TITLE
Recommendation to approve the Fiscal Year 2017 second departmental and fund budget appropriation adjustments in accordance with existing City Council policy. (Citywide)
DISCUSSION
On September 13, 2016, the City Council adopted the Appropriations Ordinance governing the City's Adopted Budget for Fiscal Year 2017 (FY 17). 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. In accordance with the City's practice, these adjustments are presented periodically throughout the year to the City Council for consideration. Please see Attachment A for a Summary of Proposed Adjustments of impacted City funds and Attachment B for a recap of FY 17 General Fund Expenditure Budget Adjustments.
This matter was reviewed by Deputy City Attorney Amy R. Webber on May 8, 2017.
TIMING CONSIDERATIONS
The following requests for adjustments to FY 17 departmental and fund appropriations are necessary to reflect changes in operating conditions. City Council action is requested on May 23, 2017, to enable the timely processing of payments.
FISCAL IMPACT
FY 17 Appropriation Adjustments
Development Services
1. Increase appropriations in the Community Development Grants Fund (SR 150) in the Development Services Department (DV) by $8,000 for the 2017 Neighborhood Leadership Program, offset by pledged revenue.
The Neighborhood Leadership Program (NLP) is a nationally recognized program to train residents working to improve their neighborhoods. These funds will help 30 participants develop grassroots leadership and organizing skills, teach participants how to leverage resources to improve quality of life in their neighborhoods, and provide financial literacy training for 100 residents. The total cost of the program for the NLP Class of 2017 is $40,200, of which the Port of Long Beach and the Orange County Credit Union have pledged $4,000 each. Additionally, on April 18, 2017, the City Council approved $25,000 in grant funding from the Tesoro Foundation. The remaining cost of $7,200 will be funded from existing appropriations in Community Development Grants Fund in the Development Services Department.
2. Increase appropriations in the Development Services Fund (EF 337) in the Development Services Department (DV) by $35,000 for the Energy Efficiency Partnership Program, offset by the Southern California Edison Company agreement revenue.
On December 6, 2016, the City Council authorized the extension of the City's Energy Efficiency Partnership Program with Southern California Edison Company (SCE). This agreement included $35,000 from SCE for technical assistance to develop an Energy Action Plan (EAP). An EAP will provide guidance to reduce energy used in municipal buildings, identify energy efficiency projects, maximize incentive funding, achieve compliance with AB 32 (Global Warming Solutions Act), and help the City achieve Gold status in SCE's Energy Leader Partnership Program.
3. Increase appropriations in the Development Services Fund (EF 337) in the Development Services Department (DV) by $762, 000 for the Willow Springs Wetlands Restoration, new Civic Center remediation, and the Climate Action and Adaptation Plan, offset by a decrease in appropriations for the Southern Pacific Train Depot at Willow Springs Park.
This budget adjustment reallocates $762,000 of Construction and Demolition funds in the Development Services Fund from the Southern Pacific Train Depot at the Willow Springs Park to the following projects: the Willow Springs Park Wetlands Restoration Project for $274,387 (which will be transferred to the Capital Projects Fund in Parks, Recreation and Marine Department), remediation of contamination at the new Civic Center site for $274,613, and preparation of the Climate Action and Adaptation Plan for $213,000. The Train Depot at Willow Springs Park project cannot proceed due to the depot's recent destruction by fire. This action will continue to fund a $500,000 sustainability capital project at the Willow Springs Park site. There is no net change to appropriations as a result of this reallocation.
Economic and Property Development
4. Increase appropriations in the Tidelands Fund (TF 401) in the Public Works Department (PW) by $7,651,552, offset by the release of internal designations for the Queen Mary and from a temporary release of operating reserves, which will be replenished when bond issue proceeds become available.
Increase appropriations in the Historic Preservation Capital Improvement Fund in the Tidelands Fund (TF 410) by $7,651,552 for capital improvements to the Queen Mary, offset by a transfer from the Tidelands Fund (TF 401).
