Huntington Beach midyear budget shows surplus driven by settlements and hiring savings

City finance staff presented a midyear budget report that showed the city is not forecasting a deficit for the current fiscal year and is instead projecting a positive swing versus the adopted budget.

Key figures and explanation Staff identified total midyear appropriation requests of about $1,470,000 across infrastructure, grant, and special revenue funds. Major midyear funding requests included renovation funding for the Newland House Museum ($390,000), construction inspection services ($140,000), a California Coastal Commission planning grant appropriation ($499,000), and several special‑revenue items including police aviation maintenance and narcotics forfeiture purchases.

The forecast shows roughly a $7.5 million increase in revenue versus the revised budget, driven in part by nonoperating receipts (including an anticipated additional ~$3.3 million tied to a waterfront settlement) and higher than budgeted interest and reimbursements. Personnel savings from managed hiring were reported at several million dollars. Staff characterized the overall result as a projected surplus (presented as approximately a $9.5 million swing relative to earlier projections) and said reserves would not need to be used this year.

Council questions and clarifications Councilmembers pressed staff on the composition of the revenue variance, the treatment of carryover purchase orders (approximately $8–8.5M), and the appropriate use of one‑time settlement funds versus recurring revenue. Finance staff explained that one‑time settlements and reimbursements account for a significant share of the variance and emphasized that open purchase orders are carried forward as part of normal year‑end accounting.

Outcome Following questions and discussion, the council pulled item 19 off consent for further review; staff will return with detailed language and further budgetary recommendations as needed.