TO: Lisa Lane Barnes, City Clerk
FROM: Robert S. Torrez, Interim Chief Financial Officer DATE: June 3, 2025
SUBJECT: SUPPLEMENTAL COMMUNICATION - AGENDA ITEM 22: ATTACHMENT 10: UPDATED POWERPOINT
Attached is an updated version of the Power Point presentation for Agenda Item 22 for the FY 2025–26 Proposed Budget Public Hearing. This version includes a technical correction to the amount of FY 2025/26 All Funds Proposed Revenues on Slide 5 and the addition of Slide 12 which provides further details on the Personnel Services expenditure variances in the General Fund.
City of Huntington Beach
FY 2025/26 Budget Adoption
City Council Public Hearing
June 3, 2025
1 Presentation Overview
• Proposed FY 2025/26 All Funds and General Fund Budget Review
• FY 2025/26 Capital Improvement Program
• Revised Master Fee and Charges Schedule and Proposed
Revenue Adjustments
• Requested Revisions to Proposed Budget
• FY 2025/26 Budget Approval and Related Actions Requested 2 Proposed FY 2025/26
All Funds Budget Review
3 FY 2025/26 All Funds Proposed Budget Review $554.9M
Department / Fund
General
Fund
Capital
Projects
Funds
Debt
Service
Funds
Enterprise
Funds
Special
Revenue
Funds
Internal
Service
Fund
Trust and
Agency
Funds
Other
Funds TOTAL
City Council 468,951 468,951
City Manager 3,101,687 100,000 35,000 3,236,687
City Attorney 4,223,414 4,223,414
City Clerk 1,196,874 1,196,874
City Treasurer 2,194,073 2,194,073
Community Development 10,618,628 2,334,861 129,000 13,082,489 Community & Library Services 16,663,318 2,615,383 1,334,000 20,612,701 Finance 5,870,337 110,000 7,677,672 13,658,009
Fire 64,520,419 332,916 893,400 466,315 66,213,050
Human Resources 2,516,074 26,955,484 29,471,558
Information Services 8,546,183 549,044 9,095,227
Non-Departmental 58,485,785 8,200,000 25,541,969 104,000 25,916,664 118,248,418 Police 96,249,310 2,304,000 50,000 98,603,310
Public Works 24,339,119 12,249,413 100,508,770 35,862,266 1,644,300 174,603,868 Grand Total 298,994,172 20,449,413 25,541,969 100,841,686 44,872,954 34,633,156 28,027,279 1,548,000 554,908,629 4 FY 2025/26 All Funds Proposed Revenues - $529.6M
5 0.0%
Property Tax
27.8%
Sales Tax
10.9%
Franchises
1.8%
Transient Occupancy
Tax
3.2%Utility Users Tax
4.4%License & Permits
1.9%
Fines & Forfeitures
1.0%Use of Money & Property
5.0%
Revenue from Other Agencies
5.8%
Charges for Current Services
26.3%
Other Revenue
0.4%
Non-Operating Revenue
11.5%
Proposed FY 2025/26
General Fund Budget Review
6 Proposed FY 2025/26 General Fund Budget Review
• Proposed FY 2025/26 General Fund Budget is structurally balanced, with a projected $1.1M surplus
7 • Portion of Waterfront allocation with the
remaining $4.3M set side in reserves.
