In 2018, city staff had projected a $9.3 million budget shortfall for Fiscal Year (FY) 2020. But at a press conference on July 31, city officials unveiled a balanced budget proposal for FY 2020. The proposed $2.8 billion budget prioritizes resources for homelessness, public safety and economic development. However, city officials forecasted shortfalls for FY 2021 and 2022.
The proposed budget is comprised of:
- $1 billion in the Enterprise Fund, which charges the public for services such as utilities (gas, water, sewer), development work, refuse/recycling, airport operations, towing and more.
- $554 million in the General Fund, which provides general services, such as public safety, public works and libraries. It is funded through taxes, fees, fines and transfers.
- $503 million in the Internal Services Fund, which accounts for internal services provided to city departments.
- $257 million in the Special Revenue Fund, which funds undertakings that are paid for by the state and federal grants, taxes or designated revenue sources for special purposes. For example, the revenue budget feeds into the Health Fund and Transportation Fund.
- $207 million in the Tidelands Fund, which supports operations and capital projects along beach areas through proceeds from oil revenues.
- $85 million in the Capital Projects Fund, which is used for the planning, design and construction of major capital improvements.
- $35 million in the Debt Service Fund, which accounts for the payment of governmental debt.
- $12 million in the Uplands Oil Fund, which is non-Tidelands Fund oil revenue used to fund operations and capital.
The city’s General Fund accounts for 20% of the total budget, split between $521 million in recurring costs and $33 million in one-time costs. City Manager Pat West said the General Fund is supported through general tax revenues.
The General Fund dedicates 71% of its budget to public safety and includes revenue from Measure A, a sales tax used to fund public infrastructure and public safety services. The General Fund is broken down as follows: 48% for the Long Beach Police Department (LBPD); 20% for the Long Beach Fire Department; and 2.6% for the city’s Department of Disaster Preparedness and Emergency Communications. “Public safety is always our priority,” West said. “It’s the top priority of any city in America.”
Leveling off the other 29% of the General Fund is: 8.1% for the city’s Public Works Department; 7% for the Long Beach Parks, Recreation and Marine Department; 4.7% for elected and appointed officials, which includes salaries, civil service positions, district budgets, election work, etc.; 2.9% for library services; and 6.8% for “other,” which includes development, financial and economic activities for the city, among other services.
The FY 2020 proposed budget covers the time span from October 1, 2019, to September 30, 2020. The budget was developed by the city manager and staff with input from city departments and councilmember offices. After Long Beach Mayor Robert Garcia submitted the proposed budget to the Long Beach City Council on July 31, local residents have had an opportunity during community meetings this month to provide their input on the financial plan before it is officially adopted. The full calendar of meetings is available at longbeach.gov/finance.
Throughout August and September, city departments will provide their insight on the budget during community hearings. The first adoption date for the budget will be September 3, when the city council can approve a portion or the entirety of the FY plan. September 10 is the second adoption date, when the city council has to officially approve the entire FY 2020 budget, per city charter.
Housing And Homeless Initiatives
Highlighting the city’s success in permanently housing more than 5,000 formerly homeless people since 2013, West said the proposed budget incorporates resources from grants and the General Fund to address the city’s homeless issue. Last year, the city received $27 million in grant funding, including $5 million from Los Angeles County’s Measure H sales-tax revenue and $12.3 million from the state’s Homeless Emergency Aid Program (HEAP).
Rapid-response, cleanup and outreach efforts for local homeless individuals will be funded by $255,000 of one-time resources from the General Fund. Moreover, $25,000 from the General Fund will finance the ongoing utility costs at the Housing Navigation Center, a facility located at 1718-1722 Hayes Ave. that the city obtained through one-time HEAP funding dollars. The site will function as a services center for homeless individuals and as a storage facility for their belongings, West said. The city plans to make improvements to the building, but has not yet announced a timeline for completion.
In drafting the budget, city officials also considered recommendations made by the Everyone Home Long Beach Taskforce late last year. Part of the taskforce’s recommendations included opening a new 125-bed shelter in North Long Beach at 6841-6845 Atlantic Ave. City officials said they are aiming for a June 2020 opening date.
To address housing affordability, city officials said the proposed budget supports the preservation or construction of 650 new affordable housing units for low-income and homeless residents. The investments in these housing units are made possible by the city’s nonprofit affiliate Long Beach Community Investment Company, which provided more than $21 million in funding and garnered $172 million in outside funding for the FY 2020 budget. City staff will also continue work on housing policy items, including inclusionary housing and a safe parking program.
According to city officials, Measure A funding plays a role in maintaining public safety services. Currently, 121 total jobs are funded through Measure A. Last year, the total was 108 jobs, according to city staff. Through the General Fund, the city will add nine LBPD non-sworn positions to handle operations for the body worn camera program, which started as a pilot initiative and will be expanded and implemented for all police units. These positions will also help the police department meet the state standards of Senate Bill 1421, which pertains to timely public access to police records.
Additional public safety services funded by Measure A include one-time investments in a city jail program, an LBPD neighborhood initiative and police academy training. Measure A will provide $100,000 for a mental health clinician to serve in Long Beach’s city jail. The LBPD’s Neighborhood Safe Streets Initiative, a community policing program targeting violent and property crimes, will receive $2.2 million from Measure A. Additionally, $1.4 million from Measure A and $800,000 from the General Fund will go toward the cost of LBPD police academy training in FY 2020 and FY 2021.
