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Home My WebLink AboutFY 2010-2011 Mid-Year Budget Review and Comprehensive Annual Cl*ty of Huntington Beach FY2010111 Mi*ds" Year COMMUNICAinoN * 0 Da inan cisl Repo Meedng Agenda Item No. ' May 16, 2 011 q '` iltti'q ""ti General Fund Revenue Profjection DPW TOMM Mf SWUM TWSEVU amoli MwAmcfl Property Taxes $66,885,727 $66 60 3 Tax 5 2j,", 5 r. s, IS,3' $4, 5 Transient - -5 slehtO .......... 15 0 0 -934�'� � 11�, "? �- 000 `5, ",,'6' 6, 5 erLocal:laxes 5 �7 7, 0 fi'4-�'5 PermitsLicense & 9 50,�` ':-F&f6iu� res` 3 965".325 , 4�,,3 73"5 0 Ole,,," 4: 3 0`08,500,�": 51 Use of Mone 1 'A�-Y - ,� ProDert 13 680296:�-,--, 44-.3 77W ?2-959;960-�� Revenue from.,Ot 'er, Q.- �4,,P�50 0 boo,� :: 4.1,20 f5-3 Agencies S, `7 7� arges, or Services ; 22,723,753 2 3.,0 Y5'.9,29, 22,816,795 (199,134)a, ' 67Ot &Keyenue ' �2 I 020831 ` J,364 3 548 1;54 26 3,�,h '-'(TT'a"'fi§f6r 9 "0, on7, pera i g,, Otal $193, 75,463,",`,�' 1,79��31'403-�179�4,56'940 , IW648.97 % N10ther Local Taxes includes Utility Taxes and Franchises V A �,vx W6 Major Components of Revenue Property Tax Projected FY 2005/06 FY 2006/07 FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 559167,632 60,607,078 65,110,424 67,226,812 6698859727 67,9509000 • Negative price pressures from distressed sales have continued to keep assessed values for Huntington Beach almost flat • Although nationally, sales of existing homes are up for the past 6 months through March, sales are still down 6.3% from last year • The assessed value for the average Single Family Residence in Huntington Beach is $555k, still down significantly from the peak of $695k • Fiscal Year 11/12 reflects a modest 0.70% increase based on the most recent Assessed Valuations from the County Assessor Maj* or Components of Revenue SalesTax Projected FY 2005/06 FY 2006/07 FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 *4:90 2,662 239724,067 1 23,934,392 20,306,313 0,795,316 21,200,000 J • Trending up for Fiscal Year 10/11 , a trend which was anticipated and is already included in revenue projections • Sales Tax increases have been driven by auto sales, fuel and service station gains in the 4th quarter of 2010 • National jobs report for April shows 240,000 jobs added; economic analysts suggest 300,000 jobs added per month shows true growth .ti 12 Maj* or Components of Revenue TOT. Projected FY 2005/06 FY 2006/07 FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 5,9489888 6,573,507 6,68 :9428 59416,580 5,8199837 59950,000 • Hotel Industry has shown signs of a rebound over current fiscal year • Occupancy in Huntington Beach up 11% for 2011 vs. 2010 while average daily rates are up 11 .9% during this same period • TOT has increased 19% over the past fiscal year, but still not at the all time high • If trends continue, TOT will likely end the year slightly above $6 million 1 13 General Fund Expense roj tions [ff 21MM/M DFUMMEE WTIMEMB w TIME K fl MY% w. fpn�. 929- -3 J3- -1,26 ej`— $4,33�, -4 12%024,97 "6 Perg6nn r. 0"1,6 91 "87 699, 4��,5 6 :0.8w,, 4, "'2'41;61:9' 48, Transfers -`" Capital 1859,142� 2, ,OQQ,0 00�, 3,706,925'84 S 1,7, 9 ",'($2,A76 0 : TAM" 8 643 54K," �181 603, *Includes Carryover and Encumbrances tit zz \'V 14 FY2010/11 ral Find 18590009000 Property and Sales Tax, 18090007000 TOT and Misc. $179,532,403 $179,127,204 Increases Carryover/Encumbrances 175 ,0009000 $177,938,548 $177,938,548 170,000,000 165 ,000,000 160,0009000 1 5 5 ,000,000 1507000,000 General Fund Revenue General Fund Expenditures L ❑Adopted Budget ® Projected as of 3/31/11 �l r ? 15 summary Recap Of FY 2009/2010 Status Of Reserve Fund Balances � FY 2010/2011 Mid-Year Update � FY 2 11/2012 Budget Development Timeline � Next Steps l 4 2 FY 2009/2010 (Audite d) Gwo (Ymn Irmo (fl kdlo)lpqa OMIFVMANIF� 5 �6 X --,-,-4 38� 29�245 S181,3333, E D' e' A'�`e 0 TOTAL $ 11,458 $ 2,265 S k -$,2",25 4, 1,03 /0, -CONT-R IB U,,T Sf GTACTO� ' ----------- st 'f PARS',,,,,A",n Pavm, Deferral R y ( UP$,,L/`5,8 6,,,7,6 7 E 71 Xpennure�Savings (678 General Fund Reserve Balance (In Thousands) MOM 0 mDm®w October 1, 2005 38,286 October 1; 2006 40,5186 October l;-2007 43,69.E y October 1, 20081 44,443 October 1, 2009 39,088 October l,'20-1.0 41,352 Annual Change :.$29264. No current plans to use reserved fund balance to balance FY 207..01207 7 ,budget General Fund deserve Balance (In Thousands) Econornlc tJncertamties 1s9,710 3 Equlprrient.Replacement, 6,913 E Capital Prgjects 2,970 PARS Obligation 3,549 Other Fund balance;* 824, ®t1u balance 41352 Includes,other non-spendable, restricted, committed, and assigned fund balances not listed. 