1 REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Al Zelinka, City Manager
VIA: Al Zelinka, City Manager
PREPARED BY: Catherine Jun, Deputy City Manager
Subject:
..title
City Council discussion of potential Charter amendments proposed by the Charter Ad Hoc Committee and staff; opportunities to propose and discuss additional amendments to be considered for the March 5, 2024 Statewide Primary Election
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Statement of Issue:
NOTE: A PDF version of this report is attached, in the event that the tables and images do not display properly on the reader’s screen.
On September 5, 2023, City Council authorized four Special Meetings scheduled on September 14, 21, 28 and October 5 to gather public feedback and consider potential Charter amendments. During the first meeting, City Council received public feedback and also requested impact analyses for potential amendments, including those proposed by the Ad Hoc Committee and staff, which are outlined in this report.
Financial Impact:
On September 5, 2023, staff provided initial estimates to place the three initially proposed ballot measures on the March 2024 Primary Election. After conducting additional research and conferring in depth with the Orange County Registrar of Voters (ROV), the staff is providing a closer estimate as follows:
Projected Cost Range Includes
Consolidated Election $318,928 $383,128 Cost of the consolidated election, postage for vote by mail ballot returns, cost recovery for
the purchase of any new election equipment
3 Ballot Measures (as
previously discussed on
9/5/23)
$51,000 $76,500 Based on the number of pages required for each measure at $8,500 per 2 pages and
3,000 words (the range on the left is based on
4-6 pages per measure)
Total $369,928 $459,628
Recommended Action:
..recommendation
A) Discuss potential Charter amendments proposed by the Ad Hoc Committee and City staff; propose and discuss additional amendment as needed; and
B) Receive and file this report.
..end
Alternative Action(s):
Do not approve one or more recommended action; direct staff accordingly.
2 Analysis:
During the first Special Meeting on September 14, City Council requested impact analyses for potential amendments proposed by the Ad Hoc Committee, which are outlined in the order they appear in the Charter:
Section 300. Recommended by the Ad Hoc Committee on 8/1/23
Preliminary Operational Analysis:
Per Charter Section 300, four Council Members and the City Attorney are elected at large in the midterm or gubernatorial election cycle, once every four years during even years, including 2022, 2026 and so forth. Similarly, the remaining 3 Council Members, City Clerk, and City Treasurer are elected at large in the Presidential election cycle once every four years in alternating even years that include 2024, 2028, etc.
The proposed Amendment would move the City Clerk and City Treasurer elections from the Presidential to the gubernatorial cycle beginning in 2030, increasing the total number of elected positions on that cycle from 5 to 7 total. The Presidential election cycle would then only have 3 elected positions on the ballot. The overall effect of the amendment is outlined in the table below. However, the impacts are inconclusive at this time.
Election Year Current Charter Proposed Amendment
3 2020
(Presidential Cycle)
5 elective offices on the ballot
for:
City Council (3),
City Clerk,
City Treasurer
2022
(Gubernatorial Cycle)
5 elective offices on the
ballot for:
City Council (4)
City Attorney (1)
2024
(Presidential Cycle)
5 elective offices on the ballot for:
City Council (3),
City Clerk* and
City Treasurer*
*These positions would be elected to a 6-year
term for this cycle only and would
permanently revert to a 4-year term in 2030.
2026
(Gubernatorial Cycle)
City Council (4)
City Attorney
2028 and every 4th year
thereafter
(Presidential Cycle)
City Council (3)
2030 and every 4th year
thereafter
(Gubernatorial Cycle)
City Council (4)
City Clerk
City Treasurer
City Attorney
The final proposed amendment in Section 300 would adjust the commencement date of a new Council Member’s term from the first Monday to the first Council Meeting following certification of election. This is partly an administrative change, as the City Council has moved its meetings from Mondays to Tuesdays. Furthermore, since the first Monday could arguably occur before certification, the amendment would assure that the election results are certified first.
Preliminary Fiscal Analysis:
There are no known significant fiscal impacts at this time.