** Includes Debt Service, Capital Expenditures,
and Transfers
• Continued Infrastructure Investments in FY 2025/26
➢ General Fund transfer to the Infrastructure Fund totals $14.5M ➢ CIP budget totals $63.6M (increase from prior year of $28.3M) includes $7.9M in General Funds
General Fund (Fund 100)
(in thousands)
Proposed
FY 25/26
Revenues (recurring) $295,089
Revenues (one-time) * 5,013
Total Revenues 300,102
Personnel Costs 189,647
Operating Costs 54,518
Non-Operating Costs ** 54,829
Total Expenditures 298,994
Surplus / (Deficit) $1,108
Proposed FY 2025/26 General Fund Revenues - $300.1M
8 Property Tax
37.9%
Sales Tax
17.6%Franchises
3.2%
Transient Occupancy
Tax
5.7%
Utility Users Tax
7.8%
License & Permits
3.3%
Fines & Forfeitures
1.8%
Use of Money & Property
7.9%
Revenue from Other Agencies
1.3%
Charges for Current Services
11.3%
Other Revenue
0.6% Non-Operating Revenue
1.7%
Proposed FY 2025/26 General Fund Revenues - $300.1M
• Major revenue variances include:
➢ Property Tax: $113.9M (5.0% or $5.7M increase)
- Higher assessed valuations as of January 1, 2025 versus prior fiscal year ➢ Other Local Taxes: $102.7M (1.19% or $1.2M net decrease) - Sales Taxes: $49.6M (1.4% or $0.7M decrease)
• Prop 172: $3.1M (0.7% or 22k decrease)
- Utility Users Tax (UUT): $23.3M (1.27% or $0.3M increase) - Franchises: $9.5M (11% or $1.1M decrease)
- Others: $17.1M (1.80% or $0.3M increase)
➢ Revenue from other Agencies: $1.7M (16.1% or $4.5M decrease) - Expected reimbursement of $1.7M from participation in the Voluntary Rate Range Intergovernmental Transfer (VRRP IGT) Program. These revenues are partially offset by $0.7M of expenditures related to program participation, for anticipated net revenues of approximately $1.0M. 9
Proposed FY 2025/26 General Fund Expenditures - $299.0M * Transfers include Infrastructure, Equipment, General Liability & Section 115 Trust Transfers
** Other includes City Council, City Manager,
City Attorney, City Clerk, and City Treasurer
10 Personnel
63.4%
Operating
18.2%
Debt Service
1.1%
Transfers *
17.3%
BY CATEGORY
Other **
3.7%
Finance
2.0%
Human
Resources
0.8%
Information Services
2.9%
Community
Development
3.6%
Community &
Library Services
5.6%
Public Works
8.1%
Non-
Departmental
19.6%
Fire
21.6%
Police
32.2%
BY DEPARTMENT
Proposed FY 2025/26 General Fund Expenditures - $299.0M Historical By Department
Department FY 2021/22
Actual
FY 2022/23
Actual
FY 2023/24
Actual
FY 2024/25
Adopted
FY 2024/25
Revised
FY 2025/26
Proposed %
City Council 364,612 380,181 400,038 494,879 494,879 468,951 0.16% City Manager 2,108,671 3,317,116 4,156,512 3,585,283 3,795,253 3,101,687 1.04% City Attorney 2,563,047 2,854,183 3,441,947 4,252,769 4,253,369 4,223,414 1.41% City Clerk 1,107,974 1,208,249 1,424,496 1,438,904 1,559,904 1,196,874 0.40% City Treasurer 278,783 349,464 1,772,274 1,892,847 1,923,122 2,194,073 0.73% Community Development 9,139,699 10,524,519 9,957,008 10,252,741 11,434,893 9,148,910 3.06% Community & Library Services 13,463,539 14,717,805 15,261,534 16,239,674 16,440,317 16,663,318 5.57% Finance 5,811,690 6,106,334 5,054,749 5,609,226 5,851,624 5,870,337 1.96% Fire 51,915,169 55,142,255 61,750,103 62,525,176 64,859,456 64,520,419 21.58% Human Resources 1,838,765 2,092,107 2,272,260 2,864,232 3,047,678 2,516,074 0.84% Information Services 6,324,097 6,934,385 6,805,293 8,450,864 8,779,838 8,546,183 2.86% Non-Departmental 57,448,450 86,383,591 69,352,039 66,107,308 72,822,592 59,955,503 20.05% Police 78,596,824 78,635,698 85,265,514 91,846,590 92,667,249 96,249,310 32.19% Public Works 20,835,966 23,349,353 23,716,058 24,434,788 25,652,409 24,339,119 8.14% TOTAL 251,797,286 291,995,240 285,189,308 299,995,281 313,582,585 298,994,172 100.0% 11 Proposed FY 2025/26 General Fund Expenditures - $299.0M • Major expenditure variances include:
➢ Personnel Services: $189.7M (6.88% or $13.1M increase) • Renegotiated Memoranda of Understanding (MOU) during FY 24/25 including Minimum Wage, Base Salaries, Public Safety Overtime and Leave Buyout: $9.0M increase
• CalPERS UAL Safety Contribution: $3.5M increase
• CalPERS UAL Misc Contribution: $1.6M increase
• Increase Vacancy Attrition: $1.0M net expense decrease
12 Proposed FY 2025/26 General Fund Expenditures - $299.0M • Major expenditure variances include:
➢ Operating Expenses: $54.5M ($2.9M net decrease)
• Voluntary Rate Range Intergovernmental Transfer (VRRP IGT) Program: ($2.6M decrease) expenditures related to program participation. • Metro Cities JPA: ($0.6M increase)
• Water Purchases: ($0.2M increase)
• Contracts for Repairs and Maintenance: ($0.3M decrease) • Other Professional Services: ($0.4M decrease)
• Equipment and Supplies: ($0.4M increase)
13 FY 2025/26 Budget Balancing Strategy
1. Operating Reductions - Personnel
➢ Personnel: $1.98M
- Eliminate 6 positions - $0.96M
- Deputy City Manager
- Senior Deputy City Attorney
- Human Resources Manager
- Principal Management Analyst (Fire)
- Office Assistant II – Permit Center (Community Development) - Office Assistant II – Maintenance Administration (Public Works) - Downgrade 1 position - $13K
- Public Affairs Manager to Public Affairs Officer (City Manager’s Office) - Increase Vacancy Attrition by $1.0M
14 FY 2025/26 FTEs by Department
15 Department 2024/25 2025/26 Variance Description
City Council 1.00 1.00
City Attorney 15.00 14.00 (1.00) Eliminate 1.00 Senior Deputy City Attorney City Clerk 6.00 6.00
City Treasurer 9.50 9.50
City Manager 16.00 15.00 (1.00) Eliminate 1.00 Deputy City Manager Community Development 61.50 62.00 .50 Eliminate 1.00 Office Asst II (Permit Center), Transfer 1.50 FTE from Public Works (Real Estate Services)
Comm & Library Services 62.25 63.25 1.00 Transfer 1.00 Capital Projects Admin from Public Works Finance 28.50 28.50
Fire 202.00 202.00
Eliminate 1.00 Principal Management Analyst, Upgrade
3.00 PT to 4.00 FTE Marine Safety Specialists: 1.00 FTE, Exchange 12.00 Firefighters for 12 Fire Paramedics
Human Resources 15.00 14.00 (1.00) Eliminate 1.00 Human Resources Manager Information Services 26.00 26.00
Police 351.00 350.00 (1.00) 2.00 Police Officers exchanged for 1.0 Police Sergeant Public Works 212.00 208.50 (3.50) Eliminate 1.00 Office Asst II (Maint), Transfer 1.50 to Community Development & 1.00 to Comm & Library Srvs
1005.75 999.75 (6.00)
987.25
958.25
980.75
991.75
1,001.75
1,005.75
999.75
950.00
960.00
970.00
980.00
990.00
1,000.00
1,010.00
FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 2025/26 Full-Time Equivalent – All Funds
Pre-COVID
16 FY 2025/26 Budget Balancing Strategy
2. Operating Reductions – Non-Personnel $2.9M
17 Object Account Amount
Professional and Contract Services (includes $1.5M for Mind OC – Be Well) $2,010,000 Conference and Training $201,000
Equipment Repairs $150,000
Liability Reserves $150,000
General Supplies $125,000
Clothing/Uniforms $90,000
Sales Tax Rebate $50,000
Cellular Wireless Data $46,000
Overtime $20,000
Miscellaneous $9,000
Total $2,851,000
FY 2025/26 Budget Balancing Strategy
3. Interfund Transfers
➢ Withdrawal from Section 115 Trust for FY2025-26 UAL Expense: $1.5M ➢ Reduce General Fund transfer to Self Insurance Workers’ Compensation Fund:
$2.0M
➢ Reduce General Fund transfer to Self Insurance General Liability Fund: $2.5M ➢ Transfer of $2.4M to the General Fund for second repayment related to the Waterfront Loan Superior Court Judgement
4. Use of Reserves
➢ Equipment Replacement Reserves - $3.3 M
5. Revenue Increases
➢ Community and Library Services - $0.5 M
➢ Fire Department - $0.5 M
18 General Fund Reserves
19 Nonspendable
Prepaids $148 $148
Restricted
Underground $364
Restitution $317
Donations $777
Section 115 Trust Funded $20,212 $21,670
Committed
Economic Uncertainties $49,090
Other Capital Projects $1,379
Other Purposes $1,554 $52,023
Type Description
Amount
Thousands Sub Total
GF Fund
Reserves As of 6/30/2024 (Thousands) Sub Total
Type Description
Amount
Thousands Sub Total
GF Fund
Reserves As of 6/30/2024 (Thousands) Sub Total
Assigned
Litigation Reserves $3,650
Capital Improvement Reserve $9,425
Equipment Replacement $8,295
General Plan Maintenance $1,651
HB Recovery Fund $10,886
Oceanview Estates $641
General Liability Plan Migration $2,801
Pension Rate Stabilization $5,517
Section 115 Trust Reserves $4,211
Year-end Fair Value $3,025
Other Purposes $8,376 $58,478
Total $132,319
FY 2025/26: Waterfront Settlement $4,370
Revised Total $136,689
FY 2025/2026
Capital Improvement
Program (CIP)
20 FY 2025/26 CIP BUDGET
➢Budget
➢New Appropriations: $ 63.6 Million
➢Continuing Appropriations: $ 7.3 Million