On November 1, 2016, the City Council approved a 66-year lease agreement with Urban Commons for the operations, management, and preservation of the Queen Mary. To reimburse Urban Commons for urgent repair needs during the first two years of the agreement, the City committed to provide up to $23 million offset by funds from $5.8 million of Queen Mary reserves, and from a bond issue netting an estimated $17.2 million in construction proceeds. In fulfillment of the City's commitment, the City needs to provide a total of $12 million in 2017 to fund immediate repairs. The bond issuance to offset the City's commitment is anticipated this fall. Due to the urgent nature of these necessary repairs, the City had previously agreed to temporarily redirect money from existing resources, if needed to fulfill its commitment and then replenish those funds as soon as the bonds are issued. This request will appropriate the additional funds needed in 2017, and is funded by a release of $4,115,173 in Queen Mary reserves, and an additional $3,536,379 from a temporary release of Tidelands operating reserves, which will be replenished when bond issue proceeds become available.
Fire
5. Increase appropriations in the General Grants Fund (SR 120) in the Fire Department (FD) by $210,000 to implement training, offset by additional Homeland Security grant funds.
In January 2017, the City Council approved the City's Federal 2015 State Homeland Security Program (SHSP 2015) grant award for $579,491. Recently, the City Council approved a total of $210,000 of additional funding from the granting agency, for a total award of $789,491. These additional funds authorize the City to fund the Training Delivery Model (TOM), a Video-based training to more effectively respond to incidents involving Chemical, Biological, Radiological, Nuclear, and/or Explosive agents (CBRNE). Therefore, an appropriation adjustment is requested for the Fire Department to fund grant-eligible expenditures within the grant performance period.
Health and Human Services
6. Increase appropriations in the General Fund (GF) in the Health and Human Services Department (HE) by $100,000 for public health and safety education program start-up efforts.
Decrease appropriation in the General Fund (GF) in the Financial Management Department (FM) by $100,000 to transfer the FY 17 one-time funds to the Health and Human Services Department (HE).
On January 17, 2017, the City Council authorized the creation of a public health and safety campaign to educate the public about the risks and consequences of youth marijuana use. The City Manager identified $100,000 of FY 17 one-time funds that were originally intended to fund the Minimum Wage Education and Information Program. As these funds are not needed for their intended purpose, it is recommended that these onetime funds be utilized to fund the start-up efforts for the public health and safety education campaign.
Legislative
7. Increase appropriations in the General Fund (GF) in the Legislative Department (LD) by $60,369, offset by the First Council District's one-time infrastructure funds transferred from the Capital Projects Fund (CP 201) in the Public Works Department (PW).
This is a technical correction for the use of community meetings, events, and public outreach efforts as approved by the City Council on February 21, 2017.
Parks, Recreation, and Marine
8. Increase appropriations in the Capital Projects Fund (CP 201) in the Parks, Recreation and Marine Department (PR) by $35,000 for the 2017 Nexus Study, offset by the Park and Recreation Facilities Fee.
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 2012.
9. Decrease appropriations in the Capital Projects Fund (CP 201) in the Parks, Recreation and Marine Department (PR) by $1,000,000.
Increase appropriations in the Capital Projects Fund (CP 201) in the Parks, Recreation and Marine Department (PR) by $274,387 for the Willow Springs Park Wetlands Restoration Project, offset by a transfer from Development Services Department (DV).
The Train Depot at Willow Springs Park project cannot proceed due to the depot's recent destruction by fire. As such, a technical adjustment is requested to decrease the appropriation in the amount of $1,000,000 in the Capital Projects Fund. As the original funding source came from the Construction and Demolition funds in the Development Services Department (DV), DV has a corresponding request to reallocate the previously dedicated resources to other projects, including the Willow Springs Park Wetlands Restoration Project. DV will transfer $274,387 to PR for the Willow Springs Park Wetlands Restoration Project in the Capital Projects Fund. Combined with insurance proceeds, the City expects to complete a sustainability capital project on the site in the amount of $500,000.
