Huntington Beach adopts $527-million budget for fiscal year 2024-25

Before the drama at the end of Tuesday night’s Huntington Beach City Council meeting the panel set out on the important task on adopting a budget for fiscal year 2024-25.

Council members unanimously agreed to pass the $527-million budget for the new fiscal year, which begins on July 1.

The structurally balanced budget includes $301.7 million in general fund revenues and $300 million in expenditures, for a $1.7 million surplus, Huntington Beach Chief Financial Officer Sunny Han said in a presentation.

More than half of the revenues come in taxes, as property taxes are expected to bring the city $108.2 million and sales tax $53.5 million. Also, a $3.3-million increase in property taxes is expected over the previous fiscal year, Han said. More than $6 million for the first repayment from the so-called Waterfront Loan case also is included in the revenue for the new fiscal year.

About the same percentage of expenditures, slightly more than half, are allotted to public safety in the form of the police department ($91.8 million) and fire department ($62.5 million).

The budget includes four new city positions, as well as an upgrade of a deputy community prosecutor to senior deputy community prosecutor in the city attorney’s office.

To help create the surplus the city will increase various fees. These include upping parking charges for tournaments and special events at the Sports Complex from $2 to $10, while field rental rates also will go up.

There will also be an increase in the credit card transaction fee, and civic center room rental fees will be added due to repeated requests for the use of those rooms, Han said.

Event organizers seeking permits for ticketed events will now need to pay a fee for each ticket, depending on the ticket’s face value.

Fees and charges will increase each year based on the Consumer Price Index, except in the case of seniors, per an amendment proposed by Councilman Casey McKeon.

“We want to handle any proposed senior fee adjustments on an as-needed basis,” McKeon said. “This will obviously help give our seniors some financial relief.”

Some of the conversation Tuesday was about proposed deficits in future fiscal years — $7.4 million in 2025-26, $11.8 million in 2026-27 and $15.1 million in $2027-28.

“Through all of this hard work we created efficiencies which turned a deficit into a surplus, and sliced future deficits by over 35% from the proposed budget that was presented at the last meeting,” McKeon said. “If you recall last year, we did the same thing ... It’s a continual effort. We set the city on a strong financial path. We still have a lot of work to do, I get it, but we have more runway now to bring in more revenue opportunities as well as create future efficiencies.”

But Councilwoman Rhonda Bolton said she was troubled by fee increases on things that residents use on a regular basis, when the city has other possible revenue opportunities like allowing unhosted short-term rentals in the coastal zone or cannabis sales.

“It feels piecemeal to me,” Bolton said. “A $7.5-million deficit in the next fiscal year is significant, and I would rather have brought residents some more holistic discussion of how we are going to fix this.”

Councilman Dan Kalmick asked Han how many open positions there were in the city, and she responded that there were currently 107.

“That’s tough, right?” Kalmick said. “It’s tough to run this organization on that. We have a lot of folks that are doing multiple jobs in multiple departments ... I’m disappointed that we aren’t talking about that now. These are systemic, structural deficits.”

Some residents also expressed concern that the city attorney office’s budget, which increased 31% last year, was set to increase by another 13% this year, to a total of $4.2 million.

City Atty. Michael Gates attributed the increases and adjustments to returning the city’s attorneys’ salaries to market value, as well as negotiations with unions that he had no control over.