REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Eric G. Parra, Interim City Manager
VIA: Sunny Han, Chief Financial Officer
PREPARED BY: Serena Bubenheim, Assistant Chief Financial Officer
Subject:
title
Consider Adopting Resolution No. 2024-29 to Adopt a Budget for the City for Fiscal Year 2024/25; Resolution No. 2024-28 Establishing the Gann Appropriation Limit for Fiscal Year 2024/2025; Resolution No. 2024-27 Levying a Retirement Property Tax for Fiscal Year 2024/2025 to Pay for Pre-1978 Employee Retirement Benefits; Resolution No. 2024-24 Modifying Salary and Benefits for Non-Represented Employees by Adding the Deputy Public Works Director/City Engineer Classification; Resolution No. 2024-25 Amending the City’s Classification Plan by Adding the Classifications of Capital Projects Supervisor and Real Time Crime Center Supervisor; Resolution No. 2024-33 Modifying Salary and Benefits for Non-Represented Employees by Adding the Senior Deputy Community Prosecutor Classification and Establishing the Compensation and Amending the Non-Elected Non-Represented Employees Pay Schedule to Update the Compensation Range for the Chief Assistant City Attorney and Deputy Community Prosecutor; Resolution No. 2024-31 Adopting an Updated Master Fee and Charges Schedule; Resolution No. 2024-32 Setting Advanced Life Support, Basic Life Support, and Emergency Ambulance Transportation Fees to be Charged by the Fire Department of the City of Huntington Beach; and Resolution No. 2024-26 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; and Authorize the City Manager or Designee to Purchase One Triple Combination Pumper Engine in the Amount of $1,257,063.
body
Statement of Issue:
The City Charter of the City of Huntington Beach requires a Public Hearing prior to the adoption of the City’s annual budget. The City Charter further requires adoption of the annual budget by June 30, 2024, for Fiscal Year (FY) 2024/25.
Financial Impact:
Proposed Budget: The FY 2024/25 Proposed Budget is structurally balanced. The All Funds Proposed Budget equals $527.2 million. The General Fund Proposed Budget totals $300.0 million. Individual departmental and fund-level appropriations are contained in the attachments herein.
Employee Tax Override: Pursuant to Chapter 3.07 of the Municipal Code, the Proposed Budget for FY 2024/25 assumes the continuation of the Retirement Tax Cap of $0.01500 per $100 of assessed value. As of the most recent audited financial statements, this tax rate resulted in $8.4 million in revenue in FY 2022/23. This recurring revenue source is included in the Proposed FY 2024/25 Budget.
Citywide Master Fee and Charges Schedule: Citywide user fees and charges generate approximately $24 million in annual revenue across all funds and $23 million in the General Fund. These funds support a wide range of City services, including public safety. If adopted as proposed by staff, the updated schedule may generate up to $1,262,586 in additional annual revenue, $908,045 of which is General Fund revenue.
Emergency Medical Service (EMS) Fees: Updating the EMS fees in accordance with the most recent EMS fee study would increase General Fund revenues by $1,643,052 million annually.
Fire Triple Combination Pumper Engine: Funds in the amount of $1,257,063 are included for the purchase of the vehicle in the proposed FY 2024/25 budget in Equipment Replacement Fund 324.
