TITLE
Recommendation to approve the Fiscal Year 2022 third and final 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. 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 appropriation adjustments. On May 17, 2022, the City Council approved the second departmental and fund budget appropriation adjustments. This is the third and final collective departmental and fund budget appropriation adjustments request for FY 22. The detailed descriptions of the proposed adjustments are provided below. See Attachment A for a Summary of Proposed Adjustments of impacted City funds.
Some of the proposed adjustments include the proposed use of funds available or operating reserves to offset expenditures with no identified funding source directly related to the use. For some of these adjustments, departments may be noting potentially higher than budgeted department-related revenues. For the General Fund, departmental revenues are typically used to balance the overall budget or create a surplus at year-end with the exception of an expense increase that directly results in increased revenue.
This matter was reviewed by Principal Deputy City Attorney Richard F. Anthony on November 28, 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 December 13, 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 $804,785 for public safety services, offset by Airport funds available.
The Long Beach Airport has a Memorandum of Understanding (MOU) agreement with the Long Beach Police Department for services provided at the Airport for K9 and Special Security Officers. At the time of the Adopted FY 22 Budget, this MOU was budgeted at $8,013,367; however, actuals are estimated to cost $8,818,152 for FY 22. An appropriation increase of $804,785 is needed for the additional cost of services for labor and is offset by Airport Fund funds available.
2. Increase appropriations in the Airport Fund Group in the Airport Department by $8,084,439 for relief fund grants, as a technical correction.
In 2020 and 2021, the Airport received relief funds through the Coronavirus Aid, Relief and Economic Security (CARES) Act and Coronavirus Response and Relief Supplemental Appropriation (CRRSA) Act to fund operating expenses and debt service payments. A combined $23,840,702 in relief fund grants was received and were fully expended through 2021. This is a technical correction to increase appropriations to align with budgeted expenditures that were transferred to these grants and funded in prior years.
3. Increase appropriations in the Airport Fund Group in the Airport Department by $375,293 for airport concessionaire rent relief funds, as a technical correction.
In 2021, the Airport received $375,293 in rent relief funds through the CRRSA Act to provide rent relief for airport concessionaires. Of this amount, $7,506 funded administrative expenses and $367,787 was applied as rent credits for airport concessionaires through 2022. This is a technical correction to increase appropriations to align with administrative expenses and rent credits that were funded by the grant.
City Manager
4. Increase appropriations in the General Fund Group in the City Manager Department by $8,850 for commissioner salaries and staff support to the Equity and Human Relations Commission, offset by a transfer of structural funds previously allocated to the Health and Human Services Department for the Human Relations Commission; and
Decrease appropriations in the General Fund Group in the Health and Human Services Department by $8,850 for a transfer to the City Manager Department for commissioner salaries and staff support to the Equity and Human Relations Commission.
Prior to FY 21, both the Office of Equity and the Human Dignity Program were housed in the Health and Human Services Department and supported the Human Relations Commission (HRC) budget in the Human Dignity Program. In FY 21, the Equity Office was moved to the City Manager Department, and on November 9, 2021, the City Council adopted an Ordinance to amend the purpose, functions, and membership of the HRC; expand and update its mission and scope; and change its name to the Equity and Human Relations Commission (EHRC). Since FY 21, City Manager Department staff have supported the EHRC and expenses have been absorbed in the department budget, but appropriation for these expenses (including commissioner salaries) remained with the Health and Human Services Department. The Health and Human Services Department appropriation needs to be transferred to the City Manager Department to align the budget with the actual operations of the EHRC in FY 22.
Disaster Preparedness and Emergency Communications
5. Increase appropriations in the General Grants Fund Group in Disaster Preparedness and Emergency Communications Department by $20,593, offset by an additional award allocation of Homeland Security grant funding;
Increase appropriations in the General Grants Fund Group in the Health and Human Services Department by $896, offset by an additional award allocation of Homeland Security grant funding; and,
Decrease appropriations in the General Grants Fund Group in the Fire Department by $883 to partially offset other departments' grant expenditures.
On June 9, 2020, the City Council approved the City's Federal 2019 Urban Area Security Initiative (UASI 2019) grant award for $1,184,315. The City has been awarded an additional $20,606 in UASI 2019 funding. The requested adjustment will align appropriations to actual grant funded expenditures totaling $1,204,921. The Department of Disaster Preparedness and Emergency Communications utilized these additional funds to develop the Hazardous Mitigation Plan. Appropriation adjustments are requested for the Disaster Preparedness and Emergency Communications, Fire, and Health and Human Services Departments to offset eligible expenditures within the grant performance period.
6. Increase appropriations in the General Services Fund Group in the Technology and Innovation Department by $472,500 for Department of Homeland Security 2021 Urban Area Security Initiative Grant, offset by grant revenue; and,
Decrease appropriations in the General Grants Fund Group in the Technology and Innovation Department by $472,500 as a technical cleanup.
