1 SUPPLEMENTAL COMMUNICATION - Meeting Date: 5/19/2026 Item No. 11 (26-445 ) Finance Commission 2026/27 Budget Discussion - May 13, 2026 Budg
etPage #: 126
Budget Category: Finance
Implication/Concern:
Assistant Chief Financial Officer
Proposed Change: Position of ACFO is not necessary and should be eliminated 2 Finance Commission 2026/27 Budget Discussion - May 13, 2026 Budget Page #: 60
Budget Category: 00412 Pension Liability
Implication/Concern:
The city pension liability continues to be one of the largest expenses in our city budget and it is because the city continues to subscribe to a defined benefit plan for pensions, not a defined contribution plan such as a 401k.
Defined Benefit plans were instituted by people who had the best intentions for helping employees experience a wonderful life during their retirement years. Moreover, the removal of retirement planning burdens from the employee's responsibility and placing them upon the employer is also a significant advantage of the DB plan structure. However, upon examination, it becomes obvious that valuation errors associated with the estimation of pension liabilities poses an unavoidable problem and raises many additional issues that fly in the face of prudent city governance.
All of the consequences of rising pension costs fall on all other budget items that are junior in priority and therefore have their funding reduced whenever more money is needed to pay for pension costs. Thus if you are concerned about funding for libraries, parks, infrastructure and public safety, you should be concerned about the ever increasing funding for these pensions.
P
roposed Change: The city should explore removing themselves from th e unsustainable; Cal-Pers guided Defined Benefits Pension packages and replace it with defined contribution packages for city employees. 3 Finance Commission 2026/27 Budget Discussion - May 13, 2026 Budget Page #: Page 31 of Capital Improvement Projects – Sports Complex lighting Budget Category: Capital Projects
Implication/Concern:
The capital project does not list how it will funded in the out years - it only lists $335,000 for the current year. The fund it draws upon is from parking on the weekends in the sports complex. The parking is not generating enough to replace the drawdown and fund out years beyond the current year since 40% of weekend parking goes into that fund.
There is no justification with hard facts, just vague statements about anticipated cost savings and worn components in current lightening system
No ROI given
Area of project includes batting cages that have been closed for nearly 2 years with no funding identified to refurbish/reopen them
Adjacent artificial soccer turf fields are far from any homes An ROI study needs to be completed and presented to the public to justify this cost 4 Proposed Change:
Do not fund this project and instead use the money allocated to this project to refurbish the batting cages and have them reopened for public use at the previous rate of 12 pitches for $1 and 72 Pitches for $5.
The Director of Community and Library Service told the Finance Commission would require $330,000 .
The amount allocated to this project would cover that effort if it is redirected to batting cage refurbishment.
Work with the city attorney to recover some or all of this money spent on refurbishing the batting cages from the current operators.
See images and sections of the current agreement below
Images of Area that with proposed lightning replacement follow:
The contract between the city and current operator of the Sports Complex is shown below. The batting cages have been closed and all equipment stripped for nearly 2 years
This is the Capital Project Description in the Budget
Finance Commission 2026/27 Budget Discussion - May 13, 2026 Budget Page #: Page 41 of Capital Improvement Projects – Public Dock Replacement in front of Huntington Harbor Yacht Club ( City owned property operating a private club) Budget Category: Capital Projects
Implication/Concern:
The yacht club is responsible for maintenance and no evidence has been presented indicating the required maintenance was performed during the 60 years the yacht club has leased the facility from the city owned asset.
Maintenance records should be evaluated.
Usage patterns should also be studied to understand the percentage of use of the docks by non yacht club members. Note the yacht club is a private club operating via a lease in a city owned building and on city owned land.
The yacht club is currently not supplying required financial statements and as far as I know, has never supplied quarterly financial statements to justify the rent they pay the city – a little of $3K a month for the yacht club, use of the land, and 30 spots in the public parking lot.
I believe the vast majority of dock usage is by Yacht Club members and this project represents a large expense for a small group of residents
5 Proposed Change:
Validate proper maintenance of the current docks has been performed by the HHYC as required in the lease
Evaluate the condition of the Docks and determine if replacement is necessary this fiscal year – provide report to city council
Ask the yacht club fund all or a portion of the project.
The contract between the city and HHYC requiring Dock Maintenance
This is the Capital Project Description in the Budget
Finance Commission 2026/27 Budget Discussion - May 13, 2026 Budget Page #: Numerous – All Departments
Budget Category: Non-Professional Services Contracts and Other Services Implication/Concern:
1 - No detail given on existing or proposed contracts
2 – Lack of transparency and oversight – No review and approval of these contracts by city council 3 – Lax enforcement of contracts – see examples
See attached Table on next page to understand scope of the issue – Nearly $48 Million in overall budget Proposed Change:
Require a detailed report showing all existing and proposed contracts and expenditures for each of the following departments:
Treasury
Community and Library Services
Police
Public Works
6 Non departmental
for review by council and the finance commission prior to presentation of the budget for study by the city council. An example of the requested report follows on the next page.
See Attached Example of Requested Report
Here is a table showing scope of the requested budget with no detail or information other than a single line item on a table of numerous entries on many different pages – 1 for each department - in a budget of document with 271 pages.
FY 26/27 - All Funds Budgets
Department
Non Professional Services - Other
Contract Services Other Total
City Attorney 50,172.00$ 515.00$ 50,687.00$
City Clerk 361,990.00$ 515.00$ 362,505.00$
Treasury 854,377.00$ 854,377.00$
City Manager 30,224.00$ 30,224.00$
Community Development 2,508,152.00$ 2,508,152.00$
C&L 3,748,382.00$ 2,800.00$ 3,751,182.00$
Finance 441,713.00$ 441,713.00$
Fire 153,805.00$ 22,735.00$ 176,540.00$
HR 119,035.00$ 119,035.00$
IT 30,900.00$ 30,900.00$
Police 2,655,381.00$ 1,030.00$ 2,656,411.00$
Public Works 21,554,363 1,789,390.00$ 23,343,753.00$
Nondepartmental 11,373,569.00$ 2,008,500.00$ 13,382,069.00$ Total 47,707,548.00$
All Budget Funds 589,984,308
Pct of All Funds 8%
FY 26/27 - General Funds Budgets
Department
Non Professional Services - Other
Contract Services Other Total
City Attorney 50,172.00$ 50,172.00$
City Clerk 361,990.00$ 515.00$ 362,505.00$
Treasury 854,377.00$ 854,377.00$
City Manager 30,224.00$ 30,224.00$
Community Development 124,501.00$ 124,501.00$
C&L 3,154,102.00$ 2,800.00$ 3,156,902.00$
Finance 132,713.00$ 132,713.00$
Fire 52,905.00$ 21,985.00$ 74,890.00$
HR 119,035.00$ 119,035.00$
IT 30,900.00$ 30,900.00$
Police 2,655,381.00$ 1,030.00$ 2,656,411.00$
Public Works 930,000.00$ 491,650.00$ 1,421,650.00$
Nondepartmental 867,569.00$ 2,008,500.00$ 2,876,069.00$ Total 11,890,349.00$
General Fund 327,300,000.00$
Pct of General Fund 4%
Example of entry in the City Clerk Department entry in current city budget. This is a single page of the 271- page budget. Note the line items entitled “Other Contract Services” and “Other Expenses”
Example of Requested Report showing Contract and all Amendments (columns split to allow reading)
Example of Contract Requirement and lax oversight by staff – Contract Growth and Lax Oversight