HomeMy WebLinkAbout06-29-2021 - Agenda Pkg - CC Adjourned Regular Meeting (Budget Workshop)Tuesday, June 29, 2021
6:00 PM
City of Hermosa Beach
City Hall
1315 Valley Drive
Hermosa Beach, CA 90254
City Council
Mayor
Justin Massey
Mayor Pro Tem
Michael Detoy
Councilmembers
Stacey Armato
Mary Campbell
Raymond Jackson
Adjourned Meeting Agenda
Fiscal Year 2021-22 Budget Workshop & Public Hearing
Location: Council Chambers (Face Mask Required) or Call-In
Duly Posted on June 26, 2021 at 12:37 p.m. by E.S.
Executive Team
Eduardo Sarmiento, City Clerk
Viki Copeland, Finance Director
Marnell Gibson, Public Works Director
Paul LeBaron, Chief of Police
Angela Crespi, Deputy City Manager
Ken Robertson, Community Development Director
Vanessa Godinez, Human Resources Manager
John Jones, Interim Community Resources Manager
City Treasurer
Karen Nowicki
City Attorney
Michael Jenkins
Suja Lowenthal, City Manager
June 29, 2021City Council Adjourned Meeting Agenda
VIEWING OPTIONS:
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Drive, Hermosa Beach. Face masks are required for all in-person attendance. Seating is limited.
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posted will be added as supplemental materials under the relevant agenda item on the City's website at
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Supplemental materials must be received before 4:00 p.m. on the date of the meeting to ensure
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Page 2 City of Hermosa Beach Printed on 6/28/2021
June 29, 2021City Council Adjourned Meeting Agenda
6:00 P.M. - ADJOURNED REGULAR MEETING AGENDA
I. CALL TO ORDER
II. PLEDGE OF ALLEGIANCE
III. ROLL CALL
IV. ANNOUNCEMENTS - UPCOMING CITY EVENTS
V. PUBLIC PARTICIPATION
Although the City Council values your comments, the Brown Act generally prohibits the Council from
taking action on any matter not listed on the posted agenda as a business item. Comments from the
public are limited to three minutes per speaker.
ATTEND IN PERSON IN THE CITY HALL COUNCIL CHAMBERS (FACE MASK REQUIRED)
OR PARTICIPATE BY PHONE:
•Toll Free: 833-548-0276
•Meeting ID: 836 2064 2539, then #
•Participant ID: #
•Passcode: 90254
ATTENDEES WILL BE MUTED UNTIL THE PUBLIC PARTICIPATION PERIOD IS OPENED.
If you are joining by phone, press * 9 to raise your virtual hand and * 6 to unmute your line.
VI. OPENING REMARKS (City Manager Suja Lowenthal)
VII. OVERVIEW OF 2021-22 BUDGET (Finance Director Viki Copeland)
·How the Budget is Balanced
·Revenue
·Appropriations
·Highlights
·Capital Improvement Plan
Link to Fiscal Year 2021-22 Preliminary Budget and Capital Improvement
Program
Attachments:
VIII. QUESTIONS/COMMENTS FROM COUNCILMEMBERS
IX. CONSENT CALENDAR
Page 3 City of Hermosa Beach Printed on 6/28/2021
June 29, 2021City Council Adjourned Meeting Agenda
a.REPORT
21-0402
ADOPTION OF THE 2021-22 APPROPRIATIONS LIMIT
(Finance Director Viki Copeland)
Recommendation:Staff recommends City Council adopt a Resolution approving and adopting the annual
Appropriations Limit for the Fiscal Year 2021-22.
1. Reso 21-xxxx adopting 2021-22 Appropriations Limit
2. 2021-22 Calculation of Appropriation Limit
Attachments:
X. PUBLIC HEARING
a.REPORT
21-0403
ADOPTION OF FISCAL YEAR 2021-22 BUDGET
(Finance Director Viki Copeland)
Recommendation:Staff recommends City Council:
1. Hear public testimony regarding the Fiscal Year 2021-22 Budget (Attachment 1);
2. Approve increase in rates for legal services effective July 1, 2021 and approve an
annual CPI adjustment commencing 2023 (Attachment 2); and
3. Adopt a Resolution approving the 2021-22 Budget as presented in Exhibit A (included
in Attachment 3).