On Tuesday, April 19, 2022, the City Council approved to accept and expend grant funding for the Department of Homeland Security 2021 Urban Area Security Initiative Grant, for the period of September 1, 2021 through May 31, 2024. An increase of appropriations in the amount of $472,500 was incorrectly added to the General Grants Fund Group in the Technology and Innovation Department. This is a technical cleanup to move the appropriation from the General Grants Fund Group to the General Services Fund Group, where the grant will be charged.
7. Increase appropriations in the General Grants Fund Group in the Police Department by $4,258, offset by a reallocation of Homeland Security grant funding; and,
Decrease appropriations in the General Grants Fund Group in the Disaster Preparedness and Emergency Communications Department by $4,326 to offset other department's grant expenditures.
On February 8, 2022, the City Council approved a grant from the 2020 Emergency Management Performance Grant (EMPG 20) for reimbursement grant award of $77,886 to enhance the City's response capabilities. The City had a cost savings of $68 in EMPG 20 projects. The requested adjustment will align appropriations to actual grant funded expenditures totaling $77,818. These additional funds authorize the Police Department to purchase Emergency Food Rations (MRE). Appropriation adjustments are requested for the Disaster Preparedness and Emergency Communications Department to offset eligible expenditures within the grant performance period.
8. Increase appropriations in the General Grants Fund Group in the Disaster Preparedness and Emergency Communications Department by $17,374, offset by an additional award allocation of Homeland Security grant funding;
Increase appropriations in the General Grants Fund Group in the Fire Department by $350,533, offset by an additional award allocation of Homeland Security grant funding; and,
Increase appropriations in the General Grants Fund Group in the Health and Human Services Department by $56,301, offset by an additional award allocation of Homeland Security grant funding.
On March 2, 2021, the City Council approved a grant from the 2019 State Homeland Security Program (SHSP 19) for grant award of $623,849 to enhance the City's response capabilities. The City has been awarded an additional $424,208 in SHSP 19 funding. The requested adjustment will align appropriations to actual grant funded expenditures totaling $1,048,057. Appropriation adjustments are requested for the Disaster Preparedness and Emergency Communications, Fire, and Health and Human Services Departments to offset eligible expenditures within the grant performance period.
Economic Development
9. Decrease appropriations in the Community Development Grants Fund Group in the Economic Development Department by $150,000, as a technical correction, for the Workforce Innovation and Opportunity Act (WIOA) grant funding.
On September 13, 2022, the City Council approved the acceptance of the WIOA grant from the City of Los Angeles to operate the Harbor Gateway YouthSource Center in San Pedro, CA. Included in this recommendation was an appropriation increase of $150,000 in the Community Development Grants Fund Group in the Economic Development Department. A technical correction is necessary to reduce the appropriation, as sufficient funds already exist in the Community Development Grants Fund Group in the Economic Development Department.
10. Increase appropriations in the General Fund Group in the Economic Development Department by $318,997 for administrative and programmatic costs related to the Business License Grant Forgiveness program for businesses impacted by the COVID-19 Pandemic, offset by funds available approved by the City Council for this purpose.
On November 17, 2020, the City Council approved a recommendation to provide grants to businesses to offset business license taxes and fees for those businesses closed or materially restricted and impacted for an extended period of time due to the City Health Orders. At the time of the original letter, the grant program was estimated to cost $1.3 million plus administrative costs of $75,000 and was to be funded by funds available or General Fund Operating reserves. The grant program has now ended, and the requested budget adjustment is to offset the programmatic and administrative costs incurred in FY 22. Though the program was for fees incurred in calendar year 2020, working through the operational logistics of executing and providing grants to businesses lasted through FY 22.
Energy Resources
11. Increase appropriations in the Tidelands Oil Revenue Fund Group in the Energy Resources Department by $89,767,032 to align the budget to actual expenditures associated with higher oil revenues, offset by revenue; and,
Increase appropriations in the Uplands Oil Fund Group in the Energy Resources Department by $4,806,643 to align the budget to actual expenditures associated with higher oil revenues and expenditures, offset by revenue.
Expenses in the Uplands Oil Fund and Tidelands Oil Revenue Fund Groups exceeded the budget amounts in each fund. The Adopted FY 22 Budget oil projections to cover structural, ongoing costs were based on a price of oil at $55 per barrel. However, in FY 22, the actual average price of oil was $94 per barrel. Both price and production costs impact the City's net oil revenues (gross revenues minus oil related expenditures). The higher than anticipated price of oil resulted in an increase in both Uplands and Tidelands net revenues and corresponding increases in payments (classified as expenditures) to the State of California Lands Commission, as well as transfer amounts to the General Fund and Tidelands Operations Fund Groups. As such, appropriation increases are requested in the Tidelands Oil Revenue and Uplands Oil Fund Groups in the Energy Resources Department to align budget to actual expense, offset by higher revenues.
