deferrals for one unit. step. 5. Report on participation in 960 Mar. 1,2010 HR Director Investigate and report results to the City Council on X hours option was DCA Paul early retirement with 960 hours/year for 2 years. disseminated to the City Council. A 6. Supplemental medical Mar. 1, 2010 HR Director Investigate and report results to the City Council on the X benefit for new non- DCA Paul elimination of supplemental medical benefits for new associated employees was hires. eliminated in January 2010. An evaluation of application to other bargaining units will be conducted as future MOU's are negotiated. 7. Distributed to Council on Mar. 1, 2010 Dir. Planning& Investigate and report results to the City Council on X June 8, 2010. Building, Energy closing city hall on Fridays,with or without furloughs. Project Manager and City Treasurer 8. Recommendations to Mar. 1,2010 All department Investigate and report results to the City Council on new X enhance revenues were heads( ideas for revenue enhancement. presented to the City Council DCA Bob—lead) with the mid-year budget review on May 3,2010. 9. Financial Statements have At an April 2010 Finance Director Present the results of the City's Financial Statement. X been issued and were City Council presented as part of the mid- Study Session year budget report on May 3, 2010. 10. Five year financial plan was June 1, 2010 Finance Director Present an update of the Five-Year Financial Plan to the X reviewed as part of the City Council. budget presentation at the August 2nd City Council Study Session. 11. Revised policies were June 1, 2010 Finance Director Present to the City Council for action a policy for X presented to the City Council equipment replacement and a policy for capital at the August 16,2010 Study improvement reserves. Session and adopted along with the 2010/11 budget on September 20, 2010.. B THREE-YEAR GOAL: MAINTAIN, IMPR VEAN® ®STAIN FUNDING FOR INFRASTRUCTURE AND EQUIPMENT WHEN WHO WHAT STATUS, _. COMMENTS DONE_ ON REVISED TARGET 1, Submitted request with the Mar. 1, 2010 Dir. of Public Works, Submit a request to have appropriation of the WRDA X City's Federal lobbyist,The working with the Army grant in the federal budget. Ferguson Group. Corps of Engineers 2. Departments have submitted May 15, 2010 DCM Bob,working with Identify and prioritize the critical equipment that needs X to Administration their critical all department heads to be replaced and the expected costs for the next two equipment needs. fiscal years. Prioritization will occur and funding identified in the fiscal year 2010/11 budget. 3. Report disseminated to the June 15,2010 Dir. of Public Works Provide to the City Council an outline of infrastructure X City Council the week of activities and long-term funding requirements. October 4,2010. C THREE-YEAR GOAL: MAINTAIN PUBLIC SAFETY WHEN WHO WHAT STATUS COMMENTS DONE ON REVISED TARGET 1. Completed at the May 3, At the April 19, Police Chief,working with Present to the City Council for information a plan to X 2010 City Council Study 2010 City the Fire Chief and Marine maintain public safety considering current budget Session. Council Study Safety Chief constraints and personnel vacancies. Session 2. Completed at the July 6, At the June 21, Community Services Dir., Develop and present to the City Council a X 2010 City Council Study 2010 City working with the Fire Chief Replacement Plan for Critical Health and Safety. Session. Council Study and Police Chief Equipment, including evaluation of potential funding Session options. 3. Report disseminated to the July 1,2010 Police Chief Provide the City Council with a written report X City Council on June 30, regarding strategies to address the problem of DUI 2010. drivers in Huntington Beach. D THREE-YEAR GOAL: E/0//fANCE ECONOMIC DEVELOPMENT WHEN WHO WHAT STATUS COMMENTS DONE ON REVISED TARGET 1. City Council approved the Mar. 15,2010 Planning and Building Dir Present to the City Council for action the Beach-Edinger X Beach-Edinger Corridor and Economic Corridor Specific Plan. Specific Plan on March 1, Development Dir. 2010. 2. On February 17,2010 the May 15,2010 Planning and Building Dir Submit for application acceptance by the California Coastal X Specific Plan was submitted and Economic Commission for the Downtown Specific Plan and a Parking to the California Coastal Development Dir. Master Plan update. Commission. 3. Exclusive Negotiating June 1,2010 Economic Development Present to the City Council for action a DDA for a hotel in X Agreement(ENA)approved Dir.,with input from the north Huntington Beach. by the Redevelopment City Council's Economic Agency on June 21, 2010. Development Committee 4. An Affordable Housing June 15,2010 Economic Development Complete negotiations of an Owner Participation Agreement X Agreement (in lieu of an Dir. (OPA)with developer DJM for Phase II of Bella Terra. OPA)was approved by the City Council on October 4, 2010. 