City of Huntington Beach
Proposed FY 2024/25 Budget Review
City Council Study Session
FEB May 21, 2024
COUNTY CALIFORNI • 17, 1909,
SUPPLEMENTAL
COMMUNICATION 1
Meeting Date: 5/21/24
Agenda lem No: 1 (24-349)
Presentation Overview
• FY 2023/24 General Fund Budget Update
Proposed FY 2024/25 General Fund Budget Review
• Proposed FY 2024/25 Capital Improvement Budget Review • Proposed FY 2024/25 Opioid Settlement Spending Plan
• Key Budget Considerations for FY 2024/25
• Next Steps - FY 2024/25 Budget Approval
UN NETON
INCORPORAT
BEACH
CALIFOR
2 FY 2024/25 General Fund
Budget Update
FEB
COUNT CALFONT • 17, 1909,
3 HUNTINGTON
INCORPORATED
Proposed FY 2024/25
General Fund Budget Review
? FEB
COUNT CALIFORN • 17, 1909,
FY 2024/25 General Fund Proposed Budget Review
Proposed FY 2024/25 General Fund Budget is structurally balanced, with a projected $132K surplus
General Fund (Fund 100) Proposed
(in thousands) FY 24/25
Revenues (recurring) $292,888
* GF portion of Waterfront allocation, of which
Revenues (one-time) * 6,877 25% is being transferred to the Section 115 Total Revenues Trust, 23% is being transferred to the
299,765 Equipment Replacement Fund, 15% is being
Personnel Costs 190,858 transferred to the Workers' Compensation Fund and 37% is being transferred to the General
Operating Costs 57,374 Liabilities Fund
Non-Operating Costs ** 51,401
Total Expenditures 299,633 ** Includes Debt Service, Capital Expenditures, and Transfers
Surplus / (Deficit) $132
• Continued Infrastructure Investments in FY 2024/25
• General Fund transfer to the Infrastructure Fund totals $14.5M • CIP budget totals $35.3M (decrease from prior year of $41.2M due to $4.5M of AES projects in FY 2023/24)
5 FY 2024/25 General Fund Proposed Revenues - $299.8M
Other Revenue
Charges for Current Services 0.6% Non-Operating Revenue
11.7% 2.5%
Revenue from Other Agencies
2.7%
Property Tax
36.1%
Use of Money & Property
7.4%
Fines & Forfeitures
1.5%
License & Permits
2.9%
Utility Users Tax
7.7%
Sales Tax
Transient Occupancy- Franchises 17.8%
Tax
3.5%
5.6%
6 FY 2024/25 General Fund Proposed Revenues - $299.8M
• Major revenue variances include: (update based on projected) • Property Tax: $108.2 million (3.8% or $3.3 million increase) - Higher assessed valuations as of January 1, 2024 versus prior fiscal year > Revenue from other Agencies: $8.1 million (200.5% or $5.0 million increase) - Expected reimbursement of $5.5 million from participation in the Voluntary Rate Range Intergovernmental Transfer (VRRP IGT) Program. These revenues are partially offset by $2.3 million of expenditures related to program participation, for anticipated net revenues of approximately $3.3 million. > Non-Operating Revenue: $7.5 million (173.8% or $4.7 million increase) - FY 24/25 includes one-time transfer of $6.9 million for first repayment related to the Waterfront Loan Superior Court Judgement
- Partially offset by FY 23/24 one-time revenues of $2.3 million for Emerald Cove Superior Court Judgement
FY 2024/25 General Fund Proposed Expenditures - $299.6M
BY CATEGORY BY DEPARTMENT
Transfers * Finance Human
Other ** 1.9% Information Services
Resources 2.8%
15.0% 3.8%
1.0%
Debt Service Community
Development
2.2% Police
3.4%
30.7%
Community &
Library Services
Operating 5.4%
19.1% Public Works
Personnel 8.2%
63.7%
Non-
Fire