1. Link to Fiscal Year 2021-22 Preliminary Budget and Capital
Improvement Program
2. Reso No. 21-xxxx - Budget Adoption 21-22
3. City Attorney_Proposed Rates 2021
4. 2021-22 General Fund Summary
Attachments:
XI. ADJOURNMENT
Page 4 City of Hermosa Beach Printed on 6/28/2021
June 29, 2021City Council Adjourned Meeting Agenda
FUTURE MEETINGS AND CITY HOLIDAYS
CITY COUNCIL MEETINGS:
July 13, 2021 - Tuesday - 5:00 PM - Closed Session,
6:00 PM - City Council Meeting
July 22, 2021 - Thursday - Adjourned Regular Meeting:
6:00 PM - Joint Meeting with all Boards/Commissions
July 27, 2021 - Tuesday - 5:00 PM - Closed Session,
6:00 PM - City Council Meeting
August 10, 2021 - Tuesday - 5:00 PM - Closed Session,
6:00 PM - City Council Meeting
August 16, 2021 - Monday - Adjourned Regular Meeting:
5:00 PM - Tri-Agency Meeting with HBCSD and BCHD
August 24, 2021 - Tuesday - No Meeting (Dark)
September 14, 2021 - Tuesday - 5:00 PM - Closed Session,
6:00 PM - City Council Meeting
September 28, 2021 - Tuesday - 5:00 PM - Closed Session,
6:00 PM - City Council Meeting
October 12, 2021 - Tuesday - 5:00 PM - Closed Session,
6:00 PM - City Council Meeting
October 23, 2021 - Saturday - Adjourned Regular Meeting:
9:00 AM - City Council Retreat
October 26, 2021 - Tuesday - 5:00 PM - Closed Session,
6:00 PM - City Council Meeting
November 9, 2021 - Tuesday - 5:00 PM - Closed Session,
6:00 PM - City Council Meeting (Mayor Transition)
November 23, 2021 - Tuesday - 5:00 PM - Closed Session,
6:00 PM - City Council Meeting
December 14, 2021 - Tuesday - 5:00 PM - Closed Session,
6:00 PM - City Council Meeting
December 28, 2020 - Tuesday - No Meeting (Dark)
Page 5 City of Hermosa Beach Printed on 6/28/2021
June 29, 2021City Council Adjourned Meeting Agenda
BOARDS, COMMISSIONS AND COMMITTEE MEETINGS:
July 6, 2021 - Tuesday - 7:00 PM - Parks and Recreation Advisory Commission Meeting
July 12, 2021 - Monday - 6:00 PM - Economic Development Committee Meeting
July 21, 2021 - Wednesday - 6:00 PM - Public Works Commission Meeting
July 20, 2021 - Tuesday - 6:00 PM - Planning Commission Meeting
August 2, 2021 - Monday - 6:00 PM - Economic Development Committee Meeting
August 3, 2021 - Tuesday - 7:00 PM - Parks and Recreation Advisory Commission Meeting
August 17, 2021 - Tuesday - 6:00 PM - Planning Commission Meeting
September 9, 2021 - Thursday - 7:00 PM - Parks and Recreation Advisory Commission Meeting
September 13, 2021 - Monday - 6:00 PM - Economic Development Committee Meeting
September 21, 2021 - Tuesday - 6:00 PM - Planning Commission Meeting
September 15, 2021 - Wednesday - 6:00 PM - Public Works Commission Meeting
October 4, 2021 - Monday - 6:00 PM - Economic Development Committee Meeting
October 5, 2021 - Tuesday - 7:00 PM - Parks and Recreation Advisory Commission Meeting
October 19, 2021 - Tuesday - 6:00 PM - Planning Commission Meeting
November 1, 2021 - Monday - 6:00 PM - Economic Development Committee Meeting
November 2, 2021 - Tuesday - 7:00 PM - Parks and Recreation Advisory Commission Meeting
November 16, 2021 - Tuesday - 6:00 PM - Planning Commission Meeting
November 17, 2021 - Wednesday - 6:00 PM - Public Works Commission Meeting
December 6, 2021 - Monday - 6:00 PM - Economic Development Committee Meeting
December 7, 2021 - Tuesday - 7:00 PM - Parks and Recreation Advisory Commission Meeting
December 13, 2021 - Monday - 6:00 PM - Planning Commission Meeting
CITY OFFICES CLOSED FRIDAY-SUNDAY AND ON THE FOLLOWING DAYS:
July 5, 2021 - Monday - Independence Day Observed
September 6, 2021 - Monday - Labor Day
November 11, 2021 - Thursday - Veteran's Day
November 25, 2021 - Thursday - Thanksgiving Day
Page 6 City of Hermosa Beach Printed on 6/28/2021
City of Hermosa Beach
Staff Report
City Hall
1315 Valley Drive
Hermosa Beach, CA 90254
Staff Report
Honorable Mayor and Members of the Hermosa Beach City Council
Adjourned Regular Meeting of June 29, 2021
·How the Budget is Balanced
·Revenue
·Appropriations
·Highlights
·Capital Improvement Plan
City of Hermosa Beach Printed on 6/26/2021Page 1 of 1
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City of Hermosa Beach
Staff Report
City Hall
1315 Valley Drive
Hermosa Beach, CA 90254
Staff Report
REPORT 21-0402
Honorable Mayor and Members of the Hermosa Beach City Council
Regular Meeting of June 29, 2021
ADOPTION OF THE 2021-22 APPROPRIATIONS LIMIT
(Finance Director Viki Copeland)
Recommended Action:
Staff recommends City Council adopt a Resolution approving and adopting the annual Appropriations
Limit for the Fiscal Year 2021-22.