Police
10. Increase appropriations in the General Grants Fund (SR 120) in the Police Department (PO) by $131,688 for front-line enforcement, offset by State COPS 17 grant revenue.
The Police Department received an additional $131,688 for grant year 2017 from the State of California Citizens Option for Public Safety Program funding from the County of Los Angeles Supplemental Law Enforcement Services Fund (State COPS). These State COPS funds will be used for front-line law enforcement efforts.
11. Increase appropriations in the General Grants Fund (SR 120) in the Police Department (PO) by $472,707 for homelessness outreach and mental health assistance, offset by grant funds from the City of Gardena.
For FY 17, the Police Department received $472,707 from the City of Gardena, serving as the fiduciary agent on behalf of the State of California Board of State and Community Corrections (BSCC), as part of its City Law Enforcement Grant program. In accordance with the parameters established by this grant, funds must be allocated to supplement homeless outreach efforts and mental health assistance efforts. Funds will be utilized to purchase additional vehicles for the Quality of Life team, fund two outreach workers to provide homelessness outreach services, and partially fund a Public Health Professional to provide mental health clinician services.
Public Works
12. Increase appropriations in the Belmont Shore Parking Meter Fund (SR 136) in the Economic and Property Development Department (EP) by $911,728, offset by funds available.
Increase appropriations in the Capital Projects Fund (CP 201) in the Public Works Department (PW) by $1,200,000 for Second Street median improvements, offset by $911,728 in funds available from the Belmont Shore Parking Meter Fund (SR 136) and up to $288,272 from a temporary release of funds for projects not currently under construction in the Capital Projects Fund (CP 201).
In February 2017, the Belmont Shore Parking and Business Improvement Area Advisory Commission recommended the use of the Belmont Shore parking meter revenues to construct the Belmont Shore Median Landscape Project. The project will improve the Second Street medians from Livingston Drive to Bay Shore Avenue with new irrigation, hardscape and landscaping among other potential improvements. The current cost proposal for this project is $1,200,000. This request will appropriate the $911,728 in funds available from the Belmont Shore Parking Meter Fund and a temporary release of appropriation and cash up to $288,272 from projects not currently under construction in the Capital Projects Fund. The appropriation and cash will be restored to the projects when the expected Belmont Shore parking meter revenue is available. The Economic and Property Development Department will return to the City Council to request appropriation to return the cash to the impacted capital projects once additional parking meter revenue becomes available. Public Works does not anticipate any projects' timeframe to be adversely impacted by this action.
13. Increase appropriations in the Capital Projects Fund (CP 201) in the Public Works Department (PW) by $50,000, for improvements on Long Beach Boulevard, offset by revenue from the General Grants Fund (SR 120) in the City Manager Department (CM).
On June 21, 2016, the City Council approved $100,000 in General Fund matching funds for the FUSE Corps Fellowship program to help address the biggest challenges facing urban communities. This program was paid for through a combination of grants from foundation partners and FY 16 election savings. Of the $100,000 in General Fund match, only $50,000 was needed. The Public Works Department has identified improvements along Long Beach Boulevard between 7th Street and Pacific Coast Highway including, but not limited to, sidewalk cleaning, graffiti abatement, and development for a landscape architecture plan. This request will appropriate funds for the project, offset by an operating transfer from the General Grants Fund in the City Manager Department by $50,000.
14. Increase appropriations in the Capital Projects Fund (CP 201) in the Public Works Department (PW) by $352,180 for future upgrades to Willow Springs Park, offset by claim reimbursement revenue in the Insurance Fund (IS 390) in the Human Resources Department (HR).
