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Home My WebLink AboutCity Manager's Report - Mid-Year Budget Update (2) aJTiNGT�2 2000 Main Street, of Huntington Beach,CA F9s 92648 City of Huntington Beach 0 Cob,".'�A;\�o. File #: 25-215 MEETING DATE: 3/18/2025 Subject: Mid-Year Budget Update Orly ac /egfrat- City of Huntington Beach Pa of 1 Printed on 3/12/2025 powered by Legistar^" 38 1 11N .„,,,,,,,....,,,,, ,- ... 0N G 704, \ ••••• -ORP O RA74p \ • r - %•. FY 2024/25 Mid-Year _ ��,) ; S Budget Update ._ . 4-, . '!�''°'�; City Council Meeting - - _- • _ . ' _c - - 0. • v March 18, 2025 en ..• 1 7 1 9 0 s 1 '••••• ‘Nc'' 0 C 0 � 0 C P NTH! �/ City Budget and Financial Position - FY 2023/24 The City ended FY 2023/24 with a $2.7 million General Fund surplus. Descriptio 111111111111111 In Thousands Revenue (Recurring) $290,289 Revenue (One-Time) * 2,276 Planned Use of Reserves 4,900 Total Sources of Funds $297,465 Expenditures less UAL 266,694 CaIPERS UAL 4,643 POB Payment 13,255 One-Time Expenditures** 6,038 Total Expenditures $290,630 Other Restricted Changes in General Fund Balance*** 4,119 General Fund (Fund 100) Surplus $2,716 * FY 23/24 one-time revenue consists of $2.3M for Emerald Cove Superior Court Judgment ** Includes $4.9M for AES Transfer and $1.1M Transfer of 50% of Emerald Cove settlement to the General Liability Fund *** Includes adjustments to YE Market Value and set-asides for Ocean View Estates and General Plan Maintenance City Budget and Financial Position - FY 2024/25 The California unemployment rate increased slightly from 5.3% in September to 5.4% in October 2024, a full percentage point above pre-pandemic levels. Economic uncertainty stemming from higher business operating costs and potential tariffs could exert upward pressure on prices, driving down sales transactions. • Property tax revenues, the City's largest General Fund revenue source (35.8%), remains strong, with a 4.5% citywide growth in value in the 2024-25 assessment roll. • Sales tax revenues, the City's second largest General Fund revenue source (17.7%), is projected to decline from the budgeted amount of $53.5 million. Revised projections based on Q4 2024 will be available in the upcoming weeks. • In October 2024, the City was awarded a $5 million settlement from Amplify for the 2021 Oil Spill. City Projected Financial Position - FY 2024/25 Description I In housands Revenue (Recurring) $293,540 Revenue (One-Time) * 10,877 Planned Use of Reserves ** 1,890 NOTE: City Council is reviewing the City's Reserve Policies. The $2.3M surplus Total Sources of Funds $306,307 shown above illustrates the year-end Expenditures less UAL 274,598 surplus should the $4M Oil Spill CaIPERS UAL 5,215 Settlement revenues be used to cover recurring General Fund expenditures. POB Payment 13,106 One-Time Expenditures *** 11,090 Total Expenditures $304,009 General Fund (Fund 100) Surplus $2,298 * FY 24/25 one-time consists of the General Fund portion of the first payment of the Waterfront Loan Settlement ($6.9M) and the Oil Spill Settlement ($4M). ** Planned use of reserves includes YTD approved use of HB Recovery Reserves for the Oil Well Abandonment Project. *** One-time expenditures includes transfers out of the Waterfront Loan Settlement ($6.9M), transfers out of 25% of the Oil Spill Settlement to the Section 115 Trust ($1M) per the City's current Reserve Policies, and estimated costs for the Special Election ($1.3M). General Fund Long -Term Financial Plan 9.5°f° CaIPERS Return FY23/24 Actual Projected Projected Projected Projected Projected (in thousands) FY23/24 FY24/25 FY25/26 FY26/27 Y27/28 FY28/29 Revenue (Recurring) 290,289 293,540 296,455 303,967 311,720 320,019 Revenue (One-Time)* 2,276 10,877 - - - - Planned Use of Reserves 4,900 1,890 - - - - Total Sources of Funds 297,465 306,307 296,455 303,967 311,720 320,019 Expenditures less UAL 266,694 274,598 282,175 290,563 297,958 304,813 CaIPERS UAL ** 4,643 5,215 10,305 13,290 16,262 19,222 POB Payment 13,255 13,106 12,750 12,537 12,384 12,229 One-Time Expenditures 6,038 11,090 - - - - Total Expenditures 290,630 304,009 305,230 316,390 326,604 336,264 Restricted Reserves 4,119 - - - - - Surplus/(Deficit) $2,716 $2,298 ($8,775) ($12,423) ($14,884) ($16,245) * FY 23/24 one-time revenue consists of $2.3M for Emerald Cove Superior Court Judgment. FY 24/25 one-time consists of the General Fund portion of the first payment of the Waterfront Loan Settlement. ** Future CaIPERS UAL Costs are estimated using the most recent CaIPERS investment return of 9.5% in FY 23/24. ft 1.3 kteri ••• _ T19177'4' •-• , • .•t!illia - - • Questions ? . • er - - -• _ - . - - •.4 - "Sa"-; . • - - • • , •"Ar471... 'at*. ••leftc% •