Executive Summary:
In 1979,the State of California adopted appropriations limits on state and local governments and in
1990 updated the method of limit calculation.Each year,staff presents to City Council a resolution to
approve and adopt the City’s annual appropriations limit.
Background:
On November of 1979,Article XIII B of the California State Constitution was adopted by the voters
through Proposition 4.This Article established appropriations limits on state and local governments
using a formula for appropriation of revenue from tax proceeds.
On June 5,1990,Proposition 111 modified this method of calculating the limit,beginning with fiscal
year 1990-91,to allow the City to choose the most beneficial of two adjustment factors for inflation
and population as follows:
Inflation
California Per Capita Personal Income Change
or
Increase in Non-Residential Assessed Valuation Due to New Construction
Population
City Population Growth
or
County Population Growth
Proposition 111 also implemented a requirement that the Appropriation Limit be reviewed annually by
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Staff Report
REPORT 21-0402
Proposition 111 also implemented a requirement that the Appropriation Limit be reviewed annually by
the City’s Independent Auditor.
Analysis:
The 2021-22 limit was calculated,per the League of California Cities Uniform Guidelines,by applying
the population and inflation factors to the prior year limit.The City’s population increase of -0.77
percent was used as the population growth factor since it is greater than the County of Los Angeles’
population change of -0.89 percent.The California Per Capita Personal Income Change of 5.73
percent was used as the inflation factor since the increase in Non-Residential Assessed Valuation
Due to New Construction is 0.15 percent.The factor with the largest change is always chosen to give
the City maximum discretion with regard to appropriations.
The law requires adoption of the 2021-22 limit by resolution and a recorded vote of the Council to
select annual adjustment factors. The choice is set forth in the attached resolution.
The limit calculation will be reviewed by the City’s auditors during the annual financial audit.
Attachments:
1.Resolution Adopting 2021-22 Appropriations Limit
2.2021-22 Calculation of Appropriation Limit
Respectfully Submitted by: Viki Copeland, Finance Director
Approved: Suja Lowenthal, City Manager
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RESOLUTION NO. 21-xxxx
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HERMOSA BEACH, CALIFORNIA, APPROVING AND ADOPTING THE
ANNUAL APPROPRIATIONS LIMIT FOR THE FISCAL YEAR 2021–
2022
WHEREAS, the voters of California, on November 6, 1979, added Article XIII B to the
State Constitution, placing various limitations on appropriations of state and local governments;
and
WHEREAS, Article XIII B provides that the appropriations limit for the fiscal year 2021–
2022 is calculated by adjusting the base year appropriations of fiscal year 1978-79 and subsequent
years for changes in the cost of living and population; and
WHEREAS, Proposition 111 (Section 1.5 of Article XIII B), enacted by the voters on June
5, 1990, modified the method of calculating the limit, beginning with fiscal year 1990-91; and
WHEREAS, the City of Hermosa Beach has complied with all of the provisions of Article
XIII B in determining the appropriations limit for fiscal year 2021–2022;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HERMOSA
BEACH, CALIFORNIA, DOES RESOLVE AS FOLLOWS:
SECTION 1. That the City of Hermosa Beach chooses to use the California Per Capita
Personal Income Change as the inflation adjustment factor for fiscal year 2021–2022.
SECTION 2. The City of Hermosa Beach chooses to use the Change in Population for
the City of Hermosa Beach as the growth adjustment factor for fiscal year 2021–2022.
SECTION 3. The City of Hermosa Beach uses the Uniform Guidelines published by the
League of California Cities in March 1991 to determine the limit and appropriations subject to the
limit.
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SECTION 4. Documentation for calculation of the limit is on file in the Finance
Department and will be reviewed by the City’s auditors during the annual financial audit, as
required by Proposition 111.
SECTION 5. The appropriations limit for the City of Hermosa Beach for fiscal year
2021–2022 is $45,674,763.
SECTION 6. This Resolution shall take effect immediately. The City Clerk shall certify
to the passage and adoption of this Resolution; shall enter the same in the book of original
Resolutions; and shall make a minute of the passage and adoption thereof in the records of the
proceedings of the City Council meeting at which the same is passed and adopted.
PASSED, APPROVED AND ADOPTED this 29th day of June, 2021.