4 Section 303(a). Recommended by the Ad Hoc Committee on 8/1/23
Preliminary Operational Analysis:
Per the Charter, City Council must hold meetings at least twice per month. However, meetings cannot be held without a quorum, as governed by the California Brown Act. The amendment references this quorum to clarify this exception to the two-meeting rule. The amendment also permits the Mayor or majority of Council Members to cancel meetings.
As part of this amendment, the City Council could consider outlining the circumstances or limiting the number of cancelations per year in an ordinance, resolution, or the Council Manual for greater clarity.
Preliminary Fiscal Analysis:
There are no known fiscal impacts associated with this amendment.
Section 304(b). Recommended by the Ad Hoc Committee on 8/1/23
Preliminary Operational Analysis:
Per the City Attorney’s Office, striking the final sentence in Section 304(b) clarifies the attorney-client role(s) between the Office and the City Council, and makes it more consistent with State law that defines the attorney- client relationship.
Preliminary Fiscal Analysis:
There are no known fiscal impacts.
5 Section 309. Recommended by Council Member McKeon on 8/1/23
6 Preliminary Operational Analysis:
Per Council discussion held on 8/1/23, the intent of this Amendment is to prevent retaliation by a Council majority upon any of the 3 elected Charter officers and his/her compensation or department budget.
The City’s financial projections show that the City will run into a General Fund deficit starting next fiscal year (i.e., 2024-2025). To balance the budget based on projections, the City has asked each department to proactively reduce their expenditures by an average of 2-10%. However, the proposed amendment regarding the City Attorney’s compensation and Office’s budget establishes a hard floor that limits downward adjustments without a four-fifths (6 out of 7) Council votes. In the event the budget can be reduced, the maximum reduction would be up to 3%.
Per the City Attorney, the remaining changes would clarify the City Attorney’s powers and duties consistent with State law and require all privileged communications remain inaccessible by any City official or third party without City Attorney or City Council approval.
7 Lastly, the Amendments to Section 309 would not take effect until January 1, 2027. The City Attorney’s Office states that this effective date is not required by law; rather it is to avoid a potential legal challenge by anyone who may believe that the changes are to benefit the current City Attorney.
Preliminary Fiscal Analysis:
In all, the fiscal impact cannot be determined at this time. However, establishing a hard floor in the CAO budget or the City Attorney’s compensation may require City management to find cost savings in other departments or reduce services.
Section 310. Recommended by the Ad Hoc Committee on 8/1/23
Preliminary Operational Analysis:
The elected City Clerk position in Huntington Beach serves as a department head and the City’s elections official. The Clerk operates a department that includes records/archive management, election services, passport services, claims administration, agenda management, public records request management, and FPPC filings. The position also manages a staff of 5 full-time staff and 4 part-time staff.
There are also 11 California charter cities with elected city clerks – whether serving a ceremonial role or as a department head. Staff reviewed their educational requirements (if any) as listed in their individual charters, municipal codes, job descriptions or websites. Out of the 11 charter cities (not including Huntington Beach), the education requirements for the Clerk position are as follows:
• One city (Redondo Beach) included educational requirements directly in the charter; four other cities had educational requirements listed on their municipal code or websites. Six additional cities did not have any educational requirements, and the remaining two cities are unknown at this time. • Existing educational requirements ranged by City:
o “Four-year college degree in finance or business related field” (Carlsbad, Municipal Code) o “Some college work in public administration and/or business administration. (Glendale, website) o “At least 15 units completed at a collegiate institution in the accounting field, either in residence or in extension, or in a recognized private school of equal educational standards.” (Redondo Beach, Charter)
o “Combination of education and experiencing equivalent to completion of an Associate of Arts Degree in Public Administration, Business Administration, or related field.” (Santa Clara, Santa Maria, website requirement)
For additional context, Orange County cities (including both charter and general law cities and mostly appointed Clerks) have educational requirements, whether the Clerk is elected or appointed. 23 out of 31 Orange County cities that provided staff with information on the job requirements reference a Bachelor’s or four year equivalent in Business Administration, Public Administration, Public Policy or Records Management. 25 out of 31 cities include the phrase “or related field”. (Three Orange County cities did not provide information about their job requirements.)
