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HomeMy WebLinkAboutHinderliter de Llamas and Associates - 2023-08-01 (2) NTING 2000 Main Street, � T�2 g Huntin ton Beach,CA N _ 92648 `City of Huntington Beach APPROVED 7-0 `�oQ�, WITH IDENTIFIED � ✓ AMENDMENTS (SEE ATTACHED ACTION AGENDA) File #: 23-566 MEETING DATE: 6/26/2023 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Al Zelinka, City Manager VIA: Sunny Han, Acting Chief Financial Officer PREPARED BY: Serena Bubenheim, Acting Assistant Chief Financial Officer Subject: Continued from June 20, 2023 with Public Hearing open - Request to Consider Adopting Resolution No. 2023-24 to Adopt a Budget for the City for Fiscal Year 2023/2024 and Authorize the Corresponding Appropriation and Transfer of$4.9 Million of AES Reserves and $3.9 Million of Equipment Replacement Reserves and Return to a 12-year Paving Cycle; Resolution No. 2023-25 Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024; Resolution No. 2023-23 Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits; Resolution No. 2023-27 Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Coordinator, Homeless Services Manager, and Municipal Records Manager; Resolution No. 2023-28 to Adopt a Revised General Fund Reserve Policy; Resolution No. 2023-26 Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code; Approve and Authorize the execution of Amendment No. 2 to the Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program; Approve and Authorize the Execution of Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC) for Technical Assistance Services; Approve and Authorize the Execution of Professional Services Contract between the City of Huntington Beach and Hinderliter, De Llamas and Associates for Sales and Use Tax Allocation and Audit Services; Approve the Budget Balancing Plan to Proactively Address the Fiscal Year 2024/25 Projected General Fund Deficit; and, Approve Modifications to the Frequency of Select Boards and Commissions ("BCCs") and Direct Staff to Update Municipal Code Section 2.100, "Operating Policy for Boards and Commissions" to Formalize a Process for BCC-directed Assignments Exceeding Four (4) Hours of Staff Time. Statement of Issue: City of Huntington Beach Page 1 of 14 Printed on 6/23/2023 powered2ol/Legistar''4 File #: 23-566 MEETING DATE: 6/26/2023 The City Charter of the City of Huntington Beach requires a Public Hearing prior to the adoption of the City's annual budget. The City Charter further requires adoption of the annual budget by June 30, 2023, for Fiscal Year (FY) 2023/24. Financial Impact: Proposed Budget: The Fiscal Year 2023/24 Proposed Budget is structurally balanced. The All Funds Proposed Budget equals $508.8 million. The General Fund Proposed Budget totals $285.6 million, with the planned use of $8.8 million in General Fund reserves. Individual departmental and fund-level appropriations are contained in the attachments herein. Employee Tax Override: Pursuant to Chapter 3.07 of the Municipal Code, the Proposed Budget for Fiscal Year 2023/24 assumes the continuation of 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 $7.9 million in revenue in Fiscal Year 2021/22. This recurring revenue source is included in the Proposed FY 2023/24 Budget. Update to the City's General Fund Reserve Balance Policy: The City desires to maintain a prudent level of reserves and the Government Finance Officers Association (GFOA) recommends a minimum of two months of operating expenditures be set aside for unforeseen events. Staff is recommending consolidating certain General Fund Assignments into the Economic Uncertainties Reserve in order to meet the two-month reserve requirement. Additionally, staff is recommending strengthening the City's Reserve policy to ensure that funds are set aside systematically and used only when truly necessary. Mind OC Contract Extension: Staff is requesting approval to amend the professional services contract with Mind OC for the Be Well HB mobile crisis response program. The City has been awarded federal and state grants (U.S. Department of Health and Human Services and California Dept. of Health Care Services) to offset the cost of the program for FY 2023/24. Funding for future years will be identified in future budgets. National Development Council Contract: Staff is requesting approval to execute a new professional services contract with National Council for Community Development (NDC). Funding for this contract is provided through the annual allocations for the Community Development Block Grant and HOME programs and the Community Development Department's annual operating budget. Hinderliter, De Llamas and Associates Contract: Staff is requesting approval to execute a new professional services contract with Hinderliter, De Llamas and Associate). Funding for this contract is included in the Finance Department's annual operating budget. Recommended Action: A) Adopt Resolution No. 2023-24, "A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2023/2024" (Attachment 2); and, B) Authorize the Professional Services included in the FY 2023/24 budget to be representative of the services projected to be utilized by departments in FY 2023/24 (Attachment 3); and, City of Huntington Beach r Page 2 of 14 Printed on 6/23/2023 j�(� ,r 4z powerec'LegistarT" File #: 23-566 MEETING DATE: 6/26/2023 C) Authorize the appropriation and transfer of the full balance ($4.9 million) of the AES Reserve from the General Fund to the AES Mitigation Fund 1284; and, D) Authorize the appropriation and transfer of$3,903,803 from the General Fund Equipment Replacement Reserve to the Equipment Replacement Fund 324; and, 44- E) Approve the return to a 12 year paving cycle; and, F) Adopt Resolution No. 2023-25, "A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024" of $1,171,687,773" (Attachment 4); and, G) Adopt Resolution No. 2023-23, "A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits" (Attachment 5); and, H) Adopt Resolution No. 2023-27, "A Resolution of the City Council of the City of Huntington Beach Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Coordinator, Homeless Services Manager, and Municipal Records Manager" (Attachment 6); and, I) Adopt Resolution No. 2023-28, "A Resolution of the City Council of the City of Huntington Beach Adopting a Revised General Fund Reserve Policy" (Attachment 7) and authorize the City Manager or designee to execute all administrative and budgetary actions necessary to consolidate certain General Fund Assigned Fund Balances to the Economic Uncertainties Reserve in order to meet the City's two-month Emergency Reserve requirement; and, J) Adopt Resolution No. 2023-26, "A Resolution of the City Council of the City of Huntington Beach, California Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code" (Attachment 8); and, K) Approve and authorize the Mayor and City Clerk to execute "Amendment No. 2 to Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program" (Attachment 9); and, L) Approve and authorize the Mayor and City Clerk to execute "Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC) for Technical Assistance Services" (Attachment 10); and, City of Huntington Beach Page 3 of 14 Printed on 6/23/2023 powered24 LegistarT" File #: 23-566 MEETING DATE: 6/26/2023 M) Approve and authorize the Mayor and City Clerk to execute "Professional Services Contract between the City of Huntington Beach and Hinderliter, De Llamas and Associates for Sales and Use Tax Allocation and Audit Services" (Attachment 11); and, N) Approve the Budget Balancing Plan to proactively address the Fiscal Year 2024/25 Projected General Fund Deficit; (Attachment 12); and, 0) Approve modifications to the frequency of select Boards and Commissions ("BCCs") and direct staff to update Municipal Code Section 2.100, "Operating Policy for Boards and Commissions," to formalize a process for BCC-directed assignments exceeding four (4) hours of staff time. Alternative Action(s): A. Instruct City staff regarding changes to be incorporated into the budget and adopt the FY 2023/24 Budget and corresponding actions and resolutions as amended. B. Continue the Public Hearing to a future date. Analysis: As required by the City Charter, the City Manager submitted the FY 2023/24 Proposed Budget to the City Council on May 7, 2023. The Proposed Budget and the Five-Year Capital Improvement Program (CIP) were also discussed at a City Council Study Session held on May 16, 2023. The purpose of the budget study session was to provide the City Council an opportunity to discuss the Proposed Budget with staff before proceeding with the formal Public Hearing on June 6, 2023. Overview Over the past couple years, the City has come together in an extraordinary way to address the fiscal and public health challenges of the COVID-19 pandemic. Through the leadership and support of the City Council, the City implemented significant cost saving measures without reductions in essential service levels, including a Citywide Separation Incentive Program and reorganization plan, and refinancing of the City's pension debt. As a result of these measures, and numerous other measures taken over the past couple years, we project a $3.8 million dollar General Fund surplus for FY 2022/23. Inclusive of these significant budget measures, the FY 2023/24 Proposed Budget also includes mandated and additional one-time savings to mitigate the City's rising pension costs; prioritizes improvements to the City's facilities, roads and parks; incorporates increased funding for critical programs such as Workers' Compensation and General Liabilities; accounts for increases to the City's contractual obligations and inflationary cost impacts; and includes the addition of 11 positions across various City departments to meet increased demand and bring critical services in-house. The FY 2023/24 Proposed Budget is structurally balanced and totals $508.8 million across All Funds. This reflects a $23.2 million, or 4.4 percent, decrease from the FY 2022/23 Adopted All Funds Budget City of Huntington Beach Page 4 of 14 Printed on 6/23/2023 Ndte .41190/ l� powered Legislar" i File#: 23-566 MEETING DATE: 6/26/2023 of $532.0 million. A significant portion of the decrease is due to the one-time redistribution of $29.6 million of American Rescue Plan Act (ARPA) funds to the General Fund in FY 2022/23 for the provision of core governmental services. For FY 2023/24, General Fund revenue is projected at $280.4 million, a $2.8 million, or 1 percent decrease from the FY 2022/23 Adopted Budget. Major sources of General Fund revenue include Property Tax, Sales Tax, Utility Users Tax, and Transient Occupancy Tax, among others. The largest decrease in General Fund revenue is in Non-Operating Revenue, attributable to the one-time transfer of ARPA funds for general governmental services that was included in the FY 2022/23 Adopted Budget. The largest revenue increase is in Property Tax, with expected revenues totaling $104.2 million due to gains in assessed property valuations. Franchise and Utility Users Taxes are anticipated at $33.0 million, a 21.8 percent increase, driven by increases in utility prices including gas and electricity. Charges for Current Services is projected to increase $6.4 million due to increased demand for services, including medical transports, recreation classes and building and planning services. The Proposed General Fund Expenditure Budget totals $285.6 million and is supported by revenues of $280.4 million, plus the one-time use of $8.8 million in General Fund Reserves. Use of reserves include the transfer of $3.9 million from the Equipment Replacement Reserve to the Equipment Replacement Fund for the purchase of critical infrastructure and public safety vehicles and equipment. The full balance of the AES Reserve ($4.9 million) is being transferred to a new AES Mitigation Fund to be used for various Capital Improvement Projects as outlined in the Memorandum of Understanding between the City and AES Southland Development LLC. The Proposed General Fund Budget has no reliance on one-time revenues to fund ongoing operations, which is critical to maintaining the City's financial viability and success and represents a $16.6 million, or 6.2 percent, increase compared to the FY 2022/23 Adopted Budget of$269.0 million. This increase is attributable to higher personnel costs arising from the addition of 11 full time employees, increased Workers' Compensation and overtime costs, and inflationary impacts on normal business activities. The FY 2023/24 Proposed Budget includes 1,002.75 Full Time Equivalents (FTEs); an increase of 11 FTEs across all funds compared to FY 2022/23. The new positions include 1 Deputy Community Prosecutor, 2 Senior Deputy City Attorneys and 1 Senior Legal Assistant in the City Attorney's Office. A Municipal Records Manager is being added to the City Clerk's Office to assist with the citywide centralization of records management, and 1 Graphic Designer and 1 Multi-Media Officer are proposed to oversee the operations of the City's Cable "3" Channel, YouTube Channel and online digital content, and to assist with citywide public information materials in the Office of Communications, bringing part of currently contracted services in-house. Three new positions are included in the Community Development Department to provide timely inspection and plan review services and improve long-term service delivery. One HR Analyst is included in Risk Management to support increased workload, mitigate risk and ensure compliance with regulatory requirements. The FY 2023/24 Proposed Budget was carefully prepared to balance immediate priorities along with the need for long-term investments. The Proposed Budget does not include any financial impacts of City of Huntington Beach Page 5 of 14 Printed on 6/23/2023 powered24 Legistarn'' ii File #: 23-566 MEETING DATE: 6/26/2023 agreements with bargaining groups that are under consideration by the City; the City Budget will be amended as bargaining group agreements are approved by the City Council. The City Budget reflects the priorities of the City Council and outlines a plan committed to enriching the quality of life for our residents, businesses, and visitors by increasing funding for core services such as public safety, community & library service programs, and improving the City's infrastructure. Budget Balancing Plan At the June 6th City Council meeting, City staff were directed to provide a budget balancing plan to proactively address the FY 2024/25 General Fund projected deficit. Departments submitted potential revenue opportunities and expenditure reductions totaling $7,179,520 for Council review, as summarized below: Summary Proposed Revenue Opportunities 1,653,295 Expenditure Reductions(One-Time) 1,643,297 Expenditure Reductions(Ongoing) 3,882,928 7,179,520 Department Reductions and Revenue Opportunities Proposed City Manager 118,610 City Attorney - City Clerk 123,050 Community& Library Services 1,157,548 Finance 273,251 Fire 1,292,695 Human Resources 35,000 Information Services 440,000 Community Development 625,487 Police 60,000 Public Works 655,582 City Treasurer - Citywide 2,398,297 7,52 The anticipated service level impacts are listed in Attachment 12. As the Fiscal Year 2023/24 Proposed Budget is balanced, staff is recommending a phased approach for Council-approved budget reductions based on the level of effort involved in implementing certain expenditure reductions and the service level impacts to the community. Level One: Effective July 1, 2023. The process to implement increased revenue options would begin at the start of Fiscal Year 2023/24. Approved budget reductions would be included in the Fiscal Year 2023/24 Adopted Budget. _ l City of Huntington Beach Page 6 of 14 Printed on 6/23/2023 powere& 'LegistarT'' File#: 23-566 MEETING DATE: 6/26/2023 REVENUE`OPPORTUNITIES. No ailtEMENNAW4Wk. iiiO4tiiii. eltitafttittnakt- .., Type.,' Ettii6tagAmount '_ 1 Update the Master Fee and Charges Schedule Ongoing All 198,000 2 Evaluate Emergency Medical Service (EMS) Fees Ongoing Fire 936,254 3 Lifeguard Tower Advertisements Ongoing Fire 356,441 4 Police Fines and Fees Ongoing Police 60,000 Comm & Lib 5 LPR(License Plate Readers) Citation Revenue Ongoing Svcs 102,600 . 1,653,295 BUDGET RE©U;CTIONS No Cost.Reductions Type. Dept Amount. Partial reprogramming of one-time revenues from Emerald 1 Cove loan repayment One-time Citywide . 