________________________________________________________________________
PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, California
ATTEST: APPROVED AS TO FORM:
________________________________ _______________________________
City Clerk City Attorney
CITY OF HERMOSA BEACH
2021-22 CALCULATION OF APPROPRIATION LIMIT
HISTORY OF LIMITATION
Limitation for 1986-87 Fiscal Year $8,609,437
1987-88
Per Capita Income Change =3.47%
>1.0544
County of Los Angeles Population Change = 1.91%
Limitation $9,077,790
1988-89
Per Capita Income Change =4.66%
>1.0655
County of Los Angeles Population Change = 1.81%
Limitation $9,672,386
1989-90
Per Capita Income Change =5.19%
>1.0638
County of Los Angeles Population Change = 1.14%
Limitation $10,289,484
1990-91
Per Capita Income Change =4.21%
>1.0562
County of Los Angeles Population Change = 1.36%
Limitation $10,867,753
1991-92
Per Capita Income Change =4.14%
>1.0594
County of Los Angeles Population Change = 1.73%
Limitation $11,513,297
1992-93
Per Capita Income Change =-0.64%
>1.0084
County of Los Angeles Population Change = 1.49%
Limitation $11,610,009
1993-94
Per Capita Income Change =2.72%
>1.0371
County of Los Angeles Population Change = 0.96%
Limitation $12,040,740
1994-95
Per Capita Income Change =0.71%
>1.0147
County of Los Angeles Population Change = 0.75%
Limitation $12,217,739
1995-96
Per Capita Income Change =4.72%
>1.0507
County of Los Angeles Population Change = 0.33%
Limitation $12,837,178
1996-97
Per Capita Income Change =4.67%
>1.0517
County of Los Angeles Population Change = 0.48%
Limitation $13,500,860
CITY OF HERMOSA BEACH
2021-22 CALCULATION OF APPROPRIATION LIMIT
HISTORY OF LIMITATION
1997-98
Per Capita Income Change =4.67%
>1.0597
County of Los Angeles Population Change = 1.24%
Limitation $14,306,861
1998-99
Per Capita Income Change =4.15%
>1.0604
County of Los Angeles Population Change = 1.81%
Limitation $15,170,995
1999-00
Per Capita Income Change =4.53%
>1.0639
County of Los Angeles Population Change = 1.78%
Limitation $16,140,422
2000-01
Per Capita Income Change =4.91%
>1.0675
County of Los Angeles Population Change = 1.75%
Limitation $17,229,900
2001-02
Per Capita Income Change =7.82%
>1.0961
County of Los Angeles Population Change = 1.66%
Limitation $18,885,693
2002-03
Increase in non-residential assessed valuation due
to new construction =1.00%
>1.0299
City of Hermosa Beach Population Change =1.97%
Limitation $19,450,375
2003-04
Per Capita Income Change =2.31%
>1.0401
County of Los Angeles Population Change = 1.66%
Limitation $20,230,335
2004-05
Per Capita Income Change = 3.28%
>1.0471
County of Los Angeles Population Change = 1.38%
Limitation $21,183,184
2005-06
Per Capita Income Change =5.26%
>1.0650
County of Los Angeles Population Change =1.18%
Limitation $22,560,091
2006-07
Per Capita Income Change =3.96%
>1.0477
County of Los Angeles Population Change =0.78%
Limitation $23,636,207
CITY OF HERMOSA BEACH
2021-22 CALCULATION OF APPROPRIATION LIMIT
HISTORY OF LIMITATION
2007-08
Per Capita Income Change =4.42%
>1.0515
County of Los Angeles Population Change =0.72%
Limitation $24,853,472
2008-09
Per Capita Income Change =4.29%
>1.0519
County of Los Angeles Population Change =0.86%
Limitation $26,143,367
2009-10
Increase in non-residential assessed valuation due
to new construction =0.88%
>1.0179
County of Los Angeles Population Change =0.90%
Limitation $26,611,333
2010-11
Increase in non-residential assessed valuation due
to new construction =1.01%
>1.019
City of Hermosa Beach Population Change =0.94%
Limitation $27,116,948
2011-12
Increase in non-residential assessed valuation due
to new construction =2.75%
>1.0314
County of Los Angeles Population Change =0.38%
Limitation $27,968,420
2012-13
Increase in non-residential assessed valuation due
to new construction =9.71%
>1.101268
County of Los Angeles Population Change =0.38%
Limitation $30,800,726
2013-14
Per Capita Income Change =5.12%
>1.05845328
County of Los Angeles Population Change =0.69%
Limitation $32,601,127
2014-15
Increase in non-residential assessed valuation due
to new construction =1.31%
>1.021002
County of Los Angeles Population Change =0.78%
Limitation $33,285,816
2015-16
Per Capita Income Change 3.82%
>1.046713
County of Los Angeles Population Change =0.82%
Limitation 34,840,696$
2016-17
Per Capita Income Change 5.37%
>1.062656
County of Los Angeles Population Change =0.85%
Limitation 37,023,675$
CITY OF HERMOSA BEACH
2021-22 CALCULATION OF APPROPRIATION LIMIT
HISTORY OF LIMITATION
2017-18
Per Capita Income Change 3.69%
>1.042810
County of Los Angeles Population Change =0.57%
Limitation 38,608,659$
2018-19
Per Capita Income Change 3.67%
>1.041987
County of Los Angeles Population Change =0.51%
Limitation 40,229,720$
2019-20
Per Capita Income Change 3.85%
