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HomeMy WebLinkAbout6/6/23 Continue with Public Hearing (PH) Open to 6/20/23 - C (2) 2000 Main Street, oE.:;a o-,r�•:a Huntington Beach,CA 14 s 92646 City of Huntington Beach APPROVED 7-0 `9 ' WITH IDENTIFIED �F F�Qy>' 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 powered2olj LegistarT'" 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 Page 2 of 14 Printed on 6/23/2023 powerec2?'LegistarT" )1-"-J-fie -0, 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, * E) Approve the return to a 12 year paving cycle; and, )fr 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, IE 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 powerec@lp Legistar * 4 �t 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 powered LegistarT" 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 powere&'Legistarn•' 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 7,179,520 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. City of Huntington Beach Page 6 of 14 Printed on 6/23/2023 powered'LegistarT" File#: 23-566 MEETING DATE: 6/26/2023 REVENUE OPPORTUNITIES., . No, Revenue•Generating.Service. Type .. . Dept Amount 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 REDUCTIONS No i ' .. .. Cost Reduct>lons '• � _ 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 powereo27y LegistarT" File#: 23-566 MEETING DATE: 6/26/2023 BUDGET REDUCTIONS' „ Cosi~:Reductions_ Type Dept ;. . Am'ount 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 powerec2A'LegistarT'•c File#: 23-566 MEETING DATE: 6/26/2023 I 23 I Defund 1 Care Manager I Ongoing I Svcs I 24,5501 BUDGET`REDUCTIONS No Cost Reductions .; 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 powered LegistarTM • 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 bypercentage grown in State Per Capita Personal Income 1.0444 p 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 powerecaq Legistar'm 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 th.e 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 powered3lj Legistar1" 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: #in #of— Occupancy Type Jurisdiction Inspections_ R1s ("hotel, motel, lodging houses") 20 20 R_1s that are also High Rises 3 —. 3 _ R2s ("apartment houses") ( 2,537 2,537 R2 that are also High Rises II 1 I 1 R2.1 ("supervised residential") i 5 5 R4s ("residential/assisted living") 1 ' 1 Es ("public and private schools") 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 'Legistari" 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 powered LegistarT'" 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 HUNTINGTON BEACH Notice of Public Hearing on the Proposed City Budget for Fiscal Year 2023r2024 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 2023/2024 totals$$508,818,053 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 2023t2024 from the City's website at htio:;hw ,huntingtonheachca.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)536.6227 httoJhuntinotonbeachca_gouiNBPubliceomn• nis1 { If } tI 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 — 6:00 PM 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 preccsc for BCC d4ccsted-ass4gements exceeding four(4) hours 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. 23-568 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 • 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. WHEREAS, California Health & Safety Code Section 13146.4 was added in 2018, and became effective on September 27, 2018; and, WHEREAS, California Health& Safety Code Sections 13146.2 and 13146.3 requires all fire departments, including the Huntington Beach Fire Department, 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 for compliance with building standards, as provided and, WHEREAS, California Health & Safety Code Section 13146.2 requires all fire departments, including the Huntington Beach Fire Department, that provide fire protection services to report