Recommended Action:
recommendation
A) Adopt Resolution No. 2024-29, “A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2024/25” (Attachment 2); and,
B) Authorize the Professional Services included in the FY 2024/25 budget to be representative of the services projected to be utilized by departments in FY 2024/25 (Attachment 3); and,
C) Adopt Resolution No. 2024-28, “A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2024/2025” of $1,217,866,589” (Attachment 4); and,
D) Adopt Resolution No. 2024-27, “A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2024/2025 to Pay for Pre-1978 Employee Retirement Benefits” (Attachment 5); and,
E) Adopt Resolution No. 2024-24, “A Resolution of the City Council of the City of Huntington Beach Modifying Salary and Benefits for Non-Represented Employees by Adding the Deputy Public Works Director/City Engineer Classification and Establishing the Compensation” (Attachment 6); and,
F) Adopt Resolution No. 2024-25, “A Resolution of the City Council of the City of Huntington Beach Amending the City’s Classification Plan by Adding the Classifications of Capital Projects Supervisor and Real Time Crime Center Supervisor” (Attachment 7); and,
G) Adopt Resolution No. 2024-33, “A Resolution of the City Council of the City of Huntington Beach Modifying Salary and Benefits for Non-Represented Employees by Adding the Senior Deputy Community Prosecutor Classification and Establishing the Compensation and Amending the Non-Elected Non-Represented Employees Pay Schedule to Update the Compensation Range for the Chief Assistant City Attorney and Deputy Community Prosecutor” (Attachment 8); and,
H) Adopt Resolution No. 2024-31, “A Resolution of the City Council of the City of Huntington Beach Adopting an Updated Master Fee and Charges Schedule” (Attachment 9); and,
I) Adopt Resolution No. 2024-32, “A Resolution of the City Council of the City of Huntington Beach Setting Advanced Life Support, Basic Life Support, and Emergency Ambulance Transportation Fees to be Charged by the Fire Department of the City of Huntington Beach” (Attachment 10); and,
J) Adopt Resolution No. 2024-26, “A Resolution of the 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” (Attachment 11); and,
K) Authorize the City Manager or designee to purchase one Triple Combination Pumper Engine in the amount of $1,257,063.
L) Direct 40 percent of Huntington Central Park Sports Complex (HCPSC) Tournaments and Special Events Parking to the HCPSC Capital Improvements Fund (Fund 325) to provide for HCPSC capital improvements.
end
Alternative Action(s):
A. Instruct City staff regarding changes to be incorporated into the budget and adopt the FY 2024/25 Budget and corresponding actions and resolutions as amended. Not approving the Master Fee and Charges and Emergency Medical Service (EMS) Fee Schedules as proposed would result in a projected General Fund deficit, requiring the use of reserves or offsetting expenditure reductions.
B. Continue the Public Hearing until June 18, 2024.
Analysis:
As required by the City Charter, the City Manager submitted the FY 2024/25 Proposed Budget to the City Council on May 10, 2024. The Proposed Budget and the Five-Year Capital Improvement Program (CIP) were also discussed at a City Council Study Session held on May 21, 2024.
The purpose of the budget study session was to provide the City Council an opportunity to discuss the Proposed Budget with staff before proceeding with the formal Public Hearing on June 4, 2024.
Overview
Over the past couple years, the City has come together in an extraordinary way to address numerous fiscal challenges, including Workers’ Compensation and insurance increases, inflationary pressures on operating and capital costs, and increasing CalPERS pension costs. Through the leadership and support of the City Council and City Manager, the City implemented various cost saving measures without reductions in essential service levels.
Inclusive of these significant budget measures, the FY 2024/25 Proposed Budget also includes mandated and additional one-time savings to mitigate the City’s rising pension costs; prioritizes improvements to the City’s facilities, roads and parks; incorporates increased funding for critical programs such as Workers’ Compensation and General Liabilities; accounts for increases to the City’s contractual obligations and inflationary cost impacts; and includes the addition of four positions across various City departments to meet increased demand and improve department efficiencies.
The FY 2024/25 Proposed Budget is structurally balanced and totals $527.2 million across All Funds. This reflects a $19.2 million, or 3.8 percent, increase from the FY 2023/24 Adopted All Funds Budget of $508.0 million.
FY 2024/25 General Fund revenue is projected at $301.7 million, a $17.8 million, or 6.3 percent increase from the FY 2023/24 Adopted Budget. Major sources of General Fund revenue include Property Tax, Sales Tax, Utility Users Tax, and Transient Occupancy Tax, among others. The largest increases in General Fund revenue are in Revenue from Other Agencies, attributable to participation in the Voluntary Rate Range Intergovernmental Transfer (VRRP IGT) Program, and in Non-Operating Revenue, which accounts for a one-time transfer of $6.9 million for the first repayment related to the Waterfront Loan Superior Court Judgement. Property Tax revenues are anticipated to increase by $4.0 million, with expected revenues totaling $108.2 million due to gains in assessed property valuations. Charges for Current Services is projected to increase by $2.3 million due to proposed increases in some of the fees, including medical transports, as well as increased demand for services, such as recreation classes and fitness center memberships.