1,138,297 2 Employee Work Enhancements Ongoing Citywide 712,000 3 Circuit _ Ongoing Citywide 350,000 4 Eliminate City Clerk Remodel CIP One-time City Clerk 100,000 Reclassify Director of Homeless& Behavioral Health 5 position to Manager. Ongoing City Mgr 57,519 6 Employee Medical Exams Ongoing HR 35,000 7 Eliminate funding for MySidewalk dashboard program Ongoing Info Svcs 80,000 8 Eliminate IS Service Van One-time Info Svcs 60,000 9 Reduce Equipment Replacement One-time Info Svcs 300,000 Terminate Ice Rink Contract Comm &Lib 10 (if single sponsor does not materialize by date) Ongoing Svcs 157,594 Comm & Lib 11 Aquatics Summer Swim Lesson Expansion Ongoing Svcs 138,950 Eliminate a portion of the temporary salaries-budget in the Housing and Permit Center Divisions and shift restricted 12 fund grant work to the Senior Management Analyst Ongoing Comm Dev 203,739 Code Enforcement Replacement Vehicles-downgrade One-time/ 13 three vehicle replacement upgrades from trucks to sedans Ongoing Comm Dev 60,000 3,393,099 Level Two: Effective January 1, 2024. Due to the level of effort and service level impacts for these budget reductions, items approved for elimination by City Council in this category may take an estimated six months to implement.. City of Huntington Beach Page 7 of 14 Printed on 6/23/2023 powereo2c7'Legistar°•' File#: 23-566 MEETING DATE: 6/26/2023 BUDGET REDUCTIONS'I Costl.Reductions „ Type Dept Amount 1 Eliminate Temporary Dept Asst II Ongoing City Clerk 23,050 2 Reclassify Multimedia Officer to Multimedia Coordinator Ongoing City Mgr 31,091 Reduce Professional/Contract Services by eliminating 3 contingency and reducing SOW(CMO) Ongoing City Mgr 30,000 4 Principal Finance Analyst(Budget)-Defund (1) Ongoing Finance 143,253 5 Call Center Part-time Staff Ongoing Finance 35,000 Reduce various Public Works contract and maintenance Public 6 budgets. Ongoing Works 46,700 Public 7 Revise tree trimming from 6-year to 7-year cycle Ongoing Works 100,000 Reduce contract and weekly landscape service for Facilities Public 8 to 2x per month. Ongoing Works 123,882 Comm & Lib 9 Gate Arm Efficiency Savings-Temp Salaries Ongoing Svcs 42,000 Comm & Lib 10 Eliminate Citywide Security Services Ongoing Svcs 147,692 Comm &Lib 11 Eliminate Park Ranger Services Ongoing Svcs 78,075 Comm & Lib 12 Senior Center-Saturday Closure Ongoing Svcs 14,450 Comm &Lib 13 Edison/Murdy-5 hr less/week Ongoing Svcs 17,000 Comm & Lib 14 Closure-Central Library(Sundays) Ongoing Svcs 150,000 Reduction in Open Hours-Central Library (reduce Monday by 2 hrs;Tuesday-Thursday by 3 hrs=11 Comm & Lib 15 hrs/week) Ongoing Svcs 83,071 Community Café Community Forum (costs for consultants,food and supplies only; continuation Comm & Lib 16 of event with sponsors, donations, and in-kind) Ongoing Svcs 35,000 Reduce Temporary Salaries, Overtime, Equipment budget 17 in Inspection Services and Administration Ongoing Comm Dev 123,295 18 Accounting Technician (Accounts Payable)- Defund (1) Ongoing Finance 94,998 Reduce beach restroom cleaning intervals during non-peak Public 19 season months Ongoing Works 100,000 Reduce contract sign&lighting maintenance services and Public 20 related equipment funding Ongoing Works 62,000 Eliminate City funded downtown power washing and porter Public 21 service and transfer costs to the Downtown BID Ongoing Works 154,000 Reduce contract and weekly landscape service to Pier Plaza, Public 22 Bluff Top,&Sunset landscape 2x per month Ongoing Works 69,000 Comm & Lib City of Huntington Beach Page 8 of 14 Printed on 6/23/2023 powered'Legistar711 File#: 23-566 MEETING DATE: 6/26/2023 I 23 I Defund 1 Care Manager I Ongoing I Svcs .I 24,5501 BUDGET REDUCT#oNS <,COSt,Reductions s . Type Dept Amount Comm & Lib 24 Closure-Banning Branch Ongoing Svcs 63,543 Comm & Lib 25 Closure-Main Street Branch Ongoing Svcs 66,883 Comm&Lib 26 Closure-Helen Murphy Branch Ongoing Svcs 36,140 27 Code Enforcement Technician- Defund (1) Ongoing Comm Dev 85,933 28 Economic Development Project Manager-Defund (1) Ongoing Comm Dev 152,520 2,133,126 Boards and Commissions Implementation of the proposed budget balancing plan will increase the workload on City staff and reduce the time available to complete core work duties. To ensure that core City functions are maintained, staff is requesting policy direction from Council to reduce the frequency of meetings to every other month for a minimum period of one year for the following Boards and Commissions: • Harbour Commission • Finance Commission • Jet Noise Commission • Historic Resources Board • Central Park Collaborative Additionally, any Boards and Commissions request for staff efforts beyond four (4) hours, as determined by the primary staff liaison, with concurrence by the department head and City Manager, will require City Council approval. Approved requests will be completed based on staff capacity and in the following priority order: (1) Day-to-day responsibilities and (2) Strategic Plan priorities. Formalizing this process will require review and updates to Municipal Code Section 2.100, Operating Policy for Boards and Commissions. The regular report to the City Council on the Strategic Plan will note changes to implementation of priorities due to work related to City Council-approved assignments beyond core Boards and Commissions duties. Professional Services { As established by Administrative Regulation Number 228, each department has submitted a list of professional services that are generally contained in their Proposed Budgets (Attachment 3). City of Huntington Beach Page-9 of 14 Printed on 6/23/2023 powere&'LegistarT'•' File #: 23-566 MEETING DATE: 6/26/2023 Professional services contracts are subject to compliance with Administrative Regulation Number 228 and City Ordinance Chapter 3.03. Paving Cycle In August 2022, staff gave a study session presentation on the Pavement Management Plan (PMP) Overview. At this study session Council provided direction to implement a 9-year zone cycle instead of the previous 12-year zone cycle, of which the last zone of the first 12-year cycle is currently under construction. In working through the CIP process, and working to achieve a balanced budget, staff reviewed the cost/benefit of a 9-year cycle to a 12-year cycle. After this review staff is recommending a 12-year cycle for the following reasons: 1. Over 7 years, the Pavement Classification Index (PCI) would only increase by 1 point (83.4 to 84.4), and both scores are in the "good" condition rating; 2. The construction cost for the 9-zone program totals $2.5 million more annually than the 12- zone program; and 3. The City has seen success with the 12-year zone program which has achieved an overall PCI of 81.6 which indicates the residential streets are currently in "good" condition. Gann Appropriation Limit In November 1979, the California voters approved Article 13B of the State of California Constitution, which allows the City's spending of tax proceeds to increase only by factors from the base year of 1978-1979. In June 1990, Proposition 111 was passed, which changed the way the limit is calculated and is outlined as follows. The City may increase its limit annually in two ways: • By a percentage equal to the increase from the preceding year in county or city population (whichever is greater). • By an amount equal to the change in per capita personal income in California or the change in the assessment roll the preceding year due to the addition of local non-residential new construction (whichever is greater). The proposed appropriation limit for FY 2023/24 was calculated as follows: FY 2022/23 Appropriation Limit $1,126,155,850 Multiplied by percentage grown in State Per Capita Personal Income 1.0444 Multiplied by change in County Population 0.9962 Proposed FY 2023/24 Appropriation Limit $1,171,687,773 Appropriations of revenues controlled by the Gann Limit are primarily in the General Fund. The General Fund proposed appropriation for FY 2023/24 of $285.6 million is significantly below this appropriation limit (Attachment 4). City of Huntington Beach Page 10 of 14 Printed on 6/23/2023 powereal LegistarT'•' File#: 23-566 MEETING DATE: 6/26/2023 Examples of proceeds of taxes governed by the Gann Appropriation Limit are: property taxes, sales taxes, utility taxes, state subventions, fines, forfeitures, interest revenue on regulatory licenses, user charges, and user fees, to the extent that those proceeds exceed the costs reasonably borne by that entity in providing the regulation, product, or service. Employee Tax Override On July 16, 2012, the City Council adopted an ordinance to permanently cap the tax rate at $0.01500 per $100 of assessed valuation. Therefore, the requested tax levy for FY 2023/24 reflects the same tax rate of$0.01500 per$100 of assessed valuation effective in FY 2012/13 pursuant to Chapter 3.07 of the Municipal Code. Fiscal Year 2023/24 will represent the twelfth year of the application of the permanent cap. The current capped Employee Tax Override results in an approximate $75 annual tax levy for a property assessed at $500,000. Revenue generated from this property tax helps the City fund public safety employee pension costs associated with pre-1978 retirement benefit levels. As such, the tax can only pay for the estimated costs associated with the public safety pension benefit formulas in place prior to the enactment of Proposition 13 on July 1, 1978. Hence, the tax can only pay for retirement benefits for all retired, current, and future public safety City employees that were contracted for prior to July 1, 1978 (such as the 2% at 50 benefit formula for Safety employees in place before enactment of Proposition 13). Based on the most recent CaIPERS actuarial valuations, the cost of pre-1978 retirement benefit levels for Safety personnel totals $26.1 million. As such, the proposed tax rate is recouping only 27 percent of eligible Safety personnel 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 essential services for Fiscal Year 2023/24 (Attachment 5). Public Hearing The City Charter requires that a public hearing be conducted on the City budget prior to adoption. Public Hearing notices have been published per.City Charter requirements (Attachment 1). At the close of this hearing, all legal requirements for budget adoption will have been met. Update to the General Fund Reserve Policy The City desires to maintain a prudent level of reserves based on the revenue impacts described above and the City's desire to maintain strong bond ratings to minimize borrowing costs. The Government Finance Officers Association (GFOA) recommends a minimum of two months of operating expenditures be set aside for unforeseen events. Cities with robust fiscal reserve policies are more likely to receive improved bond ratings based on higher scores related to financial management policies and improved fund balance reserves. Staff is recommending consolidating certain General Fund Assignments into the Economic Uncertainties Reserve in order to meet the two-month reserve requirement, as listed below: City of Huntington Beach Page 11 of 14 Printed on 6/23/2023 powerecillj LegistarTM File #: 23-566 MEETING DATE: 6/26/2023 Balance as of June 30,2022(in thousands) Cityview Replacement $ 1,028 Triple Flip 109 Strategic Initiatives 16,536 Housing Agreement 1,657 Year-End Fair Value 1,983 Total Recommended for Consolidation 21,313 Economic Uncertainties Reserve 26,114 Economic Uncertainties Reserve(revised) $47,427 Two-Month Reserve Requirement $47,215 Additionally, staff is recommending: (1) a minimum of 25% of unrestricted one-time revenues would be transferred to the Section 115 Trust, and (2) strengthening the City's Reserve policy to ensure that funds are set aside systematically and used only when truly necessary and approved by a 6/7th vote of City Council. If Economic Uncertainties Funds are utilized and the level falls below the two-month reserve requirement, the Chief Financial Officer will bring forward a proposed plan to City Council to replenish the fund within three fiscal years. Acknowledge Receipt of Fire Inspections California Health & Safety Code Sections 13146.2 and 13146.3 require all fire departments that provide fire protection services to perform annual inspections in every building used as a public or private school, hotel motel, lodging house, apartment house and certain residential care facilities. These inspections are performed to meet certain building standards. Section 13146.2 of the Code requires departments to report annually to its governing body on its conformance to these requirements. State Senate Bill 1205 requires that effective January 1, 2019, the governing body annually adopt a resolution or other formal document certifying that these inspections were completed and that this document be submitted to the State. During calendar year 2022, the Huntington Beach Fire Department completed annual inspections of all buildings referenced under Sections 13146.2 and 13146.3 of the California Health and Safety Code. This includes the following: Occupancy Type Jurisdiction Inspections R1s ("hotel, motel, lodging houses") 20 20 --R1s that are also High Rises — -- 3 I _ 3 R2 s ("apartment houses") 2,537 2,537 _ R2 that are also High Rises 1 1 — R2.1 ("supervised residential") _ 5 5 R4s ("residential/assisted living") Es ("public and private schools") j 38 This represents inspection rate of 100% of all required facilities. City of Huntington Beach Page 12 of 14 Printed on 6/23/2023 powered$]Legislar1" File #: 23-566 MEETING DATE: 6/26/2023 In conformance with Senate Bill 1205, staff recommends the adoption of the resolution shown as Attachment 8. Mind OC Contract Extension Since its successful launch in May 2021, Be Well HB, a pilot mobile crisis response program has become a critical City resource to help with a variety of non-emergency public assistance situations such as mental health crisis, addiction, and homelessness. Council approval is requested to extend the contract with the service provider, Mind OC, for an additional three years until June 30, 2026 (Attachment 9), with an annual contract amount of not-to- exceed $1.5 million. The cost for FY 2023/24 will be 100% covered by a portion of the $500,000 federal grant from the U.S. Department of Health and Human Services and $1.5 million state grant from the California Dept. of Health Care Services. Funding for the two subsequent years will be incorporated into the respective annual operating budgets and program costs may be reduced or eliminated, contingent upon the funding availability in each given year. National Development Council Contract The National Council for Community Development (NDC) provides technical assistance services for housing and economic development activities for the Community Development Department. An existing three-year contract will expire at the beginning of FY 2023/24. Council approval is requested for a new two-year agreement until June 30, 2025 (Attachment 10) with total compensation not to exceed $156,818. Funding for this contract is incorporated in the Community Development Block Grant and HOME program administrative costs, and the Community Development Department's annual operating budget. The contract procurement required through Municipal Code 3.03 was completed through an executed interagency agreement with San Joaquin County. Hinderliter, De Llamas and Associates Contract Hinderliter, De Llamas and Associates (HdL) provides sales and use tax professional and auditing services to ensure that sales tax allocations made by the State Board of Equalization (BOE) are as accurate as possible and to act on behalf of the City to pursue misallocated funds. An existing three- year contract will expire on July 31, 2023. Council approval is requested for a new three-year agreement through July 31, 2026 (Attachment 11). The proposed new contract includes an annual fixed fee of $10,200 for a total of$30,600 in fixed fees. In addition, HdL would receive 15 percent of any new sales and use tax revenue received by the City as a result of its extensive audit and sales and use tax recovery work, if the tax recovery work is approved by the BOE. This audit fee applies to additional monies received in the first eight consecutive reporting quarters beginning with the receipt of the audit revenue and includes retroactive back-quarter adjustments obtained by the firm. For the most recent three years of available data, HdL recovered approximately $1.75 million in revenue from the BOE on behalf of the City and has recovered over $14 million since the City began contracting with HdL in 1990. Funding for this contract is incorporated in the Finance Department's annual operating budget. The contract procurement required through Municipal Code 3.03 was completed through an executed interagency agreement with the City of Bakersfield. Environmental Status: Not applicable City of Huntington Beach Page 13 of 14 Printed on 6/23/2023 powered2a Legistar File #: 23-566 MEETING DATE: 6/26/2023 Strategic Plan Goal: Community Engagement Homeless Response Economic Development & Housing Infrastructure & Parks Fiscal Sustainability, Public Safety or Other Attachment(s): 1. Public Hearing Notice 2. Resolution No. 2023-24, "A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2023/2024" 3. Professional Services included in the Fiscal Year 2023/2024 Budget 4. Resolution No. 2023-25, "A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024" 5. Resolution No. 2023-23, "A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits" 6. Resolution No. 2023-27, "A Resolution of the City Council of the City of Huntington Beach Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Coordinator, Homeless Services Manager, and Municipal Records Manager" 7. Resolution No. 2023-28, "A Resolution of the City Council of the City of Huntington Beach Adopting a Revised General Fund Reserve Policy" 8. Resolution No. 2023-26, "A Resolution of the City Council of the City of Huntington Beach, California Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code" 9. Amendment No. 2 to Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program 10. Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC) for Technical Assistance Services 11. Professional Services Contract between the City of Huntington Beach and Hinderliter, De Llamas and Associates for Sales and Use Tax Allocation and Audit Services 12.Budget Balancing Plan 13.FY 2023/24 Budget Adoption Presentation City of Huntington Beach Page 14 of 14 Printed on 6/23/2023 powered LegistarT" PUBLIC HEARING CITY OF HUNTING TON BEACH { Notice of Public Hearing on the Proposed Clty Budget for Fiscai Year 2023+2024 Notice is hereby given that a public hearing will be held by the City Council of the City of Huntington Beach for the purpose of considering the City Budget for Fiscal Year 2023f2024. The Proposed Budget for Fiscal Year 202312024 totals $508,818,053 including General Fund Expenditures of S285,564,240. The public hearing Is scheduled in tie Council Chambers of the Civic Center,located at 2000 Main Street on Tuesday.June 6,2023 at 6:00pm. The public may obtain copies of the Proposed Budget for Fiscal Year 2023/2024 from the City's website at htto://www.huntinelonbeachca.00v, All Interested persons are Invited to attend to express their opinions for, or against, the Proposed Budget with written or oral comments, Written communications to the City Council should be directed to the Office of the City Clerk at the address below. Further information may be obtained from the Finance Department, 2000 Main Street, Huntington Beach,CA, 92648- 2702 or by telephone(714)536-5630. The City of Huntington Beach endeavors to accommodate persons of handicapped status in the admission or access to,or treatment or employment in,city programs or activities. The City of Huntington Beach is an equal opportunity employer. Dated: May 25,2023 and June 1,2023 City of Huntington Beach By: Robin Estanislau,City Clerk 2000 Main Street Huntington Beach,CA 92648-2702 Telephone: (714)536-5227 htte huntlnoonbeachca.goviNBPubllcComn nts+ } { } } 35 City Council/ ACTION AGENDA June 26, 2023 Public Financing Authority 6:00 PM —COUNCIL CHAMBERS RECONVENE CITY COUNCIL/PUBLIC FINANCING AUTHORITY ADJOURNED REGULAR MEETING — 6:00PM ROLL CALL Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, Burns All Present PLEDGE OF ALLEGIANCE— Led by Councilmember Moser CLOSED SESSION REPORT BY CITY ATTORNEY— None. ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) - Consent Calendar#2 (1) PUBLIC COMMENTS(3-Minute Time Limit)—27 Speakers COUNCIL COMMITTEE APPOINTMENT ANNOUNCEMENTS— None. AB 1234 REPORTING —None. OPENNESS IN NEGOTIATION DISCLOSURES— None. CONSENT CALENDAR 2. 23-570 Adopted Resolution No. 2023-33 appointing Mark D. Alvarado as Interim Chief Financial Officer and approving the Employment Agreement Recommended Action: A) Adopt Resolution No. 2023-33, "A Resolution of the City Council of the City of Huntington Beach appointing Mark D. Alvarado as Interim Chief Financial Officer"; and B) Approve and authorize the City Manager to execute the "Employment Agreement between the City of Huntington Beach and Mark D. Alvarado." Approved 7-0 PUBLIC HEARING 3. 23-566 Continued from June 20, 2023 with Public Hearing open -Adopted Resolution No. 2023-24 to Adopt a Budget for the City for Fiscal Year 2023/2024 and Authorize the Corresponding Appropriation and Transfer of $4.9 Million of AES Reserves and $3.9 Million of Equipment Replacement Reserves and Return to a 12-year Paving Cycle; Resolution No. 2023-25 Establishing the Gann Appropriation Page 3 of 6 City Council/ ACTION AGENDA June 26, 2023 Public Financing Authority Limit for Fiscal Year 2023/2024; Resolution No. 2023-23 Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits; Resolution No. 2023-27 Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Coordinator, Homeless Services Manager, and Municipal Records Manager; Resolution No. 2023-28 to Adopt a Revised General Fund Reserve Policy; Resolution No. 2023-26 Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code; Approved and Authorized the execution of Amendment No. 2 to the Agreement between the City of Huntington Beach and Mind OC for Mobile Crisis Response Program; Approved and Authorized the execution of Professional Services Contract between the City of Huntington Beach and National Council for Community Development(NDC) for Technical Assistance Services; Approved and Authorized the execution of Professional Services Contract Between the City of Huntington Beach and Hinderliter, De Llama and Associates for Sales and Use Tax Allocation and Audit Services; and, Approved the Budget Balancing Plan (as amended)to Proactively Address the Fiscal Year 2024/25 Projected General Fund Deficit Recommended Action: A) Adopt Resolution No. 2023-24, "A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2023/2024" (Attachment 2) as amended to include the impacts of the Police Officers'Association (POA) MOU, additional parking revenues, and revised Budget Balancing Plan as amended(N); and, B) Authorize the Professional Services included in the FY 2023/24 budget to be representative of the services projected to be utilized by departments in FY 2023/24 (Attachment 3); and, C) Authorize the appropriation and transfer of the full balance ($4.9 million) of the AES Reserve from the General Fund to the AES Mitigation Fund 1284; and, D) Authorize the appropriation and transfer of$3,903,803 from the General Fund Equipment Replacement Reserve to the Equipment Replacement Fund 324; and, E) Approve the return to a 12 year paving cycle; and, F) Adopt Resolution No. 2023-25, "A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024" of $1,171,687,773" (Attachment 4); and, Page 4 of 6 City Council! ACTION AGENDA June 26, 2023 Public Financing Authority G) Adopt Resolution No. 2023-23, "A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits" (Attachment 5); and, H) Adopt Resolution No. 2023-27, "A Resolution of the City Council of the City of Huntington Beach Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Coordinator, Homeless Services Manager, and Municipal Records Manager" (Attachment 6); and, I) Adopt Resolution No. 2023-28, "A Resolution of the City Council of the City of Huntington Beach Adopting a Revised General Fund Reserve Policy" (Attachment 7) and authorize the City Manager or designee to execute all administrative and budgetary actions necessary to consolidate certain General Fund Assigned Fund Balances to the Economic Uncertainties Reserve in order to meet the City's two-month Emergency Reserve requirement; and, J) Adopt Resolution No. 2023-26, "A Resolution of the City Council of the City of Huntington Beach, California Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code" (Attachment 8); and, K) Approve and authorize the Mayor and City Clerk to execute "Amendment No. 2 to Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program" (Attachment 9); and, L) Approve and authorize the Mayor and City Clerk to execute "Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC) for Technical Assistance Services" (Attachment 10); and, M) Approve and authorize the Mayor and City Clerk to execute "Professional Services Contract between the City of Huntington Beach and Hinderliter, De Llamas and Associates for Sales and Use Tax Allocation and Audit Services" (Attachment 11); and, N) Approve the Budget Balancing Plan as amended to proactively address the Fiscal Year 2024/25 Projected General Fund Deficit; (Attachment 12); and, Move Budget Reductions identified in Level 2 to Level 1 per revised Plan: 2) Reclassify Multimedia Officer to Multimedia Coordinator, 4) Reduce Various Public Works contract and maintenance budgets, and 6) Community Café Community Forum (costs for consultants, food and supplies only; continuation of event with sponsors, donations, and in-kind); and, Page 5 of 6 City Council/ ACTION AGENDA June 26, 2023 Public Financing Authority Authorize staff to meet with labor associations on modifications identified under Level 1 per revised Plan: 2) Employee Work Enhancements; and, 0) Commissions," to formalize a process for BCC directed assi of staff time. Defer to the Boards, Commissions, Committees(BCC's) Ad Hoc Committee Speakers (25) Supplemental Communications (327) Approved 7-0 with identified amendments ADMINISTRATIVE ITEMS 4. 23-5 33 Adopted Resolution No. 2023-32 Approving and Implementing the Memorandum of Understanding (MOU) between the Huntington Beach Police Management Association (PMA) and the City of Huntington Beach for July 1, 2023 through June 30, 2026 Recommended Action: A) Adopt Resolution No. 2023-32, "A Resolution of the City Council of the City of Huntington Beach Approving and Implementing the Memorandum of Understanding Between the Huntington Beach Police Management Association (PMA) and the City for July 1, 2023 through June 30, 2026;" and, B) Authorize City Manager or designee to take all administrative and budgetary actions necessary for implementation of Resolution No. 2023-32. Approved 7-0 ADJOURNMENT—at 10:40 PM, Councilmember Kalmick acknowledged the great work of Chief Assistant City Attorney Mike Vigliotta who is leaving Huntington Beach to assume the position of City Attorney for the City of Orange. The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is Tuesday, July 18, 2023, in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. The regular meeting of July 5, 2023, has been cancelled due to a lack of quorum. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov Page 6 of 6 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND HINDERLITER DE LLAMAS AND ASSOCIATES FOR SALES AND USE TAX/ALLOCATION AND AUDIT SERVICES THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY," and, HINDERLITER DE LLAMAS AND ASSOCIATES, a hereinafter referred to as "CONSULTANT." WHEREAS, CITY desires to engage the services of a consultant to perform sales and use tax/allocation and audit services; and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with; and CONSULTANT has been selected to perform these services, NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows: 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the "PROJECT." CONSULTANT hereby designates Andy Nickerson who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. 23-12993/312319 1 of 12 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. 3. TERM; TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of CONSULTANT are to commence on August 1, 2023 (the "Commencement Date"). This Agreement shall automatically terminate three (3) years from the Commencement Date, unless extended or sooner terminated as provided herein. All tasks specified in Exhibit "A" shall be completed no later than two (2) years from the Commencement Date. The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit "A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT. In the event the Commencement Date precedes the Effective Date, CONSULTANT shall be bound by all terms and conditions as provided herein. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONSULTANT on a time and materials basis at the rates specified in Exhibit "B," which is attached hereto and incorporated by reference into this Agreement, a fee, including all costs and expenses, not to exceed Three Hundred Thousand Dollars ($300,000). 5. EXTRA WORK In the event CITY requires additional services not included in Exhibit "A" or changes in the scope of services described in Exhibit "A," CONSULTANT will undertake such work only after receiving written authorization from CITY. Additional 23-12993/312319 2 of 12 compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 6. METHOD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit "B." 7. DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, data or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall turn these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first. These materials may be used by CITY as it sees fit. 8. HOLD HARMLESS A. CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTANT's subcontractors, if any) negligent (or alleged negligent) performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense and CITY shall approve selection of CONSULTANT's counsel. This indemnity shall 23-12993/312319 3 of 12 apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by CONSULTANT. B. To the extent that CONSULTANT performs "Design Professional Services" within the meaning of Civil Code Section 2782.8, then the following Hold Harmless provision applies in place of subsection A above: "CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY and its officers, elected or appointed officials, employees, agents and volunteers, from and against any and all claims, damages, losses, expenses, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) to the extent that the claims against CONSULTANT arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT. In no event shall the cost to defend charged to CONSULTANT exceed CONSULTANT's proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more other defendants to the claims and/or litigation is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, CONSULTANT shall meet and confer with CITY and other defendants regarding unpaid defense costs. The duty to indemnify, including the duty and the cost to defend, is limited as provided in California Civil Code Section 2782.8. C. Regardless of whether subparagraph A or B applies, CITY shall be reimbursed by CONSULTANT for all costs and attorney's fees incurred by CITY in enforcing this obligation. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by CONSULTANT. 23-12993/312319 4 of 12 9. PROFESSIONAL LIABILITY INSURANCE CONSULTANT shall obtain and furnish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for CONSULTANT's professional liability in an amount not less than One Million Dollars ($1,Q00,000.00) per occurrence and in the aggregate. The above- mentioned insurance shall not contain a self-insured retention without the express written consent of CITY; however an insurance policy "deductible" of Ten Thousand Dollars ($10,000.00) or less is permitted. A claims-made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements). B. CONSULTANT shall notify CITY of circumstances or incidents that might give rise to future claims. CONSULTANT will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion. If insurance is terminated for any reason, CONSULTANT agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. If CONSULTANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement. Such termination shall not 23-12993/312319 5 of 12 effect Consultant's right to be paid for its time and materials expended prior to notification of termination. CONSULTANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. 10. CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall: A. provide the name and policy number of each carrier and policy; B. state that the policy is currently in force; and C. shall promise that such policy shall not be suspended, voided or canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice; however, ten (10) days' prior written notice in the event of cancellation for nonpayment of premium. CONSULTANT shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing insurance coverage shall not derogate from CONSULTANT's defense, hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a prompt and timely manner, the premiums on the insurance hereinabove required. 23-12993/312319 6 of 12 11. INDEPENDENT CONTRACTOR CONSULTANT is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY. CONSULTANT shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 12. TERMINATION OF AGREEMENT All work required hereunder shall be performed in a good and workmanlike manner. CITY may terminate CONSULTANT'S services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall be made in writing, notice of which shall be delivered to CONSULTANT as provided herein. In the event of termination, all finished and unfinished documents, exhibits, report, and evidence shall, at the option of CITY, become its property and shall be promptly delivered to it by CONSULTANT. 13. ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsultants must satisfy the insurance requirements as set forth in Sections 9 and 10 hereinabove. 23-12993/312319 7 of 12 14. COPYRIGHTS/PATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement. 15. CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code. 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT's agent (as designated in Section 1 hereinabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices, certificates or other communications will be sent by notifying the other party via personal delivery, a reputable overnight carrier or U. S. certified mail-return receipt requested: TO CITY: TO CONSULTANT: City of Huntington Beach Hinderliter de Llamas and Associates ATTN: Chief Financial Officer ATTN: Andy Nickerson 2000 Main Street 120 S. State College Blvd., Suite 200 Huntington Beach, CA 92648 Brea, CA 92821 23-12993/312319 8 of 12 17. CONSENT When CITY's consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. 18. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 19. SECTION HEADINGS The titles, captions, section,paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 20. INTERPRETATION OF THIS AGREEMENT The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act 23-12993/312319 9 of 12 contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 21. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. 22. IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 23. LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULTANT and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT. 23-12993/312319 10 of 12 24. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the nonprevailing party. 25. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. 26. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 27. SIGNATORIES Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact,held by the signatory or is withdrawn. 28. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, 23-12993/312319 11 of 12 promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. 29. EFFECTIVE DATE This Agreement shall be effective on the date of its approval by the City Attorney. This Agreement shall expire when terminated as provided herein. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULTANT, CITY OF HUNTINGTON BEACH, HINDERLITER de LLAMAS AND a municipal corporation of the State of ASSOCIATES California lftBy:Andrew NickersonVairith_ City Manager 11.. ,ULEJLS print name INITIATED AND APPROVED: ITS: (circle one)ChairmanR residentN' e President By: 4AND Chief cialOfficer 11' APPROVED AS TO FORM: C1 Richard Park print name City Attorney ITS: (circle one)Sccretary/ iefFinancial Offic /Asst. Secretary—Treasurer Date RECEIVE AND FILE: COUNTERPART City Clerk Date 23-12993/312319 12 of 12 promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. 29. EFFECTIVE DATE This Agreement shall be effective on the date of its approval by the City Attorney. This Agreement shall expire when terminated as provided herein. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULTANT, CITY OF H ING S N BEACH, HINDERLITER de LLAMAS AND a municipal c•/•oration • the State of ASSOCIATES Califo' is B !P4I City ManaA` ' print name INITIATED A • ' 'ROVED: ITS: (circle one)Chairman/PresidentNice President AND Chief cial Officer By: APPROVED FORM: Ca print name C. Attorney ITS: (circle one)Secretary/Chief Financial Officer/Asst. Secretary—Treasurer Date • CITY OF HUNTINGTON BEACH a municipal corporation of the State RECEIVE D FILE: of California 014414., �b itell4A-d City Clerk 1�6� 14.'7 Mayor Date COUNTERPART 23-12993/312319 12 of 12 EXHIBIT A SCOPE OF WORK 1. Sales and Use Tax and Economic Analysis/Forecasting Services/Reports 1.1. Establish a special database identifying the name, address, and quarterly allocations of all sales tax producers within the City. This database will be utilized to generate special reports to City on major sales tax producers by rank and category, sales tax activity by categories, or business districts, identification of reporting aberrations, and per capita and outlet comparisons with regional and statewide sales. 1.2. Provide periodic updated reports to City identifying changes in sales by individual businesses, business groups and categories, and by geographic area. These reports may include, without limitation,quarterly aberrations due to State audits,fund transfers,and receivables,along with late or double payments, and quarterly reconciliation worksheets to assist with budget forecasting. Consultant shall meet quarterly by in person or virtually with City. 1.3. Shall additionally provide following each calendar quarter a summary analysis for City to share with Council Members, Chamber of Commerce, other economic development interest groups and the public that analyze City's sales tax trends by major groups and geographic areas without disclosing confidential individual tax records. 1.4. Establish a special database with California Department of Tax and Fee Administration ("CDTFA") registration data for businesses within applicable district boundaries holding seller's permit accounts. 1.5. Periodically license for the limited, non-exclusive, non-transferable use by City's staff certain of Consultant's web-based sales, use and/or transactions tax program(s) containing sellers permit, registration, allocation and related information for business outlets within City's jurisdiction registered with the CDTFA. 1.6. Provide periodic updated reports endeavoring to identify and assist with budget forecasting (i) changes in allocation totals by individual businesses, business groups and categories, and (ii) aberrations due to State audits,fund transfers,and receivables,along with late or double payments. 2. Allocation and Audit Recovery Services 2.1. Conduct (when mutually agreed with City) initial and on-going sales and use tax audits of businesses to help identify and correct distribution and allocation errors, and to proactively affect favorable registration,reporting or formula changes thereby generating previously unrealized sales and use tax income for the City and/or recovering misallocated tax from registered taxpayers. Common errors that will be monitored and corrected include but are not limited to: transposition errors resulting in misallocations; erroneous consolidation of multiple outlets; formula errors; misreporting of "point of sale" to the wrong location; delays in reporting new outlets; misallocating use tax payments to the allocation pools or wrong jurisdiction; and erroneous fund transfers and adjustments. 2.2. Initiate contacts with the CDTFA and sales management and accounting officials in companies that have businesses where a probability of error exists to endeavor to help verify whether current tax receipts accurately reflect the local sales activity. Such contacts will be conducted in a professional and courteous manner. 2.3. Prepare and submit to the CDTFA information for the purpose of correcting any identified allocation errors, and follow-up with individual businesses and the CDTFA to promote recovery by the City of back or prospective quarterly payments that may be owing. 2.4. If, during the course of its audit, Consultant finds businesses located in the City's jurisdiction that are properly reporting sales and use tax but have the potential for modifying their operation to 1248933.1 Page 1 of 5 EXHIBIT A SCOPE OF WORK provide an even greater share to City, Consultant may so advise City and collaborate with those businesses and City to encourage such changes. 3. Consulting and Other Optional Services Consultant may from time to time in its sole discretion, consult with City's staff, including without limitation, regarding(i)technical questions and other issues related to sales and use tax, (ii)utilization of reports to enhance business license collection efforts; (iii) sales tax projections for proposed annexations, economic development projects and budget planning, (iv) negotiating/review of tax sharing agreements,(v)establishing purchasing corporations,(vi)meeting with taxpayers to encourage self-assessment of tax obligations, and(vii) other sales and use tax revenue-related matters. 1248933.1 Page 2 of 5 EXHIBIT B FEES 4. Sales and Use Tax and Economic Analysis/Forecasting Services/Reports 4.1. Fees for performing the sales tax and economic analysis/forecasting Services as described above shall initially be $850 per month, commencing with the month of the Effective Date (hereafter referred to as"monthly fee"). The monthly fee shall be invoiced quarterly in arrears and shall be paid by City no later than 30 days after the invoice date. 4.2. Consultant may change the non-hourly Fees established above upon at least 30 days' prior written notice to City(but not more than once a year). Any such change must be with reference to the 12- month percent change in the most recently published annual Consumer Price Index for All Urban Consumers (CPI-U), as reported by the U.S. Bureau of Labor Statistics(the"CPI Change"). 5. Allocation and Audit Recovery Services 5.1. Fees for performing the allocation and audit recovery Services described above shall be 15% of all new, increased and recovered sales and use tax revenue received by the City as a result, in whole or in part,of the allocation audit and recovery services(hereafter referred to as"audit fee"). The fee shall be paid notwithstanding any related City assistance, work in parallel, and/or incurrence of attorneys' fees or other costs or expenses in connection,with the relevant Services. 5.2. The Fee described above include,without limitation, State fund transfers received for back quarter reallocations and monies received in the first eight (8) consecutive reporting quarters following completion of Consultant's allocation audit and confirmation of the corrections by the CDTFA. 5.3. These Fees shall be paid by City upon Consultant's submittal of evidence of Consultant's relevant Services in support thereof, including, without limitation, copies of relevant communications between Consultant and the CDTFA and/or taxpayers. 5.4. Consultant recognizes City's authority to waive or reduce the tax/fee-related debt of a business. Should City decide to do so for a business whose deficiency was identified by Consultant, Consultant shall be entitled to compensation in the amount of one half(1/2)of the Fees Consultant would have otherwise earned. Deficiencies which are uncollectable due to insolvency or dissolution of the business, or for deficiencies which are otherwise incapable of collection (i.e., statute of limitation or other legal defense) shall not be considered a City voluntary election to waive, and thus, Consultant would not be entitled to compensation related thereto under this provision. 6. Consulting and Other Optional Services 6.1. Fees for performing the consulting and other optional Services described above shall be based on the following initial hourly rates: (i)Principal- $325; (ii)Programmer-$295; (iii) Senior Analyst - $245; and(iv)Analyst- $195. 6.2. Consultant may change the rates for its hourly Fees from time to time. A 30 days' prior written notice to City will be given. 7. General Provisions Relating to Fees 7.1. Fees for travel and lodging expenses will be invoiced at cost and applied to all meetings(including implementation, training, operations, and support). Travel expenses only apply to out of scope travel and must therefore be pre-approved by City. 1248933.1 EXHIBIT B 7.2. Fees will be invoiced monthly to City for Services performed during the prior month.To the extent that Consultant has commercially reasonable means to do so, Fees will be netted out of City's monthly revenue disbursement. 8. Confidentiality Information Section 7056 of the State of California Revenue and Taxation Code ("R&T Code") specifically limits the disclosure of confidential taxpayer information contained in the records of the CDTFA. Section 7056 specifies the conditions under which a city, county or district may authorize persons other than such city, county or district's officers and employees to examine state sales and use tax records. The following conditions specified in Section 7056-(b)(1) of the State of California R&T Code are hereby made part of this Agreement: 8.1. Consultant is authorized by this Agreement to examine sales, use or transactions and use tax records of the CDTFA provided to City pursuant to contract under the Bradley-Burns Uniform Local Sales and Use Tax Law R&T Code Section 7200 et.seq. 8.2. Consultant is required to disclose information contained in, or derived from, those sales or transactions and use tax records only to an officer or employee of City who is authorized by City resolution provided to the CDTFA to examine the information. 8.3. Consultant is prohibited from performing consulting services for a retailer (as defined in R&T Code Section 6015), during the term of this agreement. 8.4. Consultant is prohibited from retaining the information contained in or derived from those sales, use or transactions and use tax records after this agreement has expired. Information obtained by examination of the CDTFA records shall be used only for purposes related to collection of local sales and use tax or for other governmental functions of the City as set forth by resolution adopted pursuant to Section 7056 (b) of the Revenue and Taxation Code. The resolution shall designate the Consultant as a person authorized to examine sales and use tax records and certify that this agreement meets the requirements set forth above and in Section 7056 (b), (1) of the Revenue and Taxation Code. 9. Software Use and Proprietary Information Software Use. Consultant hereby provides authorization to City to access Consultant's Sales Tax website if City chooses to subscribe to the software and reports option. The website shall only be used by authorized City staff. No access will be granted to any third party without explicit written authorization by Consultant. City shall not sublet, duplicate, modify, decompile, reverse engineer, disassemble, or attempt to derive the source code of said software. The software use granted hereunder shall not imply ownership by City of said software, or any right of City to sell said software or the use of same, or any right to use said software for the benefit of others. This software use authorization is not transferable. Upon termination or expiration of this Agreement,the software use authorization shall expire, and all City staff website logins shall be de-activated. Proprietary Information. As used herein,the term"proprietary information"means all information or material that has or could have commercial value or other utility in Consultant's business, including without limitation: Consultant's (i) computer or data processing programs; (ii) data processing applications,routines, subroutines,techniques or systems;desktop or web-based software;(iii)business processes; (iv) marketing plans, analysis and strategies; and (v) materials and techniques used; as well as the terms and conditions of this Agreement. Except as otherwise required by law, City shall hold in 1248933.1 EXHIBIT B confidence and shall not use(except as expressly authorized by this Agreement)or disclose to any other party any proprietary information provided, learned of or obtained by City in connection with this Agreement. The obligations imposed by this Section shall survive any expiration or termination of this Agreement or otherwise. The terms of this Section shall not apply to any information that is public information. 1248933.1 r , ® DATE(MM1D01YYYY) A L CERTIFICATE OF LIABILITY INSURANCE 5/25/2023 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER.THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder Is an ADDITIONAL INSURED,the policy(Ies)must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED,subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of such endorsement(s). PRODUCER NEE CT WS Certificates Woodruff Sawyer PHONE FAX 2 Park Plaza, Suite 500 (A/CAI L.EXI):844-872-6329 (MC,No): E-MIrvine CA 92614 ADDRESS: certificates@woodruffsawyer.com INSURER(S)AFFORDING COVERAGE NAIC# INSURER A:Berkley National Insurance Company 38911 INSURED HDLCOMP-01 INSURER B:Hudson Excess Insurance Company 14484 HInderliter de Llamas&Associates HdLSoftware,LLC, INSURERC: 120 S.State College Blvd, Suite 200 INSURER D: Brea,CA 92821 INSURERE: INSURER F: COVERAGES CERTIFICATE NUMBER:258623197 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR TYPE OF INSURANCE ADDL SUBR POLICY EFF POLICY EXP YY) LIMITS INSD WVD POLICY NUMBER (MM/DD/YYYY) (MMIDDIYY A X COMMERCIAL GENERAL LIABIUTY Y TCP702275410 5/2612023 5/26/2024 EACH OCCURRENCE $1,000,000 DGE TO RENTED CLAIMS-MADE X OCCUR PREM PREMISES(Ea occurrence) $1,000,000 MED EXP(Any one person) $15,000 PERSONAL 8 ADV INJURY $1,000,000 GENL AGGREGATE LIMIT APPUES PER: GENERAL AGGREGATE $2,000,000 X POLICY jECT LOC PRODUCTS-COMP/OP AGO $2,000,000 OTHER: $ A AUTOMOBILE LIABILITY Y TCP702275410 5/26/2023 5/26/2024 (Ea a0cic)deDtl INGLE LIMIT $1,000,000 X ANYAUTO BODILY INJURY(Per person) $ — OWNED SCHEDULED BODILY INJURY(Per accident) $ AUTOS ONLY AUTOS HIRED NON-OWNED PROPERTY DAMAGE $ - AUTOS ONLY AUTOS ONLY (Per accident) $ A X UMBRELLA LIAB X OCCUR TCP702275410 5/26/2023 5/26/2024 EACH OCCURRENCE $5,000,000 EXCESS UAB CLAIMS-MADE AGGREGATE $5,000,000 DED X RETENTION$None $ WORKERS COMPENSATION PER OTH- AND EMPLOYERS'LIABILITY STATUTE ER ANYPROPRIETORIPARTNERIEXECUTIVE Y/N N/A E.L.EACH ACCIDENT $ OFFICERIMEM BER EXCLUDED? (Mandatory In NH) E.L.DISEASE-EA EMPLOYEE $ II yes,describe under. DESCRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT $ 8 Proressional Liability EET 14167 01 5/28/2023 5/26/2024 Prof Lleb Agg $2,000,000 B Cyber Liability EET 14167 01 5/26/2023 5/26/2024 Cyber limit $2,000,000 B Tech E80 EET 14167 01 5/26/2023 5/28/2024 Tech E&O Limit $2,000,000 DESCRIPTION OF OPERATIONS/LOCATIONS I VEHICLES (ACORD 101,Additional Remarks Schedule,may be attached If more apace Is required) Retroactive Date for Professional Liability-2/15/2011 APPR VED AS TO FORM Line Of Coverage:Crime Policy#82556901 Effective Date 5/25/2023-5/26/2024 Carrier:Federal Insurance Company NAIC#20281 MIC AEL E.GATES Crime Limit:$1,000,000 CITY ATTORNEY See Attached... CITY OF HUNTINGTON BEACH CERTIFICATE HOLDER CANCELLATION _ • SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN City of Huntington Beach,its officers,elected or appointed ACCORDANCE WITH THE POLICY PROVISIONS. officials,employees,agents and volunteers 2000 Main Street AUTHORIZED REPRESENTATIVE Huntington Beach CA 92648k9-r-- a^, 1I -, I O 1988.2015 ACORD CORPORATION. All rights reserved. ACORD 25(2016/03) The ACORD name and logo are registered marks of ACORD Ace/Rica CERTIFICATE OF LIABILITY INSURANCE DATE(MMIDDIYYYY) 06114/2023 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER, THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED,the policy(Ies)must have ADDITIONAL INSURED provisions or be endorsed, If SUBROGATION IS WAIVED,subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT Marsh Alfinlly NAME: Marsh Affinity (Pkip o,Ext)t 800-743.8130 I V,No): a division of Marsh USA LLC. E-MAIL ADDRESS: ADPTolalSourco@marsh.com PO4 e BOX 14, 50308.0686 11 Moines,IA INSURER(S)AFFORDING COVERAGE NAIO Des INSURER A: AIU Insurance Company 19399 INSURED INSURER B: ADP TotalSowce DE IV,Inc. INSURER C: 5800 Windward Parkway INSURER D: Alpharetta,GA 30005 UC/F: INSURER E: Hinderliter de Llamas&Associates INSURER F: 120 S Stale College Blvd Suite 200 Brea,CA 92821 COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.UNITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR TYPEOFINSURANCE ADDLSUBR POLICY NUMBER LIMITS POLICYi:XP LIMITS LTR lNSO WVD ( IYYYY} (MMIDD/TYYY) COMMERCIALOENERALLIABILITY CLAIMS•MADE nOCCUR EACH OCCURRENCE PRESESREMI (Eooccurrence) S S MED EXP(Arty one person) S PERSONAL&ADV INJURY $ GEM.AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE S jl POLICY jE& LOC PRODUCTS-COMP/OP AGO $ �II OTHER: $ AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $ (Ea accident) ANY AUTO BODILY INJURY(Per person) $ —OJVNED _.SCHEDULED BODILY INJURY(Per accident) S AUTOS ONLY AUTOS HIRED NON-OWNED PROPERTY DAMAGE S AUTOS ONLY AUTOS ONLY (Per accident) $ UMBRELLA LIAR OCCUR EACH OCCURRENCE S EXCESSLIAB T CLAIMS•MADE AGGREGATE S DED RETENTION$ $ � WORKERSCOMPENSATlON X!STATUTE I ERH AND EMPLOYERS'LIABILITY YIN ANYPROPRIETORIPARTNER/EXECJTWE E.L.EACH ACCIDENT S 2,000,000 OFFlCEWMEMBER EXCLUDED? ❑ NIA X WC 034270274 CA 07/01/2023 07/01/2024 A fMandalory In NH) E.L.DISEASE-EA EMPLOYEE $ 2,000,000 if yes,describe under E L DISEASE.POLICY LIMIT $ DESCRIPTION OF OPERATIONS below 2,000,000 DESCRIPTION OF OPERATIONS 1 LOCATIONS!VEHICLES(ACORD 101,Additional Remarks Schedule,may be attached If more space Is required) All worksite employees working for Hinderllter de Uamas&Associates paid under ADP TOTALSOURCE, INC.'s payroll,are covered under the above staled policy.WAIVER OF SUBROGATION IN FAVOR OF City of Huntington Beach,Its officers,elected or appointed officials,employees,agents and volunteers AS RESPECTS OF JOB PERFORMED BY Hinderrder de Uamas&Associates AS REQUIRED BY WRITTEN CONTRACT. CERTIFICATE HOLDER CANCELLATION City of Huntington Beach,its officers,elected or appointed officials, employees,agents and volunteers SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE 2000 Main Street THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN Huntington Beach,CA 92698 ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE��.