5. Staff has met with several July 15, 2010 DCA Bob,working with Schedule and plan at least one additional sporting event X possible organizers of new the Community Services throughout Huntington Beach. sporting events with the Dir. and Marketing and emphasis on multiday off Visitors Bureau peak events. At this time no new events have been scheduled however dialogue continues. 6. City Council Study Session is July 19, '10 at Economic Development Present to the City Council for action an amended merged X scheduled for October 18, a City Council Dir. project area to include previously identified blighted shopping 2010,with the Resolution Study Session centers. scheduled for the November 15,2010 City Council meeting. E FUTURE Planning and Building Assess the constraints in the city's industrial zones and For future discussion OBJECTIVE Dir. and Economic identify potential opportunities for use, including an Development Dir. identification of market demands. F THREE-YEAR GOAL: IMPROVE INTERNAL AND EXTERNAL COMMUNICATION WHEN WHO _WHAT STATUS COMMENTS DONE ON - REVISED - TARGET 1. First report disseminated Beginning the City Clerk and PIO Post a summary of City Council meeting highlights(e.g., X to employees on March 4, day following actions by the City Council)to the Surfnet and on a link to all 2010 and for each Council each City employees. meeting thereafter. Council meeting until July 2010 2. Completed on January 8, Feb. 15, 2010 City Administrator Update employee associations on the results of the strategic X 2010. planning process. 3. Two brown bag lunches May 1,2010 Mayor Cathy Green— Hold at least one brown bag lunch with employees to providE X were held the week of lead, Mayor Pro Tern Jill Council priorities and issues. April 12, 2010. Hardy, past Mayor Keith Bohr 4. July 15, 2010 City Administrator Provide to all employees two quarterly updates on the X Conducted 2 all-employee and Finance Dir. budget situation, in person and with an interactive Q&A meetings on July 29, session. 2010. 5. Memo presented to July 15,2010 PIO,working with non- Identify revenue generation opportunities on HBTV 3 and X Communications profits and other public report on the feasibility to the City Administrator. Committee outlining entities options. Committee decided to not aggressively pursue sponsorships, but to examine opportunities that present themselves. 6. Producing business July 15,2010 PIO,working with Public Improve HBTV 3 programming using PEG(Public Education X development Cable TV Authority staff Grant)funding. programming and taping and with department scheduled presentations heads to develop ideas from the Environmental for programming Board. 7. July 15,2010 City Administrator Provide to the employees and the City Council at least one X All employees and council update on the status of employee suggestions. were updated via email on March 10,2010. G g. Request for additional July 15, 2010 City Administrator Solicit employees'suggestions(e.g. provide a link to X suggestions requested by Pipeline)and provide feedback to the employees on City Administrator on suggestions given. March 3, 2010. H Unfunded Liabilities Unfunded % Funded Description Liability Status CalPERS Safety flan $108.6 million 56.3% CalPERS Miscellaneous Plan $ 42.2 million 64.8% Supplemental Retirement Plan* $ 33.0 million 46.3% Retiree Health Care Subsidy** $ 10.7 million 44.4% TOTAL $194.5 million * Closed to new entrants since 1998. **Closed to new Non-Associated employees; for other employees available only after 10 years of service. 10-Year I Funding Gap Estimated Estimated 10 Projected 10 Year Infrastructure Asset Year Need Funding Shortfall (A) (B) A-B=(C) Drainage $11655001000 $0 $11615001000 Residential Concrete $3%5001000 $10009000 $2%500;000 Residential Pavement $31NOW $209000,000 $11 M009000 Arterial Highways and Bridges $2610009000 $201>00000 $650009000 Alleys/Parking hots/Block Walls $2293009000 $0 $22,3005000 Buildings/Facilities $38900000 $3,5009000 $3415009000 Parks and Playgrounds $11,000,000 $400,000 $10,600,000 TOTAL $28493009000 $5399009000 $23094009000 Projected FY 2011/2012 General Fund Challenge ➢Revenue is projected to increase due to slight economic improvement ➢However, expenses are projected to increase significantly due to: ■ Negotiated employee raises (see attached chart); and ■ Increased pension costs of $5. 