20.9%. Departmental
22.1%
* Transfers include Infrastructure, Equipment, General Liability & ** Other includes City Council, City Manager, Section 115 Trust Transfers City Attorney, City Clerk, and City Treasurer 8 FY 2024/25 General Fund Proposed Expenditures - $299.6M • Major expenditure variances include:
> Personnel: $90.9 million (4.7% or $8.6 million increase) - Increase to PERS Normal Cost and PERS UAL
- Continuing impacts from FY 23/24 MOU updates
- Addition of 4 FTEs (more details on following slide)
• Operating: $57.4 million (-2.6% or $1.56 million decrease) - Citywide effort to realign costs and preserve funding for contractual increases and inflationary demands related to the provision of core services Recommended FY 2024/25 Authorized Positions
• Staff is proposing 4 new positions in the FY 2024/25 Budget:
Community Development Department
• (1) Building Inspection Supervisor to provide staff supervision and oversight of complex residential and commercial projects (General Fund) Fire Department
• (1) Limited-term Management Aide to serve as a community engagement coordinator (Opioid Funds)
Police Department
• (1) Real Time Crime Center Supervisor to oversee the proactive monitoring of available technology and information systems resources to aid in the prevention of crime (General Fund)
Recommended FY 2024/25 Authorized Positions
• Staff is proposing 4 new positions in the FY 2024/25 Budget:
Public Works Department
• (1) Fleet Maintenance Crew Leader to coordinate fuel sites and fuel system compliance (General Fund)
• (1) Senior Mechanic to meet demand for heavy equipment and safety fleet vehicle maintenance and repairs (General Fund)
• (-1) Non-General Fund position restructuring:
- Upgrade of 1 vacant Capital Projects Administrator to Capital Projects Supervisor to oversee construction project management and contract administration
- Upgrade of 1 vacant Deputy Director of Public Works to Deputy Public Works Director / City Engineer
- Elimination of City Engineer position (-1)
11 FY 2024/25 Full Time Equivalent - All Funds
1,010.00
1,005.75
1,001.75
Proposed
1,000.00 Budget
Pre-COVID 991.75
983.75 986.25 986.25 986.25 987.25
990.00
978.25 980.75
980.00
Restructure
970.00 Plan
960.00
958.25
950.00
FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 12 General Fund Long-Term Financial Plan
6.1% CalPERS Return FY22/23
Actual Projected Proposed Projected Projected Projected (in thousands)
FY22/23 FY23/24 FY24/25 FY25/26 FY26/27 FY27/28
Revenue (Recurring) 277,069 279,775 292,888 294,366 301,718 309,310 Revenue (One-Time)* 35,648 5,470 6,877 -
Planned Use of Reserves - 8,804 - - -
Total Sources of Funds 312,717 294,049 299,765 294,366 301,718 309,310 Expenditures less UAL 254,720 264,960 274,435 281,813 290,201 297,443 CaPERS UAL 4,891 5,000 5,215 8,981 12,727 16,458
POB Payment 13,663 13,276 13,106 12,750 12,537 12,537
One-Time Expenditures 18,721 8,804 6,877 - -
Total Expenditures 291,995 292,040 299,633 303,544 315,465 326,438 Restricted Reserves 16,978 - - -
Surplus/(Deficit) $3,744 $2,009 $132 ($9,178) ($13,747) ($17,128) * FY 22/23 one-time revenue consists of $29.6M in American Rescue Plan Act funding and $1.8M in transfers from the Housing Agreement and Triple Flip fund. FY 23/24 one-time consists of General Fund portion of Emerald Cove settlement.