The Proposed General Fund Expenditure Budget totals $300.0 million and is supported by revenues of $301.7 million. The Proposed General Fund Budget has no reliance on one-time revenues to fund ongoing operations, which is critical to maintaining the City’s financial viability and success, and represents a $14.8 million, or 5.2 percent, increase compared to the FY 2023/24 Adopted Budget of $285.2 million. This increase is attributable to higher personnel costs arising from the continued impacts of renegotiated Memoranda of Understanding (MOU) during FY 2023/24, the addition of 4 full time employees, and inflationary impacts on normal business activities.
A summary of the General Fund budget by department is provided in the table below:
The FY 2024/25 Proposed Budget includes 1,005.75 Full Time Equivalents (FTEs); an increase of 4 FTEs across all funds compared to FY 2023/24. Along with new positions, the budget also includes upgrades to 2 current positions, as well as strategic pay increases to key positions within the City Attorney’s Office to assist with the attraction and retention of talent and to fill critical vacancies.
The new positions and FTE changes are as follows:
City Attorney’s Office
• Upgrade of 1 Deputy Community Prosecutor to Senior Deputy Community Prosecutor to lead the City’s prosecutorial efforts for complex misdemeanor cases
• Pay updates for the Chief Assistant City Attorney and Deputy Community Prosecutor classifications
• Pay updates for the Chief Litigation Counsel, Senior Deputy City Attorney, and Deputy City Attorney II are currently under review and will be brought forward to the City Council for approval at a future date
Community Development Department
• 1 Building Inspection Supervisor to ensure timely inspections for complex residential and commercial projects
Fire Department
• 1 limited-term Management Aide to serve as a community engagement coordinator to be funded by Opioid Settlement funds
Police Department
• 1 Real Time Crime Center (RTCC) Supervisor to oversee the proactive monitoring of available technology and information systems resources to aid in the prevention of crime
Public Works Department
• 1 Fleet Maintenance Crew Leader to coordinate fuel sites and fuel system compliance
• 1 Senior Mechanic to meet the demand for heavy equipment and safety fleet vehicle maintenance and repairs
• Upgrade of 1 Capital Projects Administrator to Capital Projects Supervisor to oversee construction project management and contract administration
• The City Engineer position and vacant Deputy Director of Public Works position are being eliminated and combined into 1 new Deputy Public Works Director / City Engineer position, for a decrease of 1 FTE
The FY 2024/25 Proposed Budget was carefully prepared to balance immediate priorities along with the need for long-term investments. The City Budget reflects the priorities of the City Council and outlines a plan committed to enriching the quality of life for our residents, businesses, and visitors by increasing funding for core services such as public safety, community & library service programs, and improving the City’s infrastructure.
Revisions to the Proposed Budget
The FY 2024/2025 Proposed Budget was initially presented to the City Council on May 21, 2024, and included revenues of $514.3 million and expenditures amounting to $526.9 million across all funds. Within the General Fund, revenues totaled $299.8 million and expenditures $299.6 million. Based on feedback provided during the study session, General Fund revenue estimates have been adjusted to incorporate proposed fee increases as outlined within this report. The City Attorney’s Office budget has also been updated to incorporate strategic salary increases to key positions to assist with the attraction and retention of talent and to fill critical vacancies. The full spending plan is outlined in Exhibit A-1 (Attachment 2).
Fire Department Opioid Settlement Spending Plan
The Proposed Budget includes a 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 on high-impact abatement activities and other approved uses in accordance with 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 the timely use of the funds.
Professional Services
As established by Administrative Regulation Number 228, each department has submitted a list of professional services that are generally contained in their Proposed Budgets (Attachment 3). Professional services contracts are subject to compliance with Administrative Regulation Number 228 and City Ordinance Chapter 3.03.
Gann Appropriation Limit
In November 1979, the California voters approved Article 13B of the State of California Constitution, which allows the City’s spending of tax proceeds to increase only by factors from the base year of 1978-1979. In June 1990, Proposition 111 was passed, which changed the way the limit is calculated and is outlined as follows.