>1.040265
City of Hermosa Beach Population Change =0.17%
Limitation 41,849,570$
2020-21
Per Capita Income Change 3.73%
>1.036159
County of Los Angeles Population Change =-0.11%
Limitation 43,534,643$
2021-22
Per Capita Income Change 5.73%
>1.049159
City of Hermosa Beach Population Change =-0.77%
Limitation 45,674,763$
City of Hermosa Beach
Staff Report
City Hall
1315 Valley Drive
Hermosa Beach, CA 90254
Staff Report
REPORT 21-0403
Honorable Mayor and Members of the Hermosa Beach City Council
Regular Meeting of June 29, 2021
ADOPTION OF FISCAL YEAR 2021-22 BUDGET
(Finance Director Viki Copeland)
Recommended Action:
Staff recommends City Council:
1.Hear public testimony regarding the Fiscal Year 2021-22 Budget (Attachment 1);
2.Approve increase in rates for legal services effective July 1,2021 and approve an annual CPI
adjustment commencing 2023 (Attachment 2); and
3.Adopt a Resolution approving the 2021-22 Budget as presented in Exhibit A (included in
Attachment 3).
Executive Summary:
The initial forecast of the 2020-21 Budget produced a deficit of $3.5 million.Recommendations to
unfreeze some positions,add a new position,and approve supplemental requests from departments
of $248,303 increased the deficit to $4.1 million.Staff recommends the use of unspent funds of
$1,802,370 from the two prior fiscal years and a transfer of $2,310,878 from the American Rescue
Plan Act Fund to the General Fund to balance the budget.The end result is a 2021-22 budget that
includes a Contingency (Rainy Day Fund)of $6,778,522,or 16 percent of appropriations per the
City’s adopted financial policy,essential staff and supplemental requests,and capital projects that
would continue to move the City forward towards its established goals.
Background:
On April 21, 2021, a study session was held for the 2021-22 Capital Improvement Program.
The City transitioned from a paper-based document to an interactive online budget document for the
2021-22 Fiscal Year.Additional time was needed to prepare the budget due to new software
implementation.City Council approved the date of June 29,2021 for the budget workshop and public
hearing.The planned submission date for the Preliminary Budget was moved from May 15,2021 to
June 24, 2021.
A summary of the General Fund is also provided (Attachment 4)and will be incorporated into the
Adopted Budget.
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Analysis:
The estimated General Fund revenue shortfall due to COVID-19 results in a deficit of $3.5 million,
prior to the approval of any position requests,changes to frozen positions,and approval of any
supplemental items. The chart below shows the steps taken to balance the budget:
Total General Fund Starting Surplus/(Deficit)
(3,507,454)
New Revenue
Proposition A Fund Exchange
490,000
Changes to Appropriations
Supplemental Requests
(248,303)
Position Requests/Frozen Positions
(765,356)
Prospective Expenditures
(100,000)
Changes to Transfer Ou t
Cover Lighting/Landscaping Deficit from RTI Fund
204,790
Transfer 2019 -20 and Midyear 2020 -21 Unspent Funds to Cap ital
Improvement Fund
(1,772,773)
Change
in Fund Balance Reserves
Increase Contingency to 16% of Operating Expenditures
(132,455)
Assign balance of Prop A Fund Exchange Funds not used for
Engineer in 2021-22
(369,470)
Unassign 2019-20 Year End Balance
1,751,727
Unassign 2020-21 Midyear Balance
1,823,416
Use of Other Funding Sources
Move Crossing Guards to Proposition C Fund
315,000
American Rescue Plan Act Funds
2,310,878
0
Staff recommends City Council approve the following actions to balance the 2021-22 Budget:
Adopt revised estimated revenue of $40,015,295 and transfers in of $2,729,260 which includes a one
-time exchange of Proposition A funds and transfer outlined below:
·The City of Hermosa Beach has an excess of $700,000 in Proposition A (Prop A)funds.The
City of West Hollywood needs additional Prop A funds for its transit operations.Staff
recommends City Council approve a fund exchange with the City of West Hollywood at an
exchange rate of $0.70 on the dollar,which results in $490,000.The Prop A funds would
remain restricted for the City of West Hollywood,while the funds received by Hermosa Beach
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REPORT 21-0403
remain restricted for the City of West Hollywood,while the funds received by Hermosa Beach
would become unrestricted and may be used for any purpose.Staff recommends proceeds
from the exchange be used to fund a new Assistant Engineer.Of the $490,000 received,
$369,470 would be assigned in the fund balance of the General Fund to cover costs related to
the position for approximately three additional years.The exchange agreement would come
back to Council in July 2021 for approval.