annually to its administering authority on its compliance with Sections 13146.2 and 13146.3 and, • WHEREAS,the Council of the City of Huntington Beach intends this Resolution to fulfill the requirements of the California Health & Safety Code regarding acknowledgment of the Huntington Beach Fire Department's compliance with California Health and Sections 13146.2 and 13146.3. NOW,THEREFORE,BE IT RESOLVED by the Council of the City of Huntington Beach that said Council expressly acknowledges the measure of compliance of the Huntington Beach 1 Resolution No. 2023-26 Fire Department with California Health and Safety Code Sections 13146.2 and 13146.3 in the area encompassed by the City of Huntington Beach, as follows: A. EDUCATIONAL GROUP E OCCUPANCIES: Educational Group E occupancies are generally those public and private schools, used by more than six persons at any one time for educational purposes through the 12th grade. Within the City of Huntington Beach,there lie thirty-eight(38)Group E occupancies,buildings,structures and/or facilities. During calendar year 2022, the Huntington Beach Fire Department completed the annual inspection of thirty-eight(38) Group E occupancies,buildings, structures and/or facilities. This is a compliance rate of 100 %for this reporting period. Additional items of note regarding this compliance rate can be found in the accompanying staff report for this resolution. 'F B. RESIDENTIAL GROUP R OCCUPANCIES: Residential Group R occupancies, for the purposes of this resolution, are generally those occupancies containing sleeping units,and include hotels,motels,apartments(three units or more), etc. as well as other residential occupancies (including a number of residential care facilities). These residential care facilities have a number of different sub-classifications, and they may contain residents or clients that have a range of needs, including those related to custodial care, mobility impairments, cognitive disabilities, etc. The residents may also be non-ambulatory or bedridden. Within the City of Huntington Beach, there lie twenty-three (23) R1, two thousand five hundred thirty eight(2,538)Group R2,five(5)R2.1 and one(1)R4 occupancies of this nature. During calendar year 2022, the Huntington Beach Fire Department completed the annual inspection of all R1, R2.1 and R4 occupancies, buildings, structures and/or facilities. The 2 Resolution No. 2023-26 Department completed two thousand five hundred sixty seven (2,567) inspections. This is a compliance rate of 100 %for this reporting period. Additional items of note regarding this compliance rate can be found in the accompanying staff report for this resolution. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 26th day of June , 2023. 4'1 tdOLID Mayor REVIEWED A D APPROVED: APPROVED AS FORM: City ger City Attorney kW ITIATED AND APPROVED: Fire Chief ;J Attachments: Exhibit "1" —Staff Report 3 Resolution No. 2023-26 Exhibit 1 CY2022 Staff Summary SB 1205: Fire Protection Services: Inspections: Compliance Reporting The State legislature requires the chief of every fire department to conduct annual inspections on all public or private-schools, hotel, motel, lodging house, apartment house, and certain.residential care.facilities (Health and Safety Code 13146.3, 13146.2, 17921(b)). Beginning on January 1, 2019, every fire department must report on these.State mandated annual inspections (Health and Safety.Code 13146.4, Added byStats. 2018, Ch. 854, Sec. 1. (SB 1205) • Effective January. 