12. Increase appropriations in the Gas Fund Group in the Energy Resources Department by $16,271,205 for gas purchases and transmission charges, offset by customer rate revenue.
The Energy Resources Department purchases its natural gas supply on behalf of its customers, offset by rate payer revenue. An appropriation increase of $16,271,205 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 revenue higher than budget.
Fire
13. Increase appropriations in the General Fund Group in the Fire Department by $89,232 as a technical correction for the Fire Services Study, offset by unspent one-times.
In FY 21, one-time funds in the amount of $200,000 were appropriated in the General Fund Group in the Fire Department to complete a comprehensive Fire Services Study. As of September 30, 2021, $85,291 of these funds had been spent, resulting in an unspent balance of $114,709. In the first FY 22 Citywide Budget Adjustment, $25,477 of the unspent balance was reappropriated and this item is a technical correction to appropriate the balance of $89,232 to complete the Fire Services Study.
14. Increase appropriations in the General Fund Group in the Fire Department by $634,514 for overtime expenses related to staffing assistance for California wildland fires, offset by reimbursement revenue from the State of California.
The Fire Department provided staffing assistance for California wildland fire events during FY 22. As the overtime expenses for the employees who provided support for fighting these wildland fires is unbudgeted, an appropriation increase is necessary and will be offset by reimbursement revenue from the State of California.
15. Increase appropriations in the General Fund Group in the Fire Department by $163,773 for overtime expenses related to staffing the Grand Prix of Long Beach, offset by revenue from the race organizers.
Each fiscal year, the Fire Department’s budget includes funding for fire and emergency medical support for the Grand Prix. The FY 22 budgeted amount was $120,000. Since there were two races in FY 22 (November 2021 and April 2022), both expenditures and revenue were greater than the budgeted amount. Therefore, an appropriation increase of $163,773 is requested to support overtime expenses in excess of those that were budgeted. These expenses are offset by reimbursement revenue from the race organizers.
16. Increase appropriations in the General Fund Group in the Fire Department by $236,345 for special events staffing, offset by reimbursement from production companies and event promoters.
The Fire Department provides staffing at various special events throughout the year, including movie and television filming. In FY 22, due to larger and a higher number of events, staffing expenses exceeded budget. An appropriation increase is needed for the unbudgeted staffing costs, and is fully offset by reimbursement revenues received from production companies and event promoters.
17. Increase appropriations in the General Fund Group in the Fire Department by $44,007 for additional emergency board-up costs, offset by reimbursement revenue from impacted property owners.
Emergency board-up services are provided to secure properties after fires. Due to a sharp increase in lumber costs in recent years, FY 22 emergency board-ups costs were significantly higher than budgeted. The increase in appropriation is fully offset by revenue recovered from impacted property owners.
18. Increase appropriations in the Tidelands Operating Fund Group in the Fire Department by $232,868 for additional Junior Lifeguard Program costs from increased Program enrollment and the partnership with Long Beach Unified School District, offset by Junior Lifeguard Program revenue and reimbursement from Long Beach Unified School District.
Since 1967, the Long Beach Fire Department’s Junior Lifeguard Program has offered students between the ages of nine and seventeen instruction in lifeguard rescue techniques, first aid, ocean sports, physical conditioning, and marine ecology, preparing them for careers in public safety and other public service professions. The Program is supported by fees paid by Program participants. In FY 22, enrollment increased significantly, resulting in an increase in staffing and related costs. These costs were offset by increased Junior Lifeguard Program revenue of $173,668. Additionally, the Fire Department has a partnership with Long Beach Unified School (LBUSD) to improve access to, and success in, the Junior Lifeguard Program, resulting in unbudgeted revenue of $59,200. The partnership includes Junior Lifeguard Preparatory Course at LBUSD schools taught by Fire Department staff and tuition assistance paid by LBUSD for up to 50 qualifying students to participate in the Junior Lifeguard Program.
19. Increase appropriations in the Tidelands Operating Fund Group in the Fire Department by $136,674 for additional Lifeguard staffing for the Wibit water playground at Alamitos Beach, offset by funds available.
In the summer of 2022, the City added a second Wibit water playground. This required a significant amount of unbudgeted staffing of Non-Career Lifeguards to ensure the safety of those using the Wibit equipment. While the FY 23 budget includes support for these activities, these were unbudgeted expenses in FY 22, and thus an appropriation increase for FY 22 is necessary.
Health and Human Services
20. Increase appropriations in the Health Fund Group in the Health and Human Services Department by $400,000 for the 2020 Continuum of Care, offset by grant revenues.
On May 12, 2020, the City Council approved the extension of the grant award with the U.S. Department of Housing and Urban Development (HUD), for the 2020 Continuum of Care, to accept and expend estimated funding between $9,000,000 and $11,000,000, for the period of July 1, 2021 through June 30, 2022.
