TITLE
Recommendation to approve the Fiscal Year 2022 second departmental and fund budget appropriation adjustments in accordance with existing City Council policy. (Citywide)
DISCUSSION
On August 24, 2021, the City Council adopted the Appropriations Ordinance governing the City of Long Beach’s (City) Adopted Budget for Fiscal Year 2022 (FY 22). Periodically, changes in revenue or operating conditions require mid-year appropriation adjustments. For example, in certain cases, these adjustments enable departments to expend recently awarded grant revenue for which there is no existing appropriation. In addition, changes for multi-year grants/projects are necessary to bring appropriations in line with final grant/project award amounts. Other instances involve a contractual obligation or a City Council-initiated project or general operations that require appropriation adjustments to be made. In accordance with the City’s practice, these adjustments are presented periodically throughout the year to the City Council for consideration. On March 8, 2022, the City Council approved the first departmental and fund budget appropriations adjustments. This is the second departmental and fund budget appropriation adjustments request for FY 22. The detailed descriptions of the proposed adjustments are provided below. Attachment A provides a Summary of Proposed Adjustments of Impacted City Funds.
This matter was reviewed by Assistant City Attorney, Gary J. Anderson, on May 2, 2022.
TIMING CONSIDERATIONS
The following requests for adjustments to FY 22 departmental and fund appropriations are necessary to reflect changes in operating conditions. City Council action is requested on May 17, 2022, to enable the timely processing of budget adjustments.
FISCAL IMPACT
Airport
1. Increase appropriations in the Airport Fund Group in the Airport Department by $200,000 for the purchase of additional supplies and spare parts related to the operations of the new airline ticketing facility and baggage screening facility at the Long Beach Airport, offset by Airport operating revenues.
The new airline ticketing facility and baggage screening facility at the Airport opens in Spring 2022. The facilities require the purchase of additional supplies and spare parts to operate and maintain the facilities and related equipment. The facilities include a new common use passenger processing system and a new baggage handling system that require spare parts to be kept available to reduce downtime for repairs. In addition, incidental items related to operating the new facilities will be purchased and include items such as stanchions, signs, bag tubs, maintenance equipment and janitorial supplies. The purchase is estimated to total $200,000 and is funded by Airport operating revenues generated from operating these facilities.
2. Increase appropriations in the Airport Fund Group in the Airport Department by $524,650 for capital project costs related to setup of utility infrastructure for security-restricted ground lease areas at the Long Beach Airport, offset by Airport funds available.
Airlines operating at the Long Beach Airport require space adjacent to the ramp area to facilitate their ground support operations. Locations of these security-restricted areas were relocated during the construction of the terminal area projects. These relocated areas require utility infrastructure (electrical, water, etc.) to have a functional site. The work needs to be completed in a timely manner to reduce the impact to airline flight operations. Total project cost is approximately $524,650 and is offset by Airport funds available.
Development Services
3. Increase appropriations in the Development Services Fund Group in the Development Services Department by $425,000 for environmental review costs, offset by fee revenue.
The Development Services Department incurs costs associated with preparing environmental review documents which are required to comply with the California Environmental Quality Act of 1970 (CEQA). These costs include consulting services required to prepare environmental impact reports. Due to the increasing number of projects requiring environmental review in FY 22, an appropriation increase of $425,000 is requested to align budget to anticipated actuals. The appropriation increase is offset by fee revenue collected from applicants to recover costs for these services.
Energy Resources
4. Increase appropriations in the Gas Fund Group in the Energy Resources Department by $11,700,000 for gas purchases and transmission charges, offset by $10,000,000 in customer rate revenue and $1,700,000 in funds available.
The Energy Resources Department purchases its natural gas supply on behalf of its customers, offset by rate payer revenue. An appropriation increase of $11,700,000 is requested to align its budget for gas purchases and transmission to anticipated expenditures in FY 22, including price increases driven by higher demand. The appropriation increase is offset by $10,000,000 in rate payer revenue performing higher than budget, plus $1,700,000 from funds available.
5. Increase appropriations in the Gas Fund Group in the Energy Resources Department by $15,900,000 for the required purchase of Greenhouse (GHG) emission allowances and eligible projects across various City departments, offset by $2,200,000 from AB 32 revenues performing higher than budget, a release of $9,200,000 in AB 32 credit revenue reserved for these purposes, and $4,500,000 in funds available.
