TITLE
Recommendation to adopt resolution requesting that the Board of Harbor Commissioners approve the transfer of 5 percent of Fiscal Year 2015 (FY 15) gross operating revenue, from the Harbor Revenue Fund (HR 430) to the Tidelands Operations Fund
(TF 401), with a true-up adjustment if necessary, to reflect the final gross revenue amount upon issuance of the Harbor Department's FY 15 audited financial statements. (Citywide)
DISCUSSION
City Charter Section 1209(c)(4) provides for the transfer of a maximum of 5 percent of Harbor gross operating revenue. The Charter provides that the City Council, by a vote of two-thirds (2/3) of all its members, expressed by Resolution, may request the transfer in order to meet the lawful obligations of the Tidelands Operating Fund. The provision requires a majority vote of the Harbor Board of Commissioners, expressed by Resolution, to enact the transfer, determining that the funds will not be needed for Harbor Department operations. The Harbor Department FY 16 Proposed Budget, approved by the Harbor Commission, will include a transfer amount calculated on 5 percent of FY 15 operating revenue, which is currently estimated at $17,700,000. Approval of the transfer to Tidelands will be considered by the Harbor Commission as a separate budget action in response to this formal request by the City Council.
Tidelands Fund Requirements
Department operating revenues generated in the Tidelands area (parking, leases, service agreements, etc.) and Tidelands base oil revenue are insufficient to fund Tidelands operations, particularly in light of the current oil revenue shortfall. The Harbor revenue transfer to Tidelands is a critical funding source necessary to support lifeguards, waterfront maintenance, the Convention Center, and Aquarium debt payments.
This matter was reviewed by City Attorney Charles Parkin on May 4, 2015 and by Budget Management Officer Victoria Bell on April 29, 2015.
TIMING CONSIDERATIONS
Authority to transfer the funds must be expressed by Resolution (attached). Since the adoption of the FY 16 Tidelands budget is dependent upon the annual transfer, the City Council and Board of Harbor Commissioners must adopt resolutions prior to the City Council's adoption of the FY 16 Proposed Budget, which includes the budget of the Harbor Department. City Council approval is requested on June 2, 2015 to allow time for the FY 15 transfer amount to be approved by the Board of Harbor Commissioners for the FY 16 Proposed Budget.
FISCAL IMPACT
The transfer of 5 percent of FY 15 gross operating revenue from the Harbor Revenue Fund (HR 430) to the Tidelands Operations Fund (TF 401) will be included in the City Manager's FY 16 Proposed Budget to support Tidelands operations. The transfer amount will be paid quarterly, and will be based on the actual operating revenues reported in the Harbor Department's FY 15 audited financial statements.
SUGGESTED ACTION
Approve recommendation.
BODY
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LONG BEACH MAKING CERTAIN FINDINGS AND DETERMINATIONS AND REQUESTING THE BOARD OF HARBOR COMMISSIONERS OF THE CITY OF LONG BEACH TO APPROVE A TRANSFER FROM THE HARBOR REVENUE FUND TO THE TIDELAND OPERATING FUND PURSUANT TO THE PROVISIONS OF CITY CHARTER SECTION 1209(C)(4)
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
PATRICK H. WEST
CITY MANAGER