--, ACORD 26(2016/03) ©1988-2016 ACORD CORPO ION:..All rights reserved. The ACORD name and logo are registered marks of ACORD •• AGENCY CUSTOMER ID: HDLCOMP-01 LOC#: A ® ADDITIONAL REMARKS SCHEDULE Page i of AGENCY NAMED INSURED Woodruff Sawyer Hinderllter de Llamas&Associates HdL Software,'LLC. POLICY NUMBER 120 S.State College Blvd,Suite 200 Brea,CA 92821 • CARRIER • NAIC CODE EFFECTIVE DATE: ADDITIONAL REMARKS THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: 25 FORM TITLE: CERTIFICATE OF LIABILITY INSURANCE City of Huntington Beach,Its officers,elected or appointed officials,employees,agents and volunteers are included as additional Insured as respects General Liability and Automobile Liability to the extent provided In the attached forms.Coverage Is considered Primary and Non-contributory to the extent provided in the attached forms. ACORD 101(2008/D1) ©2008 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD Professional Service Approval Form PART II ., ' Q FCoy f 0' Request Date 6/7/2023 Requester Name* Litvak,Glynis Department* FINANCE Project Manager Name* Serena Bubenheim PARTS 1 &2 OF THE PROFESSIONAL SERVICES CONTRACTS APPROVAL FORM MUST BE COMPLETED BY THE REQUESTING DEPARTMENT AND SIGNED FOR APPROVAL.PART 1&2 MUST BE FILED WITH ALL APPROVED CONTRACTS. Link to the related Laserfiche form(s)here Name of consultant:* Hinderliter de Llamas and Associates Amount of this contract:* $ 300,000.00 Is this contract over$100,000?* Yes Note Contrasts requiring City Council Approval need to be signed by the Mayor and City Clerk.Make sure that appropriate signature page is attached to Vhaa(,ontr501.) Account Number and Contractual Dollar Amount Business Unit. Fiscal Year* Dollar Amount* Description(auto-populates if account number is Object Code* valid)* 10035201.69365 2023-2024 $ 100,000.00 Other Professional Services 10035201.69365 2024-2025 $ 100,000.00 Other Professional Services 10035201.69365 2025-2026 $ 100,000.00 Other Professional Services Were formal written proposals requested from at least three available qualified consultants?* Yes •> No If no, please explain* Attach a list of consultants from whom proposals were requested(including a contact telephone number.)* Sales Tax Vendors.docx 11.3KB Attach Exhibit A,which describes the proposed scope of work.* Huntington Beach-SOW 2023-26 SUT.docx 35.6KB Attach Exhibit B,which describes the payment terms of the contract.* Huntington Beach-SOW 2023-26 SUT.docx 35.6KB Approval Department Head Approval Department Head Approver Han,Sunny Date 6/8/2023 Department Head Action* No Action Taken Approve Reject Action Notes Purchasing Approval Purchasing Approver Bubenheim,Serena Date 6/8/2023 Purchasing Action* No Action Taken Approve Reject Action Notes Budget Approval • Budget Approver Bubenheim, Serena Date 6/8/2023 Budget Action* No Action Taken Approve Reject Action Notes CFO Approval CFO Approver Han,Sunny Date 6/8/2023 CFO Action* No Action Taken Approve Reject Action Notes . .s®® \,NTINGT a • ��I O��-\......... ° q City of Huntington Beach a :..; _ •?��1 2000 Main Street ♦ Huntington Beach, CA 26 8 im' � 99 4 v o Q (714) 536-5227 ♦ www.huntingtonbeachca.gov �cF�;e' 19°--.., °00 Office of the City Clerk "°0Nri 91 Robin Estanislau, City Clerk July 31, 2023 Hinderliter de Llamas and Associates Attn: Andy Nickerson 120 S. State College Blvd., Suite 200 Brea, CA 92821 Dear Mr. Nickerson: Enclosed is a fully executed copy of the Professional Services Contract between the City of Huntington Beach and Hinderliter De Llamas and Associates for Sales and Use Tax/Allocation and Audit Services, approved by City Council on June 26, 2023. Sincerely, ed#241.4.4.44) Robin Estanislau, CMC City Clerk RE:ds Enclosure Sister City: Anjo, Japan NOTE TO FILE For All Supplemental Communications Received Regarding the Fiscal Year 2023-24 Budget Related Items See 6/26/23 Budget Record Category ID # 320.20 System ID #6411346 2000 Main Street, ��0ATINGT,, o 5itri4-. -\ Huntington Beach,CA 92648 City of Huntington Beach APPROVED 7-0 F TO CONTINUE WITH 3 eUUNTV ' PUBLIC HEARING OPEN TO JUNE 26, 2023 File #: 23-521 MEETING DATE: 6/20/2023 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and,City Council Members SUBMITTED BY: Al Zelinka, City Manager VIA: Sunny Han, Acting Chief Financial Officer PREPARED BY: Serena Bubenheim, Acting Assistant Chief Financial Officer Subject: Continued from June 6, 2023 with Public Hearing open - Request to Consider Adopting Resolution No. 2023-24 to Adopt a Budget for the City for Fiscal Year 2023/2024 and Authorize the Corresponding Appropriation and Transfer of $4.9 Million of AES Reserves and $3.9 Million of Equipment Replacement Reserves and Return to a 12-year Paving Cycle; Resolution No. 2023-25 Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024; Resolution No. 2023-23 Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits; Resolution No. 2023-27 Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Officer, and Municipal Records Manager; Resolution No. 2023-28 to Adopt a Revised General Fund Reserve Policy; Resolution No. 2023-26 Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code; Approve and Authorize the execution of Amendment No. 2 to the Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program; and Approve and Authorize the Execution of Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC) for Technical Assistance Services Statement of Issue: The City Charter of the City of Huntington Beach requires a Public Hearing prior to the adoption of the City's annual budget. The City Charter further requires adoption of the annual budget by June 30, 2023, for Fiscal Year (FY) 2023/24. Financial Impact: Proposed Budget: The Fiscal Year 2023/24 Proposed Budget is structurally balanced. The All Funds Proposed Budget equals $508.8 million. The General Fund Proposed Budget totals $285.6 million, with the planned use of $8.8 million in General Fund reserves. Individual departmental and fund-level appropriations are contained in the attachments herein. City of Huntington Beach Page 1 of 10 Printed on 6/15/2023 powere3Q1 LegistarT'•' File #: 23-521 MEETING DATE: 6/20/2023 Employee Tax Override: Pursuant to Chapter 3.07 of the Municipal Code, the Proposed Budget for Fiscal Year 2023/24 assumes the continuation of 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 $7.9 million in revenue in Fiscal Year 2021/22. This recurring revenue source is included in the Proposed FY 2023/24 Budget. Update to the City's General Fund Reserve Balance Policy: The City desires to maintain a prudent level of reserves and the Government Finance Officers Association (GFOA) recommends a minimum of two months of operating expenditures be set aside for unforeseen events. Staff is recommending consolidating certain General Fund Assignments into the Economic Uncertainties Reserve in order to meet the two-month reserve requirement. Additionally, staff is recommending strengthening the City's Reserve policy to ensure that funds are set aside systematically and used only when truly necessary. Mind OC Contract Extension: Staff is requesting approval to amend the professional services contract with Mind OC for the Be Well HB mobile crisis response program. The City has been awarded federal and state grants (U.S. Department of Health and Human Services and California Dept. of Health Care Services) to offset the cost of the program for FY 2023/24. Funding for future years will be identified in future budgets. National Development Council Contract: Staff is requesting approval to execute a new professional services contract with National Council for Community Development (NDC). Funding for this contract is provided through the annual allocations for the Community Development Block Grant and HOME programs and the Community Development Department's annual operating budget. Recommended Action: A) Adopt Resolution No. 2023-24, "A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2023/2024" (Attachment 2); and, B) Authorize the Professional Services included in the FY 2023/24 budget to be representative of the services projected to be utilized by departments in FY 2023/24 (Attachment 3); and, C) Authorize the appropriation and transfer of the full balance ($4.9 million) of the AES Reserve from the General Fund to the AES Mitigation Fund 1284; and, D) Authorize the appropriation and transfer of$3,903,803 from the General Fund Equipment Replacement Reserve to the Equipment Replacement Fund 324; and, E) Approve the return to a 12 year paving cycle; and, F) Adopt Resolution No. 2023-25, "A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024" of City of Huntington Beach Page 2 of 10 Printed on 6/15/2023 powere3Qg LegistarT'•' File#: 23-521 MEETING DATE: 6/20/2023 $1,171,687,773" (Attachment 4); and, G) Adopt Resolution No. 2023-23, "A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits" (Attachment 5); and, H) Adopt Resolution No. 2023-27, "A Resolution of the City Council of the City of Huntington Beach Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Officer, and Municipal Records Manager" (Attachment 6); and, I) Adopt Resolution No. 2023-28, "A Resolution of the City Council of the City of Huntington Beach Adopting a Revised General Fund Reserve Policy" (Attachment 7) and authorize the City Manager or designee to execute all administrative and budgetary actions necessary to consolidate certain General Fund Assigned Fund Balances to the Economic Uncertainties Reserve in order to meet the City's two-month Emergency Reserve requirement; and, J) Adopt Resolution No. 2023-26, "A Resolution of the City Council of the City of Huntington Beach, California Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code" (Attachment 8); and, K) Approve and authorize the Mayor and City Clerk to execute "Amendment No. 2 to Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program" (Attachment 9); and, L) Approve and authorize the Mayor and City Clerk to execute "Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC)for Technical Assistance Services" (Attachment 10). Alternative Action(s): A. Instruct City staff regarding changes to be incorporated into the budget and adopt the FY 2023/24 Budget and corresponding actions and resolutions as amended. B. Continue the Public Hearing until June 20, 2023. Analysis: As required by the City Charter, the City Manager submitted the FY 2023/24 Proposed Budget to the City Council on May 7, 2023. The Proposed Budget and the Five-Year Capital Improvement Program (CIP)were also discussed at a City Council Study Session held on May 16, 2023. The purpose of the budget study session was to provide the City Council an opportunity to discuss City of Huntington Beach Page 3 of 10 Printed on 6/15/2023 powers"lii,Legistarm File#: 23-521 MEETING DATE: 6/20/2023 the Proposed Budget with staff before proceeding with the formal Public Hearing on June 6, 2023. Overview Over the past couple years, the City has come together in an extraordinary way to address the fiscal and public health challenges of the COVID-19 pandemic. Through the leadership and support of the City Council, the City implemented significant cost saving measures without reductions in essential service levels, including a Citywide Separation Incentive Program and reorganization plan, and refinancing of the City's pension debt. As a result of these measures, and numerous other measures taken over the past couple years, we project a $3.8 million dollar General Fund surplus for FY 2022/23. Inclusive of these significant budget measures, the FY 2023/24 Proposed Budget also includes mandated and additional one-time savings to mitigate the City's rising pension costs; prioritizes improvements to the City's facilities, roads and parks; incorporates increased funding for critical programs such as Workers' Compensation and General Liabilities; accounts for increases to the City's contractual obligations and inflationary cost impacts; and includes the addition of 11 positions across various City departments to meet increased demand and bring critical services in-house. The FY 2023/24 Proposed Budget is structurally balanced and totals $508.8 million across All Funds. This reflects a $23.2 million, or 4.4 percent, decrease from the FY 2022/23 Adopted All Funds Budget of $532.0 million. A significant portion of the decrease is due to the one-time redistribution of $29.6 million of American Rescue Plan Act (ARPA) funds to the General Fund in FY 2022/23 for the provision of core governmental services. For FY 2023/24, General Fund revenue is projected at $280.4 million, a $2.8 million, or 1 percent decrease from the FY 2022/23 Adopted Budget. Major sources of General Fund revenue include Property Tax, Sales Tax, Utility Users Tax, and Transient Occupancy Tax, among others. The largest decrease in General Fund revenue is in Non-Operating Revenue, attributable to the one-time transfer of ARPA funds for general governmental services that was included in the FY 2022/23 Adopted Budget. The largest revenue increase is in Property Tax, with expected revenues totaling $104.2 million due to gains in assessed property valuations. Franchise and Utility Users Taxes are anticipated at $33.0 million, a 21.8 percent increase, driven by increases in utility prices including gas and electricity. Charges for Current Services is projected to increase $6.4 million due to increased demand for services, including medical transports, recreation classes and building and planning services. The Proposed General Fund Expenditure Budget totals $285.6 million and is supported by revenues of $280.4 million, plus the one-time use of $8.8 million in General Fund Reserves. Use of reserves include the transfer of $3.9 million from the Equipment Replacement Reserve to the Equipment Replacement Fund for the purchase of critical infrastructure and public safety vehicles and equipment. The full balance of the AES Reserve ($4.9 million) is being transferred to a new AES Mitigation Fund to be used for various Capital Improvement Projects as outlined in the Memorandum of Understanding between the City and AES Southland Development LLC. The Proposed General Fund Budget has no reliance on one-time revenues to fund ongoing City of Huntington Beach Page 4 of 10 Printed on 6/15/2023 powereab1j LegistarT'' File#: 23-521 MEETING DATE: 6/20/2023 operations, which is critical to maintaining the City's financial viability and success and represents a $16.6 million, or 6.2 percent, increase compared to the FY 2022/23 Adopted Budget of$269.0 million. This increase is attributable to higher personnel costs arising from the addition of 11 full time employees, increased Workers' Compensation and overtime costs, and inflationary impacts on normal business activities. The FY 2023/24 Proposed Budget includes 1,002.75 Full Time Equivalents (FTEs); an increase of 11 FTEs across all funds compared to FY 2022/23. The new positions include 1 Deputy Community Prosecutor, 2 Senior Deputy City Attorneys and 1 Senior Legal Assistant in the City Attorney's Office. A Municipal Records Manager is being added to the City Clerk's Office to assist with the citywide centralization of records management, and 1 Graphic Designer and 1 Multi-Media Officer are proposed to oversee the operations of the City's Cable "3" Channel, YouTube Channel and online digital content, and to assist with citywide public information materials in the Office of Communications, bringing part of currently contracted services in-house. Three new positions are included in the Community Development Department to provide timely inspection and plan review services and improve long-term service delivery. One HR Analyst is included in Risk Management to support increased workload, mitigate risk and ensure compliance with regulatory requirements. The FY 2023/24 Proposed Budget was carefully prepared to balance immediate priorities along with the need for long-term investments. The Proposed Budget does not include any financial impacts of agreements with bargaining groups that are under consideration by the City; the City Budget will be amended as bargaining group agreements are approved by the City Council. The City Budget reflects the priorities of the City Council and outlines a plan committed to enriching the quality of life for our residents, businesses, and visitors by increasing funding for core services such as public safety, community & library service programs, and improving the City's infrastructure. Professional Services As established by Administrative Regulation Number 228, each department has submitted a list of professional services that are generally contained in their Proposed Budgets (Attachment 3). Professional services contracts are subject to compliance with Administrative Regulation Number 228 and City Ordinance Chapter 3.03. Paving Cycle In August 2022, staff gave a study session presentation on the Pavement Management Plan (PMP) Overview. At this study session Council provided direction to implement a 9-year zone cycle instead of the previous 12-year zone cycle, of which the last zone of the first 12-year cycle is currently under construction. In working through the CIP process, and working to achieve a balanced budget, staff reviewed the cost/benefit of a 9-year cycle to a 12-year cycle. After this review staff is recommending a 12-year cycle for the following reasons: 1. Over 7 years, the Pavement Classification Index (PCI) would only increase by 1 point (83.4 to 84.4), and both scores are in the "good" condition rating; 2. The construction cost for the 9-zone program totals $2.5 million more annually than the 12- City of Huntington Beach Page 5 of 10 Printed on 6/15/2023 powere3:1.i Leg!starTM File#: 23-521 MEETING DATE: 6/20/2023 zone program; and 3. The City has seen success with the 12-year zone program which has achieved an overall PCI of 81.6 which indicates the residential