Zack Zithisakthanakul | Chief Financial Officer
Office: (714) 536 – 5630 | 2000 Main Street, Huntington Beach, CA 92648 | www.huntingtonbeachca.gov
To: Honorable Mayor and City Council Members
From: Zack Zithisakthanakul, Chief Financial Officer
Date: August 27, 2026
Subject: Finance Commission Subcommittee Report – Financial Impact of the Police Officers’ Association MOU and Options to Avoid Bankruptcy
The purpose of this memorandum is to transmit to the City Council the Finance Commission Subcommittee Report prepared in response to the City Council's August 18, 2026 direction regarding the financial impact of the Police Officers' Association (POA) Memorandum of Understanding (MOU) on the General Fund and options to avoid bankruptcy.
BACKGROUND AND TIMELINE
On August 18, 2026, the City Council directed the Finance Commission to create a subcommittee to review the financial impact of the POA MOU on the General Fund and provide options to avoid bankruptcy.
On August 20, 2026, the Finance Commission held a special meeting and selected Commissioners Pellman, Boomgarten, and Geery to serve on the subcommittee.
On August 21, 2026, City staff met with the subcommittee to assist with its review and research by providing requested financial information and responding to questions related to the Council-directed analysis.
On August 24, 2026, City staff met with the subcommittee a second time to provide additional assistance, financial information, and responses to questions in support of the subcommittee's preparation of its report.
On August 26, 2026, at its regular meeting, the Finance Commission considered the subcommittee's report and approved a motion to transmit the report to the City Council with changes to align the financial impact information with the Chief Financial Officer's Financial Impact Report.
SUBCOMMITTEE REPORT
The attached report documents the subcommittee's review of the POA MOU. The report evaluates the estimated impact of salary, overtime, other pay, and health benefit changes over the three-year term of the MOU. As presented in the report, the subcommittee identified a total estimated impact of $9,808,772 for salary, overtime, other pay, and health benefits over the three-year period.
Consistent with the Finance Commission's August 26, 2026 action, the report is being transmitted to the City Council as the Finance Commission's response to the Council's August 18, 2026 direction.
The attached subcommittee report should be considered together with the CFO's Financial Impact Report and related long-range financial analysis presented to the City Council.
ATTACHMENT
Attachment A - Finance Commission Subcommittee Report
Meeting Date: 9/1/2026 - Supplemental Communication - Finance Dept. Item No. 26 (26-759) City of Huntington Beach
Finance Commission
Subcommittee Report:
On August 18, 2026 the City Council voted “to have the Finance Commission to create a subcommittee to look into the financial impact of (POA) MOU contract to the General Fund and provide options to avoid bankruptcy. ”
On August 20, 2026 the Finance Commission held a special meeting to create a subcommittee. The subcommittee members were Commissioner Pellman, Commissioner Boomgarten, and Commission Geery.
The report from the subcommittee will present their report at the Finance Commission Meeting August 26, 2026.
Findings:
Salaries/OT/Other Pay for year 24/25
Year One (8%) * Estimated
$51,068,075 x 1.08 = $55,153,521
Year two (4%)* Estimated
$55,153,521 x 1.04 = $57,359,662
Year Three (5%)* Estimated
$57,359,662 x 1.05 = $60,227,645
Total Cost of POA MOU Poposal for Salaries + OT+Other Pay: Years One-Three:
Year One: $55,153,521 - $51,068,075 = $4,085,446
Year Two: $57,359,662 - $55,153,521 = $2,206,141
Year Three: $60,227,645- $57,359,662 = $2,867,985
Total impact 17% Salary + OT +Other pay (All three years Salary + OT+Other Pay) $4,085,446 + $2,206,141 + $2,867,985 = $9,159,572
Attachment A
Health Benefits Using numbers provided by CFO
Year One (No increase 0%)
0 Year Two (0.63%)
$45,000 (single)
$61,200 (2 party)
$218,400 (family)
=$324,600
Year Three (0.63%)
$45,000 (single)
$61,200 (2 party)
$218,400 (family)
=$324,600
Total impact for Benefits (All 3 years 0+0.63% +0.63%=1.26%) $0+ $324,600 + $324,600 = $649,200
Total Impact Of POA MOU for Salary/OT/Other Pay/Benefits $9,159,571 (Total Salary + OT+Other pay 17%)
$649,200 (Total benefits 1.26%)
= $9,808,772
Note:
*OT does Not eƯect Pension/Calpers (small exceptions)
*General Fund ~$305,054,612
*General Fund reserve ~$99,000,000