In FY 16, the Public Works Department received $352,180 from an insurance claim reimbursement related to an insurable incident at the Willow Springs Park located at 2745 Orange Avenue. The Public Works Department will work to identify future needs of this park site. Remaining funds will be included as part of the FY 18 Budget and will be used towards future park site improvements.
15. Decrease appropriations in the General Fund (GF) in the Public Works Department (PW) by $960 as a technical correction related to the Brewitt Library Tree Well Irrigation project previously approved by the City Council.
This is a technical correction to match appropriation to actuals for the Brewitt Library Tree Well Irrigation project. Use of the Fourth Council District one-time infrastructure funds was previously approved by the City Council on July 7, 2016.
16. Increase appropriations in the Capital Projects Fund (CP 201) in the Public Works Department (PW) by $947,000 for intersection improvements, offset by County Measure R revenues.
On October 11, 2016, the City Council adopted Resolution No. RES-16-0099 authorizing the City Manager to execute all master agreements, funding agreements, and any amendments, with Los Angeles County Metropolitan Transportation Authority (Metro). On November 7, 2016, the City Manager executed funding agreements with Metro formalizing the terms and conditions of use for Project Measure R funds for intersection improvements at two intersections: Bellflower Boulevard and Spring Street, and Lakewood Boulevard and Spring Street. These intersections were previously identified by Metro as impacted intersections in their 1-605 "Hot Spot" Report. These projects will address existing traffic deficiencies and address projected traffic volume growth by adding capacity to the turning movements. This request will appropriate funds for these projects, offset by Measure R revenue.
17. Increase appropriations in the Tidelands Operations Fund (TF 401) by $1,500,000 in the Public Works Department (PW) for public safety and lighting projects, offset by funds available.
On September 13, 2016, as a part of the budget adoption process, the City Council requested staff to revisit the list of prioritized Tidelands capital improvement projects and evaluate if $1.5 million in additional public safety and lighting projects could be funded. On March 31, 2017, in a memo to the Mayor and City Council, the City Manager recommended eight public safety and lighting projects for prioritization. This request increases appropriation in the Tidelands Operations Fund in the Public Works Department to fund the implementation of the following eight projects, offset by funds available.
• Lighting, Security and Critical Repairs and Improvements at Performing Arts Plaza Complex and Fountain: $685,000
• Rainbow Harbor Lighting/Electrical System Analysis and Coastal Lighting Critical Repairs: $100,000
• Safety Lighting and LED Upgrades for the Queensway Bay Bridge: $175,000
• Additional Safety Lighting on Bike Path at Shoreline Downtown Marina and Beach Stairways and Critical Lighting Repairs: $180,000
• Crime Prevention through Environmental Design Evaluation at Marina Green Parking Lot, Shoreline Downtown Marina Bike Path Areas, Beach Stairways and Marina Vista Park Restroom and Associated Improvements: $110,000
• Security Enhancements (New Security Locks, Sensors, and Lighting at all Tidelands Restrooms): $75,000
• Improvements at Marina Green Parking Lot (bicycle safety, lighting, gates) and Shoreline Drive: $75,000
• Bluff Park Lighting Feasibility/Design: $100,000
Citywide Activities Public Safety Restorations
18. Increase appropriations in the General Fund (GF) in the Police Department (PO) by $850,000 to rebuild the Training Division and Academy operations, offset from a reallocation of Measure A funds.
Increase appropriations in the General Fund (GF) in the Fire Department (FD) by $650,000 for the restoration of Paramedic Rescue 12, offset from a reallocation of Measure A funds.
Decrease appropriations in the Capital Projects Fund (CP 201) in the Public Works Department (PW) by $1,500,000.
Decrease appropriations in the General Fund (GF) in Citywide Activities (XC) by $1,500,000.
On February 14, 2017, the City Council approved a recommendation to use Measure A structural funding to proceed with the restoration of Paramedic Rescue 12 and funding the rebuild of the Training Division and Academy operations effective March 1, 2017. These public safety restorations are funded by a movement of $1,500,000 in FY 17 Measure A funding previously allocated to residential street repair. The residential street repair is maintained, but moved to FY 18.