Total $ 70.9 Million
➢Funding sources proposed:
➢General/Infrastructure Fund ($38M requested - $7.9M recommended) ➢Enterprise Funds (Water and Sewer)
➢Special Revenue Funds (Measure M, Gas Tax, Prop 42, RMRA, Park/PD DIF, Quimby, TIF)
➢Grants/Other (CDBG, OCTA)
21 2025/26 PROJECT SUMMARY
• Drainage and Stormwater 1 projects $600K
• Facilities 10 projects $3.6M
• Neighborhood 3 projects $6.8M
• Parks and Beaches 10 projects $3.3M
• Sewer 3 projects $7M
• Streets and Transportation 17 projects $28.6M
• Water 6 projects $13.7M
CIP 25/26 PROJECTS TOTAL $63.6M
22 Revised Master Fee and
Charges Schedule and
Proposed Revenue
Adjustments
23 Master Fee and Charges Schedule
Adjustments
• The City maintains a Master Fee and Charges Schedule identifying applicable fees and charges for various City services.
• The Master Fee and Charges Schedule approved in 2024 incorporates a full cost of service study based on FY 2023/24 budget data.
• A comprehensive study is conducted every three to five years, with interim updates in between to maintain alignment with actual service costs. These interim adjustments are essential to prevent erosion of cost recovery as operational costs increase, When a fee is set below full cost recovery, the General Fund typically provides a subsidy to cover the shortfall. • If adopted as proposed, the updated schedule is expected to generate up to $810,000 in additional annual revenue which all of which will benefit the General Fund. • In the years between full cost of service studies, it is recommended that the City Council authorize annual inflationary adjustments to fees. These adjustments are based on the prior year’s percentage change in the CPI for All Urban Consumers in the Los Angeles-Long Beach-Anaheim area and are capped at a maximum of 5% per year.
24 Master Fee and Charges Schedule
Adjustments (con’t)
• The proposed update represents an interim adjustment of 3% based on CPI along with a proposed new fee for most development and operational permit fees. • Building Fees – permits for new construction or modifications to existing structures • Planning Fees – entitlement review and zoning compliance • Land Development Engineering Fees – public improvement plan review • Encroachment Permit Fees – activities conducted in the public right-of-way • Fire Prevention Fees – compliance reviews related to new and existing developments • This adjustment is estimated to reduce the General Fund by approximately $130K annually. • If the Master Fee and Charges Schedule is amended as proposed, the General Fund subsidization of these fees would decrease thereby increasing available discretionary General Fund revenue to be used for capital projects, equipment and other City Council providing a broad public benefit.
25 Community and Library Services Fees
• Adopt 12 new fees along with adjustments to existing fees for programs. • New program fees projected to generate approximately $140K annually. • New programs include:
• Alternative Camp HB offerings
• Peak season beach fire pit reservation program
• Adventure Playground After-Hours program
• Artist Council membership fee
• Senior Fitness Center daily, weekly, and monthly pass options • Pickleball and volleyball court hourly rental fees
• Library Subscription Materials Deactivation Fee 26
Community and Library Services Fees
(con’t)
• Restructure specific events into three tiers based on the number of attendees and the level of City support services required by the event organizer.
• Charges include
• Application processing
• Daily permit and venue fees
• Late application submittal fees
• Event set-up and takedown charges
• Ticketed event fees ranging from $2 to $20 per ticket will be assessed based on ticket price set by the event organizer. A non-refundable deposit of $50K is also proposed for Tier 3 events, which would be credited toward the final balance due at even closeout. Estimated annual revenue from these changes is approximately $220K. 27 Community and Library Services Fees
(con’t)
• Increase peak season parking rates in the South Beach Attended Lots. Rates would rise from $15 to $20 on weekdays, from $30 to $40 on the 4th of July and from $25 to $30 on additional high-demand days associated with the holiday.
