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Huntington Beach projects FY 2024–25 surplus of about $2.3 million but flags reliance on one-time settlements
Summary
City staff presented a midyear fiscal update showing a projected $2.3 million surplus for FY 2024–25 if one-time settlement revenues are used to balance the year; staff warned sales-tax softness and built in potential special-election costs.
Deputy City Manager Jen Kerry presented a midyear overview of the city’s fiscal position for FY 2024–25, describing recurring and one-time revenues, current projections and key risks. Kerry said the city’s budgeted recurring general-fund revenues total approximately $293.5 million, with $10.9 million in one-time revenue currently included in the forecast.
Kerry told the council that one-time revenue in the projection includes about $6.9 million identified from a waterfront loan settlement and a net $4.0 million from an oil-spill settlement (the oil-spill award had an initial figure of $5.25 million before fees). She said planned transfers and one-time expenditures tied to those receipts—such as required minimum transfers to a Section 115 trust and other fund transfers—are already built into the projection.
Kerry said property-tax revenues remain strong (she cited budgeted property tax revenues of about $108.2 million and a 4.5% growth in assessed valuation) but that sales-tax results have softened through the third quarter. Staff expects updated fourth-quarter sales-tax numbers within weeks and cautioned that sales-tax weakness could reduce recurring revenue. The projection assumes potential special-election costs of about $1.3 million and a $1.9 million planned use of reserves for an oil-well project in a City Hall parking lot; with those items included, the midyear projection shows a $2.3 million surplus for 2024–25.
Kerry said the five-year forecast will be revisited as more up-to-date sales-tax information becomes available, and she noted that city policy treats one-time revenues as available for one-time expenditures and that council is reviewing its reserve policies. Council members asked about the timing and incorporation of property-tax adjustments from development; staff explained they work with a property-tax consultant (HDL) and consult development staff when estimating property-tax impacts.
Kerry emphasized that the fiscal picture is subject to change and urged monitoring of sales tax and other economic indicators; she said updated sales-tax projections will arrive in the coming weeks and could materially affect the forward estimate.