1 million in FY 12 alone Estimated FY 12 General Fund Challenge of $3.5 million Negotiated Salary Increases FY 11- FY 12 Unit Wade Increase FY 11 Impact FY 12 Impact FY 13 Impact" (CalPERS rate change) HBFA 2.5% effective 3/21/11 $2339500 $4809400 $1789000 2.0% effective 9/30/11* $394,000 $181,600 Subtotal $2339500 $8749400 $3599600 MEA 2.5% effective 7/1/11 $142,800 $57200 $15800 1.0% effective 1/1/12 $176,200 $218,200 Subtotal $1429800 $7489800 $3769200 FMA 2.0% effective 7/1/11 $7,300 $291400 $13,500 2.0% effective 1/1/12 $22,500 $21,300 Subtotal $� Fiscal Year Totals $3839600 $196759100 $7709600 Cumulative Totals $3839600 $290589700 $298299300 -- _ *Deferred from March 2010. \\_**Titereare no new raises in FY 13.Amount reflects impact of FY 13 PERS rate changes on wage increases only. Thisamount will increase if discount rate change is implemented at February PERS Board mtg. Projected FY 2012/2013 General Fund Challenge ► Estimated General Fund Expenses* : $ 194 to $ 197 million ► Estimated General Fund Revenue: $ 186 million ► Estimated General Fund Challenge: ($8 - 11 million) *Primary Factors: • Additional Ca1PERS rate increases • Ca1PERS Discount rate change from 7.75% to 7.5% • Fiscal impact of tail end of FY 2011/2012 raises • An additional $1 million for equipment Potential Solutions Expenditure Deductions );o, Revenue Increases Employee Concessions Expenditure Reductions Options Across-the-Board Cuts* Surgical or Strategic Cuts Proportionate Share Cuts Eliminate Non-Essential Services *See Attached Chart for Details by Department Across-the-Board Cuts FY 2011/2012 -- Draft For Discussion Purposes Only Across-the-board Department cuts (2.2%) City Administrator $ 34,176 City Attorney 50,513 City Clerk 20,484 City Council 6,951 City Treasurer 27,928 Community Services 283,016 Economic Development 34,988 Finance 80,777 Fire 765,242 Human Resources 108,910 Information Services 134,341 Library Services 91,084 Non-Departmental - Planning & Building 140,483 Police 1,358,168 Public Works 393,123 Total $ 3,530,185 — �_ 12 Revenue Increases Establish new fees and/or increase fees o Examples: ® Storm Drain Fee — currently $ 1 .25 million spent on Operations and Maintenance (does not include equipment) ® Credit Card Convenience Fee i Tobacco Permit Fee • Refuse Maintenance and Administrative Fee Increase fines and penalties Update fee study Property Tax Override for Public Safety Pension • Every additional $0.001 cents per $ 100 of assessed valuation generates $250,000 • Example: A $500k SFR would pay an additional $5 annually \ �� 13 Employee Concessions All Options Require Negotiations OPTION I Negotiated Salary Increases Can generate more than $2.8 million in General Fund savings over a three- year period if conceded: • HBFA $194679500 • MEA $192671800 • FMA $ 94,000 TOTAL $298299300 • Savings are structural and ongoing - _--- ---__ 14 Employee Concessi ons Pension Reform Options Require Negotiations OPTION 2 Increase Employee Pick-Up of Pension Costs o All Employees agreed to an additional 2% Pick Up for FY 11 o This concession saved the City $ 1 .2 million o The agreement expires on September 30, 2011 Each 1% of Employee Pick-Up generates Over $700,000 in savings if ALL bargaining groups participate *Please note the HBFA agreed to defer salary increases of 2% thereby providing equivalent savings. _ 15 Employee Concessions Pension Reform Options Require Negotiations OPTION 3 Establish a New Tier of Pension Benefits • Impacts new employees only • Delays retirement age • Reduces benefit formula • Changes from single highest year to average of 3 years • Reduces the City's unfunded liability Example: • New Safety Tier of 3%@55 • New Miscellaneous Tier of 2%@55 • Can generate up to $ 1 .4 million in savings by Year 10 `- __-- 16 Two Years of Solutions Proposed F FY 12 and FY 13 ► The City is projecting fiscal challenges in FY 12 and FY 13 ► .Addressing the FY 12 General Fund challenge o� is a short-terns solution ► The City's most recent 5-Year Financial Plan reflected General Fund challenges in the out-years as well ► while General Fund revenue is growing, it is not keeping pace with the rate of expenditure growth ► The City should take a long-term approach to developing solutions ► Developing two-year solutions is financially prudent and necessary to achieve long-term financial sustainability �, _ 17 Next Steps Discuss Options and Provide Direction Identify Additional or Alternative Options Flynn, .loan From: Hansen, Don Sent: Thursday, January 27, 2011 11:16 AM To: Bohr, Keith; Shaw, Joe; Carchio, Joe; Boardman, Connie; Harper, Matthew; Dwyer, Devin Cc: Flynn, Joan; Wilson, Fred Subject: Comments for the Strategic Planning Session Attachments: Comments Regarding Budget Issues and Priorities.pdf Colleagues: I will not be able to attend the strategic planning session tomorrow, but I did want to formalize my comments and suggestions for consideration. As such, I have attached a memo outlining what I believe to be our most critical challenges and specific recommendations for resolution. I am asking the City Clerk to include this memo in the official record of the meeting. Further, this email and memorandum are intended to be a one-way communication. To ensure compliance with the Brown Act, please do not respond to this email