Under the State’s AB 32 Program, the Energy Resources Department is required to purchase Greenhouse (GHG) emission allowances equal to the amount of carbon dioxide released by customers from the burning of natural gas within the department’s service territory. An appropriation increase of $8,000,000 is requested to align budget to the anticipated cost to purchase emission allowances in FY 22. In addition to the purchase of emission allowances required under AB 32, the department receives AB 32 credit revenue from rate payers to fund eligible projects that reduce greenhouse gas emissions. Projects previously approved by the City Council were originally appropriated on a one-time basis in an annual fund. Due to the nature of an annual fund, unspent appropriations for continuing projects lapse at the end of the fiscal year, and do not roll over for use in the following fiscal year. An appropriation increase of $7,900,000 is requested as a technical adjustment to appropriate the remaining balances for these various projects. The increase is requested in a multi-year fund where project balances will then remain available until each project’s completion.
Fire
6. Increase appropriations in the General Fund Group in the Fire Department by $241,018 to staff the Mobile Stroke Unit, offset by reimbursement revenue.
On August 3, 2021, the City Council authorized the City Manager to execute an agreement with the Regents of the University of California, on behalf of the University of California, Los Angeles (UCLA) Health System and the David Geffen School of Medicine at UCLA, Department of Neurology, for the provision of emergency stroke transport services. The Mobile Stroke Unit (MSU) is a specially equipped ambulance designed to transport all of the care traditionally provided in the Emergency Department of a hospital directly to stroke patients where they are, before transporting the patient to an approved stroke center for further care. The MSU is staffed by a specialty care team comprised of a Stroke Neurologist, Critical Care Transport Nurse, CT Technician, and a Long Beach Fire Department Firefighter/Paramedic. Under the agreement, UCLA will reimburse the City for the full cost of the Firefighter/Paramedic assigned to the MSU.
Police
7. Increase appropriations in the General Grants Fund Group in the Police Department by $189,542 for the Edward Byrne Memorial Justice Assistance Grant, offset by grant revenue.
On January 22, 2019, the City Council approved the award of the FY 17 Edward Byrne Memorial Justice Assistance Grant to the Long Beach Police Department. The Trump Administration placed limitations on the City as a Sanctuary City and required signature on special condition agreements to draw down the funds. The City Attorney and City Manager’s offices determined the agreements were not within City policy, resulting in funds not drawn down and removal of the budget as part of a grant cleanup process. The Biden Administration removed the special condition requirements and re-appropriation in the amount of $189,542 is requested in order to draw down the funds.
Public Works
8. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $100,000 for the COVID-19 memorial, offset by a transfer from the General Fund Group in the Public Works Department.
As part of FY 22 Budget Adoption, the City Council appropriated $100,000 in one-time General Funds in the Public Works Department for vision development of a COVID-19 memorial located within Long Beach. On March 8, 2022, the City Council approved the first FY 22 departmental and fund budget appropriations adjustments which included an additional $750,000 of funding to support the visioning, design and construction process for a COVID-19 memorial in Long Beach per the direction of the City Council on May 11, 2021. Total funding for the COVID-19 memorial is $850,000. This is a technical adjustment to move the initial $100,000 budgeted in the General Fund Group to the COVID-19 memorial project budgeted in the Capital Projects Fund Group.
9. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $190,656 for median improvements, offset by revenue received from the developer.
Bridge Development Partners, LLC (Developer), with the approval of the Development Services Department, has issued the City a check for $190,656 in lieu of reconstructing the raised median island in front of the development at 2400 East Artesia Boulevard, just west of Downey Avenue. The requirement to reconstruct the raised median was placed upon the development by the City as part of the City’s planning process. The City has agreed it will construct the raised median improvements on behalf of the Developer upon receipt of the funds.
10. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $61,378 for structural plan review and inspections of bridges, offset by revenue received from the County of Los Angeles Public Works.
The County of Los Angeles Public Works issued the City a check for an encroachment permit fee for the County Administered Bridge Preventative Maintenance Program (BPMP) Phase 1 Project. In an agreement between the City and the County of Los Angeles Public Works, $61,378 of the total permit fee will be used for structural plan review and structural inspections of the 23 bridges in Long Beach included in the BPMP Phase 1 project.
11. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $879,962 to transfer to the Tidelands Operating Fund Group, offset by prior transfers of Measure B (TOT) funding from the General Fund Group; and,
Increase appropriations in the Tidelands Operating Fund Group in the Public Works Department by $879,962 to support improvements at the Long Beach Convention and Entertainment Center, offset by a transfer from the Capital Projects Fund Group.
On March 3, 2020, Long Beach voters approved General Election Measure B, which increased the transient occupancy tax (TOT hotel tax) from six percent to seven percent. As part of the Adopted FY 21 Budget, the City Council approved 49.5 percent of the new revenue received from the tax to be designated for the Long Beach Convention and Entertainment Center (LBCEC). To date, FY 20 generated a transfer to support LBCEC in the amount of $155,005 and FY 21 generated $724,957. The funding will be used to fund the projects in the City’s recent Facilities Conditions Assessment that includes capital improvements needed for the multi-story Pacific Ballroom/Arena facility, which occupies 64,000 square feet, and additionally, for various improvements at the Convention Center. City staff are actively working on identifying needs with the Convention Center for the proper use of these funds. A budget adjustment is being requested to appropriate the funding in the Tidelands Operating Fund Group where expenditures will be recorded, offset by funds received to date in the Capital Projects Fund Group. The budget adjustment request in the Capital Projects Fund Group is for the transfer of funds to the Tidelands Operating Fund Group.
12. Increase appropriations in the Tidelands Operating Fund Group in the Public Works Department by $16,000 for construction services for the Colorado Lagoon Playground Project, offset by a transfer from the Parks, Recreation and Marine Department; and,
Decrease appropriations in the Tidelands Operating Fund Group in the Parks, Recreation and Marine Department by $16,000 to offset a transfer to the Public Works Department.
The Colorado Lagoon Playground Project replaces the prior playground equipment and provides improvements to the sidewalk. The Parks, Recreation and Marine Department has agreed to provide $16,000 of additional funding to the project from their Tidelands Operating budget. The increase in appropriations will provide the additional scope needed for the installation of low voltage conduits (for future security cameras) and backflow cages.
13. Increase appropriations in the Refuse and Recycling Fund Group in the Public Works Department by $1,562,400 to clean 22 Freeway on/off ramps located on the I-710, CA-91 and I-405 freeways, offset by grant reimbursement revenue received from Caltrans.
On June 15, 2021, the City Council authorized the City to enter into a Consent Letter and a Project Specific Maintenance Agreement with Caltrans, and any other necessary documents required to access Caltrans property, to offer and provide social services, targeted maintenance, and relocation assistance to people experiencing homelessness. As part of the State’s current budget, the Clean California program is providing $1,562,400 to the Public Works Department to clean 22 freeway on/off ramps located on the I-710, CA-91 and I-405 freeways.
California Department of Resources Recycling and Recovery (CaIRecycle)
On June 19, 2018, the City Council adopted a Resolution authorizing the City Manager, or designee, to apply for grant funds through CalRecycle; submit applications for all CalRecycle grants for which the City of Long Beach is eligible; accept the grant funds if awarded; and execute all documents necessary to implement the scope of the grant for a period of five years from the date of Resolution adoption. The following requests are needed to appropriate the grants awarded by CalRecycle in FY 22.
14. Increase appropriations in the Refuse and Recycling Fund Group in the Public Works Department by $61,023 for the Used Motor Oil Payment Program, offset by grant revenue from CalRecycle.
The CalRecycle Used Motor Oil Payment Program (OPP) is used to promote a cleaner Long Beach by funding programs to prevent used motor oil from being improperly disposed. Funding provides residents with convenient methods of recycling used oil, including an on-call curb side collection program for used motor oil and filters, Certified Collection Centers throughout Long Beach, and free drop off events twice per month. The City received $61,023 in grant funding in FY 22.
15. Increase appropriations in the Refuse and Recycling Fund Group in the Public Works Department by $50,000 for the Hazardous Waste Grant, offset by grant revenue from CalRecycle.