• Current forecast requires use of Section 115 Trust reserves (per UAL Policy) starting in FY 25/26. 13 FY 2024/25 Future General Fund Proposed Revenue Enhancements • EMS Cost Recovery Fee Adjustment
- The City's EMS fees were last updated in 2021
- Based on a third-party assessment coordinated by the Fire Department, staff will propose adjustments to the City's EMS fees
> Master Fee and Charges Schedule Adjustments
- The City is in the process of completing a comprehensive fee study based on the FY 2023/24 Adopted Budget
- Last fee study was completed in 2016
- Staff will propose adjustments to the City's Master Fee and Charges Schedule 14 FY 2024/2025
Capital Improvement
Program (CIP)
FY 2024/25 CIP BUDGET
> Budget
> New Appropriations: $ 35.3 Million
›Continuing Appropriations: $ _8.1 Million
Total $ 43.4 Million
> Funding sources proposed:
> General/Infrastructure Fund ($30M requested - $8M recommended) ›Enterprise Funds (Water and Sewer)
›Special Revenue Funds (Measure M, Gas Tax, Prop 42, RMRA, PEG, Park DIF, Quimby, TIF)
> Grants/Other (CDBG, OCTA)
16 DRAINAGE $300K
• Tide Check Valves $300k (INFR FUND)
17 FACILITIES $4.9M
• PD South Substation Move $109k (INFR FUND)
• Newland House Museum Rehabilitation $100k (INFR FUND) • Park Bench Café Roof & Siding Repair $110K (INFR FUND) • Main Street HVAC Installation $650k (INFR FUND)
• Library Master Plan $400k (CLS FUND)
• Upgrade Central Plant Cooling Tower at Civic Center $768k (INFR FUND) • Civic Center Leak Assessment $100k (INFR FUND)
• Facilities Master Plan $600k (INFR FUND)
• Fueling Station Canopies (Phase 2) $410k (INFR FUND)
• Replace R22 Air Conditioning Equipment $150k (INFR FUND) • Downtown Parking Structure $923k (INFR FUND)
• Gothard and Murdy Fire Butler Bldgs $600K (INFR FUND) 18 NEIGHBORHOOD $7.1M
• Residential Curb Ramps $700k (Measure M, CDBG FUND)
• Residential Concrete/Tree/Overlay/Slurry $6.35M (GAS TAX, INFR FUND, Sewer and Water, Measure M)
19 PARKS AND BEACHES $4.6M
• Edison Park Reconfiguration $2M (Park)
• gth Street Playground $120k (INFR FUND)
• Softball Field Improvements $565k (Park)
• Huntington Central Park Master Plan Update $181k (Park) • Langenbeck Park Playground Improvements $300k (Park)
• Pleasant View Park Playground Improvements $600k (Park) • Discovery Well Park Pump Replacement $90k (INFR FUND) • Beach Restroom Analysis $200k (INFR FUND)
• PCH & 6th Street Pedestrian Ramp $65k (INFR FUND)
• Huntington Harbour Bulkhead $400k (INFR FUND)
• Bluff Top Pathway Area Lighting $64k (INFR FUND)
SEWER IMPROVEMENTS $2M
• McFadden Sewer Lift Station Improvements (Continuing) $2M (Sewer Fund) 21 STREETS & TRANSPORTATION $8.2M
• ADA Improvement Program $250k (INFR FUND)
• Fiber Optic Master Plan $100k (INFR FUND)
• Citywide Mobility and Corridor Improvements $155k (TRAFFIC) • Downtown Street Lighting $400k (INFR FUND)
• Arterial Rehabilitation $6M (RMRA, MEAS M)
• BPMP (Gilbert Bridge Design Only) $424k (GRANT)
• Bridge Preventative Maintenance (Bolsa) $655k (MEAS M) • Main Street Specific Plan Improvements $250k (INFR FUND) 22 WATER IMPROVEMENTS $9.4M
• Annual Water Main Replacement (Design) $150k (WATER)
• Peck Reservoir Roof Replacement (Design) $500k (WATER) • Water Treatment for Well 3A $2.2M (WATER)
• Well 4 Rehabilitation $1.5M (WATER)
• Well 14 Drilling and Casing Project (Design) $250k (WATER) • Well 14 Storm Drain (Design) $50k (WATER)
• Well 14 Well House (Design) $500k(WATER)
• WOWB OC9 Cathodic Protection $3.7M (WOCWB)
• OC35 Seal Beach Vault Relocation $50k (WOCWB)
• Water Production Building Rehabilitation $479k (WATER) 23 FY 2024/25 Opioid
Settlement Spending
Plan
24 Janssen & Distributors Settlement and NOAT II CA
Bankruptcy Funds
• The Fire Department proposes year 1 spending plan of $893,400 from the Janssen and Distributors (J&D) Opioid Settlement Funds and the NOAT II (Local Government Share) California Bankruptcy Funds to be expended in accordance with Exhibit E of the J&D settlement agreements and the California Mallinckrodt Statewide Abatement Agreement.
• Expenditure of settlement and bankruptcy funds in future fiscal years will be programmed into future year budgets to ensure timely use of the funds. • These funds will be used for high-impact abatement activities and other approved uses. Fire will track expenditures to maintain compliance with the settlement agreements with the assistance of the Finance Department.