The City has applied for the Continuum of Care (CoC) funding since 1995 to fund programs and services to quickly stabilize individuals and families experiencing homelessness. The CoC grant funds the following components: (1) permanent housing; (2) supportive services; (3) transitional housing; and, (4) the Homeless Management Information System.
Appropriation in the amount of $9,608,443 is currently budgeted in the Health Fund Group in the Health and Human Services Department. As approved by the City Council, should the grant award exceed current appropriation, the Department would return to the City Council to request the balance. The grant award exceeded appropriation by $400,000, making the total grant amount $10,008,443. Therefore, an appropriation increase in the amount of $400,000 in the Health Fund Group is being requested.
21. Increase appropriations in the Housing Authority Fund Group in the Health and Human Services Department by $11,727,180 for new Emergency Housing Vouchers (EHV), offset by grant revenues.
On July 1, 2021, the Department of Housing and Urban Development (HUD) allocated new EHV and authorized funding by the American Rescue Plan Act of 2021 in the amount of $11,727,180. This will provide 570 new housing vouchers for the purpose of sheltering those who have housing uncertainties. On August 10, 2021 <http://longbeach.legistar.com/LegislationDetail.aspx?ID=5075459&GUID=6C9298D5-6FBA-48C6-989B-D8FCCD6BB996&Options=&Search=>, the Housing Authority Commission approved acceptance of the funds, and an appropriation increase in the Housing Authority Fund Group was requested. The increase in appropriation of $11,727,180 is necessary to support FY 22 EHV.
22. Increase appropriations in the Health Fund Group in the Health and Human Services Department by $160,000 for congenital syphilis prevention and control activities, offset by grant revenue.
On March 23, 2021, the City Council approved an agreement with the California Department of Public Health (CDPH), Sexually Transmitted Disease (STD) Control Branch, to accept and expend grant funding up to $80,000 annually for congenital syphilis prevention and control activities for the period of January 1, 2021 through December 31, 2023. At that time, appropriation was requested for the first year of the 3-year grant term. Appropriation is now being requested for $160,000, for the remaining two years of the grant term, offset by grant revenue.
23. Increase appropriations in the Health Fund Group in the Health and Human Services Department by $9,000 for infant education training, offset by donation revenue.
In 2018, the Los Angeles Department of Public Health (LADPH), in partnership with First 5 LA, launched the LA County African American Infant and Maternal Mortality (AAIMM) Initiative. AAIMM is a countywide coalition dedicated to addressing the disproportionately high rates of Black infant and maternal deaths and ensuring healthy births for Black families in LA County. AAIMM identified doulas as a key intervention to help reduce infant and maternal mortality in LA County. Best Start-First 5 LA and Long Beach Forward work in collaboration towards efforts identified by AAIMM. A doula is a non-healthcare professional, trained to support individuals through pregnancy, childbirth and postpartum care.
On January 31, 2022, Long Beach Forward identified the City of Long Beach’s Black Infant Health Program as a recipient for a $9,000 donation to help further AAIMM’s goal of reducing infant and maternal mortality through supporting doula and lactation education training as an intervention. Approval is being requested to accept and expend the $9,000 donation from Long Beach Forward for the period of June 1, 2022 through December 31, 2022.
24. Increase appropriations in the General Fund Group in the Health and Human Services Department by $210,400 to add to the Long Beach Recovery Act Health Equity Fund Program, offset by anticipated FY 22 year-end funds available in the General Fund; and,
Authorize $300,000 of FY 23 Racial Reconciliation Program General Fund Group structural funding in the Health and Human Services Department to be reallocated on a one-time basis to the Long Beach Recovery Act Health Equity Fund Program to support Health Equity Community Projects.
Authorization to reallocate a portion of the Health and Human Services Department’s FY 23 Racial Reconciliation structural funding in the amount of $300,000 is requested on a one-time basis to support the Long Beach Recovery Act (LB Recovery Act) Health Equity Fund Program (Program) Community Projects contracts. This reallocation will ensure that all recovery-focused funding is properly aligned under the LB Recovery Act to ensure equitable and efficient program implementation. In addition, an appropriation increase of $210,400 is requested to fully support the Program under the LB Recovery Act. This increase will be offset by anticipated citywide FY 22 Year-End funds available in the General Fund. These funds will support community-based organizations funded through the Program as intended.
Human Resources
25. Increase appropriations in the Insurance Fund Group in the Human Resources Department by $8,031,915 to cover additional insurance premium costs, offset by funds available.
The costs associated with procuring General Liability, Specialty Coverage, Property Insurance, and Workers' Compensation Insurance have increased dramatically over the last couple of years. The market for these types of insurance for public agencies have been decreasing at the national level due in part to the growing number of claims against public entities. Expenses in the Insurance Fund Group exceeded budget by $8,031,915 to cover the additional premium costs. A budget adjustment is needed to align budget with actuals, offset by funds available. Additional premiums will be collected as revenues recouped from charges to user departments in FY 24.