The CalRecycle Hazardous Waste Grant (HD37) is used to reduce the use of hazardous waste items, increase public knowledge of proper disposal and opportunities for safe hazardous waste disposal and alternatives. Funding provides residents with convenient methods of recycling hazardous waste through free drop off events twice per month. Additionally, funding provides alternatives to a popular hazardous item, single-use 1 pound propane tanks, by promoting and distributing refillable alternatives. The City received $50,000 in grant funds in FY 22.
16. Increase appropriations in the Refuse and Recycling Fund Group in the Public Works Department by $660,196 for SB1383 Local Assistance, offset by grant revenue from CalRecycle.
The CalRecycle SB1383 Local Assistance Grant is used to support the City’s implementation of the state-mandated requirements of SB1383. Funds will support the development and implementation of an organics collection and food recovery program, and public education. The City received $660,196 in grant funds in FY 22.
Long Beach Recovery Act
17. Decrease appropriation in the General Fund Group in the Police Department by $162,324 for a transfer to the Parks, Recreation and Marine Department to support the Hoops After Dark program; and,
Increase appropriation in the General Fund Group in the Parks, Recreation and Marine Department by $162,324, offset by a transfer of one-time funds previously allocated to the Police Department for the Hoops After Dark program.
On July 20, 2021, the City Council allocated $250,000 to the Police Department to implement partnerships with local community-based organizations and provide opportunities to engage with Long Beach youth in a fun, low-pressure environment to build rapport and trust. To date, the Police Department has used the funds to support several programs, including a winter session of the community-driven Hoops After Dark, Youth Boxing Mentorship, the Long Beach Bar Association’s Short Stop Youth Diversion, and Playground Partners with the YMCA. The Police Department is requesting to transfer the remaining funds to the Parks, Recreation and Marine Department (PRM), to better align program administration, logistics, and community partnerships for the Hoops After Dark program, under the expertise of PRM and include this program and associated funding in the Long Beach Recovery Act. PRM intends to continue partnerships with local, community-based organizations for the Hoops After Dark program and the Police Department will continue to partner with PRM by providing personnel to participate in the program as volunteers.
18. Increase and decrease appropriations in the General Fund Group and the General Grants Fund Group in various departments as shown in Table A below, offset by funds made available through the Long Beach Recovery Act; and approve the revised program allocations of the Long Beach Recovery Act as seen in Attachment B.
Table A: Long Beach Recovery Act Appropriation changes
|
Department |
Fund Group |
Appropriation Increase / (Decrease) |
|
City Manager |
General Fund |
$394,675 |
|
Economic Development |
General Fund |
1,385,325 |
|
Health and Human Services |
General Fund |
(80,200) |
|
Library Services |
General Fund |
25,000 |
|
Parks, Recreation and Marine |
General Fund |
105,200 |
|
Technology and Innovation |
General Fund |
70,000 |
|
Citywide Activities |
General Grants |
(9,900,000) |
|
Economic Development |
General Grants |
(1,900,000) |
|
Net Change Citywide |
All Funds |
$(9,900,000) |
The Long Beach Recovery Act (LB Recovery Act) was initially approved by the City Council on March 16, 2021, and revisions to the plan have been approved by the City Council in subsequent reports. The total LB Recovery Act funding has grown to $268.7 million since the latest revised plan and is funded by various sources, including the General Fund, as a result of the City's approach in using federal American Rescue Plan Act (ARPA) funds. The U.S. Department of Treasury’s Final Rule allows ARPA funding to be used to provide and maintain current government services (e.g., provision of eligible City services) up to the amount of the City's calculated revenue loss due to the pandemic. In compliance with the Final Rule, the City's approach will be to utilize the majority of APRA funding to maintain existing, eligible City services (specifically police, parks, and recreation services) for both FY 21 and FY 22. This portion of ARPA funding allocated to the City makes available General Fund monies, which are then used to enable the delivery of City Council-approved programs for the LB Recovery Act. This spending approach, consistent with the Final Rule, does not result in any increased budgetary allocations or levels of service for the Parks, Recreation and Marine or Police Departments and the total budget for Parks, Recreation and Marine and Police Departments were unaffected by this approach.