or correspond with each other regarding these comments until you are in open session at the planning meeting. - DH 1 © A A� 1 e y CITY OF HUNTINGTON BEACH r.; City Council Interoffice Communication To: Honorable Mayor and City Council Members From: Don Hansen Date: January 27, 2011 Subject: COMMENTS REGARDING BUDGET ISSUES AND PRIORITIES While I will not be able to participate in the discussion during the strategic planning session due to a scheduling conflict, I do wish to enter this correspondence into the record of the meeting and communicate my thoughts regarding some specific priorities that I feel are essential to our future financial stability. PERS PERFORMANCE AND FUNDING STATUS EROSION: As you now have had the chance to review, the negative returns recently experienced by PERS exacerbated the unfunded percentage of our retirement plans. Two of the plans are below 50% funded and our Safety plan is hovering at a funded percentage of 56% with an unfunded liability of$108 million. PERS is also signaling a less aggressive future rate of return. It is my understanding that PERS is contemplating a target yield reduction of 25 basis points (1/4 of a point) from 7.75% to 7.5%. If adopted, this decrease will further erode our plan's funded status and increase the required contribution from the city of Huntington Beach to maintain plan solvency. Further, as policy makers, we should contemplate the likelihood of achieving the reduced target of 7.5% in the near future. Our state remains financially crippled, our workforce is experiencing double digit unemployment and many of our own economic metrics are flat at best. I am not optimistic. CIP FUNDING GAP: I believe we are all aware of the infrastructure needs throughout our community. The chart presented by staff in their presentation further validates what we already know—we have been shortchanging our capital improvement program for years. I am hopeful that this council will work collaboratively to prioritize this issue. PENDING EMPLOYEE RAISES: When the City Council approved the long term contracts with the various bargaining units, no one contemplated the magnitude of the current economic meltdown. When these good-faith negotiations took place, both sides worked with economic data that projected a conservative growth rate of the general fund that would safely accommodate the wage increases. Needless to say, the stark reality is that the "conservative growth" did not occur. In fact, we have seen unprecedented reductions in most revenue generating areas. COMMENTS REGARDING BUDGET ISSUES AND PRIORITIES Page 2 January 27,2011 Simply said —we cannot afford these wage increases and we need to move quickly to reach that consensus with the bargaining units (HBFA, MEA and FMA) to eliminate these salary increases. Failure to address this immediately will have financial consequences that we will have to deal with soon enough. Deferring these raises is simply "kicking the can down the road". We need to reset these agreements to reflect our current reality. RECOMMENDED ACTIONS: I am hopeful that these thoughts resonate with you as well. I know we are all committed to guiding our community through these difficult times. Our success makes our future budget stronger, our employees more secure and our service delivery more robust. I would ask your consensus in giving the City Manager the following direction: 1) The City Manager will immediately commence negotiations with HBFA to eliminate the raises scheduled for March 2011 and September 2011. These negotiations should be concluded by February 2011. 2) Should the City Manager not successfully negotiate the elimination of these salary increases with HBFA by February 2011, the City Manager will present recommendations from the Fire Chief on budget cuts equal to or greater than the cost of the salary increases at the March 7, 2011 City Council Meeting for action. These budget reductions should specifically relate to Fire Department operations given the increased cost burden added by the salary enhancements to this unit. 3) The City Manager is directed to create a 5 year plan that closes the CIP funding gap by 20%. The plan should be presented to the Council no later than June 2011. 4) Upon resolution of the HBFA negotiations or subsequent budget cuts, the City Manager will commence negotiations with MEA to eliminate the scheduled July 2011 salary increase. These negotiations should be concluded by June 2011. 