Legislative
26. Increase appropriations in the General Fund Group in the Legislative Department by $51,205 to fund Board support, offset by revenue received from Southern California Air Quality Management District.
As Western Region Cities representative to South Coast Air Quality Management District (SCAQMD), Vice Mayor Richardson has been provided funding by the SCAQMD Board to fund a SCAQMD Board Deputy to advise on Board issues and work directly with the Western Region Cities. The anticipated revenue amount in FY 22 is $56,231. On May 17, 2022, the City Council approved an appropriation increase of $5,026, which was an error. A one-time appropriation increase of $51,205 is requested for the Ninth Council District, as a technical correction, to support existing staff or temporary staff as needed that will be providing Board support, offset by the funds received from SCAQMD in FY 22.
Library Services
27. Increase appropriations in the General Grants Fund Group in the Library Services Department for materials purchases and programming support by $189,045, offset by revenue from the Long Beach Public Library Foundation.
The Library Services Department has received funds totaling $189,045 from the Long Beach Public Library Foundation for materials purchases and programming support. The contributions are as follows: $1,740 from the Schmidt endowment; $1,800 from the Burcham endowment; $3,955 from the Slaybaugh endowment; $100,733 from the Apostle Youth Fund; $50,000 from Foundation Materials; $20,710 from Dive Into Learning; and, $10,107 from the Mobile Studio.
Parks, Recreation, and Marine
28. Increase appropriations in the Tidelands Operating Fund Group in the Parks, Recreation and Marine Department by $550,518 for operation and maintenance of Harry Bridges Park, offset by funds available.
In FY 22, Harry Bridges Memorial Park was transferred from Special Events to the Parks, Recreation and Marine Department’s Marine Bureau for grounds operation and maintenance (O&M) without corresponding appropriation. The O&M to preserve this space, used for special events and concerts, requires constant maintenance to prevent deterioration due to high usage, increased homeless encampments, trash, vandalism, etc. The unbudgeted costs associated with the O&M include cleanup costs, monthly landscape maintenance, and staffing. On June 14, 2020, the City Council approved a request to increase the contract authority with Parkwood for a total of $341,785. There was no offset provided in the approved City Council action with the Parks, Recreation and Marine Department stating that they would return to the City Council once final costs are known. The current requested amount of $550,518 is an increase of $208,733 over the original amount stated in the June 14, 2020 letter. The offset for this unbudgeted cost will draw down from funds available and will need to be assessed as part of the future budget development process.
29. Increase appropriations in the Capital Projects Fund Group in the Parks, Recreation and Marine Department by $16,500 for a nexus study, offset by Park and Recreation Facilities Fee revenue.
In 1989, the City established the Park and Recreation Facilities Fee (PRFF) ordinance, which enables the City to collect fees in order to mitigate the impact of new residential development on existing parks. The PRFF ordinance requires that a study be performed every five years to document the nexus between new residential development and the increased demand placed on existing park and recreation facilities. The last nexus study was conducted in 2018.
30. Increase appropriations in the Special Advertising and Promotion Fund Group in the Parks, Recreation and Marine Department by $43,074 to support the Municipal Band Summer Concert Season, offset by donations; and
Increase appropriations in the Tidelands Operating Fund Group in the Parks, Recreation and Marine Department by $44,000 to support the Municipal Band Summer Concert Season, offset by sponsorships.
The Parks, Recreation and Marine Department is requesting an appropriation increase in the amount of $87,074 to pay for activities associated with the 2022 Municipal Band Summer Concert Season. Revenues generated from sponsorship and private donations will offset this expenditure. A budget adjustment in the amount of $43,074 is requested in the Special Advertising and Promotion Fund Group and $44,000 in the Tidelands Operating Fund Group, offset by donations and sponsorships.
Public Works
31. Increase appropriations in the General Fund Group in the Public Works Department by $700,000 for permit inspection costs, offset by permit inspection revenues.
Due to the high volume of construction permits issued, operational expenses have also increased as each permit is inspected to verify the permit requirements are being met. Operationally, the Public Works Department utilized consultants to augment staff and address both current and backlogged permits in the amount of $1.1 million in FY 22. Of the increased amount, the Public Works Department is requesting an appropriation increase in the amount of $700,000 in the General Fund Group in the Public Works Department to cover the unbudgeted citywide permit inspection costs anticipated to exceed what can absorbed though out the department in FY 22, offset by the increased permit revenue generated by the inspections Public Works received.
32. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $25,000 for Storm Drain Maintenance Cost Sharing, offset by a transfer from the Water Department.
On October 2019, a water main break at the intersection of Spinnaker Bay and Parson Landing released a large amount of water in the area, causing the storm drain system to dislodge at various locations. In February 2020, Long Beach Water Department agreed to contribute $25,000 to the storm drain emergency repair and the cost to reline the storm drain system in the immediate area. This adjustment is needed to reflect the transfer of the $25,000 received from the Water Department to the Citywide Sinkhole Repairs project budgeted in the Capital Projects Fund Group.
33. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $3,000,000 for the Police Academy Space Plan Project, offset by a transfer from the General Fund Group in the Police Department.
The Police Academy Space Plan Project includes the refurbishment of the existing fireside and administration buildings. In addition, the existing trailer units will be replaced with modular buildings on foundation. Classrooms and administration offices will be housed in these buildings. The Police Department will transfer $3,000,000 of additional funding for the project. The transfer will be funded within the Police Department’s FY 22 appropriations and no budget adjustment is needed. The increase in appropriations in the Capital Projects Fund Group will provide the additional scope and construction needed for the renovation of the administration building.
34. Increase appropriations in the Capital Projects Fund Group in the Public Works Department by $2,700,000 for various critical capital improvements, offset by a transfer from the General Fund Group in the Police Department.
There are a variety of facility projects in the Police Department that are in need of critical capital improvements. The Police Department has identified five facility projects in need of improvements to be funded within their FY 22 appropriations . These include exterior improvements to the Public Safety Building, the West Division Fire Alarm System Replacement, the North Division HVAC Design Project, and the Police Headquarters Roof Repair and Emergency Generator Reconfiguration. These necessary projects were identified in the City’s Facilities Condition Assessment Report, which identifies and prioritizes Citywide facility repair needs. These improvements will be managed by the Public Works Department. An appropriation increase of $2,700,000 is requested in the Capital Projects Fund Group in the Public Works Department, offset by a transfer from the General Fund Group in the Police Department.
35. Decrease appropriations in the Capital Projects Fund Group in the Public Works Department by $3,840,394 related to the budgeting of Proposition C funds, as a technical correction.
On November 16, 2021, the City Council approved an increase of appropriations in the Capital Projects Fund Group by $3,840,394. Of this amount, $1,920,197 was to be offset with Proposition C 25 percent reimbursement revenues received from Los Angeles Country Metropolitan Transportation Authority (Metro) and $1,920,197 was a technical appropriation to allow for the transfer of the grant funds from the Capital Grant Fund Group. As part of the MUNIS conversion, these funds had already been approved and appropriated in the FY 19 First Citywide Budget Adjustments and the FY 21 Third Citywide Budget Adjustments. This request is a technical correction to decrease appropriations that were inadvertently recommended and approved twice.
36. Increase appropriations in the Tidelands Operating Fund Group in the Public Works Department by $6,794 for construction services for the Colorado Lagoon Playground Project, offset by a transfer of budget from the Parks, Recreation and Marine Department; and,
Decrease appropriations in the Tidelands Operating Fund Group in the Parks, Recreation and Marine Department by $6,794 to transfer budget to the Public Works Department.
The Colorado Lagoon Playground Project was constructed to replace the existing playground equipment and to make improvements to the sidewalk in the area. The Parks, Recreation and Marine Department has agreed to provide $6,794 of additional funding to the project. The transfer of budget between the two departments will provide the additional scope needed for the installation of low voltage conduits for future security cameras and the backflow cages.
37. Increase appropriations in the Refuse and Recycling Fund Group in the Public Works Department by $115,697 offset by grant reimbursement revenue received from CalRecycle.
On March 8, 2016, the City Council authorized City Manager to submit an application to the Department of Resources Recycling and Recovery (CalRecycle) for the Beverage Container Collection Program. This program provides grants to promote a cleaner Long Beach by funding programs to clean up and recycle beverage containers in the city. Funding supports curbside collection of recycling, neighborhood cleanup efforts, and recycling education programs in Long Beach. The City received $115,697 in grant funding in FY 22.
Citywide Activities
38. Increase appropriations in the General Fund Group in the Public Works Department by $21,939 as a technical correction for Community Garden Solar Lights project, offset by Fifth District One-time District Priority Funds;
Decrease appropriation in the Capital Projects Fund Group in the Public Works Department by $21,939 as a technical correction; and,
Decrease appropriations in the General Fund Group in the Citywide Activities Department by $21,939 for a transfer to the Public Works Department.
On October 4, 2022, the City Council approved an increase in appropriations in the amount of $21,939 in the Capital Projects Fund Group in the Public Works Department to support the Community Garden Solar Lights project as part of the Legislative Department’s Approved Projects Lists City Council letter. This item erroneously appropriated the funds in the Capital Projects Fund Group, and the Department has requested to correct this error. This technical correction decreases appropriation in the Capital Projects Fund Group in the Public Works Department, increases appropriation in the General Fund Group in the Public Works Department, and decreases appropriation in the General Fund Group in the Citywide Activities Department to accurately reflect where actual expenses will be incurred.
39. Increase appropriations in the Special Advertising and Promotion Fund Group in the Citywide Activities Department by $2,227 as a technical correction for the 2022 Pride Parade.