The City may increase its limit annually in two ways:
• By a percentage equal to the increase from the preceding year in county or city population (whichever is greater).
• By an amount equal to the change in per capita personal income in California or the change in the assessment roll the preceding year due to the addition of local non-residential new construction (whichever is greater).
The proposed appropriation limit for FY 2024/25 was calculated as follows:
FY 2023/24 Appropriation Limit $1,171,687,773
Multiplied by percentage grown in State Per Capita Personal Income 1.0362
Multiplied by change in County Population 1.0031
Proposed FY 2024/25 Appropriation Limit $1,217,866,589
Appropriations of revenues controlled by the Gann Limit are primarily in the General Fund. The General Fund proposed appropriation for FY 2024/25 of $300.0 million is significantly below this appropriation limit (Attachment 4).
Examples of proceeds of taxes governed by the Gann Appropriation Limit are property taxes, sales taxes, utility taxes, state subventions, fines, forfeitures, interest revenue on regulatory licenses, user charges, and user fees, to the extent that those proceeds exceed the costs reasonably borne by that entity in providing the regulation, product, or service.
Employee Tax Override
On July 16, 2012, the City Council adopted an ordinance to permanently cap the tax rate at $0.01500 per $100 of assessed valuation. Therefore, the requested tax levy for FY 2024/25 reflects the same tax rate of $0.01500 per $100 of assessed valuation effective in FY 2012/13 pursuant to Chapter 3.07 of the Municipal Code. Fiscal Year 2024/25 will represent the thirteenth year of the application of the permanent cap.
The current capped Employee Tax Override results in an approximate $75 annual tax levy for a property assessed at $500,000. Revenue generated from this property tax helps the City fund public safety employee pension costs associated with pre-1978 retirement benefit levels. As such, the tax can only pay for the estimated costs associated with the public safety pension benefit formulas in place prior to the enactment of Proposition 13 on July 1, 1978. Hence, the tax can only pay for retirement benefits for all retired, current, and future public safety City employees that were contracted prior to July 1, 1978 (such as the 2% at 50 benefit formula for Safety employees in place before enactment of Proposition 13).
Based on the most recent CalPERS actuarial valuations, the cost of pre-1978 retirement benefit levels for Safety personnel totals $26.6 million. As such, the proposed tax rate is recouping only 28 percent of eligible Safety personnel retirement costs.
Due to the County of Orange’s timeline for approving the tax rate and the city’s budget cycle, the rate must be set before the City Council takes action on its annual budget. The recommended assessment rate would maintain essential services for Fiscal Year 2024/25 (Attachment 5).
Public Hearing
The City Charter requires that a public hearing be conducted on the City budget prior to adoption. Public Hearing notices have been published per City Charter requirements (Attachment 1). At the close of this hearing, all legal requirements for budget adoption will have been met.
Citywide Master Fee and Charges Schedule
Citywide user fees and charges generate approximately $24 million in annual revenue across all funds and $23 million in the General Fund. These funds support a wide range of City services, including public safety. If adopted as proposed by staff, the updated schedule may generate up to $1,262,586 in additional annual revenue, $908,045 of which is General Fund revenue.
The City’s current Master Fee and Charges Schedule was approved in 2016 based on FY 2014/15 budget and financial data. Typically, a cost of service study is anticipated to be completed every three to five years with incremental updates occurring in the years in between comprehensive studies. The proposed Master Fee and Charges Schedule incorporates a full cost of service study based on FY 2023/24 budget data.
The purpose of the updates is to avoid reduction in cost recovery that occurs if fees remain unchanged while costs continue to rise. When a fee is set at less than full cost recovery, another City revenue source (typically the General Fund) provides a subsidy.
Ongoing review and adjustment of fees provides multiple benefits, including:
• Increasing the availability of discretionary General Fund revenues to be used for services and activities available to all residents and businesses, such as public safety services.
• Keeping pace with general cost inflation.
• Avoiding fee spikes that are more likely to occur when municipalities leave fees unchanged for a multi-year period.