Preliminary Fiscal Analysis:
There are no known fiscal impacts associated with this amendment.
8 Section 314 (NEW). Recommended by Council Member McKeon on 8/1/23
Preliminary Operational Analysis:
Today, if the City receives such an allegation against an elected official, the Human Resources Department may hire a third-party investigator to conduct an investigation. However, this amendment would require the City to refer the allegation to a higher-level government agency such as the Orange County District Attorney. The complainant has the recourse of suing the elected official and/or the City.
Preliminary Fiscal Analysis:
There is a degree of liability, risk of lawsuits, cost of attorney fees, and/or settlements that would yield a yet to be determined fiscal impact.
Section 401(b) & Sections 601-605. Recommended by the Ad Hoc Committee on 8/1/23
9 10
Preliminary Operational Analysis:
The amendments would transition the City from an annual to a biennial budget, starting in Fiscal Years 2026-2028. There is precedence for two-year budgets in Orange County; half of the 10 largest cities in Orange County (not including Huntington Beach) utilize biennial budgets.
There are also known advantages and disadvantages of a biennial budget. Advantages may include reduced staff time from undertaking an intensive six-month budgeting process every year. It also encourages the City to plan strategically and longer term, particularly for larger projects and initiatives.
Disadvantages may include longer range forecasting of revenues and expenditures further into the future; and more extensive budget amendments or mid-cycle reviews and adjustments that may potentially eliminate time savings in year 2.
The Chief Financial Officer is supportive of a biennial budget. However, there will be operational impacts from implementing process changes that require updates to budget forms and document pages to account for the second year; updates to the accounting software; staff training; a new format for the mid-cycle update and adjustments; and criteria and process to carryover funds between years 1 and 2.
The Finance Department would likely need to begin after the approval of this Amendment in order to kick off the budget planning season starting Fall 2025, while simultaneously developing the remaining annual budgets for FY 2024-25 and FY 2025-26.
Lastly, the amendment proposes one administrative change to retitle the Finance Director to Chief Financial Officer, which is the title used commonly today and matched with the City’s organizational chart.
Preliminary Fiscal Analysis:
The primary fiscal impacts will be the hours of staff time required to implement the process changes across all 12 City departments, conduct public engagement on this major change, and potential costs to make changes to the City’s accounting software. The required staff hours will not be known until a plan is identified to transition the budget.
11 Section 612.
12 Recommended by the Ad Hoc Committee on 8/1/23:
Preliminary Operational Analysis:
Section 612, also known as Measure C, was a voter initiative that was approved by voters during the November 1990 General Election and was incorporated into the Charter thereafter. Measure C requires majority voter approval on matters involving the following, with some exemptions:
o Sale, lease, transfer or exchange of park and beach lands in Huntington Beach o Construction of certain private and public developments on these lands
This proposed amendment would add to the list of current exemptions: public restrooms under a certain size, above ground public works utility structures under a certain size, new playground facilities or equipment in parks; and replacement playground facilities or equipment under certain sizes. These amendments would permit staff to provide these amenities without the added cost of a ballot measure, which would facilitate the process and deliver them to the public at an accelerated rate.
Preliminary Fiscal Analysis:
Currently, Measure C requires the City to produce a “shovel ready project” by completing a conceptual design, all design documents, construction documents, and pertinent environmental studies, prior to placing a park or beach project on a ballot measure. The cost of each component may vary significantly (upwards of a million dollars) and often take on a percentage of the final total project cost. For the purposes of a general fiscal analysis, the average cost, per acre, of each phase of the project is listed below, and includes additional data for an anticipated 6% increase in costs in 2024:
Project Phase Average Per Acre Cost
(2023)
Average Per Acre Cost
6% Escalation (2024)
Conceptual Design $5,340 5,661
Design Cost $13,949 $14,786
Construction Documents $44,463 $47,131
Construction $508,390 $538,893
This estimate does not include any costs to place the project on a ballot measure, which is an added cost.