·Transfer $2,310,878 from the American Rescue Plan Act (ARPA)Fund to the General Fund.
The City is fortunate to receive federal ARPA funds of $4.6 million,which may be used for the
replacement of lost revenue since March of 2020,and to partially restore staffing to pre-
pandemic levels.The first half is expected in July,with the other half distributed 12 months
later.Staff recommends using the first half of the ARPA funds for the purpose of working to
restore staffing to pre-pandemic levels and providing public safety.
At a high level, American Rescue Plan Act funds have the following eligible uses:
o COVID-19 or a negative economic impact;
o Premium pay for eligible workers;
o Government Services to the extent of the loss of revenue; or
o Investments in water, sewer, and broadband infrastructure.
The proposed use of $2.3 million in the 2021-22 Budget would free up General Fund revenue
and allow for the transfer of prior year unspent funds to the Capital Improvement Fund as
outlined below.
Adopt revised appropriations of $42,419,974 and transfers out of $3,134,118,which includes the
following staffing recommendations and supplemental requests:
·Add Essential Supplemental Requests of $148,703;
·Add Position Requests/Frozen Positions of $765,356;
·Cover the Lighting/Landscaping Deficit of $229,790 from the RTI Fund instead of the General
Fund;
·Move the budget for Crossing Guard Services,historically funded from the General Fund,to
the Proposition C (Prop C)Fund,which is an approved use of the funds restricted for transit
related expenses;
·Increase Prospective Expenditures account by $100,000; and
·Transfer $1,772,773 in unspent funds from prior years to the Capital Improvement Fund to
provide funding of $886,386 for future Capital Improvement Projects,increase the Capital
Facilities Reserve by $316,813,and establish a reserve of $569,574 for the remaining Fire
Facility payments to the County for the newly renovated fire station.The remaining $1,802,370
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from Midyear 2020-21 would be used to cover the deficit in the General Fund.
As a part of the Midyear Budget Review on March 9,2021,staff recommended assigning the unspent
General Funds from 2019-20 of $1,751,688 and the remaining available balance of $1,823,416 from
the 2020-21 Budget for use in the 2021-22 Budget process.During the budget process,it would be
determined if the funds need to remain in the General Fund or should transfer to meet funding goals,
in accordance with the City’s financial policies.The use of American Rescue Plan Act Funds
mentioned above would free up the General Fund and allow for the City to replenish the Capital
Improvement Fund.
Contracts for Services
As part of approval of the 2021-22 Budget,the City Attorney is requesting an increase in rates for
legal services effective July 1,2021 (except as noted below for pending litigation matters).The City’s
contract for legal services with Best Best &Krieger allows for Council to approve an increase in rates
without a contract amendment.
The City Attorney indicates that services have been provided to the City for over 25 years and during
that time rates were kept very low and have only increased on a few occasions.The last increase
was thirteen years’ago in 2008.Consequently,the rates are not commensurate with the public
agency legal market (which is itself considerably lower than private sector rates)and are not on a par
with the rates that are currently charged to other city clients.The rates are lower than many non-
attorney consultants used by the City and are well below the rates charged by outside attorneys that
have been hired by the City.
The new rate structure proposes an across-the-board increase in various categories of rates as
shown in Attachment 2;however,the current rate structure for pending litigation matters will be
retained until they conclude,and the new rates will apply for new litigation matters commencing after
July 1,2021.In order to avoid asking for this sort of increase in the future,a biannual CPI adjustment
in rates, commencing in 2023 is proposed.
Despite the proposed increase in rates,there is no increase in the overall legal services budget for
the 2021-2022 fiscal year.The amount budgeted for general city attorney services and litigation
should be sufficient.
General Plan Consistency:
PLAN Hermosa,the City’s long-range planning document,was adopted by the City Council in August
2017,and envisions a future where “Hermosa Beach is the small town others aspire to be;a place
where our beach culture,strong sense of community,and commitment to sustainability intersect.”
One of the guiding principles to achieve the vision is to make decisions and take actions that help
contribute to the City’s economic and fiscal stability.Other relevant General Plan policies are listed
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Staff Report
REPORT 21-0403
contribute to the City’s economic and fiscal stability.Other relevant General Plan policies are listed
below:
Governance
·1.2 Strategic planning.Regularly discuss and set priorities at the City Council and
management level to prioritize work programs and staffing needs.
·1.6 Long-term considerations.Prioritize decisions that provide long-term community benefit
and discourage decisions that provide short-term community benefit but reduce long-term
opportunities.