1, 2019). This report must be in the form of a resolution or other formal document. Definitions of key terms: R1 Residential occupancies with transient (<30 days),occupants • Boarding houses (transient) no more than 10 occupants - • Congregate residents (transient) no more than 10 occupants • Hotels, motels R2 Residential — Residential occupancies containing sleeping units or more than two dwelling units where the occupants are primarily permanent in nature, including apartments R2.1 —24-hour living facilities may contain >6 non-ambulatory,and/or bedridden clients. • Assisted living facilities such as residential care facilities, residential care facilities for the elderly (RCFEs), adult residential facilities, group homes, etc. • Social rehabilitation facilities such as halfway houses, community correctional centers,. community treatment programs, alcoholism or drug abuse recovery or treatment R4— 24-hour living facilities more than six ambulatory clients, but not more than 16 persons; maximum of six non-ambulatory or bedridden clients • Assisted living facilities such as residential care facilities, residential care facilities for the elderly (RCFEs), adult residential facilities, group homes, etc. • Social rehabilitation facilities such as halfway houses, community correctional centers, community treatment programs, alcoholism or drug abuse recovery or treatment E—Facilities used for educational purposes through the 12th grade. For purposes of reporting, the data presented does not include occupancies designated as Es that are day cares or that are facilities located in Es (e.g., YMCA after school care). Procedures In order to meet this mandate,the Community Risk Reduction Division assigns annual inspections to Community Risk Reduction staff and to Fire Companies. Inspections are logged into the Accela records management system. In 2022, all R1, R2, R2.1, R4, and Es were inspected.. • Data #in #of L Occupancy Type Jurisdiction Inspections I Ris("hotel'motel,:lodging houses")i 20 20 i_ R1s that are also Hi _Rises� 3 3 R2s ("apartment houses") 2,537 2,537 R2 that are also High Rises 1 1 R2.1 ("supervised:residential") 5 5 (-R4s ("residential/assisted living") { 1 1 1 Es("public and private:schools":) 38 1 38 II ATTACHMENT 1—DATA LIST List of 2,538 R2 (multi family)is available upon request. R1 11/23/2021 FMF-003189 [RD 4014]HUNTINGTON SURF MOTEL 720 PACIFIC COAST HWY MF 12/22/2021 FMF-023343 [RD 3416]Navigation Center 17631 Cameron Ln 11/26/2021 FMF-023347 [RD 3716]**BEST WESTERN 19360 Beach Blvd REGENCY INN** 11/4/2021 FMF-023348 [RD 3516]STARLIGHT INN 18382 BEACH BLVD 11/5/2021 FMF-023350 [RD 3115]COMFORT SUITES HOTEL 16301 BEACH BLVD 11/22/2021 FMF-023351 [RD 3516]BEACH INN MOTEL 18112 BEACH BLVD 7/2/2021 FMF-023352 [RD 4013]SUN&SANDS MOTEL 1102 PACIFIC COAST HWY 11/9/2021 FMF-023353 [RD 3715]HUNTINGTON SUITES 7971 YORKTOWN AVE MOTEL 11/12/2021 FMF-023354 [RD 3206]BEST WESTERN HARBOUR 16912 PACIFIC COAST HWY INN AND SUITES 11/12/2021 FMF-023355 TRAVELODGE OCEANFRONT 17205 PACIFIC COAST HWY 11/12/2021 FMF-023356 OCEAN SURF INN AND SUITES 16555 PACIFIC COAST HWY 11/12/2021 FMF-023357 [RD 3105]SURF CITY INN 16220 PACIFIC COAST HWY 11/10/2021 FMF-023358 [RD 3115]SPRINGHILL SUITES 7872 EDINGER AVE MARRIOTT 11/19/2021 FMF-023359 [RD 3015] HOTEL EUROPA 7561 CENTER AVE 46 12/12/2021 FMF-023360 [RD 2810]EXTENDED STAY AMERICA 5050 SKYLAB RD #494 11/12/2021 FMF-023361 [RD 3105]777 MOTOR INN 16240 PACIFIC COAST HWY 11/12/2021 FMF-023362 [RD 3105]OCEAN VIEW MOTEL 16196 PACIFIC COAST HWY 9/27/2021 FMF-023363 [RD 4115] HYATT REGENCY 21500 PACIFIC COAST HWY HUNTINGTON BEACH RESORT 11/16/2021 FMF-023364 SHOREBREAK HOTEL AT THE 500 PACIFIC COAST HWY STRAND 11/12/2021 FMF-023470 SUNSET SUITES 16401 PACIFIC COAST HWY High Rises 11/3/2021 FMF-000408 [RD 3015]HOTEL HUNTINGTON 7667 Center Ave MF BEACH 12/15/2021 FMF-006768 [RD 4115]WATERFRONT HILTON 21100 Pacific Coast Hwy BEACH RESORT 12/2/2021 FMF-017682 [RD 4115]PASEA HOTEL&SPA 21080 Pacific Coast Hwy MF R2.1 8/25/2021 FMF-006201 [RD 3314]MERRILL GARDENS 17200 GOLDENWEST ST MF RETIREMENT HOME 6/14/2021 FMF-023471 [RD 3615]BEACH CITY SENIOR LIVING, 18851 Florida St LLC DBA SEA CLIFF ASSISTED LIVING 11/12/2021 FMF-001407 [RD 3615]HUNTINGTON TERRACE MBK 18800 FLORIDA ST MF SENIOR LIVING 5/19/2021 FMF-020256 OAKMONT SR LIVING APARTMENTS 18922 Delaware St MF 11/8/2021 FMF-008072 [RD 3714]SUNRISE ASSISTED LIVING 7401 YORKTOWN AVE MF • R4 • 10/7/2021 FMF-023416 [RD 3414] HB YOUTH 7291 TALBERT AVE • SHELTER/WAYFINDERS E 9/21/2021 FMF-023435 LIBERTY CHRISTIAN SCHOOL 7661 WARNER AVE A 9/28/2021 FMF-023437 [RD 3212]SPRING VIEW MIDDLE SCHOOL 16662 TRUDY LN 9/21/2021 FMF-023438 [RD 2812]CLEGG ELEMENTARY SCHOOL 6311 LARCHWOOD DR 9/23/2021 FMF-023439 STACEY MIDDLE SCHOOL 6311 LARCHWOOD 9/28/2021 FMF-023449 [RD 3012]CIRCLE VIEW ELEMENTARY SCHOOL 6261 HOOKER DR 9/27/2021 FMF-023450 • .