13 Playgrounds average $110 per square foot in 2023, and $117 per square foot in 2024, with the anticipated 6% escalation in costs.
Recommendations from City staff
Based on staff experience working on public projects within the guidelines of Measure C, a few recommendations are listed for consideration:
• Amend Section 612(a) to: 1) remove the dollar threshold ($161,000 adjusted for CPI) that triggers Measure C, as most projects exceed that value today or 2) no longer require the environmental assessment, conceptual cost estimate and construction documents to be completed prior to a Measure C vote; these items will still be prepared and presented to the public and City Council for a thorough review. Project construction would be contingent only after obtaining approvals for all items.
• Amend Section 612(a) to clearly define “structure” and its minimum square footage, as it is not defined in the Charter. Determine if structure also includes flatwork such as pickleball and other sports courts. This would clear up ambiguity about which projects qualify under Measure C.
• Amend Section 612(c) to add public restrooms as an exempted project; remove any square foot thresholds, as many projects such as restrooms and public works utilities exceed 3,000 square feet.
Section 618 (NEW). Recommended by Council Member McKeon on 8/1/23
Preliminary Operational Analysis:
The amendment will require City Council and voter approval in order to engage in investment transactions between the City and a property owner that may yield over $100,000 in property tax exemptions. As a matter of background, when the City purchases property, it becomes property tax exempt so long as it is used for public purposes; as such, the amendment carves out exemptions for transactions in which the City acquires property for public parks or infrastructure, as defined in section 617(a) (see below). This would limit the amendment’s applicability on City operations, as it relates to these matters.
Section 617(a):
The term “Infrastructure” shall mean long-lived capital assets that normally are stationary in nature and normally can be preserved for significantly greater number of years. They include storm drains, storm water pump stations, alleys, streets, highways, curbs and gutters, sidewalks, bridges, street trees, landscaped medians, parks, beach facilities, playgrounds, traffic signals, streetlights, block walls along arterial highways, and all public buildings and public ways.
14 Staff noted that the definition above does not include water infrastructure (i.e. water lines, reservoirs, etc.). In addition, the phrase “beach facilities” could be generalized to include all “recreational facilities” which are also viewed as infrastructure.
Other considerations not covered in the exemptions may include the acquisition of buildings not used for public purposes. An example may be to acquire a commercial property that is leased out to businesses that would pay possessory interest taxes, but not property taxes; as such, staff is uncertain if the amendment would apply to these types of transactions. Another possible exemption for consideration would be transactions implementing the Zoning and Subdivision Code, as such transactions do not involve a direct City financial subsidy or investment. An example would be Zoning and Subdivision Code Section 230.26 commonly referred to as the Inclusionary Housing Ordinance under which developers of residential projects must satisfy affordable housing requirements. Should a developer choose to create affordable housing units to satisfy this requirement, the City Council should be authorized to approve implementing agreements between the City and the developer as approved by the City Attorney’s office.
Preliminary Fiscal Analysis -
The current property tax rate is 1.09391% of an assessed property value. For every dollar of property taxes remitted to the County Assessor’s Office, 16% is distributed to the City. Given this formula, only properties with an assessed value of equal to or higher than approximately $57 million in the City’s General Fund tax rate area (TRA) would yield property taxes of $100,000 or greater directly for the City of Huntington Beach.
Based on our most current tax information, only 24 properties (residential, commercial, and industrial) fall in this category. These would be among the known properties that could trigger the amendment, if the owner and the City propose to enter into a transaction that results in excess of $100,000 in property tax exemptions.
However, it should be noted that the $100,000 tax threshold is a static number that does not adjust or respond to current market conditions. If property values continue to trend upwards and the threshold does not adjust accordingly (for example, with the use of a CPI adjuster or a more appropriate method), the number of properties that may trigger this amendment will steadily increase from the current list of 24 properties.