5) Should the City Manager not successfully negotiate the elimination of these salary increases with MEA by June 2011, the City Manager will present recommendations budget cuts equal or greater to the cost of the salary increases at the July 18, 2011 City Council Meeting for action. These cuts should be focused on staff realignment with the goal of prioritizing service to the community. C I T Y O F H U N T I N G T O N B E A C H STRATEGIC PLANNING RETREAT January 28, 2011 Huntington Beach Public Library Marilyn Snider,Facilitator—Snider and Associates(510)531-2904 Michelle Snider Luna,Recorder—Snider Education&Communication(510)735-7744 MISSION STATEMENT The City ofHuntington Beach provides sustainable quality services to maintain and enhance our safe and vibrant community. CORE VALUES (not in priority order) The City of Huntington Beach values . . . Responsiveness Accountability Quality customer service Honesty and Integrity Teamwork Fiscal sustainability Community involvement Openness THREE-YEAR GOALS (2009-2012 . not in priority order) Maintain financial viability and our reserves Maintain,improve and obtain funding for infrastructure and equipment Maintain public safety Enhance economic development Improve internal and external communication S.W.®.T. ANALYSIS Strengths—Weaknesses-Opportunities-Threats ACCOMPLISHMENTS OF THE CITY OF HUNTINGTON BEACH SINCE THE JANUARY 2010 STRATEGIC PLANNING RETREAT Brainstormed List of Perceptions S. Updated the charter _ 0 Began budget debate on infrastructure - • Costco at Bella Terra ® Whole Foods opened - • Continued water conservation • Solar panels approved for City Hall • 5000 kids in Summer Reading Program i Replaced port-a-potties on the beach path with flush toilets - e Completed an Economic Development Strategy Study e Completed a Library Strategic Plan ® Processed over 8000 building and construction permits ® Performed over 25,000 building inspections • Over 96,000 attendees at story times in the library system ® Successfully handled a 4%increase in calls for emergency service ® Began debate on pension reform - ® -Finished the year end in a positive ® Electronic distribution of the agenda ® Completed a Fleet Study . • Adopted our new model and building codes • Installed a weather-based irrigation system at 8 City facilities ® Reforming Treasurer as a part-time position a The city is an attractive community ® Completed an energy retrofit at the library - ® Implemented PARS (Public Agency Retirement System) ® Started the clean-up at the Ascon ® Adopted a resolution for sale of alcohol downtown ® Completed over 7000 fire safety inspections ® Produced 9.6 billion gallons of water ® Approved a desalination plant ® Maintained our emergency reserves - a Obtained corporate sponsorship for lifeguard tower • Completed and received reimbursement for the channel oil spill • Distributed a customer survey to developers ® Approval of an affordable housing agreement for Bella Terra 2 • Began the redevelopment process for an amendment for the merged project areas - • Updated the Downtown Specific Plan ® Completed 8&'/2 miles of street rehabilitation ® Received reimbursements for 2010 winter storms ® Began automated meter reading system - 2 • Started the use of credit cards at parking meters • Established a Paperless Committee in the City a Broke the 1 million mark for circulation at the library ® Started the utility yard ® Adopted Beach Edinger Corridor Specific Plan ® Approved annexation of Sunset Beach ® Modernized our utility tax ordinance ® Balanced the budget ® New community garden ® Over 11,000 visits to the Art Center ® Eliminated over 200 personal printers ® Began a 10 point plan to enhance business friendly approach within the City • Started negotiations for a new hotel at Edinger ® Received an award for outstanding financial reporting ® Reorganized the Planning and Building Department ® Placed into service a new Urban Search and Rescue Unit which was certified by the State as a Medium Rescue Unit available for state-wide response,and completed the training for all personnel assigned to the unit ® Completed a Fire Department Strategic Planning Process • Developing a system for rapid call-back of off-duty personnel ® Development of a fire department intranet portal home page to improve internal communication ® Completed a reorganization to better align functions and reporting relationships,including addressing major budget reductions ® Hosted a 26-member delegation from China to share HB experiences regarding disaster preparedness and disaster management ® Completed and submitted to the County five Point of Disbursement Plans for mass community vaccinations resulting in receipt of$44,940 in grant funds ® Received and managed grants for WMD Training and Equipment(Urban Area Security Initiative) and Major Metropolitan Medical Response (MMRS) ® Maintained and operated a city Oil Production Unit with annual general fund revenue of approximately $500,000 and developed a 10-year maintenance and replacement plan ® Implemented job sharing as part of the budget balancing efforts for FY 2010-11 ® Registered 750 new FireMed members through a direct mail effort resulting in$44,000 in revenue ® Completed a comprehensive study and evaluation of Fire Department staffing levels ® Started negotiations for a skate park CURRENT INTERNAL WEAKNESSES/CHALLENGES OF THE CITY OF HUNTINGTON REACH Brainsto=ed Lest oEPerceptions ® Increased number of vacant police officer positions ® Loss of experienced employees ® Lack of creativity ® Reduced City workforce ® Lower service levels due to staff cuts ® Loss of institutional knowledge ® Slower response time to police emergency calls ® Challenging transportation connections • Lack of funding for all services ® Inadequate funding for equipment and capital needs 3 • Lack of wireless services • Zero budget growth • Can't do long-term planning—reactive,not proactive • Reduced funding for employee training • Employees are depressed by economic impacts that are external to City Half • Low morale • Difficult to maintain a culture of public service • Long-term labor contracts • Lack of resources for hardware and software upgrades • Reduced infrastructure funding • Competing priorities • Brain drain from massive retirements • Limited training and education opportunities for employees • Low revenues • Uncertainty in employment—lack of job security • Not enough support services • Diminished promotional opportunities • Elimination of investigative credit card fraud • Public perception that HB is a difficult city to work in • Public perception that fire inspections are a problem • Increased lawsuits against the City • Increased fees • Challenge to keep up with new technology • Negative public perception of downtown area EXTERNAL FACTORS/TRENDS THAT WILL/MIGHT HAVE A POSITIVE IMPACT ON THE CITY OF HUNTINGTON BEACH IN THE COMING YEAR Brainstormed List of Perceptions • Increased consumer retail spending • Stock market investments going up • Revenues off the lows • Positive involvement of volunteer groups • Possible regional partnerships with other communities • Continuation of major events coming to the city • Benefits of Sunset Beach annexation • Warmer climate;less rain to attract visitors to the beach • Stabilization of the housing market • Go Green initiatives • Construction of Costco • Measure M—two grant opportunities • More willingness of developers to move forward with projects • Increased interest in redeveloping deteriorated properties • A larger pool of qualified candidates for jobs • Hotel occupancy rates going up • End of the drought • An attractive community • Public and private grant opportunities • Good beach weather this summer 4 ® Continued interest in sports and local events - ® Go Local EXTERNAL FACTORS/TRENDS THAT WILL/MIGHT HAVE A NEGATIVE IMPACT ON THE CITY OF HUNTINGTON BEACH IN THE COMING YEAR Brainstormed List of Perceptions ® Aging infrastructure ® Earthquakes ® Fire ® Floods ® Tsunami ® Increased demand for services - - ® Homelessness • DUIs ® Vacancies ® Increased health care costs a Increased cost of services and supplies ® Higher construction costs ® Unfunded State and Federal mandates ® Aging technology - f Less corporate travel negatively impacting tourism ® State budget deficit ® Unemployment - b Cal PERS ® Increased crime ® Increased lawsuits ® Weak retail sales ® Increased Fire Department emergency response calls ® School budget deficits - • Decline in the stock market ® Foreclosures ® Taxation ® Increased fuel costs O Workers comp costs are higher a Aging population ® Inflationary pressures ® State and Federal regulations - ® Air quality/pollution issues ® Pressure on public safety ® Aging City Hall - ® Aging library system ® 100 year rains - ® Unreasonable expectations that every issue can be addressed by the City . a Business flight to other states 5 PRESENTATION BY THE FINANCE DIRECTOR REGARDING THE FOLLOWING OPTIONS TO ADDRESS THE BUDGET SHORTFALL EXPENDITURE REDUCTIONS o Across-the-board cuts o Surgical or strategic cuts o Proportionate share cuts o Eliminate non-essential services REVENUE INCREASES o Establish new fees and/or increase fees o Increase fines and penalties o Update fee study o Property tax override for public safety pension EMPLOYEE CONCESSIONS (all options require negotiations) o Negotiated salary increases o Increase employee pick-up of pension costs o Establish a new tier of benefits CONSENSUS BY THE CITY COUNCIL ON OPTIONS FOR THE MANAGEMENT TEAM TO EXAMINE FURTHER AND REPORT THE RESULTS,INCLUDING RECOMMENDATIONS,TO THE CITY COUNCIL FOR ACTION o Surgical or strategic cuts o Eliminate services o Establish new fees and/or increase fees o Increase fines and penalties o Property tax override for public safety pension o Negotiated salary increases o Increase employee pick-up of pension costs o Establish a new tier of pension benefits 6 NEXT STEPS/FOLLOW-UP PROCESS WHEN WHO WHAT January 31,2011 City Manager Distribute the retreat record to those unable to attend or who had to leave early. By Wed.,Feb.3,2010 All recipients Read the retreat record. By February 15,2011 Department Heads Share and discuss