On June 21, 2022, the City Council approved an increase of appropriations in the amount of $2,500 in the Special Advertising and Promotion Fund Group in the City Manager Department to support the 2022 Pride Parade offset by the Sixth District One-time District Priority Funds in the Special Advertising and Promotion Fund Group. A correction to the item needs to be made, as the Council District does not have enough appropriation in the Special Advertising and Promotion Fund Group District Priority Funds to fully offset this transfer; of the $2,500 appropriated in the Special Advertising and Promotion Fund Group, only $273 was available. The balance of $2,227 will need to be offset by Sixth District One-time District Priority Funds in the General Fund Group. This budget adjustment is needed to reverse the appropriation decrease that was authorized on June 21, 2022 for the Special Advertising and Promotion Fund to recognize and correct that there was not enough funding. No appropriation change is needed in the General Fund Group as current District Priority Fund appropriation will be utilized to fund the transfer to the Special Advertising and Promotion Fund Group in the City Manager’s Department to cover the balance of $2,227 for the parade.
40. Increase appropriations in the General Fund Group in the Citywide Activities Department by $140,000 as a technical correction related to the support for Uptown Jazz Festival;
Decrease appropriations in the General Fund Group in the Legislative Department Ninth Council District Operating Budget by $122,902 for a transfer to the City Manager Department; and,
Decrease appropriation in the General Fund Group in the City Manager Department by $17,098 to align previous Uptown Jazz Festival support from the Ninth Council District to an updated, lower amount, offset by the Ninth Council District’s FY 22 operating funds.
On August 2, 2022, the City Council approved an appropriation increase of $140,000 in the City Manager Department to support the Uptown Jazz Festival which was held on August 27, 2022, to be offset by the Ninth Council District’s FY 22 operating budget. The approved letter erroneously reduced appropriation in the General Fund in the Citywide Department when it should have been in the General Fund in the Legislative Department. Council District 9 continued to fund raise and find additional offsets to reduce the impact to their operating budget. After fundraising commenced, the reduced total offset needed from Council District 9’s operating budget is $122,902 (versus the $140,000). This item adjusts the budget in the City Manager’s Department to the updated amount as well as makes the corrections needed from the original letter to appropriate things in the correct department.
41. Increase appropriations in the Debt Service Fund Group in the Citywide Activities Department by $26,571,272 to align budget to actuals incurred from the refunding of the Lease Revenue Refunding Bond 2012 Series A (2012 Bonds), offset by proceeds received from the refunding; and,
Increase appropriations in the Fleet Services Fund Group in the Financial Management Department by $16,668,363 to align budget to actuals incurred from the refunding of the Lease Revenue Refunding Bond 2012 Series A (2012 Bonds), offset by proceeds received from the refunding.
On April 19, 2022, the City Council authorized the issuance of Lease Revenue Refunding Bonds, Series 2022 (2022 Bonds), to refund and refinance the 2012 Bonds to reduce the annual debt service burden in various City funds including the General, Fleet Services, and Towing Fund Groups. The 2022 Bonds also reimbursed the Fleet Fund Group for an $1,600,000 interfund loan for the project management costs related to the Public Safety Parking Garage. The appropriation increases are necessary to provide budget for the actuals incurred from the defeasance of the 2012 Bonds and are offset by the revenue received from the 2022 bond proceeds and deposited into the Debt Service Fund Group.
42. Increase appropriations in the Debt Service Fund Group in the Citywide Activities Department by $83,528 to align budget to actuals incurred for the construction of the Public Safety Parking Garage, offset by funds received from previously issued lease revenue bonds in a prior year.
On April 2, 2019, the City Council authorized the issuance of Lease Revenue Bonds to pay for the Public Safety Parking Garage construction project. The lease revenue bond proceeds were deposited into the Debt Service Fund Group in the Citywide Activities Department. Project costs incur in the Civic Center Fund Group are funded by charges to the Debt Service Fund Group where the revenue to offset those expenses is held. This appropriation increase will align to the budget in Citywide Activities Department.
43. Increase appropriations in the Tidelands Operating Fund Group in the Citywide Activities Department by $58,994,867 to align budget to actuals incurred for bond issuance and sale of Tidelands Revenue Refunding Bonds, Series 2022 (2022 Bonds) redemption and issuance costs, offset by bond proceeds and net annual savings from lower interest payments.
On August 9, 2022, the City Council approved the issuance and sale of Tidelands Revenue Refunding Bonds, Series 2022, to refund bonds originally issued to pay for the improvements to the Aquarium of the Pacific, taking advantage of lower interest rates, and paying for the costs of issuance. The actual cost of redemption is $58,425,000, and the cost of issuance is $569,867.
Through the refunding of the 2012 Bonds with the 2022 issuance, the Aquarium of the Pacific Corporation prepaid all remaining years of the Corporation’s $2,154,000 annual contribution to debt service, and the pre-existing lease agreement between the City and the Corporation dissolved with the issuance of the 2022 bonds, replaced by a new one.