Parks and Open Space
·1.1 Facility upgrades. Improve and update park and open space facilities on a regular basis.
·2.6 Investment and maintenance.Prioritize the investment and maintenance of existing
facilities prior to development and expansion of new facilities.
Infrastructure
·1.2 Priority investments.Use City Council established priorities and the Capital Improvement
Program (CIP) to identify and allocate funding for projects identified in the infrastructure plan.
Public Safety
·5.2 High level of response.Achieve optimal utilization of allocated public safety resources and
provide desired levels of response, staffing, and protection within the community.
Fiscal Impact:
The recommendations contained in the Preliminary Budget cure the General Fund deficit and reflect
the philosophy of maintaining City services to the extent possible with minimal disruption.
The 2021-22 Budget,including all funds,estimates revenue of $50,829,066 and appropriations of
$71,900,085, of which $16,377,229 is carried forward from prior year Capital Improvement Projects.
Attachments:
1.Link to Fiscal Year 2021-22 Preliminary Budget and Capital Improvement Program
2.Proposed Legal Services Rates 2021
3.Resolution of Budget Adoption, including Exhibit A-Budget Summary
4.Fiscal Year 2021-22 General Fund Summary
Respectfully Submitted by: Viki Copeland, Finance Director
Legal Review: Mike Jenkins, City Attorney
Approved: Suja Lowenthal, City Manager
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RESOLUTION NO. 21-xxxx
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH,
CALIFORNIA ADOPTING THE BUDGET FOR THE FISCAL YEAR 2021–2022
WHEREAS, a budget for the fiscal year 2021–22 has been prepared by the City Manager,
and;
WHEREAS, said budget incorporates expenditures for operating purposes, capital outlay
and capital improvement projects, and;
WHEREAS, said final budget will include the appropriations limit and total annual
appropriations subject to limitation as required by Section 37200 of the Government Code, and;
WHEREAS, the City Council has examined said budget and, after due deliberation and
consideration, has made such amendments to the budget as it deems advisable.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH,
CALIFORNIA DOES RESOLVE AS FOLLOWS:
SECTION 1. That the City Council does hereby approve and adopt the revised budget
for the 2021–22 Fiscal Year as presented in the documents entitled “City of Hermosa Beach
Budget Summary 2021–22”, and attached as “Exhibit A.”
SECTION 2. This Resolution shall take effect immediately. The City Clerk shall
certify to the passage and adoption of this Resolution; shall enter the same in the book of original
Resolutions; and shall make a minute of the passage and adoption thereof in the records of the
proceedings of the City Council meeting at which the same is passed and adopted.
PASSED, APPROVED and ADOPTED this 29th day of June 2021.
________________________________________________________________________
PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, California
ATTEST: APPROVED AS TO FORM:
________________________________ _______________________________
City Clerk City Attorney
Attachment 1
Current Active Matters with Current Rates & Proposed Rates effective July 1, 2021
Bi-Annual CPI to begin July, 2023
Arrangement Matter # Matter Name
Partner/Of
Counsel Associates
Paralegals,
etc.
Partner/Of
Counsel Associates
Paralegals,
etc.