Allowable Expenditures
Table 1: High Impact Abatement Activities (HIAA)
No. Activity
50% or more of the funds
from the CA Abatement 1 Provision of matching funds or operating costs for substance use disorder (SUD) facilities within the Behavioral Health Continuum Infrastructure Program (BHCIP) Accounts Fund will be
used for high-impact 2 Creating new or expanded SUD treatment infrastructure? abatement activities Addressing the needs of communities of color and vulnerable populations 3 (including sheltered and unsheltered homeless populations) that are • Other funds will be disproportionately impacted by SUD applied to approved
Diversion of people with SUD from the justice system into treatment, including opioid remediation uses by providing training and resources to first and early responders (sworn and 4 non-sworn) and implementing best practices for outreach, diversion and deflection, employability, restorative justice, and harm reduction 5 Interventions to prevent drug addiction in vulnerable youth The purchase of naloxone for local entities including for distribution and efforts 6 to expand access to naloxone for opioid overdose reversals. 26 Key Positions for Success
• Proposal to cover 100% of the costs for a part-time chief medical officer (contractor) with opioid settlement funds in year one to build up the program • The chief medical officer will create programs to provide substance use disorder (SUD) healthcare and community engagement services > The goal is for the groundwork laid in year one to support ongoing efforts and generate additional revenue streams for subsequent years • Proposal to cover 100% of the cost of a full-time Community Engagement Coordinator (Management Aide)
> Limited-term role dependent upon continued opioid settlement funding Detailed Expenditure Plan - Year 1
Opioid City Strategic
Existing
Description Total Costs Settlement Plan Priority 1 Notes Funding
Portion Deliverable
1 FTE Community Engagement $120,000 $120,000 $0 8.A.7 This is a limited-term grant-funded position that depends upon Coordinator (Management continued settlement funds. The proposal is for 100% of the costs for a Aide new position to be funded by opioid settlement funds.
0.50 Contracted Nurse $86,400 $43,200 $43,200 8.A.1 Existing funding is from the current agreement for 10 hours per week.
Educator (UCLA) The proposal is to add 10 hours per week, with the added costs to be covered by opioid settlement funds.
1 FTE Community Engagement $157,000 $78,500 $78,500 8.A.9 Existing funding is from an FTE Management Analyst position. The Analyst (Management proposal is for 20 hours per week (50%) of costs to be covered by opioid Analyst- Not a new position) settlement funds. Savings to be returned to the general fund.
0.50 Contracted Medical $167,500 $167,500 $0 8.A.1 The proposal is for 20 hours per week (100%) of costs to be covered by Director/Chief Medical Officer opioid settlement funds.
Equipment & Supplies $384,200 $384,200 $O 8.A.1 The proposal is to fully fund with opioid settlement funds for a year-one (operational and educational), purchase and not a recurring amount. Unused funds will roll over into to deliver SUD prevention and subsequent years.
response services
Training, public education, and $100,000 $100,000 $0 8.A.1, 8.A.7 The proposal is to fully fund needed equipment and supplies through outreach multimedia the public affairs office.
development
Year One Total $1,015,100 $893,400 $121,700
28 Key Budget Considerations
for FY 2024/25
FEB
COUNTY CALIFORNI • 17, 1909,
29 City Council Direction and Feedback Requested
• City Council feedback of the proposed FY 2024/25 Budget is requested, especially as it relates to:
1) Addition of 4 FTEs across various departments
2) General Fund portion of Waterfront Loan Settlement totals $6.9 million, transferred as follows:
- 25% or $1.7 million to the Section 115 Trust
- 23% or $1.6 million to the Equipment Replacement Fund - 15% or $1 million to the Workers' Compensation Fund HUNT INGTON INCORPORATED@
- 37% or $2.6 million to the General Liabilities Fund BEACH 3) Fire Department Year 1 spending plan for Opioid Settlement Funds ALI
30 SUNTING TON 8E
INCORPORATED
FY 2024/25 Budget -
Next Steps
17, 1909.
31 FY 2024/25 Budget Next Steps
• Based on City Council feedback tonight, staff will make requisite adjustments to the proposed FY 2024/25 Budget
• Revised budget will be brought back for formal City Council consideration I adoption on June 4th
ONCORPORATED GTON BEACH
ORANGE
FEB
CALIFOR
Co
32 Questions?