the Strategic Plan with staff. February 15,2011 Executive Team Review the"Internal Weaknesses/Challenges" list for (City Manager-lead) possible action items. At the Feb.22,2011 City Council Present the updated Strategic Plan to the public. City Council meeting (Mayor lead) Monthly City Council Monitor progress on the goals and objectives and revise City Manager objectives(add,amend and/or delete),as needed. (Mayor-lead) Monthly City Manager Prepare and distribute the updated Strategic Plan Monitoring Matrix July 29,2011 Mayor Strategic Planning Retreat to: 8:00/8:30 am--4:00 pm City Council - more thoroughly assess progress on the Goals and City Manager Strategic Objectives Executive Team - develop a Vision Statement for the City - develop Strategic Objectives for the next six months. 7 STRATEGIC PLAN ELEMENTS Marilyn Snider,Strategic Planning Facilitator • Snider and Associates(510)531-2904 "SWOT"ANALYSIS Assess the organizations: -Internal Strengths -Internal Weaknesses -External Opportunities -External Threats MISSION/PURPOSE STATEMENT States WHY the organization exists and WHOM it serves VISION STATEMENT A vivid, descriptive image of the future—what the organization will BECOME CORE VALUES What the organization values,recognizes and rewards—strongly held beliefs that are freely chosen, publicly affirmed,and acted upon with consistency and repetition THREE YEAR GOALS WHAT the organization needs to accomplish(consistent with the Mission and moving the organization towards its Vision) -usually limited to 4 or 5 key areas KEY PERFORMANCE MEASURES What success will look like upon achievement of the goal SIX MONTH STRATEGIC OBJECTIVES HOW the Goals will be addressed: By when,who is accountable to do what for each of the Goals FOLLOW-UP PROCESS Regular,timely monitoring of progress on the goals and objectives;includes setting new objectives every six months O 1995 Snider and Associates 8 HUNTING TON BEACH * SIX - MONTH STRATEGIC OBJECTIVES January 28, 2011 — July 15 , 2011 THREE-YEAR GOAL: MAINTAIN FINANCIAL V/AE/LITYAND OUR RESERVES WHEN WHO; WHAT STATUS COMMENTS v DONE ON REVISED TARGET 1. By the end of HR Director and the Conclude negotiations with the unions that have salary February 2011 Deputy City increases pending to eliminate and/or defer the salary Administrator increases. 2. By the end of FIR Director and the Conclude negotiations with the unions regarding February 2011 Deputy City increasing employee pick-up of pension costs. Administrator 3. By March 1, 2011 City Council With a list of services provided by the Department Heads, including cost and revenue impacts,will hold special meetings to examine possible strategic or surgical cuts, including elimination of services, in the City's departments and determine what cuts need to be made. 4. By March 1, 2011 City Manager,with Determine what fees could be established and/or input from the increased,whether they include a vote of the public,. Department Heads legal issues and the impact of the fees on the budget, including costs to institute,and recommend to the City Council for action. 5. By March 1,2011 City Manager,with Examine the feasibility of increasing fines and penalties input from the and make recommendation(s)to the City Council for Department Heads action. A 6. By June 1,2011 City Manager and Provide a report to the City Council on the property tax the Deputy City override for public safety pension and recommend Administrator(Paul) options to the City Council for action regarding the tax rate for FY 2011-2012. 7, By July 1,2011 HR Director Conclude negotiations with the unions for the establishment of a two tier pension benefits system for new employees. B , THREE-YEAR GOAL: MAINTAIN, IMPROVE AND ®STAIN FUNDING FOR INFRASTRUCTURE AND EQUIPMENT WHEN WHO WHAT STATUS COMMENTS DONE ON REVISED TARGET 1. By April 1, Director of Public Works Pursue grant funding opportunities for Traffic Signal 2011 Synchronization and Capacity Enhancements and present the results to the City Council. 2. By May 1, Director of Public Works, Identify sources of funding for infrastructure needs, 2011 with input,from the Public including a potential storm drain fee,and report the Works Commission, results, including recommendation(s)to the City Council for action. 3. By June 1, Director of Public Works, Prioritize infrastructure needs from the 10 Year.ClP 2011 with input from the Public Needs List and make recommendation(s)to the City Works Commission Council for action. C THREE-YEAR GOAL: MAINTAIN PUBLIC SAFETY WHEN WHO WHAT STATUS COMMENTS DONE ON REVISED TARGET 1. July 1,2011 Police Chief Provide the City Council with a written report regarding strategies to address the problem of DUI drivers in Huntington Beach. 2. By July 15, Fire Chief and Deputy City Provide a report to the City Council via the City 2011 Administrator(Paul) Manager evaluating assignment of marine safety to the Fire Chief. 