Section 702 & 705 (NEW). Recommended by the Ad Hoc Committee on 8/1/23
15 Preliminary Operational Analysis
Per the Ad Hoc Committee, the amendment envisions that the City would implement the proposed changes while still consolidating elections with the County Registrar of Voters (ROV). In this scenario and with the current number of registered voters, the ROV would continue to provide eight ballot drop box locations with vote by mail (VBM) options, three 11-day in-person Vote Centers at major City facilities, and ten 4-day in person Vote Centers at both local and smaller city facilities. The minimum number of Vote Centers is predetermined by an Elections Code formula and identified in the County’s Election Administration Plan which will be updated in 2025. However, the City would need to provide poll voters to verify id, request an additional 10 Vote Centers and install video cameras to monitor the drop boxes.
The City has inquired with the ROV about whether the County would allow City poll workers to conduct voter id verification at the County’s Vote Center and whether the County would consider providing additional Vote Centers above and beyond what it provides now. On September 20, the ROV stated that it cannot comment on these proposals.
In the event the ROV does not accept the City’s proposal and does not consolidate elections, staff has conducted a very preliminary cost analysis for one City standalone election. The initial startup cost for items such as equipment is $664K – 858K; the recurring or operating costs to hold each election is $689K - $832K. This is based on figures from other municipalities that have recently conducted standalone elections but scaled for Huntington Beach and its number of registered voters.
Preliminary Fiscal Analysis
Should the City eventually obtain an affirmative response from the County, the amendment would require the City to consider the following costs related to this amendment.
The City would need to provide poll workers at each ROV Vote Center to verify voter identification; this would likely require recruitment costs, training and hourly wages at a rough cost estimate of $69,000.
In regards to the cost of the additional ten 4-day in-person Vote Centers that will help achieve the total 20 residential voting locations described in the amendment – the ROV did not provide a cost estimate. The ROV stated that it is not their practice to bill jurisdictions on a Vote Center by Vote Center basis. If they are authorized by the County to provide the additional Vote Centers, the cost would be billed proportionately to all participating jurisdictions based on a formula that takes the number of voters per jurisdiction into account. This cost cannot be known at this time.
In regards to drop box monitoring, the City may be able to install 24-hour video cameras on buildings within proximity to each drop box. If a building is located on private property, staff would need to negotiate an agreement to mount a video camera on the property. At this time, one firm offers video monitoring for approximately $2,500 per location including camera equipment and installation for 24-hour access. Based on that, the City would anticipate incurring at least $20,000 plus additional unknown cost related to the agreements. The City was advised by the ROV to further consult with the City Attorney regarding the legality of local monitoring of ballot drop boxes.
16 Consolidated Election
with ROV
Proposed Charter
Amendments
Anticipated
Additional Costs
VBM Ballot Drop Box
locations
8 Added monitoring with 8
security cameras
$20,000 plus unknown
cost for related
agreements
4-day in-person Vote
Centers (local & small
City facilities)
10 Add 10 additional Voter
Centers; Voter ID
verification -related costs
Cost for 10 additional
Vote Centers is
unknown.
$9,000 for Voter ID
monitoring (recruitment,
training, hourly wages)
11-day in-person Vote
Centers (major City
facilities)
3 Voter ID verification -
related costs
$60,000 for Voter ID
monitoring (training and
hourly wages
The added costs in the table would be in addition to the consolidated election cost with the ROV for election services currently estimated at approximately $318,928 to $383,128. Adding any ballot measures would be an additional cost as well.
Section 806 (NEW). Recommended by the Ad Hoc Committee on 8/1/23.
Preliminary Operational Analysis:
There are no known operational impacts at this time. It should be noted that the amendment allows the City to fly additional flags not listed in the proposed amendment, if it is authorized by unanimous vote of the City Council.
Preliminary Fiscal Analysis:
There are no known fiscal impacts at this time.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachments:
1. PDF version of the report