TITLE
Recommendation to approve the Fiscal Year 2014 first quarter departmental and fund budget appropriation adjustments in accordance with existing City Council policy. (Citywide)
DISCUSSION
On September 3, 2013, the City Council adopted the Appropriations Ordinance governing the City's Adopted Budget for Fiscal Year 2014 (FY 14). Periodically, changes in revenue or operating conditions require 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 quarterly 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 14 General Fund Expenditure Budget Adjustments.
This matter was reviewed by Principal Deputy City Attorney Christina Checel on January 15, 2014.
TIMING CONSIDERATIONS
The following requests for adjustments to FY 14 departmental and fund appropriations are necessary to reflect changes in operating conditions. City Council action is requested on February 4, 2014 to enable the timely processing of payments.
FISCAL IMPACT
Airport
On April 28, 2003, the Federal Aviation Administration approved the Long Beach Airport Department's application for Passenger Facility Charges (PFC) funding for various capital improvements. Of the $30,306,984 approved on the application, $2,800,000 was requested for use to rehabilitate the pavement on Taxiway J West. An appropriation increase of $2,800,000 is requested for these expenditures and will be offset by PFC revenue.
· Increase appropriations in the Airport Fund (EF 320) in the Long Beach Airport Department (AP) by $2,800,000 offset by PFC revenue.
City Manager
Appropriation increases are required for high priority capital projects and project support costs funded by additional revenue from the Tidelands Oil Revenue Fund. Staff has identified projects in the Tidelands areas that address infrastructure, facility improvements, and community access needs. The projects include Convention Center improvements, parking lot improvements at Leeway Sailing Center and Marine Stadium, Sorrento Street and Walkway improvements, and a set-aside for the Seaside Way pedestrian bridge. In addition, $250,000 is provided to the Aquarium of the Pacific for general capital improvements from Tidelands Operations Fund in accordance with the Aquarium Implementation Agreement. Please see Attachment D for a detailed list of the proposed projects.
· Increase appropriations in the Tidelands Operations Fund (TF 401) in the City Manager Department (CM) by $13,740,000 from Tidelands oil revenue.
· Increase appropriations in the Tidelands Operations Fund (TF 401) in the Citywide Activities Department (XC) by $250,000 from Tidelands oil revenue.
Development Services
For FY 14, the Development Services Department has been designated $5,620 in additional funds from the Ninth Council District's FY 13 General Fund budget savings. These funds are intended for the Uptown Renaissance program in the Ninth District. These funds must be spent in FY 14 and any amount not spent in FY 14 will fall to fund balance. The increase in appropriation is offset by the associated General Fund savings.
· Increase appropriations in the General Fund (GP) in the Development Services Department (DV) by $5,620 from fund balance.
For FY 14, the Development Services Department has been designated $4,302 in additional funds from the Fourth Council District's FY 13 General Fund budget savings. These funds are intended for Neighborhood Services to assist with Snow Day and community events in the Fourth District. These funds must be spent in FY 14 and any amount not spent in FY 14 will fall to fund balance. The increase in appropriation is offset by the associated General Fund savings.
· Increase appropriations in the General Fund (GP) in the Development Services Department (DV) by $4,302 from fund balance.
Disaster Preparedness and Emergency Communications
The Disaster Preparedness and Emergency Communications Department (DC) will be administering the Urban Area Security Initiative (UASI) and other related grant programs beginning in FY 15. As such, the existing appropriation and offsetting revenue for the administration of the program and other emergency management grant funds should be transferred from the Fire Department to the Disaster Preparedness and Emergency Communications Department. Additionally, there are $3,388 of interest earnings, earned since December 2010 through October 2013, from existing grants which have not been budgeted and are included in the General Grants Fund appropriation increase.
· Increase appropriations in the General Grants Fund (SR 120) in the Disaster Preparedness and Emergency Communications Department (DC) by $322,798 from a grant reallocation from the Fire Department and interest earnings.
· Decrease appropriations in the General Grants Fund (SR 120) in the Fire Department (FD) by $319,410 for grant reallocation to the Disaster Preparedness and Emergency Communications Department.
