HomeMy WebLinkAboutApprove Fiscal Year 2018/19 Year-End Budget Adjustment and I 77_/�,, r/
City of Huntington Beach
File #: 19-955 MEETING DATE: 9/16/2019
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Dave Kiff, Interim City Manager
PREPARED BY: Chuck Adams, Interim Chief Financial Officer
Subject:
Approve Fiscal Year 2018/19 Year-End Budget Adjustment and Inter-Fund Transfers
Statement of Issue:
The Finance Department is currently undergoing the year-end closing process for Fiscal Year
2018/19. Certain technical adjustments and fund transfers are needed to reconcile the budget with
actual expenditures incurred, and to comply with auditing, actuarial, accounting or legal
requirements. City Council authorization is requested to perform these reconciliations in order to
properly close Fiscal Year (FY) 2018/19. There are sufficient revenues, available cash, and/or fund
balances to support these adjustments.
Financial Impact:
Authorization is requested for appropriation and inter-fund transfers from the General Fund (Fund
100) FY 2018/2019 budgetary savings to: A) an additional transfer up to $1.0 million into the Section
115 Trust (Fund 716) to help pay down unfunded liabilities; B) $2.0 million to the Infrastructure Fund
(314) to ensure compliance with the City Infrastructure Charter requirement; C) transfer $250,000
towards future park improvements to the Infrastructure Fund; and D) $1.58 million in transfers and
authorization to execute any future necessary action related to the City Manager's Employment
Agreement (per Resolution 2019-55), specifically in regards to the non-forgivable home loan and any
rental payments.
Recommended Action:
A) Approve the appropriation and transfer up to $1.0 million into the Section 115 Trust from one-time
FY 2018/19 year-end savings and revenues to reduce the City's unfunded pension liabilities as
reflected in Attachment 1; and,
B) Approve appropriation and transfer of$2.0 million to the Fiscal Year 2018/19 Revised Budget in
the Infrastructure Fund (314) and an additional $250,000 for park improvements as contained in
Attachment 1; and,
C) Approve authorization to execute any necessary action to comply with Resolution 2019-55 (City
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File #: 19-955 MEETING DATE: 9/16/2019
Manager Employment Agreement) including the inter-fund transfer of $1.58 million from FY 2018/19
General Fund budgetary; transfer request is reflected in Attachment 1; and,
D) Authorize appropriation and inter-fund transfers in non-General Fund accounts for expenditures
totaling $104,317 as contained in Attachment 1.
Alternative Action(s):
Do not approve the recommended action and direct staff accordingly.
Analysis:
At this time, the Finance Department estimates additional budgetary savings as of the close of FY
2018/19, which ended on June 30, 2019. These savings may be adjusted further as additional
contracts close, but we are comfortable accounting for transfers and appropriating it as described by
this Agenda Item.
These year-end budget adjustments to the FY 2018/19 Revised Budget will align appropriations in
certain funds with actual expenditures incurred through June 30, 2019, as actual expenses cannot
exceed the appropriation amounts contained in the Revised Budget. Adjustments are also required
to ensure compliance with GAAP, GASB, and other regulatory, contractual or legal requirements.
Please note any appropriation increases are fully offset by commensurate amounts of revenues,
available cash, or fund balances in each Fund.
Staff recommendation to appropriate and transfer as follows.-
Up to $1.0 million into the City's Section 115 Trust. The City created a tax-exempt, Internal
Revenue Code Section 115 Trust as authorized by the City Council on December 21, 2015, to help
address the City's unfunded pension liabilities. To further this goal, on May 2, 2016, the City Council
authorized the Public Agency Retirement Services Company (PARS) to administer the Trust's assets
and ensure the tax-exempt status for the Trust. City Council authorization is requested to
appropriate, transfer and deposit $1.0 million in one-time FY 2018/19 year-end budgetary savings
into the Section 115 Trust to help mitigate unfunded pension liabilities. With accrued interest
earnings, the balance was estimated at $7.0 million as of June 30, 2019. Adding $1.0 million to it
results in a balance of $8.0 million (this includes the prior $1.0 million transfer approved by the City
Council).
This action is consistent with the Financial Policies adopted by the City Council and with the City
Council's Strategic Planning Goal to Strengthen Economic and Financial Sustainability.
$2.0 million directly to the Infrastructure Fund (Fund 314). City Council authorization is requested to
transfer from available General Fund year-end savings to the Infrastructure Fund to ensure
compliance with the City's Charter Article VI, Section 617 (b) that requires the City to expend for
infrastructure improvements and maintenance at 15% of general fund revenues based on a five-year
rolling average".
$0.25 million transfer into the Infrastructure Fund (Fund 314). At the February 7, 2019 Strategic
Planning Retreat, the City Council reinforced the goal to "enhance and maintain the infrastructure" by
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File #: 19-955 MEETING DATE: 9/16/2019
prioritizing park improvements utilizing the Parks Master Plan. This additional money would allow for
further park improvements.
$1.58 million from to the City's General Fund (Fund 100). City Council authorization is requested to
appropriate and transfer from FY 2018/19 year-end available balances to comply with Resolution
2019-55 (City Manager employment agreement, specifically the non-forgivable home loan and some
rental assistance).
Other Grants and Funds:
$5,118 appropriation increase in the Senior Mobility Program (Fund 963) is requested to true-up the
budget for actual costs incurred for actual senior transportation expenses incurred during the fiscal
year.
$73,159 in transfer appropriation authority from the West Orange County Water Board to the Water
Fund (Fund 506) for $71,518 and the Measure M Fund (Fund 213) for $1 ,641 for prior year salary
expenditures that were inadvertently posted to other funds.
$26,040 in transfer appropriation authority from Housing Residual Receipts (Fund 233) to the
LMIHAF (Fund 352) to reconcile funds related to home repayments in prior fiscal years.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Strengthen long-term financial and economic sustainability
Attachment(s):
1. Fiscal Year 2018-19 Appropriation Adjustment and Inter-Fund Transfers
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ATTACHMENT 1
Fiscal Year 2018/19 Year-End Budget Adjustments by Fund
APPROPRIATION INCREASE:
Dept Fund Fund Name Amount
Comm Svcs 963 Senior Mobility Program 5,118
Subtotal 5,118
APPROPRIATION AND TRANSFER INCREASE:
Dept From Name Amount To Fund Name
Non-Dept 100 General Fund 1,000,000 716 Section 115 Trust
Non-Dept 100 General Fund 2,000,000 314 Infrastructure
Non-Dept 100 General Fund 250,000 314 Infrastructure
Non-Dept 100 General Fund 1,581,000 Loan TBD
Subtotal -General Fund 4,831,000
Public Works 508 West OC Water Board 71,518 506 Water
Public Works 508 West OC Water Board 1,641 213 Measure M
OBD 233 Housing Residual Receipts 26,040 352 LMIHAF
Subtotal -Other Funds 99,199
TOTAL 4,930,199
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