streets are currently in "good" condition. Gann Appropriation Limit In November 1979, the California voters approved Article 13B of the State of California Constitution, which allows the City's spending of tax proceeds to increase only by factors from the base year of 1978-1979. In June 1990, Proposition 111 was passed, which changed the way the limit is calculated and is outlined as follows. The City may increase its limit annually in two ways: • By a percentage equal to the increase from the preceding year in county or city population (whichever is greater). • By an amount equal to the change in per capita personal income in California or the change in the assessment roll the preceding year due to the addition of local non-residential new construction (whichever is greater). The proposed appropriation limit for FY 2023/24 was calculated as follows: FY 2022/23 Appropriation Limit $1,126,155,850 Multiplied by percentage grown in State Per Capita Personal Income 1.0444 Multiplied by change in County Population 0.9962 Proposed FY 2023/24 Appropriation Limit $1,171,687,773 Appropriations of revenues controlled by the Gann Limit are primarily in the General Fund. The General Fund proposed appropriation for FY 2023/24 of $285.6 million is significantly below this appropriation limit (Attachment 4). Examples of proceeds of taxes governed by the Gann Appropriation Limit are: property taxes, sales taxes, utility taxes, state subventions, fines, forfeitures, interest revenue on regulatory licenses, user charges, and user fees, to the extent that those proceeds exceed the costs reasonably borne by that entity in providing the regulation, product, or service. Employee Tax Override On July 16, 2012, the City Council adopted an ordinance to permanently cap the tax rate at $0.01500 per $100 of assessed valuation. Therefore, the requested tax levy for FY 2023/24 reflects the same tax rate of$0.01500 per$100 of assessed valuation effective in FY 2012/13 pursuant to Chapter 3.07 of the Municipal Code. Fiscal Year 2023/24 will represent the twelfth year of the application of the permanent cap. The current capped Employee Tax Override results in an approximate $75 annual tax levy for a property assessed at $500,000. Revenue generated from this property tax helps the City fund public safety employee pension costs associated with pre-1978 retirement benefit levels. As such, the tax can only pay for the estimated costs associated with the public safety pension benefit formulas in place prior to the enactment of Proposition 13 on July 1, 1978. Hence, the tax can only pay for City of Huntington Beach Page 6 of 10 Printed on 6/15/2023 poweree't 'Legistar"' File #: 23-521 MEETING DATE: 6/20/2023 retirement benefits for all retired, current, and future public safety City employees that were contracted for prior to July 1, 1978 (such as the 2% at 50 benefit formula for Safety employees in place before enactment of Proposition 13). Based on the most recent CaIPERS actuarial valuations, the cost of pre-1978 retirement benefit levels for Safety personnel totals $26.1 million. As such, the proposed tax rate is recouping only 27 percent of eligible Safety personnel 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 essential services for Fiscal Year 2023/24 (Attachment 5). Public Hearing The City Charter requires that a public hearing be conducted on the City budget prior to adoption. Public Hearing notices have been published per City Charter requirements (Attachment 1). At the close of this hearing, all legal requirements for budget adoption will have been met. Update to the General Fund Reserve Policy The City desires to maintain a prudent level of reserves based on the revenue impacts described above and the City's desire to maintain strong bond ratings to minimize borrowing costs. The Government Finance Officers Association (GFOA) recommends a minimum of two months of operating expenditures be set aside for unforeseen events. Cities with robust fiscal reserve policies are more likely to receive improved bond ratings based on higher scores related to financial management policies and improved fund balance reserves. Staff is recommending consolidating certain General Fund Assignments into the Economic Uncertainties Reserve in order to meet the two-month reserve requirement, as listed below: Balance as of June 30,2022(in thousands) Cityview Replacement $ 1,028 Triple Flip 109 Strategic Initiatives 16,536 Housing Agreement 1,657 Year-End Fair Value 1,983 Total Recommended for Consolidation 21,313 Economic Uncertainties Reserve 26,114 Economic Uncertainties Reserve(revised) $47,427 Two-Month Reserve Requirement $47,215 Additionally, staff is recommending: (1) a minimum of 25% of unrestricted one-time revenues would be transferred to the Section 115 Trust, and (2) strengthening the City's Reserve policy to ensure that funds are set aside systematically and used only when truly necessary and approved by a 6/7th vote of City Council. If Economic Uncertainties Funds are utilized and the level falls below the two-month reserve City of Huntington Beach Page 7 of 10 Printed on 6/15/2023 powere314 Legistart'" File#: 23-521 MEETING DATE: 6/20/2023 requirement, the Chief Financial Officer will bring forward a proposed plan to City Council to replenish the fund within three fiscal years. Acknowledge Receipt of Fire Inspections California Health & Safety Code Sections 13146.2 and 13146.3 require all fire departments that provide fire protection services to perform annual inspections in every building used as a public or private school, hotel motel, lodging house, apartment house and certain residential care facilities. These inspections are performed to meet certain building standards. Section 13146.2 of the Code requires departments to report annually to its governing body on its conformance to these requirements. State Senate Bill 1205 requires that effective January 1, 2019, the governing body annually adopt a resolution or other formal document certifying that these inspections were completed and that this document be submitted to the State. During calendar year 2022, the Huntington Beach Fire Department completed annual inspections of all buildings referenced under Sections 13146.2 and 13146.3 of the California Health and Safety Code. This includes the following: #in #of Occupancy Type Jurisdiction Inspections R1s ("hotel, motel, lodging houses") 20 20 R1s that are also High Rises 3 3 R2s ("apartment houses") 2,537 I- 2,537 R2 that are also High Rises C _ 1 1 R2.1 ("supervised residential") 5 j 5 R4s ("residential/assisted living") Es ("public and private schools") 38���yu------ 38 This represents inspection rate of 100% of all required facilities. In conformance with Senate Bill 1205, staff recommends the adoption of the resolution shown as Attachment 8. Mind OC Contract Extension Since its successful launch in May 2021, Be Well HB, a pilot mobile crisis response program has become a critical City resource to help with a variety of non-emergency public assistance situations such as mental health crisis, addiction, and homelessness. Council approval is requested to extend the contract with the service provider, Mind OC, for an additional three years until June 30, 2026 (Attachment 9), with an annual contract amount of not-to- exceed $1.5 million. The cost for FY 2023/24 will be 100% covered by a portion of the $500,000 federal grant from the U.S. Department of Health and Human Services and $1.5 million state grant from the California Dept. of Health Care Services. Funding for the two subsequent years will be incorporated into the respective annual operating budgets and program costs may be reduced or eliminated, contingent upon the funding availability in each given year. National Development Council Contract The National Council for Community Development (NDC) provides technical assistance services for housing and economic development activities for the Community Development Department. An City of Huntington Beach Page 8 of 10 Printed on 6/15/2023 powere31*LegistarT'•' File#: 23-521 MEETING DATE: 6/20/2023 existing three-year contract will expire at the beginning of FY 2023/24. Council approval is requested for a new two-year agreement until June 30, 2025 (Attachment 10) with total compensation not to exceed $156,818. Funding for this contract is incorporated in the Community Development Block Grant and HOME program administrative costs, and the Community Development Department's annual operating budget. The contract procurement required through Municipal Code 3.03 was completed through an executed interagency agreement with San Joaquin County. Environmental Status: Not applicable Strategic Plan Goal: Community Engagement Homeless Response Economic Development & Housing Infrastructure & Parks Fiscal Sustainability, Public Safety or Other Attachment(s): 1. Public Hearing Notice 2. Resolution No. 2023-24, "A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2023/2024" 3. Professional Services included in the Fiscal Year 2023/2024 Budget 4. Resolution No. 2023-25, "A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024" 5. Resolution No. 2023-23, "A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits" 6. Resolution No. 2023-27, "A Resolution of the City Council of the City of Huntington Beach Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Officer, and Municipal Records Manager" 7. Resolution No. 2023-28, "A Resolution of the City Council of the City of Huntington Beach Adopting a Revised General Fund Reserve Policy" 8. Resolution No. 2023-26, "A Resolution of the City Council of the City of Huntington Beach, California Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code" 9. Amendment No. 2 to Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program 10. Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC)for Technical Assistance Services 11.FY 2023/24 Budget Adoption Presentation City of Huntington Beach Page 9 of 10 Printed on 6/15/2023 poweree*LegistarTl' File#: 23-521 MEETING DATE: 6/20/2023 City of Huntington Beach Page 10 of 10 Printed on 6/15/2023 powera3"l3 LegistarTM PUBLIC HEARING CITY OF HUNTING TON BEACH Notice of Public Hearing on the Proposed City Budget for Fiscal Year 2023/2024 Notice is hereby given that a public hearing will be held by the City Council of the City of Huntington Beach for the purpose of considering the City Budget for Fiscal Year 202312024. The Proposed Budget for Fiscal Year 202312024 totals$504,818,053 including General Fund Expenditures of S285,564,240. The public hearing is scheduled in the Council Chambers of the Civic Center,located at 2000 Main Street on Tuesday,June 6,2023 at 6:00pm. The public may obtain copies of the Proposed Budget for Fiscal Year 202312024 from the City's website at http:1iw wr.huntinntonbeachca,gov. All Interested persons are invited to attend to express their opinions for, or against, the Proposed Budget with written or oral comments, Written communications to the City Council should be directed to the Office of the City Clerk at the address below, Further information may be obtained from the Finance Department, 2000 Main Street, Huntington Beach,CA, 92648- 2702 or by telephone(714)536-5630. The City of Huntington Beach endeavors to accommodate persons of handicapped status in the admission or access to,or treatment or employment in,city programs or activities. The City of Huntington Beach is an equal opportunity employer. Dated: May 25,2023 and June 1,2023 City of Huntington Beach By: Robin Estanislau,City Clerk 2000 Main Street Huntington Beach,CA 92648-2702 Telephone: (714)536-5227 httfa hantingfonbeachca.goviHBPubliceomnenis! 318 CONTINUANCE OF PUBLIC HEARING STATE OF CALIFORNIA ) ;` COUNTY OF ORANGE ) SS CITY OF HUNTINGTON BEACH ) NCP I, Robin Estanislau, declare as follows: That I am the City Clerk of the City of Huntington Beach; that at a regular meeting of the City Council/Public Financing Authority of the City of Huntington Beach held Tuesday, June 20, 2023, said public hearing was continued open to an Adjourned Regular Meeting on Monday, June 26, 2023 at 5:00 pm to Request to Consider Adopting Resolution No. 2023-24 to Adopt a Budget for the City for Fiscal Year 2023/2024 and Authorize the Corresponding Appropriation and Transfer of$4.9.Million of AES Reserves and $3.9 Million of Equipment Replacement Reserves and Return to a 12-year Paving Cycle; Resolution No. 2023-25 Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024; Resolution No. 2023-23 Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits; Resolution No. 2023-27 Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Officer, and Municipal Records Manager; Resolution No. 2023-28 to Adopt a Revised General Fund Reserve Policy; Resolution No. 2023-26 Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code; Approve and g:\agendas\agmisc\Pubhear-Continued.doc Authorize the execution of Amendment No. 2 to Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program; and Approve and Authorize the Execution of Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC) for Technical Assistance Services); and that on Wednesday, June 21, 2023 at the hour of 12:30 p.m., a copy of said notice was posted at a conspicuous place near the door at which • the meeting was held. I declare under penalty of perjury that the foregoing is true and correct. Executed on Wednesday, June 21, 2023 at Huntington Beach, California. ROBIN ESTANISLAU, CITY CLERK, CMC by: Senior Deputy Cit ' lerk Posted pursuant to Government Code Section 54950 I declare,under penalty of perjury,that I am employed by the City of Huntington Beach,in the Office of the City Clerk and that I posted this public notice on the AVIS,,Li, posting bulletin board at the Clvi Center on 1)!t?;;i1ef/itiat 12•'� a.m./ Date ( /21I�'-3 I g:lagendaslagmisc\Pubhear-Continued.doc Signature IC2G71.4t /� Senior Deputy City Clerk v City Council/ ACTION AGENDA June 20, 2023 Public Financing Authority Recommended Action: A) Adopt Resolution No. 2023-22, "A Resolution of the City Council of the City of Huntington Beach Concerning the Update of the Local Signal Synchronization Plan for the Measure M (M2) Program"; B) Adopt Resolution No. 2023-29, "A Resolution of the City Council of the City of Huntington Beach Concerning the Status and Update of the Circulation Element, and Mitigation Fee Program for the Measure M (M2) Program"; and C) Adopt the 7-year Capital Improvement Program (Fiscal Years 2023/24 through 2029/30) included as Attachment #4 for compliance with the renewed Measure M eligibility requirements. Approved 7-0 PUBLIC HEARING 14. 23-521 Continued to June 26, 2023 at 5:00 PM with Public Hearing Open - Request to Consider Adopting Resolution No. 2023-24 to Adopt a Budget for the City for Fiscal Year 2023/2024 and Authorize the Corresponding Appropriation and Transfer of$4.9 Million of AES Reserves and $3.9 Million of Equipment Replacement Reserves and Return to a 12-year Paving Cycle; Resolution No. 2023-25 Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024; Resolution No. 2023-23 Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits; Resolution No. 2023-27 Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Officer, and Municipal Records Manager; Resolution No. 2023-28 to Adopt a Revised General Fund Reserve Policy; Resolution No. 2023-26 Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code; Approve and Authorize the execution of Amendment No. 2 to the Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program; and Approve and Authorize the Execution of Professional Services Contract between the City of Huntington Beach and National Council for Community Development(NDC) for Technical Assistance Services Recommended Action: A) Adopt Resolution No. 2023-24, "A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2023/2024" (Attachment 2); and, Page 6 of 9 City Council/ ACTION AGENDA June 20,2023 Public Financing Authority B) Authorize the Professional Services included in the FY 2023/24 budget to be representative of the services projected to be utilized by departments in FY 2023/24 (Attachment 3); and, C) Authorize the appropriation and transfer of the full balance($4.9 million) of the AES Reserve from the General Fund to the AES Mitigation Fund 1284; and, D) Authorize the appropriation and transfer of $3,903,803 from the General Fund Equipment Replacement Reserve to the Equipment Replacement Fund 324; and, E) Approve the return to a 12 year paving cycle; and, F) Adopt Resolution No. 2023-25, "A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024" of $1,171,687,773" (Attachment 4); and, G) Adopt Resolution No. 2023-23, "A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits" (Attachment 5); and, H) Adopt Resolution No. 2023-27, "A Resolution of the City Council of the City of Huntington Beach Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Officer, and Municipal Records Manager" (Attachment 6); and, I) Adopt Resolution No. 2023-28, "A Resolution of the City Council of the City of Huntington Beach Adopting a Revised General Fund Reserve Policy" (Attachment 7) and authorize the City Manager or designee to execute all administrative and budgetary actions necessary to consolidate certain General Fund Assigned Fund Balances to the Economic Uncertainties Reserve in order to meet the City's two-month Emergency Reserve requirement; and, J) Adopt Resolution No. 2023-26, "A Resolution of the City Council of the City of Huntington Beach, California Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code" (Attachment 8); and, K) Approve and authorize the Mayor and City Clerk to execute "Amendment No. 2 to Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program" (Attachment 9); and, Page 7 of 9 City Council/ ACTION AGENDA June 20, 2023 Public Financing Authority L) Approve and authorize the Mayor and City Clerk to execute "Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC)for Technical Assistance Services" (Attachment 10). Supplemental Communication (1) Public Speakers— 1 Approved 7-0 to continue with Public Hearing open to Monday, June 26, 2023 at 5:00 PM ADMINISTRATIVE ITEMS 15. 