[RD,3115]VISTA VIEW MIDDLE SCHOOL INTERIM 7721 JULIETTE LOW DR .CAMPU.S. 10/7/2021 FMF-023453 • [RD.3315],OAKVIEWSCHOOL 17241 OAK LN 10/13/2021 FMF-023454 [RD 3314]OCEAN VIEW HIGH SCHOOL 17071 GOTHARD ST 10/12/2021 FMF-023455. [RD 2712]HEBREW. ACADEMY SCHOOL 14401 WILLOW LN 10/4/2021 FMF-023456 [RD 3113]COLLEGE:VIEW ELEMENTARY 6582 LENNOX DR SCHOOL • 9/29/2021 FMF-023466 [RD 3313]GOLDEN VIEW SCHOOL 17251 GOLDEN VIEW Ln 10/7/2021 FMF-023468 ST BONAVENTURE SCHOOL 16390 SPRINGDALE ST 11/30/2021 FMF-023433 [RD 4016]JOHN R PETERSON ELEMENTARY 20661 FARNSWORTH LN _ —SCHOOL 11/4/2021 FMF-023434 [RD 4019]HUNTINGTON CHRISTIAN SCHOOL 9700 LEVEE DR 11/2/2021 FMF-023441 [RD 4118]EDISON HIGH SCHOOL 21400 MAGNOLIA ST 10/13/2021 FMF-023442 [RP 4218]EADER SCHOOL K-5 9291 BANNING AVE 11/16/2021 FMF-023444 [RD..3917]:S A.MOFFETT ELEMENTARY SCHOOL 8800 BURLCREST DR 12/15/2021 FMF-023445. [RD.3918]SAINTS SIMON&JUDE SCHOOL 20400 MAGNOLIA ST 10/28/2021 FMF-023446. [RD.:39.19]:HAWES.:ELEMENTARY SCHOOL 9682 YELLOWSTONE DR :[RALPH.'E.1 11/17/2021 FMF-023447. '[RD 3820]P.EGASUS SCHOOL 19692 LEXINGTON LN 12/21/2021 FMF-023448 [RD 3819]OKA SCHOOL 9800 YORKTOWN AVE 12/6/2021 FMF-023458 [RD 3718]TALBERT MIDDLE SCHOOL 9101 BRABHAM DR 11/29/2021 FMF-023465 [RD 3817] NEWLAND SCHOOL 8787 DOLPHIN DR 11/2/2021 FEO-003311 [RD 4118]EDISON HIGH SCHOOL 21400 MAGNOLIA ST 9/29/2021 FMF-023431 [RD 3413]MESA VIEW MIDDLE SCHOOL 17601 AVILLA LN 10/21/2021 FMF-023432 . [RD.3613]SEACLIFF'ELEMENTARYSCHOOL 6701 GARFIELD AVE 11/1/2021 FMF-023457 [RD 3914]AGNES.L SMITH ELEMENTARY 770 17TH ST :SCHOOL . . • 12/1/2021 FMF-023460. [RD.3.412]HQP.E.VIEW;ELEMENTARY,SCHOOL 17622 FLINTSTONE LN 11/15/2021 FMF=023436. [RD:331.1]MARINE VIEW MIDDLE SCHOOL 5682 TILBURG DR 10/19/2021 FMF-023452 .... [RD.3208]HARBOUR VIEW.ELEMENTARY 4343 PICKWICK CIR SCHOOL-:... 10/14/2021 FMF-023459 [RD 3011]MARINA HIGH SCHOOL 15871 SPRINGDALE ST 10/5/2021 FMF-023451 [RD 3316]LAKE VIEW SCHOOL 17451 ZEIDER LN 9/22/2021 FMF-023464 SCHROEDER ELEMENTARY SCHOOL 15151 COLUMBIA LN 11/2/2021 FMF-023461 [RD 3111]CARDEN CONSERVATORY 5702 CLARK DR ELEMENTARY/PRESCHOOL 11/2/2021 FMF-023462 [RD 3111]MONTESSORI CHILD DEVELOPMENT 5702 CLARK DR CENTER 11/1/2021 FMF-023463 [RD.3.110]VILLAGE VIEW.ELEMENTARY SCHOOL 5361 SISSON DR 11/12/2021 FMF-023469 LEPORT:SC.HOOL.&CHILDRENS CENTER 16081 WAIKIKI LN • 10/28/2021 FMF-023440 [RD 3109]GRACE LUTHERAN SCHOOL 5172 MCFADDEN AVE • 3 u f Res. No. 2023-26 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, ROBIN ESTANISLAU, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at an adjourned regular meeting thereof held on June 26, 2023 by the following vote: AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, Burns NOES: None ABSENT: None ABSTAIN: None City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California 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 ��NTING1 2000 Main Street, o ��r•go ,fn?� Huntington Beach,CA Via.v 92648 cs Cityof Huntington Beach g APPROVED 7-0 S z. '=��o' TO CONTINUE WITH couNr?�;� ' 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 powere3Q. 