• Providing fee payers, city staff, and city policymakers with a pattern of consistency that provides information for forecasting and decision-making purposes.
• Helps meet fee-payer service level expectations by collecting fees to fund the existing level of services provided.
• Encouraging generational equity among fee payers by avoiding long-term stagnation of fees followed by significant fee increases.
City Treasurer Fees
Credit Card Transaction Convenience Fee (FN-67) - Each time a person utilizes a credit card for purchases of goods or services, credit card companies charge that entity a fee for the customer’s use of said card for that transaction. Most cities (and other public entities) accept credit cards as a courtesy, offering a convenient payment option to their customers. Increasingly over the past few years, many cities have begun to pass this cost along to the customer to help offset the cost of offering this convenience. Credit card processing fees paid by the City total approximately $690,000 annually. Staff is proposing to increase the credit card convenience fee from 2.29% to 3%. Implementation of this fee would result in an increased General Fund fee recovery of $73,500 and other funds recovery of $94,030.
City Manager Fees
Film Permit Fee Restructuring: The City of Huntington Beach regularly welcomes a variety of film productions in Surf City. A full audit of these film permit fees and a formalized comparison to surrounding cities had not been conducted in decades, leading to below average fees and production costs. The proposed, new fee structure (see below) will be better aligned with other cities and allow for increased general fund revenue.
• Restructured Application Fee - Formerly $182 for all applications. Proposed $300 for Film and $150 for Still Photography
• Introduction of Peak Season filming fees - Increased fees for filming April to October
• Addition of equipment fees for use of Public Works and Marine Safety Equipment (i.e. jet skis, tractors, etc.)
• Standardized fee schedule to include personnel time for Marine Safety, Fire Department, Police Department, and Public Works staff.
• Added 15% coordination fee - Fee percentage based on the total fees paid to cover ongoing coordination.
Civic Center Room Rentals: The Civic Center has three meeting spaces (the Council Chambers and Lower Level Conference Rooms B7 and B8) that are occasionally used by outside organizations. However, these spaces do not have established room rental rates, which is inconsistent with meeting spaces at other City facilities that have established rental rate structures. The proposed, new fee structure for the Civic Center mirrors that in other City facilities available for rental by the public.
The restructured Film Permit fees are estimated to increase Specific Event Fund revenues by $32,480 annually. The demand level for Civic Center room rentals and the corresponding impact to General Fund revenues is still being evaluated at this time.
Community Development Fees
Expedited Plan Review (B-47): The Expedited Building Plan Review program is a new, premium service that completes the building plan review process in half the time. The turnaround time for expedited reviews is as follows:
1st check - 10 business days
2nd check - 5 business days
3rd check - 3 business days
Expedited Plan Reviews are offered at 2x the regular plan review rate. The demand level for this service and the corresponding impact to General Fund revenues is still being evaluated at this time.
Strand Parking Structure: Parking rate increases are proposed at the Strand Public Parking Structure to align more closely with similar mixed-use facilities, and coastal and municipal parking programs in Orange County. Adjustments will be made to the transient, valet, holiday, and event rates, and monthly and business hours parking passes. Peak pricing months will also be extended to align with periods of higher demand.
It is estimated that these adjustments would generate a total annual revenue increase of $201,548, half of which would be General Fund revenue ($100,774).
Community & Library Services Fees
Specific Events Ticketed Event Fee (CS-30): The new fee associated with Specific Events will modify the current Master Fee and Charges schedule by adding a “per-ticket” fee. Event organizers seeking permits for ticketed events will be required to pay the fee for all ticketed events. The fee as proposed would be based on the face value of the ticketholder’s ticket as shown below.
Ticket Value Per Ticket Fee
|
$0 - $50 |
$2 |
|
$51 - $200 |
$4 |
|
$201+ |
$6 |
The event organizer will be required to submit the Ticketed Event fee payment based on a post-event audit of total ticket sales within 30 days of the event. Staff estimates anticipated new General Fund revenues of approximately $200,000 in FY 2024/25 based on the number of ticketed events currently scheduled.