• These adjustments are projected to generate an additional $320K annually. • In total, the proposed changes to Community and Library Services fees are anticipated to generated $ 680K in new annual revenue.
28 Fire Department Fee – AB38 Defensible
Space Inspections
• In accordance with California Civil Code Section 1102.19 (enacted through AB 38), the Fire Department implements a new fee of $203 for Defensible Space Inspections.
• These inspections are required to real estate transactions involving properties located within designated Fire Hazard Severity Zones, as identified in recently updated State fire maps.
• The inspection ensures compliances with state-mandated defensible space standards prior to the close of escrow.
• The fees supports the cost of providing these inspection services as required by law. 29
Requested Revisions to the
Proposed Budget
30 Requested Expenditure Appropriation Revisions
31 General Fund Amount
FY 2025/26 Proposed Expenditures presented on May 20, 2025 $298,994,172 Citywide
2.0 FTE Administrative Fire Captains 579,000 Fire Department Upgrade Ambulance Operations Model from 14 hr to 24 hr 162,000 Fire Department Total Revised Proposed General Fund Expenditures $299,735,172 All Funds Amount
FY 2025/26 Proposed Budget presented on May 20, 2025 $554,908,629 Citywide
2.0 FTE Administrative Fire Captains 579,000 Fire Department Upgrade Ambulance Operations Model from 14 hr to 24 hr 162,000 Fire Department Community Development Block Grant (43,943) Community Development HOME Program (35,790) Community Development
Equipment Replacement (100,000) Citywide
Technical Correction to Fund 716 1,465,716 Non-Departmental Total Revised Proposed All Funds Expenditures $556,935,612 Requested Fire Department Revisions
1 - Upgrade Ambulance Operations Model from 14 hr to 24 hr for total increase of $162K.
• Revised model will reduce response times and increase ambulance availability. Change will include an upgrade of six (6) ambulance operators from part -time to full-time, increasing the department’s FTE.
• Reduction of $100K in Equipment Replacement due to better pricing for Rosenbauer Commander Pumper Engine Quote.
2 - Fund 2.0 Administrative Fire Captain positions at $579K with no change to the department’s FTE.
• Assigned to Fire Operations Section and Professional Standards Division, respectively. • These positions will enhance oversight of administrative functions, coordinate specialty units, manage station facilities and apparatus, and serve as liaisons to various County groups and committees. 32
REQUESTED FY 2025/26 FTEs – All Funds
33 2024/25 2025/26 Variance Description
FTE All Funds Presented on May
20, 2025 1005.75 999.75 (6.00)
Subsequent Changes for Fire
Department 6.00 6.00 Fund 2.00 Admin Fire Captains; 6.00 FTE Ambulance Operators
Total Revised FTE All Funds 1005.75 1005.75 0.00
Requested Revenue Appropriation Revisions
34 General Fund Amount
FY 2025/26 Proposed Budget presented on May 20, 2025 $300,101,868 Citywide Total Revised Proposed General Fund Revenue $300,101,868 All Funds Amount
FY 2025/26 Proposed Budget presented on May 20, 2025 $529,593,686 Citywide Data Entry Correction 526,614
Technical Correction to Fund 716 1,465,716 Non-Departmental Used Oil OPP 10/11 26,614 Public Works
Safe Route to School 500,000 Public Works
Community Development Block Grant (43,943) Community Development HOME Program 502,538 Community Development
National Opioid Settlement 730,000 Fire Department
Total Revised Proposed All Funds Revenue $533,301,225
FY 2025/26 Budget Approval
and Related Actions
Requested
35 City Council Approval Requested
36 1) Adopt a budget for Fiscal Year 2025/26.
2) Authorize the Professional Services Listing included in the FY 2025/26 Budget. 3) Adopt Resolution No. 2025-39 Establishing the Gann Appropriation Limit for Fiscal Year 2025/2026 in the amount of $1,298,500,903.
4) Adopt Resolution No. 2025-40 Levying a Retirement Property Tax for Fiscal Year 2025/2026 to Pay for Pre-1978 Employee Retirement Benefits.
5) Adopt Resolution No. 2025-46, “A Resolution of the City Council of the City of Huntington Beach Adopting an Updated Master Fee and Charges Schedule.
6) Adopt Resolution No. 2024-26, “A Resolution of the Huntington Beach 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.
7) Authorize the City Manager or designee to purchase one Triple Combination Pumper Engine in the amount of $1,500,000.
8) Adopt Ordinance to change department name from the Information Services to Information Technology Services.
Questions?
37