The remaining portion of ARPA funds will be used to provide direct relief grants to those impacted most by the pandemic. Utilizing ARPA funds for these direct relief grant payments will provide the opportunity for these funds to be tax-exempt for the beneficiaries (if paid from the General Fund, these payments would be taxable to the recipients). The $9.9 million decrease in appropriation in the Citywide Activities Department is a technical clean-up so the total budget related to ARPA funds across all departments equals the correct amount received by the City. An appropriation change of $1.9 million in the Economic Development Department is a technical correction to reflect the true total budget for the direct relief grant programs that will be managed out of the General Grants Fund Group. The remaining appropriation changes reflect adjustments to various programs, including funding from the Property Activation program reprogrammed to support various Cultural Events, and the Health and Wellness Programming sub-program under the Older Adults Supports program to be managed by the Parks, Recreation and Marine Department.
Table B below details the current LB Recovery Act funding sources. Additional increases to the LB Recovery Act are due to additional grant funds being awarded to the City.
Table B: Long Beach Recovery Act Funding Sources (in millions)
|
Funding Source |
Total Program Allocation |
|
General Fund* |
$124.0 |
|
General Fund 2nd allocation** |
0.8 |
|
American Rescue Plan Act (ARPA) Direct Relief Grants++ |
11.8 |
|
Airport Rescue Grants^ |
15.1 |
|
CDC Public Health Workforce Development Grant |
2.8 |
|
Emergency Rental Assistance Program (ERAP) - Round 1 |
30.2 |
|
ERAP - Round 2 |
34.3 |
|
Epidemiology and Laboratory Capacity Grant (ELC) |
26.8 |
|
Health Disparities Grant |
7.7 |
|
HUD Home-ARP (Homelessness) |
10.2 |
|
Vaccination Grant |
5.1 |
|
Total Funding Sources |
$268.7 |
*Funds made available due to funding from ARPA covering existing City services.
**Funds made available due to funding from CARES covering existing City services.
++This represents the portion of LB Recovery Act programs funded directly by ARPA. The remaining portion of ARPA funding will be used to support existing City services.
^ Airport Grants are funded by ARPA as a direct allocation to the Airport Department. This is separate from the City’s direct allocation of ARPA funds.
The Long Beach Recovery Act programs fall under three categories: Economic Recovery, Healthy and Safe Community, and Securing our City’s Future. The Healthy and Safe Community programs increased by over $13 million largely due to adjustments to the Emergency Rental Assistance Program funding. There have been no changes to the Economic Recovery or Securing Our City’s Future programs. Table C summarizes the total funding by Program Category.
Table C: Long Beach Recovery Act Program Categories (in millions)
|
|
Total Program Allocation |
|
Economic Recovery |
$64.5 |
|
Healthy and Safe Community |
128.5 |
|
Securing Our City’s Future |
75.7 |
|
Total Long Beach Recovery Act |
$268.7 |
LB Recovery Act programs continue to evolve as additional funding sources and recovery needs are identified. Attachment B details the revised LB Recovery Act programs, sub-programs, and the associated allocation amounts. City staff will continue to report to the City Council any new recovery-related funding sources secured by the City through the Bi-Annual Reports. Past reports are available on the City’s Long Beach Recovery Act website at www.longbeach.gov/recovery <http://www.longbeach.gov/recovery>. Long Beach Recovery Act reports show funding appropriated to date at the time of report development. Additional appropriations approved by the City Council added during quarterly budget adjustments will be added to future LB Recovery Act reports.
COVID-19 Grants
19. Receive and file a report on the financial assistance accepted by the City of Long Beach, from April 1, 2021 through December 31, 2021, under Resolution No. 20-0049 to respond to the proclaimed emergency due to the COVID-19 pandemic; and,
Increase appropriations in several funds across several departments for various COVID-19-related grant opportunities.
On April 14, 2020, through Resolution No. 20-0049, the City Council authorized the City Manager, or designee, to execute all necessary documents, including subcontracts and any subsequent amendments, to apply for, accept and expend grant funding for costs incurred in response to the COVID-19 pandemic. This authorization allowed the City to take advantage of federal and State grants, with or without a match requirement, as quickly as possible and required that all agreements executed under this authority be presented to the City Council at the next practicable opportunity for receive and file. This report presents five financial opportunities accepted during the period of April 1, 2021 to December 31, 2021, for a total of $23.6 million. This total represents an estimate of funding, which the City may receive in various funds. Actual funding will vary as some funding opportunities are cost reimbursement and are based on eligible expenditures incurred. It should be noted that this report is not inclusive of all financial opportunities accepted by the City during this period and does not include grants that have been presented to the City Council separately.