Sports Complex (HCPSC) Tournaments and Special Events Parking: The new parking charge proposed for the Sports Complex will increase the daily parking rate on Tournament/Special Event days from the current $2 to $10. The current HCPSC daily rate of $2 has been in place since May 2023. A survey of other jurisdictions found that parking at sports facilities ranges from $0 (Irvine, Lake Forest) to $15 (Oceanside, Ladera Ranch).
All other non-Tournament/ Special Events days will remain at $2.
The anticipated new annual revenue generated by this adjustment is $445,321. Of this amount, staff proposes to designate 40% of this revenue (estimated at $178,127) to a special fund for HCPSC capital improvements. The remaining 60% balance of the new Tournament/Special Event day fee ($267,194) would be an increase to General Fund revenue.
Room Rental Hourly Increases: Staff is recommending raising the hourly rental rates by $15 per hour for the following facilities: Senior Center in Central Park, Clubhouses, Community Center Rooms, Central Library Theater Rental, and the C and D Rooms in the Central Library. Rates were last adjusted in December 2018.
It is estimated that these adjustments would generate increased annual General Fund revenue totaling $115,760.
Field Rental Hourly Rates: Staff is recommending raising the hourly rental rates by $7 per hour for existing categories of Adults and Youth (from $25/hr. to $32/hr.), as well as HB Non-Profit Youth and HB Organized Senior 55+ Groups ($15/hr. to $22/hr.). In addition, staff is proposing new categories of Non-Resident/Non-Profit organizations, as well as Commercial/For-Profit rates ranging from $37/hr. to $42/hr.). Rates have not been adjusted in over 20 years and are still lower than nearby jurisdictions. For example, Newport Beach rates range from $77/hr. for Resident Non-Profit groups to $344/hr. for Non-Resident Commercial rates. The city of Irvine’s rates range from $37/hr. for resident Youth Non-profit groups to $79/hr. for Commercial For-Profit. It is estimated that these adjustments would generate increased annual General Fund revenue totaling $21,000.
Fire Fees
Community Risk Reduction (CRR) Fee Schedule (F1 to F141) - The City is in the process of migrating all the CRR life safety inspections from Accela to FirstDue for a more streamlined service, invoice, customer service, and payment process. The migration will include moving all billing and invoicing to a different platform called Stripe. This request is for a 1% increase to all CRR transactions due to the increased cost of credit card processing with Stripe.
Central Net Training Center User Fees (F144 to F223, F270 to F276) - The Central Net Training Center (CNTC) fee schedule has not undergone a fee increase since 2021. CNTC fees are lower compared to another fire training facility located in Orange County. Additional fees for services such as copies and instructor wages have been added to the fee schedule, which are fees currently charged by other training centers.
Hourly Rates (F250, F251, F255, F256) - This modification would update hourly rates by 6% to align fees more closely with actual personnel costs.
Valuation Based Fire Plan Review Fees (F96 and F96.1) -This request is to align with the recently updated policy for reviewing the Alternate Materials and Methods proposal. A 2-hour application fee will be charged at the time of submittal with additional fees charged based on (1) the staff time used to review the application, or (2) a third-party plan review consultant fee to review the application.
CUPA Program - Hazardous Materials Review and Inspection (F228) - The CUPA program is consolidating the billing categories, reducing the number of quantity ranges from 9 categories to 5 categories, and simplifying the billing process. This will result in a higher fee for 7 businesses and a lower fee for 16 businesses with an overall decrease in revenue by $4,008 based on 2023 data (out of 640 businesses). Staff expects additional businesses to be included in the 2024 CUPA program based on new regulations (AB2059) affecting retail businesses, which should offset the losses due to the consolidation of billing categories.
Other Fire Department Programs (F27, F28, F99, F105, F115, F126, F136, F138, F261) - The fee study updated the fees to more closely align with actual cost based on actual staff time for several inspection fee categories.
It is estimated that these adjustments will generate an annual revenue increase of $12,947, of which $10,337 would be General Fund revenue.
Police Fees
Records (PD 60 to 63) - Copies of police reports and records are currently available at no charge. Based on a survey of surrounding cities, a $25 charge is recommended for media copies and $5 for report copies.