Library Services
For FY 14, the Library Services Department has been designated $8,173 in additional funds from the Fifth Council District's FY 13 General Fund budget savings. These funds are intended for the El Dorado and Bach branches to purchase equipment, furniture and fixtures to enhance programming and services. These funds must be spent in FY 14 and any amount not spent in FY 14 will fall to fund balance. The increase in appropriation is offset by the associated General Fund savings.
· Increase appropriations in the General Fund (GP) in the Library Services Department (LS) by $8,173 from fund balance.
Parks, Recreation and Marine
For FY 14, the Parks, Recreation and Marine Department has been designated $50,241 in additional funds from the First Council District's FY 13 General Fund budget savings. These funds are intended for the outdoor exercise project at 14th Street Park. These funds must be spent in FY 14 and any amount not spent in FY 14 will fall to fund balance. The increase in appropriation is offset by the associated General Fund savings.
· Increase appropriations in the General Fund (GP) in the Parks, Recreation and Marine Department (PR) by $50,241 from fund balance.
For FY 14, the Parks, Recreation and Marine Department has been designated $6,633 in additional funds from the Second District's FY 13 General Fund budget savings. These funds will be used for maintenance costs at Bixby Park. These funds must be spent in FY 14 and any amount not spent in FY 14 will fall to fund balance. The increase in appropriation is offset by the associated General Fund savings.
· Increase appropriations in the General Fund (GP) in the Parks, Recreation and Marine Department (PR) by $6,633 from fund balance.
For FY 14, the Parks, Recreation and Marine Department has been designated $10,000 in additional funds from the Fifth Council District's FY 13 General Fund budget savings. These funds are intended for educational materials at Willow Duck Pond and the replacement of U.S. flags. These funds must be spent in FY 14 and any amount not spent in FY 14 will fall to fund balance. The increase in appropriation is offset by the associated General Fund savings.
· Increase appropriations in the General Fund (GP) in the Department of Parks, Recreation and Marine (PR) in the amount of $10,000 from fund balance.
For FY 14, the Parks, Recreation and Marine Department has been designated $5,244 in additional funds from the Sixth Council District's FY 13 General Fund budget savings. These funds are intended for expenses related to the Martin Luther King, Jr. Peace & Unity Parade Celebration. These funds must be spent in FY 14 and any amount not spent in FY 14 will fall to fund balance. The increase in appropriation is offset by the associated General Fund savings.
· Increase appropriations in the General Fund (GP) in the Parks, Recreation and Marine Department (PR) by $5,244 from fund balance.
For FY 14, the Parks, Recreation and Marine Department has been designated $3,581 in additional funds from the Eighth Council District's FY 13 General Fund budget savings. These funds are intended for recreational programming. These funds must be spent in FY 14 and any amount not spent in FY 14 will fall to fund balance. The increase in appropriation is offset by the associated General Fund savings.
· Increase appropriations in the General Fund (GP) in the Parks, Recreation and Marine Department (PR) by $3,581 from fund balance.
Beach restrooms are experiencing increased use due to the installation of new restroom configurations. In turn, this has resulted in higher costs for materials, utilities, and maintenance. To ensure that restrooms are clean and available to the public, the Parks Recreation and Marine Department is requesting an appropriation increase of $52,000 for these costs.
· Increase appropriations in the Tidelands Operations Fund (TF 401) in the Parks, Recreation and Marine Department (PR) by $52,000 from fund balance.
Due to the increasing cost of water consumption, the Parks, Recreation and Marine Department is requesting a temporary appropriation increase for $213,000 to align the budget with historical average water use in the Tidelands areas such as Marine Stadium, Belmont Pier, Bayshore Playground, Mother's Beach and beach restrooms. As part of the FY 15 budget, capital improvements will be identified to decrease the consumption and cost of water.
· Increase appropriations in the Tidelands Operations Fund (TF 401) in the Parks, Recreation and Marine Department (PR) in the amount of $213,000 from fund balance for FY 14 only.
Police
The Police Department received a grant award of $580,154 (grant years 13 and 14) 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, including overtime hours, to support a Deputy Probation Officer assigned by the County of Los Angeles and equipment purchase for a total of $580,154. An appropriation increase is requested to allow for the utilization of these funds.
· Increase appropriations in the General Grants Fund (SR 120) in the Police Department (PD) by $580,154 offset by grant revenue.