23-522 ITEM WITHDRAWN FROM CONSIDERATION-- Future Development of 17642 Beach Blvd. B) Provide direction to staff regarding future use of the Site 16. 23-525 Approved Introduction of the Proposed Memorandum of Understanding Between the Huntington Beach Police Management Association (PMA) and the City of Huntington Beach for July 1, 2023 through June 30, 2026. Recommended Action: Approve introduction of the proposed Memorandum of Understanding Between the Huntington Beach Police Management Association and the City of Huntington Beach for the period July 1, 2023 through June 30, 2026. Approved 7-0 17. 23-524 Adopted Resolution No. 2023-31 Approving and Implementing the Memorandum of Understanding (MOU) between the Huntington Beach Police Officers' Association (POA) and the City of Huntington Beach for July 1, 2023, through June 30, 2026; and authorized appropriation of funds. Recommended Action: A) Adopt Resolution No. 2023-31, "A Resolution of the City Council of the City of Huntington Beach Approving and Implementing the Memorandum of Understanding Between the Huntington Beach Police Officers' Association (POA) and the City for July 1, 20231, through June 30, 2026;" and, B) Authorize City Manager or designee to take all administrative and budgetary actions necessary for implementation of Resolution No. 2023-31. Approved 7-0 COUNCILMEMBER ITEMS Page 8 of 9 " "'- �NTi�'CT 2000 Main Street, .. y o� �Y.�;�;;`�� Huntington Beach,CA • City of Huntington Beach 92648 APPROVED 7-0 Z�cF�o � TO CONTINUE WITH =-�yoriifyPUBLIC HEARING OPEN TO JUNE 20, 2023 File #: 23-481 MEETING DATE: 6/6/2023 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Al Zelinka, City Manager VIA: Sunny Han, Acting Chief Financial Officer PREPARED BY: Serena Bubenheim, Acting Assistant Chief Financial Officer Subject: Consider Adopting Resolution No. 2023-24 to Adopt a Budget for the City for Fiscal Year 2023/2024 and Authorize the Corresponding Appropriation and Transfer of$4.9 Million of AES Reserves and $3.9 Million of Equipment Replacement Reserves and Return to a 12-year Paving Cycle; Resolution No. 2023-25 Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024; Resolution No. 2023-23 Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits; Resolution No. 2023-27 Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Officer, and Municipal Records Manager; Resolution No. 2023-28 to Adopt a Revised General Fund Reserve Policy; Resolution No. 2023-26 Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code; Approve and Authorize the execution of Amendment No. 2 to the Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program; and Approve and Authorize the Execution of Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC) for Technical Assistance Services Statement of Issue: The City Charter of the City of Huntington Beach requires a Public Hearing prior to the adoption of the City's annual budget. The City Charter further requires adoption of the annual budget by June 30, 2023, for Fiscal Year (FY) 2023/24. Financial Impact: Proposed Budget: The Fiscal Year 2023/24 Proposed Budget is structurally balanced. The All Funds Proposed Budget equals $508.8 million. The General Fund Proposed Budget totals $285.6 million, with the planned use of $8.8 million in General Fund reserves. Individual departmental and fund-level appropriations are contained in the attachments herein. City of Huntington Beach Page 1 of 10 Printed on 6/1/2023 powered by LegistarT"' File #: 23-481 MEETING DATE: 6/6/2023 Employee Tax Override: Pursuant to Chapter 3.07 of the Municipal Code, the Proposed Budget for Fiscal Year 2023/24 assumes the continuation of 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 $7.9 million in revenue in Fiscal Year 2021/22. This recurring revenue source is included in the Proposed FY 2023/24 Budget. Update to the City's General Fund Reserve Balance Policy: The City desires to maintain a prudent level of reserves and the Government Finance Officers Association (GFOA) recommends a minimum of two months of operating expenditures be set aside for unforeseen events. Staff is recommending consolidating certain General Fund Assignments into the Economic Uncertainties Reserve in order to meet the two-month reserve requirement. Additionally, staff is recommending strengthening the City's Reserve policy to ensure that funds are set aside systematically and used only when truly necessary. Mind OC Contract Extension: Staff is requesting approval to amend the professional services contract with Mind OC for the Be Well HB mobile crisis response program. The City has been awarded federal and state grants (U.S. Department of Health and Human Services and California Dept. of Health Care Services) to offset the cost of the program for FY 2023/24. Funding for future years will be identified in future budgets. National Development Council Contract: Staff is requesting approval to execute a new professional services contract with National Council for Community Development (NDC). Funding for this contract is provided through the annual allocations for the Community Development Block Grant and HOME programs and the Community Development Department's annual operating budget. Recommended Action: A) Adopt Resolution No. 2023-24, "A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2023/2024" (Attachment 2); and, B) Authorize the Professional Services included in the FY 2023/24 budget to be representative of the services projected to be utilized by departments in FY 2023/24 (Attachment 3); and, C) Authorize the appropriation and transfer of the full balance ($4.9 million) of the AES Reserve from the General Fund to the AES Mitigation Fund 1284; and, D) Authorize the appropriation and transfer of$3,903,803 from the General Fund Equipment Replacement Reserve to the Equipment Replacement Fund 324; and, E) Approve the return to a 12 year paving cycle; and, F) Adopt Resolution No. 2023-25, "A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024" of City of Huntington Beach Page 2 of 10 Printed on 6/1/2023 powered by Legislar"" File #: 23-481 MEETING DATE: 6/6/2023 $1,171,687,773" (Attachment 4); and, G) Adopt Resolution No. 2023-23, "A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits" (Attachment 5); and, H) Adopt Resolution No. 2023-27, "A Resolution of the City Council of the City of Huntington Beach Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Officer, and Municipal Records Manager" (Attachment 6); and, I) Adopt Resolution No. 2023-28, "A Resolution of the City Council of the City of Huntington Beach Adopting a Revised General Fund Reserve Policy" (Attachment 7) and authorize the City Manager or designee to execute all administrative and budgetary actions necessary to consolidate certain General Fund Assigned Fund Balances to the Economic Uncertainties Reserve in order to m t the ' two-month Emergency Reserve requirement; and, J) Adopt Resolution No. 2023-26, "A Resolution of the City Council of the City of Huntington Beach, California Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code" (Attachment 8); and, K) Approve and authorize the Mayor and City Clerk to execute "Amendment No. 2 to Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program" (Attachment 9); and, L) Approve and authorize the Mayor and City Clerk to execute "Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC)for Technical Assistance Services" (Attachment 10). Alternative Action(s): A. Instruct City staff regarding changes to be incorporated into the budget and adopt the FY 2023/24 Budget and corresponding actions and resolutions as amended. B. Continue the Public Hearing until June 20, 2023. Analysis: As required by the City Charter, the City Manager submitted the FY 2023/24 Proposed Budget to the City Council on May 7, 2023. The Proposed Budget and the Five-Year Capital Improvement Program (CIP)were also discussed at a City Council Study Session held on May 16, 2023. The purpose of the budget study session was to provide the City Council an opportunity to discuss City of Huntington Beach Page 3 of 10 Printed on 6/1/2023 powered by Legistar'' File#: 23-481 MEETING DATE: 6/6/2023 the Proposed Budget with staff before proceeding with the formal Public Hearing on June 6, 2023. Overview Over the past couple years, the City has come together in an extraordinary way to address the fiscal and public health challenges of the COVID-19 pandemic. Through the leadership and support of the City Council, the City implemented significant cost saving measures without reductions in essential service levels, including a Citywide Separation Incentive Program and reorganization plan, and refinancing of the City's pension debt. As a result of these measures, and numerous other measures taken over the past couple years, we project a $3.8 million dollar General Fund surplus for FY 2022/23. Inclusive of these significant budget measures, the FY 2023/24 Proposed Budget also includes mandated and additional one-time savings to mitigate the City's rising pension costs; prioritizes improvements to the City's facilities, roads and parks; incorporates increased funding for critical programs such as Workers' Compensation and General Liabilities; accounts for increases to the City's contractual obligations and inflationary cost impacts; and includes the addition of 11 positions across various City departments to meet increased demand and bring critical services in-house. The FY 2023/24 Proposed Budget is structurally balanced and totals $508.8 million across All Funds. This reflects a $23.2 million, or 4.4 percent, decrease from the FY 2022/23 Adopted All Funds Budget of $532.0 million. A significant portion of the decrease is due to the one-time redistribution of $29.6 million of American Rescue Plan Act (ARPA) funds to the General Fund in FY 2022/23 for the provision of core governmental services. For FY 2023/24, General Fund revenue is projected at $280.4 million, a $2.8 million, or 1 percent decrease from the FY 2022/23 Adopted Budget.. Major sources of General Fund revenue include Property Tax, Sales Tax, Utility Users Tax, and Transient Occupancy Tax, among others. The largest decrease in General Fund revenue is in Non-Operating Revenue, attributable to the one-time transfer of ARPA funds for general governmental services that was included in the FY 2022/23 Adopted Budget. The largest revenue increase is in Property Tax, with expected revenues totaling $104.2 million due to. gains in assessed property valuations. Franchise and Utility Users Taxes are anticipated at$33.0 million, a 21.8 percent increase, driven by increases in utility prices including gas and electricity. Charges for Current Services is projected to increase $6.4 million due to increased demand for services, including medical transports, recreation classes and building and planning services. The Proposed General Fund Expenditure Budget totals $285.6 million and is supported by revenues of $280.4 million, plus the one-time use of $8.8 million in General Fund Reserves. Use of reserves include the transfer of $3.9 million from the Equipment Replacement Reserve to the Equipment Replacement Fund for the purchase of critical infrastructure and public safety vehicles and equipment. The full balance of the AES Reserve ($4.9 million) is being .transferred to a new AES Mitigation Fund to be used for various Capital Improvement Projects as outlined in the Memorandum of Understanding between the City and AES Southland Development LLC. The Proposed General Fund Budget has no reliance on one-time revenues to fund ongoing City of Huntington Beach Page 4 of 10 Printed on 6/1/2023 powered by LegistarTM File#: 23-481 MEETING DATE: 6/6/2023 operations, which is critical to maintaining the City's financial viability and success and represents a $16.6 million, or 6.2 percent, increase compared to the FY 2022/23 Adopted Budget of$269.0 million. This increase is attributable to higher personnel costs arising from the addition of 11 full time employees, increased Workers' Compensation and overtime costs, and inflationary impacts on normal business activities. The FY 2023/24 Proposed Budget includes 1,002.75 Full Time Equivalents (FTEs); an increase of 11 FTEs across all funds compared to FY 2022/23. The new positions include 1 Deputy Community Prosecutor, 2 Senior Deputy City Attorneys and 1 Senior Legal Assistant in the City Attorney's Office. A Municipal Records Manager is being added to the City Clerk's Office to assist with the citywide centralization of records management, and 1 Graphic Designer and 1 Multi-Media Officer are proposed to oversee the operations of the City's Cable "3" Channel, YouTube Channel and online digital content, and to assist with citywide public information materials in the Office of Communications, bringing part of currently contracted services in-house. Three new positions are included in the Community Development Department to provide timely inspection and plan review services and improve long-term service delivery. One HR Analyst is included in Risk Management to support increased workload, mitigate risk and ensure compliance with regulatory requirements. The FY 2023/24 Proposed Budget was carefully prepared to balance immediate priorities along with the need for long-term investments. The Proposed Budget does not include any financial impacts of agreements with bargaining groups that are under consideration by the City; the City Budget will be amended as bargaining group agreements are approved by the City Council. The City Budget reflects the priorities of the City Council and outlines a plan committed to enriching the quality of life for our residents, businesses, and visitors by increasing funding for core services such as public safety, community & library service programs, and improving the City's infrastructure. Professional Services As established by Administrative Regulation Number 228, each department has submitted a list of professional services that are generally contained in their Proposed Budgets (Attachment 3). Professional services contracts are subject to compliance with Administrative Regulation Number 228 and City Ordinance Chapter 3.03. Paving Cycle In August 2022, staff gave a study session presentation on the Pavement Management Plan (PMP) Overview. At this study session Council provided direction to implement a 9-year zone cycle instead of the previous 12-year zone cycle, of which the last zone of the first 12-year cycle is currently under construction. In working through the CIP process, and working to achieve a balanced budget, staff reviewed the cost/benefit of a 9-year cycle to a 12-year cycle. After this review staff is recommending a 12-year cycle for the following reasons: 1. Over 7 years, the Pavement Classification Index (PCI) would only increase by 1 point (83.4 to 84.4), and both scores are in the "good" condition rating; 2. The construction cost for the 9-zone program totals $2.5 million more annually than the 12- City of Huntington Beach Page 5 of 10 Printed on 6/1/2023 powered by LegistarT" File#: 23-481 MEETING DATE: 6/6/2023 zone program; and 3. The City has seen success with the 12-year zone program which has achieved an overall PCI of 81.6 which indicates the residential streets are currently in "good" condition. Gann Appropriation Limit In November 1979, the California voters approved Article 13B of the State of California Constitution, which allows the City's spending of tax proceeds to increase only by factors from the base year of 1978-1979. In June 1990, Proposition 111 was passed, which changed the way the limit is calculated and is outlined as follows. The City may increase its limit annually in two ways: • By a percentage equal to the increase from the preceding year in county or city population (whichever is greater). • By an amount equal to the change in per capita personal income in California or the change in the assessment roll the preceding year due to the addition of local non-residential new construction (whichever is greater). The proposed appropriation limit for FY 2023/24 was calculated as follows: FY 2022/23 Appropriation Limit $1,126,155,850 Multiplied by percentage grown in State Per Capita Personal Income 1.0444 Multiplied by change in County Population 0.9962 Proposed FY 2023/24 Appropriation Limit $1,171,687,773 Appropriations of revenues controlled by the Gann Limit are primarily in the General Fund. The General Fund proposed appropriation for FY 2023/24 of $285.6 million is significantly below this appropriation limit (Attachment 4). Examples of proceeds of taxes governed by the Gann Appropriation Limit are: property taxes, sales taxes, utility taxes, state subventions, fines, forfeitures, interest revenue on regulatory licenses, user charges, and user fees, to the extent that those proceeds exceed the costs reasonably borne by that entity in providing the regulation, product, or service. Employee Tax Override On July 16, 2012, the City Council adopted an ordinance to permanently cap the tax rate at $0.01500 per $100 of assessed valuation. Therefore, the requested tax levy for FY 2023/24 reflects the same tax rate of$0.01500 per$100 of assessed valuation effective in FY 2012/13 pursuant to Chapter 3.07 of the Municipal Code. Fiscal Year 2023/24 will represent the twelfth year of the application of the permanent cap. The current capped Employee Tax Override results in an approximate $75 annual tax levy for a property assessed at $500,000. Revenue generated from this property tax helps the City fund public safety employee pension costs associated with pre-1978 retirement benefit levels. As such, the tax can only pay for the estimated costs associated with the public safety pension benefit formulas in place prior to the enactment of Proposition 13 on July 1, 1978. Hence, the tax can only pay for City of Huntington Beach Page 6 of 10 Printed on 6/1/2023 powered by