Economic Development And Infrastructure
As part of the city’s 10-year Economic Blueprint, the proposed budget allocates funding to expand the city’s small business loan program and to research “opportunity zones,” a federal tax benefit for investing in underserved communities. Two new positions will also be implemented to administer the city’s short-term rental program.
In the proposed FY 2020 budget, the city’s Capital Improvement Program is budgeted at $117 million, including $19.5 million from Measure A funds, to maintain city infrastructure. West said the budget will be invested in mobility, public facilities, parks and recreation, beaches and waterways, utilities and the airport.
Long Beach Development Services will receive a proposed boost in the form of $128,000 for project planning technology improvements, as well as $136,000 in one-time funds for employee training on state building codes.
In an effort to garner an accurate count for the 2020 census, officials have allocated $600,000 of General Fund one-time dollars to support the count, set for April 2020, and the redrawing of district boundaries. Garcia said a county grant has provided an additional $350,000 to help fund the census count. The money will also go toward contracts with nonprofit organizations that may provide additional census work and temporary staffing for a redistricting commission.
The budget also takes into account the allocation of expected cap and trade dollars from the state. City officials confirmed with the Business Journal they expect to receive $1 million in cap and trade program funds to distribute to homeowners for energy-efficiency upgrades. Eligible homes will be identified through the CalEnviroScreen tool, an online program by the California Office of Environmental Health Hazard Assessment that locates local communities vulnerable to pollution. The funds will also be used to finance the city’s electric vehicle program, which seeks to reduce greenhouse gas emissions by implementing electric vehicle charging stations and introducing zero-emission vehicles in public transportation.
One-time General Fund dollars will go toward the seismic-retrofitting process for Community Hospital, West said. The total investment will be $1 million.
The General Fund will also help create two new positions for Long Beach Animal Care Services (ACS) dedicated to adoption coordination and administrative support. Officials said $100,000 of General Fund one-time funds will go toward ACS donation support, which would provide additional resources for animal care in the city.
To address social needs in the community, the budget allocates $80,000 of one-time dollars from the General Fund to create a full-time position for the city’s Language Access Program that provides accessibility to city services, programs and resources for those with limited English language proficiency.
Some recreational and cultural activities will be supported through a proposed allocation of one-time special advertising and promotions funds, West said. The budget includes the planning support for co-hosting the 2028 Summer Olympic Games, the art murals and activities for POW! WOW! Long Beach, wayfinding signage and historical plaques, and matching funds support for the Arts Council for Long Beach.
Projected Shortfalls And Budget Timeline
Financial shortfalls are projected for at least the next two years following 2020. The shortfall in FY 2021 is expected to fall somewhere between $5 million to $12 million, and between $11 million to $18 million for FY 2022.
The deficiencies are a result of general expenses growing faster than revenues, West said. The financial issue may lead to citywide service reductions or changes in service delivery, he noted, explaining that FY 2020 will serve as a time frame for officials to address these projected deficiencies. Garcia told the Business Journal that city staff work to solve any projected financial shortfalls months ahead of time in order to present a balanced budget to the public during the summer.
In their efforts to propose a balanced FY 2020 budget to the city council, city officials used the following council-approved guidelines to generate more revenue: increasing parking fines by $10, minimizing one-time funds; and minimizing enhancements to avoid offsetting service reductions.
The proposed FY 2020 budget does not include structural or one-time funding for labor agreement costs, since the current costs for a potential new labor agreement in FY 2020 are unknown at this time. West said negotiations are ongoing for a new agreement between the city and 11 labor organizations, which represent city employees.
Mayor Garcia’s Budget Recommendations
In addition to the proposed budget created by city staff, Garcia provided a list of recommendations to include in the FY 2020 plan. West indicated that all of Garcia’s proposals will be implemented into the budget.
Garcia announced plans for the new Long Beach Promise Pass program that would provide Long Beach City College and California State University, Long Beach students a transit pass. The cost of the pilot program is $350,000, funded by Long Beach Transit and the Proposition A Transit funds provided from the county to the city. “This will ensure that students can get to work and school in a way that’s not burdensome to them financially,” Garcia said. The mayor added that there is a six-month implementation timeline for the program.
Garcia’s recommendations for the budget include allocating $680,000 to create an additional four-person clean team, in addition to the three recommended by city staff, for the public works department. The clean teams serve to maintain and beautify neighborhoods. According to the city, the clean teams work proactively with residents, neighborhoods and businesses to remove litter and debris throughout Long Beach.
The mayor also proposed using one-time support to allocate: $153,000 to complete the Daisy Lane tree project; $100,000 for the second phase of the Bluff Park Historic Street Lamp project; $100,000 for the planning and design of an ADA playground at El Dorado Park West; and $22,000 for the Long Beach Public Library Foundation to support a fundraising software platform. Garcia said the revenue will come from projected surplus FY 2019 funds in the General Fund and by reallocating money from the General City Building Refurbishment program in the Capital Projects Fund.
Garcia’s recommendations also include allocating $500,000 in one-time support over two years to fund two positions that address HIV and STD testing in the city. The support is derived from available capital in the Health Fund.
In regard to the FY 2020 budget as a whole, Garcia commended West and city staff in their efforts to make the financial plan “structurally balanced” and “responsible.” “[The budget] reflects where the city is going, where our values are and how we’re going to spend and save,” the mayor said.