The Police and Harbor Departments have signed an FY 14 Memorandum of Understanding (MOU) for policing services to the Port area. The Harbor Department has agreed to increase reimbursement for the Police Port Security Unit, administrative overhead and related support $296,152 in the Tidelands Operations Fund. The MOU was not completed in time for the adopted FY 14 Budget and, therefore, a budget adjustment is necessary and will be fully offset by revenue received from the Harbor Department. The administrative overhead is budgeted as General Fund revenue and will be increased to equal the signed MOU.
· Increase appropriations in the Tidelands Operations Fund (TF 401) in the Police Department (PD) by $296,152 offset by revenue.
The Police Department is preparing to relocate the Patrol East Division to the former military Schroeder Hall facility in the Fall 2014. To fund pre-construction costs, including geotechnical surveys, environmental reviews, permitting, and architectural plans, the Police Department has identified Police Impact Fees as an eligible funding source. Approximately $460,492 has been collected to date for Police Impact Fees. The Police Department is requesting that the City Council appropriate $460,492 in the Capital Projects Fund for the Schroeder Hall Project offset by Police Impact Fee revenue from fund balance.
· Increase appropriations in the Capital Projects Fund (CP) and in the Police Department (PD) by $460,492 from fund balance.
Public Works
On June 21, 2011, the City of Long Beach entered into a Cooperative Agreement with the State of California and City of Seal Beach for landscape improvements located at the intersection of College Park Drive at the SR 22 Freeway and Studebaker Road exit. In December 2013, the City of Long Beach received $22,500 for the landscape improvements and beautification of the above stated intersection. An increase in appropriation is requested and is fully offset by revenue received from the City of Seal Beach.
· Increase appropriations in the Capital Projects Fund (CP) and in the Public Works Department (PW) by $22,500 offset by revenue.
On January 7, 2014, the City Council awarded contracts for the improvement of Pine Avenue from Seaside Way to Anaheim Street. Gas Tax Street Improvement Funds will support $3.98 million in total project costs, including $341,300 in addition to the main contract. Of the $3.98 million, $2.5 million is currently budgeted from a reallocation of project funds. An appropriation increase for the remaining amount of $1,469,325 is requested from available fund balance. The reallocation of project funds will have no impact on active projects.
· Increase appropriations in the Gas Tax Street Improvement Fund (SR 181) in the Public Works Department (PW) by $1,469,325 from fund balance.
Technology Services
For FY 14, the Technology Services Department has been designated $16,145 in additional funds from the Seventh Council District's FY 13 General Fund budget savings. These funds are intended for reprographic services for neighborhood events and projects including First Books, the Daisy Lane Parade and community meetings. These funds must be spent in FY 14 and any amount not spent in FY 14 will fall to fund balance. An appropriation increase in the General Fund is included to reflect a transfer to the General Services Fund.
· Increase appropriations in the General Fund (GP) in the Citywide Activities Department (XC) by $16,145 from fund balance.
· Increase appropriations in the General Services Fund (IS 385) in the Technology Services Department (TS) by $16,145 offset by revenue from the General Fund.
Citywide Activities
On October 22, November 5 and November 12, 2013, the City Council approved Amendments to the existing Memoranda of Understanding with the Long Beach Association of Engineering Employees, Long Beach Management Association, Long Beach Association of Confidential Employees, the Long Beach Lifeguards Association, Unrepresented Management Employees and the City Manager. The FY 14 provisions of the Amendments included full employee pick-up of the employees' CalPERS contribution rate; a 6 percent salary adjustment for Miscellaneous and 7 percent salary adjustment for Safety to offset the increase in employee pick-up and, equity adjustments of 5 percent in FY 14. As previously approved by Council, a $2.7 million appropriation is necessary in FY 14 to cover the net cost of the Agreements and is summarized in Attachment C. There is sufficient budget in the Water and Harbor Departments for these adjustments and they will not be submitting a separate appropriation increase request at this time.
· Increase appropriations by $2,705,248 in the relevant departments and funds as shown on Attachment C.
During the FY 14 budget process, salaries for some IAM classifications were inadvertently under-budgeted. Appropriation increases in the relevant departments and funds are requested for a technical correction to align budget with salary. The fund balance of the various funds will support the increase in appropriation.