11 i ,g771 l L S Y FY 2009/2010 Au � New auditing firm of Macias, Gini & O'Connell audited City's financial performance and reports � FY 2009/2010 Comprehensive Annual Financial Report received an Unqualified (Clean) Audit Opinion � The City's CAFR is award winning — has received the Government Finance Officers Association's (GFOA) Excellence in Financial Reporting Award for 24 years FY 2010/201.1 Mid Year Update � General Fund Revenue Performance � General Fund Expenditure Performance � Year-End Projections and Options Highlights of Governor's May Revise - FY 2011/2 12 Revenues, where we have been . . . General Fund Revenues (in thousands) $195,000 $1859198 $M9 $1801000 $1679090 $1655000 + —+5%o_ -2% 0% o • -1 /o +2% $15 0,000 05/06 06/07 07/08 08/09 09/10 10/11 11/12 year over year change t Revenues, where we are headed . . . � Revenue projections trending positively and expecting to end the year at approximately $180 million � The UCLA Anderson School's California Economic report states that real personal income growth is forecasted to be 3.7% and 4. 1% in 2012 and 2013 � However, a real estate and housing development comeback, coupled with a decrease in unemployment and business development is needed for true sustainable economic growth in Huntington Beach Current estimates reflect an additional $3 million in General Fund revenue next year for a total of $ 183 million in FY 2011/2012 FY 20 Recap Current fiscal year projected to end in balance Should funding remain at year-end consider the following option: • Staff recommends paying down the remaining $6 million PARS Annuity Obligation • Requires a minor amendment to existing Financial Policies N, e 4 -, ` 16 FY 2011/12 Projected Budget Despite increasing revenue, the City is still projected to face an estimated $3 million to $4 million challenge in FY2011/12 Departments have been requested to provide Level 1 cuts for $3.5 million and Level 2 cuts for an additional $1 .5 million for a total of $5.0 million in solutions Optimistic revenue projections of an additional $3 million are already factored into preliminary estimates for next year's budget Factors contributing to next year's challenge include: previously negotiated salary increases; significant pension cost increases of $5 million in FY 11/12 and an additional $8 million in FY 12/13; and increased equipment investments 17 Negotiated Salary Increases FY 10/11- FY 11/12 QED HBFA 2.5% effective 3/21/11 $233,500 $480,400 $178,000 2.0% effective 9/30/11 $394,000 $181,600 Subtotal $2339500 $8749400 $359,600 MEA 2.5% effective 7/1/11 $142,800 $572,600 $158,000 1.0% effective 1/1/12 $176,200 $218,200 Subtotal $142,800 $7489800 $3769200 FMA 2.0% effective 7/1/11 $7,300 $29,400 $13,500 2.0% effective 1/1/12 $22,500 $21,300 Subtotal Fiscal Year Totals $3839600 $1,6759100 $770,600 Cumulative Totals $383,600 $290589700 $2,8299300 18 1" FY 2011/2012 State Budget Upd ate (Revised) � May 16, 2011 - Governor's May Revise unveiled � Revised $26.6 billion shortfall $11.0 billion in cuts already approved for July 1 St $6.6 billion in higher revenues assumed but allocates $3 billion more to education, public safety and litigation costs $10.8 billion in solutions still needed to address: -$9.6 billion shortfall -$1.2 billion reserve p Higher revenues to reduce temporary taxes by $2 e 9 billion p Governor still calls for elimination of Redevelopment Agencies Eliminates 43 Boards, Commissions, Task Forces, Offices and Departments Eliminates 5,500 State jobs r 9 _� 19 FY 2011 /2012 State Budget Up d e � May 16, 2011 - Governor's May Revise eiled > Initial $25.4 billion shortfall reporte �anuary � $ 11 .2 billion in cuts already ap ved for July 1st > $ 15 .2 billion in solutions st' needed to address remaining shortfall, inch ding a S 1 billion reserve � $2 billion in addit' al income tax revenue received > Approximat $??? ($ 13 .2) billion still to be resolve � Po�t ial Redevelopment Agency elimination or �r,�'duction by the State still under consideration FY 2011/2012 BUDGET TIMELINE (Tentative) ho 0 0 wd Om o June l t - June 30, 2011 Internal Budget Development and Finalization July 2011 . _ Budget Study Session(s) August 15, 2011 Proposed FY 2011/2012�Budget to City Council August 31, 2011 Charter Deadline to Submit Budget to City Council September.5.; 2011 Potential Budget.Adoption Dates September, l9, 20,11 (Regularly_ Scheduled City Council Meetings) Septemlber 30, 2011 ; Charter Deadline to Adopt the FY 2011/2012 Budget ®ctOber 1.9 2011 , New Fiscal Year begins .. Next Steps Obtain City Council direction regarding Budget solutions : o Reflect $3.5 million in cost reductions to balance projected preliminary shortfall (i.e. Level One Cuts Only) o Reflect $5.0 million in total savings to provide a contingency for: • Unexpected revenue shortfalls • State takeaways (including redevelopment decreases or elimination) • Changes to FY 12/13 PENS rates or discount rate assumptions • Begin addressing FY 12/13 and further out-year challenges • Other unanticipated events o Reflect $8.0 million in total savings to help achieve a potential 2- year Budget Solution 21 Cl*ty of Huntington 10 awYear FY2010111 Mid, ® 0 Inancial May 16, 2011 OX=� k TFB f7, 90