Airport Department
Airport Rescue Grant
The Airport Rescue Grant is provided in accordance with ARPA, providing federal stimulus funds to eligible U.S. airports and eligible concessions at those airports to prevent, prepare for, and respond to the COVID-19 pandemic. The Long Beach Airport has been allocated $13,360,087 to prevent, prepare for, and respond to COVID-19-related costs related to operations, personnel, cleaning, sanitization, janitorial services, combating the spread of pathogens, and debt service payments. Funding must only be used for purposes directly related to the Airport. The operational period of this grant is January 13, 2022 through January 13, 2026. There is no local match or in-kind service requirement. No increase in appropriation is necessary as there is sufficient appropriation within the department.
Concessions Rent Relief Airport Rescue Grant
The Concessions Rent Relief Airport Rescue Grant is provided in accordance with ARPA, which provides federal stimulus funds to eligible U.S. airports and eligible concessions at those airports to prevent, prepare for, and respond to the COVID-19 pandemic. The Long Beach Airport has been allocated $1,501,174 to provide relief from rent and minimum annual guarantee obligations, as applicable, to eligible in-terminal airport concessions vendors. The operational period of this grant is December 23, 2021 through December 23, 2025. There is no local match or in-kind service requirement. No increase in appropriation is necessary as there is sufficient appropriation within the department.
Development Services Department
Emergency Rental Assistance Program Grant
20. Decrease appropriations in the Community Development Grant Fund Group in the Development Services Department by $196,495 to align the budget for the Emergency Rental Assistance Program with the grant award.
On October 12, 2021, the City Council authorized appropriations for the acceptance of $13,099,702 in State Block Grant funding for a second round of the Emergency Rental Assistance Program (ERAP). After this approval, the State issued the final grant award, which was reduced to $12,903,207 to reflect a 1.5 percent administrative fee retained by the State for their role in managing the federal award providing these funds. Therefore, a decrease in appropriations is needed to align the ERAP budget with the final grant award. The reduction impacts the administrative budget and does not reduce the amount of available direct assistance.
Health and Human Services Department
Immunization Program Grant - Rounds 2, 3 and 4
21. Increase appropriations in the Health Fund in the Health and Human Services Department by $5,259,020, offset by grant revenue.
The City’s Health and Human Services Department (DHHS) has been awarded $5.26 million of Immunization Program Grant funds from the California Department of Public Health (CDPH) Immunization Branch. Funding from Rounds 2, 3 and 4 is to assist Local Health Departments in preventing and controlling vaccine-preventable diseases and vaccination services for COVID-19 response. Eligible expenses include PPE, ancillary vaccination supplies, syringes, bandages, vehicle, storage container, generator, data loggers, radios, and staff support for the City of Long Beach health jurisdiction.
Public Health Workforce Development Grant
22. Increase appropriations in the Health Fund Group in the Health and Human Services Department by $2,751,815, offset by grant revenue.
Los Angeles County (LA County) awarded DHHS pass-through funding from the Centers for Disease Control and Prevention (CDC) to expand the public health workforce to support COVID-19 response, train the public health workforce for emergency response via the Public Health Preparedness Summit, and expand medical and testing services for students of the Long Beach Unified School District (LBUSD).
ELC School Re-Opening Safety Grant
23. Increase appropriations in the Health Fund Group in the Health and Human Services Department by $750,000, offset by grant revenue.
LA County has awarded DHHS $750,000 of pass-through funding from the CDC. This surplus ELC funding will support LBUSD reopening. Eligible expenses include staff time, office supplies, setting up COVID-19 test sites, procuring PPE and test kits, and tech costs needed to support LBUSD reopening.
SUGGESTED ACTION
Approve recommendation.
BODY
[Enter Body Here]
Respectfully Submitted,
KEVIN RIPER
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
THOMAS B. MODICA
CITY MANAGER