· Increase appropriations in the General Fund (GP) in the City Prosecutor Department (CP) by $13,755 from fund balance.
· Increase appropriations in the Health Fund (SR 130) in the Health and Human Services Department (HE) by $15,773 from fund balance.
· Increase appropriations in the Insurance Fund (IS 390) in the City Attorney Department (LW) by $13,169 from fund balance.
· Increase appropriations in the General Fund (GP) in the Parks, Recreation and Marine Department (PR) by $6,167 from fund balance.
In FY 13, the General Fund and Uplands Oil Fund ended the fiscal year with an ending funds available of approximately $3.3 million and $4.5 million, respectively. In the FY 13 Year-End Performance Report, the City Council was presented with proposed uses for the funds available. Based on those recommendations, the City Council is requested to appropriate the following: $2.3 million in the Police Department to help fund additional police officers on the streets in FY 14 that are a result of lower than anticipated attrition, and to support overtime in FY 14 for priorities set by the Police Chief that could include sex crimes, gang enforcement or other priorities; and $4.26 million in the Public Works Department to help provide the shortfall in funding for RDA projects due to the dissolution of the Redevelopment Agency. These funds for the Public Work Department would first be used to help complete the funding of the North Library, with any remaining balance used to help fund the remaining 2010 bond projects, including the Atlantic medians and Oregon Park.
· Increase appropriations in the General Fund (GP) in the Police Department (PD) by $2,330,000 from fund balance to help fund police officer staffing due to low attrition in FY 14 and provide overtime for priorities set by the Police Chief.
· Increase appropriations in the Uplands Oil Fund (SR 134) in the Long Beach Gas and Oil Department (GO) by $4,260,000 from fund balance.
· Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $4,260,000 for RDA bond projects offset by revenue from Uplands Oil Fund.
On October 4, 2011, the City Council authorized the allocation of $18.4 million in one-time oil revenues in the Uplands Oil Fund to be used for various projects and equipment purchases. These one-time funds were appropriated in multiple departments and funds, and the majority of the projects were completed during FY 12 and FY 13. Outstanding projects of $44,787 for some Council directed neighborhood projects and the Wi-Fi upgrade in the Harte library remain unspent in fund balance. The City Council is requested to reappropriate these one-time funds to complete the projects as previously authorized by City Council.
· Increase appropriations in the General Fund (GP) in the Development Services Department (DV) by $36,659 from fund balance for various neighborhood projects directed by City Council.
· Increase appropriations in the General Fund (GP) in the Library Services Department (LS) by $8,128 from fund balance for Wi-Fi equipment.
On September 4, 2012, the City Council authorized the allocation of $16.9 million in one-time revenues to be used for various projects and equipment purchases as part of the FY 13 adopted budget. These one-time funds were appropriated in multiple departments and funds, and the majority of projects were completed during FY 13. Outstanding projects and initiatives of $2,987,018 remain unspent in fund balance. In the items listed below, because the Police Academies cross fiscal years, the $2,146,635 was the unspent portion of the one-time provided to conduct Police Academy Class #86 in FY 13. The reappropriation of these funds will help cover the Class #86 expenses in FY 14 and the costs associated with the lower than anticipated attrition in FY 13. The City Council is requested to reappropriate these one-time funds to complete the City Council authorized projects and initiatives.
· Increase appropriations in the General Fund (GP) in the Library Services Department (LS) by $16,619 from fund balance for self-service check out hardware.
· Increase appropriations in the General Fund (GP) in the Police Department (PD) by $75,000 from fund balance for a prisoner transport van.
· Increase appropriations in the General Fund (GP) in the Police Department (PD) by $2,146,635 from fund balance for the Police Academy and low attrition.
· Increase appropriations in the General Fund (GP) in the Citywide Activities Department (XC) by $151,886 from fund balance for implementation of financial stability efforts and studies (Management Partners).
· Increase appropriations in the General Fund (GP) in the Citywide Activities Department (XC) by $596,878 from fund balance for parking citations and billing systems.
· Increase appropriations in the General Services Fund (IS 385) in the Technology Services Department (TS) by $596,878 offset by revenue from the General Fund.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
JOHN GROSS
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
PATRICK H. WEST
CITY MANAGER