If approved, it is estimated that these adjustments will generate an additional $50,000 in General Fund revenue.
Public Works Fees
The fee study updated various Public Works fees to align with actual costs more closely. To note, the majority of Public Works fees are deposit-based and unused amounts are returned to the applicant. It is estimated that these adjustments will generate an annual General Fund revenue increase of $37,000.
Annual Inflationary Adjustment
During interim years (i.e., during years between fee studies) it is recommended that the City Council authorize inflationary adjustments to fees. The recommended inflationary adjustments are based on the prior year's annual percentage change in the all-urban Consumer Price Index for Los Angeles-Long Beach-Anaheim, California (CPI), not to exceed five percent (5%) per year. If the CPI does not change or goes down in a given year, no change shall be made to the fee schedule that year unless an adjustment is made to targeted cost recovery levels or fee study findings indicate that an adjustment is appropriate, and a public hearing is held to consider adjustments to fees.
Other Orange County cities that have adopted this method include Newport Beach, Costa Mesa, Seal Beach, and Lake Forest.
General Fund and All Funds Revenue Impact
If the Master Fee and Charges Schedule is amended as proposed, 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 priorities providing a broad public benefit.
Emergency Medical Service (EMS) Fees
Fire Department fees for emergency medical services were last adjusted in 2021. The City engaged the Matrix Group in 2024 to evaluate the cost-of-service relationships between the City and its customers for emergency medical services. A top-down approach was used to distribute the cost for these services across all users. The proposed fees will eliminate the current deficit between the City’s full cost and the existing fees while remaining in alignment with neighboring jurisdictions. The proposed update and new fees are expected to bring approximately $1.6 million in new revenue. The following proposed fee schedule was prepared by the Matrix Group in cooperation with City staff:
|
Fee Description |
Current Fee |
Recommended /Full Cost Fee |
Difference |
% Change |
|
ALS/BLS Assessment and Emergency Transport Fees |
|
Basic Life Support (BLS) Base Rate |
$1,655 |
$2,092 |
($437) |
26% |
|
Advanced Life Support (ALS) Surcharge |
$174 |
$220 |
($46) |
27% |
|
Non-Resident Surcharge |
$474 |
$599 |
($125) |
26% |
|
Treat No Transport Fee |
$366 |
$462 |
($96) |
26% |
|
Mileage |
$15.77 |
$22.74 |
($6.97) |
44% |
|
Oxygen |
$115 |
$176 |
($61) |
53% |
|
EKG |
$64 |
$77 |
($13) |
20% |
|
New Fees |
|
Standby (ea. 30 min) |
N/A |
$149 |
N/A |
N/A |
|
Facility Lift Assist/Non-Transport |
N/A |
$376 |
N/A |
N/A |
A portion of the proposed increases to the Master Fee and Charges Schedule and Emergency Medical Service (EMS) Fee Schedule totaling $300,371 and $266,667 were incorporated into the City’s Proposed FY 2024/25 Budget and Long-Term Financial Outlook presented during the Study Session on May 21, 2024. Not approving the Master Fee and Charges and Emergency Medical Service (EMS) Fee Schedules as proposed would result in reduced annual General Fund revenues of $908,045 and $1,643,052, respectively. Additionally, the FY 2024/25 projected General Fund surplus of $1,699,964 would change to a deficit of $830,133, requiring the use of reserves or offsetting expenditure reductions.
Acknowledge Receipt of Fire Inspections
California Health & Safety Code Sections 13146.2 and 13146.3 require all fire departments that provide fire protection services to perform annual inspections in every building used as a public or private school, hotel motel, lodging house, apartment house, and certain residential care facilities. These inspections are performed to meet certain building standards. Section 13146.2 of the Code requires departments to report annually to its governing body on its conformance to these requirements. State Senate Bill 1205 requires that effective January 1, 2019, the governing body annually adopt a resolution or other formal document certifying that these inspections were completed and that this document be submitted to the State.
During calendar year 2023, the Huntington Beach Fire Department completed annual inspections of all buildings referenced under Sections 13146.2 and 13146.3 of the California Health and Safety Code.