Legistar'' File#: 23-481 MEETING DATE: 6/6/2023 retirement benefits for all retired, current, and future public safety City employees that were contracted for prior to July 1, 1978 (such as the 2% at 50 benefit formula for Safety employees in place before enactment of Proposition 13). Based on the most recent CaIPERS actuarial valuations, the cost of pre-1978 retirement benefit levels for Safety personnel totals $26.1 million. As such, the proposed tax rate is recouping only 27 percent of eligible Safety personnel 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 essential services for Fiscal Year 2023/24 (Attachment 5). Public Hearing The City Charter requires that a public hearing be conducted on the City budget prior to adoption. Public Hearing notices have been published per City Charter requirements (Attachment 1). At the close of this hearing, all legal requirements for budget adoption will have been met. Update to the General Fund Reserve Policy The City desires to maintain a prudent level of reserves based on the revenue impacts described above and the City's desire to maintain strong bond ratings to minimize borrowing costs. The Government Finance Officers Association (GFOA) recommends a minimum of two months of operating expenditures be set aside for unforeseen events. Cities with robust fiscal reserve policies are more likely to receive improved bond ratings based on higher scores related to financial management policies and improved fund balance reserves. Staff is recommending consolidating certain General Fund Assignments into the Economic Uncertainties Reserve in order to meet the two-month reserve requirement, as listed below: Balance as of June 30,2022(in thousands) Cityview Replacement $ 1,028 Triple Flip 109 Strategic Initiatives 16,536 Housing Agreement 1,657 Year-End Fair Value 1,983 Total Recommended for Consolidation 21,313 Economic Uncertainties Reserve 26,114 Economic Uncertainties Reserve(revised) $47,427 Two-Month Reserve Requirement $47,215 Additionally, staff is recommending: (1) a minimum of 25% of unrestricted one-time revenues would be transferred to the Section 115 Trust, and (2) strengthening the City's Reserve policy to ensure that funds are set aside systematically and used only when truly necessary and approved by a 6/7th vote of City Council. If Economic Uncertainties Funds are utilized and the level falls below the two-month reserve City of Huntington Beach Page 7 of 10 Printed on 6/1/2023 powered by LegistarTM File#: 23-481 MEETING DATE: 6/6/2023 requirement, the Chief Financial Officer will bring forward a proposed plan to City Council to replenish the fund within three fiscal years. Acknowledge Receipt of Fire Inspections California Health & Safety Code Sections 13146.2 and 13146.3 require all fire departments that provide fire protection services to perform annual inspections in every building used as a public or private school, hotel motel, lodging house, apartment house and certain residential care facilities. These inspections are performed to meet certain building standards. Section 13146.2 of the Code requires departments to report annually to its governing body on its conformance to these requirements. State Senate Bill 1205 requires that effective January 1, 2019, the governing body annually adopt a resolution or other formal document certifying that these inspections were completed and that this document be submitted to the State. During calendar year 2022, the Huntington Beach Fire Department completed annual inspections of all buildings referenced under Sections 13146.2 and 13146.3 of the California Health and Safety Code. This includes the following: #in #of Occupancy Type Jurisdiction Inspections R1s ("hotel, motel, lodging houses") ► 20 I 20 R1s that are also High Rises 3 3 R2s ("apartment houses") ! 2,537 I 2,537 R2 that are also High Rises J 1 1 R2.1 ("supervised residential") i 5 5 R4s ("residential/assisted living") 1 1 Es ("public and private schools") 38 38 This represents inspection rate of 100% of all required facilities. In conformance with Senate Bill 1205, staff recommends the adoption of the resolution shown as Attachment 8. Mind OC Contract Extension Since its successful launch in May 2021, Be Well HB, a pilot mobile crisis response program has become a critical City resource to help with a variety of non-emergency public assistance situations such as mental health crisis, addiction, and homelessness. Council approval is requested to extend the contract with the service provider, Mind OC, for an additional three years until June 30, 2026 (Attachment 9), with an annual contract amount of not-to- exceed $1.5 million. The cost for FY 2023/24 will be 100% covered by a portion of the $500,000 federal grant from the U.S. Department of Health and Human Services and $1.5 million state grant from the California Dept. of Health Care Services. Funding for the two subsequent years will be incorporated into the respective annual operating budgets and program costs may be reduced or eliminated, contingent upon the funding availability in each given year. National Development Council Contract The National Council for Community Development (NDC) provides technical assistance services for housing and economic development activities for the Community Development Department. An City of Huntington Beach Page 8 of 10 Printed on 6/1/2023 powered by LegistarT" File#: 23-481 MEETING DATE: 6/6/2023 existing three-year contract will expire at the beginning of FY 2023/24. Council approval is requested for a new two-year agreement until June 30, 2025 (Attachment 10) with total compensation not to exceed $156,818. Funding for this contract is incorporated in the Community Development Block Grant and HOME program administrative costs, and the Community Development Department's annual operating budget. The contract procurement required through Municipal Code 3.03 was completed through an executed interagency agreement with San Joaquin County. Environmental Status: Not applicable Strategic Plan Goal: Community Engagement Homeless Response Economic Development & Housing Infrastructure & Parks Fiscal Sustainability, Public Safety or Other Attachment(s): 1. Public Hearing Notice 2. Resolution No. 2023-24, "A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2023/2024" 3. Professional Services included in the Fiscal Year 2023/2024 Budget 4. Resolution No. 2023-25, "A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024" 5. Resolution No. 2023-23, "A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits" 6. Resolution No. 2023-27, "A Resolution of the City Council of the City of Huntington Beach Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Officer, and Municipal Records Manager" 7. Resolution No. 2023-28, "A Resolution of the City Council of the City of Huntington Beach Adopting a Revised General Fund Reserve Policy" 8. Resolution No. 2023-26, "A Resolution of the City Council of the City of Huntington Beach, California Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code" 9. Amendment No. 2 to Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program 10. Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC)for Technical Assistance Services 11.FY 2023/24 Budget Adoption Presentation City of Huntington Beach Page 9 of 10 Printed on 6/1/2023 powered by LegistarT'•' File#: 23-481 MEETING DATE: 6/6/2023 • ii City of Huntington Beach Page 10 of 10 Printed on 6/1/2023 powered by Legistarn•' PUBLIC HEARING CITY OF HUNTINGTON BEACH Notice of Public Hearing on the Proposed City Budget for Fiscal Year 2023/2024 j Notice is hereby given that a public hearing will be held by the City Council of the City of Huntington Beach for the purpose of considering the City Budget for Fiscal Year 2023/2024. The Proposed Budget for Fiscal Year 202312024 totals 5506,818,053 including General Fund Expenditures of S285,564,240. The public hearing is scheduled in the Council Chambers of the Civic Center,located at 2000 Main Street on Tuesday,June 6,2023 at 6:00pm. The public may obtain copies of the Proposed Budget for Fiscal Year 2023,12024 from the City's website at hilo://www.huntinotonbeachca,nov, All Interested persons are Invited to attend to express their opinions for, or against, the Proposed Budget with written or oral comments. Written communications to the City Council should be directed to the Office of the City Clerk at the address below. Further information may be obtained from the Finance Department, 2000 Main Street, Huntington Beach, CA, 92648- 2702 or by telephone(714)536-5630. The City of Huntington Beach endeavors to accommodate persons of handicapped status in the admission or access to,or treatment or employment in,city programs or activities. The City of Huntington Beach is an equal opportunity employer. Dated: May 25,2023 and June 1,2023 City of Huntington Beach By: Robin Estanislau,City Clerk 2000 Main Street Huntington Beach,CA 92648-2702 Telephone: (714)536.5227 hthrhhuntingtanbeachca.govcl-laPublicConlm?nlsf { { CONTINUANCE OF PUBLIC HEARING ;Y „, rri _; i; STATE OF CALIFORNIA ) " };,,, COUNTY OF ORANGE ) SS • -s ,= CITY OF HUNTINGTON BEACH ) I, Robin Estanislau, declare as follows: That I am the City Clerk of the City of Huntington Beach; that at a regular meeting of the City Council/Public Financing Authority of the City of Huntington Beach held Tuesday, June 6, 2023, said public hearing was opened and continued to a regular meeting on June 20, 2023 at 6:00pm to Consider Adopting Resolution No. 2023-24 to Adopt a Budget for the City for Fiscal Year 2023/2024 and Authorize the Corresponding Appropriation and Transfer of$4.9 Million of AES Reserves and $3.9 Million of Equipment Replacement Reserves and Return to a 12-year Paving Cycle; Resolution I. No. 2023-25 Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024; Resolution No. 2023-23 Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay for Pre-1978 Employee Retirement Benefits; Resolution No. 2023-27 Amending the City's Classification Plan by Adding the Classifications of Graphic Designer, Multimedia Officer, and Municipal Records Manager; Resolution No. 2023-28 to Adopt a Revised General Fund Reserve Policy; Resolution No. 2023-26 Acknowledging Receipt of a Report Made by the Fire Chief of the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code; Approve and g:\agendas\agmisc\Pubhear-Continued.doc • Authorize the execution of Amendment No. 2 to Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program; and Approve and Authorize the Execution of Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC) for Technical Assistance Services); and that on Wednesday, June 7, 2023 at the hour of 7:45 p.m., a copy of said notice was posted at a conspicuous place near the door at which the meeting was held. I declare under penalty of perjury that the foregoing is true and correct. Executed on Wednesday, June 7, 2023 at Huntington Beach, California. ROBIN ESTANISLAU, CITY CLERK, CMC by: Senior Deputy- ity Clerk Posted pursuant to Government Code Section 54950 I declare,under penalty of perjury,that I am employed by the City of Huntington Beach,in the Office of the City Clerk.a d that I posted this public notice on the osting b Iletin board at the Civi Center on at 4",I.1.S a.m./P.m) Date l0 2 g:\agendas\agmisc\Pubhear-Continued.doc Signature Senior Depu City Clerk City Council/ ACTION AGENDA June 6, 2023 Public Financing Authority 22. 23-461 Approved the Infrastructure Fund Annual Report for FY 2021/22 Recommended Action: Approve the Infrastructure Fund Annual Report for FY 2021/22. Approved 7-0 22. 23-463 Accepted bid and authorized execution of a construction contract with Elecnor Belco Electric, Inc. in the amount of$145,763 for the construction of Fiber Optic Communications to the Central Library, CC-1722, and authorized change orders not to exceed 15 percent Recommended Action: A) Accept the lowest responsive and responsible bid submitted by Elecnor Belco Electric, Inc. in the amount of$145,763; and, B) Appropriate $90,815 of undesignated Public Education and Government Access(PEG) funds to PEG fund business unit 24385101.82800; 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 Works to execute change orders not to exceed a total of 15 percent of the construction contract, or $21,864. Approved 7-0 PUBLIC HEARING 23. 23-481 Adopted Resolution No. 2023-24 to adopt a Budget for the City for Fiscal Year 2023/2024 and authorized the corresponding appropriation and transfer of$4.9 million of AES Reserves and $3.9 million of Equipment Replacement Reserves and return to a 12-year Paving Cycle; Resolution No. 2023-25 establishing the Gann Appropriation Limit for Fiscal Year 2023/2024; Resolution No. 2023-23 levying a Retirement Property Tax for Fiscal Year 2023/2024 to pay for Pre-1978 Employee Retirement Benefits; Resolution No. 2023-27 amending the City's Classification Plan by adding the classifications of Graphic Designer, Multimedia Officer, and Municipal Records Manager; Resolution No. 2023-28 to adopt a revised General Fund Reserve Policy; Resolution No. 2023-26 acknowledging receipt of a report made by the Fire Chief of the Huntington Beach Fire Department regarding the inspection of certain occupancies required to perform annual inspections in such occupancies pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code; approved and authorized the execution of Amendment No. 2 to the Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program; and, approved and authorized the execution of Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC) for Technical Assistance Services Page 7 of 10 City Council/ ACTION AGENDA June 6,2023 Public Financing Authority Recommended Action: A) Adopt Resolution No. 2023-24, "A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2023/2024" (Attachment2); and, B) Authorize the Professional Services included in the FY 2023/24 budget to be representative of the services projected to be utilized by departments in FY 2023/24 (Attachment 3); and, C) Authorize the appropriation and transfer of the full balance ($4.9 million) of the AES Reserve from the General Fund to the AES Mitigation Fund 1284; and, D) Authorize the appropriation and transfer of$3,903,803 from the General FundEquipment Replacement Reserve to the Equipment Replacement Fund 324; and, E) Approve the return to a 12 year paving cycle; and, F) Adopt Resolution No. 2023-25, "A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2023/2024" of $1,171,687,773" (Attachment 4); and, G) Adopt Resolution No. 2023-23, "A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2023/2024 to Pay forPre-1978 Employee Retirement Benefits" (Attachment 5); and, H) Adopt Resolution No. 2023-27, "A Resolution of the City Council of the City of Huntington Beach Amending the City's Classification Plan by Adding the Classifications ofGraphic Designer, Multimedia Officer, and Municipal Records Manager" (Attachment 6); and, I) Adopt Resolution No. 2023-28, "A Resolution of the City Council of the City of Huntington Beach Adopting a Revised General Fund Reserve Policy" (Attachment 7) andauthorize the City Manager or designee to execute all administrative and budgetary actions necessary to consolidate certain General Fund Assigned Fund Balances to the Economic Uncertainties Reserve in order to meet the City's two-month Emergency Reserve requirement; and, J) Adopt Resolution No. 2023-26, "A Resolution of the City Council of the City of Huntington Beach, California Acknowledging Receipt of a Report Made by the Fire Chiefof the Huntington Beach Fire Department Regarding the Inspection of Certain Occupancies Required to Perform Annual Inspections in such Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code" (Attachment 8); and, Page 8 of 10 City Council/ ACTION AGENDA June 6, 2023 Public Financing Authority K) Approve and authorize the Mayor and City Clerk to execute"Amendment No. 2 to Agreement between the City of Huntington Beach and Mind OC for Pilot Mobile Crisis Response Program" (Attachment 9); and, L) Approve and authorize the Mayor and City Clerk to execute "Professional Services Contract between the City of Huntington Beach and National Council for Community Development (NDC) for Technical Assistance Services" (Attachment 10). Supplemental Communication (2 emails) Speaker(1) Approved 7-0 to continue with public hearing open to June 20, 2023 ADMINISTRATIVE ITEMS 24. 23-488 Approved introduction of the proposed Memorandum of Understanding Between the Huntington Beach Police Officers' Association and the City of Huntington Beach for July 1, 2023 through June 30, 2025 Recommended Action: Approve introduction of the proposed Memorandum of Understanding Between the Huntington Beach Police Officers' Association and the City of Huntington Beach for the period July 1, 2023 through June 30, 2025. Approved 7-0 COUNCILMEMBER ITEMS 25. 23-480 Approved item submitted by Council Member Burns - Request to form a Charter Review Ad Hoc Council Committee to recommend proposed Charter amendments Recommended Action: A) Designate Mayor Tony Strickland to lead an ad hoc committee of himself and two other City Council Members of his choice to work with the City Attorney's Office, if necessary, and to return to City Council at a regular City Council meeting in July of this year with recommendations for proposed Charter Amendments; and, B) It is also requested that the City Clerk, who is our local elections official, provide a timeline of events or deadlines the City is required to meet in order to get any proposedCity Charter Amendments on the ballot for the March 5, 2024 election. Approved 4-3(Kalmick, Moser, Bolton-No) 26. 23-497 Approved item submitted by Council Member McKeon - Decertification of Beach/Edinger Corridor Specific Plan Environmental Impact Report Recommended Action: Direct the City Attorney and City Manager to return to the City Council with a plan for decertification of the BECSP EIR and vacate all associated findings. Approved 4-3(Kalmick, Moser, Bolton-No) Page 9 of 10