The restoration of Paramedic Rescue 12 adds six sworn Firefighter-Paramedics, associated constant staffing overtime, and materials and supplies to staff and operate the rescue ambulance. This restoration will result in increased emergency medical response capabilities on a daily basis.
The restoration of Police Academy staffing adds nine sworn FTEs to rebuild the Training Division and Academy operations. This restoration provides the personnel resources necessary to accomplish the mission to operate academy classes without redirecting officers from patrol.
POA, FFA, LBACE, LBMA and CPA Memorandum of Understandings (MOUs)
19. Increase appropriations by $18,377,737 in the relevant departments and funds as shown on Attachments-C and 0 to implement the City Council approved MOUs, which is partially offset by revenues and available funds.
On February 7, 2017, the City Council approved a new MOU with the Long Beach Police Officers Association (POA). The FY 17 provisions include a 3 percent salary adjustment and skill pay adjustments,
On April 18, 2017, the City Council approved a new MOU with the Long Beach Firefighters Association (FFA). The FY 17 provisions include a 3 percent salary adjustment and skill pay adjustments.
On April 18, 2017, the City Council approved a new MOU with the following three unions:
Long Beach Association of Confidential Employees (LBACE), Long Beach Management Association (LBMA), and City Prosecutors Association (CPA). The FY 17 provisions include a 2 percent salary adjustment and a one-time lump sum payment. The Police and Fire sworn managers that are part of the LBMA MOU received a 3 percent salary adjustment. The City Council also amended Agreement No. 302128 with Patrick H. West, City Manager, to increase the City Manager's salary. The FY 17 provisions include a 2 percent salary adjustment and a one-time lump sum payment.
The FY 17 cost of these agreements are $11,410,359 in the General Fund and $13,050,898 All Funds. These costs will be covered by savings in FY 17 achieved from taking less conservative budgetary actions, such as reducing collection charges for Worker's Compensation, General Liability, and Health Care, as well as eliminating the funding for some optional retirement liabilities.
Additionally, the one-time costs associated with the one-time lump sum payment is approximately $597,578 in the General Fund and $1,238,428 All Funds. These costs will be funded from available funds in each of the impacted funds.
Prepayment of CalPERS FY 17-18 Unfunded Liability Portion
20. Increase appropriations in the Employee Benefits Fund (IS 391) in the Citywide Activities Department (XC) by $50,591,918 for the prepayment of the Unfunded Liability portion of the employer contribution, offset by cash reserves.
Starting in July 2017 (the beginning of FY 18 for CalPERS), cities have the option to prepay the Unfunded Liability portion of the required employer contribution costs, which would lower the required payment for the unfunded liability costs and resulting in savings. The City will be opting to prepay in July 2017 the required contribution towards unfunded liabilities for the next 12 months. The pre-payment of $50,591,918 will be funded from cash reserved for long-term liabilities and will be replenished in its entirety through the normal budget and collection methodology for CalPERS in FY 18. This is anticipated to save the General Fund approximately $1.1 million and $1.9 million for All Funds in FY 18. The option to prepay the unfunded liability portion of the City's CalPERS costs will be evaluated annually to determine the benefit or feasibility of this option.
Open Space Bonds
21. Increase appropriations in the Capital Projects Fund (CP 201) in the Citywide Activities Department (XC) by $6,170,497 to transfer the unspent bond proceeds to the Debt Service Fund (OS 600) in the Citywide Activities Department (XC).
The Open Space Bonds have an unspent amount of $6,170,497. These funds have been designated to pay the General Fund portion of the debt service for the Open Space Bonds. This transaction will do an operating transfer from the Capital Projects Fund (CP 201) in the Citywide Activities Department into the Debt Service Fund in the Citywide Activities Department, to make the debt service payments.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
PATRICK H. WEST
CITY MANAGER