General Legal Services $187 $187 $170 $205 $205 $170
65270.00001 CITY ATTORNEY - GENERAL
65270.00002 NORTH SCHOOL MOU IMPLEMENTATION
65270.00003 INFILTRATION PROJECT
65270.00004 GREENWICH VILLAGE UNDERGROUNDING DISTRICT
65270.00005 PUBLIC RECORD REQUESTS
65270.00006 COVID-19 EMERGENCY RESPONSE
65270.00007 ADA / DISABILITY ISSUES
65270.00010 LAND USE
65270.00011 HILLCREST DRIVE UNDERGROUNDING DISTRICT
65270.00012 BAYVIEW 2020 UNDERGROUNDING DISTRICT
65270.00013 EL OESTE/LA CARLITA/TENNYSON UNDERGROUNDING DISTRICT
ARC $180 $180 $180 $180 $180 $180
65270.00602 PUBLIC RECORDS ACT / HANDLED BY ARC
Code Enforcement $195 $195 $170 $235 $235 $170
65270.00100 CODE ENFORCEMENT
Litigation
65270.00202 ADV. CROSSFIT HORSEPOWER: HERMOSA BEACH
65270.00203 MARK ROTH V. KIHN LUAN TRAN, ET AL.
65270.00208 HERMOSA FITNESS, LLC V. CITY OF HERMOSA BEACH (FEDERAL)
65270.00210 DINA FANGARY V. CITY OF HERMOSA BEACH, ET AL.
65270.00211 RACHEL MUZATKO V. CITY OF HERMOSA BEACH, ET AL.
65270.00212 CITY OF HERMOSA BEACH V. STEVE E. PULS
65270.00214 THOMAS KUERTEN V. CITY OF HERMOSA BEACH
Effective 07/01/21 new Litigation matters at new rates:$285 $260 $170
Pitchess Matters
65270.00300 PITCHESS $254 $218 $170 $254 $218 $170
Effective 07/01/21 new Pitchess matters at new rates:$285 $260 $170
Current active matters remain at
current rates:
$170
Current active matters remain at
current rates:
$254 $218 $170 $254 $218
City of Hermosa Beach (65270)
Current Rates Proposed Rates eff. 7/1/21
1
Attachment 2
Current Active Matters with Current Rates & Proposed Rates effective July 1, 2021
Bi-Annual CPI to begin July, 2023
Arrangement Matter # Matter Name
Partner/Of
Counsel Associates
Paralegals,
etc.
Partner/Of
Counsel Associates
Paralegals,
etc.
City of Hermosa Beach (65270)
Current Rates Proposed Rates eff. 7/1/21
Reimbursable from Third Parties Jenkins/300 Langer/250 $170 $350 $275 $170
65270.00400 HERMOSA RTI
65270.00401 PIER & STRAND HOTEL EIR
Complex Special Services $254 $218 $170 $350 $275 $170
65270.00500 HUMAN RESOURCES
65270.00501 TELECOMMUNICATIONS
65270.00502 REAL ESTATE
65270.00503 MUNICIPAL FINANCE
65270.00504 PUBLIC WORKS CONSTRUCTION
2
General Fund Revenue & Expenditure Summary
$42,744,555
Total Expenditures and Transfers Out ($45,554,092)
2,809,537 (b)
$0
Budget %
$15,992,604 $16,525,157 $532,553 3.3%
2,750,820 2,717,628 ($33,192)(1.2%)
Utility User's Tax 2,065,046 2,093,903 $28,857 1.4%
1,836,531 1,928,358 $91,827 5.0%
$23,265,046 $620,045 2.7%
$6,386,467 $61,945 1.0%
785,512 ($116,581)(12.9%)
1,978,497 1,906,306 ($72,191)(3.6%)
635,452 1,469,888 $834,436 131.3%
126,895 142,192 $15,297 12.1%
5,022,541 6,041,373 $1,018,832 20.3%
93,044 18,511 ($74,533)(80.1%)
$16,750,249 $1,667,205 11.1%
$40,015,295 $2,287,250 6.1%
2,729,260 ($667,312)(19.6%)
$42,744,555 $1,619,938 3.9%
General Fund Expenditures Budget (b)%
Personal Services $24,155,229 $2,177,020 9.9 %
Contract Services- Private 4,647,042 ($189,506)(3.9%)
Contract Services- Government 6,664,000 7,354,822 $690,822 10.4 %
Capital Improvement Projects 322,395 40,411 ($281,984)(87.5%)
Material/Supplies/Other 6,183,280 $474,499 8.3 %
Equipment/Furniture 39,190 ($20,551)N/A
Total Expenditures $42,419,974 $2,850,300 7.2 %
Transfers Out 3,134,118 $1,357,417 76.4 %
Total Expenditures and
Transfers Out
$45,554,092 $4,207,717 10.2 %
Budget Increase/(Decrease)
Total Revenues and Transfers
$41,346,375
Budget Increase/(Decrease)
$39,569,674
$21,978,209
4,836,548
Total Revenues $37,728,045
59,741
1,776,701
Use of Money & Property
Intergovernmental/State
Current Service Charges
Projected Surplus/(Deficit)
5,708,781
$41,124,617
Other Revenues
Transfers In 3,396,572
Subtotal Other Revenues $15,083,044
Subtotal Major Revenues $22,645,001
Other Revenues by Category
Other Taxes $6,324,522
Licenses and Permits 902,093
Fines & Forfeitures
Secured Property Tax
Preliminary Budget
2021-222020-21 Revised
Budget (a)
2021-22 Preliminary Budget
General Fund Summary
Budget (a)
2020-21 Revised 2021-22
Preliminary Budget
Total Revenues and Transfers in
Total Changes in Fund Balance
Sales & Use Tax
Transient Occupancy Tax
General Fund Revenues
Major Revenues
Attachment 3
(a) Adjusted Budget includes City Council-approved amendments during the current year as well as reappropriations carried
forward from the prior year.
(b) Includes the following changes to fund balance:
Increased General Plan Maintenance Fees ($75,099)
Increased Verizon PEG ($6,911)
Increased CASP Fees ($8,500)
Increased Contingency Balance ($477,812)
Reduced Prop A Fund Exchange for Engineer Salary $131,775
New Prop A Fund Exchange ($369,470)
Use 2020-21 CIP Carryforward $40,411
Transfer 2019-20 Unspent Funds $1,751,727
Use /Transfer 2020-21 Midyear Unspent Funds $1,823,416
$2,809,537