'Legistarm 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 powere3Qa'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 powere3lq LegistarT'•' 1 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 andiinflationary 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 powerenli Legistar"' 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.la3l LegistarT1' 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 powereabl 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 powerel 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 2,537 R2 that are also High Rises 1 1_ R2.1 ("supervised residential") t w^—~ 5 5 R4s ("residential/assisted living") 1 1 Es ("public and private schools") 38a 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 powereely 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 powere3l LegistarTI•" File #: 23-521 MEETING DATE: 6/20/2023 City of Huntington Beach Page 10 of 10 Printed on 6/15/2023 powere b''LegistarT" PUBLIC HEARING CITY OF HUNTINGTON BEACH Notice of Public Hearing on the Proposed City Budget for Fiscal Year 202312024 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 8506,818,053 inciudirg 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 2023t2024 from the Cily's website at htfix/Avww.Muntinetonboachca.aov. 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 t,2023 City of Huntington Beach By: Robin Estanisiau,City Clerk 2000 Main Street Huntington Beach,CA 92648-2702 Telephone: (714)536-5227 htteihuntingtanbeach,cagoviHBFublicComrrnist 318 CONTINUANCE OF PUBLIC HEARING -41 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF HUNTINGTON BEACH ) N I C7+ t 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:\age ndas\agmisc\Pubhear-Continued.doc li 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 Jerk 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 ti ti3;r,&, posting bulletin board at the Clvl ' Center on 1V/1(ff-it/As/at 11t'fi1iAjat IZ.^v a,m,/ Date (1Iz1 <3 4 g:\agendaslagmisc\Pubhear-Continued.doc Signature ,(2UIli41/4 r%7{1, Senior Deputy City Clerk r' r I 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. ) Reedyc and file thi6 ort; and 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 -'0NTINcr 2060 Main Street, D o:...; , Huntington Beach92648 ,CA = � City of Huntington Beach APPROVED 7-0 F �\�oe i TO CONTINUE WITH DDyNTY�Hr� ,,,. .. PUBLIC 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 Legistarm 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 LegislarT' 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 GeneralFund 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 LegistarT1' 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 LegistarT1' 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 LegistarTt' 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 LegistarT' 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 i #of Occupancy Type Jurisdiction I— Inspections R1s ("hotel, motel, lodging houses") i 20 I 20 R1s that are also High Rises 3 3 R2s ("apartment houses") i 2,537 ( 2,537 R2 that are also High Rises 1 ( 1 R2.1 ("supervised residential") € 5 R4s ("residential/assisted living") 1 1 f Es ("public and private schools") F 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 LegistarlM 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 City of Huntington Beach Page 10 of 10 Printed on 6/1/2023 powered by LegistarTn PUBLIC HEARING CITY OF HUNTINGTON BEACH Notice of Public Hearing on the Proposed City Budget for Fiscal Year 2423112024 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$506,818,053 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:llwww.huntinatonbeachca,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 hrtnhhuntingtanbe2cbca.gwcHBPublicCommanisf CONTINUANCE OF PUBLIC HEARING • `t= 1 {. 7 � 'rt Z7 STATE OF CALIFORNIA ) • . COUNTY OF ORANGE ) SS 'x 7:4 ;,t 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 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:\agendaslagmisc\Pubhear-Continued•doc II 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 YI lf-mac—, Gt_ by: Senior Deput 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 1''3-1.S a.m. pm. Date l0 2 g:\agendas\agmisc\Pubhear-Continued.doc Signature Senior Deput 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 formapproved 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 Nor 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