This includes the following:
|
Occupancy Type |
# in Jurisdiction |
# of Inspections |
% |
|
R1s ("hotel, motel, lodging houses") R1s that are also High Rises |
19 3 |
19 3 |
100 |
|
R2s ("apartment houses") R2 that are also High Rises |
2,473 1 |
2,596 1 |
95 |
|
R2.1 ("supervised residential") |
5 |
5 |
100 |
|
R4s ("residential/assisted living") |
1 |
1 |
100 |
|
Es (“public and private schools”) |
33 |
33 |
100 |
|
TOTAL |
2502 |
2625 |
95% |
In 2023, all R1, R2.1, R4, and Es were inspected and 99% of all R2s were inspected.
In conformance with Senate Bill 1205, staff recommends the adoption of the resolution shown as Attachment 11.
Fire Triple Combination Pumper Engine
One of the Fire Department fire engines, manufactured in 2006, has reached its 20-year operational lifespan and needs replacement. The National Fire Protection Association (NFPA) offers best practice recommendations for the fire service, emphasizing several factors for replacing fire apparatus. According to NFPA Standard 1911-100 - Annex D, page 103:
“In the last 10 to 15 years, much progress has been made in upgrading functional capabilities and improving the safety features of fire apparatus. Apparatus more than 15 years old might include only a few of the safety upgrades required by the recent editions of the NFPA fire department apparatus standards or the equivalent Underwriters Laboratories of Canada (ULC) standards. Because the changes and upgrades, and fine tuning to NFPA 1901 have been truly significant, especially in the area of safety, fire departments should seriously consider the value (or risk) to firefighters of keeping fire apparatus more than 15 years old in first-line service.”
Due to industry slowdowns and supply chain issues, the current wait time for ordering and building a fire engine can be up to two years from the issuance of a purchase agreement. The cost of purchasing one engine is $1,166,648, with an additional 7.75% sales tax of $90,415, totaling $1,257,063 (Attachment 12). The pricing is competitive, with bids obtained through Sourcewell, a national cooperative purchasing program that complies with Municipal Code 3.02.190.
Environmental Status:
Not applicable
Strategic Plan Goal:
Goal 2 - Fiscal Stability, Strategy A - Consider new revenue sources and opportunities to support the City's priority initiatives and projects.
Attachment(s):
1. Public Hearing Notice
2. Resolution No. 2024-29, “A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2024/25”
3. Professional Services included in the Fiscal Year 2024/25 Budget
4. Resolution No. 2024-28, “A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2024/2025”
5. Resolution No. 2024-27, “A Resolution of the City Council of the City of Huntington Beach Levying a Retirement Property Tax for Fiscal Year 2024/2025 to Pay for Pre-1978 Employee Retirement Benefits”
6. Resolution No. 2024-24, “A Resolution of the City Council of the City of Huntington Beach Modifying Salary and Benefits for Non-Represented Employees by Adding the Deputy Public Works Director/City Engineer Classification and Establishing the Compensation”
7. Resolution No. 2024-25, “A Resolution of the City Council of the City of Huntington Beach Amending the City’s Classification Plan by Adding the Classifications of Capital Projects Supervisor and Real Time Crime Center Supervisor”
8. Resolution No. 2024-33, “A Resolution of the City Council of the City of Huntington Beach Modifying Salary and Benefits for Non-Represented Employees by Adding the Senior Deputy Community Prosecutor Classification and Establishing the Compensation and Amending the Non-Elected Non-Represented Employees Pay Schedule to Update the Compensation Range for the Chief Assistant City Attorney and Deputy Community Prosecutor”
9. Resolution 2024-31, “A Resolution of the City Council of the City of Huntington Beach Adopting an Updated Master Fee and Charges Schedule”
10. Resolution No. 2024-32, “A Resolution of the City Council of the City of Huntington Beach Setting Advanced Life Support, Basic Life Support, and Emergency Ambulance Transportation Fees to be Charged by the Fire Department of the City of Huntington Beach”
11. Resolution No. 2024-26, “A Resolution of the 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”
12. Triple Combination Pumper Engine Quote