Long Beach Recovery Act
44. 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 |
$54,724 |
|
Economic Development |
General Fund |
(358,442) |
|
Health and Human Services |
General Fund |
275,518 |
|
Library Services |
General Fund |
(7,600) |
|
Parks, Recreation and Marine |
General Fund |
(75,600) |
|
Citywide Activities |
General Grants |
(111,400) |
|
Economic Development |
General Grants |
111,400 |
|
Net Change Citywide |
All Funds |
$ (111,400) |
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 $290.4 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 is to utilize the majority of ARPA funding to maintain existing, eligible City services (specifically police, parks, and recreation services) for FY 21, FY 22 and FY 23. 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 businesses, nonprofits, and residents 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 reallocation in appropriation in the General Grants Fund Group represents the increased amount of ARPA funding being used to support Direct Relief Grant programs. The remaining appropriation changes reflect adjustments to various programs, including a portion of the Health and Human Services Department’s FY 23 Racial Reconciliation structural funding in the amount of $300,000 in the General Fund Group being reallocated on a one-time basis to support the Health Equity Fund program of the LB Recovery Act. Additionally, $210,400 of anticipated FY 22 Year-End funds available in the General Fund will be used to support this program as well. Grant funding from the Long Beach Community Foundation has also been added to support the Health Equity Fund and Long Beach Collaboratory Programs. Table B below details the current LB Recovery Act funding sources.
Table B: Long Beach Recovery Act Funding Sources (in millions)
|
Funding Source |
Total Program Allocation° |
|
General Fund* |
$125.8 |
|
General Fund** |
2.3 |
|
American Rescue Plan Act (ARPA) Direct Relief Grants++ |
10.0 |
|
Airport Rescue Grants^ |
15.1 |
|
CDC Public Health Workforce Development Grant |
2.8 |
|
ELC Schools Re-Opening Safety Grant |
0.7 |
|
Emergency Rental Assistance Program (ERAP) - Round 1 |
30.2 |
|
ERAP - Round 2 |
34.1 |
|
ERAP - Reallocation Funds |
13.0 |
|
Epidemiology and Laboratory Capacity (ELC) Grant |
26.8 |
|
Health Disparities Grant |
7.7 |
|
HUD Home-ARP (Homelessness) |
10.2 |
|
Long Beach Community Foundation - Ballmer Group Grant |
0.1 |
|
Long Beach Community Foundation - Knight Donor Grant |
0.2 |
|
Vaccination Grant |
5.1 |
|
Youth Workforce Development Grant |
6.3 |
|
Total Funding Sources |
$290.4 |
*Funds made available due to funding from ARPA covering existing City services.
**Funds made available due to funding from CARES covering existing City services, Police Department savings, and other sources.
++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.
° This does not include the $980,000 added to the LB Recovery Act for FY 23 as seen in the FY 23 Proposed Budget Book.
The LB Recovery Act programs fall under three categories: Economic Recovery, Healthy and Safe Community, and Securing our City’s Future. Changes since the FY 22 Mid-Year Performance Report include an increase of over $6 million in the Economic Recovery programs due to additional grant funding and an increase of over $13.8 million in the Healthy and Safe Community programs largely due to adjustments to the Emergency Rental Assistance Program funding and no changes to the 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 |
$70.7 |
|
Healthy and Safe Community |
144.0 |
|
Securing Our City’s Future |
75.7 |
|
Total Long Beach Recovery Act |
$290.4 |
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>. LB 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
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 section presents one updated financial opportunity for the period of January 1, 2022 through September 30, 2022, for a total of $13 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.
Development Services Department
Emergency Rental Assistance Program Grant
45. Increase appropriations in the Community Development Grant Fund Group in the Development Services Department by $13,033,840 for the California Department of Housing and Community Development State Rental Assistance Cashflow Loan for the Emergency Rental Assistance Program.
On May 10, 2022, the City Council authorized the City Manager to accept State Rental Assistance Cashflow Loan Program funds from the State Department of Housing and Community Development (HCD). The HCD program provides the City immediate funding, in the form of a forgivable loan, to continue the Long Beach Emergency Rental Assistance Program (LB-ERAP) while the City awaits additional federal Emergency Rental Assistance (ERA) funds. As the US Treasury provides the City with reallocated federal ERA funds, those funds are then used to repay the HCD Cashflow Loan. If the US Treasury does not reallocate funds equal to the total HCD loan amount, the outstanding loan balance will be forgiven.
At the time of Council action, HCD had not finalized the City’s loan amount, so additional appropriations were not requested. The City has since received the HCD standard agreement which provides the amount of loan funding allocated to this program. Therefore, an appropriation increase equal to the amount of that standard agreement, $13,033,840, offset by forgivable loan proceeds, is requested.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
KEVIN RIPER
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
THOMAS B. MODICA
CITY MANAGER