3. By July 15, Fire Chief,working with the Provide to the City Council a report on the use of new 2011 Police Chief technology to enhance public safety. D THREE-YEAR GOAL: ENIfANCE ECONON IC DEVELOPMENT WHEN WHO WHAT STATUS COMMENTS DONE ON REVISED TARGET 1. By March 1, City Council Determine whether or not to proceed with a Supplemental 2011 Environmental Impact Report and the General Plan Amendment for the Senior Center, 2. By April 1,2011 Deputy City Declare that Huntington Beach is"Open for Business"and Administrator(Bob) begin implementing the City's 10 Point Business-Friendly Plan. 3. By May 15, Planning and Building Complete the SW corner of Beach and Warner EIR and 2011 Director submit to the Planning Commission for action. 4. By June 15, Planning and Building Complete the SE corner of Beach and Ellis EIR and submit to 2011 Director the Planning Commission for action. 5. By July 15,2011 Deputy City Survey existing businesses in Huntington Beach and identify Administrator(Bob) opportunities for expansion and obstacles that inhibit or diminish their success, and report the results to the City Council. 6. By July 15, Planning and Building Complete the Downtown Specific Plan update and present to 2011,contingent Director the City Council. upon Coastal Commission approval 7, By July 15,2011 Economic Development Complete the processing of the Center Avenue Skate Park Director and Planning and present to the City Council for action. and Building Director E THREE-YEAR GOAL: IMPROVE INTERNAL AND EXTERNAL COMMUNICATION WHEN WHO WHAT STATUS COMMENTS DONE ON REVISED TARGET 1. Weekly PIO Place on Facebook and Twitter at least two City of Huntington Beach informational postings. 2. Beginning the City Clerk and PIO Post a summary of City Council meeting highlights(e.g., day following actions by the City Council)to the Surfnet and on a link to all each City employees. Council meeting 3. No later than City Administrator Provide to all employees two quarterly updates on the March 1,2011 and Finance Director budget situation, in person and with an interactive Q&A and June 1, session. 2011 4. By March 15, Deputy City Ensure that all City Boards and Commissions'agendas are 2011 Administrator(Bob) posted to the City's website prior to the meeting,and the minutes following Board or Commission approval. 5. By July 1, 2011 IS Director Increase bandwidth in the Library by 300%. 6. By July 1,2011 Mayor Carchio and two Hold three brown bag lunches with employees to provide City Council members updates on City Council priorities and issues. (on a rotating basis) F CITY OF HUNTINGTON BEACH STRATEGIC PLANNING RETREAT Friday,January 28,2011 —Huntington Beach Public Library 8:00 Continental Breakfast 8:30 1. Meeting Called to Order—Mayor Carchio 2. Roll Call—Clerk Flynn 3. Pledge of Allegiance—Mayor Carchio 4. Announcement of Communications received after the Distribution of the Agenda—Clerk Flynn 5. Public Comments—Clerk Flynn 6. Consent Calendar Items (Agenda Items 1 and 2)—Mayor Carchio 7. Administrative Item (Agenda Item 3)Welcome,Purpose of the Retreat and Introduction of the Facilitator and Recorder—Mayor Carchio Role of the Facilitator,Recorder,Group and Public; Strategic Planning Elements; Agenda—Marilyn Snider,Facilitator—Snider and Associates Introductions of the Group/Audience City of Huntington Beach: • Mission/Purpose Statement • Core Values/Guiding Principles • Three-Year Goals(2009-2012) What Are the Accomplishments of the City in the Past Year? What Are the City's Current Internal Weaknesses/Challenges? What Are the External Factors/Trends (e.g.,economic,political,technological,environmental,social)that Will/Might Have an Impact on the City of Huntington Beach in the Coming Year: • Positively(opportunities)? • Negatively(threats)? Budget Presentation/Update,Including Budget Options to Pursue--Lori Ann Farrell,Finance Director • City Council: By Consensus,Select Which Options to Pursue • For Each Option,Identify By When,Who,Will Do What Review and Revise,if Needed/in Light of the Budget,the Three-Year Goals what needs to be accomplished) Identify Six-Month Strategic Objectives(how the goals will be addressed —by when,who will be accountable,for what specific,measurable results)for each of the Three-Year Goals Next Steps/Follow-Up Process to Monitor Progress on the Goals and Objectives(including setting a date in six months to update the strategic plan) Summary of the Retreat and Closing Remarks 4:00 Mayor Carchio--Adjourn to the next regularly scheduled meeting on Monday,February 7,2011 at 5:00 p.m. in Room B-8,Civic Center There will be a mid-morning and a mid-afternoon break with a group lunch at 12:00. Please limit use of cell phones and PDAs to the breaks. Please bring the latest update of progress on the goals and objectives (completed matrix)and your calendar.